Informationoverlord

“So fuck the FCC / Fuck the FBI /Fuck the CIA / Livin in the motherfuckin USA” - Steve Earle – F the CC

The U.S. Court of Appeals for the 2nd Circuit in New York has ruled that the U.S. Federal Communications Commission’s (FCC) indecency policy is unconstitutionally vague and could create a chilling effect beyond “fleeting expletives” heard on broadcasts.

The case deals with an appeal by Fox (and several other broadcasters) against the FCC’s expansion of its rules – made in March 2004 - to deal with obscenity and indecency in Television (and the special addition of profanity as a separate category of proscribed speech under the law)

The same court, in 2005, ruled by 2-1 that that “the FCC’s new policy regarding “fleeting expletives” represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry. We further find that the FCC has failed to articulate a reasoned basis for this change in policy. Accordingly, we hold that the FCC’s new policy regarding “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act. The petition for review is therefore granted, the order of the FCC is vacated, and the matter is remanded to the Commission for further proceedings consistent with this opinion”.

At that time the Court first pointed to the Supreme Court decision in Pacifica (1978) that the FCC could, consistent with the first amendment’s right to free speech, regulate indecent material, but emphasised the limited nature of the ruling saying it did not ’speak to cases involving the isolated use of a potentially offensive word in the course of a [radio] broadcast ‘

When the FCC reversed its initial decision not to sanction NBC for the broadcast of Bono saying “really fucking brilliant” at the 2003 Golden Globes the Commission it moved away from this position stating: “While prior Commission and staff have indicated that isolated or fleeting broadcasts of the “F-Word” such as that here are not indecent or would not be acted upon, consistent with our decision today we concluded that any such interpretation is no longer good law”

The 2nd Circuit argued ruled the FCC had failed to show why this was no longer good law and what had changed to warrant this new position on ’single’ fleeting expletives. The case was appealed to the Supreme Court who reversed this decision by a 5-4 margin stating that: “None of the Second Circuit’s grounds for finding the FCC’s action arbitrary and capricious is valid.
First, the FCC did not need empirical evidence proving that fleeting expletives constitute harmful “first blows” to children; it suffices to know that children mimic behaviour they observe. Second, the court of appeals’ finding that fidelity to the FCC’s “first blow” theory would require a categorical ban on all broadcasts of expletives is not responsive to the actual policy under review since the FCC has always evaluated the patent offensiveness of words and statements in relation to the context in which they were broadcast. The FCC’s decision to retain some discretion in less egregious cases does not invalidate its regulation of the broadcasts under review. Third, the FCC’s prediction that a per se exemption for fleeting expletives would lead to their increased use merits deference and makes entire sense.”

The Supreme Court however, refused to rule on the constitutionality of the rules, absent a ruling on that subject by the Second Circuit, so sent the case back to New York for examination of the constitutional issues. The 3 Judge panel has now done so an unanimously concluded “We now hold that the FCC’s policy violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here”.

What is an unconstitutionally vague law/rule? According to US law something is impermissibly vague if it does not “give a person of ordinary intelligence a reasonable opportunity to know what is prohibited” In this case the broadcaster argued the FCC’s indecency test was not one that made clear what was prohibited. They pointed to the Supreme Court’s decision to cut down the Communications Decency Act in Reno v ACLU where the law was found unconstitutionally vague with its use of general undefined terms such as ‘indecent’ and ‘patently offensive’, must also apply here where the identically used terms are applied.

The Court found there was additional guidance that meant the Reno decision in and of itself didn’t mean they should find against the FCC. However it did find the indecency policy impermissibly vague, pointing out that according the FCC ‘Bullshit’ – as used in an episode of NYPD Blue is indecent because it is ‘vulgar, graphic and explicit’, but ‘dickhead’ was not indecent because it was ‘not sufficiently vulgar, explicit, or graphic.’ No explanation is provided as to why, for example multiple occurrences of variants of the word ‘Fuck’ are not indecent and profane in Saving Private Ryan, but were in musical documentary The Blues.

The Court summed its vagueness argument by pointing to the FCC’s own lawyer during oral arguments whose answer to a question on whether a discussion programme dealing with the dangers of pre-matital sex aimed at teenagers would be permitted under the FCC rules replied ‘I suspect it would’. It followed this observation by listing programmes that had not been broadcast or rebroadcast and scripts that had been changed in fear of failing foul of the FCC rules.

