July 2013

The Creepy, Long-Standing Practice of Undersea Cable Tapping

In addition to gaining access to web companies' servers and asking for phone metadata, we've now learned that both the U.S. and the U.K. spy agencies are tapping directly into the Internet's backbone -- the undersea fiber optic cables that shuttle online communications between countries and servers.

For some privacy activists, this process is even more worrisome than monitoring call metadata because it allows governments to make copies of everything that transverses these cables, if they wanted to. The British surveillance programs have fittingly sinister titles: "Mastering the Internet" and "Global Telecoms Exploitation," according to The Guardian. A subsidiary program for these operations -- Tempora -- sucks up around 21 million gigabytes per day and stores the data for a month. The data is shared with NSA, and there are reportedly 550 NSA and GCHQ analysts poring over the information they've gathered from at least 200 fiber optic cables so far.

FCC: Carriers Must Better Respond to Call Completion Complaints

In an enforcement advisory issued by the Federal Communications Commission on July 19, long-distance carriers who receive informal complaints about calls not going through to rural areas must investigate the problem and report on its resolution – even if the person making the complaint is not a customer of the long-distance carrier.

Going forward, the FCC said it may take enforcement action – including monetary fines — against providers that submit deficient responses to informal complaints. “For the past several years consumers have reported problems with long distance calls to rural areas completing successfully,” the FCC wrote in the notice. “Based on our experience in investigating this issue, rural call completion problems often arise from the manner in which originating long distance providers route their calls.” When calls are not completed, people other than the caller may be harmed, the FCC noted. “Businesses lose orders, medical professionals are unable to reach patients, and family members cannot check on loved ones,” the advisory states.

Shaping the Digital Age: A Progressive Broadband Agenda

Broadband construction and development requires large quantities of resources, and its existence generates substantial innovation and economic growth. What is the public sector’s best policy approach to this burgeoning phenomenon? Views differ across the political spectrum. The conservative vision of policy regarding the Internet is to leave it alone. Progressives find that view wanting, but what is their corresponding vision? The answer is unclear. To some advocates, it involves an aggressive regulatory stance, whether in the form of “net neutrality,” “common carriage,” limitations on the sale of spectrum, or other policies that limit the latitude and operations of the companies that build and manage broadband networks. What should the progressive agenda be? Are our choices either to embrace this aggressive regulatory agenda or to accede to conservative laissez-faire?

This essay argues that there is a third, and far more promising, option for such a progressive broadband policy agenda. It balances respect for the private investment that has built the nation’s broadband infrastructure with the need to realize the Internet’s full promise as a form of social infrastructure and a tool for individual empowerment. It turns away from problems we may reasonably fear but that simply do not exist—most importantly, the idea that the provision of broadband services is dominated by an anti-competitive “duopoly” that stifles the broad dissemination of content. And it forthrightly addresses new ones—such as the need to create mechanisms to develop broadband as a ubiquitous social asset, to create institutions that do not second-guess its unpredictable and burgeoning growth, and to protect consumer privacy and users’ right to control the use of their personal information.

Google Serves 25 Percent of North American Internet Traffic

Everyone knows Google is big. But the truth is that it’s huge. On an average day, Google accounts for about 25 percent of all consumer internet traffic running through North American ISPs.

That’s a far larger slice of than previously thought, and it means that with so many consumer devices connecting to Google each day, it’s bigger than Facebook, Netflix, and Instagram combined. It also explains why Google is building data centers as fast as it possibly can. Three years ago, the company’s services accounted for about 6 percent of the internet’s traffic. “What’s really interesting is, over just the past year, how pervasive Google has become, not just in Google data centers, but throughout the North American internet,” says Craig Labovitz, founder of Deepfield, the internet monitoring company that crunched the data. His probes show that more than 62 percent of the smartphones, laptops, video streamers, and other devices that tap into the internet from throughout North America connect to Google at least once a day. Labovitz calls Google’s traffic “astounding.” The lion’s share of it comes from YouTube. But Google traffic involving search, analytics, web apps, and advertising is far from insignificant.

Subcommittee on Communications, Technology, and the Internet
Senate Commerce Committee
Thursday, July 25, 2013
10 am



Senate Commerce Committee
Thursday, July 25, 2013
2:30 p.m.

The hearing will explore the public-private partnership that the National Institute of Standards and Technology (NIST) is convening to allow private sector companies to promote cybersecurity standards and best practices to protect the nation’s most critical systems. The hearing will also explore proposals to improve cybersecurity research and development, workforce training and education, and public awareness.



