July 2013

Ex-CIA director says Huawei spied for China

A former top U.S. intelligence official has accused Chinese telecom Huawei of providing sensitive information about foreign communication systems to Beijing. Former Central Intelligence Agency chief Michael Hayden said that at a minimum, Huawei had provided Chinese officials with "intimate and extensive knowledge of the foreign telecommunications systems."

The Fading Voice of Liberty

[Commentary] The new oversight structure Congress set up in 1995 to manage international broadcasting from the Voice of America, Radio Free Europe and Radio Liberty —the Broadcasting Board of Governors— is deeply flawed.

The result has been management chaos and paralysis, and decisions about broadcasting that wasted money and, worse, squandered crucial opportunities to reach both friends and enemies abroad at a time of great international turmoil. Aware of many of these problems, Congress is again seeking to reform international broadcasting. Putting the Broadcasting Board of Governors out of business should be a top priority. Incremental changes will never solve the BBG's built-in problems and contradictions. Starting over means eliminating the board, and putting all U.S. international broadcasting into a single nonfederal organization under professional management. The objective is a single organization, with professional leadership and management, and strong connective tissue to America's strategic center—logically the National Security Council—with strong input from Congress. There must also be a sturdy firewall against political interference in U.S. international broadcasting's journalistic mission.

[Wimbush served on the Broadcasting Board of Governors from 2010-12 and was director of Radio Liberty from 1987-93.]

New Jersey Supreme Court Restricts Police Searches of Phone Data

Staking out new ground in the noisy debate about technology and privacy in law enforcement, the New Jersey Supreme Court ordered that the police will now have to get a search warrant before obtaining tracking information from cellphone providers.

The ruling puts the state at the forefront of efforts to define the boundaries around a law enforcement practice that a national survey last year showed was routine, and typically done without court oversight or public awareness. With lower courts divided on the use of cellphone tracking data, legal experts say, the issue is likely to end up before the United States Supreme Court.

Business groups call for data breach law

Industry groups called on Congress to set a national data breach notification requirement at a House hearing.

Businesses rarely urge Congress to regulate them more, but the witnesses explained that the current patchwork of state laws is burdensome to comply with. "State laws often vary needlessly and in some cases don’t make sense," Kevin M. Richards, senior vice president of federal government affairs for TechAmerica, said during the hearing of the House Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade. “These compliance obligations are particularly burdensome, however, for the small- to medium-size business," Dan Liutikas, chief legal officer for CompTIA, testified.

The Rules of In-Store Surveillance

Cellphone signals, special apps and our movements tracked by software-enhanced cameras in stores are the equivalent of the tracking cookies in Internet browsers.

Most people don’t seem to mind being tracked online, if the low percentage of people who disable cookies is any indication. Offline tracking, though, still seems to be a concern. Nordstrom discontinued using one mobile phone tracking system, produced by Euclid Analytics, after shoppers complained. That may be because the systems are new, and some people see more harm than benefit from the surveillance. On July 16, several companies involved in offline tracking announced that they would be working with a Washington-based research group, the Future of Privacy Forum, to develop a series of “best practices” for privacy controls for what it called “retail location analytics,” or tracking. Over time, it is likely that at least some customers will accept tracking, particularly if offered incentives like free mall parking in exchange for visiting a specific store.

You (and Your Cellphone) on Candid Camera

[Commentary] Anybody who shops at online stores like Amazon.com knows that those merchants track customers, what they look at, what they buy and how long they spend on the site. Perhaps it’s not all that surprising that traditional retailers — with little or no notice — have started tracking shoppers in stores, using security cameras and devices that can monitor the location of customer cellphones.

If stores want to track their customers, they should tell the public what they are doing and give people the ability to opt out of monitoring. Many shoppers say they are willing to give information about themselves in exchange for special deals and promotions. But some consumers go to physical stores because they want to protect their privacy. Traditional retailers would be smart not to alienate customers by surreptitiously tracking them.

Vivendi Declined SoftBank’s Lucrative Offer for Universal

Apparently, Vivendi, the French media and telecommunications conglomerate, rejected an $8.5 billion cash bid from SoftBank for the Universal Music Group, even though it represented a premium of at least $2 billion more than some analysts’ estimates of Universal Music’s value.