The court concluded: ” the absence of reliable guidance in the FCC’s standards chills a vast amount of protected speech dealing with some of the most important and universal themes in art and literature. Sex and the magnetic power of sexual attraction are surely among the most predominant themes in the study of humanity since the Trojan War. The digestive system and excretion are also important areas of human attention. By prohibiting all “patently offensive” references to sex, sexual organs, and excretion without giving adequate guidance as to what “patently offensive” means, the FCC effectively chills speech, because broadcasters have no way of knowing what the FCC will find offensive. To place any discussion of these vast topics at the broadcaster’s peril has the effect of promoting wide self-censorship of valuable material which should be completely protected under the First Amendment.”

The FCC can appeal the ruling to either the full court of the 2nd Circuit or take the case back to the Supreme Court. It could also just choose the rewrite its indecency rules, and then – in all likihood – end up starting this process again with new challenges to its constitutionality. I feel it is unlikely to do the latter until a decision is handed down in a loosely related case being played out in the 3rd Circuit court in Philadelphia over the infamous 2004 Super Bowl halftime show, in which CBS broadcast the ‘wardrobe malfunction’ which saw one of Janet Jackson’s breasts was exposed for about half a millisecond. An appeal to the full 2nd Circuit and/or Supreme Court seems more likely, although in both cases I think the broadcasters will succeed.

Congratulations must go out today to the big TV programme and film producers who actually managed with the help of our terrestrial broadcasters in convincing Ofcom that unless they agreed to a BBC proposal to amend to its digital multiplex licence (Multiplex B), to allow the BBC to restrict the availability of programme listing information for HDTV services only to digital receivers (digi-boxes) that implement content management technology, that they would stop some or all of their content being broadcast in HD over the platform.

[For more details of the argument, I first wrote about this here ]

For digi-box/receiver manufactures what this means it that they will now all have to sign licensing deals with the BBC to gain access to Huffman Code look-up tables, for their boxes to be able to ’see’ the HD content. These rules will also apply to the other digital multiplex licences (C and D)

One of Ofcom’s central duties is to further the needs of citizens/consumers. In this instance Ofcom claim this “will deliver net benefits to citizens and consumers by ensuring they have access to the widest possible range of HD television content on DTT.” Why? Well because they bought the idea that the producers of content would really pull programming from HD channels without this. Had Ofcom bothered to look across the pond to the US and looked at what happened when the US tackled this same issue – Broadcast Flag – they would have seen that there was NO way that the content producers would have gone though with their threat.

In the US they lost the argument and nothing changed. Had Ofcom had the balls to do what it is supposed to do and actually put the interests of the consumer first, NOTHING would have changed. Ofcom disagrees:

“Whilst some stakeholder responses asserted that, even if Ofcom were to refuse the BBC’s proposal, rights holders would continue to supply HD content on the same terms as they would if the proposal were approved, the information provided by broadcasters does not support this view.”

Ofcom says it saw evidence from the broadcaster that rights holders in contract negotiations had been holding back content: ” we consider that the evidence put forward by broadcasters does provide material and credible evidence that the lack of an effective content management framework on the HD DTT platform is currently resulting in a reduction of the range of HD content available and is a material factor for ongoing and future content rights negotiations.”

Call me a cynic , but if I knew that a regulator was weighing up whether to introduce some form of DRM, wouldn’t you instruct your negotiating teams to threaten the holding back of content unless it went through – KNOWING that the broadcasters would have to give this EVIDENCE to Ofcom? This is basic ‘head slap’ logic.

The result: “We have therefore concluded that it is likely that content would be withheld from the HD DTT platform in the absence of the introduction of content management.”
Hook, Line and Sinker. Well done Ofcom, and well done the (mostly US) TV and Film Industry.

Ofcom’s Statement

I was amused as always reading the latest Ofcom Broadcast Bulletin when they were describing the latest code breaches by Bang Babes channel, Tease Me.

This broadcast featured a presenter wearing fishnet tights and a skimpy all in one“body” with a g-string back. Her breasts were exposed but with black plasters over her nipples. At various times during the broadcast the presenter adopted sexual positions, including lying on her back with her legs wide open to camera and kneeling on all fours bending over with her buttocks close to camera. While in these positions the presenter repeatedly carried out a number of sexually provocative actions

Why was it when I read this the only thing I could think of was this …

I found this delightful animated promo for Vinyl a Spring Seasonal beer brewed by Vermont’s Magic Hat Brewery online today (Via LaughingSquid) and found myself thinking about whether or not they could run this as an ad on UK TV. One of those questions I’m sure you all think of when you see things like this. NO? Just me then. I Love the name of the beer and the whole tone of the ad.

