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What's going on? The Internet was supposed to make traditional companies poor. Instead, the Internet is making them rich.

"We heard stories about how cable was doomed by the Internet as early as 2003," says Craig Moffett, an analyst with Sanford C. Bernstein. "It has finally dawned on investors that, not only was that never a realistic concern, but also, the Internet has turned out to be a boon for both distributors and content companies." To understand why the Internet hasn't destroyed cable, ask yourself: Where do you get your Internet? It's probably from the same people selling you TV. Since 2005, total cable industry revenue is up 50% -- and two-thirds of that increase came from selling something that wasn't television. For the most part, it was Internet. Cable companies like Comcast and Time Warner Cable sell broadband at ridiculously high margins. When you compare the total cost and profit of selling TV versus selling Internet, it's clear to Moffett that pay TV "has represented less than half of [cable's] business for more than a year." While cable has made Internet a second business, content companies have treated the Internet as a second window. Even as they demand more money from cable operators for the right to carry their channels to households, media companies have also made a killing selling their shows to companies like Amazon, Netflix, Hulu, and Apple.


How the TV Business Got Rich Off the Thing That Was Going to the Kill It: The Internet
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Should broadband Internet service be treated as a basic utility in the United States, like electricity, water, and traditional telephone service? That’s the question at the heart of an important and provocative new book by Susan Crawford, a tech policy expert and professor at Cardozo Law School. In Captive Audience: The Telecom Industry and Monopoly in the New Guilded Age, released by Yale University Press, Crawford argues that the Internet has replaced traditional phone service as the most essential communications utility in the country, and is now as important as electricity was 100 years ago.

“Truly high-speed wired Internet access is as basic to innovation, economic growth, social communication, and the country’s competitiveness as electricity was a century ago,” Crawford writes, “but a limited number of Americans have access to it, many can’t afford it, and the country has handed control of it over to Comcast and a few other companies.” Because the U.S. government has allowed a small group of giant, highly profitable companies to dominate the broadband market, Crawford argues, American consumers have fewer choices for broadband service, at higher prices but lower speeds, compared to dozens of other developed countries, including throughout Europe and Asia. “In Seoul, when you move into an apartment, you have a choice of three or four providers selling you symmetric fiber access for $30 per month, and installation happens in one day,” Crawford said. “That’s unthinkable in the United States. And the idea that the country that invented the Internet can’t get online is beyond my imagination.”


Is Broadband Internet Access a Public Utility? U.S. Internet Suffers When the Refs Blow the Calls (The Huffington Post)
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A $126.3 million federal stimulus project was intended to bring high-speed fiber-optic Internet connections to public facilities across West Virginia, but state officials are now mostly selecting sites that already have fiber and delivering routers instead.

The state designated 175 new sites as "community anchor institutions" that will receive upgraded Internet service. Only seven of those sites will get high-speed fiber cable. All facilities will get new routers. "Due to the amount of time required for environmental assessments and fiber builds, we determined that we would limit most of the additional sites to 'router-only' so that we could complete the build on time," said Diane Holley-Brown, a spokeswoman for the state Office of Technology. The latest list of 175 replacement sites includes mostly schools, community and technical colleges, and Marshall University, which will receive 10 routers for buildings on its Huntington campus. Holley-Brown said the National Telecommunications & Information Administration, the federal agency overseeing the grant funds, has approved West Virginia's plans to pick sites that already have fiber and deliver routers to them.


West Virginia broadband effort narrowed

While speaking at the 2013 International CES, Federal Communications Commission Chairman Julius Genachowski announced that the FCC will soon kick-off a government-wide effort to increase speeds and alleviate Wi-Fi congestion at major hubs, such as airports, convention centers and large conference gatherings. In addition, this would also increase speed and capacity for Wi-Fi in the home where multiple users and devices are often on the network at the same time.

This will increase and free up the unlicensed spectrum available for ultra-high-speed, high-capacity Wi-Fi - known as “Gigabit Wi-Fi” - by up to 35 percent. This effort will enable higher data speeds and greater capacity – most notably, improved HD video distribution capability. Chairman Genachowski said that the FCC will take the first steps next month to unleash up to 195 megahertz of spectrum in the 5 gigahertz band. This would be the largest block of unlicensed spectrum to be made available for expansion of Wi-Fi since 2003. Because the 5 gigahertz band is already used for other purposes by both federal and non-federal users, the effort will require significant collaboration with other federal agencies. Chairman Genachowski committed the Commission to move expeditiously to complete the proceeding.


FCC Effort to Increase Wi-Fi Speeds and Alleviate Wi-Fi Congestion FCC's Genachowski: Gov't will open up radio spectrum to improve Wi-Fi (ars technica) CES: FCC Chair Promises to Boost Wi-Fi (B&C)
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At the Consumer Electronics Show, National Association of Broadcasters incentive auction point person Rick Kaplan said the success of the Federal Communications Commission’s incentive auction could hinge on not "rushing" an auction -- the FCC has set a 2014 deadline -- before resolving border issues with Canada and Mexico.

