April 2013

Koch downplays report of newspaper-company purchase

Koch Industries officials were downplaying a report by the New York Times that the Wichita-based company is aggressively pursuing the Tribune Company’s newspaper portfolio, a story that first broke six weeks ago.

Koch spokeswoman Melissa Cohlmia said that “the New York Times and many other stories have this in common – lots of conjecture and many unnamed and anonymous sources.” She said Koch Industries is “not bound by the industries we currently work in.” “We are bounded only by our capabilities, not industry areas, and ... we approach any acquisition or investment with an eye to how it adds value for both the buyer and the seller,” Cohlmia said. A major newspaper chain is a natural fit for the company, said Scott Reinardy, associate professor of journalism at the University of Kansas. “Why not?” he asked. “They spent all that advertising money in the last election and didn’t get the outcome they desired, so why not take a different track?” What’s less clear, Reinardy said, is whether the company considers newspapers an investment or a political vehicle.

Common Cause President Bob Edgar Dies at 69

Bob Edgar, president and CEO of Common Cause, died suddenly at his home on April 23. He was 69.

"We are deeply saddened and shaken today by the passing of Bob Edgar," said Common Cause Board Chair Robert Reich. "Bob will be remembered for his decency, kindness, compassion and humor. His deep commitment to social justice and strengthening our democracy is his greatest gift to Common Cause and the nation. Our hearts are with Bob’s family, his wife Merle, and sons Andrew, David and Rob, and their families." Bob, who served Pennsylvania in Congress for 12 years and also led the National Council of Churches, became the president and CEO of Common Cause in May 2007. He oversaw the relaunching of at least seven state chapters, travelled tirelessly to meet with and recruit Common Cause supporters and raised the organization’s national profile and its critical mission to strengthen our democracy. Elected to the U.S. House of Representatives in 1974 to represent the Seventh Congressional District of Pennsylvania, Bob was part of the congressional class nicknamed "the Watergate babies," those elected in the wake of the Watergate scandal and who led sweeping reforms of Congress.

April 23, 2013 (Internet sales tax bill advances)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, APRIL 23, 2013

FirstNet and CPB board’s meet today http://benton.org/calendar/2013-04-23/


JOURNALISM
   News Media and Social Media Become Part of a Real-Time Manhunt Drama
   Breaking News Is Broken - analysis

SPECTRUM/WIRELESS
   The search for more spectrum
   FCC Invites Comments on Improving Receiver Performance - public notice
   Republican Leaders Pan Justice Take on Incentive Auctions
   Why DISH should be negotiating with Clearwire rather than bidding for Sprint
   It's Time for Cities to Deploy Emergency Wi-Fi Strategies
   FCC chief’s swan song: in-flight broadband [links to web]
   FirstNet Board Is Off to an 'Optimistic' Start [links to web]
   Mobile users clam up, use more data, survey shows [links to web]
   Verizon Rural Partner Launches Separate LTE Network for Fixed Service [links to web]
   The Internet of Things: Coming to a network near you [links to web]
   Apple Wins Case Brought by Google’s Motorola Over iPhones [links to web]
   CTIA: Feds Should Control Spectrum Use - op-ed [links to web]

INTERNET/BROADBAND
   Internet sales tax advances after Obama endorsement
   The Mom & Pop Internet Sales Tax - op-ed
   President Obama backs Internet sales tax bill, White House says
   Sen Durbin says online sales tax needed to save states, brick-and-mortar stores
   Why Amazon Supports An Online Sales-Tax Bill
   A Model for Connecting Rural America to Broadband - press release

CYBERSECURITY
   US and China Put Focus on Cybersecurity
   Vast majority of global cyber-espionage emanates from China, report finds
   Cost of cyberattacks in UK triples in a year [links to web]

PRIVACY
   Wall Street vs. Its Employees' Privacy
   Stern Words, and a Pea-Size Punishment, for Google

EDUCATION
   Schools’ ed-tech budgets shrink as demand grows [links to web]
   Instead of Taking Your Daughters to Work, Introduce them to Technology [links to web]

TELEVISION
   Why the Print Model for Broadcasting Works - speech
   ACC Deal Might Bring Stability to Conferences [links to web]

