A prominent story airing last week on the NBC Nightly News with Brian Williams suggested visitors to the Sochi Olympic Games in Russia should expect their Android smartphone or laptop to be infiltrated by hackers moments after being switched on. A closer examination of the story suggests NBC News reporter Richard Engel had to go out of his way to get infected with malware.

[flv]http://www.phillipdampier.com/video/NBC News Hackers at the Olympics 2-4-14.flv[/flv]

Is it really too late to protect your electronic device if you power it on at the Sochi baggage claim facility at the airport, as NBC News’ Brian Williams claims? (3:35)

Trend Micro security expert Kyle Wilhoit, who helped design the experiment based on Engel’s usage habits, admitted security holes were left wide open on the tested devices:

On all of the devices, there was no security software of any type installed. These devices merely had standard operational programs such as Java, Flash, Adobe PDF Reader, Microsoft Office 2007, and a few additional productivity programs.

When considering this experiment, there were some basic things to be considered. First was mimicking the user behavior of Richard Engel. Since these were going to be machines with fake data, it was important to accurately imitate his normal activities. I had to investigate Richard’s user habits. In addition to other information, I needed to understand what he actually did on a daily basis, and sites he commonly visits. Also, I needed to understand where he posted. Did he post information on forums? Did he post on foreign language sites?

NBC’s story implied that three new devices, including an Apple MacBook Air, an Android phone, and a Lenovo laptop running Windows 7 were all hacked within minutes of being switched on for the first time, right out of their respective boxes.

A story about hacking at the Olympics in Sochi, Russia was recorded largely in Moscow, more than 1,000 miles away.

Careful observers will notice Wilhoit is wandering around Moscow, more than 1,000 miles away from Sochi. Wilhoit would later clarify in a tweet he never visited Sochi at all. A closer look at shots of computer screens show the reporter clicking on suspicious links and visiting obviously phony Olympics-oriented websites. With no virus or malware protection and Engel’s apparent willingness to click on anything suggests you should never loan him your laptop or phone.

NBC News went over the top getting their Android phone hacked. In fact, Engel not only had to manually find and download the infected app that let the hackers in, he had to navigate a set of menus to disable Android’s built-in security, turning on permission to download apps from unknown or third-party websites not affiliated with the Google Play store. Installing a security-compromised app also brings multiple additional warning messages advising users not to proceed. Under these circumstances, Aunt Sue can rest easy her Galaxy S4 is not accidentally open season for hackers while she watches the downhill skiing events.

Media sensationalism makes for good ratings but requires a lot of truth dodging to make the story real. This is an example.

Phillip “Follow the Money” Dampier

“In the 1990s, U.S. policymakers faced critical choices about who should build the Internet, how it should be governed, and to what extent it should be regulated and taxed. For the most part, they chose wisely to open a regulated telecommunications market to competition, stimulate private investment in broadband and digital technologies, and democratize access.” — Will Marshall, guest columnist

Is competition in Internet access robust enough for you? Has your provider been sufficiently stimulated to invest in the latest broadband technologies to keep America at the top of broadband speed and availability rankings? Is Net Neutrality the law of the land or the latest victim of a Verizon lawsuit to overturn the concept of democratizing access to online content?

I’m not certain what country Will Marshall lives in, but for most Americans, Internet access is provided by a duopoly of providers that must be dragged kicking and screaming to upgrade their networks without jacking up prices and limiting usage.

Marshall is president and founder of the Progressive Policy Institute, a so-called “third way” group inspired by centrist Democrats led by President Bill Clinton in the 1990s. Unlike traditional liberals suspicious of corporate agendas, these Democrats were friendly to big business and welcomed the largess of corporate cash to keep them competitive in election races. It was under this atmosphere that Clinton signed the bought-and-paid-for 1996 Telecom Act, ghostwritten by lobbyists for big broadcasters, phone and cable companies, and other big media interests. Long on rhetoric about self-governing, free market competition but short on specifics, the ’96 law transformed the media landscape in ways that still impact us today.

