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Beware the “new” AT&T: Time for a national citizens’ “Broadband Watch”

Fresh from its merger approval by the FCC, AT&T (nee SBC) took out a two-page color ad in the New York Times today. Their PR pitch floats over a picture of our planet’s atmosphere. Like fellow broadband super-monopolist Comcast, the “new” AT&T clearly has imperial ambitions. It desires to dominate both network connections and digital content.

Read their ad copy to see what I mean: “AT&T, BellSouth and Cingular have come together. Creating the nation’s largest provider of broadband, wireless and voice services and the world leader in IP networking. Three companies, now united to deliver the complete picture of communications and entertainment to every screen…”

Note the word “entertainment,” signaling the real goal for the broadband giant. They will use their network power to push all kinds of programming which pleases big brand advertisers and major content producers (think Viacom, Fox, etc).

The FCC should have rejected the AT&T/BellSouth deal. Commissioners Copps and Adelstein did what they could—heroically so. But the multimedia mega merger illustrates why public interest advocates must push for anti-trust and merger reform for the media and telecommunications sector. Otherwise (as I note in my new book), we will soon see phone and cable companies merge with new media companies (think Yahoo! or Google) and also swallow up newspapers, broadcasters and the like.

But we can’t count on the policy process to deliver any semblance of real reform. That’s why activists need to examine closely how AT&T and other broadband giants operate the network. It’s not the private fiefdom of AT&T, Comcast, Time Warner, etc. The digital media system is also a public trust, requiring serious citizen and activist oversight. From issues related to network capacity, to deals made with content providers, to how phone and cable companies address public interest content online, via mobile device, and with digital TV, this network (like this Land) is yours and mine. In each community, teams of activists should work with experts to monitor what AT&T and others do—reporting the good, bad, and ugly to city councils, the press, etc. We must proactively redistribute the balance of power when it come to how broadband serves the U.S. public.

Time Magazine: You’ve Got Hypocrisy

Time’s person of the year issue named You– and everyone else—as its annual award recipient. Hailing what it called “Citizens of the New Digital Democracy,” the Time Warner flagship publication breathlessly published a series of exuberant articles about how the new media is dramatically changing our country and the world. “You control the Information age” claimed the magazine headline, complete with a mirror-like cover device so you could admire yourself. But the failure of Time to seriously address the key issues raised by Web 2.0 and broadband illustrates the many hurdles to overcome if we are to have any semblance of a digital democracy.

Perhaps the best example of Time’s failure to truly be honest with readers/users was its failure to address the elimination of network neutrality. Time magazine’s parent company is one of the corporate leaders opposed to an open and non-discriminatory Internet. Time Warner is part of the cable industry lobbying apparatus that has eliminated broadband non-discrimination in the U.S. If Time Warner–and its allies Comcast, Verizon and AT&T–have their way, a handful of cable and phone conglomerates will actually determine much of our digital destiny. These old media giants want to extend their monopolies into the digital era, ensuring that their content receives preferential treatment; that broadband becomes a pay as your surf and post toll-road; and that they become powerful barons of the digital domain.

Time magazine should have acknowledged that its parent company is opposed to limits on media consolidation. It wishes to own as much of cable as it can (so it could continue to swallow up cable systems, such as what it and Comcast recently did when they carved up giant Adelphia cable). The magazine should have acknowledged that its parent once before had predicted great things for the U.S. public with new media—when AOL and Time Warner merged in what was then the largest media merger in U.S. history. It should have acknowledged the numerous lies given by Time Warner executives to shareholders, consumers, and policymakers when it claimed to be a sound and public-minded deal.

The cover story should have acknowledged how the new media poses great threats to our privacy, as data is collected about our every move by AOL and many others. It should have discussed how Time Warner’s AOL made public our personal search data, and also turned over records about our searches to the Bush Administration. Instead of mindlessly claiming that to see the future of our media we should look at raw videos on YouTube, it should have said that the public should learn about how Time Warner’s interactive ad subsidiary—Advertising.com—targets us with personalized digital marketing.

As we discuss in our new book—out tomorrow—much of today’s new media “vision” is driven by a desire to create a stronger mechanism for personalized and targeted interactive marketing. Companies such as Time Warner, Google, and Yahoo want to combine the branding power of video with the data collecting and interactive capabilities of the Internet. It will be a digital democracy shaped by Madison Avenue. That was the vision originally developed for our new media future by AOL and Time Warner’s leaders Steve Case and Richard Parsons. Much of Web 2.0 is based on that vision: a system designed to promote the “brandwashing” of America.

