April 2013

Apple won a patent-infringement case brought by Google’s Motorola Mobility unit over a phone sensor, averting an order that could have hindered imports of the iPhone 4 into the US.

The US International Trade Commission in Washington upheld a judge’s findings that the Motorola Mobility patent is invalid, though for different reasons. The patent covers a sensor that prevents the phone from accidentally hanging up or activating an application when close to a person’s face. The decision marks the latest instance in which neither Apple nor Google has been able to strike a decisive blow against its competitor in a squabble that began more than two years ago. Each has claimed the other is infringing patents, and Apple accused Motorola Mobility of breaching obligations to license some of its most widely used technology on fair terms.

[Commentary] In January this year, political activist and net guru Aaron Swartz committed suicide. Facing the potential of years in prison for downloading a database of academic articles, Swartz had exhausted his wealth and his will to fight. With the help of a rope, he gave up. Swartz's death has turned a light on the statute that had put Swartz's liberty in jeopardy: the Computer Fraud and Abuse Act, or CFAA for short.

This federal criminal statute has gotten way out of hand. The CFAA was passed in 1986 to punish the new crime of computer hacking. But a lot has changed since 1986. Use of computer networks was rare then. Now it is ubiquitous. And Congress has expanded the law several times, making its reach broader and its punishments more severe. The act has become a sprawling mess -- a powerful and mysterious weapon that could potentially reach millions of ordinary Americans. And prosecutors have interpreted it incredibly broadly. The problem results from the law's vague language: The act criminalizes "unauthorized access" to a computer. But almost 30 years after its passage, no one yet knows when access is unauthorized. The law cries out for a common-sense reworking. After Swartz's death, a cross-partisan coalition in Congress, led by Democrat Zoe Lofgren and Republican Darrell Issa, did just that, proposing a law that would end liability for terms-of-service violations and would limit felony liability for violations. But, incredibly, some in Congress are going the other way.

Google executive chairman Eric Schmidt has defended his company's low tax payments in Britain, saying the company follows the letter of the law and makes a positive contribution to the British economy.

A British parliamentary committee last year accused Google, Amazon and Starbucks of "immorally" minimizing their tax bills. Schmidt rejected the criticism in a radio interview with Britain's BBC. "I think the most important thing to say about our taxes is that we fully comply with the law and we'll obviously, should the law change, we'll comply with that as well," he said. Google has UK sales worth billions of dollars each year. But from 2006 to 2011, the last six years for which accounts are available, it reported a net tax credit because tax payments were exceeded by tax credits. These tax assets can be used to offset future profits.

The Federal Communications Commission reached another milestone in its implementation of Universal Service reforms to ensure rural Americans have access to voice and robust broadband services – including extending broadband to the millions of Americans that are unserved today.

Our primary tool to achieve this goal is the transformation of the former high-cost fund – the program supporting rural voice service – to a Connect America Fund supporting modern networks that provide both broadband and voice service. Phase II implementation is well underway for those areas of the country where 80% of unserved Americans live and key to this transformation is targeting funding efficiently to the areas where it is needed most, outside areas where competitive providers operate. With our last Broadband Progress Report, we posted an online map of broadband service today, including the unserved areas where 19 million Americans live. Today’s milestone – a Report and Order– is the next step toward adopting a final cost model that will pinpoint as accurately as possible how much support is needed, on a granular (census- block) level, to deliver both voice and broadband, without overspending.

The model framework – an “efficient provider framework” – adopted by Commission staff today resolves key assumptions about the design of the network and network engineering, including by:

• Calculating costs in a way that best approximates the discipline of competitive markets with multiple providers.
• Building on the known costs of deploying efficient modern networks. These costs can be lower than those of legacy networks, often built in a piecemeal fashion that compounds inefficiencies.
• Looking forward to the average monthly cost that is necessary to support modern, efficient networks over the long-term, rather than attempting to model past investments in legacy networks.