April 2014

Syniverse Appoints Former FCC Chairman Julius Genachowski to Board of Directors

Syniverse announced that Julius Genachowski has joined its Board of Directors. Based in Washington (DC), Genachowski is a Managing Director in The Carlyle Group’s US Buyout team, focusing on acquisitions and growth investments in global technology, media and telecommunications, including Internet and mobile.

He previously served as Chairman of the Federal Communications Commission (FCC) from 2009 to 2013. Syniverse President and CEO Jeff Gordon said he looks forward to working with Genachowski and believes his extensive experience overseeing mobile and telecom initiatives will benefit Syniverse greatly.

Genachowski, who has held senior leadership positions in the private sector for more than a decade, said he is honored to join the Syniverse board. Under Genachowski’s leadership, the FCC took major actions to extend broadband access, accelerate the roll-out of advanced mobile networks, free-up spectrum for wireless communications, preserve a vibrant Internet and media landscape, foster competition and enhance public safety communications.

Genachowski worked for more than a decade in the private sector prior to his FCC appointment. He helped build IAC/InterActiveCorp, which owned and operated multiple Internet and media businesses, including Expedia, Ticketmaster and USA Network. As a senior executive he helped grow it through acquisition and organically to a company with more than $6 billion in annual revenue and more than 25,000 employees globally. During this period, BusinessWeek named Genachowski one of 25 “managers to watch” in the media sector.

Will Bidder Exclusion Rules Lead To Higher Auction Revenue?

As the Federal Communications Commission begins to formalize rules for the upcoming voluntary incentive auctions for broadcast spectrum, questions regarding participation limits on the largest domestic wireless carriers remain open.

Proponents of bidder restrictions on AT&T and Verizon appeal to a “revenue- enhancement hypothesis,” under which the participation by the more successful carriers will allegedly discourage bidding by smaller firms and thus reduce total auction revenues.

In this bulletin, we analyze data from a recent large-scale spectrum auction to shed light on the validity of the revenue-enhancement hypothesis, and our findings are significant. Among other things, we find no evidence that AT&T and Verizon reduced the number of bidders for licenses. Moreover, we find no evidence to support the claim that lower auction revenues resulted from large firm participation.

As participants, the two increased overall auction revenues, both by winning licenses and by helping to reveal the valuations of other bidders. AT&T’s efforts (win or not) added a 21% premium to final auction prices above and beyond the revenue effects of the typical bidder.

AT&T alone accounted for nearly half of all auction proceeds, even though its winning bids were only about 10% of the total. Verizon’s impact was consistent with that of the average bidder. Accordingly, our findings contradict almost every key aspect of the revenue- enhancement hypothesis -- not only did AT&T’s and Verizon’s participation not deter smaller firms from entering the auction, but their participation substantially raised total auction proceeds. Empirical evidence supporting bidder exclusions or restrictions in the forthcoming voluntary incentive spectrum auctions therefore remains weak.

April 22, 2014 (Aereo vs Broadcasters; Netflix vs ISPs)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, APRIL 22, 2014

Today’s agenda http://benton.org/calendar/2014-04-22/


TODAY AT THE SUPREME COURT
   In Aereo case, Supreme Court to weigh public (performance) vs. private - op-ed
   Win or lose in the Supreme Court, Aereo as we know it won’t last - op-ed
   Aereo analysis: Cloud computing at a crossroads - analysis
   What happens if broadcasters lose the Aereo case? - analysis
   Why the Supreme Court might pull the plug on Aereo - analysis

MORE FROM COURT
   Companies Built on Sharing Balk When It Comes to Regulators

OWNERSHIP
   Netflix opposes Comcast’s merger with Time Warner Cable, calls it anticompetitive
   Comcast: Netflix’s Opposition to Time Warner Cable Deal Is About Shifting Costs to All Broadband Users
   The Comcast deal would not make things better - op-ed
   Nokia-Microsoft Deal to Close Friday, With a Couple Tweaks [links to web]
   Verizon Wireless consumes Golden State Cellular and Mobi PCS [links to web]

INTERNET/BROADBAND
   Supporting an Open and Inclusive Internet in Brazil - press release
   Activists want net neutrality, NSA spying debated at Internet governance conference
   The decades-old idea that could break the net neutrality logjam
   Netflix Calls Out AT&T for Subpar Streaming Performance
   AT&T Eyes 100 US Cities and Municipalities for its Ultra-Fast Fiber Network - press release
   Hey AT&T, enough with the gigawashing! - editorial
   Where's my gigabit Internet, anyway?
   Is Your Internet Connection Slower Than Advertised?
   Digital divide: Just an hour from Gig City, rural residents live in broadband desert
   Broadband network proved itself during ice storm [links to web]

