November 2011

Mall giant sues Indiana to tax Amazon sales

Shopping mall giant Simon Property Group sued the Indiana Department of Revenue on to try to force it to collect taxes from Amazon for all sales made in the state.

The nation's biggest mall operator, whose Indianapolis headquarters are across the street from the Statehouse, said it was not seeking monetary damages in the lawsuit filed in Marion County courts. "This action is being filed to benefit all of Indiana's taxpayers and the state's bricks-and-mortar retailers," Simon said. Simon, which operates 27 Indiana shopping centers, said it requested the Revenue Department begin collecting sales taxes on sales made by Amazon.com within the state's borders as required by state law. Amazon operates three distribution warehouses in Indiana and announced in July it plans to open a fourth in the state. "Amazon.com is required by Indiana law to collect and remit sales and use taxes to the state, for sales made over the Internet, but has consistently refused to do so even though it is required by current Indiana laws ..." Simon said. "Main Street retailers are being harmed by this unequal playing field in Indiana and their existence is being jeopardized and threatens the employment of hundreds of thousands of retail employees in our state." The state levies a 7 percent sales tax on most goods, giving online retailers a sizable advantage.

US Cellular: We turned down iPhone

US Cellular, the country's sixth-largest cellphone company, says it had the opportunity to carry the iPhone but turned it down because the phone is too expensive. CEO Mary Dillon told analysts on an earnings conference call that "the terms were unacceptable from a risk and profitability standpoint."

EU Commission probes Samsung, Apple over patents

European Union regulators are investigating whether Samsung Electronics and Apple may have breached EU antitrust laws with patent infringement claims in their global legal battle over the lucrative smartphone and tablet market. The two technology companies are embroiled in more than 20 legal disputes in 10 countries. "The (European) Commission has indeed sent requests for information to Apple and Samsung concerning the enforcement of 'standards-essential' patents in the mobile telephony sector," the European Commission said. "Such requests for information are standard procedure in antitrust investigations, to allow the Commission to establish the relevant facts in a case. We have no other comments at this stage," it added.

FCC, FEMA Want Help Publicizing EAS Test

With the first-ever nationwide test of the Emergency Alert System less than one week away, the leaders of the Federal Emergency Management Agency (FEMA) and the Federal Communications Commission (FCC) sent an open letter to all stakeholders, including governors, federal legislators, broadcasters, news networks and other organizations, asking for their continued help in educating their respective communities about the test. Although the EAS is decades old and often tested and used at the local level, it has never before been tested on a nationwide scale. This first test will occur at 2 p.m. ET on Wednesday, Nov. 9. The test will occur simultaneously across the U.S. and its territories and will last approximately 30 seconds, after which regular programming will resume. The test will look and sound very similar to the local tests of the Emergency Alert System that occur frequently.

PTC Blasts Networks Over Indecency

The Parents Television Council urged U.S. broadcast television networks to “stop exploiting the benefits and ignoring the responsibilities of the public airwaves.”

PTC’s response came after briefs were filed by ABC, Fox, CBS and NBC in a landmark TV decency case currently before the Supreme Court. The case involves so-called “fleeting” profanity on award shows and nudity on NYPD Blue. “The broadcast television networks reap tens of billions of dollars each and every year from the cash cow that is the public airwaves,” said PTC President Tim Winter, “but they claim to be unfairly burdened by the smallest morsel of responsibility when it comes to waiting until 10 pm to air indecent content. The networks’ Supreme Court briefs make crystal clear their resolve to shred any remaining boundaries for decency, paving the way for the harshest profanity and graphic sexual content to be aired in front of kids at any time of day.”

Apple spends lavishly on all stages of the manufacturing process, giving it a huge operations advantage

Apple’s massive competitive advantage is operations.

This is the world of manufacturing, procurement, and logistics in which the new chief executive officer, Tim Cook, excelled, earning him the trust of Steve Jobs. Apple has built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store. Because of its volume -- and its occasional ruthlessness -- Apple gets big discounts on parts, manufacturing capacity, and air freight. “Operations expertise is as big an asset for Apple as product innovation or marketing,” says Mike Fawkes, the former supply-chain chief at Hewlett-Packard and now a venture capitalist with VantagePoint Capital Partners. “They’ve taken operational excellence to a level never seen before.” This operational edge is what enables Apple to handle massive product launches without having to maintain large, profit-sapping inventories. It’s allowed a company often criticized for high prices to sell its iPad at a price that very few rivals can beat, while still earning a 25 percent margin on the device, according to the estimates of Piper Jaffray analyst Gene Munster. And if the latest rumors are to be believed, Apple’s operational expertise is likely part of what gives the company enough confidence to enter the notoriously cutthroat television market by 2013 with a TV set that would tightly integrate with existing Apple software like iTunes. The widespread skepticism over Apple’s ability to compete in such a price-sensitive market, where margins are often in the single digits, is “exactly what people said when Apple got into cell phones,” says Munster.

