new york times

The F.B.I. Criticizes the News Media After Several Mistaken Reports of an Arrest

April 18, 2013 by NewsMaker Leave a Comment

Numerous organizations, including The Associated Press, The Boston Globe and several local Boston television stations, erroneously reported Wednesday afternoon that an arrest had been made, or that a suspect was in custody, citing unnamed law enforcement sources. Two of the reports came from CNN and the Fox News Channel, both the subject of widespread criticism last June after misreporting the result of the Supreme Court ruling on President Obama’s health care overhaul law.

CNN and Fox News spent about an hour discussing the news of an arrest with various correspondents and experts before backing off when they received further information.

NBC News held back on reporting news of an arrest during continuing coverage on its MSNBC cable channel. It reported that no arrest had been made and that no person had been firmly identified as under suspicion. (The New York Times did not report that there was a suspect or an arrest.)

The F.B.I. issued a statement later in the afternoon: “Over the past day and a half, there have been a number of press reports based on information from unofficial sources that has been inaccurate. Since these stories often have unintended consequences, we ask the media, particularly at this early stage of the investigation, to exercise caution and attempt to verify information through appropriate official channels before reporting.”

CNN broke news of an arrest at 1:45 p.m., with the correspondent John King citing law enforcement sources. About a half-hour earlier, Mr. King had reported a “breakthrough in the identification of a suspect” and included details of a physical description.

“I was told by one of these sources, who is a law enforcement official, that this was a dark-skinned male,” he said.

By about 2:45, one of CNN’s law enforcement experts, Tom Fuentes, a former assistant director of the F.B.I., appeared on the air and reported that he had three sources who assured him no arrest had been made. The network issued a statement later in the afternoon that cited the three sources who had given CNN the information it used to break the news of the arrest: “CNN had three credible sources on both local and federal levels. Based on this information we reported our findings.”

On Fox News, the anchor Megyn Kelly explained the revised reporting on the arrest, saying that the usual journalistic process calls for reporters to rely on trusted sources to confirm information. “It appears in this case some confirmations were issued when perhaps they should not have been,” Ms. Kelly said.

Paul Colford, a spokesman for The Associated Press, denied The A.P. had said a suspect was arrested but only that one was “in custody.” But the news service had also reported earlier that a suspect was “about to be arrested.” Both reports turned out to be wrong. As of late Wednesday, The A.P. had not acknowledged that it had misreported the information.

Judy Muller, a former network news correspondent who teaches journalism at the University of Southern California, wrote in an e-mail, “I fear we have permanently entered the Age of the Retraction. All the lessons of the past — from Richard Jewell to NPR’s announcement of the death of Gabby Giffords to CNN’s erroneous report on the Supreme Court Ruling on ObamaCare — fail to inform the present. The rush to be first has so thoroughly swallowed up the principle of being right and first that it seems a little egg on the face is now deemed worth the risk.”

Article source: http://www.nytimes.com/2013/04/18/business/media/fbi-criticizes-false-reports-of-a-bombing-arrest.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: boston television, law enforcement experts, new york times

Economix Blog: Flaws Are Cited in a Landmark Study on Debt and Growth

April 16, 2013 by NewsMaker Leave a Comment

Mary F. Calvert for The New York Times Kenneth Rogoff and Carmen Reinhart at Ms. Reinhart’s Washington home in 2010, the year their study “Growth in a Time of Debt” was published.

An influential 2010 economics paper by Carmen Reinhart and Kenneth Rogoff showed that countries with high levels of debt experienced significantly slower rates of growth – and became a justification for many countries to adopt austerity budgets to hold down their debt loads. Now a provocative new paper is arguing that the paper was seriously flawed, in part because of basic calculation errors in a spreadsheet.

Because policy makers, economists and journalists have repeatedly cited the Reinhart-Rogoff paper in recent years, the new paper is causing a significant stir, with commentary from across the economics blogosphere.

