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  2. January 2014

January 2014

A New Twist in International Relations: The Corporate Keep-My-Data-Out-of-the-US Clause

By now, we've heard from tech companies such as Facebook, Google and Cisco Systems that the National Security Agency's spying poses a threat to their international business and, in Cisco's case, is already hurting it. So what does that threat look like, exactly, at ground level?

Some companies are apparently so concerned about the NSA snooping on their data that they're requiring -- in writing -- that their technology suppliers store their data outside the US. In Canada, a pharmaceutical company and government agency have now both added language to that effect to their contracts with suppliers, as did a grocery chain in the UK, according to J.J. Thompson, chief executive officer of Rook Consulting, an Indianapolis, Indiana-based security-consulting firm. He declined to name the companies, which are using Rook to manage the segmentation and keep the data out of the US. As a result, US-based technology companies face a serious threat. The NSA disclosures may reduce US technology sales overseas by as much as $180 billion, or 25 percent of information technology services, by 2016, according to Forrester Research, a group in Cambridge, Massachusetts.

[Dec 24]

China's Telecom Regulator Awards Virtual Telecom Licenses to 11 Companies

China's telecom regulator has awarded licenses to 11 private companies to run mobile telecom businesses based on services leased from China's state-run carriers. The new licenses mark a concrete policy change after years of discussion by China's Ministry of Industry and Information Technology, which regulates China's telecoms sector.

With the new licenses, the 11 companies will be able to lease mobile services from China's three state-run telecom service providers and then package the services as their own, potentially offering discounts, stronger branding or packages that come with the purchase of items like mobile phones. Analysts have long said the creation of the new businesses, known in the industry as virtual telecom service providers, could offer a first step to breaking up the monopoly held by China's three state-run telecom service providers -- China Mobile, China Unicom (Hong Kong) and China Telecom. Still, analysts have warned that the success of virtual telecoms depends on the leasing terms they are given by the state-owned goliaths. Many analysts have pointed out that the state-run telecoms could limit the size of competitors by leasing limited bandwidth and also could charge high rates, making it hard for private companies to compete. An MIIT sponsored news site, said that the 11 companies granted licenses included Jingdong Century Trading Co., which operates one of China's largest e-commerce sites, and Net.cn, a subsidiary of Alibaba Group, China's largest e-commerce company and a rival of Jingdong.

[Dec 26]

For ESPN, Millions to Remain in Connecticut

The governor of Connecticut arrived at ESPN’s expansive campus to celebrate the groundbreaking of the sports media giant’s 19th building, a digital center that would be the new home of “SportsCenter.” It was August 2011, and this was the third visit in a year by Gov Dannel Malloy (D-CT), whose first was about three weeks before his election. This time, Gov Malloy brought a hard hat, a shovel and an incentive package for ESPN potentially worth $25 million.

ESPN is hardly needy. With nearly 100 million households paying about $5.54 a month for ESPN, regardless of whether they watch it, the network takes in more than $6 billion a year in subscriber fees alone. Still, ESPN has received about $260 million in state tax breaks and credits over the past 12 years, according to a New York Times analysis of public records. That includes $84.7 million in development tax credits because of a film and digital media program, as well as savings of about $15 million a year since the network successfully lobbied the state for a tax code change in 2000. For Gov Malloy and other public officials in Connecticut, the conventional wisdom is that any business with ESPN is good business. After all, ESPN is Connecticut’s most celebrated brand and a homegrown success story, employing more than 4,000 workers in the state.

[Dec 27]

How would in-flight calling actually work?

Making phone calls from 35,000 feet in the air has been a hot-button topic of late. But there is still the question of how all of this will work and, perhaps more importantly, how much it will cost for you to place a call. The answers aren’t exactly as cut-and-dried as you might think.

The Federal Communications Commission is only concerned with whether or not it should approve one specific technology required to place calls from a plane using your mobile phone. This technology has been used by international airlines for years and consists of installing a small cell tower on the plane itself (commonly called a "picocell") that transmits calls from the air to the ground. Use of picocells in airplanes has been banned in the US, but other countries have not had a problem with allowing them. A picocell system would likely require customers to pay roaming fees for each minute that they are talking on the phone, much like how international roaming is charged today. Virgin Atlantic’s AeroMobile service is only available to customers of British carriers O2 and Vodafone and costs £1 per minute for calls and 20 pence for text messages, for example (it’s also limited to six users at a time).

[Dec 26]

Sources: FCC in No Rush To Decide Comcast OVD Condition

Comcast will apparently have to wait a while longer to find out whether it can get access to over-the-top programming contracts. According to Federal Communications Commission sources, the FCC is unlikely to take any action anytime soon on an item circulated last August affirming a Media Bureau decision that a Comcast representative should be able to get access to programming contracts under the Comcast/NBCU benchmark deal condition on access to content by online providers.

The item is only one vote away from passage, according to a source who says that both Commissioners Mignon Clyburn, who circulated the item in July 2013 while acting chairwoman, and new chairman Tom Wheeler have voted to approve it. A source familiar with the item says the Chairman has not asked the other commissioners to focus on the item and expected it to remain at two votes for the foreseeable future. According to a source, broadcasters and other content providers have been meeting with FCC staffers, arguing against giving Comcast the contracts, arguing that they will inevitably be used anticompetitively.

