August 2011

EMERGENCY COMMUNICATIONS

911 WORKED AFTER QUAKE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Although wireless networks were jammed following last week’s East Coast earthquake, there were no reports of problems with public safety communications, according to a preliminary assessment by the Federal Communications Commission. Public safety agencies have their own dedicated networks, so the wave of calls that temporarily crippled commercial networks did not affect first responders’ communications. 911 calls, however, operate on commercial networks, so people who tried to report emergencies during the cell outage likely were unable to do so. Although the problem of network congestion does not affect public safety agencies, some lawmakers argue that the “D Block” of spectrum should be set aside for a nationwide public safety network. (Aug 27)
benton.org/node/88655 | Hill, The
Recommend this Headline
back to top

GAPS IN CELLPHONE SERVICE
[SOURCE: New York Times, AUTHOR: Nick Bilton]
Cellular service across all major wireless carriers suffered on August 23 after a 5.9-magnitude earthquake struck Virginia. The networks worked intermittently along the East Coast when customers tried to make phone calls soon after the quake. Text messaging and data connections did not seem to be affected to the same degree. It was unclear if the network issues were a result of an overload of people using the network to make calls, or if any cellular towers were damaged in the earthquake. (Aug 23)
benton.org/node/88698 | New York Times | Washington Post
Recommend this Headline
back to top

AT&T/T-MOBILE

FCC ASKS AT&T FOR MORE INFO
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
The Federal Communications Commission asked AT&T for more information backing the company’s claims it needs to merge with T-Mobile in order to bring mobile broadband services to rural areas. The FCC’s request comes after the discovery of private AT&T documents filed to the agency that showed the company figured it would cost $3.8 billion to bring 4G LTE wireless services to 97 percent of the country. The documents, reported by media, raised criticism that the company didn't need to buy T-Mobile for the much bigger price tag of $39 billion. The company had unintentionally filed the documents with information intended to remain private. The FCC later took down the document from its Web site. AT&T has argued to regulators that without the merger, it wouldn't be able to expand high-speed mobile Internet access to as many rural areas as the U.S. government would like. The company said it didn't have a business justification for the expansion. (Aug 24)
benton.org/node/88681 | Washington Post | The Hill
Recommend this Headline
back to top

FREE PRESS ACTION
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
Media reform group Free Press sent a letter urging Democratic lawmakers to reconsider their position on the proposed merger between AT&T and T-Mobile based on information revealed in an accidentally unredacted file uploaded to the Internet last week. The file, an AT&T letter, revealed that the company estimates rolling out LTE to 97 percent of the county will cost $3.8 billion. The file, which was uploaded to the FCC docket without first being redacted for public view, has since been removed and resubmitted with the redactions in place. Free Press said that this is a figure the company calculated before its proposed $39 billion merger with T-Mobile and invalidates the company’s claim that the deal will help rural America by making it viable to roll out the high-speed broadband to more of the country. (Aug 19)
benton.org/node/88680 | Washington Post
Recommend this Headline
back to top

SPRINT FILING
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
Sprint raised new questions about AT&T and T-Mobile’s merger in a filing, saying that the economic model the companies submitted to the agency came too late and in such a piecemeal fashion that it has not given opponents a fair chance to react. The Federal Communications Commission said July 21 that AT&T indicated that it now relies on new models to support the approval of its merger, and stopped the “shot clock” on its review of the merger. Sprint representatives told FCC officials that the series of later filings about these new models “make it difficult for Sprint and other interested parties to offer timely and meaningful comments.” “The Applicants [AT&T and T-Mobile] should not be allowed to get a ‘second bite at the apple’ (let alone a third or more bites) after failing in the Applications and Opposition to establish that the proposed transaction will promote the public interest,” Sprint said in the document. In response to the filing, Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs said in a statement that the company’s filings on the model “confirms the compelling evidence previously submitted as to why our merger should be approved.” (Aug 19)
benton.org/node/88678 | Washington Post
Recommend this Headline
back to top

SUPPORT FOR AT&T/T-MOBILE?
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
AT&T’s proposed $39 billion acquisition of T-Mobile USA appears to have re-gained momentum just weeks after encountering its first significant resistance on Capitol Hill. “We’re not really running into major concerns or disquiet about the deal on any scale that we feel would threaten approval,” said AT&T senior executive vice president Jim Cicconi, pointing out the deal has now been endorsed by 27 state governors, more than 100 mayors and over 150 Chambers of Commerce nationwide. “We've got good momentum on this and it’s growing.” Cicconi noted 77 House Democrats have expressed support for the merger and said while there has been interest on the Hill AT&T hasn't encountered much in the way of opposition beyond the few members that have come out publicly against the deal. Kohl’s counterpart, Senate Antitrust subpanel ranking member Mike Lee (R-Utah) and House Judiciary chairman Lamar Smith (R-Texas) have also weighed in on behalf of the merger. “I've not run into anything beyond a couple of members where people are arguing against approval of the merger,” Cicconi said. “Quite the contrary, I think we’re getting a lot of support and I think it continues to grow the more people look at this merger.” (Aug 21)
benton.org/node/88653 | Hill, The
Recommend this Headline
back to top

GOOGLE-MOTOROLA

BREAKUP FEE
[SOURCE: New York Times, AUTHOR: Steven Davidoff]
Google agreed to pay Motorola Mobility $2.5 billion if the proposed purchase does not happen. Motorola filed a copy of the acquisition agreement that spells out the exact terms when this fee is required to be paid. Basically, it can be boiled down to an agreement that if the transaction is blocked on antitrust grounds, then Google is on the hook for $2.5 billion. But as long as Google complies with the agreement, it will have to fight such a government action in court, and a final disposition of the action has to occur by Feb. 15, 2013. People close to Google have said they do not believe there are antitrust problems. So why is the fee so big? The fee’s driver is that Google has become what Microsoft was a few years ago, a natural target for European and American antitrust regulators. For the foreseeable future, any significant transaction Google engages in will really be all about antitrust in terms of getting it done. Absent this factor, the antitrust risk on this deal seems low. (Aug 18)
benton.org/node/88694 | New York Times
Recommend this Headline
back to top

VERIZON ON GOOGLE-MOTOROLA
[SOURCE: Wall Street Journal, AUTHOR: Greg Bensinger, Spencer Ante]
Verizon Communications Inc. said Google Inc.'s $12.5 billion bid for Motorola Mobility Holdings Inc. was a welcome development because it may bring "stability" to a recent slate of smartphone patent disputes, though it stopped short of totally endorsing the proposed acquisition. It was the first time a U.S. phone company publicly commented on the blockbuster deal. "We will be looking with interest as further details of the proposed transaction become clear," said John Thorne, Verizon's senior vice president and deputy general counsel. "But, at first glance, to the extent that this deal might bring some stability to the ongoing smartphone patent disputes, that would be a welcome development."
Verizon Wireless was the first U.S. wireless carrier to make a big bet on Google's Android software, and it relied heavily on Motorola's Droid smartphone lineup to combat the iPhone, which was exclusively distributed by rival AT&T Inc. for four years. Even though Verizon Wireless started selling the iPhone earlier this year, it has a lot at stake since it still distributes millions of smartphones from Motorola Mobility and other device makers that support the Android system. Verizon Wireless is the largest seller of Android phones in North America. In August, Verizon Wireless claimed about 41% of active Android phones in North America, compared to nearly 26% for Sprint Nextel Corp., 16% for T-Mobile USA and about 9% for AT&T Inc., according to a survey by Chitika, an online advertising provider. Google said it activates 550,000 Android devices daily. (Aug 17)
benton.org/node/88684 | Wall Street Journal
Recommend this Headline
back to top