OWNERSHIP
   News Corp. in $139 Million Settlement With Shareholders

GOVERNMENT & COMMUNICATIONS
   Why Is Congress Trying to Make Our Internet Abuse Laws Worse, not Better? - op-ed
   The Internet Is Not Freaking Out About the SOPA Sequel

COMPANY NEWS
   Netflix Says Its “House of Cards” Strategy Worked, and Wall Street Agrees [links to web]
   Apple Has an Identity Crisis [links to web]
   CBS Buys Stake in TV-Streaming Firm [links to web]

STORIES FROM ABROAD
   MPAA: Hollywood Poured $15.5B Into China's Economy [links to web]
   Google defends UK tax payments, says good for country [links to web]
   Canada clears Random House-Penguin merger [links to web]
   In South African Digital TV Shift, Claims of Love Offers and Graft [links to web]
   Stern Words, and a Pea-Size Punishment, for Google

MORE ONLINE
   Civil Rights in Communications – A Movement Still in Motion - editorial [links to web]

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JOURNALISM

MEDIA BECOME PART OF DRAMA
[SOURCE: New York Times, AUTHOR: Brian Stelter]
The all-consuming search in Massachusetts for the suspects in Boston Marathon bombings gripped the nation with some of the most startling, and at times unnerving, news coverage in years. In the middle of it all were reporters, camera crews and ordinary citizens with cellphone cameras who were suddenly entwined with the story. When the second suspect was surrounded on April 19, some reporters were so close to the scene that they could count the number of gunshots and flash bang sounds. The close interaction of reporters with the unfolding events underscored the complex relationship the news media have had with law enforcement authorities this week. News organizations have been both scolded for irresponsible reporting and employed to relay information to the public, sometimes at the same news conference. Earlier on April 19, the authorities thanked news media outlets for spreading the word that Bostonians should take shelter — and cautioned them against repeating secondhand or thinly sourced information.
benton.org/node/150214 | New York Times
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BREAKING NEWS IS BROKEN
[SOURCE: Slate, AUTHOR: Farhad Manjoo]
[Commentary] Inspired by the events of the past week, here’s a handy guide for anyone looking to figure out what exactly is going on during a breaking news event. When you first hear about a big story in progress, run to your television. Make sure it’s securely turned off. Next, pull out your phone, delete your Twitter app, shut off your email, and perhaps cancel your service plan. Unplug your PC. Now go outside and take a walk for an hour or two. Maybe find a park and sit on a bench, reading an old novel. Winter is just half a year away—have you started cleaning out your rain gutters? This might be a good time to start. Whatever you do, remember to stay hydrated. Have a sensible dinner. Get a good night’s rest. In the morning, don’t rush out of bed. Take in the birdsong. Brew a pot of coffee. Finally, load up your favorite newspaper’s home page. Spend about 10 minutes reading a couple of in-depth news stories about the events of the day. And that’s it: You’ve now caught up with all your friends who spent the past day and a half going out of their minds following cable and Twitter. In fact, you’re now better informed than they are, because during your self-imposed exile from the news, you didn’t stumble into the many cul-de-sacs and dark alleys of misinformation that consumed their lives. You’re less frazzled, better rested, and your rain gutters are clear.
benton.org/node/150213 | Slate
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SPECTRUM/WIRELESS

