April 2014

Samsung's New Challenge: Rising Component Costs

As the world's biggest smartphone maker tries to keep profits up in its mainstay mobile phone business, one key challenge will come from an unexpected place: the rising costs of the components that go into its devices.

Samsung's first-quarter earnings showed that its smartphone margins remained flat from 2013, highlighting the need for the South Korean technology giant to keep costs low amid uncertain demand for its new flagship Galaxy S5 smartphone. Samsung executives said that the Galaxy S5 smartphone, which officially went on sale in early April, was received positively by the market and would likely do better than the previous model, without elaborating.

But analysts said margins could well slip this quarter. The company packed its latest phone with pricey features -- such as an improved camera, a fingerprint scanner and a heart-rate sensor -- hoping to give it a leg up against a crowded field of rivals that, like Samsung's devices, run Google's Android operating system.

"Despite increasing sales volumes, a decline in profits seems inevitable due to falling prices and intensifying competition," said Greg Roh, an analyst with HMC Investment Securities in Seoul. Not helping Samsung's cause is the company's continued reliance on its massive advertising budget to keep its sales humming, and the rising cost of making its own devices.

Confused by Facebook privacy settings? So is the Supreme Court.

The Supreme Court heard oral arguments in a pair of cases that will shape what privacy protections Americans have against warrantless searches of electronic devices.

But during the two-hour discussion, Chief Justice John Roberts touched on a related issue that millions of Americans are challenged by every day: Facebook privacy settings. The privacy settings of the social network and its related applications came up in the discussion of Riley v. California, a case involving a San Diego college student, David Riley, who was pulled over for expired tags, only to have police seize his phone and use a photo on it to convict him for participation in a drive-by shooting.

Litigator Jeffrey Fisher, representing Riley, argued that even flipping through photos on a smartphone draws on a multitude of data that is "intrinsically intertwined" in the device in such a way that implicates the Fourth Amendment.

"Including information that is specifically designed to be made public?" asked Chief Justice Roberts, "I mean, what about something like Facebook or a Twitter account?" Depending on a user's privacy settings, Facebook activity can range from entirely public to only available to an individual user -- although Facebook changes the settings often enough that users aren't always aware of the current setup.

But Chief Justice Roberts went on to say there is not really "any privacy interest" in a Facebook account -- or it's "at least diminished because the point is you want these things to be public and seen widely" -- before asking if there would be a way to create a rule that police could search "those apps that, in fact, don't have an air of privacy about them."

Even Roberts's argument about accessing publicly posted information doesn't seem to be making a lot of sense -- which isn't entirely surprising considering the court's previous problems with technology concepts -- mostly because if something is already public, there would be no need for law enforcement to use an arrestee's device to access it.

Broadcasters Seek Consumer Group Help In Retransmission Fight

Broadcasters are hoping to enlist consumer groups in battling cable operators over what broadcaster group TVfreedom.org is calling abusive pay TV practices.

At least one, Public Knowledge, signaled it would be happy to work with the group on the issue of billing practices. In a letter to eight public interest groups, TVFreedom called on them to "join the organization in developing an open and collaborative process that will place a public spotlight on the abusive billing and business practices being undertaken by the cable and satellite TV industry that are harming consumers."

The groups, in addition to Public Knowledge, are Free Press, Consumers Union, Consumer Action, Consumer Federation of America, New America Foundation, National Consumer League and Public Citizen.

The letter cites a lack of competition and consumer choice in the US video marketplace as justifying a hard look at cable's alleged billing practices including hidden fees, excessive equipment rentals, early termination fees and overbilling.

Comcast Going Big With Wi-Fi

Using a mix of quasi-public hotspots deployed in outdoor locations, businesses and on customer-side DOCSIS gateways, Comcast said its Wi-Fi network will span 8 million hotspots by the end of 2014.

Comcast, which announced it had surpassed the 1 million mark in early April, said it will be boosting that number throughout the year by deploying hotspots in several markets, including Atlanta, Baltimore, Boston, Chicago, Denver, Detroit, Hartford, Houston, Indianapolis, Miami, Minneapolis, Nashville, Philadelphia, Pittsburgh, Portland, Sacramento, Salt Lake City, San Francisco, Seattle, and Washington DC.

Usage is also on the rise. Comcast said nearly 200 million out-of-home sessions have been initiated on its Wi-Fi network so far in 2014, a 700% increase versus the same period in 2013.

Cable Operators Prepared To Enter Gigabit Era

In a wide-ranging discussion at The Cable Show, a handful of the cable’s top tech and engineering executives said technologies such as DOCSIS 3.1 position them well to offer Gigabit-level broadband services as they increasingly find themselves matched up with competitors such as Google Fiber and AT&T and the potential expansion of the telecommunication’s fiber-based “U-verse with GigaPower” platform.

Time Warner Cable, which is pairing off with Google Fiber in Kansas City, is wary of that competition, but has found that the new entrant has had limited success and that some customers are coming back because they like TWC’s video service better.

Google Fiber “is certainly a worthy competitor, if they’re going to overbuild us,” but that they offer “nothing dramatically different” than what TWC can bring to bear, Mike LaJoie, TWC’s executive vice president and chief technology and network operations officer, said. “Their product works. Our product works just as well.”

Cable’s incremental economics are generally better than someone who is entering the market in a greenfield situation and looking to cherry pick, Tony Werner, Comcast’s EVP and CTO, said, noting that Comcast has raised its speeds 13 times in the last 12 years and has begun to make 100 Mbps (downstream) its main flagship product in the Northeast and will look to continue that trend.

