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Mobile Technology News, September 5, 2014

As developers for tablets and smartphones we like to keep abreast of the latest mobile technology developments . This is a daily digest of mobile development and related technology news gathered from the BBC, the New York Times, New Scientist and the Globe and Mail to name a few. We scour the web for articles concerning, iPhone, iPad and android development, iOS and android operating systems as well as general articles on advances in mobile technology. We hope you find this useful and that it helps to keep you up to date with the latest technology developments.

  • Motorola releases round smartwatch
    Google’s Motorola division confirms details of its much anticipated smartwatch with a circular screen, which the firm claims to be more stylish than rivals.
  • What We Expect From Apple on 9.9.2014

    Editors Note:  This post will remain at the top of AlliOSNews through Tuesday, 9 September.  Newer news items will be below.  Clinton’s Comments are in Black while Tricia’s comments are in Red Tuesday, 9 September 2014 could be one of the most important days in the history of Apple.  I appreciate that, as an opening line for a post, that may sound hyperbolic or drama-ish, but I stand by it. SHINY TOYS! SHINY TOYS! Apple is expected to announce a series of products, software and solutions that could set their course for the next several years.  It is also an opportunity

    The post What We Expect From Apple on 9.9.2014 appeared first on AlliOSNews.

  • iCloud To Get Security Alerts As Apple CEO Tim Cook Speaks Out On Hacking Scandal
    Apple is planning to increase security of its iCloud service by adding alerts, company CEO Tim Cook told The Wall Street Journal on Thursday.

    Cook said email alerts and push notifications would be sent out whenever an account password is changed, iCloud data is restored to a new device or when a new device is used to access the account for the first time. That’s in addition to the two-step authentication procedure that users already have the option of activating, which Apple plans to expand.

    The increased security measures come after hackers were able to access celebrity iCloud accounts and steal private photos, including nudes, which were then circulated online.

    Cook admitted that Apple could have done more to encourage people to use stronger passwords and warn users of the risks posed by hackers.

    “When I step back from this terrible scenario that happened and say what more could we have done, I think about the awareness piece,” Cook told the Journal. “I think we have a responsibility to ratchet that up. That’s not really an engineering thing.”

    He said the changes would take effect within two weeks.

    Cook also defended iCloud security, telling the newspaper that hackers didn’t obtain passwords from Apple servers. Instead, they used a combination of phishing and correctly answering verification questions used to obtain and reset passwords.

    Earlier this week, Apple reportedly fixed the “iBrute” bug, which critics say left iCloud exposed to a brute-force attack.

  • VIDEO: A better battery life to come?
    Will smartphones get a new lease of battery life?
  • Here's How Many People Check Their S.O.'s Cell Phone: Survey
    Let’s be honest — anyone who has ever been in a relationship has probably thought about doing a little snooping, whether it’s a sneak peak at an S.O.’s email or a casual glance through his or her texts.

    However, according to a new survey, more people than you think are actually doing it.

    Avast — an anti-virus software company — asked 9,202 men and women in committed relationships whether or not they secretly check their partner’s smart phone, and nearly one in five men and one in four women said “yes”.

    The motives, however, varied by gender.

    The number one reason men said they snooped (26 percent) was because they suspected their partner was cheating on them. Another 24 percent said they did it because they are simply nosey and 12 percent said they wanted to catch their S.O. in a lie.

    Women on the other hand, were motivated more by curiosity; 30 percent said they snooped because they are nosey, only 21 percent suspected their S.O. was cheating and 14 percent wanted to catch their S.O. in a lie.

    For many, the risk was worth the reward: 71 percent of women and 53 percent of men said they found evidence of cheating or lying by checking their S.O.’s phone.

    Obtaining access wasn’t exactly hard either — 41 percent of women and 33 percent of men said their S.O.’s phone was not password protected.

    Have you ever spied on a loved one? Let us know in the comments.

    Keep in touch! Check out HuffPost Divorce on Facebook and Twitter. Sign up for our newsletter here.

