October 2013

New Silicon Valley Fund to Back Big Data Start-Ups

Some of Silicon Valley’s most well-known venture capitalists have committed more than $10 million to a new early stage fund to help foster start-ups that analyze behavioral data to determine patterns and make predictions about social behavior.

The fund, called Big Data Elite, is backed by celebrity investors like Ron Conway, one of Silicon Valley’s most prominent angel investors, and Andreessen Horowitz, the $2.5 billion venture capitalist firm, as well as Social+Capital Partnership and Anand Rajaraman, whose social media start-up was bought by Wal-Mart Stores in 2011. Big Data Elite described itself as a venture lab and early stage fund that will offer a six-month program beginning January 2014. The fund will choose 10 start-ups or individuals from a list of 20. Those chosen will work a Big Data Elite’s offices in San Francisco and will have access to advisers who work at Facebook, Zynga, Netflix, LinkedIn, Riot Games and a handful of other companies that rely heavily on data analysis. The co-founders, Stamos Venios and Tasso Argyros, the founder of Aster Data, said they wanted to build a bridge between Big Data entrepreneurs and Silicon Valley’s investor community.

Google Profit Up 36% as Paid Clicks Swell

Google posted its best profit growth in more than a year, as the Internet search giant counteracted lower advertising rates on mobile devices by selling a higher volume of ads.

Google posted a 36% increase in third-quarter net income, on a 12% jump in revenue, reversing a disappointing quarter three months ago. The results show Google's ability to draw clicks as more users reach its sites from mobile devices, such as smartphones and tablets. The challenge for Google and other Internet firms is that ads on mobile devices sell for significantly less than those on personal computers. Executives said a new policy implemented in July called "enhanced campaigns" that pushes marketers to place ads on phones as well as computers appears to be working. Two closely watched measures of Google's ad business -- paid clicks and cost-per-click -- continued to diverge. Paid clicks grew 26% compared with the prior year, the highest growth rate in a year. But the average price that advertisers paid Google when people clicked on ads fell 8%, making it two years of declines. Google remains well ahead of online-advertising rivals, commanding one-third of the world-wide market in 2013, researcher eMarketer estimates. Nearest rival Facebook Inc. will have just 5% market share in 2013, though its share has climbed more quickly than Google's in the past two years, the market-research firm estimates.

Europe Moves to Shield Citizens’ Data

Lawmakers in Brussels have introduced a measure in the European Parliament that could require American companies like Google and Yahoo to seek clearance from European officials before complying with United States warrants seeking private data. The measure, an amendment to a broader electronic privacy law pending in Parliament, is a response to Prism, the secret spying program led by the National Security Agency that came to light in June.

Europeans were outraged by the revelations that some of the biggest American Internet companies, many of whose users live in Europe, were required by the United States authorities to share information in e-mail, Web searches and other online data. Parliament’s Committee on Civil Liberties, Justice and Home Affairs may vote on the amendment as soon as Oct 21, said Jan Philipp Albrecht, the German member who is responsible for steering the legislation through the Parliament.

Huawei Sees Resolution of US Security Concern Taking a Decade

Huawei Technologies, China’s largest phone-network equipment maker, said it may take a decade to resolve the cybersecurity concerns that restrict its access to the US because the company is held to a “higher bar.”

“America has genuine concerns, and it’s Huawei’s responsibility to satisfy those genuine concerns,” said John Suffolk, the company’s global cybersecurity officer. “We will continue to work with our American colleagues to satisfy their needs and concerns and we believe we can do that.” Huawei is fighting to gain access to markets including the US and Australia. To address concerns, the company today released its second white paper detailing its approaches to cybersecurity and calling for governments and industry to develop globally consistent standards.

Georgia’s anti-’Obamaphone’ rule just hurts poor people

[Commentary] The controversy over what critics have derisively called the "Obamaphone" program is back. In an attempt to take on fraudulent subscribers in the nation's Lifeline program — a service dating to the Reagan administration that gives poor people access to government-subsidized phone lines — Georgia plans to start charging low-income Americans $5 a month for the privilege of getting what residents of other states get for free.

The new rule could wind up punishing more poor people than criminals. Georgia's state public services commissioner, Doug Everett, justifies the rule by saying that there are more free phones floating about in his state than there are people who are eligible for the Lifeline program. According to his estimates, there were at one point roughly a million Lifeline phones active in Georgia, representing more than one phone per qualifying American. "A hundred and twenty-five percent of the total number of poor people had Lifeline phones," Everett said. Later, he suggested that up to 50 percent of phones distributed under the program may have been fraudulent. Running the numbers another way, however, yields slightly different results. The eligibility cutoff for Lifeline is 135 percent of the federal poverty line. That description fits nearly 30 percent of Georgia's population. As of the 2010 Census, Georgia had 9.7 million residents, meaning just under 3 million may have been eligible for an Obamaphone. For Everett's math to stand up, the number of eligible poor in Georgia would have to have been around 880,000 -- or 733,000 according to Everett's 50-percent estimate. It seems like the program is charging a majority of low-income residents what they already can't afford -- just to catch a minority of cheaters.