July 22, 2013 (Court Renews Authority to Collect Telephony Metadata)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, JULY 22, 2013

This week’s agenda http://benton.org/calendar/2013-07-21--P1W/


GOVERNMENT & COMMUNICATIONS
   Foreign Intelligence Surveillance Court Renews Authority to Collect Telephony Metadata - press release
   NSA chief supports tech firms disclosing more on PRISM requests
   NSA revelations reframe digital life for some [links to web]
   In Major Ruling, Court Orders New York Times Reporter to Testify
   White House considering cybersecurity incentives

NEWS FROM THE FCC
   FCC Launches Modernization of E-rate Program - press release
   Open Meeting Presentation on LEAD Recommendations and Digital Learning - speech
   How the FCC Could Revolutionize Education and Put Computers in More Students’ Hands - analysis
   FCC Adopts 15th Report on the Status of Competition in the Market for the Delivery of Video Programming - press release
   Allegations of Anticompetitive Behavior in Satellite Industry - public notice
   FCC Commemorates 23rd Anniversary of the Americans with Disabilities Act
   FCC Raises Standards Governing Phone Relay Service for People with Speech Disabilities - press release
   FCC Announces Tentative Agenda for August 2013 Open Meeting - press release

SPECTRUM/WIRELESS
   Another Week, Another Wireless Deal – Part II - analysis
   Drawing a Bead on Growth at Verizon, AT&T
   New cellphone upgrade offers are far from free - analysis [links to web]
   Padden: 120 MHz Is Readily Recoverable If FCC Gets Auction Right
   Rural Legislators Seek FCC Protection of LPTV, Translators [links to web]
   Oh, Canada: Verizon Wireless Eyes Possible Northward Expansion [links to web]
   How Will Apple Handle Verizon’s iPhone Shortfall? - analysis

INTERNET/BROADBAND
   USDA Announces Funding to Improve Rural Broadband in Texas, Iowa, and North Dakota - press release [links to web]
   Colorado Legislature Wants EAGLE-Net Info
   White House considering cybersecurity incentives

TELEVISION
   FCC Signals It Would Like Swift Resolution of CBS/TWC Dispute [links to web]
   CBS Has a Weapon It Won’t Use in Its Time Warner Cable Fight
   Aereo as Bargaining Chip in Broadcast Fees Battle
   TV Foresees Its Future. Netflix Is There. - analysis
   Netflix Users Favor TV Over Movie Content
   Rural Legislators Seek FCC Protection of LPTV, Translators [links to web]
   Sports Could Save the TV Business—or Destroy It [links to web]

PRIVACY
   Study: Commerce Department App Privacy Proposal Confuses Consumers
   NSA revelations reframe digital life for some [links to web]

TELECOM
   Sandy-ravaged regions will never get landlines back

HEALTH
   Federal Health IT Strategic Plan – Progress Report - press release [links to web]

STORIES FROM ABROAD
   'Prolific Partner': German Intelligence Used NSA Spy Program
   Brussels open to reworking Kroes’ telecoms shake-up
   Vivendi Nears Two Transformative Deals [links to web]
   Huawei's Headaches Keep Growing

MORE ONLINE
   5 Facts about ethnic and gender diversity in U.S. newsrooms - analysis [links to web]
   Why the Surface RT Failed and the iPad Did Not - analysis [links to web]
   A Tech Veteran Takes on the Skills Gap [links to web]