It would potentially run into problems in the UK however under the TV and Radio Advertising Standards Codes (BCAP Codes). Section 11.8.2(a) , which deal with alcohol ads, states that ” Advertisements for alcoholic drinks must not be likely to appeal strongly to people under 18, in particular by reflecting or being associated with youth culture.”

With regulators erring on side of caution I would not be surprised to see them finding that the combined use of a child’s record player and toy fairies in this promo as being caught by their ‘ be likely to appeal strongly to people under 18′ rule.

As for me, I just want to try the beer.

“The BBC’s new strategy proposals, which are the subject of a public consultation, include the proposed closure of two of the BBC’s digital-only radio stations: 6 Music and the Asian Network. This proposal sends a negative signal to consumers about the BBC’s commitment to digital radio—and the direction of travel on digital radio in the UK—and weakens the already limited case for listeners to invest in digital equipment.” From Lords committee report on digital TV/radio switchover.�

I see the Newspaper Publishers Association (NPA) has started moaning to the BBC Trust (and plans to also moan to the DCMS) about the Beeb’s plans to launch phone apps for its news and sport content later this year. The reason? It would “damage the nascent market” for news apps.

Really? I’m not buying that as an argument.

I used buying to describe this as I suspect that is the real reason for the NPA’s objection. Whilst the Newspapers look to erect pay walls for their content they don’t want the Beeb coming in and offering theirs for free on yet another platform. They’re already the elephant in the room as far as charging for online news goes as it is. If the apps and or content are remaining free then i don’t see what the argument is. Money can be the only reason.

I look at the BBC site daily from my iPhone. I don’t need an app, although one that improved the experience would certainly be nice to have, I don’t deny. However, I also look daily at content from my Guardian and Daily Telegraph apps (I ditched the Independent’s one because it is such a crap app that it was a waste of time to use - and I say this as someone who actually buys the Indy every week day in good old fashioned hard copy).

It is not an either or option for me (as least not until I’m being asked to pay for access) and nor is it likely to be for most other people - unless they already don’t engage it the news, and for them the absense of a BBC news app wont make them any more likely to start using the Telegraph app or the Daily Mail app.

The NPA and its members - like those in commercial radio and TV - should spend less time moaning insesently about the BBC (yes, sometimes it does step over the line) and more time working on offering compelling alternatives. I sometime think if it didn’t already exist the likes of the NPA would have to create the BBC just to give themselves someone to moan about.

Ofcom is consulting on a request by the BBC to amend to its digital multiplex licence (Multiplex B), to allow the BBC to restrict the availability of programme listing information for HDTV services only to digital receivers (digi-boxes) that implement content management technology.

The BBC first punted this idea back in September 2009 and was sent packing by Ofcom who told it – following a lot on negative response from a first consultation – that it needed more information about why this would be good for consumers if it were to stand any chance of approval.

It seems to have worked.

Ofcom states that it is now minded to approve the request finding that content management is a justified objective and that the ability to restrict the availability of EPG data to receivers which implement content management, represents the most appropriate means for securing the benefits of a wider range of HD content for citizens and consumers. The proposals also call licence holders for Multiplexes C and D, which carry a similar requirement to Multiplex B to provide EPG data in an open format, be also granted a similar licence amendment to allow EPG data to be broadcast in a closed format.

Before allowing the BBC to broadcast EPG data in a closed format under a licence amendment, Ofcom would require that the BBC implements: commitments to establishing an “appeals” process whereby viewers who believe their lawful usage is being impinged by the BBC’s use of content management can raise their concerns to the BBC; to work with the other public service broadcasters to create a ‘user friendly’ consumer guide to content management; to facilitate discussions between broadcasters, manufacturers, relevant industry bodies and consumer groups to develop and implement a good practice framework for the use of content management on the HD Freeview platform; and to give an undertaking that it will respect current usage protections under copyright law and any future extension of these protections, such as those recommended by the Gower’s Review of Intellectual Property – such as format shifting.

So what would this mean in practice?

Under the BBC’s proposals, broadcasters would be allowed to allocate one of three content management states to individual HD programmes:

Unrestricted copy: the digital receiver output is unencrypted and unrestricted copies of HD content can be made onto any digital device. There are no restrictions imposed on internet distribution.

Multiple copy: the digital receiver output is encrypted and unrestricted copies of the content can be made onto digital devices that are compatible with the copy management technology. Internet distribution is not permitted.