WIRELESS
   As Phone Subsidies Fade, Apple Could Be Hurt [links to web]

TELEVISION
   NAB: Needs Answers On Repacking Moving Expenses ASAP [links to web]
   TiVo: Adherence to C3 is Sucking Millions Out of TV Ad Market [links to web]
   Digital video leaps from tablet to TV [links to web]
   Google Claims UK YouTube Users Watch Less TV [links to web]
   As ‘Meet the Press’ struggles in the ratings, plenty of questions for host David Gregory [links to web]

CONTENT
   The Effect of Social Media in Young Girls - op-ed [links to web]
   The rise of Internet video news - analysis [links to web]

PRIVACY/SECURITY
   Verizon annual cybersecurity report: 'The bad guys are winning' [links to web]
   Obamacare enrollees urged to change passwords over Heartbleed bug [links to web]
   Privacy Concerns Force Inbloom, A Data Repository For Schools, To Shut Down [links to web]

TELECOM
   FCC Commissioner Ajit Pai Statement on Phone Rates - press release

JOURNALISM
   US Newspaper Industry Revenue Fell 2.6 PCT In 2013 [links to web]

GOVERNMENT & COMMUNICATIONS
   Clapper signs strict new media directive

LOBBYING
   CEA Backs Log Cabin Republicans [links to web]

POLICYMAKERS
   FirstNet's hunt for a replacement GM may enable a fresh start

COMPANY NEWS
   The shrewd politics behind the Netflix price hike - analysis
   Apple campaign touts progress on reducing environmental impact [links to web]
   General Mills abandons mandatory arbitration after consumer outcry [links to web]

