Mobile News: Security, Spectrum, and Mergers

Lately in the news, there’s been heavy talk about the mobile industry. News reports have generally been on these topics: hacks/security flaws, spectrum, and mergers. Tech blogs and websites have to been reporting different experiments and studies on the security flaws of either Android or iPhones. Technolog previously reported that paperclips could unlock iPhones and magnets could unlock iPads. While CNBC recently reported about an Android Bug that is released via a link opened from a spam text or email.

As far as spectrum, we are all being warned that, at some point in the not-too-distant future, data will slow tremendously from overuse of radio spectrum. While cell carriers may offer unlimited data, reaching a certain point will slow your data. For example, T-mobile slows data from 4G/3G to a G after 2gbs of data has been used within a billing cycle. This speed reduction or the use of limited data plans is to prevent congestion on wireless spectrum, which causes slow networks.

The other solution to congested spectrum is to acquire more of it. Some media entities have spectrum to sell.  Right now, Verizon Wireless is trying to buy spectrum from Comcast, Time Warner Cable, and Brighthouse Networks. If that deal is approved, Verizon Wireless would walk away with better and more spectrum placing them at a greater advantage then their competition. Another way to acquire spectrum is to merge. AT&T and T-mobile attempted to merge, but the government disapproved on the basis it could deplete competition.

US Postal Service to Eliminate 28,000 Jobs

The U.S. Postal Service is attempting major restructuring for the sake of survival. “U.S. Postal Service seeks to end next-day mail” by Emily Stephenson of Reuters.com reports that the agency has proposed to “close more than half its 461 processing facilities”, eliminate next day delivery, and extend expected delivery of First Class mail.

The closure of the processing facilities would result in 28,000 jobs lost. The proposals are part of an effort to “find $20 billion in annual savings by 2015.” This large savings would come from reducing the company’s network. David Williams, USPS VP for network operations stated:

“The fact of the matter is our network is too big. We’ve got more capacity in our network than we can afford… More importantly, we’ve got to set our network up so that when volume continues to drop, our network is nimble and flexible enough to respond to those volume losses”

It is projected that the USPS will lose $14 billion this year and is hoping that the government will approve the proposals. According to the article “USPS has said it will run out of money by September of next year without a congressional overhaul of its operations.”

Sprint Claims AT&T Could Expand w/o Merging w/ T-Mobile

AT&T and T-Mobile are currently in the process of defending their future merger to the government. As mentioned in a previous post, the merged company would become the largest cell carrier with about 42% of the market. This would leave Sprint third in market, thus they are not a supporter of the merger. One of the strategies to prevent the merger is Sprint has attacked one of the main reasons for the merger offering an alternative.  “Sprint offers AT&T spectrum solution without merger” by Jasmin Melvin of Reuters.com reports AT&T has defended the merger as a means to use T-Mobile’s spectrum to improve their speed and  performance.

Sprint claims “AT&T could forgo the T-Mobile takeover and increase its network capacity by more than 600 percent by 2015 by simply putting its current resources to better, more efficient use.” The point being that the proposed reason for the merger is invalid. The detailed claims about AT&T being able to help itself expand were presented to the FCC yesterday. Sprint is also claiming that AT&T investing in this improvement “would cost far less than the $39 billion AT&T would spend to take over T-Mobile”. The response from AT&T:

“A company that has outsourced the management of its own network shouldn’t be giving advice to others”

Phil Ivey Sues Full Tilt Poker, Claims the Site has not Refunded Money to Players

Last month, I wrote about the government seizures of online poker sites. It is illegal to gamble online in the U.S. and it also illegal for any poker site, even based overseas, to allow players to use their bank accounts to play. Many sites, including Full Tilt Poker were accused of creating fake transactions as means to allow people to gamble. A few days after the seizure, the government let the poker sites go up again only as a means for players to get their money. Well, Phil Ivey, one of the most popular and successful professional players, filed a lawsuit against Full Tilt Poker.  The basis of the lawsuit is that other online players have not gotten their money back.

Campaign Against McDonald's to Change Unhealthy Marketing Continues With Letter

The health food revolution is not done with McDonald’s.  “McDonald's Under Pressure to Fire Ronald” by Julie Jargon of WallStreetJournal.com reports, “550 health professionals and organizations have signed a letter to McDonald’s Corp. asking the maker of Happy Meals to stop marketing junk food to kids and retire Ronald McDonald.” This letter is actually going to be a full-page ad running in major newspapers. The campaign is also asking the company to report it “health footprint” and “the financial impact of fighting various measures like the San Francisco ordinance passed last year that established nutritional standards for kids’ meals that come with toys.”

Fast food companies and food makers are under federal pressure to not market unhealthy food to children. The article reports marketing standards are regulated to children between ages 2 to17. The federal agencies setting these standards: FTC, FDA, CDC, & the USDA.

