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December 2013

Court to rule on patent rights

Renewing its recent fascination with the kinds of inventions that can be patented, the Supreme Court agreed to clarify when an analytical method implemented by a computer or by a link on the Internet is eligible for monopoly protection. This was the only new case granted.

The Court will be reviewing a widely splintered decision by the U.S. Court of Appeals for the Federal Circuit, in the case of Alice Corporation Pty. Ltd. v. CLS Bank International. The en banc Federal Circuit found the method at issue ineligible for a patent, but a majority could not agree on a standard for making such decisions. The case will provide a new test of the Patent Act’s most basic provision -- Section 101, which broadly outlines what kinds of inventions are patentable. One of the long-standing exceptions to the types of inventions mentioned in that section is that an abstract idea can never be patented. That issue arises frequently these days, especially with rapidly developing technology in computer software. The Justices have dealt with that issue several times in recent years.

Thirty Percent of Connect America Broadband Funding in Limbo

The fate of as much as 30 percent of money earmarked for five price cap carriers in the 2013 Connect America Fund program is in question, the Federal Communications revealed.

The FCC has authorized only $255.7 million of the requested funding -- enough to serve 393,409 homes. The FCC received challenges for approximately 30 percent of 563,767 homes originally targeted. Challenges came from competitors who said they already provide broadband to the targeted homes. An FCC spokesman confirmed that the challenges were still pending, which means some of the funding originally earmarked could eventually be released to the requesting carriers.

An Obituary for the Letter E

The letter E, an influential vowel and one of the most frequently used letters in the English language, died yesterday. It was 2,800 years old. The cause was obsolescence in the face of emerging technology, said the letter’s next of kin, the letter F.

Long considered one of the most influential letters in the Roman alphabet, at the turn of the century E had originally been heralded as the signal letter in the digital world. But in recent years, the letter had suffered a series of debilitating setbacks that closely correlated with the rise of online applications. It died May 20, 2013. But in 2004, Stewart Butterfield and Caterina Fake founded Flickr, a photograph-sharing application, without the standard penultimate E. “The most compelling reason to remove the E,” explained Ms. Fake, “was that we were unable to acquire the domain Flicker.com … The rest of the team were more in favor of other options, such as ‘FlickerIt’ or ‘FlickerUp’ but somehow, through persuasion or arm-twisting, I prevailed.” It was good news for the company but bad news for the letter. The company was acquired by Yahoo for $35 million. Soon many startups began jettisoning their Es like toxic assets. In 2009, Grindr, a geosocial network application for gay men, chose to make do without the letter E. Membership quickly swelled. Myriad other brands followed suit, including Blendr, Gathr, Pixlr, Readr, Timr, Viewr, Pushr. The decline in E-ness was also hastened by the realities of venture capitalists. “You take out the E from your company name, and you increase the valuation by millions,” said Lockhart Steele, the founder of Curbed, a lifestyle publishing empire. “Being E-free,” agrees Esther Dyson, a venture capitalist and an early investor in Flickr, “distinguishes you from the run-of-the-mill vowel-infested world.”

Weekly Digest

The Columbus Compact

December 6, 2013 (Real Journalism vs. Global Big Brother)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, DECEMBER 6, 2013

FCC mHealth Innovation Expo http://benton.org/calendar/2013-12-06/


JOURNALISM
   Real Journalism vs. Global Big Brother - op-ed

GOVERNMENT & COMMUNICATIONS
   Latest Snowden leak? Sweden spied on Russia for US
   Patriot Act author: Director of National Intelligence should be prosecuted [links to web]
   Media too focused on failures, President Obama says [links to web]

BROADBAND/TELECOM
   FCC Unlikely to Bless a Comcast-TWC Deal: Regulator
   Since deregulation in California, landline costs skyrocket
   Defining broadband competition - op-ed
   FCC's Connect America Fund To Expand Broadband to Nearly 400,000 Rural Homes and Businesses In 41 States - press release
   Sen Ayotte Introduces USF Equitable Distribution Act [links to web]

