April 2013

States rack up victories in bids to collect online sales taxes

The days of shopping online without paying sales taxes may be ending.

States are cracking down, and a nationwide system for collecting sales tax on online sales may be coming soon. Several developments in recent weeks show how quickly the landscape is changing on what has long been an important but elusive goal for state officials: collecting sales tax from online retailers. States and localities could reap as much as $11 billion a year, according to one study. Internet shoppers are already supposed to pay the money on their own but rarely do. So state officials and local retailers cheered when New York state's "Amazon tax," designed to collect taxes on purchases at Amazon and similar sites, survived a challenge last month in the state's highest court. It was a significant victory, especially after courts struck down similar laws in Colorado, Illinois and North Carolina.

TV stations feel 'squeezed' by airwave auction

As the federal government tries to encourage companies like AT&T and Verizon to create bigger, faster mobile networks, television broadcasters are feeling like the farmers of yesteryear who were asked to sell their land to make way for the nation's highways.

Broadcasters own a valuable swath of invisible real estate on the airwaves and just like farmers, their livelihoods depend on cultivating that fertile space. But the Federal Communications Commission believes clearing new lanes of over-the-air bandwidth will ease mobile network congestion, which leads to dropped calls, stuttering video and hanging e-mails. Broadcasters say they are already feeling the pinch after giving up precious airwaves in the transition to digital TV in 2009. They are worried that their businesses may be in jeopardy as the government embarks on an unprecedented auction. They fret they'll be short-changed in a complex process that is expected to rake billions of dollars into federal coffers. "We've already been squeezed once," said Gordon Smith, president of the National Association of Broadcasters, on the sidelines of the industry's annual gathering, NAB Show. "We're being squeezed twice now. There's no more juice in that squeeze."

FCC Tries Again to Clean Up Indecency Act

Just as he is about to exit, Federal Communications Commission Chairman Julius Genachowski is setting up a question that will be left to his successor: Just how should the agency deal with a backlog of indecency complaints.

Given the propensity for watchdog groups to complain that the agency is too lax, and broadcasters to sue the FCC for being too vague, it’s doubtful that any new policy will be anything other than a can of worms. The FCC is facing two vacancies, and the opening of public comment on a new indecency policy is likely to only increase the pressure from parents orgs and politicians for President Obama’s nominees to commit to a zealous approach to objectionable content. A few of the comments to the FCC so far amplify the stations’ standpoint, that the networks shouldn’t be singled out, since so many media options proliferate.

State Lines May Ease for Classes Held Online

Higher education leaders have proposed a way to make it easier for universities to offer online courses across state lines. The proposal would replace a cumbersome patchwork of rules and fees that make it costly for universities to offer online courses to students in different states.

With some seven million students enrolled in online college courses for credit — a number that is growing rapidly — higher education officials say it is crucial to simplify the system. A commission on online learning led by former Secretary of Education Richard W. Riley outlined a proposal under which any institution that had received state authorization for its online programs, based on certain quality and consumer protection standards, would be allowed to enroll students from other states that met the same basic standards and agreed to reciprocity. Under the current regulatory scheme, which was designed for courses taught in brick-and-mortar classrooms, colleges and universities generally must register their programs in every state where they are offered.

Labor Board Complaining Over Cablevision’s Tactics

The battle between Cablevision and organized labor has dragged on for months, punctuated by protests and lawsuits, in a feud that has been particularly nasty even by most labor-management standards. Now the National Labor Relations Board has accused the company of acting illegally to avoid reaching an agreement with several hundred unionized cable installers in Brooklyn.

John J. Walsh, the acting director of the labor board’s regional office in Brooklyn, said that his office would issue a complaint against Cablevision, saying the company “has bargained with no intent to reach an agreement” — in what several workers said was a strategy to undermine support for their union, the Communications Workers of America. The fight has been particularly vitriolic and visible, not least because the family that controls Cablevision, the Dolans, also controls the Knicks and Rangers.