SoftBank made its bid to Vivendi’s board about three months ago. The bid for Universal underscores the attractiveness of large music and media catalogs in the digital age, even as record companies struggle to replace revenue from lost CD sales. Consumers are increasingly turning for their entertainment to streaming services like Spotify and Netflix, which sell access to music or movies and rely on licensing deals with media companies. Universal is the world’s largest music company, with hundreds of artists. Last year Universal had $6 billion in revenue, and $694 million in earnings before interest, taxes and amortization.

CBS in Contract Showdown With Time Warner Cable

In the latest showdown between a broadcaster and a cable system, CBS has initiated an ad campaign to try to pressure Time Warner Cable to make a deal on fees for three of its major stations, with the implied threat that Time Warner subscribers in New York, Los Angeles and Dallas will otherwise lose access to CBS shows, starting next week.

In addition, the CBS-owned cable network Showtime would probably also go off the air on the systems in those cities. CBS executives charged that Time Warner Cable has refused its request to extend the current contract between the parties, precipitating the confrontation. The contract ended in June, and the two sides did agree to an extension that will end July 24. None of the financial terms of the dispute have been disclosed.

Sens. Rubio, Warner Concerned About NTIA Spectrum Reclamation

Sens. Mario Rubio (R-FL) and Mark Warner (D-VA) have asked National Telecommunications and Information Administration chief Larry Strickling for answers on what the agency is doing to free up government spectrum, particularly given the President's June 14 memo on spurring wireless innovation and in light of a Government Accountability Office study from April 2011 that concluded NTIA "cannot ensure that spectrum is being used efficiently by federal agencies" and "has limited ability to monitor federal spectrum use."

"Without effective NTIA management and oversight, we have serious reservations about the agency's ability to maximize spectrum efficiency and relinquish portions of federal spectrum," the senators wrote. The asked:

  • What specific measures has NTIA taken to address the findings in the 2011 GAO report and improve spectrum management?
  • What specific steps will NTIA take, over the next 6 to 12 months to carry out the directives of the memorandum?
  • When analyzing federal agency use of spectrum under Sec. 3 of the Presidential Memorandum, how will NTIA ensure that agencies' assessments are accurate?
  • What tools are in place to assess how federal agencies are using assigned spectrum, and how will NTIA hold agencies accountable for the valuable spectrum they occupy? Specifically, how will NTIA ensure federal agencies are maximizing spectrum efficiency?
  • How does NTIA assess fees on federal agencies for spectrum assignments? Does the agency believe the current structure provides the proper incentives for agencies to increase spectrum efficiency? Will this fee structure be examined when implementing the Presidential Memorandum?
  • Would it be helpful for NTIA to designate a 'trusted agent' structure to liaise between federal agencies charged with providing classified systems capabilities and private sector representatives seeking information on spectrum usage in areas currently used for national security and intelligence functions? If so, please explain how soon such a process could be implemented.

How about a compromise on bundling cable TV channels?

[Commentary] A report issued by the New York investment bank Needham & Co. warns that a switch to so-called a la carte programming would cost the pay-TV industry about $70 billion and leave viewers with fewer than 20 channels.

"If you unbundle, it would be bad for the TV industry but also bad for consumers," said Laura Martin, senior media analyst at Needham and author of the report, "The Future of TV." "The question is whether value to consumers is measured by the quantity of choice available or the price," she told me. "I think choice is better." "There's a lot of waste with these huge bundles of channels," said Linda Sherry, a spokeswoman for the advocacy group Consumer Action. "People are paying a lot of money for channels they don't watch. They're not getting a good deal." To me, that's the bottom line here: Are consumers getting the best possible deal? As long as you're being forced to swallow channels you never watch, the answer has to be no. Martin's response is that consumers are indeed getting a good deal — a great deal, in fact. It all depends on how you look at it.

If the average cable bill runs about $70 a month, Martin said, people should view that as $60 for the dozen or so channels they watch on a regular basis, plus an additional $10 for the option of watching more than 100 other channels any time they please. This ability to discover new programming — the opportunity to make choices — is more important to most TV viewers than saving a few bucks a month, Martin insisted.