May 14, 2013 (Government Obtains Wide AP Phone Records in Probe)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, MAY 14, 2013
State of Video – preview below and more at http://benton.org/node/151332
GOVERNMENT & COMMUNICATIONS
Government Obtains Wide AP Phone Records in Probe
WIRELESS/SPECTRUM
Equalizing Competition Among Competitors: A Review of the Spectrum Screen Filing - analysis
A violent cellphone crime wave sweeps the US
Apple, Microsoft, Google, Samsung asked to help fight cellphone thefts
Verizon Wireless Announces $ 7.0 Billion Distribution To Verizon And Vodafone In June - press release [links to web]
Meet Zact, a Shareable Cellphone Service That Changes on the Fly [links to web]
SoftBank Plans Silicon Valley Center as Part of Sprint Takeover [links to web]
Glimpses of a World Revealed by Cellphone Data [links to web]
A Rugged Internet Port For Connectivity In The Most Remote Locations [links to web]
Big 4 cellphone carriers unite on anti-texting ads [links to web]
CONTENT
Consumer groups angered over ESPN plan to subsidize cellphone data plans
FCC Rules Block Broadband Price Cuts - analysis
Netflix Still Eats a Third of the Web Every Night; Amazon, HBO and Hulu Trail Behind [links to web]
THE STATE OF VIDEO
New Free Press Report Shows How to Fix America’s Broken Video Market - press release
Public Knowledge: Video's Future Needs Help
Dish Paints Broadcasters as Consumer Unfriendly
Commisso: McCain Is Right, Programming Problem Rests with Wholesalers [links to web]
Young Americans Won’t Pay for TV. Will They Ever? [links to web]
4 reasons online TV is still a pipe dream - analysis [links to web]
Netflix Still Eats a Third of the Web Every Night; Amazon, HBO and Hulu Trail Behind [links to web]
Broadcast Networks Are Amply Filling Schedules [links to web]
DIVERSITY
Diversity On Evening Cable News In 13 Charts - research
Where have all the women gone in movies?
POLICYMAKERS
Industry darling the wrong pick to head FCC - op-ed
Rep Darrell Issa: The Internet's Man in Washington [links to web]
Ambassador Crocker for Broadcasting Board of Governors - press release [links to web]
Tough Times at Homeland Security
STORIES FROM ABROAD
Google’s antitrust settlement under attack by rivals
EU Closer to China Telecom Probe
France Weighs New Tax to Fund Film, Music Industries
MORE ONLINE
Google Fiber: Another local expansion into Gladstone, Missouri - press release [links to web]
Study: Sesame Street boosts early childhood learning [links to web]
Not All Data is Created Equal [links to web]
GOVERNMENT & COMMUNICATIONS
GOVERNMENT OBTAINS WIDE AP PHONE RECORDS IN PROBE
[SOURCE: Associated Press, AUTHOR: Mark Sherman]
The Justice Department secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news. The records obtained by the Justice Department listed outgoing calls for the work and personal phone numbers of individual reporters, for general AP office numbers in New York, Washington and Hartford (CT) and for the main number for the AP in the House of Representatives press gallery, according to attorneys for the AP. It was not clear if the records also included incoming calls or the duration of the calls. In all, the government seized the records for more than 20 separate telephone lines assigned to AP and its journalists in April and May of 2012. The exact number of journalists who used the phone lines during that period is unknown, but more than 100 journalists work in the offices where phone records were targeted, on a wide array of stories about government and other matters. The government would not say why it sought the records. Officials have previously said in public testimony that the U.S. attorney in Washington is conducting a criminal investigation into who may have provided information contained in a May 7, 2012, AP story about a foiled terror plot.