Technology is not dehumanizing. It’s what makes us human.

[Commentary] A new survey from Intel is being touted with headlines about how young adults say technology is dehumanizing. And there is one line from the press release describing the findings of the survey that supports that characterization: "A majority of millennials agree that technology makes people less human and that society relies on technology too much."

It makes perfect sense for this generation to still be processing the changes brought on by recent technological advances. Millennials were the first generation to grow up with the Internet as an integral part of their lives -- which is a somewhat disorienting experience when compared to the rest of human history. But as a millennial myself, I certainly don't think it makes me less human to be able to Skype with my grandmother who lives over a thousand miles away, engage with people from around the world on Twitter, or consume the various digital cultural works -- like say, Final Fantasy VI. To an even broader point, the use of technology and tools are actually a defining characteristic of being human.

White House: NSA chief has had 'extraordinary tenure'

A White House spokeswoman confirmed that Gen. Keith Alexander, the director of the National Security Agency and the head of US Cyber Command, will step down in the spring.

Gen. Alexander has led the NSA as it has come under intense scrutiny over the scope of its surveillance programs following leaks by former contractor Edward Snowden. But White House spokeswoman Laura Magnuson defended Gen. Alexander's tenure -- the longest of any NSA director. "General Alexander has served an extraordinary tenure and capably led these agencies through critical periods of growth and transition," she said. "The President looks forward to continuing to work with General Alexander until his term is complete and thanks him, and the men and women of the NSA, for their patriotism and dedication as they work every day to keep us safe."

Ted Cruz blocks FCC nominee

Sen. Ted Cruz (R-TX) is blocking the confirmation of Tom Wheeler, President Barack Obama's nominee for chairman of the Federal Communications Commission.

A spokesman for Sen. Cruz said the senator has placed a hold on the nomination until Wheeler clarifies whether he would require more disclosure about the donors behind political TV ads. "The senator is holding the nominee until he gets answers to his questions regarding Wheeler’s views on whether the FCC has the authority or intent to implement the requirements of the failed Congressional DISCLOSE Act," said Sean Rushton, a spokesman for Sen. Cruz. FCC regulations require TV broadcasters and cable providers to identify the "true sponsor" of all ads. Some Democrats, including House Minority Leader Nancy Pelosi (D-CA) and Sen. Bill Nelson (D-FL), have urged the FCC to use that power to require that political groups advertising on TV reveal their major donors. But Sen. Cruz argues the Democrats are trying to use the FCC to implement the goals of the Disclose Act -- which would have required political groups to reveal more information about their donors. He and other Republicans claim the bill would have chilled political speech.

Privacy groups push for strongest European data protection law possible

[Commentary] Europe needs a strong data protection law after this year’s revelations about US surveillance, 23 privacy groups said in a letter to members of the European Parliament.

The groups -- including the American Civil Liberties Union, the Electronic Privacy Information Center and Consumer Watchdog -- asked Parliament members “to adopt the strongest measures possible” in the data protection law currently being worked on in Europe. “Congress has so far failed to take necessary steps to update US privacy law or to rein in” those surveillance activities, they wrote. “As a consequence, consumers on both sides of the Atlantic remain at risk -- our most sensitive data is too readily available for scrutiny and misuse.” The groups were also critical of US privacy initiatives, including multi-stakeholder efforts and self-regulation programs. These initiatives -- such as voluntary programs to let users opt out of online tracking -- are often cited as one solution to addressing privacy concerns in lieu of legislation.

Tesla Using AT&T Service in Cars

Tesla Motors, the electric-car maker led by billionaire Elon Musk, picked AT&T to provide high-speed wireless service to its vehicles, giving the carrier a boost in its effort to expand beyond mobile phones.

All Tesla cars come equipped with AT&T network chips, which allow two-way connections for services such as roadside assistance and stolen-vehicle location. The Tesla service also includes Internet access, navigation and entertainment on a 17-inch (43-centimeter) touch screen. Terms of the agreement weren’t disclosed. Tesla, which sells its cars directly to consumers at prices starting at about $70,000, is AT&T’s latest connected-car partner. “Tesla is the most appealing car to technophiles,” said Roger Entner, a wireless-industry strategist with Recon Analytics in Dedham, Massachusetts. “Connecting cars makes a tremendous amount of sense.”