December 2011

FCC Expected To Vote On Proposed Media Ownership Changes Today

Apparently, the Federal Communications Commission will propose on Dec 22 to scrap the radio-TV cross-ownership rules, but leave in place the radio and TV local market ownership caps and essentially preserve the FCC's attempted loosening of the newspaper-broadcast cross-ownership rules, which the FCC tried to do under Republican Chairman Kevin Martin.

The Notice of Proposed Rulemaking (NPRM) was being voted by the commissioners on circulation rather than waiting for the next public meeting, which means retiring Commissioner Michael Copps would be able to weigh in on an issue near and dear to his heart. A final order will likely be scheduled for that public vote sometime in the first part of next year, after a sufficient notice and comment period on the proposed changes. That is particularly important since a lack of sufficient notice was one of the reasons the Third Circuit Court of appeals gave for throwing out parts of the FCC's 2007 decision under then chairman Kevin Martin to loosen the newspaper-broadcast cross-ownership rules. While the NPRM basically reinstates the Martin plan of making combos between TV stations and newspapers in the top 20 markets presumptively in the public interest, it does put out for comment the Martin four-part test for determining whether such combos should be allowed and whether they should be the criteria. That test is "the extent to which the combination will increase the amount of local news in the market; whether each media outlet in the combination will exercise independent news judgment; the level of concentration in the DMA; and the financial condition of the newspaper or broadcast station, and whether the new owner plans to invest in newsroom operations if either outlet is in financial distress."

AT&T’s retreat from T-Mobile deal is a chance to make wireless future brighter

[Commentary] AT&T’s proposed purchase of T-Mobile would have made AT&T the largest carrier in America, and it would have also arguably created a duopoly where AT&T/T-Mobile’s only true competitor would have been Verizon. That kind of arrangement is usually bad for consumers, and it’s definitely bad for other companies, such as Sprint, which are in the same market and trying to keep a hold of their customers. But something weird happened on the way to the bank for AT&T — regular people, journalists and policymakers started speaking out about the merger and, in the end, it was killed.

A few months ago, I suggested that instead of battling over coverage areas, perhaps carriers should start thinking about ways they could work together to serve their customers better. At the time, I suggested that perhaps government intervention was required to cook up a long-term plan for wireless build-out and to ensure that all of the parties played nicely. But maybe it’s easier than that. I think we need real options to make our wireless future brighter — and I think it’s important that the carriers commit to making it happen. Better wireless in this country doesn’t just mean you can watch an episode of “Glee” whenever you want (not that that isn’t a big perk). A sophisticated wireless network in this country is imperative for businesses, schools and, yes, regular human beings. It’s time for our service providers to start taking responsibility for their industry. Last time I checked, AT&T and Verizon weren’t operating at a loss. In fact, they’re both running highly profitable businesses. If they’re really worried about spectrum constraints and bad user experiences, they should put down the swords for a moment and start working together to fix the problems.

How People Shopped Online This Holiday Season

Little time remains for online shoppers to have gifts delivered in time for Christmas, and sales numbers for online shopping this season are arriving. The trends are clear: shoppers spent much more money online this year than last year, and they did a lot of their shopping on tablets like the iPad.

So far this holiday season, shoppers have spent $32 billion online, 15 percent more than last year, according to comScore. Last week was the heaviest online shopping week on record, and last weekend was the second-heaviest weekend. Though most sales from now to Christmas will take place in physical stores, some Web sites are still offering expedited shipping and online retailers will most likely sell another $5 billion to $6 billion in goods through the end of December, comScore said. Shoppers are much more eager to use their mobile devices to browse and buy this year, though the evidence shows that they are more likely to use their phones for product research and turn to their tablets or computers when they are ready to buy. Twelve percent of online visits to retailers’ Web sites came from mobile devices, up from 5 percent a year ago, according to IBM Benchmark, which tracks e-commerce. But just 9 percent of sales came from mobile phones. While 79 percent of shoppers use their cellphones for research, just 58 percent have made purchases on their phones, according to TechBargains.com, a deal aggregation site. Meanwhile, 75 percent have made purchases on their tablets and 94 percent on their laptops.

US Won't Back Ban on Phones for Drivers

Transportation Secretary Ray LaHood said he won't back a proposal to prohibit drivers from talking on cellphones, even hands-free devices, giving a boost to car makers and mobile-phone companies that stand to lose if regulators impose a ban.

The National Transportation Safety Board last week asked states to ban cellphones while driving in response to a deadly collision in Missouri last year that the agency blamed in part on a driver who was texting while driving. The NTSB wants the ban to include hands-free devices, which let drivers keep their hands on the wheel while talking through speakers or a headset. Secretary LaHood declined to endorse the NTSB's proposal. Hands-free calling "is not the big problem in America," Sec LaHood said. "If other people want to work on hands-free, so be it." An NTSB spokesman said the board has no response to LaHood's comments. "Our recommendations are out there and we stand by them," he said. The Dept of Transportation has rule-making authority over auto safety; the NTSB doesn't. So his comments are likely to bring relief to auto makers and the wireless industry,

Lawmakers Urge Action on Hacking

Lawmakers seized on revelations that hackers based in China broke into the U.S. Chamber of Commerce's computer network to demand legislation bolstering government and private-sector cybersecurity.

House Intelligence Committee Chairman Mike Rogers (R-MI) said the breach at the business-lobbying group showed that the private sector needs better information to defend its computer networks. "Incidents like this show that while the private sector already does much to secure its networks, it needs much clearer authority to detect threats and share information, and needs better access to what the U.S. government knows about dangerous cyber threats," he said. Chairman Rogers said legislation he is sponsoring addressed the problem by giving private-sector organizations access to classified data on cybersecurity threats. It would also clear the way, he said, for companies to share information about breaches with the government while receiving liability protection.

