Archive for the ‘telecommunications’ tag
The Big Test – Proposed Comcast and NBC Universal Merger
The proposed merger between Comcast and NBC Universal is a major test for the Obama administration’s positions on vertical mergers and media consolidation. Comcast has already made some commitments to aid it during the review process, which is likely to take at least a year. These commitments include continuing free over-the-air broadcast of NBC and Telemundo as well as enhancing availability of children’s programming and Hispanic-focused content through on demand capabilities and some use of the digital spectrum available to various channels.
The big questions left are how the Obama administration will react to the proposed merger and what conditions might be placed on the merger once its terms become more concrete. The merger would see a significant combination of internet service provision, television programming distribution, television programming production, and news gathering into one entity. At the very least, Comcast’s position as “one of the nation’s leading providers of cable, entertainment and communications products and services” is certain to raise a lot of questions during the review process.
An interesting effect of entering the review process is how Comcast’s need to enhance its image to aid in regulatory agency approval, and how this might affect the ability of other television networks to demand better retransmission terms from Comcast. It is entirely possible that Comcast may have to take a softer line in its negotiations and pay more for local broadcasts than it has in the past, in order to help convince regulatory agencies that the merger will not have anticompetitive effects.
European Union (EU) regulators drop Qualcomm investigation
European Union (EU) regulators closed their investigation of Qualcomm Inc. after all of the companies accusing Qualcomm of charging excessive royalties on technology patents withdrew their complaints. In 2005, six technology companies filed complaints alleging that the royalties Qualcomm has charged since its patented technology became part of Europe’s 3G standard are unreasonably high. Two of the companies, Nokia and Broadcom, withdrew their complaints after reaching separate outside settlements. Ericsson said in a statement that it is withdrawing the complaint and continuing “its ongoing dialogue with competition authorities around the world in relation to Qualcomm’s licensing practices.” Since all complaints have now been withdrawn, the EU dropped its investigation and is focusing its resources elsewhere. Qualcomm still faces antitrust scrutiny elsewhere in the world. Japan’s Fair Trade Commission said in September that Qualcomm coerced Japanese mobile-phone makers into agreements that prevented them from asserting their intellectual property rights, impeding fair competition and ordered Qualcomm to rescind the restrictive provisions. Earlier this year Qualcomm was fined 260 billion Won ($220 million USD) by South Korea’s antitrust agency for deterring competition through unfair fees and is currently appealing the fine. While the EU closed its four-year old antitrust investigation without levying a fine, Qualcomm was not absolved of wronging and the investigation could be restarted if another complaint is filed.
Bill Would Give President Emergency Control Over Internet
Speaking of destroying the internet, CBSNews.com reporter Declan McCullagh reports Senators Jay Rockefeller (D-W.V.) and Olympia Snowe (R-Maine) recently introduced legislation that would give the president the authority to seize control of the Internet and order a shut-down of Internet traffic during a “cybersecurity emergency.”
Despite vocal concerns from telecommunications companies and civil liberties groups, the bill’s sponsors maintain that the bill is necessary to protect the nation’s cyber infrastructure security. “We must protect our critical infrastructure at all costs–from our water to our electricity, to banking, traffic lights and electronic health records,” Rockefeller said. Agreed. Sort of. “At all costs?” That might be a bridge too far. Cybersecurity should be a top government priority, given our national infrastructure’s dependence on the Internet, but at what cost?
President Obama has acknowledged that the United States is “not as prepared as we should be,” when it comes to cybersecurity, and in May said that “[the government's] pursuit of cybersecurity will not — I repeat, will not include — monitoring private networks or Internet traffic.”
As with campaign promises, that may have been wishful thinking on the president’s part. The bill’s text takes a markedly different tack, calling for the White House to engage in “periodic mapping” of private networks to determine which of those networks are “critical” to national security. Those companies that maintain critical private networks are then required to share certain requested information with the government, but the Rockefeller-Snowe bill, in its current form, lacks the necessary internal checks on the vast power it grants the president over private networks and fails to spell out exactly what limitations would be placed on the government in the monitoring process. Before the telecommunications industry (not to mention the general public) can rest easily, the amorphous powers granted in the bill will need to be reigned in to curb opportunities for abuse of those powers.
