January 2014

FCC Complaints Never Fail to Disappoint

If the volume of complaints received by the Federal Communications Commission is any indication, many Americans would like to wash CBS’s mouth out with soap.

According to documents unearthed by the Government Attic website via the Freedom of Information Act, the CBS comedies 2 Broke Girls and Two and a Half Men have generated reams of informal FCC complaints, the majority of which have to do with viewers’ concerns with sexual innuendo and coarse language. Cable series have also been targeted (The Colbert Report, South Park, The Shield, Mad Men), but given that the FCC does not have the legal authority to regulate cable content -- indecency regulation is only applied to broadcast TV -- the commission doesn’t formally review any incoming complaints about cable shows. While much of the criticism is justified -- both prime-time series traffic in crude, single-entendre jokes about genitalia and their various manipulations/intersections -- some of the written communiqués filed away by the FCC are (unintentionally) funnier than anything you’ll see or hear on either show. [Jan 1]

Viewing Where the Internet Goes

A Q&A with Drs Vinton Cerf and Robert Kahn.

The Internet’s global reach that made classified documents available to Edward J. Snowden -- and made it so easy for him to distribute them to news organizations. Yet the Internet also made possible widespread surveillance, a practice that alarmed Snowden and triggered his plan to steal and publicly release the information. With the Snowden affair starkly highlighting the issues, the new year is likely to see renewed calls to change the way the Internet is governed. In particular, governments that do not favor the free flow of information, especially if it’s through a system designed by Americans, would like to see the Internet regulated in a way that would “Balkanize” it by preventing access to certain websites. The debate right now involves two international organizations, usually known by their acronyms, with different views: ICANN, the Internet Corporation for Assigned Names and Numbers, and the ITU (International Telecommunication Union).

[Dec 31]

Court upholds laptop searches at border

A federal court has tossed out a lawsuit trying to prevent the government from searching laptops, cellphones and other devices at US border checkpoints. The circuit judge’s decision to uphold the Department of Homeland Security (DHS) policy was a blow to civil liberties groups that argued the practice violated the Constitution’s protection against unreasonable search and seizure.

According to government documents, officials at the border search and copy the contents of thousands of people’s devices each year and can detain the devices for a short period of time without a reasonable suspicion that the traveler has committed a crime. The American Civil Liberties Union (ACLU) and the National Association of Criminal Defense Lawyers filed a lawsuit challenging the DHS policy in 2010, on behalf of the National Press Photographers Association and Pascal Abidor, a French-American man whose laptop was confiscated at the Canadian border. But in his opinion, Judge Edward Korman wrote that the groups did not have standing to dispute the DHS searches because “there is not a substantial risk that their electronic devices will be subject to a search or seizure without reasonable suspicion.” Judge Korman wrote that border agents did indeed have “reasonable suspicion” to check the laptop, since Abidor had recently returned from Lebanon and was carrying pictures of Hezbollah and Hamas rallies. The ACLU said it was considering an appeal of the decision.

[Dec 31]

Federal Court Won't Review Dual-Carriage/Viewability Rule Sunset

A three-judge panel of the US Court of Appeals for the DC circuit has denied a broadcaster appeal of the Federal Communication Commission's 2012 decision to sunset the viewability rule, deferring to the FCC's judgment and saying it had violated no rules of procedure.

The sunset in question was of the 2007 rule (the viewability rule, as broadcasters see it; the "dual-carriage" mandate, as cable operators view it) that required cable operators to downconvert digital must-carry TV station signals to analog format for their analog customers, an increasingly small percentage of the cable universe. The sunset did not mean cable operators no longer had to accommodate their analog customers, only that they could now do so by providing home conversion equipment for free or at an "affordable" cost rather than being required to deliver both an analog and digital version of must-carry stations. The National Association of Broadcasters appealed the decision, saying it was arbitrary, capricious and does not square with congressional intent -- in the 1992 Cable Act -- that must-carry signals have to be viewable without added equipment, "not merely available in theory." The three judge panel -- Judges Brett Kavanaugh, Harry Edwards and Stephen Williams -- did not agree. They concluded that the appeal lacked merit because the rule had only been a stopgap measure, pointing out that in 2012 there were more home conversion devices to display digital channels on analog sets (27 million) than there were analog cable customers left (12.6 million).

[Dec 31]

End the broadband panic meme

[Commentary] I am growing very tired of this meme: Another reporter writes about how the US is falling behind international rivals in the supply of broadband. There are serious issues to debate, but this standard meme takes attention away from them. The latest version of this article came from the New York Times. It had the title “US Struggling to Keep Pace in Broadband Service,” and it brought out the usual concern that all US growth will fall behind if the US does not have the fastest broadband in the world.

Why is this tiring? Let me count the ways.

First, while it is irritating to have slow service at home, US productivity does not depend much on that. Household broadband is less important for economic growth than the broadband to business. And what really matters for productivity? Speed to business.

Second, as for household speeds, many people simply don’t want them and do not want to pay for them.

Third, if we study demand, can we all acknowledge that demand is very skewed in the US? 10% of the users account for far more than 50% of the data to households, and 20% of the users get most systems to more than 80% of the data use. And it is growing at levels from median to highest part of the skew, so there is good reason to think demand for data is growing for all major users. Will there be capacity to handle those intensive users of data? The answer is unclear. That hints at an open question that is worth debating. Not everyone pays the same price because flat rate pricing has been so common across the US. The top 10% of users pay very low prices per megabit. Even if total expenditure per month for the biggest users is twice as expensive in the US in comparison to other countries, it is still pretty cheap.