Media ownership laws were relaxed, allowing massive buyouts of radio stations under a handful of giant corporations like Clear Channel, which promptly dispensed with large numbers of employees that provided locally produced programming. In their place, we now get cookie-cutter radio that sounds the same from Maine to Oregon. Television stations eagerly began lobbying for a similar framework for relaxing ownership limits in their business. Phone companies won their own freedoms from regulation, including largely toothless broadband regulations that allowed Internet providers to declare victory regardless of how good or bad broadband has gotten in the United States.

Marshall’s views appeared in a guest column this week in The Orlando Sentinel, which is open to publishing opinion pieces from writers hailing from Washington, D.C., without bothering to offer readers with some full disclosure.

Marshall

While Marshall’s opinions may be his own, readers should be aware that PPI would likely not exist without its corporate sponsors — among them AT&T, hardly a disinterested player in the telecommunications policy debate.

Marshall’s column suggests competition is doing a great job at keeping prices low and allows you – the consumer – to decide which technologies and services thrive. There must be another reason my Time Warner Cable bill keeps increasing and my choice for broadband technology — fiber optics — is nowhere in sight. I don’t have a choice of Verizon FiOS, in part because phone and cable companies maintain fiefdoms where other phone and cable companies don’t dare to tread. That leaves me with one other option: Frontier Communications, which is still encouraging me to sign up for their 3.1Mbps DSL.

“The broadband Internet also is a powerful magnet for private investment,” Marshall writes. “In 2013, telecom and tech companies topped PPI’s ranking of the companies investing the most in the U.S. economy. And America is moving at warp speed toward the ‘Internet of Everything,’ which promises to spread the productivity-raising potential of digital technology across the entire economy.”

Nothing about AT&T or the cable companies is about “warp speed.” In reality, AT&T and Verizon plan to pour their enormous profits into corporate set-asides to repurchase their own stock, pay dividends to shareholders, and continue to richly compensate their executives. It’s good to know that PPI offers rankings that place telecom companies on top. Unfortunately, those without a financial connection to AT&T are less optimistic. The U.S. continues its long slide away from broadband leadership as even developing countries in the former Eastern Bloc race ahead of us. Verizon’s biggest single investment of 2013 wasn’t in the U.S. economy — it was to spend $130 billion to buyout U.K.-based Vodafone’s 45% ownership interest in Verizon Wireless. Verizon’s customers get stalled FiOS expansion, Cadillac-priced wireless service, and a plan to ditch rural landlines and push those customers to cell service instead.

AT&T financially supports the Progressive Policy Institute

“A recent federal court decision regarding the FCC’s Open Internet Order has prompted pro-regulatory advocates from the ’90s to demand a rewrite of the legal framework that allowed today’s Internet to flourish,” Marshall writes in a section that also includes insidious NSA wiretapping and Internet censorship in Russia and China.

Marshall’s AT&T public policy agenda is showing.

Net Neutrality proponents don’t advocate an open Internet for no reason. It was AT&T’s former CEO Ed Whitacre that threw down the gauntlet declaring Google and other content providers would not be allowed to use AT&T’s pipes for free. AT&T has since patented technology that will allow it to discriminate in favor of preferred web traffic while artificially slowing down content it doesn’t like on its network.

“Pro-regulatory advocates” are not the ones advocating change — it is AT&T, Verizon, and Comcast, among others, that want to monetize Internet usage and web traffic for even higher profits. Net Neutrality as law protects the Internet experience Marshall celebrates. He just can’t see past AT&T’s money to realize that.

For years, cable operators have denied they have a problem.

But new evidence suggests Americans are cutting back on their cable television habit as prices continue to rise and alternatives become available.

