March 2012

Phone customers ditch their carriers faster than ever

The average cell phone customer now switches carriers as soon as his or her second two-year contract is up. That startling decline in loyalty is causing wireless companies to rethink the way they do business.

The average length of relationships between carriers and their under-contract customers fell to an all-time low of 48 months last year, PricewaterhouseCoopers' found in the latest edition of its North American wireless industry survey. The comprehensive annual study includes data from all of the region's major carriers. The trend has building for a few years. What's shocking is how quickly it accelerated. In 2010, the average customer-carrier relationship was 59 months -- nearly a full year longer. The most precipitous decline came among smaller cell phone companies, but large carriers like Verizon, AT&T and Sprint didn't fare much better. Their average relationships with customers under contract lasted just 51 months. If customers are going to cut and run frequently, carriers will need to rethink their pricing models -- particularly when it comes to expensive smartphones.

Clear Channel violates First Amendment rights

[Commentary] The First Amendment protection of freedom of speech is a treasure. I stand up for the rights of Rush Limbaugh, Garry Trudeau, Bill Maher and everyone else to have their say, whether I agree or not (outside incitement to violence). I do not condone censorship. But private censorship has crept into our public airwaves, and we must stand against it.

I'm not talking about newspapers that didn't print Trudeau's Doonesbury strip, a daily 30-second read. Newspapers are private enterprise: Anyone with enough capital can start a newspaper and write what they will. Nor cable programs like "Real Time with Bill Maher," which produced 35 hours of lefty snark in 2011. Cable TV is private enterprise: when people write a check to Comcast or Direct TV, they pay private contractors, via cable or satellite, to bring programs from Playboy to Disney into their homes. I'm talking about local TV and especially local radio, where a host like Limbaugh dominates the dial with right-wing commentary for about 750 hours each year. Broadcasting is a public-private partnership: The public owns the airwaves needed for transmission; private businesses own the buildings, equipment, etc. needed to broadcast programming. When private business goes into broadcasting, it makes a deal with the public: a free license from the Federal Communication Commission if it agrees to "serve the public interest, convenience and necessity." Broadcasting differs from newspapers and cable; the number of frequencies available in one community are few, so only a limited number of local stations are possible. Physical scarcity is the foundation of all broadcast law.

Generation X joining K Street

Silicon Valley has a new formula for #winning. The tech companies pluck top Gen X talent from the White House and Capitol Hill and assemble A-teams of lobbyists — or “evangelists,” as some of them are known — who are super connected inside the Beltway and geek chic enough to fit in at the West Coast enclaves of the industry’s titans.

“If you look at that whole group, they’ve got significant Hill experience,” said Rep. Patrick McHenry (R-NC). “But they’re still young enough that they understand the power of the tubes.” These Washington whiz kids are the vanguard in an evolution of Silicon Valley’s approach to Washington, where the twin threats of privacy and piracy regulations are waiting around every Capitol corner. Their companies, burned in the past by a libertarian bent and an above-it-all attitude toward Washington, have come to the realization that the right DC hands can save their bottom lines.

Romney heads for California to fill coffers

Mitt Romney will be rounding up donors in the traditionally Democratic strongholds of Hollywood and Silicon Valley this week, in an attempt to maintain his fundraising momentum and lay the groundwork for the delegate-rich California primary in June.

Despite losing in Louisiana to Rick Santorum on Saturday, the former Massachusetts governor is feeling sufficiently confident about his prospects in the contests looming closer in the calendar – including Wisconsin, which votes on April 3 – that he can avoid barnstorming them with rallies and town hall meetings. California, the most populous US state, is known for being crucial fundraising terrain for Democratic politicians seeking donations from liberal technology and entertainment executives. But there are also plenty of wealthy conservative Republicans in California that make it an essential stop for Romney, who is trying to build up his coffers not just for the remainder of the primary battle against Santorum but also for the probable general election match-up against Barack Obama. Among Romney’s most prominent financial backers in California is Jerry Perenchio, the former chairman of Univision, the Spanish language television channel, who donated $500,000 to Restore our Future, the super political action committee supporting Romney. Marc Andreessen, the software engineer, venture capitalist and co-founder of Netscape, is also a big donor.

