Bloomberg

Apple, Google Shaped by Silicon Valley Judge Koh’s Gavel

Judge Lucy Koh’s fingerprints are on your Gmail account, your smartphone, and, if you’re a Silicon Valley engineer, possibly your prospects for changing jobs.

Judge Koh, the California federal judge overseeing the three-year patent battle between Apple and Samsung Electronics, has so far thwarted the iPhone maker’s bid to keep Galaxy phones off the market. Now, after a jury found that both companies infringed patents, the firms are poised to take new runs at persuading Koh to order sales bans on the other.

Judge Koh also has made a mark presiding over privacy suits against Google, LinkedIn and Yahoo! In March, she blasted Google’s privacy policy as vague and possibly misleading. Not long after, Google changed its terms.

Dixons, Carphone to Combine as Smartphones Meet Fridges

Smartphones and refrigerators just got connected. Dixons Retail, whose Currys chain sells everything from tablets to vacuum cleaners, agreed to an all-share merger of equals with Carphone Warehouse Group, a deal they say will enable them to capitalize on the growth of Internet-enabled devices, such as washing machines controlled from your phone.

The retailers are pooling resources as both continue to battle against increasing competition from Web-based retailers. AO World, the UK online appliances seller that listed shares in London in February, said it’s introducing a television offer to go alongside dishwashers and refrigerators. The merger will also help bolster defenses against mobile-network operators that are seeking to reduce reliance on third-party retailers and open more of their own stores.

Time Warner and Comcast Want to Make You Watch Commercials Again

Advertisers have always hated DVR and video on demand (VOD) because they give people a way to watch the stuff they like (TV shows) without any of the stuff they don’t (commercials).

Networks complain they make ad spots harder to sell, since advertisers can’t be sure when people would actually watch their programs -- a day later? A week later? If a movie studio wants to advertise an upcoming film, how can it be sure people will see its trailers before opening weekend?

The two sides have hit on a potential solution called dynamic ad insertion. That’s the industry term for swapping out old ads for new ones depending on when a prerecorded program is being watched.

Time Warner announced that it will start offering complete seasons of some of its shows on Comcast’s Xfinity TV and digital VOD platforms. That will give customers greater access to even more programming, but they’ll also have to watch more advertising, because fast-forwarding will be disabled. And the advertising will feature dynamic ad insertion, so advertisers can be assured their commercials are fresh.

T-Mobile Owner Voices Doubt US Deal Would Be Approved

Deutsche Telekom’s chief executive officer said he doubts a merger of its T-Mobile US with Sprint could win regulatory approval anytime soon, pouring cold water on SoftBank’s ambitions to add to its holdings.

“We’re getting signals from the regulatory authority as well as antitrust supervisors that such a merger isn’t seen as expedient,” Timotheus Hoettges said. “Against that backdrop, we have to see how we can develop the business so it creates the most value for our shareholders.”

T-Mobile is boosting sales at the expense of earnings as Hoettges aims to build it into a more serious challenger to larger rivals AT&T and Verizon Communications. Sprint, the wireless provider controlled by Masayoshi Son’s SoftBank and the No. 3 operator in the US, plans to push forward with a bid for T-Mobile after meeting with banks to secure financing for an offer, people with knowledge of the situation said.

While T-Mobile added 2.4 million customers in the first quarter, more than AT&T and Verizon combined, Hoettges reiterated that a merger of the smaller wireless operators would make sense as unavoidable investments in spectrum and network upgrades would put them at a disadvantage to larger peers in the longer run.

The Tea Party Gets Into the News Biz

The conservative Heritage Foundation has a new plan to exert its influence over the Republican Party and, its leaders hope, win converts to the cause.

On June 3 it will begin publishing the Daily Signal, a new digital news site whose primary focus will be straight reporting.

“We came to the realization that the mainstream media had really abdicated the responsibility to do the news and do it well,” says Geoffrey Lysaught, vice president of strategic communications at the Heritage Foundation, who will also serve as publisher. The site aims to rectify the conservative perception that mainstream news slants to the left.

“We plan to do political and policy news,” says Lysaught, “not with a conservative bent, but just true, straight-down-the-middle journalism.” How does this help Heritage? The Daily Signal will also publish an opinion section aimed at a younger audience that isn’t thumbing through the editorial pages of the Wall Street Journal.

