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Old 14-05-14, 08:18 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - May 17th, '14

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"The idea of net neutrality is not to have the government ‘regulate the internet,’ it’s to keep the internet open, so that we still have the innovation and investment we’ve had in the past." – Sen. Al Franken, D-MI


"In five years Comcast at least would have a usage-based billing model rolled out across its footprint." –VP David Cohen






































May 17th, 2014




More Ad Dollars Flow to Pirated Video

Illicit Websites Use Automated Ad-Buying Systems to Their Advantage
Jack Marshall

It's easy for websites to make a profit selling online advertising. All they have to do is avoid paying for content.

Sites brimming with pirated movies and television shows are being supported, inadvertently, by major marketers that buy ad space on them. Thanks to the rise of automated ad-buying technologies, more ad dollars are flowing to sites with stolen copyrighted content than ever before, ad executives say. Who should do the policing is a matter of debate in the industry.

In February, nonprofit Internet safety group Digital Citizens Alliance commissioned MediaLink to research how much money these sites are earning. MediaLink examined 596 sites where viewers can find pirated movies and TV shows, and estimated those sites generate a total of $227 million in advertising revenue annually.

Even small piracy sites could generate more than $100,000 a year from ad space sold to major brands, the report said, because they don't pay for their content. The profit margins of the sites examined could range from 80% to 94%, based on the costs typically associated with maintaining such sites, which include hosting fees and human resources.

Take zzstream.li, for example, which helps users unearth and stream unlicensed video owned by companies including Home Box Office Inc., Warner Bros. Entertainment Inc. and Lions Gate Entertainment Corp. LGF -1.08% In March, it featured advertising for brands including Kraft, Toyota, 7203.TO -0.38% Target, Honda, Lego and Claritin. The site reached 1.34 million people in March, according to online measurement firm comScore.

Commercials for both Toyota and Kraft's Velveeta brand appeared on zzstream.li before a full episode of HBO's "Game of Thrones." According to HBO, this content was displayed illegally. Elsewhere on the same site an ad for Honda appeared alongside an episode of Lions Gate's "Mad Men," while commercials for Target and Merck MRK +0.69% & Co.'s Claritin preceded a full episode of the Warner Bros.-made show "The Big Bang Theory."

That content was being streamed without permission too, the program makers say.

It is a similar story with mytvline.com. Unlicensed HBO content was streamed on the site after commercials for brands including Lego and Honda.

"We work diligently to protect our content so it's unfortunate that ad dollars are finding their way to illegal video sites, most likely unbeknownst to the brands involved," said Jeff Cusson, a spokesman for HBO, a unit of Time Warner Inc.

Attempts to contact the owners of zzstream.li and mytvline.com proved unsuccessful. The zzstream.li domain is registered to a nonexistent street in Sweden, while mytvline.com was registered using a domain privacy service provided by Domains By Proxy LLC. Neither site offers any contact information.

The marketers said they hadn't intended for the ads to appear on the sites, and were unsure how they did.

Echoing the sentiment of others, Target Corp. said its ad placement on zzstream.li was "in violation of the contract terms with the vendor who manages ad placements online," and said it was working with that vendor to have its ads removed.

This is a problem that continues to plague the world of online advertising. Marketers are increasingly buying online ad space through complicated automated marketplaces and chains of brokers, instead of directly from website owners themselves. When marketers place ads through these channels, they can't be sure where they might appear across the Web.

Merck said ads for its Claritin allergy medicine were placed on zzstream.li by Tremor Video, TRMR +3.90% an ad firm working on its behalf, adding that Merck doesn't have any relationship with the site or "any like it."

Adam Lichstein, chief operating officer at Tremor Video, said the company has controls in place to ensure ads don't appear where the company and its marketer clients don't want them to.

He conceded, however, that things slip through the net. "The Internet is vast and wide and we can't control everything that happens," he said.

Piracy sites are well aware of this, and use it to their advantage. Ad executives say it is relatively easy for these sites to force their way into these automated marketplaces and to gain access to big-brand ad budgets. Even if those sites are found by ad companies and blocked from their systems, they often succeed in disguising themselves and finding a way back in.

The site operators are then paid by ad networks and marketplace operators the same way any of their publisher partners would be, these executives say, using methods such as Automated Clearing House, wire transfer or online payment services including PayPal.

"This is a huge problem. It's a giant game of Whac-A-Mole, and the piracy sites know it," explained Andrew Casale, a vice president of strategy at online advertising technology company Casale Media. "When they stop seeing big brands and material spending on their sites, they only need to change their domain names to get back to the spend."

Ad-technology firm TubeMogul also placed ads on zzstream.li on behalf of ad agency Universal McCann, though it said it too did so unintentionally. TubeMogul's chief strategy officer, Jason Lopatecki, said the company is doing its utmost to keep up with the tactics used by bad actors. There are "many tricks nefarious publishers use to play cat-and-mouse," he said.

Universal McCann's chief investment officer, David Cohen, described the problem as "an ongoing battle," and one that presents a "significant challenge to the industry."

But some say ad networks and technology firms don't do enough to stop advertisers from appearing alongside potentially illicit content. According to the Motion Picture Association of America, some companies knowingly sell ads on piracy sites because it is lucrative to do so.

"While the industry as a whole has some cleaning up of its act to do, there are some significant players that appear clearly to be turning a blind eye to blatant infringement—and profiting from it," said Farnaz Alemi, a content protection counsel at the MPAA.

Last year, the Annenberg Innovation Lab at University of Southern California attempted to track which ad networks display the most ads on illicit file-sharing sites. Its research found that a handful of companies routinely ranked among the worst offenders, including Propellerads, ExoClick and Adcash.

According to the lab's director, Jonathan Taplin, those companies simply ignore the nature of the content on the sites they work with. "It can be stopped, I know it can happen," Mr. Taplin said. "But some ad companies don't care at all."

A representative for Estonia-based Adcash said the company doesn't support piracy sites, and that it enforces policies that prohibit its ads from appearing on sites that might infringe copyright laws. ExoClick and Propeller Ads Media didn't respond to requests for comment on the Annenberg Innovation Lab's research.
http://online.wsj.com/news/articles/... EditorsPicks





Peer-To-Peer File Sharing Service Send Anywhere Raises $1M Seed Round
Catherine Shu

Like Dropbox, Box, and Google Drive, ESTmob’s Send Anywhere offers file sharing–but with a key difference. Instead of first saving files to cloud storage, Send Anywhere enables users to share content peer-to-peer between devices in real time. The Seoul-based startup company announced that it has raised a $1 million seed round led by SaeMin Ahn, a managing partner at Rakuten Ventures, with participation from Andrew McGlinchey, Andy Warner, and two Korean angel investors.

Rakuten Ventures is the investment arm of the Japanese e-commerce and Internet services company that recently purchased Viber in a $900 million deal.

ESTmob, which was spun-off in 2012 from ESTsoft, lets users share files by pairing two devices and using a temporary key confirmation, which means it requires no registration or login. Send Anywhere is targeted towards people who want to access files on multiple devices and is currently available for free as an online service or on iOS and Android.

In an email, co-founder Suhyuk Kang told TechCrunch that Send Anywhere’s peer-to-peer sharing is faster than its competitors for sending many large files at once.

“Most people using multiple devices use them in the same local network, or in very close range. Why go through the cloud?” he explained. “Cloud servers are likely to be a very long distance from the user’s device. It’s slow, there are security concerns, and it’s expensive.”

Furthermore, other file-sharing services may perform slowly for users outside of the U.S., especially if they are trying to sync large multimedia files. One benefit of bypassing a cloud server is privacy.

“I believe we can be a complementary service for cloud services in the global market,” Kang said.

Another potential competitor is WhatsApp and other messengers that allow photo- and video-sharing, but Kang says Send Anywhere preserves the quality of image files while letting users send large batches of data–more than 100 photos or 2GB of videos.

Send Anywhere’s next major update is remote access for registered devices, that will create a user experience closer to services like Dropbox while still bypassing the need for a cloud server.
http://techcrunch.com/2014/05/12/send-anywhere/





The Slow Decline of Peer-to-Peer File Sharing
Seth Fiegerman

The days of peer-to-peer file sharing being somewhat of a mainstream online activity have long since come to an end.

Peer-to-peer file sharing services, once a seemingly ubiquitous tool for pirating content, now account for only about 8% of daily Internet traffic in North America, according to a new report from Sandvine based on data from its more than 250 Internet service provider customers.

By comparison, file sharing services accounted for 22% of total daily traffic in 2011 and nearly a third of traffic in 2008, according to Sandvine.

"People have shifted their activities to streaming over file sharing," Dan Deeth, Internet trends manager at Sandvine, tells Mashable. "Subscribers get quality content at a reasonable price and it's dead simple to use, whereas torrenting or file sharing is a little more complicated."

Sure enough, Sandvine has found that "real-time entertainment," which it defines as streaming audio and video, now accounts for 56% of daily traffic, up from the high 30-range in 2011.

Netflix in particular now accounts for about a third of Internet traffic at peak hours in North America. As Deeth puts it, "My mom doesn't know how to use BitTorrent, but she sure knows how to use Netflix."

Deeth expects peer-to-peer file sharing services will continue to decline as a percentage of overall web traffic, but he doesn't believe they will disappear completely. Instead, he estimates it will bottom out at about 5% of daily Internet traffic.

"I think you're nearing the bottom," he says. "There will always be a subset of users who will think they have a right to file share, or who will never pay for over the top services no matter how great the value is."
http://mashable.com/2014/05/14/file-sharing-decline/





In a Rare Move, Canadian Mounties Seized Data from a Torrent Site
Ben Makuch

In a rare move targeting online piracy, the Royal Canadian Mounted Police allegedly seized data from a Canadian hosted torrent site on behalf of Swedish authorities.

Sparvar, a mostly Swedish file-sharing tracker providing p2p hosting to 10,000 BitTorrent users, was the target of the data collection. When the site went offline, reports quickly circulated online that an unnamed Canadian law enforcement agency confiscated Sparvar's servers during a raid.

Montreal-based hosting server Netelligent hosts Sparvar's site. According to chief information officer Mohamed Salamé, reports of an RCMP "raid" on their servers in Quebec were exaggerated. Instead the RCMP served the company with a legal document asking for a copy of Sparvar's data.

“We made a copy of the data with the client’s consent,” said Salamé, then gave it to the Mounties cooperatively. According to Salamé the RCMP acted in conjunction with Swedish law enforcement through an international mutual legal assistance treaty.

When I reached out to the RCMP by phone to confirm the data seizure, a spokesperson said the agency does not comment publicly on ongoing investigations, especially since the Mounties didn't issue a press release about the case. Salamé told me this is one of the first times he’s ever seen the RCMP act on an illegal torrenting case involving one of Netelligent’s hosted sites. He said most law enforcement requests he receives involve more “serious matters... like hacking.”

Torrent Freak reported the seizure took place after anti-piracy group Rights Alliance, an organization defending the rights of Hollywood filmmakers, filed complaints against Sparvar in Sweden. Using the same kind of tactics two years ago, Rights Alliance took down Swepiracy, another popular Swedish BitTorrent site. I asked Rights Alliance for comment on the Sparvar case, but the group didn’t respond.

While the Copyright Modernization Act passed by Canadian Parliament in 2012 aimed to curb illegal online piracy—Canada is still a known haven for Torrent sites. In their 2014 submission to the US government the International Intellectual Property Alliance (IIPA) names Canada as “a magnet for sites” that “facilitate and enable massive unauthorized downloading of pirated versions of feature films, TV shows, recorded music, entertainment software, and other copyright materials.” This isn’t anything new: file-sharing site isoHunt.com was based in Canada before it was forced to shut down in 2013.
http://motherboard.vice.com/read/in-...a-torrent-site





Al Franken Says FCC Proposed Rules Are “The Opposite of Net Neutrality”
Haley Sweetland Edwards

Senator Al Franken has a pretty good idea of what the term “net neutrality” means—and that, he says, puts him head-and-shoulders above many of his colleagues in the U.S. Congress.

“We literally have members of Congress—I’ve heard members of the House—say, ‘We’ve had all this innovation on the Internet without net neutrality. Why do we need it now?’” he told TIME in an interview last week. “I want to say, ‘Come on, just try to understand the idea. Or at least just don’t give a speech if you don’t know what you’re saying. Please—it hurts my head.”

Since coming to the Senate in 2009, Franken has been among the most outspoken proponents of so-called net neutrality rules, which require Internet service providers to treat all internet traffic—no matter the content or who produced it—equally. Under such rules, big broadband providers, like Comcast or Verizon, would be prevented from blocking or hampering consumers’ access to certain content, or prioritizing access to other content.

Franken’s colleagues who “don’t understand” the idea of net neutrality argue that the internet has been a bastion of innovation and investment for decades without such rules on the books. But the landscape of the internet has changed over the last decade, with once-tiny internet start-ups growing and consolidating into massive enterprises like Google, Amazon, and Comcast (the biggest internet service provider in the country). Franken argues that under such circumstances, net neutrality rules are necessary to protect tiny start-ups, which might become the next YouTube or Twitter, from being blocked by its now enormously powerful competition.

“The idea of net neutrality is not to have the government ‘regulate the internet,’” Franken said. “It’s to keep the internet open, so that we still have the innovation and investment we’ve had in the past.”

The Federal Communications Commission (FCC) is now considering new net neutrality rules, which have been roundly panned by consumer and open internet advocates, including Franken. The proposed rules would allow content companies to purchase better delivery speeds and quality from Internet service providers, which, Franken said, “is the opposite of net neutrality.”

The new rules will create a “fast lane” and a “slow lane” on the internet—those in the fast lane will pay a premium for the opportunity, giving an advantage to Internet startups with deep pockets. “That’s pay for play,” Franken said, echoing the sentiments he put into a public letter to FCC Chairman Tom Wheeler last week. “That’s antithetical to net neutrality.”

The net neutrality discussion comes at a time when the television industry is undergoing a revolution. As the line blurs between watching traditional cable programming, like AMC’s “Breaking Bad,” on your living room TV, and watching premium programming, like Netflix’s popular show “House of Cards,” on your laptop or tablet, how the Internet is regulated will affect how—and for what price—TV is piped into your home, too.

Having come from the front lines of the television industry—Franken was a writer and performer for Saturday Night Live for more than three decades—the issue is particularly dear to his heart. Net neutrality rules would make it illegal for a cable TV and broadband company like Comcast, which owns NBC Universal and the rights for all its programming, from making its own video content stream more quickly over broadband than video from competing cable programmers or Internet-only upstarts, like Netflix or Amazon.

Franken has also been an outspoken critic of the proposed merger between Comcast and Time Warner Cable, two of the three biggest broadband providers in the country. The merger will make it harder for independent TV producers to survive, he argued; if the combined Comcast-Time Warner Cable company, which will control at least a third of the American cable market, doesn’t want to rebroadcast your show, you’re toast. (TIME magazine is owned by Time Warner, which separated from Time Warner Cable in 2009.)

On Wednesday, Franken spent a few minutes talking to TIME about the misunderstood concept of net neutrality, the cable companies’ merger, and the future of the internet. This interview was edited for length and clarity.

Why should the public care about the Comcast and Time Warner Cable merger or the net neutrality rules?