We have reached out to the authors of the original paper to comment, and will update as soon as we hear from them. But in the meantime, here is a sense of the controversy.

In their path-breaking paper, “Growth in a Time of Debt,” based on 3,700 economic observations, Ms. Reinhart and Mr. Rogoff, now both at Harvard, found little relationship between growth and debt for countries with debt-to-economic output ratios of 90 percent or less. But for countries with debt loads equivalent to or above 90 percent of annual economic output, “median growth rates fall by one percent, and average growth falls considerably more.”

Since that paper came out, dozens of policy makers around the world have cited it as a reason for cutting budgets despite a down economy. Keep your debt below 90 percent of output, the logic went, and you would be rewarded with stronger growth in the future. (See, for instance, the House Republican budget.)

But some economists were skeptical of the results. Others wondered whether countries with heavy debts struggled to grow, or whether slow-growing countries ended up with heavy debts, for instance. And many noted how hard it could be to draw straight lines between debt and growth, given the panoply of factors at work.

Given the policy importance of the question, Thomas Herndon, Michael Ash and Robert Pollin of the University of Massachusetts, Amherst, decided to try to replicate the results. They could not do so with public data, and asked Mr. Rogoff and Ms. Reinhart for their data set.

Within it, they have seemingly discovered a few errors: some simple miscalculations or data exclusions that greatly alter the results. According to their re-running of the figures, “the average real G.D.P. growth rate for countries carrying a public debt-to-G.D.P. ratio of over 90 percent is actually 2.2 percent, not -0.1 percent,” they write.

If their analysis proves to be correct, it would significantly undercut the argument that economies need to keep their debt levels down to avoid a future growth slowdown. But other studies have found similar results to those found by Reinhart-Rogoff, and the two Harvard economists have published additional studies buttressing their results.

Moreover, the argument floating around that the Reinhart-Rogoff research altered any country’s policy course – the idea that we have austerity because of a spreadsheet mistake – is dubious at best. When the global recession hit, many members of the policy elites in Europe and in the United States already believed that budget discipline begat growth. And countries that adopted austerity budgets often had to do so because of the vicissitudes of the market and the financing constraints of groups like the International Monetary Fund and the European Commission.

Article source: http://economix.blogs.nytimes.com/2013/04/16/flaws-are-cited-in-a-landmark-study-on-debt-and-growth/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: down economy, justification, new york times

White House Budget Curbs Some Deductions for the Wealthy

April 10, 2013 by NewsMaker Leave a Comment

Outlining his budget proposals to Congress on Wednesday, Mr. Obama pushed to raise more than $600 billion in new revenue, mainly by curbing deductions for the most affluent taxpayers and forcing millionaires to pay a minimum rate of 30 percent. Under the White House plan, deductions for tax breaks like mortgage interest and contributions to charities would be capped at a maximum rate of 28 percent. The caps would limit the value of the breaks to the top 3 percent of taxpayers who face higher marginal tax rates and generate about $529 billion in additional revenue over 10 years.

Many of the budget proposals, including the limit on deductions, have been made before by the Obama administration. Analysts said Congress was unlikely to adopt them in isolation, but that some Republicans might be open to a broader deal that included measures to close various loopholes in the tax code.

Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, said the main part of the tax proposal — curbing tax deductions for high-earners — could form part of a future deal because they were close to what Republicans have themselves proposed in the past. “In any agreement that finally comes together this will be the core revenue piece of it,” he said.

At the same time, the administration formally proposed the so-called Buffett rule, which would impose a new minimum 30 percent tax rate on households earning incomes above $1 million. It said this could generate an additional $53 billion in revenue over a decade. It is named after Warren E. Buffett, the billionaire investor, who said in an Op-Ed article in The New York Times that he was paying a lower tax percentage than members of his office.

“This proposal will prevent high-income households from using tax preferences, including low tax rates on capital gains and dividends, to reduce their total tax bills to less than what many middle class families pay,” according to the White House.