[Dec 23]

Study: Consumers Will Pay $5 For An App That Respects Their Privacy

Ever since the iPhone came out in 2007, the going rate for many of the most popular apps has been exactly $0.00. Consumers pay nothing. But of course, nothing is free. Instead, consumers pay with their data, that's sold to marketers, or with screenspace, which is forked over to make room for ads. It's a trade consumers are happy to make. But are they?

A new study from economists at the University of Colorado finds otherwise. It shows that the average consumer would prefer to pay small fees for their apps, in exchange for keeping their information private and their screens uncluttered. Because the "average" app (as determined from a sample of more than 15,000 Android apps) has both advertising and access to a person's location and their phone's ID, Savage and Waldman say that paid versions of such apps could rake in somewhere around $5 per download. That's way more than the pocket change that most free apps bring in per download.

[Dec 26]

FTC official recuses self from cybersecurity case

A commissioner at the Federal Trade Commission (FTC) won’t be involved in an effort to hold a medical lab responsible for a data breach that exposed the personal details of nearly 10,000 patients.

FTC Commissioner Julie Brill said in a statement that she was recusing herself from the LabMD case in order to avoid an “undue distraction” from the issue. In recent weeks, LabMD and the watchdog organization Cause of Action, which is representing the testing lab, had unearthed speeches in which Commissioner Brill referenced the ongoing case as an example of ways the FTC was cracking down on lax cybersecurity. They had requested that Commissioner Brill be disqualified from the case. “Commissioner Brill has told the world that LabMD failed to secure consumer information and violated the law... No neutral judge with any regard for the due process requirement of avoiding the appearance of bias and prejudgment would ever say such things about a pending case,” the company said in a motion filed earlier this month.

[Dec 26]

MMTC Commends Chairman Wheeler on Leadership to Advance ‘Fourth Network Revolution’; Makes Proposals for IP Transition

The Minority Media and Telecommunications Council filed a letter with the Federal Communications Commission on December 16, 2013 commending FCC Chairman Tom Wheeler’s leadership in focusing on the upgrade and modernization of the nation’s antiquated telephone network infrastructure to speed and advance the “Fourth Network Revolution.”

MMTC desires to highlight four areas of the IP network transition that will help further the goals of (a) competition; (b) universal access and consumer protection; and (c) public safety:

  • Market demonstration tests will be helpful and essential in considering the technical and social impacts of the IP Transition on vulnerable consumers and communities.
  • Parallel processes are still needed to manage a transition that is already underway.
  • Data collection will help support and promote service affordability, consumer protection and the availability of competitive alternatives in the marketplace.
  • IP networks should continue to provide core emergency and public safety benefits.

[Dec 16]

The Year in Communications

Communications news in 2013 was dominated by serial revelations of the National Security Agency’s mass collection of data from major Internet companies and mobile carriers, leading to widespread cries of governmental overreach. But those revelations, based on leaks from former NSA contractor Edward Snowden, were accompanied by remarkable advances in wireless communications. The Snowden documents also galvanized new efforts at making the Internet more secure and private.

  • The year 2013 saw several breakthroughs in basic communications technology. Researchers in China set a new speed record for a version of 4G known as LTE-Advanced. Alcatel-Lucent readied technology for gigabit speeds on last-mile copper networks. And Samsung described tests of a new technology it called 5G. The latest version of Apple’s operating system includes the capacity to automatically toggle between different wireless technologies --such as 4G and Wi-Fi -- which is a prelude to the use of data-encoding technologies that might split up data and use multiple channels at the same time for far more efficient service. Akamai and Ericsson, meanwhile, teamed up to figure out how to carve out a special wireless data fast lane for customers who pay extra to get things like e-commerce transactions completed as fast as possible.
  • Long-discussed ideas for opening up bandwidth by sharing wireless spectrum bore fruit during 2013.
  • The disruption of traditional TV expanded in 2013. Startup Aereo marched into 22 markets after an initial test in New York with its novel business of capturing free over-the-air broadcasts on tiny antennas in data centers. Google pushed its high-speed fiber and TV service in Kansas City, and expanded elsewhere; evidence emerged that the result was better prices and faster speeds in those markets.

[Dec 23]

Google asks US court to rule that Android has not infringed Rockstar patents

Google has asked a court in California to rule that it does not directly or indirectly infringe seven patents of Rockstar Consortium, after the Microsoft, Apple, BlackBerry, Ericsson and Sony backed patent firm sued seven of Google’s Android partners in a court in Texas.

The lawsuits filed in October 2013 in US District Court for the Eastern District of Texas, Marshall Division, have placed a cloud on the Android platform, threatened Google’s business and relationships with its customers and partners and its sales of Nexus-branded Android devices, and created a justiciable controversy between Google and Rockstar, Google wrote in a complaint in US District Court for the Northern District of California. Rockstar acquired Nortel Networks’ patents for US$4.5 billion after outbidding Google in 2011. It filed lawsuits in October 2013 against Samsung Electronics, HTC and five other companies alleging infringement of some or all of seven patents. Describing the lawsuits by Rockstar as “Android OEM actions,” Google said in its filing that Rockstar has asserted its patents only against “certain mobile communication devices having a version (or an adaption thereof) of [the] Android operating system.” Each of the “Android OEM Defendants” also makes other products that do not use Google’s Android platform, Google added. Rockstar has also alleged patent infringement by Nexus 7, a device offered for sale by Google and built by Asus, one of the “Android OEM Defendants,” according to the filing.

[Dec 25]

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