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Federal law enforcers say they have their hands full with criminals who skirt legal surveillance by using hard-to-wiretap services like Google and Facebook. Now they’re about to inherit a new foe in the fight: Capitol Hill.
Some of the top lawmakers closely aligned with civil liberties and Silicon Valley interests are expressing early umbrage with the Obama administration as it weighs legislative proposals to track criminals who, in the government’s view, are “going dark” by communicating online. The White House hasn’t signed off on a plan, which could impose fines on Internet companies that lack the capacity to comply with federal wiretapping orders. If history is any guide, however, it eventually may be a steep climb for the Justice Department, the FBI and its allies, which already are under siege this week for pursuing the phone records of Associated Press reporters.
Angst over Internet surveillance detected on Hill
The Justice Department accused Apple executives, including its late chief executive Steve Jobs, of leading a conspiracy that raised e-book prices in an attempt to hurt Amazon and other competitors, according to documents filed in federal court.
At one point, Eddy Cue, Apple’s lead e-books negotiator, counseled the chief executive of Random House to withhold e-books from Amazon unless it agreed to higher prices, the Justice Department said. Another publisher, Macmillan, would later employ this strategy, Justice said. In its own court filing, Apple vehemently denied allegations of price fixing, saying it brought fresh competition to a market dominated by Amazon. “The evidence proves that Apple acted independently, to further its own legitimate business goals,” the company said. The dueling documents with the U.S. District Court of the Southern District of New York detail for the first time aspects of the government’s case against Apple. The court is scheduled on June 3 to hear the price-fixing trial that has reverberated beyond the fast-growing digital books market.
In court filing, Justice Department accuses Apple of e-book price fixing U.S. Now Paints Apple as ‘Ringmaster’ in Its Lawsuit on E-Book Price-Fixing (NYTimes) Publishers to testify against Apple in price-fixing trial (paidContent.org)
E-book sales, especially in the thriving romance genre, gave the book business a lift in 2012.
In a year that was monopolized by the “Fifty Shades” erotic novels and their various knockoffs, e-book sales in fiction rose 42 percent over the year before, to $1.8 billion. Growth in nonfiction e-book sales was smaller, a 22 percent increase, to $484.2 million. E-book sales in the children’s and young-adult categories increased 117 percent, to $469.2 million. E-books now account for 20 percent of publishers’ revenues, up from 15 percent in 2011. Publishers’ net revenues in 2012 were $15 billion, up from $14 billion in 2011, while unit sales of trade books increased 8 percent, to $2.3 billion.
E-Book Sales a Boon to Publishers in 2012
The FBI last month gave temporary security clearances to scores of U.S. bank executives to brief them on the investigation into the cyberattacks that have repeatedly disrupted online banking websites for most of a year. Bank security officers and others were brought to more than 40 field offices around the country to join a classified video conference on "who was behind the keyboards," Federal Bureau of Investigation Executive Assistant Director Richard McFeely said. The extraordinary clearances, from an agency famed for being close-mouthed even among other law enforcement agencies, reflect some action after years of talk about the need for increased cooperation between the public and private sectors on cybersecurity.
FBI says more cooperation with banks key to probe of cyber attacks
About 300 labor union members and other activists staged a demonstration to protest the potential sale of the Los Angeles Times to the politically conservative Koch brothers.
Demonstrators marched outside the downtown L.A. headquarters of Oaktree Capital Management, an investment firm that holds a roughly 20% stake in Tribune Company, which owns The Times. Protesters alleged that Charles and David Koch, billionaire siblings who fund conservative causes, want to buy The Times in order to skew the paper's coverage to favor anti-union objectives. Demonstrators carrying signs that read "No Koch Hate in L.A." marched in front of the Oaktree building on Tuesday afternoon. The building's security guards placed yellow security gates in front of two entrances where the protesters marched. The protesters targeted Oaktree because the firm manages pension investments on behalf of unionized government employees, including those in the California Public Employees' Retirement System.
Unions protest over potential sale of L.A. Times to Koch brothers
ESPN President John Skipper said he isn’t too worried about proposed legislation from Sen. John McCain (R-AZ) that would allow consumers to pick what channels they want instead of buying a big package of networks. “We don’t think the bill has any momentum,” Skipper said to reporters after ESPN made a presentation to advertisers in New York City.
His view that McCain’s legislation is a long shot is shared by many television industry insiders. ESPN is a unit of Walt Disney Co. Skipper said that ESPN is priced appropriately given the popularity of the channel and that Sen McCain is “dead wrong” on this issue. He added that the cost for a family of four to go to dinner and a movie is as much if not more than the cost of a monthly cable bill.
ESPN not worried about a la carte or competition
A Christian radio ministry may be facing a financial apocalypse after its predictions about the end of the world failed to come true.
Three years ago Oakland (CA)-based Family Radio Inc. placed billboard messages around the country, claiming that Jesus would return on May 21, 2011. Forty of the billboards were in Nashville (TN) bearing the message "He is Coming Back Soon." Some of the Rev. Harold Camping's followers had quit jobs or emptied their bank accounts to help pay for the billboards, and some traveled the country in a caravan to spread the word. The group lost more than $100 million in assets from 2007 to 2011, according to the Associated Press, falling from $135 million in 2007 to $29.2 million at the end of 2011. It's had to sell off three of its largest radio stations. In 2012, records show that Family Radio took out a $30 million bridge loan to keep operating while awaiting money from the sale of the stations. Family Radio, founded more than a half-century ago, had 66 full-service radio stations, more than 100 FM broadcast relay stations and a handful of television stations across the country at one time.
