September 2011

BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY, SEPTEMBER 1, 2011

Find all out AT&T/T-Mobile coverage at http://www.benton.org/headlines/at-t-t-mobile

AT&T/T-MOBILE
   Justice Department Files Antitrust Lawsuit to Block AT&T’s Acquisition of T-Mobile - press release
   Reaction to Justice's Move to Block AT&T/T-Mobile (Updated) [links to web]
   If the AT&T deal fails, what’s next for T-Mobile? - analysis
   DoJ Says "No Ma Cell"; What Happens Next? - analysis
   What The Justice Department’s Slapdown Of AT&T Really Means - analysis
   AT&T’s Stephenson Plans Court Fight to Salvage T-Mobile Deal
   Rivals' Cheers Could Turn to Tears - analysis
   T-Mobile Left in the Lurch - analysis
   A Newly Single T-Mobile Would Have Choices - analysis
   T-Immobile - editorial
   On AT&T, U.S. Chooses Law Over Politics - analysis
   AT&T plan is a wake-up call for regulators - analysis
   Political tinge to DoJ’s move to block AT&T
   DOJ’s move to block AT&T, T-Mobile merger could be headache for Obama
   By taking on AT&T merger, regulators take a stand for common sense - analysis

MORE ON SPECTRUM/WIRELESS
   Report Urges Congress To Act On Public Safety Network
   DISH's mysterious national wireless network plans
   Verizon LTE net will cover 185M people by yearend, says CTO [links to web]

LABOR
   Verizon seen winning healthcare fight with union
   GAO reviews Americans' interest-level in cyber jobs [links to web]

INTERNET/BROADBAND
   Universal Service reform: What it means for schools - analysis
   Amazon offers to build facilities in bid to end sales tax fight
   FCC Still Looking for Open Internet Advisory Committee Nominees - public notice [links to web]
   Should Minnesota bond for broadband? [links to web]
   Kansas City Get Your Business Online - press release [links to web]

PRIVACY
   Lawsuit says Microsoft tracks customers without consent

CONTENT
   Facebook app to help track how viruses spread [links to web]
   The World’s Richest Soccer Club Is Like A Free Content ‘Startup' [links to web]
   Social Networking Meets Problem Solving [links to web]
   Google falters in its ad screening - editorial [links to web]
   Buying, Not Renting: Apple's Future TV Model [links to web]

OWNERSHIP
   Media Institute: Google is Monopoly FTC Should Rein In

SILICON VALLEY
   The Month That Changed Tech Forever - analysis

NEWS FROM THE UK
   Online push fails to reach 8.7 million Britons
   Ofcom plans superfast wireless service
   It is right to curtail web anonymity - editorial

