May 2012

Amazon May End Up Sharing California Tax

Amazon is now bringing jobs to a growing number of states. But two California cities are pondering whether they might wind up handing some of the resulting tax windfall right back to the Internet retail giant. The pressures facing San Bernardino and Patterson—which each expect to gain around 1,000 jobs by hosting new Amazon shipping centers—could be shared by other local governments angling to court big companies to help bolster their economies. Amazon representatives asked a number of months ago whether San Bernardino would be open to discussions about sharing sales-tax revenue with the company, said Jim Morris, chief of staff for his father, Patrick Morris, the city's mayor. The parties haven't discussed the matter since, he said.

Facebook IPO Review Finds No Listing Violations

Regulators probing Facebook listing on the Nasdaq Stock Market haven't found any evidence of industry rule violations and view the botched offering as a technical failure, according to a person familiar with the matter.

Members of Congress, regulators and state officials are looking for foul play nearly two weeks after one of the largest initial public offerings fizzled during its first day on Nasdaq, leading to an estimated $100 million in initial trading losses. Yet so far, federal regulators have found no clear-cut signs that securities laws or industry rules were broken, at least in the actual listing on Nasdaq OMX Group’s exchange, the person said. Even if there are no violations in the technical exchange listing, a large group of investors is disappointed by the trading hiccups and steep stock declines, leading to complaints about other aspects of IPO, including disclosures by the underwriters. When its own review is complete, the Securities and Exchange Commission may recommend adjusting rules for the pricing of IPOs, perhaps temporarily delaying trading of a stock after the initial price is set, the person said.

Profits may elude mobile challengers

The revolution in consumer electronics touched off by Apple is bringing some unlikely names to the fore in the business of phones and other hardware. But the chance that the newcomers will have any better luck than the old guard that is now in retreat still looks like a long shot.

Google’s completion of its Motorola Mobility purchase, and Research In Motion’s disclosure that it has hired bankers to consider its financial options are the latest headlines to underline this change. The names that once led the upper end of the handset business have been eclipsed with remarkable speed in the five years since the arrival of the iPhone. RIM, Motorola and Nokia, which is burning cash fast, have shown how inhospitable the hardware world can be when changing fashions and falling volumes expose the high fixed costs of the incumbents. The new kids on the block bear unlikely names: Google, Amazon and, showing sporadic signs of interest, Microsoft. Facebook is at an earlier stage in its development as it looks to follow its users beyond the PC, but if persistent reports of a “Facebook phone” are anything to go by, it could eventually follow.

Seven Behavioral Ad Companies Called Out

Seven companies from the online data targeting world were urged to modify the way they inform consumers and enable them to opt-out of behavioral ads in order to conform to best practices outlined by the Advertising Self-Regulatory Council.

As a result, BlueCava, Turn, DataXu, Oxamedia, Gravity and Rovion have all taken action to address concerns raised by the council based on multiple investigations -- concerns related to consumer disclosures, opting out across devices, and the effectiveness and duration of opt-out mechanisms. That's despite Gravity and Rovion's contention that neither company actually participates in behavioral targeting. Oxamedia was unaware of the ASRC principles, but still agreed to make changes to become compliant, said officials. A seventh company that also claimed it does not engage in online behavioral advertising, Facilitate Digital Holdings, agreed to change its opt-out cookie’s duration to the industry standard of five years, but has not yet done so, according to the ASRC.

Search for a solution among the subplots

Like one of the multi-episode Scandinavian crime dramas currently in vogue on British television, the Leveson inquiry has emanated sub-plots, spin-off dramas and red herrings by the bushel. These have often distracted attention from the main purpose of the inquiry: to work out how the scandal over phone-hacking and press ethics can be prevented from happening again. Yet, amid the theatre surrounding Tony Blair’s testimony and the political frenzy ahead of Jeremy Hunt’s, this week has brought some of the most animated exchanges so far on the future shape of press regulation in Britain.

