October 2013

How long will Google keep burning money on Motorola?

Recently, losses at Google's Motorola Mobility have accelerated despite three rounds of layoffs that slashed around 6,000 workers. The division is now on pace to bleed $1 billion a year out of Google’s bank account. The question is, does a money pit like Motorola have a major impact on Google’s bottom line? In a lot of ways, the answer right now is no. Despite the losses, Google is profitable overall, and its cash on hand has grown steadily. But if Motorola continues to slide, Google may eventually be forced to write down the cost of the $12.5 billion acquisition -- and its investors could clamor for the company to scuttle what has so far been a painful experiment into the world of mobile hardware. Unless Google's overall performance shows a serious slump, it may not be forced to make hard decisions about Motorola any time soon. But from the perspective of return on investment, Motorola’s a long way off from showing signs of life. "The new products haven’t been a flop, it’s far too early to call them a failure," says Avi Greengart, the research director for consumer devices at Current Analysis. "Financially speaking, however, Motorola hasn’t been a flop. It’s been a disaster."

Online Dating and Relationships

One in ten Americans have used an online dating site or mobile dating app; 66% of these online daters have gone on a date with someone they met through a dating site or app, and 23% have met a spouse or long term partner through these sites.

Public attitudes toward online dating have become more positive in recent years, but many users also report negative experiences. Social networking sites have emerged as a venue for navigating the world of dating and relationships. These are among the results of a national survey of dating and relationships in the digital era, the first dedicated study of this subject by the Pew Research Center’s Internet Project since 2005. Key findings include:

11% of Internet users (representing 9% of all American adults) say that they have personally used an online dating site. As recently as 2008, just 3% of American adults had used online dating sites.
7% of cell phone apps users (representing 3% of all American adults) say that they have used a dating app on their cell phone.

Taken together, 11% of all American adults are “online daters”—meaning they have used a dating site or mobile dating app. Online dating is especially common among the college-educated and those in their mid-20’s through mid-40’s, and 38% of Americans who are currently single and actively looking for a partner have used online dating at one point or another.

Time to move ahead at the FCC

[Commentary] Sen. Ted Cruz (R-TX) placed a hold on the Senate vote to confirm Tom Wheeler as chairman of the Federal Communications Commission. A vote on Wheeler, a venture capitalist and former trade association executive, has strong bipartisan support and a list of opponents that would make any advocate of free markets proud. So why has Sen Cruz put it on hold?

“The Senator,” said an aide, “is holding the nominee until he gets answers to his questions regarding Wheeler’s views on whether the FCC has the authority or intent to implement the failed DISCLOSE Act.” It would be completely inappropriate for an independent regulatory agency like the FCC to even attempt unilateral action, especially in the face of strong opposition, on requiring disclosure of financial contributors of television and radio advertisements. It is perfectly understandable and appropriate for Sen. Cruz to raise these questions. On the other hand, DISCLOSE is no reason to hold up the confirmation of Tom Wheeler, who upon confirmation will surely rank near the top of all Administration officials in terms of private-sector experience. The Hill recently reported that “Wheeler’s candidacy for the job has divided liberals. Groups including the New America Foundation, Free Press and Demand Progress have warned that Chairman Wheeler would be too close to the industries he would be in charge of regulating.” We may not agree with Chairman Wheeler on every aspect of every issue, but we seriously doubt that unilateral implementation of the DISCLOSE Act is at the top of his FCC to-do list. On a variety of other fronts, the FCC has decisions to make that -- even if not made exactly to our liking -- have the potential to reduce costs for consumers, spawn faster innovation, and incentivize more capital investment. Let’s get on with it.

FCC Looks the Other Way as a New Wave of Consolidation Devours Local TV Stations

Free Press released Cease to Resist: How the FCC’s Failure to Enforce Its Policies Created a New Wave of Media Consolidation. The report investigates how companies are using shady tactics to buy up TV stations and build new national media empires. The report comes as Sinclair Broadcast Group spearheads one of the largest waves of TV consolidation in history. The report also looks at tactics used by Gannett, Media General, Nexstar and Tribune.

Among the report’s key findings:

In the first eight months of 2013, 211 full-power TV stations changed hands, the highest level in more than a decade, and the fourth-highest year on record in terms of deal value. The latest surge of consolidation is unique from prior waves in that it’s taking place in small and medium-sized markets and involves companies that are not household names.
Sinclair Broadcast Group is leading the current wave of consolidation. In the past two years alone, Sinclair has closed or announced deals that will increase its holdings from 58 to 161 stations nationwide. These deals will more than double the number of markets Sinclair serves from 35 to 78, covering nearly 39 percent of the U.S. population.

The report also details how media companies are using shell companies to evade the Federal Communications Commission’s media ownership rules, making inefficient use of the scarce public airwaves and depriving communities of diverse viewpoints and in-depth news coverage. Sinclair controls or will control 46 stations nominally owned by a third party, with 40 of these stations’ licenses held by shell companies Sinclair created for the express purpose of evading the FCC’s ownership rules. The report also details recommendations to the FCC and incoming Chairman Tom Wheeler. Turner calls on Wheeler to deny the latest transaction deals, which Free Press and other groups have challenged, and to close the numerous loopholes in its ownership rules. The report also describes how the FCC can modernize its ownership rules to better reflect the capabilities of digital broadcasting. These changes would maximize efficient use of the public airwaves and promote greater competition and diversity in the local TV market.