THE SEARCH FOR MORE SPECTRUM
[SOURCE: FCW, AUTHOR: Eliza Krigman]
If President Barack Obama’s goal of repurposing 500 MHz of spectrum for commercial broadband use is to have any chance of success, some of that spectrum must come from the federal government. With industry and the Federal Communications Commission already working to tap alternative sources of this finite resource, the federal government and the Defense Department in particular face growing pressure to share the wealth. Much of the talk now is focused on how the government could be induced to move faster, and most of the ideas revolve around compensating agencies for relinquishing the spectrum. At the FCC, Commissioner Jessica Rosenworcel advocates giving agencies part of the proceeds that come from auctioning spectrum to the private sector. Similarly, the President’s Council of Advisors on Science and Technology suggested developing some kind of spectrum currency. And some lawmakers, including House Communications and Technology Subcommittee leaders Reps. Greg Walden (R-OR) and Anna Eshoo (D-CA), have talked about creating a fee structure that would penalize inefficient spectrum use. In the current budget-constrained environment, the financial rewards could be appealing to agencies. But so far, nothing material has developed.
benton.org/node/150216 | FCW
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IMPROVING RECEIVER PERFORMANCE
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
Early in 2012, Federal Communications Commission Chairman Julius Genachowski tasked the FCC’s Technological Advisory Council (TAC) to study the role of receivers in ensuring the efficient use of spectrum and to provide recommendations on avoiding obstacles posed by receiver performance to making spectrum available for new services. Acting on this request, the TAC working group on Receivers and Spectrum provided actionable recommendations to the Chairman at the TAC’s December 2012 meeting and has recently formalized these recommendations in a white paper for the Commission to consider. The FCC’s Office of Engineering and Technology (OET) invites comment on the TAC white paper and its recommendations to help determine what next steps may be appropriate.
In addition to the work of the TAC, the Government Accountability Office (GAO) was tasked by Congress in the Middle Class Tax Relief and Job Creation Act of 2012 to study spectrum efficiency and receiver performance. The report recommends the Commission consider small-scale pilot tests and other methods to collect information on the practical effects of various options for improving receiver performance.
Also, in July 2012, the President’s Council of Advisors on Science and Technology (PCAST) published a Report that noted the important role of receivers in spectrum policy and regulation, and recommended receiver interference limits be defined to specify the level of radio interference that receivers should be expected to tolerate without being able to make claims of harmful interference. The TAC white paper focuses on this definition of “interference limits” in making its policy proposals.
OET seeks specific comment on the TAC white paper, which recommends multiple actions the Commission could take to implement an interference limits policy. OET also seeks comment on the overall interference limits policy approach proposed in that white paper and information on the practical effects of various options including the method used today relative to receiver standards and specifications, the use of multi-stakeholder organizations in the development of interference thresholds, and the role of the FCC.
benton.org/node/150215 | Federal Communications Commission | TAC paper | GAO paper | PCAST report
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GOP RESPONDS TO JUSTICE LETTER ON INCENTIVE AUCTIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Republican leadership of the House Commerce Committee has told the Federal Communications Commission that if it follows the Justice Department's suggestions for the incentive auction, it may not get enough money to fully compensate broadcasters for giving up spectrum, potential leading to a failed auction. Justice weighed in at the FCC saying it should take into account the differences in spectrum value -- lower bands are more valuable for cell service than higher -- when deciding how much spectrum in a market one company should be allowed to hold. It also suggested that the getting the reclaimed broadcast spectrum into the hands of competitors to Verizon and AT&T would likely be its highest and best use. Led by Commerce Committee Chairman Fred Upton (R-MI) and Communications Subcommittee Chair Greg Walden (R-OR), a half dozen Republican signatories to the letter said that putting restrictions on bidders in the upcoming broadcast incentive auctions would reduce the size of bids and "could lead to a complete failure of the auction," including construction of an interoperable public safety network. The legislators said that when they came up with the legislation establishing the incentive auction, they wanted it to make more spectrum available to wireless carriers, but that they also expected the auctions to generate enough revenue to cover broadcasters and the first responder network and deficit reduction. Justice's suggestions could threaten that goal, they said.
benton.org/node/150201 | Broadcasting&Cable | Press release
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DISH AND CLEARWIRE
[SOURCE: GigaOm, AUTHOR: Tim Farrar]
Commentators have questioned whether the leverage inherent in DISH’s bid for Sprint – for what is a considerably larger company – will constrain the ability of a merged Sprint/DISH to invest in the Sprint network and implement plans to provide seamless mobile access to subscription TV content (based around DISH’s Sling and Hopper technology), and a plan to offer fixed wireless broadband to the estimated 40 million households that lack access to high bandwidth fiber or cable networks. Further, many expect that Masayoshi Son, the CEO of SoftBank, will outbid Ergen – despite his protestations to the contrary. Ergen’s vision for DISH’s future is bold and exciting, but the question ultimately is whether Sprint is crucial to achieving it, and whether it can even work without Clearwire. So the question is, might SoftBank agree to sell part of Clearwire’s spectrum to DISH, in exchange for DISH agreeing to withdraw its bid for Sprint? That would certainly be logical, but with two billionaires’ egos at stake, it’s never a given that the most rational outcome will prevail. [Farrar is president of Telecom, Media and Finance Associates]
benton.org/node/150200 | GigaOm
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EMERGENCY WI-FI
[SOURCE: PC Magazine, AUTHOR: Samara Lynn]
The nightmarish events of this week remind us how vital communications are during a disaster. People need information in an emergency, and with the prevalence of mobile devices, Wi-Fi is often the best way to get that information during a crisis. After the bombings in Boston this week, people reached for their mobile devices to contact loved ones or gather information. Twitter, Facebook, and other social media platforms lit up with warnings to text rather than call in order to save bandwidth, as well as requests for people to open up closed Wi-Fi networks. There were conflicting reports about whether cellular networks were shut down to avoid the remote detonation of more explosives, but ultimately the carriers confirmed that networks were just congested. Communications, understandably, became chaotic. In New York, we saw it with 9/11, Hurricane Sandy, and the Northeastern blackout of 2003. This is why urban planners and government officials need to take a hard, serious look at offering citizens blanket, municipal Wi-Fi connectivity in times of crisis.
benton.org/node/150192 | PC Magazine
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INTERNET/BROADBAND