They should care [about the merger] because it’ll affect their cable bill, their bill for their Internet, and what kind of service they get. When you have the biggest cable provider buying the second biggest cable provider, you end up getting a big company—a behemoth—that cares even less about customer service. I’m not the first one to notice that Comcast is already pretty famous for providing bad service. And [the public] should care [about both the merger and net neutrality rules] because when you have competition, you have innovation. YouTube was invented in a pizzeria in San Mateo because you had net neutrality in place. They didn’t have to pay Comcast so people could see it.

How does the Comcast-NBC Universal merger in 2010, which you also opposed, affect the proposed merger today?

When [Comcast was] buying NBCU, they explicitly said, ‘We’re not broadening our distribution. This vertical integration is okay because we’ve still got other competitors.’ They named Time Warner Cable as their primary competitor. The CEO of Comcast Brian Roberts actually said that—he said, ‘There might have been motivation to over charge, but the existence of Time Warner Cable will keep us honest.’ And now they’re saying the opposite. They’re saying, ‘Time Warner Cable is not a competitor. We don’t compete with Time Warner Cable at all.’ They are absolutely contradicting everything they said four years ago.

The discussion about the merger is happening at the same time that the FCC is considering new net neutrality rules. How does one inform the other?

Comcast would love to keep the focus on TV, but the bigger issue here is broadband. This merger would be the first largest broadband provider in the country acquiring the third largest. Between them, they’ll control 40% of the internet broadband market, and data shows that about 30% of the people in this country have only one choice of broadband provider in their area. This would give [the new combined company] tremendous leverage in the market. What’s going to happen when one company has that kind of power?

Are the new net neutrality rules that FCC Chairman Tom Wheeler will propose next week consistent with what President Obama promised in 2007?

I believe [Obama] pledged to appoint FCC commission that would honor net neutrality and keep net neutrality as law. The latest proposed rules by Wheeler—what he’s really talking about is creating a fast lane where people can pay to have their content treated unequally. That’s not net neutrality. That’s pay for play. That’s antithetical to net neutrality.

So what should be done instead?

To my mind, you have to say that internet is telecommunications. That’s all you have to do. That’s the response to the courts. [In January, a DC court threw out the FCC’s net neutrality rules on the grounds that the FCC’s jurisdiction ended at “telecommunications.”] So you say, it’s telecommunications, and then FCC has the power to enforce net neutrality and continue to try to solve network management problems and we continue to have the kind of innovation that we’ve had, that has made the internet what it is.
http://time.com/94205/al-franken-say...et-neutrality/





FCC Head to Revise Broadband-Rules Plan

Agency won't let firms segregate web traffic into fast, slow lanes
Gautham Nagesh

The head of the Federal Communications Commission is revising proposed rules for regulating broadband Internet, including offering assurances that the agency won't allow companies to segregate Web traffic into fast and slow lanes.

The new language by FCC Chairman Tom Wheeler to be circulated as early as Monday is an attempt to address criticism of his proposal unveiled last month that would ban broadband providers from blocking or slowing down websites but allow them to strike deals in which content companies could pay them for faster delivery of Web content to customers.

The plan has drawn criticism from a wide range of players in the technology world, including Google Inc., Netflix Inc. NFLX +2.14% and dozens of prominent tech investors, who say that such deals will inherently segregate the Internet into fast and slow lanes.

In the new draft, Mr. Wheeler is sticking to the same basic approach but will include language that would make clear that the FCC will scrutinize the deals to make sure that the broadband providers don't unfairly put nonpaying companies' content at a disadvantage, according to an agency official.

The official said the draft would also seek comment on whether such agreements, called "paid prioritization," should be banned outright, and look to prohibit the big broadband companies, such as Comcast Corp. CMCSA -0.20% and AT&T Inc., T +0.11% from doing deals with some content companies on terms that they aren't offering to others.

Mr. Wheeler's language will also invite comments on whether broadband Internet service should be considered a public utility, which would subject it to greater regulation. The FCC has so far not reclassified broadband as a utility, and providers have fiercely opposed such a move, saying it would cause innovation and investment to collapse.

The redrafting reflects the challenge Mr. Wheeler faces as he pushes forward with a vote Thursday on the plan that would then open the proposal to public comment. The chairman, agency officials said, is trying to address the backlash to his initial proposal while sticking to what he thinks will be the fastest course of action.

"The new draft clearly reflects the public input the commission has received," one of the FCC officials said, noting that the proposal seeks specific comment on the benefits of reclassifying broadband as a utility.

"The draft is explicit that the goal is to find the best approach to ensure the Internet remains open and prevent any practices that threaten it."

But Mr. Wheeler's modifications aren't likely to mollify critics of the plan, especially those who are calling for a purely neutral Internet in which all traffic is treated the same.

Last week two of the five FCC commissioners, Democrat Jessica Rosenworcel and Republican Ajit Pai, called for Mr. Wheeler to delay Thursday's vote, which would open the proposal to public comment, in light of the backlash.

Perhaps the boldest change is Mr. Wheeler's willingness to broach the topic of reclassification. Those who argue for it say that it is the surest way to achieve pure "net neutrality," the notion that the Internet's pipes should be equally open to all. Without it, they say, the FCC's authority isn't strong enough to prevent the paid deals.

The FCC also plans to seek comment on two other net neutrality proposals offered by the Mozilla Foundation and Columbia Law Professor Tim Wu, who coined the term "net neutrality."

Telecom lawyers believe Mr. Wheeler is using the threat of reclassification to discourage broadband providers from attempting arrangements that would run afoul of his rules. However, the broadband providers have successfully challenged the FCC's last two attempts at enforcing net neutrality in court, most recently in January.

Reclassification would probably also result in a court fight, leaving the status quo until it is settled. Mr. Wheeler argues that there are no rules to prevent broadband providers from blocking or slowing down websites under the current regulatory framework. His strategy is to allow the deals while relying on the FCC's regulatory hand to make sure they are fair.

"I won't allow some companies to force Internet users into a slow lane so that others with special privileges can have superior service," Mr. Wheeler wrote to Google and other companies.

Net-neutrality advocates worry that Mr. Wheeler's approach may work while he remains in office, but a different commission could let enforcement wither. To assuage such concerns, Mr. Wheeler's latest draft rules will include new language on protecting consumers and innovators such as Web companies that rely on the broadband pipe. One possibility is approving proposed language that requires broadband providers to give all users access to "fast and robust service." However, such wording could prompt another legal challenge.

Mr. Wheeler's updated draft would also propose a new ombudsman position with "significant enforcement authority" to advocate on behalf of startups, according to one of the officials. The goal would be to ensure all parties have access to the FCC's process for resolving disputes.

Mr. Wheeler's insistence that his strategy would preserve an open Internet, without previously offering much insight into how, has been a source of disquiet within his agency. Of the five-member commission, both Republicans are against any form of net neutrality rules, which they view as unnecessary. Commission observers will be watching the reaction of the two Democrats, Ms. Rosenworcel and Mignon Clyburn, to Mr. Wheeler's new language.

"There is a wide feeling on the eighth floor that this is a debacle and I think people would like to see a change of course," said another FCC official. "We may not agree on the course, but we agree the road we're on is to disaster."
http://online.wsj.com/news/article_e...MDEwMTExNDEyWj





Internet Providers Strike Back on Net Neutrality
Amy Schatz

In a surprise to no one, Internet providers warned federal regulators that treating broadband like phone lines will stunt future investments and service upgrades.

Twenty-eight CEOs representing companies which provide Internet service to a majority of Americans sent a letter to the Federal Communications Commission Tuesday warning the agency against adopting more regulations of broadband lines. AT&T’s Randall Stephenson, Verizon’s Lowell McAdam, Comcast’s Brian Roberts*, Cox Communication’s Patrick Esser and Brian Sweeney of Cablevision were among the signatories.

The letter, meant to strike back at net neutrality activists who have been pressing for the re-regulation of broadband lines, offers few new arguments in the debate but is a reminder to regulators that Internet providers won’t allow re-regulation of their lines without a fight.

“Reclassification of broadband Internet access offerings as Title II – telecommunications services — would impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy,” the companies warned. “An era of differentiation, innovation, and experimentation would be replaced with a series of ‘Government may I?’ requests from American entrepreneurs. That cannot be, and must not become, the U.S. Internet of tomorrow.”

Broadband companies made similar arguments four years ago when the FCC last broached the idea of re-regulating (or reclassifying) Internet lines under Title II of the Communications Act, which was written with old phone networks in mind. That idea was quickly dropped after Internet providers complained to practically everyone in D.C.

Net neutrality advocates argue that regulating Internet lines under Title II would give the agency clear authority to stop providers from blocking websites or discriminating against competitors’ services.

That may be the case, but broadband providers are likely a bit more concerned about other things that Title II could allow the agency to do, including rate regulation of Internet lines or requiring broadband providers to offer wholesale access of their networks to smaller competitors.

Net neutrality advocates are worried about FCC Tom Wheeler’s new proposal for net neutrality rules which would allow Internet providers to pay for faster lanes of service to consumers. Opponents of the plan argue it would change the nature of the Internet by allowing deep-pocketed companies to buy fast-lane access while everyone else is left with slower, more congested service.

Amid complaints about his plan, Wheeler added more language in the draft proposal asking if Title II is a better way to approach the net neutrality issue. In their letter, the CEO’s dismissed the idea that Title II would prevent companies from offering priority service if they wanted to.

“In defending their approach, Title II proponents now argue that reclassification is necessary to prohibit “paid prioritization,” even though Title II does not discourage—let alone outlaw— paid prioritization models. Dominant carriers operating under Title II have for generations been permitted to offer different pricing and different service quality to customers,” the companies wrote.

The letter came as net neutrality activists kept up pressure on the agency to take the Title II route and shut down Wheeler’s fast-lanes proposal. A group of actors and musicians (including Eddie Vedder, Mark Ruffalo, and … Wallace Shawn? Inconceivable!) delivered a letter expressing their desire for the agency to go down the re-regulation road. “Unless the Commission restores strong nondiscrimination protections based on a solid legal framework, creativity, cultural commerce and free expression will suffer,” they said.

Meanwhile, Reddit co-founder Alexis Ohanian put posters up at bus shelters across D.C. after his Crowdtilt campaign reached more than $20,000 in donations. He originally planned to buy advertising space on a billboard but opted for bus ads instead after discovering there aren’t any billboards near the FCC’s building in downtown D.C. (FCC commissioners also don’t take the bus — they have parking spaces in the building — but whatever.)

FCC officials are expected to vote on the proposal Thursday, after which the draft would be made public so people can finally see details of what Wheeler is proposing.

*Comcast’s NBCUniversal unit is an investor in Revere Digital, Re/code’s parent company.
http://recode.net/2014/05/13/interne...et-neutrality/





Net Neutrality Protesters are Literally Camped Outside the FCC. And the Agency is Hearing Them Out.
Brian Fung

By 9:30 Tuesday morning, Washington was already well on its way to a hot and sticky afternoon. For the handful of protesters camped out in front of the Federal Communications Commission, the heat was all worth it.

The demonstrators are calling on the FCC's chairman, Tom Wheeler, to abandon a proposal that allows Internet providers to charge content companies like Dropbox and Google extra for speedy and reliable service. They set up shop on a small strip of concrete and grass outside the FCC building on Maine Avenue in Southwest. When I visited, drivers whizzed past on a highway onramp just a few feet from the curb. While the traffic didn't feel unsafe, it kept the protesters mostly hemmed in. Orange and white tents from REI dotted the perimeter. It was hard to see whether anyone was inside them taking refuge from the heat.

Drawing inspiration from the Occupy Wall Street protests of a few years ago, the demonstrators are asking the agency to reclassify broadband providers as utility companies, which would allow the government to issue a ban on speeding up or slowing down types of Internet traffic. The FCC is considering rules that would prohibit companies from blocking traffic but could give them the freedom to offer faster service to Internet companies like Netflix and Google that chose to pay a fee.

Wheeler has defended the proposal, saying that he won't hesitate to regulate broadband companies more strictly if the situation demands and that he is following the roadmap laid out by a federal court that struck down the FCC's old net neutrality rules in January.

"The FCC must reclassify the Internet as a common carrier under Title II of the Communications Act," said Kevin Huang, the campaign manager for the consumer group Fight for the Future. Huang had been camped at the FCC for the past two days. "Anything less is just 'net neutrality' in air quotes."

The protesters are apparently being heard. A spokesperson for FCC Commissioner Ajit Pai confirmed that Pai came out and chatted on Friday with the protesters, some of whom have been camped out since May 7. While Pai, a Republican, opposes net neutrality regulations, the discussion was cordial, according to Kevin Zeese, a Baltimore-based criminal lawyer and net neutrality advocate. Other FCC staff members — even a security guard — have high-fived some members of the group in solidarity as they passed in and out of the building, said Zeese.

"When we're out passing out literature, people almost always take the materials," said Zeese. "They say: 'Thank goodness you're out here. We're glad you're here. We're with you, and we hope they're listening to you.' We've had some employees come out specifically to shake our hands."

An FCC security guard who declined to give him name because he was not authorized to speak publicly told me the protest has been mostly calm in recent days.

The FCC is scheduled to vote on the net neutrality proposal Thursday. The protesters have vowed to sit in on the meeting, which is open to the public. "We'd like to have a strong public presence," said Margaret Flowers of the consumer group Popular Resistance.

If Wheeler gets the votes he needs to move forward with his net neutrality plan this week, it will kick off a lengthy comment period, during which the public can continue to weigh in on the issue. In short, this isn't going to be resolved overnight.

"The powers that be are going to make the decision," said J.R. Clement, an independent contractor who has represented broadcast media interests at the FCC for the past six years and who was watching the protesters Tuesday. "Being here the last 10 years, I can say that the wheels here turn very slowly."

More protesters were expected to arrive Tuesday night in time for a concert at the campsite, and they're planning a rally ahead of the FCC's meeting Thursday morning.
http://www.washingtonpost.com/blogs/...ring-them-out/





F.C.C. Backs Opening Net Rules for Debate
Edward Wyatt

Federal regulators appear to share one view about so-called net neutrality: It is a good thing.

But defining net neutrality? That is where things get messy.

On Thursday, the Federal Communications Commission voted 3-2 to open for public debate new rules meant to guarantee an open Internet. Before the plan becomes final, though, the chairman of the commission, Tom Wheeler, will need to convince his colleagues and an array of powerful lobbying groups that the plan follows the principle of net neutrality, the idea that all content running through the Internet’s pipes is treated equally.

While the rules are meant to prevent Internet providers from knowingly slowing data, they would allow content providers to pay for a guaranteed fast lane of service. Some opponents of the plan, those considered net neutrality purists, argue that allowing some content to be sent along a fast lane would essentially discriminate against other content.

“We are dedicated to protecting and preserving an open Internet,” Mr. Wheeler said immediately before the commission vote. “What we’re dealing with today is a proposal, not a final rule. We are asking for specific comment on different approaches to accomplish the same goal, an open Internet.”

Mr. Wheeler argued on Thursday that the proposal did not allow a fast lane. But the proposed rules do not address the connection between an Internet service provider, which sells a connection to consumers, and the operators of backbone transport networks that connect various parts of the Internet’s central plumbing.

That essentially means that as long as an Internet service provider like Comcast or Verizon does not slow the service that a consumer buys, the provider can give faster service to a company that pays to get its content to consumers unimpeded.

The three Democratic commissioners on the five-member panel, including Mr. Wheeler, voted in favor of opening the plan to public comment. The plan will be open for comment for four months, beginning immediately.

The two Republican members, who voted against the plan, said that it exceeded the agency’s legal authority, that there had been no evidence of actual harm or deviation from net neutrality principles and that elected members of Congress should decide the issue, not regulatory appointees.

