January 2015

The FCC’s De-Americanization of the Internet

[Commentary] The governments of the world are watching to see if the Federal Communications Commission officially votes to de-Americanize the Internet with a U-turn change in American Internet policy by regulating America’s Internet like a telephone utility network.

If the FCC abandons America’s global Internet policy for national purposes, other governments naturally could as well. Moving away from a global Internet toward a national, bordered, and tariffed Internet could allow every country to turn their current large implicit Internet trade deficit with America into a future, explicit, large and highly lucrative Internet trade surplus at the expense of America’s bandwidth-hogging Internet companies. By attempting to fix an Internet that Americans know is not broken, the FCC is recklessly risking de-Americanizing the Internet and destroying the American benefits of a global Internet -- America’s most influential innovation and export in the modern era.

[Scott Cleland is President of Precursor LLC, a research consultancy for Fortune 500 companies]

Politicians are supporting Comcast's Time Warner Cable merger with letters ghostwritten by Comcast

Many of the letters sent to the Federal Communications Commission by state and local officials regarding the Comcast-Time Warner Cable merger bear striking resemblance to each other, with local officials apparently adding one sing-off sentence and their signature to the Comcast corporate PR document, then sending it off to federal regulators on official letterhead of their offices.

Comcast asserted that the numerous letters sent to the FCC by local officials expressing support for the proposed Comcast-Time Warner Cable merger displayed its broad grassroots backing. Yet e-mail records indicate that these letters are far from grassroots. Although Comcast is well-known for having one of corporate America’s most sophisticated armies of lobbyists, the records shed new light on just how intimate of a role these actors play in shaping what the public -- and federal regulators -- hear about the company from supportive government officials. For the FCC to green-light the merger, Comcast must prove that the deal would serve the public interest -- no doubt a key driver of Comcast’s focus on appearing to have support from public officials.

Google investment revives satellite Internet talks

It was a hot idea in the 1990s: Provide global Internet access with mega-constellations of dozens or hundreds of small satellites flying in low Earth orbit. The result was a bloodbath of serial bankruptcies. Now big investments in two new ventures, including Google backing for SpaceX, bet that the idea's time has come.

Today small satellites are far more capable, launch costs are improving, demand for high-speed data continues to grow and deep-pocketed entrepreneurs and investors are hunting for ways to make money in space. SpaceX envisions deploying more than 4,000 satellites, and OneWeb nearly 650. Large numbers of spacecraft are needed to cover parts of the world lacking good Internet access from ground or space-based providers. That means the satellites have to be cheap, said John Olds, CEO of Atlanta-based SpaceWorks Enterprises. "That's what's changed in the last 10 years, that's different from Teledesic," he said. "The satellites are getting less expensive, and that's sort of enabling these things to be reconsidered."

Public Wi-Fi and Minorities: Study Finds Strong Benefits

According to a new study from WifiForward, African-Americans and Latinos are more likely to use public Wi-Fi networks and use them more often. Furthermore, they report more in the way of positive impacts from public Wi-Fi use than their Caucasian counterparts.

One-third of Latinos and 29 percent of African-Americans use public Wi-Fi to access the Internet, which explains why public Wi-Fi access “plays a larger role for communities of color,” WifiForward notes. “The study’s findings confirm earlier surveys showing that Latinos and African Americans, particularly those who are middle- and lower-income, are much more likely to rely on smartphones and other mobile devices for their primary access to the Internet,” commented Michael Calabrese, director of the Wireless Future Project at the New America Foundation’s Open Technology Institute.

Sheriffs Want Popular Police-Tracking App Disabled

Sheriffs are campaigning to pressure Google to turn off a feature on its Waze traffic software that warns drivers when police are nearby. They say the apps could put officers' lives in danger from would-be police killers who can find where their targets are parked.

Waze is a combination of GPS navigation and social networking. Fifty million users in 200 countries turn to the free service for real-time traffic guidance and warnings about nearby congestion, car accidents, speed traps or traffic cameras, construction zones, potholes, stalled vehicles or unsafe weather conditions. There are no known connections between any attack on police and Waze, but law enforcers are concerned it's only a matter of time. They are seeking support among other law enforcement trade groups to pressure Google to disable the police-reporting function.

