April 2014

Big Labels Take Aim at Pandora on Royalties

The music industry has opened a new front in its war against Pandora Media: royalties for songs made before 1972.

Several major record companies filed a lawsuit in New York State Supreme Court in Manhattan, accusing Pandora of violating the state’s common-law copyright protections by using recordings of older songs without permission. Along with a string of cases filed against Sirius XM Radio, the suit highlights an obscure legal issue that has come to the fore with the rise of streaming music online: that recordings made before Feb. 15, 1972, are not subject to federal copyright protection and may be missing out on tens of millions of dollars in royalties, according to industry estimates. In the suit, the three big labels -- Sony, Universal and Warner Music -- along with ABKCO, an independent label that controls the rights to many early songs by the Rolling Stones, accuse Pandora of playing old songs without licenses. Like the suits against Sirius XM -- the band the Turtles (“Happy Together”) acted first, with a $100 million class-action suit, and the labels followed with their own complaint -- the case argues that even though songs from before 1972 are not under federal copyright, Pandora should have to get permission to use them under state law.

University of Chicago Economist Who Studies Media Receives Clark Medal

Matthew Gentzkow, an economics professor at the University of Chicago Booth School of Business who has done innovative work analyzing issues like bias in the press and the impact of the media on society, has been awarded the 2014 John Bates Clark Medal, the American Economic Association announced.

Bestowed by the association on the person it considers the top American economist under age 40, the Clark Medal is regarded as second only to the Nobel prize in the field and has often been a precursor to that honor. Gentzkow, 38, has used deeply researched, data-driven projects to examine what drives ideological biases in newspapers and how the Internet is remaking the traditional media landscape.

American Securities Puts Prison-Phone Operator GTL on Block

Cellphones, texting and email have decimated the traditional phone business, but until recently it had a literally captive market where it could command $17 or more for a 15-minute call. Now, the largest US operator of prison phones, Global Tel*Link Corp., is being shopped by its private-equity owner, according to people familiar with the matter.

The sales push follows a decision by federal regulators to cap the fees that companies like GTL can charge for interstate calls to and from inmates. The government also is weighing a cap on charges for in-state calls. GTL, based in Mobile (AL), has been passed between private-equity firms over the past decade. It was sold most recently in late 2011 for about $1 billion to New York-based American Securities LLC. It isn't clear whether regulatory concerns were behind the firm's decision to find a buyer for the company.

The virus of US surveillance

[Commentary] Heartbleed is a reminder that when these bugs happen, they must be fixed as quickly and comprehensively as possible. Allowing bugs to persist so the National Security Agency can probe them -- for no specific reason -- is dangerous for a different kind of national security.

Facebook plays offense in DC for new feature

It’s a tune that is familiar in Washington: Facebook announces a new product or policy change, and privacy hawks fire back. And it’s a tune that Facebook is trying to end. The public first learned April 17 about Nearby Friends, which lets Facebook users who turn on the feature see in real-time how close they are physically to their online compatriots. But some in DC got an early rundown of the company’s major launch. The firm routinely reaches out these days to Washington types, including those on Capitol Hill, a spokeswoman said -- a reflection that Facebook is increasingly interested in tempering worries from the policy crowd.

An Internet ‘Big V’ Opts for Abject Contrition

Charles Xue, an American businessman who once embodied the raucous energies testing Internet censorship in China, has returned to prominence as the opposite: a contrite prisoner endorsing the government’s determination to cleanse and control the Web.

In a display recalling the Communist Party’s past ideological offensives, Xue was shown on state-run television on Thursday, repenting his misdeeds, endorsing the campaign against him and thanking officials for their mercy. The Chinese Ministry of Public Security said that Xue had been granted bail, nearly eight months after the police detained him in Beijing and charged him with having sex with prostitutes. Despite the sex charge, a torrent of official media reports at the time left little doubt that the government’s ire against Xue was prompted by his presence on the Internet, where he attracted 12 million followers on Weibo, a popular microblogging service similar to Twitter.

Nielsen and comScore Duel Over Mobile Ad-Tracking

Marketers have been pouring money into mobile, but they’re still hungry for better tools to track the reach of their ads. Now there are signs of progress at the big measurement firms.

