February 2014

'Special Excess': The Secret Broadband, Internet, Cable, Wireless and Phone Networks

[Commentary] Forget about the National Security Agency and the phone networks. There's another secret network you should know about. I call it "special excess," though it's known in the telecom industry as "special access."

You won't hear about these secret wires. For example, when AT&T and Verizon tell us they are losing lines, the special access wires are not part of the accounting, even though they represent the majority of access lines in America. Or when you hear that local service is losing money, the secret is that much of the revenues from these "special" networks are not being added to that calculation and are hidden from sight. Some analysts estimate that they are overcharging the competitors and businesses that use these networks by more than $12 billion annually. Or worse, this network has obscene profit margins of over 100 percent last time there was any data available, which was 2007. And yet there's nothing special about special access lines. They are just more wires and services that are part of the network.

[Kushnick is Executive Director of the New Networks Institute]

Retail Hackers Exploited Holes in Network-Management Software

The hackers behind recent attacks on large retailers such as Target and Nieman Marcus got inside those corporate computer systems through the software used to keep tabs on their sprawling networks, according to a Federal Bureau of Investigation bulletin.

The two-page document suggests retailers could have taken steps to block a potent computer virus that allowed hackers to steal payment card information. Some retailers targeted by the hackers have not yet come forward, according to people familiar with the investigation. The document doesn't mention any retailers by name. But it says the hackers exploited holes in "remote management software," which companies use to monitor and manage their networks, during a recent string of payment card hacks. Connecting that software to payment-card readers at checkout counters "may represent a vulnerability" that, along with poor passwords, allows attackers to infiltrate the network, according to the document.

Will the White House’s big data privacy initiative distract from the NSA debate?

The White House is studying how the growth of "big data" will affect online privacy. Every day, Americans create data points about themselves that are increasingly being collected, analyzed and used by private and public actors alike. These data points can be reveal relationships or personal information from shopping choices to health-care information, but are also used to commercialize services and perform research. But some civil liberties advocates worry that the initiative is an attempt to shift focus away from the National Security Agency's controversial spying programs.

"It's an important issue to study," says Cato Institute Research Fellow Julian Sanchez, "but given the odd timing, I think it read to many folks as -- take your pick -- a distraction, a bone to privacy advocates, or a shot across the bow of tech companies that have been pushing back on NSA." Sanchez's skepticism about the timing was echoed by other privacy advocates.

EPIC Executive Director Marc Rotenberg looks at the project as an opportunity, saying, "we think this is a very important privacy initiative, probably the most important [the administration] has launched since the consumer privacy bill of rights were released two years ago. "He says it's good to see the White House acknowledge one of the "big challenges of the information age" is "reconciling the opportunity of big data with the privacy risks."

The TV Efficiency Revolution

Coming out of the 2012 presidential election, big data was the talk of the town. It has caused a wave of change, resulting in organizations building technology, acquiring data and learning the statistical software R—a free software for statistical computing and graphics. Caught up in this wave is how the biggest line item in any campaign budget is being scrutinized: television.

Traditionally, TV is the largest piece of any campaign budget, and for the first time its effectiveness in reaching voters was being questioned. Most campaigns have relied on a gross rating point (GRP) model to determine reach and frequency of a television buy. The Obama campaign made an effort to change this model by using the “optimizer” to find what persuadable voters were watching across hundreds of television networks. This new strategy dramatically changed the way they bought television. Instead of trying to reach an arbitrary goal of 1000 GRPs, they sought out persuadable voters across 100 different television channels. This allowed the campaign to capture new audiences not found using traditional methods. It’s a strategy that a campaign of any size can adopt if it’s concerned with reaching persuadable voters.