School District Told to Replace Web Filter Blocking Pro-Gay Sites

Students using the computers at Camdenton High School in central Missouri have been able to access the Web sites for Exodus International, as well as People Can Change, antigay organizations that counsel men and women on how to become heterosexual. But the students have not been able to access the Web sites of the Gay and Lesbian Alliance Against Defamation, or the Gay-Straight Alliance Network. They have been able to read Bowers v. Hardwick, the 1986 Supreme Court ruling that upheld a Georgia statute criminalizing sodomy. But they have been blocked from reading Lawrence v. Texas, the 2003 Supreme Court ruling that held that laws criminalizing sodomy were unconstitutional. They have been given access to scores of antigay sites, but not to those supportive of gay people. A clear-cut case of censorship? Actually, not so clear. It does not appear that the school superintendent or the librarians or board members or the district Web master made these decisions. Instead, the district’s Web filter determined which sites would be open to students and which would be blocked.

Why Socialist Cuba Prohibits Social Media

[Commentary] 'There's a reason the people in Cuba don't have access to the Internet. It is because the government [couldn't] survive it."

That was Sen Marco Rubio (R-FL) last week at a Washington conference titled "Cuba Needs a (Technological) Revolution: How the Internet Can Thaw an Island Frozen in Time." The event was sponsored by Google Ideas, a for-profit venture of the giant Internet search enterprise, and the nonprofit Heritage Foundation. I was asked to kick off things with a Rubio interview. So I began by asking him what he makes of the Cuban military's reference last year to technology that allows young people to exchange thoughts digitally as "the permanent battlefield." The regime can physically attack public displays of resistance, like the Ladies in White who are beaten by Castro's hired hands. But it would be much tougher to put down protests that go viral.

That's why Sen Rubio wants us to "imagine what would happen if all of a sudden Havana became a Wi-Fi zone." It's not a bad thought experiment, even without the technology at hand today. As Sen Rubio said, if the Cuban people get access to the Internet, "the Internet will take care of everything else, I believe that with all my heart." So too do the Castros, judging from the lengths they are going to keep it from happening.

Huawei set to miss out on Australia network

The Australian government has stressed its determination to protect information security on a planned national broadband network in an indication that Huawei, the Chinese telecom infrastructure vendor, could be excluded from contracts for building it.

“The National Broadband Network is the largest nation-building project in Australian history, and it will become the backbone of Australia’s information infrastructure,” said the attorney-general’s office. “As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it.” The statement followed a report by the Australian Financial Review that Tony Sheehan, deputy secretary of the Attorney-General’s Department, had told Huawei late last year “not to bother tendering” for NBN contracts because it would not succeed.

Future of set-top boxes in UK

Behind the array of new technology and optimism on show at last week’s Internet Protocol TV world forum in London, an underlying air of apprehension was perceptible.

The potential concern for the TV set-top box makers at the convention was all around them, albeit in a wireless form: the Internet. As the variety of TV content available over the internet expands, the future market for makers of TV set-top boxes – such as Virgin Media’s TiVo and Sky’s Plus – has been called into question. Why would a consumer pay for a subscription to use a set-top box when “smart TVs” allow direct access to internet content, known as over the top (OTT), for free?

UK publishers collaborate in digital drive

Publishers of newspapers and magazines are setting aside competitive differences to collaborate as they grapple with larger digital platforms and plummeting traditional advertising revenues, an industry survey has found.

The Association of Online Publishers’ annual census of UK members also found that mobile development, ecommerce and commercial data analysis are key priorities for the coming year. “Publishers are coming together to understand how they can work collaboratively,” said Lee Baker, director of the AOP. “We are seeing more of that on a much more sophisticated level ... Lots of businesses are simultaneously moving into very, very new territory, which is driving this approach.”

Universal faces longer EU probe of EMI bid

Universal Music faces an extended probe into its planned $1.9 billion bid for EMI’s recorded music business, after an initial investigation by the European Commission concluded the deal could raise competition concerns in both the CD and digital music markets.

The Commission’s decision was widely expected, as Universal is already the largest global recorded music company by revenues. The combination with EMI, home to Katy Perry and Coldplay, would leave the market with just three big record label groups while lifting Universal’s market share in some member states above 50 percent. The Commission’s announcement of a “Phase II” investigation appeared to dismiss arguments put forward by Universal Music that its market power would be constrained by the size of customers such as Wal-Mart and Tesco in physical music or Apple and Amazon in digital music and by the prevalence of free pirated copies of its products. The enlarged company “would not appear to be sufficiently constrained by the remaining competitors on the market, by its customers’ buyer power and/or by the threat of illegal music consumption,” the Commission said.

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