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TODAY AT THE SUPREME COURT

SUPREME COURT TO WEIGH PUBLIC VS PRIVATE
[SOURCE: Los Angeles Times, AUTHOR: Jon Healey]
[Commentary] The Supreme Court is scheduled to hear arguments in the most important copyright case of the year, and possibly the most important one since it took up file-sharing piracy in MGM vs. Grokster. The new case, ABC vs. Aereo, tests the reach of a key monopoly held by copyright owners: the rights to the "public performance" of their works. On the surface, this case is a slam dunk for ABC and the other broadcasters that brought the lawsuit. Aereo sells a subscription TV service that provides consumers access to their city's local broadcast channels via the Internet, enabling its customers to watch live or recorded shows on their tablets, smartphones, laptops or smart TVs. That's a truncated version of cable, and Congress made clear in 1976 that cable companies have to get broadcasters' permission before retransmitting their programs to the public. In recent years, broadcasters have been demanding (and receiving) increasing retransmission fees, creating a major new revenue stream. To the broadcasters and their allies, that's the entire case. o Aereo and its allies, however, the details are important. Because even if the networks, the US Solicitor General and others on ABC's side are right about what the law says, they're wrong about what's actually happening when an Aereo customer watches TV. This case could ultimately affect how flexible business models will be, as well as companies' ability to build online services around consumers' fair use of copyrighted material. If the justices decide how to treat Aereo by ignoring its technology and looking only at the market segment it occupies, that would be troubling news for innovators.
benton.org/node/180819 | Los Angeles Times
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WIN OR LOSE IN THE SUPREME COURT, AEREO AS WE KNOW IT WON’T LAST
[SOURCE: GigaOm, AUTHOR: Paul Sweeting]
[Commentary] I wouldn’t put money on any particular outcome from the Supreme Court’s review of the Aereo case given how flummoxed actual experts seem to be by the question. But even a clean victory for Aereo isn’t likely to buy the company much beyond a little more time before it needs to find a buyer or be overtaken by the very forces of disruption it would unleash. It’s an inherently inefficient way of doing live streaming that Aereo is already having trouble scaling to meet demand. If you had clear license to transmit broadcast programming over the Internet without needing the legal protection of the Cablevision precedent that’s not the way you would do it. And therein lies Aereo’s real problem. If it loses in court it’s done. But even if it wins there’s nothing to stop broadcasters themselves from eventually providing streaming access to their broadcast signals, potentially at no cost to viewers. It’s simply a matter of time before the technological infrastructure is in place to provide universal live streaming access and to do it much more efficiently than Aereo can. It might look something like Tablet Television, which uses an ATSC dongle to turn tablets into digital TV receivers, or it might look something like LTE multicasting (a.k.a. LTE Broadcast). But it will be scalable and robust in a way that Aereo and other unlicensed services working around the margins of the Cablevision decision will have a hard time matching. [Sweeting is Principal, Concurrent Media Strategies]
benton.org/node/180806 | GigaOm
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AEREO ANALYSIS: CLOUD COMPUTING AT A CROSSROADS
[SOURCE: ars technica, AUTHOR: David Kravets]
The question of whether online broadcast television is to remain in the hands of a stodgy industry that once declared the VCR the enemy is being put directly before the Supreme Court. Aereo isn't exactly a cloud provider. Yet what the broadcasters say it can't do has the cloud industry closely following the startup's legal battles and business model. Aereo essentially maintains that they are providing offsite "rabbit ears" for their customers, allowing consumers to record freely available content that their rented antennas captured in their local markets. If Aereo is blocked from allowing consumers the ability to stream their content at will, what's preventing rights-holders from making the same claim against cloud-storage providers?
benton.org/node/180778 | Ars Technica
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WHAT HAPPENS IF BROADCASTERS LOSE THE AEREO CASE?
[SOURCE: Fortune, AUTHOR: Peter Suciu]
[Commentary] Should Aereo win the right to retransmit the over-the-air signals of television broadcasters, other operators could use similar technologies to also avoid paying the retransmission fees, and that, say some legal experts, could undermine the entire broadcast business model. The rumors of the death of broadcast TV could be greatly exaggerated however. Pamela Samuelson, professor of law at UC Berkeley School of Law said: "My prediction is that the court will split on the case, but Aereo will win on statutory interpretation and the court will say if you don't like this result, tell it to Congress. Aereo has on its side that Microsoft and other tech companies think that many cloud services companies would be at risk if ABC's interpretation of the statute prevails." However, the broadcasters may instead opt for what some have called the "nuclear option." In the summer of 2013, executives at Fox threatened to pull its prime time content and move it to a cable offering, while more recently CBS hinted it might also consider such a strategy. The question becomes whether broadcasters could really make the jump to cable.
benton.org/node/180777 | Fortune
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WHY THE SUPREME COURT MIGHT PULL THE PLUG ON AEREO
[SOURCE: Fortune, AUTHOR: Roger Parloff]
[Commentary] Aereo will finally plead its case to the nine US Supreme Court justices who will determine its fate. Since the enactment of the Copyright Act of 1976, retransmitters of broadcast signals have been required to first obtain permission from the broadcasters -- who own copyrights to much of the programming encoded therein. Congress has enacted elaborate rules dictating how cable and satellite providers can obtain such permission -- sometimes through statutory licenses and sometimes through negotiation. As a result, retransmitters generally end up paying fees for the privilege, and retransmission fees have become a crucial portion of broadcasters' revenue, especially as advertising revenues wane in an Internet-dominated world. Yet because of Aereo's quirky technology -- which is in many respects less efficient than existing, alternative methodologies -- Aereo claims it can do an end-run around the need to ask such permission. As the broadcasters look at things, then, Aereo "simply captures over-the-air broadcasts and then, without authorization, profits from retransmitting those broadcasts to its subscribers," the broadcasters write in the joint brief, which was authored by a team headed by Paul Clement of the Bancroft law firm and Paul Smith of Jenner & Block. "This would seem to be obvious copyright infringement -- an entire business model premised on massive and unauthorized commercial exploitation of copyrighted works, where the prices of competitors are undercut because they are licensed and pay fees." The government rejects Aereo's attempt to portray itself as a simple provider of individual antennae and DVRs, stressing its status as "an integrated system."
benton.org/node/180776 | Fortune
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MORE FROM COURT

SHARING AND REGULATION
[SOURCE: New York Times, AUTHOR: David Streitfeld]
In the newfangled sharing economy, questions about safety, taxes and regulation have tended to be an afterthought. That has helped propel companies like Uber, Airbnb and Lyft into the stratosphere. But regulators as well as some elected officials across the country are increasingly questioning the presumptions and tactics of these start-ups, especially the notion that laws do not apply to them. The companies are fighting back by rallying their impassioned and growing customer base. And they are stocking up on lawyers and lobbyists.
benton.org/node/180816 | New York Times
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OWNERSHIP

