April 2014

In Silicon Valley Thriller, a Settlement May Preclude the Finale

After years of legal skirmishes, four leading Silicon Valley companies are scheduled to go on trial next month on claims of conspiring to keep their employees down. Settlement talks have accelerated and people close to the case say that barring a last-minute snag, a deal is imminent.

The antitrust lawsuit pits 64,613 software engineers against Google, Apple, Intel and Adobe. It accuses the companies of agreeing not to solicit one another’s employees in a scheme developed and enforced by Steven P. Jobs of Apple. In their drive for control, the companies undermined their employees’ opportunities to get better jobs and make more money, the court papers say.

A 43-year-old programmer who helped set in motion a class-action lawsuit against the companies and became one of its five class representatives will not be present in the San Jose courtroom. He was shot and killed by the police last December. The programmer, Brandon Marshall, died in circumstances that remain murky. He was agitated and combative, escalating a confrontation with sheriff’s deputies by assaulting one, who shot him in the chest. Marshall’s death is just one of many ways in which the case has shaped up to be a Silicon Valley drama unlike any other.

Aereo Case Will Shape TV’s Future

[Commentary] More and more, many of the splashy business victories are going to companies that find a way to put a new skin on things that already exist. Since 2012, Chet Kanojia has been building a business, backed by the media mogul Barry Diller, with ambitions to join that cohort.

His start-up, Aereo, uses tiny remote antennas to capture broadcast TV signals and store them in the cloud, where consumers can watch them on a device of their choosing -- no cable box, no cable bundle and most important, no expensive cable bill. It’s a threat to both the lucrative cable bundle and the networks that receive rich fees for being part of that cable package. Aereo would give so-called cord cutters the means to assemble a more affordable package of online streaming options like Amazon Prime, Apple TV or Netflix, and still spend a Sunday afternoon watching the NFL and “60 Minutes” immediately afterward. As antenna-driven viewing has dropped and digital consumption has surged, Aereo is a way to put old wine in a new bottle. It is a crafty workaround to existing regulations, which rides on the Cablevision court ruling in 2008, which held that consumers had the right, through their cable boxes, to record programming. But then, cable companies pay broadcasters billions in so-called retransmission fees while Aereo pays them exactly nothing. (And the case is not just about Aereo — it opens the gate for cable companies or others to build a similar service and skip the billions in payments to the networks.)

Aereo's TV Internet Broadcasts Are a Simple Case of Piracy

[Commentary] Aereo is a two-year-old company that picks up television signals and sends them to the Internet-connected devices of Aereo subscribers, all without permission from or payment to the broadcasters who provide the programming. In copyright parlance, such use of broadcast signals is called unlicensed public performance. In plain English, it's piracy.

In reality, broadcasters still provide a free service to consumers, and they are the only television distributors that do. Aereo profits from selling copyrighted content the company does not own. The outcome of this week’s Supreme Court case could determine the future of the television industry. High-quality television can no longer be supported exclusively by advertising, as broadcasters now must compete with highly profitable pay networks. As revenues decline, broadcasters cannot afford to subsidize competing platforms like cable, satellite and Aereo, while still providing free high-quality programming to those unwilling or unable to pay. How would a ruling for Aereo damage the television market? It's hard to know exactly. But the NFL and Major League Baseball warn in an amicus brief that a ruling in favor of Aereo could steer sports and other popular programming away from broadcasting. The Supreme Court's job is not to decide what the television business will look like in five years. The question before the court is whether a company "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers. That's a straightforward question with only one common-sense answer.

[Hane is a partner in the Pillsbury law firm's Washington (DC) office]

Apple, Google Vie to Offer Exclusive Game Apps

A long-running battle between Apple and Google for mobile dominance is spreading to the most lucrative genre of apps: videogames. The two Silicon Valley giants have been wooing game developers to ensure that top-tier game titles arrive first on devices powered by their respective operating systems, people familiar with the situation said. In exchange, Apple and Google are offering to provide a promotional boost for these games by giving them premium placement on their app stores' home pages and features lists, these people said.

Time Warner Cable, DirecTV need help to work out Dodgers TV deal

[Commentary] Two months after the launch of SportsNet LA, there’s nothing to celebrate. For far too many fans, there are no Los Angeles Dodgers games to see.

If you are in the vast majority of fans without Time Warner Cable, good luck getting anywhere close to that many home games on your television this year. This is an embarrassment to the Dodgers, and to the city of Los Angeles. No one roots for a cable or satellite company. This is an outrage to the fans who just want to see their team, and who have less than zero interest in the public finger-pointing between TWC and DirecTV. Dodgers President Stan Kasten acknowledged that he has told fans he expects DirecTV to hold out all season. TWC, not the Dodgers, has the responsibility to make deals with other cable and satellite providers. TWC owes the Dodgers so much money -- $8.35 billion over 25 years -- that there is little to no room to cut the asking price for SportsNet LA without taking a huge financial hit. The Dodgers are not about to take less money from TWC -- their take after revenue sharing with Major League Baseball is believed to be close to $5.5 billion, although they could keep more as the years go on -- and the new owners have invested heavily into the team and Dodger Stadium. If you take DirecTV at its word, that it is holding out for a more reasonable financial deal, then there should be room to resolve the dispute.