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AT&T/T-MOBILE

DOJ TO BLOCK AT&T/T-MOBILE
[SOURCE: Department of Justice, AUTHOR: Press release]
The Department of Justice filed a civil antitrust lawsuit to block AT&T Inc.’s proposed acquisition of T-Mobile USA. The department said that the proposed $39 billion transaction would substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives.
The department’s lawsuit, filed in U.S. District Court for the District of Columbia, seeks to prevent AT&T from acquiring T-Mobile from Deutsche Telekom AG.
According to the complaint, AT&T and T-Mobile compete head to head nationwide, including in 97 of the nation’s largest 100 cellular marketing areas. They also compete nationwide to attract business and government customers. AT&T’s acquisition of T-Mobile would eliminate a company that has been a disruptive force through low pricing and innovation by competing aggressively in the mobile wireless telecommunications services marketplace.
The complaint cites a T-Mobile document in which T-Mobile explains that it has been responsible for a number of significant “firsts” in the U.S. mobile wireless industry, including the first handset using the Android operating system, Blackberry wireless email, the Sidekick, national Wi-Fi “hotspot” access, and a variety of unlimited service plans. T-Mobile was also the first company to roll out a nationwide high-speed data network based on advanced HSPA+ (High-Speed Packet Access) technology. The complaint states that by January 2011, an AT&T employee was observing that “[T-Mobile] was first to have HSPA+ devices in their portfolio…we added them in reaction to potential loss of speed claims.”
The complaint details other ways that AT&T felt competitive pressure from T-Mobile. The complaint quotes T-Mobile documents describing the company’s important role in the market:
T-Mobile sees itself as “the No. 1 value challenger of the established big guys in the market and as well positioned in a consolidated 4-player national market”; and
T-Mobile’s strategy is to “attack incumbents and find innovative ways to overcome scale disadvantages. [T-Mobile] will be faster, more agile, and scrappy, with diligence on decisions and costs both big and small. Our approach to market will not be conventional, and we will push to the boundaries where possible. . . . [T-Mobile] will champion the customer and break down industry barriers with innovations. . . .”
The complaint also states that regional providers face significant competitive limitations, largely stemming from their lack of national networks, and are therefore limited in their ability to compete with the four national carriers. And, the department said that any potential entry from a new mobile wireless telecommunications services provider would be unable to offset the transaction’s anticompetitive effects because it would be difficult, time-consuming and expensive, requiring spectrum licenses and the construction of a network.
The department said that it gave serious consideration to the efficiencies that the merging parties claim would result from the transaction. The department concluded AT&T had not demonstrated that the proposed transaction promised any efficiencies that would be sufficient to outweigh the transaction’s substantial adverse impact on competition and consumers. Moreover, the department said that AT&T could obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor.
benton.org/node/88467 | Department of Justice | Assistant Attorney General Sharis Pozen | Deputy Attorney General James Cole | NYTimes | Bloomberg | CNBC | WashPost | NPR
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WHAT HAPPENS TO T-MOBILE
[SOURCE: GigaOm, AUTHOR: Ryan Kim]
AT&T’s $39 billion bid for T-Mobile USA isn't over with the Department of Justice’s decision to file suit against the merger. But it raises a lot of new uncertainty around the deal and the possibility that it might not go through at all. So what happens to T-Mo if AT&T’s can't buy it? Here are some thoughts on possible outcomes: 1) T-Mobile could go it alone -- with the $3 billion break-up free and spectrum promised by AT&T, 2) Sprint could make a play for T-Mobile, but the DoJ suit suggests that Sprint may face similar opposition if it tries to go after T-Mobile but even a combined Sprint/T-Mobile wouldn't rise to the level of a No. 2 carrier, 3) T-Mobile could end up being an appealing pick-up for one or more cable companies, 4) A private equity firm could look at taking on T-Mobile, and 5) Deutsche Telekom could sell off T-Mobile in parts.
benton.org/node/88502 | GigaOm
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WHAT NEXT?
[SOURCE: Public Knowledge, AUTHOR: Harold Feld]
[Commentary] In a court fight with AT&T, the odds are in the Department of Justice's favor -- which is why so many companies simply abandon the merger once DoJ has filed to block an acquisition. If AT&T fights, the Federal Communications Commission is not off the hook with its review of the deal. It needs to make a decision. The most obvious (and most likely) thing for the FCC to do is follow the general shape of DoJ's antitrust complaint and refer for a hearing. Remember, even if AT&T ultimately wins on pure antitrust, the same concerns may make the matter contrary to the public interest under the higher public interest standard. So it seems fairly straightforward that a DoJ complaint = issue of material fact that an administrative law judge (ALJ) would need to consider, and the if AT&T wins on the Antitrust side that is a factor to consider by the ALJ. But this case is unusual because it actually gives rise to the concern that the proposed merger violates Section 314 of the Communications Act. So the FCC has a rare option here. It can decide that the merger is ungrantable as a matter of law and dismiss the Applications. At that point, AT&T can appeal to the D.C. Circuit, a process which will take at least a year, possibly more, and where the agency gets lots of deference for its decision. And, even if AT&T wins its appeal, it gets the right to a hearing on the issue of material fact (does this violate Section 314). My bet is AT&T gives up at that point, or T-Mobile walks away and collects its $6 Billion in spectrum and cash.