Gig City's High-Speed Internet Doesn't Reach All Residents

Chattanooga (TN) offers the fastest Internet connections in America along fiber-optic links stringing out from a revitalized downtown. But urban planners taking part in the Vanguard Next City conference still found physical and economic barriers separating the central city and its Gig technology with nearby neighborhoods, especially the Westside.

The barriers are both physical and economic. To get to nearby businesses and jobs, many of those living in the College Hill Courts public housing project cut through a chained-link fence and walked through a field to cross US Highway 27 and connect with downtown. And many Westside residents can’t afford Chattanooga’s superfast Internet.

But that could change if the city implements the winning suggestions from the Chattanooga Challenge that ended the fifth annual Next City conference. A team of government and civic leaders from across the country suggested that Chattanooga offer free Wi-Fi service to College Hill Courts to bridge the digital divide and develop a new pathway to connect downtown and the neighborhood.

A Major Win for the Open Internet

As one of Brazil’s leading Internet scholars and chair of Netmundial Virgilio Almeida brought NETmundial to a close, the US government delegation rose in applause. And almost everyone else in the room rose with us.

We affirm the Multistakeholder Statement of São Paulo, the ideas it presents, the ideals it embraces, and the multistakeholder process that made it possible. We rose out of appreciation for the Brazilians and the Internet community leaders that brought us together and impressively managed a challenging conversation. And we rose in joint commitment to preserving, promoting, and expanding the benefits of a single, interoperable, open, and global Internet for all of the world’s people.

NETmundial clearly demonstrates the suitability of the multistakeholder approach over intergovernmental discussion to address Internet governance issues. We will carry this experience forward as we approach upcoming multilateral events like the International Telecommunication Union (ITU) Plenipotentiary Conference in Korea in October, where we will work to ensure that the ITU remains relevant and responsive to the evolution of technology in its traditional areas of competence, and leaves issues such as Internet governance to the fully capable global multistakeholder community.

[Michael Daniel serves as Special Assistant to the President and White House Cybersecurity Coordinator. Lawrence Strickling serves as Assistant Secretary of Commerce for Communications and Information and Administrator, National Telecommunications and Information Administration. Ambassador Daniel A. Sepulveda serves as US Coordinator for International Communications and Information Policy at the US Department of State. Christopher Painter serves as Coordinator for Cyber Issues at the US Department of State. Scott Busby serves as Deputy Assistant Secretary of State for Democracy, Human Rights and Labor]

Electric Objects Wants To Display the Most Beautiful Parts Of The Internet On Your Wall

Jake Levine thinks the Internet is stuck inside our computers. We turn on our screens, check e-mail, write a Word document, head over to Facebook, maybe watch some Netflix, then turn them off.

"That tends to build some anxiety," said Levine, the former general manager at Digg. "You have software built on those devices that is designed to demand your attention, to focus you. What we end up feeling at the end of all of that is anxious."

That’s where Levine's new venture, comes in. He wants to take some of the more serene parts of the Internet out of that stress-inducing device sitting on your desk, and put them on your wall through a different kind of device.

"I'm building an Internet-connected screen that will bring the Internet to your wall, a screen that is worthy of that beautiful mess of human expression that pervades our connected lives," Levine explained in a Medium post.

It sounds a lot like a smart TV. But, the similarities between the two end at the screen. Both the hardware and software of Levine's invention are designed for "passive" or "ambient" use, more like a picture frame and less like a tablet.

Alex Rainert, the head of design at Project Florida who is testing the device, said it doesn't feel like a gadget at all.

The Important Role the Tech Industry Plays in Fighting Poverty

[Commentary] SF Gives was born out of the strife and opportunity facing San Francisco and the Bay Area. We all have to take responsibility for the future of our region; tech and business leaders are not exempt.

We are blessed with economic prosperity thanks to the tech boom, but this boom also brought with it tens of thousands of new neighbors and growth. The change we are experiencing is undeniable, and it’s the already marginalized among us -- the one in five people living in poverty in our community -- that suffer most.

There are misunderstandings on both sides of the rising tide of prosperity. It’s good for companies to want to be here, to thrive and to inspire risk-taking and entrepreneurship. But those companies must recognize the indelible nature of their footprint, not only on the business sector, but also on housing and the overall cost of living. In that growth, we need to ensure that all of our residents have access to a better life, but it will take investments and it will take leadership.

[Lurie is CEO and Founder, Tipping Point Community]

Comcast: Too Much Control

[Commentary] In many markets, Comcast and other big telecommunications companies don’t directly compete with each other, meaning consumers don’t have other options to turn to. The companies prefer to control their respective domains -- and our pocketbooks.

And this is all about to get worse. Much, much worse.

Comcast, the nation’s No. 1 cable and Internet company, wants to take over Time Warner Cable, the No. 2 cable provider. Put them together and you get one media giant controlling the vast majority of pay-TV and Internet access in America.

A bloated Comcast will likely engage in all kinds of shenanigans that hurt consumers -- everything from instituting totally unnecessary data caps to restricting what kinds of devices customers attach to the network to forcing folks to purchase expensive equipment. And though Comcast is obliged to adhere to the FCC’s now-overturned (and loophole-ridden) open Internet rules, this condition will expire in January 2018.

All of this will result in higher prices. This much power in the hands of one company is bad news for all US residents, including those who live in communities Comcast and Time Warner Cable don’t serve. Comcast would be able to use its market power to dictate the terms of broadband openness, cost and access at a time when the US is falling behind other nations on each of these measures. With Comcast in charge we’ll continue to sink in the ratings.

Benton

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