Platform Access

CALinnovates Statement Regarding the FCC’s Revamped Privacy Proposal

October 7, 2016

“This version, like the first, falls woefully short in its noble goal to safeguard consumer data and increase transparency for the public. Subjecting the exact same data to different and arbitrary rules depending upon a company’s primary offering in today’s era of vertical integration does not increase consumer privacy. It is also blind to the realities of the marketplace. We need 21st Century privacy rules to govern a 21st Century data market.” said Tim Sparapani, CALinnovates’ senior policy counsel.

“Chairman Wheeler has indicated that some favored companies will be allowed to practice permissionless innovation outside the FCC’s jurisdiction while other disfavored entities must operate under the microscope despite the fact that the data is one in the same. Businesses of all types today are data companies first and foremost, whether they make software or deliver internet access – or both. And innovation can and should spring from all types of companies, ISPs included.”

“Today, Verizon owns Yahoo, AOL and Huffington Post, and the line between ISPs and edge providers has been increasingly blurred. Consumers will be no better off under this scheme than the previous one, but they may be worse off than they are today.”

“This is a referendum on innovation and an affront to consumers who expect more and demand better. No matter how Chairman Wheeler tries to spin it, his latest iteration of the FCC’s privacy proposal is nothing more than lipstick on a pig,” said Mike Montgomery, executive director of CALinnovates.

“CALinnovates encourages Chairman Wheeler to return to the drawing board to rewrite the rules one more time. Better yet, the FCC should seek further public input as well as guidance from Congress and the FTC, which has the longstanding privacy expertise the FCC lacks.”

CALinnovates is a non-partisan coalition of tech companies, founders, funders and non-profits determined to make the new economy a reality.

Statement Re: FCC’s Decision to Pull STB Plan From Meeting Agenda

“Today consumers, content creators and the larger innovation community were given a reprieve from government dictating how innovation should take place when the FCC pulled the set-top box item from the agenda. Innovative companies are already shaking up the set-top box market and don’t want or need the FCC’s help.

When more than 200 Members of Congress, Roku, Amazon and others oppose the Wheeler plan, the writing was already on the wall and it was wise of Chairman Wheeler to hit the eject button. CALinnovates stands with Congressman Tony Cardenas in requesting that the FCC release the order as it currently stands. Doing so will allow the public to comment. Keeping sunshine rules in place on this item is inappropriate and against the spirit of the APA.

The ecosystem is already headed toward an app-based solution and by potentially creating a compulsory licensing scheme, Chairman Wheeler stands in the way of progress, innovation and the promise of this new Golden Age of television.”

Why Pot Is The New Frontier For Tech Entrepreneurs

By Mike Montgomery

The cannabis industry is growing like, well, a weed. And the fact that recreational marijuana is on the California ballot in November means that we are about to see an extraordinary number of tech entrepreneurs enter this arena. According to cannabis research firm The Arcview Group, if the measure passes, the California cannabis market will grow from $2.7 billion to $6.6 billion by 2020.

Currently, Alaska, Colorado, Oregon and Washington are the only states where recreational marijuana use is legal. It’s a $5.7 billion industry (“the fastest growing industry in America,” according to Cashinbis) that is poised to take off once California hits the market.

There are plenty of hot areas for fledgling cannabis entrepreneurs. Edibles, vapors, extraction processes and growing systems, to name just a few. “If you are looking at product development, there is no standard—no one will tell you how to do it,” says Michael Devlin, co-founder and president of Db3, which makes Zoots edibles. “As the industry grows, they will ask for innovation. The winners will be those who respond to that.”

I checked in with activist Brian Caldwell, owner of Triple-C: The Original Cannabis Club, to see what areas might be ripe for budding tech entrepreneurs interested in the cannabis industry:

Mature consumer-facing software: Right now, Weedmaps and Leafly are the top two sites where cannabis consumers can look up dispensaries, find cannabis strains and read reviews. But neither is perfect and both need to mature a lot in order to be truly user friendly.

Weedmaps suffered from a lot of growing pains and has had a number of software issues. Leafly, while packed with information on specific strains and great technologically, seems to be struggling to gain traction.