ONLINE SALES TAX BILL ADVANCES
[SOURCE: The Hill, AUTHOR: Brendan Sasso, Bernie Becker]
The Marketplace Fairness Act, legislation that would empower states to tax online purchases, cleared a key hurdle in the Senate after winning an enthusiastic endorsement from President Barack Obama. Senators advanced the bill 74-20 in procedural vote, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill. The Senate will now begin debate on amendments. The chamber is expected to hold the decisive vote on the bill later this week. Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Best Buy, Macy’s and J.C. Penney, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes. But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshaling its users in a massive campaign to kill it.
benton.org/node/150228 | Hill, The | ars technica | NYTimes | WSJ
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MOM AND POP INTERNET SALES TAX
[SOURCE: Wall Street Journal, AUTHOR: John Donahoe]
[Commentary] For small businesses, there is nothing fair about the Marketplace Fairness Act. The legislation stems from a fight between big bricks-and-mortar national retailers and big online retailers, all of whom seem unconcerned that small enterprises—and the jobs they create—are going to be collateral damage. The trouble with the bill is that it treats mom-and-pop businesses the same way as it does multibillion-dollar retailers. Yet a small business with a dozen employees simply can't be lumped in with national behemoths such as Amazon and retail chains that have warehouses and stores around the country. The Marketplace Fairness Act should include an exception for small businesses. Why? Because otherwise an unfair burden will be placed on them. Enabling small businesses and entrepreneurs to grow, and giving consumers across the country and around the world the opportunity to connect with them, is at the heart of what we do at eBay. We want to continue this tradition and make it possible for small businesses to keep their virtual doors open, so that they can compete in the marketplace, grow into bigger businesses—just the sort that should be subject to the Marketplace Fairness Act. [Donahoe is the president and CEO of eBay]
benton.org/node/150227 | Wall Street Journal
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PRESIDENT OBAMA SUPPORTS ONLINE SALES TAX BILL
[SOURCE: Associated Press, AUTHOR: ]
The White House says President Barack Obama supports a bill to give states more authority to collect sales tax from Internet retailers. White House spokesman Jay Carney says the Senate bill would level the playing field for small businesses and brick-and-mortar retailers that are undercut by online companies. Carney says that governors and mayors have overwhelmingly told the White House the bill is needed. He says states are losing out on revenue that could go to education, law enforcement, infrastructure investments and health care.
benton.org/node/150211 | Associated Press | American Public Media
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DURBIN MAKES CASE FOR ONLINE SALES TAX BILL
[SOURCE: The Hill, AUTHOR: Pete Kasperowicz]
Senate Majority Whip Dick Durbin (D-IL), a cosponsor of a bill allowing states to collect taxes from online sales, said that the bill is needed to save states that are drowning in red ink, and brick-and-mortar stores that are trying to compete with Internet retailers. "My state is struggling, terrible budget problems," Sen Durbin said. "We're in the red with deficits, pension system is in trouble. Money that should be collected for sales tax, not being collected." The bill being considered today would allow states to collect the sales tax from online retailers, most of which are allowed to escape the collection of taxes from the 46 states that have a sales tax. Sen Durbin said few people are aware that they are supposed to pay this tax each year. "It's really an honor system, that's what it comes down to," he said. "It turns out only one out of 20 people in Illinois even know this exists. Five percent of the population knows." Sen Durbin said he has paid the tax on his own online purchases, ever since his accountant asked if he wanted to pay them. "I said, 'I think I do,' and I did, and I have ever since," Sen Durbin said.
benton.org/node/150212 | Hill, The | American Public Media
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AMAZON SUPPORTS ONLINE SALES TAX BILL
[SOURCE: National Public Radio, AUTHOR: Jacob Goldstein]
Amazon supports a Senate bill that would empower states to tax online purchases. Why?
Collecting state and local sales tax all around the country would require a fair bit of effort on the part of online retailers, because sales tax rules vary from state to state. That's not a huge deal for a giant company like Amazon, but it would be more of a burden for smaller online retailers. From Amazon's point of view, that's a good thing — it makes life harder for Amazon's smaller competitors.
Under current law, Internet retailers have to charge sales tax in states where they have a significant physical presence — like, say, a big warehouse. For a long time, Amazon kept warehouses out of big states so it could avoid charging sales tax in those states. Brick-and-mortar retailers didn't like this, and started lobbying state governments to push for Amazon to charge sales tax. So Amazon changed its strategy. The company agreed to start paying sales tax in more states — and it started building huge warehouses near major metropolitan areas in those states.
benton.org/node/150191 | National Public Radio
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CONNECTING RURAL AMERICA
[SOURCE: Federal Communications Commission, AUTHOR: Julie Veach]
The Federal Communications Commission reached another milestone in its implementation of Universal Service reforms to ensure rural Americans have access to voice and robust broadband services – including extending broadband to the millions of Americans that are unserved today. Our primary tool to achieve this goal is the transformation of the former high-cost fund – the program supporting rural voice service – to a Connect America Fund supporting modern networks that provide both broadband and voice service. Phase II implementation is well underway for those areas of the country where 80% of unserved Americans live and key to this transformation is targeting funding efficiently to the areas where it is needed most, outside areas where competitive providers operate. With our last Broadband Progress Report, we posted an online map of broadband service today, including the unserved areas where 19 million Americans live. Today’s milestone – a Report and Order– is the next step toward adopting a final cost model that will pinpoint as accurately as possible how much support is needed, on a granular (census- block) level, to deliver both voice and broadband, without overspending. The model framework – an “efficient provider framework” – adopted by Commission staff today resolves key assumptions about the design of the network and network engineering, including by:
Calculating costs in a way that best approximates the discipline of competitive markets with multiple providers.
Building on the known costs of deploying efficient modern networks. These costs can be lower than those of legacy networks, often built in a piecemeal fashion that compounds inefficiencies.
Looking forward to the average monthly cost that is necessary to support modern, efficient networks over the long-term, rather than attempting to model past investments in legacy networks.
benton.org/node/150202 | Federal Communications Commission
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CYBERSECURITY

