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  2. January 2014

January 2014

Wireless carriers consider ending phone subsidies

It's a perk wireless customers have come to expect: Sign up for a two-year service contract, and get a new smartphone at a deeply discounted price or sometimes even free. But the reign of cellphone subsidies could be ending as customers demand more flexible mobile plans, forcing wireless carriers to look for alternatives to the long-standing practice.

AT&T hinted that it was considering doing away with phone subsidies. Chief Executive Randall Stephenson said subsidizing a smartphone every two years was an expensive undertaking that he didn't think the company could afford. Some customers have balked at the notion of paying for a phone's full retail cost, which is often hundreds of dollars more than the subsidized price. But analysts said cellphone subsidies were a myth and that without them, consumers could end up saving money.

[Dec 24]

US airlines want to stay cell phone free

The Federal Communications Commission could soon allow inflight cell phone use, but US airlines aren't eager change their own rules -- or equipment -- to enable such calls.

The five largest US airlines, which account for about 90% of the nation's air travel, all say their current plans do not include allowing for calls, even though they will look at the rules once they are passed. "A clear majority of customers who responded to a 2012 survey said they felt the ability to make voice calls on board would detract from -- not enhance -- their experience," said Richard Anderson, CEO of Delta Air Lines last week. “Delta employees, particularly our in-flight crews, have told us definitively that they are not in favor of voice calls on board." It's not necessarily only customer opinion that's the behind the airlines' reluctance to allow the calls. It's cost. Cell phones may not work that well at cruising altitudes, and would require airlines to install expensive equipment, that would add hundreds of pounds of extra weight to each aircraft, said airline consultant Michael Boyd.

[Dec 24]

Dish and DirecTV hike prices for 2014

Following the trend from recent years, nearly every available package from the two satellite TV providers will increase in price, with fee hikes ranging between $2 and $5. Also in an annual tradition, both companies began notifying customers of the price hikes just before Christmas.

DirecTV's 4.4% average price increase surpasses the 3.2% hike in 2012, according to Nomura Equity analyst Adam Ilkowitz. Its base "Entertainment" package will cost $58 per month in 2014, up $3 from last year's price, and the top-of-the-line "Premier" package will cost $130, up $5 from a year ago. Ilkowitz attributes a significant part of DirecTV's price hike to the rising cost of content and the desire to keep the satellite TV provider's operating profit flat. Dish once again raised prices by more than DirecTV. The No. 2 satellite TV provider said it would hike fees by 5.5% in 2014 following its steep 16.3% price hike at the beginning of 2013. But unlike DirecTV, Dish isn't hiking fees on all of its plans in 2014. Dish's bare bones, $20 Welcome plan, and its $60 America's Choice 120+ plan will cost the same in 2014 as they did this year. But all of its other plans are getting $5 price hikes, except for the $30 "Smart Pack," which is going up to $33 next year.

[Dec 24]

Three cheers for the chairman

[Commentary] It’s the time of year for giving thanks and spreading cheer. In this spirit, I would like to offer three cheers for FCC Chairman Wheeler.

It is still early in his term, but it is fast becoming clear that he is poised to do great things in his time at the commission’s helm. My first cheer: He understands competition, the need for regulatory humility, and the paramount importance of the consumer. My second cheer follows from the idea of regulatory humility: the chairman’s leadership in lifting the FCC’s ban of cellphone on airplanes -- and, in particular, his refusal to bend to concerns that consumers have expressed about the potential annoyance of being subjected to their fellow passengers’ conversations. My third cheer for Chairman Wheeler is for his refusal to get things wrong -- as seen by his decision to delay the incentive auction proceeding and withdraw former Chairman Genachowski’s proposed media ownership rules. Both of these are important proceedings which should be completed expeditiously. But, lamentably, both have been beset by serious problems -- and more important than getting them done is getting them done right.

[Hurwitz is an assistant professor at the University of Nebraska College of Law] [Dec 24]

Regulatory Barriers to Time Warner Cable Deal Limited Regardless of Buyer

US regulators who didn’t act as cable-TV prices almost tripled in the past two decades are poised to remain hands-off on mergers among the industry’s biggest providers. Few regulatory or antitrust barriers would prevent a potential acquisition involving Time Warner Cable, the second-largest US cable operator, by any of its three largest competitors, communications and antitrust lawyers said.

Any merger involving Time Warner would go before the FTC or Justice Department, which focus on competition, and the FCC, which has broader authority to ask whether a combination advances the public interest. A deal involving Comcast would provoke closer scrutiny than other deals because of the company’s ownership of programmers including the NBC network, said Andrew Jay Schwartzman, a Washington-based communications lawyer. Conditions may be imposed to ensure programming is distributed to competitors, he said.