Managed copy: the digital receiver output is encrypted and only one copy of the content can be made onto a DVR and one external digital device which is compatible with the copy management technology. Internet distribution is not permitted

In all three content management states:

Ofcom’s current intention is also to make a requirement of the BBC being able to broadcast EPG data in a closed format under a licence amendment, that the free to air HD broadcasters on Multiplex B must only apply the minimum level of content management needed to secure content from rights holders.

This sounds good , but if the minimum level of content management that all broadcaster demand is ‘Managed Copy’ then that will be the minimum level of content management needed to secure content from rights holders – so, this is a fairly worthless statement.

Ofcom is clear that that content management cannot be applied to Standard Definition (SD) content, or HD content that has been converted down to SD, and that no restrictions are placed on the recording of HD content onto an DVR which is integrated with a receiver.

For digi-box/receiver manufactures what this means it that they would have to sign licensing deals with the BBC to gain access to Huffman Code look-up tables, to be able to ’see’ the HD content. This will be licensed on a royalty-free basis and on fair, reasonable and non-discriminatory (FRND) terms to any party who undertakes to comply with the content management standards agreed and specified by the Digital TV Group (DTG), and the BBC will be only be able to require content management technologies in receivers that form part of the DTG specification

Why the whole idea should be binned.

It’s all about piracy, right? Just as it was when DRM was stuck on CDs - and that worked SO well. Rights holders don’t want their HD content appearing online (unless they put it there of course) hence why ‘Internet distribution is not permitted.’ In the only option above that rights holder would choose. Very nice. The reality is that if someone want to put your content online on a bit-torrent site they will, and it only takes one person to do it. What this proposal does is wastes time and money for no net benefit to the consumer – nor in reality the rights holder – all for the sake of what exactly?

Also, when you look at, for example the Multiple Copy and Managed Copy options what is are “digital devices that are compatible with the copy management technology” ? Is a blank DVD covered by this? Is an iPod? Or are we, as I suspect, just going to do things that piss off the consumer?

The Rights Holders may say, look most people just want to record something and maybe watch in on a mobile digital device or burn a copy to disc – we’re not going to stop them doing that (although I’m sure they want to stop you doing either of these things), but if they say this – which could fit the description of ‘Managed Copy’ – the questions would be, well, they can already do that now. If that’s what the average person is going to do, then you don’t need any of this DRM in place at all. If instead you’re after the few who will burn off and sell or upload to the internet and share, then they’re going to do that whether or not your output is encrypted or not.

DRM applied in this way is, as it has been every time it has been applied, is a means of saying ‘we are going to treat you all like you’re potential criminals. …because that’s how we like to think of your our valued customers.’ This proposal is merely the latest example of it.

Sadly it is now a done deal. Once Ofcom is ‘minded’ it means it has ‘decided’.

The Lawyers for the US Federal Communications Commission (FCC) got a rough ride this week as they returned to the Second Circuit Federal appeals court to argue, once again that their rules to deal with obscenity and indecency in Television and in particular the use of ‘fleeting expletives’ should stand.

The case deals with an appeal by Fox (and several other broadcasters) against the FCC’s expansion of its rules – made in March 2004 - to deal with obscenity and indecency in Television (and the special addition of profanity as a separate category of proscribed speech under the law)

In June 2005, the same court ruled by 2-1 that that “the FCC’s new policy regarding “fleeting expletives” represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry. We further find that the FCC has failed to articulate a reasoned basis for this change in policy. Accordingly, we hold that the FCC’s new policy regarding “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act. The petition for review is therefore granted, the order of the FCC is vacated, and the matter is remanded to the Commission for further proceedings consistent with this opinion”.

At that time the Court first pointed to the Supreme Court decision in Pacifica (1978) that the FCC could, consistent with the first amendment’s right to free speech, regulate indecent material, but emphasised the limited nature of the ruling saying it did not ’speak to cases involving the isolated use of a potentially offensive word in the course of a [radio] broadcast ‘

When the FCC reversed its initial decision not to sanction NBC for the broadcast of Bono saying “really fucking brilliant” at the 2003 Golden Globes the Commission it moved away from this position stating: “While prior Commission and staff have indicated that isolated or fleeting broadcasts of the “F-Word” such as that here are not indecent or would not be acted upon, consistent with our decision today we concluded that any such interpretation is no longer good law”

According to the court the FCC has failed to show what has changed to warrant their change in position. The FCC claims they are still following Pacifica, but the court found that there was no question that the FCC had changed its policy regarding the treatment of ‘fleeting expletives’ and that it had done so without providing reasoned opinion for doing so. The Court says it cannot find any reasoning why a single expletive now fits within the Commission’s ‘indecency test’ and that the Commission decision is devoid of any evidence that suggests a fleeting expletive is harmful, let alone establishing that it is harmful enough to warrant government regulation.

