Can Rivada succeed where the U.S. government has failed?

Posted on by Roger Entner

President Trump’s re-election campaign recently spun the wireless industry into turmoil again. Kayleigh McEnany, national press secretary for President Trump’s 2020 reelection campaign, told Politico that “A 5G wholesale market would drive down costs and provide access to millions of Americans who are currently underserved. This is in line with President Trump’s agenda to benefit all Americans, regardless of geography.”

This new message comes after months of private comments by Trump 2020 campaign manager Brad Parscale and adviser Newt Gingrich that promoted a different plan for 5G, one that would have the federal government seize 5G spectrum from the Pentagon and give it to a private company to manage and lease to other, private companies for use. Enter Rivada, a company headed by Declan Ganley and backed by political heavyweight Karl Rove and venture capitalist Peter Thiel.

As the rumors about Rivada being “given” commandeered spectrum to manage a 5G network swirled, shares in Intelsat took a dive from $23.55 on Friday, March 1, 2019 to $17.76 on Tuesday, March 5, a 25% drop in just two trading days, shaving off $700 million in market cap. This reflects how concerned Wall Street is about the specter of a government-sponsored national 5G wholesale network.

Robert Spalding, a retired brigadier general and author of the now-infamous National Security Council memo suggesting the government create a government-controlled national 5G network, has not backed off his idea despite the swift and negative reactions the idea has spawned. Spalding reiterated in an interview discussing the potential Rivada 5G wholesale network that he still saw merits in a nationwide wholesale network. This was followed by an opinion piece by Kevin Werbach in The New York Times who advocated for a national wholesale network, arguing that it would magically reduce consumers’ mobile bills.

Oddly, Werbach advocates breaking the “wireless oligopoly” by replacing it with a monopoly. Mr Werbach concedes that there have been notable failures of government-controlled communications networks like Australia’s open access fiber network, but suggests that in the U.S. it will be a success with “careful oversight and a long-term commitment by the government.” This is a dog whistle for economic regulation at best and nationalization at worst.

This entire debate is happening against the backdrop of robust and methodical 5G build-out in the U.S. American mobile operators have already started building 5G networks, having engaged in the standards-setting process to make it a reality for years. Some operators are already up and running and in dozens of cities we will have mmWave 5G networks in only a few months. By the end of the year, wireless operators will use some of their existing wireless spectrum for 5G as well, which means we’ll have nationwide 5G networks by the end of the year, with larger and larger ultra-high speed areas in even more places. How can a state-sponsored 5G wholesale provider catch up to this reality when they are at least two years behind in building out the infrastructure, and their prospective customers all have their own networks?

When I take a step back and look at the entire hoopla, it appears to me that it is a solution that is looking for a problem. Rivada is looking for a business and its investors are looking for a payoff. In 2016, Rivada applied to become the wholesale broadband provider for Mexico’s Red Compartida, but was disqualified from bidding after failing to post a bid bond. In 2017, Rivada tried to become the nationwide FirstNet provider but lost out to a competing bid from an existing carrier. In both cases, Rivada sued the respective governments without success.

Each state in the United States had the choice to opt in or out of using FirstNet or pursue their own first responder network. Initially, New Hampshire chose Rivada to run its first responder network, but with hours left to make the decision, New Hampshire changed its mind and chose FirstNet. The push for a nationwide 5G wholesale network is Rivada’s third (or fourth) try to convince a government to give it spectrum for free. You can’t blame Rivada for a lack of trying, but just because Rivada is trying to make a buck does not mean its idea makes business sense, or is something the U.S. government should adopt at the expense of depriving existing 5G efforts of more spectrum.

Instead, like it has in the past, the U.S. should invest in its winning strategy of clearing more spectrum for commercial deployment, expedite the siting of 5G infrastructure, and allocate spectrum based on sound analysis of which companies are best positioned to use the critical input as efficiently and quickly as possible.

Are there Alternatives to Featured Apps?