FOCUS ON CYBERSECURITY
[SOURCE: New York Times, AUTHOR: Jane Perlez]
The United States and China held their highest-level military talks in nearly two years on April 22, with a senior Chinese general pledging to work with the United States on cybersecurity because the consequences of a major cyberattack “may be as serious as a nuclear bomb.” Cybersecurity has become a sudden source of tension between the two countries. China has bristled over the growing body of evidence that its military has been involved in cyberattacks on American corporations and some government agencies. Last month, the Obama Administration demanded that the Chinese government stop the theft of data from American computer networks and help create global standards for cybersecurity. At a news conference after talks with the chairman of the Joint Chiefs of Staff, Gen. Martin E. Dempsey, the Chinese general, Fang Fenghui, said he would be willing to set up a cybersecurity “mechanism,” but warned that progress might not be swift.
http://www.nytimes.com/2013/04/23/world/asia/united-states-and-china-hol...
China: Cyberattacks Are Like Nuclear Bombs (Wall Street Journal)
benton.org/node/150226 | New York Times | Wall Street Journal
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CHINA’S CYBER-ESPIONAGE
[SOURCE: Washington Post, AUTHOR: Craig Timberg]
Analyses of hundreds of documented data breaches found that hackers affiliated with the Chinese government were by far the most energetic and successful cyberspies in the world last year, according to a report to be issued by government and industry investigators. Although hackers with financial motives are the most common source of data breaches worldwide, China dominated the category of state-affiliated cyber-espionage of intellectual property, said the 2013 Data Breach Investigations Report. The report was issued by Verizon’s RISK Team and 18 partners, including officials from the United States and several foreign governments. Of 120 incidents of government cyber-espionage detailed in the report, 96 percent came from China; the source of the other 4 percent was unknown, it said. “This is a pretty shocking statistic,” said Wade Baker, the managing principal for the RISK Team, which provides security consulting. The report, issued by Verizon every year since 2008, was the first to break out government-affiliated cyber-espionage as its own category, reflecting the rising numbers of such intrusions and the increasingly sophisticated efforts to determine their origins.
benton.org/node/150225 | Washington Post | Politico
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PRIVACY

