Washington Post

You may never see a penny of the $400 million Apple just agreed to pay e-book buyers

Apple has agreed to pay e-book customers $400 million to settle a class-action lawsuit over its e-book pricing practices. But don't get too excited. The company is only going to pay under certain conditions.

The deal, struck with 33 state attorneys general, was prompted by the Justice Department's antitrust suit against Apple, which claimed the firm illegally colluded with book publishers to raise e-book prices.

If the court of appeals sends the case back to US District Court Judge Denise Cote , Apple has agreed to pay $50 million to settle its damages claim. And if the appeals court reverses the decision? "If we are vindicated by the appeals court, no settlement will be paid," the company said.

What a terrible Comcast rep can teach regulators about the Time Warner Cable merger

[Commentary] A Comcast customer service call from hell highlights something that isn't as easily quantified by cold, hard economic analysis. The Federal Communications Commission, one of two agencies along with the Justice Department charged with approving the merger of Comcast and Time Warner Cable, typically considers the public interest as part of its mandate.

Consumer advocates argue that quality customer service ought to be included under that umbrella. Yet the very fact that people are making that case at all underscores how subjective the term "public interest" really is, and why it's sometimes easier to focus on what can be measured or projected numerically.

Google’s back-door approach to Internet policy

Google isn't exactly sitting on its hands in the network neutrality debate. It's taking a more oblique approach to the Washington game -- like speaking through industry groups.

Google has also, like Netflix, begun shaming Internet providers that it perceives as laggards in the video streaming department. And it is clear Google hasn't completely disengaged from issues of Internet policy. It's simply grown more selective in its battles, and perhaps a little more ninja-like in the way it fights them.

White spaces: An analyst explains the grand opportunities he sees for innovation

What will be the next massive shift in our world?

Analyst Horace Dediu, who writes insightfully on Apple and more at Asymco, said, “People say there’s no more opportunities, I say there’s tons of opportunities because you look at all these spaces where -- to put it bluntly -- software has not yet infiltrated. Software -- you can say technology but let’s be more specific -- it’s software. Once you inject software into any product you go from making it dumb to smart.”

He singled out health care, education and transportation as fields likely to go through upheaval that will benefit the average individual. Dediu expects wearables to drive the change in health care.

This is why the government should never control the Internet

[Commentary] July 15 is the deadline for the public to comment on the Federal Communications Commission’s attempt to regulate the Internet under the seemingly innocuous moniker of “net neutrality.”

The architect of this movement, and the man who coined the term “net neutrality,” is Columbia law professor Tim Wu. Unfortunately, he has been immensely influential among regulators. Net neutrality advocates have argued that ISPs have an economic incentive to act anti-competitively toward consumers and competitors.

While some tech companies have been inspired by Wu as they try to “regulate their rivals,” phone and cable companies, they may be forging their own regulatory chains, link by link. Wu’s vision shows how their ostensible goal could continue to morph into a regulatory regime for the entire Internet ecosystem, affecting far more than ISPs. Inviting regulators into your neighborhood is likely to embolden them to control not only your neighbor but you, too.

Wu’s supporters should be careful what they wish for.

[McDowell served as a commissioner of the Federal Communications Commission from 2006-2013 and is currently a visiting fellow at the Hudson Institute’s Center for Economics of the Internet]

No, Aereo isn’t really claiming to be a true cable company

In an effort to survive, Aereo's throwing everything against the wall and hoping something -- anything -- sticks. Its latest tactic? To embrace the Supreme Court decision that effectively killed its existing business model, and to work within the confines of the ruling to arrive at an alternative that won't land the company in court again.

Aereo is now conceding that it is a cable company after all, after having argued the opposite point before the Supreme Court. The company now says it's willing to pay those licensing fees -- but to the Copyright Office, rather than to the broadcasters who were suing Aereo in the first place. In short, Aereo is trying to thread a very small needle: It wants to say it's just enough of a cable company that it qualifies for the benefits that come along with it (more on that shortly) but not so much of a cable company that it needs to pay expensive retransmission fees required of other cable companies.

If Aereo admits that it's a cable company in the eyes of the copyright law, what's to stop the FCC from branding Aereo as a cable company that has to pay retransmission fees? Aereo's only hope at avoiding that outcome rests on the FCC's historical reluctance to say whether online video services count as MVPDs.