Blair, the former prime minister, floated the idea of rules to separate news and comment in newspapers as part of a “change in culture” across the UK press. Michael Gove, the education secretary, in contrast urged caution before the big foot of state intervention came anywhere near press freedoms. Siding with editors who fear statutory intervention, he told Lord Justice Leveson: “I’m unashamedly on the side of those who say that we should think very carefully before legislation and regulation because the cry ‘Something must be done’ often leads to people doing something which isn’t always wise.” Lord Justice Leveson is looking for a simple answer to a question he first asked last July when he received his warrant to inquire: if the press are the guardians of our freedom, who guards the guardians? At the end of the evidence from his scores of witnesses, he asks each to offer their vision of a future regulatory system.

Hunt aide told News Corp of license fee deal

Jeremy Hunt’s closest adviser leaked information to Rupert Murdoch’s News Corp about how much the government was going to charge viewers for the television license fee, evidence submitted to the Leveson inquiry shows.

As the culture secretary prepares to testify at the inquiry on May 31 about whether he had too close a relationship with the media company, a revealing new set of emails has emerged. They show Adam Smith, Hunt’s former special adviser, telling Frédéric Michel, a lobbyist working for News Corp, that the license fee settlement would be frozen until 2017. The email was sent on October 19 2010, a day before George Osborne, the chancellor, formally announced the decision as part of a spending review. The decision was one of significant commercial interest to News Corp. Murdoch and his company’s executives have repeatedly complained that the license fee-funded BBC is too large and well-financed to allow competitors to flourish.

Conviction in Thailand Worries Web Users

A Thai court convicted a local webmaster for failing to quickly delete posts considered insulting to Thailand's royal family, adding to world-wide concerns over governments adopting increasingly tough tactics to police the Internet. Chiranuch Premchaiporn, 44 years old, escaped a potential 20-year prison term, instead being fined 20,000 baht ($630) and given an eight-month suspended sentence. Still, Internet businesses operating in Thailand, including websites operated by global giants such as Google, will likely be chilled by the ruling, which sets a precedent for prosecuting website owners for what their users say online.

Wireless Industry Likes Spectrum Sharing, but Still Wants More

Q&A with Chris Guttman-McCabe, vice president of regulatory affairs at CTIA, the trade association for the wireless industry.

Recently, the President’s Council of Advisors on Science and Technology (PCAST) urged President Obama to adopt computer technologies so that better use is made of radio spectrum for wireless communications. The report says that newer radio technologies could help share spectrum among, say, government agencies and companies, and thereby increase capacity a thousand fold. In other words, the technologies would help carriers serve the exploding number of data-guzzling smartphones and tablets on the market. But the carriers in recent years have claimed they need to acquire additional spectrum, citing a looming “spectrum crisis.” Guttman-McCabe said that CTIA members were excited about the idea of spectrum sharing, but that giving the carriers more spectrum should still remain the government’s top priority.

With Plan X, Pentagon seeks to spread U.S. military might to cyberspace

The Pentagon is turning to the private sector, universities and even computer game companies as part of an ambitious effort to develop technologies to improve its cyberwarfare capabilities, launch effective attacks and withstand the likely retaliation.

The previously unreported effort, which its authors have dubbed Plan X, marks a new phase in the nation’s fledgling military operations in cyberspace, which have focused more on protecting the Defense Department’s own computer systems than on disrupting or destroying those of enemies. Plan X is a project of the Defense Advanced Research Projects Agency, a Pentagon agency that focuses on experimental efforts and has a key role in harnessing computing power to help the military wage war more effectively.

Bill banning warrantless cellphone tracking clears California Senate

California is one step closer to banning law enforcement from tapping the data from the tracking device in your palm, pocket or purse without a warrant.

The state Senate passed a bill that requires a warrant to seek access from wireless carriers to the near-constant data stream coming from our cellphones. Existing law addresses only the search of places and seizure of property identified in a warrant. There's also a warrant procedure for acquiring stored communications. The bill, SB 1434, amends the state Penal Code to address location data collected by our ubiquitous electronic devices, including our mobile phones.

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