WALL STREET VS EMPLOYEE PRIVACY
[SOURCE: Wall Street Journal, AUTHOR: Jean Eaglesham, Michael Rothfeld]
State efforts to block companies from monitoring employees' personal Facebook and Twitter accounts are under fire from a new front -- securities regulators. An unlikely alliance of regulators and industry groups is seeking to carve out exemptions in state laws that would allow certain financial firms to sidestep bans on looking at the personal social-media accounts of employees. Wall Street's self-regulator, the Financial Industry Regulatory Authority, says financial firms need a way to follow up on "red flags" suggesting misuse of a personal account, according to a spokesman. Finra has asked lawmakers in about 10 states to make changes to proposed legislation, the spokesman said. Securities regulators worry that the raft of new laws aimed at protecting employees' privacy puts investors at risk. They say the fast spread of financial advice on social networks such as Facebook and Twitter could create new channels for Ponzi schemes and other frauds, and that fighting those frauds will be harder if state lawmakers snarl efforts by companies to monitor what employees are pitching to investors.
benton.org/node/150203 | Wall Street Journal
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GOOGLE’S PUNISHMENT
[SOURCE: New York Times, AUTHOR: Claire Cain Miller]
Regulators in Germany, one of the most privacy-sensitive countries in the world, unleashed their wrath on Google for scooping up sensitive personal information in the Street View mapping project, and imposed the largest fine ever assessed by European regulators over a privacy violation. The penalty? $189,225. Put another way, that’s how much Google made every two minutes last year, or roughly 0.002 percent of its $10.7 billion in net profit. It is the latest example of regulators’ meager arsenal of fines and punishments for corporations in the wrong. Academics, activists and even regulators themselves say fines that are pocket change for companies do little to deter them from misbehaving again, and are merely baked into the cost of doing business.
benton.org/node/150223 | New York Times
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TELEVISION

PRINT MODEL FOR BROADCASTING
[SOURCE: TVNewsCheck, AUTHOR: Mark Fowler]
[Commentary] No outside force or coercion, no loss of freedom of the press or speech, is necessary to produce all sorts of broadcast programming in the public interest. It may not always be of highest quality, but is the government to be the arbiter of what is quality? And, for the diehard critics, I challenge them to name one controversial issue of public importance, federal, local, or international, not covered by the broadcast media. They cannot. [Fowler is a former Federal Communications Commission chairman]
benton.org/node/150218 | TVNewsCheck
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OWNERSHIP

NEWS CORP SETTLEMENT
[SOURCE: New York Times, AUTHOR: Amy Chozick]
As News Corporation continues to negotiate settlements with victims of a phone-hacking scandal within its British newspaper division, its board reached a $139 million settlement with a group of United States shareholders. The group had asserted that News Corporation’s board — led by Rupert Murdoch, the chairman and chief executive — breached its fiduciary responsibility in handling the crisis in Britain. The lawsuit also asserted that the company unethically paid $670 million in 2011 to acquire the Shine Group, the television production company of Murdoch’s daughter, Elisabeth Murdoch. The suit was filed by Amalgamated Bank, the largest union-owned bank in the United States, which handles large-scale labor and pension funds. News Corporation will not pay any of the $139 million settlement. Rather, the company will receive a payment from insurance that protects corporate boards from this type of litigation. News Corporation indicated that the settlement would move it one step closer toward distancing itself from the hacking imbroglio that erupted in 2011. “We are pleased to have resolved this matter,” News Corporation said.
benton.org/node/150222 | New York Times | Financial Times
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GOVERNMENT & COMMUNICATIONS