One of the worst affected by cable cord cutters is Time Warner Cable, which has been consistently losing video customers month after month since 2009:

Disputes with programmers and competition from satellite and telephone companies may not be enough to explain away the trend of subscriber losses. It also does not explain why Americans under 35 are increasingly unlikely to sign up for cable television at all.

Cable cord cutting — fact or fiction?

Nonsense, replies Bloomberg opinion columnist Matthew C. Klein:

It is tempting to think that the declining number of subscribers at the U.S.’s biggest cable-television companies is a symptom of the industry’s malaise as it slowly slides into obsolescence. Don’t buy it. The losses are accounted for in the gains by smaller and nimbler rivals.

[…] The customers who have been abandoning Comcast and Time Warner Cable in droves haven’t given up on paid TV content, however. Focusing on the travails of the biggest cable companies obscures the reality that, according to Bloomberg Industries, the total number of pay-TV subscribers is slightly higher now than it was at the end of 2008 and that there were probably more people paying for television subscriptions at the end of 2013 than at the end of 2012.

To the extent that individual company results tell us anything, it could be about where Americans are moving, or the relative quality of service offered by the various companies. In the 12 months ended Dec. 31, AT&T Inc. added 924,000 subscribers to its U-verse TV service, while Verizon Communications Inc. added 536,000 subscribers to its FiOS TV service. Since the end of 2008, the two companies best known for their wireless services have added about 8 million pay-TV subscribers — far more than Time Warner Cable and Comcast have lost.

Klein’s views mirror those of many cable industry executives who blame the economy for deteriorating cable television subscriber numbers. Many suggest multi-generational households are responsible — stay at home kids and older parents are sharing a single cable television subscription. Others claim discretionary income is squeezing some to downgrade, but not cancel, cable television service.

Klein’s accounting does not tell the entire story. Competition from telephone companies, especially AT&T’s U-verse, is not as pervasive against Time Warner Cable and Comcast as Klein suggests. In fact, Charter Communications is among the cable companies facing the biggest onslaught of competition from AT&T. U-verse has picked up many of its newest subscribers not because of a sudden urge to switch, but rather because the service has only just become available in several new markets as a result of AT&T’s expansion effort. Verizon FiOS is still slowly expanding within its current franchise areas as well. Neither Comcast or Time Warner Cable consider either service much of a serious competitive threat.

AT&T U-verse, the larger of the two telephone company services, has a TV penetration rate of just 21 percent of customer locations. FiOS, which serves a smaller customer base, has a 35 percent penetration rate for television. Cable remains dominant for now, even as it loses subscribers and market share.

Another way to measure cord cutting is to look at the subscriber numbers of major basic cable networks that are most likely to be a part of any channel lineup. ESPN, for example, lost around 1.5 million subscribers between September 2011 and September 2013. Most of that loss came from cord cutting or downgrades to tiers like “Broadcast Basic,” consisting mostly of local television stations. ESPN’s numbers include all pay television platforms — satellite, telco TV, and cable.

In spite of the subscriber losses, cable industry profits remain healthy. Revenue growth these days comes from broadband service and rate increases.

The Kansas State Legislature website makes it very difficult to find exactly who wrote and introduced Senate Bill 304, the laughingly titled, “Municipal Communication’s Network and Private Telecommunications Investment Safeguards Act.”

In fact, the bill should be titled, “The Big Telecom Duopoly Protection Act,” because it makes it almost impossible for any publicly owned network to get off the ground and compete in the state of Kansas, even in places where the nearest cable or DSL connection is dozens of miles away.

Instead of naming names, the legislature’s website prefers to show the bill introduced by the Committee on Commerce, sponsored by the Committee on Commerce, and referred to the Committee on Commerce for further consideration. Since they apparently wrote and co-sponsored the bill, we don’t expect it will take them too long to rubber stamp their approval.

