Cisco appears to have continued its recovery following a painful restructuring. Sales are up and setting records, earnings beat the consensus of analysts, and Cisco’s outlook for the coming quarter is positive, too. Cisco’s even reached a point where it’s at least close to fitting into its old skinny jeans. What a difference a year makes. Last year it was all about gloom and doom and some irritable investors were calling for Chambers to lose his job.

Since then the company has undergone a painful but necessary restructuring, shed thousands of jobs, shut down marginal business units and refocused on its core businesses, and as yesterday’s quarterly earnings report proved, the results are not only starting to show, but starting to stick.

So is the work done? Definitely not. Yes, Cisco is showing some return to its strengths, but there’s still a long way to go. We talked about that, the troubles Cisco’s competitors are facing, his long-held view that companies like Cisco should get a tax holiday to repatriate their cash held outside the U.S. and many other things.

Also Chambers, remembering that I dedicated “How Ya Like Me Now” to Cisco last quarter as it turned the corner on its troubles, asked me what song I might use to characterize its results this quarter. Taking inspiration from the headline of my first story and from his cautiously optimistic tone, I settled on “It’s Getting Better All The Time,” the Beatles track, performed by Paul McCartney and embedded after the Q&A. Enjoy.

AllThingsD: John, I don’t know if you saw the headline I wrote earlier, but I said you fit into your skinny jeans again. Is that fair?

John Chambers: [Laughs] I think it’s fair. We were up about four or five inches there so I think we have an inch or two to go, but we’re getting close.

So let me ask about the quarter. It looks like a solid quarter where a lot of the troubles were starting to get behind you. In broad brush strokes, where were Cisco’s strengths? I know some of your competitors were having their own troubles, but where were you strong in particular?

The strengths were that we appear to be executing on the market transitions that are going on, and we appear to be reinventing ourselves, not just in terms of how we control our costs, but in terms of the productivity we’re getting out of our employees. So if you look at the major transitions going on in the industry from an economic point of view, to how customers buy, to where the high tech industry is going, which I would argue is all connected to intelligent networks, that all appears to be playing out as we had hoped. The other transitions that you think about, like data centers and the cloud, we saw 90 percent growth in an industry that is growing at best in the teens. Our ability to move in collaboration, where we grew 10 percent though I think we could do better — it remained solid for us. In video with set-top boxes up 23 percent to new video technologies growing well and seeing improvement in the margins. There are things we need to do to reinvent Cisco. I think I said this at your own conference a decade ago [Chambers spoke at D5 in 2007, but that is not where he made this comment. -Ed.] that voice will be free. It’s almost there. You could see the trend, and what it meant is that once voice would become a smaller part of the network load, that would be given away in order to make way for the video and the entertainment. The same trends are taking place all over again at multiple speeds and multiple gears, which if we’re right, they all play together. Everything from mobility to cloud to the intelligent network, to wireless to security, to video being pervasive, all of those are coming together at tremendous speed. And we’re pulling them all together pretty well for our customers. Now, this is just the beginning if we execute right, and we have plenty of hurdles in front of us, but this may be the voice-will-be-free trend times 10 in terms of the impact of the transitions going on. We appear to have managed them well; we did what we said we would do, turned in record earnings and record revenues, and earnings per share were up 48 percent. We’ve realigned ourselves and reinvented the company, which I think you have to do every five years. Sometimes it takes a crisis to reinvent. … It’s a journey and we’re just getting started.

What’s the number one hurdle that you want to get over this year, that’s in front of you right now and keeping you up at night?

I want to build deeply into our capabilities, a continued focus on gross margins and effectiveness, from product design to sales all integrated together. You probably know this, but we’re the only company who’s anywhere near this profitable with $45 billion in sales with open standards. It isn’t a mainframe business where everything is proprietary or like in Apple’s situation where it’s a wonderful company but it has an architecture. We do it entirely with open IP, so we can be challenged by a 10-person start-up or a by the biggest giants like Dell or IBM or Hewlett-Packard to come at us. With this type of margin but so low a barrier to entry, we’re doing relatively well. But we still have to reinvent ourselves at a faster pace. We have to do what I call the basic blocking and tackling to participate in the new capitalism that we’re heading into. That’s the attention to gross margins, getting the market transitions right, tying the products together so you can get the price premium on them. But what really keeps me up at night this last year was the realization that this has to be constant reinvention. Average is over. An average high-tech company is headed down. Those above-average companies are going to head down in 3 to 5 years. If as a company you can’t reinvent yourself every 3 to 5 years, you have a problem coming at you.

Does that then imply that Cisco had become complacent or even average? It was and is the biggest networking player, but did Cisco lose its way and try to do too much?

Well, I could give you a long list of things we have to do better. We’re a healthily paranoid company so we always have things we could do better. I do think we were fat. Four to five inches, not just one or two. We’re not back in our skinny jeans yet, as you put it, but we’re within an inch or so of getting there. We missed market transitions at the speed at which they occurred. We should have seen the drop-off in public spending coming at us sooner. Everyone else has still run off the turn, even though they saw what happened to us two to four quarters ago. We should have seen it sooner and reinvented ourselves before it hit us, and made the turn much more effectively, and I’m committed to doing that, and the leadership team is, too. It would have been easy to just cut a billion dollars in expenses, reorganize sales and how customers buy. We realized that gross margins can deteriorate not just because of what competitors do but what we do to ourselves, like what we did on switching. We should have been smarter there.

On the conference call you mentioned the possibility of getting back into the mergers and acquisitions game. Any hints on where you might go or whom you might buy?

I think it’s a fair question. Part of the reason we said that was to explain why we’re building up cash in the U.S. Part of it was for share buybacks because the price was attractive. A lot of people don’t realize that we use M&A deals to gain leadership. We were a routing company, we acquired three switching companies. We were an enterprise and commercial company, we acquired a service provider company in Stratacom. If you look at where it’s going to be, it’s probably in data center, collaboration and video, and combining those with security, bring your own device and mobility. A large part has to do with our government allowing us to bring money back to our country.

That’s always been a big issue of yours. You made some comments about it on the conference call as well. Care to elaborate?

I think that it’s going to happen in the next presidential administration whether the president is re-elected or someone else is. I’ve been disappointed that we haven’t been able to get our message out about this more effectively. Ironically, I was in Europe, the government leaders there look you right in the eye and ask what they need to do to bring jobs to their country and keep the ones they have. They are partnering with business. I think we’re following Europe in the wrong way and following more of what they did to get them in trouble in the first place.

There’s a bit of a disconnect, however, to anyone who sees on one hand a company that wants to bring cash back in a tax-advantageous manner in the name of creating jobs, while the same company just fired so many people in the restructuring. Can you connect those dots for the person who sees the apparent logical disconnect? If it’s about jobs, then why are you firing people in the first place? If you were having lunch with President Obama or any other political leader, they might be confused, so how do you explain it?

