April 2013

Breaking Free of the Cellphone Carrier Conspiracy

When you buy a cellphone — an iPhone or Android phone, let’s say — you pay $200. Now, the real price for that sophisticated piece of electronics is around $600. But Verizon, AT&T and Sprint are very thoughtful. They subsidize the phone. Your $200 is a down payment. You pay off the remaining $400 over the course of your two-year contract. It’s just like buying a house or a car: you put some cash down and pay the rest in installments. Right? Wrong. Here’s the difference: Once you’ve finished paying off your handset, your monthly bill doesn’t go down. You keep reimbursing the cellphone company as though you still owed it. Forever.

And speaking of the two-year contract, why aren’t you outraged about that? What other service in modern life locks you in for two years? Home phone service? Cable TV service? Internet? Magazine subscriptions? Baby sitter? Lawn maintenance? In any other industry, you can switch to a rival if you ever become unhappy. Companies have to work for your loyalty. But not in the cellphone industry. If you try to leave your cellphone carrier before two years are up, you’re slapped with a penalty of hundreds of dollars. If you’re not outraged by those rip-offs, maybe it’s because you think you’re helpless. All of the Big Four carriers follow the same rules, so, you know — what are you gonna do?

Last week, the landscape changed. T-Mobile violated the unwritten conspiracy code of cellphone carriers. It admitted that the emperors have no clothes. John J. Legere, T-Mobile’s chief executive, took to the stage not only to expose the usurious schemes, but to announce that it wouldn’t be playing those games anymore.

As Web Search Goes Mobile, Competitors Chip at Google’s Lead

Google remains the undisputed king of search, with about two-thirds of the market. But the nature of search is changing, especially as more people search for what they want to buy, eat or learn on their mobile devices.

This has put the $22 billion search industry, perhaps the most lucrative and influential of online businesses, at its most significant crossroad since its invention. No longer do consumers want to search the Web like the index of a book — finding links at which a particular keyword appears. They expect new kinds of customized search, like that on topical sites such as Yelp, TripAdvisor or Amazon, which are chipping away at Google’s hold. Google and its competitors are trying to develop the knowledge and comprehension to answer specific queries, not just point users in the right direction. “What people want is, ‘You ask a very simple question and you get a very simple answer,’ ” said Oren Etzioni, a professor at the University of Washington who has co-founded companies for shopping and flight search. “We don’t want the 10 blue links on that small screen. We want to know the closest sushi place, make a reservation and be on our way.”

The President Gives Hollywood a Pass on Violence

[Commentary] There was something missing from President Obama's speech in Denver about gun violence. He focused almost exclusively on passing gun-control laws, and not at all on one of the nation's biggest promoters of violence: the entertainment industry.

A more creative chief executive would have used this moment to widen the discussion by drawing attention to the increasingly graphic violence so pervasive in television shows, movies and videogames. The President has been more than willing to challenge the National Rifle Association, but that is like a Republican president standing up to labor unions—not a move that risks anything with his core supporters. President Obama could show some real bravery by taking on Hollywood. Brown is a former anchor for CNN and NBC News

Cisco buys Ubiquisys for $310 million

A UK technology company inspired by poor mobile connectivity in Wiltshire has been acquired by Cisco for $310 million. Ubiquisys, whose small-cell telecoms technology uses local hubs to enhance call quality and data connection, is the latest UK company to be acquired by a larger US participant. The all-cash fee includes retention payments for Ubiquisys executives, including founder Will Franks, whose frustration with poor rural connections led him to develop the technology. However, at least four-fifths of the $310 million will go to Uniquisys’s backers, who initially put in a reported $81 million of venture capital.

Deutsche Telekom Risks U.S. Exit Without Boost

Unless Deutsche Telekom AG is prepared to abandon another attempt to exit the U.S. market, it has to sweeten the terms of its $33 billion deal to combine T- Mobile USA with MetroPCS Communications. To win support from MetroPCS shareholders in an April 12 vote, New Street Research LLP says Deutsche Telekom may have to cut the debt component by $6 billion, while Nomura Holdings Inc. says MetroPCS owners want a bigger equity stake. While Deutsche Telekom could choose to walk away, that would represent another failed attempt to exit the business, following a 2011 agreement to sell T-Mobile to AT&T that regulators blocked.

Top 10 Companies That Pose the Biggest Threat to Pay TV

Intel may be the ambitious entry in the so-called “over the top” movement aimed at making an end run around the pay-TV business, but it’s far from the only game in town. There’s a wide field of players with no shortage of innovative — but often flawed — strategies. Here’s how they stack up. 1) Microsoft, 2) Google, 3) Apple, 4) Sony, 5) Aero, 6) Amazon, 7) Roku, 8) Netflix, 9) TiVo, and 10) Boxee. The wild card is Hulu.

Aereo May Have Unlikely Ally

Aereo might call a Wall Street analyst as a witness in its case versus leading broadcasters.

Entities linked with the major networks have charged that the service could deprive them of carriage or retransmission consent fees, but Barclays’ Anthony DiClemente disputes that. DiClemente isn’t making the case to defend Aereo, but simply to suggest to investors that the service doesn’t pose much of a threat to the value of major media companies. They tend to “bundle” broadcast stations' in package deals with cable assets and aren’t likely to allow a cable operator to get one without paying for the other. “Distributors could have a hard time disaggregating the two to save” on retransmission payments, the analyst says.

TV Broadcasters Looking Into Aereo-Dish Network Discussions

Dish Network is looking to quash a subpoena. In a court filing, the company says that television networks aren't entitled to learn whether it has plans to incorporate Aereo technology.

According to a petition that was filed this week in Colorado federal court, the broadcasters are seeking information including "(i) Aereo's communications with DISH; (ii) any 'actual, contemplated, considered, or proposed' business arrangements between Aereo and DISH; and (iii) 'offers or expressions of interest' by Dish in acquiring Aereo's assets."

Anne-Marie Slaughter Named Next President of New America Foundation

The New America Foundation’s Board of Directors announced the appointment of Anne-Marie Slaughter as the Foundation’s next president, effective Sept. 1.

Dr. Slaughter, a Princeton professor, former Dean of Princeton’s Woodrow Wilson School of Public and International Affairs, and the former Director of Policy Planning at the U.S. State Department, will succeed Steve Coll, who stepped down on March 31 after five years leading the nonpartisan public policy think tank. Dr. Slaughter, a current New America board member, will work out of both New America's Washington, DC and New York offices. Dr. Slaughter served as the Director of Policy Planning at the State Department from 2009-2011. She was the first woman to hold that position. She is currently the Bert G. Kerstetter '66 University Professor of Politics and International Affairs at Princeton University, where she also served as Dean of the Woodrow Wilson School of Public and International Affairs prior to her government service. With her new role at New America, she will transition to emeritus status at Princeton. Dr. Slaughter is one of the nation’s leading thinkers about the challenges and opportunities presented by 21st century globalization.

Apple bars China app for ‘illegal’ content

Apple has removed at least one online application from the China App Store because it provides access to books that are banned by the Chinese government, according to the developer of the app.

Hao Peiqiang, the developer of an online bookstore app called “jingdian shucheng”, received a letter from Apple’s “App Review” telling him his app will be removed because it “includes content that is illegal in China.” Apple did not specify what content it was referring to, but Hao told the Financial Times he believed the offending content consisted of three books by Wang Lixiong, the Chinese writer whose works are mostly banned in China.

Benton

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