Roberton Williams, senior fellow at the Tax Policy Center in Washington, said the rule’s inclusion in the budget proposal was an indication that the Obama administration was determined “to make sure that the rich people pay something.”

Tax rates for high-earners were increased this year for the first time in two decades as part of the postelection deal to avoid the so-called fiscal cliff and to help pay for the cost of expanded health care coverage.

Despite those increases, the effective tax burden for the very wealthy remained considerably lower than in past decades, according to Emmanuel Saez, professor of economics at the University of California, Berkeley. He estimated the recent tax increases could take the total average federal tax rate of the top 0.1 percent of earners to about 40 percent, compared with about 51 percent in 1981. The total tax take from that group had fallen to about 33 percent after the Bush tax cuts.

In its proposal, the Obama administration also proposed a $3 million limit on tax-deferred individual retirement accounts — another tax measure aimed at wealthy individuals who have been accused of using the accounts to shelter large amounts of money rather than for simple savings.

The White House also proposed, as it has in the past, ending the preferential treatment of private equity and hedge fund profits, known as carried interest. These profits are currently taxed as a long-term capital gain.

The treatment of carried interest has for years been strongly defended by elements of the financial industry, and the White House proposal was quickly attacked on Wednesday by the leading private equity industry trade group. Even supporters of the proposal conceded that it faced stiff political opposition.

“Republicans are never going to sign off on this,” said Andrew Fieldhouse, an analyst at the Economic Policy Institute.

While most of the proposed tax increases were aimed at higher earners, there were important proposals that would affect all individuals.

The administration proposed higher taxes on tobacco products to pay for early childhood education, raising about $78 billion over a decade.

Its plan for a new cost-of-living formula to reduce future Social Security benefits would also involve indexing income tax brackets to the different measure of inflation. This would effectively increase the money raised by the income tax across the board over the next decade, affecting “people throughout the income distribution,” said Donald Marron, director of the Tax Policy Center.

President Obama said he was still committed to lowering the federal corporate tax rate from 35 percent. But he also wanted to close tax loopholes that allow many companies to pay a much lower effective corporate tax rate.

In the budget, he proposed eliminating special tax privileges for the oil, gas and coal industries to save a further $44 billion over 10 years, increased taxation of foreign earnings, and special rules for corporate jets.

The Business Roundtable, a lobbying group that represents major corporations, said it welcomed any cut in corporate taxes, but wanted the reductions to be part of broader reform, and objected to measures that aimed at particular industries.

“Singling out certain industries for taxation is bad tax policy,” the group said in a statement.

Article source: http://www.nytimes.com/2013/04/11/business/white-house-budget-curbs-some-deductions-for-the-wealthy.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: marginal tax rates, mortgage interest, new york times

You’re the Boss Blog: Are There Lessons to Be Learned From Dollar Shave Club’s Viral Start-up?

April 10, 2013 by NewsMaker Leave a Comment

J. Emilio Flores for The New York Times Michael Dubin: “For a 24-hour period, no one could get on the site.”

Today’s Question

What small-business owners think.

We’ve just published a Conversation with Michael Dubin, a founder of Dollar Shave Club, the razor-blade business that got its start with a promotional video that went viral in March 2012. It featured Mr. Dubin walking briskly through a warehouse as he issued off-color wisecracks and encouraged men to buy his razor blades on a subscription basis for as little as $2 a month.

In the last year, the company, in Santa Monica, Calif., has increased its full-time staff to 24; begun to sell three different types of blades that are sourced from overseas manufacturers and sold for $1, $6 and $9 a month; introduced a new product called shave butter and generally made the transition from YouTube sensation to a real business. After you have read the interview with Mr. Dubin, whose background is in digital media and marketing and who has also performed improvisational comedy as a hobby, please tell us in the comment section below if you think there are lessons in this story for other businesses.

Why did this video go viral? What does it suggest for other companies who are marketing with video?