Not everyone is concerned about the bill’s prospective reach, however. According to McCullagh, a Senate source familiar with the legislation likens the president’s authority to shut down the internet to President Bush’s grounding of all aircraft immediately proceeding the Sept. 11, 2001 terrorist attacks. The obvious difference between the two examples is that the government is not required to access vast quantities of sensitive personal information in order to ground airplanes. Shutting down critical networks in the event of a cyber emergency means knowing exactly which private networks are “critical,” which by necessity means some level of monitoring. Without an appropriate process for administrative review and healthy checks on the extent of the government’s monitoring power, the bill will have a hard time garnering the necessary support to get passed.
Criminal charges for cell-phone self-portraits – more harm than good.
by Melanie Persinger, MTTLR Associate Editor
Image Lincoln by Katy/teapics. Used under a Creative Commons BY-NC-SA 2.0 license.As new technologies become part of our lives, teenagers figure out a way to use these technologies to do what it is they do best: get themselves into trouble. Cell phones and picture messaging are no exception. This fall, a fifteen-year-old girl in Ohio was arrested for taking nude photographs of herself and sending them to other minors. The teenager was charged with illegal use of a minor in nudity oriented materials and possession of criminal tools under Ohio law 2907.323(A)(3). The charges could also qualify the girl to be classified as a sex offender, requiring her to register annually. An Ohio prosecutor, Ken Oswalt, said that the other minors who received the photographs might also be charged for possession of child pornography.
The Ohio case was recently settled out of court, and the young woman in that case will not have to register as a sex offender. But the law at issue was Ohio’s version of Megan’s law, which has been enacted, with slight variations, in all fifty states and the District of Columbia. This means that a similar case could potentially come up anywhere in the United States. In fact, the case in Ohio is by no means the first instance of a minor being faced with criminal charges for taking and sending, or posting online, nude photographs of themselves. According to Fox News, “Similar cases have been reported in New Jersey, New York, Alabama, Utah, Pennsylvania, Texas and Connecticut.” Michigan and Florida have also seen similar cases. Because this is a growing trend, it is important to ask ourselves if criminal charges are the appropriate way to deal with these teenagers’ misconduct.
The aim of laws of this type (preventing sexual offenses against minors) is to prevent harm to the child. Proponents of the law in issue argue that this means protecting children from harm they could cause to themselves in addition to protecting them against harm caused by others. While the current law does this to a certain extent, it is also overly broad in that it imposes a different, and arguably worse, harm on the minor. It is true that once the photographs become public, they will likely haunt the teenager forever or could possibly end up in the hands of adults who are looking for child pornography, both of which are harms that we should be concerned about. However, imposing criminal charges will not undo the fact that the photograph(s) are now out in public. Additionally, imposing criminal charges, especially requiring the minor to register as a sex offender, is also likely to haunt them forever. It is hard to see how preventing harm to minors justifies imposing other harms on them: the stigma of a criminal record and being labeled as a sex offender.
Webcaster Settlement Act: Can it Really Save Internet Radio?
by: Adam Denhoff, Associate Editor, MTTLR
Image this is podcasting by Thomas Kamann. Used under a Creative Commons BY 2.0 license.Internet radio broadcasters were given renewed hope of long-term stability when President Bush signed the Webcaster Settlement Act in October. The Act allows webcasters and record labels to continue negotiating for a reduced performance royalty rate while Congress is in recess, as it extends the deadline for a new deal to February 15, 2009. The issue stems from a March, 2007 decision by the Copyright Royalty Board (CRB), which would force webcasters to pay for each song streamed to each user at a retroactive rate as follows:
2006: $0.0008 per song, per listener
2007: $.0011
2008: $.0014
2009: $.0018
2010: $.0019
SoundExchange, the organization that represents artists and record labels, favors higher performance royalties because it believes that musicians deserve their fair share of Internet radio profits. The Digital Media Association (DiMA), a trade organization that represents a number of prominent webcasters including AOL Radio and Yahoo! Music, believes that the decision of the Copyright Royalty Board would bring about the end of Internet radio by forcing webcasters to pay outrageously high performance royalties at rates that they simply could not afford.