  • Innovate or face business extinction
    Stark choice for big firms: Change or face extinction
  • Hacker Succeeds In Breaking Into HealthCare.gov For First Time
    A hacker broke into HealthCare.gov and installed malicious software on one of its servers in the first successful breach of the health insurance exchange, federal officials said Thursday.

    No personal data were stolen from the Obamacare site as the hacker accessed only a test server that did not contain consumer information, according to Kevin Griffis, a senior adviser at the Department of Health and Human Services.

    “Data was not transmitted outside the agency, and the website was not specifically targeted,” Griffis said in a statement. “We have taken measures to further strengthen security.”

    A spokesman for the Department of Homeland Security said that agency helped remove malicious software that was designed to launch denial-of-service attacks — a common tactic used by hackers to flood websites with traffic until they crash.

    The hacker broke into the server sometime in July, according to The Wall Street Journal, which first reported the breach on Thursday. The malware was discovered on Aug. 25 during a routine security test, federal officials said. The server was guarded by an easy-to-crack default password and the hackers appeared to have installed the malware for use in future cyberattacks against other websites, according to the Journal.

    The breach of HealthCare.gov marks the latest in a spate of hacking against both major corporations and government agencies. Earlier this week, Home Depot appeared to be the latest retailer to get hacked when a huge cache of credit and debit card data linked to purchases at the store went on sale on a black market website.

    Last week, JPMorgan said it was investigating a possible cyberattack after reports that hackers stole gigabytes of data, including customer credit and savings account information, from its network.

    The federal government hasn’t fared much better. In July, Chinese hackers broke into the databases of the Office of Personnel Management, which contains files on federal employees, including those who apply for top-secret clearances.

    After its Oct. 1 debut last year, HealthCare.gov was plagued with problems, including repeated glitches that lasted for weeks and initially prevented millions of people from signing up for health insurance. The site was fixed after the White House hired dozens of engineers and programmers from tech industry giants like Google and Oracle to repair it. More than 8 million people have signed up for insurance via the federal and state health care exchanges, federal officials said in May.

    The security of the federal website has been an especially sensitive issue given the fierce political battle over Obamacare. Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, has been investigating potential security vulnerabilities in the site. Mitre, a contractor hired to check the site’s security, found 28 security flaws in a test last October. Administration officials said last year that those flaws had been fixed or did not pose a threat, according to The Washington Post.

  • Bank customers to sign in with veins
    A new way of accessing bank accounts is being launched, which identifies individuals through the unique pattern of veins in their fingers.
  • Bodysurfer's Daring Ocean Rescue Caught On His GoPro Camera
    Talk about being in the right place at the right time.

    Volunteer ocean lifeguard Daren Jenner, 55, didn’t anticipate rescuing someone during his vacation at Hawaii’s Poipu Reef, but that’s precisely what happened during one of his leisurely bodysurfing excursions. Jenner strapped his GoPro camera to his handboard (which helps with speed and lift from the water) and set out for adventure.

    While he was out, he heard the voice of an exhausted snorkeler crying out for help, according to “Good Morning America.” A 52-year-old man visiting from California had drifted to the reef’s breaker zone and panicked when he didn’t have enough energy to swim back to the shore.

    Jenner had the man hold onto his handboard for flotation and escorted him safely back to shore with the eventual help of a nearby surfer. Paramedics met the men on the beach and determined that the snorkeler, while tired and scared, was physically fine.

    Jenner’s fearlessness and quick-thinking, puts him in the ranks of other heroes such as the Oregon deputy sheriff who saved a 14-year-old boy from freezing cold surf earlier this summer. After fighting 50-degree waters for 45 minutes, Deputy Terry Brown pulled the boy ashore with help from a Coast Guard rescue swimmer. Both of them suffered from hypothermia but fully recovered within a matter of days.

