Fortune

How AT&T and Verizon Are Testing the Limits of Mobile Network Neutrality

Federal network neutrality rules are supposed to prevent Internet service providers from discriminating against content providers—but also from unfairly favoring their own content. The wireless industry has been testing the boundaries of the rules, an effort that’s taken off over the past few days with moves by Verizon Communications and AT&T, the two largest mobile carriers. Some critics are calling on the Federal Communications Commission to crack down on the two carriers, which have exempted some of their own video services from customers’ monthly data allowances, a practice known as zero rating.

“AT&T is using its latest data-cap exemptions to prop up its satellite-TV business by disfavoring the competitive and diverse video choices people have online,” said Matt Wood, policy director at Free Press. Wood was similarly critical of Verizon’s Go90 data exemption, when it became public in February.

Meet the US's First Ever Cyber Chief

Retired Air Force Brigadier Gen. Gregory Touhill just got a promotion. The White House has named Touhill as the first ever federal chief information security officer, a role that is focused on bolstering the US government’s digital defenses.

The Obama Administration first announced the creation of the position in February as part of a $19 billion “cybersecurity national action plan” that included IT investments and new hires. Touhill currently serves as the deputy assistant secretary for cybersecurity and communications within the Department of Homeland Security. In the new job, he will report to Tony Scott, the federal chief information officer and former executive at business software company VMware. Touhill will lead a team within the White House’s Office of Management and Budget “that conducts periodic cyberstat reviews with federal agencies to insure that implementation plans are effective and achieve the desired outcomes,” said Scott, the US info chief, and Michael Daniel, US cybersecurity coordinator, in a jointly authored blog post announcing the news. Touhill will be responsible for “helping to ensure the right set of policies, strategies, and practices are adopted across agencies,” they said.

Todd Park stepping down as America's chief technology officer

Apparently, Todd Park is planning to step down as Chief Technology Officer by year-end.

He is expected to take on a new White House role, working from Silicon Valley to recruit tech talent into government roles.

He won early praise for his 90-day development of the initial Healthcare.gov rollout, and in 2012 was picked by President Barack Obama to replace Aneesh Chopra as CTO. In this role he helped oversee the repair of Healthcare.gov’s subsequent (and disastrous) relaunch.

Lauren Zalaznick: A forest fire is about to hit the media industry

A Q&A with former NBCUniversal executive Lauren Zalaznick.

Asked about what she sees in the future of the media industry, Zalaznick said: “The challenge is that the great media companies today are going to remain the great media companies of the future, but they are going to be joined by the emerging great media companies of today. The great middle is what is going to suffer the most.”

She left a job with Big Media to start her own newsletter, LZSunday Paper. Although she is not a journalist, Zalaznick added that maintaining a diversity of voices in the media will remain important in the future.

Is municipal broadband more important than net neutrality?

Annoyed by slower broadband speeds offered by a handful of private ISPs, multiple municipalities across the US have established their own public broadband services.

Comcast, Verizon, and other major ISPs routinely lobby against cities’ abilities to establish such networks; limits on public broadband have been enacted in 20 states so far.

“The cable companies especially have the capital to invest in bringing everyone a fast lane,” says Christopher Mitchell, director of Community Broadband Networks at the Institute for Local Self-Reliance. “They just don’t want to do that because they effectively have a monopoly on high-speed access.”

City-owned fiber-optic networks aren’t cheap, which is why many cities across the US continue to rely on private ISPs. But the public networks that are constructed have their intended effect, Mitchell says: Private ISPs drop their broadband prices and increase broadband speeds.

Put aside, for a moment, the notion of “fast lanes” bandied about in the current net neutrality fervor: the real problem is a lack of competition due to much of the US broadband market being controlled by large, private ISPs, a situation well documented by Harvard law professor Susan Crawford in her book Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

There’s a better way than the interconnection agreements proposed by Federal Communications Commission Chairman Tom Wheeler. Why not instead undo the barriers facing municipal broadband instead?

In the fight over e-book pricing, why Amazon is not the bully

[Commentary] As a fight over e-book pricing intensifies between French book publisher Hachette and online retailer Amazon, some are suggesting that Amazon customers are being left behind.

While details of the ongoing standoff are sketchy, it has become clear that Amazon is pressuring Hachette by making access to its books difficult on amazon.com. As an author whose recent book was published by Hachette, Fortune's Adam Lashinsky earlier penned an article that takes issue with Amazon's behavior as contrary to the company's ostensible obsession with customer service.

Turning Lashinsky's argument around, I'm trying to understand what strange universe he lives in to believe that consumers won't come out ahead if Amazon wins this fight. Lashinsky may be conflating author interest with consumer interest, and I can understand his disappointment in being collateral damage in this fight. But as he notes, consumers have alternative choices to buy his book (as I already have).