benton.org/node/151787 | Associated Press
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WIRELESS/SPECTRUM
EQUALIZING COMPETITION AMONG COMPETITORS: A REVIEW OF THE DOJ’S SPECTRUM SCREEN EX PARTE FILING
[SOURCE: Phoenix Center, AUTHOR: George Ford, Lawrence Spiwak]
One important concern for the upcoming and highly-complex voluntary incentive auctions for broadcast television spectrum is the degree to which the largest mobile wireless providers will be allowed to participate. Recently, the U.S. Department of Justice encouraged the Federal Communications Commission to engineer the auction to favor smaller providers in an attempt to equalize competition among mobile wireless competitors. In this BULLETIN, we review the Justice Department’s analysis and find significant defects. First, the DOJ’s notion of “foreclosure value” is not a sufficient justification for rigging the auction. The efficiency of an auction’s outcome should instead be based on relative “use value,” and there are good reasons to suspect the use value of larger carriers exceeds that of smaller carriers. Economic theory therefore suggests the presumption should be in favor of non-interference. Second, we demonstrate that the DOJ’s proposal is inconsistent with its own depiction of the mobile wireless market, where firms act as Cournot competitors, face spectrum exhaust, and realize a type of economies of scale in the use of spectrum. Published research shows that under such conditions, spectrum exhaust turns the standard antitrust analysis on its head—namely, that more competitors may, in fact, lead to higher prices and lower quality. Third, we show that case law holds that government intervention, whether by the FCC or the DOJ, should not be directed at equalizing competition among competitors, but the DOJ’s recommendation is plainly aimed at doing so. We conclude that the Department’s proposal effectively seeks to return spectrum allocation to the comparative hearing process, where government—not markets—selects deserving entities for spectrum licenses in a process disguised as an “auction” among preselected winners.
benton.org/node/151730 | Phoenix Center
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CELLPHONE CRIME
[SOURCE: IDG News Service, AUTHOR: Martyn Williams]
Incidents of cellphone theft have been rising for several years and are fast becoming an epidemic. IDG News Service collected data on serious crimes in San Francisco from November to April and recorded 579 thefts of cellphones or tablets, accounting for 41 percent of all serious crime. On several days, like Feb. 27, the only serious crime in the city was cellphone thefts. In just over half the incidents, victims were punched, kicked, or otherwise physically intimidated for their phones, and in a quarter of robberies, users were threatened with guns or knives. This isn't just happing in tech-loving San Francisco, either. The picture is similar across the United States.
benton.org/node/151733 | IDG News Service
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FIGHTING CELLPHONE THEFT
[SOURCE: Los Angeles Times, AUTHOR: Chris O'Brien]
New York State Attorney General Eric Schneiderman sent letters to Apple, Samsung, Google and Microsoft, asking for details about what they are doing to deter such crimes. "Cracking down on violent and dangerous cell phone thefts is important for New Yorkers," AG Schneiderman said. "The companies that dominate this industry have a responsibility to their customers to fulfill their promises to ensure safety and security. This is a multibillion-dollar industry that produces some of the most popular and technologically advanced consumer electronic products in the world. Surely we can work together to find solutions that lead to a reduction in violent street crime targeting consumers." According to a press release, theft of Apple products represent the bulk of the increase in crime. The attorney general's office says that in New York City during the first nine months of 2012, there were 11,447 cases of stolen "iDevices"( which include iPhones and iPads). That's an increase of 3,280 from 2011. The release stresses that it's not just Apple. New York City police report that 30% of electronic gadgets stolen on buses and the subways are made by other manufacturers.
benton.org/node/151785 | Los Angeles Times
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CONTENT
GROUPS ANGERED PROPOSED ESPN DEAL
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Consumer groups are outraged about a potential plan for ESPN to subsidize smartphone data usage, saying it would violate the principle of network neutrality. They argue that all Internet traffic should be treated equally and that major corporations should not be able to pay for preferential treatment that wouldn't be available to a small personal blog or a start-up mobile app. The consumer groups argue that the Internet should remain an open platform that provides equal access to all websites, apps and services. Michael Weinberg, a vice president at Public Knowledge, warned that the ESPN deal could lead to a two-tiered Internet — one for wealthy corporations and one for everyone else. “That becomes a problem for any new entrant,” he said. “It changes the dynamic of how we see competition and growth online.” Matt Wood, policy director for advocacy group Free Press, said the deal would be “very discriminatory,” and would tilt the marketplace toward “the ESPNs and the other large content providers of the world.”
