May 2011

Study: More Money, More Media Coverage Lead to More Negative Political Ads

A study published in the May-June issue of Marketing Science has found that big budgets and media saturation are among two key contributing factors to negative campaign advertising.

In "The Seeds of Negativity: Knowledge and Money," co-authors Mitchell Lovett, an assistant professor of marketing at the Simon Graduate School of Business at the University of Rochester, and Ron Shachar, professor at the Arison School of Business, Israel, and a visiting professor at Duke University's Fuqua School of Business, followed U.S. House of Representative races in 2000, 2002 and 2004 and found that "negativity indeed increases in both voters' knowledge and the candidate's budget." Or, in the non-academic English used in the press release, "if voters know little about each candidate, the advertisements will generally focus on a candidate's positive attributes. But a candidate with deep pockets or media saturation is much more likely to turn to attack ads." Early in the election, a candidate will introduce himself and let voters get to know him. In a non-competitive race, as in Eliot Spitzer's race for governor of New York in 2006, the candidate can continue to take this approach. But, as is more often the case, once the race becomes competitive and voters achieve a baseline knowledge of all candidates -- thanks to previous advertising or to media coverage -- something must be done to cut through the clutter. So the fur begins to fly.

More Shoppers Trust the Internet Than TV

[Commentary] Shopping is no longer a chore. It's a scavenger hunt where the win is defined as consumers finding deals that feel specially tailored for them or when they feel they've somehow out smarted their fellow shopper. These new dimensions have opened new paths and resulted in more opportunities for marketers to message and connect with their consumers.

When it comes to shopping, "Winning!" is the word of the day, and not just because Charlie Sheen says so. Yahoo and Universal McCann worked together on a three-part study featuring a Comprehensive Online Quantitative Survey of nearly 2,500 people who have purchased or intend to purchase electronics, automobile, personal care, retailers, finance and OTC medicine. In addition, interviews with marketers in each category and 45 tech-savvy consumers across the U.S. were conducted. The study found that with the maturation of the internet as a communication and content platform, usage is universal and has fundamentally shifted how consumers make purchases. Getting a great product at the right price is only one part of the equation to a satisfying buying experience. There's a renewed energy and passion for shopping, and consumers are having fun.

How will states tax Internet downloads? Congress may decide

Here's an interesting conundrum, posed by Rep Dennis Ross (R-FL), at a House Judiciary subcommittee hearing:
"Imagine you are sitting in Dulles airport in Virginia, waiting for a flight back to Florida," Ross began in his opening remarks. "You download a music file from Apple, which is headquartered in California. The music is sent to you via a server in Oklahoma."

Which of these states should be allowed to tax the sale? Without a "clear national rule," he warned at the hearing, "all four states may attempt to tax the transaction."

And so Congress is considering one such national standard: HR 1860, the Digital Goods and Services Tax Fairness Act of 2011. Rep Lamar Smith (R-TX) submitted the bill to the Judiciary committee two weeks ago. A similar law sponsored by Ron Wyden (D-OR) awaits consideration in the Senate.

The crux of the legislation centers around this sentence: "No State or local jurisdiction shall impose multiple or discriminatory taxes on or with respect to the sale or use of digital goods or digital services." The bill defines a "discriminatory tax" as a tax imposed by a State or local jurisdiction at a higher rate than "is generally imposed on or with respect to the sale or use of tangible personal property or of similar services that are not provided electronically." A "multiple tax" is defined as one in which that State or locality "gives no credit with respect to a tax that was previously paid on or with respect to the sale or use of such digital good or digital service to another State or local jurisdiction." Then come more specific limits on taxation. Any tax on the sale of digital goods and services can only be imposed on the State and its localities "whose territorial limits encompass the customer's tax address." This is understood as the address that the customer offered and which the seller received in good faith.

Rural Cellular Association Calls on FCC to reject Reverse Auctions

The Rural Cellular Association urged the Federal Communications Commission to reject reverse auctions and seek Congressional authority to institute Universal Service Fund reform.

“The FCC should establish a level playing field that gives every carrier a fair and equal opportunity to compete for funding,” said RCA President and CEO, Steven Berry. “A cost-model approach is the most efficient and effective way to allocate funding, and truly portable funding would direct support to those carriers that successfully capture customers.” The FCC supports reverse auctions as one of the key mechanisms in its USF reform proposal. Currently, multiple firms receive USF money in order to operate. Under the proposed plan a single company would win the right to get USF funding to provide service to consumers.

The Netherlands To Enact Law That Ensures Network Neutrality

The Netherlands might be a tiny country, but when it comes to broadband, it is one that likes to make big moves. It had been quick to embrace fiber broadband. It was early to the idea of gigabit per second connectivity. And now it is enacting a law that guarantees “net neutrality” for its citizens. The country’s telecom law was amended May 24, to ensure free access, according to the Ministry of Economic Affairs, Agriculture and Innovation. In addition to the wired Internet, the new amendment will ensure network neutrality is extended to the mobile network and services such as Skype are allowed to work without interference.

US and UK Cooperation on Cyberspace

President Barack Obama and Prime Minister David Cameron reaffirmed their close bilateral cooperation, and charted important new steps forward, on an area of increasing attention: cyberspace issues, particularly cybersecurity.