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  • Bitcoin trader enters guilty plea
    The operator of an exchange for the virtual currency Bitcoin pleads guilty in New York to running an unlicensed money transmitting business.
  • Apple, financial firms negotiate lower fees for mobile payments
    In preparation for its mobile payment technology, Apple has successfully negotiated deals with five major financial institutions — American Express, JP Morgan Chase, Citigroup, Capital One, and Bank of America — to lower transaction fees, sources say. One linchpin was convincing them that mobile payments constitute “card present” transactions, which have a lower discount rate than their opposite, owing to lower fraud risk. That card-present rate has been dropped another 15 to 25 basis points however, meaning that Apple should get a roughly 10 percent discount on processing rates.



  • UV sensor on Samsung Galaxy Note 4 doesn’t make sense

    UV sensor shouldn’t be used to determine how much sunscreen you apply.

    The post UV sensor on Samsung Galaxy Note 4 doesn’t make sense appeared first on iMedicalApps.

  • Briefly: Group audio on Skype for iPhone, new Valiant Hearts for iOS
    Social communication platform Skype has updated its iPhone app, allowing users to now start a group audio call. Any chat, audio call or video call and be turned into a group audio call with up to four people. Free to download, Skype for iPhone requires iOS 7.0 or later to run.
  • A Technology Consultant's War Story From The Valley of Despair
    2014-09-04-KaarePic.jpg

    This month I spotlight a high stakes war story shared by a Microsoft consultant that really shows the impact of consulting work. If you are a technology consultant, you’ve heard this question from friends and relatives: “What do you do again?” Sharing war stories is the best way to tell our friends and loved ones — gosh, even customers — the magic that goes into keeping the lights on. Which is my segue for this war story from Kaare Boraas, a Microsoft Dynamics ERP Architect.

    Q: Kaare, when I put out the call for war stories, I was told yours was the best. What can you tell us?

    A: I’ve been through many implementations and each one has a story, but the one that stands out is a recent Dynamics AX implementation for a coal mine because if we didn’t get the software implemented in time, a major metro city literally would be lights out.

    What happened is the owners of a major coal mine supplying power for a large metro area in Canada, decided they could manage the mine more efficiently themselves and gave the management company notice. This meant they had 180 days to change out everything — phones, network, computers, printers — and, most importantly, to pick an ERP (Enterprise Resource Planning) software product, an implementation partner, AND complete the implementation in 180 days.

    Q: That’s a strict deadline — what happened if you missed it?

    A: Well, the mine feeds the power generation plants. I guess if they missed the deadline, a large Canadian city would be without power. The deadline was in stone. They had 180 days to take over operation of the mine, with no other option. By the time we were engaged, we only had four-and-a-half months.

    Q: Now that makes it a war story for everyone involved! How did it unfold?

    A: We followed the normal phases for a project. We just did them faster than normal. We had a pretty good understanding of scope of the project before we started the design, but we actually didn’t know that coal production was in scope. It seems funny now, since they are, after all, a coal mine. We added that to the scope after the design and scrambled to come up with a solution.

    Q: You were working with really tough obstacles.

    A: Definitely. We had to go live on time so they could continue producing coal and the province would have power. We couldn’t afford to get distracted by little things. The executive committee kept the road clear so we could move at the pace we needed. We were given a lot of freedom — we proved ourselves quickly and built confidence. They let us do what we needed to do.

    Q: What is “The Valley of Despair” I’ve heard you talk about?

    2014-09-04-Despair2.png

    A: This is a simple diagram from an ERP 101 course. Typically, at the start of a project, people are excited. It is something new and they have the opportunity to participate in building a solution to make their company better. As the workload increases, people tend to struggle with issues and decisions and start to have trouble seeing the end. Hopefully, the business starts seeing small successes and can envision how their business processes will work in the system. It is easy to be pessimistic when you’re in the valley of despair. No one ever feels ready to go live. A wise man once told me, “The only thing worse than going live is not going live.”

    I think the Valley of Despair on this project may have been deeper than any other project. In fact the project may have started there. The project wasn’t initiated to improve business; it was thrust upon them as they had to replace the ERP used by the management company.

    Q: So, did the city power stay on?

    A: Yes! And this project won the Microsoft Canadian Impact Award. It was a precarious timeline and the stakes were high, but we had strong leadership, everyone shared a common vision, and we all worked together to succeed.