Bottom line is that there are really no good options for AT&T at this point. To come back for a victory, AT&T must (a) convince FCC to hold off; while, (b) convincing the court to go ahead despite the FCC being on hold. And then it has to win the case -- which the odds do not favor. At some point, T-Mobile is going to exercise its option and walk. It has $6 billion in cash and spectrum, which will make it a heck of a lot more competitive (or more attractive to a potential buyer). AT&T can delay the inevitable by fighting. But while AT&T still has a theoretical road to victory, I don't think anyone seriously wants to take that bet.
benton.org/node/88500 | Public Knowledge
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WHAT IT MEANS
[SOURCE: paidContent.org, AUTHOR: Jeff Roberts]
Why did the government sue? Shortly after the merger was announced, the government said it would investigate the deal. Typically, this leads to negotiations in which the company offers to take steps to ensure the deal will not be anti-competitive. The fact the government is now going to court means negotiation have broken down.
AT&T can do one of three things: it can fold its cards, go to court, or try to reach a settlement by offering new concessions to the government. but a settlement is unlikely because there are few concessions that would satisfy the Justice Department at this point.
benton.org/node/88498 | paidContent.org
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AT&T TO CHALLENGE SUIT
[SOURCE: Bloomberg, AUTHOR: ]
AT&T Chairman and Chief Executive Officer Randall Stephenson is facing the toughest regulatory challenge of his career as U.S. officials put his $39 billion gamble on T-Mobile USA in jeopardy. While AT&T seeks an expedited hearing in court to force the Justice Department to make its case against the merger, the carrier will also propose remedies that would make the takeover more suitable to the agency. There was no internal debate within the company on whether to fight for the deal. AT&T may still be able to close the merger, either by defeating the Justice Department in court or by negotiating with regulators. “Our door is open” if AT&T wants to address the agency’s concerns about the deal, Sharis Pozen, acting chief of the Justice Department’s antitrust division, told reporters at a news conference. The Justice Department has assured AT&T that its public comments about its willingness to discuss remedies were genuine.
benton.org/node/88541 | Bloomberg | Bloomberg
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FUTURE FOR RIVALS
[SOURCE: Wall Street Journal, AUTHOR: Shara Tibken]
AT&T's rivals may be cheering the Justice Department's move to block the takeover of T-Mobile USA, but some of them could get hurt if the deal falls through. While other carriers may benefit from a distracted AT&T and T-Mobile in the short term, they could suffer if—as the Justice Department argues—killing the deal leaves an aggressive, low-priced competitor in the market. They'll also lose the opportunity to pick up assets like customers or spectrum that AT&T would have to shed to complete a deal, and they may find it difficult to make big acquisitions of their own. Bernstein analyst Craig Moffett said the news, clearly negative for AT&T and T-Mobile, is also likely bad for all U.S. carriers. "Put simply, the industry will be structurally less attractive than it would otherwise have been," he said. "Pricing is likely to be less stable, and profound technological risks, including free texting and bandwidth arbitrage, that would be manageable in the context of a significantly consolidated industry now become much more threatening."
benton.org/node/88539 | Wall Street Journal | Bloomberg
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T-MOBILE IN LURCH
[SOURCE: Wall Street Journal, AUTHOR: Greg Bensinger]
The Justice Department's move to block AT&T's $39 billion acquisition of T-Mobile USA could further hobble Deutsche Telekom AG's troubled unit, which has been shedding customers since the deal was announced in March and faces a crippling shortage of the airwaves that feed data-hungry smartphones. On the plus side, the fourth-largest U.S. carrier stands to reap $6 billion in cash, spectrum and network access, which AT&T pledged to pay if it couldn't complete the deal. Still, T-Mobile would be left as an asset its parent wants to sell with an uphill battle to retain customers. If AT&T is forced to walk away, telecommunications-industry bankers said they expect talks to combine Sprint Nextel Corp. and T-Mobile to heat up again. Germany's Deutsche Telekom grew tired of investing in the U.S. wireless industry, and it had been seeking ways to offload T-Mobile USA for at least two years before it settled on the sale to AT&T. The options it studied included an IPO, a deal with private equity, and a combination with Sprint. T-Mobile USA lost 149,000 customers in this year's first half and just 56,000 in all of 2010, leaving it with 33.6 million. Compared with the year-earlier second quarter, T-Mobile had about one million fewer contract customers, which tend to be the most lucrative, even as it added pay-as-you-go subscribers.