Read the full article here.

The FCC’s Perplexing Set-Top Box “Solution”

By Mike Montgomery

Federal Communications Commission (FCC) Chairman Tom Wheeler jabbed a sharp stick in Hollywood’s eye via an op-ed in the creative community’s hometown newspaper, the Los Angeles Times, by announcing his new plan to obliterate the set-top box (STB) in favor of an apps-based approach. But unfortunately this welcome development of the FCC finally embracing apps as the future of TV consumption comes paired with deeply troubling news — instead of empowering open markets and innovators to invent and develop new apps and services to replace yesterday’s set-top boxes, Chairman Wheeler seems intent on creating a new government-mandated IP Licensing Board inside the FCC that dictates standards for the video app market.

That is an enormous step backwards that will confound and delay the introduction of new consumer apps and put government exactly where it does not belong — in the heart of the innovative and creative process by which new products are designed, developed, and rolled out. The Wheeler Licensing Body is regulatory overreach on steroids that will freeze app innovation in place and comes out of left field as not a single public comment over a seven month period even contemplated such a bizarre conclusion to the proceeding.

The idea that an additional layer of bureaucracy will spur “speed to market” momentum is farcical. If anything, there may be a “speed to licensing body” followed by slow progress that will ultimately keep consumers waiting for the newest innovations to hit the marketplace after a tedious and clunky bureaucratic process concludes. This will set back innovation and investment, which ultimately harms the very consumers Wheeler contends he’s helping.

We would never accept this kind of “Washington first” mandate for the apps, services, and platforms that power the web, and we should not tolerate such an approach in the video space. It’s a deeply flawed double standard by an FCC that has careened far outside its jurisdictional lane into copyright standard setting and the licensing process that undergirds much of the entertainment and technology economy. We have already seen this play out in other industries, and similar regimes have only served to create confusion, impede innovation and create additional costs; there is no reason to invite these dynamics into the booming video space.

The music industry is a prime example of a regulatory structure the entertainment world should attempt to avoid. CALinnovates has been an outspoken voice on music licensing issues and everyone involved in that debate would unanimously agree that music’s licensing system has been a mess and that the industry would certainly choose a far different approach if it could take a mulligan.

Read the full article here.

Just Tell Me What I Need to Know! The FTC Delves Into Disclosures to Consumers

By Tim Sparapani

“Bad UI leads to bad UX” is one of the most common sayings in Silicon Valley. Translated, this means that bad user interface (UI) – the look, feel and relative usability of an app or website’s design – will inevitably create a bad user experience (UX).  Silicon Valley spends considerable resources trying to build more intuitive, instinctive designs, especially when trying to get consumers’ attention and permission for using their data to offer them products and services.  This challenge is at the heart of an upcoming Federal Trade Commission conference this week focusing on the effectiveness of online disclosures to consumers.

Companies have long had to balance completeness and usefulness in disclosures — take our constantly evolving nutrition labels, for example.   In the digital age, while tech companies have made important strides in communicating with consumers,  striking the right balance is still a challenge just as it is with describing the most important details about your favorite cereal.

Despite decades of work in trying to figure out best disclosure practices by all kinds of companies, it’s amazing how much we have to learn about design for disclosing critical information to consumers. The challenge is most stark online:  tech companies must figure out how to get their  consumers’ attention, tell them what they need to know, and obtain their permission when needed, while not creating the dreaded “notice fatigue” where consumers ignore disclosures or, worse, abandon the website or app out of annoyance.

That’s why the upcoming FTC workshop to explore consumer disclosures is both so interesting and so important. The FTC, state attorneys general, and consumers themselves, rightfully expect that companies should communicate clearly what consumers should or must know about a company’s products or services.  Today, the FTC will gather experts from various disciplines to explore consumer messaging cognition and challenges for disclosures, permissions and warnings all with the goal of advancing UI.