  • NYT: iWatch has flexible display, iPhone 6 has one-handed mode
    The New York Times is corroborating other reports on the iWatch and iPhone 6, and adding some extra details. The iWatch is once again expected to come in two sizes, and offer a mix of health/fitness tracking and smartphone-like functions. Significantly, the paper adds that the watch’s display is flexible and protected with sapphire, and that its circuitboard is about the same size as a postage stamp.



  • Tech Revolution or Gender Revolution: Which Has Had a Greater Economic Impact?
    The technology revolution has profoundly changed the way we live and work. How’s that for stating the obvious? At the risk of channeling my grandmother, this is noteworthy for someone who grew up in the age of fax machines and VHS tapes.

    A simple example of the ubiquity of the tech revolution is the incredible computing power and connectivity we now have in the palm of our hands. Geneva-based International Telecommunication Union predicts that 2014 is the year that the number of in-use cell phones will surpass the number of people on the planet. Now that surprised me.

    But the technology revolution isn’t just about the coolest gadgets and how many of us have them. Over the last three decades, technology has significantly altered our economic landscape, as well as social conventions and public policy. Yet I would argue there is another revolution in the same period that has had an even greater impact on the American economy: women’s participation in the workforce.

    Throughout the same three decades, the steep rise in the number of women in the workforce has strengthened household incomes and the U.S. economy overall. To put this revolution in terms of gross domestic product (GDP), a group of economists using Census Bureau data determined that without the increase in women’s paid work, GDP would have been roughly 11 percent lower in 2012.

    Comparing that to the 6 percent contribution to GDP of the information, communications and technology-producing industries combined in 2012, women’s increased participation in paid work, contributed almost twice as much to GDP.

    According to the economists’ calculations, if women’s employment patterns had remained unchanged, American households overall would have substantially lower earnings today. Additionally, GDP output would be, in today’s dollars, $1.7 trillion less — that’s roughly equivalent to the combined U.S. spending on Social Security, Medicare and Medicaid in 2012.

    That’s huge.

    Considering that women earn less than men in nearly every occupation — 77 percent of men’s pay is the widely reported figure — their contribution to GDP is even greater. Despite this shift in labor patterns, basic U.S. labor standards, developed under the assumption of a one-income family, have been slow to adjust. Reconciling work and family demands is a challenge for many working women. And, unfortunately, motherhood is often blamed for the gender pay gap.

    Women now make up almost half of the total U.S. labor force — the 2012 figure from the U.S. Department of Labor puts the number at 47 percent. So, for the sake of the economy, let’s hope the gender revolution continues. And for the sake of women and families, let’s make sure the next phase of this revolution addresses the persistent gender pay gap.

  • How To Brainpick The Internet
    the european

    Maria Popova tweets 60 times a day but fears the Internet’s information overload. She told The European’s Max Tholl how to strike the balance and not conflate the amusing with the interesting.

    The Bulgarian writer, blogger and critic is the founder of the BrainPickings, blog that features Popova’s writing on culture, art and things she finds on the Internet. Popova was featured in Forbes’ “30 under 30” list as one of the most influential individuals in media and was listed on “The 140 Best Twitter Feeds of 2012 List” by Time magazine. She spends anywhere from three to eight hours writing a day, publishes three articles a day from Monday to Friday, and tweets four times per hour between 8 a.m. and 11 p.m. EST with few exceptions.

    “Literature is the original Internet.”

    The European: You call “Brain Pickings” a “human-powered discovery engine for interestingness.” What’s your definition of “interestingness”?

    Popova: Anything that moves me and impresses upon me some fragment of truth that leaves me different, even slightly altered and more enriched — intellectually, creatively, and spiritually.

    The European: Do you think that that concept has changed in the digital age?


    Popova: Not at all! What has changed is that we’ve conflated the amusing (cat slideshows! silly quizzes!) with the interesting, the temporary diversion with the deeper dimension of personal growth. The most “interesting” ideas are invariably timeless.

    The European: How much do interests reveal about a person?

