February 2013

The New York Times Company and others have come forward in recent weeks to say that they were hacked. Although hacking is common, it’s rare for companies to talk about it — even though doing so could warn customers about compromised data, or alert other businesses to a particular threat. Should companies be required to disclose security breaches?

A man shuffles down the street, phone in hand. He appears to be reading a message, but in fact he’s hacking into city computer systems and peering into the pockets of passersby — flicking through their bank accounts, government records and personal details. This kind of nightmare scenario is the feature of a new video game called ‘Watch Dogs,’ one of a number of new video game titles that put the player in the role of the passing hacker. Hacking and cyber warfare are not new themes for video game makers. But new titles that center on constant data threats and government surveillance are resonating now because they hit a little too close to home.

Technological transitions do not change the values Congress codified in the Communications Act and the Federal Communications Commission remains committed to advancing a set of core principles rooted in those values:

1. Competition. Over the last two decades, we've moved from monopoly toward competition in many areas of the communications market, a hugely positive trend. Take voice service: Today, most consumers and businesses have several options to choose from, including their local phone company, a cable company, multiple wireless providers, and Internet providers like Vonage and Skype. These choices exist because of massive private investment, and because of policies that created and maintain the conditions necessary for competition to flourish, including rules to ensure interconnection; consumer roaming across mobile carriers; number portability; and Internet openness, so broadband providers can't block competing voice apps and services. Still, competition challenges remain. For example, for robust residential broadband with no or high monthly usage limits, most consumers today have only one or two choices. Some have suggested that an all-Internet Protocol communications market will necessarily be robustly competitive -- "Deregulate for a competitive, all-IP world!" would be the bumper sticker -- eliminating the need for FCC policies to foster and protect competition. But basic economics and the facts on the ground show that's simply not true. Technological change brings great benefits, but it doesn't automatically bring vibrant competition, particularly in high-fixed-cost, network-effects-driven market segments. At the same time, it's also not true that all legacy regulations remain appropriate for promoting competition in today's marketplace. We must take a nuanced, data-driven approach to determining which policies to keep, which to eliminate, and which to add or modify.
2. Universal service and consumer protection. The U.S. largely succeeded in connecting all Americans to the dominant communications platform of the 20th century -- the telephone network -- and used a number of policies to protect and empower telephone consumers. In the 21st century, universal service and consumer protection remain vital goals. But we will not meet these goals, no matter how fast technology transitions proceed, without modern policies like the 21st Century Communications and Video Accessibility Act of 2010, the Connect America Fund, and the Mobility Fund.
3. Public safety. Ongoing technology transitions promise to substantially improve public safety. For instance, 4G LTE and next generation 911 can enable first responders to access data, video, and images in ways that will help them save lives. At the same time, technology transitions present new risks. Last year's major natural disasters highlighted the fact that, unlike copper, fiber networks do not have an independent source of power, which means consumers and businesses can lose access to 911 and other vital services during an emergency. And IP networks bring with them significant cybersecurity threats. Policies and industry standards need to evolve to ensure that the resiliency of our networks is not diminished as a result of technology transitions.

The two big casino states, Nevada and New Jersey, are racing into online gambling as a way of protecting their turf.

They will in essence become laboratories for what is and is not feasible in Internet wagering. In the year since online poker became a theoretical possibility in Nevada, no company has yet offered it. One problem: It’s too small a market, especially in a state where it is not exactly hard to gamble the old-fashioned way. In a harbinger of the new age, gamblers at the Borgata casino in Atlantic City will, as USA Today put it, “be able to lose their shirts without wearing one.” Gamblers staying in one of the casino’s 2,000 rooms can now place their bets right there without venturing onto the casino floor. From there it is only a small step to just staying home and gambling from the hammock. Internet companies that make online games are watching all this with considerable interest.