The explosive popularity of tablets, smartphones and other Internet-connected consumer devices has ushered in a new technology ecosystem driven by Apps. These self-contained software programs have not only provided the stakeholders involved with a compelling way to exploit everything from movies and games to magazines and newspapers, but have created a thriving new marketplace poised for ongoing, accelerated growth. While the stakeholders are many, the myriad of complex business and legal issues facing them are no less staggering in number. For publishers, content creators, App developers, content distributors, aggregators, storefront operators and service providers, the successful navigation of a rapidly evolving landscape of shifting terms and conditions, privacy regulations, content restrictions and corresponding business considerations across multiple devices and platforms has proven a daunting but essential exercise for leveraging the economic opportunities available.

In this CLE-accredited webinar, the DigitalHHR team will explore the critical business and legal challenges associated with the development, publication, distribution, sale and use of Apps. We will discuss the contours of in-App purchases, subscription-based offerings, and “freemium” models, as well as in-App advertising and App-based ad networks. We will analyze the evolving privacy terms and conditions associated with the use of Apps, and the corresponding laws, regulations and case law impacting end user data collection, disclosure and ownership. We will also address the terms and requirements promulgated by the various platform operators, including Apple, RIM (Blackberry) and Google (Android), and how they impact stakeholders’ participation across the different App environments.

The webinar will be held on Thursday, April 7, 2011 from 12:30 p.m. to 1:30 p.m. EDT.

To register, please click here.

The FCC’s inquiry involves Google’s call-blocking policy.  In June, Google began noticing extremely high-cost calls to a concentrated number of rural destinations which generated vastly disproportionate costs.  Its internal investigations, using data filters to sort out call patterns, revealed that the top 10 telephone prefixes (the area code plus the first three digits of a seven digit number) to US destinations generated more than 160 times the expected amount and accounted for 26.2 percent of its monthly U.S. costs.  By August, Google began restricting calls to certain high-cost destinations.  Google’s response letter to the FCC describes the Google Voice service and explains Google’s investigation into and rationale behind its call blocking policy.  It claims that its engineers developed a “tailored solution” so that Google Voice currently restricts calls to fewer than 100 specific phone numbers, a practice which Google’s counsel believes is necessary to “prevent these schemes from exploiting the free nature of Google Voice.” 

While Google has only recently began blocking costly calls, the practice whereby rural telecoms charge long distance carriers exorbitant rates to connect and terminate calls from their networks is not new.  In may cases these telecoms partner and share revenue with adult chat service, conference calling centers and others to attract traffic to their networks.  AT&T, and other long-distance carriers, have long complained and sued over these so-called traffic pumping schemes.  However, as common carriers subject to FCC regulations, they were banned in 2007 from blocking calls and are required to deliver phone calls without discrimination to all numbers dialed.  AT&T’s complaint to the FCC is rooted in its contention that Google’s call blocking policy is enabling it to dance around this ban that applies to other carriers.

However, this recent skirmish over Google Voice is really part of a larger debate currently playing out in the regulatory stage over “network neutrality” rules being reexamined by the FCC and AT&T has framed Google’s actions as part of the debate. 

In its Statement on Google Voice and Net Neutrality, AT&T stated that “By openly flaunting the call blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the spirit, if not the letter, of the FCC’s fourth principle contained in its Internet Policy Statement.“   The FCC’s fourth principle on net neutrality states that “consumers are entitled to competition among network providers, applications, and service providers, and content providers.“  

Some members of Congress are also concerned about the adverse impact on the market and support for universal service if Google is allowed to operate its telephone services outside of the rules that govern carriers.  As they stated in their letter to the FCC “[I]t is our opinion that a company should not be able to evade compliance with important principles of access and competition set forth by the FCC by simply self-declaring it is not subject to them without further investigation.”

Google responded to these charges by stating that “The FCC’s open Internet principles apply only to the behavior of broadband carriers – not the creators of Web-based software applications.” Google claims that AT&T is attempting to blur the distinction between Google Voice and traditional phone service but maintains that web applications like Google Voice and Skype shouldn’t be treated like traditional phone service.

Google distinguishes Google Voice from traditional phone carriers by explaining that unlike traditional carriers which charge users for their services, Google Voice is a free, web-based software application similar to e-mail rather than a telecom service designed to “supplement and enhance existing phone lines, not replace them” and should therefore be exempt from common carrier rules.   The service is currently available to a limited number of users on an invitation-only basis.  Users are still required to have an existing land or wireless line in order to use Google Voice and are still able to make outbound calls on any other phone device.  Therefore, because Google Voice is a software application, not a telephone company, Google believes that its service is not and should not be subject to common carrier laws or the FCC’s jurisdiction.

Distinctions aside, with nearly 1.5 million users, the increasingly popular service is viewed by some as running a rival service to traditional phone companies.  The heart of the FCC’s inquiry is whether Google Voice is a telecom service or an online software application and whether this distinction really matters.  How different is a call traveling directly over carrier lines from one that goes through software applications?  As of now, the difference appears to be the ability to block less than 100 calls, an option not available to AT&T and other carriers.

Whether the FCC agrees with Google’s characterization of its service and its interpretation of the current open Internet principles may have a dramatic impact on both the telecom and internet marketplaces.  And the FCC’s newly proposed rules on network neutrality may also play a prominent role in this debate.  We will continue to monitor the proceedings and keep you posted.

Power.com, a Rio de Jeneiro-based company, is also getting in on the action, with a solution that offers users the ability to view all of their social networks and synchronize friends lists, photos, updates, etc., on one platform.  Essentially, when a user logs in via Power.com they can access any of their social network pages with one click, and can simultaneously update the content of all their personal pages.  As of now, Power.com already supports Facebook, MySpace, Hi5, MSN Messenger and some others, and has its sights set on LinkedIn, Gmail, AOL and some other well-known social utilities.

While all of this one-stop-shop socializing seems appealing for a lot of reasons, (and I’m not suggesting otherwise), there are some real paradigm-shifting concerns to consider.  Privacy is obviously a big one (but that is an issue I will address in its own posting so stay tuned).  The more significant and relevant issue is the shift from a more traditional, territorial approach to ownership of end user data—where websites jealously guarded their relationships and connections with their subscribers and users–to the idea of data “portability” and the sharing of end user data across sites and among business partners.  For example, Facebook has detailed information about its users (e.g., their identities, likes, friends, etc.) but up until now that information has, for the most part, been solely of use from a targeting/marketing perspective. By creating an environment where a user can log in to websites with his or her Facebook profile and invite Facebook friends to share the experience on that site, the Facebook profile information can now be leveraged for the delivery of personalized advertising on the partner site.  Facebook gains from being able to monetize its information “off-site” and the partner gains from being able to harvest the Facebook information for targeted ad sales without having to collect the information itself.  Users may benefit from not having to provide their information to multiple sites across the Web.  There is also the added benefit (as pointed out by Facebook) of providing users with a single point of contact to control privacy settings.

While this sounds good in theory, it will definitely raise eyebrows when it comes to negotiating deals, particularly with respect to ownership issues and the conditions and limitations of the use of the information.  Some say these mere technical advancements won’t yet have a significant impact on how businesses approach social media, but I think it will be very interesting to see how quickly that will change.  Is everything better when its social? That remains to be seen.