November 2011

AT&T Seeks Sprint Plans to Compete Following T-Mobile Ruling

AT&T asked US District Judge Ellen Segal Huvelle to compel Sprint Nextel to turn over documents regarding its plans to compete in the wireless phone industry after a decision is made on AT&T’s proposed purchase of T-Mobile USA.

AT&T listed 47 areas of interest, including whether Sprint had any plans for a “business combination” with T-Mobile if the AT&T transaction is blocked. AT&T says it needs the documents to defend against the Justice Department’s antitrust lawsuit seeking to stop the T-Mobile deal. “Sprint is a strong and vibrant competitor as evidenced by events in the past six months -- a fact that is critical to AT&T’s defense of DOJ’s claim that the challenged merger will dampen competition in the mobile wireless industry,” said AT&T lawyer Steven Benz of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC. AT&T also requested Sprint’s plans to compete should the $39 billion deal be approved, as well as its analysis of the merger. AT&T is also seeking information on Sprint’s bids for government contracts over the past three years, the identities of Sprint’s business and government customers, and the number and location of proposed cell sites that Sprint planned at some point to deploy and abandoned.

Feud between wireless companies and broadcasters turns ugly

The rivalry between television broadcasters and wireless companies has turned ugly in the past day with the wireless companies calling broadcast television a dying industry and the broadcasters accusing the wireless companies of diminishing racial diversity.

The spat began when CTIA, an association that represents wireless carriers such as AT&T and Verizon, released a statement slamming the National Association of Broadcasters (NAB) on the same day the group launched a new coalition to protect the future of broadcast television.

“When you have to form a coalition to talk about your future, perhaps it suggests you don’t have one,” said Jot Carpenter, CTIA's vice president of government affairs. NAB did not appreciate CTIA trying to spoil the launch of its new group. "Sometimes statements get made inside the Beltway that are so shockingly arrogant that one has to step back and ask: Really?" wrote Dennis Wharton, NAB's vice president of communications.

All the Texts, Without All the Costs

Even though a text message usually costs the carriers less than a penny to route between mobile phones, they charge customers as much as 20 cents to send a text and another 20 cents to receive one. This adds up to an estimated $20 billion a year in revenue for the wireless industry and a lot of grumbling from consumers who feel abused.

But in the last two years there has been a proliferation of mobile apps, the latest being Apple’s iMessage, that allow users to text free. While they differ in format and ease of use, they all work on the principle of sending and receiving texts via cellphones’ data streams. “Traditional texts are sent over a defined protocol, like their own channel, that is different from the voice and data channels,” said Michael O’Brien, senior vice president for marketing solutions at Syniverse Technologies, a company that develops products and services for the wireless industry. A single text message sent via a texting app uses no more than 160 bytes of data. Most cellphone data plans are 2 to 10 gigabytes (one gigabyte is about a billion bytes). So even if you texted someone all of “War and Peace,” 160 characters at a time, you would still have ample data left on your plan — although you might lose a friend.

Amazon, Now a Book Lender

As the e-reader and tablet wars heat up, Amazon.com is launching a digital-book lending library that will be available only to owners of its Kindle and Kindle Fire devices who are also subscribers to its Amazon Prime program.

The program will be limited, at least at the beginning, in what is available to borrow. Amazon will initially offer slightly more than 5,000 titles in the library, including more than 100 current and former national bestsellers. None of the six largest publishers in the U.S. is participating. Several senior publishing executives said recently they were concerned that a digital-lending program of the sort contemplated by Amazon would harm future sales of their older titles or damage ties to other book retailers. Moreover, Amazon will restrict borrowers to one title at a time, one per month. Borrowers can keep a book for as long as they like, but when they borrow a new title, the previously borrowed book automatically disappears from their device. The new program, called Kindle Owners' Lending Library, cannot be accessed via apps on other devices, which means it won't work on Apple Inc.'s iPad or iPhone, even though people can read Kindle books on both devices. This restriction is intended to drive Kindle device sales, says Amazon. The program, which is effective Thursday, comes a few weeks before Amazon ships the Kindle Fire tablet on Nov. 15, which is a direct competitor with the iPad.

Ad companies have their hands, or cookies, in your browser

Your computer's appetite for cookies would put the Cookie Monster to shame. Without letting you know, your Internet browser gulps down hundreds of the digital tracking beacons fed to it by the websites you visit, sometimes storing them for months or years, enabling an array of companies you've never heard of to monitor what you do online.

Cookies are not inherently dangerous — they are a kind of virtual ID card that helps browsers perform a number of online tasks that most users have come to expect: allowing you to stay logged in to your Google or Yahoo email service, or to go from page to page on Amazon.com while filling up your shopping basket with books. Each time you add a new book, for instance, your browser sends a request to Amazon's servers, flashing the special ID code on the cookie. Because Amazon placed the cookie on your computer in the first place, it will recognize the ID it assigned to you, look up your account and add the new book to your basket. But the useful cookies are far outnumbered by those that serve no other purpose than to keep track of what you do online. They often come from sites you have never visited. This can happen when you open pages that carry embedded advertisements, which are capable of adding cookies to your browser without your permission or knowledge — and often do.