The proposal also requests public comments on whether and by how much the commission should tighten regulation of Internet service providers. For example, the commission asks whether it should reclassify high-speed Internet service as a utilitylike application, subject to stricter regulatory controls than now apply, and if it should ban certain practices that might impede consumers from getting equal access to all legal online content through their chosen Internet service provider.

President Obama, who campaigned in 2008 promising to enact net neutrality, said through a spokesman that the administration “will be watching closely as the process moves forward in hopes that the final rule stays true to the spirit of net neutrality.”

The public will have until July 15 to submit initial comments on the proposal to the commission, and until Sept. 10 to file comments replying to the initial discussions.

Even the Democratic commissioners were not unanimous in their reasons to issue the rules for public comment. Jessica Rosenworcel concurred in the decision after having called last week for the chairman to delay action.

“I support network neutrality,” Ms. Rosenworcel said. “But I believe the process that got us to this rule making today is flawed. I would have preferred a delay. I think we moved too fast, to be fair.”

Mignon Clyburn, who said the issue had provoked her mother to ask her for the first time about an F.C.C. proposal, said she, too, had misgivings. “Though I still may have preferred to make portions of the draft more neutral,” she said, “what we are voting on today asks about a number of alternatives, which will allow for a well-rounded record to develop, on how best to protect the public interest.”

Ajit Pai, the senior Republican on the commission, said all the members shared “some important common ground: namely, a bipartisan consensus in favor of a free and open Internet.”

But, he added, “a dispute this fundamental is not for us, five unelected individuals, to decide. Instead, it should be resolved by the people’s elected representatives, those who choose the direction of government, and those whom the American people can hold accountable for that choice.”

The fifth commissioner, Michael O’Rielly, was the most forceful in his dissent. “The premise for imposing net neutrality rules is fundamentally flawed and rests on a faulty foundation of make-believe statutory authority,” he said. “I have serious concerns that this ill-advised item will create damaging uncertainty and head the commission down a slippery slope of regulation.”

The proposed rules in some cases go beyond those that were included in the commission’s 2010 Open Internet Order, which was struck down this year by a federal appeals court.

Commission staff members explained that the proposal would make Internet service providers do a better job of telling consumers how they manage their traffic, a regulation that was upheld by the court. It would revive, under a new legal justification, the “no blocking” rule that was struck down by the court. And it would set a “commercially reasonable” standard to judge whether an Internet provider is discriminating against some content.

Certain forms of discrimination would be allowed. Mr. Wheeler cited 911 calls or transmission of real-time medical information as examples of applications that broadband providers could subject to preferential service.

The proposed rules would also include an enforcement mechanism and establish an ombudsman to help investigate complaints from the public and provide guidance about the commission’s processes.

True to form for an issue that has so inflamed public opinion, few of the parties most involved in the debate were satisfied with the commission’s approach. Verizon Communications, which brought the court challenge to the commission’s previous open Internet rules, issued a statement warning it against subjecting broadband to strict oversight.

“For the F.C.C. to impose 1930s utility regulation on the Internet would lead to years of legal and regulatory uncertainty and would jeopardize investment and innovation in broadband,” the company said.

Consumer advocates said the proposal did not go far enough.

“Today’s F.C.C. discussion about the rules included encouraging words about the need for an open Internet,” Consumers Union said in a statement. “But the agency’s plan still appears to go against the principles of ensuring one. The proposal could negatively impact consumer prices, choices and access to the Internet, as well as free speech and innovation.”
http://www.nytimes.com/2014/05/16/te...eutrality.html





Why Comcast’s $10 a Month Internet Isn’t All It’s Cracked Up to Be
Cecilia Kang

As Comcast tries to win over regulators reviewing its controversial merger with Time Warner Cable, its well-honed lobbying campaign often highlights a company program offering Internet to low-income families.

In the Washington area, ads promoting the program, known as Internet Essentials, plaster the Metro and flood radio waves during the morning commute. In a recent video on Comcast’s Web site, NBC News reporter Andrea Mitchell touted the benefits of the program, which offers Internet for $10 a month to families whose children qualify for free or reduced-price lunches at school.

“Whether you’re researching George Washington for a history paper or searching for a job, Internet access is essential,” Mitchell said.

But many low-income consumers say accessing Comcast’s program isn’t so easy.

Comcast says it has enrolled 300,000 families across the country in three years, a figure critics say is low considering that 2.6 million households are eligible. Many consumers say they have been denied access to the service because it’s only available to new Comcast customers. Others were rejected because of old unpaid bills — as little as $53 from a decade ago. And those who do get the program say it’s often too slow. The speed is 5 megabits per second, enough for basic Internet use but often frustrating for those who try to stream videos or download big files.

Shaping how regulators view Internet Essentials is critical for Comcast. As it tries to win over regulators at the Federal Communications Commission and the Justice Department, the cable company is trying to defuse what analysts view as the biggest threat against the deal: a determination by the FCC that a merger would be against “the public interest,” an ill-defined standard that leaves a lot to the judgment of the agency’s commissioners.

Internet Essentials is a way for Comcast to show a more civic-minded side, countering the company’s mixed reputation among consumers.

The proposed merger with Time Warner Cable has alarmed consumer advocates because it would combine the country’s top two cable and Internet service providers, putting Comcast in control of 40 percent of the high-speed Internet market and 30 percent of cable TV. Comcast and Time Warner Cable consistently rank at the bottom of customer satisfaction surveys.

Critics say Comcast is using the Internet Essentials program to brighten its public image and paper over deeper problems posed to consumers by the deal. In Philadelphia, where the company is based and where it arguably has the most control over the program’s outcome, participation rates are especially low.

“While Comcast should be applauded for trying to bridge the digital divide, they are clearly benefiting from the promotion of this program,” said Hannah Sassaman, a policy director at a Philadelphia community organizing group, Media Mobilizing Project.

Comcast proudly defends the Internet Essentials program, and executives bristle when opponents say the program is being used to counter negative perceptions of Comcast or Time Warner Cable.

“This makes me sigh,” Comcast Executive Vice President David Cohen said in an interview. “You can criticize us for data consumption caps. You can criticize us because cable bills are too high. You can criticize us because the acquisition of Time Warner Cable will make us too big. I can understand that. But every once in a while, even a big company does a good thing for the right reasons.”

Philadelphia story

If any place should be a success story for Comcast’s Internet Essentials program, it’s Philadelphia. It has the highest poverty rate of any big city in the nation. Comcast’s corporate headquarters are housed in the city’s tallest skyscraper; the company plans to construct an even taller 59-story office tower in 2017.

Comcast executives have deep ties to the city’s political leaders and community organizations. Cohen served as chief of staff to former mayor Ed Rendell. The firm has been a major contributor to community groups and has in return enjoyed tax breaks and grants for its skyscrapers.

In 2012, Comcast head Brian Roberts went to Constitution High School to promote Internet Essentials, bringing with him a camera crew, the mayor of the city and other top company executives. Located just one mile from Comcast’s corporate headquarters downtown, Constitution High School draws promising students from some of the city’s poorest neighborhoods. More than half receive free or reduced-price lunches, making them eligible for Comcast’s program, which also provides $150 used laptops.

But two years later, few students at the school can remember the program. In an informal survey, a teacher recently asked 139 students if their families had enrolled and only two raised their hands.

One student said her family participates in Internet Essentials but complains the connection is slow. She often looks up definitions of words on her smartphone rather than wait for pages to download on her home computer. Many students rely on the school computer lab to do their homework because they still have no Internet access at home.

“I really expected more,” said Ray Yuan, a student who helps run the tech lab and who remembers the Comcast event at his school. “Comcast has so much money and what they are offering to families and even giving to the school is substandard.”

Yuan stacked 10 used notebook computers on a desk, all donated by Comcast after the event. Within months, he said, half the computers stopped working; the others are frustratingly slow to use.

The experience at Constitution High School is mirrored across the city. In Philadelphia, the adoption of Internet Essentials is about 9 percent of eligible families, compared with the national average of 12 percent.

At the city’s consumer affairs office, officials say residents often call to complain about the Comcast program, saying they have been rejected because of small past bills. Current customers are also often frustrated they can’t switch to the lower-cost program.

Two years ago, Dawn Hawkins tried to participate so her then-12-year-old son, Kavi, could do his homework online. She was rejected because of a long-forgotten $53 balance on her cable bill from 10 years ago. Hawkins said she had not been a Comcast customer in years and asked to get on a payment program to settle the charges but was denied.

“You say you want to help the community, but how can you punish me for a bill I don’t even remember I had?” said Hawkins, who has become a community organizer with Action United, a group that has staged protests in front of Comcast's headquarters to complain about the requirements that kept her and others from signing up.

Comcast’s Cohen said that a small but vocal group of people is behind the protests and that the company’s program has been largely praised. He added that the program clearly states it won’t include applicants with past bills or who are current customers.

Bargaining chip

Ads for Internet Essentials are hard to come by in Philadelphia. But in the nation’s capital, Comcast has been widely promoting the program since announcing in February that it wanted to purchase Time Warner Cable for a blockbuster price of $45 billion.

Two months after the merger was announced, Comcast said it would extend the life of the program indefinitely, beyond the initial three-year trial.

In a congressional hearing this week, Cohen told lawmakers that the merger would allow Comcast to offer the Internet Essentials program to Time Warner Cable’s millions of subscribers.

Federal officials have also touted the program, noting that Comcast is the only corporation to offer a discounted service that could help expand the adoption of broadband across the nation.

Internet Essentials was conceived expressly to win goodwill in Washington. It began three years ago as part of an offering to the FCC as the agency considered another big and controversial merger by Comcast — this one to NBC Universal for $31 billion.

While the Justice Department is bound to a fairly strict interpretation of the law in its antitrust reviewal process, the FCC can look at deals with a more subjective eye. The FCC says it weighs “the potential public interest harms of the merger against any potential public interest benefits.” The standard is a carryover of the FCC’s original mandate of doling out licenses for airwaves, which the government says is a public trust.

Comcast argues that the deal should be approved because the company and Time Warner Cable do not compete in the same markets. It also cited Internet Essentials in its FCC application, saying the program would result in the expansion of Internet access to more low-income households.

The company won’t say how much Internet Essentials costs to market and operate.

“Comcast should be applauded for creating this program on the one hand, but you wonder if these kinds of programs should be offered as bargaining chips related to a review of this merger,” said Gene Kimmelman, president of the consumer advocacy group Public Knowledge.

Executives acknowledge that they are promoting Internet Essentials in the hope that it will help them win approval for their merger. But they also insist they have good intentions.

“Sure, it helps in the transaction as a public-interest benefit, but we are doing it because we think it’s the right thing to do,” Cohen said.
http://www.washingtonpost.com/busine...51c_story.html





Comcast May Impose Data Caps on All Customers Within 5 Years

Executive VP for the cable giant predicts move to a usage-based billing model, with a data cap of maybe 500GB.
Steven Musil

Cable giant Comcast could institute data usage caps on all customers in the next five years, if one executive's prediction proves accurate.

Speaking with investors at the MoffettNathanson Media and Communications Summit, Comcast Executive VP David Cohen said he expects the cable giant would have in place a "usage-based billing model," with a data cap of maybe 500GB.

"If you made me predict today, I would predict that in five years Comcast at least would have a usage-based billing model rolled out across its footprint," he said in response to a moderator's question about whether there would be a large number of broadband plans tailored to meet the usage and pricing needs of customers, according to a transcript (PDF).

When Comcast, which has about 20 million customers, increased its existing cap from 250GB to 300GB in 2012, it began testing a new policy in which it would impose an overage fee for those who exceed the cap. For those who went over the cap, the company began charging an additional $10 per 50GB of usage.

"I would also predict that the vast majority of our customers would never be caught in the buying [of] the additional buckets of usage, that we will always want to say the basic level of usage at a sufficiently high level that the vast majority of our customers are not implicated by the usage-based billing plan," Cohen explained. "And that number may be 350 -- that may be 350 gig a month today, it might be 500 gig a month in five years, but it will never -- I don't think we will want to be in a model where it is fully variablized and 80 percent of our customers are implicated by usage-based billing and are all buying different packets of usage."

Comcast instituted the cap in 2008. Then the company said that the median usage for most residential customers was somewhere between 2GB and 3GB. While usage has increased dramatically since then thanks to streaming content, Comcast has long maintained that 98 percent of its customers never come close to exceeding the caps it imposes.

A study conducted in 2012 by Sandvine, a company that makes network management tools used by cable operators, found that only about 1.5 percent of US broadband households used more than 250GB of data per month. And only about 1 percent exceeded 300GB.

Time Warner Cable, which Comcast is attempting to acquire, last year began testing a new 30GB usage-capped billing option to its broadband customers, offering discounts to those who agree to limit their usage. While controversial, usage-based billing was unlikely to be an issue during the regulatory review of the proposed merger, Cohen said.

"It really has nothing to do with our transaction," he said. "It's a generic industry-related issue."

However, Cohen said he "wouldn't be stunned to see usage-based billing questions in the NPRM [the Federal Communications Commission's Open Internet Notice of Proposed Rulemaking] around the open Internet because people have tried to make this an open Internet issue."
http://www.cnet.com/news/comcast-may...in-five-years/





AT&T’s GigaPower Plans Turn Privacy Into a Luxury that Few Would Choose
Stacey Higginbotham

SUMMARY:
Customers of AT&T’s GigaPower service could end up paying more than double the $29 advertised cost to keep Ma Bell from monitoring their web surfing if they elect to get video with their broadband.

If you sign up for AT&T’s GigaPower fiber-to-the-home internet service in Austin, Texas, you can expect to pay more than twice the advertised rate on plans that include video to keep your privacy and web surfing history intact.

AT&T’s GigaPower service, which currently delivers 300 Mbps to homes and will eventually get upgraded to a gigabit, launched last December in Austin. It did so with two different pricing plans, one that cost $99 a month for typical service, and another that cost $70 a month provided users agreed to let AT&T monitor their packets to see where on the web the user has been. In turn, AT&T would sell ads targeted to that customer based on his or her habits.

But the $29 more a month to keep your privacy isn’t actually $29 a month. As you add video service, the price differential between choosing privacy and letting AT&T snoop rose to $62 a month for an equivalent package and included a $49 one-time fee (see the screenshot below). Keeping your web history out of Ma Bell’s hands would have cost almost $800 the first year you signed up at the high-end and $531 at the low-end of ordering only internet (there’s a $99 activation fee and a $7 monthly gateway box fee).

AT&T is making wireline broadband plans more consumer unfriendly

At the time the pricing plans launched, I hated the idea and wrote extensively about how AT&T’s plans corrupt the way wireline broadband is offered today, adding another layer of charges for something that used to be free. And given AT&T’s complicity in handing over user information to government agencies its deeper knowledge of your web visits is unsettling. It does say it “will not collect information from secure (https) or otherwise encrypted sites,” which may be worth more if plans to make the web mostly https ever come about.

But for such a seemingly bad deal for consumers (charging you $29 a month for something you had formerly gotten for free), I discovered that an overwhelming majority of AT&T customers signing up for a GigaPower plan choose the so-called “Premier” option that strips users of their privacy. (I’ve heard that at least two-thirds and at least three-fourths at different points in time). It seemed so bizarre to me, especially that many of these users didn’t seem to even recognize their privacy was being stolen from them.