They’re related. The first thing you’ve got to do when you hit bumps in the market is find out how much of the damage was self-inflicted and how much was the result of the conditions of the market. It would be a cop-out to say it was all the general market. We had to look at what we were doing internally. Every government leader in the world who’s adding to government payrolls and adding government debt is going in the wrong direction. We have to use technology to deliver services better. You do see most government leaders saying they want to get their own houses in order. The second thing they do is look at ways to generate private sector jobs. I’m a strong Republican, but I think President Clinton got it right with business and knocked the ball out of the park. He partnered with business, he was critical where appropriate, but in six years he generated 22 million jobs, grew GDP on average by 4 percent per year, and he was America’s champion on the Internet. I think that’s a more practical example. He grew private sector employment versus government employment by a ratio of 9 to 1, and created a positive climate for business, and when business got out of line he’d whack ’em. I think it would be a major mistake not to let companies repatriate their cash because whoever is in the Oval Office next year is going to want to get private sector jobs growing again, and there really aren’t very many levers left to pull. We’ve never had this slow a recovery after this deep a recession.
–

Getting Better – Paul McCartney

The position of the anti-SOPA activists is antithetical to the principle of protection — for authors, that is — mandated in the Constitution of the United States. Our nation’s founders recognized that furthering the rights of creators is in the national interest, to “promote the progress of science and useful arts” by “securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Over the centuries, copyright protection has been codified in an expanding body of federal law in an attempt to implement the protection outlined in the Constitution.

The SOPA debate is emblematic of the growing tension between the copyright creator — the authors, composers, lyricists and artists who have contributed so much to the socio-economic fabric of American life — and the “interests” of the public in having free access to the works of others. However, the creator/public dichotomy is a false paradigm. What is truly at stake are the competing interests of the creators and the corporations who have acquired and are exploiting their works.

It is the rare creator who has the luxury to create simply for the sake of creating. As history has shown (every Renaissance artist worth his canvas had a patron), in order for creators to enjoy the benefits of their creations, it is necessary for them to cross over into the world of commerce, and to seek the patronage of publishers, record labels, and film and television producers. Sadly, the relationship between creator and corporate sponsor is seldom equal, as evidenced by the scores of documents executed by authors, songwriters and other creators, granting the rights in their works to corporate entities in perpetuity, often in exchange for modest compensation.

Congress attempted to include in the Copyright Act a series of provisions to give the creator (or the heirs of a deceased creator) the opportunity to terminate even perpetual grants of copyright, and “recapture” rights to their works in the U.S. These provisions, known as the “termination provisions,” were first introduced as part of the Copyright Act of 1976, and later modified as part of the Sonny Bono Copyright Act of 1998.

The intent of Congress in enacting the termination provisions was clear: To give creators, or their heirs, the opportunity to escape inequitable deals, or simply to revise the terms of their deals in order to share proportionately in the success of their creations. And, indeed, the opportunity to recapture rights is a potentially valuable asset for creators and their statutory successors. Yet, outside the music industry, the termination right is significantly underutilized, while even songwriters and recording artists are often thwarted in their attempts to recapture rights in a process made unduly complicated in response to pressure from corporate lobbyists.

Like the termination provisions, the real value of SOPA and other copyright enforcement legislation is its role in safeguarding the interests of the intended beneficiaries of copyright protection. Whether or not SOPA is the most effective means of curbing piracy in the online arena is a matter that should be thoroughly examined. However, the SOPA debate should not be commandeered as a vehicle for furthering the position of those who seek to write authors out of the copyright law and the Constitution.

Lisa A. Alter is a partner in the firm of Alter & Kendrick, LLP, in New York City. Her practice is focused primarily in the area of copyright law, with a particular emphasis on domestic and international music copyright issues. Ms. Alter has lectured frequently at law schools and professional meetings on copyright matters, and has represented clients on legislative matters impacting their copyright interests. She is the author of “Protecting Your Musical Copyrights,” which has recently been released in its second edition.

Poor Chris Dodd — he just got the top media lobbying job in Washington, D.C., at the very moment that the strong-arming-pols, scare-the-children, Jack Valenti era in media lobbying is now decidedly over.

It’s obviously a very confusing time for big media these days, on a lot of fronts. But any of the consummate insider moves once used by the legendarily pugnacious Valenti (pictured here onstage at our first D: All Things Digital conference in 2003) had a hard time this past week, as Internet players went very public in protesting two Congressional bills aimed at combating piracy online.

Not that Dodd didn’t try to cope.

The former Senator — who is now the chief lobbyist for the once much more powerful Motion Picture Association of America — gave a can’t-we-all-get-along interview to the New York Times on Thursday, in which he called for a meeting with techies to come to some acceptable compromise.

Wrote the Times:

“In an interview Thursday, Mr. Dodd said he would welcome a summit meeting between Internet companies and content companies, perhaps convened by the White House, that could lead to a compromise … ‘The perfect place to do it is a block away from here,’ said Mr. Dodd, who pointed from his office on I Street toward 1600 Pennsylvania Avenue.”

But on Friday, after politicians quickly moved to delay both the House’s Stop Online Piracy Act (SOPA) and the Senate’s PROTECT I.P. Act (PIPA) — after successful protests pointing out that the legislation could lead to censorship — Dodd went to the full Valenti again:

“We applaud those leaders in Washington who have chosen to stand with the millions of hard working Americans all across this nation whose livelihoods are threatened by foreign criminal websites designed to steal. As a consequence of failing to act, there will continue to be a safe haven for foreign thieves; American jobs will continue to be lost; and consumers will continue to be exposed to fraudulent and dangerous products peddled by foreign criminals.”

Foreign criminals! Foreign thieves! Is it just me, or does Dodd sounds like Cher, singing, “Gypsies, tramps and thieves”?

(Let’s be clear, that utterance could never top Valenti’s most infamous quote: “I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.”)

To be fair, Dodd is hindered by strict restrictions on his lobbying Congress until next year. That said, this is not an old-timey, private Capitol Hill fight, but a modern-era, social-media-charged one.

And it’s pretty clear that the old scare tactics used by big media will no longer work as well, as consumers — as much as they like their movies — seem to love their Internet more.

Thus, what has happened is that — at least for now — the MPAA and media companies have lost and lost big, after the typically fractious Web powers decided to lock arms for once and cooperate with a creative, take-it-to-the-people approach of showing a disabled Internet.

Dramatic? Yes. Effective? Certainly. (That Facebook and Google agree on anything? Astonishing!)

Where it goes from here is unclear — the MPAA and its constituents could certainly rally and put forth their own protest. Ironically, the most effective way to do that is not via the airwaves or other former means of broadcast to the public, but on the Web.

Which is controlled by Dodd’s foes. (You see the problem here.)

The answer, in the end, might have to be the cooperation he first suggested.

As he told the Times:

“The companies, Mr. Dodd said, are ‘rethinking everything,’ not just about the bills, but about their relationship with an estranged Silicon Valley. That need for rapprochement, he said, ‘has come home in a way that no rhetoric of mine could express.’”

Much more to come, obvi.

Oh, just peruse it:

One thing that was particularly fantastic from the protests over the two bills in Congress that most of the Internet was protesting over yesterday, was the plethora of creative videos that were released.

Here are two that I liked a lot — a comic one from Jest, called “Wikipedia/SOPA Survival Kit”; and a very cogent argument against the legislation, from Clay Shirky on the TED Web site, titled “Defend our freedom to share (or why SOPA is a bad idea)”:

Mark Zuckerberg, CEO, Facebook:

The internet is the most powerful tool we have for creating a more open and connected world. We can’t let poorly thought out laws get in the way of the internet’s development. Facebook opposes SOPA and PIPA, and we will continue to oppose any laws that will hurt the internet.

