October 2013

These iPhone 5c Price Cuts Are Coming Dangerously Close to a Trend

Several weekend price promotions for Apple’s iPhone 5c are raising eyebrows, given the newness of the mid-range phone and the fact that Apple products so rarely see discounts. The promotions started with an offer from Best Buy giving customers a $50 gift card with the purchase of one of Apple’s colorful new models. Then Wal-Mart said it would “roll back” prices on the 5c for a limited time, and RadioShack jumped on the bandwagon with its own $50 gift card offer. The moves are particularly noteworthy given the relative consistency of pricing on Apple products, which tend to sell for their full price until at least the month or two before a new product is expected.

But ascertaining the reasons behind cellphone price moves can be trickier than it appears. When a new tech product hits the market, a quick price cut is often a sign of weak demand. However, when it comes to cellphones, such pricing moves aren’t always an indication of slow sales. Promotions on phones, even relatively new ones, are not uncommon as retailers such as Best Buy and Amazon trade some of their profit margins in exchange for a higher share of sales for a hot new product.

Think piracy is killing the music industry? This chart suggests otherwise.

For more than a decade, the recording industry has been complaining that online copyright infringement is devastating the music industry. And it's true that the revenues of conventional record labels have plunged in recent years. But if you look at the bigger picture, things don't look so grim. Indeed, sales of recorded music are falling off a cliff. But fortunately, that's not the only way musicians can make money. Concert revenues have soared in the last 15 years. Other sources of revenue have also grown robustly.

Behind the scenes with Google Fiber: Working with city governments

most Americans connect to the Internet from their homes, their signal travels along a local telecommunications infrastructure, currently built mostly of copper cables that run along utility poles or underground. Now that technology has advanced, communities are starting to upgrade to fiber-optic cable that’s better suited to 21st century communications demands, like high-speed Internet. And that involves a lot of detailed planning — utility pole by utility pole and block by block. That’s what Google Fiber teams are working on right now in the Kansas City area, Austin, and Provo. Before anyone picks up a shovel or climbs a ladder, Google examines:

Access to infrastructure, where Google works with the city and, where applicable, the local electric utility and telephone company to figure out which poles and conduit can be used for Google Fiber;
Access to local infrastructure maps about poles and conduits; and
Expedited construction permits, so that Google Fiber cities can be ready to receive thousands of permit requests from Google.

[Derek Slater is Government Relations Manager at Google]

Young People Are Not as Digitally Native as You Think

Everyone knows young people these days are born with smartphones in hand and will stay glued to the Internet from that time onward. Right? Well, not quite.

Actually, fewer than one-third of young people around the world are “digital natives,” according to a report and billed as the first comprehensive global look at the phenomenon. The study, conducted by the Georgia Institute of Technology and the International Telecommunication Union, shows that only 30 percent of people ages 15 to 24 have spent at least five years actively using the Internet, the criterion used to define digital nativism. In many developed countries, more than 90 percent of young people are considered digital natives, with South Korea leading the way at 99.6 percent. But many developing countries lag far behind — all the way down to the Pacific island of Timor-Leste, where a mere 0.6 percent of 15- to-24-year-olds are digital natives.

German NSA has deal to tap ISPs at major Internet Exchange

The German equivalent of the National Security Agency has secret arrangements with local telecom firms, providing direct access to data flowing over domestic fiber.

According to the German magazine Der Spiegel, the Federal Intelligence Service (known by its German acronym, BND) has taps on the major Internet exchange point in Frankfurt known as DE-CIX. The magazine cited a “three-page confidential letter” that was signed by Chancellor Angela Merkel’s office and the Ministry of the Interior. The letter noted that the BND would also have access to data sent over 25 major German ISPs, including 1&1, Freenet, Strato, GSC, and Lambdanet Plus. This revelation seems to be the rough German equivalent of the NSA's own XKeyscore surveillance system. The BND, which is prevented by German law from conducting domestic spying, ostensibly has its attention turned toward Russia, Central Asia, the Middle East, and North Africa. However, Der Spiegel does note that the BND is allowed to spy on Germans "in some cases." The German tech news site Heise reports that it still unknown exactly how the BND avoids capturing domestic traffic sent over German networks.

Supreme Court Won't Review FCC Pole Attachment Decision

The Supreme Court declined to review a US Court of Appeals for the DC Circuit upholding the Federal Communications Commission's pole attachment rate order.