Amazon offers to serve as tax collector — for a price

Amazon for years has fought state efforts to force it to collect sales taxes from its customers. Now, instead of battling the tax man, the company is looking to profit — by hiring itself out as an Internet tax collector.

In an abrupt about-face, the company is now offering to handle sales-tax chores for merchants who sell products through its site for a fee equivalent to 2.9% of the taxes collected. The optional service, which is set to roll out Feb. 1, will be offered to Amazon's third-party vendors in all 50 states. It's a strategy that could reap millions of dollars in new revenue for Amazon, which has been among the most vocal opponents of government attempts to tax e-commerce. Analysts said Amazon's shift is an acknowledgment that Internet retailers ultimately will have to play by the same rules as bricks-and-mortar stores. It's also a recognition that there's money to be made in the process, said George Runner, a member of the California State Board of Equalization, the agency that administers sales tax. "This is what smart businesspeople do," Runner said. "They are going to use whatever model they can to expand their business opportunities. They're very slick at it."

Occupy Wall Street, brought to you by social media

Occupy Wall Street has spread around the country at Internet speed as participants tap into Twitter, Facebook and microblogging site Tumblr to call Americans to the streets to protest what they see as a broken global financial system.

What would have taken months to unfold in a different era has occurred in days and hours. The Economist magazine calls it America's "first true social-media uprising." "If not for social media, 80 percent of our information would not have gone out to get people's attention," said Joanne Coppolino, an "occupier" in downtown San Jose. "Social media helps us to stand as one." And in just six weeks, the movement has moved beyond the nation's shores to cities such as Hong Kong and Buenos Aires. In all, more than 900 cities around the world have experienced Occupy protests, although most haven't drawn the thousands of participants seen at events such as Occupy Oakland or Occupy Wall Street in New York City.

Facebook’s Use of Cookies Raises German Regulators’ Suspicions

Facebook may be tracking the Internet activity of users even after they cancel their accounts, the German data privacy watchdog said.

After an investigation of the way cookies are installed after a user opens and then closes a Facebook account, the Hamburg Data Protection agency said on its Web site that it suspected the company was unlawfully tracking subscribers. “Arguments that all users have to remain recognizable after they leave Facebook to guarantee the service’s security can’t stand up,” Johannes Caspar, the agency’s head, said on the Web site. “The probe raises the suspicion that Facebook is creating user tracking profiles,” which would be unlawful if users were not alerted. Cookies are created for each new Facebook user and some are maintained when a user leaves the service. The cookies are stored for two years and can clearly identify users during that time, the regulator said. The German regulator’s action adds to investigations of Facebook by the Irish data protection agency and the Norwegian privacy watchdog. A group of European Union regulators has said it will look for possible privacy violations in Facebook’s facial-recognition feature.

A la Carte Class Action Suit Gets Fresh Legs

The Ninth Circuit Court of Appeals has withdrawn a three-judge panel decision last June affirming a lower court's ruling that a group of cable and satellite subs did not have a case when they alleged that bundled cable programming was an antitrust violation.

The class action suit had been filed against NBCU, Viacom, Disney, Fox, Time Warner, Time Warner Cable, Comacst, DirecTV, Echostar and Cablevision, among others. The subscribers claimed that bundling of high-value channels with lower-valued ones reduces consumer choice and raises prices, precluding distributors from offering a la carte and constituting a restraint of trade in violation of the Sherman Antitrust Act. In June, the three-judge panel had upheld a district court ruling throwing out the antitrust suit, saying that it was "a consumer protection class action masquerading as an antitrust suit.... In the absence of any allegation of injury to competition as opposed to injuries to consumers," wrote Judge Sandra Ikuta, "we conclude that plaintiffs have failed to state a claim for an antitrust violation." But in a one-paragraph order Oct. 31, the court withdrew the decision and said it was going to reconstitute a panel, making moot requests to rehear the case.

Android phone repair cost telcos billions: study

Fitting older versions of Google's popular Android software to cheaper cellphones could send the repair costs of global telecoms operators up as much as $2 billion, a study by wireless services firm WDS showed.

Costly hardware failures are more common on Android devices than on Apple Inc iPhones and Research In Motion Inc BlackBerry phones, which have strict control over the components used in their devices, WDS data showed. Cheaper Android models, costing as little as $100 to make, have helped Android emerge as the dominant platform in smartphones, attracting dozens of manufacturers ranging from Samsung Electronics Co Ltd to no-brand Asian vendors. "While this price point sounds very attractive, when you look at a total cost of ownership it’s a different story," said Tim Deluca-Smith, Vice President of Marketing at WDS, which offers device management and call center services to operators.

Benton

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