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Analysis: Despite New Entrants, Netflix-CBS Deal Secures Spot At The Top

WASHINGTON, February 25, 2011 – Amazon’s new movie streaming service represents a first step into the market but it will be a while before it – or any other new entrant to the sector – challenges Nexflix at the top of the heap.

This week through its Prime subscription service, Amazon offered free streaming movies and television shows to its subscribers. Amazon will offer more than 5,000 movies and shows that subscribers can access through their computers, compatible Blu-ray players or set top boxes that Amazon has begun to feature on its website. This move represents Amazon’s entry into the new and unstructured online video market.

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WASHINGTON, February 25, 2011 – Amazon’s new movie streaming service represents a first step into the market but it will be a while before it – or any other new entrant to the sector – challenges Nexflix at the top of the heap.

This week through its Prime subscription service, Amazon offered free streaming movies and television shows to its subscribers. Amazon will offer more than 5,000 movies and shows that subscribers can access through their computers, compatible Blu-ray players or set top boxes that Amazon has begun to feature on its website. This move represents Amazon’s entry into the new and unstructured online video market.

Netflix, already a solid leader in the field, also stepped into a more prominent role this week with a new deal with network CBS. The deal, which is worth $200 million, will give Netflix users access current CBS hits as well as a substantial back catalog of classic CBS shows such as “Frasier,” “Cheers,”  and “Twin Peaks.”

These new deals leave Hulu – which made the initial mainstream foray into online video – with a large gap to make up. Hulu features content from  ABC, NBC, and Fox, but  has remained static since the launch of its premium site, Hulu Plus.  Nor does the company look to be building beyond some small additions since its beta in June. Hulu seems unable to build a larger catalog of shows, as its affiliated networks appear unwilling to license whole blocks of shows like those recently acquired by Netflix. Consumers have  also complained about the dearth of Hulu-compatible viewing devices, forcing them to watch shows primarily on their computers. The restriction on Hulu can be largely attributed to the networks, which have an incentive in the form of more advertising dollars to drive consumers to watch their shows on broadcast television rather than online.

Consumers also place a high priority on hardware and are more interested in watching television on their televisions through DVD, Blu-ray, or stand alone boxes, than they are on their computers. Netflix has been able to convince several manufacturers to build its service into their products. The result is beneficial to both parties as it makes the hardware more appealing and more versatile.  AppleTV, for example, provides a stand-alone player that enables rentals and downloads of video through the iTunes store, as well as a dedicated output to send content to users’ televisions. AppleTV also allows users to access the Netflix catalog, but if other providers want to compete they may need to similarly appeal to  hardware manufacturers to build in their service into devices.

This week’s announcements seem to show that Amazon, Apple, Hulu, and other potential providers have a long way to go if they are going to challenge Netflix’ lead in online video streaming. So far Netflix is the only company with the content, delivery system and current market share to be a complete player in the online video market. Amazon has a certain amount of hardware support, but its catalog is too small and lacks widespread availability. Hulu doesn’t have enough control over the content it provides to make it widely available on all devices other than people’s computers.

New players to the online video battle will find a high price of admission without strong content offerings to consumers. Netflix has found itself able to build not only a larger catalog, but also a more diverse one, encompassing Hollywood, television studios, and foreign production companies.  Market analysts agree that Netflix holds its sizable lead mostly due to its superior number of available titles and its already-entrenched mail subscription service.

“At this point,” said Piper Jaffray analyst Michael Olson, “the only company generating enough revenue from subscription video to spend on an improving library without taking a significant hit to the bottom line is Netflix.”

 

Nate Hakken is a native of Washington, DC. As the son of two itinerant academics, Nate spent much of his childhood living in England and Scandinavia. He has a B.A. from Sarah Lawrence College, as well as a J.D. from Vermont Law School, where he studied Internet and technology law. Nate is a jack-of-all-trades, having worked as a sound engineer, teacher, camp director, outdoor adventure guide, and medical researcher. Outside of work, he is an avid cyclist who competes across the Mid-Atlantic and has been known to play the guitar when asked nicely.

China

Experts Debate TikTok Ban, Weighing National Security Against Free Speech

Although many experts agree TikTok poses a threat, some believe a ban is the wrong solution.

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WASHINGTON, May 26, 2023 — With lawmakers ramping up their rhetoric against TikTok, industry and legal experts are divided over whether a ban is the best solution to balance competing concerns about national security and free speech.