The world today needs political leaders who are pro-internet. We have been working with many of these folks for months on better alternatives to these current proposals. I encourage you to learn more about these issues and tell your congressmen that you want them to be pro-internet.

Sen. Ron Wyden (D., Ore.):

The Internet has become an integral part of everyday life precisely because it has been an open-to-all land of opportunity where entrepreneurs, thinkers and innovators are free to try, fail and then try again. The Internet has changed the way we communicate with each other, the way we learn about the world and the way we conduct business. It has done this by eliminating the tollgates, middle men, and other barriers to entry that have so often predetermined winners and losers in the marketplace. It has created a world where ideas, products and creative expression have an opportunity regardless of who offers them or where they originate.

Protect IP (PIPA) and the Stop Online Piracy Act (SOPA) are a step towards a different kind of Internet. They are a step towards an Internet in which those with money and lawyers and access to power have a greater voice than those who don’t. They are a step towards an Internet in which online innovators need lawyers as much or more than they need good ideas. And they are a step towards a world in which Americans have less of a voice to argue for a free and open Internet around the world.

Legal Team, Red Hat Software:

In a single generation, the Internet has transformed our world to such an extent that it is easy to forget its miraculous properties and take it for granted. It’s worth reminding ourselves, though, that our future economic growth depends on our ability to use the Internet to share new ideas and technology. Measures that block the freedom and openness of the Internet also hinder innovation. That poses a threat to the future success of Red Hat and other innovative companies.

The sponsors of SOPA and PIPA claim that the bills are intended to thwart web piracy. Yet, the bills overreach, and could put a website out of business after a single complaint. Web sites would vanish, and have little recourse, if they were suspected of infringing copyrights or trademarks.

The good news is that there is growing opposition from many quarters to these bills. Just this past weekend, the White House expressed serious concerns, opposing legislation — like SOPA and PIPA — that “reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.

Lanham Napier, CEO, Rackspace:

In my last blog post on SOPA and PIPA, I explained why Rackspace — along with much of the Internet community — opposes these bills in their current form. They are well-intentioned, but would do more harm than good. Their enforcement provisions could be easily evaded, and they would undermine the security and stability of the Internet.

Since then, I and other Rackers have been working with key lawmakers to fix the bills so that they will (a) actually be effective in fighting online piracy, and (b) avoid disrupting the Internet or imposing unreasonable costs on Internet users and service providers.

We at Rackspace are on the front lines of the battle against copyright infringers and other online criminals. We employ dedicated teams that take enforcement actions under the Digital Millennium Copyright Act as well as our own strict Acceptable Use Policy every day. We agree that better tools are needed for this fight but SOPA and PIPA do not fit the bill.

Gary Shapiro, President and CEO, Consumer Electronics Association:

“It is increasingly clear that bills causing collateral damage to innovation in the guise of fighting piracy are not politically viable. Now that unreasonable solutions to piracy have been shown not to work, it is time to explore reasonable ones. We urge policymakers to join CEA in support of the OPEN Act — a bicameral, bipartisan and narrowly targeted approach to fighting foreign “rogue websites.”

Paul Hortenstine, Motion Picture Association of America, which supports the bills:

The legislation targets criminals: foreign thieves who profit from pirated content and counterfeit goods. These foreign rogue websites are operating freely today while legitimate American businesses are opposing legislation that would block these criminal websites from the American market.

The Pirate Bay, a site that links visitors to pirated content and would arguably fit someone’s definition of “foreign rogue Web site”:

SOPA can’t do anything to stop TPB. Worst case we’ll change top level domain from our current .org to one of the hundreds of other names that we already also use. In countries where TPB is blocked, China and Saudi Arabia springs to mind, they block hundreds of our domain names. And did it work? Not really.

To fix the “problem of piracy” one should go to the source of the problem. The entertainment industry say they’re creating “culture” but what they really do is stuff like selling overpriced plushy dolls and making 11 year old girls become anorexic. Either from working in the factories that creates the dolls for basically no salary or by watching movies and tv shows that make them think that they’re fat.

Ben Greenman, Contributor, The New Yorker:

Dear Spanish speakers, I was only joking when I said you think we’re all protesting soup. Geez: People are so touchy on blackout days

January 18, 2012 7:44 am via webReplyRetweetFavorite

@bengreenman

Ben Greenman

Sen. Orrin Hatch of Utah, the top Republican on the Judiciary Committee, was among the most significant shifts. He said in a statement Wednesday afternoon that the bill is “simply not ready for prime time.”

Read the rest of this post on the original site »

That’s the phrase that has been greeting visitors to the English-language sections of Wikipedia since midnight Eastern Time. Other sites, like BoingBoing, began their protest just minutes ago as I’m writing this at 8 am ET. BoingBoing displayed a “503: Service Unavailable” message against a black background, saying it was “because the U.S. Senate is considering legislation that would certainly kill us forever.”

They were just two examples of the coordinated Web-wide protest taking place against the Stop Online Piracy Act (SOPA), and a companion bill, PIPA. Numerous other major sites were also taking part, according to SOPAStrike.com, a site boosting the protest. Mozilla and WordPress.org were taking part by blacking out their sites and directing visitors to take-action pages. The Internet Archive was to go dark for 12 hours today, beginning at 6 am PT. Google covered most of its colorful logo in a black banner and placed a link to a take-action page on its home page.

Many Internet companies are railing against the bills because, they argue, the provisions included amount to censorship and don’t properly protect sites accused unfairly of enabling piracy. In a post on its company blog, Google chief legal officer David Drummond wrote that the bills “provide incentives for American companies to shut down, block access to and stop servicing U.S. and foreign websites that copyright and trademark owners allege are illegal without any due process or ability of a wrongfully targeted website to seek restitution.” Under SOPA and PIPA, sites like Google could find themselves in legal hot water just for linking to pirated content in search results. “We know from experience that these powers are on the wish list of oppressive regimes throughout the world,” Drummond wrote.

Supporters of the two bills argue that the laws are necessary to clamp down on sites that operate outside the U.S., enabling the circulation of pirated films, TV shows and other copyrighted content.

Chris Dodd, the former senator who is now President of the Motion Picture Association of America, said in a blog post that the protests on the Web are “stunts that punish their users or turn them into their corporate pawns, rather than coming to the table to find solutions to a problem that all now seem to agree is very real and damaging.”

The White House had announced over the weekend that President Obama doesn’t support either SOPA or PIPA in their current forms.

Update: A few folks have pointed out to me that Wikipedia is still technically available via smart phones and mobile devices. Also if you disable Javascript in your computer’s browser it circumvents the blackout. There’s more on that in this FAQ on Wikipedia’s blackout and also in this technical FAQ.

That would be Rep. Jared Polis, an avid opponent of the bill. Polis (D., Colo.) dropped the names of his favorite League of Legends in-game characters to boost his cred while encouraging other community members to call their own congresspeople.

Polis’s comments came as part of a conversation about SOPA started by Riot Games CEO Brandon Beck. Riot’s League of Legends recently surpassed World of Warcraft in popularity, with 11.5 million active monthly players as of November.

Sooner or later, the geek voting bloc may well be swarmed with pandering politicians. But maybe, just maybe, Polis is an example of someone being authentic.