NETFLIX OPPOSES COMCAST’S MERGER WITH TIME WARNER CABLE, CALLS IT ANTICOMPETITIVE
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Netflix opposes Comcast's $45 billion bid for Time Warner Cable, no longer pulling its punches toward the company it recently agreed to pay for smoother video streams. Netflix chief executive Reed Hastings and chief financial officer David Wells said the merger would create a single company with too much power over the broadband Internet market. Combined, Comcast and Time Warner Cable could control as much as half of all broadband Internet subscriptions, with most of those homes having no alternative options for broadband service providers, the executives said. "Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services as Netflix," the executives wrote. "The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger." Netflix is the first major Web company to criticize Comcast's acquisition plans. The company fears other ISPs will follow Comcast's demands of the video streaming service to pay for more direct connection with its home Internet users.
benton.org/node/180807 | Washington Post | The Hill | Revere Digital | The Verge | AdWeek | GigaOm
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COMCAST RESPONDS TO NETFLIX
[SOURCE: Variety, AUTHOR: Todd Spangler]
Comcast accused Netflix of coming out against the cable operator’s proposed $45 billion takeover of Time Warner Cable because of a desire to shift delivery costs to all broadband users -- rather than just the streaming-video service’s customers. Comcast says that Netflix’s opposition is based on “inaccurate claims and arguments.” “Netflix is free to express its opinions. But they should be factually based,” said Jennifer Khoury, Comcast’s senior VP of corporate and digital communications. “And Netflix should be transparent that its opinion is not about protecting the consumer or about net neutrality. Rather, it’s about improving Netflix’s business model by shifting costs that it has always borne to all users of the Internet and not just to Netflix customers.” Comcast reiterated its position that private Internet interconnection agreements have “nothing to do with net neutrality.” “There is nothing unprecedented about our agreement with Netflix,” Khoury said. The deal is very similar to those that companies like Akamai Technologies, Yahoo, Limelight Networks and Google have with companies like Comcast, Verizon, AT&T, Level 3 and Sprint, she said. In fact, according to Khoury, “Netflix approached us for this direct connection between Netflix and Comcast, cutting out the wholesalers with whom Netflix had traditionally contracted and paid for transit. This arrangement was thus about Netflix exercising its market power to extract a more favorable arrangement directly from Comcast than what Netflix had been paying for through third-party providers.”
benton.org/node/180821 | Variety | The Wrap
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THE COMCAST DEAL WOULD NOT MAKE THINGS BETTER
[SOURCE: Washington Post, AUTHOR: Delara Derakhshani]
[Commentary] The Washington Post’s editorial on Comcast’s proposed takeover of Time Warner Cable [“Cable merger,” April 15] served up a rather tepid endorsement of the mega-deal, saying the government should okay the merger, but “keep a close eye” on the new company. Considering the poor track record of these two cable and Internet giants and the power they would wield as a single company, this merger should be flatly rejected. The editorial correctly raised concerns about the conflicts of interest that could lead Comcast to give preference to its own products on the wires it owns. But it dismissed the very real prospect that a bigger Comcast could discriminate heavily in negotiations with content creators, which would likely be passed on to consumers in the form of even higher prices. [Derakhshani is policy counsel with Consumers Union, the advocacy arm of Consumer Reports]
benton.org/node/180790 | Washington Post
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INTERNET/BROADBAND

