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April 2013

CISPA Changes Show Power of Internet Advocacy

[Commentary] Last week CISPA, the cybersecurity information-sharing bill, passed the House. Though fundamentally flawed, the bill is very different from when it passed the House a year ago, demonstrating the power of a growing Internet advocacy community that sometimes underestimates its own influence. Two game-changing achievements stand out.

When CISPA was reintroduced this year, CDT and others pointed out that, once again, the bill allowed information shared with the government for cybersecurity purposes to be used for national security purposes unrelated to cybersecurity. In the face of criticism that this loophole would turn CISPA into a backdoor intelligence-gathering operation, the House Intelligence Committee amended the text to clearly prohibit such uses. Chalk up one significant victory for Internet advocacy. A second major flaw in the bill was that it would have changed decades of federal policy by shifting control over private sector cybersecurity programs to a super-secret military agency, the National Security Agency. Last year, in the face of criticism, the House leadership blocked any vote on the question of civilian versus military leadership. This year, in the face of ongoing advocacy about the dangers of giving a military agency the lead role in cybersecurity efforts for private sector networks, an amendment was allowed and passed. The amendment was poorly drafted and may not actually say what its sponsors or advocates intended, but there was no doubt that Members thought they were voting to reaffirm civilian leadership. There is no going back now. That House vote changed the dynamic of the debate. The lead Senate bill last year, and the White House, had already embraced civilian control. Any future cybersecurity bill must give the lead role to a civilian agency. A second significant victory for Internet advocates.

After Sandy, Questions Linger Over Cellphone Reliability

Roughly one in four cellphone towers in the path of Hurricane Sandy went out of service. It was a frustrating and potentially dangerous experience for customers without a landline to fall back on. Now, local officials and communications experts are pushing providers to improve their performance during natural disasters.

In the city of Long Beach (NY), all the cell towers went down during Sandy. City Manager Jack Schnirman described the experience at a recent Federal Communications Commission hearing on how cellphone networks held up, or didn't, during the storm. "There was one woman in particular who passed away, of natural causes, an elderly woman," he said. "And her daughter had to walk literally a mile and a half from her home to police headquarters just to say, 'Listen, my mom has passed, and I thought I should tell somebody.' " To prepare for the next disaster, Schnirman wants better access to "Cell on Wheels," or COWs. They're cell towers that can be moved from place to place. He wants backup power, like generators, at cell towers. And he wants better access to the cell providers themselves. He said he didn't even know whom to call during Sandy.

A decade of iTunes singles killed the music industry

Although iTunes has in many ways been a godsend to fans of digital music, it has been a source of endless frustration for the music industry.

Since the introduction the iTunes Music Store on April 28, 2003, music sales have plummeted in the United States -- from $11.8 billion in 2003 to $7.1 billion last year, according to the Recording Industry Association of America. When adjusted for inflation, revenue has been more than halved since Apple launched the iTunes Music Store. Interestingly, during that same time, people have been buying more music than ever. How is that possible? It's because the iTunes Music Store popularized the cheap digital single.

Lamar Smith Proposes New Criteria for Choosing NSF Grants

House Science Committee Chairman Lamar Smith (R-TX) has drafted a bill that, in effect, would replace peer review at the National Science Foundation (NSF) with a set of funding criteria chosen by Congress.

For good measure, it would also set in motion a process to determine whether the same criteria should be adopted by every other federal science agency. The legislation represents the latest—and bluntest—attack on NSF by congressional Republicans seeking to halt what they believe is frivolous and wasteful research being funded in the social sciences. Last month, Senator Tom Coburn (R-OK) successfully attached language to a 2013 spending bill that prohibits NSF from funding any political science research for the rest of the fiscal year unless its director certifies that it pertains to economic development or national security. Smith's draft bill, called the "High Quality Research Act," would apply similar language to NSF's entire research portfolio across all the disciplines that it supports.

