April 2011

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, APRIL 25, 2011

This week's events http://benton.org/calendar/2011-04-24--P1W/

AT&T/T-MOBILE
   AT&T/T-Mobile deal offers risk, reward for Obama - analysis
   AT&T Admits It Can't Handle The iPhone
   AT&T Doesn't Show Its Cards in FCC Filing
   AT&T, arguing T-Mobile merger won’t curb competition, talks up smaller rivals
   AT&T: T-Mobile sucks (and we'd like to buy it for $39 billion)

TELEVISION/RADIO
   Broadcasters Want Supreme Court to Bring Certainty to Indecency Rules [links to web]
   Networks Ready to Cash In - analysis
   Demand Builds for TV Ad Time [links to web]
   DVRs Give More Shows a Lifeline [links to web]
   Scuffle Over On-Demand Movies Portends Battles to Come [links to web]
   Can Dish plus Blockbuster unseat Netflix?
   Liberty Media’s Greg Maffei on the future of the television industry [links to web]

MEDIA & ELECTIONS
   Media’s Spotlight Shines Less Brightly on Palin - analysis

CYBERSECURITY
   To win the cyberwar we have to reinforce the cloud - op-ed

PRIVACY
   Those snoopy iPhones - editorial
   April 16-22: Privacy

HEALTH
   ALS Study Shows Social Media's Value as Research Tool

MORE ONLINE
   State Department shifts digital resources to social media [links to web]
   Google, a Giant in Mobile Search, Seeks New Ways to Make It Pay [links to web]
   Online gambling needs a full airing in DC - editorial [links to web]
   English-Language Press Flexing Its Muscles in Eastern Europe [links to web]
   Mobile technology is turning us all into feudal serfs - op-ed [links to web]
   New York Times’ R&D Lab has built a tool that explores the life stories take in the social space [links to web]
   Twitter stays in San Francisco, moving to Market Street [links to web]
   SimpleGeo Makes Location Data Free, Complicates Smartphone Tracking Worries [links to web]
   NPR's social media specialist lives the tweet life [links to web]