GOOGLE-MOTOROLA AND SMARTPHONES
[SOURCE: Fast Company, AUTHOR: Austin Carr]
Google's $12.5 billion acquisition of Motorola Mobility means the people who decide what happens when you push a button on your smartphone will now also decide where that button goes. The same way Apple does. And RIM. And HP with WebOS. It's a step toward making mobile devices synonymous their operating systems. We say, "I have an iPhone," and not, "I have an iPhone running iOS." With Google's purchase of Motorola Mobility, "I have a Google phone" might become a common phrase -- it certainly rolls off the tongue easier than, "I have a Motorola phone running Android." Especially if Google ever becomes the primary maker of Android smartphones and tablets. We're not quite there. And, in fact, the biggest consequence yet determined of Google's acquisition is whether handset makers such as Samsung, HTC, and others will choose to stick with Android and compete with Google's now in-house brand (Motorola Mobility). If not, they could develop their own, niche operating systems instead. Or, more likely, expand to Windows Mobile.
benton.org/node/88609 | Fast Company
Recommend this Headline
back to top

18 PATENTS
[SOURCE: Bloomberg, AUTHOR: Brian Womack, Susan Decker]
Among Motorola Mobility Holdings’s more than 17,000 patents, a group of 18 may prove most useful in Google’s effort to fend off litigation targeting the Android mobile platform. The inventions date back to 1994 and form the heart of three Motorola lawsuits against Apple, making them among the stars of the portfolio, said David Mixon, a patent lawyer at Bradley Arant Boult Cummings. They cover technology essential to the mobile-device industry, including location services, antenna designs, e-mail transmission, touch- screen motions, software-application management and third- generation wireless. “Any patent owner, before they consider litigation is going to carefully evaluate their patents to withstand an attack,” Mixon said. “You don't want to hold any back. You want to pick your strongest patents.” Google is counting on its $12.5 billion acquisition of Motorola Mobility to strengthen its patent lineup as Apple and Microsoft challenge Android, the best-selling smartphone operating system in the second quarter. Google had been issued fewer than 1,000 patents as of the start of this year. Motorola Mobility would add another 17,000, as well as about 7,500 pending applications. (Aug 22)
benton.org/node/88628 | Bloomberg
Recommend this Headline
back to top

WIRELESS/SPECTRUM

GIVE AIRWAVES SOME AIR
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] Policymakers in Washington agree that more airwaves should be made available for wireless services, but they clash over some important details — for example, how to make the most efficient use of the prime airwaves occupied by TV broadcasters. There's also a philosophical split over whether to set aside some of these additional airwaves for unlicensed uses, rather than selling them all to the highest bidders. Lawmakers should heed the lessons of history on that front. The experience with Wi-Fi shows that making spectrum available for wireless spurs innovation and broad public benefits, although it's impossible to predict what that innovation will look like or what those benefits will be. The goal of reclaiming spectrum shouldn't be just to amass the largest possible amount of cash for the Treasury. It should be to advance the public interest, including its real but unquantifiable interest in innovation.
benton.org/node/88670 | Los Angeles Times
Recommend this Headline
back to top

GENACHOWSKI REPLY TO DINGELL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Communications Commission Chairman Julius Genachowski has indicated that the commission will not release its Allotment Optimization Model (AOM) -- how it will reconfigure broadcast spectrum after an incentive auction -- until after it gets that auction authority from Congress, a signal that did not sit well with at least one congressman and a whole national association worth of broadcasters.
The chairman's timeline came in response to Rep. John Dingell (D-MI), who had pointed out that the FCC had not yet detailed its spectrum plans and asked the chairman to rectify that in a June letter to the Commission. Rep Dingell has been a longtime supporter of broadcasters and a critic of a spectrum reallocation plan he fears could leave few if any broadcast stations in Detroit.
"At this point, the AOM remains very much a work in progress," said Chairman Genachowski in his letter to Dingell, "and I am deeply concerned that disclosure of pre-decisional information would potentially damage the Commission's deliberative processes, as well as result in needless public confusion about the status of the Commission's work on the voluntary incentive auction concept." But he suggested he would be willing to provide more info once Congress has passed legislation authorizing the FCC to compensate broadcasters for giving up spectrum. "Should Congress grant the Commission the ability to conduct voluntary incentive auctions," said Chairman Genachowski, "I commit to you that we will put the then-current (and further refined) version of the AOM out for public comment before setting the rules for the auction. The result will be a full, fair and open process that will allow for a complete review of the methodology, data and assumptions the Commission will ultimately use to implement that authority." (Aug 22)
benton.org/node/88634 | Broadcasting&Cable
Recommend this Headline
back to top

TELEVISION/RADIO

PUBLIC INSPECTION FILE TO OMB
[SOURCE: CommLawBlog, AUTHOR: Harry Cole]
We have movement on the local public inspection file front!
The proceeding the FCC kicked off last April – inquiring into (among other things) whether there really is any need for the public inspection file requirements of Sections 73.3526 and 73.3527 – has now been bucked over to the Office of Management and Budget. This opens up one final 30-day period during which comments on the requirements may be submitted (to OMB). The deadline for comments is September 15, 2011.
Why another round of comments? It’s all part of the Paperwork Reduction Act (PRA) process. In PRA parlance, the public file requirements constitute “information collections”. Because of that, the FCC can't impose those rules without approval from OMB, which approval can extend for no more than three years. Once the three-year clock tolls, the FCC’s got to go back to OMB and request an extension of the previously-issued approval if the FCC wants to keep the requirements in place. As part of that extension process, the FCC must: (a) give everybody a 60-day opportunity to submit comments to the Commission; (b) review those comments and prepare a “supporting statement” addressing the comments; and (c) ship the comments and its supporting statement to OMB. Then OMB must provide a 30-day comment opportunity of its own. That’s where we are right now. (Aug 17)
benton.org/node/88582 | CommLawBlog
Recommend this Headline
back to top

LOCAL TV NEWSCASTS
[SOURCE: New York Times, AUTHOR: Brian Stelter]
This is what the rebound in local television looks like: news is starting earlier than ever in the morning, and replacing “The Oprah Winfrey Show” in the afternoon. Three years after the business buckled under the weight of the advertising recession, the more popular stations are adding newscasts and in some cases employees — though not as many as were dismissed during the downturn. Station economics affect the nation’s news diet because local TV news is consistently identified in surveys as the top news source for most Americans. Three trends have benefited the local station business.
First, advertisers have streamed back, especially in the automotive sector that is so important to local media. Steve Ridge of Frank N. Magid Associates, which consults with local stations nationwide, said local TV ad revenues were up almost 25 percent in 2010 compared with 2009, buttressed by political ad spending. So far this year, even without political ads, the owners of several big groups of stations reported slight upticks in ad revenues versus 2010.
Second, cable and satellite companies have agreed in many cases to pay retransmission fees to stations, and bigger stations in local markets can command bigger fees. Even though stations are splitting those fees with their network partners, like NBC and ABC, they “really have been an infusion of stability,” Ridge said.
Third, the downturn became a rationale not only to cut costs but to innovate and experiment within news divisions, which have historically been profit centers for stations. The benefit of the industry’s bad times, executives say, is that it forced a hard look at news operations. (Aug 21)
benton.org/node/88696 | New York Times
Recommend this Headline
back to top

INTERNET/BROADBAND

USDA BROADBAND FUNDING
[SOURCE: Associated Press, AUTHOR: Michael Felberbaum]
Telecommunications companies in 16 states will share more than $103 million in federal funding through the Department of Agriculture to help expand broadband Internet access to those areas of rural America that haven't been reached by the high-speed service or are underserved. "There's a big gap that remains between rural and urban areas because it's just hard to make a business case in rural areas," said Jonathan Adelstein, the agriculture department's rural utilities service administrator, in a conference call with reporters. "Rural areas' future depends upon access to broadband and we're not where we need to be today." The states that will benefit from the funding are: Alabama, Arkansas, California, Illinois, Kentucky, Louisiana, Missouri, Nebraska, Nevada, Ohio, Oklahoma, Texas, Virginia, West Virginia, Wisconsin and Wyoming. Adelstein said rural areas lag behind the urban areas of the country when it comes to broadband Internet access because the more remote areas don't have enough people, have rugged terrain, or it's too costly for companies to serve them. (Aug 22)
benton.org/node/88657 | Associated Press | USDA
Recommend this Headline
back to top