Google vs Brazil

In 2012 as a whole, Google received more than twice as many takedown requests as it had in 2011. “It’s become increasingly clear that the scope of government attempts to censor content on Google services has grown,” legal director Susan Infantino wrote. This varies country by country: some only bother the company a few times each year. Others get in touch multiple times each day. Among this latter group of countries, the one that has been the most aggressive about using Google to remove content—and the country who among top requesters, has had its requests shot down most often -- is Brazil. In 2011 and again in 2012, of all the countries in the world, Brazil asked Google to take down Internet content more times than any other country. Plenty of these had to do with defamation, which comprises about two-fifths of overall requests: Google’s social network, Orkut, is particularly popular in Brazil, and many of the 2011 requests related to defamation on Orkut and YouTube. But in 2012, a disproportionate number—235 court orders and three executive requests out of 697 total—related to violations of election law, the third most common reason countries cite for removing online material (second is privacy and security). Brazil’s election law, compared to those in the United States, are restrictive.

FCC Begins Transition to All-IP Interconnection

[Commentary] On April 18, 2013 the Federal Communications Commission took matters into its own hands and began the transition to all-IP interconnection with not one, but two steps.

First, the FCC began a process to authorize IP-based providers to obtain telephone numbers directly from the numbering administrator. Second, and perhaps more importantly, the FCC sought comment on database and routing issues that must be resolved in order to enable the transition to all-IP interconnection. It is almost impossible to overstate the importance of these database and routing issues. With a database in place, service providers will be free to figure out all of the details needed to move to a world of all-IP interconnection. With all due respect to lawyers, let’s hope those details are worked out by engineers.

Is the Specter of a 'Cyber Cold War' Real?

The epidemic of cyber-burglary and trade secret theft coming out of China is leading many technology and industrial multinationals to not only ask "How do I screen when hiring Chinese employees?" but to discuss avoiding hiring Chinese scientists, engineers and executives for key positions -- or at least determine ways to isolate them from core company systems. Some companies are already doing both of those things.

The Myth of America's Tech-Talent Shortage

So it turns out the United States is not, in fact, the educational wasteland tech industry lobbyists would have you think.

Companies like Microsoft often claim that America is suffering from an economically hobbling shortage of science, math, and computer talent. The solution, they argue, is to let employers fill their hiring gaps by importing tens of thousands of educated guest workers beyond what the law currently allows. Much as farmers want to bring in field workers from Mexico on short-term visas, software developers desperately want to bring in more coders from India. The Senate's current immigration bill would grant their wish. As written, it vastly increases the annual limit on H1-B visas, which allow corporations to bring employees with a bachelor's degree to the U.S. from overseas for up to six years. Roughly half the guest workers who currently arrive through the program come for computer-related jobs. When Facebook CEO Mark Zuckerberg announced earlier this month that he was forming a political action group to back the reform effort, it was in part seen as a move to ensure that the H1-B provision would make it to President Obama's desk intact.

There's just one problem. That whole skills shortage? It's a myth, as was amply illustrated in a report written by researchers from Rutgers, Georgetown, and American University, and issued by the Economic Policy Institute.

April 29, 2013 (Lifeline; Online sales tax bill)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, APRIL 29, 2013

A look at what’s coming up this week http://benton.org/calendar/2013-04-28--P1W/


TELECOM
   Strengthening a Vital Lifeline or Snatching it Away? - analysis

INTERNET/BROADBAND
   White House backs off mandatory cybersecurity standards for companies
   Online sales tax bill could crash in House
   Push to Require Online Sales Tax Divides the GOP
   9,646 Tax Burdens on the Internet - editorial [links to web]
   Taxing the Internet: Who benefits? - op-ed [links to web]
   Look Out Google Fiber, $35-A-Month Gigabit Internet Comes to Vermont
   The Payphone of the Future Is Calling [links to web]

CONTENT
   Why the Internet is a false idol - analysis
   Center Will Offer New Tools for Measuring the Impact of Media Beyond Numbers
   Giving a Wide Berth to Artists of Cable TV - analysis [links to web]
   Two Classics of the Soaps Are Heading to the Web [links to web]
   Hollywood’s content rights back on DC stage [links to web]
   Looking at Facebook’s Friend and Relationship Status Through Big Data [links to web]
   Researchers Call Out Twitter Celebrities With Suspicious Followings [links to web]
   Local TV Stations Try Mobile Apps [links to web]
   Twitter Speaks, Markets Listen, and Fears Rise [links to web]

