AT&T Flails in the Quicksand
AT&T's practice of throttling heavy cellular data users has resulted in a small-time lawsuit that's quickly ballooned into a big-time headache for the company. A customer took the wireless carrier to small-claims court, but further grappling between the parties has shined a bright spotlight on the matter. Meanwhile, Yahoo slammed Facebook, Britannica threw out printed volumes, and Samsung dropped hints of iPads to come.
03/17/12 5:00 AM PT
The name of AT&T's pain, for this month anyway, is Matthew Spaccarelli. He's a customer that gave the carrier a small thumping in court, and that would have left AT&T with a very minor scab. But it seems the company just couldn't resist picking at it.
It all started when Spaccarelli took AT&T to small-claims court over his smartphone data rate being throttled. He's an unlimited data user, and like many unlimited AT&T subscribers who use the network heavily, he saw his data rates being choked down to a crawl. Most users react to this by frowning and grumbling and swearing and wandering around in Sprint stores, but Spaccarelli did some small-scale litigation and walked away with $850 in his pocket. So good for him.
But that wasn't the end of it. AT&T reportedly reached out to Spaccarelli and invited him to some settlement talks. In this case, "invited" apparently meant "participate in the talks under a non-disclosure agreement or we'll dump you as a customer."
That NDA is important -- it would have forbidden Spaccarelli from posting documents related to his case online. Those documents could serve as a how-to manual for any angry AT&T customer who's experienced data throttling to take the carrier to court and possibly walk out with nearly $1,000 in hand.
Instead, Spaccarelli forwarded AT&T's invitation to the AP. So not only does AT&T look like a bully, but it's also drawn more attention to his court documents.
AT&T has its own side of the story. It says that NDAs are common practice for any kind of settlement talk, and that Spaccarelli actually reached out to the company, not vice versa. Also, AT&T says Spaccarelli admitted to unauthorized tethering, which is a cardinal sin in the religion of wireless providers.
Whatever the truth is, the truthier version of the story is making Spaccarelli out to be a champion of annoyed wireless users, while AT&T is coming out looking like a clueless victim of the Streisand effect.
Listen to the podcast (13:41 minutes).
The Encyclopedia Britannica has been anchoring bookcases for centuries with its distillation of the whole of human knowledge, neatly crammed into 20-odd thick, leather-bound volumes that collectively weigh as much as a full-grown adult. Those books have served as reference guides, doorstops, bathroom readers, and the basis for countless sixth-grade reports for 244 years.
But Britannica's most recently printed edition will be its last. It's giving up on printed encyclopedias and relying entirely on its website and mobile apps.
The decision has an air of inevitably to it. Now that so much information is available from a million sources online for free, who wants to pay over $1,000 and devote several square feet of shelf space to these giant books? You could use a physical encyclopedia to learn what humanity knew about theoretical particles in 2002, if that's when your edition of Britannica was printed, or you can look online and find out what scientists learned about the Higgs-Boson particle just last week.
Britannica will keep its online presence, where users can look up topics and get a little information for free or a lot of information for an annual subscription fee. But even that approach is beginning to look questionable. Sites like Wikipedia and other online sources are completely free. Information is so abundant now that it's difficult to convince people to pay for it.
However, Britannica and other encyclopedias do have an asset that's often very lacking in lots of online sources: authority. Britannica's articles are written by actual experts in their fields -- everyone from Marie Curie to Bill Clinton. Other online sources can be less reliable, especially Wikipedia, which allows edits to be made by literally anyone.
Of course, Wikipedia does have an elite cadre of editors who keep an especially close watch on things, and its articles often cite respected journals and books as their sources. Not all those sources are easily accessed, though, so perhaps that's where Britannica can find its niche online for premium subscribers -- reliable summaries written by experts in addition to an abundance of primary source documentation.
Now that the newest iPad has been revealed, reviewed and shipped out to everybody who ordered one in a hurry, it's time for Apple rumor junkies to move on to speculating about some other silvery object of desire -- the next MacBook Pros, perhaps, or an Apple TV that's actually a TV. Right?
No, not yet. There's more chattering to be done about iPads, thanks to an anonymous Samsung executive to who talked to The Korea Times recently.
The Times was speaking to a Samsung official about how much business the company does with Apple. It's a love-hate relationship -- they try to sue the pants off each other in court at the same time Apple buys billions of dollars in parts from Samsung each year. But this employee told the paper that Samsung's business with Apple could grow now that Apple plans to release a smaller iPad, possibly coming later this year.
Apple wouldn't confirm anything one way or the other, but if that really is something it plans to do, Samsung might well be privy to the information. Apple has to buy its parts well in advance -- it can't just conjure its products to appear a week after Tim Cook takes the stage for a show and tell. Samsung happens to be a major screen supplier for Apple, and if you're asked to provide millions of 7.85-inch screens for Cupertino, it's not hard to make a guess as to what they're for.
But would Apple really want to make an iPad mini? The 10-inch size has already proven popular on Apple's home turf in the U.S., as well as Western Europe and a few other places. But in some markets, 10-inch tablets are generally regarded as too big -- perhaps a 7-incher would give Apple a better foothold in those places.
However, there still exists much doubt. A smaller tablet could be presented to price-conscious buyers as a cheaper alternative to a full-bodied iPad, but the iPad 2 is already being positioned as the company's discount tablet. Throw another model in the mix and suddenly the line starts to look a little crowded. In terms of product selection, Apple's motto isn't "Have It Your Way" -- it's more like "Keep It Simple, Stupid."