The Court also rejected the FCC position that even non-literal uses of expletives fall within its indecency definition because it is “difficult (if not impossible) to distinguish whether a word is being used as an expletive or as a literal description of sexual or excretory functions.” According to the court Bono’s exclamation that his victory at the Golden Globe Awards was “really, really fucking brilliant” is a prime example of a non-literal use of the “F-Word” that has no sexual connotation.

The FCC’s order also introduced a new approach to profanity - introducing a new definition (at odds with traditional understanding of the meaning of profanity) - and again failed to provide evidence as to why a separate ban on profanity is necessary.

The U.S. Supreme Court reversed this decision by a 5-4 margin stating that: “None of the Second Circuit’s grounds for finding the FCC’s action arbitrary and capricious is valid. First, the FCC did not need empirical evidence proving that fleeting expletives constitute harmful “first blows” to children; it suffices to know that children mimic behavior they observe. Second, the court of appeals’ finding that fidelity to the FCC’s “first blow” theory would require a categorical ban on all broadcasts of expletives is not responsive to the actual policy under review since the FCC has always evaluated the patent offensiveness of words and statements in relation to the context in which they were broadcast. The FCC’s decision to retain some discretion in less egregious cases does not invalidate its regulation of the broadcasts under review. Third, the FCC’s prediction that a per se exemption for fleeting expletives would lead to their increased use merits deference and makes entire sense.”

The Supremes however, refused to rule on the constitutionality of the rules, absent a ruling on that subject by the Second Circuit, so sent the case back to New York for examination of the constitutional issues.

Judges Rosemary Pooler, Pierre Level and Peter Hall the same three judges that heard the case the first time around at the second Circuit all seemed pretty clear during oral arguments which side of the argument they were on, and few in the courtroom expect anything other than a unanimous ruling that the FCC rules are unconstitutionally vague.

When an FCC lawyer argued that the FCC’s policy was designed to “protect children” and that ratings and scheduling were ineffective in doing so, one judge, Pierre Leval – the one judge who had sided with the FCC in the first round of this case - asked, “What are you protecting children from?” A point followed up by Judge Hall who asked how the FCC could justify this stance whilst at the same time admitting it had a different rule for news programming, and Judge Pooler who questioned whether or not the first amendment allowed the FCC scope to –in their own words - “bend over backwards” to respect the sanctity of news and editorial judgment.

Hall, getting to the crux of the issue asked “How do the children figure this out? They are still hearing the same words.”

The Judges were also less than reassured by the FCC lawyers of just what would be allowable on TV. Judge Leval asked if he, as a broadcaster, could run a show about preserving virginity until marriage that included explicit references to sex, and was less than reassured by the response from the FCC’s lawyer of “I suspect you can,” leading Judge Pooler to intervene, commenting “You know what a good lawyer will say — ‘When in doubt, don’t run it.’ That’s the chill.”

It looks like the Supreme Court could be seeing this case again very soon – if they decide to take it – and I would expect this time they will side with the Second circuit and hand victory, rightly, in my view, to the broadcasters.

January is the time of year where you are meant to look ahead to what is in store during the coming year. So here’s my look back/ahead.

IT/Internet
Copyright

‘3 Strikes’ permeates across Europe
In a move to combat internet piracy, several countries have adopted or proposed laws that would involved cutting off internet access to ‘alleged’ illegal p2p filesharers. South Korea became the first country to implement a three-strikes law, closely followed by Taiwan. France adopted the ‘Hadopi law’ in September, although it has yet to become law, with the French data protection agency currently holding up to act, over concerns at how the punishment procedure of the Hadopi law would work in practice. Both the New Zealand and UK governments have put forward proposals ( The Digital Economy Bill in the UK) which would possibly result in ‘3 strikes’ rules.

Meanwhile Singapore, Germany and Spain are amongst the countries that have said they will not cut off subscribers. Spain’s proposed law – passed by the cabinet - would target websites accused of facilitating piracy. First warning letters would be sent, then an appearance before a panel of experts, who would decide whether to then refer the case to a judge, who would then have to power to order the closure of the site.