Here’s Polis’s message:

Hi, this is Congressman Jared Polis of Colorado. As a member of the League of Legends community (partial to Anivia and Maokai), and as someone who made his living as an Internet entrepreneur before being elected to Congress, I’m greatly concerned about the future of the Internet and gaming if Congress doesn’t wake up. You may have heard that Congress is currently considering a bill called the Stop Online Piracy Act, or SOPA. While SOPA has a ton of problems, there are some significant issues that I thought fellow gamers might want to know about.

I’m particularly concerned that SOPA might stifle the kind of innovation that brings us games we love, such as LoL. The bill makes it far too easy for angry competitors to sue good law abiding companies out of existence. It threatens any company or website that depends on user-generated content, even companies like Riot. Instead of coming up with great ways to keep making games like LoL even better, companies will have to spend their money hiring lawyers. That’s why companies like Riot, who want to protect the games they create, are opposed to SOPA.

I’ve been working on alternative legislation that would protect the games companies create while also fostering innovation. But we also need you to call your members of Congress and let them know of your opposition to SOPA. This bill has a very real chance of passing, and it is up to all of who want to protect the Internet to take action. More information is available at http://keepthewebopen.com/. Please make your voices heard in this debate! I will be happy to respond to your posts below, and will check back every few hours today and respond to as many as I can.

(Image courtesy of Rep. Polis’s Web site.)

Sprint CEO Dan Hesse

Shares of Sprint are rallying by about 6 percent in after-hours trading, on word that AT&T has abandoned its $39 billion bid for T-Mobile.

That’s really only a jump of 13 cents per share — a figure that says a lot about the pickle in which Sprint remains, despite the fact that its arguments against the AT&T-T-Mobile combination have prevailed.

Sprint no longer has to deal with the threat of a merged AT&T-T-Mobile. But it still has to cope with the fact that it is a distant No. 3 to AT&T and Verizon Wireless. And, after betting on a different 4G technology, the company also has to bring up an entirely new network, all while trying to turn off its older Nextel network.

Still, there is some cause for celebration, an opportunity that Sprint did not let go to waste.

“From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T’s proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer,” Sprint said today in a statement, in which it also praised federal regulators for their opposition to the deal.

Sprint and its CEO, Dan Hesse, had opposed the deal mightily before government regulators and Congress, and in the court of public opinion, investing a lot of political capital in the process.

That said, the deal’s failure doesn’t exactly help Sprint out of the messy spot it’s in.

For one thing, Sprint is still losing money. In its most recent quarter, it booked a $301 million loss on revenue of $8.3 billion, which was an improvement over the prior year’s period. On the bright side, it added 1.3 million customers — and that was before it had Apple’s iPhone in its stores to help entice new customers.

But while having the iPhone is nice, it’s not helping the bottom line. As The Wall Street Journal reported in October, Sprint has committed to buy more than 30 million iPhones, which will cost it as much as $20 billion over time, and on which it expects to lose money through at least 2014.

And that’s not even the half of it. Sprint also plans to spend big to build a new LTE network in 2012, and currently relies on WiMax as its 4G technology. With $5 billion in cash and short-term investments on its balance sheet as of the end of December, Hesse said, the company will have to go to the credit markets and borrow to get the build-out done.

Meanwhile, its relationship with the wireless broadband concern Clearwire isn’t exactly helping. Clearwire is the provider of Sprint’s 4G technology, and relies heavily on Sprint for its funding. By using Clearwire’s WiMax technology, Sprint was first to the market with 4G, something that gave it an early advantage over its rivals. But that the move also left Sprint alone as both AT&T and T-Mobile Verizon joined numerous carriers in Europe in moving to a rival 4G technology, known as Long-Term Evolution, or LTE.

Had Sprint not started the move to LTE, it likely would have faced an increasingly tough time getting device makers to bring out their latest and greatest devices for a WiMax standard that few other carriers were adopting.

So for Sprint, while one important battle is won, the war to turn the company around — and it will be a tough one — is far from over, and far from victory.

Update: Initially I identified T-Mobile as going launching an LTE network, which it’s not. I meant to say Verizon. Sorry about that.

AllThingsD’s Ina Fried contributed to this report.

The US government has regularly claimed that it supports a free and open Internet, both domestically and abroad. We cannot have a free and open Internet unless its naming and routing systems sit above the political concerns and objectives of any one government or industry.

– From an open letter to Congress signed by 83 Internet engineers expressing their opposition to SOPA and PIPA

I have now one ambition: to retire before it becomes essential to tweet.

– Barney Frank, who sent this, his first and only tweet, in 2009, announced in a Monday press conference that he will retire in 2012, after 30 years in Congress

But some, such as Jared Hardy, co-founder of a North Dakota beer start-up, aren’t waiting for Congress to act.

Mr. Hardy is among a small but growing number of small-business pioneers already cracking open those doors, by raising capital through the online social-networking process known as “equity-based crowd-funding.”

Read the rest of this post on the original site »

Ahead of a House hearing Wednesday, nine tech companies sent a letter Tuesday to congressional leaders saying the legislation would “expose law-abiding U.S. Internet and technology companies to new uncertain liabilities.”

The bill would let the U.S. attorney general seek court orders requiring U.S. Internet sites and search engines to take reasonable measures to block access to other websites carrying pirated material. That could compel them to block domain names and search results featuring those sites.

Read the rest of this post on the original site »

Eric Schmidt (left) with Alan Davidson and an unidentified mime

“It’s been a remarkable experience — and a very exciting and intense time — but I’m ready for a new challenge,” Davidson said in an email to colleagues. “After six and a half years, I’ve decided it’s the right moment for me to leave my current role at the company. Starting later this month, I will be taking a sabbatical to explore other opportunities.”

Davidson’s departure is a bit of a surprise, and a real blow to Google. He was the company’s first full-time lobbyist in Washington and the guy who established its presence in the Beltway. He’s leaving at a time when Google is mired in all sorts of regulatory issues and facing increased scrutiny of its operations. So the company is understandably scrambling to replace him. Sources say it’s hoping to replace Davidson with a former member of Congress in an effort to further bolster its Capitol clout.

Sounds like exactly the sort of lobbyist that company chairman Eric Schmidt described in this October interview with the Washington Post.

“The conclusion that we came to [as far back as when I was at Sun Microsystems] is that there are two kinds of lobbying,” Schmidt said. “And this, I think, is grossly unfair but kind of true. There’s the kind of lobbying where you pay an ex-senator to get the current senator to write a sentence into a bill, and there’s no confusion as to what this is about. You are representing your corporate interest. It’s specific to your company. In Washington, for example, you can pay an ex-person $50,000 to arrange a meeting to get that process, to get those five sentences written in this bill, and so forth and so on.”

Davidson’s email in full, below:

From: Alan Davidson
Date: Mon, Nov 7, 2011 at 4:35 PM
Subject: Time for a new challenge
To: Alan Davidson

In 2005, I joined Google in Washington to build a first-rate Internet
policy group. It’s been a remarkable experience – and a very exciting
and intense time — but I’m ready for a new challenge. After six and
half years, I’ve decided it’s the right moment for me to leave my
current role at the company. Starting later this month, I will be
taking a sabbatical to explore other opportunities.