OK, one more "but": BUT ... with the new iPad, Apple changed its naming convention. It's not the iPad 3 or HD, it's just "iPad." So what happens when the next iPad comes out? Will this year's model sell for the $400 discount price in 2013? What will it be called? The "Old iPad?" When Apple gives its products singular names like "iMac" or "iPod," without specific generational titles, it doesn't typically give the old models prime placement on its shelves or its website. You can still get them, but Apple doesn't give them the same marketing oomph as it does with the old iPad 2 or iPhone 4. Now that iPad is using that same present-perfect naming convention, maybe an iPad mini will come along next year to fill in the gap as the cheaper model that Apple actually promotes.
And who knows, maybe Samsung's just messing with Apple to have a little fun. But if that unnamed Samsung official really did let spill some accurate information, that probably broke a very heavy non-disclosure agreement. That's exactly what these two need: one more reason to sue each other.
10-Warhead Patent Missile
In its quest to regain its identity, Yahoo has lately taken on a new hobby: patent warmonger. Its latest product is weaponized patent lawsuits, and its first unwitting customer is Facebook.
This new role Yahoo's decided to play was foreshadowed a couple of weeks ago when Yahoo confirmed it had marched up to Facebook's door and demanded licensing fees for several patents it claims Facebook's been stealing for years. They relate to things like instant messaging, advertising systems, privacy settings, and methods for customizing ads and content.
Apparently, Facebook told Yahoo to go pound sand. But now Yahoo's struck back with a lawsuit focusing on nearly a dozen patented technologies. Yahoo claims it wants damages and an injunction that would prevent Facebook from using the technologies in question. What it likely really wants is a settlement -- and on paper, Facebook looks like a juicy target. It's flush with cash, and it's about to get even flusher when its IPO hits in a few weeks.
Facebook claims Yahoo's decision to go ahead with the lawsuit came as a surprise. It's hard to imagine this was a complete shock, though, considering last month's discussions, so perhaps "surprised" is a relative term here.
In fact, Yahoo has a history of targeting companies just as they're about ready to jump into the public market. Nearly a decade ago, Yahoo put Google in a clamp just as it was warming up for its big IPO too. The issue back then was search patents, and Yahoo was rewarded for its efforts. It got millions of shares of Google stock. If stock is what it wants this time around, then don't be sad, Facebook -- it's suing you because it thinks you're a winner.
Yahoo's relative longevity has certainly given it time to amass a large patent portfolio. And if Facebook decides to defend itself in court, we'll see whether it really did cross the line into stealing Yahoo's technology . But regardless of what, if any, violation did occur, Yahoo's decision to sue has drawn a lot of flak, with some critics saying the company's starting to look like a patent troll. That's a term used to describe a company whose portfolio is really an attack weapon loaded with patents it owns but doesn't actually use -- in other words, a "non-practicing entity."
That term doesn't quite apply to Yahoo. Over the years, it has helped kick off a few ideas that eventually snowballed into what we now refer to as "social networking," and some of its services could arguably be called "social" in nature. But it's definitely not in the social business to the degree Facebook is, and it's using patents as an offensive rather than defensive weapon -- thus the use of the T-word.
Yanking Cable's Chain
Over the last few decades, cable companies have dug in some very firmly entrenched positions in the entertainment industry.
They've sewn up the rights for thousands of shows on hundreds of channels, and in a lot of markets, consumers don't have many options in picking a provider. And they've gotten lazy. A select few cable companies are often singled out as having some of the worst customer service records of any major consumer-facing business in America -- yeah, you know which ones you are, and so does everyone else. Also, they apparently don't feel they need to grant a few very common and longstanding customer requests, like the desire for a la carte channel packages.
Broadband could be a way to bring some major changes to the TV market, and lots of big names in the Internet and consumer technology worlds are zeroing in on the opportunity. It's only been a week since Apple refreshed its Apple TV device, but there's already chatter about whether the next Apple TV will be the big breakthrough product everyone expects. Maybe the first Google TV blitz was a flop, but the company seems determined to make another go at it, and there are rumors it's looking to become an actual cable provider in a couple of select markets. And there's talk even Microsoft and Yahoo could try to get in on the game.
Now you can add Intel to that list too. It's reportedly been speaking with media companies and cable channels about plans to launch a Web-connected set-top box. Users would get both streaming TV and video on demand.
For consumers, seeing yet another big company salivate over the TV market could be refreshing. The more players lining up to change TV's status quo, the better the odds are that someone will come up with a really great system. It could also induce headaches, because until things shake out and the winners and losers are decided, finding and getting what you want on the service you're most familiar with could become a little confusing.
Intel might have an especially difficult time, too. It's a huge name in hardware, but it doesn't have much history as a content portal. Intel likes to form big partnerships, though, so maybe it'll bring in some good friends in that regard. Content might also be difficult to acquire -- Apple's had a TV platform on iTunes for years, but there have been recent reports it still can't get TV producers to budge on some new distribution ideas it wants to get moving with. But that could say as much about Apple as it does about TV producers.
Even as all of these technology companies are scraping for the chance to put cable to shame, though, most of their plans seem to depend on customers having fast, reliable and practically unlimited broadband connections. And there are ISPs in the U.S. that provide that level of service. Many of them also happen to be cable TV companies.