January 2012

Vodafone Wins India Tax Case

India's Supreme Court ruled that Vodafone Group isn't liable to pay taxes on the deal it struck to enter India in 2007, delivering a major victory to the British telecommunications giant and providing some encouragement to foreign companies that are concerned about the country's investment climate.

The court's decision means that Vodafone won't have to pay more than $2 billion in taxes on its $11.2 billion acquisition of a controlling stake in an Indian cellphone company from Hong Kong's Hutchison Whampoa Ltd. Indian authorities don't have jurisdiction to tax the deal, because it was structured as a transaction between two foreign entities, a three-judge panel of the court said. The highly anticipated verdict, which overturns a ruling by a lower court in Mumbai, is a huge win for Vodafone, vindicating the company's four-year legal fight in India. The tax case was closely watched and became a symbol for many foreign investors of the uncertainty of doing business in India, the unpredictability of regulators and the risks foreign firms face if they decide to make big bets on Indian growth.

Bloomberg jabs at Comcast on anniversary of NBC deal approval

Business media giant Bloomberg LP is marking the upcoming one-year anniversary of the government's approval of Comcast Corp.'s acquisition of NBCUniversal to remind regulators that it thinks the cable giant is disrespecting the feds.

Bloomberg, parent of business news channel Bloomberg Television, thinks that Comcast should be required to put the Bloomberg channel near its main competitor CNBC on its cable systems. Bloomberg has argued practically since the day Comcast announced its deal with NBCUniversal that it feared the cable giant would favor NBC's CNBC financial channel over Bloomberg on its systems, which reach more than 20 million consumers.

Vermont Legislators Say Protecting Broadcast Signals is Critical

A trio of Vermont legislators has asked the State Department to make sure the government negotiates a new spectrum agreement with Canada before they do any repacking in the second digital transition that would likely result from incentive spectrum auctions.

The Federal Communications Commission will have to move some channels, and others will likely have to share channels to free up contiguous blocks of spectrum for auction to wireless companies. In a letter to Secretary of State Hillary Clinton, Senators Patrick Leahy (D-VT) and Bernie Sanders (I-VT) and Rep. Peter Welch (D-VT) said that stations there had already been forced to cut power due to the DTV transition in 2009 and that any further repacking could have "devastating" impact without coordination with Canada.

House Commerce Committee Annual Report Highlights Net Neutrality, Spectrum

House Commerce Committee Chairman Fred Upton (R-MI) sent his Republican colleagues a report on Committee’s accomplishments in the 2011. He said that in every area of the Committee’s jurisdiction – including communications – it has passed legislation to promote the American economy. “Every Subcommittee and every Member has been involved in this effort,” he said.

On April 8, 2011, the House approved H.J.Res. 37, a resolution that will overturn the Federal Communication Commission’s “network neutrality” rules. The bill, authored by Communications and Technology Subcommittee Chairman Greg Walden, rejects these controversial regulations that put the government in charge of how network traffic is managed and what kinds of partnerships can be formed to serve consumers. Network neutrality rules may cost between 500,000 and 700,000 jobs by 2015, and result in up to 1.45 million fewer jobs in the economy by 2020. Chairman Walden also introduced FCC reform legislation and the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act which authorizes the Federal Communications Commission to auction airwaves that will significantly expand the availability of wireless broadband for consumer use and produce $16.5 billion in proceeds for the federal taxpayer. In December, the bill was approved by the Communications and Technology Subcommittee and passed the House as part of H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2011. Getting it to the President’s desk is a top priority for 2012.

LTE-Advanced: Think of it as broadband for cars

This week, the International Telecommunication Union approved the LTE-Advanced standard, and the web understandably got excited, in some cases, even proclaiming the arrival of ‘5G’. The wireless broadband nerd contingent at GigaOM is also pretty amped up about LTE-Advanced and the huge gains in speeds, capacity and network efficiency it will deliver, but we also think the party is a bit premature. LTE-Advanced will ultimately have a huge impact on the mobile networks and the devices that use them, but don’t expect 1 Gbps speeds to suddenly pop on your phones next year. LTE-Advanced won’t come out as a single new network like plain-old LTE did, but rather, in waves. It’s more like a menu of technologies: Operators will select whatever technology or technique that looks tastiest at the time, implement it in their current LTE networks, and when they get hungry for more speed, capacity or efficiency, they will return to their vendors for another meal.

