June 2010

FCC to Hold Public Forum on Comcast-NBCU

Apparently, the Federal Communications Commission plans to host a public forum on the proposed Comcast-NBC Universal joint venture next month. Look for the date to be July 13 and the city to be Chicago. An announcement could come as soon as June 3, when the FCC is officially scheduled to re-start the informal 180-day shot clock on its review of the merger.

The Good, the Bad and the Ugly of AT&T's New Pricing Plan

Carriers keep discovering that if you give people access to fat pipes, they're going to use them. That's good for innovation, but on the wireless side, it can cause problems for the carriers' bottom lines.

The answer to that problem would be usage-based broadband. What's key to understand here is that few folks in the industry believe it's possible to offer the level of mobile broadband that people want on current wireless networks — even after carriers switch to more efficient technologies like LTE. An exception might be Clearwire, which has deep spectrum resources when compared with the other major carriers. Indeed, Clearwire's Mike Seivert said that currently its mobile customers consume an average of 7GB each month, a feat that would cost $75 a month on AT&T's new pricing plans (on Clearwire it could cost $40-$55). AT&T's pricing has taken current usage into consideration, with the carrier claiming that 98 percent of its users consume less than 2 GB per month, while 65 percent consume less than 200 MB. But in the long term, it isn't a great option for consumers, and when it comes to the tethering fee, is downright punitive. It's also inconsistent with managing user demand for broadband given that one reason for the shift is to manage scarce spectrum resources and prevent network congestion. Instead what it does is push more subscribers into a higher tier of service by creating an extremely low-usage tier with high overage fees, and a higher-usage tier with fees that, comparatively speaking, are much more reasonable. For example, using 201 MB on the lower-usage, DataPlus plan costs $30 whereas $25 on the DataPro plan will yield up to 2 GB. If you're anywhere in that broad middle (or worried about landing there), you're going to select the 2GB tier, even though most iPhone users use an average of 500 MB. That's not ideal, and the $20 fee for tethering is simply paying AT&T for the privilege of using your phone to connect your laptop to the web. Basically that fee is a $20 "Keep Your Laptop Off the Network" sign.

Network spending shows why free TV isn't dead yet

If you looked at the finances of the broadcast TV networks, you might not be optimistic about the future of free TV. Each year, ABC, NBC and Fox contribute a smaller share of the profits reaped by their parent companies. Meanwhile cable channels boost viewership and get growing chunks of the advertising pie. No wonder a cable company is about to scoop up NBC — largely because it owns cable channels, which also deliver a stream of revenue from subscription fees.

So why are the TV networks spending tens of millions of dollars more on prime-time dramas and comedies for next season than they did in the last season? What's in it for the companies, when even Fox, No. 1 among viewers in the key demographic of 18- to 49-year-olds, eked out just 3 percent of the total operating profit reported by Rupert Murdoch's News Corp. in the last quarter?

An analysis of the broadcast business suggests a few answers:

1) Even though the profits may be slim on the broadcast segment alone, other areas of media companies enjoy the benefits.
2) The most expensive shows that generate the largest audiences are usually developed on broadcast TV before migrating to cable channels.
3) The benefit of hitting a home run outweighs the cost of a few strikeouts.
4) Broadcast television is developing sources of revenue that were once exclusively the domain of cable networks. That also helps justify new spending.
5) Broadcast TV, not cable, remains the easiest way for advertisers to get their message out quickly. And now advertisers have more money to spend.

FTC Grapples With Updating COPPA

Children's advocates, technology and legal experts, Web site operators and others struggled Wednesday to determine how best to adapt a 2000 rule implementing a law aimed at protecting children's privacy to the growing list of devices people are using to get online.

Among the issues experts at the FTC's first workshop on updating its rule implementing the Children's Online Privacy Protection Act grappled with was whether the rule should be expanded to include new types of devices that people use to get online such as mobile phones and interactive gaming systems and whether the definition of personally identifiable information should be expanded. The law requires Web sites aimed at children under 13 or those with "actual knowledge" that they are collecting personally identifiable information from children under 13 to obtain parental consent before collecting personal information from them. During the panel's first session, wireless and gaming industry representatives, legal and technology experts and a children's advocate debated what constitutes being online and what types of devices are children now using to get online. One area where there was some disagreement over was the use of gaming devices to get online.

Professor Argues COPPA Restricts Behavioral Targeting Of Children

Does the Children's Online Privacy and protection Act limit marketers' ability to send behaviorally targeted ads to users under 13? Some advocates want the Federal Trade Commission to say the answer is yes.

Speaking today at an FTC workshop, American University professor and COPPA architect Kathryn Montgomery reiterated her argument that the law should be interpreted to prohibit behavioral targeting of minors under 13, at least absent parental consent. The statute itself bans marketers from collecting "personal information" from children under 13 without parental consent. Problem is, no one can agree on the type of data that should be considered personal information. The statute itself says the term includes obvious types of data -- names, addresses and telephone numbers -- but also any "identifier" the FTC determines will permit "the physical or online contacting of a specific individual." Whether cookies fall into that category appears to be an open question. On one hand, marketers certainly seem to hope they're reaching specific individuals when they pay a premium for behavioral targeting. On the other hand, if a computer is used by more than one person in a household, there's no guarantee that the cookies associated with that computer can be matched to particular individuals.

Oil Spill Coverage Engulfs the Media

Six weeks after the explosion of the Deepwater Horizon oil rig, the Gulf disaster generated its highest level of coverage since the story broke, completely dominating the news agenda.