When I started at Google none of us really knew how the Internet, and
this company, would grow and change. The mobile, cloud, and social
technologies just taking hold then are now full-on revolutions today.
At Google, we’ve grown from one person in shared rental space (me!) to
a large regional team with a flagship office in DC. I am intensely
proud of the team we have built throughout the Americas, and the work
we have done.

When we started the office, I knew that we couldn’t affect the major
policy debates of the day alone. It has only been in partnership with
so many of you that we have been able to make progress on many of the
great issues affecting the Internet. As we seek to fill my role, Pablo
Chavez will continue to be a good point of contact in our ongoing work
together. Thank you.

With best regards,
Alan

The crowdfunding bill, called the Entrepreneur Access to Capital Act, would allow companies to give out equity stakes in exchange for investments of up to $2 million.

The stakes wouldn’t count against the SEC’s famous 500-shareholder rule. And individual investors would be capped at putting in $10,000 or 10 percent of their annual income.

So, potentially, a start-up raising funding on a service like Kickstarter could make its donors true investors, rather than just giving them acknowledgment or some reward in exchange for their money.

Crowdfunding for start-ups is something people have tried to do before, but ever so carefully. For instance, a soon-to-launch company called Wahooly promises to help start-ups give out equity in exchange for social media marketing. Wahooly’s current model — which it says is designed to work with current SEC rules — is to become a shareholder in each participating start-up and then split any proceeds with its brand-advocate users.

Meanwhile, the House on Thursday also passed a bill called the Access to Capital for Job Creators Act that would remove a ban on start-ups soliciting accredited investors for capital.

And earlier this week it passed a bill allowing companies to do small public offerings of up to $50 million without registration requirements.

All the bills now have to pass the Senate before they can be signed into law.

Oak Ridge National Lab's "Jaguar" computer

Despite the fact that the Chinese system was built largely with American-made or American-designed components, the news came as a bit of a blow to American pride, and even caught the attention of President Obama, who kvetched about it in January’s State of the Union address.

By June (the list is updated twice a year) the Chinese machine had fallen to second place, its crown seized by a supercomputer in Japan, relegating the top supercomputer in the U.S. to third place.

Today, the Oak Ridge National Lab in Tennessee, part of the U.S. Department of Energy, will announce plans to build a system that has a good shot at reclaiming the top spot. The machine will be named “Titan,” and its primary computing engine will be the Tesla chip from Nvidia, the company best known for turning out chips that enhance the graphics of games on personal computers.

Nvidia has been making inroads in high-performance computing for some time. Earlier this year I wrote about how the Tesla chips were helping Lucasfilm make movies faster.

I talked with Steve Scott, the CTO of Nvidia’s Tesla business unit, who told me that the Titan machine will be 10 times more powerful than the current Jaguar machine, and that 85 percent of its computing power will come from Nvidia chips, while the remaining portion will come from conventional CPU chips from Advanced Micro Devices.

Why GPUs and not CPUs? It turns out that graphics chips are really good at doing a certain kind of math known as a floating point operation, much faster than a typical CPU chip from Intel or AMD found inside a PC or server.

It’s also an issue of power. For years, as chips and the transistors on them have shrunk, the amount of power required to send pulsing through them has dropped as well. Scott says that is no longer the case. “We’ve reached the point where processors have become power constrained. If you pack all the transistors that you can onto a chip and run it as fast as you can, the chip will melt. We’ve entered a time where performance is constrained by power, and its only going to get worse, so you need processors that are power efficient,” he says. “It’s a fundamental sea change in the underlying technology of high performance computing.”

GPUs, originally designed for gaming and professional graphics applications like editing movies and visualizing complex problems for engineers and scientists, are inherently designed to perform several repetitive tasks at once. In explaining this, I always think back to the old saying “many hands make light work,” though here it’s applied to computing. Two people who divide up the task of folding a pile of laundry get it done faster than one. And four people will get it done faster than two.

Basically, a GPU chip is designed to render what happens to every pixel of a computer screen 50 times a second or even faster. Essentially, lots of small computational jobs are carried out at once. It’s called parallel computing, and, fundamentally, CPUs chips aren’t as good at it as GPU chips. CPUs are better at doing one job at a time, getting it done really fast, and then moving on to the next one. Generally speaking, Scott says, GPUs are about eight times faster at floating point operations than CPUs.

For Nvidia it will be a return trip to the top spot. China’s supercomputing champ, the Tianhe-1A at National Supercomputing Center in Tianjin, which is now ranked No. 2 in the world, uses Nvidia GPUs. This certainly got the world’s attention concerning the potential for GPUs in high performance computing.

The plan at Oak Ridge calls for Titan to have 18,000 nodes, each with an AMD CPU chip coupled with an Nvidia Tesla GPU. Most of the heavy lifting will be done by the GPUs, Scott says. Its total computing capacity will top out at 20 petaflops. FLOPS are floating point operations per second. “Peta” refers to how many the system can do every second: In this case, the answer is 20 quadrillion. Just because I can — and because it’s one of the rare cases where I get to use a number that’s larger than the national debt — I’m going to write that number out: 20,000,000,000,000,000.

And what will it be used for? While many of the Department of Energy’s computers are used to simulate nuclear explosions that are no longer allowed thanks to the Test Ban Treaty, this one won’t be. The mission at Oak Ridge, Scott says, is to advance the boundaries of science. Scientists will use it to model climate change, and to predict the results of different methods of mitigating it. They’ll also use it to design engines, study biology and genetics, and explore the possibilities of using nuclear fusion for energy. If you have interesting scientific work to do that requires this kind of computing oomph, you can even write a proposal explaining how you’d use it.

In the first phase of Titan’s deployment, which is already under way, Oak Ridge will upgrade its existing Jaguar supercomputer with 960 new Tesla chips. In a second phase, expected to start next year, Oak Ridge plans to deploy the 18,000-node Tesla-based system.

Down the road, the hope within supercomputing circles is that performance improves to the point where we’re no longer talking petaflops, but exaflops, or quintillions of floating point operations every second. The government is already working on that, and earlier this year President Obama asked Congress for $126 million in the federal budget to begin research to work on ways to get there by 2018. The biggest problem: How to supply enough electrical power while delivering the computing muscle. Today’s announcement by Oak Ridge is a big step in that direction, but there are still 981 more petaflops to conquer.

Ready, aim, fire — at Google at the Senate Judiciary Committee’s antitrust subcommittee hearing happening right now in Washington, D.C.

It is titled: “The Power of Google: Serving Consumers or Threatening Competition?”

Here we go:

11:04 am: As usual in D.C., the Senators on the committee get to pontificate first.

Oh, joy! (I used to live there and cover Congress stuff for the Washington Post from time to time and I am having bad déjà vu right now.)

A quick cut to Google Executive Chairman Eric Schmidt, who is appearing alone. He looks a little peaked, especially as the pols begin to describe the scary behemoth the search giant is.

And also that it is trying to force users to its other products.

Rut-roh.

11:07 am: Sen. Mike Lee, the Republican from Utah, who is a Google critic, is talking on about the search giant’s power, reading from his testimony in a dullish style.

I thought this dude was a Tea Party firebrand!

“The primary focus should be consumer welfare,” he says, blah, blah, blaaaaaaah.