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GOVERNMENT & COMMUNICATIONS

FISA RENEWS COLLECTION OF TELEPHONE METADATA
[SOURCE: Office of the Director of National Intelligence, AUTHOR: Press release]
As indicated by a previously classified court order disclosed by the media on June 5, 2013, the Foreign Intelligence Surveillance Court authorization requiring the production of certain telephony metadata under the “business records” provision of the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. Section 1861, expires on July 19, 2013. On June 6, 2013, the Director of National Intelligence declassified certain information about this telephony metadata collection program in order to provide the public with a more thorough and balanced understanding of the program. Consistent with his prior declassification decision and in light of the significant and continuing public interest in the telephony metadata collection program, the DNI has decided to declassify and disclose publicly that the Government filed an application with the Foreign Intelligence Surveillance Court seeking renewal of the authority to collect telephony metadata in bulk, and that the Court renewed that authority. The Administration is undertaking a careful and thorough review of whether and to what extent additional information or documents pertaining to this program may be declassified, consistent with the protection of national security.
benton.org/node/156210 | Office of the Director of National Intelligence | WSJ | The Hill
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SUPPORT FOR PRISM REQUEST DISCLOSURE
[SOURCE: Los Angeles Times, AUTHOR: Jessica Guynn, Ken Dilanian]
Gen. Keith Alexander, director of the National Security Agency, said he supports allowing technology companies to disclose more about their cooperation with national intelligence authorities. Gen Alexander made the comments during at a security forum at the Aspen Institute. "We just want to make sure that we do it right, that we don't impact anything with the FBI," Alexander said. More than 60 technology companies including Apple, Google and Facebook and other organizations Thursday sent a letter to the Obama administration, national intelligence authorities and Congress urging more transparency on national security requests for user data. The companies are asking permission to report on the number and scope of user data requests. The letter also asked Congress to pass legislation that would let companies disclose user data requests without having to first seek permission from the Foreign Intelligence Surveillance Court, which oversees the requests.
benton.org/node/156182 | Los Angeles Times
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RISEN MUST TESTIFY
[SOURCE: New York Times, AUTHOR: Charlie Savage]
In a major decision about press freedoms, a divided federal appeals court ruled that James Risen, an author and a reporter for The New York Times, must testify in the criminal trial of a former Central Intelligence Agency official charged with providing him with classified information. Two members of a three-judge panel for the United States Court of Appeals for the Fourth Circuit, in Richmond (VA) — the court whose decisions cover the Pentagon and the C.I.A. — ruled that the First Amendment provides no protection to reporters who receive unauthorized leaks from being forced to testify against the people suspected of leaking to them. “Clearly, Risen’s direct, firsthand account of the criminal conduct indicted by the grand jury cannot be obtained by alternative means, as Risen is without dispute the only witness who can offer this critical testimony,” wrote Chief Judge William Byrd Traxler Jr., who was joined by Judge Albert Diaz. Risen has vowed to appeal any loss at the appeals court to the Supreme Court, and to go to prison rather than testify about his sources.
benton.org/node/156190 | New York Times
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CYBERSECURITY INCENTIVES
[SOURCE: Politico, AUTHOR: Tony Romm]
The Obama Administration has weighed whether to back tax breaks, insurance perks and other legal benefits for businesses that make meaningful improvements to their digital defenses. Those incentives — considered in May and not yet final — would aim to entice power plants, water systems and other forms of critical infrastructure to adopt the voluntary cybersecurity standards that the government and industry are drafting in response to President Barack Obama’s executive order. The Department of Homeland Security first raised the ideas in a May 21 presentation, labeled “preliminary,” and an Obama Administration official cautioned that the presentation is a “snapshot in time” — and that it only “reflects some preliminary analysis.” Still, businesses could find much to like in the proposed perks. They include limited protections from legal liability, for example, and new tax incentives for companies — presumably for demonstrating good cyber behavior. But many of the incentives suggested in the presentation could require action by Congress, which failed repeatedly to approve any cybersecurity legislation last year.
benton.org/node/156220 | Politico
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NEWS FROM THE FCC