Nielsen will announce it is partnering with BrightRoll and TubeMogul -- two digital ad-sales firms -- for a technical trial before the expanding its ad-tracking system, known as Online Campaign Ratings, to mobile this summer.

ComScore, a Nielsen rival, announced the expansion of its measurement product, Validated Campaign Essentials, to track ads appearing on smartphones and tablets.

The two initiatives are evidence of how important tracking consumer activity on mobile devices is becoming to advertisers -- and how measurement companies are scrambling to provide more of that information.

A Time For "No!"

[Commentary] How much more do regulators need to know before they understand that the proposed Comcast-Time Warner Cable merger is bad news all around?

It’s bad for consumers, competition, and our very democracy. Word is it could take many months, maybe close to a year, for the two government agencies to conduct and complete their reviews. Really? The facts of the case should lead both agencies to speedy thumbs-down decisions.

Fact Number One: The merged company would further diminish competition.
Fact Number Two: Consumers, long hurting from over-priced cable and from scarce and costly broadband, would face even higher bills.
Fact Number Three: This proposal, if approved, would wreak significant harm on our civic dialogue and, indeed, on our democracy.

I don’t believe that, apart from the cable barons themselves, anyone would welcome the cableization of the Internet. Yet that is precisely the danger here. And who better to cableize it than the biggest cable company? What a tragic denial of the promise of the Internet this would be!

Let’s get rid of this threat right now with clear and straight-from-the-shoulder denials of the merger by the Department of Justice and the FCC. This is a time for “No!”

[Copps served as a commissioner on the Federal Communications Commission from May 2001 to December 2011 and was the FCC's Acting Chairman from January to June 2009]

FCC chief defends plan to limit large carriers in auction

Federal Communications Commission Chairman Tom Wheeler is defending plans to limit large wireless carriers when the federal government auctions off airwaves worth billions of dollars in 2015.

In a letter to House members, FCC Chairman Wheeler said the agency is designing the highly anticipated auction with "equity and openness in mind" to "deliver to consumers, regardless of their zip code, greater wireless competition, improved services and lower costs." Chairman Wheeler's letter is in response to a letter from 78 House Democrats who asked him to allow unlimited competition among wireless carriers in the 2015 auction. That auction will involve buying airwaves from broadcasters, repackaging those airwaves and selling them to spectrum-hungry wireless companies.

Revenue from the 2015 auction, as well as from two airwave auctions in 2014, will go toward funding a nationwide network for first-responders.

"My proposal would reserve a modest amount of this low-band spectrum in each market for providers that, as a result of the historical accident of previous spectrum assignments, lack such low-band capacity," Chairman Wheeler wrote, adding that the proposal will "contain safeguards to ensure that all bidders for reserved spectrum licenses bear a fair share of the cost of making incentive payments to broadcasters."

Chairman Wheeler pointed to wireless companies' need for low-frequency spectrum, especially in rural areas. "Today, most of this low-band spectrum is in the hands of just two providers," he said. "The Incentive Auction offers the opportunity, possibly the last for years to come, to make low-band spectrum available to any mobile wireless provider, in any market, that is willing and able to compete at auction."

Chairman Wheeler said he agreed with lawmakers looking to incentivize broadcasters and wireless companies to participate.

Sprint/T-Mobile merger may prompt US FCC to rewrite auction rules

A planned merger of Sprint and T-Mobile US could prompt US regulators to rewrite rules they are now weighing for a 2015 auction of airwaves, according to sources familiar with the proposed plan.

Federal Communications Commission Chairman Tom Wheeler has proposed restrictions on how much the biggest carriers, Verizon Communications and AT&T, could bid in the major auction of television spectrum scheduled for mid-2015. However, as in many other proceedings, the FCC's rules would be based on the "current market structure." Any changes or proposed changes in that structure that could undermine the goals of the auction would prompt a review and potential edits, said sources briefed on the proposed rules. That means if SoftBank Corp, Sprint's parent company, moves ahead with its goal of merging the No. 3 wireless carrier with No. 4 provider T-Mobile, the FCC could eliminate the reserve set off for smaller competitors, sources said.

Benton

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