July 2015

Password Sharing: Are Netflix, HBO Missing $500 Million by Not Cracking Down?

Netflix, HBO and other Internet video-subscription providers are theoretically leaving megabucks on the table from customers nefariously sharing login info with nonpaying users. So why aren’t they aggressively trying to block the millions of freeloaders gorging on “Game of Thrones” or “Orange Is the New Black”? Illicit password-sharing would appear to be a serious issue for subscription video-on-demand (SVOD) players: The practice will cost the sector upwards of $500 million worldwide in 2015, according to a recent report from research firm Parks Associates. But the reason subscription-video services are not moving to actively stamp out password sharing, at least for the time being, is that they don’t want to screw up the customer experience -- especially as they’re in growth mode, adding new subscribers every month.

First, think of it along the lines of the tech-biz maxim “it’s not a bug, it’s a feature.” The real problem is, SVOD providers really can’t block unauthorized users if they have a legit password without instituting an additional form of authentication. Netflix and HBO want to make it as easy as possible to watch their streaming services; if they started asking for your mother’s maiden name or some other proof you’re entitled to the goods, customers would get irritated. Right now, though, in the scramble for market share, putting up with password-sharing cheaters is a cost of doing business that Netflix and HBO don’t have an easy way to solve.

A bitter clash at the FCC is gumming up one of the most important issues in tech right now

Bowing to pressure from Republican Representatives, Federal Communications Commission Chairman Tom Wheeler won't be holding a hotly anticipated vote on rules for a looming, high-stakes auction of wireless airwaves. TV industry advocates say the real reason the vote fell apart was because Chairman Wheeler couldn't find enough Democratic votes to move ahead, in an indication of how fragile the FCC's Democratic majority can sometimes be. The discord, according to those advocates, stems from fears that the draft auction rules could unintentionally lead to interference between mobile devices.

The FCC's proposal would have considered relocating some TV station channels into this gap. Mainly, these stations would be the ones that decided not to give up their airwaves to cell service providers such as Verizon and AT&T. But some within the FCC, such as FCC Commissioner Jessica Rosenworcel, worried that plan would render some mobile technologies unusable, said Preston Padden, a former Disney executive who now leads a coalition of TV stations interested in selling their airwave rights. But because the FCC is not offering enough money to TV stations to entice them to sell, the FCC "is saying, 'Oh no, we're going to have to jam broadcasters in [the duplex gap] and that's what caused the fight," said Padden, whose coalition members would benefit from a higher auction price. (The auction works by having the government buy up the TV stations' airwave rights and then reselling them to cellular carriers.) Padden claimed that if the FCC offered 5 percent more money to broadcasters, more of them would agree to sell -- and fewer would need to be relocated. "They're being penny wise and pound foolish, and that's why they've got this problem," said Padden.

Lawmakers and broadcasters to FCC: Avoid putting TV stations in duplex gap

In a letter to Federal Communications Commission Chairman Tom Wheeler on July 15, Sens Chuck Schumer (D-NY), Marco Rubio (R-FL) and Cory Booker (D-NJ) urged Chairman Wheeler to preserve the duplex gap for unlicensed and wireless mics. “A diverse coalition of broadcasters, tech companies, and consumer advocates have raised concerns that placing broadcasters in the duplex gap will complicate and inhibit live news reporting in major urban areas. Furthermore, the current proposal would deprive millions of Americans of the full benefit of next generation unlicensed technologies, including Wi Fi, enabled by making three channels available for unlicensed use on a national basis,” wrote the Senators.

Disney, CBS, FOX and NBCUniversal, Univision, along with affiliate organizations jointly wrote to the FCC asking that the agency preserve reserved spectrum for use by wireless microphones that are critical to news gathering. “We are concerned that, as part of the incentive auction re-packing, the FCC may place TV stations in the portion of the duplex gap that the FCC previously reserved for use solely by wireless microphones. Although we understand that the FCC intends to minimize the number of markets in which this could happen, we remain concerned that the implications of this decision have not been fully explored, as well as with the level of uncertainty about which and how many markets will be impacted by this potential decision."

Do Encrypted Phones Threaten National Security?

[Commentary] In Washington (DC), where a growing chorus is demonizing end-to-end encryption that permits people to have conversations that the government can never see, Sen Sheldon Whitehouse (D-RI) has aired a particularly extreme anti-privacy position: Sen Whitehouse suggested that selling well-encrypted smartphones to Americans should be treated like dumping toxic waste in streams. They began with a hypothetical kidnapping. “A girl goes missing,” Sen Whitehouse told Deputy Attorney General Sally Yates. “A neighbor reports that they saw her being taken into a van out in front of the house. The police are called. They come to the home. The parents are frantic. The girl's phone is still at home.” Naturally, everyone wants to search the phone for clues. But it is encrypted. Of course, the phone doesn’t necessarily hold any clues, and the victim is no worse off than every child kidnapped in the thousands of years before smartphones existed. Nevertheless, Sen Whitehouse feels that the phone maker bears some culpability for the girl’s fate, and should perhaps be made to pay up in a civil lawsuit.

Shaping encryption policy by way of dueling lawsuits and jury awards strikes me as one of the least efficient, least accurate methods imaginable to quantify the costs and benefits of different approaches to encryption and data security. And in a nation in which telecommunications companies were able to wrangle retroactive immunity for knowingly and illegally helping the government to spy on Americans, the notion that civil liability would be consistently applied to powerful corporations, even in the aftermath of black-swan events, is strikingly naive.

