November 2011

Google executive chairman Eric Schmidt noted that Taiwan already fared better than the US in terms of broadband penetration, the speed of its internet, and the percentage of its people with smartphones. Yet there was still one looming problem, he noted, and that was the rising cost of building more advanced telecommunications networks. This is an issue globally because the spread of smartphones and the rise of mobile computing has meant a surge in demand for data delivered over telecom networks, to the extent that it is threatening to exceed operators’ capacity to do so at high speeds. “The good news,” Schmidt told Douglas Hsu, chairman of Far Eastone, one of Taiwan’s biggest telecom operators, in front of an audience of hundreds, “is that your customers love you . . . the problem is that they love you too much.” Schmidt said that the capacity issue could be resolved in the short term by increased investment into existing telecom infrastructure, but “that would [only] buy us some time”. If data usage continues to increase at the current rate, beyond the five- to eight-year time frame “I don’t know exactly how we’ll solve that problem,” he said. Still, Schmidt argued that one solution was for governments around the world to do more to help network operators to roll out faster and better networks. “I think it is important that governments realize that we need to make it easier for telcos to get financing” for infrastructure investments.

Schmidt defended his company as a great innovator, contradicting an unflattering portrait drawn by Apple (AAPL) co-founder Steve Jobs before he died last month. Schmidt told reporters that he is still "very sad and recovering from the sense of loss" from Jobs' death Oct. 5.

[Commentary] Cable TV sellers will likely endure misery in the coming years similar to that visited upon US newspapers in the last few decades. In fact, the decline has already started, and to survive, cable providers are going to have to become much more nimble. Americans have been buying steadily fewer cable TV subscriptions over the past decade, according to figures from SNL Kagan. Numbers of cable TV subscriptions rose in the US every year from 1980 through 2001, but have since been on a slow slide. While the weak economy has led some American families to unplug their cable packages, a stronger underlying cause is the online accessibility of news and entertainment. It may take a few years for a crisis in cable TV sales to be widely appraised, but the medium is trending quite like US newspapers before that industry’s famine.

[Martin is the CLAS-Honors Preceptor of Journalism at the University of Maine and a columnist for Columbia Journalism Review]

State governments would be able to collect online sales taxes under a bill due to be introduced in the Senate on Nov 9. Supporters of the online sales tax collection requirement include Wal-Mart Stores, Target and other "big box" retailers who argue they are at a disadvantage against online-only competitors. A bipartisan group of up to seven senators will introduce the bill, which is broader than similar legislation introduced in the Senate in July.

The new bill will differ from a bill in the House of Representatives by affecting more small businesses under a lower exemption threshold, the sources said. State and local governments support the upcoming bill even more than earlier measures. Retailers have been exempted from collecting taxes on sales in states where they do not have a physical presence since a 1992 Supreme Court case -- before the advent of e-commerce. Backers of the new bill say state and local governments will lose $24 billion in uncollected sales taxes in 2012 without the power to tax Web transactions. States have worked for more than a decade to streamline rules and get congressional approval to collect the taxes.

AOL, Microsoft, and Yahoo officially announced a rumored partnership today, one that would allow advertisers to buy inventory from all the three companies.

The partnership covers "premium, non-guaranteed display inventory," namely, display advertising that's normally sold through ad networks rather than the companies' sales teams, said Ross Levinsohn, Yahoo's executive vice president for the Americas, in a press conference Tuesday afternoon. He called the move a "fundamental rethink of how our digital media is bought and sold." Starting in January, an advertiser will be able to approach Yahoo, AOL, or Microsoft and purchase ads across Yahoo Network Plus, AOL's Advertising.com, and/or the Microsoft Media Network.