PRIVACY
   California's online privacy laws need an update - editorial [links to web]
   Your privacy, under attack - analysis [links to web]
   Rep. Chaffetz: Don’t want government ‘searching my Facebook page’ [links to web]

WIRELESS/BROADBAND
   Smartphones Finally Surpass the Feature Phone [links to web]
   Rapid rise of chat apps slims texting cash cow for mobile groups [links to web]
   Consumers' shift to older iPhones raises concerns on Wall Street [links to web]

HEALTH
   FCC Issues Collection Instructions for the Healthcare Connect Fund - public notice [links to web]
   Health Information Technology Policy Committee Appointment - public notice

THE GOOGLE
   Google Spent $291 Million on Acquisitions First Quarter
   Google Fiber and the Next Stage In The Evolution of T. GOOG - analysis
   Does anyone know why Google bought Motorola? - analysis

POLICYMAKERS
   FCC Names Universal Service Board Members - public notice
   Shelanski Nominated for Office of Information and Regulatory Affairs - press release
   Nelsen Tapped for CPB Board - press release
   Health Information Technology Policy Committee Appointment - public notice

STORIES FROM ABROAD
   Banned in China: Bloomberg and New York Times say they had no choice [links to web]
   Iraq Revokes Licenses of Al Jazeera and 9 Other TV Channels [links to web]

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TELECOM

STREGTHEN LIFELINE OR SNATCH IT AWAY?
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
[Commentary] Through a web of subsidies called the Universal Service Fund, U.S. telephone subscribers ensure that telecommunications networks are affordable and available in rural areas; that schools, libraries and rural health centers can access basic and advanced services at discounted rates; and low income consumers can still afford basic phone service. This week, a Congressional panel focused on the program that provides discounts on monthly telephone service for eligible low-income consumers to help ensure they have the opportunities and security that telephone service affords, including being able to connect to jobs, family, and 911 services. Although, historically, the low income program has been viewed as a benefit without a vocal constituency, the hearing demonstrated that many consumers rely on support to ensure their connection to vital communications.
http://benton.org/node/150666
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INTERNET/BROADBAND

WHITE HOUSE BACKS OFF MANDATORY CYBERSECURITY
[SOURCE: Washington Post, AUTHOR: Ellen Nakashima]
The White House has backed away from its push for mandatory cybersecurity standards in favor of an approach that would combine voluntary measures with incentives for companies to comply with them. That approach reflects recognition of the political reality of a divided Congress, which makes mandated standards difficult to push through, and a belief that an executive order President Barack Obama signed in February could improve companies’ cybersecurity. The White House’s focus now “is more about having discussions with Congress about the right incentives we could put in place to encourage the adoption of the framework,” a senior administration official said. A range of possibilities exist, including tax breaks and immunity from lawsuits for failing to protect systems. The administration still wants cyber legislation, the official said, but that means creating incentives to meet voluntary standards, revised procedures for government cybersecurity and the removal of barriers to the sharing of cyberthreat data between industry and government.
benton.org/node/150698 | Washington Post
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HOUSE AND THE ONLINE SALES TAX BILL
[SOURCE: The Hill, AUTHOR: Bernie Becker, Russell Berman]
Supporters of a bill that would broaden states’ ability to collect sales tax on online purchases acknowledge they face a tough battle in the House. The measure, called the Marketplace Fairness Act, appears on a glide path toward passage in the Senate, with a final vote likely in early May. But while Democratic leaders in the Senate supported the bill enough to bypass the Finance Committee and bring it straight to the floor, the GOP brass in the House has so far shown little interest in the measure. The issue has received such scant attention in the lower chamber that neither Speaker John Boehner (R-OH) nor Majority Leader Eric Cantor (R-VA) has taken public positions on it.
benton.org/node/150728 | Hill, The | The Christian Science Monitor
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ONLINE SALES BILL COULD DIVIDE GOP
[SOURCE: New York Times, AUTHOR: Jonathan Weisman]
Legislation that would force Internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist’s Americans for Tax Reform and the Heritage Foundation in an unusual position: they’re losing. For years, conservative Republican lawmakers have been influenced heavily by the antitax activists in Washington, who have dictated outcomes and become the arbiters of what is and is not a tax increase. But on the question of Internet taxation, their voices have begun to be drowned out by the pleas of struggling retailers back home who complain that their online competitors enjoy an unfair price advantage. Rep Scott Rigell (R-VA) calls them “the hardworking men and women who have mortgaged their homes to buy or to rent a little brick-and-mortar shop.” And each time Norquist and others in the antitax lobby take a loss, they start to seem more vulnerable, Republican lawmakers acknowledge, with ramifications for the continuing fights on the deficit and the shape of the tax code.
benton.org/node/150726 | New York Times
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VTEL
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran]
A rural Vermont telephone company might just have your $70 gigabit Internet offer beat. Vermont Telephone, whose footprint covers 17,500 homes in the Green Mountain State, has begun to offer gigabit Internet speeds for $35 a month, using a brand new fiber network. So far about 600 Vermont homes have subscribed. VTel’s Chief Executive Michel Guite says he’s made it a personal mission to upgrade the company’s legacy phone network, which dates back to 1890, with fiber for the broadband age. The company was able to afford the upgrades largely by winning federal stimulus awards set aside for broadband. Using $94 million in stimulus money, VTel has invested in stringing 1,200 miles of fiber across a number of rural Vermont counties over the past year. Mr. Guite says the gigabit service should be available across VTel’s footprint in coming months. VTel joins an increasing number of rural telephone companies who, having lost DSL share to cable Internet over the years, are reinvesting in fiber-to-the-home networks.
benton.org/node/150723 | Wall Street Journal
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CONTENT