FCC LAUNCHES MODERNIZATION OF E-RATE PROGRAM
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission initiated a review and modernization of the E-rate program built around three goals:
Increased Broadband Capacity: To ensure schools and libraries have affordable access to 21st century broadband, the FCC seeks comment on a range of proposals to focus funds on supporting high-capacity broadband, including: simplifying rules on fiber deployment to lower barriers to new construction; prioritizing funding for new fiber deployments that will drive higher speeds and long-term efficiency; phasing out support for services like paging and directory assistance; ensuring that schools and libraries can access funding for modern high-speed Wi-Fi networks in classrooms and library buildings; and allocating funding on a simplified, per-student basis.
Cost-effective Purchasing: To maximize the cost-effectiveness of E-rate purchases, the FCC seeks comment on how to increase consortium purchasing to drive down prices; how to create other bulk buying opportunities; how to increase transparency of prices and spending; how to improve the competitive bidding processes; and a pilot program to incentivize and test more cost-effective purchasing practices.
Streamlined Program Administration: To streamline the administration of the E-rate program, the FCC seeks comment on speeding the review of E-rate applications; providing a streamlined electronic filing system and requiring electronic filing of documents; increasing the transparency of USAC’s processes; simplifying the eligible services list and finding more efficient ways to disburse E-rate funds; reducing unused E-rate funding; and streamlining the E-rate appeals process.
The proposal also seeks comment on a variety of other issues, including the applicability of the Children’s Internet Protection Act (CIPA) to devices brought into schools and libraries and to devices provided by schools and libraries for at-home use; adjusting to changes in the National School Lunch Program that affect E-rate; additional measures for protecting the program from waste, fraud and abuse; wireless community hotspots; and the adoption of E-rate program procedures in the event of a national emergency or natural disaster.
The proceeding marks the first comprehensive update of the E-rate program since 1997.
[WC Docket No. 13-184]
benton.org/node/156162 | Federal Communications Commission | Chairwoman Clyburn | Commissioner Rosenworcel | Commissioner Pai | President Obama | Education Secretary Duncan | The Hill | Statements | Fact Sheet
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LEAD COMMISSION PRESENTATION
[SOURCE: Federal Communications Commission, AUTHOR: ]
During the Federal Communications Commission’s July 19 meeting, Kenmore Middle School Principal Dr. John Word joined representatives from the bipartisan LEAD Commission – former U.S. Department of Education Secretary Margaret Spellings and Founder and CEO of Common Sense Media Jim Steyer – to deliver presentations on the need to wire U.S. schools for digital education. LEAD Commission released a five-point blueprint, outlining specific actions to accelerate the expansion of digital learning in K-12 Education in the United States.
Solve our infrastructure challenge by wiring schools with high-speed broadband;
Build a national initiative to put learning devices in the hands of all students by 2020;
Accelerate adoption of digital curriculum and encourage continued innovation;
Embrace and encourage model schools; and
Invest in human capital to train our teachers.
The LEAD Commission co-chair said that the E-Rate program should be updated to reflect the realities and needs of kids and schools today. Several key goals are important to this rulemaking process:
The program should be aligned with today’s technology, focusing on high-speed bandwidth;
It should focus on supporting next generation models such as online and blended learning;
The program should be simplified to make it easier for school districts to access E-Rate funds;
It should be updated to align with current reform efforts in education; and
It should better connect to other technology efforts at the state and local level so that we leverage other efforts and build a cohesive system.
benton.org/node/156160 | Federal Communications Commission | Dr John Word | Kenmore Middle School
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HOW THE FCC COULD REVOLUTIONIZE EDUCATION AND PUT COMPUTERS IN MORE STUDENTS' HANDS
[SOURCE: National Journal, AUTHOR: Ronald Brownstein]
On July 19, the Federal Communications Commission will start restructuring the "E-rate" under which Washington provides funds to help schools connect to the Internet. This seemingly obscure decision could trigger an education revolution by enormously accelerating the deployment of tablets and other digital tools into classrooms. Even lawyers' eyes may glaze over when confronted with the gray columns in the "Notice of Proposed Rulemaking" the commission will unveil on Friday, but the document will provoke a kaleidoscope of change for the families of America's 76 million primary and secondary students—and sooner than many might imagine. "This is a once-in-a-generation opportunity to allow our education system to essentially leapfrog some of our competitor nations," says James Shelton, the acting Education Department deputy secretary. The generational opportunity that Shelton and other advocates envision centers on the use of digital technology to create a more personalized learning environment. Reformers project a reimagined classroom in which all students are equipped with tablets or laptops that allow them to work at their own pace on lessons that adjust to their progress; use video links to take courses, such as advanced science lessons, only available at other schools; and receive real-time feedback from teachers who obtain reports on their performance through online connections with the students' devices. Constant digital updates would replace bulky out-of-date textbooks lugged in spine-crushing backpacks. If the FCC brings mass broadband to the classroom by expanding the E-rate program, it will create a vast new market for everything connected to digital education. That will likely spur a virtuous cycle of invention and competition that generates new answers to all of these challenges from educators, parents, and private companies alike. To promote new digital breakthroughs, the FCC for years has mostly bet on a strategy of deregulation. But to propel schools into the Information Age, government intervention looks like the indispensable first step toward unlocking private innovation.
benton.org/node/156158 | National Journal
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FCC ADOPTS 15TH REPORT ON THE STATUS OF COMPETITION IN THE MARKET FOR THE DELIVERY OF VIDEO PROGRAMMING
