July 2014

T-Mobile Disguising Throttling with New Speed Test Data Cap Exemptions

[Commentary] On the heels of T-Mobile’s controversial announcement that it will be exempting many popular music streaming services from its data caps, the “Uncarrier” has also confirmed that it will be exempting the Ookla speed test and other online speed testing applications as well.

Unlike AT&T and Verizon, T-Mobile does not charge subscribers overage fees when they exceed their data caps. Rather, T-Mobile throttles network speeds for customers who go past a predetermined data allotment. Depending on the type of plan, customers that exceed the “Data Speed Reduction Threshold” can receive maximum speeds ranging from 50 to 128 Kbps -- speeds that don’t even meet the Federal Communications Commission (FCC) 1999 definition of broadband.

By exempting speed tests from the throttling, T-Mobile is effectively preventing consumers from learning exactly how slow their throttled connections are. Under the new policy, T-Mobile customers who exceed their data caps will not be able to gauge the actual speeds available to them for the vast majority of their daily usage.

T-Mobile has justified the move on the basis that it more closely adheres to the true intent of online speed tests, but this doesn't make sense, because whenever customers who have hit their caps use the Ookla application, they are trying to measure their true network speed -- not the speed no longer available to them. The inability for customers to estimate the actual speeds they are receiving serves mostly to disguise the carrier’s throttling policies.

The decision also harms customers, who will lose the ability to plan their mobile broadband activities around the actual speeds that they are receiving.

Total US Ad Spending to See Largest Increase Since 2004

Total media ad spending in the US in 2014 will see its largest increase in a decade, according to new figures from eMarketer.

On the strength of gains in mobile and TV advertising, total ad investments will jump 5.3% to reach $180.12 billion, achieving 5% growth for the first time since 2004, when ad spending increased 6.7%. Mobile will lead the 2014 rise in total media ad spending in the US, and advertisers will spend 83.0% more on tablets and smartphones than they did in 2013 -- an increase of $8.04 billion.

By the end of 2014, mobile will represent nearly 10% of all media ad spending, surpassing newspapers, magazines and radio for the first time to become the third-largest individual advertising venue, only trailing TV and desktops/laptops.

Though investments in TV advertising will rise just 3.3%, advertisers will spend $2.19 billion more on the medium than they did in 2013, making it the second-leading category in terms of year-over-year dollar growth. Strong, steady growth in mobile advertising will push digital ads to represent nearly 30% of all US ad spending in 2014. Advertisers will invest more than $50 billion in digital channels in 2014 for the first time, an increase of 17.7% over 2013. Just over one-third of that will come from mobile, but by 2018, mobile will account for more than 70% of digital ad spending.

Sandberg: Facebook Study Was ‘Poorly Communicated’

Facebook 's psychological experiment on nearly 700,000 unwitting users was communicated “poorly,” Sheryl Sandberg, the company’s No. 2 executive, said.

It was the first public comment on the study by a Facebook executive since the furor erupted in social-media circles.

“This was part of ongoing research companies do to test different products, and that was what it was; it was poorly communicated,” Sandberg, Facebook’s chief operating officer, said. “And for that communication we apologize. We never meant to upset you.”

T-Mobile: FTC Charges 'Unfounded and Without Merit'

T-Mobile refuted charges by the Federal Trade Commission (FTC) that it had bilked customers for hundreds of millions of dollars in erroneous SMS charges. CEO John Legere called the complaints “unfounded and without merit.”

The FTC claims that T-Mobile took in 35 to 45 percent of the revenue from SMS services like “flirting tips, horoscope information or celebrity gossip” that typically charge $10 monthly. The Commission also alleges that T-Mobile continued collecting money off these charges even after it had reason to believe the charges were fraudulent.

Legere noted that T-Mobile has been fighting to add more transparency to the industry. “We exited this business in late 2013, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action,” Legere wrote. “We are the first to take action for the consumer and I am calling for the entire industry to do the same.”

World Cup Mania Shows How Sports Is Driving Biggest Mergers

More Americans have watched the US soccer team in this World Cup than ever before. The two biggest announced acquisitions in the world in 2014 are for US pay-TV operators. Yes, there is a connection.

AT&T’s bid for DirecTV, and Comcast’s merger with Time Warner Cable, totaling a combined $134 billion, are tied together by a thread that today is driving many of the decisions in the world of pay-TV: Sports. AT&T will buy DirecTV only if the satellite-TV provider renews its exclusive Sunday night package of football games. Time Warner Cable is selling because it’s losing customers rebelling against high cable bills -- caused in part by the soaring cost of obtaining sports rights.

The two deals are prime examples of how sports programming’s immense popularity has become both the cause of, and solution to, pay-TV’s slowdown. Much of the value of sports programming for pay-TV operators stems from its immediacy. Unlike shows that can be watched later on Netflix, sports are typically watched in real time. This is great for advertisers, because commercials aren’t as frequently skipped, and it’s great for the pay-TV systems, because online options can’t offer a comparable substitute. The result: More media consolidation is on the way.

Microsoft admits to technical error in IP takeover, but No-IP still down

Microsoft admitted it made a technical error after it commandeered part of an Internet service's network in order to shut down a botnet, but the Nevada-based company says its services are still down.

