May 2011

Google plays ball with carriers to kill tethering apps, violates spirit of the ‘open access’ it bid $4.6B to protect

[Commentary] It seems a few American carriers have started working with Google to disable access to tethering apps in the Android Market in recent weeks, ostensibly because they make it easier for users to circumvent the official tethering capabilities offered on many recent smartphones — capabilities that carry a plan surcharge.

Sure, it’s a shame that they’re doing it, but from Verizon’s perspective, it’s all about protecting revenue — business as usual. It’s Google’s role in this soap opera that’s a cause for greater concern. You might remember that Google made a big splash a little over three years ago during the auction for the C Block 700MHz spectrum that Verizon now uses for its LTE network, intentionally driving up bidding past the $4.6 billion open access trigger without really having any intention to win it. This isn't the first time Google has pulled apps (tethering apps, even) per carrier agreement, but it is the first time they've come dangerously close to tangling with the new 700MHz regulations as a result.

Europe's 'single secure cyberspace' plan under attack

European Union plans to "create a single secure cyberspace" have come under fire from civil liberties groups, with many saying that they only serve to highlight how far the bloc still has to go in understanding the modern online world.

In February, at a secret meeting of the Council of the European Union's Law Enforcement Work Party (LEWP), politicians discussed plans to create a "virtual Schengen border" (the Schengen area is the common passport area within the E.U.) with ISPs required to block "illicit content" from outside the area. The Council of the European Union is the E.U.'s central legislative and decision-making body. There has been no clarification as to what this "illicit content" might be, merely that there would be an E.U. blacklist. The plan has been compared to China's heavy-handed methods in controlling access to the Web.

"This proposal will be used as a justification of every repressive measure by every undemocratic regime in every part of the world. Even the discussion of the project legitimizes this profoundly illegitimate suggestion," said Joe McNamee of European digital rights group EDRi on Monday. "Most absurd of all, despite all of the costs in terms of democracy, freedom of speech and even the economy, there is no analysis of any benefit or expected benefit that, even mistakenly, the architects of this madness expect to outweigh the cost."

Death of bin Laden could sway public-safety debate

The death of Osama bin Laden could sway the debate over an expensive communications network for police and firefighters, analysts say.

Public-safety advocates welcomed President Obama's announcement of bin Laden’s death and reiterated their calls for Congress to swiftly devote a valuable chunk of airwaves to an emergency network that they say would have prevented the deaths of many first responders in the Sept. 11, 2001, attacks. Senate Commerce Committee Chairman Jay Rockefeller (D-WV), who has made the communications network his top priority this year, called for a renewed focus on making sure public-safety agencies get speedy broadband so they can talk to each other in the event of similar attacks. House Homeland Security Committee Chairman Pete King (R-NY) said the network might be even more vital after bin Laden's death than before. Charles Dowd, communications chief for the New York Police Department (NYPD), said the news of bin Laden's death should spur Congress to act this year. The Public Safety Alliance, a collection of influential advocacy groups, also drew on the occasion of bin Laden’s death to push for the network.

NBC launches round-the-clock local news channels in California, Dallas

NBC Universal announced it is launching nonstop local news and information channels in Dallas, Miami and California to fulfill part of the of the local programming condition imposed by the Federal Communications Commission as part of the Comcast merger.

Local stations owned and operated by Comcast-NBC Universal in all three markets will launch the channels this week, bringing the total number of markets with local, nonstop news channels to nine including Washington, DC. Opponents of the merger argued it would give Comcast too much influence in markets where the firm would be the dominant cable provider, dominant broadband provider and the owner and operator of the local NBC affiliate. The local programming conditions are aimed at preserving the amount of local and public interest content carried by NBC Universal under Comcast. The firm agreed to produce 1,000 additional hours of local programming at the outset of the merger and will also produce an additional 1,000 hours of news and information programming for its Telemundo outlets, with further details coming this summer.

Mexican and Egyptian press no longer free, press conditions in Mideast much worse

Mexico can no longer be considered to have a free press because of the threats and violence associated with drug trafficking, but an eight-year decline in press freedom around the world appears to have begun leveling off in 2010, Freedom House reported in its annual accounting of press freedoms.

The report found the Middle East and North Africa showed a dramatic deterioration in 2010. Among the results: Egypt was downgraded to "not free," while Libya, Saudi Arabia, Syria and Tunisia continued to rank among the worst countries in the world for media independence and press freedom. Only Saudi Arabia, among those five countries, was not swept early this year by uprisings and appeals for freedom.