Article source: http://boss.blogs.nytimes.com/2013/04/10/have-you-tried-video-marketing/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: michael dubin, new york times, razor blades

Bucks Blog: Coffees to Go, and Make One ‘Suspended’

April 2, 2013 by NewsMaker Leave a Comment

Tony Cenicola/The New York Times

A while back, I wrote about how I was pleasantly surprised to receive a free coffee at a bagel shop drive-through, during “Random Acts of Kindness” week. The customer in front of me paid for my order before driving away.

Now, it seems, some do-gooders are trying to go beyond simply paying for the person in line behind them, who — truth be told — may or may not be hard up for cash. Supporters of the “suspended coffee” trend are aiming to prepay for future customers who are truly needy.

The movement has apparently spread here to the United States from Europe, according to a recent post on The Consumerist, which also said it considered the practice “stupid and inefficient.”

So what is a “suspended” coffee? It works like this, according to a Facebook page about the practice: Customers pay for their own coffee, then pay for an extra coffee — or two — but “suspend” delivery of the drink. Then, someone else can come in and ask the cashier if there are any suspended coffees. The cashier hands the drink over to the nonpaying customer.

This may sound nice in theory, but it can cause problems in practice. For starters, the coffee shop has to keep track of the coffee credits somehow. And then there’s the delicate issue of having lots of down-on-their-luck people wandering into cafes to, in effect, beg for coffee. Not to mention, as The Consumerist notes, that coffee isn’t exactly the most filling food for truly hungry people. And they may not know to ask for a “suspended” coffee, anyway.

I called Starbucks to ask what they think of this, since they have locations on most busy corners in most big cities. A spokeswoman, Jaime Riley, said the company was aware of the trend, but that so far it seemed mostly confined to Europe. In an e-mail, she said, “We are always touched when we hear about such thoughtful acts of our customers.”

That said, the company doesn’t have a formal store policy about this sort of thing. “We simply encourage our partners (employees) to use their best judgment to help make every customer visit special,” she said.

What do you think of this idea? Do you know of a coffee shop that does it?

Article source: http://bucks.blogs.nytimes.com/2013/04/02/coffees-to-go-and-make-one-suspended/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: consumerist, e mail, new york times

You’re the Boss: A Start-Up Tries to Give Wine Spritzers a New Image and a Second Wind

March 27, 2013 by NewsMaker Leave a Comment

Sandy Huffaker for The New York Times Jayla Siciliano: “Keeping the product natural makes it much more difficult to find bottlers we can use.”

Start

The adventure of new ventures.

During the seven years she did product development and design for both Diesel in Santa Barbara, Calif., and Burton Snowboards in Burlington, Vt., Jayla Siciliano attended a lot of work-related parties and dinners and did plenty of social drinking. The problem was that she also had to get up the next morning and work, so during social events she started pouring sparkling water into her wine. “It was perfect,” she said. “I could sip that all night and I would wake up feeling fine.”

What she had concocted was a wine spritzer, the stuff women drank at summer barbecues in the 1970s and ’80s. The spritzer always had a “girlie” reputation, solidified with the advent of wine coolers in the ’80s, a bottled, sweetened version of the spritzer. The popularity of both spritzers and coolers faded in the ’90s, but in the last year or so the spritzer has been making a comeback. (This newspaper wrote about that comeback last May). Now Ms. Siciliano has become part of its second wind.

She first created her version of the spritzer while at Burton Snowboards, where she spent a lot of time on boats in the summer, conducting business with “big guys that do a lot of snowboarding.” They saw Ms. Siciliano pouring Pellegrino into her wine glass and started asking for some in theirs, too. “I thought if these guys want to drink a spritzer, I could break through the feminine reputation it has,” she said.

She quit her job in 2007, moved back to Santa Barbara and started doing research into things like carbonation, bottling and flavor formulas. She also went back to school and got an M.B.A. at the University of San Diego. While there, she wrote the business plan for her wine spritzer start-up, Bon Affair, and started raising money. Although Ms. Siciliano did conduct focus groups and surveys to collect data on the importance of ingredients, she did no market research before diving in.