INTERNET AS FALSE IDOL
[SOURCE: Washington Post, AUTHOR: Caitlin Dewey]
[Commentary] If the Arab Spring realized social media’s civic promise, then the Boston bombings may be the moment that promise evaporated. By now, we’re only too familiar with the much-analyzed, much-disparaged mistakes the ambiguous “hivemind” made in the wake of the attacks. In a thousand disparate ways, across every available social channel, we all made the same mistake: We believed we were entitled to and could easily possess first-hand knowledge of the Boston tragedy. And we believed our networks, the ones we had come to know and trust, imparted that knowledge. The fact remains that — in the wake of a devastating tragedy, at a moment that should have humbled us — the only thread uniting social media users was our conviction of the Internet’s infallibility.
benton.org/node/150697 | Washington Post
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MEASURING MEDIA IMPACT
[SOURCE: New York Times, AUTHOR: Michael Cieply]
What is the difference? If your question is like that one, more practical than philosophical, the University of Southern California’s Annenberg School for Communication and Journalism may soon have an answer. With $3.25 million in initial financing from the Bill and Melinda Gates Foundation and the John S. and James L. Knight Foundation, the college’s Norman Lear Center is about to create what it is calling a “global hub” for those who would measure the actual impact of media — journalistic, cinematic, social and otherwise. Martin Kaplan, the director of the Lear Center, will join its director of research, Johanna Blakley, as a principal “investigator” for the new enterprise. He spoke last week about the futility of counting page-views, “likes,” and retweets when trying to figure out whether an opinion piece, a documentary film or a television show actually moved anyone. “Those measure how many people saw something,” he said. “That’s not the same as an outcome.”
benton.org/node/150715 | New York Times
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THE GOOGLE

