Bethany Patterson

Spotify Wants to Use Apple’s Services for Free

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Posted by Bethany Patterson on Friday, June 7th, 2019, 4:08 PM PERMALINK

Apple Music and Spotify are at war for our ears, and Spotify is fighting dirty.

Even though Spotify has been outperforming Apple Music, it has filed a complaint against Apple in Europe, claiming it is engaging in anticompetitive behavior. The European Commission will now conduct an antitrust investigation against the company.

But can Apple’s business practices really be classified as anticompetitive?

The App Store provides a platform where Apple users can easily access millions of apps from all over the world. Though Apple offers its own messaging, music and internet browser apps, Facebook Messenger, Gmail, Whatsapp, Spotify and Google Chrome are some of the most downloaded apps in the store.

The company reviews 100,000 apps a week and approves most of the proposals. Spotify claims that Apple is purposely interfering with the app’s user experience. But the App Store has released almost 200 app updates for the music streaming company, and Spotify’s Apple Watch app is currently leading in the watch’s music category.

That doesn’t sound like a company trying to squash its competition.

The vast majority of apps in the App Store pay nothing to Apple. The company only collects a commission on digital goods and services sold within the App Store, since those sales are processed through its proprietary payment system.

Free apps that process subscriptions within the App Store using Apple's payment processing system (like Hulu or Pandora) pay a 30 percent commission for the first year of that subscription and 15 percent for subsequent years.

Spotify has circumvented this fee by requiring users to subscribe outside the app. An Apple-user who wants to subscribe to Spotify Premium must sign up through the company’s website; afterward, the user can listen to music on the iOS Spotify app. Apple does not collect any commission on these subscriptions.

But now Spotify wants to conduct sales through the App Store without paying for Apple’s payment processing services.

In a blog post, the company’s CEO Daniel Ek wrote that if it were to pay the commission, it would need to raise its prices and therefore couldn’t compete with Apple Music. So Spotify wants to force Apple to either stop collecting commission on in-app purchases or offer other payment options within the App Store.

In other words, it wants to access Apple’s platform, utilize its software tools and use its payment system for free.

The App Store provides a reliable and secure place for apps to conduct transactions. Spotify doesn’t get to call the shots or demand to use Apple’s digital infrastructure for less money, especially since the streaming company is thriving by having users subscribe outside the app.

It’s time that Spotify becomes willing to pay for the services it’d like to use.

Photo Credit: Marco Verch


Congress, Tell States That Taxing Authority Stops at Their Borders

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Posted by Bethany Patterson on Thursday, June 6th, 2019, 9:13 AM PERMALINK

Money-hungry states are attempting to reach past state lines and impose business taxes on companies that aren’t within their borders.

The Business Activity Tax Simplification Act (BATSA), which was just reintroduced this week in the House by Congressman Steve Chabot, would stop greedy state governments from imposing these taxes outside their borders. Americans for Tax Reform signed a coalition letter urging Congress to pass the legislation and stop similar state tax intrusions.

In May, the Massachusetts Department of Revenue proposed to collect corporate income taxes on any business that has “considerable in-state sales derived through either economic or virtual contacts.” In other words, a Nevada-based company that sells products to Boston residents may be forced to pay Massachusetts’ corporate income tax.

The proposal cites last year’s Supreme Court decision on South Dakota v. Wayfair, which enables states to collect sales taxes on out-of-state businesses. Because of previous Supreme Court rulings (most notably Quill Corp. v. North Dakota), many states did not pursue levying business income taxes on companies that don’t own property or have employees within their borders.

Because Wayfair laid the groundwork to collect sales taxes on out-of-state companies, attempts to tax businesses’ income will likely increase.

Considering the huge impact e-commerce has on the economy, this unwarranted expansion of states’ power could have dramatic negative consequences. For one, increasing tax burdens and compliance costs would likely have a chilling effect on the economy as a whole.