Ms. Siciliano did look at trends in the alcohol industry, however, and saw both the growth in light beer over the last 20 years and the growing interest in wine as indicators she was onto something. “I also bartended in college and again in 2009, when I was starting Bon Affair,” she said, “and I saw lots of women looking for a lighter option after that second glass.”

In April 2010, Ms. Siciliano connected with Troy Johnson, a food writer in San Diego and former creator and star of the Food Network show “Crave.” Mr. Johnson said when he heard Ms. Siciliano describe her version of the spritzer — using good wine, no preservatives, no sweeteners — “lights started to go on. I had seen wine spritzers coming back a bit; the best mixologists were starting to play with them on their menus. And when I tasted it, it was so much better than I thought it was going to be. It has a very sophisticated palate.”

Mr. Johnson was traveling for “Crave” last February when Ms. Siciliano called to tell him she had found two angels willing to invest $450,000 in Bon Affair. She asked if he was on board. “I was sitting in a bar in Manhattan and I looked down at the menu and it said ‘wine spritzer,’” Mr. Johnson said. “I told her, ‘I’m in.’”

Founder: Jayla Siciliano.

Employees: Bon Affair has nine partners — all have stock options — but no full-time employees yet.

Location: Solana Beach, Calif.

Pitch: “The reason I got into this was because it fit into a healthy, balanced lifestyle, which is how I want to live,” Ms. Siciliano said. “We have two products, a sauvignon blanc and pinot noir and we don’t add sugar or preservatives. It’s a lighter alternative for wine drinkers, it has half the calories.”

Challenges: The first 5,000 bottles that came off the line last spring at the Detroit manufacturer Ms. Siciliano chose had specks of tomato floating in them. “They had been bottling a Bloody Mary mix and didn’t fully clean the line,” she said. “We had to scrap all of that.”

There were other bottling issues too — leaking, caps that wouldn’t come off, incorrect labels and low-fills. Ms. Siciliano discovered the cap problem right before a big event in San Diego, after which she and Mr. Johnson spent two days sorting through boxes to separate the bad from the good. The company has since switched to a California bottler. “Keeping the product natural makes it much more difficult to find bottlers we can use,” she said.

Traction: In January, after Bon Affair was mentioned in a Shape Magazine “Hot List,” Ms. Siciliano said Web orders went up tenfold: “We went from a few a week to five or six a day.” In fact orders went up so fast there wasn’t enough product to meet the demand. This spring, Bon Affair will be in four Whole Foods stores in San Diego as well as on Amazon. And in April, after the next bottling run, it will be sold in eight states. The company has also had some international sales through Wineflite, a wine-shipping service based in San Francisco.

Revenue: $15,000. The bottles retail for $14.

Financing: Three investors have put in $640,000.

Competition: “We really don’t have any direct competitors,” said Ms. Siciliano. “There are a couple of spritzer companies in Italy, but they are sweeter and have over 7 percent alcohol. We’re at 6.5 percent.”

What’s Next: A year from now Ms. Siciliano wants Bon Affair’s bottles lining the shelves of all the Whole Foods stores in California and offered on Virgin America flights.

What do you think? Is there a market for Bon Affair?

You can follow Eilene Zimmerman on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/03/27/a-start-up-tries-to-give-wine-spritzers-a-new-image-and-a-second-wind/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: new york times, raising money, wine spritzer

BBC to Sell Lonely Planet Travel Guidebooks

March 19, 2013 by NewsMaker Leave a Comment

In 2007, when the British Broadcasting Corp. bought the Lonely Planet travel guidebooks, it drew criticism from rivals for using public money to expand into areas better left to the private sector.

On Tuesday, as the BBC confirmed plans to sell Lonely Planet to a reclusive American billionaire, it drew internal scrutiny — this time for losing public money on the sale.