Deutsche Telekom AG hasn't prepared any alternative scenarios for its T-Mobile USA unit if a $39 billion sale to AT&T Inc. falls apart, a management board member said. Deutsche Telekom risks getting saddled with a mobile-phone business that had profit declines in four of the past five years. The deal, struck at 28.8 times profit, gave T-Mobile USA the highest valuation of any wireless carrier outside China. With T-Mobile USA now mired in its biggest profit slump in almost a decade, a sale at the same multiple AT&T was willing to pay would generate $12 billion less for Deutsche Telekom.
benton.org/node/88538 | Wall Street Journal | Bloomberg | Bloomberg - T-Mobile to lose $12B
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T-MOBILE'S CHOICES
[SOURCE: Wall Street Journal, AUTHOR: Martin Peers]
Anyone listening to AT&T and Deutsche Telekom's hype in recent months might have concluded T-Mobile USA was struggling to survive. Actually, the most immediate risk for T-Mobile was probably the uncertainty from a lengthy regulatory review of its acquisition by AT&T. T-Mobile has plenty of alternatives to develop a 4G strategy. It could partner with Sprint, which has embarked on a costly upgrade of its wireless network and has shown itself willing to rent out access to its cell towers to other companies. Alternatively, it could partner with Clearwire, which is 54%-owned by Sprint but somewhat independent and which is building out a separate network entirely. It could even partner with Dish Network, which has valuable wireless spectrum and wants to build a new wireless broadband network -- preferably with a partner. T-Mobile USA won't be lacking for friends should its marriage with AT&T fall apart.
benton.org/node/88536 | Wall Street Journal | Bloomberg | Bloomberg - T-Mobile to lose $12B
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T-IMMOBILE
[SOURCE: Wall Street Journal, AUTHOR: Editorial staff]
[Commentary] Within the next five years, we'll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98% of all Americans." So President Obama said in his January State of the Union address. His Justice Department seems to have other ideas. We're talking about the lawsuit that Attorney General Eric Holder's Antitrust Division filed to block AT&T's proposed $39 billion takeover of T-Mobile USA. Justice claims the deal, which would combine the country's second- and fourth-largest cellphone companies, would reduce competition, raise prices and retard innovation. In the government's view, the U.S. needs at least four major wireless carriers to have a competitive market, and it has its ancient, theoretical, antitrust market-share models like the Herfindahl-Hirschman Index to prove it. What it doesn't have is evidence that this has, or will, hurt consumers. Since the government started auctioning wireless spectrum in the 1990s as technology has advanced, consumer telephone choices have proliferated and prices have fallen. Americans pay some of the lowest cellphone rates in the developed world. The Federal Communications Commission noted in a June report that 90% of Americans could chose from five or more mobile voice-service providers in 2010, up from 73% in 2009. That's hardly a sign of markets becoming less competitive.
The political interpretation of Justice's actions was borne out yesterday when acting antitrust chief Sharis Pozen said that "our door is open" to AT&T if the company wants to resolve the government's "concerns." In other words, do our bidding on some regulatory or political business, and you can still get your merger. Meantime, Pozen and Justice are putting a legal damper on investment and innovation in one of America's few dynamic industries, and that will do economic damage far beyond AT&T.
benton.org/node/88535 | Wall Street Journal
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US CHOOSES LAW OVER POLITICS
[SOURCE: Wall Street Journal, AUTHOR: Martin Peers]
If breadth of backers was the main criteria, AT&T's $39 billion purchase of T-Mobile USA would have sailed through regulatory review. After all, who could oppose a deal supported by interest groups as varied as the Louisiana Ballooning Foundation and the Association of New Jersey Orchestras? But good corporate citizenry and lobbying expertise aren't the only criteria. And as the Justice Department's court challenge to the deal demonstrated, the deal was always long on hype for how it would help consumers, and short on robust legal arguments. AT&T's problem is that the legal issues aren't on its side. Antitrust lawyers had said in recent days that the company's chances of winning approval rested on political issues trumping legal concerns. The fact that the government challenged -- months earlier than observers had expected -- demonstrates that the legal issues won the day. On the most basic level, it was evident before the filing, the combination exceeds concentration of market share levels -- as defined by the Herfindahl-Hirschman index -- that the federal government generally finds acceptable. Divestitures could resolve the concentration risk, of course. But AT&T will find it harder to get around the reality that a merger would reduce the number of national wireless firms from four to three -- in the process eliminating a low-priced competitor.
benton.org/node/88533 | Wall Street Journal
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A MERGER TOO FAR?