Posted on by Roger Entner

Mobile Operating System (OS) providers like Google and Apple and device manufacturers like Samsung aren’t the only ones who can stick apps on the homepage of your mobile device. Others can too if the device manufacturer or OS provider plays ball. Some consumers find it helpful to have another app at their disposal, others call it bloatware and try to get rid of it as quickly as they can. At the beginning of May 2018, Verizon’s Oath business and Samsung announced a deal that will put Oath’s Newsroom app, Yahoo Sports, Yahoo Finance and Go90 mobile video apps preloaded on all Verizon flagship Samsung Galaxy S9 and S9+ phones. The deal also provides for native ads which blur the line between content and advertising on Oath’s apps and Samsung’s Galaxy app. In exchange, Verizon’s Oath and Samsung will share advertising revenues.

The Business Driver
With their partnership, Verizon and Samsung are attempting to raise their apps from the black hole that is typical app discovery to the forefront of the customer’s attention. This is similar to Verizon’s brandware program where it offers marketers to place their apps on Android smartphones sold in Verizon retail stores for somewhere between $1 and $2 per device. Why carriers and device manufacturers are pre-installing apps for subscribers is clear, even if their strategy is misguided: It’s additional revenues that are almost pure profit. Especially handset manufacturers are working with razor sharp margins. For app developers it is a much more difficult decision. They have to pay for the pre-loading if the customer uses the app or just deletes it.

The Problem: Ongoing Use and Uniqueness
Successful apps must conquer awareness, device installation, first use, and, finally, regular use. While preloading the Oath apps on Android certainly creates awareness of the app and forces device installation – it does little for first use and absolutely nothing to create sustained use.
More importantly, these apps are also not that unique. Pre-installing the same old types of apps people are familiar with, and likely have replacements for, is not going to help create sustained use. When we look at the different apps that Verizon is pre-downloading on the Galaxy S9 and S9+, it’s a decidedly mixed bag. The inclusion of Go90 in the lineup has been seen by critics as the proof point that all we have is bloatware. Rarely was an app more hyped and publicized than Go90, and rarely did an app flop harder. Yes, the other three apps Yahoo Finance, Yahoo Sports and Oath’s Newsroom are highly rated give access to top publishers and are popular without being preloaded, but it’s a stretch to say that they’re unique. Installing apps that aren’t unique result in what we’ve already seen in media coverage of this announcement: Bloatware.

Preloaded apps on Android smartphone leads you to two possible and not mutually exclusive possibilities: One is that the app discovery process is fundamentally broken and even great apps are not being found by consumers. Neither the Apple App Store nor Google play have an even half-way decent content discovery process. The other is that some app developers have a greater marketing budget than resources to develop a great app. Pushing suboptimal apps to unsuspecting customers is doubling down on a losing proposition. Instead of dying a silent death in obscurity, the apps and their developers get skewered by consumers and the press alike. Not all publicity is good publicity.
But “pre-installs” won’t be bloatware if they provide real value. Take Siri for example – no one complained about Siri being pre-installed. It was unique, cool, and better. No – not everyone uses Siri, but no one would argue that she wasn’t unique and cutting-edge when first pre-installed – and if you still don’t like it you can make it disappear in a folder. The route Samsung is taking with Bixby fits into this mold somewhat, but Bixby has a lot of kinks to work out before we can put it in the same class as Siri.

Better Matters
What continues to surprise me is that companies who have an impact on the customer experience are not trying different routes. If we really believe that better matters, why aren’t they pushing boundaries farther? The goal is to drive ongoing use and consumption of content on mobile devices, and do it in unique ways that consumers might value.

A quick review of what’s happening on Android Phones shows four unique solutions carriers and OEMs should investigate:
• Lock Screen Solutions replace default lock screen experience with content/ads (e.g., Unlockd, start by Celltick)
• Launchers permanently replace the default android user interface (e.g., Evie Labs, Aviate)
• Dynamic first screen solutions when there’s relevant content, make it available as the first thing seen AFTER unlock (e.g., Mobile Posse)
• Web Portals integrate content into the default homepage of mobile browsers (e.g., Synacor and Airfind)

It’s time for carriers to get aggressive and understand that the also-ran solutions like the Oath/Samsun aren’t going to excite consumers. Metrics do show that these alternate approaches have been well adopted by customer segments and, in many cases, drive greater usage. Being cautious and worried that an alternate approach will alienate users is holding them back from coming up with cutting edge solutions that still would work for a good segment of their subscriber bases. Not everything has to be a one size fits all solution – these innovative solutions can all be positioned as cool new tech subscribers can use if they like it. And if they don’t, that’s ok too – after all, some people don’t want to use Siri or Alexa either because of security concerns.