    
Popova: Kurt Vonnegut once wrote: “The most damning revelation you can make about yourself is that you do not know what is interesting and what is not.” No doubt it’s an intentionally cheeky sentiment, but there’s a grain — perhaps a boulder — of truth. We are a collage of our interests, our influences, our inspirations, all the fragmentary impressions we’ve collected by being alive and awake to the world. Who we “are” is simply a finely curated catalog of those.

    The European: Do you have any idea who your readers are?

    
Popova: Based on the letters I receive, my readers cut across nearly every imaginable occupation, age group, and life path, so it’s difficult and misleading to attempt lumping them into an archetype or two. Just yesterday, I heard from a high school student in the Netherlands and a retired educator in Nebraska within minutes of one another. I think the only common denominator is that, like me, they are people interested in what it means to live — what it means to lead a good life, a fulfilling life, a purposeful life — which is, in turn, the only common denominator between all the ideas I read and write about.

    The European: How do you select the things you present on “Brain Pickings?”

    Popova: With that same lens: Is this something that’s both interesting and important, shedding light on some corner of human existence? Is it something that helps me answer even a tiny portion of that grand question of how to live?

    “I still write for an audience of one.”

    The European: Do you think that it is easier to establish consensus in the digital age because like-minded people can easily share what they like, thereby establishing a consensus about certain things among that group?

    Popova: I’m not sure “consensus” is the right term, but people are certainly better able to gravitate toward like-minded others. The downside of that, of course, is that it creates a kind of echo chamber — or what’s been called a “filter bubble” — where we become even more firmly rooted in our existing beliefs through peer affirmation. It takes a constant practice — an increasingly urgent discipline — to seek out ideas that challenge us and stretch us. It’s a form of intellectual hygiene that has always been necessary, but never more so than in the digital era, where it is so easy and so frictionless to surrender to the filter bubble.

    The European: There is such a huge availability of information on the Internet. Does this make it easier or more difficult to gather information and thereby knowledge?


    Popova: I don’t think knowledge results from “gathering” information. If anything, the correlation is probably negative. The Internet does make it easier to gather — aggregate, as the jargon goes — information, but not necessarily to make sense of it. An overabundance of raw information devoid of context and interpretation can actually be detrimental to knowledge. Knowledge springs from the act — the art — of interpreting, digesting, and integrating new information with our existing understanding of the world. That’s why the human element is so vital in the age of algorithms, because we’re very far from having artificial intelligence advanced enough — morally and creatively, as these are necessary components of sense-making — to do this interpretation and integration for us.

    The European: Do you think that, because of this huge availability of information, people have more interests today?


    Popova: I can’t speak for others, but I’ve found in myself a tendency to retreat deeper and deeper into my existing interests as a form of self-defense against the abundance of demands for my time and attention. Again, it takes a certain discipline not to do that and to continually expand one’s ideological comfort zone, as it does not to scatter oneself too chaotically across a multitude of diversion.

    The European: Anne-Marie Slaughter described “Brain Pickings” as “like walking into the Museum of Modern Art and having somebody give you a customized, guided tour.” Is that an accurate analogy?


    Popova: It’s a very generous one. I certainly try to do this for myself — “Brain Pickings” remains a record of my own becoming, so I still write for an audience of one — in a more metaphorical way, of course, taking “art” to mean the art of living, encompassing everything from philosophy to science to design.

    “The label is irrelevant.”

    The European: You do draw a lot of inspiration from books. What are books better at than the Internet?


    Popova: Literature is the original Internet — every footnote, every citation, every allusion is essentially a hyperlink to another text, to another mind. The difference — the advantage, for me at least — is that in books, those “links” don’t beckon as immediate demands for our attention, redirecting us elsewhere before we’ve finished the present thought, but serve instead as gentle invitations to extend this thought once we’ve finished absorbing and digesting it. There’s something to be said for the value of slow, continuous, deliberate thinking, which remains the forte of books and the Achilles’ heel of the vast majority of the web.

    The European: Do you think that digital curation is a greater threat to traditional print papers than regular online journalism?