BBC Worldwide, an arm of the public broadcaster than runs many of its international and for-profit operations, said Tuesday that it had agreed to sell the series to NC2 Media, a company controlled by Brad Kelley, a businessman from Kentucky who made a fortune in tobacco and later turned his attention to real estate and other interests.

The price, £51.5 million, or $77.3 million, was nearly £80 million below the £130 million that the BBC paid for Lonely Planet in two stages. The scale of the loss prompted the BBC Trust, a panel that oversees the broadcaster, to call on the executive arm of the BBC to “commission a review of lessons learnt and report to the Trust with its findings.”

“Although this did not prove to be a good commercial investment, Worldwide is a very successful business, and at the time of purchase there was a credible rationale for this deal,” Diane Coyle, vice chairwoman of the trust, said in a statement.

At the time of the purchase, the BBC — then headed by Mark Thompson, who is now chief executive of The New York Times Company — talked about extending the Lonely Planet brand into new areas, including digital outlets. But publishers of traditional travel guidebooks have struggled to compete with travel sites on the Web, like TripAdvisor.

Meanwhile, rivals of the BBC complained that the broadcaster had no business moving into new areas at a time when some commercial media companies have struggled with the challenge of the Internet.

In 2009, James Murdoch, then the head of the European and Asian operations of News Corporation, described the BBC’s purchase as a “particularly egregious example of the expansion of the state.” In addition to its other media holdings, News Corporation is the largest shareholder in British Sky Broadcasting, a pay-TV company that competes with the BBC.

The BBC has been scaling back since it agreed to a reduction in its public funding — which comes from a license fee on television-owning households — in 2010.

“Lonely Planet has increased its presence in digital, magazine publishing and emerging markets whilst also growing its global market share, despite difficult economic conditions,” said Paul Dempsey, interim chief executive of BBC Worldwide, in a statement. “However, we have also recognized that it no longer fits with our plans to put BBC brands at the heart of our business and have decided to sell the company.”

Despite the challenges facing travel publishers, the BBC said Lonely Planet is the biggest travel guidebook series in the United States, Britain and Australia, where the title was founded in 1973 as a bible for backpackers. It said 120 million books have been published in 11 languages, and 120 million people visit its Web sites annually.

“The challenge and promise before us is to marry the world’s greatest travel information and guidebook company with the limitless potential of 21st-century digital technology,” Daniel Houghton, executive director of NC2 Media, said in a statement. “If we can do this, and I believe we can, we can build a business that, while remaining true to the things that made Lonely Planet great in the past, promises to make it even greater in the future.”

The purchase is a big expansion of Mr. Kelley’s media holdings; he also has an investment in OutWild TV, a Web site that shows travel videos. Mr. Kelley is said to be one of the largest private landowners in the United States, with millions of acres of ranch land in Texas and other states.

Article source: http://www.nytimes.com/2013/03/20/business/media/bbc-to-sell-lonely-planet-travel-guidebooks.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: james murdoch, new york times, new york times company

Mexican Leaders Propose Telecommunications Overhaul

March 12, 2013 by NewsMaker Leave a Comment

The proposal would give broad new powers to regulators who have been frustrated in their attempts to reduce the market power of América Móvil, which is controlled by the billionaire Carlos Slim Helú.

Most important, it would allow regulators to require a company with control of a majority of the market to divest some assets or submit to special rules to prevent it from abusing its market dominance.

América Móvil controls about 80 percent of Mexico’s fixed lines, about 70 percent of its mobile lines and 74 percent of its fixed-line Internet connections, according to the Inter-American Development Bank. (Mr. Slim owns about 8 percent of The New York Times Company.)

A study released last year by the Organization for Economic Cooperation and Development estimated that the lack of competition in telecommunications costs the economy about $25 billion a year. The study noted that Mexico was at the bottom of the rankings among O.E.C.D. countries in penetration for fixed, mobile and broadband markets. Profit margins for América Móvil are much higher than the O.E.C.D. average, and the company invests less per person than companies in any other country.