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AT&T/T-MOBILE

POTENTIAL RISK/REWARD FOR OBAMA
[SOURCE: Politico, AUTHOR: Mike Zapler, Brooks Boliek]
AT&T's controversial $39 billion bid for T-Mobile officially got under way, crystallizing a big risk and possibly a big opportunity for President Barack Obama. The risk: allowing a deal that could, in time, leave Americans with just two choices for cellphone providers. The potential opportunity: extending high-speed wireless to virtually the entire country, which AT&T has promised if the deal goes through. The political implications don't end there: Blocking the acquisition would mean alienating a stalwart member of the business community. Approving it, critics warn, could lead to steep layoffs as the two phone companies merge overlapping operations. Those tensions lie at the heart of what's shaping up as one of Washington's fiercest regulatory and lobbying battles in recent memory. On one side is AT&T, stocked with a battalion of lobbyists and prepared to spend probably tens of millions of dollars to cinch Justice Department and FCC approval. On the other side is Sprint and a collection of public interest groups that say the deal would allow a quasi-duopoly in the wireless market — AT&T and Verizon would control about 80 percent of the market — leaving consumers holding the bag with higher prices for poorer service.
benton.org/node/56923 | Politico
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AT&T CAN'T HANDLE IPHONE
[SOURCE: Business Insider, AUTHOR: Matt Rosoff]
In a new filing explaining why it wants to buy T-Mobile, AT&T essentially admits that its network wasn't ready for the iPhone, and won't be able to handle new smartphones and tablets as they come on board. The filing says: "A smartphone generates 24 times the mobile data traffic of a conventional wireless phone, and the explosively popular iPad and similar tablet devices can generate traffic comparable to or even greater than a smartphone. AT&T’s mobile data volumes surged by a staggering 8,000% from 2007 to 2010, and as a result, AT&T faces network capacity constraints more severe than those of any other wireless provider." Those dates aren't a coincidence. 2007 is when the iPhone was introduced as an AT&T exclusive. AT&T warns the problem is getting worse as more consumers use video and enterprise apps on their smartphones, and guesses that its network will carry more traffic in the first five to seven weeks of 2015 than it did in all of 2010. It's nice to see AT&T finally admitting it has a problem. One has to wonder why it didn't see this coming when it signed the iPhone deal in the first place, though.
benton.org/node/56919 | Business Insider
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AT&T DOES NOT NEGOTIATE WITH ITSELF
[SOURCE: National Journal, AUTHOR: David Hatch]
AT&T signaled tough negotiations lie ahead over its proposed $39 billion acquisition of T-Mobile by not volunteering any regulatory conditions in a 381-page filing with the Federal Communications Commission on Thursday that outlines the public-interest benefits of the deal. Critics complain the transaction could result in higher prices, fewer choices, and obstacles for competitors, especially those requiring access to AT&T’s nationwide network. By contrast, Comcast and NBC Universal, whose joint venture was strongly opposed by a coalition of cable networks and advocacy groups, made a series of pro-consumer commitments early on to assuage concerns about the combination, which won approval in January. Instead, AT&T emphasizes in its submission that the wireless carrier is facing a severe shortage of spectrum and needs to combine with T-Mobile to free up more airwaves that it can use to deploy new services, including superfast 4G wireless broadband. Joan Marsh, vice president of federal regulatory with AT&T, insisted at a briefing that it is “way too early” to discuss possible conditions. Gary Phillips, associate general counsel with AT&T, noted that the company already has acknowledged that it expects the FCC and/or Justice Department, whose approvals are required for the deal, to impose restrictions. Marsh said the transaction is necessary for T-Mobile because it also faces spectrum constraints and has an added problem: no immediate plans for deploying 4G service. She argued that the wireless marketplace is sufficiently competitive to absorb this corporate union, which would remove the fourth-largest nationwide mobile carrier (T-Mobile) from the marketplace. Despite the possibility it might have to divest some assets to win approval of the purchase, Marsh said AT&T would still fulfill its promise of extending 4G service to 97 percent of Americans.
benton.org/node/56914 | National Journal
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AT&T TALKS UP RIVALS
[SOURCE: Washington Post, AUTHOR: Ian Shapira, Hayley Tsukayama]
These days, the nation’s second-tier and regional wireless carriers are receiving some glowing advertising from a seemingly odd pitchman: AT&T. The praise is hardly intended as flattery but is a critical element of AT&T’s strategy to persuade federal antitrust officials that its $39 billion acquisition of T-Mobile will not harm competition in markets across the country. “Sprint has already achieved substantial success in the marketplace by offering attractive pricing plans and upgrading its smartphone portfolio,” said Joan Marsh, an AT&T vice president focusing on federal regulatory affairs, sounding much like a spokeswoman for the rival company. “MetroPCS and Leap, which are the leading all-you-can-eat data providers ... have enjoyed great success focusing on value-oriented services, and both have begun moving upmarket,” Marsh gushed. The rivals were not convinced. Sprint and smaller niche players that belong to the Rural Cellular Association countered in dueling media calls and statements that AT&T’s move to consolidate two of the three largest wireless carriers will crush their business prospects.
benton.org/node/56913 | Washington Post
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T-MOBILE SUCKS, SAYS AT&T
[SOURCE: ars technica, AUTHOR: Nate Anderson]
$39 billion -- that's a lot to pay for a company. It must be awesome, right? Here's how AT&T describes acquisition target T-Mobile:
"T-Mobile is not an important factor in AT&T’s competitive decision-making."
"As a standalone company, however, T-Mobile USA would continue to face substantial commercial and spectrum-related challenges. It confronts increased competition from industry mavericks such as MetroPCS, Leap, and others; its percentage of US subscribers has been falling for nearly two years; and it has no clear path to LTE."
"T-Mobile USA, in contrast to others, does not have a differentiated network position. T-Mobile USA has admitted that it suffered from its late transition to a 3G network, and unlike Sprint, which first promoted a 4G network, T-Mobile USA’s HSPA+ launch appears to have been lost among other carriers’ 4G messaging."
"AT&T does not believe that T-Mobile USA has a particularly compelling portfolio of smartphone offerings as compared to AT&T, Verizon, and Sprint."
"To the extent that T-Mobile USA’s prices are lower than those received by AT&T and Verizon Wireless for otherwise comparable subscribers, T-Mobile USA’s lower prices have not stimulated growth in its share of retail subscribers. This indicates that other aspects of T-Mobile USA’s service are in some way lacking."
And it's not just T-Mobile; AT&T can't say enough bad things about the imminent problems with its own network.
benton.org/node/56911 | Ars Technica
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TELEVISION/RADIO