HAWAII'S BROADBAND AMBITIONS
[SOURCE: Associated Press, AUTHOR: Audrey McAvoy]
Gov. Neil Abercrombie's (D-Hawaii) administration said it aims to make Hawaii's Internet connection 200 times faster over the next seven years. A Communications Workers of America report last year ranked Hawaii 31st in the nation in Internet speeds. The administration's goal is to have connection speeds of 1 gigabit per second by 2018. "We want to take it into every household," Abercrombie said at an event announcing the plan. "And we want to take it at a level that assures ubiquitous access." The Department of Commerce and Consumer Affairs and other state agencies would play a critical role in implementing the plan by easing the regulatory process to help companies invest in broadband, Hawaii Broadband Task Force chairman David Lassner said. (Aug 24)
benton.org/node/88658 | Associated Press
Recommend this Headline
back to top

TIERED BROADBAND PLANS
[SOURCE: Technology Review, AUTHOR: Kenrick Vezina]
With just a handful of different pricing packages, Internet service providers (ISPs) can increase profits and better meet demand, says a new paper by Nick Feamster, an associate professor in Georgia Tech's college of computing, and colleagues. Tiered pricing is not new -- several ISPs already implement it -- but Feamster's team analyzed the effectiveness of tiers using models built from real-world ISP data. "The research addresses the fundamental tension between the desire for simple billing models ... and the economic efficiency of the resulting flow of traffic," says Jennifer Rexford, a professor in Princeton's department of computer science. Simple models, like the blended rates based on megabytes of information per second per month that most ISPs use today, are easy to understand and enforce. However, blended rates disregard other factors, such as the distance the packets of data travel, that can influence the costs of providing service. Ideally, says Feamster, ISPs would offer an "infinite" number of tiers in which the price precisely reflected the costs of the service provided. But how much benefit do tiers offer compared to the bundled pricing used in today's systems? And how many tiers does it take to approach the optimal results? (Aug 24)
benton.org/node/88601 | Technology Review | read the research
Recommend this Headline
back to top

DUTCH LOVE FIBER
[SOURCE: GigaOm, AUTHOR: Om Malik]
The Netherlands, a country that wants to have 1 Gbps connections everywhere now has 269,000 fiber-based broadband subscribers. It’s pretty cool to see fiber grow so fast in a country which has been pushing the edge when it comes to broadband. The country has a total of 6.29 million broadband subscribers including 2.66 million who use cable broadband. According to Akamai’s State of the Internet report, the boom in fiber helped the average connection speed register a 25 percent year-over-year gain during first quarter of 2011 to 7.5 Mbps. Peak speeds during the Q1 2011 were 22 Mbps, Akamai data shows. Like South Korea, Japan, Hong Kong and Sweden, I like to keep an eye on what the Dutch are doing when it comes to broadband. (Aug 18)
benton.org/node/88612 | GigaOm
Recommend this Headline
back to top

UNIVERSAL SERVICE

USF REFORM AND STATES
[SOURCE: National Journal, AUTHOR: Sara Jerome]
An attempt by the Federal Communications Commission (FCC) to overhaul a major telecom fund could yank cash away from various states, and while the winners and losers are still hard to call, the reform effort already has state officials worrying. The Universal Service Fund, an $8 billion fund that subsidizes phone service in rural and low-income areas, is being redesigned this year as the FCC attempts to shift the money from traditional voice service. Certain companies, including rural phone firms, may wind up getting less cash than before, while others could make out like bandits. That also means a change in how much government-collected cash flows to certain states. Gov. Haley Barbour (R-Mississippi) -- whose state received the largest cut of the rural section of the fund -- is already trying to slow the overhaul. Gov Barbour wrote to the FCC this week urging officials not to rush the reform process and praising the current configuration of the fund. The reforms under consideration by the FCC “threaten to undermine competition, stifle access and slow broadband adoption (wireless or otherwise) in Mississippi and other rural parts of the United States,” Gov Barbour wrote. (Aug 25)
benton.org/node/88616 | National Journal
Recommend this Headline
back to top

CABLE AND USF REFORM
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
Two groups representing cable providers wrote to the Federal Communications Commission voicing their objections to a plan submitted last month by six leading telecom firms to reform the Universal Service Fund. FCC Chairman Julius Genachowski has asked for public input on the agency's efforts to shift the focus of the high-cost portion of the USF away from subsidizing landline phone connections in rural areas and towards fostering broadband Internet access. In response, the telecom carriers unveiled the America's Broadband Connectivity (ABC) plan last month, which attempts to achieve that goal. But American Cable Association President Matthew Polka and National Cable & Telecommunications Association President Michael Powell argue the ABC plan would advantage legacy local exchange carriers (LECs) at the expense of their members' firms and others attempting to provide voice services using VoIP and other, newer technologies. "We appreciate the contribution to the reform efforts that the incumbent LECs have made by developing these proposals," wrote Polka and Powell. (Aug 23)
benton.org/node/88651 | Hill, The
Recommend this Headline
back to top

ADVERTISING

GOOGLE SETTLEMENT
[SOURCE: New York Times, AUTHOR: Claire Cain Miller]
Google will pay $500 million to settle federal government charges that it has knowingly shown illegal ads for fraudulent Canadian pharmacies in the United States, the Justice Department announced.
The federal investigation, which was first revealed in May, found that Google was aware that some Canadian pharmacies that advertised on its site failed to require a prescription for substances like the painkiller Oxycontin and the stimulant Ritalin. Google continued to accept their money and assisted the pharmacies in placing ads and improving their Web sites, according to the Justice Department. Illegal online pharmacies have been a challenge for regulators, because the Internet makes it easy for them to operate under the radar and emerge under different names when they get shut down. Search engines like Google drive much of the traffic to these sites, say researchers who study online pharmacies. Web sites are liable for advertising that breaks federal criminal law. Since 2009, when it became aware of the investigation, Google has taken significant steps to chase illegal pharmacies from its site. (Aug 24)
benton.org/node/88688 | New York Times | Dept of Justice | Washington Post
Recommend this Headline
back to top

OWNERSHIP

MURDOCH'S INFLUENCE
[SOURCE: Los Angeles Times, AUTHOR: Joe Flint]
Though Rupert Murdoch considers himself a political conservative, when it comes to his business dealings he is a pragmatist. He's willing to befriend a liberal democrat who can help his business agenda and he's not afraid to use his media properties as weapons to further his vast -– and politically connected –- empire. The practices used by Murdoch and his companies are coming under closer scrutiny in the wake of the phone hacking scandal that led to News Corp. closing its British tabloid News of the World. Britain has been rocked by the revelation that News of the World had broken into the voice mails of celebrities, the royal family and crime victims. The debacle has also called into question the cozy relationships the paper and its parent company have with politicians and law enforcement there. A former News of the World editor, Andy Coulson, who was arrested last month as part of the hacking investigation, had gone on to serve as a communications specialist for British Prime Minister David Cameron. Paul Stephenson, the head of Scotland Yard, also resigned as a result of the ethics scandal. Scotland Yard is also under fire for its role in the News of the World mess. It has been accused of not conducting a thorough investigation into the hacking allegations when they first surfaced to protect its relationship with News Corp. media outlets. (Aug 24)
benton.org/node/88666 | Los Angeles Times
Recommend this Headline
back to top

PRIVACY

THE END OF PASSWORDS?
[SOURCE: NetworkWorld, AUTHOR: Ellen Messmer]
The federal government's National Strategy for Trusted Identities in Cyberspace (NSTIC) program, set up this spring, is making progress against its goal of identifying and supporting more secure alternatives to simple passwords that the government as well as anyone else might use in authenticating to online applications. "We're trying to get rid of passwords. It's time for something better," says Jeremy Grant, senior executive adviser at the National Program Office for NSTIC, located at the National Institute of Standards and Technology. The federal government, he says, can lead in working with industry on better types of authentication for large-scale use that may be deemed preferable to passwords. The next step in this project involves setting up a steering committee with industry to foster consensus on standards and guidelines, with a slew of pilot projects expected next year, based on current budget expectations. Though the budget process is not complete, the Obama administration has $25 million allotted for the NSTIC program, and out of that, "$17.5 million is for pilots," says Grant, adding, "We haven't published yet what the criteria will be." However, the idea at present is to conduct about half a dozen pilot projects for strong authentication, making the funds available perhaps through a grants process.
benton.org/node/88599 | NetworkWorld
Recommend this Headline
back to top

