August 30, 2013 (Black Budget)
Headlines will return on Tuesday, September 3; enjoy the Labor Day weekend!
BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, AUGUST 30, 2013
GOVERNMENT & COMMUNICATIONS
US spy network’s successes, failures and objectives detailed in ‘black budget’ summary
NSA paying U.S. companies for access to communications networks
Director of National Intelligence vows to release transparency report
President Obama's NSA review panel isn't the change we need - analysis
Cameron Kerry tries to reassure Europe over NSA spying [links to web]
CYBERSECURITY
Administration Previews Optional Industry Cyber Standards
WIRELESS/SPECTRUM
Verizon-Vodafone Impact: 'Colossal' - analysis
Library TV White Spaces Broadband Trial to Include Rural, Non-Rural Areas
Mobility Fund Phase I Support Authorized for 20 Winning Bids - public notice [links to web]
Samsung, Apple rivalry set to heat up in September
TELEVISION/RADIO
Time Warner Cable customers fuming as CBS blackout drags on
Why not pull the plug on cable [links to web]
Linear TV Viewing Still Matters As Cord-Cutting Trend Expands: Study [links to web]
Cumulus Radio Deal Could Crowd Clear Channel
ADVERTISING
Troubles Ahead for Internet Advertising
Facebook updates data use policy
POLICYMAKERS
Commissioner Jessica Rosenworcel Announces Staff Change: Policy Director Alex Hoehn-Saric Will Depart - press release [links to web]
GOVERNMENT & COMMUNICATIONS
[SOURCE: Washington Post, AUTHOR: Barton Gellman, Greg Miller]
US spy agencies have built an intelligence-gathering colossus since the attacks of Sept. 11, 2001, but remain unable to provide critical information to the President on a range of national security threats, according to the government’s top secret budget. The $52.6 billion “black budget” for fiscal 2013, obtained by The Washington Post from former intelligence contractor Edward Snowden, maps a bureaucratic and operational landscape that has never been subject to public scrutiny. Although the government has annually released its overall level of intelligence spending since 2007, it has not divulged how it uses those funds or how it performs against the goals set by the President and Congress. The 178-page budget summary for the National Intelligence Program details the successes, failures and objectives of the 16 spy agencies that make up the US intelligence community, which has 107,035 employees. The summary describes cutting-edge technologies, agent recruiting and ongoing operations.
The National Security Agency and the CIA launched aggressive new programs to hack into foreign computer networks and sabotage systems described as "offensive cyber operations." The US spends $4.3 billion annually on cyber operations, according to the report. The figure includes efforts to prevent hackers from accessing U.S. systems.
benton.org/node/158077 | Washington Post | The Hill | WashPost
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NSA PAYING FOR ACCESS
[SOURCE: Washington Post, AUTHOR: Craig Timberg, Barton Gellman]
The National Security Agency is paying hundreds of millions of dollars a year to US companies for clandestine access to their communications networks, filtering vast traffic flows for foreign targets in a process that also sweeps in large volumes of American telephone calls, e-mails and instant messages. The bulk of the spending, detailed in a multi-volume intelligence budget obtained by The Washington Post, goes to participants in a Corporate Partner Access Project for major U.S. telecommunications providers. New details of the corporate-partner project, which falls under the NSA’s Special Source Operations, confirm that the agency taps into “high volume circuit and packet-switched networks,” according to the spending blueprint for fiscal 2013. The program was expected to cost $278 million in the current fiscal year, down nearly one-third from its peak of $394 million in 2011. Voluntary cooperation from the “backbone” providers of global communications dates to the 1970s under the cover name BLARNEY, according to documents provided by former NSA contractor Edward Snowden. These relationships long predate the PRISM program disclosed in June, under which American technology companies hand over customer data after receiving orders from the Foreign Intelligence Surveillance Court.
benton.org/node/158092 | Washington Post
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TRANSPARENCY REPORTS
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Director of National Intelligence James Clapper will begin releasing annual reports about the National Security Agency’s surveillance activity in the coming months, a spokesperson for the Office of the Director of National Intelligence has confirmed. The report will disclose the total number of court approvals granted for a range of surveillance requests, including national security letters as well as those made under Section 702 of the Foreign Intelligence Surveillance Act. Director Clapper promised not only to release the aggregate number of requests for each category, but also the number of targets at which those requests were aimed. The full list of categories the report will cover includes:
FISA orders based on probable cause (Titles I and III of FISA, and sections 703 and 704).