WIRELESS/SPECTRUM
   Dish Network to Bid in Spectrum Auction Next Month [links to web]
   AT&T Follows in T-Mobile’s Footsteps With Cell Plans That Separate Device Cost from Monthly Service Fee [links to web]
   Verizon quietly unleashes its LTE monster, tripling 4G capacity in major cities [links to web]
   FCC’s Role in Expanding Inflight Mobile Wireless Services [links to web]

TELEVISION/RADIO
   A la carte TV pricing would cost industry billions, report says
   Surprise! You’re Watching More TV Than Ever. [links to web]
   SiriusXM Will Have to Defend Multiple Lawsuits over Pre-1972 Music [links to web]
   The New Haven Independent seeks to expand its hyperlocal mission to low-power radio [links to web]

PRIVACY
   Android Flashlight App Developer Settles FTC Charges It Deceived Consumers - press release [links to web]

ADVERTISING
   Interactive Advertising Bureau Releases Native Advertising Playbook to Establish Common Industry Lexicon, Evaluation Framework & Disclosure Principles - press release [links to web]

PATENTS
   House Passes Bill Aimed at Patent 'Trolls'
   Tech groups praise House ‘patent troll’ vote [links to web]
   Patent debate shifts to the Senate [links to web]
   Judge to punish lawyers for frivolous lawsuit over AOL-Microsoft patent “conspiracy” [links to web]

GOVERNMENT PERFORMANCE
   Enrollment Numbers Rise after Website Improves [links to web]
   Kicked Off Healthcare.Gov? Try Now, Obama Administration Says [links to web]
   Rep Rogers: Shut down HealthCare.gov to fix security issues [links to web]
   Media too focused on failures, President Obama says [links to web]

OPEN GOVERNMENT
   CBO Scores DATA Act [links to web]

AGENDA
   FCC Reschedules December Open Meeting - public notice
   A re-write of the 1996 Communications Act? That’s exactly what I wanted for Christmas! - AEI editorial [links to web]

COMPANY NEWS
   Twitter Adds First Female Director
   New cybersecurity boom arrives in Silicon Valley [links to web]

STORIES FROM ABROAD
   Venezuela Cyber Crackdown Ensnares Bitly [links to web]
   Regulator tells Telefónica to loosen grip on Brazil [links to web]

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JOURNALISM

REAL JOURNALISM VS. GLOBAL BIG BROTHER
[SOURCE: Huffington Post, AUTHOR: Norman Solomon]
[Commentary] Every new revelation about the global reach of the National Security Agency underscores that the extremism of the surveillance state has reached gargantuan proportions. The Washington Post just reported that the NSA "is gathering nearly 5 billion records a day on the whereabouts of cellphones around the world." Documents provided by whistleblower Edward Snowden have forced top officials in Washington to admit the indefensible while defending it. One of the main obstacles to further expansion of their Orwellian empire is real journalism. Real journalism is "subversive" of deception that can't stand the light of day. This is a huge problem for the Obama Administration and the many surveillance-state flunkies of both parties in Congress. What they want is fake journalism, deferring to government storylines and respectful of authority even when it is illegitimate. In motion now, on both sides of the Atlantic, are top-down efforts to quash real journalism when and how it matters most. In the two English-speaking countries that have done the most preaching to the world about "Western values" like freedom of the press, the governments led by President Barack Obama and Prime Minister Cameron are overseeing assaults on real journalism. They're striving to further normalize fake journalism -- largely confined to stenographic services for corporate power, war industries and surveillance agencies. A parallel goal is to harass, intimidate and destroy real journalism. The quest is to maximize the uninformed consent of the governed. Journalism is at a momentous crossroads. The alternative to unrelenting independence is sheepism, and that's not journalism; it's a professionalized baseline of bowing to government and corporate pressure even before it has been overtly exerted.
benton.org/node/169311 | Huffington Post
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GOVERNMENT & COMMUNICATIONS