CONTENT

CBO SCORES PROTECT IP
[SOURCE: ars technica, AUTHOR: Timothy Lee]
The Congressional Budget Office (CBO) has released a new estimate of the cost of the PROTECT IP Act, the controversial legislation to force private ISPs, search engines, and other parties to censor websites accused of facilitating copyright infringement. Based on personnel estimates supplied by the Obama administration, the CBO estimates that the enforcement activities of PROTECT IP will cost taxpayers about $10 million per year. The bulk of the money would be spent on hiring staff. The Justice Department would need additional agents to "commence legal actions against individuals who operate or register an Internet site dedicated to activities infringing on copyrights of others," the CBO says. "DOJ anticipates that it would need to hire 22 special agents and 26 support staff to execute its new investigative responsibilities under the bill." The price tag for bringing on those new workers? $47 million over five years, or just under $10 million per year. Of course, this is just a rough estimate. The actual costs will be controlled by future Congressional appropriations and the enforcement priorities of the administration. An extra $10 million in spending is a drop in the bucket in a federal budget that now exceeds $3 trillion. But the estimate comes with two important caveats. First, the personnel requirements were estimated by the Obama administration, which may have an incentive to downplay the bill's costs in order to speed its passage. So it's possible that the government would devote significantly more resources to enforcement once the legislation was enacted. The bigger concern is that the estimate doesn't include potential costs to the private sector. The Unfunded Mandates Reform Act requires the CBO to estimate whether proposed legislation will cost the private sector more than $142 million. The CBO says it can't do that in this case because of "uncertainty about how often and against whom the Department of Justice or copyright holders would use the authority" provided by the legislation. (Aug 19)
benton.org/node/88622 | Ars Technica
Recommend this Headline
back to top

ONLINE MUSIC LOCKER RULING
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
A federal court ruling in New York could pave the way for Google and Amazon, should they face lawsuits over their decisions not to obtain licenses from record companies before launching their online music lockers. Ars Technica reported that a judge ruled that MP3tunes, an online music locker, is eligible for a safe harbor in the digital copyright law that protects a company from copyright liability over illegal music uploaded to its service as long as it removes that material when notified. While the judge in the case ruled in favor of EMI, the report says it was a hollow victory at best. Judge William Pauley wrote in court documents that there is “no genuine dispute” about whether or not MP3tunes should be considered under the safe harbor. Public Knowledge’s Sherwin Siy said in a statement that the court rejected a framework EMI put forth that “would have imperiled remote-storage services and other cloud applications. The court’s rejection of these arguments deflates a lot of the legal uncertainty that record labels have tried to inject into these technological developments.” (Aug 23)
benton.org/node/88676 | Washington Post
Recommend this Headline
back to top

FCC REFORM

FCC ELIMINATES OUTDATED REGS
[SOURCE: Reuters, AUTHOR: ]
The Federal Communications Commission is stripping 83 rules from its books as part of its reform agenda and in response to a request from President Barack Obama earlier in the year to improve or remove any rules that were out of date. Among the rules being eliminated are Fairness Doctrine regulations that were intended to promote honest, balanced discussion of controversial issues when introduced in 1949. But as more broadcast stations and cable channels became available, the need to mandate a diversity of viewpoints eroded and the rules were abolished in 1987. The FCC has not enforced the rules in more than two decades, but they were never officially taken off the books. "Striking this from our books ensures there can be no mistake that what has long been a dead letter remains dead," FCC Chairman Julius Genachowski said. Other media-related regulations that have not been in effect for years will also be deleted. The FCC said the 83 rules eliminated will not have any significant impact on broadcast businesses. (Aug 22)
benton.org/node/88637 | Reuters | FCC | WashPost
Recommend this Headline
back to top

GOVERNMENT & COMMUNICATIONS

BART AND FREE SPEECH
[SOURCE: Associated Press, AUTHOR: Paul Elias]
Leaders of the San Francisco Bay Area's transit agency say they may adopt a policy allowing police to turn off wireless communications on train platforms — but only in extreme public safety circumstances. The board of the Bay Area Rapid Transit system held a special public meeting to discuss the issue. BART ignited a global debate over free speech when it cut cellphone and wireless data service in San Francisco subway stations earlier this month to disrupt plans for a protest. Dozens of people attended the meeting to speak against the wireless shut-off. Some called for the disbanding of BART police and the firing of its chief spokesman. The board rejected those demands, and it didn't take any formal votes. But members say they expect to adopt a formal policy within a month. (Aug 24)
benton.org/node/88640 | Associated Press
Recommend this Headline
back to top

NEWS FROM SILICON VALLEY

JOBS RESIGNS
[SOURCE: New York Times, AUTHOR: David Streitfeld]
Steven P. Jobs, whose insistent vision that he knew what consumers wanted made Apple one of the world’s most valuable and influential companies, is stepping down as chief executive. Jobs, 56, has been on medical leave since January, his third such absence. He underwent surgery for pancreatic cancer in 2004, and received a liver transplant in 2009. But as recently as a few weeks ago, Mr. Jobs was negotiating business issues with another Silicon Valley executive. Jobs will become chairman, a position that did not exist before. Apple named Tim Cook, its chief operating officer, to succeed Mr. Jobs as chief executive. Rarely has a major company and industry been so dominated by a single individual, and so successful. His influence has gone far beyond the iconic personal computers that were Apple’s principal product for its first 20 years. In the last decade, Apple has redefined the music business through the iPod, the cellphone business through the iPhone and the entertainment and media world through the iPad. Again and again, Mr. Jobs has gambled that he knew what the customer would want, and again and again he has been right. (Aug 24)
benton.org/node/88693 | New York Times
Recommend this Headline
back to top

JOBS RESHAPED INDUSTRIES
[SOURCE: New York Times, AUTHOR: David Pogue]
[Commentary] Steve Jobs' resignation from Apple is rocking the world — and not just the tech world. Jobs, after all, has almost single-handedly reshaped a stunning range of industries: music, TV, movies, software, cellphones, and cloud computing. The products he’s shepherded into existence with single-minded vision read like a Top 10 list, or a Top 50 list, of the world’s most successful inventions: Macintosh. iPod. iPhone. iTunes. iMovie. iPad.
Jobs will remain chairman of Apple's board. You can bet that as chairman, Jobs will still be the godfather. He'll still be pulling plenty of strings, feeding his vision to his carefully built team, and weighing in on the company’s compass headings.
Second, the tech world doesn't turn on a dime. Apple’s pipeline is already stuffed with at least a couple of years’ worth of Jobs-directed products. In the short term, you won't see any difference in Apple’s output of cool, popular inventions.
Third, even if Jobs isn't sitting at every design meeting, ripping apart or heartily embracing each idea presented to him, his tastes, methods and philosophies are deeply entrenched in the company’s blood. (Aug 25)
benton.org/node/88691 | New York Times
Recommend this Headline
back to top

TIMING OF JOBS RESIGNATION
[SOURCE: CNNMoney, AUTHOR: Philip Elmer-DeWitt]
One of the mysteries surrounding Steve Jobs' decision to hand the CEO title over to Tim Cook is its timing.
The assumption underlying most of the commentary these past two days is that Jobs must be really, really sick, but he's clearly not on his deathbed. John Dvorak offers a simpler, more logical explanation: "The reason is Tim Cook."
Everyone in Silicon Valley would love to hire this guy, and from his perspective, his title as "acting" chief executive gets old fast when you are actually running the company.
Jobs has been on extended leave for months, so what's going to change with this announcement? Nothing, that's what — except the title itself. And this is what is important.
Giving up the CEO title to Cook had to be done sooner than later. The company cannot take a chance that Cook might get be tired of being jerked around. More importantly, from Cook's perspective, he cannot afford to be the acting chief executive if Jobs actually dies while he is acting chief.
The way these companies operate, they will keep a CEO if he or she is the actual CEO and the chairman/founder dies. If he or she is the acting CEO when the chairman/founder/CEO dies, then the job is up for grabs. Cook would not automatically become the CEO.
In other words, Cook may get screwed out of the top spot when the weasels come out of the woodwork. "Yes, he's the acting CEO, but let's just look around before we give him the job — just in case." (Aug 26)
benton.org/node/88625 | CNNMoney
Recommend this Headline
back to top

