April 2014

Google, Facebook and other tech companies race to develop artificial intelligence

The latest Silicon Valley arms race is a contest to build the best artificial brains.

Facebook, Google and other leading tech companies are jockeying to hire top scientists in the field of artificial intelligence, while spending heavily on a quest to make computers think more like people. They're not building humanoid robots -- not yet, anyway. But a number of tech giants and startups are trying to build computer systems that understand what you want, perhaps before you knew you wanted it.

Facebook now has more than a billion mobile users every month

Facebook reported its first-quarter earnings, posting revenues of $2.5 billion and a profit of $1.07 billion in profit. That's a big improvement over the same quarter last year, when it reported $1.45 billion in revenues and $373 million in profit. That means in the last year revenue was up 72 percent and profit roughly tripled.

One of the numbers that really stood out was how much Facebook makes per user. In the US and Canada Facebook now makes $5.18 in annual advertising revenue per user. That's an increase of over 80 percent from one year ago. Facebook reported 1.28 billion monthly active users and over 1 billion monthly active mobile users. This time last year Facebook had 1.1 billion active monthly users and 751 million monthly mobile users, an increase of 34 percent. It was the first time it had over 1 billion mobile users in a single month.

China becomes the iPhone growth story

The slowing growth of the iPhone has been hanging over Apple’s share price for the best part of two years now. On April 23, that slowdown suddenly reversed. Unit sales of the smartphone, which makes up more than half of Apple’s total revenue, rose 17 percent to 43.7 million devices in the company’s fiscal second quarter, much better than forecast, and revenues grew 14 percent to $26.1 billion. Apple shareholders and seasoned observers alike were taken aback.

Carlos Slim secures control of Telekom Austria

Carlos Slim’s long-running battle to establish himself in the European telecoms market took a step forward, after Austria’s state holding company (ÖIAG) approved a shareholder agreement that paves the way for the Mexican tycoon to take control of Telekom Austria. Under Austrian law, the agreement between Slim’s América Móvil, which already owns 27 percent of Telekom Austria, and the ÖIAG, which has a 28 percent stake, means that they must now make a bid for the remainder of Telekom Austria’s shares.

Bipartisan group slams US SEC for resisting email privacy reform

A coalition of liberals and conservatives is lashing out at the US Securities and Exchange Commission for pushing back against legislation that would force government agencies to get warrants before they access the e-mail of people under investigation.

The group, Digital 4th launched www.notwithoutawarrant.com, a website urging the public to lobby the White House to support sweeping changes to federal privacy laws proposed in Congress in 2013.

In a conference call with reporters, the group singled out the SEC for stalling the reforms. It also called on President Barack Obama to respond to a petition with more than 100,000 signatures in support of the bill, saying the SEC's opposition has caused the White House to ignore a groundswell of support.

The Broadband Revolution Is Not Nigh

[Commentary] Is America on the cusp of a broadband revolution? You might get that impression from AT&T’s announcement that it is considering providing Internet service of up to 1 gigabit, or 1 billion bits, a second to 21 metropolitan areas including Atlanta, Chicago, Los Angeles and San Francisco.

The company’s plans sound impressive and ambitious. But if you happen to live in the cities AT&T is talking about, you might want to keep your Champagne on ice. Even if the company were ready to start laying new fiber-optic lines tomorrow, it would take many months of digging before it would be in a position to provide super-fast broadband connections.

A better way to understand what AT&T is doing is to look at it as a salvo in the company’s war of words with Google. Neither company will necessarily get around to expanding in all of the cities they’ve mentioned, however. Meanwhile, cable companies have been trying to consolidate control of the market.

Most Americans currently have few choices for high-capacity Internet service; nearly 60 percent of households buy broadband from their local cable companies, according to the Leichtman Research Group. It would be great if competition between Google Fiber and AT&T ended up providing Americans with more choices. But it would be naïve to believe that a broadband revolution is coming as long as a handful of cable companies dominate this important market.

Portland’s being a pushover to snag Google Fiber

[Commentary] As Seattle tries to figure out how to improve its broadband situation, it ought to keep an eye on its sister to the south. Portland is getting hot and heavy with Google, which may bring its fast fiber broadband service to the Rose City as early as 2015.

Portland recently reached a preliminary franchise agreement with the online giant and will begin public deliberations on the deal in May, according to The Oregonian.

Google announced in February that it plans to bring its fast-fiber broadband and cable-TV service to Portland and five surrounding cities. But first Portland and the neighboring cities must sort through the same neighborhood issues that Seattle now faces with CenturyLink and other broadband providers demanding special treatment and more access to public property.