SUPPORTING AN OPEN AND INCLUSIVE INTERNET IN BRAZIL
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Michael Daniel, Lawrence Strickling, Daniel Sepulveda, Christopher Painter, Scott Busby]
[Commentary] We head to Sao Paulo, Brazil, to attend NETmundial, a global meeting of governments, entrepreneurs, academics, Internet institutions, activists and users to discuss the future of Internet governance. Over two days delegates will discuss and work toward developing a set of principles to guide international Internet governance activities in the future. The United States will work with other delegations to expand the community of individuals, organizations, firms, and governments who are willing to put their faith in the proven multi-stakeholder system of cooperation and coordination; this system has enabled the unprecedented growth of the global Internet, which in turn has fueled economic development and innovation. Along with most of the world’s Internet advocates and users, we believe that no one stakeholder or group of stakeholders, including governments, should have control over the operation or protocols of the Internet or the creativity, innovation, and freedom of expression that it enables. We are optimistic that NETmundial will make an important contribution to the positive evolution of the Internet and its governance and we support efforts at NETmundial and beyond to preserve an, open, inclusive, resilient, interoperable, and innovative global Internet. [Daniel serves as Special Assistant to the President and White House Cybersecurity Coordinator; Strckling serves as Assistant Secretary of Commerce for Communications and Information and Administrator, National Telecommunications and Information Administration; Ambassador Sepulveda serves as US Coordinator for International Communications and Information Policy at the US Department of State; Painter serves as Coordinator for Cyber Issues at the US Department of State; Busby serves as Deputy Assistant Secretary of State for Democracy, Human Rights and Labor]
benton.org/node/180804 | National Telecommunications and Information Administration
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ACTIVIST AGENDA FOR INTERNET CONFERENCE
[SOURCE: PCWorld, AUTHOR: John Ribeiro]
A campaign on the Internet is objecting to the exclusion of issues like network neutrality, the cyberweapons arms race and surveillance by the US National Security Agency from the discussion paper of an Internet governance conference in Sao Paulo, Brazil. A significant section of the participants are also looking for concrete measures and decisions at the conference rather than yet another statement of principles. The proposed text “lacks any strength,” does not mention NSA’s mass surveillance or the active participation of Internet companies, and fails to propose any concrete action, according to the campaign called Our Net Mundial.
benton.org/node/180823 | PCWorld
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THE DECADES-OLD IDEA THAT COULD BREAK THE NET NEUTRALITY LOGJAM
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Ever since the DC Circuit court ruled that the government can't ban Internet providers from blocking or prioritizing Web traffic, the Federal Communications Commission has been looking for a way to get around the ruling. For network neutrality advocates, the few proposals that have emerged so far aren't satisfying; they're all a little risky, and they aren't guaranteed to produce the results that the FCC wants. Now a new recommendation has federal regulators sitting up. Under the proposal, regulators would surgically apply new rules on Internet providers that otherwise could only be imposed on phone companies. And with that, the FCC could solve some of the thorniest issues surrounding net neutrality, according to a paper co-written by Columbia Law scholars Tim Wu (who coined the term "net neutrality") and Tejas Narechania. They argue that the FCC should selectively be able to apply more stringent, telecommunications-type regulations to certain aspects of an industry that tends to escape easy definition. From Wu and Narechania's perspective, this describes exactly what phone companies do: Establish the connection between a caller and a responder for the purposes of a transaction. And this telecommunications function is increasingly what we pay Internet providers to do -- unlike before, when they offered telecommunications as one of a bundle of features that together added up to an "information service." Under these conditions, the authors say, the FCC would be completely justified in applying Title II of the Communications Act -- the part of the FCC's congressional charter that lets it apply blanket restrictions on phone companies -- to broadband companies, which are currently regulated lightly as Title I businesses.
benton.org/node/180789 | Washington Post
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NETFLIX CALLS OUT AT&T
[SOURCE: Bloomberg, AUTHOR: Crayton Harrison]
Netflix, stepping up its criticism of Internet service providers, called out AT&T for offering video-streaming speeds that trail even those of phone companies with inferior technology. AT&T, the biggest landline phone company in the US, provided an average speed in March of 1.73 megabits a second for Netflix’s service on fiber-based connections, trailing CenturyLink and Windstream Holdings, which use older DSL lines, Netflix said. AT&T could improve its speeds by using a free interconnection with Netflix, the video company said. “AT&T customers expect a good quality Netflix experience given how much they pay AT&T for their Internet service,” Netflix said
benton.org/node/180820 | Bloomberg
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AT&T EYES 100 US CITIES AND MUNICIPALITIES FOR ITS ULTRA-FAST FIBER NETWORK
[SOURCE: AT&T, AUTHOR: Press release]