Proponents of a TikTok ban argue that the app poses an “untenable threat” because of the amount of data it collects — including user location, search history and biometric data — as well as its relationship with the Chinese government, said Joel Thayer, president of the Digital Progress Institute, at a debate hosted Wednesday by Broadband Breakfast.

These fears have been cited by state and federal lawmakers in a wide range of proposals that would place various restrictions on TikTok, including a controversial bill that would extend to all technologies connected to a “foreign adversary.” More than two dozen states have already banned TikTok on government devices, and Montana recently became the first state to ban the app altogether.

TikTok on Monday sued Montana over the ban, arguing that the “unprecedented and extreme step of banning a major platform for First Amendment speech, based on unfounded speculation about potential foreign government access to user data and the content of the speech, is flatly inconsistent with the Constitution.”

Thayer contested the lawsuit’s claim, saying that “the First Amendment does not prevent Montana or the federal government from regulating non expressive conduct, especially if it’s illicit.”

However, courts have consistently held that the act of communicating and receiving information cannot be regulated separately from speech, said David Greene, civil liberties director and senior staff attorney at the Electronic Frontier Foundation.

“This is a regulation of expression — it’s a regulation of how people communicate with each other and how they receive communications,” he said.

Stringent regulations could protect privacy without suppressing speech

A complete ban of TikTok suppresses far more speech than is necessary to preserve national security interests, making less intrusive options preferable, said Daniel Lyons, nonresident senior fellow at the American Enterprise Institute.

TikTok is currently engaged in a $1.5 billion U.S. data security initiative that will incorporate several layers of government and private sector oversight into its privacy and content moderation practices, in addition to moving all U.S. user data to servers owned by an Austin-based software company.

This effort, nicknamed Project Texas, “strikes me as a much better alternative that doesn’t have the First Amendment problems that an outright TikTok ban has,” Lyons said.

Greene noted that many online platforms — both within and outside the U.S. — collect and sell significant amounts of user data, creating the potential for foreign adversaries to purchase it.

“Merely focusing on TikTok is an underinclusive way of addressing these concerns about U.S. data privacy,” he said. “It would be really great if Congress would actually take a close look at comprehensive data privacy legislation that would address that problem.”

Greene also highlighted the practical barriers to banning an app, pointing out that TikTok is accessible through a variety of alternative online sources. These sources tend to be much less secure than the commonly used app stores, meaning that a ban focused on app stores is actually “making data more vulnerable to foreign exploitation,” he said.

TikTok risks severe enough to warrant some action, panelists agree

Although concerns about suppressing speech are valid, the immediate national security risks associated with the Chinese government accessing a massive collection of U.S. user data are severe enough to warrant consideration of a ban, said Anton Dahbura, executive director of the Johns Hopkins University Information Security Institute.

“Will it hurt people who are building businesses from it? Absolutely,” he said. “But until we have safeguards in place, we need to be cautious about business as usual.”

These safeguards should include security audits, data flow monitoring and online privacy legislation, Dahbura continued.

Thayer emphasized the difference between excessive data collection practices and foreign surveillance.

“I think we all agree that there should be a federal privacy law,” he said. “That doesn’t really speak to the fact that there are potential backdoors, that there are these potential avenues to continue to surveil… So I say, why not both?”

Lyons agreed that TikTok’s “unique threat” might warrant action beyond a general privacy law, but maintained that a nationwide ban was “far too extreme.”

Even if further action against TikTok is eventually justified, Greene advocated for federal privacy legislation to be the starting point.  “We’re spending a lot of time talking about banning TikTok, which again, is going to affect millions of Americans… and we’re doing nothing about having data broadly collected otherwise,” he said. “At a minimum, our priorities are backwards.”

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, May 24, 2023 – Debate: Should the U.S. Ban TikTok?

Since November, more than two dozen states have banned TikTok on government devices. Montana recently became the first state to pass legislation that would ban the app altogether, and several members of Congress have advocated for extending a similar ban to the entire country. Is TikTok’s billion-dollar U.S. data security initiative a meaningful step forward, or just an empty promise? How should lawmakers navigate competing concerns about national security, free speech, mental health and a competitive marketplace? This special session of Broadband Breakfast Live Online will engage advocates and critics in an Oxford-style debate over whether the U.S. should ban TikTok.