Christian radio group faces financial hard times
A top German court ruled on that Google must heed requests to remove automatically generated search suggestions linked to people’s names if these are deemed defamatory.
In the ruling, the Federal Court of Justice said that the rights of an unnamed founder of an internet nutritional supplement and cosmetics company were infringed upon, when the “autocomplete” function on www.google.de added “Scientology” and “fraud” as suggested searches related to his or her name. The court, which is the highest instance for appeals, said this did not mean that Google had been wrong to develop its autocomplete feature, but “it has not taken sufficient measures to prevent the software-generated search suggestions from infringing on the rights of third parties.”
Court rules against Google on search feature
The Senate Commerce Committee’s Subcommittee on Communications, Technology, and the Internet held a hearing titled “State of Video.” There appeared to be a lot more questions than answers.
The general consensus was that the marketplace for video deliver was changing rapidly and government needed to take that into account. But there was not a lot of focus on what exactly Washington should do about it.
- Testifying before the panel, former Commerce Committee Chairman John McCain (R-AZ) advocated for the a la carte pay-TV model. He introduced legislation along those lines last week. He said consumers didn't want all the channels cable was bundling together. While he said he was an EPSN fan and wouldn't give it up, he argued that most people weren't and didn't want to have to pay the several dollars it costs per month. Subcommittee Chairman Mark Pryor (R-AR) said it "seems very common sense," but he asked industry witnesses to weigh in about potential problems.
- National Association of Broadcasters President Gordon Smith advised that whatever government does or doesn't do, it should keep the value of free, over-the-air broadcasting top of mind. Smith warned that DISH's ad-skipping technology threatened the ad side of the broadcast revenue stream model responsible for all that free, local, public interest programming broadcasters supply, while Aereo threatened the other revenue stream, retransmission consent
- National Cable & Telecommunications Association President Michael Powell offered no policy solutions. He said that NCTA did not endorse sweeping Cable Act reform, suggesting that video is too fast-moving a space for what would be a slow process. And while he said surgical strikes on particular elements might be in order, he did not offer any of those, citing his membership's differences of opinion. NCTA members include both the operators who have to buy programming in bundles and some of the programmers who bundle them. He warned that McCain's legislation could actually drive up prices for many consumers. He said that as fewer people subscribe to a channel, the advertising revenue falls and the price of the channel goes up. He also argued that an a la carte system would make it harder for small channels to grow in popularity and could kill off channels aimed at minorities.
- Dish Network executive R. Stanton Dodge said his company’s service, The Hopper, did not delete ads, only gave subscribers the option of skipping them.
- Sen. Mark Warner (D-VA) signaled he was troubled by News Corp. President Chase Carey's warning that if broadcasters lost their court challenge to Aereo’s service, some high-value content might have to move to cable. Sen Warner, a former wireless executive, pointed out that those companies had bought their spectrum at auction while broadcasters had not. He said that if broadcasters were threatening to take some of their high-value content off free TV, it raised the question of whether they should be able to keep their broadcast licenses or whether the spectrum might be repurposed to a higher public good. NAB’s Smith came just short of branding Aereo a pirate, but as much as said that it was piracy to provide TV station signals and charge for the service while not paying a copyright fee, as MVPDS do.
- There was no Aereo exec on the panel, but a strong defense of the service came from John Bergmayer, senior staff attorney at Public Knowledge. He said two courts had already concluded Aereo was a remote TV antenna rental service. On McCain’s bill, Bergmayer agreed that bundles of channels make sense for many consumers, but he applauded McCain's bill and said people should have the option to purchase individual channels if they want.
Senate Hearing Finds State of Video in Flux McCain: Consumers shouldn't pay for TV they don't watch (The Hill) NAB’s Smith Defends Fox Aereo Response (TVNewsCheck) Sen. Warner fires warning shot at broadcasters over Aereo dispute (The Hill) Sen. Warner to Broadcast Nets: Don't Even Think About Using Cable to Bypass Aereo (The Wrap) Cable Bills Focus of Congress Push for a La Carte Prices (Bloomberg) The State of Video Hearing: Can The Web Save us All? (Public Knowledge) Consumers Ready for State of Video to Change (Public Knowledge)
Senate Commerce Committee Chairman Jay Rockefeller (D-WV) has asked the Government Accountability Office to look into the impact of broadcast television station joint sales agreements (JSAs) and shared service agreements (SSAs) on consumers.
Chairman Rockefeller said that in light of the "serious questions" raised about the impact of those and other coordination arrangements, he wants GAO to take a "closer look" at that coordination, including how broadcasters use the agreements, how many such arrangements there are (he tells GAO he will want to know why they can't determine that if they are unable to), whether the arrangements make programming blackouts more likely or raise costs of services, do they result in more local programming or simply duplication on multiple outlets, what would prevent the FCC from requiring copies of all JSA's and SSA's and other evidence of coordination be placed in a public file, and whether there should be some aspects of them that are regulated.
Rockefeller Calls for GAO Study of TV Station Shared Service Agreements http://www.broadcastingcable.com/article/493484-Rockefeller_Calls_for_GAO_Study_of_TV_Station_Shared_Service_Agreements.php?rssid=20065 ACA Praises Rockefeller for GAO SSA Report Request (B&C)