Federal Prosecutors Pursue Digital Piracy Cases

The Justice Department's fight against piracy is going mobile. For the first time, federal prosecutors are building criminal cases against those who allegedly help distribute pirated versions of thousands of apps for Google's Android operating system, which is used in mobile phones. So far, four men from Florida and Oregon have been charged with copyright crimes for allegedly making illegal versions of copyrighted apps or running websites where pay-for apps were available for free download. Other individuals are under investigation and could be indicted soon, according to people familiar with the cases. The prosecutions come amid a heightened Justice Department effort to target the middlemen who run sites that host pirated material, much of which is uploaded by others.

Did Anyone Look at That Ad?

comScore announced a partnership with Google, the leader in digital advertising, to help advertisers figure out who is looking at their ads -- in real time, while an ad campaign is going on -- so brands can make adjustments on the fly and perhaps entice more people to click.

Under the deal, Google will integrate comScore’s Validated Campaign Essentials (vCE) technology for measuring ad performance directly into Google’s DoubleClick ad-serving platform. Initially, the tools will be available to quickly measure how viewers are interacting with video and display ads on the desktop. Eventually, the partners plan to extend the measurements to mobile devices and other platforms, and they hope to persuade the broader advertising and media industries to support the technology.

Impatience Has Its Reward: Books Are Rolled Out Faster

While the television industry has begun catering to impatient audiences by releasing entire series at once, the book business is upending its traditional timetable by encouraging a kind of binge reading, releasing new works by a single author at an accelerated pace.

The practice of spacing an author’s books at least one year apart is gradually being discarded as publishers appeal to the same “must-know-now” impulse that drives binge viewing of shows like “House of Cards” and “Breaking Bad.” “Consumers want to be able to binge-read or binge-watch,” said Christine Ball, the associate publisher of Dutton. “We wanted to give the consumers what they wanted in this case.”

Florida Gets 5-to-1 Return on TV, Film Incentive Program Dollars, Study Finds

The news out of Florida -- that the state saw a five-to-one return on its film and TV incentives spending -- can be seen as good and bad news for California’s struggling production community.

The bad news is that much of the business that produced those returns -- charted in a study commissioned by the Motion Picture Association of America -- very well might have come from Hollywood. The good news is that the positive results provide more firepower for the coalition of studios, guilds, vendors and local politicians that are pressing California legislators to help stop the ongoing exodus of movie and TV production. Pointing to this kind of return can only help this spring, when California lawmakers will decide whether to extend and expand the state’s tax incentive program, currently capped at $100 million.

Apple loses latest bid to block e-books antitrust monitor

Apple lost its latest bid to put a court-appointed antitrust monitor on hold, after the 2nd US Circuit Court of Appeals in New York rejected its argument that the monitor's work was causing it irreparable harm.

FCC Chairman Tom Wheeler Remarks at Silicon Flatirons

The message is simple, so simple it can be summed up in a quote from Abraham Lincoln’s second address to Congress. “As our case is new, so we must think anew, and act anew.”

All of us have observed the growing convergence of previously separate and distinct communications services and with it, inevitably, the growing obsolescence of the Communications Act’s categories -- principally the titles that address common carriage, broadcasting, and cable. While there may continue to be a viable distinction on the consumer, or demand, side, it certainly is no longer true on the production, or supply, side. As we consider the Communications Act, there is one high-level point that deserves emphasis. Internet speed means that even a new Telecommunications Act will be out of date the moment it is signed. The only way to deal with this reality is to have an expert agency capable of being as nimble as the innovators redefining technology and re-drawing the marketplace. In the event that the Commission is thwarted in its ability to apply its expert policy judgment then, in light of the new, ever-changing technology landscape, I believe the best and ultimate outcome would be Congress’s significant modification of the Communications Act. Bigger picture, the FCC has the authority it needs to provide what the public needs -- open, competitive, safe, and accessible broadband networks. Indeed, that we have authority is well-settled. What remains open is not jurisdiction, but rather the best path to securing the public interest. Those are the challenges that the FCC will confront with the Open Internet, the IP transitions, the Incentive Auction, and other issues.

Benton

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