Section 702 of FISA
FISA Business Records (Title V of FISA)
FISA Pen Register/Trap and Trace (Title IV of FISA)
National Security Letters issues pursuant to 12 U.S.C. § 3414(a)(5), 15 U.S.C. §§ 1681u(a) and (b), 15 U.S.C. § 1681v, and 18 U.S.C. § 2709
benton.org/node/158091 | Washington Post | Politico
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PRESIDENT OBAMA'S NSA REVIEW PANEL ISN'T THE CHANGE WE NEED
[SOURCE: The Verge, AUTHOR: Adi Robertson]
[Commentary] President Barack Obama officially announced the five men in charge of reviewing the secretive and powerful US intelligence apparatus: Richard A. Clarke, Michael Morell, Cass Sunstein, Geoffrey Stone, and Peter Swire. The group — which includes three former White House advisors and one former CIA deputy director — will be given the task of restoring public trust in a much-maligned program, using what President Obama has called "new thinking for a new era." President Obama said that the panel would "review our entire intelligence and communications technologies," a wording that could mean anything from examining precisely how the NSA stores phone and e-mail records to taking a high-level look at virtually every agency that deals in surveillance. Almost all of the members raise red flags to people who want a rigorous review of privacy issues. Michael Morell has spent almost his entire career at the CIA; he stepped down as deputy director only a few months ago. But the question isn’t just whether the panel is composed of people who are willing to take a hard look at the NSA’s surveillance programs. It’s what they’ll actually end up reviewing, how seriously the White House will take their proposals, and whether we’ll see both concrete technological changes and a holistic rethinking of how privacy concerns should be weighed against national security ones. President Obama has said that the panel will let his Administration "move forward with a better understanding" of privacy and security concerns, and he’s promised other changes that will prioritize civil liberties, but there’s no guarantee that this committee has any real teeth.
benton.org/node/158087 | Verge, The
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CYBERSECURITY
ADMINISTRATION PREVIEWS OPTIONAL INDUSTRY CYBER STANDARDS
[SOURCE: nextgov, AUTHOR: Aliya Sternstein]
The Obama Administration released a draft of computer security protocols for companies that operate key systems, such as chemical plants and the electric grid. Final guidelines to protect the networks that run critical infrastructure are due, by executive order, in February 2014. A final draft is expected to be published in October, according to National Institute of Standards and Technology (NIST), the agency ordered to produce the standards. Although the guidelines will be optional, federal officials are weighing whether to make them mandatory for government contractors.
benton.org/node/158079 | nextgov
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WIRELESS/SPECTRUM
VERIZON-VODAFONE IMPACT
[SOURCE: Wall Street Journal, AUTHOR: Spencer Ante, Ryan Knutson, Dana Cimilluca]
Verizon’s push to take full control of its US wireless business could spark a new round of mergers across the telecom industry. Verizon's talks with Vodafone Group, which owns 45% of Verizon Wireless, could soon result in a deal worth as much as $130 billion, said people familiar with the matter. That would be the second-largest acquisition on record, bigger than Exxon's purchase of Mobil or the ill-fated merger of America Online and Time Warner in 2000. A deal would give Vodafone plenty of cash to spend and creating openings for other companies like AT&T to maneuver as well. It comes as conditions improve for the highly competitive European telecom market to begin a much sought consolidation. But first a deal has to get done. In an indication the companies are moving closer after years of false starts, Verizon has scheduled a board meeting to consider the matter amid expectations a deal could be sealed by early next week, people familiar with the matter said. Verizon currently owns a 55% stake in Verizon Wireless, the top U.S. cellphone carrier. Since Verizon already controls the carrier, its 100 million subscribers may not notice any change despite the deal's giant size. But the financial implications for the company are substantial.
