January 2014

A new power in conservative media

A player in Christian and talk radio stations is buying up popular conservative websites -- moves that could make Salem Communications the next big thing in right-wing media.

The California-based company has recently gobbled up sites that reach millions of readers, like Michelle Malkin’s Twitchy.com, the Eagle Publishing group which is home to RedState.com, HumanEvents.com and the conservative publishing house Regnery. The Salem empire already includes more than 100 Christian and conservative talk-radio stations and several Christian-themed websites, as well as HotAir.com and TownHall.com. Though Salem doesn’t appear to be planning major changes to the sites, media experts say the move represents a bid to consolidate the huge conservative market and power up the company’s effort to reach beyond its core conservative Christian devotees to possibly become more of a powerful political force on the right. The consolidation Salem is undertaking is unlike anything seen on the left, where media efforts are generally much more individualized. With the expansion, Salem is well-positioned to expand its audience -- and its conservative influence -- by tapping a new group of listeners and readers described by one media observer as those who are “the sister or cousin” of the hardcore Tea Party member who’s already tuned in.

How the NSA Threatens National Security

Through many disclosures, we've learned an enormous amount about the National Security Agency’s surveillance capabilities, how the agency is failing to protect us, and what we need to do to regain security in the Information Age.

First and foremost, the surveillance state is robust. It is robust politically, legally, and technically. Second, the NSA continues to lie about its capabilities. Third, US government surveillance is not just about the NSA. The Snowden documents have given us extraordinary details about the NSA's activities, but we now know that the CIA, NRO, FBI, DEA, and local police all engage in ubiquitous surveillance using the same sorts of eavesdropping tools, and that they regularly share information with each other. We have no evidence that any of this surveillance makes us safer. Not only is ubiquitous surveillance ineffective, it is extraordinarily costly. Finally, these systems are susceptible to abuse.

The President's Review Group recommendations are largely positive, but they don't go nearly far enough. We need to recognize that security is more important than surveillance, and work towards that goal.

[Schneier is the chief technology officer of Co3 Systems, a computer-security firm]

Big City Community Networks: Lessons from Seattle and Gigabit Squared

[Commentary] We recently learned that the Gigabit Squared project in Seattle is in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using city-owned fiber to reduce the cost of building its trunk lines. There are a number of important lessons, none of them new, that we should take away from this disappointing news. (This is the first of a series of posts on the subject.)

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

[Mitchell is the Director of the Telecommunications as Commons Initiative with the New Rules Project of the Institute for Local Self-Reliance.]

AT&T's special access proposal faces fire from CompSouth

AT&T's desire to eliminate pricing discounts on special access contracts that are longer than three years now faces its latest challenge from CompSouth, an association of CLECs serving business customers in the Southeast.

The telco's main argument is related to its goal of switching all of its current wholesale TDM-based special access customers to IP-based services such as Ethernet by 2020. In its filing with the Tennessee Regulatory Authority (TRA), CompSouth said AT&T has not provided any facts about how it would no longer be able to provide DS1 and DS3 services after it transitions to all-IP. Incumbent telcos use circuit emulation technology that allows TDM-based services to be transported over an IP network. "CompSouth submits that there is no factual basis for AT&T's claim that the company will be unable to continue offering DS1 and DS3 services following its alleged transition to an 'all IP' network," the organization wrote in its complaint. If AT&T eventually gets its way, a wholesale customer's monthly charges could increase by as much as 20 to 30 percent for some services.

In 2014 the next billion will access the mobile internet -- at $20 a handset

In 2013 smartphones outsold feature phones, and the dean of Silicon Valley tech investing, Marc Andreessen, says that within three years you simply won’t be able to buy a non-smartphone. We won’t exceed 3.5 billion smartphone subscriptions until 2016. The total number of mobile subscriptions, however, will exceed 7 billion by 2014, according to the International Telecommunications Union. Meanwhile, the total number of mobile phone numbers will also be growing, and will exceed the number of people on earth thanks to countries like India, where many people have more than one phone to take advantage of price variations in different places.

