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TMT Perspectives

Insight & Commentary on Business, Legal and Policy Developments Affecting the Telecom, Media, and Technology Sectors

Foreign Ownership Reporting – FCC Licensees May Also Be Required To File BEA Reports

Posted in Business Skills, FCC

Our colleague, Amy D’Agostino, has just written an article on the international ownership reporting requirements of the Bureau of Economic Analysis, in Law360. The BEA’s mandatory reports are used for a variety of important US governmental purposes, such as the federal budget and trade and monetary policy.

The reports are required to be filed by any US person or company that owns 10% or more of a foreign company, as well as by any foreign person or company that owns 10% or more of a US company. The latter (foreign ownership of a US company) overlaps with the type of reporting that the FCC requires of its licensees and, therefore, the BEA reporting requirements may well be relevant to readers of our TMT blog.

Most FCC licensees are well aware of the FCC reporting requirements that apply to the types of licenses they hold. The FCC requires that it be informed of the identities of companies and persons that hold “attributable” interests in FCC licensees. The FCC has various ownership attribution rules that define what constitutes an attributable interest for different kinds of FCC-regulated businesses. For common carrier radio licensees, such as cellular telephone and personal communications service (PCS) licensees, an attributable interest generally is a 10% or more equity interest. For broadcast licensees, an attributable interest generally is a 5% or more voting interest. The FCC also requires reporting of and regulates foreign ownership interests in licensees in a manner that involves summing of all of the foreign ownership interests held by various alien individuals and companies. In addition to the BEA penalties cited in the article, the FCC has its own independent enforcement rules for FCC reporting.

As noted in Ms. D’Agostino’s article, the information collected by the BEA is supposed to remain confidential and is not to be used for regulatory purposes. Nevertheless, companies will want to ensure that reports filed with various government agencies, including the FCC and the BEA, are consistent and timely.

 

Will SoftBank’s Windfall from Alibaba Be Enough for Sprint to Buy T-Mobile?

Posted in Antitrust, Business Skills, Companies, Competition Policy, FCC, Finance, IPO, Mergers & Acquisitions, Valuations

SoftBank, the owner of Sprint, is dedicating substantial resources to convince the US business community that greater competition for broadband service will develop in the US if Sprint is allowed to merge with T-Mobile. According to SoftBank’s chairman, Masayoshi Son, this merger would enable the combined company to obtain scope sufficient to compete with AT&T Wireless and Verizon Wireless. This additional competition, SoftBank argues, will cause the development of greater wireless broadband capacity and faster wireless speeds. In turn, this will spur greater demand for wireless services. It will also spur an arms race that will result in greater wireline broadband capacity.

Son has taken the unusual step of making this pitch directly to the business community for the purpose of putting pressure on FCC regulators and DOJ antitrust lawyers who are doubtful that a merger between Sprint and T-Mobile will spur such competition. Son’s presentation is simple and infectious. He states how far behind the US is in broadband penetration and speed compared to the rest of the world and says it isn’t good and we can do better. It’s been a long time since we have heard anyone say that the status quo is not good enough. For example, see Reuters‘ Alina Selylukh’s article on Son’s presentation here. Continue Reading

A Tangled Tail: Disney vs. Deadmau5?

Posted in Intellectual Property, Trademark

Once upon a time, a dance music phenomenon named Joel Zimmerman, far better known by his stage name, Deadmau5 (pronounced “Dead Mouse”), began wearing a giant mouse mask over his head and became an electronica mega-star. The mouse mask has giant ears, big, convex eyes, and what can be only be described as a devilish grin. Under the rodential disguise is a head for business; Deadmau5′s company, Ronica Holdings Ltd., obtained a trademark registration for a three-quarter portrait of the mouse mask on August 24, 2010. The registration for the three-quarter portrait, which appears to the right, covers numerous goods and services in Classes 9, 16, 25 and 41. Continue Reading

Seven-Year Battle Between Viacom and Google Finally Ends in Settlement

Posted in Copyright, Intellectual Property, Lawsuits

Media heavyweights Viacom and Google announced last week that their massive, seven-year copyright lawsuit has settled, just days shy of arguments on the pending appeal.

The companies jointly issued the following statement: “This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together.” While terms of the settlement remain undisclosed, reports state that no money traded hands.

The parties’ legal battle began back in 2007, when Viacom, owner of media platforms such as MTV, Comedy Central, Nickelodeon and Paramount Pictures, filed suit in New York federal court against Google (shortly after its acquisition of YouTube), alleging that YouTube was knowingly posting Viacom’s copyrighted shows and clips without permission. Among the content at issue were episodes of South Park and The Daily Show. Viacom sought $1 billion in damages against Google for the alleged copyright violations and argued that YouTube had the responsibility to remove pirated content. Google defended by seeking protection under the copyright laws and maintained that it would, and did, take down videos specifically identified by copyright owners. Continue Reading

Mt. Gox’s Collapse Leads to First Major US “Bit-igation”

Posted in Companies, Cybersecurity, Finance, Lawsuits, Transactions

It’s no secret that Bitcoin businesses and their customers have been having a rough time lately. On March 3, 2014, Bitcoin wallet service Flexcoin announced that it was shutting down after hackers stole 896 Bitcoins (approximately US$600,000). On March 4, 2014, Bitcoin exchange Poloniex admitted that hackers had stolen 12.3% of its funds. And, of course, the biggest news has been the collapse of Mt. Gox, formerly the largest Bitcoin exchange in the world, which filed for bankruptcy last week after the disappearance of 744,000 Bitcoins (approximately US$480 million) due to repeated hacker attacks. Continue Reading

Does the Constitution Have Anything to Say About Bitcoin and Money Laundering?

