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Senate Majority Whip Dick Durbin (D-IL), a cosponsor of a bill allowing states to collect taxes from online sales, said that the bill is needed to save states that are drowning in red ink, and brick-and-mortar stores that are trying to compete with Internet retailers.

"My state is struggling, terrible budget problems," Sen Durbin said. "We're in the red with deficits, pension system is in trouble. Money that should be collected for sales tax, not being collected." The bill being considered today would allow states to collect the sales tax from online retailers, most of which are allowed to escape the collection of taxes from the 46 states that have a sales tax. Sen Durbin said few people are aware that they are supposed to pay this tax each year. "It's really an honor system, that's what it comes down to," he said. "It turns out only one out of 20 people in Illinois even know this exists. Five percent of the population knows." Sen Durbin said he has paid the tax on his own online purchases, ever since his accountant asked if he wanted to pay them. "I said, 'I think I do,' and I did, and I have ever since," Sen Durbin said.


Sen Durbin says online sales tax needed to save states, brick-and-mortar stores The consequences of an online sales tax (American Public Media)
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The White House says President Barack Obama supports a bill to give states more authority to collect sales tax from Internet retailers.

White House spokesman Jay Carney says the Senate bill would level the playing field for small businesses and brick-and-mortar retailers that are undercut by online companies. Carney says that governors and mayors have overwhelmingly told the White House the bill is needed. He says states are losing out on revenue that could go to education, law enforcement, infrastructure investments and health care.


President Obama backs Internet sales tax bill, White House says The consequences of an online sales tax (American Public Media)
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Apple won a patent-infringement case brought by Google’s Motorola Mobility unit over a phone sensor, averting an order that could have hindered imports of the iPhone 4 into the US.

The US International Trade Commission in Washington upheld a judge’s findings that the Motorola Mobility patent is invalid, though for different reasons. The patent covers a sensor that prevents the phone from accidentally hanging up or activating an application when close to a person’s face. The decision marks the latest instance in which neither Apple nor Google has been able to strike a decisive blow against its competitor in a squabble that began more than two years ago. Each has claimed the other is infringing patents, and Apple accused Motorola Mobility of breaching obligations to license some of its most widely used technology on fair terms.


Apple Wins Case Brought by Google’s Motorola Over iPhones US trade panel says Apple did not violate Google patent (Reuters)
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While educators and parents continue to report a growing need for technology use in education and learning, schools are struggling to meet today’s needs and tomorrow’s expectations, according to “From Chalkboards to Tablets: The Digital Conversion of the K-12 Classroom,” the latest report from the Speak Up 2012 survey, released on April 19. Given the budget realities – with 74 percent of respondents reporting that they have smaller technology budgets than they had five years ago – administrators are re-thinking their opposition to the “bring your own device” approach and districts who are piloting such a program increased by 47 percent in just one year.


Schools’ ed-tech budgets shrink as demand grows
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[Commentary] In January this year, political activist and net guru Aaron Swartz committed suicide. Facing the potential of years in prison for downloading a database of academic articles, Swartz had exhausted his wealth and his will to fight. With the help of a rope, he gave up. Swartz's death has turned a light on the statute that had put Swartz's liberty in jeopardy: the Computer Fraud and Abuse Act, or CFAA for short.

This federal criminal statute has gotten way out of hand. The CFAA was passed in 1986 to punish the new crime of computer hacking. But a lot has changed since 1986. Use of computer networks was rare then. Now it is ubiquitous. And Congress has expanded the law several times, making its reach broader and its punishments more severe. The act has become a sprawling mess -- a powerful and mysterious weapon that could potentially reach millions of ordinary Americans. And prosecutors have interpreted it incredibly broadly. The problem results from the law's vague language: The act criminalizes "unauthorized access" to a computer. But almost 30 years after its passage, no one yet knows when access is unauthorized. The law cries out for a common-sense reworking. After Swartz's death, a cross-partisan coalition in Congress, led by Democrat Zoe Lofgren and Republican Darrell Issa, did just that, proposing a law that would end liability for terms-of-service violations and would limit felony liability for violations. But, incredibly, some in Congress are going the other way.


Why Is Congress Trying to Make Our Internet Abuse Laws Worse, not Better?
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Netflix’s numbers are up. Revenue came in at the billion-dollar mark that analysts were looking for, and the company’s U.S. streaming subscriber total hit 29.2 million — also around consensus. The big win was a net income number (after adjusting for one-time hits) of 31 cents per share, well above the 18 cents or 19 cents per share the Street expected.


