April 2015

Casting Early Presidential Vote Through Facebook by Clicking ‘Unfollow’

With the presidential race heating up, a torrent of politically charged commentary has flooded Facebook, the world’s largest social networking site, with some users deploying their “unfollow” buttons like a television remote to silence distasteful political views. Coupled with the algorithm now powering Facebook’s news feed, the unfollowing is creating a more homogenized political experience of like-minded users, resulting in the kind of polarization more often associated with MSNBC or Fox News. And it may ultimately deflate a central promise of the Internet: Instead of offering people a diverse marketplace of challenging ideas, the web is becoming just another self-perpetuating echo chamber.

Psychonalyzing Comcast

[Commentary] To Comcast’s Brian Roberts, the acquisition of Time Warner Cable was all about remaking the cable bundle for the digital age. It was all about continuing to use distribution (i.e., the cable system) to get leverage over content, however much the marriage of content and distribution renders Comcast suspect in the eyes of hyperbolic regulators, customers and business partners. By joining the two cable systems, the deal would give Comcast a fair approximation of national scale to match the national scale of Netflix, Apple, HBO, etc. It would be able to use its 30 million cable homes as leverage over sports leagues, movie studios and cable channels to build up its own Internet TV package in competition with Netflix and other Web-based TV purveyors. As he walked away from the deal, Roberts said, “This allows us to think again.” Now whether there is a way ahead that makes both business sense and allows the Roberts family to enlarge their role on the national stage is a different question.

In Advertising Battle, TV Fights Back Against the Web

Marketers have been moving money, gradually but measurably, away from TV and into digital outlets that promise sophisticated ad targeting and the ability to reach audiences that are eschewing traditional television. Now, the TV empire is striking back.

NBCUniversal, owner of channels including USA, Bravo and E!, along with Time Warner’s Turner Broadcasting and other media companies are touting new tools that they say close the gap with the online players when it comes to data and analytics. That will be a key feature of their pitches in “upfront” negotiations in coming weeks, when TV networks sell the majority of ad time for coming programming.

Google’s Looming Battle Over Search

[Commentary] “General search” -- searching of all of the world’s accessible information and delivering results without differentiation -- is fast becoming hopelessly outdated. In an era of exploding data, it is more efficient and more effective to presort information into categories. So it is hardly surprising that Google searches have evolved to emphasize specialized results better targeted to users’ queries. Yet regulators seem perplexed.

It’s a mistake to consider “general search” and “comparison shopping” or “product search” to be distinct markets. From the moment it was technologically feasible to do so, Google has been adapting its traditional search results -- that familiar but long since vanished page of 10 blue links—to offer more specialized answers to users’ queries. Product search, which is what is at issue in the European Union complaint, is the next iteration in this trend. To say that Google will be able to leverage its success in general search into dominance of more specialized markets completely misses the mark. There is nothing here that should worry antitrust regulators. Competition with Google may not and need not look exactly like Google itself, but it is competition nonetheless.

[Manne is the founder and executive director of the International Center for Law and Economics]

European disintegration threatens business on the Internet

[Commentary] By making it harder to start and run an internet business, European Union authorities threaten to make Europe less prosperous and the web less useful. Facebook’s recent experience in Europe tells a disturbing tale.

National authorities are entitled to their differences over how Facebook and other internet companies should be regulated. But ignoring the rules Europe has so painstakingly crafted, and arrogating the authority that those rules accord to the Irish regulators, is not the answer. The simplest way to resolve their differences is for national regulators to work together, as they have done effectively in the past. That is surely a better approach than to fragment Europe’s single market, and waste resources mounting independent investigations into issues that have already been thoroughly examined.

[Allan is Facebook’s vice-president of public policy in Europe]

With clock ticking, lawmakers unveil Patriot Act bill

A bipartisan group of lawmakers introduced major reforms to the National Security Agency along with extensions to three expiring provisions of the Patriot Act. The negotiated legislation from House Judiciary Committee leaders -- including Chairman Bob Goodlatte (R-VA) and Sens Patrick Leahy (D-VT) and Mike Lee (R-UT) -- would enact the largest changes to America’s intelligence powers in more than a decade. “As several intelligence-gathering programs are set to expire in a month, it is imperative that we reform these programs to protect Americans’ privacy while at the same time protecting our national security,” Chairman Goodlatte said in a joint statement along with the other House authors, Reps. John Conyers (D-MI), Jerrold Nadler (D-NY) and Jim Sensenbrenner (R-WI), the original author of the Patriot Act.

The new bill, called the USA Freedom Act, would effectively end the NSA’s phone records collection. Instead, it would require agency officials to obtain the records from private phone companies after securing a court order. It would also add a new panel of experts to the secretive Foreign Intelligence Surveillance Court, allow US tech companies to disclose more about the information they are forced to hand over to the government and impose limits on the FBI’s use of “national security letters,” which is one way the government obtains companies’ records. Still, it could meet opposition both from hawks concerned about weakening American security and from civil libertarians who oppose reauthorizing the Patriot Act without more sweeping changes. The American Civil Liberties Union quickly came out against the bill, saying it does not go far enough. “The disclosures of the last two years make clear that we need wholesale reform. Congress should let Section 215 sunset as it’s scheduled to, and then it should turn to reforming the other surveillance authorities that have been used to justify bulk collection,” said Jameel Jaffer, the group’s deputy legal director.