Yes, we have endless possibilities with new media, including the Web 2.0 paradigm. But powerful political and economic forces will shape what ultimately develops. If Time Warner has its way, they will hold a key copyright over our digital democracy.

New York Times and Network Neutrality: Great position. But the paper needs to disclose its own conflicts on the issue

This week the New York Times editorial page weighed-in to support national legislation requiring network neutrality (“Protecting Internet Democracy,” January 3, 2007. Reg. may be required). We share those sentiments, of course. It’s time for a law that restores and extends Internet non-discrimination in the U.S. But we also believe that news organizations need to inform readers/viewers/users about how their own corporate relationships are affected by communications policy issues. The New York Times Co. is staking much of its future on digital media, including interactive advertising. For example, it acquired the About.com informational web service in 2005 for $410 million. The goal, said Times Co. officials, was to “increase the company’s revenue from the expanding online advertising business.” The Times Co. has historically been a leader in developing interactive marketing techniques, including so-called “surround sessions” which enable advertisers to digitally follow New York Times online users as they access the paper electronically. Indeed, as we cover in our new book, Digital Destiny, the Times Co.’s Martin Nisenholtz (who heads its digital operations) has been a key ad industry leader promoting the advance of interactive data collection and personalized targeted marketing. Few Times readers and users really understand what the Times Co. is doing with all this data in the service of its advertisers.

The Times Co. requires network neutrality—otherwise it knows it will have to pay a digital version of the Mafioso-like vig to Comcast, Time Warner, Verizon and AT&T. The major phone and cable conglomerates want to charge everyone an assortment of fees for higher-speed Internet distribution, creating a de facto pay toll road for broadband. Given that everyone will be distributing video-centered multimedia to TV’s, cell phones and PC’s, having such “premium for a price” Internet access will be a necessity to prosper in the Web 2.0 and beyond era. Therefore, the Times Co must have network neutrality if its investments in About.com and other “new media” related strategies will return the profits to help support its journalism (which is a key reason why the country requires network neutrality. Without it, serious journalism will be in future jeopardy—as it is today).

Today, the Times reported that its parent company was selling off its television station group. It’s another indication that the Times Co. (wisely) understands its future lies with broadband. But the success of such a business model depends in part on an open Internet. We believe that the Times should have explained to its readers that when it supports network neutrality, it has its own financial future at stake. The paper, and the rest of the Times properties, should also begin to inform its users about the range of data collection and targeted electronic marketing its doing. Complete and full disclosure should be the rule—not an after-thought serving as fodder for bloggers.

As Progressives Plan to Meet in Memphis, it’s Time to Look Beyond Policy

We are heartened by the upcoming conference on media reform coming up Jan. 12-14. But the focus of the conference should be to look beyond Washington for answers. The communications industry is already defining our emerging digital media reality through major investment and mergers. Washington—even under the Democrats—can’t really help in the short-term. Media industry leaders know this—that policy is largely irrelevant at the moment. Yes, we should fight for network neutrality, access for low-income Americans and oppose big mergers. But we must also address how the public interest can be best served in this broadband media “anywhere, anytime” era. It requires, in our opinion, a proactive effort to shape the marketplace. If we are going to have a media system which provides serious news, as well as promotes ideas which puts people first (think health care, employment, education and peace), we need to work together to help create it.

The theme for Memphis should be to both address policy and market activism. Otherwise, we won’t make the progress we so desperately require.

MSN’s Holiday Challenge: Using Sweepstakes to Collect Your Data for Uncle Bill. Not Santa

The new sweepstakes run by Microsoft’s MSN unit–Holiday Challenge [‘Win Up to $50,000]–is emblematic of one of the key ways online marketers collect your personal and related data. Hey, they say. `Wanna win some big bucks?’ Just fill out the form to play. They assume, natch, that you won’t be clued in to the data collection and branding game going on. They don’t make much of the lifeless link which takes you to its privacy “Highlights” page (you have to click again after that if you want to reach the full privacy policy pages). Once enrolled in the game, Microsoft will be able to learn about your behavior online at various MSN pages–all the while you have to endure rich media/search engine pitches for products.

