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When reports surfaced last week that Verizon and Google (Nasdaq: GOOG) were privately working out a deal that more or less flew in the face of what we thought was Google's stance on Net neutrality, the company was eager to issue denials. At least, it denied that things were playing out exactly as they'd been reported in The New York Times.
It turns out that Google was in fact hammering out an agreement with Verizon, an ISP that's mostly maintained the service provider party line when it comes to Net neutrality: Let us manage our networks the way we choose. Doesn't exactly gibe well with Google's previous rallying cry: Americans, please write your congresspeople in support of a neutral Internet.
The unlikely pair presented their joint proposal this week, and they characterized it as something that could make everyone happy. For Net neutrality advocates, they threw in provisions like forbidding ISPs from blocking access to content, from banning the use of lawful applications and devices, and from discriminating against competitors' content. Their plan also requires ISPs to publicly disclose network management practices.
But those provisions would only apply when users access the Web via wires -- plugging into your home modem, the Ethernet jack in the office, etc. Presumably it's still considered the wired Web if you're using a WiFi router too.
The unwired Web -- the mode of access that would not be protected by all those provisions -- is made up of cellular Internet services and future wireless broadband technologies like the ones the FCC hopes will one day push Internet access to every corner of the U.S.
What provisions apply to the world of wireless? Just that last one -- public disclosure of management practices. Outside that, just about anything goes. Specific services can be cut off, others promoted; access to site A could be slowed down for whatever reason, while site B ships its data in and out in a blink, all done to maximize profit for the provider.
The proposal has raised the hackles of Net neutrality advocates. Besides not liking the idea on principle, some have questioned how anyone's going to make the distinction between the wireless and the wired Web. There's really just one Internet. Also, if such a plan is enacted, it's really going to hit rural users in the shorts. Wireless broadband is currently the big hope for pushing the online world into America's hinterlands, and if it's all tied up with odd little carrier restrictions when it gets there, it's not going to look much like the Web that the rest of the world's been using all these years.
By leaving the trusty old Ethernet jack alone, Google and Verizon aren't upsetting what most Web users currently consider to be the status quo: sitting down at home with your laptop and surfing anywhere on the Net you want by way of that wire going into the wall. But the real future growth of the Web is on the mobile side, and if anything like the Google/Verizon plan becomes reality, it won't grow up neutral.
This announcement has definitely damaged Google's rep with the Net neutrality crowd. They feel that in order to get in bed with Verizon on this issue, Google had to leave its principles in a crumpled heap on the floor. The ones who get really passionate about neutrality call this a direct contradiction of Google's "don't be evil" policy; others just say it's caused the company to lose that special heroic glow it once had. No more magic, no more rainbows, no more unicorns running free in the Googleplex. Now it's another plain old corporation, just as slimy and self-serving as the next.
But that sort of image fallout will probably be limited to those who keep score in the Net neutrality game. The rest of humanity just sees Google as that company that gives you free Web stuff like search and maps and email.
Google's aware of the backlash, though, and it's said a few words in its own defense. The short version: Easy does it; we're not trying to dictate U.S. policy. It was just a suggestion.
But realistically, what are the chances for this suggestion somehow becoming law? It would be nice to find out by asking the person in charge, but there seems to be a touch of disagreement over who has the authority to dictate this kind of rule. Is it the FCC? The president? Congress? The companies that own the physical wires running underground?
Presently, the issue is a cluster of chaos and confusion. Mobile devices are growing fast in popularity, the economy's still going through a prolonged case of PTSD, the more adventurous entrepreneurs are jumping to provide new services for the mobile Web, technology is bringing faster and more capable devices to market every six months, and it's an election year, so everyone in a position to do something is looking out for number one.
In this kind of environment, it's a miracle that the mail still gets delivered. Is anyone really in the mood to pick through such a divisive and fast-changing issue that could have serious repercussions for the future of the U.S. economy? Perhaps that's why Google and Verizon are bringing this out now. With so much confusion in the air, here's an idea from big names on both sides of the aisle, so to speak. If it's not enacted outright, maybe they hope that it'll serve as a baseline to which other plans are compared, and that in the end, an agreement will settle right around the center they've just established.
Listen to the podcast (15:39 minutes).
Another Year, Another CEO
I won't pretend to know every little detail of former HP (NYSE: HPQ) CEO Mark Hurd's after-hours antics. But think about it for a minute -- if you're a hugely powerful CEO and you want to secretly spend 20 grand, is it really necessary to resort to the same tactic as some kid in marketing who bumps his cab fares up 10 bucks every time he gets sent out of town?