LATEST SNOWDEN LEAK? SWEDEN SPIED ON RUSSIA FOR US
[SOURCE: The Hill, AUTHOR: Rebecca Shabad]
Sweden’s FRA intelligence agency has been spying on Russian politicians on behalf of the United States, according to documents leaked by Edward Snowden. Swedish TV station Sveriges Television reported that Sweden was a key regional partner for the US National Security Agency because major telecommunications cables pass through it (suggesting bulk rather than targeted collection). FRA spokesman Fredrik Wallin said “no comment,” when the TV station asked for his reaction to the document. According to Sweden’s report, the NSA document was dated April 18, 2013.
benton.org/node/169252 | Hill, The | GigaOm | Sveriges Television
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BROADBAND/TELECOM

COMMISSIONER PAI: FCC UNLIKELY TO APPROVE COMCAST-TIME WARNER CABLE
[SOURCE: Wall Street Journal, AUTHOR: Maureen Farrell, Amol Sharma, Shalini Ramachandran]
Any effort by Comcast to acquire Time Warner Cable would face significant hurdles in Washington, according to a Federal Communications Commission official, casting doubt on a cable-industry consolidation scenario that has grabbed Wall Street's attention. Comcast, the No. 1 cable provider, measured by subscriber numbers, has been considering a bid for the No. 2 player, Time Warner Cable, which is already being pursued by a smaller cable firm, Charter Communications. But Ajit Pai, a commissioner at the Federal Communications Commission, said that the Obama Administration would be unlikely to approve a combination of Comcast and Time Warner Cable. "The Obama Administration has applied greater scrutiny to proposed mergers and acquisitions," he said, citing examples including AT&T's attempted takeover of T-Mobile US. "Precedents like this suggest an outright acquisition by Comcast of Time Warner Cable could face a number of hurdles in the Obama Administration," Commissioner Pai said. "A Republican administration likely would be more inclined to approve a deal." Commissioner Pai said he is inclined to support any deal that "would serve the public interest," doesn't pose competitive harm in the industry and could generate efficiencies.
benton.org/node/169322 | Wall Street Journal
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DEREGULATION AND COSTS IN CALIFORNIA
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
When California's telephone market was deregulated in 2006, consumers were told that increased competition would improve service and reduce prices. It hasn't worked out like that. For some consumers, monthly phone rates have risen 260% in the last five years. Meanwhile, quality of service declined substantially earlier this year when AT&T slashed the number of minutes available under its measured plan 25%, to 168 a month from 225, and raised the price of extra service to 6 cents from 4 cents a minute. Again, not what officials said would happen. Now consumers are filing a complaint with the California Public Utilities Commission. The Utility Reform Network, a San Francisco consumer advocacy group, said it's lodging the complaint on behalf of all AT&T customers. A draft of the complaint alleges that AT&T's rates for measured and flat-rate service far surpass "just and reasonable levels" and are the highest of all phone companies'. Natalie Billingsley, a senior official at the PUC's consumer-protection arm, the Division of Ratepayer Advocates, didn't mince words when I asked about the effect of phone deregulation. "It has substantively been a failure," she said. "All we have seen since deregulation is a constant increase in prices."
benton.org/node/169321 | Los Angeles Times
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DEFINING BROADBAND COMPETITION
[SOURCE: American Enterprise Institute, AUTHOR: Daniel Lyons]
[Commentary] “Competition” is a somewhat slippery word that can mean different things to different people. The Federal Communications Commission has a checkered history of using regulations and subsidies in largely unsuccessful efforts to manufacture competition. So many in the telecommunications industry have been cautiously optimistic about FCC Chairman Tom Wheeler’s rhetoric, while waiting to hear just how he defines the term. In a speech at Ohio State University, Chairman Wheeler began providing some promising details. In his prepared remarks, the Chairman took a middle road. While noting that “[t]he Internet is not a law-free zone” and that “markets…don’t always, by themselves, solve every problem,” he explained that America “strongly favors Internet freedom, limiting government involvement to over-riding purposes” and that any intervention should be “in a fact-based, data-driven manner” to promote competition. But it was his unscripted remarks that commentators fixed upon because he noted with seeming approval the fact that some providers are beginning to offer consumers different options at different price points. But he then went a step further, seeming to endorse paid prioritization agreements as well. Chairman Wheeler’s comments suggest that he defines “competition” to include competition among different pricing structures and business models. Consumers ultimately benefit from efforts by broadband providers, and Internet content providers, to find new and potentially more efficient ways to serve consumers. Companies with popular pricing structures will attract consumers. Bad pricing models will wither on the vine as NetZero did. Regulators should resist pressure to disrupt this virtuous cycle and pick winners and losers. Rather, they should intervene primarily when companies abuse market power in ways that harm consumers. Overall, consumers benefit from companies’ experiments to find new and more efficient pricing structures to govern an increasingly diverse marketplace.
benton.org/node/169320 | American Enterprise Institute
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FCC’s CONNECT AMERICA FUND TO EXPAND BROADBAND TO NEARLY 400,000 RURAL HOMES AND BUSINESSES IN 41 STATES
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Over $255 million in funding to provide new broadband access to over 400,000 homes and businesses in rural areas of 41 states has been authorized from the Federal Communications Commission’s Connect America Fund, connecting nearly 1 million people who lack service. The Connect America Fund is part of the FCC’s initiative to bring broadband access to rural communities. The $255,723,850 authorized today represents a jump-start to bring broadband to these areas. It brings the total authorized from the first phase of the Connect America Fund to nearly $403 million. Five carriers will use the funds in rural portions of their service areas where, absent support from the Connect America Fund, broadband expansion was unlikely. The carriers are AT&T, CenturyLink, Fairpoint Communications, Frontier Communications, and Windstream.
benton.org/node/169304 | Federal Communications Commission | Public Notice
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TELEVISION/RADIO