Under BATSA, states would only be able to collect business activity taxes on companies that have a significant physical presence in the state. BATSA would set a simple standard: states can only levy business activity taxes on businesses that have property or employees within their borders.

In other words, BATSA would ensure that companies are taxed fairly and uniformly, while creating a clear nexus standard that would eliminate confusion and reduce lawsuits.

If businesses are less worried about unexpected taxation, they can focus their profits—which otherwise would be wasted on unnecessary tax litigation and preparation—on job creation and investment.

Congress has the Constitutional authority to shield citizens and companies from disastrous state tax laws. It should use this authority to keep overreaching states’ hands off of companies’ hard-earned revenues.

View the coalition letter in support of BATSA here.

Photo Credit: IAmSanjeevan


Why the DoD should pursue a multi-cloud strategy

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Posted by Bethany Patterson on Wednesday, June 5th, 2019, 2:07 PM PERMALINK

In a report released in May, the House Appropriations Committee expressed concern over the Department of Defense’s (DoD) continuing pursuit of its Joint Enterprise Defense Infrastructure (JEDI) cloud services contract.

And rightfully so. JEDI would award a $10 billion contract to a single cloud services vendor, which strays from existing industry best practices to use a multi-cloud environment.   

Taking a single-vendor approach could hurt the DoD’s ability to innovate in the long run by limiting its options. Many businesses today use multi-cloud environments, since they prevent vendor lock-in and allow for greater flexibility. According to the Office of Management and Budget, industries “leading in technology innovation have also demonstrated that hybrid and multi-cloud environments can be effective and efficient.”

Multi-cloud strategies also lower costs. Trey Hodgkins, an information technology consultant, wrote that using “multiple interoperable offerings would ensure that the Department obtains the benefits of competition to achieve best value for both warfighter and taxpayer.”

Using a multi-cloud approach could have positive implications for national security. For one, it could protect the Pentagon from cyberattacks and data breaches. Lieutenant General VeraLinn Jamieson, the deputy chief of staff for Air Force Intelligence, Surveillance, Reconnaissance and Cyber Effects Operations, advocates for a multi-cloud environment stating, “If I have a multi-cloud, I’ve given him (the enemy) a targeting problem.” 

The DoD’s interest in the JEDI contract is particularly perplexing considering that the Central Intelligence Agency (CIA) is pursuing a multi-vendor and multi-cloud strategy after six years under a single-vendor contract. The agency is changing its approach “to increase access to cloud innovation and reduce the disadvantages associated with using a single cloud service provider,” according to the House Appropriations Committee’s report. 

The JEDI contract has received a lot of public backlash. The House Appropriations Committee will not allocate any funds for moving data to the JEDI cloud until the DoD’s Chief Information Officer produces a report on how the department will transition to a multi-cloud environment.

The procurement process has also been criticized. Critics claim that JEDI’s strict gating criteria, which determine the companies that qualify for the contract, were created with the winner in mind and intentionally disqualify competitors. Oracle has even filed a bid protest lawsuit before the Court of Federal Claims. 

It’s commendable that the DoD is modernizing its operations, but the department should carefully consider using multiple cloud vendors in order to bolster innovation and, most importantly, national security.

Photo Credit: David B. Gleason


A Deep Dive Into the 5.9 GHz Band

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Posted by Bethany Patterson on Thursday, May 30th, 2019, 2:32 PM PERMALINK

Federal Communications Commission Chairman Ajit Pai made waves at the Wi-Fi World Congress when he announced the Commission would consider allocating the 5.9 GHz band for unlicensed use.

Twenty years ago, the FCC allocated 75 megahertz (MHz) of spectrum in the 5.9 gigahertz (GHz) band to Dedicated Short Range Communications (DSRC), a technology that allows car-to-car communication. DSRC has never really taken off, and many groups have pushed for shared use of the band.