HP'S NEW STRATEGY
[SOURCE: Associated Press, AUTHOR: ]
Hewlett-Packard’s decision to surrender in smartphones and tablet computers and possibly get rid of its personal computer business underscores how Apple has transformed consumer electronics in just four years. HP’s new CEO Leo Apotheker is now trying to turn the Silicon Valley stalwart into a twin of East Coast archrival IBM. In doing so, he is acknowledging that his company has failed to balance the demands of both the consumer and corporate markets. As a result, it needs to exit most of its consumer businesses, just as IBM did six years ago. Apple is the hottest consumer electronics company on the planet. The iPhone’s debut in 2007 brought ease of use and an intuitive design unmatched by predecessors, including smartphone pioneer Palm, which HP bought last year in hopes of getting a foothold in mobile devices. Apple followed in 2010 with the iPad tablet computer and managed to persuade people to buy a product they never knew they needed. Rather than remain locked in a futile fight with a company that seems to have found the magic touch on making hit consumer products, HP is whittling its competition to the other business technology specialists — namely, IBM, Oracle Corp. and Cisco.
HP’s overhaul has three parts:
HP will stop making tablet computers and smartphones by October.
It will try to spin off or sell its PC business, the world’s largest. By the end of next year, HP computers could be sold under another company’s name.
The company plans to buy business software maker Autonomy Corp. for about $10 billion in one of the biggest takeovers in HP’s 72-year history. That would expand HP’s software and services offerings, where IBM is strong. (Aug 18)
benton.org/node/88642 | Associated Press
Recommend this Headline
back to top

August 17, 2011 (AT&T/T-Mobile; Google-Motorola)

“Once you have a monopoly, you have pricing power, you need rules." Without more regulation, “your choice is lawlessness.”
-- Carl Howe, the Yankee Group

BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, AUGUST 17

** Headlines is escaping for a long summer break. We will return MONDAY, AUGUST 29. **

AT&T/T-MOBILE
AT&T’s Purchase of T-Mobile May Spur More Industry Regulation
Could California PUC spoil AT&T/T-Mobile union? - analysis

GOOGLE-MOTOROLA
   FCC to Have Say in Google-Motorola
   Google plan to buy Motorola Mobility an explosive development in tech world - analysis
   The next building blocks for Google's mobile empire - analysis
   Google-Motorola: The European Opportunity -- And Challenges - analysis
   How Android came to dominate - analysis
   What Google lost -- and gained -- by not buying Motorola in 2010 - analysis
   What Google-Motorola Means for Advertisers - analysis [links to web]
   Google-Motorola deal draws questions
   Query on Google's Strategy - analysis
   Google deal opens consolidation possibilities - analysis
   What the Google/Motorola Deal Means for TV - analysis [links to web]
   HP-Palm Deal Looks Better With Time - analysis [links to web]
   BlackBerry Maker RIM Again Subject of Takeover Talk [links to web]
   The Many Wars of Google - analysis [links to web]
   When Google Met Moto [links to web]

SPECTRUM/WIRELESS
   A Bull Market in Tech Patents
   Rep Dingell Slams FCC on Spectrum Policy, Sides with NAB
   LightSquared plays the patriot card in spectrum battle - analysis [links to web]

LABOR
Verizon Tells Striking Workers It Plans to Suspend Benefits
Verizon Calls In Reinforcements On Day 10 Of Strike

INTERNET/BROADBAND
   The FCC and broadband: Will rural areas be left behind? - op-ed
   Who pays for your P2P habit? ISPs or you?
   Internet Security Alliance says Administration's cybersecurity plan won't protect networks [links to web]
   Air Force must subject cyber weapons to legal review [links to web]

CONTENT
   Sex, Drugs and Profanity on Primetime Animated Programs
   Fox Starts Its Web Pullback, and ABC Gets Ready to Follow [links to web]
   Google Plus members value their privacy [links to web]
   Amazon Set to Publish Pop Author [links to web]

JOURNALISM
Ron Paul Wears Invisibility Cloak In News Media's Eyes - analysis
News Corp. Editors Had Been Aware of Phone Hacking Since '07

EMERGENCY COMMUNICATIONS
Harnessing the Power of Social Media in Times of Crisis [links to web]
Charter to Cut Off Service to First Responders - press release [links to web]

STORIES FROM ABROAD
   Tax Policy Change Would Bring Cash Piles Abroad Back Home
   Two jailed for using Facebook to incite disorder in UK
   Fighting China's Golden Shield: Cisco sued over jailing and torture of dissidents [links to web]
   UK says Google needs further privacy improvements [links to web]
   It Ain't Over Yet: Samsung Galaxy Tab Injunction Suspended Outside Germany [links to web]
   South Koreans sue Apple claiming privacy violations over iPhone user information [links to web]

back to top

AT&T/T-MOBILE

YANKEE GROUP STUDY ON AT&T/T-MOBILE
[SOURCE: Bloomberg, AUTHOR: Sara Forden, Jeff Bliss]
AT&T ’s pursuit of U.S. government approval for its $39 billion planned purchase of T- Mobile USA may spur more regulation for the entire telecommunications industry. If the Federal Communications Commission and the Justice Department sign off on the transaction, they may require AT&T and Verizon Wireless to keep prices from rising, said Carl Howe, an analyst at Yankee Group. Regulators also might create a new mobile service provider by combining smaller competitors or requiring the combined AT&T- T-Mobile to sell part of its customer base to a mobile virtual network operator such as TracFone Wireless or Tru, according to a Yankee Group report. “Once you have a monopoly, you have pricing power, you need rules,” Howe, the report’s co-author, said. Without more regulation, “your choice is lawlessness.” The deal would leave 17 of the top 27 wireless markets in the U.S. “highly concentrated,” according to the Yankee Group report, co-authored by Gigi Wang. Sprint Nextel Corp. would be a weakened third-place player that would be bought by Verizon, “creating a national duopoly,” the report said. The FCC will need to cap what a combined AT&T-T-Mobile and Verizon could charge rivals’ customers for access to their networks for data transmission, Howe said. The FCC requires providers of data-roaming services to offer access to other providers “on commercially reasonable terms and conditions” under an order that went into effect in June. “Just because there’s an order doesn't mean the regional carriers feel the prices are accessible or that the FCC is enforcing it,” Howe said.
benton.org/node/87247 | Bloomberg
Recommend this Headline
back to top

COULD CALIFORNIA DERAIL AT&T/T-MOBILE?
[SOURCE: Politico, AUTHOR: Michelle Quinn]
A five-person panel in California could be the wrench in the works of AT&T’s bid for T-Mobile. In one scenario, if federal authorities approve the deal but California’s Public Utilities Commission (CPUC) votes against it, AT&T could obtain T-Mobile’s spectrum in California but not its customers, cell towers, retail space and other property in the Golden State. The CPUC recently extended the timeline of its review by one month and came out with a list of issues AT&T and other parties need to address. "AT&T should recognize California could be more than just a bump on the road to approval,” said James Bradford Ramsay, general counsel at the National Association of Regulatory Utility Commissioners.
benton.org/node/87235 | Politico
Recommend this Headline
back to top

GOOGLE-MOTOROLA

FCC HAS SOME SAY IN GOOGLE-MOTOROLA MOBILITY DEAL
[SOURCE: Politico, AUTHOR: Tony Romm]
Because Motorola Mobility owns a few licenses that are under the FCC's jurisdiction, the company will have to apply to transfer those licenses over to Google, a Federal Communications Commission spokesman said. That process is likely to be more routine than, say, the high-profile license transfer between T-Mobile and AT&T. (Motorola's licenses are not classified as "commercial mobile services" and therefore do not have to hold up against the same kind of public interest scrutiny.) However, that doesn't rule out the chance that other issues could be raised during the process - so we'll be tracking. AND MORE on the acquisition in a moment.
benton.org/node/87223 | Politico
Recommend this Headline
back to top