Of course, a smartphone isn’t nearly as useful if you don’t have a data connection good enough for browsing the web, downloading apps, streaming music and video, and using maps. Only 30% of the world’s 7 billion mobile subscriptions included mobile broadband in 2013, says the ITU. But according to some estimates, most mobile subscribers will likely be internet-connected within the next decade. In 2014, the smartphone and tablet industry will take big strides in that direction: Usable smartphones manufactured in the motherland of cheap electronics, Shenzhen, will be had for $20, at least in China. With phones and tablets that cheap, the bottleneck for most people won’t be their device, but the cost and quality of mobile access.

Why T-Mobile wants Verizon’s discarded 4G airwaves

[Commentary] Why does T-Mobile want to build an LTE network using frequencies Verizon hasn’t touched in six years? There are several reasons, but the main one has to do with the different stages the two carriers are at in their LTE rollouts.

Verizon sold the low-frequency licenses because it no longer needed them. Verizon had already built out its coverage network to most of the U.S. population. It no longer needed range, it needed capacity, and those high-frequency AWS airwaves were the perfect vehicle for the high-bandwidth network it craved. Verizon traded in its beachfront property for what it considered penthouse real estate.

T-Mobile is in the opposite position. It’s in the process of building a very high-capacity LTE network in the big cities using AWS frequencies (networks just as powerful as Verizon’s). But the big knock on T-Mobile has always been that its impressive 3G and 4G speeds disappear once you leave the city limits. These low-frequency airwaves will let T-Mobile build wide-sweeping networks to fill in those gaps. The reason T-Mobile is acting now to buy those airwaves — apart from having recently raised funds for such acquisitions — is that the 700 MHz airwaves it’s buying recently became much more useful. T-Mobile is getting a portion of the band known as the A-block, which no other nationwide operator is using for LTE. Still T-Mobile remains in the market for more spectrum. The Verizon purchase only gives it 700 MHz licenses covering half the country’s population. If T-Mobile truly wants to shed its reputation as being a city-only service provider, it will have to buy a lot more airwaves.

AT&T’s Sponsored Data plan isn’t the end of network neutrality but it is a new model for wireless

[Commentary] AT&T’s sponsored data announcement will generate outrage in many circles as net neutrality fans and those worried about the next generation of startups cry foul over AT&T’s plans to let companies pay to let certain content bypass AT&T’s data caps. But depending on what AT&T charges and how competitive you think the wireless market is, I can’t work myself into a froth just yet.

Instead, based on the implementation, I see an evolution of the internet on the mobile side that makes sense given the limitations of spectrum and the demand for mobile content. As people gave up their unlimited data plans a few years back (because carriers would have made their lives miserable otherwise), the wireless operators now have the perfect stick to beat both the end consumer and the content companies into participating in a double-sided market. One where the consumer and the content provider both pay AT&T. While there are plenty of valid arguments about whether data caps are the right way to solve for worries about network congestion, in the mobile world they have become the de facto standard at the big operators. And even plans that offer unlimited data reserve the right to slow your speeds or throttle your usage in times of congestion. So if you accept data caps as a reasonable way for wireless carriers to manage their networks, then letting companies pay to let certain content or apps bypass those caps seems like a valid innovation in the carrier business model as opposed to a subtle violation of network neutrality.

AT&T's Sponsored Data is bad for the internet, the economy, and you

[Commentary] AT&T’s Sponsored Data program is a way for AT&T to levy taxes on companies who can afford to pay. That has huge implications for the free market of the internet: if YouTube doesn't hit your data cap but Vimeo does, most people are going to watch YouTube. If Facebook feels threatened by Snapchat and launches Poke with free data, maybe it doesn't get completely ignored and fail. If Apple Maps launched with free data for navigation, maybe we'd all be driving off bridges instead of downloading Google Maps for iOS.

