March 2012

All Mobile Traffic Isn't Equal

One of Europe's biggest wireless companies recently started offering a new plan in France: For less than $14 a month, customers could get unlimited Web browsing on their phones. The catch -- the Internet was limited to Twitter and Facebook. Every 20 minutes spent on any other website cost nearly 70 cents.

France Telecom SA's Orange Group is one of several wireless carriers around the world experimenting with slicing up the Web into limited offerings and exclusive deals they hope will bring marketing advantages or higher profits. Such tests remain the exception not the rule. Still, they show that the "open Web" ideal that has long governed Internet use is starting to break down as more and more surfing takes place on mobile devices. Telecom executives, tired of being the "dumb pipes" through which valuable Internet traffic flows, say they need to cut such deals to make investing in expensive mobile-data networks worthwhile. But entrepreneurs seeking to devise new mobile offerings worry the shifting rules of the game will favor well-heeled companies that can afford carriers' new terms.

The moves by carriers to allow special access to some websites have also drawn criticism from "network neutrality" advocates, who say the entire Web should be equally accessible to users. In the U.S., the Federal Communications Commission has adopted network neutrality rules that are stricter for landline networks than mobile ones.

Cable Firms Warm to Outdoor Wi-Fi

As demand for mobile-data services explodes, straining the nation's cellular networks, cable operators are beginning to pump more resources into outdoor Wi-Fi, pursuing the potentially lucrative business of offering mobile-device users another route to the Web. But four years after the cable industry rolled out its first outdoor Wi-Fi networks, it has built just a handful across the country, and they remain works in progress.

Some cable operators—including Cablevision Systems, based on New York's Long Island—have made a big commitment to the outdoor networks, but others see them mostly as a tool to retain subscribers—a free add-on to their home broadband plans. That may be why Wi-Fi coverage remains patchy in some areas more than 18 months after Cablevision, Comcast and Time Warner Cable struck an agreement to let their subscribers roam onto each other's Wi-Fi networks in the Philadelphia-New York region. Time Warner Cable has built only about a dozen hot spots in Manhattan, focusing its recent efforts instead on Southern California. Now, however, cable operators appear to be picking up the pace, at least in their priority markets. On Feb 28, Cablevision executives said the company plans to make significant investments in Wi-Fi this year because it will "provide a real advantage for the company" as more customers look to watch TV online through devices.

FTC Attorney to Join Microsoft

A senior Federal Trade Commission attorney who led several of the agency's antitrust investigations into Google has been hired by the company's archrival, Microsoft.

Randall Long, a deputy assistant director in the agency's Bureau of Competition, will become a director of regulatory affairs in Washington (DC) at the end of March, Microsoft said. In recent years, Microsoft has emerged as Google's chief legal antagonist, working publicly and privately to get antitrust cops in Washington and Brussels interested in Google's activities. As part of his new job, Long will likely continue those efforts before the FTC and other agencies. At the FTC, Long focused on mergers and hasn't been part of a group at the agency now conducting a wide-ranging antitrust investigation into Google's business practices. But it remains unclear how much access he may have had to nonpublic information about the investigation in his role at the FTC. As the lead staff attorney in the AdMob case, Long recommended that the commission challenge the deal, people familiar with the matter said. Ultimately, the commission narrowly decided to allow the deal, largely because the unexpected entry of Apple into the market upended their legal case.

Google Web Grows in New York City

Google has dramatically expanded its presence in Manhattan in the past year, adding roughly 750 people to its outpost in 2011 in the most prominent example of a technology company shifting its focus toward New York.

After acquiring four New York companies and going on a hiring spree for its media and advertising arms, Google now has about 2,750 employees in New York City, a 38% increase from 2010. That's faster growth than for the company overall, which expanded 33% from 2010 to 2011. Google's expansion in New York—once seen as too expensive for tech start-ups—has helped fuel a perception that the city is in the midst of a technology industry boom. It comes as Facebook, Hewlett-Packard and other companies expand their New York presences, and Cornell University moves forward with an engineering campus on Roosevelt Island.

Snowe's exit shakes up Senate panels

The surprise announcement that Sen. Olympia Snowe (R-Maine) will retire at the end of this year has roiled the line of succession to two of the Senate’s most powerful committees.

Snowe’s retirement would have bigger implications if Republicans recapture the Senate majority and control of the chamber’s panels. Commerce Committee: Snowe’s retirement puts Sen. Jim DeMint (R-SC), co-founder of the Senate Tea Party Caucus, in line to become the ranking Republican on Commerce, as current ranking member Kay Bailey Hutchison (R-TX) has also announced her retirement. Sen DeMint is known as an agitator for conservative causes, ready to block Senate floor action to advance his arguments. He said the committee promotion would allow him to focus on legislating. “I’d look forward to that — if we can get ourselves to some kind of trajectory toward balancing the budget — to get back to legislating,” Sen DeMint said. “I’d rather legislate than agitate.” Sen DeMint said he will push legislation to rewrite rules for broadcast and cable television that he called “antiquated.” Sen DeMint will advocate for consolidating federal agencies and “looking at how we can reconstruct the whole Commerce Department.”

