Under the deal being discussed, PokerStars would acquire the assets of its smaller rival, according to the person. The deal would be part of a broader settlement of a civil case brought by the DOJ against the two companies, the person said. The DOJ shut down the U.S. web sites of Full Tilt Poker and PokerStars last year as part of a crackdown of online poker sites.

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iStockphoto | italianestro

The carrier said it will sell off all of the 700 MHz A and B licenses it got in a 2008 auction — if it is allowed to buy the AWS licenses it wants to get from the cable company consortium. Verizon says its 700 MHz C band spectrum and the AWS frequencies are enough for its LTE network.

However, it made it clear that its plans to sell the A and B band spectrum is contingent on government approval for several AWS purchase plans that are being reviewed by the Federal Communications Commission and Department of Justice. Verizon has pending deals to acquire spectrum from Cox and Leap Wireless as well as SpectrumCo — an entity owned by Comcast, Time Warner Cable, and Bright House Networks.

Verizon said it is announcing the sale now “to ensure the process can move forward quickly once the AWS license transfers have been completed.” Cynical observers might think they want to push regulators just a teenie bit, too.

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers,” Verizon VP Molly Feldman said in a statement. “Moreover, provided our acquisition of AWS spectrum is approved, our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers.”

(Image courtesy of iStockphoto|italianestro)

A letter sent to shareholders today by founder and CEO Jeff Bezos, titled “The Power of Invention,” tackles the publishing industry head-on by explaining how both authors and customers are benefiting from its Kindle publishing business.

While Bezos fails to address the DOJ lawsuit, which accused Apple and five major book publishers of conspiring to raise e-book prices, he provides a glimpse at how he’s changing the economics of the business on a small scale.

Bezos says Amazon’s Kindle Direct Publishing division has already produced more than a thousand authors who are selling more than a thousand copies a month. Some have reached hundreds of thousands of sales, and two have joined the Kindle Million Club.

Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43.”

If you can’t take Bezos at his own word, the letter includes eight quotes from customers and authors who have benefited from Amazon’s services, including its publishing, fulfillment and Web services.

“These innovative, large-scale platforms are not zero-sum — they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers,” he wrote.

The company’s stock was trading down 1.81 percent, or $3.46 a share today, to $187.23. In recent months, the stock has slipped from its 52-week high of $246.71 a share.

Regulators warned Google that their approval of the $12.5-billion acquisition does not preclude continued monitoring of the company’s use of MoMo’s arsenal of 17,000 patents — particularly those deemed standards essential (SEP). Both agencies are clearly very wary of the possibility for their misuse, given Google’s recent endorsement of the not-really-fair-and-reasonable-at-all licensing terms Motorola Mobility has been trying to squeeze out of Apple and others — 2.25 percent of the net selling price in which its patented technology is used. And their dueling statements announcing the approval of the merger reflect this.

Here’s the DOJ:

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.”

And the EC:

“Today’s decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola’s past and Google’s future actions. However, the question whether Motorola’s or Google’s conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure.”

In other words, neither agency feels that the SEP and FRAND licensing issues surrounding this acquisition have been properly dealt with. But they will be, if the need arises. And Google best tread carefully.

In its roadshow presentation released online today, the Vegas-based company, which manages 42,000 hotel rooms, said one of the biggest opportunities it had going forward was on the Internet, including social games and real-money gaming.

Mitch Garber, the CEO of the company’s interactive division, said it recently launched Caesars Casino in beta on Facebook, making it the first time that a brand name was used to compete in the casino genre.

Garber believes that the game, which includes video slots, blackjack and roulette, will displace Double Down Casino as one of the category leaders. The developer of Double Down Casino, Double Down Interactive, was recently acquired by video poker giant International Game Technology for $500 million.

Garber said over the past 13 months, so much of the business has changed.

With the sale of Double Down, and the visibility into social games leader Zynga, which went public in December, and the release of more information this week by Facebook in its public filing, there are lots of verifiable signs that this is a big business.

For instance, on Wednesday, Facebook revealed that Zynga made up 12 percent of its overall revenues. Zynga’s Poker game is the leading casino-based game on Facebook, and more recently, it launched Bingo as part of a casino series.

Over the past two days, Zynga’s stock price has soared based on the Facebook news, rising 8.11 percent today alone to close at $13.39 a share.

Caesars said yesterday it was applying to be listed on the Nasdaq market under the symbol “CZR,” and that it was planning to sell 1.8 million shares between $8 and $10 apiece.

Caesars Chairman, CEO and President Gary Loveman was positive about a number of aspects of the business, as he should be in a presentation to potential investors, but one of the highlights was online gaming.

“This is a big deal for us,” he said, calling out the opportunity for gambling online, across both mobile and social networks and across multiple languages.

In addition to launching Caesars Casino on Facebook, the company has been building up its online gaming chops for some time.

Garber said this past year the company purchased Israel-based Playtika, which operates Slotomania, a very popular slots game on Facebook, iPhone and iPad. It also has two software partners that will enable it to expand into online gambling in the U.S. as soon as it becomes legal.

“We aren’t aware of any other bricks and mortar company that has the online experience that is preparing themselves as we are,” he said.