Isn't padding expense reports the poor man's way -- or at least the middle-class man's way -- to defraud a corporation? Aren't upper-crusters supposed to play the game with a little more sophistication? Super-discreet attorneys, diamond-encrusted accountants that can make a million bucks invisible to the IRS, some kind of business in Cayman, stuff like that? Or am I watching too many "Dynasty" reruns?
And the money itself wasn't even the point -- it's not like Hurd couldn't afford the US$20,000 out of pocket. It seems he just wanted to hide the fact that he was spending money on playdates with a woman who was not his wife.
Now Hurd has become the third HP CEO in a row to leave under a cloud of controversy, and it all began with a sexual harassment charge leveled against him by a certain female contractor working for HP. An investigation turned up no evidence of harassment -- but it did uncover $20,000 in bogus expenses filed by Hurd to cover liaisons with the contractor.
The woman in question is Jodie Fisher. The most important thing to know about her is that she is not Jodie Foster. But in addition to being an HP contractor, Fisher is actually an actress too -- she's on IMDB, so that means she's totally legit. And her STARmeter is up 6 percent this week. Meanwhile, Foster's is actually down 21 percent, possibly because of a project she just did with a certain foul-mouthed, bat-crap crazy actor. So take heart, Mark Hurd. You're not as bad to be around as Mel Gibson.
Learning of Hurd's ouster, Fisher said this outcome -- Hurd losing his job and getting a huge severance package and all -- was never her intention. She's also joined Hurd's denial that there was ever a sexual relationship between the two. And there are reports that Hurd has paid Fisher an undisclosed sum of money. Also, remember that Hurd is married for the time being. In the business, they call that a sex scandal Lego set -- you get to put the pieces together yourself.
HP stock took about a 10-percent dip just after Hurd departed, and a week later it still hadn't quite recovered. In his time at HP, Hurd did manage to please stockholders by just about doubling the company's share price. But that bottom line boost came at the expense of thousands of jobs.
So HP yet again sets off on a quest to hire a new head honcho, and they've had a tough time with that task for the past half-decade -- Carly Fiorina, Patricia Dunn, now Hurd. Cathie Lesjak is the interim chief, but she's not in the running for the permanent position. Perhaps Hurd's departure won't prove to be that big a shock to the system -- after the last five years, it's not a big jump to think HP's upper management may well be used to a revolving door of CEOs by now.
A Bad Week for the Marks
Also out this week, but with much less of a bang, is Apple's (Nasdaq: AAPL) Senior VP for Mobile Devices Mark Papermaster. You may recall the name: A little over two years ago, Apple lured Papermaster away from IBM (NYSE: IBM), where he'd been working for quite a long time. But his contract with IBM included a do-not-compete clause, and the case drew a lot of attention and got people asking just how enforceable those clauses are.
Papermaster's departure comes just a few weeks after that whole iPhone 4 antenna saga reached full boil. It's mostly simmered down by now, but the timing of the whole thing has left some wondering whether Papermaster's taking the fall for it.
The Wall Street Journal claims it wasn't nearly so simple. Citing unnamed sources, the paper reported that Papermaster actually fell out of CEO Steve Jobs' favor months ago. Apparently he just wasn't a good fit for Apple's corporate culture, and when you're not head-over-heels in love with the guy heading up one of your most important product lines, something has to change.
Also, that trouble with IBM may have played a crucial role. It basically hobbled Papermaster's role at Apple for a whole year while the lawyers did their dances. At the time he was hired, Apple had a certain plan in mind for semiconductors, but by the time he could actually get to work, that plan may have changed just enough that his specific talents weren't as necessary.
So the timing makes it look bad, but perhaps the antenna incident was just icing on the cake -- or maybe even nothing at all.
Security Insecurity
Last week, as Research In Motion (Nasdaq: RIMM) was facing down the threat of bannination from the UAE and Saudi Arabia due to security concerns, the company's CTO David Yach showed a little snout. He told Reuters that any country that wanted to pull the plug on BlackBerry and ban its services from their airwaves would have a pretty hard time of it, because most of the world's governments rely on the platform to some degree.
But the tough talk didn't mesh with what RIM apparently did just a few days later. Just as its Messenger service was about to go dark in Saudi Arabia, reports surfaced that the company had begun testing a series of in-country servers that would enable the government there to monitor communications over the BlackBerry network.
