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December 2014

1 in 5 Europeans Has Never Used the Internet

Nearly one in five Europeans aged 16 to 74 have still never used the Internet, according to the latest results in an annual survey released from Eurostat, the European Union’s statistics office.

When asked, “When did you last use the Internet?”, 18 percent of people surveyed answered “never,” down from 43 percent in 2006. Only 1 percent of people in Iceland said they had never used the Internet, while 94 percent said they used it every day. Less than 5 percent of people in Norway, Denmark and Luxembourg said they had never used the Internet. The number of Brits who said they had never used the Internet dropped to 6 percent in 2014 from 29 percent in 2006. Romania had the most people offline, with 39 percent saying they had never used the Internet.

Italian priest installs cellphone-jamming device in church

A Catholic Priest, Father Michele Madonna, installed a jamming device in his Italian church to stop the congregation talking on their cells in Naples, Italy. He said he was fed up with the constant ringing and beeping of phones during his sermons. But he's now facing a backlash from furious shop owners, who say the jammer is blocking contact credit card machines in their stores.

December 18, 2014 (No, Listening to Final Serial Episode Does not Excuse You from Headlines)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY, DECEMBER 18, 2014

Calendar of telecom events http://benton.org/calendar


CYBERSECURITY
   Top Five Theater Circuits Drop 'The Interview' After Sony Hack
   Sony scraps 'The Interview' release
   LA Times: Attackers win a round over Sony's 'Interview' [links to web]
   Hollywood Outraged at Sony’s Decision to Dump ‘The Interview’ [links to web]
   US Said to Find North Korea Ordered Cyberattack on Sony
   The Evidence That North Korea Hacked Sony Is Flimsy - Wired analysis [links to web]
   ICANN targeted by hackers [links to web]

INTERNET/BROADBAND
   New Commerce Department Report Examines Competition Among US Broadband Service Providers - press release
   The 3 Big Myths that Are Holding Back America's Internet - Susan Crawford op-ed
   Title II And The Return of the “Gore Tax.” Or, The Debate We Should Be Having. - Harold Feld analysis
   FCC Chairman Wheeler's Response to Rep Goodlatte Regarding Net Neutrality and Antitrust Law [links to web]
   Why broadband execs are telling Washington and Wall Street different things on network neutrality - Brian Fung analysis [links to web]
   USDA Seeks Applications for Community Connect Broadband Grants - press release [links to web]
   Kansas Corporation Commission approves Chanute public broadband [links to web]
   Gigabit or GigaWhat? There is Work to Do Regarding Ultra-Broadband Services - analysis [links to web]
   Charlottesville (VA) is about to get ‘Google Fiber lite’ thanks to this small wireless carrier [links to web]
   ICANN transition plan needs new ideas to ensure accountability - Daniel Castro op-ed

WIRELESS/SPECTRUM
   Consumer Financial Protection Bureau accuses Sprint of illegal billing in lawsuit

TELEPHONY
   Phone companies would like to cut your landline cord for you

TELEVISION/RADIO
   STELAR Becomes Law

TELEVISION/RADIO
   STELAR Becomes Law
   Don't Count AM/FM Radio Out Just Yet - op-ed [links to web]

OWNERSHIP
   Broadcasters try to block Aereo asset sale, $90M tax transfer [links to web]

GOVERNMENT & COMMUNICATIONS
   Tech firms tussle with Department of Justice over the right to say 'zero'
   Santa Claus and the Surveillance State [links to web]
   Google gearing up for 2015 NSA fight [links to web]

POLICYMAKERS
   Senate Confirms FCC Commissioner Michael O'Reilly to Full Term
   Federal Election Commission Chairwoman-elect on 'dark money' mission [links to web]
   Senate Confirms Three for Broadcasting Board of Governors - press release [links to web]

COMPANY NEWS
   DISH-Netflix Integration Illustrates Growing Influence of Netflix [links to web]
   Vessel subscription service looks to reshape economics of online video [links to web]

INTERNATIONAL
   Only 5 percent of Cubans can get on the same Internet Americans do. That could soon change.
   Meet the unofficial US Ambassador to Cuba: The Internet - analysis
   Inside the Firewall: Tracking the News That China Blocks - research [links to web]
   Reporters Without Borders Publishes 2014 Round-Up of Violence Against Journalists - press release [links to web]
   Google in the European Union: A victim of its own success - AEI op-ed [links to web]