A LA CARTE TV PRICING WOULD COST INDUSTRY BILLIONS, REPORT SAYS
[SOURCE: Los Angeles Times, AUTHOR: Meg James]
Consumers want to choose the channels they get from their pay-TV providers, but such a move would not only undermine the business model for media companies, it could also lead to higher prices for customers, according to a new report by Needham & Co. Few have been able to put a price tag on the cost to the industry of a la carte programming, but Needham & Co. media analyst Laura Martin took a stab at it in her study. "Our calculations conclude that $80 billion to $113 billion of US consumer value would be destroyed by this shrinking channel choice," Martin wrote in her report. [Interesting that she characterizes consumers picking the channels they pay for as “shrinking choice”] She determined that the economic costs would be enormous because so many smaller channels would disappear -- at least 124 channels -- wiping out an estimated 1.4 million jobs in media. Martin figured that at least $45 billion in TV advertising would be at risk. The Needham report estimates that it costs media companies an average of $280 million annually to run an entertainment cable channel. (The costs to program a sports channel -- with big-ticket sports -- are much higher). That means a channel requires at least 165,000 viewers over the course of a year to break even. "By implication, about 56 channels would survive, and 124 channels would disappear, based on 2012 viewing levels," Martin wrote.
benton.org/node/169293 | Los Angeles Times | MediaPost
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PATENTS

HOUSE PASSES BILL AIMED AT PATENT 'TROLLS'
[SOURCE: Wall Street Journal, AUTHOR: Gautham Nagesh]
The House overwhelmingly passed legislation aimed at discouraging frivolous lawsuits by patent holders who hope to extract settlements from companies wary of litigation costs. By a vote of 325-91, the House approved the Innovation Act from House Judiciary Chairman Bob Goodlatte (R-VA), setting the stage for the Senate to act in the coming months. The bill would require patent holders who file lawsuits to disclose more information upfront on the patents involved and the nature of the alleged infringement. It would also give judges more discretion to limit discovery or award legal fees when a lawsuit fails to prove infringement. Companies that pushed for the bill describe the patent-holding entities that file lawsuits as patent "trolls." Critics of the bill said it could hinder innovation and prevent inventors from upholding their rights. A large, bipartisan contingent spoke out in favor of the bill, arguing that small-business owners and startups are frequently the target of patent assertion entities seeking a quick settlement. However, the main support for the bill has come from large technology companies like Google, as spending on patent litigation has risen in recent years. Opposition came from a small but vocal minority led by the Judiciary Committee's senior Democrat, Rep. John Conyers (D-MI), as well as Reps. Mel Watt (D-NC), and Dana Rohrabacher (R-CA). They said the bill would impose an undue burden on patent holders seeking to enforce their rights.
benton.org/node/169302 | Wall Street Journal | GigaOm | The Hill | The Verge | Verizon
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AGENDA