So I went through the sign up process myself online. Initially a customer looking for a triple play bundle sees the below as the default screen. For any of the bundle options, the default page offers only the “Premier” privacy-invading pricing, even if all you want is broadband. Incidentally, if you sign up for the Premier service you do so under a one-year contract and if you cancel before your year is up, AT&T charges you $348; or the $29 extra you would pay if you wanted privacy under the “Standard” plan.

If you click on the circled segment, you get a chance to see the first screenshot where you can calculate the true cost of keeping your surfing to yourself. Even if you don’t click on that and make it through the sign up, AT&T does tell you one more time that you have just given it permission to monitor your surfing habits. It was at this point that Steve Watt, a tech executive and new GigaPower subscriber in Cedar Park, realized he had signed away his privacy. He tweeted his dismay and I shared our article from the launch.

Choosing “the snooping plan.”

Realizing he had a choice in the matter, he went back through the process and found the option to check out the alternative plan. But in seeing the difference between the $120 broadband and video bundle he was after and the additional $62 in fees (plus that $49 activation fee) he decided that he could live with what he called “the snooping plan.”

“I understood the bundle and what I was getting with the bundle, but at first I didn’t understand there was another option that didn’t include snooping,” Watt said. “In their defense I should have probably read the fine print on the page so there it is. I signed up for [the snooping plan] anyway, but I hope Google Fiber comes to Cedar Park.”

Plenty of Austin residents and those in areas surrounding Austin are in agreement. In the meantime, AT&T has shifted the pricing for broadband in an anti-consumer direction while also misleading people about the costs of keeping Ma Bell out of your surfing history.

So it’s clear that while Google Fiber and other gigabit networks are pressuring AT&T to upgrade, it will not go gentle into that dumb pipe.
http://gigaom.com/2014/05/13/atts-gi...-would-choose/





AT&T Courts Satellite TV With an Eye on Growth
David Gelles

AT&T is in talks to buy DirecTV for at least $50 billion, and the two sides are actively working toward an announcement, according to several people with knowledge of the matter.

If completed, a deal would give AT&T, the country’s second-largest wireless carrier, control of the country’s largest satellite television provider, further reshaping the rapidly changing telecommunications and television industries. AT&T has grown interested in DirecTV in recent months, according to several people with knowledge of the company’s thinking, leading to an approach in the last few weeks. Rumors of a deal between the two companies have sent DirecTV shares up about 12 percent this month.

On Monday, after The Wall Street Journal reported that talks had accelerated, details on the timing and the price of a deal began coming into focus. The terms of any agreement are not expected to be released in the next two weeks, and the two sides are working on a pricing structure under which AT&T would pay $92 to $94 a share. In addition, Mike White, DirecTV’s chief executive, is not expected to step down if the deal goes through.

DirecTV closed at $87.16 on Monday, but was up sharply in after-hours trading.

For AT&T, a deal for DirecTV would signal its continued ambitions to grow in the United States, after its attempted takeover of the rival wireless carrier T-Mobile failed in 2011 because of resistance from regulators.

This year, AT&T was looking to expand in Europe and considering an acquisition of Vodafone, which sold its stake in Verizon Wireless back to Verizon Communications for $130 billion in February.

But AT&T has refocused its attention on the United States market, believing it has an opportunity to expand its footprint in the pay-television business. DirecTV has about 20 million subscribers in the United States.

Talks between AT&T and DirecTV began in earnest after Comcast announced its plan to acquire Time Warner Cable. That deal, if completed, would create a clear leader in the cable television industry.

People knowledgeable about both deals said that if AT&T and DirecTV announced a merger, it could complicate the review of Comcast’s bid for Time Warner Cable, because antitrust regulators might want to consider both deals simultaneously.

By acquiring DirecTV, AT&T could bolster its small television operations and gain a valuable foothold in Latin America, where DirecTV has about 18 million subscribers.

But several people in the industry said they believed that the ideal target for AT&T would be not DirecTV but its main competitor, Dish Network. Dish, run by the billionaire Charles W. Ergen, has amassed a trove of spectrum that could be valuable to AT&T as it seeks to build out its wireless network.

Some investment bankers privately speculated that talks between AT&T and DirecTV were intended to draw Mr. Ergen off the sidelines and into the fray. But last week, speaking in a conference call after announcing first-quarter earnings, Mr. Ergen said his company was not in a position to make an offer for DirecTV.

“DirecTV would be too frothy for us, for our board to look at, at those kinds of prices,” he said.

AT&T is facing renewed competition in the wireless market. Verizon has taken full control of Verizon Wireless, giving it access to additional cash. And Sprint, the third-largest wireless provider, has struck a deal with Japan’s SoftBank that will give it added firepower as it seeks to expand.

Another deal on the horizon could be Sprint’s making an offer for T-Mobile, the fourth-largest wireless carrier, which is just completing its own major purchase. Last year, T-Mobile acquired MetroPCS.

People briefed on the discussions between AT&T and DirecTV said there was no guarantee that a deal would be completed.

AT&T and DirecTV declined to comment.

Michael J. de la Merced contributed reporting.
http://dealbook.nytimes.com/2014/05/...s-for-directv/





Shocker: Cable TV Prices Went Up Four Times the Rate of Inflation

Even communities with multiple competitors weren't spared.
Jon Brodkin

The Federal Communications Commission today issued a report on average cable TV prices in the US, and to the surprise of no one, it turns out they went up a lot.

"Basic cable service prices increased by 6.5 percent [to $22.63] for the 12 months ending January 1, 2013. Expanded basic cable prices increased by 5.1 percent [to $64.41] for those 12 months, and at a compound average annual rate of 6.1 percent over the 18-year period from 1995-2013," the FCC said.

The basic cable increase was four times the rate of inflation as measured by the Consumer Price Index (CPI) for the 12-month period, and substantially above inflation for the 1995-2013 measurement.

"These price increases compare to a 1.6 percent increase in general inflation as measured by the CPI (All Items) for the same one-year period," the FCC wrote. "The CPI’s compound average annual rate of growth over the 18-year period was 2.4 percent."

"Expanded basic cable" service is the price of a basic package plus "the most subscribed cable programming service tier excluding taxes, fees, and equipment charges."

Additionally, "equipment prices for basic and expanded basic services increased by 4.4 percent and 4.2 percent, respectively, for the 12 months ending January 1, 2013," the report stated.

"Cable operators" for the purposes of this report include both coaxial cable and fiber services such as Verizon FiOS. The FCC didn't list prices by company, but broke out measurements of communities that have competition vs. communities without competition.

Communities with competitors didn't fare any better.

"Over the 12 months ending January 1, 2013, the average price of expanded basic service increased by 4.6 percent, to $63.03, for those operators serving communities for which no effective competition finding was made as of January 1, 2013," the FCC said. "For the effective competition communities, the average price of expanded basic increased by 5.8 percent, to $66.14."

Technically, a community isn't considered to be competitive unless the incumbent operator has successfully petitioned the FCC for a finding of effective competition. Getting this finding relieves the company of price regulation, which helps explain why customers don't necessarily pay less when they have choices. Additionally, cities and towns "that are exempt from rate regulation provide a greater number of video channels, on average, than the responding cable systems subject to local rate regulation," the FCC said.

A community can be deemed competitive if the incumbent has fewer than 30 percent of households as subscribers, or if a second operator offers service to at least half of the community and has 15 percent of households as subscribers. The competition can come from a second cable operator or another service such as satellite.

"We surveyed operators serving 486 out of the 24,238 communities without a finding of competition and 314 out of the 9,417 communities granted an effective competition finding pursuant to the statute," the report said.

The rising cost of sports programming and other content has probably helped push up prices. Because of bundling, consumers can't simply choose the channels they want. As we recently reported, US homes on average receive 189.1 cable TV channels and only watch 17.5 of them.
http://arstechnica.com/business/2014...-of-inflation/





Why Silicon Valley Actually Had a Pretty Good Day in D.C.
Amy Schatz

Despite all the hand-wringing statements about net neutrality that Silicon Valley companies were shooting out Thursday, tech actually had a pretty good day in D.C.

While FCC Chairman Tom Wheeler’s fast-lane/slow-lane net neutrality proposal was taking a beating on all sides (even Wheeler took a few whacks at it), Internet companies sneaked through a huge victory when the agency agreed to set aside up to three channels of TV airwaves for unlicensed use.

That doesn’t sound like a big deal, but it’s something that Google, Microsoft and other tech companies have spent years advocating. In the past, Republican lawmakers have mostly shut down those efforts, saying that billion-dollar tech companies don’t need a freebie.

This time it mostly slid under the radar as Republicans were distracted by net neutrality and upset about proposed bidding restrictions on AT&T and Verizon in the upcoming TV airwaves auction.

Most airwaves can only be used by companies or parties that hold exclusive licenses; unlicensed airwaves can be used by anyone. Wi-Fi networks run on unlicensed airwaves, and tech companies have been trying for years to get more set aside for more powerful Wi-Fi networks.

Internet companies recently got a huge chunk of airwaves set aside for unlicensed use. But they also coveted a channel or two of TV airwaves, which are among the most valuable since signals on those frequencies can go through buildings and travel relatively long distances.

With its move Thursday, the FCC basically created a half-mile public beach in the middle of multimillion-dollar mansions. An auction of the TV airwaves next year is expected to bring in more than $20 billion from wireless companies.

WifiForward, a lobbying group backed by Google, Microsoft and Comcast*, called the action a “substantial achievement.”

Wheeler hadn’t initially set aside many airwaves for unlicensed use, but agreed to provide at least one full national channel while bargaining with other FCC commissioners, particularly Democrat Jessica Rosenworcel, who has been an unlicensed-airwave advocate.
http://recode.net/2014/05/15/why-sil...od-day-in-d-c/





Lets Do 2014 Numbers for the Mobile Industry: Now we are at 100% Mobile Subscription Penetration Rate Per Capita Globally

Lets do the big mobile numbers blog. Where are we in mobile stats in 2014?

The mobile subscription rate is at or very very nearly at 100%. For 7.1 Billion people alive that means 7.1 Billion mobile phone subscriptions worldwide. Not everyone has a mobile account or number - babies don't have mobile phones so some of us have two or more accounts. Hong Kong is past 200% penetration rate for example. But globally yes, we are now at 100%. 7.1 Billion mobile phone accounts in use worldwide.

SIZE IS HUGE

So first, some context. The PC. Take every type of PC, including desktops, laptops, netbooks and tablet PCs and add them together. What do we have? 1.5 Billion in use worldwide. Mobile is nearly 5 times larger. Televisions? Sure. We are now at 2 Billion TV sets in use globally. But mobile has 3.5 times users. What of 'paid' TV viewers - ie cable and satellite TV accounts? Thats only 1 Billion. Mobile has 7 times more paying customers. Landline phones? There are only 1.1 Billion of those left. Mobile is more than six times bigger.

Then lets talk about those numbers. 7.1 Billion mobile subscriptions is not 'unique users' and it is not 'handsets in use'. The number of unique users is now 4.5 Billion or 63% of all humans alive are actually users of mobile phones. The remaining 2.6 Billion accounts are second or third accounts for the same user. And many of us have two phones. What is the number of phones in use? We are at 5.4 Billlion mobile handsets in use around the world. So out of the unique user number (4.5 Billion) 900 million carry two phones. So 20% of us, one in five who has a mobile subscription or account, actually walks around with two phones (and at least two accounts).

MOBILE SUBCRIBERS END OF 2013
Total active mobile subscriptions or accounts . . . . 7.1B (was 6.7B in 2011, growth 6%)
Unique mobile users . . . . . . . . . . . . . . . . . . . . . . 4.5 B (was 4.3B in 2011, growth 5%)
Actual mobile phones in use . . . . . . . . . . . . . . . . 5.4 B (was 5.2B in 2011, growth 4%)
Source: TomiAhonen Almanac 2014
This data may be freely shared

MONEY IS ALSO HUGE

The industry grew 7% in total revenues last year and the global mobile industry is now worth 1.56 Trillion dollars annually. That breaks down so, that 1.15 Trillion is service revenues (our phone calls, messages, internet access, music, games, advertising, apps etc). 280 Billion is handset sales (mostly smartphones) and another 125 Billion is 'other hardware' that includes a wide range from networking equipment to accessories.

Of the service revenues those highly hyped smartphone apps are still only a tiny corner of the opportunity. The mobile operators/carrriers still make the majority of the service revenues and two giants dominate that space - voice calls and messaging. Voice calls were worth 673 Billion dollars in 2013 while messaging was worth 199 Billion dollars. And no most of that was not 'OTT services' like Whatsapp. SMS text messaging was worth 130 Billion dollars and MMS another 46 Billion dollars in 2013, for the lion's share of messaging revenue worldwide. Please note that an increasing portion of both SMS and MMS is now content (like voting for TV shows), advertising and commerce revenues (coupons etc).

HANDSETS

So lets talk phones. 5.4 Billion mobile phones in use worldwide. The industry sold 1.8 Billion new mobile phones just last year alone. And more than half of the new sales are now smartphones (990 million were in 2013). In the installed base, already 31% of all mobile phones in use are smartphones (1.7 Billion units) and this year will sell about 1.2 Billion more with roughly half going to replace older smartphones and half going to first-time smartphone owners. But before you lament those 'dumbphones' they aren't that dumb these days. 44% of all phones in use have WiFi capability. 67% can install apps via Java. Four out of five has a memory card slot. Nine out of ten phones in the world can receive MMS multimedia messages (And 100% can do SMS text messaging obviously).

The migration to smartphones continues at rapid pace. Three regions - advanced Asia-Pacific, Europe and North America have passed the mid-point so there are smartphones for more than half of the population. The Middle East is nearing the mid-point. Lagging in the migration rate come Latin America, developing parts of Asia, and Africa. As I've reported on this blog regularly in the 'Smartphone Bloodbath' series monitoring the market share wars on a quarterly basis, Android has now utterly won the smartphone platform war with over 80% of new sales. Apple's iPhone has peaked and is in gradual decline at about 15% with the remnant few percent split among Windows, Blackberry and miscellaneous others. In the installed base the past large sales of Symbian and Blackberry still place them ahead of Windows, with Windows lingering in fifth ranking among smartphone operating systems by actual devices in use. Android and iPhone obviously dominate the installed base as well.

MOBILE INTERNET

An easily-muddled statistic, the internet or 'browsing' user base and which platform they use is prone to very wild swings of legitimate reporting of the statistics. It depends on whether you count primary use or all use (many of us will access web content from several device types, our laptops, our tablets, our smartphones etc). And the reporting is often coming from systems which do not measure all use, or which miscalculate part of the use (often iOS measurements cannot differentiate between iPhones - ie smartphones vs iPads ie tablets and iPod Touch ie PDA uses). But when we allow multiple uses, and look at all 'browser' type of access to 'internet content' such as Facebook, Google, Twitter, YouTube, Amazon etc - then the usage in 2013 was like this:

There are 2.9 Billion users of the internet when any device and type is allowed including accessing from internet cafe and other shared devices.

48% of the internet users will use both a PC of some kind (which includes tablets) and a mobile phone
42% will not use a PC and will only access the internet on a mobile phone (smartphone or dumbphone)
and 10% will not use a mobile phone and only access the internet on some type of PC (including tablet)

Of mobile phones used to access internet content, the numbers build like this. 1.6 Billion use a smartphone. 2.2 Billion use an HTML based mobile brower (including smartphones and dumbphones). And 2.6 Billion use any type of mobile browser including WAP and HTML (this of course therefore includes smartphones too). You can see there is a lot of chance to offer confusing and 'disagreeing' numbers just by browsing before we consider say app downloads.