Unlicensed use allows anyone to use the bands, so long as they aren’t causing harm. Devices and services that use unlicensed spectrum include Wi-Fi, routers, fitness trackers and baby monitors.

The FCC has been aware of the issues surrounding the 5.9 GHz band for a while. In 2018, it completed its first round of research on the topic and concluded that unlicensed use can share the 5.9 GHz band with existing car technologies.

While Chairman Pai’s announcement excited Wi-Fi enthusiasts, plans to move forward were delayed soon after at the request of the Department of Transportation. However, it is likely the FCC will continue reviewing the 5.9 GHz band officially in July.

While safety is obviously the government’s top priority, increased Wi-Fi traffic has made the FCC more invested in freeing up spectrum. However, because the issue involves actors from multiple industries with differing interests, finding a solution will be difficult.

So where do all the parties stand on opening up the 5.9 GHz band?

Chairman Pai

Though the FCC has been exploring its options for months, Chairman Pai kept an open mind in his speech. He gave a set of potential paths to take, rather than a prescriptive plan.

First, the FCC could choose to not change anything. However, he said that “[g]iven the history of and outlook for DSRC, I am quite skeptical that this is a good idea.”

Second, the FCC could allocate the band for Cellular Vehicle-To-Everything (C-V2X) technology. Many in the auto industry are moving toward C-V2X, including Ford, which chose it over DSRC.

Third, the band could be split or shared. One way is to allocate the lower 45 MHz of the band for unlicensed devices and automotive communications technology and reserve 30 MHz exclusively for vehicle-to-vehicle technology. The FCC could also allocate the lower 45 MHz exclusively for unlicensed use and the upper 30 MHz for vehicle-to-vehicle technology.

Fourth, all 75 MHz could be dedicated for unlicensed use.

Commissioners Mike O’Rielly and Jessica Rosenworcel

Freeing up spectrum for unlicensed use is not a partisan issue. Commissioners Mike O’Rielly, a Republican, and Jessica Rosenworcel, a Democrat, have been proponents of reevaluating the 5.9 GHz band for years.

In 2015, the two co-wrote a blog saying that “while DSRC has been slowly developing, the demand for Wi-Fi and devices using unlicensed spectrum has exploded.” They advocate for allowing both DSRC and unlicensed use to operate within the band.

Individually, the two support opening up the 5.9 GHz band as well. Commissioner O’Rielly said in 2018 that it is “pure folly to believe that DSRC will ever work as envisioned, as time and technology advancements elsewhere have undermined previous use cases. … I am confident that at least 45 megahertz can be reallocated for unlicensed services without jeopardizing automobile safety.”

Commissioner Rosenworcel said in 2018 that the FCC’s “bet on DSRC didn’t pan out the way we thought it would” and that other countries are able to use less spectrum for vehicle technologies.

When it comes down to making the decision on the 5.9 GHz band, it’s clear where Commissioners O’Rielly and Rosenworcel will fall.

Transportation community

In April, Toyota announced it would stop installing DSRC in its vehicles until 2021, saying that “we have not seen significant production commitments from other automakers.”

However, despite the fact that not many cars use DSRC, the transportation community is still invested in keeping its access to spectrum, citing that the 75 MHz are necessary for saving lives.

While Transportation Secretary Elaine Chao hasn’t released an official statement on the band, several transportation officials have spoken out.

Following the FCC’s announcement in 2018 that the band could be safely shared with unlicensed use, the DOT’s National Highway Traffic Safety Administration released a statement, saying that “preserving the 5.9 GHz band for transportation communications is essential to public safety today and in the future.” The statement also urged that no decisions be made before all three rounds of research are completed.

The Intelligent Transportation Society of America and the Institute of Transportation Engineers have recently released similar statements urging that the 5.9 GHz band be preserved.

Jim Tymon, American Association of State Highway and Transportation Officials executive director, said that “the FCC should stay the course and not give up the spectrum that the transportation community has been counting on.”