    Popova: I’m not exactly sure what “digital curation” even means anymore — certainly not something I identify with at this point. But I do believe the editorial and the curatorial live on a spectrum. Every nonfiction writer is essentially a curator of ideas — whether this means the selection of academic and clinical studies to be cited in a Malcolm Gladwell-style pop psychology book or the snippets of articles highlighted and contextualized in a day’s worth of Andrew Sullivan’s blog. At their best, journalists — writers, editors, “curators”, or whatever we choose to label them — help people figure out what matters in the world and why. The label under which they do it is irrelevant.

    The European: What was your favorite “Brain Picking” so far?

    Popova: In a way, what has propelled me to do this for nearly eight years now is the longing for perpetual growth, for self-expansion and self-transcendence, which requires a hope that each new day brings a better “favorite.” That said, when “Brain Pickings” turned seven in the fall of 2013, I wrote about my seven most important life-learnings from those years, and those remain at the heart of what I write about and how I live, so that particular article is something I keep coming back to whenever I need to re-center.

    This piece was first published in The European.

  • Space Robot Arm Tech Could Help Surgeons Operate On Kids
    By: Elizabeth Howell, SPACE.com Contributor
    Published: 09/04/2014 07:08 AM EDT on SPACE.com

    The technology powering robotic arms in space could be used to perform minor surgeries for children on Earth.

    MacDonald, Dettwiler and Associates (MDA) — the manufacturer of the robotic arms Canadarm and Canadarm2 — is now part of a project called KidsArm. The effort aims to use a mini-arm to automate some tasks during pediatric surgery.

    Both space robotic arms were used to build the International Space Station. While Canadarm now only exists in space as a modified boom, Canadarm2 is still used today to capture the commercial Dragon and Cygnus cargo spacecraft visiting the station, and to assist astronauts during spacewalks, among other tasks. [The International Space Station in Pictures]

    “Our tests indicate we can operate on tiny structures such as blood vessels without damaging them,” said Thomas Looi, the program director for the Centre for Image-Guided Innovation and Therapeutic Intervention at the Hospital for Sick Kids (SickKids) in Toronto, said in a statement.

    “The goal of the robotic arm is to help doctors perform certain procedures many times faster than if they were only using their hands, and with increased accuracy,” Looi added. “Some of this would be done autonomously. While we are not quite there yet, KidsArm is able to perform three to five suture points autonomously.”

    KidsArm includes a vision-based system that works like robotic eyes, allowing guiding a small surgical arm to be guided to the spot it needs to reach in order to do its work. To figure out where to suture, KidsArm uses a stereo camera that creates a “3D point cloud” of spots to guide the tool tip into the zone.

    KidsArm is in testing right now at SickKids to see if it will be useful for anastomosis, a procedure that involves connecting vessels and similar parts of the body. Researchers are testing the accuracy of the robotic arm‘s camera pointing system, and how well it puts in the sutures.

    SickKids announced the project in a NASA news release, but In a NASA press release, did not disclose when doctors plan to use the technology regularly for surgeries.

    MDA is involved in several other surgical robotic arm projects. The company was a co-creator of the University of Calgary’s neuroArm, which works inside an MRI and did its first operation in 2008. A new generation of arm is being developed for commercial use.

    Additionally, MDA and Ontario’s Centre for Surgical Invention and Innovation have a robotic arm, called Image-Guided Autonomous Robot, under clinical testing that could be useful for breast cancer diagnosis and surgery.

    Follow Elizabeth Howell @howellspace. Follow us @Spacedotcom, Facebook and Google+. Original article on Space.com.

    Copyright 2014 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • This November We Can Reclaim Local Authority Over the Internet
    2014-09-04-fcc.jpg

    In July, the Federal Communications Commission (FCC) stirred up a hornets’ nest by announcing it might overturn state prohibitions on municipally owned broadband networks. Republicans protested that Washington should keep its grubby hands off state authority. Giant cable and phone companies contended that local governments are incapable of managing telecommunications networks and the resulting failure will burden taxpayers.