MESSAGING OTT AND PEAK SMS

So the OTT revolution has really taken off led by Whatsapp. But still the total user base is modest. OTT services across all OTT types have only 1.4 Billion users. That compares with 5.8 Billion users of SMS and 3.3 Billion users of MMS. The total traffic, user count and even revenues of SMS still grew in 2013 while OTT services grabbed the majority of total mobile messaging traffic. The heavy users who send more than 100 messages per day will shift most of that traffic rather rapidly to more cost-effective (and user-friendly) messaging platforms. But even heavy Whatsapp users will usually not abandon SMS they only greatly diminish its use. For advertisers and brands, obviously, SMS is the only way to reach every economically viable person on the planet, with MMS a near-universal second choice.

MEDIA CONTENT

The total non-voice 'data' opportunity in mobile is now nearing 500 Billion dollars in value. 40% of that is now from messaging and 60% from 'value-add data' which includes media content, apps and many other elements like the sales commission from m-commerce. 290 Billion dollars is the total value of mobile media content. The big media opportunities in mobile are social media, TV and video, gaming, search, news and virtual goods. Music has passed its peak and mobile music revenues are now in decline. Several areas of smaller size are growing fast led by m-health and m-education. Smartphone apps are only a tiny slice of this space with most income earned by apps built for gaming.

MOBILE ADVERTISING

Then we have advertising. Mobile ads keep growing at rates of nearly 100% per year and across all mobile ad income types passed 30 Billion dollars in value in 2013. This includes the often-reported banner ad revenues and the less-often included messaging revenues and the in-app advertising.

DIGITAL DIVIDE

And finally a few words about the so-called 'Rich World' vs the 'Emerging World'. The spoils of the digital miracle are not spread evenly. But even here the 'best story' in digital for the Emerging World is of course mobile. Of the 7.1 Billion mobile subscriptions, we in the 'West' have 2.1 Billion mobile subscriptions for a 175% mobile penetration rate. The Emerging World with 5.9 Billion people have 5.0 Billion subscriptions for an 85% penetration rate. In the Industrialized World 97% of all phones in use are cameraphones vs 76% in the Emerging World. 82% of the mobile subscriptions in the Industrialized Countries have migrated to 3G while only 18% of the accouns in the Emerging World have done so. 53% of handsets in the West are smartphones while only 21% in the rest of the world are so. And did you know many actually buy used handsets? Only 3% of mobile phones in the Industrialized World are second-hand phones (these tend to be hand-me-down phones we give to our young kids). But in the Emerging World 17% of all phones in use are second-hand phones (often shipped from more affluent countries).

SO WHO ARE THE BIG DOGS

Then lets do the 'if measured only by their mobile business' chart of the biggest players. So for example Apple we remove the Macs and iPads and iPods and iTunes, only the iPhone and its app store revenues. For Samsung we remove the flat screen TVs and PCs and all sorts of consumer electronics. For Vodafone we remove the fixed landline telecoms business etc. When we measure the largest companies on the planet by purely their mobile income we get this chart:

BIGGEST COMPANIES WHEN ONLY COUNTING THEIR MOBILE BUSINESS IN 2013

1 (3) Apple iPhone, USA, smartphones . . . . $ 112 B
2 (4) Samsung Galaxy, S Korea, handsets . $ 103 B
3 (1) China Mobile, China, operator . . . . . . . $ 91 B
4 (2) Verizon Wireless, USA, operator . . . . $ 82 B
5 (5) AT&T Wireless, USA, operator . . . . . . $ 65 B
6 (6) Vodafone Mobile, UK, operator . . . . . . $ 58 B
7 (7) Telefonica Movil, Spain, operator . . . . . $ 52 B
8 (9) T-Mobile, Germany, operator . . . . . . . . $ 50 B
9 (8) NTT DoCoMo, Japan, operator . . . . . . . $ 49 B
10 (10) Orange Mobile, France, operator . . . .$ 44 B

Note: All except China Mobile in the above chart are 'virtual companies' with imaginary names to reflect their mobile businesses and their mobile branding.
Source: TomiAhonen Almanac 2014
This data may be freely shared

So the two big smartphone makers Apple and Samsung have kicked the big mobile operators from the top slots. No big surprise here, as the trend was clearly forming for the past few years. Meanwhile operators struggle with flat revenues or even declining revenues as voice calls and messaging revenues are under increasing threats from OTT services like Skype and Whatsapp.

ALL DATA IN THE ABOVE MAY BE FREELY SHARED

Please mention your source as TomiAhonen Almanac 2014 for any data you want to use. You don't have to ask for permission to quote any of the above numbers.

Thats what the world of mobile looks like in early 2014. If you need more data, I have just released the 2014 edition of the TomiAhonen Almanac which has now over 200 pages and over 100 charts and tables, like the above and much much more hard-to-find mobile data in a handly pocket-sized ebook that you can save onto your smartphone or tablet to keep all the latest mobile data always with you. The ebook TomiAhonen Almanac 2014 costs only 9.99 Euros and is available for immediate download only from this link. (Note currently it still shows the 2012 Almanac but obviously you'll get the brand new 2014 Almanac if you buy it). There is also a free edition of an older Almanac if you need rough numbers but don't care to have the latest specific details. See more at TomiAhonen Almanac 2014.
http://communities-dominate.blogs.co...-very-nea.html





The Peril of Knowledge Everywhere
Quentin Hardy

Thanks to advances in technology, we may soon revisit a question raised four centuries ago: Are there things we should try not to know?

That’s because the collection of data is increasing, in both scale and type, at a phenomenal rate.

IBM says that 2.5 quintillion bytes of data are created each day. That is a number both unimaginable and somewhat unhelpful to real understanding. It’s not just the huge scale of the information, after all, it’s the novel types of data (incidental photographs stored in the cloud, for example, or requests to Google for driving directions) that governments, corporations, and individuals gain access to for all sorts of purposes.

Take Jetpac, a mobile app that uses some of the 60 million photos a day stored on Instagram to create visual guides to over 6,000 cities worldwide. So if you’re looking for hipsters in San Francisco, for example, its algorithms can identify by location the incidence of mustaches in snapshots, and determine (are you ready for it?) that the Mission neighborhood is a good place to try. Sounds like fun.

In addition, however, “we are able to identify gay bars in Tehran. Moscow too,” said Pete Warden, a co-founder of Jetpac. The company does not want to do that, he added, but he does think it’s important that “we make people aware, get people talking about this.”

Mr. Warden was speaking on Friday at a data science conference in Berkeley, Calif., where many participants expressed concern about the effects all this data would have on the ability of powerful institutions to control people, from state coercion to product marketing.

“Big Brother couldn’t have imagined we’d tell him where we were, who we talk to, how we feel – and we’d pay to do it,” said Vivek Wadhwa, a tech entrepreneur and social critic. “We need an amendment in the Constitution that says you own your data.”

That is a difficult and quite possibly unworkable idea though. For one thing, if you walk by the camera at a cash machine, is that picture of you yours? Must you give permission every time someone like Mr. Warden wants to spot your mustache where you’ve publicly posted it? You’d spend all your time giving and denying permissions. And, since much of the data is in a transnational cloud, would it even matter what it said about privacy in a foundational American document?

“People call for regulation, but regulation is slow-moving, and the analysis will just go somewhere else,” said Gilman Louie, a venture capitalist at Alsop Louie Partners, and the former head of In-Q-Tel, the venture firm affiliated with the C.I.A. “Many people are happy to share their information, but they can’t control the flow of it, and any piece of information is a fractal of me.”

That is, one bit here and another there, both innocuous, may reveal something personal that is hidden perhaps even from myself.

If we want protection from the world we’re building, perhaps we’re asking that the algorithm wielders choose not to know things, despite their being true. To some, that may be a little like the 1616 order by the Catholic Church that Galileo cease from teaching or discussing the idea that the Earth moves around the sun.

Since then, we have been living in something closer to the spirit of the 18th-century Enlightenment, when all forms of knowledge were acceptable, and learning was a good in its own right. Regulation has been based on actions, not on knowledge.

Now, however, there is so much to know, and the business of knowing new patterns can be done by so many people, for so many different ends. That changes things.

For Mr. Louie, the situation may be something like a vastly more difficult version of laws against red lining, a practice by some banks to deny mortgages to minorities who wanted to move into white neighborhoods. The banks were allowed to know about the neighborhood, but they couldn’t use the knowledge to that end.

“Data companies will be told that certain correlations should not be applied to data,” he said. Since standards of behavior vary so much between one place and another, he said, “there will be a lot of interesting sociological debates among nations, states, even cities” about what you are allowed to know.

Other participants noted that we are also entering a new world where individuals can be as powerful as institutions. That phone gives Big Brother lots of data goodies, but it can also have access to its own pattern-finding algorithms, and publish those findings to the world.

“It’s not a one-way street, there are new ways to react against power structures too,” said Joe Reisinger, co-founder of Premise, a company that mines hyperlocal data, like prices in markets in India, to figure out national economic information. “What if you structured social action, or civil disobedience, into something that could be repeated at a huge scale?”

The mobile phone, he suggested, is akin to that other important relic of the 18th century, the Minuteman’s musket, leaning against the door as a guard against tyranny.
http://bits.blogs.nytimes.com/2014/0...ge-everywhere/





Research in India Suggests Google Search Results Can Influence an Election
Craig Timberg

Google long ago went from being a mere directory of the Internet to a shaper of online reality, helping determine what we see and how. But what power does Google have over the “real” world – and especially the volatile one of closely contested elections?

Psychologist Robert Epstein has been researching this question and says he is alarmed at what he has discovered. His most recent experiment, whose findings were released Monday, found that search engines have the potential to profoundly influence voters without them noticing the impact. Epstein has coined a term for this power: Search Engine Manipulation Effect, with the acronym SEME.

Epstein, former editor-in-chief of Psychology Today and a vocal critic of Google, has not produced evidence that this or any other search engine has intentionally deployed this power. But the new experiment builds on his earlier work by measuring SEME in the concrete setting of India’s national election, whose voting concludes Monday.

With a group of more than 1,800 study participants – all undecided voters in India -- the research team was able to shift votes by an average of 12.5 percent to favored candidates by deliberating altering their rankings in search results, Epstein said. There were also increases in the likelihood of voting and in measurements of trust for the preferred candidates, and there were decreases in the willingness to support rivals. Fewer than 1 of every 100 participants, meanwhile, detected the manipulation in the results.

“It confirms that in a real election, you can really shift voter preferences really dramatically,” said Epstein, now a senior research psychologist for the American Institute for Behavioral Research and Technology, a non-profit group based in California, which conducted the study.

Skeptics of Epstein’s previous work, which was presented at last year’s meeting of the Association of Psychological Science, noted that voters typically have a range of information sources beyond what search engines provide and are swayed by other factors, such as party allegiances, potent issues and ethnic and religious affiliations.

Besides, these skeptics have said, operators of major search engines, including Microsoft and Yahoo, have incentives to avoid even the appearance of manipulating elections given the fierce backlash that would result from discovery.

Google officials, in response to Epstein’s latest research, said in a statement, “Providing relevant answers has been the cornerstone of Google’s approach to search from the very beginning. It would undermine people’s trust in our results and company if we were to change course.”

Epstein’s previous study measured the ability of a fictitious search engine called “Kadoodle” to influence impressions of research subjects in California about candidates in the race for prime minister of Australia — something the subjects presumably knew little about.

For the new study, Epstein’s team used advertisements to recruit undecided voters for India’s national election, encouraging them to sign on to a Web portal. After answering some general questions, the subjects were presented with the Kadoodle search engine and encouraged to query information on the major candidates in the election: Rahul Gandhi, Narendra Modi and Arvind Kejriwal.

But Kadoodle was rigged. Each of the subjects was randomly assigned to a group favoring one of the candidates. The top 10 links Kadoodle produced all featured Web pages favoring that candidate; favorable links to the other two candidates, meanwhile, fell to the bottom of the search results. After viewing the search results, typically for 10 or 11 minutes, the subjects were queried on their voting preferences.

Among the group shown pro-Gandhi rankings, his support increased by 26.5 percent. For Kejriwal, the increase was 11.3 percent, for Modi 9.1 percent. (Each experimental group was the same size, in part to minimize any potential effect on the election itself).

Some outside experts agree that a dominant search engine such as Google does have extraordinary power to alter how people and events are viewed. Fewer are convinced that anyone in a position to deploy this power would do so.

“It could potentially turn an election around,” said Panagiotis T. Metaxas, a Wellesley College computer science professor who has studied search engine manipulation. “Humans are very manipulable. ... Advertisement is really the science of doing that.”
Metaxas also has studied how Google has displayed search results in elections dating back to 2008. He concludes that the company is well aware of the potential for creating bias among voters and works to prevent that by standardizing how it displays results, with the most prominent links to candidates’ own Web pages and entries on Wikipedia.

He also is skeptical of potential government efforts to regulate how search engines present their results, which according to some legal experts enjoy First Amendment protection in the United States — just as a newspaper editor’s decision about what to put on the front page would.

Epstein, whose research into this subject started after a run-in with Google in 2012, said that even without deliberate ma#nipu#la#tion, search engines tend to favor front-runners by featuring links that are popular, creating a snowball effect that could benefit candidates who initially have only a small edge in popular support. There is evidence that such an effect has favored Modi in the Indian election, Epstein said.

“Even if you’re not doing it deliberately, you are driving votes,” Epstein said. “They are running a system that is determining the outcome of elections.”
https://www.readability.com/articles/qnyzicmg





EU Court Rules People Sometimes Have a Right to be Forgotten Online
Mark Jackson

Sometimes Internet privacy and freedom of information can come into bitter conflict with each other and that appears to be the outcome of a new ruling against Google by the European Union’s Court of Justice (ECJ). The outcome could lay the groundwork for everybody to have a “right to be forgotten” online.

The case itself occurred after a Spanish man (Mario Costeja González) complained that the detail of an auction notice for his former home, which was repossessed after he failed to pay his taxes, appeared in Google’s search results.

The notice itself was made public on the third-party website (twice via a newspaper called La Vanguardia) and Mr González wanted the source material edited and the Google result removed because the proceedings concerning him had been fully resolved for a number of years, thus he felt as though the reference to them was now “entirely irrelevant“.

Mercifully the Spanish Data Protection Agency (AEPD) rejected the complaint against La Vanguardia, which correctly ruled that the information in question had been lawfully published by it. But the AEPD then ruled that Google should still delete the related references to the page, which Google perhaps understandably viewed as unfair because the information was already in the public domain, and so began the court battle until today’s ECJ verdict.

ECJ Statement

“An internet search engine operator is responsible for the processing that it carries out of personal data which appear on web pages published by third parties.

Thus, if, following a search made on the basis of a person’s name, the list of results displays a link to a web page which contains information on the person in question, that data subject may approach the operator directly and, where the operator does not grant his request, bring the matter before the competent authorities in order to obtain, under certain conditions, the removal of that link from the list of results.”

As a result Google (plus other search engines) now find themselves stuck between a rock and a hard place, faced with the unenviable task of having to either figure out some way of automatically filtering out results that include links to websites which contain information on the person being searched (sounds like a technical and administrative nightmare) or capitulating to a colossal amount of new requests for individual data removals. “This is a disappointing ruling for search engines and online publishers in general,” said Google.