MORE ONLINE
   2014 is ending, but this wave of technology disruptions is just beginning - Vivek Wadhwa op-ed [links to web]

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CYBERSECURITY

TOP FIVE THEATER CIRCUITS DROP 'THE INTERVIEW' AFTER SONY HACK
[SOURCE: Hollywood Reporter, AUTHOR: Gregg Kilday]
The top five theater circuits in North America have decided not to play Sony's The Interview. Regal Entertainment, AMC Entertainment, Cinemark, Carmike Cinemas and Cineplex Entertainment have all decided against showing the film. Sony refused to back down from its plans to release the film and instead, in discussions with exhibitors, told the exhibitors it was up to them whether or not they played the movie and that Sony would support whatever decision they made.
benton.org/headlines/top-five-theater-circuits-drop-interview-after-sony-hack | Hollywood Reporter
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SONY SCRAPS ‘THE INTERVIEW’
[SOURCE: Los Angeles Times, AUTHOR: Richard Verrier, Ryan Faughnder, Brian Bennett]
Sony Pictures Entertainment's extraordinary decision to scrap the Christmas release of "The Interview" came amid mounting pressure from powerful theater owners and other studios concerned that the film's release could keep moviegoers away from multiplexes during the holidays, one of the most lucrative periods for Hollywood. The decision would cost Sony perhaps $70 million for the costs of making the film and marketing efforts to date, and could also prompt an executive shake-up, industry analysts said. Sony Pictures Entertainment is led by Chairman Michael Lynton and Co-Chairman Amy Pascal. "By canceling release of the film, Sony Entertainment is admitting it made the wrong decision to go forward," said Laura Martin, senior media analyst at Needham. "They are now succumbing to pressure that they obviously underestimated six months ago." Sony executives had originally resisted postponing "The Interview," fearing that doing so would be a victory for the hackers, and set a dangerous precedent for future threats.
benton.org/headlines/sony-scraps-interview-release | Los Angeles Times | WSJ | NYTimes
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NORTH KOREA AND SONY
[SOURCE: New York Times, AUTHOR: David Sanger, Nicole Perlroth]
American officials have concluded that North Korea was “centrally involved” in the hacking of Sony Pictures computers, even as the studio canceled the release of a far-fetched comedy about the assassination of the North’s leader that is believed to have led to the cyberattack. Senior administration officials, who would not speak on the record about the intelligence findings, said the White House was debating whether to publicly accuse North Korea of what amounts to a cyberterrorism attack. Sony capitulated after the hackers threatened additional attacks, perhaps on theaters themselves, if the movie, “The Interview,” was released. Officials said it was not clear how the White House would respond.
benton.org/headlines/us-said-find-north-korea-ordered-cyberattack-sony | New York Times
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INTERNET/BROADBAND