The Other Announcement
The other news in the announcement are mobile native ads. They do not stand out but are designed to fit into the regular content flow. The only difference between articles and the native ad is that the source is identified as “sponsored by” instead of just the source. They are much harder to distinguish from regular ads that are designed to stand out and with a catchy headline can get more click. The Mobile Marketing Association claims in its Mobile Native Ad Format document that native ads have higher engagement. Considering how new mobile native ads are relatively new, we don’t know how consumers will react when they click on a native ad when they thought they clicked on non-paid content.
Mobile Operating System (OS) providers like Google and Apple and device manufacturers like Samsung aren’t the only ones who can stick apps on the homepage of your mobile device. Others can too if the device manufacturer or OS provider plays ball. Some consumers find it helpful to have another app at their disposal, others call it bloatware and try to get rid of it as quickly as they can.
At the beginning of May 2018, Verizon’s Oath business and Samsung announced a deal that will put Oath’s Newsroom app, Yahoo Sports, Yahoo Finance and Go90 mobile video apps preloaded on all Verizon flagship Samsung Galaxy S9 and S9+ phones. The deal also provides for native ads which blur the line between content and advertising on Oath’s apps and Samsung’s Galaxy app. In exchange, Verizon’s Oath and Samsung will share advertising revenues.

The Business Driver
With their partnership, Verizon and Samsung are attempting to raise their apps from the black hole that is typical app discovery to the forefront of the customer’s attention. This is similar to Verizon’s brandware program where it offers marketers to place their apps on Android smartphones sold in Verizon retail stores for somewhere between $1 and $2 per device. Why carriers and device manufacturers are pre-installing apps for subscribers is clear, even if their strategy is misguided: It’s additional revenues that are almost pure profit. Especially handset manufacturers are working with razor sharp margins. For app developers it is a much more difficult decision. They have to pay for the pre-loading if the customer uses the app or just deletes it.

The Problem: Ongoing Use and Uniqueness
Successful apps must conquer awareness, device installation, first use, and, finally, regular use. While preloading the Oath apps on Android certainly creates awareness of the app and forces device installation – it does little for first use and absolutely nothing to create sustained use.
More importantly, these apps are also not that unique. Pre-installing the same old types of apps people are familiar with, and likely have replacements for, is not going to help create sustained use. When we look at the different apps that Verizon is pre-downloading on the Galaxy S9 and S9+, it’s a decidedly mixed bag. The inclusion of Go90 in the lineup has been seen by critics as the proof point that all we have is bloatware. Rarely was an app more hyped and publicized than Go90, and rarely did an app flop harder. Yes, the other three apps Yahoo Finance, Yahoo Sports and Oath’s Newsroom are highly rated give access to top publishers and are popular without being preloaded, but it’s a stretch to say that they’re unique. Installing apps that aren’t unique result in what we’ve already seen in media coverage of this announcement: Bloatware.

Preloaded apps on Android smartphone leads you to two possible and not mutually exclusive possibilities: One is that the app discovery process is fundamentally broken and even great apps are not being found by consumers. Neither the Apple App Store nor Google play have an even half-way decent content discovery process. The other is that some app developers have a greater marketing budget than resources to develop a great app. Pushing suboptimal apps to unsuspecting customers is doubling down on a losing proposition. Instead of dying a silent death in obscurity, the apps and their developers get skewered by consumers and the press alike. Not all publicity is good publicity.
But “pre-installs” won’t be bloatware if they provide real value. Take Siri for example – no one complained about Siri being pre-installed. It was unique, cool, and better. No – not everyone uses Siri, but no one would argue that she wasn’t unique and cutting-edge when first pre-installed – and if you still don’t like it you can make it disappear in a folder. The route Samsung is taking with Bixby fits into this mold somewhat, but Bixby has a lot of kinks to work out before we can put it in the same class as Siri.