    The national debate is both welcome and timely.  Welcome because it is grounded while addressing some of the most fundamental issues of our time: What is the role of government?  What is the value of competition?  What is the meaning of democracy?  Timely because we are entering the home stretch of an election year where most state legislators are up for re-election.  And because we confront the prospect of mergers between giants Comcast and Time Warner and AT&T and DIRECTTV that may operate under new rules that allow them greater ability to discriminate against other providers.

    Some background to the FCC’s decision may be in order.  In the early 2000s, exasperated by poor service, high prices and the condescending refusal of cable and phone companies to upgrade their networks, cities began to build their own.   Today 150 cities have laid fiber or cable to every address in town. Another 250 offer Internet access to either businesses or residents. About 1,000 have created school or library networks. See map.

    The vast majority of these networks have proven wildly successful.  The borough of Kutztown, Pennsylvania, for example, saved an estimated $2 million in just the first few years after constructing one of the nation’s first fiber networks, a result of lower rates by the muni network and price reductions by the incumbent cable company in response to competitive pressure. Bristol Virginia estimates its network has saved residents and businesses over $10 million. Lafayette, Louisiana estimates savings of over $90 million.  (The benefits of muni networks have been amply catalogued by the Community Broadband Initiative.

    Competition by public networks has spurred cable and phone companies to upgrade. After Monticello, Minnesota moved ahead with its citywide fiber network TDS, its incumbent telco, began building its own despite having maintained for years that no additional investments were needed. After Lafayette began building its network, incumbent cable company Cox, having previously dismissed customer demands for better service as pure conjecture scrambled to upgrade.

    It’s true that some public networks have had significant financial losses, although it is usually bondholders, not taxpayers who feel the pain.  But compared to the track record of private telecoms, public sector management looks like a paragon of financial probity.

    In 2002, after disclosing $2.3 billion in off balance sheet debt and the indictment of five corporate officials for financial shenanigans Adelphia declared bankruptcy.  In 2009 Charter collapsed resulting in an $8 billion loss after four executives were indicted for improper financial reporting. In 2009 FairPoint Communications declared bankruptcy, resulting in a loss of more than $1 billion. WorldCom, TNCI, Cordia Communications, AstroTel, Norvergence.  The list of private telecommunications companies that have been mismanaged to the point of collapse is long.

    We should bear in mind that investors will deduct the losses from their taxes.  Thus the cost to taxpayers of private corporate mismanagement arguably has been far greater than that caused by losses in public networks.

    In any event, as FCC Chairman Tom Wheeler told a House Communications Subcommittee in May, “I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments want to pursue it, they shouldn’t be inhibited by state laws that have been adopted at the behest of incumbent providers looking to limit competition.”

    If forced to, private companies will compete, but they much prefer to spend tens of millions of dollars buying the votes of state legislators to enact laws that forestall competition rather than spend hundreds of millions to improve their networks.

    Today, four states have outright bans.  Fifteen others impose severe restrictions.  In Utah, for example, if a public network wants to offer retail services, a far more profitable endeavor than providing wholesale services, it must demonstrate that each service provided will have a positive cash flow the first year!

    After five North Carolina cities proved that muni networks could be hugely successful, Time Warner lobbied the state legislature to prohibit any imitators. Dan Ballister, Time Warner’s Director of Communications insisted, “We’re all for competition, as long as people are on a level playing field.”

    Level playing field? Time Warner has annual revenues of $18 billion, more than 500 times greater than Salisbury, North Carolina’s $34 million budget. It has 14 million customers while Salisbury’s Fibrant network has about 2500.

    Level playing field? Incumbent telephone and cable companies long ago amortized the costs of building their network. When a new competitor enters the market, it must build an entirely new network, passing the costs onto subscribers or investors in the form of higher prices or reduced margins. Large incumbents have far more leverage when negotiating cable channel contracts. A new network serving a single community might pay 25- 50 percent more for its channels.

    The law Time Warner wrote and persuaded the North Carolina legislature to pass slants the playing field even more in favor of the giant telecoms. Time Warner can build networks anywhere in North Carolina but the public sector is limited to its municipal boundaries.  A public network must price its communication services based on the cost of capital available to private providers even if it can access capital more cheaply.