Republicans Tee Up Cybersecurity Questions

Republican staffers have signaled the questions their members are pondering for a Jan 27 hearing on cybersecurity in the House Commerce Committee, including what constitutes "overnotification" about breaches.

Citing a laundry list of attacks in the past year that included the Sony had and Cox Communications, the Majority staff memo pointed to a "patchwork" of 47 state laws dealing with breach notification and another dozen on data security. "This patchwork of state laws creates confusion for consumers looking for consistency and predictability in breach notices as well as compliance issues for businesses in the midst of securing their systems after a breach," the memo said.

The questions being teed up on the Republican side include:
1) What are important components of a trigger for notifying consumers after a breach?
2) When should companies notify consumers after a breach? What factors go into that decision?
3) Does including a data security requirement in this bill add value for consumers and businesses navigating the current patchwork of state laws?
4) What types of information lead to identity theft? Financial fraud?
5) What elements of a breach notification bill are most critical to reduce the complexity associated with the existing 47 different State laws?
6) What can be done to protect against customer overnotification?

CenturyLink wants Congress to update the 1992 Cable Act

CenturyLink has made a plea to the House Commerce Committee to reform the 1992 Cable Act so new entrants in the video services race can more effectively negotiate prices for content.

Emerging video players like CenturyLink lack the buying power of incumbent cable operators like Comcast, which have more clout with content owners to negotiate more favorable terms. This means that programmers don't have a lot of incentive to offer reasonable terms to newer players, which the telecommunications company says "effectively deprives consumers of the benefits of competition." "CenturyLink believes the Cable Act should be amended to give providers the right to carry national programming from an adjacent or alternate market during a breakdown in retransmission consent negotiations, thus preserving competition and protecting consumers from programming blackouts," said David Bartlett, Vice President of Federal Government Affairs for CenturyLink. "Consumers benefit from more choices and more competition, not less."

Bidding war between networks, sports leagues will increase price of cable TV

Time Warner Cable, Cablevision and scores of rural cable providers are tacking on sports surcharges each month, the direct result of higher fees they are paying to ESPN and other sports networks to carry their channels.

Beginning Feb 5, DirecTV will raise fees by 5.7 percent. The rise in cable prices is likely to test the patience of customers, who may already be tempted to cut their cords in exchange for streaming options that will soon be available to them. The catalyst for the price increases is a slew of dealmaking between ESPN and the biggest professional sports leagues. Based on a recent deal, ESPN is estimated to pay $1.9 billion each year just for National Football League games. ESPN and TNT have signed a new $2.6 billion annual contract to carry National Basketball Association games. Analysts say these costs will get passed on to customers -- slowly and steadily over the next decade.

TV Content Generates 80 Percent of Consumer Attention

TV content still generates 80 percent of consumer attention. TV websites are either the top sites in their genres or among the top five in key genres including news, sports, food, kids, weather, comedy, gaming, home, music and entertainment. And they get as much as Facebook and the four major internet portals -- Google/YouTube, AOL, MSN and Yahoo -- combined.

According to Nielsen and comScore data, Americans spend 175 hours a month watching video on the Internet. Of that 80 percent is spent with multi-screen TV content. The other 20 percent is spent with Internet activity, including search, social, mobile, email as well as video.

Sling TV won't end cable as we know it. But something like it will.

Sling TV is caught in a middle ground between the cable model and the online streaming model, able to borrow some good things from both but also hampered by not having the chief advantages of either. It's also not clear how long this particular middle ground will even exist, as TV plunges toward its online future.

Most of the problems with Sling TV are, so far, problems with contracts. A lot of the missing content is missing because its owners are still wary of licensing it to streaming services. As content providers become more comfortable, Sling TV should be able to expand its library. It's even possible the service will come to function like a DVR that lives in the cloud somewhere along the line. For now, Sling is mostly interesting for what it represents, not for what it is just yet. It doesn't seem likely this is the service that will make cable television go the way of the dinosaurs, but something like this will probably do that someday. It's just a question of who gets there first, and Sling TV is getting a head start.

Benton

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