The court does not have to explain why it denies an appeal, simply saying that the petitions for appeal in Electric Power Service v. FCC had been denied and that Justice Alito had taken no part in the decision. The DC Circuit had found that the FCC, in changing decades old policy on pole attachments, had justified the standard for its change in policy. The FCC in July 2011 had voted to reform its pole attachment rules as another way to promote broadband deployment and ease telecom's route to that deployment. “We are pleased that the Supreme Court has rightly put a final stake in the efforts of the electric utility industry to delay the FCC’s implementation of the statute’s clear directive," said USTelecom Vice President Glenn Reynolds.

ITU: Mobile Broadband is Moving Up

The latest figures from the International Telecommunications Union buttress the Obama Administration's focus on wireless broadband deployment, with the number of worldwide mobile broadband subscriptions approaching 2 billion.

According to a summary of the fifth edition of the "Measuring the Information Society" report, released on Oct 7, 2013, mobile broadband accessed by tablets and smart phones is the fastest-growing segment of the global ICT market. The report found declining prices for both mobile and fixed broadband service and "unprecedented adoption of 3G—3G is the report's benchmark for qualifying as high-speed mobile broadband access. ITU predicts that by the end of 2013, almost 40% of the world's population will be online. The report found there continues to be an economic divide, with broadband uptake, fixed and mobile continuing to be limited in developing countries. Some 4.4 billion people worldwide are not yet online, the report says, concluding that more action must be taken to improve accessibility and affordability.

Google offers rivals more space to get EU deal

Google has agreed to give rivals more space on its website, raising the chances of a deal with Europe's antitrust authorities and reducing the risk of a hefty fine of possibly up to 10 percent of its global sales.

The European Commission said it welcomed revised proposals from Google on how to display search results after a long-running investigation found the company was in breach of EU competition law. The company's initial submissions drew fierce criticism from competitors, so the regulators asked Google to go back to the drawing board. The fresh concessions made by the search giant appear to have pushed it closer to a settlement. The new proposal would make links to rival websites, services and search engines much more visible. Competitors will be able to display logos next to links, and dynamic text will provide more information about their content.

Alliance for Affordable Internet Launches to Stimulate Global Policy Reform To Lower Access Costs To Users

The Alliance for Affordable Internet (A4AI) is a new coalition aimed at leading policy and regulatory reform and spurring action to drive down artificially high Internet prices in developing countries.

By advocating for open, competitive and innovative broadband markets, A4AI aims to help access prices fall to below 5% of monthly income worldwide, a target set by the UN Broadband Commission. A4AI’s 30+ members reach across boundaries of geography, industry, and organization type and include governments, companies, and civil society organizations from both developed and developing countries. Members share a belief that that policy reform, underpinned by robust research and genuine knowledge-sharing, is one of the best ways to unlock rapid gains in Internet penetration rates. The Alliance was initiated by the World Wide Web Foundation, and its honorary chairperson is Dr Bitange Ndemo, the immediate former Permanent Secretary of Kenya’s Ministry of Information and Communications, who is widely regarded as the father of Broadband in Kenya.

The Alliance will begin in-country engagements with three to four countries by the end of 2013, expanding to at least twelve countries by the end of 2015.
Members have committed to a set of policy best practices that will guide advocacy work at the international level.
Key policy levers to drive prices down include allowing innovative allocation of spectrum, promoting infrastructure sharing, and increasing transparency and public participation in regulatory decisions.
A4AI will produce an annual ‘Affordability Report’, with the first edition being unveiled in December 2013.

The move to mobile apps is bad for Do Not Track

The last few years have seen a heated argument between the advertising industry and privacy advocates over Do Not Track, a technology that allows Internet users to indicate that they wish not to be tracked online. But as users increasingly access the Internet via mobile apps rather than Web browsers, the current generation of Do Not Track technology could become less relevant.

A fifth of all Americans with cellphones say they primarily surf the Web using mobile devices — not a desktop or laptop, according to the Pew Research Center. According to Flurry, a company that helps advertisers track users' online behavior, 80 percent of US consumers' mobile-device time is spent in apps. Just 20 percent is spent in a browser. Compared against all forms of browsing (desktop and mobile), we spend 30 percent more time in apps than we do surfing the Web. According to Peter Swire, who helped lead industry negotiations on Do Not Track and who now sits on White House review panel on intelligence, the biggest focus in policy debates over Do Not Track has been on browsers. The current generation of Do Not Track technology, then, may not be effective at protecting users' privacy.

Benton

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