Nevada Sets Stage for Online Poker

Nevada is positioning itself to become the first state to allow Internet-poker games within its borders, a move that comes as online-gambling laws are being debated in statehouses and in Congress.

The state's gambling regulator will vote Dec 22 on rules that would allow companies to apply for licenses to operate poker websites in Nevada. The new rules were designed to put the state in a position to move quickly to become the center of a lucrative new part of the gambling industry should Congress pass one of several laws overturning the ban on Internet wagering, making the state the de-facto national licensing body. In the meantime, Nevada's new regulations could allow the state's casino companies to operate gambling websites limited to players within Nevada's borders, said Mark Lipparelli, chairman of the Nevada Gaming Control Board, the body that drew up the rules, which are set to be voted on by the Nevada Gaming Commission. Lipparelli said websites limited to Nevada's borders could be up and running before the end of next year if the gaming commission votes to allow them. Lipparelli said technology is available to allow companies to limit the bets to people within state borders but that the systems would have to be vetted by regulators and state attorneys to ensure they comply with rules.

Cellphone Jugglers Seek Best Deals

As cellphone companies in emerging markets reach further down the economic ladder for customers, the providers are struggling with a new kind consumer: the chronic churner.

Some rupiah-pinching subscribers are so price-sensitive that they change their number 20 times a year to take advantage of every little giveaway and discount in this hypercompetitive market. Indonesia's more than 10 cellular companies sell millions of prepaid cellular subscriptions monthly, but nearly as many numbers fall out of use. Such heavy volume of cell numbers tossed after a month or two means volume may be less vibrant than rising subscription figures suggest. That's true not just in Indonesia, but in India and other emerging economies as well. Now cellphone service providers are fighting back, looking to hook customers for longer periods to provide more steady, predictable revenue streams. Churning is most active in markets where many subscribers are on prepaid plans that can be activated by just popping in a new SIM card—the small chips that activate phone numbers and access mobile networks. A card typically doesn't require a new handset or a long contract, and some cost as little as 50 cents apiece. In the developed world, most subscribers pay monthly by usage and often are locked in under multiyear contracts. Churn rates—the percentage of subscribers a phone company loses in a month—average less than 3% in much of the West but can top 10% in markets dominated by prepaid cards.

Internet Radio Wants More Ad Dollars

If a song plays on the Internet, rather than the radio, does it count for anything?

That question is at the heart of an intensifying dispute between traditional radio broadcasters and online radio service Pandora Media Inc. over how their audiences are measured. At stake: a share of scarce radio advertising dollars. Traditional radio ad rates are based on audience estimates provided by Arbitron Inc., which doesn't currently measure listeners for Pandora or other online music services. Pandora, looking to win more ad revenue, recently commissioned a research firm to generate audience measurements. It paid Edison Research to translate data from its servers about users into radio-like metrics. But in a report earlier this week, Arbitron said it "urges those reviewing estimates from Internet music services not to make direct comparisons to Arbitron audience estimates in any market." It didn't mention Pandora directly. Arbitron noted, for instance, that there is no way to tell whether a live human being is on the receiving end of the online music signal, whereas Arbitron measures that for traditional radio using a device called a "portable people meter."

Year of the Talking Phone And a Cloud That Got Hot

While other industries struggled, consumer technology seemed to march ahead as always in 2011, with important new products and services continuing to roll out. Sure, some tech companies, like BlackBerry maker Research In Motion, suffered reverses. And some products, like Hewlett-Packard's TouchPad, flopped. But many shone. So here is a look at a few of the biggest tech products of the past year, with some analysis of what they signified and what issues they raise for 2012.

Apple is driving the industry toward simpler, more reliable digital experiences tied into ecosystems of content and cloud services. It is expected to bring out radically new iPhones and iPads in 2012. But can it fend off challenges from popular, rapidly improving rivals using Google's Android operating system? And, in the absence of Steve Jobs, can it keep churning out game-changing hits?
LTE networks, if they become the norm, could get overwhelmed. To fend off this prospect, the biggest carriers in 2011 began charging more for greater data usage, a move that could curb the spread of innovative services that rely on large data downloads, such as video streaming and sharing of music and high-resolution photos.
Cloud services are sure to expand in 2012, but questions remain on their reliability, security and privacy. And while most now cost little or nothing, these offerings could become another monthly fee burden for consumers.
Google may be losing control of Android, as hardware makers and cellular carriers redefine it to suit their own needs, and fail to offer consumers updates in a timely fashion. Except for the Kindle Fire, the operating system hasn't caught on in tablets.
The big test in television may come in 2012, when Apple is believed to plan to ship a whole new type of Internet-connected TV, which the company hasn't confirmed. A big obstacle: Cable and media companies will have a huge say in this potential revolution, and the current system serves them well.

How to react to an explosion of negative political ads

[Commentary] Candidate-bashing advertising has already started in the 2012 election campaign – from the presidential race on down. In the Republican contest for the Jan. 3 Iowa caucuses, negative ads are already a hot issue in their own right. As they should be.

By next fall, more than $1 billion could easily be spent on all types of campaign ads, with many of them slams at opponents. Campaign ads in 2012 will probably be more plentiful than at any time in the past. Any change in campaign-finance laws will require that voters rebel at the proliferation of super PACs, and especially negative ads. Voters need to wake up to an unspoken premise in such advertising – that Americans haven’t done their homework on issues and candidates. With Congress in the doghouse with voters – at 9 percent popularity – the time may be ripe for a voter backlash at the root of that distrust of lawmakers: influence-peddling by big monied groups. Both the “Occupy” movement and the tea party have helped raise the issue. As super PACs roll out their ads in coming months, the rest of America should also see through the ads to the purpose of the money that pays for them.

Benton

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