I grew up at a time when Ronald McDonald was a very prominent mascot, along with the Moon Man (awesome if you know who I’m talking about), and Happy Meal toys were a little more extravagant. But despite growing up in a low-income background, I didn’t eat McDonald's on a consistent basis. Fast food, of any kind, was considered a once-in-a-while meal. Times have changed. People are busier today; families don’t always have time to make meals. Also, food makers and fast food companies are getting very clever with value meals/prices. Despite the minimizing of Ronald McDonald and the retirement of the Moon Man, children are exposed to a lot of unhealthy food.  

Government Seizes Online Poker Sites Possibly Killing the Market

Poker intrigues me; It's a combination of luck and critical thinking. The luck is based on the cards dealt but the critical thinking comes from considering all the factors before choosing to play the hand. In poker and in life, the same cards dealt should not always be played the same. But I do not play poker. I don’t play poker because I will not risk my hard earned money. I believe poker is a game for those that can afford to lose as much as they want to win and who have the will to play moderately.

Of and on, I watch “Poker After Dark” (although I haven’t watched in a month). I am well aware of the various poker sites that exist, considering almost all commercials during the show promote these sites and the players tend to wear emblems during the game. On most commercials for poker sites, the commercials tend to always exclaim you can play for free. This I know to be a lie because some professional poker players started off playing cash games online. I began to wonder the reasons behind promoting the site as free when most know it’s used for gambling. Well, the government knows this too and has seized many poker sites on Friday.

According to “Online Poker Players Face Big Life Changes” by Alexandra Berzon of the Wall Street Journal online,

“The U.S. Justice Department shut down Full Tilt Poker on Friday, along with other online poker sites, accusing 11 people of bank fraud and of illegally operating gambling websites. The government seized accounts run by the sites that held money stored by players.”

The government and poker sites have been back-and-forth through the years over the legality of online poker. For one, the government believes it’s gambling and when they made it illegal to gamble online in the U.S., most sites moved their operations overseas. It is also illegal for sites to allow people to use their bank accounts to pay for the gambling. The government is accusing the poker sites of charging accounts and creating fake “merchants” to disguise the payments. For example, bank statements would list a transaction/ transfer as coming from company xyz instead of Full Tilt Poker.

According to PokerScout, a company keeping track of online poker sites, “[poker] sites saw around $16 billion in wagers from U.S. players last year, with the bulk of that taken in by Full Tilt Poker and PokerStars”. With major endorsements by casinos and professional poker players and now the seizure of the sites, these online poker sites are going to lose a lot of money and support. I read from Wall Street Journal a few casinos ended their business relationship with any sites that were indicted.

Russia Wanted a Makeover, an Ad Makeover

Does a country need an ad/marketing agency? I didn’t think so until I read “Selling the World on Russia (Leaving Out the Spies)” by Andrew Kramer. It turns out that Russian Officials were so concerned about it’s worldly image and the affect the image had on opportunities that, a few years, they hired various agencies to work on this image. The article profiled one of those agencies, Adore Creative, and Rupert Wainwright's, its CEO, adventure working with Russia.  Adore Creative’s job was to create a video for the 2013 World University Games, the 2014 Winter Olympics,  and the 2018 World Cup, three videos in total.

Russia wanted to shed the stereotypical images of its country. Wainwright wanted to “normalize” the country within the ads because “If people see that sense of normalness, he said, ‘the country will de-demonize itself’” But it wasn’t so simple for Wainwright. The Russian Officials were zealous on shedding Cold War images that their idea for the Olympic video was “a black-and-white montage of post-Soviet street protests and the Berlin Wall falling down…”, not very appealing as a promotional video. They also wanted to include a host of their philosophical ideas and imagery. Wainwright eventually worked with the tough demeanor of the officials to create videos which, along with the other work from the other agencies, helped Russia to earn rights to host all three of the games they submitted videos to.

The article presents a country as a client as a potential clash of ideals and a challenge for the agency.  Having contributed to Russia’s win to host all games is an accomplishment for Russia and the ad/marketing agencies which took them as a client. Wainwright stuck well to his guns; giving the Russian officials what they hired Adore Creative for, the ability to host three international games, three opportunities for Russia to reshape its image on a Worldly stage.

"Net Neutrality" Means...

Tuesday the FCC approved “Net Neutrality”. It is suppose to guarantee internet access for all consumers. I read Wall Street Journal’s “Internet Gets New Rules of the Road” by Amy Schatz and Shayndi Raice and “Most of the Internet Grumbles about FCC Net Neutrality Rules” by Jennifer Valentino-Devries to get a better understanding of the meaning of the passage.

For consumers, internet providers “can't block legal content from websites, or ’unreasonably discriminate’ against companies like Skype or Netflix that want to use broadband networks to provide video or voice services” (Schatz and Raice). Although, Schatz and Raice’s article mentioned providers attempting to create a pay tier system for internet usage. “Net Neutrality” creates more transparency about such pricing. In fact, providers have to provide more detailed information about all pricing.

For internet providers, they have been given the right to manage web congestion. Meaning that the loophole to providing service is if disruptions are part of “managing” congestion. The providers were also given permission to create a pay tier system.