February 2011

Regulators Eye Apple Anew

The Department of Justice and the Federal Trade Commission have begun looking at the terms Apple Inc. set this week for media companies who want to sell their content on its popular iPad and other devices.

Their in Apple's new subscription service is at a preliminary stage, and might not develop into either a formal investigation or any action against the company. But it comes as Apple has attracted growing antitrust scrutiny in the US and Europe. A spokeswoman for the European Commission, the European Union's executive arm, said that the commission was aware of the new subscription service and was "carefully monitoring the situation." The Justice Department and the FTC are both interested in examining whether Apple is running afoul of U.S. antitrust laws by funneling media companies' customers into the payment system for its iTunes store—and taking a 30% cut, the people familiar with the situation said. The agencies both enforce federal antitrust laws and would have to decide which one of them would take the lead in the matter.

Social media, phones Ally

Social media and mobile phones are growing increasingly close, a relationship evident at this year's big wireless conference in Barcelona. The mobile industry's international trade show, which in the past has focused almost solely on wireless carriers, saw a host of new faces this year. Twitter Chief Executive Dick Costolo delivered a keynote address. Facebook was the star of two new phones by Taiwanese handset-maker HTC Corp. And the location-based social-media app maker Foursquare announced it is expanding internationally, bringing five new languages to its users. The new relationship reflects a shift in the way people communicate. According to Android chief Andy Rubin, social media is now on the continuum of ways that people interact. "There are different forms of communication for different situations," he said. Sites like Facebook and Twitter have had apps available on cellphones for years. But those apps are becoming increasingly important to the business models of social-media sites, carriers and handset makers.

Keep the library doors open

[Commentary] I spent my childhood hanging out at the Los Angeles Public Library. Today, this quality of life in Los Angeles is no longer a given. We will not find an open door at our library on Sundays or Mondays. On those days, the great beating heart of our city, the Central Library, is only a beautiful, enticing resource whose doors are shut tight.

For the first time in 139 years, the Los Angeles Public Library is unable to offer service more than five days each week. The library's budget is only 2% of the total city budget. In the past two years, the library force has been reduced by 28%. The book budget has shrunk to $1.70 per capita, versus a national average of $4.20. This is shameful. Measure L can change it. Measure L will progressively increase the library's share of existing city revenues. Within four years, it will increase the library's charter-required funding from the current 0.0175% to a maximum of 0.0300% of each $100 of assessed tax value on property within the city. The measure doesn't call for a tax increase. It calls for a change in city priorities, a change in how we allocate the funds Los Angeles already collects. That change of priorities is crucial. The city's leaders have shown that they cannot be trusted to weigh the worth of our library appropriately as they grapple with L.A.'s deficits. Their unwillingness to give the library its fair share means that the voters must step in.

When Glenn Beck googles 'Google' he doesn't like the results

Fox News commentator Glenn Beck has put Google in his rhetorical cross hairs. The search giant is, of course, the employer of Wael Ghonim, the marketing executive who emerged as a figurehead of the recent political uprising in Egypt, at one point saying he was "ready to die" for the cause of freedom. Google has offered Ghonim its support. But support was not as immediately forthcoming from Beck. "I'm really not sure I want my search engine involved in government overthrows," he said on his show. "I'm not afraid that Google is reading my e-mail or tapping your phone lines or stealing Grandma's recipes -- that kind of paranoia is reserved for the left during the Bush administration with Microsoft." Among Beck's criticisms is that Google is working closely with several levels of government, including the NSA, law enforcement, and the National Geospatial Intelligence agency. Beck also pointed to ties between Google and what he called liberal entities, including media watchdog Free Press, George Soros' Open Society Foundation and others.

Obama meets with Silicon Valley tech elite

Amid a struggling economy and high unemployment, President Barack Obama met with a small, elite group of Silicon Valley business leaders to sound them out on his economic policies.

The President landed at San Francisco International Airport where he was greeted by Lt. Gov. Gavin Newsom, Attorney General Kamala Harris, and San Francisco Mayor Edwin Lee. He then posed for pictures with supporters before bounding onto a helicopter for a short flight to Cañada Community College in Redwood City. Later, the president's motorcade arrived in Woodside, where crowds gathered to cheer him on before he met with 12 tech executives for a private 90-minute dinner at the home of prominent Silicon Valley venture capitalist John Doerr -- a big campaign donor. Those invited included Apple CEO Steve Jobs, Facebook CEO Mark Zuckerberg, Oracle CEO Larry Ellison, Google CEO Eric Schmidt and Twitter CEO Dick Costolo. White House officials confirmed all those on the guest list were present. Larry Gerston, professor of political science at San Jose State, called the gathering a "study session" and predicted President Obama would do more listening than talking with the leaders of companies around the table, who are hiring by the thousands. "Of the 66,000 jobs added in California last year, 12,000 -- 18 percent -- came from Silicon Valley, which has less than 5 percent of the state's population," he said. And talking tech with the likes of Jobs and Zuckerberg is good for the BlackBerry-toting president's image, Democratic political consultant Jude Barry said. "Obama is better at embracing Silicon Valley than other elements of American business," he said. "Americans don't blame Google and Facebook for losing their homes." But Orson Aguilar, executive director of the Berkeley-based Greenlining Institute, a multiethnic public policy group, took aim at Obama for "schmoozing wealthy tech moguls" while his 2012 budget proposal calls for cuts in social programs.