Microsoft, we know, is now seeking to develop a business model for the always-on era. Selling software can no longer cut it as a steady and significant revenue source. But Microsoft should do this in a way that makes it the corporate leader fostering privacy online–as well as supporting content and culture that enriches democracy. Its new sweepstakes ploy reveals a cynical lack of both imagination and commitment to do something better.

Follow the Data—N.Y.Times Overlooks

Today’s business story on Microsoft’s online business honcho Steve Berkowitz over-looked a key critical dimension with what is really going on at that company. Microsoft is now focused on interactive advertising–and data collection–as a primary source of revenue. Microsoft has turned every bit of itself into a system that serves the needs of its adCenter [Microsoft Digital Advertising Solutions]. As we explained recently in a complaint to the Federal Trade Commission, Microsoft’s bundling of search, rich media, user-generated content (blogs, videos), email, instant messenger, etc. to help collect the data used for advertising microtargeting is on the cutting-edge of what threatens consumer privacy, in the U.S. and everywhere else.

We hope that the news media will look closely at its own operations as its relates to interactive marketing and privacy. Everyone, including the New York Times, is engaged in interactive data collection and ad schemes that threaten our privacy. Perhaps if business reporters, editorial boards, and executive producers were willing to cast a critical eye at themselves in this regard, we would have business stories that got to the core of what is driving e-commerce today.

“Looking for a Gambit To Win at Google’s Game.” Saul Hansell, NYT. 12/9/06

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Time for a Bold Public Interest Media/Telecom Agenda

We hope readers will look at Matt Stoller’s blog and his important piece entitled “On Building a Progressive Governing Coalition Around Net Neutrality.” It should be a part of a much larger debate about what should be done—at this critical juncture with our digital media system—to ensure that it truly serves democracy. We believe that there now must be a major push—in Congress and the marketplace–to advance a comprehensive agenda that will:

• require broadband content non-discrimination;
• invest in digital content services designed to foster news and public affairs;
• invest and support digital media services owned by women, persons of color, and low-income Americans;
• “save” newspaper journalism through changes in tax laws, SEC rules, and via new policies encouraging employee and non-profit ownership;
• expand “universal service” so that everyone who cannot afford it receives free residential broadband service;
• open up Internet-connected cell phone/mobile platforms (the “deck”) and digital cable and satellite services to all broadband content (in other words, ensure network neutrality gets content wherever the Net is—not just on PC’s);
• foster the development of financially sustainable and diverse Web 2.0 social networks which build communities of interest that can help organize for a more equitable society;
• enact privacy and interactive advertising safeguards so that we aren’t digitally “shadowed” online from marketers and government. This will also act as a check against the stealth machinery promoting consumption that has been placed throughout our digital environment. [We know more must be added to this draft digital media agenda].

In the next few months, it will be important for all the groups and individuals concerned about the U.S. media system to come together and foster a serious plan and strategy. One reason why some groups haven’t focused on the emerging threat to democracy in the digital era [such as the loss of broadband content and network non-discrimination due to cable/telco lobbying the Bush FCC] is that advocates [including myself] haven’t made the case well enough about what the alternative vision can be. It should be a broadband content system that truly reflects U.S. diversity—and strives to promote the artistic, cultural, political, and even spiritual aspects of a “Just” society. I envision such a system everywhere—a diverse “digiplex” of dedicated and inter-networked public interest Web 2.0 sites in cities, state capitals and nationally [connected, of course, to many like-minded global services]. It would offer a range of programming and community-connecting efforts on cell phones, digital TV, and PC’s that would help challenge the status quo. If such services now existed in the Gulf Coast region, for example, there would be more powerful voices offering video and other programming that holds the country and political leaders accountable for failing to effectively rebuild. It would be run by—and better represent—those Gulf Coast residents who today do not own any major media outlet (namely, most people). I believe that such services could also generate revenues that would help pay for the programming and organizing which must be done.

One approach to some of this is to propose federal legislation–the Community Digital Diversity and Civic Engagement Act–that would provide a portion of the necessary funds and the equitable access policies. It would build upon the good work already being done by community cable, low power radio, citizen journalists, newspaper unions and many others. It’s time, frankly, that policy advocates looked beyond broadcast ownership: a new world has already dawned. A number of my proposals require a marketplace intervention that would explore business models for sustainability, so there’s a role for public interest minded funders here. We will be turning more to this topic in the New Year. Let’s have a serious debate, build and embrace allies, and work as hard as we can to make the necessary changes.