Heritage is betting that these readers, attracted to the Daily Signal’s news, will find themselves persuaded by the conservative commentary and analysis that will draw on the think tank’s scholars and researchers.

Sprint CEO Says Strong No. 3 Needed Amid Price Wars

Sprint Chief Executive Officer Dan Hesse said the wireless price wars aren’t sustainable and show the need for a bigger No. 3 competitor in the US.

“A stronger No. 3 will get one and two to react more aggressively so everybody benefits,” Hesse said in an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg Television.

“If you are smaller, the big two do not react as aggressively.” Both Sprint and T-Mobile posted net losses in the first quarter. “T-Mobile and Sprint have to invest more per customer in their network,” Hesse said. “Think of a nationwide network, it largely affects costs. It is like a jumbo jet. AT&T and Verizon, because of their size, can put more customers on that, and divide it among more customers and can spend more money on advertising.”

Huawei Plots Future Elsewhere as US Trust Stays Elusive

Huawei Technologies, China’s biggest maker of phone-network equipment, is focusing investments on countries in which it has been accepted, because of lingering suspicions in the US about its motives.

“Right now we should not be expending too much effort in the United States as it might take 10 or 20 years for them to know that Huawei is a company with integrity,” founder and Chief Executive Officer Ren Zhengfei told reporters at a briefing in London. “We will accelerate efforts in countries that have accepted us.”

A US congressional committee in 2012 said Huawei and its competitor ZTE provide opportunities for Chinese intelligence services to tamper with telecommunications networks for spying, a claim both companies have denied.

Don't Let the Feds Rummage Through Cell Phones

[Commentary] When most human activities involve screens and sensors that automatically save data on remote computers, what legal standards should constrain law enforcement's access to that distant information?

It's essential that we get this right, because mobile phones are just plastic boxes that gather and generate data for distant use.

What's important about the handset is the link it provides between a person and all that data. Beyond accessing immediate, on-the-spot communications to protect the safety of arresting officers, any further examination of a phone at the time of an arrest should be made by law enforcement only under the supervision of a judicial officer.

Law enforcement officials often maintain that the advent of the digital era means they need broad new authority to track and apprehend criminals. They call the digitization of information "going dark."

But the reality of mobile-phone technology, and the power we humans allow mobile phones to have over our life patterns, belies this claim. Rather than going dark, these digital times are allowing law enforcement to shed more light on human lives than ever before. We shouldn't let this happen without independent judicial oversight.

[Crawford is the John A. Reilly Visiting Professor in Intellectual Property, Harvard Law School]

Apple, Google and the Hubris of Silicon Valley's Hiring Conspiracy

[Commentary] The tech aristocrats, who from 2005 through 2009 secretly forged a series of no-recruit agreements, suspected what they were doing wasn’t quite kosher. But why did they think they could get away with it?

And now that they’ve been exposed, what does the episode tell us about the nature of a corporate culture built on the labor of a relatively well-paid but evidently exploited cohort of digitally talented serfs? Well, they did kinda get away with it.

The $324 million Apple, Google, Intel, and Adobe agreed to pay works out to about 0.4 percent of their combined total revenue for the most recent quarter. The individual plaintiffs will end up with a few thousand dollars apiece. It’s unlikely, moreover, that the defendants will suffer any lasting taint when it comes to new hires.

One reason the bosses had the cojones to try this caper is that Apple and Google in particular are the dream factories of America’s digital and marketing elites.

T-Mobile Adds More Customers Than AT&T, Verizon Combined

T-Mobile US added more subscribers in the first quarter than AT&T and Verizon Communications combined, heightening the carrier’s allure as Sprint pursues a merger.

Promotions and cheaper plans helped T-Mobile add 1.3 million new monthly subscribers in the period, topping the 998,000 projected by analysts and the 1.16 million customers that AT&T and Verizon added combined.

The subscriber growth came at a cost: T-Mobile’s fourth quarterly loss in a row. Sprint plans to push forward with a bid for T-Mobile after meeting with banks to make debt arrangements for that offer, Bloomberg News reported, citing people with knowledge of the situation.

T-Mobile Chief Executive Officer John Legere is delivering on a promise to shake up the US wireless industry. The fourth-largest US carrier has been on a campaign to lure customers away from larger rivals by providing financing for phones, cheap international rates and as much as $650 to people who switch service.