TV UPFRONT
[SOURCE: AdWeek, AUTHOR: Anthony Crupi]
With about three weeks to go before the broadcasters unveil their 2011-12 upfront slates, you don't exactly have to place a call to Dionne Warwick and the old Psychic Friends Network to figure out that the TV networks are going to make a killing. According to a new forecast issued by analyst Anthony DiClemente of Barclays Capital, the Big Four broadcasters are likely to increase their upfront commitments by 7.5 percent year-over-year to $9.23 billion, beating the previous high-water mark of $8.8 billion in the 2008-09 bazaar. DiClemente sees CBS leading the market with sales of $3.01 billion, or a gain of 15.6 percent from a year ago. ABC’s sales should rise by as much as 12 percent to $2.68 billion, while Fox will see a 6.4 percent lift, taking in $2.11 billion. With NBC expected to move less inventory than its peers, The Comcast owned network should experience a concomitant decline in dollar volume. DiClemente is forecasting a 10.7 percent drop for the Peacock, with upfront orders adding up to $1.43 billion.
benton.org/node/56929 | AdWeek
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DISH AND BLOCKBUSTER
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Earlier this month, Dish bought Blockbuster off the auction block for $320 million. The move was as puzzling to industry watchers as it was intriguing. Blockbuster, the bricks-and-mortar video chain, had been knocked flat by Internet companies such as Netflix, who were quicker to move from DVD rentals to streaming movies online. It was a tale of fast-shifting fortunes: Blockbuster’s stock was delisted from the New York Stock Exchange this past summer, and it filed for Chapter 11 bankruptcy protection — a steep falloff from the $1.6 billion it was worth in 2002. Netflix, by contrast, has built a market capitalization of $13 billion (up from $288 million in 2002) and now streams content to more than 200 devices. Observers say that under different management, Blockbuster could do better. In a lengthy article in the Harvard Business Review, former Blockbuster chief executive John Antioco said the business was held back by squabbling by former parent company Viacom’s shareholders and management over the company’s online strategy. Viacom didn't want to put its movies and television shows online because it was making more money from theaters, DVD sales and licensing fees with cable companies. While Blockbuster shareholders spent precious time debating the merits of late fees for video rentals and retail store tie-ups with companies such as Barnes & Noble, Netflix was renting videos online and building the technology to stream video over game consoles, laptops and mobile phones. And Redbox was offering cheaper rentals at grocery stores. “I firmly believe that if our online strategy had not been essentially abandoned, Blockbuster Online would have 10 million subscribers today,” Antioco said, “and we'd be rivaling Netflix for the leadership position in the Internet downloading business.”
benton.org/node/56927 | Washington Post
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MEDIA & ELECTIONS

TV AND ELECTION 2012
[SOURCE: New York Times, AUTHOR: Nate Silver]
One of the few pieces of statistical evidence that we can look toward at this early stage of the presidential campaign is the number of media hits that each candidate is receiving. Apart from being interesting unto itself, it’s plausible that this metric has some predictive power. At this point in 2007, Barack Obama and John McCain were receiving the most coverage among the Democratic and Republican candidates respectively, and both won their races despite initially lagging in the polls. In contrast to four years ago, however, when the relative amount of media coverage was fairly steady throughout the campaign, there have already been some dramatic shifts this year. Sarah Palin’s potential candidacy, for instance, is only receiving about one-fifth as much attention as it did several months ago. During the month of November 2010, Ms. Palin’s name retrieved 777 hits, according to this technique. That represented just over half of the 1,533 citations for all 23 candidates combined. So far this month, however, Ms. Palin has accounted for just 124 hits out of 1,090 total, or roughly 11 percent. Instead, her place has been taken by Trump, who has accounted for about 40 percent of the coverage. The decline in media coverage for Ms. Palin tracks with a decline in her polling numbers. Whereas she was pulling between 15 and 20 percent of the Republican primary vote in polls conducted several months ago, she’s down to about 10 percent in most surveys now. Trump, meanwhile, whose media coverage has increased exponentially, has surged in the polls, and is essentially in a three-way tie for the lead with Mitt Romney and Mike Huckabee over an average of recent surveys. A Pew poll released yesterday, which asked voters which Republican candidate they'd heard the most about, found Mr. Trump’s name mentioned far more often than any other. The voters in Pew’s survey passed this quiz with flying colors: so far this month, Mr. Trump has in fact received as much coverage as the next six candidates combined.
benton.org/node/56910 | New York Times
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CYBERSECURITY