Better Matters
What continues to surprise me is that companies who have an impact on the customer experience are not trying different routes. If we really believe that better matters, why aren’t they pushing boundaries farther? The goal is to drive ongoing use and consumption of content on mobile devices, and do it in unique ways that consumers might value.

A quick review of what’s happening on Android Phones shows four unique solutions carriers and OEMs should investigate:
• Lock Screen Solutions replace default lock screen experience with content/ads (e.g., Unlockd, start by Celltick)
• Launchers permanently replace the default android user interface (e.g., Evie Labs, Aviate)
• Dynamic first screen solutions when there’s relevant content, make it available as the first thing seen AFTER unlock (e.g., Mobile Posse)
• Web Portals integrate content into the default homepage of mobile browsers (e.g., Synacor and Airfind)

It’s time for carriers to get aggressive and understand that the also-ran solutions like the Oath/Samsun aren’t going to excite consumers. Metrics do show that these alternate approaches have been well adopted by customer segments and, in many cases, drive greater usage. Being cautious and worried that an alternate approach will alienate users is holding them back from coming up with cutting edge solutions that still would work for a good segment of their subscriber bases. Not everything has to be a one size fits all solution – these innovative solutions can all be positioned as cool new tech subscribers can use if they like it. And if they don’t, that’s ok too – after all, some people don’t want to use Siri or Alexa either because of security concerns.

The Other Announcement
The other news in the announcement are mobile native ads. They do not stand out but are designed to fit into the regular content flow. The only difference between articles and the native ad is that the source is identified as “sponsored by” instead of just the source. They are much harder to distinguish from regular ads that are designed to stand out and with a catchy headline can get more click. The Mobile Marketing Association claims in its Mobile Native Ad Format document that native ads have higher engagement. Considering how new mobile native ads are relatively new, we don’t know how consumers will react when they click on a native ad when they thought they clicked on non-paid content.

World’s Fastest Mobile Internet

Posted on by Roger Entner

More spectrum! is the rallying cry among participants in the global race to be the first country to deploy 5G networks. Generally speaking, deploying more spectrum into a network means faster speeds and more capacity to handle consumer demands. But not all spectrum is created equal.

Low frequency spectrum, below 1 GHz, typically travels further and more easily penetrates walls and buildings better than higher frequency spectrum, above 1 GHz. Mid-band frequencies, between 1 GHz and 2.1 GHz, radio signals travel about two thirds as far frequencies below 1 GHz and have a harder time penetrating structures. While people can use their wireless device in the home, reception in inside rooms or the basement could be more difficult. High frequency spectrum – between 2.1 and 6 GHz – has a hard time penetrating walls. And spectrum above 6 GHz, called mmWave (millimeter Wave) spectrum, does not travel far and has an even harder time penetrating structures.

Licenses to use spectrum are typically awarded by the Federal Communications Commission based on defined geographic areas and for specific amounts of spectrum. Engineers typically refer to the specific spectrum licenses as “channels” or “carriers”.

Regulators can opt to allocate spectrum for large or small geographic areas, e.g., nationwide versus an economic area, and for bigger or more narrow channels, e.g., a 5 MHz channel versus a 20 MHz channel. Licenses covering smaller geographic areas and for smaller amounts of spectrum are attractive to smaller providers who are willing to sacrifice peak data speeds for coverage. The question is what do regulators want? More bidders in a spectrum auction that provide slower speeds or fewer bidders that can then offer faster speeds?

Spectrum in the United States is highly fragmented and therefore does not yield the technically optimal speeds that could be achieved across the various spectrum bands described above. The FCC has licensed 22 5×5, three 6×6, four 10×10, one 11×11, three 15×15 MHz and one 20×20 MHz licenses. The optimal channel size for 4G, a technology we started to implement in 2011 is 20×20 MHz. Prior FCCs have unfortunately allocated spectrum in ways that make it impossible to provide the fastest possible speeds in the US. There is one exception to this trend – the FCC’s decision to allocate MSS satellite spectrum in a 20×20 MHz channel.