Green Bay Packers a Model for Broadband Fundraising

[Commentary] All of you who believe in broadband’s impact on economic development (or are a little jealous of stories like this about Chattanooga’s 1 gigabit network), should look to the Green Bay Packers of the NFL for the key to financing your broadband network. The franchise raised $70 million to rehab its football stadium (Lambeau Field) by selling 280,000 stock shares to individuals at $250 a pop. They pulled off this amazing feat in just five weeks! The Green Bay Packers are a nonprofit corporation owned by local residents and businesses. Packers pride enabled Green Bay to outdo tech companies that can’t get an initial public offering off the ground, let alone raise $70 million. If Green Bay can do all this for a football field, can’t your hometown or county convince constituents to raise just a few million for a broadband network?

What if you create a nonprofit organization similar to the Packers, but with the goal being to build a broadband network, and then sell stock that:

gives constituents ownership of a vital community asset;
makes the benefits of broadband available to everyone in the community at affordable prices;
potentially makes some amount of money for investors when the network makes a profit; and
creates a mechanism for raising additional money for economic development projects.

Will Apple put Siri in everything?

Apple has wisely chosen to patent its voice assistant Siri, and the Patently Apple blog did what it does best: dug up the patent and dissected it.

The patent is long, detailed and goes into a lot of depth about how Siri works and could work, including as a personalized recommendation service for online shopping, as a travel booking service, and as part of a car navigation system or the car’s entertainment system. Clearly Apple would want to cover its bases when it comes to Siri and its potential future uses. But it doesn’t mean Apple is currently working on any of this. Still, it’s always interesting to get a look at what a secretive company is at least pondering.

Reading the Fine Print on Apple’s Book-Making Software

Apple’s free book-creation tool, iBooks Author, seemed too good to be true: it gives anyone the ability to easily lay out an interactive book with no programming required, slap it up for sale in Apple’s iBooks Store and ideally make a quick buck. But hours after Apple released the software, people noticed that they were not allowed to sell these books outside Apple’s store. That’s according to iBooks Author’s fine print, better known in the software industry as the end-user license agreement.

It reads:
“If you charge a fee for any book or other work you generate using this software (a “Work”), you may only sell or distribute such Work through Apple (e.g., through the iBookstore) and such distribution will be subject to a separate agreement with Apple.”

In other words, Apple has indirect ownership of your iBooks, because you can’t sell them through anyone but Apple. The clause immediately provoked controversy on the Web, even from some of Apple’s biggest enthusiasts.

What Apple Is Wading Into: A Snapshot Of The K-12 Textbook Business

The battle for the college digital textbook market—including startups like Inkling and Kno—gets a fair amount of attention. But the K-12 textbook business that Apple now seeks to revolutionize is much less talked about outside of education circles. On top of the bureaucracy that companies have to deal with, the digital infrastructure in many K-12 schools is weak, with an average of three students for every device as well as more mundane problems like too few electrical outlets. That said, there’s clearly some real opportunity: While many assume the K-12 market is largely controlled by the three big companies that Apple is partnering with, in fact, more than half of that $8 billion market isn’t. The market is estimated at $8 billion. There are 50 million K-12 students in public schools in the US.

Rural Groups Urge FCC to Look Beyond Cuts and Caps for USF Reform

In comments filed with the Federal Communications Commission, four rural telco organizations urged the FCC not to adopt certain Universal Service reforms proposed in a notice of proposed rulemaking (NPRM) released late last year.

The National Exchange Carrier Association, the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies and the Western Telecommunications Alliance argued that Universal Service reforms adopted thus far for rural carriers “have consisted entirely of caps, cuts and phase-outs to cost recovery components.” The groups urged the FCC to focus on developing “sufficient, predictable and meaningful” Universal Service and inter-carrier compensation (ICC) mechanisms to support broadband services in areas served by rural carriers. In the comments, the groups ask the FCC at a minimum to provide Universal Service support for “stand-alone broadband offerings, middle mile costs and conversions to IP-enabled switching.”

Benton

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