Netflix has stopped using on-screen messages to alert subscribers to video latency issues that the company claimed ISPs caused, but industry participants and observers told us they believe both content providers and ISPs should provide the public with data-driven information on interconnection issues. Netflix said last week that its “small scale test” of the latency messages would end Monday, soon after Verizon -- an ISPs referenced in the messages -- sent Netflix a cease-and-desist letter seeking an end to the messages (CD June 10 p14). Nondisclosure agreements mean “we outsiders cannot really tell whether Netflix properly complained about non-performance or unsatisfactory performance by Verizon,” said Pennsylvania State University telecom and law professor Rob Frieden.
Level 3 said it plans to buy tw telecom, reaching a deal worth about $7.3 billion, including debt. Tw telecom shareholders will get a 27 percent stake in the combined company, Level 3 said in a Monday news release (http://bit.ly/1siB73h). The deal, set to close in Q4, is unlikely to face major problems in obtaining federal and state regulatory approvals, industry analysts and observers told us. The deal also likely signals the start of a larger trend toward similar deals involving long-haul and metropolitan network providers, analysts and observers said.
The FCC wants the private sector to lead the communications sector’s “new paradigm” on cybersecurity risk management but “must be ready” with regulatory “alternatives” if that work fails, Chairman Tom Wheeler said Thursday. Wheeler’s remarks at an American Enterprise Institute event, billed as his first major cybersecurity policy speech as chairman, expanded on the FCC’s existing message within the sector this year that it preferred a voluntary industry-led effort to a regulatory approach (CD May 19 p4). The FCC released a prepared version of Wheeler’s speech after the AEI event (http://bit.ly/1oUaNIT).
The FBI is “piloting” use of facial recognition involving criminal mug shots as part of its Next Generation Identification (NGI) database, but that program will not involve collecting civilians’ photos from drivers’ licenses or other sources, said FBI Director James Comey Wednesday. The facial recognition pilot is limited to criminal mug shots “because those are repeatable, we can count on the equality of them and they are tied to criminal conduct, obviously,” he said. State governments occasionally send the FBI pictures of people who are licensed school bus drivers or have other sensitive professions, but such photos won’t be part of that database, Comey told the House Judiciary Committee during the hearing, which also touched on the effects the USA Freedom Act (HR-3361) would have on the FBI’s surveillance capabilities and cybersecurity work.
NTIA’s planned spinoff of its oversight of the Internet Assigned Numbers Authority (IANA) functions, along with debates on cross-border data flows and data localization, are top issues the U.S. communications sector is examining for potential effects on their overseas business, industry officials said Monday night. Those issues all fundamentally center on how the world will view the Internet in the future, given it wasn’t a jurisdiction-bound technology meant to be “defined by geography per se,” said David Weller, Google head of global trade policy, at an FCBA event.
Dueling claims from Netflix and Verizon about the true reason for Netflix’s buffering issues are inherently policy posturing, but they also highlight underlying questions about data transparency and whether stakeholders have effectively explained the issue to the public, industry observers told us Thursday. When videos buffer, Netflix has begun including messages on some users’ screens claiming that an ISP’s network “is crowded right now,” including for users on Verizon’s network. Netflix said it is phasing those messages in for users on all ISPs, regardless of the type of connection or agreement the company has with a particular broadband provider (CD June 5 p11).
Leaks that began a year ago this month about controversial National Security Agency surveillance programs continue to damage U.S. relations with erstwhile and potential allies on Internet governance issues, but there are signs that damage can be and already is being repaired, experts said Wednesday at a Brookings Institution event. The U.S. has been trying to maintain and grow a coalition of national governments that back the existing multistakeholder Internet governance model, in the lead- up to upcoming international forums that will affect Internet governance. U.S. Coordinator for International Communications and Information Policy Daniel Sepulveda has acknowledged the NSA programs have affected his discussions with foreign governments on Internet governance issues (CD Nov 8 p5).
NSA Director Mike Rogers acknowledged Tuesday that the agency does use facial recognition as part of its surveillance programs. “We use facial recognition as a tool to help us understand these foreign intelligence targets,” he said during a Bloomberg Government cybersecurity event. The NSA doesn’t collect and analyze facial recognition data “on a unilateral basis against U.S. citizens,” but “in a digital age, we will encounter U.S. persons in the wilderness.” The New York Times reported Sunday that the NSA was using facial recognition technology to collect facial data from images transmitted through text messages, emails and other social media. That issue also came up at an NTIA meeting on a facial recognition code of conduct. (See separate report below in this issue.)
The Supreme Court ruled against Akamai Technologies Monday in its patent lawsuit versus Limelight Networks, saying a company can claim patent infringement against another entity only when that entity was involved in every step of the claimed infringement. The U.S. Court of Appeals for the Federal Circuit, which originally ruled on the case in 2012, “fundamentally misunderstands what it means to infringe a method patent,” Justice Samuel Alito wrote in the Supreme Court’s unanimous opinion (http://1.usa.gov/1hsV8ja). Oral argument was held in April (CD May 1 p16). The Federal Circuit had ruled Akamai and patent co-owner Massachusetts Institute of Technology could argue Limelight had committed “divided” or “inducing infringement” of its patents on content delivery methods by committing most steps in the infringement process and then inducing a third party -- its customers -- to take the final step in that process. The Federal Circuit’s “contrary view” would deprive U.S. law “of ascertainable standards and require the courts to develop two parallel bodies of infringement law,” the Supreme Court said. Limelight believes the Supreme Court’s ruling is a win for the entire country “by promoting clear rules governing liability for patent infringement,” a spokeswoman said. “We look forward to full resolution” of the case, she added. Akamai had no immediate comment. Supreme Court justices had spent much of oral argument debating whether a ruling on Akamai’s claim of “divided” or “inducing infringement” would have any lasting value since Akamai had the option to argue its case again before the Federal Circuit because that court hadn’t ruled on claims of direct infringement. The Supreme Court remanded the case back to the Federal Circuit, directing it to decide the direct infringement issue. Cisco, Facebook and Google were among the major tech companies backing Limelight’s case, arguing an Akamai win would open them up to more suits from patent assertion entities.
The U.S. wireless tower sector is likely to do very well over the next 12 months amid a confluence of telecom industry trends like increasing network expansions and network quality improvements, industry participants and observers told us. Those trends taken together are making the tower sector “as robust as it’s ever been,” said Clayton Funk, a managing director at broker Media Venture Partners. Wireless carrier consolidations -- such as a possible merger between Sprint and T-Mobile US -- will continue to be a top factor in the industry’s outlook, but not as large as in the past, observers said.