Sprint is probably best positioned to leverage high band spectrum for maximum speed due to its high band spectrum holdings. The 2.5 GHz band has 194 MHz that is dynamically shared for upload and download and is owned by one operator, Sprint. Where it is available Sprint utilizes three 20 MHz channels combined for ultra-fast downloads, the big caveat here is “where it is available.” Sprint is still lagging behind in the availability of high speed 4G internet and the limited range of 2.5 GHz is hampering its availability in rural America. Hopefully the FCC will allocate the mmWave spectrum (24 GHz and higher at this time even though technically mmWave starts at 30 GHz), where a multiple amount of spectrum of what has been licensed today for wireless is available, in 100 MHz or larger channels. Remember, the wider the license/channel, the faster the speed.

European regulators are increasingly allocating their spectrum in larger channels and in some countries the auction process aggregates the licenses won into larger channels to maximize the benefit of having larger channels. One example is in Switzerland which uses a process called Combinatorial Clock Auction (CCA) to achieve maximum channel sizes. Due to that Switzerland is regularly among the five fastest countries for mobile internet. The FCC should consider CCA in its upcoming high band and mmWv band auctions to maximize the opportunities for carriers to obtain wide channels. This will also help the agency prevent individual bidders from buying discrete, small channels solely to prevent competitors from creating wide, contiguous channels. DISH Network and its bidding partners Northstar Wireless and SNR Wireless did exactly this when it strategically purchased licenses to create fragmented channels in 2015 during auction 97. This increases the value of the blocking licenses if DISH and its bidding partners want to sell the license again.

New smartphones have the capabilities to use several channels at the same time, creating faster downloads by essentially gluing different pieces of spectrum together. In late 2016, the first smartphones with 3 Carrier Aggregation, or the ability to use three license/carrier simultaneously came to market. For example, the iPhone 7 and the Samsung Galaxy S7/S8 could use 3 Carrier Aggregation, the iPhone 8 could use 4 Carrier Aggregation. The new Samsung Galaxy S9 can use up to 7 Carrier Aggregation.

The disadvantage of carrier aggregation is that it uses more of the device’s battery power by having multiple radios (transmitters/receivers) active at the same time and because the phone has to periodically check if the different spectrum bands are actually available, which in turn reduces battery life. While having the ability to aggregate more channels is welcome, the less often the band-aid technology is needed the better. The better method is to create larger channels in the first place and if larger channels are aggregated the resulting speed is even higher with less impact on the battery life of the phone.

In a nutshell, the FCC needs to put a framework together that facilitates the creation of the largest possible channels to create the fastest possible mobile internet that incidentally will also have the least impact of the battery life of smartphones. Having to aggregate several small channels puts the US at a significant comparative disadvantage vis-à-vis other countries allocating spectrum for much wider channels. The FCC should either allocate spectrum in the high and mmWave bands in larger blocks across larger geographic areas, or employ a Combinatorial Clock Auction system that gives both the benefits of having potentially more license winners with the advantage of having the largest possible channel sizes for superior speed. Only then will the US have a chance of keeping pace with other countries and maybe even having the world’s fastest mobile internet.

The Phone number is becoming the new SSN and then some

Posted on by Roger Entner

It is not a new trend, but as we are becoming increasingly connected, a unique identifier for people is becoming increasingly important. Created in 1936, the original sole purpose of the social security number (SSN) was to track Social Security benefits. Almost all Americans have one, receiving a unique social security number shortly after birth usually at the same time the birth certificate is being processed. The uniqueness of the SSN number lends it much better than names to identify individuals in the employment records of people, for bank purposes, insurance records. The problem is that it is being used for purposes it was never designed for which opens the floodgates to fraud and criminal activity such as identity fraud.

With the advent of the mobile phone, telephone numbers transformed from a way to reach a family to reaching an individual. Wireless local number portability, introduced in 2003, has allowed customers to take their number with them when they change operators. Combined with essentially full mobile penetration, the result is that people are rarely changing their mobile phone number anymore and the number has become almost an extension of the person.