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
Call it a merger too far. After years of turning a deaf ear to consumers' concerns and unblinkingly approving tie-ups among an ever-dwindling number of telecom giants, Uncle Sam has at last awoken to the idea that bigger may not be better when it comes to phone service. The facts are indisputable, and those facts clearly point toward a merger of dubious public merit that would serve primarily to consolidate AT&T's growing stranglehold over telecom service nationwide. A marriage of AT&T and T-Mobile would also place renewed pressure on Verizon to similarly beef up, possibly through an acquisition of Sprint, leaving even fewer choices for consumers. AT&T's pitch started unraveling recently when AT&T acknowledged to the FCC that it would cost about $3.8 billion to expand its own network to cover 97% of the country. In other words, the company could achieve the same goals for customers at a fraction of the cost of climbing into bed with T-Mobile. "It's clear that AT&T's main goal in acquiring T-Mobile is to eliminate a competitor from the marketplace," said Joel Kelsey, a telecom-industry analyst with Free Press, a Washington-based advocacy group. "AT&T is prepared to pay a huge premium to kill off its competition." So why is this merger different from all the other telecom mergers that have come down the pike since market deregulation in 1996? "If this merger goes through, two companies — AT&T and Verizon — would control about 80% of the wireless market," Kelsey said. "I think that was too much for the Justice Department."
benton.org/node/88532 | Los Angeles Times
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POLITICAL TINGE?
[SOURCE: Financial Times, AUTHOR: Richard McGregor, Matt Kennard, Helen Thomas]
The Department of Justice's decision on AT&T/T-Mobile was delivered with a political tinge, with James Cole, the deputy attorney-general, saying: “We see this as a move that will help protect jobs in the economy, not a move that’s going to in any way reduce them.” He said: “The general experience with mergers is that there is what’s called efficiencies, which is redundancies when the two companies come together, which usually reduces jobs, in our experience.” Coincidentally or not, such a rationale dovetails perfectly with the agenda of the Obama administration, which is focused on how to create, and protect, jobs, at a time of persistent high unemployment. The timing took some by surprise, as did the DoJ’s decision not to proceed in concert with the Federal Communications Commission.
benton.org/node/88530 | Financial Times
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POLITICAL HEADACHE?
[SOURCE: The Hill, AUTHOR: Peter Schroeder]
The Department of Justice believes it has a strong case that the $39 billion merger between AT&T and T-Mobile USA is anticompetitive, but in making every effort to block the deal, it also is exposing itself -- and the White House -- to some major political headwinds. The economy is widely expected to be the major issue on the 2012 campaign trail, and DOJ's efforts to suffocate the deal are not winning the White House any friends in organized labor. Furthermore, the move reopens what has been a rich vein of attack for Obama critics -- that the White House is meddling in the work of the nation's businesses to the detriment of the economy. Dana Frix, a partner at Chadbourne & Parke LLP, said the strong complaint shows the DOJ is willing to pursue its work despite political and economic considerations. "When unemployment is so high, it takes a lot of political resolve for the DOJ to fight something that is backed by the unions and which at least purports to increase the number of jobs that will be available in the US in the near term," said Frix, who also chairs the firm's communications, media and technology practice group. "They decided that they were not going to turn away from the facts that were presented to them," he said.
benton.org/node/88528 | Hill, The
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REGULATORS STAND FOR COMMON SENSE
[SOURCE: San Jose Mercury News, AUTHOR: Troy Wolverton]
[Commentary] AT&T said its proposed acquisition of T-Mobile would be a boon for consumers. Government regulators aren't buying that line. That's a good thing, because the deal was bound to be a raw one for you and me. The Justice Department charged that the deal would illegally narrow competition in the wireless phone market. Of course, that's not how AT&T, T-Mobile and their allies have been pitching this deal.
They say the deal would help AT&T improve its service, a persistent complaint among its customers. It would allow the company to expand its next-generation data network so that it covered 97 percent of all Americans, instead of just 80 percent as it previously planned. That investment would lead to thousands of new jobs and even allow AT&T to bring call center jobs that had been offshored back to America. The acquisition would eliminate a competitor, AT&T and its allies acknowledged. But, they argued, many American consumers have a choice of five or more carriers in their local markets, so the change would barely be noticeable. Although it's true that there are plenty of small wireless carriers around, the four big wireless companies -- AT&T, Verizon, T-Mobile and Sprint -- control more than 90 percent of the national market. And should the deal go through, AT&T and Verizon combined would control nearly 80 percent of that market.
benton.org/node/88527 | San Jose Mercury News
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MORE ON SPECTRUM/WIRELESS