Major computer hacking forum shut down by 20 countries, US announces

The Justice Department announced the largest international takedown of an online criminal hackers’ forum, an illicit Web site for the trafficking of tools and talent. Over a 24-hour period, officials said, authorities in the United States and 19 other countries jointly shut down Darkode, the world’s most sophisticated English-language Internet forum for criminal hackers. During Operation Shrouded Horizon, the FBI infiltrated Darkode at high levels and began gathering evidence and intelligence on members, officials said. “Through this operation, we have dismantled a cyber hornets’ nest of criminal hackers which was believed by many, including the hackers themselves, to be impenetrable,” said US Attorney David J. Hickton of the Western District of Pennsylvania, whose office handled the joint investigation with the FBI and the department’s criminal division.

Darkode is a tightly controlled, invitation-only digital bazaar in which a prospective member can gain admission only after posting what amounts to a professional résumé of illegal hacking capabilities, Hickton said. It launched in 2008 and has 250 to 300 members, officials said. The other countries involved in the takedown were Australia, Bosnia and Herzegovina, Brazil, Canada, Colombia, Costa Rica, Cyprus, Croatia, Denmark, Finland, Germany, Israel, Latvia, Macedonia, Nigeria, Romania, Serbia, Sweden and the United Kingdom. Europol, the European Union’s law enforcement agency, also took part.

After Dodging the Bullet that Hit OPM, Interior ‘Owns’ Up to Cyber Problem

Sometimes fear is the best motivator. At the Interior Department, this was the case when computer hackers stole millions of federal employee records from an Office of Personnel Management database stored inside one of Interior's data centers. The assailants left Interior's data unscathed. But point taken, Interior Chief Information Officer Sylvia Burns said at a House Oversight and Government Reform Committee hearing. The incident, part of a historic hack against the US government, prompted the department to expedite a goal of eliminating wimpy passwords as the only safeguard when signing in to agency systems.

"When I, as a CIO for the department, learned of the intrusion, it was horrifying to me and since that time, my team and I have been on high alert working probably seven days a week, long hours to take our lessons learned and do a mitigation plan around it," Burns said. Still, Burns clearly has her work cut out for her. Results of an information security audit presented to lawmakers laid out thousands of security vulnerabilities in Interior’s public websites. "We have to all own this problem and it will take all of us to fix the problem, “Burns said of the cybersecurity dilemma in general, across her department's distributed bureaus and offices. “And everybody has been taking it seriously so I’m very gratified by that.”

FCC Wants to Operate 100 Percent in the Cloud by the End of 2017

Few agencies in any government sector have approached cloud computing with as aggressive a plan as the Federal Communications Commission. For many years, the agency was behind the technological curve, relying on an aging infrastructure -- particularly ironic given FCC’s position as an authority in the communications realm. It won’t be behind the curve much longer. The FCC is going all-in on cloud computing and is currently in the middle of a “lift-and-shift,” which describes the lifting of internal servers off premise and the shift in modernizing its many applications for cloud.

“The FCC is lifting their servers, shifting entirely to cloud computing and rewriting their applications for cloud and everything in the future,” said Tony Summerlin, senior strategic adviser for FCC. By the end of fiscal 2017, FCC expects to be at or very close to “100 percent cloud,” with no applications running on its own equipment. Instead, FCC will make use of platform- and software-as-a-service offerings.

Sen Ted Cruz makes New York Times' list

Five days after accusing The New York Times of bias, secrecy and foul play, Sen Ted Cruz (R-TX) is finally getting what he wanted: a highly coveted spot on the paper's bestseller list. Sen Cruz's memoir, "A Time For Truth," will appear at No. 7 on the Times' list for hardcover nonfiction, reflecting its second-week sales, a Times spokesperson confirmed.

Sen Cruz's book had not been included on the list for its first week, on the grounds that its sales had been driven by "strategic bulk purchases." Times spokesperson Eileen Murphy said that the newspaper made no changes to its selection process, and so the fact that Sen Cruz's book is being included now suggests a rise in individual purchases, spurred by his public battle with the paper.

Parents and Social Media

Social media networks have become vital channels for Americans’ daily interactions. Users rely on these platforms to keep in touch with family and friends, gather information and share what is important to them. This report explores how parents -- 75 percent of whom use social media -- turn to social media for parenting-related information and social support. Among the findings:

Mothers are heavily engaged on social media, both giving and receiving a high level of support via their networks. 81 percent of parents who use social media try to respond to good news others share in their networks, including 45 percent of social-media-using parents who “strongly agree” that they do so. Some 53 percent of mothers say they “strongly agree,” compared with 33 percent of fathers who say that.

Social media is broadly viewed as a source of useful information and as one parenting tool among a collection of options. Mothers use it as a parenting resource slightly more often than fathers.

Few parents say they have felt uncomfortable when information about their children is shared by other family members or caregivers on social media.

Parents, like non-parents, use a variety of social media platforms.

Parents are particularly active on Facebook and LinkedIn, while non-parents use Instagram more frequently.

The surprising way smartphones are changing the way we shop

Gamestop has no doubt that mobile devices have changed the way its customers shop. Smartphones and tablets now account for up to 68 percent of the traffic to the videogame chain’s Web site, where customers are frequently browsing products and looking up trade-in values for their old games. One thing they’re not doing much of on mobile devices? Buying stuff. In fact, “purchasing through that phone probably wouldn’t even make the top ten list of engagement activities that they do,” said Jason Allen, the retailer’s vice president of multichannel.

Gamestop's experience reflects a trend seen throughout the industry: While there has been a surge in traffic to retailers' Web sites from smartphones, a proportionately big boom in sales on these gadgets have yet to appear. In other words, for all the time we spend swiping and tapping on our phones, we still aren’t especially willing to make purchases on them. Instead, shoppers are largely using their phones as something of a personal, pocket-sized sales associate that helps them browse and research while they are in a store. That has prompted retailers to adapt their mobile strategies to help them do something counterintuitive: Boost in-store sales.