April 2016

Making a Cable Merger Safe for Consumers

Telecommunications companies often use mergers to limit consumer choice and raise prices. That’s why federal regulators are right to seek tough conditions before approving a deal that would combine three cable companies. The proposed deal involves Charter Communications’s $65.5 billion acquisitions of Time Warner Cable and Bright House Networks. The new Charter would be the country’s second-largest broadband company, after Comcast, and the third-largest cable and satellite-TV company, after Comcast and AT&T, which last year acquired DirecTV. There is no question that these acquisitions would give Charter significantly more power over millions of consumers, media companies and Internet businesses like Netflix and Amazon.

The proposed deals, like the statellite-TV company Dish Network, want regulators to block the Charter deals altogether, as the government did in 2015 when it stopped Comcast from acquiring Time Warner Cable. But it would be hard to convince a judge that the Charter deals should not go through. If Comcast had been allowed to acquire Time Warner Cable, the company would have clearly dominated the industry in a way that the new Charter would not. Comcast’s proposal would have given it control of about 60 percent of the national broadband market, along with outsize influence over how Americans use the Internet. The postmerger Charter would have only 23 percent of that market. That said, the Charter acquisitions clearly pose antitrust problems. They would increase consolidation in an important industry where power is already concentrated in the hands of a few companies. Regulators should fully enforce these merger conditions if the deals go through and come up with other policies to encourage more competition.

New study: Snowden’s disclosures about NSA spying had a scary effect on free speech

In June 2013, reporters at The Washington Post and the Guardian ran a series of stories about the US government’s surveillance programs. According to documents leaked by Edward Snowden, the National Security Agency was harvesting huge swaths of online traffic — far beyond what had been disclosed — and was working directly with top Internet companies to spy on certain people. Glenn Greenwald, one of the Guardian journalists who reported the disclosures and a surveillance skeptic, argued in a 2014 TED talk that privacy is a critical feature of open society. People act differently when they know they're being watched. “Essential to what it means to be a free and fulfilled human being is to have a place that we can go and be free of the judgmental eyes of other people,” he said.

The problem, though, is that it's difficult to judge the effect of government-spying programs. How do you collect all the utterances that people stopped themselves from saying? How do you count all the conversations that weren’t had? A new study provides some insight into the repercussions of the Snowden revelations, arguing that they happened so swiftly and were so high-profile that they triggered a measurable shift in the way people used the Internet. Jonathon Penney, a PhD candidate at Oxford, analyzed Wikipedia traffic in the months before and after the NSA’s spying became big news in 2013. Penney found a 20 percent decline in page views on Wikipedia articles related to terrorism, including those that mentioned “al-Qaeda,” “car bomb” or “Taliban.” "You want to have informed citizens," Penney said. "If people are spooked or deterred from learning about important policy matters like terrorism and national security, this is a real threat to proper democratic debate."

AT&T’s plan to build a wireless-TV bundle seems to be working

In the four months since it announced the feature, more than 3 million people have signed up for AT&T's new unlimited data plan, the wireless company said. The numbers represent an early sign that AT&T's plan to make money off of newly-acquired DirecTV may be paying off. The unlimited data plans require customers to sign up for either DirecTV or AT&T's other TV product, U-verse — effectively creating a bundle of smartphone and television service. When it first launched in January, company executives said the offering was aimed at the 36 million households that had either its wireless phone service or TV service, but not both.

Activists to give Google petition against RNC sponsorship

Activists will deliver a petition with over 400,000 signatures to Google’s headquarters asking the company to refrain from sponsoring the Republican National Convention should Donald Trump become the party’s presidential nominee. Progressive groups like ColorOfChange, Credo Action and Free Press Action Fund have been pressuring American corporations not to donate to a Republican convention boosting Trump. The groups will fly a plane over Google’s Mountain View (CA) campus with the message “Google: Don’t be evil. #DumpTrump,” a reference to Google’s famous original corporate motto.

Google was a sponsor of the 2012 Republican convention where the party nominated Mitt Romney. A spokesperson for the company did not respond to a request for comment. Companies are also reportedly becoming wary of the idea of putting their corporate brands next to Trump, who has blazed a path to the nomination by making remarks members of both parties have said are out-of-bounds. The progressive groups say that the companies, should they choose to sponsor the event, would in effect be offering Trump more legitimacy.

This summer, Congress must make sure the Internet stays free

[Commentary] By Sept 30, 2016, the Obama Administration plans to transition its stewardship over core Internet functions to the international community. The transition plan presented to the US Department of Commerce was finalized by the International Corporation for Assigned Names and Numbers (ICANN), which sets broad policy for the Internet's naming system, and coordinates many of its most essential functions. The plan raises troubling questions that must be answered before it is approved by the US government. At stake are the stability and freedom of the Internet, which serves as a personal and commercial lifeline not only to Americans, but also to a majority of people across the globe. That the Internet today is decentralized, open and free of government interference is thanks to the American government's adoption, during the Clinton years, of a multi-stakeholder model of governance. Since early days, it was agreed that the overseers of the Internet would be private and governmental groups working together under ICANN's umbrella.

