March 2015

The Expanding Opportunities for Broadcasters Coalition Says Its Auction Formula Tops FCC's

If broadcasters want to get more for their spectrum in the Federal Communications Commission's reverse auction in 2016, the Expanding Opportunities for Broadcasters Coalition says they need to back the EOBC formula for calculating the opening bids. With the EOBC formula, the group says, the value of TV spectrum in the opening round of bidding would increase by 73 percent. And the higher the opening bid, the EOBC says, the higher the final bid will likely be.

Since prices only go down in a reverse auction, "it's better to go down from a higher price than from a lower price," said EOBC Executive Director Preston Padden. The FCC currently bases its opening bids on the protected contours of the selling station. "Our reweighting of the FCC formula gives broadcasters the credit they deserve for the spectrum they occupy beyond their own service area -- spectrum that the FCC wants to buy at a discount," the EOBC says.

Internet retailers face looming duty to collect out-of-state tax

Online shopping is hugely popular but not with state governments. For years, states have complained the Internet shopping boom is costing them billions in tax revenue thanks to a long-standing law that prevents them from taxing distant retailers. That’s set to change after a March 3 Supreme Court decision that opens the door wide for states to expand their tax collection powers, and that will likely affect Amazon as well as smaller Internet retailers.

In the ruling, Justice Anthony Kennedy said that the growth of the Internet means it’s time for the top court to revisit a 1992 decision called Quill, which held that states can’t force a business to collect tax in a given state unless it has a physical presence there. The ruling comes at a time when main street retailers are increasingly upset at online competitors who, they say, offer lower prices since they don’t have to charge tax. Those retailers have been pushing the Marketplace Fairness Act, a bipartisan bill that would eliminate Quill as an obstacle for out-of-state tax collection, but one that has repeatedly failed to pass Congress. But now the Supreme Court decision could make the Marketplace Fairness Act unnecessary. Instead, state governments may now be emboldened to simply write new tax collection laws, and then rely on Justice Kennedy’s words if they are challenged in court.

Google Wants to Make Wireless Airwaves Less Exclusive, Cheaper

Google wants to make the wireless industry less exclusive by facilitating the use of cheap airwaves to lower the barriers to entry, said Google executive Milo Medin. Google is pursuing at least two separate routes to expand wireless service. One is the conventional wireless offering it is planning to detail in the coming months. The company said the service will be on a small scale and represent an effort to demonstrate new technologies.

The other project that Medin discussed on March 2 is separate. He’s backing the Federal Communication Commission’s proposed Citizens Broadband Radio Service, which would free up a large swath of inexpensive airwaves that anyone could use. Medin said Google wants to build a database and act as traffic cop to help such users as schools, hospitals and local governments exploit some of those airwaves. “Anybody now could be an LTE operator,” he said, referring to the faster wireless broadband service touted by the big carriers.

Google, Facebook, LinkedIn Want to Make Sure They Have Space to Grow

Some of Silicon Valley’s biggest companies are on a real estate buying binge, paying premium prices to make sure they have enough space for future expansion. Facebook is the latest to dive in, agreeing in February to spend $395 million for Menlo Science and Technology Park, a jumble of 21 low-slung warehouses and office buildings 30 miles southeast of San Francisco (CA). It’s now home to an orthopedic surgical tools company, a supermarket distribution center and a storage facility for an office-furniture company. “We’re going to grow over time,” said John Tenanes, head of real estate for the social-networking giant, whose headquarters are across the road. “We just want to be prepared when that happens.”

In 2014, Google paid more than $1 billion to buy at least 19 properties in Silicon Valley, ranging from warehouses near its headquarters in Mountain View (CA), to a 935,000-square-foot office portfolio in nearby Redwood City (CA). In all, it has spent more than $2.5 billion on property in the area since 2005. “It’s a race for space,” said Jed Reagan, an office market analyst at Green Street Advisors. “A lot of these companies are growing like crazy and the Silicon Valley and San Francisco markets are getting very tight.” It is driven, he said, by “a very bullish view of the world.”

What Hillary Clinton's e-mails hide about Washington

[Commentary] There looks to be little doubt that Hillary Clinton violated the spirit of the Federal Records Act, if not the letter of it, by forgoing an official e-mail address and exclusively using her "homebrewed" address. But Clinton's real sin here might be clumsiness: that legislation, and similar efforts to ensure transparency, are violated all day, every day. Clinton simply dispensed with the illusion of compliance.

The case of Jeb Bush is a helpful counterpoint here: he turned over tons of e-mails from his time as governor of Florida. But he also, through that period, used Jeb@Jeb.org for personal, political, and fundraising matters -- and he didn't turn over all of those e-mails. Who knows what lurks among them? Clinton's case is unusual, but Bush's is not -- and it speaks to the gaping holes in our transparency laws. This isn't to excuse Clinton. She should have used an official e-mail address, and she didn't. But if she had used an official e-mail address for her banal communications while carefully hiding her more impolitic missives, few would know to fault her, but the cause of transparency would not be much better served. Clinton deserves the opporbrium she's getting. But she's just an extreme example of a widespread problem.

Full-Frontal Advertising: The Slow Reveal

[Commentary] Is advertising finally full-frontal? In 2014, I predicted the convergence of the long-hyped television upfronts and the relatively newer digital content “new fronts,” suggesting that while it may not take place tomorrow, it won’t take forever, either. I called the convergence “full-frontal” advertising.

