Jimm Phillips

If U.S. government approval of SoftBank’s proposed purchase of 70 percent ownership of Sprint Nextel “is contingent upon agreement to restrict purchase of telecommunications equipment from select venders by virtue of geography, then it is a sad day for free and open global trade,” Huawei spokesman Bill Plummer told us in an email. House Intelligence Committee Chairman Mike Rogers, R-Mich., has said SoftBank and Sprint told him they will not integrate Huawei-manufactured telecom equipment into the Sprint network if the government approves the deal. The companies also said they plan to reduce Clearwire’s use of Huawei-manufactured equipment; Sprint is seeking government approval of its plan to buy out the carrier. SoftBank and Sprint were addressing concerns that Huawei posed a potential national security risk (CD April 1 p5). Excluding a manufacturer based on geography will do little to address network security concerns “given that every telecom gear vender relies on common global supply chains and faces common cyber-challenges,” Plummer said. “Such a contingency would mean little more than the unfair market-distorting penalization of a globally-respected company that meets the highest standards of network security, is a trusted vendor to 45 of the world’s top 50 network operators, and is an active investor and employer in the U.S.”

MetroPCS’s board urged shareholders to approve a proposed merger with T-Mobile USA, noting in a letter Monday that there’s “no assurance that MetroPCS will be able to deliver the same or better stockholder value as a stand-alone wireless company in the future.” MetroPCS said it believes merging with T-Mobile “will create the value leader in the U.S. wireless marketplace and provide significantly more value and potential equity upside to MetroPCS stockholders than could be achieved by MetroPCS on a stand-alone basis” (http://bit.ly/XmcELo).

Sprint Nextel and SoftBank have told House Intelligence Committee Chairman Mike Rogers, R-Mich., “they would not integrate Huawei in to the Sprint network and would take mitigation efforts to replace Huawei equipment in the Clearwire network,” Rogers said in a statement Thursday. SoftBank is seeking federal government approval for its planned buy of 70 percent ownership of Sprint; the government also needs to approve Sprint’s plan to purchase full control of Clearwire. The SoftBank and Clearwire deals have received additional attention because of both companies’ use of Huawei-manufactured equipment -- Huawei and fellow China-based telecom equipment manufacturer ZTE are helping build SoftBank’s 4G network in Japan, while Clearwire uses Huawei equipment on the edges of its network. Clearwire has previously said it’s reducing its use of Huawei-manufactured equipment.

Proxy advisory firm Institutional Shareholder Services (ISS) said MetroPCS shareholders should vote against the proposed merger with T-Mobile USA, arguing Wednesday in a report that MetroPCS shareholders would receive a “lower equity split than justified” and that MetroPCS could “continue to thrive” as a standalone company. Under the current deal, MetroPCS shareholders would receive $1.5 billion in cash and 26 percent ownership of the merged carrier (CD Oct 4 p1). The ISS recommendation will likely prompt T-Mobile owner Deutsche Telekom to modify the current deal terms in order to win approval when MetroPCS shareholders meet April 12, industry analysts say.

T-Mobile USA is “canceling our membership to the Wireless Carrier Club,” T-Mobile CEO John Legere said at a press conference Tuesday, saying the carrier will begin selling the iPhone 5 on April 12 and start a series of other steps to brand T-Mobile as the “Un-carrier.” T-Mobile said it will be selling the iPhone 5 for $99.99, plus a monthly $20 fee over the course of two years. The carrier will offer the iPhone 4S for $69.99 plus a $20-per-month fee over two years, and the iPhone 4 for $14.99 and a $15-per-month fee over two years. The fee is in addition to the cost of a customer’s voice, text and data plan. T-Mobile said it will offer other new smartphones on similar fee schedules (http://t-mo.co/ZqQaqh).

Broadband is the fastest-growing segment of Comcast’s business, but innovation will change Comcast’s traditional cable base “more in the next five years than it has in the past 50,” Comcast CEO Brian Roberts told the Washington Economic Club Thursday. When Microsoft invested $1 billion in Comcast in 1997, Roberts said Bill Gates told him then that Comcast’s business would expand far beyond delivering TV service. That prediction has held true, Roberts said. Comcast has about 22 million video customers and 20 million broadband customers, he said. “Those lines will cross some time in the next couple of years and we will have just as many -- if not more -- broadband customers than we have video customers,” he said. Comcast faces a “different broadband every year,” he said. “We change the speeds, the nature of it, so Wi-Fi is now … part of our definition of broadband. So we want to have the fastest Wi-Fi as well as the fastest pipe. We want to offer you access outside of your home."

States should increase their role as a partner with the federal government to address Internet privacy issues, said Steve Ruckman, Maryland assistant attorney general and director of the Maryland Office of the Attorney General’s Internet Privacy Unit, at a joint FCBA-American Bar Association Forum on Communications Law event Wednesday. Maryland Attorney General Doug Gansler has made Internet privacy protections a priority -- both in his in-state work and in his role as president of the National Association of Attorneys General NAAG), Ruckman said. Gansler was originally scheduled to speak at the FCBA event, but needed to testify at a Maryland General Assembly hearing.

There has been little movement in the debate over the Marketplace Fairness Act (HR-684, S-336) since it failed to pass the Senate in December, eBay Senior Director of Global Public Policy Brian Bieron told us. The Senate had rejected including the bill’s provisions as an amendment to the 2013 Defense Authorization Act. The bill would allow state governments to collect sales taxes when an in-state resident makes an online purchase from an out-of-state retailer. “It seems like the same people who were for [the bill] before are for it now, the same people who had objections to it before have objections to it now,” Bieron said. “It seems to be pretty much the same debate it’s been for some time now, only louder.” The bill effectively gives states a “new power” to tax people outside their own borders, he said during an Information Technology & Innovation Foundation event Tuesday. EBay has been an active opponent of the Marketplace Fairness Act -- the company organized a gathering of small business owners on Capitol Hill earlier this month to voice their concerns about the bill.

Congress should take its time in considering the Cyber Intelligence Sharing and Protection Act (CISPA) and other cybersecurity legislation that may involve information sharing, said Ryan Radia, the Competitive Enterprise Institute’s (CEI) associate director-technology studies, at a joint CEI-TechFreedom event Monday. Both groups were part of a free market-oriented coalition that opposed CISPA when it was being considered last year (WID April 24/12 p5). The bill passed the House then but did not get a vote in the Senate amid strong White House opposition. There has been pressure for Congress to move quickly on legislation to augment President Barack Obama’s recent cybersecurity executive order, but a slower process won’t make the situation “much worse off” than it is already, Radia said. “This is the time to do something, but let’s do something right. This is going to be on the books for a long time, and a problematic law … will create bad precedent.” Radia and other experts said they were concerned about the implications of information sharing provisions in the current version of CISPA.

The House Judiciary Committee is looking at “all possibilities” for addressing cybercrime as part of the greater push on Capitol Hill to address cybersecurity issues, said Sam Ramer, the committee’s senior counsel. Cybersecurity is a “top priority” for Chairman Bob Goodlatte, R-Va., Ramer said at a Congressional Internet Caucus Advisory Committee panel Friday. He noted the House Crime Subcommittee held a hearing Wednesday on cybercrime and possible reforms to the Computer Fraud and Abuse Act (CD Mar 14 p1). There’s no singular “keystone” to addressing cybersecurity issues because those issues “affect so many different areas of our lives -- personal, commercial, R&D, medical,” Ramer said.