Bloomberg

The Slow, Painful Death of the Media's Cash Cow

Most of the newspapers currently in operation will ultimately die, because the Internet rewards scale rather than deep local knowledge. They will die whether they stick to their knitting or go all-in on “digital first.” And their deaths will, as deaths tend to, be rather unpleasant. I’m not going to tell them to waste the time they have left on a long-shot chance at life. But I’m not quite willing to tell them they shouldn’t, either.

Telecom’s Next Battle Will Take Place in the Web’s Slow Lane

The telecommunications industry has found a new battleground: slower, narrowband systems.

Vodafone is building a wireless network that’s cheap and robust enough to link items like garbage cans or garden soil sensors to the internet, so refuse companies will know when to send the truck and the roses get just the right amount of water. The system, in Madrid, is the vanguard of what will eventually be a global Vodafone narrowband network for the so-called internet-of-things -- millions, perhaps billions, of connected devices designed to save businesses money and time, and free consumers from mundane tasks. The new grid is cheaper to run than than regular mobile and WiFi networks because it uses less power. It’s designed for gadgets like gas meters or traffic-light signals that check in sporadically, rather than driverless cars or heart monitors, which speak continuously to the net.

To carriers like Vodafone, the networks represent a way to replace income from voice and data bundles that are becoming commoditized. Champions of the narrowband IoT envision homes and neighborhoods teeming with devices, blipping away for a few cents a day on batteries that last for years.

Yahoo Asks for Transparency From U.S. After E-Mail Scan Report

Yahoo demanded more transparency from the federal government after reports surfaced saying the company had built a software program to scan customers’ incoming e-mails for US intelligence agencies.

Yahoo, in a letter to ­James Clapper, the director of National Intelligence, “is formally urging that the U.S. government provide its citizens with clarification around national security orders they issue to internet companies to obtain user data,” the company said. “While the letter makes specific reference to recent allegations against Yahoo, it is intended to set a stronger precedent of transparency for our users and all citizens who could be affected by government requests for user data.”

Silicon Valley Cozies Up to Washington, Outspending Wall Street 2-1

A political weather map of America would show Wall Street under a cloud, and Silicon Valley bathed in sunshine. Over the Obama administration’s eight years, the technology industry has embedded itself in Washington. The president hung out with Facebook Inc.’s Mark Zuckerberg and hired the government’s first chief tech officer. At least at the lower levels of officialdom, the revolving door with companies such as Google is spinning ever faster -- as it once did with Wall Street. Politicians have played down their connections to finance since the taxpayer bailout of 2008. No such stigma attaches to tech, for now. But as the Valley steps up its lobbying efforts, with a wish-list that ranges from immigration to rules for driverless cars, some critics warn that similar traps lie in wait: It’s not easy for the government to police an industry from which it poaches talent and solicits help with writing laws.

The five biggest U.S. tech companies are now the five biggest companies, period -- at least as measured by market value. And they’re flexing that financial muscle. The tech firms spent $49 million on Washington lobbyists in 2015, while the five largest banks shelled out $19.7 million, data compiled by the Center for Responsive Politics shows.

On the personnel front, the Campaign for Accountability, a non-profit group, studied the to-and-fro between government and Google. It found that 183 people who worked under President Barack Obama through 2015 were hired by Google, while 58 headed the other way.

AT&T Turns to Media Acquisitions as Its Video Ambitions Grow

AT&T has gone from a regional phone company to a national telecommunications powerhouse over the last decade. Its next big expansion will see it buying businesses to transform into a media and entertainment giant, apparently.

Over the next three to five years, AT&T will seek deals to become a producer of programming, shifting its business model so that it owns some of the content it distributes, said the people, who asked not to be identified discussing the company’s strategy. The company’s targets include companies worth $2 billion to $50 billion, apparently. Phone companies are trying to figure out their next steps for expansion as wireless growth flattens out and competition with cable providers remains intense. While its main rival Verizon has bet big on mobile advertising, AT&T is more focused on becoming a powerhouse in video programming. Having become the largest US pay-TV provider through the DirecTV deal, AT&T now faces a new set of challenges -- holding on to TV subscribers in an era of cord-cutting as well as fighting cable networks’ attempts to raise prices for their channels. Adding media properties to AT&T’s distribution business would give the phone carrier valuable insight for marketers into the viewing habits of its users, just as TV rival Comcast got in the acquisition of NBCUniversal in 2011. “The landscape has changed so much in the past 10 years. Strategically, going into media makes a lot of sense,” said Amy Yong, an analyst with Macquarie Capital USA Inc. “Owning content has become very important, not only for cost benefits but getting a stronger foothold among consumers.”

Google Attacks EU Plans to Make It YouTube Copyright Cop

Google attacked a European Union overhaul designed to ensure copyright owners get a fairer share of income, saying the measures would force it to vet text, video and images before they can be shared on its YouTube service.