LA Mayor Eric Garcetti should summon executives from the Dodgers, DirecTV and TWC to his office and cajole them toward a settlement, whatever it might be. When New Yorkers went two years without their Yankees on the new YES Network, the mayor, governor and attorney general all worked to broker a deal.

$250,000 Grant to Finance Website Tied to PBS Series

The coming PBS series “How We Got to Now,” based loosely on Steven Johnson’s book “Where Good Ideas Come From,” will be a history program, examining innovation and its role in creating social change, including such topics as how 18th century English coffeehouses spurred the age of enlightenment. The producers also plan to bring the project into the present by using a $250,000 grant from the John S. and James L. Knight Foundation to create an interactive site aimed at encouraging conversation and idea-sharing among civic leaders, urban planners, designers, economic development officials and others.

Police Grapple With Cybercrime

As crime is increasingly moving online, state and local police -- who have spent decades refining how to track down murderers, thieves and drug dealers -- are having a hard time keeping up.

"It probably is one of the most perplexing questions right now in terms of state and local policing: How do they handle this stuff?" said Richard McFeely, who recently stepped down as the top cybersecurity official at the Federal Bureau of Investigation. "We're not generally working these cases. We need to get out ahead of this." In 2012, consumers reported $525 million in damages to the Internet Crime Complaint Center, a group run partly by the FBI that collects data on cybercrimes, including fraud, hacking and identity theft. That was an 8% increase from the prior year.

Students Deploy Riot-Ready Social Media

At least 10 riots have rocked colleges in recent months, resulting in hundreds of arrests and dozens of injuries amid a growing sense that social media are helping to fuel misbehavior at student mass gatherings.

Interviews with several police chiefs suggest that the use of Twitter by students as a way to organize, assemble and re-assemble has accelerated the speed and size with which crowds gather. The popularity of the "selfie" is evident, too, bringing into play a new level of voyeurism among students who want to get a photograph of themselves inside the melee even if they don't really want to take part in it. "It used to take a lot more work to generate a gathering," said Gary Margolis, who manages the National Center for Campus Public Safety. "Now one tweet and you've just reached 40 people. Everyone has their own mass communications device in their pocket."

MIT’s Alex Pentland: Measuring Idea Flows to Accelerate Innovation

Alex Pentland is a computational social scientist at the Massachusetts Institute of Technology and director of the Human Dynamics research group at the MIT Media Lab. For decades, Pentland and his graduate students have been attaching sensors to people to study their patterns of movement and communication in work and community settings.

In the early days, the sensors tended to be big and clunky. Over the years, the mobile sensors became steadily smaller and more versatile. The current generation, called sociometric badges, are only a bit thicker than a credit card, but they can detect location, movement and a speaker’s pitch and volume (words are not recorded). Added to the mix have been the most ubiquitous personal sensors of all -- cellphones, which became popular in the 1990s. “We understood what cellphones meant,” Pentland said. “Everyone was going to run around with sensors on them.” That has led to a flood of information, a kind of big data. And in recent years, Pentland has been identified with concepts -- and terms he has coined -- related to the collection and interpretation of all that data, like “honest signals” and “reality mining.” His descriptive phrases are intended to make his point that not all data in the big data world is equal. Pentland argues that even the less valuable information in current flood of personal data could help open the door to what he calls “social physics.”

Lying is free speech too

[Commentary] Does the 1st Amendment allow states to make it a criminal offense to disseminate false statements about a political candidate? Should citizens who fear that their free speech will be chilled by such a law be permitted to challenge it even if they aren't in danger of imminent prosecution?

Only the second question will be argued before the Supreme Court, but it is inextricably linked to the first one. If the court rules that the Susan B. Anthony List, an antiabortion group, may not challenge Ohio's criminalization of false political speech, that law and similar ones in other states will remain on the books. Citizens who believe that a law chills speech shouldn't have to surmount high legal hurdles to challenge it in court. If the court were to consider the constitutionality of Ohio's law, there are good reasons to believe it would be struck down. In 2012, the justices invalidated a federal law making it a crime for a person to falsely claim to have received military honors. In that decision, Justice Anthony M. Kennedy wrote: "The remedy for speech that is false is speech that is true." That observation is especially applicable to a political campaign. In extreme cases, a politician who feels his reputation has been besmirched by a false statement may file a civil libel suit. But using criminal law to police truth in political debate is unnecessary and invites abuse. A ruling for the Susan B. Anthony List in this case would be a first step toward recognition of that principle.