As the drama of devastation, containment and finger-pointing continued to unfold, the mainstream media devoted 38% of its newshole to the spill during the week of May 24-30, according to the Pew Research Center's Project for Excellence in Journalism. This marks the sixth week in a row the disaster has made the roster of top stories. And last week's coverage easily exceeded the previous high water mark (20%) during the week of May 3-9. Moreover, it represents the most attention to any subject since the week of March 22-28, when Congress passed the health care bill and that story filled 45% of the newshole.

Study: Value-added broadband living up to its name

Services like voice over IP and IPTV are doing for broadband service provider bottom lines exactly what those carriers had hoped — adding a big chunk of value-added revenue, according to the latest report from market research firm Point Topic.

The firm's "Consumer Broadband Value Added Services" report says BVAS revenue grew by 30%, from $39.6 billion to $48.9 billion, during 2009. That's more than twice the rate — 14% —that sign-ups for broadband lines achieved last year and good news at a time when broadband subscriber growth has been slowing for most carriers. Basic subscription revenue margins also are dwindling, and Point Topic said the research data strengthens the argument for operators to launch bundled services over their broadband lines. There were 417 million broadband lines at the end of 2009, compared to about 366 million at the end of 2008, according to Point Topic. Standard subscription revenue from those lines amounted to about $129 billion, so value-added service revenue lived up to its name, contributing an additional revenue boost of almost 38%. Overall, subscribers to value-added services also were up by about 13% in 2009.

Stimulus slow to break ground but generating jobs

Nearly six months after the first broadband stimulus awards for infrastructure projects were announced, many award winners have not yet been able to break ground on their projects, although they expect to soon.

A key concern is securing the availability of funds, which are administered by either the Rural Utilities Services or the National Telecommunications and Information Agency — and those agencies have been struggling with unprecedented workloads as a result of the stimulus program. In the mean time, award winners seem to be doing their best to accomplish as much as they can prior to securing funding — including making network engineering plans and, for some companies, undertaking the process of selecting outside construction firms. Some have even hired a few new people, a sign that the stimulus program is already making progress on achieving one of its key goals: job creation.

Senators Fed Up With Secret Blocks On Nominees

Nearly a year and a half after taking office, President Obama is still struggling to get scores of his key executive and judicial branch appointees confirmed by the Senate. Almost all of those nominations have been stalled by unnamed Republican senators using what's known as the "secret hold." The practice, which has been around a long time, is essentially an anonymous threat to filibuster any attempt to vote on a bill or nomination. But now Democrats — and even some Republicans — say they've had it. They want to curtail the use of secret holds or do away with them altogether. Democrats say the secret hold has never been used — or abused — as much as it has been since Obama was sworn in. At a comparable time in 2002 when George W. Bush was president and Congress left for its Memorial Day recess, only 13 nominations had been pending in the Senate for more than two days. This Memorial Day, 120 of Obama's nominees awaited confirmation, and most were held up anonymously. The nominees who have gotten confirmed have had to wait on average more than 100 days after winning approval in committee.

Putting Data and Innovation to Work to Help Communities and Consumers Improve Health

Department of Health and Human Services Secretary Kathleen Sebelius and Institute of Medicine President Harvey Fineberg today launched a national initiative to share a wealth of new community health data that will drive innovation and lead to the creation of new applications and tools to improve the health of Americans.

To help citizens, clinicians and local leaders use data to improve health and value of health care, the Community Health Data Initiative (CHDI) is turning to Web application developers, mobile phone applications, social media, and other cutting-edge information technologies to "put our public health data to work."

"Our national health data constitute a precious resource that we are paying billions to assemble, but then too often wasting," Secretary Sebelius said. "When information sits on the shelves of government offices, it is underperforming. We need to bring these data alive. If made easily accessible by the public, our data can help raise awareness of health status and trigger efforts to improve it. The data can help our communities determine where action is most needed and what approaches might be most helpful. As a nation, we can and should harness the exploding creativity in our information technology and media sectors to help us get the most public benefit out of our data investments."

"In every science-based endeavor, data are the key to effective action," said Dr. Fineberg. "We need to make more creative and vigorous use of the data we generate now, and we need to create a demand-and-use cycle that will bring about even better health information in the future."

The Initiative was announced at a Community Health Data Forum on June 2 at the National Academy of Sciences' Institute of Medicine (IOM). Federal and community leaders were joined by developers and technology pioneers who demonstrated 16 innovative applications that make use of publicly available health data. Most of the sample applications have been developed or refined in the three months since HHS and IOM hosted a meeting on March 11 to explore the feasibility of an effort along the lines of the CHDI. At the heart of the Initiative, increasing amounts of federally generated community health data will be made publicly available, in easily accessible and useful formats. Secretary Sebelius announced that by the end of 2010, a new HHS Health Indicators Warehouse will be deployed online, providing currently available and new HHS data on national, state, regional, and county health performance - on indicators such as rates of smoking, obesity, diabetes, access to healthy food, utilization of health care services, etc. - in an easy-to-use "one stop data shop." The Warehouse will also include information on proven ways to improve performance on particular indicators. Users will be able to explore all of this data on the Warehouse Web site, download any and all of it for free, and integrate it easily into their own Web sites and applications.

The Initiative envisions an expanding array of applications being built using HHS' data, as well as data supplied by other sources. Community leaders, consumers, employers, providers, and others can choose among independently developed applications to help in health assessment, planning and action. The CHDI does not endorse particular applications, but rather enables their independent development through easier access to expanded, free data. Communities, professionals and consumers can then choose the applications they find most useful.