Expert Panel: With Broadband, Markets Can Emerge Anywhere

A panel of private industry experts assembled last week to discuss the impact of broadband on rural economies and how to best incorporate it during Rural Telcon at Broadband Properties Magazine’s 2011 summit. Michael Curri, Founder and CEO of Strategic Networks Group, Inc. – a company that specializes in broadband deployment and development – began the panel by pointing out that broadband economies would not adequately grow without help and asking what can be done to spur adoption. “We are the broadband economists, said Curri early on in his presentation. “Lessaiz faire isn't going to get the market where we want it to go quickly enough.” The key, he said, is to act on measurable data to assess needs and construct solutions. When needs are properly assessed and solutions are designed and executed to meet those needs, the positive impact on economies could be significant. He pointed to data collected in North Carolina, showing that despite the recent economic downturn, jobs gained in the Internet economy outnumbered those lost by sevenfold and that regions with better broadband showed improved productivity.

Wireless Consolidation: How Did We Get Here?

MetroPCS recently met with the Federal Communications Commission about wireless competition, presumably in response to AT&T’s proposal to buy T-Mobile USA for $39 billion. Already, industry groups, average consumers and Sprint have come out against the proposed merger, and MetroPCS also offered up this nice slide showing how the industry has been consolidating for the last decade. It also shows the huge disparity in market cap between the top two carriers and the remaining ones, namely Sprint and MetroPCS. If we want to be fair, I would have also included Leap Wireless which operates the Cricket brand of prepaid service, and is the most direct competitor to MetroPCS. Leap’s market cap on the day this chart was compiled was $1.29 billion. That’s still a long way off from AT&T’s $180 billion.

Facebook Serves 25% Of Display Ads

Facebook accounted for more than one-quarter (25.8%) of all U.S. display ad impressions in the fourth quarter of 2010 -- up from 23.1% in the prior quarter, per comScore.

The social network's gain came at the expense of Yahoo, whose display ad share fell to 9.7% from 11%, and Fox Interactive Media, which dropped to 2.4% from 3.8%, in the third quarter. Among other top Web publishers, Microsoft's share slipped to 4.5% from 5%, and Google, from 2.7% to 2.4%. AOL saw a slight uptick from 2.4% to 2.5% in the fourth quarter. More than 1.3 trillion ad impressions were served in the quarter, about the same as the prior three months. Of that total, Facebook was responsible for 338.6 billion. The new figures reflect Facebook's growing dominance of display advertising based on its more than 500-million-strong audience worldwide and its advantage over the major Web portals in user engagement.

The First Amendment and the Fallacy of the Public’s Airwaves

[Commentary] The public-airwaves concept, particularly as it concerns the authority and mission of the Federal Communications Commission, has led to much misunderstanding and confusion. It is a mischievous notion that has been misused as a rationalization for government regulation. Indeed, the public-ownership notion is the main reason for broadcasting’s second-class status under the First Amendment. The concept of public “ownership” of the airwaves is demonstrably at odds with Congress’s intent in enacting the Radio Act of 1927 and the Communications Act of 1934. The time has come for the FCC to take the following actions: Renounce the discredited concept of public ownership of the airwaves, bury the scarcity rationale, and adopt the approach advocated by former FCC chairman Mark Fowler, by applying a public-interest standard based on minimally regulated marketplace forces rather than content regulation. Fowler once said that whether you call the public-trusteeship model of regulating broadcasters “paternalism” or “nannyism,” it is “Big Brother,” and it must cease.

Network neutrality doesn't work for mobile operators

[Commentary] Telefónica and France Telecom have publicly registered their growing concern with the European Union that content providers are unfairly benefiting by not paying to use broadband networks. While the increase in broadband traffic--mainly driven by video download--is impacting fixed networks, the consequences for mobile operators is severe, if not dire.

A recent study by the global management consultancy AT Kearney, commissioned by Deutsche Telekom, France Telecom Orange, Telecom Italia and Telefónica, claimed that, if the growth in mobile data traffics continues as it is forecast to do, then there must be a realignment as to who captures the value and who funds the investment. In other words, the telcos want the content providers--Google and the like--to cough up money, and in large amounts. In an effort to justify this "realignment", AT Kearney decided to model the capital expenditure requirements for mobile operators based upon existing forecasts covering the 2009-2014 period. However, it found mobile data estimates for this period to be so high that it adopted a 'constrained' scenario, believing that data offload would have a greater impact than had been anticipated, or that growing congestion would drive users away from mobile data networks. While the report makes many recommendations as to how this growing issue could be resolved, one telling observation is that current pricing models do not prompt content providers into making any attempt at efficiently using mobile networks. This, at the very least, would appear to be extravagant and arrogant. Perhaps a backlash is appropriate.

Benton

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