The Radio and Internet Newsletter (RAIN) calculates that, assuming the average Internet broadcasting station plays 16 songs per hour, a webcaster would have a royalty obligation of 1.28 cents per listener hour in 2006 (which would skyrocket almost three-fold by 2010). These royalties would only cover use of the sound recording, and webcasters also have to pay an additional fee to holders of copyrights in the composition. Using the CRB’s proposed royalty structure, it would be nearly impossible for an Internet radio station to remain profitable, and most, if not all webcasters would be forced out of business. Tim Westergren, the head of Pandora (one of the nation’s most popular Web radio services), believes that its royalty fees for this year could represent 70% of its projected $25 million dollar revenue. According to David Oxendide, a lawyer representing many smaller webcasters, CRB’s royalty structure would be a fatal blow to small and medium sized stations whose royalties would be between 100% and 300% of annual revenues.
Traditional radio broadcasters, like those represented by the National Association of Broadcasters (NAB), have seen web-based radio as a serious threat to their dominance. They lobbied against the Webcaster Settlement Act. However, they retracted their aggressive opposition to the Act when the negotiating deadline was extended to February 15; the extension will allow the NAB to negotiate its own performance royalty structure with SoundExchange. Today, terrestrial radio broadcasters pay licensing fees only, but SoundExchange is working to change that.
What does all this mean for Internet radio? Well, even SoundExchange acknowledges that the royalties in CRB’s model might be unworkably high. Nonetheless, SoundExchange officials complain that Internet radio stations have done too little to turn a profit from streaming music on the web. Webcasters counter by arguing that advertisers have yet to embrace Internet radio which makes it nearly impossible to get investment funding.
Although the music is industry is in shambles and record labels are desperate for new sources of revenue (i.e. performance royalties from online radio stations), perhaps biting the hand that feeds is not the right approach. A thriving source of online music is essential for the survival of the music industry. Surely record companies would prefer that new music be spread via web-based radio rather than on illegal file sharing networks? Introducing performance royalties into both the digital and terrestrial radio schemes makes sense; why should radio stations be required to compensate the songwriter, but not the performer or record label for use of copyrighted material? However, the Recording Industry Association of America, SoundExchange, and DiMA should negotiate a performance royalty rate that benefits all parties by ensuring that Internet radio lives on. The impossible-to-interpret “willing buyer, willing seller” model utilized by the CRB is not a transparent approach. The Webcaster Settlement Act, which allows the parties to negotiate further, is a step in the right direction.
Terminating Early Termination Fees
by: Brian Savage, Associate Editor, MTTLR
Two former Qwest customers have filed a putative class action lawsuit against Qwest seeking to end termination fees for broadband Internet subscribers. This is one of the first challenges to broadband service termination fees. Both former customers were charged 200 dollars when they canceled their broadband service. One customer, Rory Durkin, intended to cancel service but decided to continue paying for monthly broadband service when he learned of the termination fee – even though he did not have a working computer.
The other customer, Robin Vernon, allegedly called to cancel service, was told on the phone by a Qwest customer service representative that there was no fee to cancel, but later received a bill for a 200 dollar early termination fee (ETF). When Vernon demanded to see a contract, Qwest informed her that the contract was made orally on the telephone by Mrs. Vernon’s husband and that neither a written copy of a contract nor a recording of the telephone conversation was available. Shortly thereafter, she started receiving calls from a collection agency.
Qwest markets its broadband services as requiring a two-year commitment, but customers do not agree to this in a contract. Customers typically order the broadband service over the telephone. After becoming a subscriber, Qwest mails a "Subscriber Agreement" to the new customer that is not signed by Qwest or the customer. The Subscriber Agreement states "IF YOU ORDER SERVICE WITH A TERM COMMITMENT, YOU AGREE TO MAINTAIN THAT SERVICE FOR THE ENTIRE TERM COMMITMENT PERIOD." The Subscriber Agreement, however, does not mention an ETF and the only term of service mentioned is a month-to-month commitment.
The complaint alleges that the ETF is an unlawful penalty under common law contract principles because "(a) it is wholly disproportionate to the harm, if any, that early cancellation may cause Qwest; (b) it is not based on a bona fide reasonable estimate of the damages, if any, that Qwest incurs from an early cancellation; and (c) the actual damage, if any, Qwest may suffer as a result of early termination is not difficult to ascertain." The complaint also asserts an unjust enrichment claim and other state law claims.
So, what is the likelihood of success in this action and what could this mean for you as a broadband subscriber? Other recent challenges to termination fees in a cellular phone context suggest that if this action against Qwest is successful, customers will likely be able to choose monthly plans without ETFs.