After the dust settles, if Amazon wins, he will wind up selling more books at lower retail prices and probably earn higher royalty payments. I think Lashinsky should redirect some of his wrath on Hachette, who, like other major publishers, pays only a 25% royalty rate on e-book sales, compared to 50% from native e-publishers like Open Road Media or 50%-70% from Amazon (depending on e-book price).

[Sherman is an adjunct professor at Columbia Business School, where he teaches courses in business strategy and corporate entrepreneurship]

Why surfing the Web could become as dreadful as flying economy class

[Commentary] If you want a glimpse into what the speed of your Internet connection might look like under the newly proposed Open Internet rules, take yourself back to the last uncomfortable hour of a long plane flight.

You know the feeling. You're back in economy class wondering if seats have actually gotten smaller these past few years (they probably have), and amazed when you glance up front and see how appealing business class has become.

That's what the Internet could look like soon. With all the talk about fast lanes and paid prioritization recently, the Federal Communication Commission's proposed rules could lead us down a path where regular and premium service levels make Internet service look a lot more like air travel.

Tiered service has been common in air travel for years, with airlines offering special amenities and improved service for those who can afford to pay more, while everyone else gets crammed into regular seats. Although almost everyone would prefer to travel more comfortably and wait in faster security and boarding lines, it's often challenging for airlines to convince people to pay the premium for first class: It can cost up to ten times more to fly business instead of economy on a trans-Atlantic flight, and both seats get you to the same destination.

So while airlines try to make first class more appealing with new amenities and personalized attention, they simultaneously have an incentive against improving the quality of "regular" service as a way to protect their higher-end business. And as airlines have struggled financially in recent years, it appears they may even be actively degrading economy class options.

What's more, this tactic has the added benefit of increasing the appeal of premium options while still maintaining the premium price. This nuance is critical because it illustrates the incentives for airlines not only to make more seats available by reducing their size, but to increase the disparity between economy and premium seats to make the premium seats even more attractive to flyers.

[Morris is the Senior Policy Counsel and Kehl is a Policy Analyst at New America's Open Technology Institute]

Amazon isn't -- and likely never will be -- a monopoly

[Commentary] Pricing was the basis of the Justice Department's actions in 2012 against the major book publishers and Apple, who hated the fact that Amazon sold new e-book titles for less than $10, believing that Amazon was getting customers used to a price that could not sustain publishers' business models.

The publishers colluded with Apple to force a model on e-book sellers where the publisher set prices for books and retailers simply took a commission. The latest tussle with Hachette is likely an extension of this battle, in which Amazon is fighting to regain its ability to dictate prices. If this is, in fact, the case, then it's highly unlikely that Amazon is up to anything illegal.

Antitrust courts since the 1970s have consistently held that it's not illegal for a company to hold huge market share like Amazon does or even to use that market share as a tool in negotiations with suppliers, as long as they aren't using that power to raise prices for the end consumer. Absent this doctrine, it's easy to see how uncompetitive companies could turn to the government for shelter against competition from highly successful firms like Amazon.

Instead of innovating, these companies could rely on the Justice Department to prevent their competitors from becoming too powerful.

Educating the 'big data' generation

MIT's big-data education programs have involved numerous partners in the technology industry, including IBM, which began its involvement in big data education about four years ago.

IBM revealed to Fortune that it plans to expand its academic partnership program by launching new academic programs and new curricula with more than twenty business schools and universities, to begin in the fall. To date, IBM has invested more than $24 billion in R&D and acquisitions to build the company's capabilities around big data and analytics, and it employs about 15,000 consultants and 400 mathematicians to focus exclusively on the area.

Business analytics is now a nearly $16 billion business for the company, IBM says -- which might be why it is interested in cultivating partnerships with more than 1,000 institutions of higher education to drive curricula focused on data-intensive careers.

The W. P. Carey School of Business at Arizona State University launched a Master of Science in Business Analytics degree in 2013 and is now adding a Bachelor of Science in Data Analytics program as well. ASU started its master's program small, with an initial cohort of five students last fall. It has matriculated 100 and is shooting for two groups of 50 by 2015. Meanwhile, the number of applications to the master's program has jumped from 159 in 2013 to 298 applications as of early May.

Is a mandatory kill switch the solution to smartphone theft

How do you stop the growing epidemic of stolen smartphones? Lawmakers in California seem to think it's by mandating providers to sell devices with built-in "kill switch" capabilities that would make stolen phones inoperable.

A key question was left unanswered: Is this the solution to smartphone theft? You'd be hard-pressed to find a consensus among industry experts on the matter.