What differentiates the phone number from the social security number is the extensibility and the built-in security of the phone number and the associated device. Mobile phones, especially in the US, are the thing that is around us more than anything else. People will leave their home without their keys, they will leave their home without their wallet, they will leave their home without underwear, but they won’t leave their home without their mobile device. It is with us all the time. This always on the person, makes the time lap between a theft and the reporting of the theft very short. You know immediately when your phone is gone missing. For example, every phone and SIM number has a unique identifier which is registered with the operator’s network. When the phone number associated with the SIM or the phone are no longer in synch, especially when the device appears suddenly at a location far away from where the customer usually is, fraud could be a factor if the phone is being used for a transaction. This is especially true when your phone is active thousands of miles apart within minutes of each other.

People are creatures of habit. There is an old saying in wireless that 90% of the people use their phone in the same places 90% of the time. We generally wake up in the same place, we go the same way to work at the same time, day in and day out. The majority of calls go to the same five people. The wireless identity management ecosphere is able to bring a level of security and flexibility that social security numbers were never designed for and never had nor will have – all tied to a phone number.

The possibilities are endless. The phone combined with a unique ID and behavior pattern can solve our most vexing security problems. Security measures are based on three factors: Something you know, something you have, and something you are.

Something you know is the worst of all the factors. Passwords are something you know and we all know how bad passwords are. Our system for passwords has made it difficult for people to remember and easy for programs to crack. Password retrieval tools are a significant vulnerability to the security of the system. On top of it, people cannot be trusted with passwords. 30% of phishing emails get opened. 97% of users are not able to identify a sophisticated phishing email. Only 3% report a phishing attack to IT or management. Every time a system uses a password for access you know your security system is a failure. Passwords have to die in order for us to be safe.

Something you have is much harder to fake. Authentication tools ranging from RSA fobs to authentication software are one way to make sure that only authorized individuals get access. The phone is just about the most personal device there is and theft is almost immediately reported.

Something you are is the most reliable single factor. Our finger prints or retina is difficult to impersonate. Our behavior pattern of where we go, when we go and what we do is even more difficult to fake.

Just imagine this scenario: You wake up at your home because your phone’s alarm went off at the same time as always, pressing the snooze button twice. As you get up you check your messages and your favorite app. By combining your location with your device interaction both roughly at the same time and the same applications, the system knows you are most likely you. You take a shower and then leave your home at the same time as every workday as you head to the gym. Your phone and car synch their Bluetooth for handsfree calling and you call your mother. Since you regularly stop at your favorite coffee drive through, the system asks you if you would like your usual order. You agree and the system contacts the coffee drive through with your order and the time of arrival based on your normal route, traffic conditions and the length of the drive through line. As you get to the window your latte is hot and steaming. The barista verbally checks you are you, verified by the NFC chip in your phone. The barista hands you your coffee and you get automatically charged for your beverage because your phone number is tied to your favorite credit card. After the gym you head to work, where as you approach your office the phone lets you know which parking spots are still open. Since you are showing up at the usual time and did you usual morning routine, the automatically locked door opens for you as it identifies your phone as you near the door. As you sit down at your desk you boot up your computer. When you are at the login screen, you provide either a fingerprint scan or retina scan with your phone and the computer provides access. The level of security can be tailored to the situation but predominantly relies of factors “you have” or “you are”. Things that are unique and are difficult to give away. Short of a James Bond-type effort such a system that ties together your phone number with your device and your behavior is as secure as it gets.

This is what is possible with a phone number and will become reality in the next few years. Say good bye to password, all thanks to phone numbers and how they are interconnected through your device to other databases, financial institutions and biometric data.

Analyzing the Impact of the FCC’s Proposed Restoring Internet Freedom Order

Posted on by Roger Entner

On November 27, 2017 Recon Analytics convened a panel of esteemed legal, policy and regulatory experts to discuss the Federal Communications Commission’s (FCC) Restoring Internet Freedom Order. The discussion focused on the investment and innovation implications of the FCC treating broadband as a Title I information service; how proponents of Title II may react and the arguments they may raise on appeal; and how all of this will work to either attract or repel additional investment in the sector for years to come.

Majority of Americans concerned about internet companies tracking their personal information

Posted on by Roger Entner

At the end of October, Recon Analytics surveyed more than a thousand American consumers to assess their awareness of and attitudes towards the variety of ways internet companies and social media platforms like Facebook, LinkedIn, Snapchat and Twitter collect, track and use consumers’ personal information.  The survey, explained below, reveals that a majority of Americans are concerned about the amount of personal data these companies track and strongly favor more transparency on how personal data is collected and used as part of internet companies’ business models.