INTERNET ABUSE LAWS
[SOURCE: The Atlantic, AUTHOR: Orin Kerr, Lawrence Lessig]
[Commentary] In January this year, political activist and net guru Aaron Swartz committed suicide. Facing the potential of years in prison for downloading a database of academic articles, Swartz had exhausted his wealth and his will to fight. With the help of a rope, he gave up. Swartz's death has turned a light on the statute that had put Swartz's liberty in jeopardy: the Computer Fraud and Abuse Act, or CFAA for short. This federal criminal statute has gotten way out of hand. The CFAA was passed in 1986 to punish the new crime of computer hacking. But a lot has changed since 1986. Use of computer networks was rare then. Now it is ubiquitous. And Congress has expanded the law several times, making its reach broader and its punishments more severe. The act has become a sprawling mess -- a powerful and mysterious weapon that could potentially reach millions of ordinary Americans. And prosecutors have interpreted it incredibly broadly. The problem results from the law's vague language: The act criminalizes "unauthorized access" to a computer. But almost 30 years after its passage, no one yet knows when access is unauthorized. The law cries out for a common-sense reworking. After Swartz's death, a cross-partisan coalition in Congress, led by Democrat Zoe Lofgren and Republican Darrell Issa, did just that, proposing a law that would end liability for terms-of-service violations and would limit felony liability for violations. But, incredibly, some in Congress are going the other way.
benton.org/node/150208 | Atlantic, The
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THE INTERNET AND CISPA
[SOURCE: The Atlantic, AUTHOR: Rebecca Greenfield]
Over 200 sites are participating in the Internet shutdown to protest the Cyber Intelligence Sharing and Protection Act (CISPA), which the House of Representatives passed. But, the big names that showed up to last year's nearly Internet-wide protest of SOPA—like Wikipedia and Wired—haven't shut down their sites this time, even though opponents argue this bill is worse than any previously proposed Internet regulation. "#CISPA is the ugly fusion of SOPA and PIPA into a super zombie bill determined to kill your online privacy," tweeted out YourAnonNews to underscore that very point. The voices speaking out are very loud, but they don't have the ubiquity or scale of that last round of online protests. Unlike SOPA which was widely condemned in the tech community, CISPA has the support of some major tech companies for the bill's measures meant to help them fight hackers. Last year Facebook came out in support of the legislation. And though it has since revoked its official support, the industry lobbying group TechNet, whose members include Google, Facebook, Yahoo, and Microsoft, sent a letter to Congress earlier this month in support of the legislation: "This bill recognizes the need for effective cybersecurity legislation that encourages voluntary, bi-directional, real time sharing of actionable cyber threat information to protect networks." A few days later, the House passed that bill. The full list of pro-CISPA companies found here also includes IBM and HP.
benton.org/node/150199 | Atlantic, The
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Internet sales tax advances after Obama endorsement

The Marketplace Fairness Act, legislation that would empower states to tax online purchases, cleared a key hurdle in the Senate after winning an enthusiastic endorsement from President Barack Obama.

Senators advanced the bill 74-20 in procedural vote, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill. The Senate will now begin debate on amendments. The chamber is expected to hold the decisive vote on the bill later this week.

Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Best Buy, Macy’s and J.C. Penney, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes.

But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshaling its users in a massive campaign to kill it.

The Mom & Pop Internet Sales Tax

[Commentary] For small businesses, there is nothing fair about the Marketplace Fairness Act.

The legislation stems from a fight between big bricks-and-mortar national retailers and big online retailers, all of whom seem unconcerned that small enterprises—and the jobs they create—are going to be collateral damage. The trouble with the bill is that it treats mom-and-pop businesses the same way as it does multibillion-dollar retailers. Yet a small business with a dozen employees simply can't be lumped in with national behemoths such as Amazon and retail chains that have warehouses and stores around the country. The Marketplace Fairness Act should include an exception for small businesses. Why? Because otherwise an unfair burden will be placed on them.

