July 2013

Online Marketer Settles Privacy Charges

Even as digital advertisers and privacy advocates are trying to come to an international consensus that would give consumers more control over online tracking, a well-known advertising technology company has agreed to pay $1 million to settle charges that it circumvented certain users’ privacy settings. The digital marketing company, called PulsePoint and based in Manhattan, agreed to settle charges by the acting attorney general of New Jersey and the New Jersey Division of Consumer Affairs that the company had bypassed the privacy settings of consumers in New Jersey whose Safari browsers were set to block computer code that enabled targeted ads.

The consent order charges that PulsePoint covertly placed bits of code called cookies — which allow ad networks to follow a user’s activities across the Web and customize ads to that user’s activities — on the Safari browsers of consumers whose privacy settings were set to block those third-party ad cookies. In particular, the order said that PulsePoint, and a predecessor company called ContextWeb, used JavaScript code to trick Safari browsers into treating ads as if they were Web sites a user had visited and accepting tracking cookies from those ads. The cookies allowed the company to place as many as 215 million targeted ads on browsers set to prevent those kinds of ads, according to the order. The settlement also requires PulsePoint to post details on its Web site about its data collection practices, along with instructions on how consumers can limit or opt out of the information collection.

New York Probes Bloomberg Reporters' Access to Information

New York Attorney General Eric Schneiderman's office is looking into how much access Bloomberg LP news reporters may have had to information about the media and technology company's customers, said people familiar with the inquiries. Officials in the New York Attorney General's investor protection unit in recent weeks have queried Bloomberg about reporters' knowledge of terminal subscribers' activities, said the people. The Attorney General's office hasn't opened a formal investigation into the Bloomberg practices, said one of the people familiar with the probe.

Taking Aim at Cricket, T-Mobile Moves MetroPCS into 15 New Markets

T-Mobile is following through on its promise to quickly expand its recently acquired MetroPCS brand into new cities.

The company announced a $40-per-month service and a pair of new devices that will come to 15 new markets as part of the MetroPCS expansion. In the new cities, the MetroPCS brand will be used atop T-Mobile’s network but set up its own stores, mostly through third-party exclusive dealerships.

House committee proposes funding cuts for NEA, other arts groups

A bill approved by the House of Representative's committee on appropriations would cut funding for a number of cultural organizations, including the National Endowment for the Arts, whose budget would be slashed to $75 million for the 2014 fiscal year, a 49% decrease from the agency's funding for 2013 before the budget sequester.

The proposed NEA cuts are part of an across-the-board reduction in federal spending that was put forward this week by the committee, which is led by Rep. Hal Rogers (R-KY). The bill calls for an overall federal spending cut of 19%. The House Appropriations Committee's proposal for the NEA is at odds with President Obama's request for $154.5 million in funding for the arts agency in his fiscal 2014 budget, announced in April. The committee is also proposing spending cuts of 19% for the Smithsonian Institution and the National Gallery of Art.

House subcommittee votes to revamp FCC process

The House Commerce Committee’s Subcommittee on Communications and Technology advanced two bills that would overhaul the way the Federal Communications Commission operates.

House Republicans approved similar bills last year, but Senate Democrats never brought them up. Democrats allowed the subcommittee to approve the bills on a voice vote after Subcommittee Chairman Greg Walden (R-OR), the author of the legislation, promised to work to address their concerns over the August recess. Republicans argue the bills would provide more openness and transparency at the FCC, but Democrats warn they would open the agency up to more litigation and would hamper its ability to protect consumers.

FCC Commissioner Pai: FCC Has Made No Meaningful Progress On Process Reforms

Federal Communications Commission member Ajit Pai said that the FCC still had work to do on the mobile spectrum allocation and process reform fronts. He also said the FCC either needs to set an internal schedule for various elements required for holding a broadcast incentive auction in 2014, or concede it will need to move that goalpost.

He said the FCC needed to accelerate efforts to allocate spectrum for mobile broadband; remove regulatory barriers to infrastructure investment; and be "as nimble as the industry we oversee." Commissioner Pai said that the FCC had not made "any meaningful process reforms" over the past 12 months since his first speech calling for them. He conceded that some of those reforms would take congressional action. On the spectrum front, Commissioner Pai said, the FCC had achieved the first three steps he had outlined, adopt and revise rules for the AWS-4 and WCS spectrum bands and launch the incentive auction rulemaking.

The End: Barnes & Noble in Silicon Valley

As the chief executive of Barnes & Noble from 2010 to 2013, William Lynch might have had one of the most difficult jobs in the retail business. He made it harder still by running a large chain of bookstores as though it were a tech startup.

Burning through about a billion dollars, the company built its own e-reading devices, which were well-received, and then its own tablet computers, which weren’t. Barnes & Noble sold so few tablets over the holidays last year that it actually lost money during the one time retailers can count on profits. Barnes & Noble is a $6.8 billion company with 675 carefully selected locations in every state in the country. It also operates 686 college bookstores, which with the e-reader operations make up the company’s Nook Media unit. Sales at its regular stores declined almost 6 percent in the company’s 2013 fiscal year, to $4.6 billion. But because their margins are getting higher and their expenses lower, the bookstores still make money: Ninety-five percent are profitable.

AT&T Preps U-Verse Speed Boosts

AT&T is on track to complete U-verse upgrades that will boost downstream Internet speeds to 45 Mbps “in the next few months,” and get the telco pointed toward speeds of 75 Mbps and 100 Mbps “in the near future,” company SVP and CFO John Stephens said.

The coming speed increases are one result of Project VIP, a three-year- capex investment plan that will see AT&T expand its U-verse footprint by an additional 8.5 million customer locations, for a total penetration of 33 million homes. AT&T is also spending a good chunk of that cash to deploy its Long Term Evolution network, which should be “substantially complete” by the summer of 2014, according to AT&T Mobility president and CEO Ralph de la Vega. AT&T’s coming wireline speed upgrades could be welcome news to customers who need more than 24 Mbps, the downstream maximum speeds supported by AT&T’s current, fastest Internet tier, Max Turbo. Still, they don’t pose a threat to overtake the speeds offered by most major U.S. cable MSOs, which have already deployed DOCSIS 3.0 tier that advertise maximum downstream speeds of 100 Mbps or more.

Google Fiber Hits the Road

In an effort to drum up sales for its blend of broadband and TV services, Google Fiber is hitting the road in the Kansas City area. Google Fiber has created a portable version of its “Fiber Space” storefront, where prospective customers can get hand-on access to the ISPs 1 Gbps broadband and subscription TV offerings, ask the hard questions, and sign up for service.

European Commission and Penguin finally wrap things up in Apple e-book pricing case

Over six months after the European Commission reached an e-book pricing settlement with four publishers and Apple, the EC has approved a similar settlement with Penguin.

Penguin, which was trying to clear the decks for its upcoming merger with Random House, had offered its proposed settlement terms in April. They include, in particular, the termination of on-going agency agreements and the exclusion of certain most-favored-nation (MFN) clauses in Penguin’s agency agreements during the next five years. Penguin also offered to give retailers freedom to discount e-books, subject to certain conditions, during two years.

Benton

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