Online Ad and Data Collection Watch

My group has launched a new project to keep the public better informed about the latest threats to our privacy. Click here to visit Online AdWatch. It will regularly highlight new developments in the interactive ad marketplace across the PC, mobile, and digital TV platforms. Send me your favorite examples of technologies, applications and market strategies that should be included.

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Yahoo!’s Deal with the Newspaper Industry: Papers should come clean about the data they will now collect/share and our privacy

We are troubled, as are many, about the crisis occurring within the U.S. daily newspaper industry. The lay-offs, cut backs, and other problems besetting such distinguished papers as the Los Angeles Times, San Jose Mercury News, Philadelphia Inquirer, and too many others, requires the attention of policy makers and civic leaders. We believe a principal cause for the current problem are publishers and newspaper holding companies whose first interest is squeezing out maximum revenue returns—for themselves and shareholders. Newspapers can make a reasonable profit and support serious journalism. But when they are seen as just another vehicle designed to generate lots of cash, the defenders of the First Amendment have been replaced by white-collar criminals. It’s time for new federal laws that would enable newspapers to be operated without regard to maximizing shareholder return.


 We also know we are in a key transition period for all media. That’s why we should publicly examine all the major deals shaping our future information landscape—to determine how well they will serve the public interest [Yes. We think that’s more important than just making money from the deals]. So, when William Dean Stapleton, CEO of MediaNewsGroup, says in a joint statement that the new partnership with Yahoo! and 176 newspapers is “transformational”–it requires a closer look. Some of the biggest names in the news business—Belo, Cox, Hearst, Scripps and MediaNews—have now hitched their digital wagons to Yahoo! Papers such as the San Francisco Chronicle, San Jose Mercury News, and Dallas Morning News are now a part of what is called the “most comprehensive advertising network in the online industry.” A major facet of the deal, notes the release, is for the papers to “[U]se Yahoo!’s search monetization functionality on newspapers Web sites, such as Web search, downloads of the Yahoo! toolbar and sponsored search.”

We recognize that newspapers must boldly work to secure new digital revenues. But in doing so, they must be responsible. That includes explaining carefully to every reader and user the kind of personal and other data Yahoo! is now able to collect and financially harvest. Readers/users need to know how Yahoo! and its newspaper partners will “target” them. When Yahoo! acquired rich media ad firm AdInterax last month, they noted that “Rich media technology enables marketers to create more compelling and interactive advertising units online using sight, sound and motion to deliver a message to target consumers. Yahoo! plans to further integrate rich media capabilities into its current leading offerings by developing a self-service model for marketers based on the AdInterax platform. This new rich media solution will enable advertisers and agencies to create and run rich media campaigns coupled with other Yahoo! capabilities including behavioral targeting, geo-targeting, demo-targeting, and dayparting.” The release also noted that “the AdInterax tracking and reporting module tracks traditional metrics including impressions, clicks, and reach and frequency, in addition to other key branding and direct marketing data.”

Newspapers should be protecting the privacy of the public—from both the excesses of government as well as commercial interests. Journalistic-related companies should make deals with online marketers such as Google and Yahoo! which place the privacy interests of readers/users first. We suggest that the editors from the papers now working with Yahoo! commission stories that will explain the deal in terms of what data is being collected and how it will be used. Then, the papers should run editorials calling on Congress to pass meaningful privacy safeguards on electronic data gathering. But—if they did that—wouldn’t it now threaten the very deal they just made? We will be tracking this story.

PS: We also want to see the same privacy-related disclosure from the 50 papers now involved with Google, via a deal announced earlier this month. They include the New York Times and Washington Post.

AT&T’s “30-Month” Net Neutrality Merger Trade-in Offer: What a Joke!

So desperate to become a digital colossus once it swallows BellSouth, AT&T offered the dissident Democrats on the FCC a network neutrality “concession” today. Unbelievably, AT&T offered to operate its broadband Internet system as an open and democratic network—but only for 30 months! The offer illustrates how unethical and cynical the top executives are at Ma(d) Bell. `Yes, U.S. public,’ they say. `We will give you a democratic Internet for a brief moment, if you let us grow as an even larger unaccountable monopoly.’ AT&T’s offer underscores why permanent network neutrality safeguards are worth fighting for. The very companies who will provide the vast majority of broadband service, such as AT&T, really don’t want the public to have it.

AT&T is trying to sell to FCC Commissioners Copps and Adelstein the digital equivalent of the Brooklyn Bridge. They should say: “sorry, wrong number.”

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