AT&T announced a major initiative to expand its ultra-fast fiber network to up to 100 candidate cities and municipalities nationwide, including 21 new major metropolitan areas. The fiber network will deliver AT&T U-verse with GigaPowerSM service, which can deliver broadband speeds up to 1 Gigabit per second and AT&T’s most advanced TV services, to consumers and businesses. AT&T will work with local leaders in these markets to discuss ways to bring the service to their communities. Similar to previously announced metro area selections in Austin and Dallas and advanced discussions in Raleigh-Durham and Winston-Salem, communities that have suitable network facilities, and show the strongest investment cases based on anticipated demand and the most receptive policies will influence these future selections and coverage maps within selected areas. This initiative continues AT&T’s ongoing commitment to economic development in these communities, bringing jobs, advanced technologies and infrastructure. The list of 21 candidate metropolitan areas includes: Atlanta, Augusta, Charlotte, Chicago, Cleveland, Fort Worth, Fort Lauderdale, Greensboro, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Nashville, Oakland, Orlando, San Antonio, San Diego, St. Louis, San Francisco, and San Jose. With previously announced markets, AT&T now has committed to or is exploring 25 metro areas for fiber deployment.
benton.org/node/180792 | AT&T | LA Times | telecompetitor | B&C
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HEY AT&T, ENOUGH WITH THE GIGAWASHING!
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
[Commentary] AT&T announced that it plans to discuss bringing its gigabit service to 21 municipalities that have that certain set of je ne sais quoi that AT&T is looking for. The “receptive policies” and “strongest investment cases” the company mentions in its press release dismantles the idea that network providers must serve all community members and can take away a point of leverage that municipalities have traditionally used to ensure that low-income areas also get infrastructure upgrades. And wait, there’s even more uncertainty ahead. In Austin, which AT&T is “already servicing with fiber today,” so far AT&T’s GigaPower service is limited to 300 Mbps and is set to get an upgrade to a full gigabit sometime in 2014. Google is not blameless here, but given the new type of invasive plans that offer advertising in exchange for a lower price tag, and the fact that AT&T’s efforts to bring a gigabit so far aren’t delivering a gig, Ma Bell should have some explaining to do before these 21 cities get too excited about their hoped-for gigabit service.
benton.org/node/180802 | GigaOm
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WHERE'S MY GIGABIT INTERNET, ANYWAY?
[SOURCE: Network World, AUTHOR: Jon Gold]
There is even a small but growing group of Americans for whom gigabit connectivity is already here. Municipalities from Texas to Minnesota, and from Vermont to Nevada, are all seeing gigabit providers sprout up like fibrous little buds. Those, however, are mostly either local governments offering services only to their residents, or limited promotional deployments from companies like CenturyLink and CSpire. Google Fiber -- and, more recently, AT&T -- are the only major national players with active plans for gigabit residential services. Google Fiber is currently available in Kansas City, with plans afoot for Austin, Texas, and Provo, Utah, and more expansion in the works. AT&T announced that it will offer gigabit service to the Triangle area of North Carolina. But those two may be it for the general public’s foreseeable future, as no other major US ISPs are planning home gigabit service.
benton.org/node/180773 | Network World
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IS YOUR INTERNET CONNECTION SLOWER THAN ADVERTISED?
[SOURCE: Wall Street Journal, AUTHOR: Rani Molla]
If your Internet speed feels too slow, it probably is. Most major US Internet service providers usually deliver slower speeds than they advertise to their customers. Indeed, the vast majority of the 800 cities included in the sortable table below experience median Internet speeds that are slower than what their providers advertise, according to data provided by Ookla and its online speed test, Speedtest.net. Ookla, which previously licensed its data and technology to the Federal Communications Commission, compiled the data from tens of millions of speed tests as well as surveys of 646,404 Speedtest users’ subscribed Internet speeds since March 2013.
benton.org/node/180797 | Wall Street Journal
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DIGITAL DIVIDE: JUST AN HOUR FROM GIG CITY, RURAL RESIDENTS LIVE IN BROADBAND DESERT
[SOURCE: Chattanooga Times Free Press, AUTHOR: Shelly Bradbury]
In the shadow of “Gig City,” Chattanooga (TN), there are hundreds of people -- nearly all in rural areas -- who can't access even basic broadband Internet. "It is a tale of two districts," said Corey Johns, executive director of Connected Tennessee, a statewide organization that tracks and works to improve broadband coverage in Tennessee. About 8 percent of Tennessee's households have no access to broadband, according to Connected Tennessee. In Northwest Georgia, about 5 percent of households are unserved, the Georgia Technology Association reports. In a world where everything from college classes to paying bills is done online, the lack of access spells trouble for rural areas, Polk County Executive Hoyt Firestone said. "It's not a luxury," he said. "Broadband is a necessity in today's environment. It's today's pathway for economic development. Just like the highway improvement acts and the interstate system -- Internet service can do that for telecommunications. If we can't acquire the same service as the larger urban areas, we're going to fall way behind." Yet despite potential customers who are practically begging for Internet providers to expand to their areas, the big players so far haven't pulled the trigger on very rural broadband. That's because it's hard to make a profit on rural lines, said Mark Wigfield, Federal Communications Commission spokesman.
benton.org/node/180774 | Chattanooga Times free Press
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TELECOM