A shared vision for cyberspace’s future. Leaders noted that networked technology now provides one of the essential foundations for opportunities and growth within any modern prosperous global economy, and outlined their shared vision for cyberspace which places at its heart fundamental freedoms of speech and association, individual privacy, and the free flow of information.

Building consensus on responsible behavior. Both recognized that the same kinds of “rules of the road” that help maintain peace, security, and respect for individual rights internationally must equally apply in cyberspace. Leaders’ highlighted their commitment to building consensus on the basic principles, and participating in the London International Cyber Conference in November 2011.
Protecting our citizens and building the rule of law. Through its deposit of instruments of accession in Strasbourg today, the United Kingdom has now joined the U.S. and 30 other states as parties to the Budapest Convention on Cybercrime, the world’s foremost treaty to combat cybercrime internationally. The Convention sets standards for national laws in dealing with online fraud and abuse, but even more importantly permits effective cooperation between nations — a crucial tool since so many cybercrimes cross national boundaries. Noting this landmark achievement, leaders’ agreed to continue work to expand the reach of this important treaty.
Partnering with industry to win the future. In recent months, President Obama and Prime Minister Cameron each hosted milestone discussions with leaders from their respective technology industries. These innovators help spur the investment and long-term job growth on which economies depend; noting their contribution, Prime Minister Cameron and President Obama will continue to find ways to join with industry to maintain national competitiveness.
Expanding the reach of networked technologies. The U.S. and UK are committed to partnering to help more countries benefit from information and communications technologies. Leaders’ will direct new and regular government-wide consultations, sharing strategies and plans to more effectively deploy resources in building technological capacity in the developing world.
Sharing a responsibility for cybersecurity. Leaders’ concluded by noting the relationship on cybersecurity issues remains deeper than ever; that both nations benefit from a shared awareness of threats to national networks, share measures to better defend them. To maintain that leadership and better confront tomorrow’s threats, the President and Prime Minister noted new trans-Atlantic initiatives to provide joint funding and review of cybersecurity research and development (R&D) projects.

DHS plans expansion of cybersecurity workforce

The Department of Homeland Security plans to grow its cybersecurity workforce by more than 50 percent, as lawmakers and the White House work to expand the department's authority in securing both government and private-sector websites.

By October 2012, DHS' cyber staff will grow from 260 to 400 workers, Philip Reitinger, deputy undersecretary of the department's National Protection and Programs Directorate, said at a Senate committee hearing. A new legislative proposal released by the White House this month not only places DHS as the lead defender of the dot-gov domain but also gives the department expanded authority. The DHS secretary would require companies to disclose annually "high-level summaries" of their cybersecurity plans and whether risks have been properly addressed. The secretary would also create a process for designating critical infrastructure such as power plants and electric grids.

FCC Report Finds U.S. in Middle of Broadband Pack: That Isn't the Point

The latest Federal Communications Commission report on global broadband suggests the United States ranks about ninth for mobile broadband adoption among Organization for Economic Co-operation and Development member countries and 12th for fixed (DSL or cable) broadband on a per-household basis.

In March 2010, economists at the Phoenix Center said “historical trends suggest the United States will likely move to 13th in broadband adoption by 2012 even without significant policy changes.” The latest FCC (News - Alert) report shows that was an accurate forecast. But nobody should expect the United States to rank much better than where it is, for historical reasons. The United States ranks no better than 15th in global measures of telephone density. But nobody really suggests the United States has a fixed-line voice availability problem. In fact, most observers say demand for that product is declining. So where does the United States currently rank on per-capita measures of broadband penetration in early 2010? 15th, as it turns out; precisely where it has long ranked in terms of fixed-line voice line penetration. But assessing broadband availability is more complicated than it used to be, in large measure because of mobile broadband, an area where the United States is forecast to lead, at least in terms of fourth generation Long Term Evolution deployments.

AT&T looking to buy even more 700 MHz spectrum for LTE

The Federal Communications Commission is seeking comment on a proposal by AT&T Mobility to purchase close to two dozen 700 MHz spectrum licenses in Minnesota and Wisconsin the carrier said it plans to use for its forthcoming LTE network.

AT&T did not disclose how much it plans to spend on the licenses. The news is notable considering AT&T's seemingly unquenchable thirst for radio waves. The carrier just last week filed a petition with the FCC to purchase two other 700 MHz spectrum licenses. In March, AT&T announced its intention to purchase T-Mobile USA's operations and spectrum for $39 billion, and late last year AT&T said it would purchase Qualcomm's 700 MHz licenses for $1.93 billion. All of the proposed transactions are pending before the FCC. AT&T's latest gambit involves purchasing 22 licenses from Redwood 700 covering 72 counties in 17 CMAs in Minnesota and Wisconsin. The licenses include lower 700 MHz B Block (704-710; 734-740) and C Block (710-716; 740-746) spectrum.

Verizon CFO: We will combat heavy data users with overage charges, not throttling

When Verizon Wireless unveils its new, tiered data price plans for smartphones this summer, the carrier will not cap usage and then throttle speeds when users go over their allotted amounts (as T-Mobile USA does). Instead, the operator will charge users more for every amount of data they use (as AT&T Mobility does).

"The user that wants to use a lot [of data] will pay for it," said Verizon Communications CFO Fran Shammo at the Barclays Capital Global Communications, Media and Technology conference.

Benton

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