NEW COMMERCE DEPARTMENT REPORT EXAMINES COMPETITION AMONG US BROADBAND SERVICE PROVIDERS
[SOURCE: Department of Commerce, AUTHOR: Press Release]
A new report released by the US Commerce Department's Economics and Statistics Administration examines, for the first time, competition at the full range of speeds of Internet service in the US. The ESA report, “Competition Among US Broadband Service Providers,” finds that far more competition exists at slower speeds than at higher speeds. At download speeds of 3 megabits per second, 98 percent of the US population had a choice of at least two mobile ISPs, and 88 percent had two or more fixed ISPs available to them. At somewhat higher speeds, such as 10 Mbps, the typical person is able to choose among two fixed ISPs. At speeds greater than 10 Mbps, the number of providers decreases further -- only 37 percent of the population had a choice of two or more fixed-service providers at speeds of 25 Mbps or greater; only 9 percent had three or more choices. The report also found that four out of ten Americans did not live where very-high-speed broadband service -- 100 Mbps or greater -- is available.
benton.org/headlines/new-commerce-department-report-examines-competition-among-us-broadband-service-providers | Department of Commerce | read the report | Commerce blog
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THE 3 BIG MYTHS THAT ARE HOLDING BACK AMERICA'S INTERNET
[SOURCE: Medium, AUTHOR: Susan Crawford]
[Commentary] The US is lagging its competitors in the quality of its Internet access, and the people in charge are hearing excuses. It’s time to debunk the myths. Here's my list of the Three Great Myths about US Internet access:
1) "There's no problem because everyone who wants high-speed Internet access has it." The Federal Communications Commission's most recent data on sign up for high-speed Internet reports just 40 percent of Americans had signed up for wired download speeds of 3 Mbps or higher in 2012, with expense as the most-cited reason for not signing up.
2) "The industry has invested a tremendous amount in high-speed Internet access infrastructure; we would lose that investment if there was any attempt to regulate high-speed Internet access." Yes, Comcast, Time Warner, Verizon, and AT&T have invested in their networks  --  but their capital expenditures for 2009 to 2013 amount to just 15 percent as a percentage of the $1.5 trillion in revenue during that time (quite a bit less than the 20 percent for all four during 2001–2005). These companies are in harvesting mode.
3) "Who needs fiber? Mobile wireless is the future." This is like saying that because we have airplanes we don’t need airports. To haul all our mobile wireless data back from us to the Internet, particularly when we’re uploading a ton of data, we’ll need fiber deep into the places we live, work and entertain ourselves.
[Susan Crawford is the author of The Responsive City]
benton.org/headlines/3-big-myths-are-holding-back-americas-internet | Medium
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THE DEBATE WE SHOULD BE HAVING
[SOURCE: Tales of the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] Here’s the debate we should be having: do we still believe in Universal Service or not? If we no longer believe in Universal Service as a fundamental principle, fine. Let’s own that and end the program. If we do believe in the principle of universal service, and we agree that broadband is the critical communications medium of the 21st Century, it makes no sense to play tax arbitrage games with definitions. The FCC continues to play silly, complicated games with the Connect America Fund (CAF) because everyone wants to redirect USF support to broadband but nobody wants to include broadband in the contribution base. As a result, an increasingly smaller base of voice services is supporting an increasingly larger set of overall services. This makes no sense and is inherently unsustainable.
benton.org/headlines/title-ii-and-return-gore-tax-or-debate-we-should-be-having | Tales of the Sausage Factory
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ICANN TRANSITION PLAN NEEDS NEW IDEAS TO ENSURE ACCOUNTABILITY
[SOURCE: The Hill, AUTHOR: Daniel Castro]
[Commentary] The US government announced earlier this year that it would give up its historic oversight of the Internet Corporation for Assigned Names and Numbers (ICANN), the principal organization responsible for managing the Internet's domain name system. Since then, ICANN has launched a series of parallel processes to develop a proposal for the transition and establish accountability mechanisms to protect the organization from corruption and malfeasance. Although the National Telecommunications and Information Administration originally planned to transition control to ICANN by September 2015, this deadline looks increasingly unlikely as stakeholders struggle to find a workable proposal. One particularly thorny issue in this process has been the question of how to replace the unique role the US government has played in protecting ICANN from both internal and external threats, such as capture by government, capture by private-sector interests, improper management and internal self-dealing. Without the US government involved, the Internet community needs to find another check on the ICANN board to ensure its long-term accountability and legitimacy.
[Daniel Castro is a senior analyst with the Information Technology and Innovation Foundation]
benton.org/headlines/icann-transition-plan-needs-new-ideas-ensure-accountability | Hill, The
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WIRELESS/SPECTRUM

CONSUMER FINANCIAL PROTECTION BUREAU ACCUSES SPRINT OF ILLEGAL BILLING IN LAWSUIT
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
The Consumer Financial Protection Bureau (CFPB) is suing Sprint for allegedly cramming customers' phone bills with illegal charges. The CFPB said Sprint violated prohibitions on unfair practices contained in the Wall Street reform law and is urging the courts to force the company to refund tens of millions of dollars to customers and impose fines. The CFPB said the exact amount of customers affected and dollar amount would be uncovered as it proceeds with the lawsuit, which was filed in a federal court in New York. The lawsuit covers Sprint’s actions from 2004 to 2013, during which time the company outsourced its third-party billing for text message alerts. The CFPB alleged that the outside vendors had "unfettered access" to customers' accounts with inadequate oversight. The system, from which Sprint profited, allowed third parties to easily tack on illegitimate charges to customers' bills, according to the lawsuit. Most of the customers affected were targeted online to give up their cellphone numbers
benton.org/headlines/consumer-financial-protection-bureau-accuses-sprint-illegal-billing-lawsuit | Hill, The
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TELEPHONY