benton.org/node/151782 | Hill, The
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NETWORK NEUTRALITY AND BROADBAND PRICE CUTS
[SOURCE: Phoenix Center, AUTHOR: George Ford]
[Commentary] Six years ago, the Phoenix Center released (and later published) a paper entitled Network Neutrality and Foreclosing Market Exchange: A Transaction Cost Analysis. In that paper, we analyzed the effects of network neutrality proposals that foreclose or severely limit market transactions between content providers and broadband service providers. Our model revealed that under plausible conditions, rules that prohibit efficient commercial transactions between content and broadband service providers could, in fact, be bad for all participants: consumers would pay higher prices, the profits of the broadband service provider would decline, and the sales of Internet content providers would also decline. As a result, such proposals would eliminate the potential for efficient, voluntary, welfare-improving market transactions. Notwithstanding our warning, such proposals were eventually formalized in the FCC’s Open Internet Order. Significantly, while the FCC’s Open Internet Order prohibits such transactions for wireline networks, the Open Internet Order does not block voluntary deals in the mobile broadband sector. Given this opening in the rules, a real-world attempt to exploit this exception was inevitable. As fate may have it, we now have anecdotal evidence of such an attempt. To wit, the Wall Street Journal just reported that ESPN is discussing with at least one mobile wireless carrier a deal that allows the cable sports channel to subsidize consumers’ wireless data plans. Video content is bandwidth intensive, and the usage charges incurred for mobile data properly incent consumers to consume bandwidth rationally. Consequently, to the consumer, ESPN’s content—which is largely streaming video of sporting events and news—is more costly to consume at the margin. Demand slopes downward, so the higher cost leads to lower consumption. Since ESPN is partly in the business of selling eyeballs to advertisers, the reduction in the use of its service cuts into profits. Likewise, since consuming ESPN’s video is desired by consumers, the reduction in demand for ESPN over mobile networks also reduces the demand for mobile data plans, reducing the profits of the mobile data provider. With both ESPN and the data networks hurt by the opportunity cost of bandwidth, there’s a win-win possibility for a voluntary market exchange.
benton.org/node/151732 | Phoenix Center
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THE STATE OF VIDEO
COMBATING THE CABLE CABAL
[SOURCE: Free Press, AUTHOR: Press release]
Free Press released a comprehensive analysis of the economics of the cable industry. The new report investigates why cable bills continue to increase annually at three times the rate of inflation and examines policies that could bring consumers more choice and lower prices. Among the report’s findings:
Despite flat and in some cases declining subscriber growth, multichannel video providers have raised the prices of their video services by more than 22 percent since 2007 — continuing this practice throughout the most recent recession. This trend has resulted in a 27 percent increase in video revenues.
Despite these increasing revenues, the distributors’ video profit margins are declining since programmers are demanding higher fees to carry their channels. However, cable providers like Comcast are using their highly profitable broadband offerings to cross-subsidize their declining video profits.
The owners of the cable channels have substantial pricing power. These programmers’ revenues have grown 36 percent since 2007. Over the past two decades, the programming industry’s cash-flow margins grew from 24 percent to 41 percent, even as many of these channels lost viewers.
benton.org/node/151779 | Free Press | read the report
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VIDEO’S FUTURE NEEDS HELP
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In May 14 testimony before the Senate Communications Subcommittee, John Bergmeyer, senior staff attorney at Public Knowledge, will say that while the technology exists to eliminate video distributors' bottleneck control, Congress should first take steps to promote that technology -- online video distribution -- before it can "begin to disengage from regulations that were designed to counter the effects of this bottleneck control." Bergmeyer is all for revamping regulations, but only as long as the result is giving viewers more choice of providers and the ability to watch whatever they choose, whenever they choose. Public Knowledge's recommendations include getting rid of the sports blackout rules, which prevent cable and satellite operators from carrying a sporting event if it is blacked out on broadcast TV -- in the case of the NFL due to the lack of a sellout at the stadium.