CYBERWAR AND THE CLOUD
[SOURCE: Financial Times, AUTHOR: Mike McConnell]
[Commentary] Many challenged my grim assessment early last year, when I called for America to develop a new strategy to address the kinds of cyberattacks that could cripple our nation’s infrastructure. If there were a cyberwar, I told Congress, we would lose. The unfortunate truth is that, a year later, we are no better prepared – and the stakes have risen. Since then more details have emerged on the early 2010 attacks on Google and two dozen other companies, connecting them to China. Alongside the revelations about the Stuxnet attack on Iran and the WikiLeaks saga, the question today is no longer whether the cyberthreat is real – that was last year’s discussion. The challenge now is what to do about it, while balancing security, privacy, openness and innovation. We should immediately focus on protecting critical infrastructure – the power grid, financial networks, air traffic control and other transport infrastructure –– by realigning their use of the Internet. To do this we must create new “protected lanes” inside the global superhighway. I call this potential area “dot.secure”: a series of highly protected lanes for those operating vital infrastructure, within the free and open world of the .com global network. We must remember that cyberspace is more than just the Internet. It is a domain itself. For America to protect our economy and way of life as we have in the other domains, we cannot wait for the next big attack to shock us into action. [McConnell was director of the National Security Agency in the Clinton administration and director of national intelligence in George W. Bush’s second term. He is executive vice-president of Booz Allen Hamilton]
benton.org/node/56964 | Financial Times
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PRIVACY

THOSE SNOOPY IPHONES
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] The most talked-about feature of Apple's iPhones and iPads these days isn't a clever new software application. It's a hidden digital record on every device of the locations where it has been used — a numerical travelogue that effectively traces its owner's movements by noting the times and places it has been used. The "consolidated.db" file has been discussed by security researchers for months, but it didn't receive widespread attention until the O'Reilly Radar technology blog published an expose April 20. Within a day, two members of Congress had dashed off letters to Apple demanding more information, including an explanation of why the data were being collected and stored in unencrypted form. And now several European countries are launching their own investigations. The data can be examined by anyone who takes physical possession of the device — a jealous lover, a thief, an attorney with a subpoena. So why all the fuss? Some of it stems from the suspicion that the devices are transmitting the logs back to Apple, which they don't appear to be doing. But another reason is the mystery around why the information is being recorded in the first place.
benton.org/node/56965 | Los Angeles Times
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PRIVACY THIS WEEK
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
Although the biggest news of the week may be AT&T's filing at the Federal Communications Commission on the acquisition of T-Mobile, we have to admit that, like many other people in DC, we're still reading through it to see how, as AT&T claims, 1) the transaction will benefit consumers and the economy and 2) the transaction will preserve and promote competition. So, instead, some brief notes on the issue of privacy. In the digital age, are consumers empowered to reveal and conceal information about themselves selectively? Of course, much like chocolate and peanut butter, it is hard to keep two great issues separate in Washington (DC), so it may not be a surprise that privacy is an issue in the AT&T|T-Mobile merger. The Center for Digital Democracy believes the government should consider protecting consumers from location-based mobile ads as part of its review of the deal. CDD argues that the merger would give the combined entity access to a wealth of information about users' locations and mobile browsing habits that the firm could then use to target advertisements without consumers' consent.
http://benton.org/node/56905
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HEALTH

SOCIAL MEDIA AND HEALTH RESEARCH
[SOURCE: Wall Street Journal, AUTHOR: Amy Dockser Marcus]
A new clinical trial found that lithium didn't slow the progression of Lou Gehrig's disease, but the findings released April 24 also showed that the use of a social network to enroll patients and report and collect data may deliver dividends for future studies. The study was based on data contributed by 596 patients with the disease, formally called amyotrophic lateral sclerosis or ALS. By showing that the drug didn't have any effect on progression of the condition, it contradicted a small study three years ago that suggested such a benefit was possible. The new study, published online in the journal Nature Biotechnology, represents an early example of how social networking could play a role in clinical trials, an area of medical science with strict procedures that many would consider especially difficult to apply in the online world. Social-network trials aren't likely to replace conventional randomized, double-blinded, placebo-controlled trials, the gold-standard for generating medical evidence. But such trials have become so complicated and time-consuming that new models are needed.
benton.org/node/56955 | Wall Street Journal
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