Chairman Walden Appoints Members of Bipartisan Cybersecurity Working Group, Announces Upcoming Hearing

House Communications and Technology Subcommittee Chairman Greg Walden (R-OR) appointed members of the subcommittee to serve on a bipartisan Communications and Technology Cybersecurity Working Group to examine the current landscape and lay the foundation for the subcommittee’s efforts to address cybersecurity.

The Working Group is tasked with identifying existing legal impediments to securing communications networks against cyberthreats and incentive-based approaches to encourage private-sector companies to work with each other and the public sector. Members of the Working Group include: Subcommittee Vice-Chair Lee Terry (R-NE), Ranking Member Anna Eshoo (D-CA), Rep. Doris Matsui (D-CA), Rep. Bob Latta (R-OH), Rep. Michael Doyle (D-PA), and Rep. Adam Kinzinger (R-IL). Subcommittee Chairman Greg Walden will serve as an ex-officio member of the working group. Vice-Chairman Terry and Ranking Member Eshoo will co-lead the group. At the conclusion of its work the group will report its findings to Chairman Walden.

How the e-book landscape is becoming a walled garden

Just as a few massive chain stores eventually came to dominate the traditional printed book market in North America, the e-book marketplace is a kind of oligopoly involving a few major players — primarily Amazon, Apple and Barnes & Noble.

And while bookstore owners of all kinds are free to decide which books they wish to put on their shelves, these new giants have far more control over whose e-books see the light of day because they also own the major e-reading platforms, and they are making decisions based not on what they think consumers want to read but on their own competitive interests. That is turning the e-book landscape into even more of a walled garden.

FCC, Sen Grassley seek way around impasse

Lawmakers are working on a face-saving resolution to a standoff between Sen. Chuck Grassley and the Federal Communications Commission that has kept the panel down by two members for months now.

Sen Grassley threatened to block the confirmation process over the FCC’s refusal to hand over documents related to the agency’s review of LightSquared, the broadband company that’s been in a bloody regulatory battle for more than a year. But the Iowa Republican may now be able to secure the information he seeks through a workaround that doesn’t violate the FCC’s refusal to turn over the material.

But even if Sen Grassley were to lift his hold on the nominations, there’s no guarantee their journey to the FCC will speed up. There’s a larger stalemate between Democrats and Republicans over agency nominations, largely stemming from the controversy over Richard Cordray’s appointment to lead the Consumer Financial Protection Bureau. Senate Republicans successfully filibustered Cordray’s nomination, but President Barack Obama last month used a recess appointment to bypass Congress.

What Google learned from SOPA

Google today implements its controversial new privacy policy, which ties together more than ever before data gathered from users' online activities across all of its properties -- search, Gmail, Google Plus, Picasa, Google Maps, etc. -- to better target ads based on users' interests.

There is plenty of blowback, of course. But that might have been mitigated, at least somewhat, by Google's ad campaign, "Good to Know," which comprises cute line drawings to explain and promote the new policy. "Online privacy has never looked more cuddly," decided Advertising Age. Or maybe privacy intrusion has never looked more cuddly is a better way to put it. Google of course is putting the best possible face on what is, after all, a highly controversial, possibly troubling move. But the campaign might be unique in terms of taking such actions directly to the people, circumventing lawyers, interest groups and politicians to the extent possible. "Good to Know" was launched in Europe before the anti-SOPA campaign reached full volume, culminating in an online movement of people and companies that resulted in Web blackouts and other protests the led to the anti-piracy legislation's being shelved. Google took part, though only with a message on its site stating its opposition to the bill. But the company must have been pleased by the effort's success, since it offered further evidence that in many cases, direct-to-the-public publicity campaigns can be highly effective.

Deciphering the madness of the Murdoch method

Rupert Murdoch's decision to demote his own son is a perfect example of why he's endlessly interesting. Sometimes he makes business decisions purely with his head, canny and shrewd, occasionally ruthless. That's what he did this time. But sometimes he makes giant decisions with his heart, appearing misguided or just nuts; for example, he runs the New York Post and the Times of London at deep losses that will apparently continue forever, and he just doesn't care.

Overall, the Murdoch method has worked well for him. For investors in his News Corp, it has not worked nearly as well as it should have. Recent events show the problem clearly. Amazingly, amid the U.K. phone hacking scandal that led to James Murdoch's downfall -- a mushrooming story that a member of Parliament yesterday called "the single largest corporate corruption case in this country for more than 250 years" -- the Murdoch method is still working, at least for him.