11:09 am: Now, the subcommittee’s dour chairman, Sen. Herb Kohl from Wisconsin, is introing Schmidt, who is actually being introed by California Sen. Dianne Feinstein.

She is an Eric fan, obvi, praising his accomplishments at Google. But she also gives props to Jeffrey Katz, CEO of Nextag, who is testifying against Google later. Also, let her add, is the fabulous CEO of Yelp, Jeremy Stoppelman, another anti-Google speaker to come.

“I hope they tango rather than tangle,” says Feinstein inexplicably about those called to testify. Hey, white geeks can’t dance, although wrestling would also be hard for them too.

In any case, gotta love these everybody-loving pols!

11:14 am: Finally, Schmidt, who — of course — starts off invoking the last big tech giant who was here getting spanked by Congress.

Schmidt does not name Microsoft — classy, by which I mean not at all — but is referring to the software giant.

“We get it,” he says about the lessons Google has learned from Microsoft’s own antitrust troubles back in the day.

11:18 am: Schmidt is talking about Google and saying he welcomes the competition.

“Today it’s Google turn in the spotlight,” he says, still not uttering the word “Microsoft,” much as Microsoft execs have often not been able to say Google. “One company’s past [should] not be another company’s future.”

Now, the senators can have at him. Kohl is up first.

11:20 am: The first question is if Google is favoring its own products, via search.

Schmidt harkens back to what he calls early Google lore that it is just trying hard to get consumers stuff quicker.

The need for speed!

“Is really trusting Google to do the right thing sufficient?,” asks Kohl, who quotes former President Ronald Reagan’s famous line: “Trust but verify.”

That gives Schmidt the chance to talk about how quickly Google could lose out to competitors and then is onto how hard it is to do what Google does.

It takes extra-smart smartypants. Trust us, he says, as we are smartier!

11:24 am: Kohl comes back with a damning quote from Google’s famous Marissa Mayer, who apparently has said that the company favors its own products and why not?

Schmidt says he was not there when she allegedly said this, but that its own testing and intuition tells Google if consumers want a Google map or whatever tout de suite!

Kohl repeats the Mayer quote again: “We do all the work for the search page, so we put [a Google Maps link] in first.”

“I will let Marissa speak for herself,” says Schmidt, now too deep in the weeds of her verbal faux pas. Get out, Eric!

11:28 am: Sen. Lee is up, not taking any of this speedy, we-know-best business.

And he has a chart! I love a good chart. It shows Google info always ranks first in listings versus other sites it competes with.

Schmidt has not seen this poll, but thinks it is not accurate.

11:31 am: Let me note that Schmidt’s grey suit is fantastic looking. And right behind him, you can see Google’s top lawyer, the always nattily dressed David Drummond.

Back to the chart!

Lee wants to know why, according to his chart, that Google seems to come up first.

“Either way, you’ve cooked it,” claims Lee.

“Senator, I can assure you we have not cooked anything,” counters Schmidt.

(Note: Google does have an excellent cafeteria in Silicon Valley, complete with organic arugula and Kombucha for all.)

11:33 am: Hoo boy! But Lee’s time has expired, so Schmidt gets a break in the form of New York’s Sen. Charles Schumer.

I like the way he says “ee-no-vation” for innovation.

He does an expected plug for New York, of course. Somehow it is No. 1 in tech. Not so much, but brag on, Chuck!

11:38 am: Schumer is still talking about New York and its fab entrepreneurs.

Apparently, he has done a lot of jawboning with start-up dudes (likely over Kombucha) and they think Google is a positive force.

“Google is actually pretty good, we don’t see them as rapacious,” Schumer says the New York nerds tell him.

Is “rapacious” the criteria here?

Schumer is running out of time and has yet to ask a question and now is trying to get Schmidt to test Google’s broadband project in the Hudson Valley.

Now that’s rapacious!

Is there going to be an actual question here?

Yes: Oh please tell us, genius boy, what could Google do better?

Really.

11:42 am: Now, Sen. John Cornyn from Texas is on and asking about the prescription controversy Google was embroiled in recently.

Oops, I missed a bit when someone called me about the CEO mess at Hewlett-Packard I reported on earlier.

Onto Senator Amy Klobuchar from Minnesota. She is cleverly using an article about the Vikings football team to ask about how Google’s super-secret-sauce algorithm works and how it ranks results.

“Do you think companies should have a lot more certainty in how they are ranked?,” she asks.

11:51 am: Schmidt is not really answering, except to say Google is not perfect.

“We don’t know how to do it with more certainty,” he says, which is odd for a company that is perhaps the most irksomely certain group of geeks ever assembled on the planet.

Klobuchar moves to copyright issues. “There’s a real problem here,” agrees Schmidt.

Yes, and some media companies think Google is the problem and has not done enough to fix the problem.

“It’s difficult,” says Schmidt. Well, isn’t Google smartier?

“We’re under great pressure to resolve this,” he says.

11:55 am: Klobuchar is still worried about the small businesses, but she wants Google to come to Duluth.

Good lord, it’s a shakedown in plain sight. Maybe Google isn’t the scary one here! These pols seem pretty frightening.

Now Iowa Sen. Charles Grassley is saying he will attend some Google event in his state.

Of course!

Grassley makes a wishy-wishy statement, and we get to hear from Iowans on both sides.

Some are apparently concerned that Google is a troublemaker and some aren’t.

Iowans, like a lot of folks, are torn.

“We are happy to be judged,” says Schmidt.

12:00 pm: Now it is time for Sen. Al Franken from Minnesota.

“First let me say, I love Google,” he says.

Otay. I wonder if Franken knows that Google is a giant scary computer.

But, as a citizen of San Francisco, I say he should love whoever he wants!

Franken is also concerned about his love’s behavior and is taken aback by one of Schmidt’s previous answers.

It’s that irksome Marissa Mayer quote again.

When asked if the algo was unbiased, Schmidt apparently was not as sure as shootin’!

Now, it is onto Yelp and the fiery quotes from Stoppelman about how Google nefariously blocks the review site’s content.

Eric “generally” disagrees with Jeremy.

At one point Google tried to buy Yelp, so this is a fraught situation.

Does Franken know about the previous Google-Yelp hookup?

Drama!

Schmidt says it is Yelp’s fault for asking to be removed from the algo. Actually, Yelp only asked Google to stop jacking its fare.

12:11 pm: Oh noz, another pol? This time Sen. Richard Blumenthal from Connecticut.

He is super-smiley, while calling Google a “behemoth.” I like that word a lot and use it for the company often, although I always like to use a qualifier like “thuggish” or “freaky.”

Back to the blabby Blumenthal, who cannot seem to get out a question.

Wait! He asks if Google can suggest some fixes to “avoid government regulation.”

I. Kid. You. Not.

12:21 pm: Kohl is back and giving Google a little more slap-a-doo.

I like the whole Kohl thang of looking over his glasses down at Schmidt.

He asks: Should we trust Google? Should we?

In my opinion: If your mother says she loves you, you should check it.

So, no!

Schmidt assures him: “We make mistakes.”

Lee is then back, asking if Google gives preference to its own products in search?

Exactly the point and a question that is still not answered properly.

12:24 pm: Lee remains troubled by Schmidt’s testimony.

He uses terms like “leverage its natural dominance” and “significant market share to disadvantage” competitors.