The Republican-dominated members of the committee are already well-acquainted with the state’s largest cable and phone companies, as their campaign donations from 2012 illustrate:

• Sen. Julia Lynn (R), Chairperson: AT&T ($1,750), Comcast ($1,500), CenturyLink ($1,000);
• Sen. Susan Wagle (R), Vice-Chair: Cox Communications ($1,750), AT&T ($1,500), Kansas Cable Telecommunication Association ($1,250), Comcast ($1,000), CenturyLink ($1,000);
• Sen. Tom Holland (D), Ranking Member: AT&T ($1,000);
• Sen. Pat Apple (R): AT&T ($1,000), Comcast ($1,000), Kansas Cable Telecommunication Association ($250), Time Warner Cable ($250), Verizon ($250), CenturyLink ($250);
• Sen. Jim Denning (R): CenturyLink ($250);
• Sen. Oletha Faust-Goudeau (D): AT&T ($1,000), Cox Communications ($1000), Kansas Cable Telecommunication Association ($250);
• Sen. Jeff Longbine (R): AT&T ($2,000), CenturyLink ($1,750), Cox Communications ($500);
• Sen. Jeff Melcher (R): CenturyLink ($1,000);
• Sen. Robert Olson (R): AT&T ($1,750), Comcast ($1,500), CenturyLink ($1,250), Cox Communications ($750);
• Sen. Mary Pilcher-Cook (R): Comcast ($1,000).

Data: Project Vote Smart, 1/30/2014

AT&T is a frequent backer of anti-community broadband initiatives, as are some of the nation’s biggest cable companies.

The Kansas Senate’s Commerce Committee has introduced a bill that would make it next to impossible to build publicly owned community broadband networks that could potentially compete against the state’s largest cable and phone companies.

Senate Bill 304 is the latest in a series of measures introduced in state legislatures across the country to limit or prohibit local communities from building better broadband networks that large commercial providers refuse to offer.

SB 304 is among the most protectionist around, going well beyond the model bill produced by the corporate-backed American Legislative Exchange Council (ALEC). At its heart, the bill bans just about any would-be competitor that works with, is run by, or backed by a local municipality:

Sec. 4. Except with regard to unserved areas, a municipality may not, directly or indirectly offer or provide to one or more subscribers, video, telecommunications or broadband service; or purchase, lease, construct, maintain or operate any facility for the purpose of enabling a private business or entity to offer, provide, carry, or deliver video, telecommunications or broadband service to one or more subscribers.

For purposes of this act, a municipality offers or provides video, telecommunications or broadband service if the municipality offers or provides the service:

• Directly or indirectly, including through an authority or instrumentality:
• Acting on behalf of the municipality; or for the benefit of the municipality;
• by itself;
• through a partnership, joint venture or other entity in which the municipality participates; or
• by contract, resale or otherwise.

Tribune, Kansas is the county seat of Greeley County.

This language effectively prohibits just about everything from municipally owned broadband networks, public-private partnerships, buying an existing cable or phone company to improve service, allowing municipal utilities to establish broadband through an independent authority, or even contracting with a private company to offer service where none exists.

The proposed legislation falls far short of its intended goals to:

• Ensure that video, telecommunications and broadband services are provided through fair competition;
• Provide the widest possible diversity of sources of information, news and entertainment to the general public;
• Encourage the development and widespread use of technological advances in providing video, telecommunications and broadband services at competitive rates and,
• Ensure that video, telecommunications and broadband services are each provided within a consistent, comprehensive and nondiscriminatory federal, state and local government framework.

Proponents claim the bill is open to allowing municipalities to build broadband services in “unserved areas.” But upon closer inspection, the bill’s definition of “unserved” is practically impossible to meet anywhere in Kansas:

“Unserved area” means one or more contiguous census blocks within the legal boundaries of a municipality seeking to provide the unserved area with video, telecommunications or broadband service, where at least nine out of 10 households lack access to facilities-based, terrestrial broadband service, either fixed or mobile, or satellite broadband service, at the minimum broadband transmission speed as defined by the FCC.