That's not fair competition; that's just pay-to-play.

Pull the thread out even farther and it gets even more evil: if sponsored data becomes a de facto cost of business in the exploding mobile market, those costs will just get passed right back to consumers. And rest assured that AT&T will find a way to keep your service rates high and your contract terms restrictive; nothing about this plan involves shifting AT&T's profits, just increasing them. Lower-income customers on cheaper plans will be disproportionately affected: you and I might still pay for data and use whatever services we want, but anyone counting bits will be buffeted into a world of corporate control. If AT&T can levy taxes on access to a hundred million subscribers who are increasingly turning to mobile devices over traditional PCs, that turns the wireless behemoth into major economic gatekeeper on the internet -- a situation that would flagrantly violate the network neutrality principles that govern landline internet but were waived for mobile. That was a huge policy mistake, and now we're paying the price.

AT&T Allows Advertisers to Sponsor Mobile Data

Say you want to watch a movie trailer on your smartphone. Why should you pay for the data required to display it when you are essentially viewing an advertisement? That’s the idea behind a program that AT&T calls Sponsored Data.

Businesses working with AT&T can pay for the data that is used to consume their content or services so that it does not show up on a customer’s phone bill. AT&T announced three initial partners working with its Sponsored Data program, including Aquto, an ad platform that provides marketers tools to use sponsored data; Kony Solutions, a company that helps businesses develop apps; and UnitedHealth Group, the health care company, which plans to use the program to stream educational videos to people’s mobile devices. AT&T said that when sponsored content shows up on customers’ phones, a Sponsored Data icon will be displayed to show that the content costs them nothing to watch.

Free Press Policy Director Matt Wood responded to AT&T’s announcement: “Caps are supposed to help wireless carriers manage congestion. But if getting a big check from another company suddenly makes AT&T’s congestion concerns go away, that shows data caps aren't necessary in the first place. Caps are merely another way to pad AT&T’s profits. While sponsored data will be pitched as a way to save customers money, it's really just double charging. The customer is still paying for the connection, and won't get a refund just because Facebook or YouTube or ESPN are also paying for some data usage now. Both the customer and the content or app provider are paying for the same data. Only AT&T makes out better. The extra costs could flow back to consumers too, in the form of higher cable bills, or higher prices to use the websites and apps taking on this expense. For example, if ESPN has to pay more money to AT&T just to reach wireless customers, ESPN is going to try to make that money back somewhere else. Content and app providers that can't pay this new toll to reach customers will be at a huge disadvantage, and may never get off the ground in the first place if they can't afford AT&T's sponsor fees. Letting the carriers charge more or less money to reach certain sites is discriminatory, and it's not how the Internet is supposed to work."

T-Mobile Swap Gives Verizon Spectrum, $2.4 Billion in Cash

T-Mobile US agreed to buy airwaves from Verizon Wireless for about $2.4 billion in cash as part of a spectrum swap that will give both companies more network capacity in areas where they need it. T-Mobile will purchase 700-megahertz A-block spectrum licenses from Verizon. As part of the exchange, Verizon will get so-called AWS and PCS licenses, which have a combined value of about $950 million.

The deal will provide T-Mobile with a big swath of low-band frequencies -- a type of spectrum that Chief Operating Officer Jim Alling has said are the missing piece of its network coverage. Verizon, meanwhile, can use T-Mobile’s so-called AWS airwaves to relieve congestion in cities where network performance has suffered due to heavy traffic. “This deal proves to be a big win for Verizon, which was able to unload spectrum it bought in 2008 for a big premium,” said Walt Piecyk, an analyst at BTIG LLC. He said Verizon is making a 38 percent profit on the airwaves it acquired in a government auction. Verizon never put the spectrum to use because it built out its network with different frequencies.

Benton

Search