Key findings: 

  • An overwhelming majority of consumers, 73%, are concerned about how their personal data is being collected and used by internet companies.
  • Almost 77% would like more transparency on the ads being targeted to them based on the personal data the internet companies collect.
  • Among those surveyed there is a shared feeling of uncertainty and insecurity over how much internet companies and platforms know about each of us and what they’re doing with that information.
  • More than 70% of respondents are unaware of tools they can use to control or limit the usage of their personal data.
  • Nearly one third of respondents, 29%, did not know that many of the “free” online services they use are paid for via targeted advertising made possible by the tracking and collecting of their personal data.
  • Almost half of the respondents are aware that Facebook and Google track their personal data even when they are not actively using their services.
  • A vast majority of those surveyed, 77%, support regulations that would require Google, Facebook and other online platforms to be more transparent about how and what personal data they collect from consumers.
  • An even greater majority, 82%, are in favor of legally requiring internet companies to disclose what information they collect and to whom they sell it to.
  • More than half of the respondents, 55%, would use internet companies’ products and services more if they would give consumers greater control over their personal information.

The all-encompassing surveillance and storage of personal data by internet companies with limited or no regulatory or legal checks and balances worries most Americans, rightfully so, especially when the attitudes of many of these companies’ senior leaders are taken into account.

Nothing to hide

On December 3, 2009, Eric Schmidt, then-Google CEO and current Executive Chairman of Alphabet Inc., Google’s parent company, dismissed the notion of online privacy in an interview with CNBC, saying, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”

Terrifying as that statement may be, Google’s all-seeing eye may have already made secrets a thing of the past.

At the 2010 Washington Ideas Forum Schmidt offered more insight into what Google knows.

“We don’t need you to type at all. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about,” he told attendees.

Social norms

Facebook’s chief executive Mark Zuckerberg has a similarly cavalier attitude when it comes to online privacy. In 2010 he said the conventional concept of privacy is no longer a “social norm.” Later that year a Facebook employee claimed that his boss simply “doesn’t believe in it.” Perhaps unsurprising given that Zuckerberg described those who trusted him with their data as “dumb [expletive]s” shortly after launching the social media platform.

Transparency

Efforts from internet companies’ to be more transparent about how they use consumers’ personal data may be too little, too late: one third of respondents said increased transparency will not alleviate their concerns about online data collection and usage.

Regulation on the horizon?

Americans are skeptical about government interference in private businesses and for the past two decades the internet grew and evolved with little regulatory oversight. The Federal Communications Commission (FCC) took a largely “hands off” approach to regulating the internet under both Democrat and Republican administrations. As a result, the internet economy grew by leaps and bounds. The resulting bonanza has been so successful that today four of the world’s largest corporations are unregulated technology firms: Apple, Alphabet Inc., Microsoft and Amazon. Their founders have become some of the wealthiest people on the planet.

Although the “hands off” approach has long been favored by regulators, the pendulum is now heading in the opposite direction. This is quite a reversal of fortune for internet companies who – just two years ago – were successful in persuading the FCC to impose privacy regulations on network providers to thwart a competitive threat to their business models. Earlier this year internet companies deployed their lobbying muscle to fight Congressional proposals that would have extended the privacy rules beyond network providers to companies like Google and Facebook. What’s good for the goose apparently isn’t good for the gander.

Long term outlook

The silver lining for internet companies and their investors? Over half of Americans – 55% – would use their products and services more if they would give consumers greater control over their personal information. This would require a radical change in thinking by these companies in that they have to depart from the mindset that they own the consumer data they collect. They might have a license to use it, the same way that consumers have a license to use a search engine or a software product, but fundamentally it is an equal exchange.

Although Americans have cheered the free services offered by companies that previously have had “Don’t Be Evil” as their motto, a certain sobering feeling is taking over. Today, internet companies maintain the upper hand in the online economy: they own their products and services and the data and information generated by their customers. This paradigm won’t last forever so these “disruptors” must prepare for when regulators come to disrupt them.

Wireless – The Essential Engine by Recon Analytics

Posted on by Roger Entner