October 2013

Tap on Merkel Provides Peek at Vast Spy Net

In testimony to Congress, the director of national intelligence, James R. Clapper Jr., gave only the roughest sketch of the size of the National Security Agency’s surveillance program, but suggested that the leader of the United States’ most powerful European ally, German Chancellor Angela Merkel, was a single fish in a very big sea.

“We’re talking about a huge enterprise here with thousands and thousands of individual requirements,” he said, using a phrase that appeared to mean individual surveillance targets. Clapper said that the United States spies on foreign leaders and other officials to see “if what they’re saying gels with what’s actually going on,” and how the policies of other countries “impact us across a whole range of issues.” German political and intelligence officials went to the White House on Oct 30 looking for answers to some of the questions the administration has been reluctant to discuss, and eager to use the incident to broker a far closer intelligence-sharing agreement with Washington that, among other things, would end the surveillance of its leaders. If put into effect, such an arrangement could begin to dismantle a system that has grown ever larger, and more sophisticated, during a decade in which supercomputers and the algorithms used to search vast databases have put the NSA far ahead of rival intelligence services. President Obama has asked whether the technology has outrun common sense, and the Merkel episode has raised in a very public way the question of whether the benefits of spying on friends outweigh the damage if such spying becomes known.

American Intelligence and the 'High Noon' Scenario

[Commentary] It is bad politics and bad policy for good friends to put their partners in politically impossible situations, and recent reports of aggressive American espionage have done just that. It matters little that the reports may or may not be true or that foreign leaders may or may not have already suspected these activities. The issue now is that seemingly plausible accounts are in the public domain, and people are angry. But American intelligence works to meet the needs and follows the lead of American policy makers. There is actually a formal framework for national intelligence priorities agreed upon regularly at the National Security Council level. When policy makers validate a need to better understand, say, the level of corruption in a particular state or the intentions of a friendly but balky ally, what is it they think they are asking the intelligence community to do And when they read a responsive, incisive report, where do they think it came from? There's a real danger here. The American signals-intelligence community is being battered at home from extreme left and extreme right, and it's being battered from abroad for just being extremely good.

[Gen Hayden was director of the Central Intelligence Agency from 2006 to 2009.]

NSA Fallout Hits AT&T's Ambitions In Europe

AT&T’s ambitions to expand in Europe have run into unexpected hurdles amid the growing outcry across the region over surveillance by the National Security Agency.

German and other European officials said any attempt by AT&T to acquire a major wireless operator would face intense scrutiny, given the company's work with the US agency's data-collection programs. Resistance to such a deal, voiced by officials in interviews across Europe, suggests the impact of the NSA affair could extend beyond the diplomatic sphere and damage U.S. economic interests in key markets. AT&T Chief Executive Randall Stephenson has signaled repeatedly in recent months that he is interested in buying a mobile-network operator in Europe, highlighting the potential for growth on the continent at a time when the US company faces headwinds at home. Europe's anger over the NSA's collection of electronic communications has reduced the likelihood a European deal could happen anytime soon.

Interim FCC chief Clyburn put focus on consumers and the poor

Four years ago, Mignon Clyburn arrived in Washington as a regulatory newcomer to take a seat on the Federal Communications Commission. She faced immediate skeptics because of her high-profile father, Rep James Clyburn (D-SC), a former House majority whip. In her six months leading the FCC, she has pushed through consumer-friendly regulations to reform prison phone rates and to provide more access to technology in rural areas.

The regulations, some industry experts note, are modest in their scope compared with controversial policies the agency has taken on, such as network neutrality. But the 51-year-old commissioner says those policies are significant because they directly affect consumers, particularly minorities, low-income families and rural residents. “These are my people,” she said in a recent interview. “My duty is to empower communities, particularly those like mine that are often overlooked.” With recently confirmed FCC Chairman Tom Wheeler expected to be sworn in on Nov 4, current-Chairwoman Clyburn will remain a member of the FCC and said she will work with her fellow Democratic chairman and maintain a focus on consumer protections.

No US Action, So States Move on Privacy Law

State legislatures around the country, facing growing public concern about the collection and trade of personal data, have rushed to propose a series of privacy laws, from limiting how schools can collect student data to deciding whether the police need a warrant to track cellphone locations. Over two dozen privacy laws have passed this year in more than 10 states, in places as different as Oklahoma and California.

Many lawmakers say that news reports of widespread surveillance by the National Security Agency have led to more support for the bills among constituents. And in some cases, the state lawmakers say, they have felt compelled to act because of the stalemate in Washington on legislation to strengthen privacy laws. For Internet companies, the patchwork of rules across the country means keeping a close eye on evolving laws to avoid overstepping. Many companies have an internal team to deal with state legislation. And the flurry of legislation has led some companies, particularly technology companies, to exert their lobbying muscles -- with some success -- when proposed measures stand to harm their bottom lines.