FCC’s Intergovernmental Advisory Committee

Chairman Julius Genachowski announced members of the Federal Communications Commission’s Intergovernmental Advisory Committee (IAC). The IAC provides guidance, expertise, and recommendations to the FCC on a range of telecommunication issues for which local, state, and Native American Tribal governments explicitly or inherently share responsibility or administration with the FCC.

IAC membership is comprised of fifteen representatives of local, state and Tribal governments who, based on their expertise in telecommunications policy, will make recommendations to the Commission on the many telecommunications issues within the jurisdiction of the Commission and impacting state, local and Tribal governments. The FCC’s rules specify IAC membership in the following categories: four elected municipal officials (city mayors and city council members); two elected county officials (county commissioners or council members); one elected or appointed local government attorney; one elected state executive (governor or lieutenant governor); three elected state legislators; one elected or appointed public utilities or public service commissioner; and three elected or appointed Tribal representatives. While the FCC’s rules authorize a fifteen-member IAC, Chairman Genachowski announced fourteen members and one vacancy. The FCC continues to seek applicants for one elected state executive (governor or lieutenant governor) to serve as a member of the IAC.

Municipality Representatives (4)

Michael R. Bloomberg, Mayor, New York, New York (Designees: Bruce Regal, Attorney, New York City Law Department; and Radhika
Karmarkar, Attorney, New York City Department of Information Technology and Telecommunications)
Andy Huckaba, City Councilman, Lenexa, Kansas
Gary I. Resnick, Mayor, City of Wilton Manors, Florida
Arlanda Williams, Councilwoman, Terrebone Parish, Houma, Louisiana

County Representatives (2)

Dow Constantine, County Executive, King County, Washington (Designee: Marlin Blizinsky, Government Relations Officer, King County Department of
Information Technology)
Joyce M. Dickerson, Commissioner, Richland County Council, South Carolina

City Attorney Representative (1)

Kenneth S. Fellman, City Attorney, Cherry Hills Village, Colorado

State Legislative Representatives (3)

Chris Perone, State Representative – District 137 Connecticut
Thomas J. Sloan, House of Representatives – District 45 Kansas
Michael L. Vaughn, House of Delegates – District 24 Maryland

State Public Utility Commission Representative (1)

Ronald Brisé, Commissioner, Florida Public Service Commission

Tribal Representatives (3)

Cherie Moomaw, Colville Business Council Member, Confederated Tribes of the Colville Reservation, Washington
Thomas Brandon Stephens, Deputy Housing Officer, Eastern Band of Cherokee Indians, North Carolina
Brian Tagaban, Executive Director, Navajo Nation Telecommunications Regulatory Commission, Arizona

FCC Grows Inpatient with C Spire

The Federal Communications Commission’s Wireless Telecommunications Bureau has sent a letter to C Spire (formerly Cellular South) requesting (again) information pertinent to the FCC’s review of AT&T’s proposed acquisition of T-Mobile. Since June 6, 2011, C Spire has refused to share information requested by the FCC for various reasons. In this letter, Wireless Telecommunications Bureau Chief Rick Kaplan again rejects C Spire’s objections and requires a reply within 10 days.

Elections Will Turn on Which Candidates Use Social Sharing Most Effectively

Eighty percent of House and Senate members have social-media accounts. That's 5% more than among millennials -- the key demographic of 18-29 year olds. Even more surprising, Congress has adopted Twitter far more widely than any other group recently surveyed by Pew Research: 81 percent of the House and Senate's 433 members use the platform, as against only 18 percent of 18-29 year-olds.

With a presidential election approaching next year, the question is, what will politicians do with these tools? How will President Obama capitalize on the fact that 23 million-plus people "like" his Facebook page? How will Mitt Romney reach new voters via his more than 93,000 Twitter followers? Politicians have the tools in place, but can they use them effectively? The most successful candidates will use social-media sharing at every step of their campaigns. This is not just about the swapping of virtual campaign buttons on Facebook, which the Obama campaign promoted in 2008. It means engaging communities of likely supporters in conversations across the Web -- on every possible device. This campaign cycle will not be about clicks, but targeted communications that can be messaged instantly, based on real-time information.

Reps Barton and Markey Generally OK with Verizon's Targeted Ad Consent/Disclosure

Reps. Ed Markey (D-MA) and Joe Barton (R-TX) appear generally satisfied with how Verizon handled consent for and disclosure of consumer's online information for a new targeted advertising program, but said they still wished it were an opt in, rather than an opt-out regime.

Verizon pointed out in the letters that they do not disclose individually identifying information. The company also argued that it took steps to notify customers individually, publicly disclose details of the program, and provided a "clear and easy way" for consumers to opt out. Reps Markey and Barton, co-chairs of the bipartisan privacy caucus, said the company "followed the law and exceeded common industry practices in this area." But they suggested that either the law or industry practice needed tweaking.

Benton

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