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On April 24, 2013, the House Commerce Committee’s Communications and Technology held a hearing to examine the Federal Communications Commission’s Lifeline program. The program provides a subsidy to telecommunications providers to offset the cost of basic monthly service at the primary residence for eligible, low-income subscribers. These discounts can be as high as $10.00 per month, and vary depending on the subscribers’ location. Additionally, tribal communities may qualify for enhanced Lifeline assistance (up to an additional $25.00).
Subcommittee Chairman Greg Walden (R-OR) said the FCC had spent $2.2 billion of "other people's money" on the program in 2012. He pointed out that the fund has increased by more than 250% since 2008, "all while the cost of phone service has gone down." He also pointed to reports that, although the subsidy is supposed to be limited to one subsidized phone, some people have eight or more. Chairman Walden also pushed for a Lifeline budget, which the FCC said it planned to have in early 2013. Julie Veech, chief of the FCC’s Wireline Competition Bureau, said the FCC was still evaluating its reforms and could not give a time frame for when the budget would be in place.
Ranking subcommittee member Anna Eshoo (D-CA) said the FCC must continue to fix problems. But she also pointed out the program was started under iconic Republican President Ronald Reagan and that continues to advance the important public policy goal of making sure low-income homes have access to phone service. Rep. Henry Waxman (D-CA), ranking member of the Commerce Committee, called it an important program and national commitment. He said he had heard from homeless vets, the disabled and others who said the program had a big impact in keeping them connected. Rep Waxman joined with Rep Eshoo and others to make the point that the Lifeline program was created under President Reagan, and expanded to wireless under President George W. Bush. He said he was not opposed to Lifeline oversight, but was opposed to it becoming a political issue. He pointed out that the universal service High Cost Fund pays hundreds per line to phone companies, compared to the $9.25 per month Lifeline subsidy, and that multiple lines to a single household can be subsidized, versus only one that is supposed to be subsidized per household under the Lifeline program.
Recap: The Lifeline Fund: Money Well Spent? Throw Out the Lifeline? Republicans Question Program's Value (Broadcasting&Cable) Republican questions whether Tsarnaevs had ‘Obama phone’ benefits (The Hill- Blackburn) House Dems call for FTC inquiry into 'Obama phone' website (FTC – FTC Inquiry) Republican attack on Lifeline runs into strong defense (Speed Matters)
Verizon Communications is eager to buy Vodafone Group out of their massive mobile-phone joint venture—but it will have to get over a $30 billion hurdle.
That amount is roughly the difference between what people on either side of the potential deal say Vodafone's 45% stake in the biggest U.S. mobile operator, Verizon Wireless, is worth. The Verizon camp starts at a valuation around $100 billion; for Vodafone, the stake is worth about $130 billion, people familiar with the matter said. The disagreement over price is in the spotlight now that Verizon has launched a public push to acquire the U.K. company's stake.
Verizon Price Gap: $30 Billion
A federal court in Seattle issued a ruling that could help settle the question of just how much a company can expect to reap from standard-essential patent. In the highly-anticipated court ruling, U.S. District Judge James Robart determined that Google’s Motorola Mobility unit is entitled to about $1.8 million a year from Microsoft for its use of certain patents.
Motorola had been seeking in excess of $4 billion in the case, which centered around patents related to the H.264 video standard and the 802.11 wireless standard. In making its determination, the court noted that there are some 92 different entities with patents essential to 802.11 networking. If each of them got the 1.15 percent to 1.73 percent royalty that Motorola wanted, the cost of just wireless networking alone would exceed the price of the Xbox Microsoft was using it in.
Court Denies Motorola the Billions it Wanted From Microsoft for Standard-Essential Patents
The Senate agreed to advance a bill that would allow states to collect online sales tax. In a 63-30 vote, the Senate ended debate on The Marketplace Fairness Act, S. 743, which would empower states to collect taxes on purchases made online by consumers in their states. The Senate will vote on final passage of the bill when senators return May 6 from a weeklong recess. The strong vote suggest supporters of the bill are likely to see it win approval since final passage requires only a majority. Its path through the House, despite the support of many GOP governors, is less clear.
Senate advances online sales tax measure
AT&T argued that it would be illegal for the Federal Communications Commission to follow the Justice Department's advice on the upcoming auction of airwave licenses.
In a filing with the FCC, AT&T argued that the Justice Department is asking the agency to rig the auctions in favor of Sprint and T-Mobile, the smaller of the four national carriers. "It is surprising that the Antitrust Division of the Department of Justice would even propose measures that are so nakedly designed to help specific companies," AT&T wrote. The company argued that it would be illegal for the FCC to violate the public's interest to boost particular competitors. "Picking winners and losers in this fashion would be patently unlawful," AT&T wrote. AT&T said the claim that it is warehousing spectrum is "completely divorced from reality."