Verizon Wireless agreed to a 21 million dollar settlement in a California class action suit regarding ETFs and now offers plans with month-to-month commitments. Customers can still choose to pay a lower price for the phone and enter into a long-term contract, or the customer can choose to pay full price for the phone without a long-term contract and its accompanying ETF. A California judge also ordered Sprint Communications to pay back 18 million to customers who had paid ETFs. Many phone companies (Sprint, AT&T) are now adjusting their plans by either offering prorated termination fees, so that customers pay less if they cancel later in their agreement, or offering monthly plans like Verizon.
The plaintiffs’ successes in the cell phone cases suggests that the broadband case will be successful as well. Cell phone carriers, because they offer cheaper handsets when customers enter into a long-term contract, can argue that the ETF is appropriate since customers keep their phones after cancelling service. The argument for overturning broadband termination fees is arguably stronger because former broadband customers do not keep anything from the company. The end of broadband termination fees, therefore, may be near.
Allowing customers to cancel their service at any time without an ETF and to switch providers may allow for smaller companies with competitively priced plans to more easily build a customer base and compete with the larger companies. This could result in lower prices for everyone.
Employee text messaging privacy in the wake of the Detroit mayoral scandal
by: Marc Kaplan, MTTLR Associate Editor
Image Andy texting what Cheney should say by Steve Rhodes.Used under a Creative Commons BY-NC-SA 2.0 license.
Text messaging has exploded in popularity in the U.S. and around the world. Indeed, 75 billion text messages were sent in the U.S. in June 2008 and 40% of American teenagers believe they can text blindfolded. With so many communications exchanged through this medium, the privacy of text messages has come under legal challenge in a number of contexts. Employees frequently have access to text-messaging through work-provided devices, and not-uncommonly use the devices to send personal messages. Whether they can expect privacy in relation to those messages is an unsettled legal matter.
A case study: the Kilpatrick Scandal
In one example, former Detroit mayor Kwame Kilpatrick resigned from office in September, under criticism after his “private” text messages – from his government-issued pager – were revealed following a whistler-blower suit. The suit alleged that the mayor unlawfully discharged Detroit police officers because he was afraid the officers would reveal his extra-marital relationship with his Chief of Staff, Christine Beatty. At trial, the mayor contended that allegations of an affair were “preposterous”, and the vigorous defense was able to preserve the text messages from discovery before the trial. Even without the messages as evidence, the jury found the mayor guilty and gave the aggrieved officers a multi-million dollar verdict.
After the trial, the plaintiffs succeeded in obtaining the text messages through subpoena, and discovered that they bared a rather different story than that maintained by Kilpatrick.
Beatty: “And, did you miss me, sexually?”
Kilpatrick: “Hell yeah! You couldn’t tell. I want some more. “
Detroit Free Press
With this new leverage, the plaintiffs offered to settle as opposed to fighting through the appeal. The mayor agreed to the settlement, in what appears to have been an attempt to cover up the newly exposed text messages.Although the issue was litigated all the way to the Michigan Supreme Court it was eventually ruled that the settlement agreement was a public record and subject to the state’s freedom of information act.The text messages, now accessible to the public, have continued to be relevant in subsequent proceedings against Kilpatrick and Beatty for perjury, conspiracy, obstruction of justice, misconduct, and other charges.
Employee privacy protections
Courts have split over the protections given to text messaging, attempting to weigh the need to access communications in the ubiquitous and casually-used medium against privacy concerns.
In Quon v. Arch Wireless Operating Co, a highly publicized case factually similar to Kilpatrick’s, a police department searched an officer’s text messages to determine whether the officer exceeded his quota of text messages by using it for personal communications. The district court held that the officer’s text messages sent through the government-issued pager were subject to the privacy protections of the Stored Communications Act and were therefore not searchable by his employer. The 9th Circuit affirmed in part and held that the officer had a reasonable expectation of privacy in the text messages and that the search had violated his 4th Amendment rights.
Not all courts have broadly construed the Stored Communications Act or constitutional protections of text message privacy. Indeed, in a separate case involving Mayor Kilpatrick’s text messages as they related to a murder investigation, a district court in the 6th Circuit breezily distinguished Quon by holding that it was inapplicable to a case with the same fact pattern but where personal text messages were not the targetof the search.
These holdings appear contradictory, but the more important issue may be what questions the cases leave unanswered. Quondoes not specify whether the holding should apply to both public and private employers. Commentators also also disagree on whether Quon will change employers’ practices significantly. Drawing general rules from these cases or trying to predict the direction of this fertile area of the law appears fraught with danger, as does texting personal messages from your work-issued Blackberry®, unless you live in California.