Posted in Companies, Finance, Transactions

In 2013, the US Treasury Department announced that Bitcoin exchanges would have to follow the same rules as established financial institutions and implement anti-money laundering programs. As we discussed in a previous blog post, two weeks ago Bitcoin entrepreneur Charlie Shrem was arrested and charged with conspiracy to commit money laundering, based on the use of his Bitcoin exchange business, BitInstant, to sell over US$1 million in Bitcoin to users of the Silk Road, a now-defunct website that allowed its users to buy and sell illegal drugs on the Internet. Representatives from the US Attorney’s office recently discussed how Bitcoin could be more prone to money laundering than current forms of money transfer. With all the concern surrounding Bitcoin and its potential for money laundering, in addition to more recent reports of theft of bitcoins, there is one baseline question that requires closer scrutiny from the legal community—does Congress have the same constitutional power to apply anti-money laundering laws to users of “private” currency like Bitcoin as to users of “public” currency like US dollars? Continue Reading

What Technology Companies Can Expect from FCC Review of the Comcast – Time Warner Cable Merger

Posted in Companies, Competition Policy, FCC, Mergers & Acquisitions, Transactions

For a decade, technology companies have been prepared to unleash a wave of innovation related to how people consume cable television. The cable TV industry has generally blocked such efforts, and the FCC to date has largely sidestepped the issue.

The competition authorities at the FCC and the DOJ will shortly begin reviewing the proposed Comcast-Time Warner Cable merger. It seems unlikely, however, that either will take action to promote new technologies for consuming cable TV.

The Cable Television Set-top Box Prevents Innovation

The cable TV set-top box, or “STB,” is the implacable foe to technological innovation. Years ago, Congress passed a law directing the FCC to create rules that would allow consumers to buy whatever STBs they wanted to use from whomever they wanted and plug them into their cable wire. For years, the FCC has sidestepped this obligation. Continue Reading

Bitcoin: Staying on the Right Side of the Law

Posted in Companies, Cybersecurity, Finance, Privacy, Transactions

Recently, Charlie Shrem, a well-known Bitcoin advocate and entrepreneur, was arrested and charged with conspiracy to commit money laundering and operating an unlicensed money transmitting business. Shrem was the vice-president of the Bitcoin Foundation, a non-profit organization dedicated to advocating for the legitimacy of Bitcoin (although he has now stepped down from this position), and the CEO of BitInstant, a Bitcoin currency exchange. According to the criminal complaint, from December 2011 to October 2013, Shrem and his co-defendant Robert Faiella used BitInstant to sell over US$1 million in Bitcoin to users of Silk Road, the now-defunct website that allowed its users to buy and sell illegal drugs on the Internet. Continue Reading

How Will the New FCC Chairman’s Market Knowledge Affect Merger Reviews?

Posted in Antitrust, Competition Policy, FCC, Mergers & Acquisitions, Transactions

New FCC Chairman Tom Wheeler has spent three decades immersed in the business and policy concerns of two of the most significant communications industries  cable and wireless  under the Commission’s jurisdiction. Thus, there is no doubt that he has the knowledge and experience to lead the agency. However, Chairman Wheeler’s stance on many key issues  including Net neutrality  remains unclear. One of the most important questions at the outset of his tenure is: in the face of increasing market consolidation, how will he cause the FCC to evaluate transactions among industry giants in the industries he used to lead? In Karlee Weinmann’s recent article for Law360, I share some thoughts on how Chairman Wheeler might view these transactions, and how the parties to these deals will need to approach the FCC on his watch if they hope to obtain the required regulatory approvals.

Thought Experiments about Internet Privacy Law (Part 4)

Posted in Business Skills, Privacy, Social Networking

In this series, we conduct a thought experiment on Internet privacy law inspired by a law review article written by Professor Orin S. Kerr, titled “The Next Generation Communications Privacy Act.” The article was Kerr’s thought experiment, discussing how the Electronic Communications Privacy Act, adopted in 1986, could be rewritten from scratch to better reflect the realities of the Internet today. In our series, we laid out the most important facets of today’s Internet: access to information on the Internet is worth to each person one half of that person’s net worth; a vast amount of capital investment is required to store and analyze the big data that makes access to the Internet so valuable; the investment will occur only if a reasonable profit is earned, which is achieved by selling advertising, charging a subscription fee, or some combination thereof; and that Internet users also derive value from their ability to broadcast information on the Internet, not simply to access information.

Assuming we have an adequate picture of today’s Internet, we can proceed with our thought experiment about what Internet privacy law might look like without the Electronic Communications Privacy Act as we know it. Kerr’s article postulated rewriting the Act by applying the stricter wiretap standard to both live communications and stored data. However, he noted that the Act was adopted because Fourth Amendment privacy rights had not been applied to the Internet in case law at the time. We would like to accept Kerr’s premise that privacy law starts with the Fourth Amendment. In this post we explore what an Internet privacy law regime would look like based on the Fourth Amendment. Continue Reading