Sounds like, um, Microsoft. And then it is back to that niggling Marissa Mayer quote. (Memo to the voluble exec, who apparently never met a microphone she didn’t want to talk into: You might want to take a day off today at the Googleplex.)

Google-luvin’ Franken is back and he is asking about mobile search.

Where Google is dominant again! (Jellllllo, Al, we in Silicon Valley know that one already!)

He asks if all Android devices come pre-loaded with Google products. Schmidt thinks two-thirds come with it, but handset makers can choose.

12:31 pm: Back to all-smiles Blumenthal, who says he has come to no conclusion.

But lo! He is not as silly as he seems and goes into an interesting racetrack analogy about how Google owns the track and now has horses and now those horses are winning.

Hmmmm…

Schmidt disagrees, natch!

He thinks the Internet is the platform and Google is the GPS.

Metaphor contest!

I think Google is a big tasty banana cream pie we can’t stop eating, although we know it’s bad for us.

That or an alien wearing an expensive suit who will soon eat us all.

Franken comes in with a doping horses joke. Remember when he was funny on “Saturday Night Live”?

Me neither.

It goes on without a lot of really good discussion. Klobuchar asks something, but I forget it immediately. My bad!

She has a last question about advertisers and privacy. Softball!

Let me write this for Schmidt before he inevitably spits it out: Of course, Google wants to protect privacy.

12:37 pm: Finally, the second panel of critics. Sadly, I must go to an appointment in Silicon Valley to visit one of its rapacious companies.

Oops, I meant ee-no-vative.

But, no worries, John Paczkowski will take over from here once it gets going again after the break.

12:47 pm: The panel’s back in session. The first critic to take a shot at Google, Thomas Barnett, a lawyer for Expedia.

12:51 pm: Riffing on Schmidt’s earlier “We know, we get it” comment, Barnett argues the opposite.

“Google doesn’t get it,” he says, adding that the company’s ever-expanding market power is troubling.

12:54 pm: Google is a monopoly, Barnett continues, and it has a duty not to abuse that position. He concludes by saying antitrust enforcement can and should play a role in maintaining competition in the markets in which it does business.

12:57 pm: Moving on now to Nextag CEO Katz, who has some tough words for the search giant. “Today Google doesn’t play fair,” he says.

He argues that Google rigs its results to drive consumers to Google Product Search when they search for information to inform their purchases.

1:00 pm: Next: Stoppelman of Yelp, who wonders if it’s even possible to create a company like Yelp today because of Google’s massive market power.

1:04 pm: Google’s outside lawyer, Susan Creighton, takes the mic next. Having trouble with the video stream from the Senate, but as best I can tell she talked broadly about the competitive landscape and reiterated Schmidt’s “competition is just a click away” narrative.

1:08 pm: She concludes by saying government oversight of Google’s search results rankings would put the company at a disadvantage and turn its search service into something akin to a “regulated utility.”

1:09 pm: Interesting. Creighton says she doesn’t believe Google has monopoly power.

1:10 pm: “Each of you right now can test whether or not you like Google’s search results and if you don’t like them it’s free and instantaneous to try someone else.”

1:22 pm: Apologies, the Senate video feed has gone from bad to worse.

1:23 pm: Franken asks Yelp’s Stoppelman and Nextag’s Katz if they could start their companies today given Google’s market power.

Both say that’s unlikely.

1:26 pm: Terse exchange between Franken and Creighton about whether Google paid Apple to be the default search engine on its iOS devices. Lots of back and forth, but Creighton finally concedes that there’s some sort of financial deal between the two companies.

1:39 pm: Sen. Lee asks what Google might do to “level the playing field.” Stoppelman suggests separating search from its other properties. Pipe dream.

1:40 pm: Well, it looks like it may be getting near the end of the session, which is a good thing because we get it to by now.

And that is: Nothing significant is going to get said here.

Well, Mr. and Ms. Entrepreneur, your friends at IBM are thinking of you today. Big Blue will today announce the availability of $1 billion in new financing options specifically aimed at small and medium businesses to pay for purchases of new tech hardware, software and services.

Now before you roll your eyes, harrumph, and restrain yourself from saying “Who cares about small and medium businesses anyway?” allow me to answer: You do. In the U.S., small businesses account for a huge swath of the economy, accounting for about two-thirds of new jobs created over the last 15 years, and they hired 40 percent of high-tech workers. They also employ roughly 90 percent of the workforce of the entire world.

And get this: According to IBM, the total amount spent on technology each year by small and medium businesses — IBM defines them as having fewer than 1,000 employees — amounts to a quarter of a trillion dollars.

Compared to that, well, a billion is a little slice. But when credit is hard to get from ever-more-cautious banks in a tough economy, CIOs will see it as a welcome move. Half of small businesses crash and burn within five years because they can’t get access to capital.

Not only is IBM making the cash available but it is making it easy to get. Most of IBM’s small and medium business customers interact with Big Blue not directly, but through business partners — third parties like CDW and Ingram Micro — who sell IBM gear and do the heavy lifting associated with getting different bits of hardware and software working right. They also tend not to have huge IT departments as larger companies do, says Andy Monshaw, the general manager of IBM Midmarket Business. “It’s a really fragmented market with literally thousands of local players,” he says. “It’s a market based on long-term local relationships.”

Entrepreneurs are running up against expectations of the so-called “consumerization of IT.” They have easy-to-use technology at home, but the stuff at the office is older and not cutting it. One big thing these companies are looking at is cloud computing. An IBM survey found that 60 percent of them are shopping around for cloud services. That got the attention of IBM’s Global Financing unit, which helps customers pay for new gear and services in much the same way that car dealers help people buy cars — by providing attractive financing packages.

On top of that, IBM has come up with a long list of products and services that are priced in ways that make sense to smaller companies — stuff that gets charged on a per-user or consumption basis. IBM has hacked together a list of products and services to fit with the effort, including cloud services, analytics and security, as well as products from recent acquisitions like Netezza, Cognos and Cast Iron.

Certainly there’s a lot of hand-wringing going on, especially in the U.S., about what it will take to get the economy creating jobs again. In fact, the president of the United States is going to talk about that very subject in an address to Congress and the nation tonight. And a survey done by Pepperdine University and Dun & Bradstreet found that 35 percent of small business owners say their biggest impediment to hiring more workers is access to capital.

In July, the largest daily deals company sent an email to subscribers, saying it was changing the way it would use mobile location information. The same month, a congressman wrote to Groupon CEO Andrew Mason asking for more information regarding its data collection techniques, Reuters reports.

At the time, Groupon explained to users: “If you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you.”

AllThingsD’s Kara Swisher wrote at the time: “In other words, if you let them, in order to improve the experience and make the Groupon app more useful, you’re being tracked.”

This was about the same time that Apple and Google got into hot water for tracking users on the phone, ostensibly in order to improve location-based services.

Groupon has become accountable for its actions not only because of the size of its business but also because of its announced intention to raise $750 million in a public offering.

In a response to the congressional questions, Groupon’s general counsel David Schellhase explained that the company is developing technology that will track customers’ locations, even if they don’t have the Groupon app open on their phones.

The letter was written to the co-chairmen of the House Bipartisan Privacy Caucus — Joe Barton, a Texas Republican, and Edward Markey, a Massachusetts Democrat — who made it publicly available today, according to Reuters.