An Overview of Telecommunications Companies’ Involvement in Domestic Espionage: Part II
by: Joseph Eros, Associate Editor, MTTLR
If the lawsuits are allowed to proceed, the plaintiffs may present testimony from witnesses claiming direct knowledge of AT&T’s close involvement with the NSA. Mark Klein, a retired AT&T technician, filed a declaration describing the installation of a secure room, accessed only by NSA-cleared personnel, in an AT&T switching facility. According to Klein, “the content of all the electronic voice and data” transmitted through AT&T’s switches was transferred into the NSA secure room.19
Documents presented by former Qwest CEO Joseph Nacchio during his trial on insider-trading charges could also reveal important evidence for the telecom suits: Nacchio claimed that Qwest lost NSA contracts because the company refused to share its customers’ calling information. However, the details of Nacchio’s allegations have so far been revealed only in closed-door court sessions.20
By the time the Ninth Circuit is ready to rule, though, its opinion may be irrelevant. President Bush has called for the planned amendments to FISA to include immunity for the companies who may have shared customer information with the NSA: “[FISA] needs to be changed, enhanced, by providing the phone companies that allegedly helped us with liability protection.”21 The President has said he will not sign any FISA amendments unless they include immunity.22
Although few laws exempting specific industries from liability suits have been passed, there is a recent example. The Protection of Lawful Commerce in Arms Act,23 passed in October 2005, shields firearms manufacturers from suits for “the harm caused by those who criminally or unlawfully misuse firearm products . . . that function as designed and intended.”24 Its enactment ended lawsuits against gun manufacturers by cities seeking compensation for the costs of gun violence.25
The Senate Select Committee on Intelligence has included an immunity provision into its FISA amendment bill:
Notwithstanding any other provision of law, a covered civil action shall not lie . . . and shall be promptly dismissed, if the Attorney General certifies to the court that the assistance alleged to have been provided by the electronic communications service provider was . . . in connection with an intelligence activity involving communications that was authorized by the President during the period beginning on September 11, 2001 and ending on January 17, 2007.26
No committee-approved House version of the bill includes a telecommunications immunity provision. Speaker of the House Pelosi has conditioned such legislation on House investigation of the surveillance program, saying that “you can’t even consider such relief unless we know what people are asking for immunity from.”27
Given the continuing disputes with Congress over supervision of classified activities, it seems unlikely that the House would be satisfied with the White House’s explanations the Bush Administration would be prepared to offer. So President Bush and the rest of us will probably have to wait for the Ninth Circuit to see if the AT&T and the other telecommunications companies can be held liable for following the NSA’s orders.
19 Klein Declaration in at Hepting v. AT&T, June 8, 2006, at ¶34, available at http://www.eff.org/files/filenode/att/KleinDecl-Redact.pdf.
20 Andy Vuong, Judge Denied Use of Spying Data, Denver Post, Oct. 11, 2007, available at http://origin.denverpost.com/breakingnews/ci_7141986.
21 President George W. Bush, White House press conference (Oct. 17, 2007), available at http://www.whitehouse.gov/news/releases/2007/10/20071017.html.
22 Peter Grier, Fight Over Court Role in US Eavesdropping, Christian Science Monitor, Oct. 12, 2007, available at http://www.csmonitor.com/2007/1012/p03s02-uspo.html.
23 15 U.S.C.A. § 7901.
24 15 U.S.C.A. § 7901(a)(5).
25 See Leslie Wayne, Smith & Wesson Is Fighting Its Way Back, New York Times, April 11, 2006, available at http://www.nytimes.com/2006/04/11/business/11guns.html.
26 Section 202 of the FISA Amendment Acts of 2007, as passed by the Senate Select Committee on Intelligence on October 18, 2007, at 45-46, available at http://intelligence.senate.gov/071019/fisa.pdf.
27 153 Cong. Rec. H11653 (daily ed. October 17, 2007) (statement of Rep. Pelosi), available at http://www.gpoaccess.gov/crecord/07crpgs.html by selecting October 17.