FCC Chairman Wheeler Launches Broadband Privacy Discussion

Federal Communications Commission Chairman Tom Wheeler called the broadband privacy workshop the commission hosted on April 28 the beginning of a very important discussion. The FCC is trying to decide how to regulate broadband CPNI (customer proprietary network information), now that it has reclassified Internet service providers as telecommunications out of the reach of the Federal Trade Commission, which is now prevented from exercising authority given common carrier exemption. Chairman Wheeler said that the issue falls under a broader one, which is the basic concept that "changes in technology don't change our values." He said that privacy is unassailable and how the FCC deals with it is what makes the issue and the era so challenging, but exciting at the same time.

Chairman Wheeler detoured a few centuries to point out that Alexander Hamilton was concerned about the mail being compromised as he and the founding fathers were hammering out the Federalist Papers, then jumped to the Civil War to talk about Rebels cutting the telegraph wires -- Chairman Wheeler wrote a book about Lincoln's use of the telegraph during the war -- and putting the wires to their tongues to sense the pulses and hack the messages. But he returned to the present day to make the point that the issues were not new, and that in this era increasingly the information and the networks are becoming increasingly synonymous. Chairman Wheeler said Congress was explicit in its instructions to the FCC, which was that consumers have the right to expect privacy of the information network collect about them. The FCC has been overseeing that CPNI relationship when it comes to phone, including VoIP, and traditional video -- VOD records, for example -- but broadband CPNI is new territory. Chairman Wheeler said that in a digital world, everyone leaves digital footprints "all over the place."

Iowa Broadband Legislation Rolls Ahead

Iowa is one step closer to expanded broadband connectivity in the state. House File 641, Gov Terry Branstad’s (R-IA) “Connect Every Acre” initiative, passed the Iowa House of Representatives by a 90-5 vote on April 21. The measure, which uses a litany of income and property tax breaks to incentivize the build-out of broadband networks in the state’s underserved areas, now must be ratified in the Senate. This is the second time around for Branstad’s proposal. It was initially defeated in the House during the 2014 legislative session over concerns that the tax breaks were too high and skepticism that providers would take on projects in Iowa’s rural areas. The legislation was re-introduced on Jan. 13, during Branstad’s “Condition of the State” address.

Jimmy Centers, spokesman for Branstad, said that the issues have been addressed, noting that the current legislation actually extends the tax credit length by seven additional years in comparison to the original proposal. With the landslide vote in favor of HF 641 in the House, the governor is confident in the bill’s prospects in the Senate. Broadband installations that qualify under HF 641 are exempt from property tax for a period of 10 years. To qualify, projects must take place within a targeted service area defined by the U.S. Census Bureau where download speeds of 25 Mbps or more and upload speeds of 3 Mbps or more are not currently available.

Survey Says: Wi-Fi’s Worth the Money

Consumers around the world are clamoring for stronger, faster and easier-to-use Wi-Fi services and they are willing to pay to get them, according to a recent study conducted by IE Market Research. What’s more, subscribers are willing to give up some of their privacy if it means a better customer experience with personalized offers. IE Market Research queried 4,070 pay TV customers in 11 countries from Feb. 16 to March 23, according to Nizar Assanie, vice president of IE Market Research. “The survey was one of the most robust and comprehensive studies on WiFi and big data analytics to date,” he said. Among its findings:

The biggest problems with Wi-Fi service are coverage outside the home and poor connection speed.
Consumers are willing to pay for carrier grade Wi-Fi service.
Users are also willing to give up personal information and pay more for personalized customer care.
The survey underscores a universal truth in the business: In order to increase subscriber growth, cable operators must invest more.

'Tech Elder' Berninger Seeks FCC Stay of Title II

VoIP pioneer Daniel Berninger has petitioned the Federal Communications Commission to stay its Title II reclassification decision until a federal appeals court, likely the DC circuit, hears various appeals of that open Internet order. Making an argument for what he calls irreparable harm to entrepreneurship (irreparable harm is one of the threshold issues for a stay), Berninger says the FCC decision will keep him from earning a living and strand his investment in previously unregulated services with no chance of recovering it. He also makes a case for why a stay would not harm others, why it is in the public interest and why a challenge of the rules is likely to succeed on the merits. Berninger says he will seek a court stay if the FCC does not respond by early May.

Berninger has been leading a group of self-described "tech elders," including broadband video pioneer Mark Cuban, who are opposed to Title II reclassification of Internet access as a common carrier service, which the FCC adopted Feb. 26 on a pure party line vote with strong dissents from the Republicans. Berninger said Title II reclassification threatens his livelihood and causes "irreparable harm to my career as an architect of new communications services if allowed to take effect pending judicial review."

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