Mustering $130 billion is no small feat for a company with a market capitalization of $138 billion. Verizon reportedly plans to do it with a combination of cash and stock. The cash component would require borrowing $50 billion or more. Verizon's shares are down 12% since their April highs, meaning its stock won't stretch as far. In the short term, though, higher leverage could constrain Verizon's ability to do larger deals such as buying Dish Network. It might also delay Verizon's entry into Canada, where it has reportedly been in talks to acquire one or two struggling carriers. Higher debt could also theoretically prevent Verizon from participating in the auction for spectrum relinquished voluntarily by broadcasters, which the Federal Communications Commission plans to hold in 2014. But considering the high price Dish Chairman Charlie Ergen would likely demand and with AT&T, another potential bidder, currently tied up with two pending deals in front of the FCC, Dish seems unlikely to be bought for now. The Canadian deals, which would likely be worth less than $1 billion, might be small enough to get done anyway. And despite the FCC's goal, few analysts think the spectrum auction will happen before 2015. For Verizon, a bigger issue is that the deal likely wouldn't strengthen its ability to defend its U.S. wireless-market share as a stronger Sprint and T-Mobile US bring more competition.
benton.org/node/158090 | Wall Street Journal | Wall Street Journal | WSJ – Debt Sale | FT
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LIBRARY TV WHITE SPACES BROADBAND TRIAL TO INCLUDE RURAL, NON-RURAL AREAS
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
Participants have been chosen for a trial of TV white spaces equipment for public libraries announced by the Gigabit Libraries Network. The trial, scheduled to get underway soon, is designed to test the practicality of Wi-Fi hotspots that use vacant TV spectrum known as TV white spaces for connectivity to the Internet. TV white spaces technology is normally viewed as a good solution for rural areas because it has excellent propagation characteristics, thereby supporting connectivity over several miles — even without line of sight. And several of the communities chosen for the trial are in rural areas – including Humboldt County, CA; Delta County, CO; and a statewide collaboration involving the University of New Hampshire’s Broadband Center of Excellence and NH FastRoads. Perhaps surprisingly, though, one of the communities chosen was Skokie, IL – a Chicago suburb that’s anything but rural. When asked about the selection of this diverse, entrepreneurial and urban community, GLN Coordinator Don Means noted that “Skokie’s primary means of public broadband access is a fiber line split between the library, the park district, and the high school. Demand for bandwidth means this capacity is frequently strained, and network managers have to work to ensure no one organization overuses the resource.” Gaining access to the Super WiFi spectrum, he said, would give the Skokie library “an even greater resource with which [to] serve the community, from the technologically advanced to the underserved, and everyone in between.”
benton.org/node/158078 | telecompetitor | Access Humboldt
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SAMSUNG, APPLE RIVALRY SET TO HEAT UP IN SEPTEMBER
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
Samsung is laying ground for big, competitive moves this fall with two new devices that could amp up its rivalry with Apple. Samsung executives have said the company plans to release a smartwatch and a new version of its big-screen Galaxy Note smartphone ahead of a major mobile conference next month in Germany. The launch comes ahead of Apple’s expected Sept. 10 event to unveil its next version of the iPhone and possibly a cheaper Apple phone to compete with other smartphones with a lower price tag. Sinking profitability is a problem facing many companies that make top-tier smartphones. As the markets for high-end smartphones hit close to a saturation point, it’s become harder for firms to pick up easy growth. To compensate, companies have had to start lowering their price points, particularly in emerging smartphone markets such as China. Analysts have linked that price competition to the growing popularity of the devices.