An Overview of Telecommunications Companies’ Involvement in Domestic Espionage: Part I
by: Joseph Eros, Associate Editor, MTTLR
Because the calls were mostly between US citizens within the USA, the US government would need a warrant in order to monitor them. The Foreign Intelligence Surveillance Act (FISA), 50 USC 1801 et seq, allows warrantless surveillance of the electronic communications of agents of foreign powers either within the USA or outside of it, but a secret FISA court must approve a warrant in order for the communications of a US citizen within the USA to be surveilled.4
Within a few months, over 40 lawsuits had been filed against the major telecommunications companies, mostly by civil liberties groups. Most of these suits were later consolidated into one action in the Northern District of California.5 The plaintiffs alleged that the NSA surveillance was in violation of the Electronic Communications Privacy Act (ECPA), 18 U.S.C. § 2702(a)(1),6 Federal laws against eavesdropping on wire and radio communications (18 U.S.C. §§ 2511)7 and (47 U.S.C. § 605),8 and FISA,9 as well as the privacy laws of all 50 states and the District of Columbia.10
The activists sought statutory damages (for example, the ECPA specifies damages of “no less than $1,000 for each aggrieved Plaintiff or Class Member” (18 U.S.C. § 2707),11) as well as an injunction “restraining Defendants from continuing to make such unlawful disclosures.”12 This consolidated action awaits further developments in an earlier suit against AT&T’s disclosures to the NSA, Hepting v. AT & T Corp.13 The government sought dismissal of the Hepting claims based on the state secrets privilege. If information about which call records were disclosed and how the information was gathered could not be presented in court due to its potential to reveal US intelligence methods, the plaintiffs would be unable to prove their claims, and AT&T would be unable to defend itself.14 This argument succeeded for the government at AT&T in Illinois, where a lawsuit over the alleged disclosures to the NSA was dismissed in July 2006.15
But in California’s Northern District it failed: Judge Walker held that the
subject matter of this action is not a ’secret’ for purposes of the state secrets privilege and it would be premature to conclude that the privilege will bar evidence necessary for plaintiffs’ prima facie case or AT & T’s defense. Because of the public disclosures by the government and AT & T, the court cannot conclude that merely maintaining this action creates a ‘reasonable danger’ of harming national security.16
The suits could continue, with classified evidence handled by personnel with security clearances following special procedures.17
Unsurprisingly, the Federal government and AT&T appealed. The Ninth Circuit heard arguments on August 15, 2007, and “repeatedly pressed Gregory Garre, the Bush administration’s deputy solicitor general, to justify his requests to toss out the suits on grounds they could endanger national security.”18 No ruling is expected for months.
Editor: Part II will publish tomorrow. It will address evidence of telecommunications companies’ involvement in warrantless NSA espionage, and dissect the debate over whether to extend immunity to those companies.
1 Leslie Cauley, NSA has massive database of Americans’ phone calls, USA Today, May 11, 2006, available at http://www.usatoday.com/news/washington/2006-05-10-nsa_x.htm.
2 James Risen and Eric Lichtblau, Bush Lets U.S. Spy on Callers Without Courts, N.Y. Times, December 16, 2005, available at http://www.nytimes.com/2005/12/16/politics/16program.html.
3 A Note to Our Readers, USA Today, June 30, 2006, available at http://www.usatoday.com/money/industries/telecom/2006-06-30-nsa_x.htm.
4 U.S. citizens traveling abroad can have their calls monitored with no warrant required, only the Attorney General’s approval. See U.S. v. Bin Laden, 126 F.Supp.2d 264, 279 (S.D.N.Y. 2000).
5 See In re National Sec. Agency Telecommunications Records Litigation, 444 F.Supp.2d 1332 (Jud. Pan. Mult. Lit. 2006).
6 Master Consolidated Complaint Against Defendants AT&T Mobility et al. for Damages, Declaratory and Equitable Relief at ¶90, In re Nat. Sec. Telecommunications Records Litigation, MDL-1791, No. 06-1791 (VRW), 2007 WL 668730 (N.D. Cal. Jan. 16, 2007).
7 Id. at ¶118.
8 Id. at ¶125.
9 Id. at ¶133.
10 Id. at ¶260.
11 Id. at ¶102.
12 Id. at ¶128.
13 439 F.Supp.2d 974 (N.D. Cal. 2006).
14 Id. at 985.
15 Terkel v. AT & T Corp., 441 F.Supp.2d 899 (N.D. Ill. 2006).
16 Hepting v. AT&T, 439 F.Supp.2d at 994.
17 Id. at 1010-11.
18 Declan McCullagh, Appeals court may let NSA lawsuits proceed, CNET News.com, Aug. 15, 2007, http://www.news.com/Appeals-court-may-let-NSA-lawsuits-proceed/2100-1028_3-6202865.html.
