November 2014

An Internet Tax Save

[Commentary] The Internet is safe from new online sales-tax burdens, at least for the rest of 2014.

That’s the reassuring news from House Speaker John Boehner (R-OH), who put a fork in a Senate plan to let America’s 9,600 state and local taxing authorities plunder the Internet. As the saying goes, no one is safe when the legislature is in session. And that goes double for a lame duck session in the twilight of Sen. Harry Reid ’s (D-NV) tenure as Majority Leader. The danger is heightened because the moratorium on Internet access taxes is due to expire Dec. 11. A bipartisan Senate tax cabal led by Sens Reid, Dick Durbin (D-IL) and Mike Enzi (R-WY) has been trying to meld the popular moratorium with a separate measure that would force online merchants to collect sales taxes for all of those 9,600 revenue departments, even in places where the merchants have no physical presence.

But a Boehner spokesperson said, “The Speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year.” He added that “the House and Senate should work together to extend the moratorium on internet taxation without further delay.”

Cell phone dead zones bring a call for more towers

If you look at a map of a cell phone provider’s service, there are large swaths of the country that have no cell signal. The solution seems simple: Erect more cell towers. But Verizon and AT&T say the rugged terrain in places like Oak Creek Canyon (AZ) makes that too difficult. Sprint says erecting towers in places with few people is just too expensive. The cost to install a cell phone tower is about $25,000, and that’s not including the necessary permits.

$2 Billion and Counting

[Commentary] Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it.

Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work. Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists. A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then. And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify -- we’re working day and night to recover money for artists and the music business that piracy was stealing away. There are at least three big misconceptions out there about how we work, how much we pay, and what we mean for the future of music and the artists who create it.

Let’s take a look at them:

Myth number one: free music for fans means artists don’t get paid.
Myth number two: Spotify pays, but it pays so little per play nobody could ever earn a living from it.
Myth number three: Spotify hurts sales, both download and physical.

European Antitrust Regulators to Hold Discussions With Google’s Rivals

European antitrust regulators will hold discussions with the companies most concerned by Google’s business practices before deepening existing investigations or resolving them, the new competition commissioner for the European Union said. Google has faced an increasing barrage of criticism in Europe, where there is widespread concern about how United States technological dominance could affect personal privacy and the ability of European rivals to compete effectively. “I need to know what those most directly affected by the practices in question have to say,” Margrethe Vestager, the new commissioner, said in a statement after a question about Google from a member of the European Parliament. “I will therefore need some time to decide on the next steps.”

The high price of the Google guarantee

[Commentary] Let’s call it the Google guarantee. It may well be the future of the internet. Send a message or email, swap a photograph, engage in some banter with friends via a games app and you can be certain of one thing. The company standing behind these digital exchanges will ensure that your words, images and expressed intentions are forever secure from the prying eyes of state intelligence agencies.

There is a really big question behind all this. It is about who gets to decide what in a democracy. Should it be the masters of the commercial internet or, more prosaically, should it be the elected politicians who make laws and the independent judges charged with upholding the rule of law? All but the most extreme libertarians will accept that there is a balance to be struck between the privacy of the individual and the state’s duty to safeguard the security of wider society. Different nations will make different choices.

Net Neutrality Debate: Internet Access and Costs Are Top Issues

[Commentary] President Barack Obama suggested classifying consumer broadband as a public utility, allowing the Federal Communications Commission to set precise proscriptions covering quality of service. In principle, this makes sense.

It is hard to overstate the importance of broadband to America’s economy and society. Free to do as they pleased, the clutch of companies that control access to the Internet would have enormous power to determine what information reaches Americans online. But would the cure be worse than the disease, entangling the Internet in an endless fight over regulation and perhaps slowing investment in one of the nation’s most vital services? To some extent, it depends on how you view the threat. For Gene Kimmelman, president of the advocacy group Public Knowledge, what’s at stake is no less than American democracy. Left free to decide which content flowed through their pipes, broadband providers could deploy their power in the service of their political preferences.