One small caveat is that the ruling suggests that Internet search engines should still take account of the individuals role in public life, which is another way of saying that personal name searches for politicians and celebrities won’t be impacted by this ruling (people whom are very much in the public eye / public interest). Ironically the case is now so public that Mario Costeja González’s original goal, of getting his past situation erased, appears to have been lost.

The European Commission has already proposed a similar “right to be forgotten” policy as part of their plans to overhaul the controversial data-protection rules, which could be finalised by the end of 2014. But hopefully the EC’s final legislation will be balanced against the very real need to reserve accurate historical records and freedom of information. Penalising search engines for being search engines might not be the best solution.
http://www.ispreview.co.uk/index.php...en-online.html





Politician and Paedophile Ask Google to 'Be Forgotten'
Jane Wakefield

Google has received fresh takedown requests after a European court ruled that an individual could force it to remove "irrelevant and outdated" search results, the BBC has learned.

An ex-politician seeking re-election has asked to have links to an article about his behaviour in office removed.

A man convicted of possessing child abuse images has requested links to pages about his conviction to be wiped.

And a doctor wants negative reviews from patients removed from the results.

Google itself has not commented on the so-called right-to-be-forgotten ruling since it described the European Court of Justice judgement as being "disappointing".

Nor has it released any figures about the number of takedown requests received since Tuesday.

The original case was brought by a Spanish man who complained that an auction notice of his repossessed home on Google's search results had infringed his privacy.

The ruling surprised many because it contradicted the advice of the European Union's advocate general who said last year that search engines were not obliged to honour such requests.

EU Commissioner Viviane Reding described the decision as "a clear victory for the protection of personal data of Europeans" but others are concerned about the consequences that it will have for free speech.

Wikipedia founder Jimmy Wales has criticised the ruling, calling it "astonishing" while free speech advocates at The Index on Censorship said the court's ruling "should send chills down the spine of everyone in the European Union who believes in the crucial importance of free expression and freedom of information".

"The court has said that an individual's desires outweigh society's interest in the complete facts around incidents," it added.

Marc Dautlich, a lawyer at Pinsent Masons, said that search engines might find the new rules hard to implement.

"If they get an appreciable volume of requests what are they going to do? Set up an entire industry sifting through the paperwork?" he asked.

"I can't say what they will do but if I was them I would say no and tell the individual to contact the Information Commissioner's Office."

Although the judgement refers specifically to search engines and states that only the links to information, rather than the information itself, be removed from the net, some news organisations have seen a rise in the number of people asking to have articles removed since the ruling.
http://www.bbc.com/news/technology-27423527





Justice Dept. Criticized on Spying Statements
Charlie Savage

Two Democratic senators accused the Obama administration on Tuesday of seeking to “ignore or justify” statements it made to the Supreme Court about warrantless surveillance by the National Security Agency, contributing to what they called a “culture of misinformation” by the executive branch.

In a letter to Solicitor General Donald B. Verrilli Jr., the senators, Mark Udall of Colorado and Ron Wyden of Oregon, maintained that the Justice Department was not being forthright about what they portrayed as factual misrepresentations to the Supreme Court in 2012. The case involved a challenge to the constitutionality of a law permitting warrantless N.S.A. surveillance.

The senators’ message was a response to a letter that the Justice Department sent them in December defending its conduct in the surveillance case, Clapper v. Amnesty International, in part because certain aspects of N.S.A. spying had been classified at the time. The department’s letter had not been public, but Mr. Udall’s office provided it to The New York Times on Tuesday.

Together, the letters added to a growing public record of some of the legal frictions that have followed the increased scrutiny of N.S.A. surveillance practices set off by the leaks from the former contractor Edward J. Snowden.

The Justice Department was reviewing the senators’ letter and declined to comment further, said Brian Fallon, a spokesman.

In the Clapper case, a group of plaintiffs challenged the constitutionality of the FISA Amendments Act of 2008. It permits the N.S.A. to intercept Americans’ international emails and phone calls on the domestic network and without a warrant as long as the target of the surveillance is a noncitizen located abroad.

The Obama administration argued that the plaintiffs lacked standing because they could not prove their communications had been intercepted. The justices voted 5 to 4 to dismiss the case.

Writing for the majority, Justice Samuel A. Alito Jr. recited two claims made by the government: The Justice Department must notify criminal defendants who faced evidence derived from such surveillance, and the N.S.A., to intercept the Americans’ communications without a warrant, must target their foreign contacts for surveillance. But both claims have come under scrutiny in the recent focus on N.S.A. activities.

It emerged that the Justice Department was not notifying defendants in situations when warrantless surveillance had led in turn to a wiretap order on an individual that produced evidence used in court. Mr. Verrilli fought an internal battle last summer to change the practice, and prosecutors have been belatedly notifying defendants, who have clear standing to challenge the constitutionality of the spying.

And in August, it surfaced that the N.S.A. was also systematically scanning Americans’ cross-border emails without warrants and saving copies of any messages that contained discussion of a surveillance target. That meant the plaintiffs did not necessarily have to be in contact with an intelligence target for their communications to be intercepted without a warrant.

In November, Mr. Udall, Mr. Wyden and a third Democratic senator, Martin Heinrich of New Mexico, sent a letter to Mr. Verrilli pointing out both discrepancies and expressing concern that they had not been acknowledged or corrected. Mr. Heinrich did not sign the follow-up letter, and a spokeswoman for the senator, Whitney Potter, said he was satisfied with the Justice Department’s response.

In its December letter, the Justice Department argued that its description of the law had been accurate and noted that “based on a recent review” it had adopted a less constrained interpretation of its duty to notify defendants and had changed its practice. It has also defended itself in related court filings.

The department has argued as well that it was appropriate not to tell the court about scanning Americans’ international emails and saving those that discussed targets, because that activity had been classified at the time and was not relevant to the legal question before the court — whether the plaintiffs had standing.

But Mr. Udall and Mr. Wyden argued that the fact that the information was classified at the time did not make it acceptable to mislead the court into believing Americans’ international messages must be to or from a target to be collected without a warrant.

Jameel Jaffer, an American Civil Liberties Union lawyer who argued the case on behalf of the plaintiffs, said that he would have contended that his clients had legal standing based on the “about the target” collection had the government disclosed that the contents of everyone’s international emails were scanned as part of that program.

“What these letters highlight is the extent to which the government was able to take advantage of the fact that the Supreme Court, as much as the American public, was operating in the dark about the scope of the statute and the way the government was using it,” he said.
http://www.nytimes.com/2014/05/14/us...tatements.html





Glenn Greenwald: How the NSA Tampers with US-Made Internet Routers

The NSA has been covertly implanting interception tools in US servers heading overseas – even though the US government has warned against using Chinese technology for the same reasons, says Glenn Greenwald, in an extract from his new book about the Snowden affair, No Place to Hide

For years, the US government loudly warned the world that Chinese routers and other internet devices pose a "threat" because they are built with backdoor surveillance functionality that gives the Chinese government the ability to spy on anyone using them. Yet what the NSA's documents show is that Americans have been engaged in precisely the activity that the US accused the Chinese of doing.

The drumbeat of American accusations against Chinese internet device manufacturers was unrelenting. In 2012, for example, a report from the House Intelligence Committee, headed by Mike Rogers, claimed that Huawei and ZTE, the top two Chinese telecommunications equipment companies, "may be violating United States laws" and have "not followed United States legal obligations or international standards of business behaviour". The committee recommended that "the United States should view with suspicion the continued penetration of the US telecommunications market by Chinese telecommunications companies".

The Rogers committee voiced fears that the two companies were enabling Chinese state surveillance, although it acknowledged that it had obtained no actual evidence that the firms had implanted their routers and other systems with surveillance devices. Nonetheless, it cited the failure of those companies to cooperate and urged US firms to avoid purchasing their products: "Private-sector entities in the United States are strongly encouraged to consider the long-term security risks associated with doing business with either ZTE or Huawei for equipment or services. US network providers and systems developers are strongly encouraged to seek other vendors for their projects. Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."

The constant accusations became such a burden that Ren Zhengfei, the 69-year-old founder and CEO of Huawei, announced in November 2013 that the company was abandoning the US market. As Foreign Policy reported, Zhengfei told a French newspaper: "'If Huawei gets in the middle of US-China relations,' and causes problems, 'it's not worth it'."

But while American companies were being warned away from supposedly untrustworthy Chinese routers, foreign organisations would have been well advised to beware of American-made ones. A June 2010 report from the head of the NSA's Access and Target Development department is shockingly explicit. The NSA routinely receives – or intercepts – routers, servers and other computer network devices being exported from the US before they are delivered to the international customers.

The agency then implants backdoor surveillance tools, repackages the devices with a factory seal and sends them on. The NSA thus gains access to entire networks and all their users. The document gleefully observes that some "SIGINT tradecraft … is very hands-on (literally!)".

Eventually, the implanted device connects back to the NSA. The report continues: "In one recent case, after several months a beacon implanted through supply-chain interdiction called back to the NSA covert infrastructure. This call back provided us access to further exploit the device and survey the network."

It is quite possible that Chinese firms are implanting surveillance mechanisms in their network devices. But the US is certainly doing the same.

Warning the world about Chinese surveillance could have been one of the motives behind the US government's claims that Chinese devices cannot be trusted. But an equally important motive seems to have been preventing Chinese devices from supplanting American-made ones, which would have limited the NSA's own reach. In other words, Chinese routers and servers represent not only economic competition but also surveillance competition.
http://www.theguardian.com/books/201...outers-snowden





Privacy Group Accuses UK Spy Agency of Hacking Millions of Computers Worldwide
Lorenzo Franceschi-Bicchierai

Civil-liberties groups have sued the NSA and its British sister agency, the UK Government Communications Headquarters (GCHQ), over their spying activities in the wake of whistleblower Edward Snowden's revelations. Now, for the first time, a privacy group is suing the GCHQ for hacking millions of computers and cellphones worldwide.

Privacy International, a London-based digital-rights advocacy organization, filed a legal complaint against the GCHQ before the Investigatory Powers Tribunal, a UK court that hears cases about government surveillance, on Tuesday. The group is accusing the spy agency of using invasive hacking techniques, such as infecting targets with malware, which have no legal justification.

In the complaint (embedded, below), Privacy International equates hacking into a computer with "entering someone’s house, searching through his filing cabinets, diaries and correspondence, and planting devices to permit constant surveillance in future, and, if mobile devices are involved, obtaining historical information including every location he had visited in the past year."

Considering the invasive nature of such activities, which allegedly enable the GCHQ and NSA to access all data on a target's computer — including communications, passwords and even webcam feeds — the spy agency is required to have legitimate reasons for hacking.

But according to Eric King, a lawyer who teaches IT law at the London School of Economics and the deputy director of Privacy International, the GCHQ has never justified being in the "hacking business."

"To invade people's fundamental rights, it is essential that government have clear laws and justification that govern when they do so," he told Mashable in a phone interview. "To have a single broad power that says, 'We can do whatever we want, whenever we like, at any time,' is the antithesis of what rule of law is meant to be about." "To have a single broad power that says, 'We can do whatever we want, whenever we like, at any time,' is the antithesis of what rule of law is meant to be about."

In the complaint, Privacy International details a long list of secret NSA and GCHQ programs, such as NOSEY SMURF (allows hackers to take over a target's microphone), TRACKER SMURF (used to track a target's location) and GUMFISH (used to take over a target's webcam).

Privacy International argues that the programs violate articles 8 and 10 of the European Convention on Human Rights, which protect the the right to privacy and freedom of expression, respectively. The programs also don't have a legal justification in UK law, according to the activist group.

What's more, the NSA and GCHQ appear to doubt the legality of the programs in two separate documents, cited in Privacy International's complaint.

The first, leaked by Snowden, is an NSA presentation that describes QUANTUM, an NSA-GCHQ hacking program. The document reads, "Continued GCHQ involvement may be in jeopardy due to British legal/policy restrictions."

The second, uncovered by journalist Ryan Gallagher, was prepared by a GCHQ representative, and discusses implanting malware. It reads, "An additional concern in the UK is that performing an active attack ... may be illegal."

At this point, it's impossible to know whether Privacy International's complaint will be successful. One argument that could be used against it: The organization is not the victim of these hacking techniques, so it doesn't have the authority to challenge them.

This issue, technically called legal standing, has long been a problem in lawsuits against intelligence companies, especially in the U.S. In several cases, civil-liberties groups such as the American Civil Liberties Union and the Electronic Frontier Foundation have seen their lawsuits dismissed because courts ruled they were not targets of the surveillance, or at least could not prove that they were.

In the latest case, however, Privacy International is confident this won't be a problem. In the complaint, it says given the fact that its employees use computers and mobile phones — usual targets of these hacking techniques — and "given the apparently indiscriminate nature of the activity in question," the group could be a target, and has the right to sue.

Here's Privacy International's full complaint against the GCHQ:

Privacy International Legal Compliant Against GCHQ
http://mashable.com/2014/05/13/priva...-gchq-hacking/





Tough NZ Comms Interception, Network Security Law Kicks In

Aussie operators in NZ must register with police.
Juha Saarinen

Local and international telcos and network providers in New Zealand are now required to comply with strict and complex new communications interception and security legislation.

The new law will apply to Australian businesses and providers operating in the country, such as Vocus which runs data centres and networks in New Zealand.

Known as the Telecommunications (Interception Capability and Security) Act (TICSA), the new law requires network operators to register with the NZ Police. Similary, suppliers of a wholesale or retail telecommunications service must provide their information to the police registry.

Registrants must tell the police their total number of connections, customers and size of their geographic coverage, and ensure that law enforcement agencies have access to customer data and connections when needed.

As part of the new law - which requires the country's main signals intelligence agency, the Government Communications Security Bureau (GCSB) to play a prime role in network and systems security - providers are now dutybound to notify the state about any design and procurement decisions before implementation, according to government guidance [PDF].

Prior to TICSA, network operators were free to design their infrastructure according to their wishes and to meet commercial demands, and to buy equipment and software from any supplier.

From this month, the GCSB has to be notified of and approve proposed changes to a provider's network operations centre, core network including gateways and interconnects as well customer databases and authentication systems.

GCSB network security vetting process schematic

Providers will also be required to have their staff vetted for security clearance. However, the GCSB will not run the security clearance process itself, and warns that this "may take a significant length of time."

Neverthless, there are certain things that network operators are permitted to do without notifying the GCSB.

Network providers can patch and update software and firmware, and make changes to power, air conditioning and fire suppression systems.

They are also not required to inform the spy agency of emergency changes to networks, at least not immediately. Nor will providers have to notify the GCSB about home routers, servers and databases sold to customers.

Failure to comply with the new legislation, GCSB, or ministerial direction on network design and equipment, could land providers with hefty fines.

These can be as steep as NZ$50,000 (A$46,000) to NZ$500,000 a day.

The new law was slammed by web giants Google, Facebook and Microsoft last year as being from the 19th century and incompatible with international privacy legislation.

Despite this, the New Zealand government declined to exempt overseas operators from the new law.
http://www.itnews.com.au/News/385149...-kicks-in.aspx





Pervasive Monitoring Is an Attack
Tim Bray

That’s the title of RFC 7258, also known as BCP 188 (where BCP stands for “Best Common Practice”); it represents Internet Engineering Task Force con#sensus on the fact that many powerful well-funded entities feel it is appropri#ate to monitor people’s use of the Net, without telling those people. The con#sensus is: This monitoring is an attack and designers of Internet protocols must work to mitigate it.

Concretely, quoting from the RFC (PM stands for Pervasive Monitoring): “Those developing IETF specifications need to be able to describe how they have considered PM, and, if the attack is relevant to the work to be published, be able to justify related design decisions.”