FCC RESCHEDULES DECEMBER OPEN MEETING
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
Due to a House oversight hearing, the Federal Communications Commission has rescheduled it’s Dec 12 open meeting to 2:30 pm. The FCC also confirmed the meeting’s agenda. The FCC will consider:
A Report and Order that takes critical steps to improve the reliability and resiliency of 911 networks nationwide; and
A Notice of Proposed Rulemaking to revise outdated rules and provide airlines with the ability to permit passengers to use mobile wireless services via onboard airborne access systems.
In addition, the FCC will hear two presentations:
A status update on the Technology Transitions Policy Task Force’s work towards making near-term recommendations related to the FCC’s expectations and role in the IP transition; and
An update on FCC and industry efforts to promote mobile wireless device unlocking.
benton.org/node/169305 | Federal Communications Commission
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COMPANY NEWS

TWITTER ADDS FIRST FEMALE DIRECTOR
[SOURCE: Wall Street Journal, AUTHOR: Yoree Koh]
Twitter announced it added its first female director, former Pearson Chief Executive Marjorie Scardino. The appointment ends drawn-out speculation as to when Twitter might diversify its all-male boardroom ranks. The company was criticized in the weeks leading up to its high-profile Wall Street debut for its lack of women in top executive positions — a fact exacerbated by CEO Dick Costolo’s seemingly flippant attitude shown in response to critics. Scardino’s appointment is effective immediately and she will join the audit committee, according to a filing with the Securities and Exchange Commission. The 66-year-old’s experience as the head of Pearson, a publishing and education company, will bring helpful perspective as Twitter looks to strengthen its ties to the media industry.
benton.org/node/169303 | Wall Street Journal | LA Times | USAToday | Washington Post
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FCC Unlikely to Bless a Comcast-TWC Deal: Regulator

Any effort by Comcast to acquire Time Warner Cable would face significant hurdles in Washington, according to a Federal Communications Commission official, casting doubt on a cable-industry consolidation scenario that has grabbed Wall Street's attention.

Comcast, the No. 1 cable provider, measured by subscriber numbers, has been considering a bid for the No. 2 player, Time Warner Cable, which is already being pursued by a smaller cable firm, Charter Communications. But Ajit Pai, a commissioner at the Federal Communications Commission, said that the Obama Administration would be unlikely to approve a combination of Comcast and Time Warner Cable. "The Obama Administration has applied greater scrutiny to proposed mergers and acquisitions," he said, citing examples including AT&T's attempted takeover of T-Mobile US. "Precedents like this suggest an outright acquisition by Comcast of Time Warner Cable could face a number of hurdles in the Obama Administration," Commissioner Pai said. "A Republican administration likely would be more inclined to approve a deal." Commissioner Pai said he is inclined to support any deal that "would serve the public interest," doesn't pose competitive harm in the industry and could generate efficiencies.

Since deregulation in California, landline costs skyrocket

When California's telephone market was deregulated in 2006, consumers were told that increased competition would improve service and reduce prices. It hasn't worked out like that.