Auction for H Block Licenses in the 1915-1920 MHz and 1995-2000 MHz Bands Rescheduled for January 22, 2014

The Federal Communications Commission announces that the auction of licenses in the 1915-1920 MHz and 1995 MHz-2000 MHz bands (“H Block”), which is designated as Auction 96, will commence on January 22, 2014.

This Public Notice also revises the previously-announced schedule of pre-auction deadlines for Auction 96. These schedule changes are necessary to give potential bidders and FCC staff additional time for planning and preparation for Auction 96 upon the resumption of regular FCC operations. Auction 96 will now begin on January 22, 2014, and short-form applications to participate in the auction will be due prior to 6:00 p.m. Eastern Time (ET) on November 15, 2013. All other procedures, terms and requirements as set out in the Auction 96 Procedures Public Notice remain unchanged.

Google and San Francisco Launch Real-Time Crisis Map

In the event of future emergencies that may strike San Francisco, the city plans to launch a new online crisis map with real-time displays of affected areas so residents can respond appropriately.

The map, dubbed Crisis Mode, is currently running live in conjunction with SF72 – a new open source digital platform that provides online resources and updates for emergency preparedness – and was developed by Google.org, the search engine's charitable arm. In the event of a city emergency, the crisis map becomes the home page of SF72. Francis Zamora, the San Francisco Department of Emergency Management’s public information officer, said the map is currently in soft-launch mode, as the city is still fine-tuning the processes around sharing information. But the plan is to display real-time emergency related information on the map and use the tool to push out official updates regarding those emergencies to the public.

Cyber Civil Servants Knock on Industry’s Door After Shutdown

There are about 200,000 cyber employees in the federal workforce, according to a recent government survey. Many were exempt, or "excepted," from the furlough, meaning they had to work but wouldn't be paid for that work until government reopened and resumed payroll operations. (Congress eventually passed a law authorizing back pay to furloughed federal employees as well.) Between the 16-day shutdown and the possibility of another lapse in funding just three months away, some cyber civil servants are considering jumping ship, according to several industry recruiters, who say they've seen an uptick in job inquiries from federal data security specialists. "Rarely do we receive inbound calls from cybersecurity people who work for the federal government -- a lot of times because the job is so secure," said Mark Aiello, president of Cyber 360 Solutions, a placement firm in Massachusetts. He estimates receiving at least half a dozen such queries since Oct. 1, when the shutdown began. "The basic motivation for their call is they are concerned over the debt crisis and ongoing furloughs. The vast majority of people were on the job and deemed essential but concerned,” he said. “They recognize they can probably make more money in the private sector [and ask themselves] 'Why am I going through this if it's just going to happen every quarter, every election cycle?'”

Obamacare website: 6 biggest contractors

It cost the federal government more than $300 million for outside contractors to set up the Obamacare website that has had so much trouble in its first three weeks of operation. Most of that money has gone to six prime contractors that together have received more than $200 million in taxpayer funds, with the biggest single contractor receiving $88 million. Overall, the government has spent $394 million setting up the website and the exchanges through which the public can buy health insurance. While not all the money went into the troubled websites, most of it did.

The largest contractor is CGI Federal, the U.S. unit of a Canadian firm CGI Group. It received $88 million through last March 31. Its original $93.7 million contract runs through December, with three one-year option periods still possible.
Quality Software Services Inc. received $55.1 million to set up the data hub.
National Government Services Inc. a unit of WellPoint, received $31.6 million for a consumer call center and providing premium aggregations.
The MITRE Corp received $22 million for project management and information technology security.
Genova Technology received $16 million for information technology
Terremark Federal Group, a unit of Verizon, received $15.5 million for cloud computing services.

No, technology isn’t going to destroy the middle class

Is technology killing the middle class? George Mason University economist and blogger Tyler Cowen thinks so. In his new book, "Average Is Over: Powering America Beyond the Age of the Great Stagnation," Cowen predicts a world in which 10 to 15 percent of the population are skilled at working with the smart machines of the future.

He believes they will become extremely wealthy, while everyone else will face stagnant or falling wages. To many people, such a gap between a meritocratic elite and most workers would be deeply unsettling. Some see extreme inequality undermining democracy; others think it would create economic crises and undermine economic growth. But is the bleak world depicted by "Average Is Over" really around the corner? There are good reasons to be skeptical.

Why Illinois court's 'Amazon tax' ruling may not last long

By avoiding the fundamental constitutional question, last week's Illinois Supreme Court 6-1 ruling against the state's “Amazon tax” has left the controversial issue of Internet sales taxes up to Congress or the U.S. Supreme Court to sort things out once and for all. In other words: Don't expect those Internet marketers that fled the state when the law was enacted two years ago to be flocking back anytime soon.

The state's highest court found Illinois' Internet sales tax void and unenforceable because it conflicts with a federal law that temporarily blocked new state or federal taxes aimed at online retailers or Internet providers, the first court in the country to take that stance. But others say a conflict with federal law merely makes the state tax unenforceable. For unstated reasons, the court did not address a lower court ruling that found the state tax in violation of the Commerce Clause of the U.S. Constitution.

Benton

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