[Greenstein is the Kellogg Chair of Information Technology, and a member of the Management and Strategy Department at the Kellogg School of Management, Northwestern University]

[Dec 31]

Apple Says It Is Unaware of NSA’s iPhone Backdoor

Apple just responded to newly released documents claiming that the National Security Agency has a method for gaining backdoor access to its iPhone. It says it has never worked with the agency, and is unaware of the alleged program targeting the iPhone known as DROPOUTJEEP.

Here’s Apple’s statement in full: “Apple has never worked with the NSA to create a backdoor in any of our products, including iPhone. Additionally, we have been unaware of this alleged NSA program targeting our products. We care deeply about our customers’ privacy and security. Our team is continuously working to make our products even more secure, and we make it easy for customers to keep their software up to date with the latest advancements. Whenever we hear about attempts to undermine Apple’s industry-leading security, we thoroughly investigate and take appropriate steps to protect our customers. We will continue to use our resources to stay ahead of malicious hackers and defend our customers from security attacks, regardless of who’s behind them.”

[Dec 31]

ACLU sues to get info on NSA surveillance

The American Civil Liberties Union sued the Obama Administration for more information about how intelligence agencies conduct surveillance.

The civil liberties group filed a Freedom of Information Act lawsuit in a New York federal court seeking information on an executive order originally signed by President Ronald Reagan that is frequently used by the administration to justify National Security Agency actions. The ACLU in its suit said the NSA is using the order to justify the collection of “vast quantities of data worldwide,” including “nearly 5 billion records per day on the location of cell phones, including Americans' cell phones." It also said the agency used the order to obtain “information from Google and Yahoo user accounts as that information travels between those companies' data centers located abroad.” The group cited "recent revelations" in the press to back up its claims. Its lawsuit was joined by Media Freedom and Information Access Clinic at Yale University. In its complaint, the ACLU said recent revelations "have confirmed that the government interprets that authority to permit sweeping monitoring of Americans' international communications.”

[Dec 30]

Cable is holding its own, and then some

TV fans aren't ready to cut their cord to cable. Viewers spent a record 17.2 hours per week watching ad-supported cable networks in 2013, rebounding from a slight dip last year, while the big four networks claimed a combined 7.5 hours, another low. "With the growth in on-demand viewing, Hulu and Netflix, you'd think there'd be less viewing of cable TV as a whole," says Turner Broadcasting research chief Jack Wakshlag. "But it's at the highest it's ever been." The gains weren't shared equally, some shows on some networks fared better than others. But half of the top cable networks saw prime-time audience declines. [Dec 31]

Apple’s Cook, Gore Should Face E-Book Queries, U.S. Says

Apple faces opposition from the Department of Justice in the company’s bid to block an antitrust monitor appointed in the electronic books price-fixing case from interviewing top executives and directors, including chief executive officer Tim Cook and board member Al Gore.

The government said the monitor, former Justice Department inspector general Michael Bromwich, should be allowed to interview the company’s leaders, as such activities are “standard procedure in monitorships,” according to a filing in Manhattan federal court. Bromwich was appointed in October by US District Judge Denise Cote to evaluate Apple’s antitrust compliance policies. Apple said in court papers filed in November that the monitor was operating in an “unfettered an inappropriate manner,” and was overstepping his authority by pressing for immediate interviews with senior management. “Stripped of its blustery rhetoric and personal attacks, Apple’s motion is about its desire to shield its highest-level executives and board members from the perceived inconvenience of having to sit for these interviews,” Justice Department lawyers said. Apple’s claim that Bromwich’s request would result in loss of market share growth at the world’s biggest technology company is “wholly unbelievable,” the US lawyers said.

[Dec 31]

Content, good pricing drove media deals in 2013

Nothing gets between Americans and pro football. It's a lesson learned the hard way by Time Warner Cable as it blinked in its negotiations over licensing fees with CBS on the eve of the NFL regular season debut in September 2013. If the costly fight proved anything this year, it was that owners of compelling content can often steer their destinies even as emerging technologies upend distribution and sales tactics.

Despite tirades about bountiful junk on the Internet and cable and the decline of the legacy media business, investors' money flowed to the producers of TV shows and websites. Even magazines and newspapers got some good news in 2013. US media and entertainment companies completed $75.8 billion worth of acquisitions and mergers in 2013, a 47% increase on 2012, according to Thomson Reuters. The number of deals was up, as well -- 766 vs. 596 in 2012. Some investors found valuation of the target companies ideal as the recovery of the advertising market from the 2008 financial crisis teeters along. Total US advertising spending rose for the fourth-consecutive year in 2013, up 3.8% to $171.3 billion, according to data from eMarketer. A sharp spike in mobile advertising and a steady recovery of TV ads more than offset the continual -- and likely, irrevocable -- fall in print advertising. Other deals were the manifestations of companies seeking consolidation -- aligning resources with competitors -- to fortify themselves against foes and forces that threaten future profits. "Consolidation is happening in every legacy industry," wrote media analyst Ken Doctor, on his website, Newsonomics.com. "2013 was the biggest year of TV station ownership consolidation."

[Dec 30]