GOOGLE-MOTOROLA AN EXPLOSIVE DEVELOPMENT
[SOURCE: Washington Post, AUTHOR: Joshua Topolsky]
[Commentary] As far as explosive developments in the world of technology go, Google’s $12.5 billion deal for Motorola’s Mobility business is tantamount to detonating a nuclear bomb ... a big one. Ownership of that company will hand Google substantial businesses that it has previously flirted with but never committed to. Notably, the business of producing and selling its own hardware for smartphones and tablets, and the not-insignificant side business of manufacturing and designing TV set-top boxes used by cable providers. But there are bigger questions here. Google licenses the Android operating system to phone-making partners such as Samsung, HTC and LG; how can Google turn around and compete with those companies? How will Google manufacture smartphones with Motorola while providing the newest innovations to partners that are now its rivals? And why exactly does Google — until now, a purely Web- and software-focused company — want to be in the hardware business? Google will undoubtedly see advantages in using Motorola’s expertise to design hardware and software side by side. And Google will need to hold its market position against Apple’s tightly integrated devices and services, as well as the new partnership between Microsoft and Nokia. The landscape of the mobile industry is quickly becoming all about that synergy of hardware and software. Can Google ignore the trend?
benton.org/node/87198 | Washington Post
Recommend this Headline
back to top

COULD SPRINT BE NEXT PIECE FOR GOOGLE?
[SOURCE: CNNMoney, AUTHOR: David Goldman]
Google made a cannonball dive into a field it's long been edging toward: the mobile communications market.
Pending regulatory approval, Google's arsenal now includes Motorola (MMI), Android, Google Voice, a fiber optic cable infrastructure, an Internet phone service and experience in the mobile retail markets. It's also got more than $26 billion in cash left over, in case it wants to go buy another arrow for its mobile quiver. Could Google buy Sprint? Sprint's market cap has fallen to just $10 billion -- down 15% so far this year. Google could probably afford to buy the struggling carrier with cash, even after the Motorola deal closes. Google relies on the established carriers to sell and support its devices. But if Google could have the ability to deal directly with its customers, why not cut out the middleman? Though analysts widely believe Google's mobile ambitions are strong, few think Google would actually try to become a wireless carrier anytime in the near future. The infrastructure needed to carry signals around the globe is incredibly expensive, reducing the profit margins of wireless companies to next-to-nothing. "If you look at the margins Google enjoys compared to the margins carriers enjoy, why would you ever want to trade one for another?" asked Charles Golvin, analyst with Forrester Research. "Also, you can't be a carrier with just one device. It would create questionable competitive dynamics." Then again, no one thought Google would want to buy up a handset manufacturer -- or launch a head-to-head assault on Facebook, as it did with Google+. Four months into Larry Page's tenure as CEO, he's already proven he's not afraid to make high-stakes bets.
benton.org/node/87225 | CNNMoney
Recommend this Headline
back to top

GOOGLE-MOTOROLA EUROPE
[SOURCE: paidContent.org, AUTHOR: Ingrid Lunden]
If Google gets the green light to buy Motorola Mobility for $12.5 billion, one area where the deal could be especially significant is in Europe, where Motorola has all but disappeared after once enjoying a healthy share of the mobile device pie. According to figures from Strategy Analytics, at the end of last year Motorola had 0.7 percent share of the European mobile market. Compare that to only five years ago, when Motorola had a 16.1 percent share. Today, that percentage would put Motorola right between Apple and Samsung in smartphones, or just behind Samsung overall as a strong number-three. Part of Motorola’s decline in Europe was down to its own strategy -- a reversal of what Nokia has been doing of late in the U.S., if you will. It decided to pull back from declining operations in Europe as a way of cutting costs and keeping its focus on its home market. Meanwhile, Android has been seeing a very strong surge in the region—as it has been worldwide—and Google has centered quite a bit of its mobile development in London. If Google has bought Motorola not only for its patents, but also to have stronger design control over at least one Android licensee, then the European market may see some of the first fruits of that new union.
benton.org/node/87197 | paidContent.org
Recommend this Headline
back to top

HOW ANDROID CAME TO DOMINATE
[SOURCE: Fortune, AUTHOR: Beth Kowitt]
When Google acquired a tiny wireless startup called Android in 2005, few at the search giant had particularly high hopes for the deal -- if they even knew about it. At that point Google had purchased just a handful of companies, mostly software makers it had quietly folded into its operations. (Big, high-profile deals like YouTube and DoubleClick came later.) Besides, not many people knew exactly what Android did: The upstart was in stealth mode, and co-founder Andy Rubin, best known for creating the Sidekick mobile device, said little about its product or mission. Executive chairman Eric Schmidt would later joke that he scarcely noticed when Google founders Larry Page and Sergey Brin bought the company. Today, of course, Android is impossible to ignore. It is the mobile operating system -- the brains of a cellphone -- that powers more than 100 million gadgets. (That number will be out of date by the time you read this: Every day another 400,000 Android devices are activated.) Apple's iPhone gets credit for showing consumers just how cool and powerful a mobile device could be, but Google democratized smartphones by making Android available free to any handset maker that wanted to use the platform. At last count, Android software was on more than 300 different phones and tablets around the world. The only smartphones that use the iPhone operating system? iPhones. "If you just plot the graph looking at how quickly we grew," says Rubin, now senior vice president of mobile at Google, "it's almost vertical."
benton.org/node/87186 | Fortune
Recommend this Headline
back to top

GOOGLE-MOTOROLA 2010
[SOURCE: ars technica, AUTHOR: Anders Bylund]
Google just plunked down $12.5 billion for Motorola Mobility. Would the deal have been cheaper if Big G had just purchased a handset maker back in January 2010 rather than launching the ill-fated Nexus One instead? Buying Motorola Mobility makes Google a truer copy of the Apple business model. No longer a hands-off software provider with no financial interest in handset sales, Google now needs to worry about hardware implementation and direct profits. This two-headed beast will deliver the purest Android experience on the market, and will be held up as a role model or pariah when things go right or very wrong for the platform. And let's not forget that Motorola Mobility might not go home with Google after all. Perhaps the biggest reason to pick up Motorola rather than just buying another basket of protective patents is that regulators might block a pure patent deal but could let this agreement pass because Google is buying hardware operations where it holds no monopoly whatsoever. That doesn't make it a slam-dunk, however. All told, leaving Motorola on the table for a year and a half added at least $6 billion to the dollar cost but also brought about a slew of less obvious costs -- and benefits. For better or worse, Android just changed in a big way. And if Google had made this move a year ago, the market would look very different today in that unpredictable way that makes hurricanes out of fluttering butterfly wings.
benton.org/node/87195 | Ars Technica
Recommend this Headline
back to top

QUESTIONS FOR GOOGLE
[SOURCE: San Jose Mercury News, AUTHOR: Mike Swift]
The day after Google announced a $12.5 billion cash deal to buy Motorola Mobility, Silicon Valley and Wall Street on Tuesday questioned the value of the move -- as the initial glow surrounding the bold combination dimmed amid concerns about the challenges ahead. The strongest skepticism came from Standard & Poor's, which on Tuesday downgraded Google stock in part over concerns that the biggest deal in Google's history would take longer than expected to close, and that Motorola's more than 17,000 patents would not adequately protect Google's Android mobile software from a barrage of intellectual property challenges from such rivals as Apple, Microsoft and Oracle. "I'm not disputing (the Motorola patents) will help protect Android, but the way people seem to be looking at the company and its actions yesterday is that Android is now all clear when it comes to IP issues, and that clearly, in our opinion, is not the case," said Scott Kessler, information technology analyst for Standard & Poor's Equity Research, which downgraded Google to "sell" from "buy." Other Wall Street analysts did not follow suit in downgrading Google stock, but some raised questions about the deal's risks and complexity, or lowered their long-range price targets for Google stock. One possibility, analysts said, is that Google will use Motorola to put out a few high-quality phones and tablets to compete with Apple's iPhones and iPads, technology that could be shared with other phone-makers that use Android.
benton.org/node/87268 | San Jose Mercury News
Recommend this Headline
back to top