How to communicate something you really need someone to know is a vexing problem in life.  Perhaps, if you are married, you are really good at sharing important news and wisdom with your spouse.  You probably do not try to use the same words to share the same bit of wisdom with your children or someone who is from an older generation.  Words and phrases, much less idioms or technical language, often mean different things to people with different experiences.  Those consumers for whom English is not their first language may understand words in translation differently than those who are native speakers.

Read the full article here.

The FCC’s Perplexing Set-Top Box “Solution”

By Mike Montgomery

Chairman Wheeler smartly embraces an app-based approach while simultaneously proposing a cumbersome licensing regime that will harm innovation and consumers alike.

Federal Communications Commission (FCC) Chairman Tom Wheeler jabbed a sharp stick in Hollywood’s eye today via an op-ed in the creative community’s hometown newspaper, the Los Angeles Times, by announcing his new plan to obliterate the set-top box (STB) in favor of an apps-based approach. But unfortunately this welcome development of the FCC finally embracing apps as the future of TV consumption comes paired with deeply troubling news – instead of empowering open markets and innovators to invent and develop new apps and services to replace yesterday’s set-top boxes, Chairman Wheeler seems intent on creating a new government-mandated IP Licensing Board inside the FCC that dictates standards for the video app market. That is an enormous step backwards that will confound and delay the introduction of new consumer apps and put government exactly where it does not belong – in the heart of the innovative and creative process by which new products are designed, developed, and rolled out. The Wheeler Licensing Body is regulatory overreach on steroids that will freeze app innovation in place and comes out of left field as not a single public comment over a seven month period even contemplated such a bizarre conclusion to the proceeding.

The idea that an additional layer of bureaucracy will spur “speed to market” momentum is farcical. If anything, there may be a “speed to licensing body” followed by slow progress that will ultimately keep consumers waiting for the newest innovations to hit the marketplace after a tedious and clunky bureaucratic process concludes. This will set back innovation and investment, which ultimately harms the very consumers Wheeler contends he’s helping.

We would never accept this kind of “Washington first” mandate for the apps, services, and platforms that power the web, and we should not tolerate such an approach in the video space. It’s a deeply flawed double standard by an FCC that has careened far outside its jurisdictional lane into copyright standard setting and the licensing process that undergirds much of the entertainment and technology economy. We have already seen this play out in other industries, and similar regimes have only served to create confusion, impede innovation and create additional costs; there is no reason to invite these dynamics into the booming video space. The music industry is a prime example of a regulatory structure the entertainment world should attempt to avoid. CALinnovates has been an outspoken voice on music licensing issues and everyone involved in that debate would unanimously agree that music’s licensing system has been a mess and that the industry would certainly choose a far different approach if it could take a mulligan. In STBs, Chairman Wheeler intends to create a brand new licensing bureau, with a number of questions still outstanding about enforcement, process, and legality. This isn’t as easy as Wheeler says, but ultimately the devil is in the not-so-transparent details, which the public will see in late October after the FCC votes on the issue in three short weeks.

Read the full article here.

How Tech Entrepreneurs, Big And Small, Are Helping Solve The Problem Of Organ Donation

By Mike Montgomery

Transplanting organs is a medical miracle. Finding willing donors, and connecting them to the patients who need organs, can sometimes be an even bigger miracle. Only 52% of Americans are registered as organ donors, according to nonprofit registry Donate Life America.

In early July, Apple AAPL -0.37% took a step toward getting more people enrolled when it announced that iPhone users will be able to register as an organ, eye or tissue donor using iOS 10’s integrated Health app. In conjunction with Donate Life America, Apple will share this information with the national registry.

This isn’t the first time Apple has allowed users to list themselves as organ donors; the iOS 8 release in 2014 featured a way for donors to list their status, as they do on driver’s licenses. What’s new is the ability to register and the routing of that information into the donor database, where doctors can see it. With 100 million iPhone users worldwide, that could make a big difference in clearing organ-donation waitlists.

“Apple’s uniquely positioned here,” because of the iPhone’s massive user base, says Iltifat Husain, assistant professor of emergency medicine and director of mobile app curriculum at Wake Forest Baptist Medical Center in Winston-Salem, N.C.

