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Microsoft Attorney: Jerry Yang Said Google-Yahoo Merger Would Kill Competition

WASHINGTON, July 15 – Yahoo founder Jerry Yang said that if Yahoo and Google agreed to merge, competition in the search engine industry would cease, Microsoft general counsel Brad Smith testified before a Senate Judiciary subcommittee on Tuesday.

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By William G. Korver, Reporter, BroadbandCensus.com

WASHINGTON, July 15 – Yahoo founder Jerry Yang said that if Yahoo and Google agreed to merge, competition in the search engine industry would cease, Microsoft general counsel Brad Smith testified before a Senate Judiciary subcommittee on Tuesday.

Yang made the comments in a meeting with Microsoft executives on June 8, according to Smith, who attending the meeting.

Yang’s view was that if Google remained on one pole, and Yahoo and Microsoft were on another, competition in the industry would continue, according to Smith. But With Yahoo and Google aligned in a close business relationship, Smith said, the viability of Microsoft would diminish.

The result would be a “monopole,” said Smith.

Smith recounted the meeting to a rapt audience as one of the witnesses for the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on “The Google Yahoo Agreement and the Future of Internet Advertising.”

After being reminded that he was under oath, Smith, also a senior vice president at the Redmond, Wash., based software giant, adamantly reaffirmed his statement. He said that no single company should control 90 percent of a market owing to an agreement with its largest competitor.

Smith said that the government should block a June 12 agreement, between Google and Yahoo, in which Google and Yahoo announced a collaboration on a range of search technologies.

At first, Michael Callahan, general counsel of Yahoo, disagreed with Smith’s “characterizations” of Yang’s views. When pressed by senators on exactly what Yang said, Callahan said he could not recall what Yang said during the “long meeting.” Callahan was also present at the meeting with Yang and Smith.

Callahan did reiterate Yahoo’s commitment to remaining in the search market and remaining a Google rival.

Callahan said the advertising agreement did not force Yahoo to provide a certain number of Google ads on their web site and does not bar Yahoo from entering into deals with other companies.

Furthermore, Yahoo’s agreement with Google should be beneficial to publishers, consumers, and advertisers, as well as to both of the companies, Callahan said, since relevant content, audience size, and number of ads will increase as a result of the agreement.

Callahan’s view was supported by Google Chief Legal Officer David Drummond and Tim Carter, the CEO of web site Askthebuilder.com.

Drummond said that notwithstanding Google’s agreement with Yahoo, Yahoo remains independent.

Privacy advocates and others concerned about the lack of online competition have grown anxious over the prospect of 90 percent of online searches being in the hands of one company. The more data that is available to an individual search engine, the easier it would be to construct facts about a web searcher’s identity, these critics say.

Google now accounts for about 70 percent of searches; Yahoo accounts for 20 percent; with Microsoft at 10 percent, according to witnesses at the hearing.

Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said he was wary about the possibility of vast amounts of personal data being in the possession of one company. Furthermore, the prospect of increased advertising prices, decreased competition, and loss of jobs also must be taken into account under the Google-Yahoo agreement, Leahy said.

Matthew Crowley of Yellowpages.com also criticized the agreement, saying that it would increase advertising prices, decrease customer choice and discourage competition and innovation.

Pressed by Sen. Orrin Hatch, R-Utah, on whether the deal would give individuals incentive to bypass Yahoo and buy advertising directly from Google, Callahan said that companies should be aware that there is “no guarantee” that their ads will be on Yahoo as well as Google.

Smith also said that Microsoft’s failed attempts to purchase Yahoo would only put the combination at about 30 percent of all searches, or about three times smaller than the combined size (90 percent of the market) of a Google-Yahoo combination.

Drummond responded by declaring that Yahoo could proceed on one of two paths. On one path, Yahoo remains a player in the search engine market and generates more revenue as a result of its deal with Google. On the other path, Yahoo ends being “gobbled up by Microsoft.”

When asked whether Google would consider changing the language of their agreement if asked to do so, Drummond said yes. Callahan, of Yahoo, “echo[ed]” Drummond’s comments.

Articles and Agreement Referenced in this Article:

Education

National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap

EducationSuperHighway is signing up partners and will launch November 4.