GOOGLE'S STRATEGY
[SOURCE: Wall Street Journal, AUTHOR: Martin Peers]
Maybe Google's next big purchase will be in Hollywood. Investors could be forgiven for fearing such an offbeat script after watching the search giant agree to buy Motorola Mobility for $12.5 billion. That deal has strategic logic, in as much as it builds up Google's patent portfolio in the mobile industry. But it raises questions about Google's overall strategy. And the company's willingness to diversify into a lower-margin, highly competitive industry where it has little experience makes a Hollywood film studio purchase seem somewhat less outlandish. Indeed, buying a studio would help Google's YouTube -- which is reportedly expanding its offerings by spending $100 million on original content -- just as buying Mobility is meant to bolster Google's Android mobile operating system. Most likely, a big content company purchase is the last thing on Google's mind. But after Monday's bombshell, Google needs to clarify its growth strategy for investors. Is its focus still on advertising, with free products like Android designed to gain market share in new areas to support ad sales? Or has Google decided that mobile advertising is growing too slowly and instead it wants to be like Apple, which has become the world's most valuable company by integrating hardware and software. Most likely Google hopes to do both.
benton.org/node/87266 | Wall Street Journal
Recommend this Headline
back to top

MORE CONSOLIDATION?
[SOURCE: Financial Times, AUTHOR: Paul Taylor, Richard Waters]
Will Google-Motorola trigger further consolidation among smartphone manufacturers? Will the deal force hardware makers such as Samsung, HTC, LG Electronics, Sony Ericsson and the two Chinese smartphone manufacturers, ZTE and Huawei, to reassess their dependence on Google’s Android operating system and consider alternatives such as Microsoft’s Windows Phone 7 or Hewlett-Packard’s Web OS? Could the deal spur further vertical integration between hardware makers and operating system vendors?
Of the six main smartphone operating systems available today – Android, Apple iOS, Research in Motion’s BlackBerry OS, Nokia’s Symbian, Microsoft’s Windows Phone 7 and HP’s Web OS – four now form their own tightly integrated ecosystems. This model, pioneered by RIM and then perfected by Apple, has some key advantages and some disadvantages. Tight integration between hardware and software enabled RIM to build perhaps the most secure and robust wireless messaging and e-mail-centric devices; it has enabled Apple to produce the clean, simple and seamless interface of the iPhone and to attract huge numbers of software developers to the App Store – now a key strategic advantage for Apple in both the smartphone and tablet PC markets. However, as both RIM and later Nokia with Symbian discovered, tight integration is fine until the operating system is no longer able to keep pace with advances in component hardware, including processors and interfaces, especially touch screens.
benton.org/node/87265 | Financial Times
Recommend this Headline
back to top

SPECTRUM/WIRELESS

TECH PATENTS
[SOURCE: New York Times, AUTHOR: Steve Lohr]
Google was willing to pay $12.5 billion for Motorola Mobility in no small part because of its stockpile of 17,000 patents. The patent portfolio, some analysts estimate, could represent more than half of the value of the deal, or more than $400,000 a patent. If so, it was a relative bargain. In June, Apple and Microsoft teamed up with four other companies to pay $4.5 billion for the 6,000 patents held by the bankrupt Canadian telecommunications maker Nortel Networks. That works out to $750,000 a patent or nearly four times the average price for computer, software and telecommunications patents over the last few years, patent experts say. In a stumbling economy, stocks languish in a skittish funk and real estate remains depressed. But technology patents look downright bubbly. This patent gold rush has a darker side. It is diverting money for innovation from industries crucial to the economic future of the United States, analysts say. Patents were created as an incentive for innovation, giving inventors a temporary right to commercialize their ideas, without others copying them. While the recent blockbuster patent deals may make sense for the companies, analysts say, they are fed largely by legal considerations — asserting patent claims or defending against claims — rather than economic ones.
benton.org/node/87270 | New York Times | NYTimes | WSJ | FT
Recommend this Headline
back to top

GENACHOWSKI GETS DINGELL-GRAM
[SOURCE: National Journal, AUTHOR: Sara Jerome]
Rep. John Dingell (D-MI) took the Federal Communications Commission to task for what he sees as a failure to fully answer his questions about spectrum policy. In a letter to FCC Chairman Julius Genachowski, Rep Dingell said he is "disturbed" that the FCC has not answered his spectrum questions "in a substantive manner." Rep Dingell originally wrote to Chairman Genachowski in June with a list of detailed questions about the potential impact of the agency's spectrum proposals. In a response dated August 3, Chairman Genachowski responded to some aspects of the letter, but in Dingell's view, he was evasive on some key points. Chairman Genachowski appeared, in Dingell's view, to skirt one question in particular about the potential structure of incentive auctions, a proposal that would offer compensation to TV broadcasters to sell off their airwaves to mobile companies. The FCC wants Congress to approve such auctions. Rep Dingell and other members of Congress are concerned that broadcasters could be harmed by the proposal. "With respect to voluntary incentive auctions, it is imperative that Members of Congress know what effect they will have on the broadcast industry and their constituents' ability to receive free, over-the-air local programming," the congressman wrote. Rep Dingell suggested it might be necessary for members of Congress to file Freedom of Information Act requests if it wants to get real answers about the FCC. Rep Dingell also sided with the National Association of Broadcasters (NAB) in his letter. NAB says the FCC's proposals could harm TV stations. Genachowski's "failure" to respond more fully "leaves me no alternative but to conclude that the NAB's analysis is probably more correct than not."
benton.org/node/87244 | National Journal | The Hill
Recommend this Headline
back to top

LABOR

VERIZON STRIKE UPDATE
[SOURCE: Bloomberg, AUTHOR: Devin Banerjee]
Verizon Communications told the employees it will suspend certain benefits at the end of the month if they haven't returned to their jobs. Verizon stopped funding the workers’ pensions when their former contract expired Aug. 6, said Richard Young, a spokesman for the company. “If they’re not employed and not working for the company, we’re not going to fund their pensions,” Young said.
benton.org/node/87245 | Bloomberg
Recommend this Headline
back to top

VERIZON STRIKE UPDATE
[SOURCE: Multichannel News, AUTHOR: Todd Spangler]
Verizon Communications has called in hundreds of additional management and non-union employees to handle customer service and network operations duties, as the strike by 45,000 workers wore into its tenth day. The union-represented Verizon employees in the Northeast and Mid-Atlantic regions have been on strike since Aug. 7. The Communications Workers of America (CWA) represents about 33,000 Verizon workers, while the International Brotherhood of Electrical Workers represents some 12,000. "We've called up hundreds of additional employees in the last few days," Verizon spokesman Rich Young said. "Our plan is to do what we have to do to keep our networks running. By and large, 10 days into the strike, our networks are performing solidly." Previously Verizon had said it trained 40,000 management employees, retirees and contractors to fill in for the strikers.
The CWA said that more than 100,000 people have signed an online petition calling on Verizon CEO Lowell McAdam to "get serious about bargaining." "We will never have an economic recovery if profitable companies like Verizon can demand huge concessions from workers," CWA communications director Candice Johnson said. "You don't build a middle class by cutting workers' wages, benefits and standard of living. That's just one reason why Verizon is becoming synonymous with 'VeryGreedy.'" According to Chaison, Verizon lacks credibility "by demanding concessions simply because it would like them despite being profitable, and their no guarantees that the striking workers will be able to keep their jobs even if they agree to cost-cutting concessions."
benton.org/node/87191 | Multichannel News
Recommend this Headline
back to top