New European rules, which need to be implemented by all Member States by June 2011, included Article 1(3)a of the new Better Regulation Directive (Directive 2009/140/EC ) – the argument over the wording of which almost scuppered the whole Telecoms Package – which states that any measures to restrict the fundamental rights or freedoms of citizens may only be imposed if they are appropriate, proportionate and necessary within a democratic society, and their implementation shall be subject to adequate procedural safeguards…including effective judicial review and due process. A prior fair and impartial procedure and an effective and timely judicial review shall be guaranteed.

As more countries adopt ‘3 Strikes rules’ I would expect to see laws challenged under this article. In the debates on the Digital economy Bill in the UK, several Lords have already questioned whether the current drafting language of the UK’s bill would stand up to a legal challenge under the directive.

Broadband
Operators will be pressing ahead with were either rolling out or trialing superfast broadband of up to 100Mbps and more in Europe. This will be key for many operators as Value Added Services become the name of the game in attracting customer and reducing churn. According to a report from Informa – Beyond Triple Play: Value added services for broadband operators – Music subscriptions, online storage, home monitoring and games subscriptions were the most attractive value added services operators could offer. These were the most highly valued by consumers and the potential revenue to operators and the effect they could have on decreasing churn was highlighted. Orange (France) Telia (Sweden), SKT (Korea) Telfonica (Spain),TDC (Denmark) DT (Germany) and Virgin Media (UK) were amongst those identified as pursuing a broad service range. Booz & Company also identified VAS as one of the five distinct shifts they saw effecting the Telecoms industry in 2010.

Online Music
Make or break year for the likes of Spotify and Mog who both launched free/subscription based music streaming services in 2009. It will be a question of how long the big labels will stick with them before bailing out. To be fair to the labels they are at long last realising that they have to be more daring if they want to combat illegal filesharing by offering a real variety of alternatives, but I still would not be surprised to see Spotify or Mog ultimately fail. The Biggest threat to all of these online music services will likely come from telcos/cable operators bundling music download and streaming packages into their TV/Broadband/Phone offerings. BskB has launched such a service in the UK and Virgin Media is due to do the same (although due to Record company cold feet, it looks like this will not be the game changing ‘all you can eat’ service that it might have been).

Tablet Computers
Can Apple make the Tablet a must have? No. A must want perhaps, but a must have? I just don’t see it. For starters, it will be Apple priced. But it will be a Kindle Killer some say. Maybe, but: it will be Apple priced. To use it as your main computer, you’ll need a real keyboard and mouse to use with it in the home/office where pissing about using a virtual keyboard not only gets boring but doing so on the tablet is ergonomically unsound and screws your back in. [obviously should anyone from Apple want to sent me one to try out, I’ll be more than happy to let you try and convert me to its merits]

Telecoms

As mentioned above, Booz & Company five distinct shifts they saw effecting the Telecoms industry in 2010.
1. Growth Shifts to the East and South -Much of the growth in the telecom industry will shift from mature Western markets toward developing countries.
2. Focus Shifts to Value-Added Services – Much of the telecom world is being rapidly commoditized—from connectivity and basic services to low-end handsets, to networking equipment to the networks themselves—prompting virtually every player in the sector to seek out new sources of value. The clear solution: services.
3. The Digital Generation Sets New Expectations - As rivals in the telecom sector battle to move up the value chain, the world is quickly moving toward an ‘all digital, all the time’ model.
4. Operational Efficiency Becomes Even More Critical - The commoditization of large swaths of the telecom value chain is forcing every player in the industry to create the most efficient operations they possibly can— outsourcing non-core functions such as engineering and network and field services operations, even spinning off entire passive infrastructures that are no longer central to creating real value, and completely overhauling their business processes.
5. Regulators Take a Renewed Interest in the Sector - As telecom players move to add more services that require faster networks, many policymakers and regulators around the world are moving to support these efforts. No longer does the ideology of the free market hold complete sway over regulatory thinking. Instead, regulators are becoming more prescriptive and more interventionist as they look to support economic growth through large-scale broadband network deployment—in some cases even engaging directly in such investments.

Convergence and Consolidation
Started to happen in 2009, and likely to increase in 2010. In the UK, for example, Carphone Warehouse’s purchase of Tiscali UK, and the merger between Orange and T-Mobile’s UK businesses. If the latter merger is cleared some commentators expect ‘3′ to once again become a potential target for whether 02, Vodafone or even BT. Elsewhere, Deutsche Telekom has said it is seeking further partnerships and investment opportunities under a new strategy to address the growing convergence between TV, the Internet, and mobile service segments; Portugal Telecom (PT) is targeting overseas growth in its Brazilian markets and is looking at investing in further mobile operators in sub-Saharan Africa, including Mozambique; Belgacom CEO Didier Bellens said the operator plans to develop new technology and expand overseas. It sees opportunities in the former Soviet region, including Uzbekistan and Kazakhstan; Turkcell, is seeking investment in North Africa and Middle East region, where it does not have a strong presence.

