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Scandal casts cloud over News Corp.’s ed-tech business


Educators are calling for New York state to cancel Wireless Generation's no-bid contract.

The phone-hacking scandal that erupted over Rupert Murdoch’s News Corp. in the United Kingdom last month took a new turn this week when the heads of the New York state and New York City teacher unions sent a letter demanding that the state controller and department of education throw out a $27 million no-bid contract pending with the News Corp. subsidiary Wireless Generation.

“We have become increasingly concerned with the proposed contract,” the union officials wrote. “It’s especially troubling that Wireless Generation will be tasked with creating a centralized database for personal student information even as its parent company stands accused of engaging in illegal news gathering tactics, including the hacking of private voice mail accounts.”

An official was quoted as saying the New York education department will stand by its recommendation to approve the contract. Officials in the office of the state Controller had no comment.  The controller has until early September to approve or reject the Wireless Generation contract.

The two union leaders are only the latest to submit formal objections. Shortly after the scandal broke out in the United Kingdom, some educators and parents expressed dismay that Wireless Generation—which provides mobile and web software, data systems, and professional services that enable teachers to use data to assess student progress and deliver more personalized instruction—would have access to and handle sensitive student information.

A Change.org petition asking New York state and city education officials to cancel non-bid contracts awarded to Wireless Generation had 485 signatures as of press time. The petition was started by Class Size Matters, a nonprofit organization of parents and other citizens dedicated to achieving smaller classes in New York City and in the nation as a whole.

The wiretapping scandal plaguing Rupert Murdoch’s News Corp. and his now-defunct News of the World has cast a dark cloud over the company’s other businesses—including Wireless Generation. Defenders of the ed-tech firm say it is unfair to draw comparisons between the News of the World cell-phone hacking scandal and U.S. education.

Murdoch’s News Corp. purchased 90 percent of Wireless Generation for roughly $360 million in late 2010. Klein joined News Corp. as CEO of the company’s newly formed education division in January. The education division focuses on technology-based content and digital assessment tools.

In June, the company announced that Kristen Kane, former chief operating officer for New York City schools, would assume the same position at News Corp.’s education division. Peter Gorman, former superintendent of Charlotte-Mecklenburg Schools in North Carolina, was named senior vice president and will work with school districts to implement the division’s programs.

News Corp. faces a host of financial and legal challenges as allegations of cell-phone hacking and police bribery come to light. One report charges that News International and News of the World tabloid reporters hacked into the cell phone of a kidnapped girl before police learned of and could confirm that the girl was murdered. News International is the British newspaper division of Murdoch’s global News Corp.

Lawmakers questioned London police about reports that officers took bribes from journalists to provide inside information for tabloid scoops and to ask why the force decided to shut down an earlier phone hacking probe after charging only two people. Detectives reopened the case earlier this year and are looking at a potential 3,700 victims.

In the United States, the FBI is conducting a preliminary inquiry into an allegation that News of the World journalists sought to hack into the phones of 9/11 victims. Lawmakers have raised questions about whether New York-based News Corp. could face legal action in the U.S. if allegations of bribing police for stories turn out to be true.

As the investigations move forward, Klein will be at the helm of a committee tasked with addressing the matter internally. Its mandate remains somewhat murky. In a July 18 statement, News Corp. said the company’s Management and Standards Committee would cooperate with investigators and “lay the foundation for future standards” at News International. The committee will be headed by commercial lawyer Lord Grabiner. It will answer directly to Klein and conduct its own inquiries “where appropriate.”

Some of Murdoch’s most lucrative U.S. assets include the Fox TV network, 20th Century Fox film studio, the Wall Street Journal, and the New York Post, a competitor to the Daily News.

Joan Lebow, a Wireless Generation spokeswoman, told the Huffington Post: “Personal privacy is of paramount concern and Wireless Generation, chosen because it is a leader in providing effective educational software that helps teachers and students in 50 states, follows the highest privacy standards and regulations in [New York] and nationwide. We do not share student data with News [Corp.] or its subsidiaries.”

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