April 2013

T-Mobile USA agrees to come clean about 'uncarrier' service plans

T-Mobile USA's "radical" service plans promising no annual contracts aren't quite as radical as consumers might think, and the mobile operator will change its advertising and offer refunds in a settlement with the state of Washington.

On March 26, the fourth-largest U.S. carrier introduced a series of new service offerings, including no-contract monthly plans and a program that let customers pay for a new phone over the course of 24 months. In unveiling the plans, T-Mobile thumbed its nose at rival mobile operators, calling the new offerings "uncarrier" plans that would free the company and its customers from the constraints of conventional service agreements. Now the company has agreed to clarify a few things in that pitch after an investigation by the Washington Attorney General's Office. Specifically, T-Mobile didn't tell potential customers who bought phones on time that they would have to keep T-Mobile service for 24 months or pay off the rest of the phone's full price when they canceled the service, said Paula Sellis, an attorney who handled the case in the Attorney General's Office. The fine-print disclosures that T-Mobile did offer were hard to understand, she said.

Businesses Take a Cautious Approach to Disclosures Using Social Media

Dozens of companies are taking advantage of newly clarified rules from the Securities and Exchange Commission that have now blessed the use of social media sites to disclose financial information.

Although social networks have proliferated for years and the public more readily turns to Twitter than the S.E.C.’s Edgar Web portal for updates, the agency just a few months ago was still evaluating whether using newer outlets would violate its rules. Even with the updated guidelines, uncertainty over what exactly the commission will allow has meant that many companies, and their legal teams, are playing it safe this earnings season.

Debt Dish May Give Sprint Indigestion

Debt is cheap these days. But then again, so is talk. That is something for Sprint Nextel shareholders to bear in mind as they weigh competing offers: a $20.1 billion bid from Japan's SoftBank to buy 70% of Sprint versus a rival $25.5 billion one from Dish Network for all of it.

On the face of it, Dish's bid, with more cash, $37 billion in present value from potential synergies and large swaths of wireless airwaves, seems a better deal. SoftBank's offer comes with neither synergies nor spectrum. But SoftBank brings a cash infusion for Sprint; Dish brings a boatload of debt. Despite Dish's assertions that the new company will be more than able to handle such a load, deal financing matters for equity investors. They will be left with a stake in the combined company no matter who wins. And high levels of debt can hinder performance given the capital-intensive nature of the telecom business. To complete the financing for its deal, Dish needs to raise an additional $9.3 billion of debt. The "vast majority" of this will likely be raised via Sprint, even though Dish's leverage of gross debt that is four times earnings before interest, taxes, depreciation and amortization is lower than that of Sprint at five times.

Level the sales tax playing field for online and local retailers

[Commentary] Republicans' resolve to oppose higher taxes is well established, but a growing number of conservatives are recognizing that a national online sales tax is more about leveling the playing field for brick-and-mortar retailers.

South Dakota Gov. Dennis Daugaard is one of the Republicans seeing the light. "It's a matter of equity and fairness," he said. The Senate, after a years-long debate, is poised to pass a bipartisan national online sales tax bill with as many as 25 GOP senators on board. They understand that the legislation will simply enforce a tax that's already on the books but seldom paid. The House should follow suit and end local brick-and-mortar businesses' crippling 5 percent to 10 percent price disadvantage compared to Internet retailers. The federal bill is expected to raise as much as $11 billion in uncollected tax revenue that is desperately needed by states, counties and cities to provide essential services, such as keeping more teachers and police officers on the job. Main Street and Internet shops should play by the same tax rules. Congress should force online retailers to calculate the required sales tax on consumer purchases and send the revenues to cash-starved states.

Robocalls: Businesses dial up pressure on the FCC

Business groups representing industries from health care to banking are pressuring the Federal Communications Commission to ease its rules on robocalls — saying they should get a carve-out for technology that automatically dials customers.

In meetings with top FCC aides, executives with the U.S. Chamber of Commerce, the American Bankers Association and American Association of Health Care Administrative Management say they’re being victimized by unfair class action lawsuits brought under the Telephone Consumer Protection Act and that the “predictive dialers” they use should be exempt from robocall rules. Such predictive-dialing technology allows “businesses with a legitimate need to contact large numbers of specific customers for nontelemarketing purposes,” the groups told top FCC staff during a spate of recent meetings. The meeting is part of an escalating fight at the commission over the TCPA, a 1991 law designed to crack down on telemarketer robocalls peddling goods and services. Congress modified the law in 2003, ordering the Federal Trade Commission to establish a Do Not Call Registry for consumers.

Web oils the wheels of progress

[Commentary] By any measure, the changes wrought by the Internet have been fast. In the less than 20 years since the Internet became commercially available, what began as an idea for scientists to share information by connecting their computers has grown to touch almost every aspect of our lives, from business, finance and education to shopping, relationships and entertainment. James McQuivey, digital disruption expert at Forrester Research, says: “The number one effect [of the internet] from a purely macroeconomic perspective is that we are witnessing the dramatic reduction of the friction that was presumed to be unavoidable in the modern economy.

Google search proves to be new word in stock market prediction

Searches of financial terms on Google can be used to predict the direction of the stock market, according to an analysis of search engine behavior stretching back nearly a decade.

The changing face of news after Boston

[Commentary] I am a veteran print guy and have treated Twitter as an offshoot of what I do the rest of the time. But I have never thought of it as a primary source of news until the events in Boston and, in particular, the manhunt that took place in Cambridge and Watertown a few days after the bombings. News has moved to the digital sphere, but how we manage that shift is still evolving, and the shape of future journalism still unclear. We have seen glimpses of what it might be, but that's what they are -- only glimpses.

Samsung to block access to app store in Iran

Iranian users of Samsung mobile applications said that the company had notified them that they will no longer have access to the company's online store as of May 22. The move is seen as part of international sanctions on the country over its disputed nuclear program. The West has imposed banking and insurance sanctions on Iran since it suspects Iran is pursuing nuclear weapons, a charge Tehran denies. In the message, Samsung said that it cannot provide access to the store, known as Samsung Apps, in Iran because of "legal barriers."

ACLU: CISPA Is Dead (For Now)

The Cyber Intelligence Sharing and Protection Act (CISPA) is all but dead, again.

The controversial cybersecurity bill, which passed the House of Representatives last week, will almost certainly be shelved by the Senate, according to a representative of the Senate Commerce Committee. "We're not taking [CISPA] up," the committee representative said. "Staff and senators are divvying up the issues and the key provisions everyone agrees would need to be handled if we're going to strengthen cybersecurity. They'll be drafting separate bills." Sen. Jay Rockefeller (D-WV), chairman of the committee, said the passage of cybersecurity legislation is "important," but said the bill's "privacy protections are insufficient." That, coupled with the fact that President Barack Obama has threatened to veto the bill, has even CISPA's staunchest opponents, such as the American Civil Liberties Union, ready to bury CISPA and focus on future legislation.

"I think it's dead for now," says Michelle Richardson, legislative council with the ACLU. "CISPA is too controversial, it's too expansive, it's just not the same sort of program contemplated by the Senate last year. We're pleased to hear the Senate will probably pick up where it left off last year."

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