July 2014

Now on Your Cellphone Bill, Services You Never Wanted

For years, phone carriers have wanted to find ways to make it easy for mobile customers to buy things and charge them to their phone bills. That has legitimate uses, like buying ringtones and apps, or even making political donations or financial pledges to a nonprofit radio station. But it is easily abused, in ways not always easy to spot: Consumers, for instance, could start getting text messages about sports scores or horoscopes for which they never wanted to sign up.

As with 900 numbers, it’s ripe with potential for abuse, and in some cases that potential has become reality,” said Jan Dawson, an independent telecom analyst for Jackdaw Research.

Such practices recently returned to the spotlight when the Federal Trade Commission filed a lawsuit accusing T-Mobile USA of profiting from “cramming” -- the tacking on of unauthorized charges that appear, often without a coherent explanation, on customers’ bills.

The practice of cramming is common on bills for traditional phone lines, but only recently began to appear on bills for mobile phone usage. Regulators say that in the context of cellphones, cramming typically occurs when a user is browsing the web with a smartphone, encounters an advertisement and inadvertently agrees to something. The phone number then subscribes to a text-message service, which delivers texts on topics like celebrity gossip, dating and the weather for a monthly fee that is usually around $9.

Despite those consumer protections, some companies still manage to drop in those extra charges on unwitting consumers. Since 2010, the Federal Communications Commission has taken nine anti-cramming enforcement actions against companies and proposed more than $33 million in fines. That is much less than 1 percent of the amount consumers may have lost to cramming charges in the same period.

Russian lawmakers pass new bill restricting Internet

Russia's parliament passed a bill requiring Internet companies to store Russians' personal data inside the country in an apparent move to pressure sites such as Facebook and Twitter into handing over user information.

Introducing the bill to parliament, MP Vadim Dengin said "most Russians don't want their data to leave Russia for the United States, where it can be hacked and given to criminals."

"Our entire lives are stored over there," he said, adding that companies should build data centres in Russia. The bill would increase pressure on social networking services which do not have offices in Russia and have become a vital resource for anti-government groups.

Both Facebook and Twitter refuse to hand over user data to governments.

FCC’s ‘fast lane’ Internet plan threatens free exchange of ideas

[Commentary] The world was introduced to Kickstarter when our Web site went live in 2009. One thing we didn’t have to worry about: access to the Internet. We didn’t have to negotiate a deal with a cable company or other Internet service provider (ISP). Such roadblocks would have created enormous logistical and financial hurdles -- ones so big they might have shut us down before we got started.

But that’s the world that start-ups will be born into if the Federal Communications Commission moves forward with its proposed rules allowing paid prioritization -- a system where Internet carriers can charge for access to a “fast lane.” Once a fast lane exists, it will become the de facto standard on the Web. Sites unwilling or unable to pay up will be buffered to death: unloadable, unwatchable and left out in the cold.

It won’t be enough anymore to have a great idea and to execute it well. New entrepreneurs will have to pay their ISP tax, too. This proposed system would incentivize entrepreneurs to divert resources from their customers and staff and into paid deals with ISPs. Trading healthy competition for deep pockets is a terrible way to create an innovative, competitive economy.

It’s also a terrible way to promote a vibrant culture and informed citizenry. Allowing paid priority access and content discrimination would threaten the free exchange of ideas that takes place online, between people from all around the world, every second of every day. That free exchange is key to what makes the Internet such a powerful force.

[Strickler is chief executive and co-founder of Kickstarter]

Nielsen: 2014 digital music sales plummet compared to 2013’s first half

Nielsen Soundscan released its annual mid-year US music sales report, and it touted the biggest musical movers and shakers of 2014 to date.

However, while the rest of the top-20 singles chart was full of million-plus selling songs, no other full-length album broke the million mark, and the total numbers compared to 2013 were drastically lower.

Total album sales, combining physical and digital numbers, were down 15 percent to 121 million, and while Nielsen didn't confirm how the album numbers split, the announcement of a 13 percent drop in digital singles sales was indicative that MP3s weren't picking up the sales slack. The digital-single drop of nearly 90 million sales, down to 593.6 million, also didn't see an equivalent boost in streaming numbers on services such as Spotify; those rose 42 percent to 70.3 million streams, but that was only a jump of 20 million.

The numbers didn't clarify whether streaming services saw any major jumps in subscription purchases in 2014, as well.

Op-ed

Decision Time: Fast Lanes for the 1% and Slow Lanes for the 99%?

TESTIMONY OF HON. MICHAEL J. COPPS
SENATE JUDICIARY COMMITTEE FIELD HEARING
“PRESERVING AN OPEN INTERNET: RULES TO PROMOTE COMPETITION
AND PROTECT MAIN STREET CONSUMERS”
BURLINGTON, VT
JULY 1, 2014

The journal that published Facebook’s psychological study is raising a red flag about it

Facebook's newsfeed study isn't just controversial among Internet users and academics, it turns out. Now, even the journal that published Facebook's research says it has reservations about having done so. The Proceedings of the National Academy of Sciences, one of the top scientific journals in the country, said it was publishing an editorial expression of concern regarding Facebook's study.