PUBLIC SAFETY NETWORK AND 911 COMMISSION
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
A report detailing the unfinished recommendations from the commission that investigated the Sept. 11, 2001 terrorist attacks called on Congress to act swiftly to finally build a national broadband public safety network aimed at improving communications for emergency first responders. In a report card on the steps the United States has taken to respond to those attacks, the Bipartisan Policy Center listed the failure to address the communications problems among the nine items that remain unfinished 10 years after the 2001 terrorist attacks. "The inability of first responders to communicate with each other on demand was a critical failure on 9/11," reads the report, crafted with help from the co-chairmen of the federal commission that investigated the Sept. 11, 2001 attacks, former-Gov Tom Kean (R-NJ) and former Rep-Lee Hamilton (D-IN). "Incompatible and inadequate communications led to needless loss of life. To remedy this failure, the commission recommended legislation to provide for the expedited and increased assignment of radio spectrum for public safety purposes. To date, this recommendation continues to languish." It said the biggest obstacle at this point is a political battle in Congress over whether to give spectrum known as the D-block to public safety officials or stick with current law, which requires that the D-block be auctioned off to commercial bidders.
benton.org/node/88509 | National Journal | Bipartisan Policy Center | B&C
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DISH'S WIRELESS PLANS
[SOURCE: Politico, AUTHOR: Eliza Krigman]
Look out, LightSquared. There’s a new maverick in the wireless industry — at least if DISH Network's recently announced plans to build a state-of-the-art nationwide wireless network are to be believed. If the company follows through, it could bring more competition to the industry and help meet the skyrocketing demand for mobile broadband. But DISH’s endgame is anything but clear, and how it will proceed is raising a web of political and policy questions for both industry players and the Federal Communications Commission. Like LightSquared, DISH Network has amassed an impressive swath of satellite spectrum it would like to leverage for land-based transmissions. DISH, it said in a filing with the FCC last week, wants to “deploy the most advanced wireless broadband service using the LTE Advanced standard." The satellite TV firm requested permission to combine its $1.375 billion bid for TerreStar with an earlier $1 billion purchase of DBSD North America. That, and a host of alterations to its spectrum requirements, would allow DISH to emerge as a major player in the wireless space, the company claims. “We’re doing exactly what FCC Chairman Julius Genachowski and what President Obama wants: Get spectrum used that is currently going unused,” a DISH executive said.
benton.org/node/88459 | Politico
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LABOR