For some consumers, monthly phone rates have risen 260% in the last five years. Meanwhile, quality of service declined substantially earlier this year when AT&T slashed the number of minutes available under its measured plan 25%, to 168 a month from 225, and raised the price of extra service to 6 cents from 4 cents a minute. Again, not what officials said would happen. Now consumers are filing a complaint with the California Public Utilities Commission. The Utility Reform Network, a San Francisco consumer advocacy group, said it's lodging the complaint on behalf of all AT&T customers. A draft of the complaint alleges that AT&T's rates for measured and flat-rate service far surpass "just and reasonable levels" and are the highest of all phone companies'. Natalie Billingsley, a senior official at the PUC's consumer-protection arm, the Division of Ratepayer Advocates, didn't mince words when I asked about the effect of phone deregulation. "It has substantively been a failure," she said. "All we have seen since deregulation is a constant increase in prices."

Defining broadband competition

[Commentary] “Competition” is a somewhat slippery word that can mean different things to different people. The Federal Communications Commission has a checkered history of using regulations and subsidies in largely unsuccessful efforts to manufacture competition. So many in the telecommunications industry have been cautiously optimistic about FCC Chairman Tom Wheeler’s rhetoric, while waiting to hear just how he defines the term. In a speech at Ohio State University, Chairman Wheeler began providing some promising details.

In his prepared remarks, the Chairman took a middle road. While noting that “[t]he Internet is not a law-free zone” and that “markets…don’t always, by themselves, solve every problem,” he explained that America “strongly favors Internet freedom, limiting government involvement to over-riding purposes” and that any intervention should be “in a fact-based, data-driven manner” to promote competition. But it was his unscripted remarks that commentators fixed upon because he noted with seeming approval the fact that some providers are beginning to offer consumers different options at different price points. But he then went a step further, seeming to endorse paid prioritization agreements as well.

Chairman Wheeler’s comments suggest that he defines “competition” to include competition among different pricing structures and business models. Consumers ultimately benefit from efforts by broadband providers, and Internet content providers, to find new and potentially more efficient ways to serve consumers. Companies with popular pricing structures will attract consumers. Bad pricing models will wither on the vine as NetZero did. Regulators should resist pressure to disrupt this virtuous cycle and pick winners and losers. Rather, they should intervene primarily when companies abuse market power in ways that harm consumers. Overall, consumers benefit from companies’ experiments to find new and more efficient pricing structures to govern an increasingly diverse marketplace.

New cybersecurity boom arrives in Silicon Valley

Nefarious cybercrime syndicates and villainous state-sponsored hackers are making the digital world an increasingly dangerous place. That's bad news for companies suffering growing losses from relentless cyberattacks. But it's good news for Silicon Valley, where cybersecurity has suddenly become the hot new-old thing.

The security industry has been around for decades and produced giants such as McAfee and Symantec in the 1990s. But over the last decade it was mostly overlooked by venture capitalists and entrepreneurs, who didn't see much opportunity for big returns. That's all changed now that the volume and sophistication of attacks are increasing, forcing victims to open their wallets.

FCC’s Role in Expanding Inflight Mobile Wireless Services

The Federal Communications Commission’s proposal on inflight mobile wireless services on airplanes is consistent with the FCC’s role as an expert agency. We would like to offer additional information about why the FCC is taking this action now and provide a little more insight into what the proposal entails.

As the expert agency on communications, it is the FCC’s role to re-examine our rules in light of new technology and to eliminate unnecessary regulations when appropriate. Under the proposal, which will be put out for public comment, the default will still be (and in fact will more clearly be) that the use of mobile wireless services is prohibited, absent specialized onboard equipment. If the new technology isn’t installed, the prohibition remains. If the new technology is installed, airlines would still have the ultimate say on whether and how to provide service -- including the ability to program the system not to handle voice calls (while allowing text, email, and web browsing). In addition, systems can also be turned off if necessary for safety announcements and emergencies. It’s important to note this proposal is, indeed, only a proposal and that it asks many questions. The proposal is a technical one that would revise an existing prohibition on the use of mobile wireless services when airborne. This outdated rule was put in place 22 years ago during the era of first generation cellular systems (think car-phones) because of concerns about interference to systems on the ground.

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