FCC COMMISSIONER AJIT PAI STATEMENT ON PHONE RATES
[SOURCE: Federal Communications Commission, AUTHOR: FCC Commissioner Ajit Pai]
The data released by the Federal Communications Commission’s Wireline Competition Bureau show why the agency shouldn’t increase rural Americans’ phone bills. The FCC’s so-called “rate floor” is supposed to ensure that urban and rural rates are “comparable.” But even though the Bureau’s data reveal that the local phone rate in Washington, DC is $14.10, the FCC is on the precipice of raising rates for rural Americans from $14.00 to $20.46. As a result, rural Americans will have to pay 45 percent more for local phone service than those living in our nation’s capital. On top of all that, this rate increase will not save the government any money. This issue is another example of why so many in our nation’s heartland feel so alienated from Washington, DC. Too often, there is one set of rules for those inside the Beltway and another set of rules for everyone else. I hope the Commission will reconsider this ill-conceived policy and not raise rural Americans’ phone bills to no end.
benton.org/node/180788 | Federal Communications Commission
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GOVERNMENT & COMMUNICATIONS

MEDIA DIRECTIVE
[SOURCE: Politico, AUTHOR: Hadas Gold, Josh Gerstein]
A new directive issued by Director of National Intelligence James Clapper prohibits employees of certain government agencies from discussing any intelligence-related matter with the media, classified or not. “[Intelligence Community] employees … must obtain authorization for contacts with the media” on intelligence-related matters, and “must also report… unplanned or unintentional contact with the media on covered matters,” the directive says. DNI spokesperson Shawn Turner said that after the "damaging leaks in 2012," Clapper ordered a review to determine if there were a "consistent baseline requirement" for the intelligence community for engaging the media. "The review demonstrated that baseline requirements were not consistent across the IC, but that there were best practices within the Community that could inform a consistent approach. That approach took shape as IC Directive 119," Turner wrote in an email. "This policy is being issued together with IC Directive 120 to ensure that members of the Intelligence Community are made aware of the protections provided them as whistleblowers who make protected disclosures. As with ICD 119, ICD 120 was initiated before Edward Snowden stole NSA property and leaked it to the media.”
benton.org/node/180793 | Politico | The Hill
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POLICYMAKERS

FIRSTNET'S HUNT FOR A REPLACEMENT GM MAY ENABLE A FRESH START
[SOURCE: Fierce, AUTHOR: Tammy Parker]
The surprise announcement that Bill D'Agostino, the First Responders Network Authority's general manager, has resigned, could provide a fresh start for the authority, which is still struggling to satisfy critics in the public-safety community. D'Agostino resigned "for personal and family reasons," according to FirstNet. His hiring was announced on April 23, 2013. FirstNet has launched the search for a new GM. The authority, which is charged with building the 700 MHz LTE-based nationwide public-safety broadband network, has leased office space in Reston (VA), for its corporate headquarters, and the new GM, once he or she is chosen, will be located there. D'Agostino generated praise for his performance as GM. But his past positions with Verizon Wireless and other mobile operators raised concerns among some in the public-safety community who felt FirstNet was already too closely tied to cellular carriers.
benton.org/node/180786 | Fierce
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COMPANY NEWS

NETFLIX PRICE HIKE
[SOURCE: Washington Post, AUTHOR: Brian Fung]
If you're on the fence about getting a Netflix subscription, you may want to act now. The company is hinting at a price hike that could hit sometime in the next couple months. In a letter to shareholders, company executives wrote that a one- or two-dollar monthly increase could soon be levied on new customers, with a rise in prices eventually hitting existing customers as well. The increase comes just weeks after Netflix signed a controversial deal agreeing to pay Comcast -- the nation's largest cable TV company and among the biggest providers of fast Internet connections -- an undisclosed amount of money in exchange for better streaming speeds. That led critics to wonder whether Netflix would pass on any new costs it may have incurred as a result of the agreement to consumers. When asked whether the Comcast negotiations played a role in Netflix's decision to raise prices, Netflix spokesperson Joris Evers was vague, writing in an e-mail that "the main motivation is to provide more great things to watch, but content delivery costs are part of the costs we have to pay." More likely is that Netflix has chosen to raise costs while people's memory of the Comcast deal is still fresh -- opportunistically deflecting any ill-will over the hike toward the cable company, one analyst said.
benton.org/node/180822 | Washington Post
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Activists want net neutrality, NSA spying debated at Internet governance conference

A campaign on the Internet is objecting to the exclusion of issues like network neutrality, the cyberweapons arms race and surveillance by the US National Security Agency from the discussion paper of an Internet governance conference in Sao Paulo, Brazil. A significant section of the participants are also looking for concrete measures and decisions at the conference rather than yet another statement of principles. The proposed text “lacks any strength,” does not mention NSA’s mass surveillance or the active participation of Internet companies, and fails to propose any concrete action, according to the campaign called Our Net Mundial.

The shrewd politics behind the Netflix price hike

If you're on the fence about getting a Netflix subscription, you may want to act now. The company is hinting at a price hike that could hit sometime in the next couple months.

In a letter to shareholders, company executives wrote that a one- or two-dollar monthly increase could soon be levied on new customers, with a rise in prices eventually hitting existing customers as well. The increase comes just weeks after Netflix signed a controversial deal agreeing to pay Comcast -- the nation's largest cable TV company and among the biggest providers of fast Internet connections -- an undisclosed amount of money in exchange for better streaming speeds. That led critics to wonder whether Netflix would pass on any new costs it may have incurred as a result of the agreement to consumers.

When asked whether the Comcast negotiations played a role in Netflix's decision to raise prices, Netflix spokesperson Joris Evers was vague, writing in an e-mail that "the main motivation is to provide more great things to watch, but content delivery costs are part of the costs we have to pay." More likely is that Netflix has chosen to raise costs while people's memory of the Comcast deal is still fresh -- opportunistically deflecting any ill-will over the hike toward the cable company, one analyst said.

Comcast: Netflix’s Opposition to Time Warner Cable Deal Is About Shifting Costs to All Broadband Users

Comcast accused Netflix of coming out against the cable operator’s proposed $45 billion takeover of Time Warner Cable because of a desire to shift delivery costs to all broadband users -- rather than just the streaming-video service’s customers.