benton.org/node/151781 | Broadcasting&Cable
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DISH ON BROADCASTERS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In testimony for the May 14 state of video hearing in the Senate Communications Subcommittee, Dish’s R. Stanton Dodge frames broadcasters' challenge of its Hopper DVR service -- which allows subs to skip commercials and, more recently, view content on other devices -- as an attack on consumers. "The networks are accusing millions of subscribers of being copyright infringers just because they want to skip commercials more easily or watch TV on iPads in their bedroom," he plans to tell the panel. Stanton calls for retransmission reform, framing retrans disputes as broadcasters vs. consumers. He calls them one-sided contests with government-aided broadcasters on one side, and the "Losers" being "the consumers who get their programming pulled from them by the broadcasters and see their bills on the rise."
benton.org/node/151745 | Broadcasting&Cable
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DIVERSITY
DIVERSITY AND CABLE NEWS
[SOURCE: Media Matters for America, AUTHOR: Rob Savillo, Oliver Willis]
A review of guests on 13 evening cable news shows on CNN, Fox News, and MSNBC during the month of April 2013 reveals that these networks overwhelmingly host male and white guests. Out of 1,677 total guests, CNN had the largest proportion of men -- 76 percent -- during the month of April. Women did not make up more than 33 percent of guests on any network. Fox News had the largest proportion of white guests -- 83 percent. African-Americans were the largest non-white group on all networks, representing 19 percent, 10 percent, and 5 percent of guests on MSNBC, Fox, and CNN, respectively. According to the most recent U.S. Census data, white men make up only 31 percent of the U.S. population. On evening cable news, they represented a much larger percentage of guests -- 62 percent of guests on CNN, 60 percent on Fox, and 54 percent on MSNBC.
benton.org/node/151804 | Media Matters for America
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WOMEN IN MOVIES
[SOURCE: Los Angeles Times, AUTHOR: Rebecca Keegan]
There's one mountain in Hollywood that even "The Hunger Games'" scrappy heroine Katniss Everdeen hasn't been able to move: the number of roles for women. Despite the success of recent female-driven movies such as "Bridesmaids" and the "Hunger Games" and "Twilight" series, female representation in popular movies is at its lowest level in five years, according to a study being released Monday by the USC Annenberg School for Communication and Journalism. Among the 100 highest-grossing movies at the U.S. box office in 2012, the study reported, 28.4% of speaking characters were female. That's a drop from 32.8% three years ago, and a number that has stayed relatively stagnant despite increased research attention to the topic and several high-profile box-office successes starring women. When they are on-screen, 31.6% of women are shown wearing sexually revealing clothing, the highest percentage in the five years the USC researchers have been studying the issue. For teen girls, the number who are provocatively dressed is even higher: 56.6% of teen girl characters in 2012 movies wore sexy clothes, an increase of 20% since 2009.
benton.org/node/151803 | Los Angeles Times
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POLICYMAKERS
TOM WHEELER
[SOURCE: Politico, AUTHOR: Sascha Meinrath]
In announcing his campaign for president in 2007, then-Sen. Barack Obama spoke convincingly about how “lobbyists” and “special interests” have “turned our government into a game only they can afford to play.” He promised to close the revolving door that brings major industry players into positions in government that regulate those industries. But now, President Obama has nominated the former chief lobbyist for both the wireless and cable industries, Tom Wheeler, to lead the Federal Communications Commission. The fact that Wheeler was a major campaign fundraiser for the President’s reelection only makes the nomination all the more troubling. The American consumer needs an FCC chairman who will champion significant and meaningful reforms: promote universal access to affordable and quality broadband; restore robust competition in telecom services; encourage open Internet rules and, open wireless platforms, and unlocked mobile devices. These are all commitments President Obama made and the general public supports but industry opposes — which is all the more reason why nominating a chief lobbyist from the industry doesn’t make sense.
