July 2015

20 years of Amazon: 20 years of major disruptions

In July 1995, Amazon.com sold its first book online, Fluid Concepts and Creative Analogies by Douglas Hofstadter. Now you can hop online from your phone, download the e-book version, bid on a vintage couch on which to read it, and hire someone to explain the concepts to you — all with one click. In its 20 years, Amazon has been at the forefront of innovation, changing the way we shop, buy, read and live. From the sexy (drones) to the unsexy (cloud services), here are some of the major lifestyle disruptions that Amazon and its products have led.

Privacy campaigners win concessions in UK surveillance report

Privacy campaigners have secured significant concessions in a key report into surveillance by the British security agencies. The 132-page report, A Democratic Licence To Operate, which Nick Clegg commissioned in 2014 in the wake of revelations by the US whistleblower Edward Snowden, acknowledges the importance of privacy concerns.

“Privacy is an essential prerequisite to the exercise of individual freedom, and its erosion weakens the constitutional foundations on which democracy and good governance have traditionally been based in this country,” the report says. It says that there are “inadequacies in both law and oversight that have helped create a credibility gap that has undermined public confidence”. The report proposes that the intelligence services retain the power to collect bulk communications data on the private lives of British citizens, but it also now concedes that privacy must be a consideration throughout the process. The report, written for the Royal United Services Institute (RUSI) by a panel that includes three former heads of UK intelligence agencies, also calls for an overhaul of existing legislation. Despite its concessions to the privacy lobby, the report overall is more favourable to the police and intelligence services than to the campaigners.

Your Streaming Music Payments Are Going Where?

People in the music industry agree: The payments from streaming services are too damn low. But who is to blame? It's nearly impossible to follow the money precisely as it flows from fans to the people who write and sing the songs. Now, a paper from a prominent music school untangles the web of royalty payments, service fees, and secret deals to give one of the fullest pictures yet of what is wrong with the economics of streaming music. It even proposes a potential solution: Bitcoin.

The Rethink Music initiative at the Berklee College of Music's Institute of Creative Entrepreneurship spent the last year examining the business practices of the music industry. "This is an industry whose fundamental business model has been completely upended, but its cost structure and its intermediary structure haven’t changed from a very different era,” says Panos Panay, the institute’s managing director. The report doesn't come from a completely disinterested source. It was underwritten by Kobalt Music Group, a music publisher that is trying to make transparency its calling card. But the numbers largely line up with a widely cited study carried out by Ernst & Young and French record label trade group SNEP.

Push Notifications Are as Distracting as Phone Calls

A new study from three researchers at Florida State University suggests that merely receiving a push notification is as distracting as responding to a text message or a phone call. The study asked more than 150 students to complete a well-known test of sustained attentional performance. The researchers found that performance on the assessment suffered if the student received any kind of audible notification. That is, every kind of phone distraction was equally destructive to their performance: An irruptive ping distracted people just as much as a shrill, sustained ring tone. It didn’t matter, too, if a student ignored the text or didn’t answer the phone: As long as they got a notification, and knew they got it, their test performance suffered.

“Our results suggest that mobile phones can disrupt attention performance even if one does not interact with the device,” write the study’s authors. “As mobile phones become integrated into more and more tasks, it may become increasingly difficult for people to set their phones aside and concentrate fully on the task at hand, whatever it may be.” Furthermore, they add, the feeling of “divided attention” may be so uncomfortable that it drives people to look at their phones, even if they know they shouldn’t. “If people are genuinely distracted by notification-induced thoughts, some problematic mobile phone use could be prompted by the desire to escape that feeling,” they write.

Could Wireless Data and TV Broadcasts Share the Same Channels?

As mobile data usage continues to skyrocket and as the amount of unused spectrum that is ideally suited for fixed and mobile wireless service dwindles, the telecommunications industry will need to find new ways of maximizing existing resources. With that in mind, there is some promising research from Rice University suggesting that it could be possible for wireless data service to share UHF spectrum with TV broadcasters also using the same frequencies.

Already some broadband wireless providers are offering fixed service using broadcast television spectrum in areas where certain channels are not used by broadcasters, spectrum known as “TV white spaces.” White spaces technology designed to use vacant TV channels to support nomadic broadband wireless similar to Wi-Fi also is under development. Rice researchers took these ideas a step further by using spectrum bands corresponding with in-service UHF channels. The technology potentially could be useful in urban areas where many UHF channels are in use by broadcasters. Key to the sharing capability is what the researchers call WATCH technology, for “wi-fi in active TV channels.” According to a Rice University press release, WATCH could provide at least six times more wireless data bandwidth in comparison with traditional white spaces technology.

FCC's Lifeline Program Ripe for Fraud, Abuse

[Commentary] The Federal Communications Commission’s low-income program, known formally as Lifeline, has spent billions of ratepayer dollars to provide phone service for poorer Americans. Because of significant waste, fraud and abuse in the program, however, a good portion of that funding has not been used as intended. More than once, the Government Accountability Office has taken the FCC to task for failing to control the program, evaluate its flaws and improve accountability. In June, the FCC proposed to expand Lifeline to subsidize broadband services without adequate controls to prevent further misuse of funds. We have significant concerns about this new course of action. It is not too late to change direction, but doing so would require the FCC to confront the substantial issues plaguing the program and adopt strong solutions.