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission (FCC) today adopted its 15th Report to Congress on the status of competition in the market for the delivery of video programming. The Report, which covers 2011 and 2012, measures the market’s progress toward increasing competition and diversity in multichannel video programming distribution, increasing the availability of satellite delivered programming, and spurring the development of communications technologies. The trends found since the 14th Report show continued deployment of digital technology, sustained consumer demand for access to video programming anywhere and anytime, an increased number of households with access to four multichannel video programming distributors (MVPDs) as telephone companies extend their video systems, and an increased number of online video providers who are entering the market as well as developing original content. Specifically, the Commission found that, among other things:
The number of MVPD subscribers grew from 100.8 million to 101.0 million households between year-end 2010 and June 2012. During this period, cable’s share of MVPD subscribers fell from 59.3 percent of all MVPD video subscribers at the end of 2011 to 55.7 percent at the end of June 2012.
Between year-end 2010 and June 2012, Direct Broadcast Satellite (DBS) MVPDs and telephone MVPDs gained both video subscribers and market share.
Since the last report, the number of households relying exclusively on over-the-air broadcast service has remained steady at approximately 11.1 million households, although the percentage of all households they represent increased slightly from 9.6 percent in 2011 to 9.7 percent in 2012.
While the online video distributor (OVD) industry is still evolving, OVDs continue to expand the amount of video content available to consumers through original programming and new licensing agreements with traditional content creators.
Viewing of OVDs’ video programming on television sets is becoming increasingly prevalent. For example, one source, SNL Kagan, estimated by the end of 2012 the number of Internet-connected television households (i.e., accessed via an Internet-enabled game console, OVD set-top box, television set, or Blu-ray player) would have grown to 41.6 million, or 35.4 percent of all television households.
benton.org/node/156156 | Federal Communications Commission | Chairwoman Clyburn | Commissioner Rosenworcel | Commissioner Pai
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ANTICOMPETITVE BEHAVIOR IN SATELLITE INDUSTRY
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Federal Communications Commission seeks comment on whether, and, if so, to what extent, incumbent satellite operators are inhibiting competition in the market for satellite services, particularly in the fixed-satellite services (FSS) arena. Specifically, the Commission seeks comment on whether FSS operators are warehousing satellite orbital locations and frequency assignments, and preventing competitors from purchasing capacity on incumbent-owned satellites. Comments are due on or before August 19, 2013, and reply comments are due on or before September 17, 2013.
[IB DOCKET NO. 13–147; FCC 12–79]
benton.org/node/156154 | Federal Communications Commission
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COMMEMORATING AMERICANS WITH DISABILITIES ACT
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
In recognition of the 23rd anniversary of the Americans with Disabilities Act (ADA), the Federal Communications Commission highlighted milestones in its efforts to bring the accessibility provisions of the Communications Act into the digital age by implementing the Twenty-First Century Communications and Video Accessibility Act (CVAA). Signed into law by President Obama on October 8, 2010, the CVAA ensures that people with disabilities have equal access to Internet communication and video programming technologies of the 21st century.
benton.org/node/156152 | Federal Communications Commission | see presentation
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FCC RAISES STANDARDS GOVERNING PHONE RELAY SERVICE FOR PEOPLE WITH SPEECH DISABILITIES
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission raised the standards for providers of Speech-to-Speech (STS) Relay Service in order to improve the experience for persons with a speech disability who need the service in order to make telephone calls using their own voice or an assistive voice device. The order amends certain mandatory minimum standards to improve Speech-to-Speech TRS, including:
Increasing the time a Communications Assistant (CA) must stay with a call. For each STS call lasting for 20 minutes or longer, an STS CA must stay with the call for a minimum of 20 minutes before transferring the call to another CA. This increases the current minimum period before such a transfer may be made from 15 to 20 minutes. Establishing effective communication between an STS user and a CA can require a period of adjustment. Extending the length of time a CA must stay with a call will improve the effectiveness and efficiency of the communications by reducing the number of instances an STS user would need to re-establish communication with another CA.
Muting option. Providers must offer STS users the option to mute their voices during an STS call. Because some users are uncomfortable with having their voices heard by the other party to the call, this function will give users the option to have the called party hear only the CA’s voice.
Dialing 711 to initiate STS calls. STS callers who dial 711 (the TRS dialing code) must have the same ease of reaching an STS CA as users of other types of TRS.
benton.org/node/156150 | Federal Communications Commission | Chairwoman Clyburn | Commissioner Rosenworcel | Commissioner Pai
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FCC ANNOUNCES TENTATIVE AGENDA FOR AUGUST OPEN MEETING
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Federal Communications Commission Chairwoman Mignon Clyburn announced that the following items will be on the tentative agenda for the next open meeting scheduled for Friday, August 9, 2013:
Revision of Part 15 of the Commission’s Rules Regarding Operation in the 57-64 GHz Band: The FCC will consider a Report and Order addressing technical requirements applicable to unlicensed services in the 57-64 GHz frequency band to provide additional competition in the broadband market, improve efficient delivery of broadband services in residences and businesses, and facilitate backhaul transport to support the deployment of 4th Generation (4G) and other wireless services.
Comprehensive Review of Licensing and Operating Rules for Satellite Services: The FCC will consider a Report and Order that streamlines Part 25 of the Commission’s rules to facilitate greater investment and innovation in the satellite industry and promote more rapid deployment of new satellite services to the public.
Status of the Broadcast Incentive Auction: The Incentive Auction Task Force will present the latest update on progress towards the Commission’s 2014 television broadcast incentive auction.
benton.org/node/156208 | Federal Communications Commission
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SPECTRUM/WIRELESS