    The North Carolina law, as with many such state laws, prohibits public networks from using surpluses from one part of the city to finance the telecommunications system. But the law doesn’t prohibit private networks from doing so. Time Warner can tap into profits from its vast customer base (largely in uncompetitive areas) to subsidize predatory pricing against muni competition. When Scottsboro, Alabama built a city wide cable network Charter used profits from other markets to offer Scottsboro customers a video package with 150 channels for less than $20 per month, even while Charter was charging customers in nearby communities over $70 for the same package. In a proceeding at the FCC, experts estimated Charter was losing at least $100-$200 year on these deals and even more when factoring in the cost of six major door-to-door marketing campaigns.

    Existing North Carolina law already required a referendum before a city can issue bonds to finance a public network. The new law specifically exempts cities from having to obtain voter approval “prior to the sale or discontinuance of the city’s communications network”.

    Terry Huval, Director of Lafayette’s LUS Fiber describes still other ways state laws favor incumbents.  “While Cox Communications can make rate decisions in a private conference room several states away, Lafayette conducts its business in an open forum, as it should. While Cox can make repeated and periodic requests for documents under the Public Records Law, it is not subject to a corresponding… Louisiana law limits the ability of a governmental enterprise to advertise, but nothing prevents the incumbent providers from spending millions of dollars in advertising campaigns.”

    The FCC’s current proceeding came in response to petitions from two cities: Chattanooga, Tennessee and Wilson, North Carolina.  Both have very successful world-class muni networks.  Surrounding communities are clamoring to interconnect.  The Chattanooga Times Free Press recently described the frustration and anger of people living tantalizingly close to these public networks.

     

    “When Joyce Coltrin looks outside the front door of her wholesale plant business, her gaze stops at a spot less than a half mile away.

    All she can do is stare in disbelief at the spot in rural Bradley County where access to EPB’s fiber-optic service abruptly halts, as mandated under a Tennessee law that has frozen the expansion of the fastest Internet in the Western Hemisphere… the small business owner has no access to wired Internet of any type, despite years of pleas to the private companies that provide broadband in her community.

    “The way I see it, Comcast and Charter and AT&T have had 15 years to figure out how to get Internet to us, and they’ve decided it’s not cost-effective,” Coltrin said. ‘We have not been able to get anything because of these state laws, and through no fault of our own, we are treated as second-class citizens. They’ve just sort of held us hostage.'”

    On July 16, House Republicans voted 221-4 to freeze FCC funding if it attempts to overturn state prohibitions.  Sixty Republican House members sent a letter to Wheeler declaring, “Without any doubt, state governments across the country understand and are more attentive to the needs of the American people than unelected federal bureaucrats in Washington, D.C.”  Eleven Republican Senators agreed, “States are much closer to their citizens and can meet their needs better than an unelected bureaucracy in Washington, D.C… State political leaders are accountable to the voters who elect them…”

    But if state legislatures are closer to and more accountable to the people than the FCC or Congress surely city councils and county commissions are even closer and more accountable.

    Ultimately then, this is a fight about democracy. Corporations prefer to fight in 50 remote state capitols rather than 30,000 local communities. But genuine democracy depends on allowing, to the greatest extent possible, those who feel the impact of decisions to be a significant part in the decision making process. Harold DePriest, head of Chattanooga’s municipally owned broadband network (and electricity company) poses the fundamental question this way, “(D)oes our community control our own fate, or does someone else control it?” Decisions about caps and rates and access, about the digital divide and net neutrality can be debated and made at the local level, not in some distant boardroom or having to rely on federal agencies to act and federal courts to support their actions.

    If the FCC decides in favor of Chattanooga and Wilson the issue will be tied up in courts for years. But we shouldn’t need the federal government to come to our rescue. The elections this fall will revolve around many issues.  But given the centrality of high speed, affordable, reliable broadband and the looming prospect of even more corporate consolidation citizens this issue should be front and center. In 90 days, in 19 states that restrict municipal broadband, voters will be given the chance to overturn that decision by throwing out those who said no to local democracy.

     

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