A federal court in Reno granted Microsoft an ex-parte restraining order that allowed it to take control of 22 domains run by No-IP, a DNS (Domain Name Service) provider owned by Vitalwerks, which was served the order.

Microsoft alleged the domains were being abused by cyber criminals to manage and distribute malware.

It was the tenth time Microsoft has turned to the courts to take sweeping action against botnets, or networks of hacked computers. Although No-IP was not accused of wrongdoing, Microsoft maintained the company had not done enough to stop abuse on its networks.

Microsoft's intention by seizing the domains was to block only the computers using No-IP's services that were being used as part of a botnet. But "due to a technical error, however, some customers whose devices were not infected by the malware experienced a temporary loss of service," according to an email statement from David Finn, executive director and associate general counsel of Microsoft's Digital Crimes Unit. He claimed that No-IP's services were restored at 6 a.m. Pacific Time on July 1. No-IP spokeswoman Natalie Goguen wrote via email that Microsoft made a technical change the following day to forward legitimate traffic back to No-IP, but "it didn't do anything."

ISPs, communication firms file legal complaint over UK GCHQ spying

Seven Internet service and communications providers worldwide have filed a legal complaint against the UK's spy agency GCHQ in light of the Snowden revelations.

The complaint was filed on July 2 by US firms RiseUp and May First/People Link, the UK's GreenNet, Netherlands-based Greenhost, Zimbabwe's Mango, Korean firm Jinbonet, Germany's Chaos Computer Club and Privacy International in collective action against GCHQ's intelligence activities.

The organizations say they are calling for an end to GCHQ's "attacking and exploitation of network infrastructure in order to unlawfully gain access to potentially millions of people’s private communications."

The complaint was filed with the UK's Investigatory Powers Tribunal, an organization that investigates complaints against public bodies. The claimants assert that GCHQ's "attacks on providers" are not only illegal, but are destructive and undermine the "goodwill organisations rely on."

In addition, the claimants say that the government's actions have damaged trust placed in security and privacy. GCHQ and the NSA's network exploitation and intrusion capabilities, including covert data injections, also come under fire within the complaint.

Russia may force web firms to store Russians’ personal data within its borders

The Russian parliament, the Duma, has passed a bill that would require web service providers to store Russians’ personal data within the country’s borders.

The bill was passed on its first reading.

This is a similar move to that proposed in other countries such as Brazil, following Edward Snowden’s US National Security Agency revelations. However, Brazil dropped its plans for mandating local data storage.

If approved by the Federation Council, the Russian requirement will go into effect in September 2016, meaning companies like Google and Twitter would need to establish data centers in Russia by then if they want to continue trading legally there.

What is more, those that don’t comply may find their services blocked on the order of telecommunications regulator Roskomnadzor, according to Lenta.ru. In other words, this may be a precursor to the shutting-off of major international web services in Russia at some point in the coming years.

Layoffs at Wall Street Journal as Part of Newsroom Re-evaluation

The Wall Street Journal has cut between 20 and 40 staff members in recent weeks, according to people familiar with the matter, as part of a re-evaluation of its newsroom that came at the end of its financial year.

Some of those laid off were informed at the end of June, which also marked the final days of the newspaper’s fiscal year. The layoffs have not been announced to the newsroom staff, according to two people familiar with the matter.

Dow Jones, the Journal’s parent company, declined to answer specific questions on the layoffs, or confirm the details, but provided a statement saying it had been evaluating the newsroom “to target areas for growth and deploy our resources globally.” As a result, Dow Jones said, “we will be eliminating certain positions.”

Those laid off include veteran reporters and editors at the newspaper.

The new Bloomberg Media

Bloomberg LP media group employees have been informed that the first in a planned suite of "digital-led multi-platform brands," a politics site being developed by high-profile political journalists and "Game Change" authors John Heilemann and Mark Halperin, both poached by Bloomberg in May with annual salaries reported to be north of $1 million, will debut on October 6 -- 30 days before the 2014 Midterms -- in tandem with a daily half-hour television show hosted by the duo that will air in Bloomberg TV's 5 p.m. timeslot as well as streaming online.

Bloomberg Businessweek editor-in-chief Josh Tyrangiel, who's been working closely with Smith on the media-group strategy, described the show as "much closer to 'Pardon the Interruption' on ESPN than 'Meet the Press,'" according to a partial transcript provided by a source.

"One of our biggest advantages in politics is we are not ideological, we are not a sewer." (Presumably the show will share the name of the site: Bloomberg Politics.)

The next launch in the sequence is expected to be Bloomberg Business, which will align with the content of Businessweek and businessweek.com. There had been talk of launching the business site ahead of Bloomberg Politics in September, but the internal target is now looking more like December, according to sources with knowledge of the roll-out.

Other digital launches in the hopper include Bloomberg Markets, a financial title, and the luxury-oriented Bloomberg Pursuits, which is being overseen by Vanity Fair veteran Chris Rovzar; they will align with the respective print magazines of the same names. A tech site is also being discussed, sources said.

Benton

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