The more prosaic -- though actually trickier -- issue net neutrality is meant to address is about price. Should broadband providers be allowed to charge providers of content differentially for different speeds or tiers of services? Consumer groups and free speech advocates like Public Knowledge argue this is a surefire way to split the Internet into “haves” and “have-nots.” The smart kid with the clever new idea would no longer be able to compete with the zippy websites of established players in the fast lane. The Internet would lose its garage-based engine of creativity.

Still, the threats articulated by the staunchest defenders of a neutral Internet do not quite amount to an imminent danger, nor do they necessarily call for an all-out embrace of traditional regulation. Stopping unreasonable discrimination can be done at a lower cost, on a case-by-case basis that does not imperil perhaps the most important objective of all: extending the Internet to all Americans.

Comcast agrees with President Obama on network neutrality, except for the legal bit

A day after President Barack Obama jolted the telecom industry with a bold announcement on network neutrality, Comcast declared that it agrees with him – on every point. Comcast says it is totally against “blocking,” “throttling,” “paid prioritization” and the other types of mischief that net neutrality is intended to prevent. In response to Obama’s various policy positions, Comcast stated over and over again “We agree and that is our practice.”

But there is one caveat: “There is one important technical legal difference of opinion between the President and Comcast: we do not support reclassification of broadband as a telecommunications service under Title II.” In other words, Comcast likes Obama’s ideas just fine in theory, but not in practice. And while the company frames the disagreement as a “technical legal difference,” the distinction between Title II (what President Obama wants) and the Section 706 (what Comcast wants) is in fact totally monumental. Also, why Comcast is quick to say that “no blocking” and “no throttling” is its practice, the company might have added that it is currently under a legal order to abide by net neutrality until 2018 -- which was a promise it had to make when it swallowed content giant NBC.

FCC GOP Members Hot Over Program Contracts Vote

The cat cannot be put back into the bag and the bell cannot be unrung. With those colorful characterizations amidst some tough talk, Federal Communications Commission members Ajit Pai and Michael O'Rielly expressed their disaffection, and registered their official dissent, from the FCC's vote to allow third parties to view commercially sensitive programming contracts provided the FCC as part of its vetting of the Comcast/Time Warner Cable and AT&T/DirecTV merger reviews.

A majority of FCC commissioners voted to allow that third party access, upholding the FCC Media Bureau’s decision rejecting programmer challenges to the third parties seeking access and to the Media Bureau's modification of its protective order to try and assuage programmers concerns. Commissioners Pai and O’Rielly were not happy with either the product or the process.

Average NY Cable Home Tunes To 25 Networks Per Month

About 74% of tuning hours in Cablevision Systems and Time Warner Cable homes are done outside of primetime, and the average household tunes to 25 channels per month, with 90% of the tuning hours being consumed on 100 networks, the cable companies found in a new report that tabulates tuning data from the New York market.

Among the findings -- with new, more granular insights for marketers that are targeting the influential DMA -- are that roughly 21% of local news tuning (Monday through Friday, 6-9 a.m.) across broadcast and local cable origination stations is exclusively on News 12 and NY1, the cable news channels owned and operated by Cablevision and Time Warner Cable, respectively.

Google Fiber is selling to businesses in limited neighborhoods for $100 a month

Google has begun to solicit customers for its first Internet service geared not for homes but for businesses. The company said it would charge $100 a month for broadband speeds of 1 gigabit per second through its new Google Fiber service for small businesses.

Only businesses in a handful of neighborhoods in Kansas City (MO) and Kansas City (KS) will be able to buy the service. Those neighborhoods are roughly bordered by Armstrong Avenue, 18th Street, Central Avenue and Interstate 70 in Kansas City (KS). In Kansas City (MO), the area is roughly bordered by the state line, Gregory Boulevard, the Paseo, and 75th and 79th streets.

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