August 2015

The Upside of a Downturn in Silicon Valley

[Commentary] Tech investors are known for their strutting optimism, but the best of them are keenly aware of the motivating powers of impending doom. Some of the most successful tech investments of all time — among them Google and Facebook — came about in Silicon Valley’s lean times.

This is a paradox of invention, as well as of investing: Bad times feed good ideas, which in turn lead to good times, which breed complacency, waste and lots of bad business plans.

No one in the tech industry knows if the recent stock market turbulence will prompt another opportunity to mourn good times. But some venture capitalists are beginning to plan for a leaner era ahead. Sooner rather than later, some external shock may prompt a slow-moving retrenchment in the fund-raising for start-ups. Money will dry up, companies will face hard choices, and there will be layoffs, shutdowns and much heartache. That may just be what Silicon Valley needs.

Cuba's Internet Dilemma: How to Emerge From the Web's Stone Age

The Internet is essential for today’s business, finance, communications and information, but today hasn’t dawned in Cuba, which still has some of the worst Internet access in the world.

It’s restricted to a few workplaces and fewer than 4 percent of homes, including those of senior officials, foreign executives and media, doctors and artists. It’s unavailable on the country’s 1991-vintage 2G mobile-phone network. President Raul Castro’s government recognizes the problem, but faces a dilemma: how to expand Internet access to boost its economy and satisfy its population while maintaining control of information. Cuban officials say at least 50 percent of the population will have residential Internet service and 60 percent will have mobile phones by 2020, without saying how they’ll achieve that. “It’s stupid how much they’ve delayed the inevitable,” said Carlos Alzugaray, a former Cuban ambassador to the European Union and professor at the University of Havana. “Meanwhile, we’re losing ground -- we’re in the Stone Age.” The Internet was used by 30 percent of Cuba’s population in 2014, according to the International Telecommunication Union, compared with 57 percent in its ally Venezuela and 87 percent in the US.

Why Gogo's Infuriatingly Expensive, Slow Internet Still Owns the Skies

If you’ve flown for work on a major US airline over the past five years, you’ve probably used Gogo, and “fast and reliable” are probably not how you’d describe it. More like “hell-sent and extortionate." Since pioneering the in-flight Internet business, Gogo has dominated, commanding about 80 percent of the market. And as often happens with near monopolies, Gogo has become a name people love to hate. “So, Gogo is officially a joke at this point, right?” is the title of a well-commented-on thread on the road warrior site FlyerTalk. “They’ve got a monopoly, and they just don’t care,” says pharmaceutical executive and frequent flyer Keith Lockwood. “Once you have it, it’s hard not to have it.”

But for the first time since that famous 2008 Louis CK rant, Gogo has some serious competition. At least two companies -- ViaSat and Global Eagle Entertainment (GEE) -- are encroaching on its airspace, winning business by offering faster, cheaper connections that use satellites instead of cell towers. Gogo is launching its own satellite system that should come online by the end of 2015. “We’re going to create a great new future in aviation,” Small says. “And as long as we keep making progress, the customers are going to hang with us.”

Sham telecoms created to scam AT&T must pay back ill-gotten gains

AT&T has won a $252,000 judgment from the remnants of sham telecommunication companies that were created in order to bill legitimate phone companies for services they didn't provide. The companies billed AT&T $13 million, but AT&T figured out the scam after paying only a fraction of that. The defendants, All American Telephone Co., e-Pinnacle Communications, Inc., and ChaseCom, operated out of Utah and Nevada and had all shut down by 2010. The Federal Communications Commission granted AT&T’s complaint against the companies in March 2013 and were ordered the defendants to pay back the $252,496.37 they got from AT&T. The FCC dismissed AT&T's request for interest and "consequential damages," saying the company can pursue those in court.

Analyst: Sinclair Greed May Lead to Retrans Fix

The massive blackout of Sinclair Broadcast Group stations could be the catalyst for government action that levels the playing field on retransmission consent negotiations that have been overwhelmingly favorable to broadcasters up till now. In a research note, BTIG analyst Richard Greenfield says that with the Federal Communications Commission and Congress already looking at the cost of the cable bundle, the latest dispute with Dish Network could be the straw that breaks the camel’s back. FCC Chairman Tom Wheeler said he directed the FCC’s Media Bureau to have an emergency meeting with Sinclair and Dish to restore programming to consumers.