“The government is sending a clear signal that its way of dealing with the sector is very different,” said Jana Palacios Prieto, a telecommunications expert at the Mexican Institute for Competitiveness.

Through a combination of legal challenges and lobbying, América Móvil’s lawyers have managed to block or delay regulation that might chip away at the company’s market share and its margins.

“We are two to three decades behind other countries,” said Ernesto Piedras, the director general of the Competitive Intelligence Unit, a telecommunications consulting firm. “We have a regulatory outlook that is so poorly enforced that practically any modification will leave us better off.”

The measures announced Monday also aim to curtail the market dominance of Mexico’s broadcast duopoly: Televisa, which is controlled by Emilio Azcárraga Jean, and TV Azteca, which between them control almost the entire television market. The proposal envisions auctioning off two new private television networks, a plan the broadcasters have fought for years.

Televisa said in a statement that it welcomed more competition, while América Móvil did not have an immediate comment.

The measures that were announced on Monday must still clear a series of legislative hurdles. The first step is for Congress and state assemblies to approve a constitutional reform. Because the changes were negotiated among Mr. Peña Nieto’s top aides and leaders of the three main political parties, they are expected to pass.

Then Congress must rewrite several laws to put those changes into effect. That, analysts say, is when the industry may find ways to water down some of the measures.

Among the proposals announced on Monday is one that would lift the limit on foreign investment in telecommunications to 100 percent from 49 percent. The law would give full autonomy to Mexico’s Federal Competition Commission, which has struggled to impose fines on América Móvil and tried unsuccessfully to force broadcasters to provide their free channels to pay TV competitors.

The changes would also create a new body over the next year with broad powers to regulate telecommunications companies, including the possibility of ordering them to divest assets to prevent them from exercising control over the market.

Article source: http://www.nytimes.com/2013/03/12/business/global/mexican-plan-would-rein-in-phone-and-tv-providers.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: new york times, new york times company, telecommunications costs

DealBook: Dell Agrees to Open Its Books to Icahn

March 11, 2013 by NewsMaker Leave a Comment

Chad Batka for The New York Times Carl Icahn has suggested a so-called leveraged recapitalization of Dell

Dell Inc. has agreed to open its books to the activist investor Carl C. Icahn, signaling a possible truce on one front in the battle over the computer maker’s proposed $24.4 billion buyout.

In exchange, the billionaire — who was critical of the deal just last week — has agreed to confidentiality, which silences, temporarily at least, the influential investor.

In a brief statement on Monday, Mr. Icahn’s firm said that it “looks forward to commencing its review of Dell’s confidential information.”

Disruptions: On Facebook, Sharing Can Come at a Cost

March 4, 2013 by NewsMaker Leave a Comment

Paul Sakuma/Associated Press The way Facebook highlights or hides information on its site raises ethical questions.

7:23 p.m. | Updated

Something is puzzling on Facebook.

Early last year, soon after Facebook instituted a feature that let people subscribe to others’ feeds without being friends, I quickly amassed a healthy “subscriber” list of about 25,000 people.

Every Sunday morning, I started sharing my weekly column with this newfound entourage. Those posts garnered a good response. For example, a column about my 2012 New Year’s resolution to take a break from electronics gathered 535 “likes” and 53 “reshares.” Another, about Mark Zuckerberg, Facebook’s founder and chief executive, owing me $50 after the company’s public offering, quickly drew 323 likes and 88 reshares.

Since then, my subscribers have grown to number 400,000. Yet now, when I share my column, something different happens. Guess how many people like and reshare the links I post?

If your answer was over two digits, you’re wrong.

From the four columns I shared in January, I have averaged 30 likes and two shares a post. Some attract as few as 11 likes. Photo interaction has plummeted, too. A year ago, pictures would receive thousands of likes each; now, they average 100. I checked the feeds of other tech bloggers, including MG Siegler of TechCrunch and reporters from The New York Times, and the same drop has occurred.

What changed? I recently tried a little experiment. I paid Facebook $7 to promote my column to my friends using the company’s sponsored advertising tool.