AT&T AND LEAP WIRELESS
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
[Commentary] Last Friday, perhaps while you were reading our piece Introducing the New Sprint, AT&T announced that it will acquire Leap Wireless, and its Cricket brands, for $1.2 billion. And we can’t shake the irony that when we first introduced SoftBank’s plan to acquire a majority stake of Sprint it came on the heels of the news that T-Mobile and MetroPCS would combine. And, of course, this new AT&T-Leap deal is AT&T’s first sizable acquisition since the Justice Department squelched the company’s $39 billion deal to buy the fourth-largest U.S. wireless carrier, T-Mobile USA, in 2011. (Not that we want to call AT&T’s $780 million dollar purchase of Alltel wireless “puny.”) What’s going on in wireless?
http://benton.org/node/156128
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WIRELESS COMPETITION
[SOURCE: Wall Street Journal, AUTHOR: Miriam Gottfried]
Verizon Wireless and AT&T have long ruled the U.S. wireless industry, adding subscribers and expanding margins as weaker rivals foundered. Now, it seems the good old days are gone. Competition is heating up as Sprint and T-Mobile US, fresh off transformative deals, are investing in their networks and pushing new strategies. Analysts expect both to start adding subscribers. With overall growth in the industry slowing, any gains may come at the expense of Verizon Wireless and AT&T. So far, there is scant evidence of a subscriber-growth slowdown at the two giants. Verizon Communications, which co-owns Verizon Wireless with Vodafone Group, said that it added 941,000 postpaid connections in the second quarter, of which 472,000 were phones. AT&T, due to report second-quarter earnings Tuesday, said on June 6 that it expects postpaid, net wireless additions of about 500,000, including phones and other devices. But the upstarts' efforts are only getting under way. And carrier margins may already be showing some strain.
benton.org/node/156226 | Wall Street Journal
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INCENTIVE AUCTION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission’s biggest challenge is to ensure that broadcasters can make enough out of an incentive auction to want to give up spectrum. If the commission doesn't get that part right, the current debate over band plans and what wireless carriers can bid for spectrum will be moot. That is the message from Expanding Opportunities for Broadcasters Coalition executive director Preston Padden, according to a copy of his prepared testimony for an auction oversight hearing in the House Communications Subcommittee slated for July 23. According to Padden, his coalition comprises 70-plus stations willing to offer up spectrum under the right conditions -- under the auction rules, those bidders do not have to identify themselves. Padden argues that with sufficient incentive, the FCC can reach in initial target of 120 MHz of spectrum. Without it, "the auction will fail at its inception and there will be no need to debate other issues such as band plans and wireless carrier eligibility," he says. Padden says the FCC should not try to limit the payout to broadcasters -- by "scoring" stations based on population coverage or other factors. He also warns the FCC that broadcasters need more information about the auction design.
benton.org/node/156198 | Broadcasting&Cable
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APPLE AND VERIZON
[SOURCE: Wall Street Journal, AUTHOR: John Paczkowski]
Verizon has an iPhone problem and it’s not going away. Verizon said that more than half of the 7.5 million smartphones it activated during the period were iPhones. That’s a big number and good news for the carrier. But sadly it’s not nearly good enough to significantly pare down its ballooning iPhone purchase commitment to Apple. Verizon must sell $23.5 billion worth of iPhones this year to satisfy the agreement it made with Apple in 2010, according to an analysis of SEC filings by former Sanford C. Bernstein & Co. analyst Craig Moffett. And at the rate it’s currently going, it has very little chance of doing that. To date, Verizon’s reported iPhone sales have lagged so far behind its commitments that Moffett figures the company is likely headed toward a shortfall of more than $12 billion. And that’s a problem not just for Verizon, but for Apple as well. Obviously, the company would rather not advertise that a high-profile carrier like Verizon has fallen so far short of its purchase obligations for one of its flagship products. But there’s far too much money at stake here for it to simply grant Verizon amnesty. It’s quite the conundrum for Apple — more so now that its shareholders and other carrier partners are aware of it. Apple’s negotiations with Verizon will likely be materially different simply because Verizon’s iPhone shortfall is no longer a secret.
benton.org/node/156186 | Wall Street Journal
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INTERNET/BROADBAND

