October 2014

Pride, prejudice and precluding infrastructure competition for government-owned networks

[Commentary] It is a truth universally acknowledged that a telco in possession of market power will seek to use its position to foreclose competition. This is true regardless of whether the telco is privately or publicly owned.

Recent events in Australia confirm that governments, when conflicted by their joint roles as network owners and custodians of regulatory policy and legislation, are prepared to sacrifice the benefits of competition in order to pursue redistributive agendas. This is true even if such agendas are more costly for consumers and taxpayers in the long run than doing nothing at all.

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation]

Google’s Schmidt: 'We're going to end up breaking the Internet'

The integrity of the Internet could be at risk if Congress does not act to rein in the National Security Agency, Google’s Eric Schmidt warned.

Speaking alongside other tech executives and Sen Ron Wyden (D-OR) at a Silicon Valley event, Schmidt said the revelations about US surveillance could prompt countries to wall off their networks. “The simplest outcome: We’re going to end up breaking the Internet,” Schmidt said, “because what’s going to happen is governments will do bad laws of one kind or another, and eventually what’s going to happen is: ‘We’re going to have our own Internet in our own country, and we’re going to do it our way.’ ”

Top officials including Attorney General Eric Holder have criticized tech companies like Google and Apple for making their phones inaccessible to anyone except the owner -- even police with a warrant. But the companies are only taking natural steps to respond to the spying, Schmidt said. “The people who are criticizing this should have expected this,” he said.

Appeals court wrestles with secret US demands for telecom records

A US appeals court grappled with a lawsuit challenging the Federal Bureau of Investigation's ability to force Internet and telecommunications firms to turn over customer records without revealing the government's demands.

A lower court judge in San Francisco previously ruled such gag orders were unconstitutional in a lawsuit filed by an undisclosed telecom company. At a hearing, a three-judge 9th US Circuit Court of Appeals panel in San Francisco weighed whether the First Amendment allowed recipients of so-called "national security letters" to discuss them. Judge N.R. Smith, a George W. Bush nominee, asked whether the government should have a greater responsibility to lift the gag order on its own. That would ease the burden on telecom companies who currently have to go to court, he said. Douglas Letter, an attorney for the US Department of Justice, said the FBI does not have the resources to continuously review thousands of national security letters to determine if secrecy is still warranted. "The bureau would not be able to function," Letter said.

Work Continues Toward the #CommActUpdate

Although Congress may not be in session this month, our work continues full speed ahead. As part of our ongoing outreach, committee staff recently commenced bipartisan listening sessions with segments of the communications and technology industry and other stakeholder groups.

These meetings provide our bipartisan staffs an opportunity to dive deeper on specific topics and better understand the issues facing the modern communications marketplace. We are interested in pursuing pro-innovation policies that reflect our evolving economy. It is important to have a firm grip on how our laws impact consumers, job creators, and the market as a whole, and hear directly what ideas are worth pursuing as well as identifying potential landmines to avoid. Listening sessions provide an opportunity to round out the information we’ve already received from our previous hearings and the white paper series. We look forward to moving forward in a bipartisan and productive manner. We will continue gathering information via listening sessions, white papers, staff and member outreach, and direct contact with our constituents. October, and the remaining months of the year provide an important window to prepare as we gear up to legislate next Congress.

Kentucky city threatens to block Comcast/Time Warner Cable merger

Comcast has to convince the federal government to approve its purchase of Time Warner Cable (TWC), but so far the government advancing the most aggressive opposition may be in Lexington, Kentucky.

The city is served by Time Warner Cable, and it isn't happy with the service. The city council "voted unanimously during a council work session … to put two resolutions denying transfer of ownership on the agenda for [an upcoming] council meeting." Comcast's purchase of Time Warner Cable includes a sale of certain territories to Charter. Charter would take over in Lexington after the deal. Lexington's cable franchise agreement with TWC expired in 2012, but hasn't been renewed.

Fighting for communication's future

[Commentary] While we were impressed with the honesty and rigor of our conversation with [Federal Communications Commission Tom] Wheeler, we were disappointed that the meeting was held behind closed doors, particularly in light of the fact that Comcast and its contemporaries visit the commission each and every day. Public meetings are one of the few ways in which everyday people have any chance of counteracting the oversize influence that corporations like Comcast have in American politics. As [Chairman] Wheeler thinks of the dozens of people he met with …, we hope he'll remember the millions filing comments in support of real net neutrality, and the thousands filing against the Comcast-Time Warner Cable merger and in support of diverse local media ownership. And we hope he'll make himself available to hear these voices before it's too late.

[Wolfson is an assistant professor in the Department of Journalism and Media Studies at Rutgers University and co-founder of Media Mobilizing Project]

‘Broad Consensus’ that Media Violence Can Lead to Increased Child Aggression

The vast majority of parents, pediatricians and media researchers all believe that violent movies, video games and television shows can lead to increased aggression in children, according to a new study published in the journal, Psychology of Popular Media Culture. In the past, there was a perception that the field was divided about whether children’s behavior could be affected by violent content. This study dispels that notion completely by showing that, in fact, there is broad consensus that violent content can lead to more aggression.

TV Spending Drives Website Traffic, Revenues: Study

Websites that advertise on television draw more traffic and ultimately more revenue. Those were two of the conclusions drawn from “What’s Driving Digital,” a new study of Nielsen Ad Views data , commissioned by the Cabletelevsion Advertising Bureau, which finds that TV promotion serves as the primary driver of traffic to websites. Moreover, digital players that spend more money on TV ads, generally benefit from higher revenues. The study indicated that the 75 so-called, largest pure-play Internet brands allocated more than $4 billion on TV advertising in 2013, a jump of 37% from 2009 spending levels. Some 85% of this group showed a direct correlation between TV spending and traffic. The 38 advertisers that spent more averaged one-third more unique visitors, while the 25 advertisers that spent less averaged 22% fewer unique visitors. To that end, the study indicated that Priceline cut its TV spending by 26% during the period, and ended up with 24% fewer unique visitors. Conversely, Ancestry.com upped its TV advertising ante by 22% and registered a 21% rise in uniques.

Jimmy Buffett to Spotify: Give recording artists a raise

Singer-songwriter Jimmy Buffett put the chief executive of music streaming service Spotify on the spot, demanding more money for musicians. “Do you see [recording artists] getting a raise directly from you, as opposed to the bull— you have to deal with in going through the labels?” he said during a question and answer session at the Vanity Fair New Establishment Summit, a San Francisco technology conference.

Daniel Ek begged off, saying that Spotify, for the most part, contracts with recording labels and songwriting publishers, who in turn negotiate terms with the artists. The panel moderator, Irving Azoff, owner of Azoff MSG entertainment, told Buffett, a multimillionaire, to “sell one of [his] planes.” Buffett noted he was defending “young, struggling artists.” Ek said Spotify is now paying more than $1 billion annually to labels and publishers, or 70% of its revenue. He agreed it's tough dealing with the labels and songwriting publishers. Spotify was founded in 2008, and “it took three and a half years to get the first licensing done,” he said.

Half of Offline Americans Live in Rural Areas

Americans who don’t use the Internet have more than just their lack of digital communication in common. They are also more likely to be rural, elderly and poor.

About 48% of the 50 million Americans who haven’t gone online in the last year live in nonmetro areas, according to a new report from McKinsey & Company, a management consulting firm. In contrast, only about 15% of the overall U.S. population lives in nonmetro areas. That means the average rural resident is three times more likely to be offline than the average urban resident. Eighty percent of people who don’t use the Internet are lower income, and more than half of the offline population is aged 55 and up.

Benton

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