There are also a number of IPO/Licensing opportunities in 2010

Australia: SingTel is considering selling a minority stake in its Australian unit Optus through an initial public offering (IPO) in Australia during 2010.
Azerbaijan: Fixed-line incumbent Aztelecom and regional operator Baku City Telephone Network (BGTS) are both likely to be privitised.
Bangladesh: The Bangladesh Telecommunications and Regulatory Commission (BTRC) has announced that 3G mobile licences will be auctioned this year.
Colombia: The Information and Communications (ICT) Ministry is preparing to award up to three new mobile telecommunications licences in 2010
Costa Rica: The Costa Rican regulator plans to award three new mobile concessions during the first quarter of 2010.
Côte d’Ivoire: The l’Agence des Télécommunications de Côte d’Ivoire (ATCI), plans to issue two 3G licences in 2010.
Czech Republic: The Czech regulator CTU intends to issue the fourth 3G licence in the course of 2010.
Denmark: TDC may be planning an IPO in 2010.
Egypt: Orascom Telecom Holding is seeking a partner to merge with in 2010/2011 , with small/medium sized operators in emerging markets or in Europe favoured.
India: The country will auction 3G licences this year (following many delays in 2009, mainly due to spectrum ownership)
Kosovo: Ministry for Economy and Finance plans to privatise incumbent operator, PTK, in 2010.
Libya: The Libyan government has announced plans to sell stakes in both its mobile operators—al-Madar and Libyana—through an IPO.
Pakistan: The country could eventually offer 3G licences during 2010.
Poland: Poland’s fourth-largest mobile carrier Play may be sold in 2010, whilst number one mobile operator, Polkomtel, is considering an IPO.
Serbia: The telecoms regulator RATEL, plans to award the country’s second fixed telephony licence early 2010.
UK: Cable & Wireless will demerge its businesses fully by the end of March 2010 . The operator has operationally split its two distinct business units into a Worldwide unit and a CWI international operator, as it forges ahead with the separate listing of the two operations on the stock exchange.

Nokia v Apple v Google
Whilst Nokia is still the biggest handset vendor (in market share) in the world, the end of 2009 saw Apple (through the iPhone) overtake Nokia to become the most profitable handset vendor. Nokia is expected to put a lot of effort into the US market in 2010, with Strategy Analytics believing that “a successful fight on Apple’s high-profit home turf can simultaneously help to revitalize Nokia’s margins and to put a check on Apple’s surging growth.”

Nokia and Apple swapped patent suits during 2009, with Nokia accusing Apple of infringing 10 Nokia patents for technologies such as wireless data, speech coding and security. Apple hit back accusing Nokia of infringing 13 its patents including graphical interfaces, teleconferencing, power conservation and touch screen technologies. Expect the hostilities to continue through 2010.

Nokia is also facing competition in the mobile operating system market where its Symbian system has for a long time been market leader, from Google’s Android operating system. Google’s move to launch their own branded handset, as Apple did with the iPhone, will also likely impact on both Apple’s and Nokia’s finances during 2010.

Media
Video on Demand
This year will see the UK version of Hulu and Arqiva’s SeeSaw do battle in the UK market. SeeSaw is built on the ‘Project Kangaroo’ technology platform that Arqiva bought from BBC Worldwide, ITV and Channel 4 following a Competition Commission decision to block the project claiming it would reduce competition and harm consumers. Those involved and many politicians criticized the decision saying instead of ensuring and financial benefits of the service stayed in the UK, it handed potential profits to the likes of Hulu. For example outgoing ITV head, Michael Grade said “”As a result of the Competition Commission turning down the decision to launch Project Kangaroo, I guarantee an American company will take the lion’s share of our content in the UK very soon…Google or Hulu. Hulu is looking to launch in the UK. As a result of the commission’s decision, UK creative money will go to the Americans and not get reinvested in the UK.”

As Grade mentioned, YouTube will also feature in this shake up having already secured its first long-form on-demand UK TV content with Channel 4.

I totally agree with Grade and others on this. Whilst it is hard to argue that the Competition Commission decision was flawed on legal grounds, the end result for the creative industries in the UK– which the government claims to care so much about – is potentially devastating.