Overall, the decision of how to allocate the 5.9 GHz band will be tough. However, one thing’s clear: the decision will need to be made soon. As Chairman Pai said in his speech, “we can’t keep kicking this can down the road.”

Photo Credit: Alan Stark


FCC Should Think Twice Before Hanging Up on Robocalls

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Posted by Bethany Patterson on Thursday, May 30th, 2019, 11:19 AM PERMALINK

Earlier this month, Federal Communications Commission Chairman Ajit Pai proposed new measures that would enable mobile carriers to block robocalls.

“Combatting the scourge of unwanted robocalls has topped my consumer protection agenda since I became FCC Chairman,” he wrote in a blog post.

Specifically, the FCC seeks to allow phone companies to block robocalls for their customers without affirmative consent. In other words, blocking robocalls would become the default setting; customers would not need to opt in for this service, but they could opt out. It would also allow consumers to block calls from any number that isn’t from a pre-approved list or their contacts list.

Moreover, the FCC would like to create a “safe harbor” for companies that block calls that can’t be authenticated through the SHAKEN/STIR system, which combats illegal caller ID spoofing. By reducing the risk of punishment for blocking the wrong numbers, this safe harbor will encourage carriers to block more shady calls.

The FCC will vote on these measures at its open meeting on June 6. All FCC Commissioners—Brendan Carr, Mike O’Rielly, Geoffrey Starks and Jessica Rosenworcel—have spoken out against scam robocalls.

While many people understandably rejoiced at the thought of never receiving another scam call from a “credit reporting agency,” the issue is not as cut-and-dry as it seems.

In fact, these measures could cause major problems for businesses with legitimate uses for robocalls.

Commissioner O’Rielly addressed this concern in a speech for ACA International, a trade group that represents companies in the debt collection industry, “Repeat after me: ‘robocall’ is not a bad word. There are good and legal robocalls, and there are scam and illegal robocalls, and it’s the latter that are wreaking havoc on the nation’s communications networks.”

Commissioner O’Rielly makes a good point. Robocalls aren’t always bad. School districts use them to alert students of snow days; dentist offices use them to remind patients of upcoming appointments; and yes, collection agencies use them to remind people to pay their debts on time.

The truth is that while these calls may be annoying, they serve a legitimate purpose and deliver valuable information to consumers. Most people would like to be alerted of upcoming due dates or possible credit card fraud, and often robocalls are the most efficient way to convey information.

This could put up a roadblock for financial companies, who are required to notify customers in certain situations. In an information breach that affects millions of people, it would be nearly impossible for a company to manually reach each customer in a timely manner.

At the core of it, everybody hates robocall scams, but not every robocall is a scam. For this reason, the FCC should carefully consider how its rules affect legitimate robocalls.

Photo Credit: Ant & Carrie Coleman


Why the T-Mobile–Sprint Merger is Good for America

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Posted by Bethany Patterson on Tuesday, May 21st, 2019, 9:44 AM PERMALINK

Yesterday, FCC Chairman Ajit Pai publicly announced his support for the merger between telecommunications companies T-Mobile and Sprint.

While Chairman Pai’s blessing isn’t an official approval of the merger, it’s one big step forward to realizing the benefits a combined T-Mobile and Sprint—which, if approved, would create a new company, the New T-Mobile—would bring.

The merger will also be instrumental to helping the United States maintain its position as the global leader in innovation and technology.

In particular, the New T-Mobile would help America win the global 5G race. According to a recent CTIA report, while the United States assigns the most low- and high-band spectrum for wireless, there is room for major improvement regarding mid-band assignment. Both T-Mobile and Sprint have committed to a significant build-out of their mid-band spectrum holdings.

A merger between the two companies would also lead to a more connected America. According to Chairman Pai’s statement, their combined network would cover at least two-thirds of the nation’s rural population with high-speed 5G. In fact, within three years, 85 percent of rural Americans will have access to reliable wireless service. T-Mobile and Sprint have also said they will create an in-home broadband product, which would also serve rural areas.