The Lawmaker's Internet Trick or Treat

What are the worst laws threatening the Internet? NetChoice has a list for that. For the fifth year, NetChoice, a public policy organization that promotes Internet innovation, has surveyed the legal landscape and identified the laws and proposed laws that could potentially undermine key elements of Internet freedom and commerce.

A small change in the Communications Decency Act could make Facebook, Reddit, Twitter, and other social nets responsible for inappropriate posts.
A new California privacy bill (CA SB 568) chills advertising on the Internet.
Infringing on the right to public photography makes it harder to find criminals. Laws under consideration in Michigan and Massachusetts would limit the collection and retention of license plate reader technology widely used by law enforcement.
A federal Internet sales tax bill, called the Marketplace Fairness Act, could cripple e-commerce.
Some states want to impose new taxes on travel services. Ohio, Tennessee, Virginia and Oregon are creating new taxes on the services provided by online travel sites and local travel agents.
New legislation wants to take control of your online accounts when you die. You may want to know how you want your online accounts handled, but several states are considering bills that allow a court-appointed executor to counter your wishes.

Sprint CEO calls network neutrality 'a hard concept to get my head around'

"Regulatory issues" are apparently a vexing problem for Sprint’s Dan Hesse right now, which makes sense as he's the CEO of a major wireless company with ambitions to launch a service that competes with wireline broadband providers. When asked if Sprint would consider offering data plans that looked more like those available abroad, Hesse said he was interested.

Specifically, the topic on the table was "Zero Rating," which is industry parlance for an app or service that doesn't count against a customer's data cap. Could Sprint start making deals with the likes of Netflix, Facebook, or others for Zero Rating service? Here's Hesse: “My belief is yes, that there are a number of business models. Whether it's ... service providers [who pay] for better throughput through your network [or something else]. There's gotta be a business model for it. Things like Zero Rating, which is nothing but a benefit, actually, what's not to like if you have a special relationship with a particular application developer?” Hesse may see it that way, but whether regulators at the Federal Communications Commission would too is an entirely different matter. Hesse, as you might expect, isn't a fan of network neutrality at all -- at least as it applies to wireless services. He went to far as to put the phrase in scare quotes as he spoke on the subject: “[Wireless spectrum] it is a finite resource ... but again I'm a carrier guy so it's hard for me to even understand, it truly is and I've been looking at ‘Net Neutrality’ for a long time. It's actually a hard concept for me to get my head around. It's like telling the airlines you can't sell first class seats.”

Court blocks Deutsche Telekom plans to cap Internet speed

Deutsche Telekom will not be able to cap Internet connection speeds when customers exceed data limits on flat-rate packages, a German court ruled.

The district court of Cologne said the plans would place an "unreasonable disadvantage to the customers" as they count on Internet for a fixed price at stable connection speeds. The case was brought to court by consumer lobby group Verbraucherzentrale NRW, which said in a statement that after this ruling there was no legal basis for an Internet speed cap.

Facebook Status: Big Gains, but Worries Ahead

Facebook spooked investors with warnings that it may be nearing the limits of one of its most important areas of revenue growth.

After reporting strong third-quarter financial results, Facebook executives told analysts that they may not be able to cram any more ads into users' news feeds, and that US teens are spending less time on the site. Chief Financial Officer David Ebersman said Facebook doesn't expect to "significantly increase" the share of ads in a user's news feed from what it is now. The inclusion of ads into those feeds, last year, helped propel a big increase in Facebook revenue. Instead, Facebook will rely on improving the quality and relevance of the ads to drive up prices, he said. Ebersman also said the number of US teens using Facebook daily declined from the previous quarter. He called the decline "of questionable statistical significance" and said it is hard to measure the number of teen users on the network because their self-reported ages are unreliable. Those worrisome signs overshadowed a better-than-expected earnings report that showed the company swinging to a profit on a 60% jump in revenue, topping $2 billion for the first time.

Intel Explores Sale of TV Venture to Verizon

Intel is in talks to sell all or part of its yet-to-be-launched TV venture to Verizon, reflecting the difficulty the company has had in building an online version of pay television, according to a person familiar with the situation.

For the past couple of years Intel has been planning a service that would stream TV channels over the Internet, and has made a significant investment in the operation, which now involves more than 350 people. The company has developed an advanced set-top box that was widely praised by media executives as significantly easier to use than boxes offered by traditional cable operators. But securing access to TV channels proved a huge challenge. The company has had extensive talks with big media companies -- including Walt Disney, Viacom, Time Warner, and Comcast's NBCUniversal, according to people familiar with the matter -- but there have been various sticking points and so far no deals have been announced.

Benton

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