Netflix Says Its “House of Cards” Strategy Worked, and Wall Street Agrees The House of Cards effect: Netflix tops $1B in Q1 revenue, near 30M U.S. subscribers (paidContent) Was “House of Cards” Worth It for Netflix? (Wall Street Journal)
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Google executive chairman Eric Schmidt has defended his company's low tax payments in Britain, saying the company follows the letter of the law and makes a positive contribution to the British economy.

A British parliamentary committee last year accused Google, Amazon and Starbucks of "immorally" minimizing their tax bills. Schmidt rejected the criticism in a radio interview with Britain's BBC. "I think the most important thing to say about our taxes is that we fully comply with the law and we'll obviously, should the law change, we'll comply with that as well," he said. Google has UK sales worth billions of dollars each year. But from 2006 to 2011, the last six years for which accounts are available, it reported a net tax credit because tax payments were exceeded by tax credits. These tax assets can be used to offset future profits.


Google defends UK tax payments, says good for country

State efforts to block companies from monitoring employees' personal Facebook and Twitter accounts are under fire from a new front -- securities regulators.

An unlikely alliance of regulators and industry groups is seeking to carve out exemptions in state laws that would allow certain financial firms to sidestep bans on looking at the personal social-media accounts of employees. Wall Street's self-regulator, the Financial Industry Regulatory Authority, says financial firms need a way to follow up on "red flags" suggesting misuse of a personal account, according to a spokesman. Finra has asked lawmakers in about 10 states to make changes to proposed legislation, the spokesman said. Securities regulators worry that the raft of new laws aimed at protecting employees' privacy puts investors at risk. They say the fast spread of financial advice on social networks such as Facebook and Twitter could create new channels for Ponzi schemes and other frauds, and that fighting those frauds will be harder if state lawmakers snarl efforts by companies to monitor what employees are pitching to investors.


Wall Street vs. Its Employees' Privacy
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The Federal Communications Commission reached another milestone in its implementation of Universal Service reforms to ensure rural Americans have access to voice and robust broadband services – including extending broadband to the millions of Americans that are unserved today.

Our primary tool to achieve this goal is the transformation of the former high-cost fund – the program supporting rural voice service – to a Connect America Fund supporting modern networks that provide both broadband and voice service. Phase II implementation is well underway for those areas of the country where 80% of unserved Americans live and key to this transformation is targeting funding efficiently to the areas where it is needed most, outside areas where competitive providers operate. With our last Broadband Progress Report, we posted an online map of broadband service today, including the unserved areas where 19 million Americans live. Today’s milestone – a Report and Order– is the next step toward adopting a final cost model that will pinpoint as accurately as possible how much support is needed, on a granular (census- block) level, to deliver both voice and broadband, without overspending.

The model framework – an “efficient provider framework” – adopted by Commission staff today resolves key assumptions about the design of the network and network engineering, including by:

  • Calculating costs in a way that best approximates the discipline of competitive markets with multiple providers.
  • Building on the known costs of deploying efficient modern networks. These costs can be lower than those of legacy networks, often built in a piecemeal fashion that compounds inefficiencies.
  • Looking forward to the average monthly cost that is necessary to support modern, efficient networks over the long-term, rather than attempting to model past investments in legacy networks.

A Model for Connecting Rural America to Broadband Bureau Adopts Connect America Phase ll Cost Model Platform (FCC R&O)
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The Republican leadership of the House Commerce Committee has told the Federal Communications Commission that if it follows the Justice Department's suggestions for the incentive auction, it may not get enough money to fully compensate broadcasters for giving up spectrum, potential leading to a failed auction.

Justice weighed in at the FCC saying it should take into account the differences in spectrum value -- lower bands are more valuable for cell service than higher -- when deciding how much spectrum in a market one company should be allowed to hold. It also suggested that the getting the reclaimed broadcast spectrum into the hands of competitors to Verizon and AT&T would likely be its highest and best use. Led by Commerce Committee Chairman Fred Upton (R-MI) and Communications Subcommittee Chair Greg Walden (R-OR), a half dozen Republican signatories to the letter said that putting restrictions on bidders in the upcoming broadcast incentive auctions would reduce the size of bids and "could lead to a complete failure of the auction," including construction of an interoperable public safety network. The legislators said that when they came up with the legislation establishing the incentive auction, they wanted it to make more spectrum available to wireless carriers, but that they also expected the auctions to generate enough revenue to cover broadcasters and the first responder network and deficit reduction. Justice's suggestions could threaten that goal, they said.


Republican Leaders Pan Justice Take on Incentive Auctions Committee Leaders Express Concern With DOJ’s Advocacy for Restricted Spectrum Auction (Press release)