Panelists

Pro-TikTok Ban

  • Anton Dahbura, Executive Director, Johns Hopkins University Information Security Institute
  • Joel Thayer, President, Digital Progress Institute

Anti-TikTok Ban

  • David Greene, Civil Liberties Director and Senior Staff Attorney, Electronic Frontier Foundation
  • Daniel Lyons, Nonresident Senior Fellow, American Enterprise Institute

Moderator

  • Drew Clark, Editor and Publisher, Broadband Breakfast

Anton Dahbura serves as co-director of the Johns Hopkins Institute for Assured Autonomy, and is the executive director of the Johns Hopkins University Information Security Institute. Since 2012, he has been an associate research scientist in the Department of Computer Science. Dahbura is a fellow at the Institute of Electrical and Electronics Engineers, served as a researcher at AT&T Bell Laboratories, was an invited lecturer in the Department of Computer Science at Princeton University and served as research director of the Motorola Cambridge Research Center.

Joel Thayer, president of the Digital Progress Institute, was previously was an associate at Phillips Lytle. Before that, he served as Policy Counsel for ACT | The App Association, where he advised on legal and policy issues related to antitrust, telecommunications, privacy, cybersecurity and intellectual property in Washington, DC. His experience also includes working as legal clerk for FCC Chairman Ajit Pai and FTC Commissioner Maureen Ohlhausen.

David Greene, senior staff attorney and civil liberties director at the Electronic Frontier Foundation, has significant experience litigating First Amendment issues in state and federal trial and appellate courts. He currently serves on the steering committee of the Free Expression Network, the governing committee of the ABA Forum on Communications Law, and on advisory boards for several arts and free speech organizations across the country. Before joining EFF, David was for twelve years the executive director and lead staff counsel for First Amendment Project.

Daniel Lyons is a professor and the Associate Dean of Academic Affairs at Boston College Law School, where he teaches telecommunications, administrative and cyber law. He is also a nonresident senior fellow at the American Enterprise Institute, where he focuses on telecommunications and internet regulation. Lyons has testified before Congress and state legislatures, and has participated in numerous proceedings at the Federal Communications Commission.

Drew Clark (moderator) is CEO of Breakfast Media LLC. He has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing campaign for broadband data. As Editor and Publisher, Clark presides over the leading media company advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.

Graphic by SF Freelancer/Adobe Stock used with permission

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Section 230

Supreme Court Sides With Google and Twitter, Leaving Section 230 Untouched

A wide range of tech industry associations and civil liberties advocates applauded the decision to leave Section 230 untouched.

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Photo of Justice Clarence Thomas by Stetson University used with permission

WASHINGTON, May 18, 2023 — The Supreme Court on Thursday sided with Google and Twitter in a pair of high-profile cases involving intermediary liability for user-generated content, marking a significant victory for online platforms and other proponents of Section 230.

In Twitter v. Taamneh, the court ruled that Twitter could not be held liable for abetting terrorism by hosting terrorist content. The unanimous decision was written by Justice Clarence Thomas, who had previously signaled interest in curtailing liability protections for online platforms.

“Notably, the two justices who have been most critical of Section 230 and internet platforms said nothing of the sort here,” said Ari Cohn, free speech counsel at TechFreedom.

In a brief unsigned opinion remanding Gonzalez v. Google to the Ninth Circuit, the court declined to address Section 230, saying that the case “appears to state little, if any, plausible claim for relief.”

A wide range of tech industry associations and civil liberties advocates applauded the decision to leave Section 230 untouched.

“Free speech online lives to fight another day,” said Patrick Toomey, deputy director of the ACLU’s National Security Project. “Twitter and other apps are home to an immense amount of protected speech, and it would be devastating if those platforms resorted to censorship to avoid a deluge of lawsuits over their users’ posts.”

John Bergmayer, legal director at Public Knowledge, said that lawmakers should take note of the rulings as they continue to debate potential changes to Section 230.

“Over the past several years, we have seen repeated legislative proposals that would remove Section 230 protections for various platform activities, such as content moderation decisions,” Bergmayer said. “But those activities are fully protected by the First Amendment, and removing Section 230 would at most allow plaintiffs to waste time and money in court, before their inevitable loss.”

Instead of weakening liability protections, Bergmayer argued that Congress should focus on curtailing the power of large platforms by strengthening antitrust law and promoting competition.

“Many complaints about Section 230 and content moderation policies amount to concerns about competition and the outsize influence of major platforms,” he said.

The decision was also celebrated by Sen. Ron Wyden, D-Ore., one of the statute’s original co-authors.