PHONE COMPANIES WOULD LIKE TO CUT YOUR LANDLINE CORD FOR YOU
[SOURCE: Chicago Tribune, AUTHOR: Julie Wernau, Ellen Jean Hirst]
[Commentary] The Illinois Telecommunications Act is up for review the spring of 2015, and big phone companies are expected to push to eliminate a legal obligation to provide landlines, which are still the cheapest and most reliable form of phone service. In a measure being pushed by AT&T in states across the nation, consumer advocates say, the company wants to eliminate the act's "obligation to serve" requirement, which gives everyone in the state the right to landline service. That would open the door for phone companies to abandon areas they deem unprofitable. AT&T has said it plans to abandon the old Time Division Multiplexing system (your landline) by 2020.
benton.org/headlines/phone-companies-would-cut-your-landline-cord-you | Chicago Tribune
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TELEVISION/RADIO

STELAR BECOMES LAW
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
President Barack Obama has signed the Satellite Television Extension and Localism Act Reauthorization Act (STELAR), making it the official law of the land for the next five years. The act renews the satellite compulsory license, makes some retransmission regime changes, mandates a review of the Federal Communications Commission's definition of good faith bargaining, and sunsets the ban on integrated set-tops.
benton.org/headlines/stelar-becomes-law | Broadcasting&Cable
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GOVERNMENT & COMMUNICATIONS

TECH FIRMS TUSSLE WITH DEPARTMENT OF JUSTICE OVER THE RIGHT TO SAY 'ZERO'
[SOURCE: Washington Post, AUTHOR: Ellen Nakashima]
A growing number of technology companies seeking to promote transparency have been testing the limits of new government guidelines on how they can disclose national security orders for their customers’ data. Over the past year or so, about a dozen online and communications firms have reported that they have never received such a request, effectively breaching the spirit if not the letter of government guidance issued in January 2014 intended to make it more difficult for would-be terrorists or spies to identify services that could be used to evade detection. Their decisions have frustrated US officials, even as they privately acknowledge there is little they have been able to do about it.
benton.org/headlines/tech-firms-tussle-department-justice-over-right-say-zero | Washington Post
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POLICYMAKERS

SENATE CONFIRMS FCC COMMISSIONER MICHAEL O'RELLY TO FULL TERM
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
Commissioner Michael O'Rielly of the Federal Communications Commission was confirmed by the Senate for a full five-year term on the FCC. He had been filling out the unexpired term of former Commissioner Robert McDowell, which ended June 30, 2014. (Commissioners are allowed to continue serving for what can be an extended period before being officially confirmed to a new term.) O’Rielly has been a commissioner since November 2013. Before that he was policy advisor in the Office of the Senate Republican Whip.
benton.org/headlines/senate-confirms-fcc-commissioner-michael-oreilly-full-term | Multichannel News | The Hill | Chairman Wheeler | Commissioner Clyburn | Commissioner Rosenworcel | Commissioner Pai
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INTERNATIONAL

ONLY 5 PERCENT OF CUBANS CAN GET ON THE SAME INTERNET AMERICANS DO. THAT COULD SOON CHANGE.
[SOURCE: Washington Post, AUTHOR: Nancy Scola]
In a remarkable shift, the Obama Administration and the Castro government agreed to a series of moves aimed at opening up Cuba to real, high-speed, Internet access. Cuba and the United States have agreed to begin allowing communications devices and telecommunications services to move between the two countries. Only about 5 percent of the Cuban population can get on the full global Internet, and only, often, through government institutions, high-end hotels, and black market access. Whether the new US-Cuba agreement means simply that it will be easier for Cubans to get online or whether they'll also be freer to move around once there remains to be seen. But perhaps nowhere on the planet has the fracturing of the global Internet been more real than it has been in Cuba. The moves signal that perhaps, with the help of the United States, that will no longer be the case.
benton.org/headlines/only-5-percent-cubans-can-get-same-internet-americans-do-could-soon-change | Washington Post | The Hill | USAToday
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MEET THE UNOFFICIAL US AMBASSADOR TO CUBA: THE INTERNET
[SOURCE: GigaOm, AUTHOR: Kevin Fitchard]
[Commentary] The US government isn’t yet lifting the full trade embargo to Cuba, but the two countries will now allow communications devices, services and infrastructure to move more freely between them. The Internet certainly can’t cure all ills -- and it’s caused a few ills of its own -- but it’s become the key tool of global discourse. Diplomacy is great, but opening up the Internet lanes between the US and Cuba would create links between politicians, businesses, organizations, media outlets and even ordinary people. That’s a truly amazing thing.
benton.org/headlines/meet-unofficial-us-ambassador-cuba-internet | GigaOm
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Sony scraps 'The Interview' release

Sony Pictures Entertainment's extraordinary decision to scrap the Christmas release of "The Interview" came amid mounting pressure from powerful theater owners and other studios concerned that the film's release could keep moviegoers away from multiplexes during the holidays, one of the most lucrative periods for Hollywood.