Google spent $1.8 billion to buy 48 companies last year

Google bought 48 companies during 2010, a buying spree that cost the Internet giant $1.8 billion, and a pace of acquisitions the company said it plans to continue through 2011.

The price Google paid for the companies, their technology and their talent included $681 million for the mobile advertising technology company AdMob; $179 million for social technology company Slide; $158 million for Widevine Technologies, a content protection and video optimization company; and $123 million for On2, a developer of video compression technology. The price tags of those companies, plus an additional 44 acquisitions totaling $669 million, were disclosed in Google's 10-K form recently filed with the Securities and Exchange Commission. Google's acquisitions price tag did not include the largest purchase it announced in 2010 -- its proposed $700 million purchase of travel search company ITA Software, a deal that is being scrutinized by federal antitrust regulators.

RSA conference looks at online vulnerability

The hottest trends in technology also represent some of the gravest threats to corporate data security. Mobile devices, social networking and cloud computing are opening up new avenues for both cyber criminals and competitors to access critical business information, according to speakers at this week's RSA Conference 2011 at San Francisco's Moscone Center and a survey. The poll of 10,000 security professionals, by Mountain View market research firm Frost & Sullivan, also concluded that corporate technology staffs are frequently ill prepared to deal with many of the new threats presented by these emerging technologies.

Democracy by Internet

[Commentary] After the revolution in Egypt, it has become a truism that the Internet can foster dissent and political freedom. But in a thoughtful speech this week, Secretary of State Hillary Rodham Clinton put that observation in perspective and committed the United States anew to promoting the online exchange of ideas in other countries.

Clinton's speech was vague in places, and there is a tension between her emphasis on the importance of protecting the privacy of everything from business documents to journalists' notes and efforts by the U.S. government to combat online security threats. Overall, however, it was an impressive attempt to advance an international conversation about how best to bring a commitment to democracy worldwide into an age in which the Internet is "town square, classroom, marketplace, coffeehouse and nightclub." In her address, Clinton celebrated the idea of confidentiality, saying it was necessary for the conduct of business and journalism as well as diplomatic communications. But she made it clear that in some instances confidentiality must yield to other values. Indeed, the administration in which she serves has placed law enforcement above protecting the privacy of some online communications. That contradiction makes it easy for other nations to accuse the United States of hypocrisy. But it doesn't undermine Clinton's primary point that the Internet shouldn't be censored. It's an important message. Clinton said the costs of blocking the Internet are "unsustainable in the long run." But in the short run, even after the revolution in Egypt, plenty of autocrats will turn the "off" switch.

The real challenge for Internet freedom? US hypocrisy. And there's no app for that.

[Commentary] Secretary Clinton's speech on Internet freedom was full of good news. The US has a more grown-up view of the complexities of Internet freedom and its importance. The bad news was in what Clinton didn't address: the role US foreign policy and US companies play in Internet oppression. Then, there is the thorny issue of our growing dependance on companies like Facebook, Twitter, and Google as the providers of digital infrastructure that makes cyber-activism possible. Clinton was right to acknowledge that the Internet is “the public space of the 21stcentury” – but today this space feels and looks more like a shopping mall than a community playground. The striking impression one gets from watching the recent events in Egypt and Tunisia is that these revolts happened not because of Facebook, Twitter, and Google – but in spite of them. While their services were widely used by activists on the ground, the parent companies have been extremely quiet. And for a good reason: They all have global business interests and eye expansion abroad. Being seen as the digital equivalents of The Voice of America is bound to create additional liabilities for them in important markets like Russia or China.

CTIA estimate faces tough questions on spectrum auction estimates

CTIA is facing tough questions on its estimate for how much money would be raised if TV broadcasters sell off their pieces of the airwaves. CTIA said in a white paper this week that incentive spectrum auctions can raise $33 billion. Harold Feld, legal director of Public Knowledge, is skeptical about some of the assumptions in the paper. Even some of the top proponents of spectrum auctions acknowledge that estimates often vary. The architect of the FCC's National Broadband Plan (which laid out the path forward on spectrum auctions), Blair Levin explained that this is because "the experience with auctions suggests that there are many factors that will affect the ultimate price." "The big auctions often went way beyond the estimate but that doesn't mean it will here. I do think they are in the range, and that that is best one can do," he said. Levin added that there are "only two certainties" about such an auction: "It will raise billions" and, "more important, those billions will be more than matched by new investments, new services and new jobs."

Benton

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