INTERNET/BROADBAND

FCC, BROADBAND AND USF REFORM
[SOURCE: MinnPost.com, AUTHOR: Byron Dorgan]
[Commentary] This year the Federal Communications Commission (FCC) has begun a rule making on something they call the Connect America Fund. They want to push the development of broadband across our country. I think that is a good idea. But the FCC is also considering changes to the "Universal Service Fund" that concern me. I believe it could undermine telephone service including broadband service in rural areas. The FCC is talking about "reforming" or eliminating the funds that help communications providers (both wire-line and wireless) finance the commitments they have made to connect our remote and rural areas. Small rural telephone companies rely on those funds to finance the networks they have built and to build out new broadband service to rural areas. Eliminating that support would be devastating to some rural areas. [Dorgan is a former senator from North Dakota]
benton.org/node/87232 | MinnPost.com
Recommend this Headline
back to top

WHO PAYS FOR P2P?
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
Who’s paying for peer-to-peer traffic across the Internet? It’s not the largest ISPs, which can actually profit from such traffic, but smaller regional Internet providers and those who operate campus or corporate networks, according to a new paper out that studies how P2P applications affect ISPs. The paper claims to look at the whole ecosystem, across network boundaries and geographical borders to detail the effect of the entire system of files. Some of the results are surprising:
A third of BitTorrent traffic stays local: Thirty-two percent of BitTorrent traffic stays in the country of origin and 49 percent of traffic is intra-domain or crosses a single peering or sibling network link.
BitTorrent traffic doesn't usually hit the big backbone transit providers: That’s partly because it stays local and partly because the largest amount of BitTorrent traffic stays inside a local area network run by a hosting company or enterprise.
BitTorrent traffic occurs at the same time as peak web traffic and it’s growing: The old myth that BitTorrent users were up late at night seeding files has evolved and most users are sharing files during the day. Many are doing so during “peak traffic times,” which the researchers don't disclose unless daytime means peak traffic time.
benton.org/node/87237 | GigaOm
Recommend this Headline
back to top

CONTENT

PTC STUDY ON CARTOONS
[SOURCE: Parents Television Council, AUTHOR: Press release]
The Parents Television Council's latest study documents the levels of adult content on networks with the highest-rated primetime animated cable shows among children ages 12-17, according to Nielsen data. The networks included in the study reflect where kids are consuming the most popular animated shows during primetime: Adult Swim, Cartoon Network, Disney Channel and Nick at Nite. Based on the Nielsen findings, PTC examined 123 episodes of animated programming that aired on Adult Swim, Cartoon Network, Disney Channel and Nick at Nite for the presence of sexual content, violence, drugs and explicit language between March 21, 2011 and April 14, 2011 PTC research analysts documented 1,487 incidents of explicit language, drugs and sexual content during the four-week study period. On average, young viewers were exposed to adult content once every two minutes and 19 seconds. TV-PG rated animation featured sex, drugs or profanity every two minutes and 31 seconds. Adult Swim, which used to begin airing at 11:00 pm ET and now begins at 9:00 pm ET (8:00 pm CT), included some of the highest-rated animated shows among ages 12-17 and the highest levels of explicit content.
benton.org/node/87230 | Parents Television Council
Recommend this Headline
back to top

JOURNALISM

RON PAUL INVISIBLE
[SOURCE: National Public Radio, AUTHOR: Frank James]
[Commentary] Busted. That's what we in the news media are in the matter of the presidential campaign of Rep. Ron Paul (R-TX). Famous and not so famous critics have pointed out in the past day that journalists for the most part have ignored Rep Paul even when he succeeds at a level other Republican presidential candidates haven't. As far as many political reporters have been concerned, the congressman might as well be wearing one of those Harry Potter invisibility cloaks. He's there but we apparently can't see him. For instance, despite putting in a strong second place showing in the Ames Straw Poll in Iowa and polling consistently well in polls of voters nationally or in caucus and primary states, the 74-year old Libertarian was mostly ignored. The leading reason has to be because most journalists accept the conventional wisdom that Paul can't get Republican nomination. A number of his views just don't line up well with GOP orthodoxy. And that's true despite how some of his fiscal views anticipated the arrival of the Tea Party.
benton.org/node/87229 | National Public Radio
Recommend this Headline
back to top

NEWS OF THE WORLD UPDATE
[SOURCE: Bloomberg, AUTHOR: Tariq Panja, Amy Thomson]
News of the World executives may have been aware of widespread phone hacking at the U.K. tabloid since 2007, U.K. lawmaker Damian Collins said, citing a letter by former royal reporter Clive Goodman. Goodman wrote that hacking was discussed at editorial conferences in a letter in which he was suing for unfair dismissal, Collins said in an interview today. Goodman is the only journalist from the newspaper who has been jailed for phone hacking. Parliament’s Culture, Media and Sport Committee examined responses from former News Corp. employees and found “devastating revelations.”
News Corp COO James Murdoch is likely to be called back to testify again before the Media Committee. Among the conflicts, some former News of the World and News Intl. editorial and legal executives say James Murdoch was more informed than he claims about pertinent details, including the reason for making a high-end settlement with a hacking victim.
benton.org/node/87192 | Bloomberg | paidContent | paidContent | NPR
Recommend this Headline
back to top

STORIES FROM ABROAD

OVERSEAS CASH
[SOURCE: New York Times, AUTHOR: Steven Davidoff]
In an analyst report in May, JPMorgan Chase estimated that 519 American multinational corporations had $1.375 trillion outside the United States. The problem is particularly acute among technology companies, which historically tend to hoard cash because of the cyclical nature of their business. Tax policy is driving much of this trend. For multinational corporations, cash earned abroad cannot easily be remitted to the United States. If it is paid back to the United States, it is subject to a dividend tax that can rise to as much as 35 percent. Companies are loath to pay this tax because while they can offset it with taxes paid abroad, the companies still end up paying a relatively high tax rate. Yet it is not just a tax issue. Many United States companies want to keep cash abroad to focus on high-growth regions for investments and acquisitions.
Apple has a cash problem. It’s not just that Apple has too much cash, $76 billion as of June 30. It’s rather that the bulk of that pile, estimated at $41 billion, is held abroad. Apple does not want to bring it back to the United States for several reasons, primarily because of the tax consequences, but also because of its own growing foreign presence. Apple is not alone — this problem is an increasing one in corporate America. And the answer may not be more big, all-cash acquisitions, like Google’s $12.5 billion offer for Motorola Mobility. A recent Moody’s report noted that Microsoft held $42 billion abroad, or more than 80 percent of its cash. Cisco Systems has $38.8 billion, or almost 90 percent of its cash. Google — at least before Monday’s deal — had nearly $40 billion in cash, with more than 43 percent of it held abroad.
benton.org/node/87271 | New York Times
Recommend this Headline
back to top

UK ARRESTS
[SOURCE: BBC, AUTHOR: ]
Two men from Cheshire have been jailed for four years each for using Facebook to incite disorder during riots in England last week. Jordan Blackshaw, 21, of Vale Road, Marston and Perry Sutcliffe-Keenan, 22, of Richmond Avenue, Warrington, were jailed at Chester Crown Court. The Recorder of Chester, Judge Elgan Edwards praised the swift actions of Cheshire Police. He said he hoped the sentences would act as a deterrent to others. Both men pleaded guilty under sections 44 and 46 of the Serious Crime Act to intentionally encouraging another to assist the commission of an indictable offence. The Crown Prosecution Service said Blackshaw had created a Facebook event called "Smash d[o]wn in Northwich Town", intended for the receipt of the "Mob Hill Massive Northwich Lootin'". The page went on to specify a meeting time and place of 9 August, between 13:00 and 16:00 BST, "behind maccies" - thought to be the McDonald's restaurant in Northwich town center.
benton.org/node/87228 | BBC
Recommend this Headline
back to top

Benton

Search

Benton

Daily Digest

Analysis

August 2011

Dish Network and DirecTV Find Themselves at Opposite Ends of the Satellite Spectrum

Masked Protesters Aid Time Warner’s Bottom Line

UK's Home Office backs away from social network blocking after riots

Google chairman attacks UK media red tape

Labour seeks stop-gap media controls

Virgin raises concerns over rural competition

August 17-28, 2011 (August Catch-up)

Headlines will return Monday, August 29

August 17, 2011 (AT&T/T-Mobile; Google-Motorola)

Tax Policy Change Would Bring Cash Piles Abroad Back Home