VERIZON LABOR UPDATE
[SOURCE: Reuters, AUTHOR: Sinead Carew]
Verizon Communications is expected to prevail on key issues such as healthcare costs in its negotiations with unions but may end up postponing its plan to freeze pensions, according to experts who have been following the telephone company's labor dispute. Negotiations between Verizon and the unions representing its wireline workers are expected to resume on Wednesday after both sides last week agreed on a new framework for bargaining. About 45,000 technical and customer service workers -- roughly half of Verizon's wireline workforce -- returned to work last week after a two-week work stoppage.
"With the workforce returning to work, both sides realize that an extended strike would be very costly and they're both backing down," said Professor Harry Katz, a labor specialist at Cornell University. Katz added, however, "Verizon is going to get meaningful concessions in the negotiations. They're just not going to get the extreme draconian concessions they were after."
benton.org/node/88456 | Reuters
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INTERNET/BROADBAND

USF REFORM AND SCHOOLS
[SOURCE: eSchool News, AUTHOR: Cynthia Schultz]
With broadband service becoming an increasingly essential tool for participating in modern life, federal policy makers are pursuing regulatory reforms that will fundamentally refocus the government’s “Universal Service” programs and related regulations to spur more broadband deployment and adoption -- a marked departure from the historical primacy of circuit switched voice services. These reforms promise to give community anchor institutions, including schools and libraries, access to a wider variety of affordable broadband service than ever before. The changes also promise to expand the range of broadband services eligible for support under the federal Schools and Libraries Universal Service Support Mechanism. At the same time, broadband service providers and their customers -- including schools -- will face new compliance challenges as the web of federal programs supporting broadband infrastructure grows larger and more intertwined.
benton.org/node/88507 | eSchool News
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AMAZON'S NEW OFFER
[SOURCE: Los Angeles Times, AUTHOR: Marc Lifsher]
Amazon is offering to build at least two distribution centers and hire as many as 7,000 workers if lawmakers back away — at least temporarily — from trying to force the Internet giant to collect sales taxes on purchases made by California customers. The proposal, along with promises to invest as much as $500 million in the new facilities, was made in the form of draft legislation at a meeting between Amazon lobbyists and representatives of companies that belong to the California Retailers Association. The retailers trade group and other supporters of California's effort to collect more than $300 million a year in unpaid taxes on Internet sales dismissed the Amazon compromise as a ploy. "The so-called deal that Amazon has proposed is not serious," said Bill Dombrowski, president of the retailers group. Lenny Goldberg of the California Tax Reform Assn. called it "a totally cynical maneuver that's part of the game that they try to play in every state."
benton.org/node/88526 | Los Angeles Times
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PRIVACY

MICROSOFT SUIT
[SOURCE: Reuters, AUTHOR: Dan Levine]
Microsoft allegedly tracks the location of its mobile customers even after users request that tracking software be turned off, according to a new lawsuit. The proposed class action, filed in a Seattle federal court, says Microsoft intentionally designed camera software on the Windows Phone 7 operating system to ignore customer requests that they not be tracked. The lawsuit against Microsoft cites a letter the company sent to Congress, in which Microsoft said it only collects geolocation data with the express consent of the user. "Microsoft's representations to Congress were false," the lawsuit says. The litigation, brought on behalf of a Windows Phone 7 user, claims Microsoft transmits data -- including approximate latitude and longitude coordinates of the user's device -- while the camera application is activated. It seeks an injunction and punitive damages, among other remedies.
The case in U.S. District Court, Western District of Washington is Rebecca Cousineau, individually on her own behalf and on behalf of all others similarly situated v. Microsoft Corp., 11-cv-1438.
benton.org/node/88515 | Reuters
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OWNERSHIP