Making the wireless world more web-friendly
by: Professor Susan Crawford
Visiting Professor of Law, University of Michigan Law School
Member, ICANN Board of Directors
Founder, OneWebDay
Your wireless carrier (in the U.S., probably AT&T or Verizon Wireless) has a lot of control over the handset you can use and the applications that can run on that device. In fact, wireless carriers routinely ask for (and get) an enormous slice of the revenue from applications that work on their networks, and they force handset manufacturers to jump through all kinds of hoops in order to be allowed to sell devices that can connect to these networks. (You can’t, usually, buy devices except through the wireless carrier itself.)
There has been a great deal of consolidation in the wireless carrier market: twelve wireless carriers that were independent as of 1999 have combined (through merger, spinoff, or joint venture) into four large wireless carriers: AT&T, VZ, (and, far behind in terms of size) T-Mobile and Sprint. AT&T and VZ together control more than half the market and the lion’s share of new subscribers. The competitive picture isn’t great — AT&T and VZ actually charge more per minute than other, smaller carriers (like Sprint).
Until the FCC’s 1968 seminal Carterfone decision, which allowed non-AT&T equipment to be connected to the telephone network, consumers were not free to buy and use devices of their own choice for ordinary telephone communications. Carterfone led to the broad use of the modem and the fax machine, and arguably the birth of the commercial internet. But this open attachment regime has not to date applied to the wireless world, as either a legal or practical matter. The wireless carriers are in complete control.
This has had bad effects on the ecosystem of the wireless world. It’s essentially a closed system, for both applications and devices. We’ve gotten used to locked phones that cannot be switched between service providers and two year contracts with heavy penalties for early termination. Here’s the Washington Post from this past summer:
Currently, the major U.S. wireless carriers, including AT&T and Verizon Wireless, largely decide which Web sites, music-download services and search engines their customers can access on their cellphones. This is accomplished by wireless companies determining which cellphones will receive their services: AT&T, for example, is the only carrier available to users of Apple’s iPhone.
This isn’t a great situation for consumers or innovators.
Google’s paired announcements yesterday were aimed at addressing this situation in a way that will – ultimately – be very good for Google.
First, they said they were releasing a software “stack” – an open software platform called Android – that would be available under an open-source license. The idea is that anyone could adopt that platform (which includes an operating system, middleware, a user-friendly interface, and some applications) and use it on their phones or in their networks. They’ll be releasing tools for developers to use in writing for that stack, which will (they hope) spur the creation of impossibly cool applications that everyone will have to have. They’ll have big developer conferences someday for Android, just like Microsoft does, creating buzz, t-shirts, and a general sense of well-being and connectedness.
Second, they announced a large consortium of companies that will help in further developing Android and pushing it out into the world – the Open Handset Alliance. It’s significant that this group includes T-Mobile and Sprint, the smaller guys in the U.S. It’s also significant that some large handset manufacturers (but not Nokia, why?) and chipset creators are involved too. This will give these guys courage to fight the depredations of the current breaking-kneecaps wireless carrier situation in the U.S. I bet the handset manufacturers are feeling some relief. There’s strength in numbers. This is like unionizing to challenge The Man.
Yes, Om Malik is right, this is a big PR move. But the goal is to raise things up a level, to make this platform so ubiquitous and crammed with so many great applications (including Google ad-serving thingies) that the incumbents won’t be able to avoid it. Now, nothing guarantees that this platform will stay open. In fact, VZ could adopt it and close it to applications it viewed to be competing with its core services – like Skype. But the hope is that this kind of modular approach will become the norm in the wireless world.
In fact, the goal is greater than that – the goal is to make the wireless world much more like the PC world, where there is no necessary connection between transport and content and anyone can introduce the new cool thing.
This clearly helps Google. Of course it does. Why would they do it otherwise? There will be new landscapes to plaster with ads, new ways to make money out of disorder. We won’t be able to find a thing or a person we need without Google’s help.
But this initiative also leaves room for new Googles to show up in the wireless ecosystem, and to take advantage of new kinds of cheap, portable devices that are much better than what we’ve got now.
Maybe I’ll finally be able to afford a cool phone.