Kaplan, who was a FCC staffer during the transition to digital television, said that would be nothing compared with the repacking associated with the incentive auctions, and that rushing the process was both counterproductive and unnecessary. Charla Rath, VP, wireless policy development for Verizon, said Kaplan was right that the industry had some time, but said that the demand had grown -- for one thing, with the advent of tablets that were not around when the FCC's Broadband Plan was talking about the coming crunch. But she said that does not change the urgency and warned about a delay that would mean spectrum was not available when it needed to be.


Kaplan -- FCC Should Not Rush Auction
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For years, the radio industry has watched with worry as consumers snap up all kinds of electronic gadgets — from cellphones to tablets to set-top TV boxes — that deliver seemingly every kind of media but that old standby, terrestrial radio. This week, broadcasters won a victory of sorts through a deal with Sprint Nextel, which will make local FM radio signals available on some of its smartphones.

It is the first such deal with a phone carrier after years of pressure from the major radio broadcasters. Yet whether customers, and other phone companies, will take to the idea is far from certain. Under the three-year deal, Sprint will make FM radio available on some of its Android and Windows phones, using a tuner application called NextRadio. The app — designed by Emmis, which owns 21 stations around the country — will allow some interactivity with other forms of media on the phone. Emmis CEO Jeffrey Smulyan said he believed that radio listening could increase 15 percent if it were widely available on cellphones. Both Sprint and the major radio companies will invest in the effort, and they can also share revenue from certain kinds of advertising that make use of the radio and phone features: for example, if a radio ad for a fast-food restaurant is accompanied by a coupon accessible on the phone.


FM Radio on Cellphones, Long Sought by Broadcasters, Comes to Sprint
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It’s a fundamental truth of warfare than when you attack your enemy, you open yourself up to a retaliatory attack of some kind. It’s true enough in the real world, and now true in realm of cyber warfare as well.

For it appears to have been a retaliatory action by Iran that hit a batch of U.S.-based banks last fall with a series of ongoing distributed denial of service attacks. The New York Times says that U.S. government officials are internally blaming Iran for the attacks, which have disrupted the online banking operations of numerous American banks, including Bank of America, Citigroup, Wells Fargo, U.S. Bancorp, and PNC since September. The retaliation is for the numerous cyberattacks that have been carried out by the U.S. and Israel against Iran’s nuclear research program.


Cyberwar in Iran Comes Home to U.S. Banks. Is Anyone Surprised?
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Hundreds of new gadgets come out of the Consumer Electronics Show every year -- but to hear some inventors and tech companies talk, thousands of baseless patent suits come out of it, too. “Patent trolling,” the practice of buying up scores of little-known patents solely to sue others for infringement, is hardly a new phenomenon. By some accounts, patent litigation has been on a steady upward slope for nearly 20 years. But 2013 marks the first year that the issue has been taken up at CES, perhaps because litigators have begun chasing after small start-ups and companies well outside the tech field. That’s costing businesses dearly, argued Rep. Peter DeFazio (D-OR) and representatives from several tech companies on a panel. Companies lost $29 billion to patent litigation in 2011, Rep DeFazio said. Forbes reports that Google’s senior patent counsel, Suzanne Michel, estimated that an additional $80 billion is “indirectly” wasted when executives and engineers become distracted by the lawsuits.


CES: Tech firms, lawmaker slam patent trolls, push for copyright reforms
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It's a post-SOPA world. But the question is, what does that mean for the future? Content companies used to getting their way on Capitol Hill got humbled last January when an unprecedented wave of public protest shut down the SOPA and PIPA proposals that would have regulated online copyright. Now that the public has been awakened to the issue, those interested in a more balanced copyright system are thinking over their strategy.

"Everything is on the table, including copyright terms," said Gigi Sohn, the president of Public Knowledge, speaking at a panel at CES 2013. "Let's put it to those who want greater, longer, stronger CR enforcement... why shouldn't we have some balance? Let's turn the clock back and think about the original need for copyright." This year, says Sohn, will be the year "we push our own, affirmative, agenda."


Will 2013 be the year copyright reformers hit back?
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Falls happen, even to the most balanced of us. But what if no one is around to help? As our parents, grandparents and maybe even some of us age, it's becoming increasingly important and desirable to go about life without limitations but feel like there's a safety net if we should need it. And several tech companies have recognized the need. At the 2013 Consumer Electronics Show, a couple of the many items focused on continued independence, mobility and security. For the silver citizen on the go, Philips Lifeline has a new personal emergency response system, GoSafe, that will get you help wherever you are. In fact, it will know whether you've fallen and will summon help if you don't respond, whether you're at home or out and about. This newly released device uses Wi-Fi in addition to assisted GPS and cell-tower triangulation to piece together your exact location. And if that doesn't work, the device has an audio beacon as well.


Helpful emergency gadgets for seniors