To my surprise, I saw a 1,000 percent increase in the interaction on a link I posted, which had 130 likes and 30 reshares in just a few hours. It seems as if Facebook is not only promoting my links on news feeds when I pay for them, but also possibly suppressing the ones I do not pay for.

Facebook proudly informed me in a message that 5.2 times as many people had seen my post because I had paid the company to show it to them. Gee whiz. Thanks, Facebook.

This may be great news for advertisers, but I felt slightly duped. I’ve stayed on Facebook after its repeated privacy violations partly because I foolishly believed there was some sort of democratic approach to sharing freely with others. The company persuaded us to share under that premise and is now turning it inside out by requiring us to pay for people to see what we post.

Facebook takes a different view, saying that it is still finding the right balance for the algorithm that decides what people see in their news feeds.

“The two aren’t related; we don’t have an incentive to reduce the distribution that you send to your followers so that we can show you more ads,” said Will Cathcart, product manager for Facebook’s news feed.

“The impact ads are having on engagement is relatively low, and we’re really pleased with how low that is,” he said. “Over time, we’ve shipped a number of changes to our algorithm that may cause content to go up or down.”

Facebook said in a statement that “the median amount of feedback on posts (likes, comments, shares) from people who have more than 10,000 subscribers is up 34 percent from a year ago.” But Facebook has also said that there has been a 2 percent drop in interaction on the news feed, and is now replacing free content with paid content, which means a large number of free posts will disappear from people’s feeds as sponsored ads float to the top.

Eben Moglen, a professor at Columbia who specializes in Internet law, said that although Facebook’s decisions to prioritize paid content could be seen as unethical, the company is not breaking any antitrust laws, yet.

“While the effort that is being characterized is problematic, no one has defined Facebook as dominant in a market,” he said, adding that the competition among social networks leaves it open to operate of its own devices.

In the past, lawmakers have gone after big companies that favor their own products and suppress others.

Microsoft in the late 1990s took advantage of its hold on PCs to force Internet Explorer onto people. Recently, Google has caught the attention of the Federal Trade Commission and a number of European regulators for highlighting its own products in search results. But in both instances, the companies were monopolies. Although Facebook has one billion users, there are plenty of other social networks and billions of people still not on the site.

“Certainly Facebook has changed its policies and adjusted its products in order to squeeze as much revenue out of all of the openings of the business model in a way that they didn’t have to do before they went public,” said James McQuivey, an analyst at Forrester Research and author of the book “Digital Disruption.” “It’s very possible there’s now a giant pendulum swinging within Facebook, where every division is under pressure to find revenue and advertising solutions.”

But for those who use Facebook for business needs, like restaurants, news outlets and local mom-and-pop shops that rely on the site to update customers, the changes could be damaging.

“It’s not just that people will feel nickeled and dimed by this, it’s that ultimately the value of the product disappears as the stream of information in your social network, one that used to be rapid and friction-free, is no longer there and now consumed by advertising,” Mr. McQuivey said.

When I asked Avichal Garg, another product manager for Facebook’s news feed, why my interaction count dropped so sharply, he said the company clearly needed to improve its algorithm.

“It’s really not in our best interest to take out the most engaging stuff and replace it with ads,” he said. “We want to make sure we show the right content to the right people.” Facebook’s ability to control the algorithm puts it in a different position from its competitors.

Twitter has the same type of advertising module, the sponsored tweet, but although it might highlight the ad in a user’s stream, it does not suppress other people’s content in the process. Everything just falls into a time-based stream.

Facebook may become dominant enough that its actions vex regulators, then it may be forced to change what it highlights. Or, maybe its users will grow so tired of what seems like another bait-and-switch that they will decide to stop sharing, even if it seems to be free.

E-mail: bilton@nytimes.com

Article source: http://bits.blogs.nytimes.com/2013/03/03/disruptions-when-sharing-on-facebook-comes-at-a-cost/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: digits, facebook, new york times