MEDIA INSTITUTE TELLS FTC TO REIGN IN GOOGLE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Media Institute has told the Federal Trade Commission that the government needs to step in to remedy the "threat" to competitors in the digital space posed by Google's unrivaled dominance in the search and advertising marketplace. That came in a White Paper submitted by the institute as the FTC vets Google's search and ad businesses. The Institute is an independent First Amendment think tank supported by major media companies and more frequently associated with arguing against government entry into the media space. It points out in the paper that all those media need to compete in a digital space where Google is its major competitor for advertising.
benton.org/node/88511 | Broadcasting&Cable
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SILICON VALLEY

TECH CHANGED FOREVER
[SOURCE: CNNMoney, AUTHOR: David Goldman]
While an earthquake and a hurricane slammed the East Coast in August, the West Coast endured a different kind of turmoil. Within a 10-day span this past month, Google reinvented itself as a hardware company, Hewlett-Packard moved to ditch PCs and become a software company, and Apple lost its iconic CEO. The three Silicon Valley Goliaths now face transitions that will reshape the technology landscape. "We're being knocked off our axis here," said Laura DiDio, principal of research firm ITIC. "What's happening now would have been unthinkable just a month ago."
benton.org/node/88461 | CNNMoney
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NEWS FROM THE UK

GETTING BRITS ONLINE
[SOURCE: Financial Times, AUTHOR: Maija Palmer]
The number of adults in the UK using the Internet has increased by just 500,000 in the past year, despite concerted government efforts to get more people online.
Some 8.73m Britons have never used the Internet, according to figures from the Office for National Statistics, a reduction from the 9.2m reported a year ago. Martha Lane Fox, co-founder of Lastminute.com, was named the government’s “digital champion” last year and has launched a campaign – Race Online 2012 – to get another 4m people using the Internet by next year. The government last year announced a £30m cash injection for the scheme, which will be distributed to UK online centers – a network of 3,500 community-based IT facilities. Lane Fox said the figures showed how important it was for the network of 100,000 volunteers who have been recruited for the Race Online project to push forward Internet education. Meanwhile, Age UK has been running campaigns to get older people to go online. The charity said it had introduced 200,000 to the technology over the past few years. However, according to ONS figures, there are still about 5.7m people over the age of 65 who have never used the Internet.
benton.org/node/88521 | Financial Times
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OFCOM WIRELESS
[SOURCE: Financial Times, AUTHOR: Daniel Thomas]
Ofcom, the UK telecoms regulator, is to announce plans for the first superfast wireless communication in Europe employing unused parts of the airwaves that had been reserved for television. “White space” gaps in the spectrum will allow businesses and consumers to tap into the powerful signals normally used by broadcasters. The effect will be similar to a faster and more powerful version of the WiFi service common in many parts of the UK, leading to new applications and improved connections as well as the potential to extend broadband services to remote rural areas. Ed Richards, Ofcom chief executive, said: “We are hoping that white space develops in the same way as WiFi has in the UK. We have reached a point where companies can start developing services and applications. It offers much more capacity than WiFi in homes and offices, as well as significant use in extending broadband to rural areas.” Devices using this “white space” will not need a licence as long as there is no interference with existing users of the spectrum. Ofcom will also create a central database to help those devices find the right space to operate.
benton.org/node/88519 | Financial Times
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ANONYMITY
[SOURCE: Financial Times, AUTHOR: John Gapper]
[Commentary] One of the founding principles of the web – not only the technology but the culture that has grown up with it – is that, as the New Yorker cartoon once put it: “On the Internet, nobody knows you’re a dog.” The policy that people are free to interact online anonymously – or at least using pseudonyms – is now under attack from social networking companies. Both Faceboook and Google have cracked down on people trying to use pseudonyms rather than full identities. Anonymity should not be banned in every corner of the Internet any more than it is in the physical world in democracies – it would breach civil liberties. But there are good reasons to discourage it. Most users would gain if anonymity were the exception rather than the rule.
benton.org/node/88518 | Financial Times
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