FTC sues Amazon over children’s in-app purchases

Federal regulators announced it has filed a lawsuit against Amazon.com for allegedly making it too easy for children to make purchases when using mobile apps without a parent's permission.

The Federal Trade Commission said Amazon charged parents millions of dollars of unauthorized payments for what's known as "in-app purchases," typically make-believe items popularly offered within mobile games such as Candy Crush Saga that enhance a game or allow a user to advance levels.

The FTC said in its suit that it seeks a court order for the company to refund families affected by the unauthorized charges that began in 2011. It also wants the court to permanently ban Amazon from charging parents for in-app purchases without their consent. Amazon, whose chief executive Jeffrey Bezos owns The Washington Post, did not immediately respond to a request for comment.

The FTC alleges that beginning in November 2011, Amazon violated the FTC Act by billing parents for charges incurred by their children without permission. Amazon's Kindle Fire tablet was used by children to play games and spend "unlimited amounts of money" to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement, the agency wrote. The FTC said that at first, no password requirements were put in place to stop children from making the purchases.

Sen Ron Wyden: Uber should be as unfettered as Facebook

A Q&A with Sen Ron Wyden (D-OR).

Back in 1996, then-Reps Ron Wyden (D-OR) and Christopher Cox (R-CA) added 26 words to the Communications Decency Act that have, in the 18 years that followed, perhaps done more than any other law to shape how the Internet has evolved in the United States. Called Section 230, the provision said that Web sites that host users' writings, videos, and more aren't held liable as publishers of that content. That obscure provision is widely credited with allowing the Internet economy and online communications to flourish.

Now, a new generation of Internet-powered yet offline companies such as Airbnb, Aereo and Uber is invoking the spirit of Section 230 to argue that, as mere platforms for the activities of users, they should have the same operational freedom enjoyed by first-generation Internet companies. The car-hailing service Uber has argued that it simply uses the Internet to pair drivers and riders. Are these new online platforms stretching the spirit of Section 230 too far? Or are regulators and the courts failing to see its relevance in an age when what the law calls an "interactive computer service" isn't as clear-cut as it once was?

“One of the things that's been learned over this 20-year odyssey is that you should not try to force old legal regulatory or tax regimes on fundamentally new innovations," Sen Wyden said. "That does not mean that there should be no regulation at all. But all too often the machinery of government has been used to protect old business models against innovation. That is what I have tried resolutely to push back against.”

The Senate has advanced a bill to legalize cell phone unlocking

We're one step closer to a world where it's no longer a huge chore to take your existing cell phone to another network. The Senate Judiciary Committee just unanimously approved a bill that'd make it easier for you to "unlock" your cell phone so that you can port it to a different carrier -- much in the way you can bring your phone number with you.

"With today’s strong bipartisan vote in the Judiciary Committee, I hope the full Senate can soon take up this important legislation that supports consumer rights," said Sen Patrick Leahy (D-VT), the committee chairman. The House has already passed a similar bill -- but unlike the House version the Senate's, notably, doesn't forbid people from unlocking lots of cell phones. That language is important when it comes to businesses that trade in second-hand devices; currently, you can only unlock your phone if you ask for your carrier's permission (and only at the end of your contract).

Authors Guild president to Amazon: No, thanks. We don’t want your money.

A Q&A with Authors Guild president Roxana Robinson.

The contract dispute between Amazon.com and Hachette Book Group has delayed the shipment of thousands of titles. The battle took another turn as Amazon reached out to Hachette authors with an offer to immediately begin offering the delayed books again and give its share of Hachette digital book sales to the authors for the duration of the dispute -- if the publisher would also forgo its share of the revenue.

What do authors think? Robinson isn't buying it, saying the offer is merely a tactic to bully the publisher into conceding to unfavorable terms. When presented with that argument, Amazon said that writers against the deal are "conflating the long-term structure of the industry with a short-term proposal designed to take authors...out of the line of fire."

“The Amazon letter didn't really take us out of the middle; it asked us to take sides against our publishers,” Robinson said. "It also seems to assume that what we really want is a short-term windfall, which is what we get if Amazon asked Hachette to give up revenues from e-books. But we want a healthy publishing ecosystem, a system of commerce in which we’re not trying to kill each other or drive each other out of business.” She added that the government should step in whenever a single company has too much power, it creates “a situation in which legal intervention would make sense.”