EAGLE-NET INVESTIGATION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
EAGLE-Net Alliance continues to come under scrutiny over its government grant to provide broadband to anchor institutions and allegations it is overbuilding existing service. The Colorado State General Assembly's Legislative Audit Committee has formally asked EAGLE-Net Alliance to provide records for the committee's review and to agree to send a representative to an Aug. 27 meeting with the committee. A letter from both Democratic and Republican members of the Committee asked for the records by Aug. 15 and suggested EAGLE-Net has been hard to pin down on a date for a meeting.
benton.org/node/156200 | Broadcasting&Cable
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TELEVISION

CBS NOT SUGGESTING ANTENNAS
[SOURCE: Wall Street Journal, AUTHOR: Peter Kafka]
CBS is telling its viewers that if it goes dark in Time Warner Cable markets like New York and Los Angeles, they should go get a subscription with another pay-TV company. But here we should note one option CBS isn’t promoting: Using an old-fashioned antenna to get the network’s shows, over the air, without paying anyone for them. That’s perfectly legal, of course, and lots of people still watch their TV that way. But presumably CBS doesn’t want to play up the notion that you can watch their shows for free — because it is trying to get pay-TV distributors to pay them a bunch of money in “retransmission fees” for those same shows. So if you’re not going to watch “Big Bang Theory” on Time Warner Cable this summer, CBS would much rather you watch it via another pay-TV company. And it’s just possible that if it comes down to watching it for free versus not watching it at all, the company would rather you just tuned out.
benton.org/node/156202 | Wall Street Journal
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AEREO AND RTRANSMISSION
[SOURCE: New York Times, AUTHOR: Brian Stelter]
As another television programming blackout looms, this time because of a high-stakes negotiation between the CBS Corporation and Time Warner Cable, there is a new wrinkle, courtesy of Aereo, the start-up that streams broadcast TV via the Internet. The contract dispute between CBS and Time Warner Cable is the first to unfold in the New York metropolitan area since Aereo came to market there. CBS and Time Warner warned that if the dispute was not resolved by July 24, CBS could be taken away from three million of Time Warner Cable’s 12 million subscribers. Enter Aereo. The service, backed by Barry Diller and a number of other venture capitalists, uses giant arrays of antennas to pick up freely available television signals and stream them to the phones, computers and other screens of paying subscribers. By relying on the antennas, Aereo does not pay the kinds of retransmission fees that distributors like Time Warner Cable pay to broadcasters like CBS — an approach that Aereo says is legal, but that the broadcasters say is not. Analysts have theorized that distributors could exploit Aereo, or a service like it, to avoid paying increasingly steep retransmission fees. Such fees are at the heart of the current fight with CBS.
benton.org/node/156228 | New York Times
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NEXTFLIX IS THERE
[SOURCE: New York Times, AUTHOR: David Carr]
[Commentary] Apple and Google were back making waves in the television world, with reports suggesting they were renewing efforts to use technology to transform the box in your living room. But Netflix already has. Netflix knows a little about transformation. It’s worth remembering that it managed to go from the largest user of the Postal Service to the largest source of download traffic on the Web in the span of months, not years. After a big stumble on pricing in 2011, Netflix recovered and then some, using its expertise in technology and algorithms to accrue over 36 million users worldwide. But few would have guessed that Netflix’s software expertise would extend to entertainment produced by top-flight actors, directors and writers. Beginning this year, Netflix streamed four original series — “House of Cards,” “Hemlock Grove,” “Arrested Development” and “Orange Is the New Black.” The shows earned generally good notices, kicked up a great deal of chatter, and, drum roll here, were nominated for 14 Emmys. It was the first time an Internet-only service earned a seat at the big-boy table in television.
benton.org/node/156232 | New York Times
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TV VS MOVIE CONTENT
[SOURCE: MediaPost, AUTHOR: David Goetzl]
Networks looking to capture more dollars from Netflix and Amazon Prime appear to have a lot of runway ahead, according to new research. GfK data shows Netflix users preferred TV content to movies by a 77% to 23% margin. Amazon Prime had a greater spread at 79% to 21%. Since Hulu is loaded with recently aired TV episodes, it’s not surprising TV dominated there at 96%. Overall for the subscription video-on-demand (SVOD) services, TV dominated by about 81% to 19%. The research looked at some 2,300 viewing segments and the methodology had more than 500 subscribers to one or more of the services detailing their viewing habits once a day for a one-week period.
benton.org/node/156230 | MediaPost
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PRIVACY

APP PRIVACY PROPOSAL
[SOURCE: MediaPost, AUTHOR: Wendy Davis]
A privacy proposal calling for mobile app developers to provide consumers with so-called “short-form notice,” which explains data collection practices in one or two words, seems to be gaining traction at the Commerce Department. But Carnegie Mellon University researchers say in a new paper, published this week, that the proposal in its current form could confuse consumers. The Commerce Department's short-form notice proposal, which is still in draft form, calls for developers to describe the information collected in a single word, or very short phrase -- like “biometrics,” “health information,” “location,” and “browser history.” The proposal also says developers should use short phrases to describe the third-parties that will receive the data -- like “ad networks” or “social networks.” But Carnegie Mellon researchers say the proposed terminology is ambiguous.
benton.org/node/156180 | MediaPost
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TELECOM

STORM-RAVAGED REGIONS NOT GETTING LANDLINES BACK
[SOURCE: CNNMoney, AUTHOR: Katie Lobosco]
Last fall, Superstorm Sandy wiped out landline telephone service for thousands of people. Many of them are never getting those landlines back. Verizon is still in the process of repairing the telephone infrastructure that was damaged by the massive storm in late October. But in many cases, the telecom giant is replacing the old copper-based systems with new technologies -- including wireless. Those changes are coming for the industry as a whole, whether or not telecom giants like Verizon and AT&T want them to. And they were coming long before Sandy struck. The parts needed to repair the old landline technology are hard to find, sending companies to some odd places to purchase equipment, such as eBay. "It can't be that our critical infrastructure is relying on eBay for replacement parts," said Bob Quinn, head of AT&T's regulatory affairs.
benton.org/node/156218 | CNNMoney
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STORIES FROM ABROAD