Sports Broadcasting Rights
All eyes will be on the European as the Court of Justice it hands down an opinion in the Pubcasting case (The Football Association Premier League Ltd v QC Leisure and others / Karen Murphy v Media Protection Services Limited) – C-403/08 & C-429/08 - It looks at whether licence agreement provisions restricting foreign broadcasters from selling decoders, etc., for use outside their territory, is an illegal restriction of competition contrary to Article 81 of the EC Treaty, and also seeks guidance on the meaning of the expression “illicit device”.
This case could have a huge impact on the whole issue of copyright for broadcasts, and the idea that rights may be licensed to exclusive licensees in particular member states (for considerable sums) As the licensing methods under consideration in this case are also employed in other forms of sports broadcasting, the outcome will be closely awaited, given its potential to impact the industry’s approach to these issues.

YouTube Copyright Case
Both Viacom and Google have now asked a federal court for summary judgment in their copyright infringement case: Google says it doesn’t knowingly store or play copyrighted clips on the site, and if it does, it is protected by the Digital Millennium Copyright Act. Google also cites last year’s ruling in the Veoh/Universal Music Group case, in which a court ruled in favour of the Youtube. Viacom reiterates its initial argument, which is that Google and YouTube knew what they were doing and profited from it, which means the DMCA does not protect them.

Google should be feeling confident in this case, although one suspects that this case has a few more years in it yet.

Social Media
There’s an App for that. Yes, as we all get more mobile it has now become essential for your website/service to have an App (iPhone/Android/Symbian) people – myself included - now take whether or not there is an app to allow seamless access via mobile online into account before signing up for/using online services. (Yes, Shelfari, Library Thing etc this is why I don’t use you anymore)

Facebook Phone?
Google Buys Twitter?
Google Buys Evernote?
Nokia Buys Evernote?

“…there’s something about being ticketed… and numbered that gives the man the feeling of being a piece of baggage or a convict. One can’t help thinking wistfully of our father’s day, when the world hadn’t grown so small. But one could move about in it without being watched so closely. Nowadays, we’re treated like demented or delinquent children. And the eyes are always on us.”

As we roll into 2010 and face another year of the slow creep of the Surveillance state (don’t forget if you’re in Manchester you can run out and get one of those nice ID Cards to prove who you are, and go on the government’s nice database) I was lucky enough over the Christmas period to watch a few episodes of the Orson Welles Sketchbook. The one that came as the biggest surprise, dates from 1955, and had Welles talking about Officialdom, and its infringement on our privacy.

Welles would no doubt have been interested in a situation where – in the UK – we allegedly have around 20% of the world’s CCTV cameras watching 1% of the world’s population; where a government wants to take DNA of all the population – just in case you ever commit a crime; where the government wants to create an ID database – with associated ID card – containing lots of information that has little or nothing to do with identifying who you are; and where the Police feel it’s their job to stop people taking photographs of them, buildings, and indeed just about anything else. We keep being told we live in a different world now and that means that the State and Officialdom are therefore no longer there to serve us, but to control us for our own safety. It’s funny that 45 years ago Welles hit the nail on the head when he said of the Police:

” I’m willing to admit that the policeman has a difficult job, a very hard job, but it’s the essence of our society that the policeman’s job should be hard. He’s there to protect, protect the free citizen, not to chase criminals, that’s an incidental part of his job. The free citizen is always more of a nuisance to the policeman that the criminal. He knows what to do about the criminal.”

Orson’s solution was to have an ID card – government rejoice – but not in the way the government envision it – government still rejoice and still try and spin it. He called for the creation of big international organization for the protection of the individual, to be called “I.S..[sic].P.I.A.O. That would be the International Association for the Protection of the Individual Against Officialdom.”

” The card itself should look rather like a union card, I should think, a card of an automobile club. And since its purpose is to impress and control officialdom, well, obviously, it should be as official looking as possible. With a lot of seals and things like that on it. And it might read something as follows:

This is to certify that the bearer is a member of the human race. All relevant information is to be found in his passport. And except when there is good reason for suspecting him of some crime, he will refuse to submit to police interrogation, on the grounds that any such interrogation is an intolerable nuisance. And life being as short as it is, a waste of time. Any infringement on his privacy, or interference with his liberty, any assault, however petty, against his dignity as a human being, will be rigorously prosecuted by the undersigned, I.S.[sic].P.I.A.O. That would be the International Association for the Protection of the Individual Against Officialdom. ”

Clever man that Orson Welles.