The back story • Since the pervasive-surveillance story broke in June 2013, it’s reasonable to wonder why the IETF is putting this stake in the ground in May of 2014. The IETF works by “rough consensus”, and the path to this particular consensus was particularly rough. The resistance was vocifer#ous, and fell into some of these baskets:

• “This is politics. The IETF doesn’t/shouldn’t do politics.”

• “There are legitimate reasons to monitor Internet traffic.” (For example, in businesses and prisons.)

• “I work in an area where privacy technologies can’t be used.” (One exam#ple is ham radio).

• “Privacy technologies will drive up the cost of deploying, managing, and using the Net.”

• “The IETF Security Area Directors were mean to me in the past, got in the way of publishing important work, and this will give them another club to beat me with.”

I and lots of others didn’t buy the objections. My own takes are: First, the doc#ument carefully steers clear of the motivations for pervasive monitoring, mostly because you can’t figure out what they are. Second, we don’t want an Internet optimized for prisons. Third, if your application doesn’t support pri#vacy, that’s probably a bug in your application. Fourth, the cost of ignoring surveillance exceeds the cost of mitigating it. Finally, the state of Internet pri#vacy suggests that the security people historically haven’t been mean enough.

Of course, if you were paranoid and suspicious, you might feel that some of the resistance is related to the facts that there are people making big money selling surveillance technology, and that other people think Ed Snowden is a traitor and it’s perfectly reasonable for the NSA to know everything about ev#eryone, because if you’re not doing anything wrong why would you want pri#vacy?

Also, the IETF has a contingent that is reflexively against anything new, or that has any flavor of idealism, or that generally rocks any boats.

In any case, I think it was very important, for the continued relevance and use#fulness of the IETF, that it, in this case, rise above its own naysayers, bring to bear a mix of idealism, suspicion, and paranoia, and do what is right for the ac#tual people who use the Internet.

Acknowledgments • Thanks are due to Stephen Farrell, who wrote the document, to the members of the “Perpass” mailing list, and then the IETF community as a whole.

Also to Ed Snowden and the journalists who brought his story forward, for starting this very, very necessary conversation.
https://www.tbray.org/ongoing/When/2...g-is-an-Attack





Data Mining Your Children
Stephanie Simon

The NSA has nothing on the ed tech startup known as Knewton.

The data analytics firm has peered into the brains of more than 4 million students across the country. By monitoring every mouse click, every keystroke, every split-second hesitation as children work through digital textbooks, Knewton is able to find out not just what individual kids know, but how they think. It can tell who has trouble focusing on science before lunch — and who will struggle with fractions next Thursday.

Even as Congress moves to rein in the National Security Agency, private-sector data mining has galloped forward — perhaps nowhere faster than in education. Both Republicans and Democrats have embraced the practice. And the Obama administration has encouraged it, even relaxing federal privacy law to allow school districts to share student data more widely.

The goal is to identify potential problems early and to help kids surmount them. But the data revolution has also put heaps of intimate information about school children in the hands of private companies — where it is highly vulnerable to being shared, sold or mined for profit.

A POLITICO examination of hundreds of pages of privacy policies, terms of service and district contracts — as well as interviews with dozens of industry and legal experts — finds gaping holes in the protection of children’s privacy.

The amount of data being collected is staggering. Ed tech companies of all sizes, from basement startups to global conglomerates, have jumped into the game. The most adept are scooping up as many as 10 million unique data points on each child, each day. That’s orders of magnitude more data than Netflix or Facebook or even Google collect on their users.

Students are tracked as they play online games, watch videos, read books, take quizzes and run laps in physical education. The monitoring continues as they work on assignments from home, with companies logging children’s locations, homework schedules, Web browsing habits and, of course, their academic progress.

A report by McKinsey & Co. last year found that expanding the use of data in K-12 schools and colleges could drive at least $300 billion a year in added economic growth in the U.S. by improving instruction and making education more efficient.

Parents, however, are growing increasingly wary — and deeply frustrated. They’re finding that it’s nearly impossible to find out which companies are collecting data on their children, much less how it’s being used.

School administrators are often in the dark, too. They don’t know which digital tools individual teachers are using in the classroom. And when they try to ask pointed questions of the ed tech companies they work with directly, they don’t always get clear answers.

“When you really start digging in… they start getting antsy. It’s ‘Why are you asking this?’” said Lenny Schad, chief information technology officer for the Houston Independent School District.

“This is a problem we can’t ignore,” Schad said. It is, he said, “the wild, wild West.”

Knewton CEO Jose Ferreira finds such concerns overblown. When parents protest that they don’t want their children data-mined, Ferreira wishes he could ask them why: Is it simply that they don’t want a for-profit company to map their kids’ minds? If not, why not? “They’d rather the NSA have it?” he asked. “What, you trust the government?”

Ferreira said he often hears parents angrily declaring that their children cannot be reduced to data points. “That’s not an argument,” Ferreira said. “I’m not calling your child a bundle of data. I’m just helping her learn.”

LOOPHOLES IN AN OLD LAW

The U.S. Department of Education has called safeguarding children’s privacy a priority. “That has to be first, that has to be foremost, that’s absolutely paramount,” Education Secretary Arne Duncan said in a recent video chat posted by the department.

Yet the Family Educational Rights and Privacy Act, written when the floppy disk was just coming into vogue, offers only limited protections.

The 1974 law, known as FERPA, explicitly gives school districts the right to share students’ personal information with private companies to further educational goals.

Companies are supposed to keep standardized test scores, disciplinary history and other official student records confidential — and not use it for their own purposes. But the law did not anticipate the explosion in online learning.

Students shed streams of data about their academic progress, work habits, learning styles and personal interests as they navigate educational websites. All that data has potential commercial value: It could be used to target ads to the kids and their families, or to build profiles on them that might be of interest to employers, military recruiters or college admissions officers.

The law is silent on who owns that data. But Kathleen Styles, the Education Department’s chief privacy officer, acknowledged in an interview that much of it is likely not protected by FERPA — and thus can be commercialized by the companies that hold it.

Districts could write privacy protections into their contracts with ed tech companies. But few do.

A recent national study found that just 7 percent of the contracts between districts and tech companies handling student data barred the companies from selling it for profit.

Few contracts required the companies to delete sensitive data when they were done with it. And just one in four clearly explained why the company needed personal student information in the first place, according to the study, conducted by the Center on Law and Information Policy at Fordham University.

“We don’t know what these companies are doing with our children’s data,” said Joel Reidenberg, the Fordham law professor who conducted the study.

A White House report on big data released earlier this month recognized the risk, and called for updating FERPA. Sen. Ed Markey (D-Mass.) and Sen. Orrin Hatch (R-Utah) on Wednesday began circulating a draft bill to do just that. Their bill would tighten controls on student records and give parents the right to review — and correct — some of the information that private companies hold on their children. But the bill only covers official student educational records, not the streams of “metadata” that companies collect when kids work online.

There’s no conclusive proof any company has exploited either metadata or official student records. But privacy experts say it’s almost impossible to tell. The marketplace in personal data is shadowy and its impact on any one individual can be subtle: Who can say for sure if they’re being bombarded with a certain ad or rebuffed by a particular employer because their personal profile has been mined and sold?

Ed tech insiders will not name bad actors in their industry. But they will say this: It’s quite possible to exploit student data — and there can be a great deal of pressure to do so, especially for startups that are giving away their product for free in hopes of gaining a toe-hold in classrooms.

Unless your product is good enough to sell, “there’s this huge temptation to just make money by selling or exploiting data,” said Matthew Rubinstein, the founder and CEO of LiveSchool, which markets software that helps schools track student behavior.

Children’s personal information “is splintering across the Internet,” said Cameron Evans, Microsoft’s chief technology officer. “Anonymity is going to be more valuable than gold in the near future.”

STUDENT RECORDS AT RISK

Ed-tech companies divide into two main camps. Some serve as digital file cabinets for pre-existing student records; they’re basically organizational tools. Others deliver lessons and quizzes online and collect fresh data directly from students as they work.

The POLITICO examination found that both can carry privacy risks.

Take LearnBoost, a startup backed by prominent venture capital firms. It’s marketed as a “free and amazing” tool that lets teachers upload their notes on student attendance, test scores, behavior and more to a digital grade book. Any teacher can sign up, even if her district doesn’t participate.

A key element of the pitch: LearnBoost makes it easy for teachers to email the grade book to parents, students and others “as they see fit.”

LearnBoost does note in passing that confidential student data should be shared “very carefully.” But it offers no guidelines. And privacy advocates find it alarming that a for-profit startup is holding student records and making it easy for teachers to send them zipping around the Internet without supervision from the district.

The company did not return emails seeking comment.

Other sites receive huge amounts of student information directly from schools or districts. The data management site LearnSprout, for instance, stores information such as attendance records, which can be granular to the point of noting head lice, a cold, a doctor’s appointment or bereavement — to name just a few of the categories. Interactive Health Technologies stores multi-year fitness records on students, based on data from heart monitors they wear in P.E., and integrates them with “unlimited data points” from the classroom, including behavioral and nutrition records.

Knowing so much personal data is in a private company’s hands worries some parents, especially in the wake of the cyberattack that stole credit card numbers from tens of millions of Target customers last winter.

K-12 districts and contractors haven’t reported any major data breaches, but it’s been a recurring problem for colleges. In one of the worst incidents, hackers attacked the University of Maryland in February and scooped up records — including social security numbers — for nearly 300,000 students, faculty and staff.

Other companies hold more even more intimate, and potentially more valuable, information on children.

Consider the popular nonprofit tutorial service Khan Academy. It’s free. But users do pay a price: In effect, they trade their data for the tutoring.

“Data is the real asset,” founder Sal Khan told an academic conference last fall.

The site tracks the academic progress of students 13 and older as they work through online lessons in math, science and other subjects. It also logs their location when they sign in and monitors their Web browsing habits. And it reserves the right to seek out personal details about users from other sources, as well, potentially building rich profiles of their interests and connections.

After POLITICO inquired about Khan Academy’s privacy policy, which gave it the right to draw on students’ personal information to send them customized advertising, the policy was completely rewritten. The new text, posted online late last week, emphasizes Khan Academy’s commitment to protecting privacy and deletes the line about targeted advertising.

But the revised policy makes clear that Khan Academy still allows third parties, such as YouTube and Google, to place the tiny text files known as “cookies” on students’ computers to collect and store information about their Web usage. Khan Academy also states that it may share personal information with app developers and other external partners, with students’ consent.

A spokeswoman for the site said Khan Academy’s main goal in collecting data is to “help students learn effectively and efficiently.”

MURKY PRIVACY POLICIES — OR NONE AT ALL

Parents and teachers typically turn to companies’ privacy policies to try to figure out what student data is being collected and how it could be used. Clarity is a rarity.

Even companies that assert they do not sell personal information typically reserve the right to change that policy at any time. Most won’t notify users in the event of such a change. Instead, they recommend reading the online privacy policy regularly to see if it’s been updated.

Most policies also indicate that student information will trade hands, and may be subject to an entirely new privacy policy, if the company is sold — a common fate for a start-up.

Then there’s the legal jargon and fuzzy terminology to unravel.

Moodle, which many schools use as a forum for students to post work and communicate with teachers, states that it won’t share users’ personal information — “but it may be accessible to those volunteers and staff who administer the site and infrastructure.” Who are those volunteers? Are they trained to protect user privacy? The site lists an email address for users to get more information, but questions sent to that address bounced back.

Google’s privacy policy is considerably more detailed, but until recently, it did not make clear that the company scanned all emails sent through its Google Apps for Education platform, which is used by millions of students and teachers. The automated scan picked out key words that might suggest a user was, say, planning a camping trip. Google could then use that information to target ads to that individual. It did not routinely send ads to students, but it did direct them to alumni who used the Google Apps for Education platform.

After angry students filed a lawsuit, Google updated its terms of service to acknowledge the email scanning — and then announced late last month that it would stop the practice altogether for customers using Apps for Education.

Other companies don’t make any privacy policy at all available for parents to review, POLITICO has found.

The data storage and analytics firm eScholar, which sells software to help districts manage records on 20 million students — and stores some of that data on its servers — does not have a posted privacy policy. Spokeswoman Ann Tarasena said the company is working on it. In the meantime, eScholar writes privacy protections into its contracts with districts. It wouldn’t release the contracts — citing privacy concerns.

On Thursday, responding to questions raised by this article, the company posted online a statement of its general privacy principles, including a pledge not to sell student data.

Then there’s Panorama Education, a data analytics platform used by thousands of schools and backed by investors including Facebook’s Mark Zuckerberg and actor Ashton Kutcher.

CEO Aaron Feuer said the company abides by each district’s privacy rules, but it does not have a blanket policy to share with the public.

The lack of consistent standards troubles Sen. Markey, who has become a leading voice on consumer privacy in Congress.

“The goal here should be to help scholars make the grade,” Markey said, “not help companies make a sale.”

DATA DEMANDS ESCALATE

In recent months, more than 30 public school districts from Bainbridge Island, Washington, to Broward County, Florida, have signed partnerships with a nonprofit called Code.org. The organization gives schools free curricular materials and teacher training to set up computer science classes.

All it asks for in exchange: Data. Lots and lots of data.

Code.org requires that its partner schools turn over up to a dozen years of academic records, including test scores, on every participating student, according to a model contract reviewed by POLITICO.

In addition to their official academic records, Code.org collects huge amounts of new information on participating students as they watch the tutorials and do the activities on its website. It collects their computer login, email address and password and captures their interaction with the website, including searches conducted on the site.

Code.org’s privacy policy is a bit confusing. It says it does not share personal information with third parties. It promises not to share it, either, with the organization’s donors or sponsors, among them Facebook’s Zuckerberg and Microsoft’s Bill Gates.

But the policy goes on to say it may provide personal information to “schools, teachers and affiliated organizations.” It explicitly states that Code.org does not control how that information “is later used by them or shared with others.”

The policy doesn’t define “affiliated organizations” or explain how access is determined. Nor does it explain what Code.org does with its voluminous student files or how it protects them.

Spokeswoman Roxanne Emadi declined to discuss those issues.

Officials in some districts that have signed up with Code.org said they were comfortable with handing over the data because they assumed it would be aggregated and anonymized — though the contract makes no mention of that — and used to gauge the effectiveness of the program. “That kind of analysis and research goes on all the time,” said Robert Runcie, superintendent in Broward County. “It’s not a problem.”

Others said they didn’t realize when they signed the contract how much data would be turned over.

On Thursday, in response to this article, Code.org CEO Hadi Partovi posted an open letter stating that the organization only sought anonymized data and would update and clarify its privacy policy.

To Doug Levin, who runs an association of state educational technology directors, the ambiguity of the Code.org policy is an astonishing example of how little attention is being paid to protecting student privacy.

“That’s just unacceptable,” he said. “I mean, you’re just throwing potentially sensitive information over the wall in the hopes that there won’t be any issue.” The contracts highlight the danger of the ed tech explosion, Levin said: When it comes to protecting privacy, “the rules of the road are not real clear.”

THE PROMISE OF BIG DATA

For all the concerns about privacy, education reformers are adamant that the digital revolution must be allowed to flourish.

Already, publishers are producing digital textbooks that can effectively read students’ minds, figuring out when they’re on the verge of forgetting key concepts and sending them text, video or quizzes to fix the facts firmly in their memory.

