July 2013

How Will Apple Handle Verizon’s iPhone Shortfall?

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.

Huawei's Headaches Keep Growing

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.

NSA chief supports tech firms disclosing more on PRISM requests

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.

Study: Commerce Department App Privacy Proposal Confuses Consumers

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.

Sports Could Save the TV Business—or Destroy It

Without live sports, the TV business could fall apart; and because of live sports, the TV business could fall apart.

Confused? Ha, well, blame the bundle, perhaps the most successful and most misunderstood business model in entertainment.

Networks have recognized that sports has unique social currency in live viewing, and they've stormed the marketplace in the last few years, throwing egregious sums of money in exchange for exclusive deals. Those costs are trickling up. As Patrick Hruby explained, "big time sports are taking a minimum of $84.90" out of each family's budget even if they don't care about sports. This amounts to a "sport tax" on families forced to pay for something they don't watch. Cable companies sensing this backlash are starting to resist new sports networks. There is even chatter about what would happen if sports existed on a separate "tier" that untied the Gordian Knot of TV. Households will decide for themselves if the cost of their cable package is worth the price ($73 a month, on average). But before we cheer the death of the cable bundle and the end of the sport tax, consider what might die along with it.

5 Facts about ethnic and gender diversity in U.S. newsrooms

The renewed attention to the composition of newsrooms comes in the wake of the American Society of News Editors’ (ASNE) annual survey of workforce diversity, which showed that minorities and women are less represented in newspaper newsrooms than in society at large.

In recent years, progress on the diversity front has largely stalled. ASNE has counted professional full-time newspaper journalists since it first released the census in1978. This year, 978 out of 1,382 daily print newspapers responded, representing 71% of all U.S. dailies. In addition to the continued reduction in the size of the daily newspaper workforce in 2012, some of the key findings in the ASNE report relate to diversity in the newsroom.

  1. Overall, minority journalists accounted for 12% of the total newspaper newsroom workforce in 2012.
  2. Smaller newspapers are less likely to employ minority journalists.
  3. Women are often underrepresented in newspaper newsrooms.
  4. About one-third of newsroom managers are women.
  5. In the past two decades, there has been little overall change in the percentage of minorities in the newsroom.

Why the Surface RT Failed and the iPad Did Not

At first glance, to most consumers, the Apple iPad and Microsoft Surface RT tablet computer look somewhat similar. But Microsoft announced that it was taking a $900 million write-down to reflect unsold inventory of the Surface RT. That’s a stark comparison to Apple’s iPad, which continues to break record sales and has sold more than 100 million devices. So why is one still succeeding while the other has failed? I have a theory. Impatience.

When Steve Ballmer, Microsoft’s chief executive, announced the Surface tablets last year, he stood on stage and touted a number of new and exciting features to try to separate the company’s offerings from the iPad. Among the new gizmos were additional ports, a USB drive, a microSD memory card slot, the ability to use a pen with the Surface Pro and a built-in flip-up stand. Pens sold by Microsoft also work with the Surface RT. Just thinking about all those options is enough to make your head spin. Today’s consumers don’t want options. They are impatient. They want to tear their new shiny gadget from the box and immediately start using it. They don’t have time to think about SD cards or USB drives or pens or flip stands. The Surface RT didn’t allow that. Customers had to think about it.

A Tech Veteran Takes on the Skills Gap

Gary J. Beach has long been a close observer of technology, a frequent speaker on the conference circuit and a confidante of senior technology executives. He is a former publisher of Computerworld, Network World and CIO Magazine, where he is currently publisher emeritus. More than six years ago, Beach decided to begin studying in earnest a much-debated issue, and a subject of ritual complaint among technology executives — the apparently lagging skills of the American workforce. The result is his book, “The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America’s Future” (John Wiley & Sons). Much of the book is an illuminating, idiosyncratic history of education in America, dating back to 1941. “The skills gap is really an education gap, and it affects us all,” Beach explained. America cannot compete with China or India in churning out engineers. Instead, the United States can thrive by being more innovative. Stronger math and science skills are needed, he writes, but so are other skills, which he calls the “5C’s — critical thinking, communication, collaboration, creativity and confidence.”

Subcommittee on Communications and Technology
House Commerce Committee
Tuesday, July 23, 2013
10:30 am
http://energycommerce.house.gov/hearing/oversight-incentive-auction-impl...

Members will review the progress of implementing the spectrum incentive auctions the committee passed as part of the Middle Class Tax Relief and Job Creation Act.



FCC Launches Modernization of E-rate Program

The Federal Communications Commission initiated a review and modernization of the E-rate program built around three goals:

  1. 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.
  2. 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.
  3. 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]