Moving forward, ultimate control of the IANA function must never pass to an international organization controlled by governments, whether the United Nations, the International Telecommunications Union, or ICANN recast with governments in control. Congress must ensure that the US remains in a position to protect the stability and freedom of the Internet. That means making sure that any institution taking over the stewardship of the Internet's core functions should be structured to keep the Internet decentralized, open and free.

[Daniels is the former Chairman and CEO of Network Solutions, Inc., where he monitored firsthand the administration of the IANA function and the allocation of domain names.]

Getty ramps up pressure on Google with image search complaint

Getty Images filed a complaint against Google at the European Commission, accusing the search giant of promoting piracy to solidify its market dominance. The photo service specifically called out Google’s 2013 change to its image search, which allowed users to see high-resolution photos rather than “low res thumbnails” that might encourage users to click through to see a better-quality image. “By creating its own captive, image-rich environment and cutting off user traffic to competing websites — and reserving that traffic exclusively for its own benefit — Google is able to maintain and reinforce its dominance in search,” Getty’s general counsel, Yoko Miyashita, said.

Getty said the 2013 change immediately started diverting traffic away from its own site, which the company said is hurting the livelihood of the 200,000 photographers who use Getty to distribute images. While the complaint was filed with European regulators, Getty said “antitrust authorities around the world should take action.”

Sen Ted Cruz's Cuba and Muni Broadband-Related Amendments Withdrawn

Sen Ted Cruz (R-TX) has withdrawn a couple of amendments to a Federal Communications Commission reauthorization bill being marked up in the Senate Commerce Committee that would have targeted Administration efforts to loosen communications restrictions on Cuba. Also withdrawn was an amendment Sen Cruz co-sponsored that would have reined in the FCC's preemption of state laws limiting municipal broadband buildouts. Still in the running, though with modifications, was an amendment he introduced requiring a GAO study of federal spectrum opportunity costs and technology by Sen Marco Rubio (R-FL). Sen Rubio has been a big backer of freeing up more spectrum for wireless broadband.

Toronto Gets Its Own Free, Encrypted Mesh Network

Canadians are famously dissatisfied with Internet access in this country, and Mark Iantorno and Benedict Lau, two Toronto developers, are no exception. In December, they met for lunch at a cafeteria in a downtown office, and got to talking about how increasingly frustrated they were—Iantorno with sky-high data plan prices, and Lau, who is a mobile engineer with Android, with “black box design,” or the opacity of consumer tech. At that lunch, they talked about how to bring free, accessible Internet to the city, uncoupled from Canada’s three all-powerful telecoms. They went over various ideas: Iantorno suggested floating Wi-Fi rigged balloons over the city, an idea cribbed from Google’s Project Loon. Lau was skeptical. "I'm doing this thing called mesh networking,” he said. “You should take a look.”

Meshnet networks, or meshnets, are a form of intranet that doesn’t require a central router point. Instead of emitting from a single point, they’re distributed across an entire system of nodes. Accessing one is free—and doesn’t require the services of a telecom. Lau had spent the previous summer chatting with other meshnet enthusiasts in Europe, trying to figure out the best way to set up routers across the city. He suggested it was time to give it a try in Toronto. What grew out of Lau and Iantorno’s meeting, four months ago now, was a plan to build a meshnet in this city—one where users wouldn’t need to worry about eavesdroppers, because it would be encrypted. When it’s finished, Toronto’s first free-to-use meshnet should provide an accessible and secure internet community, maintained by locals keen on becoming digitally self-sufficient. Those early adopters could reshape our relationship to internet providers, and cut monthly rates out of the picture.

The damaging effects of a flawed Internet creation myth

[Commentary] In his 2003 article on network neutrality, Tim Wu made a fundamental error: He conflated product differentiation with price discrimination. This error has resulted in the promulgation of a flawed Internet creation myth — namely, that price and product differentiation on behalf of Internet service providers must be banned in order to preserve the Internet as its originators intended it to be. Wu asserted that his neutrality principle is “a tradeoff between upward (application) and downward (connection) neutrality. If it is upward, or application, neutrality that consumers care about, principles of downward neutrality may be a necessary sacrifice.” These broad statements echo the Internet creators’ acceptance of pricing flexibility and ongoing commercial innovation.

Unfortunately, Wu’s erroneous conflation of price discrimination, product differentiation, and non-neutrality has fed a movement calling for bans on virtually all changes to ISP price structures. The net neutrality crusade now threatens the ability of commercial Internet innovation to proceed in step with technical innovations, in the manner that the Internet’s creators expected. At the end of the day, a less dynamic Internet ecosystem means fewer new applications and less innovation in fields that desperately need it, including health care, financial systems, and the fight against homelessness. Regulators — and potential “converts to the faith” — should consider this when evaluating the credibility of advocacy underpinned by the modern network neutrality creed.

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation and a faculty member of Victoria Business School, Victoria University of Wellington, New Zealand.]