Microsoft Can't Keep Up in a Mobile World

The PC ecosystem is under threat. To rescue it, Microsoft and Intel may have to dig deeper—into their own pockets.

Global personal-computer shipments fell 14% in the first quarter, according to research firm IDC, their steepest decline ever. Microsoft's stock duly fell 5% on April 11, with Hewlett-Packard's stock down 7% and Intel's, 3. What is surprising is that investors are surprised. Not only did the two halves of the "Wintel" duopoly miss the boat with mobile, their latest attempt to regain momentum has looked ineffectual for months. New machines running Microsoft's latest touch-enabled operating system, Windows 8, typically powered with Intel chips, are so rare as to elicit stares when seen in the wild. Microsoft blames limited distribution. But IDC analyst Bob O'Donnell points out that such machines have proven too confusing and expensive.

California town moves to ban Internet cafes permanently

If there are any fans of online gambling in Oakley (CA), you won't find them at an Internet cafe here.

The city moved this week to place a permanent ban on places that have more than four computers with Web access available for public use in an effort to avoid the crime these so-called Internet cafes attract. The establishments offer customers a chance to participate in online sweepstakes, purchasing time on the Internet in hopes of winning prizes. Oakley has prohibited them since September, when the council adopted an interim urgency ordinance to buy time while it studied the issue. Antioch and Pittsburg already have outlawed Internet cafes; Brentwood allows them but requires the prospective business to apply for a permit from the chief of police. Oakley's concerns include unsupervised minors loitering in front of the businesses and late-night noise. More worrisome is the criminal activity that other local cities have reported in and around these businesses -- robberies, burglaries and illegal drug use as well as assaults, public drunkenness and vandalism.

Once it becomes official, Oakley's ordinance will allow exceptions for schools, libraries and other public facilities as well as nonprofits.

Billionaire Slim Preparing Blitz Into TV After Mexico Crackdown

Billionaire Carlos Slim is preparing an aggressive push into Mexico’s television market to take advantage of new telecommunications legislation, even as the changes threaten his dominance in the phone business.

While Slim’s wireless carrier, America Movil SAB, is one of the chief targets of a bill to create more competition in Mexico, proposals to give consumers more options in cable and satellite TV will benefit the company, Chief Financial Officer Carlos Garcia-Moreno said last month. The bill is under Senate review after passing the lower house of Congress in March. The law offers Slim his best chance in years to get a license to offer pay-TV services over satellite and cable, said Pablo Vallejo, an analyst at Corporativo GBM SAB. Slim, the world’s richest person, is amassing media assets, including Mexican soccer teams and the rights to air the Olympics, to lure customers with exclusive programming.

Deutsche Telekom, U.S. Firms Scrap With India Over Scuttled Satellite Deal

Deutsche Telekom AG and two U.S. investment firms are challenging the Indian government over a canceled contract to supply broadband service, another hitch for foreign companies conducting business in the country.

The dispute concerns an agreement with an arm of the government's space agency to use satellite technology to develop an Internet broadband network. New Delhi canceled the contract in 2011, saying it might have shortchanged the federal treasury and that one government official had too much influence over the approval process. Now U.S. investment firms Columbia Capital LLC and Telcom Ventures LLC are seeking more than $1.6 billion in arbitration before a United Nations panel.

iPhone Outpaced in Surging India by Less Costly Rivals

Apple and Samsung are being beaten in the fast-growing Indian smartphone market by a couple of aggressive local competitors.

Sales growth at Bangalore-based Karbonn Mobiles India Pvt. and Micromax Informatics Ltd. is being fueled by Indians buying their first smartphone to surf the Internet, which will be accessed by more than 300 million people by 2017. Their secret: the price. In a country where about 800 million people live on less than $2 a day, Karbonn handsets start from 3,599 rupees ($66) and Micromax’s from 3,999 rupees, less than the cheapest Apple and Samsung smartphones. The iPhone 4 is available for 26,500 rupees and Samsung’s Galaxy Y Duos Lite for 6,110 rupees.