“Despite being unfairly maligned by political and corporate interests that have turned it into a punching bag for everything wrong with the internet, the law Representative [Chris] Cox and I wrote remains vitally important to allowing users to speak online,” Wyden said in a statement. “While tech companies still need to do far better at policing heinous content on their sites, gutting Section 230 is not the solution.”

However, other lawmakers expressed disappointment with the court’s decision, with some — including Rep. Cathy McMorris Rodgers, R-Wash., chair of the House Energy and Commerce Committee — saying that it “underscores the urgency for Congress to enact needed reforms to Section 230.”

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Broadband Roundup

White House Meets AI Leaders, FTC Claims Meta Violated Privacy Order, Graham Targets Section 230

The Biden administration announced $140 million in new funding for national AI research.

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Photo of Vice President Kamala Harris by Gage Skidmore used with permission

May 5, 2023 — Vice President Kamala Harris and other senior officials on Thursday met with the CEOs of Alphabet, Anthropic, Microsoft and OpenAI to discuss the risks associated with artificial intelligence technologies, following the administration’s announcement of $140 million in funding for national AI research.

President Joe Biden briefly stopped by the meeting, telling the tech leaders that “what you’re doing has enormous potential and enormous danger.”

Government officials emphasized the importance of responsible leadership and called on the CEOs to be more transparent about their AI systems with both policymakers and the general public.

“The private sector has an ethical, moral and legal responsibility to ensure the safety and security of their products,” Harris said in a statement after the meeting.

In addition to the new investment in AI research, the White House announced that the Office of Management and Budget would be releasing proposed policy guidance on government usage of AI systems for public comment.

The initiatives announced Thursday are “an important first step,” wrote Adam Conner, vice president of technology policy at the Center for American Progress. “But the White House can and should do more. It’s time for President Joe Biden to issue an executive order that requires federal agencies to implement the Blueprint for an AI Bill of Rights and take other key actions to address the challenges and opportunities of AI.”

FTC claims Facebook violated privacy order

The Federal Trade Commission on Wednesday proposed significant modifications to its 2020 privacy settlement with Facebook, accusing the company of violating children’s privacy protections and improperly sharing user data with third parties.

The suggested changes would include a blanket prohibition against monetizing the data of underage users and limits on the uses of facial recognition technology, among several other constraints.

“Facebook has repeatedly violated its privacy promises,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”

Although the agency voted unanimously to issue the order, Commissioner Alvaro Bedoya expressed concerns about whether the changes exceeded the FTC’s limited order modification authority. “I look forward to hearing additional information and arguments and will consider these issues with an open mind,” he said.

Meta responded to the FTC’s action with a lengthy statement calling it a “political stunt” and outlining the changes that have been implemented since the original order.

“Let’s be clear about what the FTC is trying to do: usurp the authority of Congress to set industry-wide standards and instead single out one American company while allowing Chinese companies, like TikTok, to operate without constraint on American soil,” wrote Andy Stone, Meta’s director of policy communications, in a statement posted to Twitter.

Meta now has thirty days to respond to the proposed changes. “We will vigorously fight this action and expect to prevail,” Stone said.

Sen. Graham threatens to repeal Section 230 if tech lobby kills EARN IT Act

The Senate Judiciary Committee on Thursday unanimously approved the Eliminating Abusive and Rampant Neglect of Interactive Technologies Act, a controversial bill that would create new carveouts to Section 230 in an attempt to combat online child sexual abuse material.

But Sen. Lindsey Graham, R-S.C., the bill’s cosponsor and ranking member of the committee, expressed doubt about the legislation’s future, claiming that “the political and economic power of social media companies is overwhelming.”

“I have little hope that common-sense proposals like this will ever become law because of the lobbying power these companies have at their disposal,” he said in a statement on Thursday. “My next approach is going to be to sunset Section 230 liability protection for social media companies.”

If Congress fails to pass legislation regulating social media companies, Graham continued, “it’s time to open up the American courtrooms as a way to protect consumers.”

However, large tech companies are not the only critics of the EARN IT Act. The American Civil Liberties Union on Thursday urged Congress to reject the proposed legislation, alongside two other bills related to digital privacy.

“These bills purport to hold powerful companies accountable for their failure to protect children and other vulnerable communities from dangers on their services when, in reality, increasing censorship and weakening encryption would not only be ineffective at solving these concerns, it would in fact exacerbate them,” said Cody Venzke, ACLU senior policy counsel.

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