Today, Groupon offers a service called Now that offers deals — based on a user’s location — that can be redeemed immediately. But in order to find the offers, you have to remember to open the app and search for discounts manually.

Schellhase argued in the letter that customers are asking for services, such as push notifications, that would make the process more automatic.

In the letter, Schellhase explained that if it were able to track a user’s location at all times, Groupon could send a notification to the phone that would appear around lunchtime and alert that person to an offer for a nearby restaurant.

“In order to choose a relevant deal for the user at the correct time, location information would need to be collected about the user just before noon, even if the Groupon mobile application is not running on the device at that time,” he explained.

Schellhase added that customers would have to sign up for the service, otherwise Groupon would not collect the data.

The time for putting party first is over. If you want to see a bipartisan #compromise, let Congress know. Call. Email. Tweet. —BO

July 29, 2011 7:45 am via webReplyRetweetFavorite

@BarackObama

Barack Obama

“The time for putting party first is over. If you want to see a bipartisan #compromise, let Congress know. Call. Email. Tweet. —BO,” the president wrote. Then his team proceeded to tweet out state-by-state in alphabetical order the Twitter handles of Republican representatives (they’re currently on “i.”)

Earlier this week, Obama urged Americans to contact their reps during a prime-time address. They did en masse, taking down or making unreliable the Web sites of Speaker of the House John Boehner and others. (My colleague Arik Hesseldahl wrote a killer headline for that one: “Obama: I Want YOU to Crash John Boehner’s Web Server.”)

If nothing else, Obama’s tweets will likely bump up the follower accounts of a good many representatives’ Twitter accounts. It’s a #FollowFriday in true Twitter fashion.

See also: Harry Reid’s Plan to Save America From Default Using Wireless Spectrum

Reid’s plan, which is expected to come to the Senate floor for a vote today, would raise $24.5 billion over 10 years, of which $13.1 billion would be available for deficit reduction, according to the nonpartisan Congressional Budget Office.

So how does $13 billion help solve a $14.3 trillion problem? It helps fills some of the gaps by making the bill more palatable to lawmakers on both sides of the aisle. As one wireless industry lobbyist put it, spectrum auctions are in large part seen as politically neutral territory because they’re not tax increases that Republicans would oppose, and they’re not spending cuts, which so irritate Democrats.

The Reid plan is a variation of one put forth by Sen. Jay Rockefeller, the West Virginia Democrat and chairman of the Commerce Committee which oversees wireless spectrum issues. Rockefeller’s plan would have raised $6.5 billion. Both plans essentially call for setting aside a big block of wireless spectrum, known as the D Block, for public safety. It would give the FCC authority to auction off TV spectrum currently held by TV broadcasters, and pay for financial incentives to entice them to voluntarily give that spectrum up. Broadcasters are generally not inclined to give it up, however.

There’s also a spending component to the plan. The D Block spectrum set aside for public safety agencies would be used to create a national wireless broadband network that emergency officials could use during an emergency. This is an idea that’s been rolling around Washington since the 9/11 terrorist attacks.

Rockefeller’s plan calls for $12 billion to begin construction of the network, plus a few billion for research and development into additional uses for the network. Reid’s bill drops the R&D funding and cuts the construction funds to $7 billion. It’s not enough to build the network, but more of a down payment, meaning there’s a good chance that lawmakers will have to find some money to finish the job in a few years.

Reid’s bill would also direct the Federal Communications Commission auction of airwaves — currently held by government agencies like the U.S. Department of Defense — that aren’t being actively used. In addition, it would encourage TV broadcasters to voluntarily give up some of their unused spectrum for auction by offering them part of the proceeds.

What would all that spectrum be used for? The expectation is that wireless carriers like Verizon Wireless and AT&T would bid on it in order to expand their wireless broadband networks, and thus give smartphone users more bandwidth to slake their apparently insatiable digital thirst.

Just because spectrum auction revenue is neither a tax increase nor a spending cut doesn’t mean there’s no opposition. Sen. John McCain, the Arizona Republican and 2008 GOP presidential nominee, blasted the plan and called it a “cop-out” from the Senate floor. Meanwhile, Rep. Anna Eshoo, a California Democrat, told Politico earlier this week that the debt bill is the wrong place to debate wireless spectrum.

It wouldn’t be the first time that wireless spectrum has figured in the budget-balancing and deficit-reduction process. Revenue generated from spectrum auctions helped then-President Bill Clinton balance the budget in 1993 and 1997, and President George W. Bush used them to help reduce the federal budget deficit in 2005.

(Image from Harry Reid’s campaign site.)

Nope, just the effect of the unfortunate nether-region photo tweet by Democratic Rep. Anthony Weiner, which has apparently caused others on Capitol Hill to stop posting as much to the microblogging service.

We all know how much pols love to raid the social media space these days, to garner more attention and, presumably, votes.

But, according to stats compiled by tweetcongress.org in the lovely chart below, titled “The ‘Weinergate’ Effect on Congressional Tweet Frequency,” tweets are down 27 percent by Republicans and 29 percent by Democrats.

Enjoy the number-crunching (click on the image to make it even larger):

The witness list for tomorrow’s hearing before the Senate Judiciary Committee includes AT&T CEO Randall Stephenson. His written testimony has already been released, so we know at least some of what he’s going to say. I’ve embedded it below for your perusal.

Stephenson cites the spectrum crisis that FCC Chairman Julius Genachowski has mentioned so many times in his speeches. AT&T is still fighting the perception that its network has been overwhelmed by data demand from the iPhone. That in mind, he says in his prepared remarks:

To meet the ever increasing demand by consumers, we have to find ways to get more capacity from existing spectrum. That is exactly what the combination of AT&T and T-Mobile will do. Our two companies have very complementary assets, which means that combining them will create much more service-enhancing network capacity–the equivalent of new spectrum–than the two companies could have done operating separately.

Then he goes on to tap another favorite issue of Genachowski’s: Bringing broadband Internet to rural communities where access isn’t as easy to get.

Many people and many communities today don’t have access to the full capabilities of the mobile Internet economy. With the scale, resources and synergies this transaction provides, we can and have committed to provide cutting-edge LTE mobile Internet service to more than 97 percent of the U.S. population–nearly 55 million more Americans than our pre-merger plans and millions more than any other provider has committed to serve.

Next he says nice things about unions, in particular the Communications Workers of America, reminding senators that the CWA as well as the AFL/CIO have endorsed the deal.

Meanwhile, it won’t be uncompetitive at all. In fact, while the number of wireless carriers in the U.S. market will decrease by one, consumer choice increases. How’s that work? I’ll let him tell you.

All T-Mobile customers will have the choice of retaining their existing rate plans or switching to an AT&T rate plan, and they will thus have more choices than before, including a state-of-the-art LTE service that T-Mobile had no clear path to offer on a standalone basis.

Also expected to testify: Sprint CEO Dan Hesse, Cellular South CEO Victor “Hu” Meena and also Gigi Sohn, the president of Public Knowledge and Larry Cohen, head of the Communication Workers of America. Tune in tomorrow, when I’ll be liveblogging the hearing. See you then.

Stephenson Testimony ATT T-Mobile 5.11.11