"This would effectively turn the internet into a place where everything uploaded to the web must be cleared by lawyers before it can find an audience," the search-engine giant said after the European Commission unveiled draft rules that would also allow newspapers to demand payment when services such as Google News run their articles. Google, owned by Alphabet Inc., is already fighting three EU antitrust probes into search, phone software and advertising. If Sept 14's proposals become law, the company may have a weaker hand when dealing with copyright holders, boosted by more powers to withdraw content or demand compensation. EU regulators said they want to protect publishers and creators when their work is made available on the internet, often without remuneration.

Quantum Computers Are Coming. The World Might Not Be Ready.

[Commentary] One of the most interesting applications of quantum mechanics is in computing. In theory, quantum computers could take advantage of odd subatomic interactions to solve certain problems far faster than a conventional machine could. Although a full-scale quantum computer is still years off, scientists have lately made a lot of progress on the materials, designs and methods needed to make one. Investment in the field is surging. IBM, Microsoft and Google are all building quantum research labs. Startups are gearing up. Banks are very interested indeed. Governments see applications for space exploration, medical research and intelligence-gathering. America's National Security Agency, in fact, has been quietly trying to build a quantum computer for years, in the hope that it would make an unstoppable code-breaker.

Businesses, in particular, should pay attention. Many have files that must be stored for years, for legal or commercial reasons. But woefully few have a long-term strategy for protecting them. That's especially worrisome because, without precautions, sensitive records -- medical files, financial data, trade secrets -- that are stored using today's encryption could potentially be exposed by quantum computers. Governments could also help. Quantum computing requires competence in physics, computer science and engineering, and that makes it hard to find qualified workers. Public investment in basic quantum-science research would help build a skilled workforce, boost technical know-how and generally lay the groundwork for a promising new field. It could also speed the development of stronger cryptography. More cooperation between Silicon Valley and the government, not on notable display recently, could be invaluable in this regard. In short, common sense isn't useless in approaching quantum computers; it may be the best way to prepare for an era of thrilling strangeness.

FCC Tightens TV-Station Ownership Curb by Cutting Discount

Federal regulators tightened limits on owning television stations by eliminating the practice of only counting part of some stations’ audience, a move opposed by broadcasters including 21st Century Fox Inc. and Sinclair Broadcast Group Inc. The Federal Communications Commission in a 3-to-2 Democratic-led party-line vote on Sept 7 abolished the 30-year-old UHF discount. Under the eliminated discount, the agency counted only half of households in a TV station’s local area, when judging ownership against the limit of reaching 39 percent of US TV households. Groups that exceed the limit as a result of the change needn’t sell stations, but must comply in future transactions, meaning future deals could result in sales to conform with the regulation. Companies over the limit without the discount include Tribune Media Co., Ion Media Networks Inc. and Univision Communications Inc., the FCC said.

The FCC in August voted to preserve other TV and radio station ownership restrictions, including a ban on owning both a daily newspaper and a nearby broadcast station. The live audience for broadcast TV has been shrinking for years, and broadcasters have said they need to be freed of “antiquated and unreasonable” rules to vie with digital competitors. Tribune, with 42 stations in cities including New York, Los Angeles and Chicago, where it is located, in an annual filing told investors that abolishing the UHF discount would affect its ability to acquire additional stations. Gary Weitman, a spokesman, in an e-mail said the FCC decision is a “non-issue” since company holdings comply with the rules.

Apple, Google Back Microsoft Over ‘Sneak-and-Peek’ Searches

Apple, Google and Amazon were among the tech leaders that rallied behind Microsoft in its battle to stop the US government from conducting so-called sneak-and-peek searches of customer e-mails. Microsoft and its supporters argue the very future of mobile and cloud computing is at stake if customers can’t trust that their data will remain private.

A group of 11 technology firms including Google said in its court filing that the federal law allowing the searches goes “far beyond any necessary limits” while infringing users’ fundamental rights. “The government’s ability to engage in surreptitious searches of homes and tangible things is practically and legally limited," the companies said in the filing. “But the act allows the government to search personal data stored in the cloud without ever notifying an account owner that her data has been searched."

Broadband for All Starts With More Public Wi-Fi

[Commentary] The 21st-century equivalent of Herbert Hoover’s chicken-in-every-pot promise is a faster Internet connection in every home. It’s a laudable but, for now, elusive goal. While working to reach it, however, the next president -- whether that’s Donald Trump or Hillary Clinton, both of whom have promised far greater investment in public infrastructure -- must attain a more immediate objective: finishing the Obama Administration’s work of connecting so-called anchor institutions across the nation.

Stories of public school students congregating outside schools or libraries so they can use their public Wi-Fi networks to do homework are stirring evidence of the digital divide. Addressing this inequity will require a broader definition of “anchor institutions,” which include not just libraries but public-transit systems and parks. Public Wi-Fi needn’t be confined by roofs or walls. Under the Telecommunications Act of 1996, the Federal Communications Commission must conduct yearly reviews of whether advanced telecommunications capability “is being deployed to all Americans in a reasonable and timely fashion,” and take “immediate action” if it is not. When it comes to anchor institutions, and consumers who have nowhere else to turn for vital access, “immediate action” remains overdue.