Even the FCC does not consider satellite broadband service when it draws maps where broadband is unavailable. But this Big Telecom-backed bill does. Even worse, it requires would-be providers to prove that 90 percent of customers within a “census block” don’t have access to either mobile or satellite broadband. Since satellite Internet access is available to anyone with a view of the southern sky, and the most likely unserved customers would be in rural areas, it would be next to impossible for any part of the notoriously flat and wide open state to qualify as “unserved.”

Each rectangle represents one “census block” within a larger “census tract” that partially covers Greeley County. Under the proposed legislation, a community provider would have to visit each census block to verify whether a private company is capable of providing broadband service, including satellite Internet access.

To illustrate, Stop the Cap! looked at Greeley County in western Kansas. The county’s total population? 1,247 — the smallest in the state. Assume Greeley County Broadband, a fictional municipal provider, wanted to launch fiber broadband service in the area. Under the proposed bill, the largest potential customer base is 1,247 — too small for most private providers. Still, if a private company decided to wire up the county, it could with few impediments, assuming investors were willing to wait for a return on their investment in the rural county. If SB 304 became law, a publicly owned broadband network would have to do much more before a single cable could be installed on a utility pole.

Census Block 958100-1-075, in downtown Tribune, has a population of 10.

To open for business, Greeley County Broadband would have to spend tens of thousands of dollars to independently verify its intended service area — the county — is unserved by any existing broadband technology, including satellite and mobile broadband. The authors of the bill intentionally make that difficult. Just one census tract in Greeley County (#9561), encompassing the county seat town of Tribune (pop. 741) has dozens of census blocks. Some are populated, others are not.

Greeley County Broadband now has several big problems. Under the language in the bill, a municipal provider must first define its service area entirely within its borders — in this case Greeley County — and base it on contiguous census blocks. That means if pockets of qualifying potential customers exist in a census block surrounded by non-qualifying census blocks, Greeley County Broadband cannot include them in its service area.

Census Block 958100-1-075 — essentially at the intersection of Broadway Ave. and West Harper St., right next to City Hall — has a population of 10. AT&T Mobility’s coverage maps show Tribune is covered by its 3G wireless data network (but not 4G). That census block, along with every other in the area, would be disqualified from getting municipal broadband the moment AT&T upgrades to 4G service, whether reception is great or not. It doesn’t matter that customers will have to pay around $60 for a handful of gigabytes a month.

But wait, Verizon Wireless declares it already provides 4G LTE service across Greeley County (and almost all Kansas). So Greeley County Broadband, among other would-be providers, are out of business before even launching. Assuming there was no 4G service, if just two of those ten residents had a clear view to any satellite broadband provider, Greeley County Broadband would not be permitted to provide anyone in the census block with service under the proposed law. Under these restrictions, no municipal provider could write a tenable business plan, starved of potential customers.

Kansans need to consider whether that is “fair competition” or corporate protectionism. Is it a level playing field to restrict one provider without restricting others? If competition promotes investment in technologically challenged rural Kansas, would not more competition from municipal providers force private companies to finally upgrade their networks to compete?

In fact, the bill introduced this week protects incumbent cable and phone companies from competition and upgrades by keeping out the only likely competition most Kansans will ever see beyond AT&T, Comcast, or CenturyLink’s comfortable duopoly – a municipal or community-owned broadband alternative. Providing the widest possible diversity is impossible in a bill that features the widest possible definition of conditions that will keep new entrants out of the market. Community-owned networks usually offer superior technology (often fiber optics) in communities that are usually trapped with the most basic, outdated services. While the Kansas legislature coddles AT&T, that same company wants to mothball its rural landline network pushing broadband-starved customers to prohibitively expensive, usage capped wireless broadband service indefinitely.

Seeing Big Red? The areas colored dark red represent the claimed coverage of Verizon Wireless’ 4G LTE network in Kansas. Under SB 304, these areas would be prohibited from having a community-owned broadband alternative.