Google may be an exciting newcomer to the telecom business but in its dealings with cities, it acts like a crusty old player in the industry. In Portland, Google is twisting arms by offering its fast broadband in return for city handouts, just as CenturyLink is doing in Seattle.

Cities are pushovers when it comes to broadband. The way politicians talk about it, you’d think their constituents were stuck in the dark ages and broadband was as important as the fire department.

Google Fiber is appealing and has plenty of cheerleaders on social media and at City Hall. Yet Google is a mixed blessing. The majority of residents in any city would probably rather get broadband service from a public utility that’s accountable to them, instead of from a fairly opaque company that makes its money delivering hypertargeted advertising.

Privacy concerns are offset by the prospect of a wealthy company stepping in to help address a complicated infrastructure challenge. Still it’s a business, not a gift, and city officials should push to make sure all of their residents benefit from the deals they make.

Regulators approve settlement with Verizon over broadband rollout

Citing what it called misunderstandings and misinformation about Verizon's 1993 promise to roll out high speed Internet service statewide, the New Jersey Board of Public Utilities unanimously approved a controversial settlement that critics claim reduces some of the commitments that the telecom company made 21 years ago.

BPU President Dianne Solomon said that there was "clearly confusion" over Verizon's original broadband obligations, with the board saying that the company was never required to deliver broadband via fiber. The agency and its staff said that the settlement will avoid potentially years of litigation over Verizon's broadband agreement, called Opportunity New Jersey, and how rural areas in the southern part of the state will be serviced.

"Verizon is getting a free pass," said Gregory Facemeyer, a member of the Hopewell Township Committee, a town without wired broadband service. Under one of the settlements most-debated clauses, Verizon will be permitted to substitute high-speed wireless service, so-called 4G, instead of delivering broadband service over copper or fiber-optic lines, in some areas.

Japan attack on wireless 'oligopoly' awkward for SoftBank's US plans

For Japanese billionaire Masayoshi Son, who wants to build the world's largest mobile Internet company, criticism of his operations from regulators in his home market could not come at a worse time.

The feisty entrepreneur is lobbying skeptical Washington officials to let him buy a second US mobile operator, saying he would help to break up a cozy US wireless oligopoly.

Son says he is an outsider who stirred up a price battle that benefited consumers after he took over Vodafone's failing Japanese operation in 2007. So it must be galling to hear regulators in Tokyo chide his SoftBank Corp, along with NTT DoCoMo, Japan's mobile industry leader, and No.2 KDDI Corp, for lack of competition in the domestic smartphone market.

"You could say the mobile market is an oligopoly of the three big companies," Communications Minister Yoshitaka Shindo said at a regular news conference in April. His ministry is preparing long-term proposals to bring lower prices and faster services, including fostering growth of mobile virtual network operators (MVNOs), cut-rate providers that lease network access from the big carriers.

The sniping will not help Son's plans to acquire T-Mobile US.

It's time for the FCC to stand up for Americans instead of ruining the Internet

[Commentary] The Internet is screwed, and the US government is making it worse. Political cowardice caused the Federal Communications Commission to lose its first battle for net neutrality regulation: the rules that keep the Internet as you know it free and open.

The idea of net neutrality is that all traffic is created equal -- whether you’re a movie streaming from Netflix, or a WhatsApp message, or a Tweet, or a bulletin board message. But according to a report from the Wall Street Journal, instead of trying to correct the errors it made in open Internet rules the first time around, the FCC will consider enacting new rules that directly destroy the principles of net neutrality.

The proposal would allow profit hungry behemoths like Comcast, AT&T, and Verizon to become gatekeepers that give preferential treatment to companies that pay the most for special access to customers. If cowardice caused the FCC to lose its first major net neutrality battle, complicity with the ISP industry is leading to its second major failure.

The proposed rules would mark a complete capitulation to the monied Internet interests, harming consumers in the short and long-term. The ISPs that control the "last mile" of the Internet -- the pipes that connect to your home -- would love nothing more than to extract tolls from companies. Netflix’s surrender to Comcast sits in the murky waters of "peering," where major ISPs connect to one another, but the new rules could mean that similar deals are made in the last mile of the Internet where net neutrality thrives.

The government is too afraid to say it, but the Internet is a utility. The data that flows to your home is just like water and electricity: it’s not a luxury or an option in 2014. The FCC’s original Open Internet rules failed precisely because it was too timid to say that out loud, and instead erected rules on a sketchy legal sinkhole that was destined to fail.