Enabling small businesses and entrepreneurs to grow, and giving consumers across the country and around the world the opportunity to connect with them, is at the heart of what we do at eBay. We want to continue this tradition and make it possible for small businesses to keep their virtual doors open, so that they can compete in the marketplace, grow into bigger businesses—just the sort that should be subject to the Marketplace Fairness Act.

[Donahoe is the president and CEO of eBay]

US and China Put Focus on Cybersecurity

The United States and China held their highest-level military talks in nearly two years on April 22, with a senior Chinese general pledging to work with the United States on cybersecurity because the consequences of a major cyberattack “may be as serious as a nuclear bomb.”

Cybersecurity has become a sudden source of tension between the two countries. China has bristled over the growing body of evidence that its military has been involved in cyberattacks on American corporations and some government agencies. Last month, the Obama Administration demanded that the Chinese government stop the theft of data from American computer networks and help create global standards for cybersecurity. At a news conference after talks with the chairman of the Joint Chiefs of Staff, Gen. Martin E. Dempsey, the Chinese general, Fang Fenghui, said he would be willing to set up a cybersecurity “mechanism,” but warned that progress might not be swift.

Vast majority of global cyber-espionage emanates from China, report finds

Analyses of hundreds of documented data breaches found that hackers affiliated with the Chinese government were by far the most energetic and successful cyberspies in the world last year, according to a report to be issued by government and industry investigators.

Although hackers with financial motives are the most common source of data breaches worldwide, China dominated the category of state-affiliated cyber-espionage of intellectual property, said the 2013 Data Breach Investigations Report. The report was issued by Verizon’s RISK Team and 18 partners, including officials from the United States and several foreign governments. Of 120 incidents of government cyber-espionage detailed in the report, 96 percent came from China; the source of the other 4 percent was unknown, it said. “This is a pretty shocking statistic,” said Wade Baker, the managing principal for the RISK Team, which provides security consulting. The report, issued by Verizon every year since 2008, was the first to break out government-affiliated cyber-espionage as its own category, reflecting the rising numbers of such intrusions and the increasingly sophisticated efforts to determine their origins.

Cost of cyberattacks in UK triples in a year

The cost of cybersecurity breaches against British businesses has tripled in the past year as attacks on valuable intellectual property and customer data accelerate. Some 87 percent of small businesses and 93 percent of large organizations experienced at least one kind of security breach in the past year, according to a report by the Department for Business, Innovation and Skills. The cost of security breaches to UK companies amounts to billions of pounds annually and has tripled over the past year, it says.

Stern Words, and a Pea-Size Punishment, for Google

Regulators in Germany, one of the most privacy-sensitive countries in the world, unleashed their wrath on Google for scooping up sensitive personal information in the Street View mapping project, and imposed the largest fine ever assessed by European regulators over a privacy violation. The penalty? $189,225.

Put another way, that’s how much Google made every two minutes last year, or roughly 0.002 percent of its $10.7 billion in net profit. It is the latest example of regulators’ meager arsenal of fines and punishments for corporations in the wrong. Academics, activists and even regulators themselves say fines that are pocket change for companies do little to deter them from misbehaving again, and are merely baked into the cost of doing business.

News Corp. in $139 Million Settlement With Shareholders

As News Corporation continues to negotiate settlements with victims of a phone-hacking scandal within its British newspaper division, its board reached a $139 million settlement with a group of United States shareholders.

The group had asserted that News Corporation’s board — led by Rupert Murdoch, the chairman and chief executive — breached its fiduciary responsibility in handling the crisis in Britain. The lawsuit also asserted that the company unethically paid $670 million in 2011 to acquire the Shine Group, the television production company of Murdoch’s daughter, Elisabeth Murdoch. The suit was filed by Amalgamated Bank, the largest union-owned bank in the United States, which handles large-scale labor and pension funds. News Corporation will not pay any of the $139 million settlement. Rather, the company will receive a payment from insurance that protects corporate boards from this type of litigation. News Corporation indicated that the settlement would move it one step closer toward distancing itself from the hacking imbroglio that erupted in 2011. “We are pleased to have resolved this matter,” News Corporation said.