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Evan Marwell, founder and CEO of Education Super Highway.

WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.

On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.

The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.

The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.

The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.

The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.

“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”

Over 120 regional and national carriers have signed up for the initiative.

The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.

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Broadband's Impact

Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services

The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.

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The author of this Expert Opinion is Steve Lacoff, general manager of Avalara for communications

The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.

Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.

Cloudification is a game changer

This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.

Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.

The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.

In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.

Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”

Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.

Don’t let communications tax take you by surprise

One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.

Here are some of the key pitfalls to keep an eye on:

  • Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
  • More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
  • Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail.  They must be filed in a timely, accurate cadence to avoid additional audit risk.

Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.

It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.

Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Digital Inclusion

Digital Inclusion Week Highlights Focus on Broadband-Disconnected Urban Residents

Most Americans benefitting from federal spending on rural broadband are white non-Hispanic Americans, says NDIA.

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Angela Siefer, executive director of the National Digital Inclusion Alliance

WASHINGTON, October 8, 2021 – Experts on digital empowerment pressed the federal government to maintain a focus on broadband equity during a Wednesday event, hosted on Wednesday by the National Digital Inclusion Alliance as part of “National Digital Inclusion Week.”

Speaking about the broader agenda for NDIA, Angela Siefer, the non-profit group’s executive director, said that NDIA’s purpose was to provide “peer-to-peer learning. We get the conversation started. Everything we get is from boots on the ground.”

This theme of community-informed practice and knowledge sharing echoed throughout the presentation.

Siefer said that NDIA “learned that digital redlining is happening in Cleveland” from discoveries that came from having boots on the ground and from living there.

“Digital redlining” refers to discrimination by ISPs in deployment, maintenance, upgrade or delivery of services. Often, as was alleged in Cleveland, NDIA accused AT&T of avoiding making fiber upgrades to broadband infrastructure. The group has also published reports with the Communications Workers of America making similar charges.

These discoveries have built momentum for some, including New York Democratic Rep. Yvette Clark’s Anti-Digital Redlining Act, introduced in August. The bill attempts to ban systematic broadband underinvestment in low-income communities.

Panelists argued that federal government perpetuates digital divide

Underinvestment in historically excluded communities extends beyond large corporations’ – it includes the U.S. federal government’s broadband investment approach. Paolo Balboa, NDIA’s programs and data manager, said that federal government perpetuates racism within the digital divide.

Balboa discussed how federal broadband programs focus funds on expanding availability to residents in unserved and underserved rural areas, but ignore the many – often black and brown – urban Americans lacking high-speed internet access.

But NDIA’s research found that most Americans benefitting from federal spending on rural broadband are white non-Hispanic Americans. Americans who lack home broadband service for reasons besides local network availability are disproportionately of color, says NDIA.

The panelists argued that federal policies directed at closing the digital divide by spending primarily on rural infrastructure leaves out the digital inclusion programs urban and some rural inhabitants need.

Amy Huffman, Munirih Jester, Paolo Balboa, Miles Miller

In finding that fewer than 5 % of the bulk of American households without home broadband are rural, NDIA argues for a federal policy approach centering cost of access as the solution to connecting more families of color. The officials advocate a broader focus that includes the experiences of urban city and county residents for whom cost is the major barrier.

Munirih Jester, NDIA programs director said that NDIA keeps an active list of free and low-cost internet plan available for low-income households, and how they may access it to find affordable ISPs.

Amy Huffman, NDIA policy director, discussed the provision of COVID-19 response funding. She highlighted organization’s resources to raise awareness of the FCC’s Emergency Broadband Benefit, a program to help households afford Internet service during the pandemic.

This year, more than 100 events were registered as part of this week’s Digital Inclusion week, with many visible on the NDIA blog, said Yvette Scorse, NDIA Communications Director.

In a statement this Monday, the Commerce Department’s National Telecommunications Infrastructure Agency spotlighted the agency’s efforts on the topic, including its Tribal Broadband Connectivity Program which is making $980 million available to Native American communities.

As previously reported this August, NTIA recently launched Connecting Minority Communities Pilot Program making $268 million in grant funds available to HBCUs and other Minority-serving institutions.

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