“Sinclair’s actions vis-à-vis Dish look to us like lighting a match in a dry brush field,” Greenfield says. “The government is looking for reasons to get more involved to help consumers. Sinclair may have finally given them a blatant enough excuse.” The result of what Greenfield call's Sinclair's greed could be bad for all broadcasters and help distributors. “It could very well lead to a reform of retransmission consent negotiations that helps level the lopsided playing field,” he said.

State of California Provides $50 Million to Connect Schools to the Internet

California State Superintendent of Public Instruction Tom Torlakson announced a second round of Broadband Infrastructure and Improvement Grants (BIIG 2.0) is available for California schools and districts to enhance their network connectivity. "Because of a wise investment approved by the Legislature and Governor Jerry Brown (D-CA), an additional $50 million is available to help schools connect to the state's education network," said Torlakson. "This will give students access to technology that will prepare them for college and careers, and give teachers more resources to improve instruction." BIIG 2.0 builds on the first round of funding earlier in 2015 that provided nearly $27 million to 227 school sites.

FCC Chairman Wheeler Calls for Emergency Meeting on DISH-Sinclair Dispute

Currently, there is a blackout affecting 129 television stations in 79 markets as a result of an ongoing dispute between Sinclair Broadcasting, the nation's largest broadcast group, and DISH, a direct broadcast satellite provider. On Aug 25, DISH requested an emergency order for injunctive relief, alleging violations of the Federal Communications Commission’s rules requiring good faith negotiations.

FCC Chairman Tom Wheeler said, "Today, I have directed the Media Bureau to convene an emergency meeting with DISH and Sinclair to get to the bottom of the dispute and bring back local programming to consumers. The parties will have until midnight to file their views. The public interest is the Commission's responsibility. We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming. The Commission will always act within the scope of its authority if it emerges that improper conduct is preventing a commercial resolution of the dispute. [In 2014], Congress instructed the Commission to look closely at whether retransmission consent negotiations are being conducted in good faith. That’s why I have proposed to my fellow Commissioners a new rulemaking to determine how best to protect the publicinterest. The facts surrounding this dispute inform our findings in that proceeding, but we will not wait to act on behalf of consumers."

The 22 Amendments That Could Determine the Fate of the Senate's Cybersecurity Bill

After a brief but heated battle, Senators packed up for summer recess early in August without voting on a key cybersecurity bill, the Cybersecurity Information Sharing Act, or CISA . In announcing that the bill's consideration would be delayed, Majority Leader Mitch McConnell (R-KY) lined up 22 amendments that will get a vote when the bill comes up again in the fall, a product of intense negotiations over the bill's fate.

The amendments -- 10 from Republican Senators and 11 from Democrats Senators, plus one from the bill's bipartisan cosponsors -- range widely in their goals, and they have been the subject of a lobbying push in August from both supporters and opponents of CISA. The bill sets up incentives for businesses to share cyberthreat information with the government, with the goal of supplying both with the tools and data they need to bolster their defenses. It will likely come up again after the Senate reconvenes in September, but it's just one issue in a tight legislative schedule.

AT&T Says Injecting Ads Into Airport Wi-Fi Was a Test That Is Now Over

AT&T said it has ended an experiment that had the company serving ads to those using its free Wi-Fi at two Washington (DC)-area airports. “We trialed an advertising program for a limited time in two airports (Dulles and Reagan National) and the trial has ended,” AT&T said. “The trial was part of an ongoing effort to explore alternate ways to deliver a free Wi-Fi service that is safe, secure and fast.” The company didn’t say when the test ended.

Jorge Ramos: Part journalist, part activist, and now full-on Trump combatant

Jorge Ramos would be the first to say it. In his role as the lead anchor of Univision's nightly Spanish-language newscast and a series of English-and Spanish-language news and public affairs programs for nearly three decades, he regards his role as one part traditional journalist. He's there to tell people what has happened, when it happened and what it means. But he would also say that, with the nation's Latino population growing rapidly, the number of Latino elected officials nowhere near keeping pace and the fate of some 11.3 million undocumented immigrants -- many of whom are Latino -- now the primary issue in the 2016 election, he and the rest of the news staff at Univision must also play another role: They must embrace the work of social justice. They must report accurately and fairly but never pretend that all information or points of view are equally valid. So, to say that Ramos -- one part journalist, one part activist -- understands a critical part of his job to include questioning Donald Trump and challenging Trump's ideas on immigration -- well, that would be an understatement.

Benton

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