benton.org/node/158082 | Washington Post
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TELEVISION/RADIO
TIME WARNER CABLE CUSTOMERS FUMING AS CBS BLACKOUT DRAGS ON
[SOURCE: Los Angeles Times, AUTHOR: Meg James]
The upcoming football season is likely to provide the tipping point, analysts say, with both CBS and Time warner Cable under increased pressure to resolve their contract dispute. which has blacked out the CBS-owned KCBS Channel 2 and KCAL Channel 9 in more than 1 million Los Angeles homes served by the cable company. Both companies are under increased pressure — from viewers, Congress and the Federal Communications Commission — to resolve their differences. "This is so frustrating," Justin Bass, a Los Angeles Dodgers fan said. "The whole system is broken. There's no recourse. I just have to sit here and take it." Time Warner Cable customers like Bass, unless they have installed an over-the-air antenna to capture the broadcast signal, have missed nine Dodgers games that have aired on KCAL. "The problem is, Congress is out, the FCC is waiting to confirm a new chair, and pretty much everyone is resigned to blackouts as the 'new normal,'" said Harold Feld, senior vice president of the public interest group Public Knowledge. The National Football League season starts Sept. 5, and CBS is expected to broadcast its first regular season game Sept. 8. Consumer outrage is expected to ignite if the blackout isn't over by then.
benton.org/node/158081 | Los Angeles Times
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CUMULUS-DIAL GLOBAL
[SOURCE: Wall Street Journal, AUTHOR: Hannah Karp]
Radio broadcaster Cumulus Media is close to acquiring one of the country's largest syndicators of radio programming, Dial Global, according to people familiar with the matter, in a deal that is likely to shake up the industry's competitive landscape. People familiar with the proposed transaction said it would be for $260 million in cash, part of which would be used to pay off Dial's debt, so that Dial would be debt-free when it came to Cumulus. The deal is subject to approval by federal antitrust regulators; if approved, it is expected to close before the end of the year, they said. A Cumulus-Dial combination would create a meaningful, albeit smaller, competitor to Clear Channel Communications Inc.'s Premiere Networks and Walt Disney's ESPN Radio. Premiere dominates syndication of talk and entertainment radio programming, as ESPN does sports. Publicly-traded Dial Global, based in New York, produces exclusive nationwide radio coverage for the National Football League and the Olympics, and also produces coverage of NCAA sports and the PGA Golf Championship. Also on its roster are the Grammy Awards, NBC News Radio and talk shows by Dennis Miller and Herman Cain.
benton.org/node/158089 | Wall Street Journal
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ADVERTISING
TROUBLES AHEAD FOR INTERNET ADVERTISING
[SOURCE: New York Times, AUTHOR: Quentin Hardy]
[Commentary] When it comes to advertising, the Internet is at war with itself. Much of the Web relies on advertising income, but anti-ad technology could put a dent in that revenue. A recent report from the Web service PageFair said that on average 22.7 percent of visitors to 220 Web sites were using ad-blocking software, which automatically removes most ads from a Web page. The figures were highest in gaming and technology Web sites, which tend to have a large concentration of savvy users. PageFair said the practice was growing at a rate that suggests almost all sites will appear without ads by 2018. Earlier this year, Google kicked Adblock for Android mobile devices off its store, making it harder to get the mobile version (it’s still available at an Adblock site). This “had a significant impact on user growth,” said Till Faida, a co-founder of Eyeo, which produces the Adblock software for numerous browsers. Google is keen to make income from mobile ads, partly because the price advertisers pay Google for largely nonmobile Web advertising has fallen for the past seven quarters. Advertising, in effect, will have a less distinct role in overall marketing. And when a product or function is subsumed, it typically loses some of its profit margin.
benton.org/node/158083 | New York Times
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FACEBOOK UPDATES DATA USE POLICY
[SOURCE: Washington Post, AUTHOR: Robert Galbraith]
Facebook announced that it is making changes to its data use policy — formerly known as its privacy policy — and its statement of rights and responsibilities, the two main documents that govern the relationship between the network and its 1.15 billion users. Users can review these changes on the Facebook Web site, and the company has posted a section by section breakdown of the proposed changes to the policies. While users are no longer able to vote on changes to Facebook’s policies, chief privacy officer Erin Egan said in a company blog post that the network is happy to field feedback from its users over the next seven days. The proposed changes include an explicit explanation that users’ name, profile picture and information such as brands they like can be used for “commercial, sponsored or related content. Those under 18 have to show that at least one parent or guardian has also agreed to those terms on behalf of any younger users. The changes come shortly after the firm settled with Facebook users who complained that the company had abused their right to privacy by including some information in ads without notifying or compensating them.
benton.org/node/158084 | Washington Post | Los Angeles Times | Bloomberg
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