GERMAN INTELLIGENCE USED NSA PROGRAM
[SOURCE: Spiegel, AUTHOR: ]
Angela Merkel and her ministers claim they first learned about the US government's comprehensive spying programs from press reports. But Spiegel has learned that German intelligence services themselves use one of the NSA's most valuable tools. Germany's foreign intelligence service, the BND, and its domestic intelligence agency, the Federal Office for the Protection of the Constitution (BfV), used a spying program of the American National Security Agency (NSA). This is evident in secret documents from the US intelligence service that have been seen by SPIEGEL journalists. The documents show that the Office for the Protection of the Constitution was equipped with a program called XKeyScore intended to "expand their ability to support NSA as we jointly prosecute CT (counterterrorism) targets." The BND is tasked with instructing the domestic intelligence agency on how to use the program, the documents say.
benton.org/node/156216 | Spiegel
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EUROPEAN WIRELESS REFORM
[SOURCE: Financial Times, AUTHOR: Daniel Thomas, James Fontanella-Khan]
Brussels has opened the door to reworking part of its ambitious plans to shake-up the European telecoms market to bring down costs for consumers who use phones outside their home market. The move follows a realisation within Brussels that part of the draft proposals dealing with wholesale costs could undermine the profitability of mobile operators in their own markets. While the headline reforms for lowering so-called roaming costs for consumers will remain, European Commission officials have conceded that amendments were likely to be required and have agreed to listen to industry complaints. Chief executives of some of Europe’s biggest telecoms groups will meet Neelie Kroes, digital commissioner for the EU, to discuss the implications of the draft package.
benton.org/node/156214 | Financial Times | FT – call to Kroes
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HUAWEI’S HEADACHES
[SOURCE: Wall Street Journal, AUTHOR: Juro Osawa]
The headaches for Huawei Technologies keep growing, fresh after the U.K. government said that it would conduct a review of the Chinese company's cybersecurity arrangements and a former U.S. intelligence official reportedly accused it of spying for Beijing. Since last year, Huawei, the world's second-largest telecom equipment vendor after Sweden's Ericsson, has been under the spotlight because of questions raised in the U.S., Australia and the U.K. about potential national security risks based on concerns that the Shenzhen-based company might have deep ties to the Chinese government. The caution and suspicion toward Huawei comes amid China's growing importance and changing role in global technology industries, from being a manufacturer of simple goods to a provider of key technology.
benton.org/node/156184 | Wall Street Journal | IDG News Service
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TV Foresees Its Future. Netflix Is There.

[Commentary] Apple and Google were back making waves in the television world, with reports suggesting they were renewing efforts to use technology to transform the box in your living room. But Netflix already has.

Netflix knows a little about transformation. It’s worth remembering that it managed to go from the largest user of the Postal Service to the largest source of download traffic on the Web in the span of months, not years. After a big stumble on pricing in 2011, Netflix recovered and then some, using its expertise in technology and algorithms to accrue over 36 million users worldwide. But few would have guessed that Netflix’s software expertise would extend to entertainment produced by top-flight actors, directors and writers. Beginning this year, Netflix streamed four original series — “House of Cards,” “Hemlock Grove,” “Arrested Development” and “Orange Is the New Black.” The shows earned generally good notices, kicked up a great deal of chatter, and, drum roll here, were nominated for 14 Emmys. It was the first time an Internet-only service earned a seat at the big-boy table in television.

Netflix Users Favor TV Over Movie Content

Networks looking to capture more dollars from Netflix and Amazon Prime appear to have a lot of runway ahead, according to new research. GfK data shows Netflix users preferred TV content to movies by a 77% to 23% margin. Amazon Prime had a greater spread at 79% to 21%. Since Hulu is loaded with recently aired TV episodes, it’s not surprising TV dominated there at 96%. Overall for the subscription video-on-demand (SVOD) services, TV dominated by about 81% to 19%. The research looked at some 2,300 viewing segments and the methodology had more than 500 subscribers to one or more of the services detailing their viewing habits once a day for a one-week period.

Aereo as Bargaining Chip in Broadcast Fees Battle

As another television programming blackout looms, this time because of a high-stakes negotiation between the CBS Corporation and Time Warner Cable, there is a new wrinkle, courtesy of Aereo, the start-up that streams broadcast TV via the Internet.

The contract dispute between CBS and Time Warner Cable is the first to unfold in the New York metropolitan area since Aereo came to market there. CBS and Time Warner warned that if the dispute was not resolved by July 24, CBS could be taken away from three million of Time Warner Cable’s 12 million subscribers. Enter Aereo. The service, backed by Barry Diller and a number of other venture capitalists, uses giant arrays of antennas to pick up freely available television signals and stream them to the phones, computers and other screens of paying subscribers. By relying on the antennas, Aereo does not pay the kinds of retransmission fees that distributors like Time Warner Cable pay to broadcasters like CBS — an approach that Aereo says is legal, but that the broadcasters say is not. Analysts have theorized that distributors could exploit Aereo, or a service like it, to avoid paying increasingly steep retransmission fees. Such fees are at the heart of the current fight with CBS.