Although Facebook didn't technically break any rules on human-subject research, the journal said, Facebook's research "may have involved practices that were not fully consistent with the principles of obtaining informed consent and allowing participants to opt out."

Expressions of concern are a way for scholarly journals to notify readers of potential problems in published research, though PNAS said it did not believe Facebook needed to comply with the paper's human-subject research policies. PNAS added in a statement to the Washington Post that the announcement was aimed at acknowledging concerns about the research and that it does not intend to investigate the study further.

Authors weigh in on Amazon, Hachette dispute

The clash between Amazon.com and publishing giant Hachette has taken a new turn, as hundreds of authors asked readers to write e-mails to Amazon's chief executive Jeffrey P. Bezos to protest the web retailer's tough tactics.

One letter, spearheaded by author Douglas Preston and signed by nearly 400 authors -- including Stephen King, Pulitzer Prize winner Robert A. Caro and novelist ames Patterson -- takes Amazon to task specifically for not accepting pre-orders on Hachette authors' books, not discounting the prices of many Hachette books and slowing the delivery of many Hachette titles to consumers' doorsteps.

"We have made Amazon many millions of dollars and over the years have contributed so much, free of charge, to the company by way of cooperation, joint promotions, reviews and blogs. This is no way to treat a business partner. Nor is it the right way to treat your friends," the authors wrote.

Privacy, Civil Liberties and the NSA

[Commentary] On July 2, the Privacy and Civil Liberties Oversight Board released a detailed analysis of U.S. surveillance programs. The headline-grabbing conclusion of the research is that a set of National Security Agency programs that collect vast amounts of Internet communications from U.S. companies has proved to be an effective intelligence tool, but that some aspects bordered on unconstitutionality. The board said that the NSA programs need better safeguards for protecting Americans' communications scooped up in the process. One of the goals of the board in writing the report has been to increase transparency about U.S. surveillance. In addition to this effort to explain the program, the board has set forth a series of policy recommendations designed to ensure that the program appropriately balances national security concerns with privacy and civil liberties. As you pack up for July 4 weekend, we thought we’d take a closer look at what the Privacy and Civil Liberties Oversight Board is and what it found out about the NSA.

Urban libraries say they’re getting shortchanged in a battle for Wi-Fi funding

As far too many of us have learned as a result of the recession, the public library is often the only place where out-of-work Americans can go to apply for jobs and unemployment benefits online. In many cases, the only way libraries can afford to offer those services is with help from the federal government. Through a public program known as E-Rate, Washington gives institutions a bit of money each year to defray the costs of buying Internet service and equipment.

That initiative got a big boost recently, with the Federal Communications Commission announcing plans to spend $1 billion a year for the next two years on better Wi-Fi, amid a broader push to modernize the E-Rate program. Now the FCC has to decide how to divide up that $2 billion -- and libraries are smack in the center of a brewing fight about it. Library directors from five cities, including Seattle, Memphis and Hartford (CT), have sent letters to FCC Chairman Tom Wheeler saying that they stand to be shortchanged if the commission moves forward with a plan to tie the money to the square footage of their facilities.

Under the proposal, the FCC would give libraries a budget for WiFi funding at a rate of $1 per square foot -- which some say isn't nearly enough. "Wi-Fi costs are not merely a function of the square footage of a room with wireless connectivity," wrote Matthew Poland, chief executive of the public library system in Hartford (CT). "Wi-Fi performance is a function of users."

Poland argued that other libraries -- such as those serving wealthy suburbanites -- tend to be bigger. Not only would the proposed formula give more funding to suburban facilities, but those libraries would be taking in money that might be put to better use elsewhere. Inner-city libraries, Poland wrote, serve more users in a tighter space; their patrons tend to be less wealthy and disproportionately unemployed or under-employed. The upshot: It isn't fair for large, rich libraries to get even more money when small, needy libraries might get less.

EPIC Complains to FTC About Facebook Emotion Study (corrected)

CORRECTION: Our headline originally stated EFF filed the complaint.

A leading privacy group filed a formal complaint with the Federal Trade Commission over a 2012 study in which Facebook manipulated the news feeds of nearly 700,000 users of the social network to see what effect the changes would have on their emotions.

The group, the Electronic Privacy Information Center, said Facebook had deceived its users and violated the terms of a 2012 consent decree with the FTC, which is the principal regulatory agency overseeing consumer privacy in the United States.

“The company purposefully messed with people’s minds,” the advocacy group wrote in its complaint. “At the time of the experiment, Facebook did not state in the Data Use Policy that user data would be used for research purposes. Facebook also failed to inform users that their personal information would be shared with researchers.”