Comcast says that Netflix’s opposition is based on “inaccurate claims and arguments.” “Netflix is free to express its opinions. But they should be factually based,” said Jennifer Khoury, Comcast’s senior VP of corporate and digital communications. “And Netflix should be transparent that its opinion is not about protecting the consumer or about net neutrality. Rather, it’s about improving Netflix’s business model by shifting costs that it has always borne to all users of the Internet and not just to Netflix customers.” Comcast reiterated its position that private Internet interconnection agreements have “nothing to do with net neutrality.” “There is nothing unprecedented about our agreement with Netflix,” Khoury said. The deal is very similar to those that companies like Akamai Technologies, Yahoo, Limelight Networks and Google have with companies like Comcast, Verizon, AT&T, Level 3 and Sprint, she said.

In fact, according to Khoury, “Netflix approached us for this direct connection between Netflix and Comcast, cutting out the wholesalers with whom Netflix had traditionally contracted and paid for transit. This arrangement was thus about Netflix exercising its market power to extract a more favorable arrangement directly from Comcast than what Netflix had been paying for through third-party providers.”

Netflix Calls Out AT&T for Subpar Streaming Performance

Netflix, stepping up its criticism of Internet service providers, called out AT&T for offering video-streaming speeds that trail even those of phone companies with inferior technology. AT&T, the biggest landline phone company in the US, provided an average speed in March of 1.73 megabits a second for Netflix’s service on fiber-based connections, trailing CenturyLink and Windstream Holdings, which use older DSL lines, Netflix said. AT&T could improve its speeds by using a free interconnection with Netflix, the video company said. “AT&T customers expect a good quality Netflix experience given how much they pay AT&T for their Internet service,” Netflix said

In Aereo case, Supreme Court to weigh public (performance) vs. private

[Commentary] The Supreme Court is scheduled to hear arguments in the most important copyright case of the year, and possibly the most important one since it took up file-sharing piracy in MGM vs. Grokster.

The new case, ABC vs. Aereo, tests the reach of a key monopoly held by copyright owners: the rights to the "public performance" of their works. On the surface, this case is a slam dunk for ABC and the other broadcasters that brought the lawsuit. Aereo sells a subscription TV service that provides consumers access to their city's local broadcast channels via the Internet, enabling its customers to watch live or recorded shows on their tablets, smartphones, laptops or smart TVs. That's a truncated version of cable, and Congress made clear in 1976 that cable companies have to get broadcasters' permission before retransmitting their programs to the public. In recent years, broadcasters have been demanding (and receiving) increasing retransmission fees, creating a major new revenue stream. To the broadcasters and their allies, that's the entire case. o Aereo and its allies, however, the details are important. Because even if the networks, the US Solicitor General and others on ABC's side are right about what the law says, they're wrong about what's actually happening when an Aereo customer watches TV. This case could ultimately affect how flexible business models will be, as well as companies' ability to build online services around consumers' fair use of copyrighted material. If the justices decide how to treat Aereo by ignoring its technology and looking only at the market segment it occupies, that would be troubling news for innovators.

As Phone Subsidies Fade, Apple Could Be Hurt

US wireless carriers are making unexpectedly fast progress moving their customers away from subsidized phones, a shift that could put further pressure on sales of expensive devices like the iPhone.

Apple charges more for its phones than many companies charge for low-end laptops. Until recently, American subscribers have been insulated from the sticker shock by carriers that subsidized hundreds of dollars of the cost with hopes of recovering it via two-year service contracts. Increasingly, though, carriers are moving toward a model where customers pay full cost for their phones, typically under installment plans. Smaller rival T-Mobile US sells all of its smartphones that way. The fast adoption of subsidy-free plans is setting up a real world test of consumer behavior: Will Americans continue to buy expensive phones if they are aware of the full price they are paying?

Verizon annual cybersecurity report: 'The bad guys are winning'

Verizon's 2014 Data Breach Investigations Report taps information from more than 50 organizations around the world to analyze more than 63,000 security incidents and 1,300 confirmed breaches. Amid the onslaught of breaches and statistics, the report also tries to offer some hope that organizations such as Verizon are starting to better leverage information about cyberattacks to craft strategies to fight back.

"After analyzing 10 years of data, we realize most organizations cannot keep up with cybercrime – and the bad guys are winning," said Wade Baker, principal author of the Data Breach Investigations Report series, in a statement. "But by applying big data analytics to security risk management, we can begin to bend the curve and combat cybercrime more effectively and strategically." This year's report says that 97% of attacks fall into nine categories, including denial of service attacks, cyberespionage and point-of-sale intrusions.