While many reforms are appropriate, two in particular are critical, and the FCC has shown little interest to date in fixing them. First, the FCC must set a spending cap for the program. If the FCC fails to control costs, hard-working taxpayers facing higher phone bills may drop service altogether. The FCC, therefore, has a responsibility to set a spending limit that balances the goals of the program against the burden on consumers nationwide. Second, the program must be better targeted to eligible low-income individuals who would not otherwise sign up for service. Given the significant problems with Lifeline, it is not surprising that many have lost confidence in the program. Rather than rush headlong down a path that will increase spending and multiply concerns about waste, fraud and abuse, the FCC needs to reevaluate the program and address its serious flaws. This means, at a minimum, an overall cap and better targeting. To do less would betray the FCC’s responsibility to Americans to ensure that their money is well spent.

ACLU to appellate court: Please halt NSA’s resumed bulk data collection

The American Civil Liberties Union (ACLU) has asked one of the nation’s top appellate courts to order the National Security Agency to stop its bulk records collection, which resumed in limited form in June as part of the USA Freedom Act. The Second Circuit Court of Appeals had previously ruled in ACLU v. Clapper in May 2015 that the dragnet data collection went beyond the scope of what was authorized by Congress. “This dragnet surveillance program should never have been launched, and it should certainly be terminated now,” said Jameel Jaffer, deputy legal director of the ACLU. “Not even the government contends anymore that the program has been effective, and the Second Circuit has already concluded that the program is illegal. It’s a needless and unlawful intrusion into the privacy rights of millions of innocent Americans.”

The previous collection program was stopped temporarily when Section 215 of the Patriot Act expired -- but with the passage of USA Freedom on June 2, 2015, the government can access the phone records from the telecommunication companies with an individualized court order from the Foreign Intelligence Surveillance Court (FISC). The FISC allowed the government to continue its existing bulk collection as it transitions to compliance with the USA Freedom Act.

Defending the Digital Consumer

Commissioner Julie Brill of the Federal Trade Commission has a pretty good idea what the Internet will look like in five years: It won’t exist. The FTC executive believes everyone will have so many devices deeply woven into the Internet, that the line between online and offline will simply cease to exist. That will present many challenges for the FTC. Continuing to provide consumers with notice and choice about how and why their data will be used is likely to become exponentially more complex. Working as an attorney in consumer protection and antitrust for more than 20 years, Commissioner Brill has become a key player in the country’s digital privacy debate.

Asked if she had the chance to change on thing with respect to technology and privacy in the US, Commissioner Brill said, "I would like to see more significant protections for health information and other sensitive information that is flowing outside of the protected silos of sector-specific privacy laws, such as the Health Insurance Portability and Accountability Act. Fitness bands, wearables and other health-oriented devices, apps and online services provide consumers with enormous benefits, from monitoring their health to answering questions about health conditions and diseases. Yet the information about consumers that flows from these devices, as well as health information that marketers and data brokers infer from other information, can be deeply personal and can cause severe harm to consumers if it is inappropriately used or disclosed."

What the Iran deal means for the country’s surprisingly strong tech industry

[Commentary] There's going to be a lot of ink spilled about the nuclear agreement the West just struck with Iran. The deal to scale back Iran's uranium enrichment program still has to be approved by Congress and Iranian officials. But if it moves ahead, analysts say, there's at least one group that'll unquestionably benefit from the move, and that's Iran's burgeoning tech sector. Iran has a tech sector? you might ask. Well, yes -- and it's one of the fastest-growing in the region.

Some technology in Iran has flourished in spite of the country's restrictions. Satellite TV may be illegal in Iran, but it can still be found in homes everywhere. The same goes for Facebook. Nearly 60 percent of Iranians were said to use Facebook "regularly" in 2012, even though the service is illegal. Ayatollah Ali Khamenei, Iran's supreme leader, is also active on social media. But these are just data points about technology consumption. What's really interesting is how Iranians are increasingly producing technology of their own -- sometimes with the blessing of Tehran, other times completely independently. Iranians! They're more like us than you think. Iran's deal with the United States, which is expected to lift a number of economic sanctions against Tehran, could allow the country to attract more foreign money or technology to bolster its growing tech sector.

NAB accuses retransmission reformers of manufacturing a crisis

Broadcasters warned the Federal Communications Commission that retransmission reform advocates of “manufacturing” disputes to “spur the government to regulate more heavily.” The FCC is about to tread into the thorny, never-ending debate over the retransmission consent regime as prescribed by language in the satellite reauthorization bill (STELAR) passed in 2014. In a section (103) of the bill, Congress asked the FCC to commence a rule making within nine months “to review its totality of the circumstances test for good faith negotiations.”

Meeting with FCC officials the week of July 6, executives from the National Association of Broadcasters argued that nearly all retransmission consent agreements are inked without any interruption to consumers’ service. But as August draws near, the NAB predicted that some pay TV companies would create conflict to try and convince the FCC to make changes to the current retransmission consent regime. “The commission should… not be surprised by an uptick in pay TV-manufactured disputes as it launches its… proceeding. The commission should keep a close eye on this trend, as bad actors should not be rewarded with government assistance, especially when those actions come, yet again, at consumers’ expense,” the NAB wrote in an ex parte filed with the FCC on July 13. Citing recent SNL Kagan data, the NAB argued that retrans fees are not the leading reason why consumers’ pay TV bills are growing.