In 2015, as we approach the upfront season again, the question remains: How much closer are we to seeing full-frontal, and how many layers need to be peeled back before we get there? We’ll move toward a full-frontal world one reveal at a time, while the television world and the digital world are courting one another. Over the next year, we’ll see real opportunities for advertisers and agencies interested in full-frontal advertising to take advantage of the technology, data and inventory currently available. Full-on full-frontal may still be a few years away, but the opportunity to put a bit more skin in the game is clearly here.

[Scott Ferber is the CEO of Videology]

FCC's Sohn says Google, Facebook had little say on net neutrality

The Federal Communication Commission’s landmark decision on network neutrality has produced all sorts of speculation about the degree to which well-known tech giants shaped the outcome. “The fact of the matter is that Google and Facebook sat this one out … I don’t what this person is smoking” said FCC lawyer Gigi Sohn in reference to a Gawker story. According to Sohn, FCC Chairman Tom Wheeler’s ultimate decision did not come about as a result of pressure from corporations or the White House.

Instead, she said Chairman Wheeler (who is not a lawyer) came to reassess the situation after learning about various legal nuances, and in response to a series of external developments, including a time in Spring 2014 when his Netflix service started sputtering. Sohn did, however, credit the White House and members of Capitol Hill for providing “covering fire” as it became clear that Chairman Wheeler’s office intended to go forward with reclassification. She added that the FCC’s final decision did not come about as a result of any single factor (including comedian John Oliver), but rather from broad public support.

AT&T’s privacy plan may be short-lived and may not even be as bad as we think

AT&T hit a nerve with its privacy-eroding Internet Preferences Plan, which lets customers surf the web at gigabit speeds but also lets the telecommunication company see what sites they visit in order to serve up relevant ads. AT&T’s plan may be short-lived, however, if the Federal Communications Commission takes action under its new network neutrality rules.

Under Section 222 of Title II of the Communications Act that the FCC recently decided to implement as part of its net neutrality order, the agency can do something about Ma Bell’s plan. The next question is whether or not the FCC would use it. In any case, AT&T may catch less of your web surfing than you fear. Under AT&T’s own terms and conditions of the plan, it’s unclear how much of your web surfing Ma Bell can actually track in the first place since more sites have begun using the secure https protocol. No matter what AT&T is using, it is clear that it will not collect information from secure web sites that use https.

To truly solve the issue, you can pay more and hope that your packets somehow avoid AT&T’s packet sniffing (or are you just avoiding the advertising emails?) or you can write the FCC a letter complaining that AT&T’s Internet Preference Plan invades your privacy in a way you think violates Section 222 of Title II. Or maybe you can hope John Oliver picks up on this story and calls Tom Wheeler a dingo again.

How Do Municipalities of Different Sizes Use the Internet?

How are municipalities using the Internet today? Can current uses help predict which are more likely to embrace the Internet of Everything? An online survey conducted in partnership with the National League of Cities -- emailed to city clerks in three waves during the fall of 2014 -- received 121 valid responses.The results of this survey have made three things clear:

First, more education is needed for public officials and residents in general on what broadband is and the type of connections available. This basic knowledge can help with advocacy and broadband availability efforts.

Second, a clear relationship exists between a municipality's size and the availability of online services for its residents and businesses, as well as its social media presence. The reasons for these are mainly two: being unable to afford an online services platform, and/or hiring additional staff to manage social media presence. More importantly, however, is a lack of perceived need for these services. But the need is clear -- certain age groups, specifically millennials, see these services as a quality of life issue -- not as a luxury or passing fad. And today, citizens expect to communicate with government, as they do with private businesses, using social media and other Internet-based applications.

Third, the relationship seen with online services, social media presence and municipal size may also, unfortunately, apply to IOE and big data strategies. Lack of resources and perceived need (or lack thereof) could be the main reasons, but because these are becoming quality of life components, municipalities -- regardless of size -- must make them a priority.

Responsive cities -- as defined and discussed in the book with the same title -- are benefiting from big data and IOE. Smaller municipalities also need to join this bandwagon as they transition to the digital age.

[Dr. Roberto Gallardo is a faculty member of the Extension Center for Technology Outreach
Dr. William Hatcher is an Associate Professor in the Department of Government at Eastern Kentucky University]

Let roaming fees hang around for a while longer, EU countries say

The Council of the European Union -- the part of the EU legislature that represents member states -- has formally laid out its stance on changing incoming legislation around roaming and network neutrality. This means negotiations with the European Parliament can formally commence, and as some parliamentarians warned, this will be a feisty fight.

The Council’s position opposes the Commission and Parliament’s original intention of eliminating roaming surcharges for those travelling within the EU by the end of 2015. Instead, from mid-2016 people would get to use a daily 5MB “basic roaming allowance” when crossing borders that would be the same as domestic mobile data costs. Above that, operators will be able to charge extra for roaming, but not more than the wholesale costs levied by the carrier whose network is being roamed onto. It would only be in mid-2018 that member states would ask the Commission to “assess … what further measures may be needed with a view to phasing out roaming charges” and then maybe propose new laws. In other words, the Council wants the abolition of roaming fees to be put on ice, despite the widespread push for a European digital single market.

Benton

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