Net Neutrality, One More Time

February 29, 2008

After being off the front burner for a while the issue of ‘Net Neutrality has once again been placed front and center. Not much has changed since the last time the issue was on the table; the same arguments are being implemented and the same examples are being forwarded. Net Neutrality is not a cut-and-dry if-then issue, and unfortunately parties on both sides are doing more to muddy the waters than to offer the clarity which is needed.

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Broadband in America

February 14, 2008

Last month the National Telecommunications and Information Administration (NTIA) released its annual study of broadband in the U.S., it is one of many on the topic to have been published in the past two months. The number of reports does not lead to consensus as to the success, or failure, of broadband initiatives in this country. One thing that is agreed upon is the importance of bringing broadband to the masses.

The NTIA report admits that, “The lack of a single authoritative data set makes it difficult to establish with certainty whether broadband penetration has become ubiquitous, and this Report acknowledges the benefits of better data gathering tools.” The Pew Internet & American Life Project noted this as well: “there are no systematically collected and publicly available sources of data on adoption and deployment of broadband at the local level.” Regardless, the NTIA paints a pretty picture. Unfortunately it is not one that is shared.

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The SIIA’s Report on Software & Information

January 31, 2008

In its most recent report, Software and Information: Driving the Global Knowledge Economy, the Software & Information Industry Association (SIIA) aimed “to collect and disseminate objective data about the economic contribution of the software and information industries to the U.S. and world economies,” and to, “provide the most accurate measurement of the substantial impact” of those industries. While the case the SIIA makes is strong (the software and information industries do add significant value to the domestic and world economies and they are chief drivers of innovation and increased productivity), it must be kept in mind that the SIIA is “the principal trade association for the software and digital content industry.”

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Internet Perceptions

January 25, 2008

In the past month two reports exploring perceptions, in some cases mis-perceptions of information found on the Internet and of those using the Internet to find information were released.

Last week the Annenberg School for Communication’s Center for the Digital Future at the University of Southern California released its Seventh Annual Internet Survey.

The report notes a 14 percent rise in the number of users over the age of 17 who consider the Internet an important source of information, up from 66 percent in 2006 to 80 percent last year. “The Internet is perceived by users to be a more important source of information for them — this over all other principal media, including television, radio, newspapers, and books.” (Another report, from the Pew Internet & American Life Project, released at the end of last year, reported similar findings: “In general, more people turn to the internet . . . than any other source of information.”) As the other media types mentioned are available via the Internet, this finding is somewhat ambiguous. However, what is more concrete, and paradoxical, is that less than half (46 percent) of users, “said that most or all of the information online is generally reliable.”

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New York vs. Intel

January 18, 2008

On January 10, New York State Attorney General Andrew Cuomo subpoenaed Intel. “After careful preliminary review, we have determined that questions raised about Intel’s potential anticompetitive conduct warrant a full and factual investigation,” he said in the official statement.

Intel is now being investigated for anti trust issues associated with the sale of x86 processors, the chips responsible for running most PCs and servers. Though the numbers vary, Intel is said to control over three quarters of the x86 market, worth roughly $30 billion, in both revenue and volume.

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JP Morgan’s “Nothing but Net”

January 11, 2008

If the title of JP Morgan’s 2008 report, “Nothing but Net”, is correct, it should be a banner year for the Internet. The 312 page report discusses several “Key Investment Themes”, asks a few questions for the upcoming year and then goes on to provide outlooks for the U.S. and China and offer in-depth analysis of over two dozen companies.

The free cash flow (FCF) of the top five Internet companies in JP Morgan’s universe totaled $8.8 billion in 2007; in the current year they predict that number to jump over 40 percent to $12.5 billion. While some of that cash may go to share repurchases, it is predicted that the large volumes of FCF generated in the past two years will fuel mergers and acquisitions activity in 2008. Of moves in this arena it is suggested that, “large companies will continue to seek out investments in social media, where sites often grow virally and the large-caps appear satisfied, for the most part, to let the public pick the winners out of a crowded field before making acquisitions.” In addition to the cash, the M&A activity will be pushed on by a few key drivers.

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Information Security

January 4, 2008

The problem of information insecurity is well documented in the public (think stolen government laptops and T.J. Maxx) as well as inside the enterprise where attempts to thwart and lock down data leaks are increasing. Two reports on information security, with somewhat different angles but painting a similar picture, came out at the end of last year. The subtitle of the Fifth Global State of Information Security report, published by Price Waterhouse Coopers (PWC), “The End of Innocence,” provides a fine summation of the current state of affairs: it is time to acknowledge a problem that until now was either ignored or invisible.

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Digital Footprints

December 20, 2007

When FaceBook made the mistake of making too much of their users’ data public, enough of them spoke up about it to get the company to apologize and change its data sharing practices. More recently, the search company Ask also made a change in its treatment of user data; it now allows Ask users to erase their search history. While Ask may be doing this strictly because it cares about its users, it is also seen as a way to highlight the difference between Ask and the other major search companies which store user search data. Also in the search arena, Google is still under scrutiny for its proposed acquisition of DoubleClick; some are concerned that this merger would place too much user data in the hands of one company. These examples seem to indicate that user data and online privacy are taken very seriously by Internet users.

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Software Piracy

December 13, 2007

On November 25, the Associated Press ran an article the gist of which was, “targeting small businesses is lucrative for the Business Software Alliance, the main copyright-enforcement watchdog for such companies as Microsoft Corp., Adobe Systems Inc. and Symantec Corp.” The story stated that, “The BSA is well within its rights to wring expensive punishments aimed at stopping the willful software copying that undoubtedly happens in many businesses . . . But software experts say the picture has more shades of gray.” With this in mind it is interesting to take a look at the latest yearly report published by the BSA which came out this past summer. Though the numbers may or may not be spun to the organization’s advantage, it does reveal why it feels action is needed.

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Digital Media Piracy

December 6, 2007

A number of events in the past months indicate that the issue of digital piracy is far from solved. Back in October the Recording Industry Association of America (RIAA) won its first case against an individual accused of illegally downloading and sharing music. Then, in November, the Associated Press reported that the ISP Comcast was throttling traffic originating from peer-to-peer networks such as BitTorrent. Finally, this month, the French government announced it would cut off the broadband connections to those found guilty of downloading copyrighted material via the Internet. With the acceleration of activity in this arena change seems both necessary and inevitable.

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