June 2011

Beginning July 1, a new California state law will require large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet — a prospect eased only slightly by a 1-percentage-point drop in the tax that also takes effect at the same time.

Getting the taxes, which consumers typically don't pay to the state if online merchants don't charge them, is "a common-sense idea," said Gov. Jerry Brown (D-CA). The new tax collection requirement — part of budget-related legislation — is expected to raise an estimated $317 million a year in new state and local government revenue. But those taxes may come with a price. Amazon and online retailer Overstock.com Inc. told thousands of California Internet marketing affiliates that they will stop paying commissions for referrals of so-called click-through customers. That's because the new requirement applies only to online sellers based out of state that have some connection to California, such as workers, warehouses or offices here. Both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers.

Vodafone could receive an annual dividend of up to $5.5bn from its 45 per cent stake in Verizon Wireless beginning next year, said Andy Halford, Vodafone chief financial officer.

The dividend estimate is based on the $1bn-a-month or $12bn-a-year free cash flow that Verizon Wireless generates, cash that to date has been mainly used to pay down the company’s debt. Verizon Wireless, the largest US mobile operator, stopped paying a dividend to its corporate parents, Verizon Communications and Vodafone, in 2005. Vodafone, the UK-based mobile network operator, has been pressing Verizon Communications, which owns a majority stake in Verizon Wireless, to sanction a resumption of the dividend from the end of this year when the debt is due to be fully repaid. Verizon Communications has said that Verizon Wireless is likely to pay “a fair dividend” to its parents beginning in 2012, but has not indicated what level of pay-out it favors. Analysts believe Verizon Communications will sanction a resumption of dividend payments from Verizon Wireless next year, in part to avoid the risk that Verizon Communications might have to reduce its own dividend pay-out.

Language trying to block the Federal Communications Commission from implementing its network neutrality rules has surfaced again, now included in language in the House Appropriations Financial Services Subcommittee version of a 2012 funding bill that passed out of committee June 23. But Democratic senators are calling on their colleagues to block the effort.

House Republicans tried to attach a similar amendment to a temporary spending bill earlier in the year and succeeded in getting passage in the House but not the Democratically-controlled Senate. Sen Kay Bailey Hutchison (R-TX), ranking member on the Commerce Committee, had previously tried to attach a fund-blocking amendment to an omnibus appropriations bill last fall.

On June 23, the Financial Services subcommittee approved the following bill language: "SEC. 621. None of the funds made available by this Act may be used to implement the Report and Order of the Federal Communications Commission relating to the matter of preserving the open Internet and broadband industry practices adopted by the Commission on December 21, 2010."

In a letter to the chair and ranking members of the Senate Appropriations Committee Wednesday, 10 senators including Commerce Committee Chairman Jay Rockefeller (D-WV) and Communications Subcommittee Chairman John Kerry (D-MA) called on them to rebuff any similar effort in the Senate.

People often gripe about dropped calls and painfully slow download speeds on their mobile phones — despite wireless carriers’ boasts to the contrary. Now Rep. Anna Eshoo (D-CA) has a bill that she says would inject some truth in the wireless industry’s advertising claims of “lightning fast” and “supercharged.”

Called the Next Generation Wireless Disclosure Act, the bill would require the wireless industry to include information such as guaranteed minimum data speed, pricing and network reliability in carriers’ sale and billing material. It would also require the Federal Communications Commission to evaluate the speed and price of high-speed wireless data service. Rep Eshoo — whose district encompasses the heart of Silicon Valley, which also happens to be a hot spot for dropped calls — said the time has come to call wireless companies on their claims. “Consumers need to know the truth about the speeds they’re actually getting,” she said. Her legislation would “establish guidelines for understanding what 4G speed really is and ensure that consumers have all the information they need to make an informed decision.”