Even more intimate tracking may be possible in the future: The Bill & Melinda Gates Foundation funded a $1.4 million research project in 2012 to outfit middle-school students with biometric sensors designed to detect how they responded on an a subconscious level to each minute of each lesson. The results suggested the sensors could be useful for teachers, foundation spokeswoman Deborah Robinson said.

“We’re really just at the beginning of truly leveraging the power of data to transform the process of teaching and learning,” said Aimee Rogstad Guidera, executive director of the Data Quality Campaign, which urges states to develop responsible policies for data-driven education.

“When we take the time to explain to parents why this is good and how it’s going to help, they’re fine with it,” Guidera said.

Not all parents, however, are convinced.

To Barmak Nassirian, a father of two and grassroots privacy activist, the question boils down to this: No matter how well they safeguard the data, no matter how stringent their privacy policies, do you want private companies “to get into your kid’s head and mine the learning process for profit?”

Investors, after all, are pouring into the sector because they expect it to make money, not because — or at least, not only because — they believe it will help kids learn.

“Their mission isn’t a social mission,” said Michael Moe, co-founder of GSV Capital, a leading investor in ed-tech companies. “They’re there to create return.”

More than $650 million flowed into technology firms serving the K-12 and higher education market last year. That’s nearly double the $331 million invested in those spheres in 2009, Moe said. Nationwide, the market for education software and digital content stands at nearly $8 billion, according to the Software & Information Industry Association.

It’s not entirely clear that all those apps boost achievement; a recent national survey commissioned by the Gates Foundation found just 54 percent of teachers considered the digital tools their students use frequently to be effective.

Given that uncertainty, the data companies collect on students could be their most valuable assets.

Publishers of digital textbooks, for instance, could potentially use their insights on students’ academic progress to pitch them — or, more likely, their parents — new products targeted directly at their needs.

“In the industry, there’s a lot of desire to do that,” said Andrew Bloom, chief privacy officer for McGraw-Hill Education. Bloom stressed that McGraw-Hill has no plans to do such marketing unless school districts consent.

Khaliah Barnes, director of the student privacy project for the Electronic Privacy Information Center, can imagine another scenario: Companies with rich student dossiers could market aptitude and attitude profiles to college admissions or corporate recruiting offices.

“As an employer, that’s the sort of profile I would want to buy: Who can solve a problem quickly? Who has the tenacity to finish all the problems? Who drops off quickly?” Barnes said.

Ferreira, the CEO of the New York data analytics firm Knewton, said he’s not planning to create such profiles. “But I suppose I can imagine a future where it happens,” he said. “I’m not sure how I feel about that.” If such profiles were to come into use, he said, Knewton would not sell or share them without students’ consent.

A model state bill drafted by the American Legislative Exchange Council, a conservative lobbying group, could make such targeting more likely; it would set up a central state database for student records and allow colleges or businesses to browse them in search of potential recruits.

Companies might also seek to mine student profiles to find customers uniquely vulnerable to their sales pitches. For instance, young adults who struggled with high-school math could be bombarded with ads for high-priced payday loans, Barnes said.

Such prospects may sound far-fetched, but the recent White House report on big data acknowledged it as a very real possibility. Data collected on children as they take advantage of educational services “could be used to build an invasive consumer profile of them once they become adults,” the report concluded.

Knewton’s Ferreira is impatient with alarmist scenarios and anxious parents.

He once described education as “the world’s most data-mineable industry, by far” — and he has raised $105 million from investors who share that vision. By next year, he expects to be mapping the minds of 10 million students. If he can identify who among them will struggle with fractions next Thursday, he can also recommend resources to help them before they hit that wall.

Ferreira has a tough time understanding how anyone could object to data mining when it has such power.

“It just helps children,” Ferreira said. “That’s all it does.”
http://www.politico.com/story/2014/0...en-106676.html





Blackphone: Why the First “Spy-Proof” Mobile is Such a Hit in a Post-Snowden World

Demand has been “huge” for the customised Android device which offers encrypted phone calls and texts which can’t be unscrambled by spy agencies.
Rob Waugh

Phil Zimmermann has spent his life trying to save an endangered species - human privacy. His new product, Blackphone, allows “two humans to whisper in each other’s ears from across the world.”

Demand, he says, has been "huge” for the customised Android device which offers encrypted phone calls and texts which can’t be unscrambled even by spy agencies.

A majority of the companies on America’s Fortune 50 list - the top companies ranked by revenue - have already ordered. Blackphone will cost around £375 and be on sale in June.

Zimmermann, inventor of PGP, the most widely used system of encrypted email in the world (encryption means it’s protected by complex codes so snoopers are locked out) dislikes using email - at least to talk to journalists he doesn't know.

Emails can be forwarded, copied, replied-to-all. He promises to call back later. His company already makes privacy software for phones and PCs - and is clear on who should buy Blackphone - “every law-abiding citizen.”

One mobile phone company - the Dutch company KPN - has ordered “hundreds of thousands” to sell to ordinary consumers - breaking a decades-old tradition that phone companies went along happily with police and government wiretaps.

"That is a hopeful sign to me," Zimmermann says. "In the past, they just rolled over."

“We are in the golden age of survellance,” says Zimmermann. "Whoever wants it can enjoy total information awareness - from cameras which read number plates automatically, to watching who calls whom, and what they say. If a politician is seen in a hotel with an attractive woman, facial recognition can pick him out.”

Blackphone, an Android device, running a special privacy-boosted version of the software called PrivatOS, aims to restore some of the balance - it also offers encrypted texts and emails, and built-in resistance against malicious software.

Users can switch off encryption for less sensitive calls - such as ordering a pizza.

Blackphone is unique. While Zimmermann’s technology already is used by soldiers and spies, it’s now in the hands of ordinary citizens. He hopes it ignites interest in governments - and how closely they are watching us.

Zimmermann has been fighting for privacy for most of his life, “I first tried to make a phone for encrypted calls in 1995 - but the technology wasn’t there yet. I had to wait until everyone had broadband.”
“Blackphone isn’t totally spy-proof - if someone really wants to listen in, they can stick a microphone on your wall. But when you see that green ‘Secure’ logo on screen, and say something sensitive, it has a tremendous effect on how comfortable you feel.”

Encrypted phone technology is already used - by armed forces around the world. Blackphone has already been ‘tested’ by intelligence agents, before handing devices using the technology to special forces such as the SAS.

“That’s how I know it works,” he says. ““It’s used by soldiers - and it’s been tested by the intelligence agencies of those countries. It works."

There have been previous encrypted handsets, but they were large, clunky devices - complex to operate, and not really boardroom material. Zimmermann says demand from large companies has been “huge”.

“A majority of the Fortune 50 companies - some of the biggest in the world - have placed orders,” he says.
Industrial espionage is hugely common around the world - and for companies it provides a quick, secure way to have sensitive conversations.

“In some countries wire-tapping is incredibly common - not just by the government, but by private individuals. In Brazil for example, a few thousand U.S. dollars is enough to pay someone at a telephone exchange to tap and record any phone calls you make - whether it’s to steal industrial secrets, or for espionage,” Zimmermann says.

“Edward Snowden made the world aware of what U.S intelligence were doing,” he says. ““He showed that the entire population was being spied on - not just Al Qaeda suspects, everyone. They were looking for a needle in a haystack, and just loaded the haystack onto a truck and sifted through it.”

Zimmermann warns that the data isn’t going away - information gleaned from previous wiretaps may be used in political battles in the future.

"This sort of data, people have a habit of reaching back into the past, and using it," he says. "We will see battles in the future that the NSA have sown the seeds of now."

“What amused me among the Snowden documents was the NSA boasting of how many things they had broken into - but they had never broken into anything I ever designed,” he says. “I was even mentioned in a memo. It was research into new technology I was developing, and it was headed, ‘This can’t be good’. It warms my heart they have such respect for my work.”
https://uk.news.yahoo.com/blackphone...090358818.html





Teen Arrested for 30+ Swattings, Bomb Threats
Brian Krebs

A 16-year-old male from Ottawa, Canada has been arrested for allegedly making at least 30 fraudulent calls to emergency services across North America over the past few months. The false alarms — two of which targeted this reporter — involved calling in phony bomb threats and multiple attempts at “swatting” — a hoax in which the perpetrator spoofs a call about a hostage situation or other violent crime in progress in the hopes of tricking police into responding at a particular address with deadly force.

On March 9, a user on Twitter named @ProbablyOnion (possibly NSFW) started sending me rude and annoying messages. A month later (and several weeks after blocking him on Twitter), I received a phone call from the local police department. It was early in the morning on Apr. 10, and the cops wanted to know if everything was okay at our address.

Since this was not the first time someone had called in a fake hostage situation at my home, the call I received came from the police department’s non-emergency number, and they were unsurprised when I told them that the Krebs manor and all of its inhabitants were just fine.

Minutes after my local police department received that fake notification, @ProbablyOnion was bragging on Twitter about swatting me, including me on his public messages: “You have 5 hostages? And you will kill 1 hostage every 6 times and the police have 25 minutes to get you $100k in clear plastic.” Another message read: “Good morning! Just dispatched a swat team to your house, they didn’t even call you this time, hahaha.”

I told this user privately that targeting an investigative reporter maybe wasn’t the brightest idea, and that he was likely to wind up in jail soon. But @ProbablyOnion was on a roll: That same day, he hung out his for-hire sign on Twitter, with the following message: “want someone swatted? Tweet me their name, address and I’ll make it happen.”

Several Twitter users apparently took him up on that offer. All told, @ProbablyOnion would claim responsibility for more than two dozen swatting and bomb threat incidents at schools and other public locations across the United States.

On May 7, @ProbablyOnion tried to get the swat team to visit my home again, and once again without success. “How’s your door?” he tweeted. I replied: “Door’s fine, Curtis. But I’m guessing yours won’t be soon. Nice opsec!”

I was referring to a document that had just been leaked on Pastebin, which identified @ProbablyOnion as a 19-year-old Curtis Gervais from Ontario. @ProbablyOnion laughed it off but didn’t deny the accuracy of the information, except to tweet that the document got his age wrong. A day later, @ProbablyOnion would post his final tweet: “Still awaiting for the horsies to bash down my door,” a taunting reference to the Royal Canadian Mounted Police (RCMP).

According to an article in the Ottawa Citizen, the 16-year-old faces 60 charges, including creating fear by making bomb threats. Ottawa police also are investigating whether any alleged hoax calls diverted responders away from real emergencies.

Most of the people involved in swatting and making bomb threats are young males under the age of 18 — the age when kids seem to have little appreciation for or care about the seriousness of their actions. According to the FBI, each swatting incident costs emergency responders approximately $10,000. Each hoax also unnecessarily endangers the lives of the responders and the public.

Take, for example, the kid who swatted my home last year: According to interviews with multiple law enforcement sources familiar with the case, that kid is only 17 now, and was barely 16 at the time of the incident in March 2013. Identified in several Wired articles as “Cosmo the God,” Long Beach, Calif. resident Eric Taylor violated the terms of his 2011 parole, which forbade him from using the Internet until his 21st birthday. Taylor pleaded guilty in 2011 to multiple felonies, including credit card fraud, identity theft, bomb threats and online impersonation.

In nearly every case I’m aware of, these kids who think swatting is fun have serious problems at home, if indeed they have any meaningful parental oversight in their lives. It’s sad because with a bit of guidance and the right environment, some of these kids probably would make very good security professionals. Heck, Eric Taylor was even publicly thanked by Google for finding and reporting security vulnerabilities in the fourth quarter of 2012 (nevermind that this was technically after his no-computer probation kicked in).
http://krebsonsecurity.com/2014/05/t...-bomb-threats/





Researchers Find, Analyze Forged SSL Certs in the Wild
Zeljka Zorz

A group of researchers from Carnegie Mellon University and Facebook has managed to get a concrete sense of just how prevalent SSL man-in-the-middle attacks using forged SSL certificates are in the wild.

Lead by Lin-Shung Huang, PhD candidate at Carnegie Mellon University and, during the research, an intern with the Facebook Product Security team, they have created a new method for websites to detect these attacks on a large scale: a widely-supported Flash Player plugin was made to enable socket functionalities not natively present in current browsers, so that it could implement a distinct, partial SSL handshake to capture forged certificates.

This detection method was deployed on Facebook’s website, and the result was as follows: of nearly 3.5 million SSL connections analyzed, 6,845 (0.2%) of them were forged SSL certificates.

These certificates are not authorized by the website owners, but most browsers will "accept" them, i.e. they will warn users of the error, but will allow them to choose whether they will continue on to the (potentially insecure) website.

The overwhelming majority of the subjects of the forged certificates were, expectedly, tied to the wildcard domain *.facebook.com. When it comes to the bogus issuers of the certificates, most were apparently security companies: Bitdefender, ESET, BullGuard, Kaspersky Lab, etc, as some security solutions can intercept and analyze SSL connections in order to protect users from fake, insecure ones.

"The second most popular category of forged certificates belongs to commercial network security appliances that perform web content filtering or virus scanning on SSL traffic. As observed in the certificate subject fields, Fortinet was one of the issuers that manufactures devices for web content filtering with support for HTTPS deep inspection," they noted.

Other instances of forged certificates were issued by an adware-peddling company. Finally, the researchers also noticed an unknown issuer named IopFailZeroAccessCreate on a number of occasions, and managed to tie it to SSL man-in-the-middle attacks by malware around the world.

More information about the research can be found in the very interesting paper published by the researchers. The group is set to present their research at the 35th IEEE Symposium on Security and Privacy later this month.
http://www.net-security.org/secworld.php?id=16843





AdBlock Plus’s Effect on Firefox’s Memory Usage
Nicholas Nethercote

AdBlock Plus (ABP) is the most popular add-on for Firefox. AMO says that it has almost 19 million users, which is almost triple the number of the second most popular add-on. I have happily used it myself for years — whenever I use a browser that doesn’t have an ad blocker installed I’m always horrified by the number of ads there are on the web.

But we recently learned that ABP can greatly increase the amount of memory used by Firefox.

First, there’s a constant overhead just from enabling ABP of something like 60–70 MiB. (This is on 64-bit builds; on 32-bit builds the number is probably a bit smaller.) This appears to be mostly due to additional JavaScript memory usage, though there’s also some due to extra layout memory.

Second, there’s an overhead of about 4 MiB per iframe, which is mostly due to ABP injecting a giant stylesheet into every iframe. Many pages have multiple iframes, so this can add up quickly. For example, if I load TechCrunch and roll over the social buttons on every story (thus triggering the loading of lots of extra JS code), without ABP, Firefox uses about 194 MiB of physical memory. With ABP, that number more than doubles, to 417 MiB. This is despite the fact that ABP prevents some page elements (ads!) from being loaded.

An even more extreme example is this page, which contains over 400 iframes. Without ABP, Firefox uses about 370 MiB. With ABP, that number jumps to 1960 MiB. Unsurprisingly, the page also loads more slowly with ABP enabled.

So, it’s clear that ABP greatly increases Firefox’s memory usage. Now, this isn’t all bad. Many people (including me!) will be happy with this trade-off — they will gladly use extra memory in order to block ads. But if you’re using a low-end machine without much memory, you might have different priorities.

I hope that the ABP authors can work with us to reduce this overhead, though I’m not aware of any clear ideas on how to do so. In the meantime, it’s worth keeping these measurements in mind. In particular, if you hear people complaining about Firefox’s memory usage, one of the first questions to ask is whether they have ABP installed.
https://blog.mozilla.org/nnethercote...-memory-usage/

















Until next week,

- js.



















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