GOOGLE ACQUISITIONS
[SOURCE: Bloomberg, AUTHOR: Brian Womack]
Google spent $291 million on acquisitions and assets during the first quarter as the company looked to bolster revenue and user growth. Among the eight deals last quarter, $150 million was for patents and developed technology. In February, the company announced it agreed to buy Channel Intelligence Inc. for $125 million, adding online- marketing tools used by retailers to bolster Internet sales. Google is stepping up purchases of companies and technology to expand beyond its core search-based advertising business. Last year, the company completed its largest acquisition, buying Motorola Mobility Holdings for $12.5 billion, adding patents and a smartphone and tablet business.
benton.org/node/150680 | Bloomberg
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THE EVOLUTION OF T. GOOG
[SOURCE: Tales of the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] Without owning a network, Google is now happily embedded within the mobile world. And all the mobile companies, that swore in 2007 they would fight to the death to keep their platforms closed and that disruptive Google out, plan a good portion of their lifecycle around Google’s Android operating system and Google mobile applications. Every time Google starts to look at a new business, such as wireless, or television, or broadband fiber networks, analysts shake their heads and babble on endlessly about how said new business is so totally different from what Google does and lacks basic symmetries so Google is bound to fail. This is because the analysts in question are looking at the MVPD business, or the wireless business, or the application business through the model of a traditional company. These analysts imagine that Google wants to be the next Comcast, or the next Verizon Wireless, or the next Samsung. And, looking at how hard it is to break into the respective industry, they predict Google will lack the ability to wipe out the incumbents, who will fight back with every competition repressing mechanism they have. Analysts do not understand toxoplasma gondii (or T. GOOG, for our purposes) and how it works.
benton.org/node/150682 | Tales of the Sausage Factory
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GOOGLE-MOTOROLA
[SOURCE: The Verge, AUTHOR: Nilay Patel]
Why did Google spend $12.5 billion to purchase Motorola Mobility? It's been nearly two years since the deal was announced and close to a full year since it closed, and the questions keep piling up while the answers keep getting worse. The biggest problem is that Motorola's patent portfolio doesn't appear to be worth anything close to what either company assumed: the judge in the Microsoft v. Motorola patent case ruled yesterday that Redmond owes a paltry $1.7 million in annual royalties for using Motorola's standards-related Wi-Fi and video-encoding patents in every Xbox 360 and Windows 7 PC sold, rather than the $4 billion Motorola had originally demanded. To put that in perspective, it would take 3,235 years for Microsoft's royalties to pay off Google's $5.5 billion valuation of Motorola's patent portfolio. That's a significant blow to Google's interest in using Motorola's patent portfolio as a defensive measure against an increasingly-litigious Apple. With the value of Motorola's patents now coming into focus, the complete implosion of a previous suit against Apple, and increasing domestic and international pressure against using standards-related patents to block competitive products, it's not unreasonable to say that any patent-related benefits to the purchase have vanished. Google may have wanted to buy a bulwark against future Apple lawsuits, but it ended up with a fairly anemic patent-licensing business instead. That's a significant blow to Google's interest in using Motorola's patent portfolio as a defensive measure against an increasingly-litigious Apple. With the value of Motorola's patents now coming into focus, the complete implosion of a previous suit against Apple, and increasing domestic and international pressure against using standards-related patents to block competitive products, it's not unreasonable to say that any patent-related benefits to the purchase have vanished. Google may have wanted to buy a bulwark against future Apple lawsuits, but it ended up with a fairly anemic patent-licensing business instead. And that patent-licensing business certainly isn't enough to offset quarter after quarter of losses as Motorola's current products fail to compete against strong devices from Apple, Samsung, and HTC. Google has repeatedly said that it inherited an 18-month pipeline of products from the company that it needs to flush out.
benton.org/node/150678 | Verge, The
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POLICYMAKERS