This will help Americans in typically underserved areas stay connected online. In other words, this will help school kids do their homework, businesses expand and families keep in touch with relatives across the country.

Detractors point out that a merger could lead to decreased competition or job losses. To address the first point, a T-Mobile–Sprint merger would actually lead to more competition. The New T-Mobile will have approximately 126 million subscribers, allowing it to compete better with Verizon and AT&T, which have 150 million and 142 million subscribers, respectively.

Speculations that the combination will result in a loss of 28,000 jobs are flat out wrong. Currently, Sprint has 30,000 employees. If the New T-Mobile eliminates 28,000 jobs, the company would not be able to maintain its expanded operations. Rather, the new company will likely create 5,600 new customer care jobs.

Don’t listen to the naysayers, and think of the future. Not only will 5G connect more Americans to the internet, it will boost the United States’ global competitiveness and improve our standard of living.

The FCC should formally approve the T-Mobile–Sprint merger—it would be a boon for the economy and America as a whole.

Photo Credit: Mike Mozart


Getting the National Spectrum Strategy Right

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Posted by Bethany Patterson on Wednesday, May 8th, 2019, 1:55 PM PERMALINK

It is without a doubt that the deployment of 5G will have a major impact on the country.

Not only is 5G faster (potentially even 100 times faster) than traditional 4G service, it will also bolster the United States’ global competitiveness and improve the standard of living. Almost all aspects of Americans’ lives—from medicine to transportation to manufacturing—will be impacted by the deployment of 5G.

The United States is a global leader in 5G. According to a recent CTIA report, the nation is tied for first with China in terms of 5G readiness, moving up two spots from last year’s ranking. America also leads the world with the most commercial 5G deployments of any nation; by the end of the year it will have 92 deployments, while South Korea (another major player in the race for 5G) will only have 48.

While the United States assigns the most low- and high-band spectrum for wireless, there is room for major improvement regarding mid-band spectrum assignment. For example, America currently has no mid-band spectrum available, while South Korea and China have 280 and 300 megahertz available, respectively.

In October 2018, President Trump signed a memo directing the development of a national spectrum strategy. Recognizing that 5G is crucial for the nation’s future success and feeling threatened by other countries (namely, China), some have pushed that the strategy follow a wholesale—essentially nationalized—approach to 5G. This is not the route America should take.

It is crucial that the United States adopt a strategy centered on free market principles—the same values that made the 4G rollout so successful. These free-market policies, such as exclusive use licenses and flexible use rights, will keep America the global leader in spectrum.

National Economic Council Director Larry Kudlow spoke on this issue at CTIA’s 5G Summit in April, affirming that the private sector is ahead of government and always will be. Competition is the way to get to 5G, and China is not beating the United States. In his view, any assertion otherwise is "nonsense." 

The national spectrum strategy should maintain the United States’ position as a leader in spectrum while sparking innovation and economic growth. As such, this strategy should prioritize more auctions of low-, mid-, and high-band spectrum, which will boost businesses’—and subsequently consumers’—wireless access. It should also focus on ensuring that equipment can operate in multiple countries and the necessary infrastructure can be built. In addition, the government should modernize and streamline its policies and procedures to enable further growth and development.

Fortunately, the federal government has been making great strides towards 5G. The FCC has released its 5G FAST Plan, which strives to encourage private sector investment, update its policies, and make spectrum more widely available. In fact, the FCC has announced its largest spectrum auction ever will occur later this year. The Trump Administration has also prioritized 5G by encouraging private investment through its tax cuts and deregulation, in addition to releasing an official presidential memorandum.

Overall, 5G is the way of the future, and it’s imperative that the federal government create the best strategy to remain dominant during this digital revolution.  

Photo Credit: Christiaan Colen


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