The security concerns these governments have are all about their own security, not RIM's. The worry is that since the BlackBerry platform encrypts information and sends it to servers in other countries, local law enforcement can't get a peek inside if they ever feel they need to.
Now, though, it seems Saudi law enforcement can, though Research In Motion wouldn't confirm the reports.
That situation may have emboldened the government of India to pipe up with its own set of similar demands for RIM. It's given the company until Aug. 31 to hand over access to the platform's encryption technologies or face a ban there as well.
There are a couple of trends at work here. For one thing, the increasing sophistication of smartphones means they're getting more and more handy at all sorts of jobs, including tasks that might be done in order to commit a crime. Law enforcement groups figure that if they can gain access to the data trail these devices leave behind, their jobs will get a whole lot easier.
But why's everyone picking on RIM in particular? That's because BlackBerry has a reputation for going above and beyond in terms of data security. That whole business of encrypting data and sending it to overseas servers -- that's not something everyone does. And right now, RIM is in a position of weakness. It used to be more or less the only game in town when it came to enterprise-class smartphones. But now it's taking a beating from competitors like iPhone and Android, and if it doesn't accede to some of these countries' demands, those governments may decide that jumping onto a different platform would be worth the effort.
Robot With a Texting Problem
It appears that a rogue developer in Russia has cooked up an application that turns Android smartphones into text-crazed automatons. The security researcher Kaspersky Lab has labeled the app "Trojan-SMS AndroidOS Fake Player," which is apt but does not flow off the English tongue gracefully. Perhaps the Russian translation is more poetic.
Anyway, those who download this app think they're just getting a new media player for their Android phones. But what they really get is an automated SMS bot that keeps sending text messages to premium services, ringing up a huge bill.
It looks as though this malware is only sending the messages to local Russian numbers, so if you're not in Russia, this particular attack probably won't affect you.
Even if you are in Russia, it appears that you kind of had to go out of your way to get it. Google says the app was never distributed by the Android Market, the official Android application store. People had to get it through some shifty little third-party site.
Google also reminded users about Android's applications permissions model, which is designed to protect against this kind of thing. That's a pop-up screen you get when installing a new app -- it warns you what kind of information and activities this new application will be using so you can see for yourself and decide whether it sounds shady. Presumably a media player that wants permission to send text messages shouldn't pass the smell test.
Still, it's easy to think that not all users will understand the importance of putting every app they download under that degree of scrutiny. And sometimes it's hard to know what's suspicious and what's not. Say it wants to see your contacts list. Or it wants access to GPS to see your location. Well, that is private, but the app might want to use that info for a feature you'll really enjoy and that won't actually violate your privacy at all. Maybe, maybe not. Hard to know for sure. You might be able to look into it and find out, but when you're about to get a new app and you just want it to work, it's really tempting to just say, "Yeah, whatever. Do it."
Care to Streak?
When the iPad was first announced, there was talk about how a new generation of tablet computers, from Apple and others, would bridge the gap between smartphones and notebooks.
But in Dell's (Nasdaq: DELL) mind, that just created a new gap that needed some more bridge work -- the gap between smartphones and tablets. That's the space the company seems to be gunning for with the Streak, a device we heard about a few months ago and which is just now hitting the U.S. market. Brand names aside, it looks like the lovechild of an iPad and a Droid, though it seems to have inherited most of its genes from the latter.
It's an Android device that can make and take regular phone calls but features a five-inch touchscreen, which is pretty damn big if you're calling it a phone and very small if you're calling it a tablet. All the vital organs seem to be intact: Snapdragon processor running at a GHz, 3G, WiFi, Bluetooth, GPS, 5 megapixel camera, etc.
But there's some doubt about whether the Streak will run wild or whether it'll get tackled quickly and dragged off the field. Price is one concern -- it's $300 with contract. But so is the iPhone 4 if you want the 32 GB model, and the Streak can take a 32 GB data card. Then there's the network: AT&T (NYSE: T). Again, a certain other phone has sold well despite being tied to that carrier. The Streak's operating system at launch is downright ancient -- Android 1.6. But Dell says it'll be upgradeable to the brand-new 2.2 version later this year. Putting it on shelves before that seems kind of self-abusive, but whatever, that's Dell's call.
The size issue, though -- that's a real tough one. It's not going to
look quite right in a pants pocket, unless you're trying to make a
particular fashion statement. Putting it up against your head to make
a call might make people think you've shrunk, if only for a moment. On
the other hand, compared to other tablets, the screen's microscopic.
So who knows -- could turn out to be a healthy hybrid, or maybe a
confused mutt.