Dr. Husain, who runs the site iMedicalApps.com, says he’s surprised Google GOOGL +0.36% hasn’t offered the same functionality to Android users. From a public health perspective, he says, it makes the most sense for the largest mobile platforms to collect information about organ donors’ wishes within the operating system they already use, without having to download a third-party app.

Read the full article here.

In Tech-Driven Economy, FCC Needs to Step Up

By: Mike Montgomery

It’s clear that technology is a key driver of prosperity in today’s modernizing economy. Trillions of dollars in economic activity flow through the networks which make up the internet, making America’s digital economy the envy of the world. Networks are redefining the services people consume and the income people derive. For example, according to a Pew survey, 72 percent of Americans have used a sharing or on-demand service.

That’s why the Federal Communications Commission has never been more important. From last year’s Net Neutrality rules to current proceedings about set-top boxes, internet privacy and business services, FCC rules are shaping the future of the internet – and the broader economy that it fuels. Whether you agree or disagree with these regulations, everyone agrees they will have a profound impact.

That is why it’s so disconcerting to see the FCC disconnected from the economic impact of its decisions. In a report he published in July, the FCC’s very own former chief economist, Gerald Faulhaber, Ph.D., raised alarms about the agency’s dangerous turn away from economic analysis in its decision making.

In the report, Dr. Faulhaber asks: Why do the U.S. Department of Labor, the U.S. Environmental Protection Agency and the Consumer Financial Protection Bureau all conduct stringent cost-benefit analyses on their decisions while the FCC does not?

The FCC has simply become too important to the economy for it to fail to explore the economic impact of its decisions. For example, numerous economists warned the FCC that its decision to impose so-called Title II regulations on internet service providers, which treats today’s advanced broadband access in the same way as telephone services from generations ago, will have a negative impact on investment and innovation while not solving the issue we all want addressed: how to ensure that internet traffic is treated fairly across networks, regardless of where it comes from. Yet, when issuing its Open Internet Order, the FCC conducted no economic analysis of the impact its proposed rules would have on consumers, innovation or investment.

How is that possible?

The problems continue. The FCC is currently facing a major backlash from Congress, Hollywood and many innovators for its proposed new technology standards for set-top boxes.

Read the full article here.

Advertising sucks, but TV would be worse without it

By: Mike Montgomery

Given the opportunity, many of us choose to organize our TV watching to minimize ads as much as possible. We record, fast forward or pay subscription fees to services like Netflix and HBO to watch shows ad-free. But here’s the dirty little secret of television — advertising makes it go and keeps it affordable for the viewing public.

Which is why the Federal Communication Commission’s attempt to “open” the cable set-top box to competitors has the potential to be a giant disaster for consumers. Let me explain. Although advertising is becoming increasingly easy to skip, it still funds an enormous number of programs. Last year advertisers spent $79 billion on TV. That’s down slightly from 2014 but still makes it the largest slice of advertising spending in media beating out digital and (obviously) print.

Advertising makes up as much as 50 percent of revenue for programmers and 8.5 percent of revenues for the so-called multi-channel video programming distributors. The money flowing from these ads keeps the TV ecosystem going. Networks have money to invest in and pay the creators who make TV shows. Prestige shows like “Mad Men” and “Empire” are financed by ads. But it also allows MVPDs to keep subscription prices relatively low by providing another source of revenue — one that doesn’t come out of consumers’ pockets. That helps subsidize pay channels, which is why standalone HBO costs $14.99 per month but you can get HBO through your cable provider for $10 per month.

The FCC’s proposal to open the set-top box market to third-party developers would destroy this entire system. The MVPDs would be required to provide their programming streams to anyone who wanted to use them. These third-party box makers wouldn’t be required to follow the advertising deals that MVPDs have carefully contracted. They could alter or delete the original ads or pile on more ads and keep all that new revenue for themselves, driving down the value of the “original” ads and sucking up revenue that would ordinarily go to fund new programs. Chairman Tom Wheeler has claimed the new rules won’t allow this but experts recognize that the “rules won’t prohibit extra ads around TV channels.”

Read the full article here.

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