USAC BOARD
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
Federal Communications Commission Chairman Julius Genachowski appoints the following persons to serve on the Board of Directors of the Universal Service Administrative Company (USAC):
Representative for incumbent local exchange carriers (ILECs) (other than Bell Operating Companies) with annual operating revenues in excess of $40 million: Kenneth F. Mason
Representative for ILECs (other than Bell Operating Companies) with annual operating revenues less than $40 million: Geoffrey A. Feiss
Interexchange carriers with annual operating revenues of $3 billion or less : Rochelle D. Jones
Representative for competitive local exchange carriers: Joseph Gillan
Representatives for schools that are eligible to receive discounts pursuant to section 54.501 of the Commission’s rules: Daniel A. Domenech, Ph.D., Brian L. Talbott, Ph.D., and Julie Tritt Schell
Representative for low income consumers: Ellis Jacobs
Representatives for rural health care providers that are eligible to receive supported services pursuant to section 54.601 of the Commission’s rules: Eric Brown and Katharine Hsu Wibberly, Ph.D.
Representative for state telecommunications regulators: Ronald A. Brisé
Representatives from the telecommunications industry: Raquel R. Noriega and Olivia Wein
The FCC also released an order waiving portions of its own rules on the composition of the USAC board.
benton.org/node/150688 | Federal Communications Commission | Wireline Chief Veach
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SHELANSKI NOMINATED FOR OFFICE OF INFORMATION AND REGULATORY AFFAIRS
[SOURCE: The White House, AUTHOR: Press release]
President Barack Obama announced his intent to nominate Howard A. Shelanski to be Administrator of the Office of Information and Regulatory Affairs in the Office of Management and Budget. Shelanski is the Director of the Bureau of Economics at the Federal Trade Commission (FTC), a position he has held since 2012. Mr. Shelanski is currently on leave from the Georgetown University Law Center, where he has been a professor since 2011. From 2011 to 2012, he was also Of Counsel to the law firm Davis, Polk & Wardwell. Prior to this, he was the Deputy Director for Antitrust in the FTC's Bureau of Economics from 2009 to 2011. Before joining the FTC, Mr. Shelanski was on the faculty at the University of California at Berkeley from 1997 to 2009. He served as Chief Economist of the Federal Communications Commission from 1999 to 2000 and as Senior Economist for the President's Council of Economic Advisers at the White House from 1998 to 1999. He was an associate with Kellogg, Huber, Hansen, Todd & Evans from 1995 to 1997. He served as a clerk for Justice Antonin G. Scalia of the United States Supreme Court, for Judge Louis H. Pollak of the U.S. District Court in Philadelphia, and for Judge Stephen F. Williams of the U.S. Court of Appeals for the D.C. Circuit. Mr. Shelanski received a B.A. from Haverford College, and a J.D. and Ph.D. from the University of California at Berkeley.
benton.org/node/150686 | White House, The
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NELSEN FOR CPB
[SOURCE: The White House, AUTHOR: Press release]
President Barack Obama announced his intent to nominate Brent F. Nelsen for the Board of Directors of the Corporation for Public Broadcasting. Nelsen is a Professor of Political Science at Furman University, a position he has held since 2002. He has served as Chair of the South Carolina Educational Television Commission since 2011. From 2003 to 2009, he served as Chair of the Department of Political Science at Furman University, and has held various teaching positions there since 1990. He was President of the South Carolina Political Science Association from 2009 to 2010, and is a member of the American Political Science Association. Dr. Nelsen received a B.A. from Wheaton College, and an M.A. and Ph.D. from the University of Wisconsin-Madison.
benton.org/node/150685 | White House, The
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HIT POLICY COMMITTEE
[SOURCE: Government Accountability Office, AUTHOR: Gene Dodaro]
The American Recovery and Reinvestment Act of 2009 (ARRA) established the Health Information Technology Policy Committee to make recommendations on the implementation of a nationwide health information technology infrastructure to the National Coordinator for Health Information Technology. There is an opening on the committee for a member from the research community. Candidates considered for this appointment will be required to complete a financial disclosure form. For this appointment the Comptroller General of the United States is announcing the following: Letters of nomination and resumes should be submitted through May 18, 2013 to ensure adequate opportunity for review and consideration of nominees.
benton.org/node/150683 | Government Accountability Office
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Online sales tax bill could crash in House

Supporters of a bill that would broaden states’ ability to collect sales tax on online purchases acknowledge they face a tough battle in the House.

The measure, called the Marketplace Fairness Act, appears on a glide path toward passage in the Senate, with a final vote likely in early May. But while Democratic leaders in the Senate supported the bill enough to bypass the Finance Committee and bring it straight to the floor, the GOP brass in the House has so far shown little interest in the measure. The issue has received such scant attention in the lower chamber that neither Speaker John Boehner (R-OH) nor Majority Leader Eric Cantor (R-VA) has taken public positions on it.

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