The decision would cost Sony perhaps $70 million for the costs of making the film and marketing efforts to date, and could also prompt an executive shake-up, industry analysts said. Sony Pictures Entertainment is led by Chairman Michael Lynton and Co-Chairman Amy Pascal. "By canceling release of the film, Sony Entertainment is admitting it made the wrong decision to go forward," said Laura Martin, senior media analyst at Needham. "They are now succumbing to pressure that they obviously underestimated six months ago." Sony executives had originally resisted postponing "The Interview," fearing that doing so would be a victory for the hackers, and set a dangerous precedent for future threats.

Attackers win a round over Sony's 'Interview'

[Commentary] If an anonymous group threatened in mid-December to harm bakeries without saying where, when or how, would every doughnut shop and cake vendor feel compelled to shut down through the holiday season? Of course not. Yet a threat by an anonymous group of hackers led the country's major theater chains to close their doors to “The Interview,” Sony Pictures' edgy comedy about a planned assassination of North Korea's Kim Jong Un.

The hackers are engaged in terrorism, pure and simple, in an effort to stop people from seeing the movie. But even though the terrorists won this round, Sony still can — and should — make the movie widely available through other means. Judging from the early reviews, “The Interview” probably isn't worth the fuss. But the hackers picked this fight, threatening not just a single Hollywood studio but the millions of Americans likely to go to a movie during the holidays. And no matter what you think of the people behind “The Interview,” they represent any artist whose work may offend someone in power. That's the sort of speech we can't afford to have squelched.

Hollywood Outraged at Sony’s Decision to Dump ‘The Interview’

Hollywood’s creative community was outraged at Sony’s decision to yank the release of “The Interview” as actors, directors, writers and other celebrities took to social media to express themselves.

US Said to Find North Korea Ordered Cyberattack on Sony

American officials have concluded that North Korea was “centrally involved” in the hacking of Sony Pictures computers, even as the studio canceled the release of a far-fetched comedy about the assassination of the North’s leader that is believed to have led to the cyberattack.

Senior administration officials, who would not speak on the record about the intelligence findings, said the White House was debating whether to publicly accuse North Korea of what amounts to a cyberterrorism attack. Sony capitulated after the hackers threatened additional attacks, perhaps on theaters themselves, if the movie, “The Interview,” was released. Officials said it was not clear how the White House would respond.

The Evidence That North Korea Hacked Sony Is Flimsy

[Commentary] Attribution in breaches is difficult. Assertions about who is behind any attack should be treated with a hefty dose of skepticism. Skilled hackers use proxy machines and false IP addresses to cover their tracks or plant false clues inside their malware to throw investigators off their trail. When hackers are identified and apprehended, it’s generally because they’ve made mistakes or because a cohort got arrested and turned informant. So let’s look at what’s known. Sony and FBI Deny Connection to North Korea. In their initial public statement, whoever hacked Sony made no mention of North Korea or the film.

Title II And The Return of the “Gore Tax.” Or, The Debate We Should Be Having.

[Commentary] Here’s the debate we should be having: do we still believe in Universal Service or not?

If we no longer believe in Universal Service as a fundamental principle, fine. Let’s own that and end the program. If we do believe in the principle of universal service, and we agree that broadband is the critical communications medium of the 21st Century, it makes no sense to play tax arbitrage games with definitions. The FCC continues to play silly, complicated games with the Connect America Fund (CAF) because everyone wants to redirect USF support to broadband but nobody wants to include broadband in the contribution base. As a result, an increasingly smaller base of voice services is supporting an increasingly larger set of overall services. This makes no sense and is inherently unsustainable.

Top Five Theater Circuits Drop 'The Interview' After Sony Hack

The top five theater circuits in North America have decided not to play Sony's The Interview.

Regal Entertainment, AMC Entertainment, Cinemark, Carmike Cinemas and Cineplex Entertainment have all decided against showing the film. Sony refused to back down from its plans to release the film and instead, in discussions with exhibitors, told the exhibitors it was up to them whether or not they played the movie and that Sony would support whatever decision they made.

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