AT&T fires back at DOJ over airwave auction
T-Mobile USA's "radical" service plans promising no annual contracts aren't quite as radical as consumers might think, and the mobile operator will change its advertising and offer refunds in a settlement with the state of Washington.
On March 26, the fourth-largest U.S. carrier introduced a series of new service offerings, including no-contract monthly plans and a program that let customers pay for a new phone over the course of 24 months. In unveiling the plans, T-Mobile thumbed its nose at rival mobile operators, calling the new offerings "uncarrier" plans that would free the company and its customers from the constraints of conventional service agreements. Now the company has agreed to clarify a few things in that pitch after an investigation by the Washington Attorney General's Office. Specifically, T-Mobile didn't tell potential customers who bought phones on time that they would have to keep T-Mobile service for 24 months or pay off the rest of the phone's full price when they canceled the service, said Paula Sellis, an attorney who handled the case in the Attorney General's Office. The fine-print disclosures that T-Mobile did offer were hard to understand, she said.
T-Mobile USA agrees to come clean about 'uncarrier' service plans T-Mobile Settles Claim That Its No-Strings Plans Have Too Many Strings (WSJ)
Dozens of companies are taking advantage of newly clarified rules from the Securities and Exchange Commission that have now blessed the use of social media sites to disclose financial information.
Although social networks have proliferated for years and the public more readily turns to Twitter than the S.E.C.’s Edgar Web portal for updates, the agency just a few months ago was still evaluating whether using newer outlets would violate its rules. Even with the updated guidelines, uncertainty over what exactly the commission will allow has meant that many companies, and their legal teams, are playing it safe this earnings season.
Businesses Take a Cautious Approach to Disclosures Using Social Media
Debt is cheap these days. But then again, so is talk. That is something for Sprint Nextel shareholders to bear in mind as they weigh competing offers: a $20.1 billion bid from Japan's SoftBank to buy 70% of Sprint versus a rival $25.5 billion one from Dish Network for all of it.
On the face of it, Dish's bid, with more cash, $37 billion in present value from potential synergies and large swaths of wireless airwaves, seems a better deal. SoftBank's offer comes with neither synergies nor spectrum. But SoftBank brings a cash infusion for Sprint; Dish brings a boatload of debt. Despite Dish's assertions that the new company will be more than able to handle such a load, deal financing matters for equity investors. They will be left with a stake in the combined company no matter who wins. And high levels of debt can hinder performance given the capital-intensive nature of the telecom business. To complete the financing for its deal, Dish needs to raise an additional $9.3 billion of debt. The "vast majority" of this will likely be raised via Sprint, even though Dish's leverage of gross debt that is four times earnings before interest, taxes, depreciation and amortization is lower than that of Sprint at five times.
Debt Dish May Give Sprint Indigestion
[Commentary] Republicans' resolve to oppose higher taxes is well established, but a growing number of conservatives are recognizing that a national online sales tax is more about leveling the playing field for brick-and-mortar retailers.
South Dakota Gov. Dennis Daugaard is one of the Republicans seeing the light. "It's a matter of equity and fairness," he said. The Senate, after a years-long debate, is poised to pass a bipartisan national online sales tax bill with as many as 25 GOP senators on board. They understand that the legislation will simply enforce a tax that's already on the books but seldom paid. The House should follow suit and end local brick-and-mortar businesses' crippling 5 percent to 10 percent price disadvantage compared to Internet retailers. The federal bill is expected to raise as much as $11 billion in uncollected tax revenue that is desperately needed by states, counties and cities to provide essential services, such as keeping more teachers and police officers on the job. Main Street and Internet shops should play by the same tax rules. Congress should force online retailers to calculate the required sales tax on consumer purchases and send the revenues to cash-starved states.
Level the sales tax playing field for online and local retailers
Business groups representing industries from health care to banking are pressuring the Federal Communications Commission to ease its rules on robocalls — saying they should get a carve-out for technology that automatically dials customers.
In meetings with top FCC aides, executives with the U.S. Chamber of Commerce, the American Bankers Association and American Association of Health Care Administrative Management say they’re being victimized by unfair class action lawsuits brought under the Telephone Consumer Protection Act and that the “predictive dialers” they use should be exempt from robocall rules. Such predictive-dialing technology allows “businesses with a legitimate need to contact large numbers of specific customers for nontelemarketing purposes,” the groups told top FCC staff during a spate of recent meetings. The meeting is part of an escalating fight at the commission over the TCPA, a 1991 law designed to crack down on telemarketer robocalls peddling goods and services. Congress modified the law in 2003, ordering the Federal Trade Commission to establish a Do Not Call Registry for consumers.
Robocalls: Businesses dial up pressure on the FCC