[Meinrath is vice president of the New America Foundation and director of the Open Technology Institute.]
benton.org/node/151736 | Politico
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TOUGH TIMES AND HOMELAND SECURITY
[SOURCE: New York Times, AUTHOR: Nicole Perlroth]
A new wave of cyberattacks is hitting American companies at a particularly vulnerable time for the Department of Homeland Security, the federal agency charged with fending them off. That is because the department has been grappling with the departures of its top cybersecurity officials. In the last four months, Jane Holl Lute, the agency’s deputy secretary; Mark Weatherford, the top cybersecurity official; Michael Locatis, the assistant secretary for cybersecurity; and Richard Spires, the chief information officer, have all resigned. Candidates currently being considered to fill their posts include Beltway officials and executives from the antivirus software makers Symantec and McAfee, according to people briefed on their professional backgrounds who were not authorized to speak publicly about the department’s hiring process. But these people said the leading candidates lacked critical ties to Silicon Valley and to the hacking community from which Homeland Security has said it so urgently needs to recruit.
benton.org/node/151748 | New York Times
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STORIES FROM ABROAD
GOOGLE SETTLEMENT UNDER ATTACK
[SOURCE: Financial Times, AUTHOR: Richard Waters, Alex Barker]
Google’s rivals have called its proposed antitrust settlement with Brussels too weak to redress the imbalance in the internet search market – and warned it is likely to have the opposite effect, discouraging users from visiting rival sites. The deal, intended to make Google list more competitors’ services, contains loopholes that will undermine its impact, some opponents of the US search company say. Their critiques are the first in-depth responses to the provisional deal the US company struck with Joaquín Almunia, EU competition commissioner, this year. Almunia will have to decide next month whether to try to force Google to make more concessions to head off a possible formal complaint, following the end of a “market testing” period for the draft remedies agreed so far.
benton.org/node/151794 | Financial Times | Bloomberg
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CHINA PROBE
[SOURCE: Wall Street Journal, AUTHOR: Matthew Dalton]
The European Union's trade chief will ask for backing from senior members of the bloc's executive arm to start investigations into alleged unfair trade practices by Chinese network-equipment suppliers Huawei Technologies and ZTE, an EU official said, amid concern from European companies that such a probe could prompt a backlash against their interests in China. The threat comes at a sensitive time for European telecommunications-equipment suppliers, which are looking to increase their business in China. Europe's three major suppliers—Ericsson, Alcatel-Lucent and Nokia Siemens Networks , a joint venture between Nokia Corp. and Siemens—are hoping to win significant business from Chinese telecommunications operators as they embark on multibillion-dollar spending programs to roll out high-speed wireless data networks. The European companies fear that a decision by the EU to start the investigations could lead to retaliation against them by the Chinese operators, which are controlled by the Chinese government, leaving Huawei and ZTE with the bulk of this business.
benton.org/node/151793 | Wall Street Journal
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FRANCE WEIGHS NEW TAX
[SOURCE: Wall Street Journal, AUTHOR: Sam Schechner, Inti Landauro]
The French government is considering a new tax on smartphones, and broadening existing taxes to apply to foreign video-streaming companies, as it looks for ways to keep financing its cinema, music and literature in the digital age. A French government panel, created last fall to recommend updates to the country's decades-old thicket of cultural aids and taxes, published in a 700-page report whose 80 recommendations would, among other things, target electronics manufacturers like Apple and Samsung Electronics, as well as major suppliers of online video like YouTube. The recommendations come as France is casting around for ways to protect financial support for its culture industries as films, music and books are increasingly distributed via new channels.
http://online.wsj.com/article/SB1000142412788732371630457848120134849237...
France set to tax smartphones to protect culture in digital age (FT)
benton.org/node/151791 | Wall Street Journal | FT
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