[Dec 23]

Q3 2013 Internet Advertising Revenues Climb To Landmark High Of Nearly $10.7 Billion, Marking 15% Year-Over-Year Growth

Internet advertising revenues in the US hit a record-breaking high of $10.69 billion for the third quarter of 2013, according to the latest IAB Internet Advertising Revenue Report figures released by the Interactive Advertising Bureau (IAB) and PwC US.

This represents an uptick of 15 percent over the record-setting revenues of $9.26 billion reported in Q3 2012. In addition, it marks a 4.2 percent rise from the second quarter of 2013, which came in at $10.26 billion. “These figures reflect marketers’ trust in interactive to deliver,” said Randall Rothenberg, President and CEO, IAB. “It is indicative of the digital age in which we live, and within which advertisers need to effectively reach targeted audiences wherever they are consuming information or entertainment -- often on several screens at once.”

[Dec 23]

COPPA crowdsourcing. Yeah, really.

We received an interesting suggestion recently. “With how fast technology changes, how about building in a process so companies can see if newer methods meet the requirements of existing rules?” A related recommendation: Crowdsourcing.

“The FTC could publicize an idea and get feedback from people.” We’re fans of innovation, too, which is why the Children’s Online Privacy Protection Rule includes a procedure for companies to ask if methods of getting parental consent not listed in COPPA nonetheless meet the Rule’s standards. As for crowdsourcing, we call it a notice and request for public comment — and we’ve been at it since the Truman Administration. The Federal Trade Commission’s approval of a verifiable parental consent method proposed by Imperium, LLC, illustrates how the agency builds these two ideas into the policy-making process. COPPA requires certain sites to get verifiable parental consent before collecting, using or disclosing personal information from kids under 13. The Rule lists some options for how to do that, but also opens the door for companies to request FTC approval for other ways to get Mom or Dad's OK. It makes sense, doesn’t it? Rather than setting out the process in stone, COPPA was crafted with the assumption that new methods could come along that merit a close look. Imperium recently proposed a parental consent method based on knowledge-based authentication. That’s a way to verify a user by asking challenge questions about "out-of-wallet" information — info that can’t be determined by looking through a person’s wallet and would be tough for someone else to answer correctly. The method may be new as far as COPPA is concerned, but financial institutions and credit bureaus have been using it for years. Now Santa Ana-based iVeriFly has asked the FTC to approve its suggested method of getting parental consent.

You’ll want to read the proposal for details, but here’s what the FTC is asking:

  • Is iVeriFly’s proposed method already covered by existing methods in the Rule?
  • Does it meet the Rule’s requirement that it’s reasonably calculated to ensure the person giving consent is actually the kid’s parent?
  • When it comes to consumers’ information, what are the risks and benefits of the proposal?

[Dec 23]

Gannett completes its Belo acquisition

Gannett, the parent company of USA TODAY, said it has closed its $2.2 billion purchase of Belo in a deal that nearly doubles its portfolio of TV stations.

The deal's closing was anticipated after the McLean, Va.-based company has said that it agreed to unload some assets to clear all regulatory hurdles. To address federal regulators' concern over media ownership concentration, Gannett said it will sell KMOV in St. Louis to media company Meredith. The Belo acquisition, announced in June, expands Gannett's stable of TV stations to 40 from 23 and its reach to nearly a third of US households. The company is now the largest independent station group of major network affiliates in the top 25 markets, with 21 stations in those regions. The deal makes the company the largest owner of CBS affiliates and expands its NBC affiliate group, which is already No. 1. Gannett's shares closed up nearly 3%, at $28.61.

[Dec 23]

US Mobile Internet Traffic Nearly Doubled This Year

Two big shifts happened in the American cellphone industry recently: Cellular networks got faster, and smartphone screens got bigger. As a result, people’s consumption of mobile data nearly doubled.

In the United States, consumers used an average of 1.2 gigabytes a month over cellular networks in 2013, up from 690 megabytes a month in 2012, according to Chetan Sharma, a consultant for wireless carriers, who published a new report on industry trends. Worldwide, the average consumption was 240 megabytes a month in 2013, up from 140 megabytes in 2012, he said. But what’s in a megabyte or gigabyte anyway? A megabyte is about the amount of data required to download a photo taken with a decent digital camera, or one minute of a song, or a decent stack of e-mail. So using that analogy -- 1.2 gigabytes of mobile data a month looks something like 1,200 photos that a person downloaded to the Internet from a mobile device each month, compared with 690 photos he downloaded a month in 2012.

[Dec 23]

President Obama can’t point to a single time the NSA call records program prevented a terrorist attack

National Security Agency defenders, including President Barack Obama, continue to cite the terrorist attack on Sept 11, 2001 when defending the program that scoops up domestic call records in bulk. But asked specifically if he could identify a time when that program stopped a similar attack, President Obama couldn't. That's because the program hasn't prevented a second 9/11. The reason the President can't cite a specific time the phone meta-data program stopped a similar tragedy is simply because it hasn't.

[Dec 23]

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