However, Zynga told All Things D it was currently seeking partnerships to pursue real-money gaming, and MGM Resorts also recently unveiled a plan to partner with online poker company Bwin.Party Digital Entertainment.

Of course, the big driver for everyone is that the laws are changing in the U.S., which makes it nearly a foregone conclusion that online gambling — at least some games — will become legal over the next year.

Late last year, the Department of Justice issued a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures.

“We see the odds being close to 100 percent,” Garber said. “It’s just a matter of whether it will be federally regulated or state by state. The states are already doing it, but the federal government is getting their act together, too.”

The two companies on Monday filed a joint motion to stay their pending federal court case until at least January. The move clearly wasn’t AT&T’s idea, however. The Justice Department said last week it would seek a stay in the case given that AT&T had pulled its paperwork with the Federal Communications Commission.

“If approved by the court, all pretrial and trial deadlines, including depositions and discovery, would be cancelled and a status conference would be held before the court on Jan. 18,” the Justice Department said in a statement. The government said that under the joint plan, AT&T will file a status report with the court by noon on Jan. 12 indicating “whether they intend to proceed with the transaction at issue in the litigation, whether they intend to proceed with another transaction, the status of related proceedings with the Federal Communications Commission (FCC) and their plans and timetable for seeking any necessary approval from the FCC.”

In a statement on Monday, AT&T said it is working with T-Mobile on “whether and how” to proceed with the deal.

“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees,” the company said. “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”

Until now, AT&T has plowed full steam ahead with the proposed $39 billion deal, despite objections from a long list of competitors and regulators, including the FCC, DOJ, Sprint and C Spire Wireless (formerly known as Cellular South).

With the Federal Communications Commission threatening to block the deal, and the Justice Department already suing to do the same, AT&T last month pulled its application before the FCC, in hopes that a court would take its side in the DOJ case. The company said it would deal with the FCC once a court heard its case with the Justice Department.

However, the DOJ one-upped the telecom giant on Friday, arguing that the court case should be put on hold, now that AT&T has yanked its application to the FCC to acquire T-Mobile’s licenses.

Check.

Your move, AT&T.

Update: For its part, AT&T general counsel Wayne Watts says the company is “anxious to bring to the American consumer the benefits of increased wireless network capacity and efficiencies that can only arise from combining the resources of AT&T and T-Mobile USA,” and is “eager” to present its case in court.

The Department of Justice has already filed suit seeking to block the deal, which requires approval from both agencies.

FCC Chairman Julius Genachowski has circulated a draft opinion that would seek to have a hearing before an administrative law judge, though the commission is likely to hold that hearing only after the DOJ suit is decided. If the Justice Department is successful in its effort, the FCC move would be moot. However, AT&T now needs to go 2-for-2 if it hopes to complete the deal.

The decision is not shocking, given that the FCC had indicated it shared some of the Justice Department’s concerns.

However, what is noteworthy is just how strong the agency’s concerns are.

FCC officials said on Tuesday that the agency found in its review not only that the deal would hurt competition, but also that it represents an unprecedented reduction in competition. In every market except Omaha (where T-Mobile does not offer service), the agency found that the merger would reduce competition to a meaningful degree.

The agency staff also rejected AT&T’s claims that the deal would lead to a faster or more complete rollout of 4G. And, rather than create jobs, the FCC staff believes approval of the deal would actually lead to fewer U.S. jobs.

AT&T, naturally, said it was not thrilled with the decision.

“The FCC’s action today is disappointing,” said Larry Solomon, SVP of corporate communications. “It is yet another example
of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both. At this time, we are reviewing all options.”

In addition to setting up a possible second court battle, the FCC findings also mean that any proposed settlement would have to satisfy two agencies, both of whom seem to see little merit — and lots of harm — in the deal. Oh yeah, Sprint and C-Spire Wireless have also filed suits of their own.

The department filed an amended legal complaint in a Washington D.C. federal court to indicate that state attorneys general from New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania have joined the case.

“We are pleased that these states have joined the department in its lawsuit,” the department said in a written statement. “Together, we will seek to protect consumers from the anticompetitive harm that would result from this proposed transaction.”

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In a surprisingly early and decisive move, the Department of Justice on Wednesday filed suit to block AT&T’s planned $39 billion purchase of T-Mobile USA. Justice Department attorneys said that they are concerned the deal will lessen competition, ultimately leading to higher prices for consumers.

Experts say the broad worry about the reduction in competition makes it tough to imagine what sort of sweeteners the companies could create to make the deal easier to swallow.

“Given the nature of the specific concerns articulated by the DOJ, those types of concerns are hard to address through concessions,” said Maury Mechanick, a telecommunications attorney with White & Case.

As a result, it would appear that AT&T and T-Mobile will have to weigh whether they are willing endure an all-out court fight to try to preserve the deal.

And oh, what a fight it would be. In order for the deal to go forward, AT&T would have to convince a federal court to see things its way as well as prevail on any appeals, a process that is uncertain, not to mention costly and time-consuming. Even if they ultimately prevail in court, the companies still need the approval of the Federal Communications Commission.

Both FCC Chairman Julius Genachowski and Commissioner Michael Copps issued statements on Wednesday saying that they, too, have concerns about the deal. While the FCC review is separate from the one being done by the Justice Department, the statements indicate the two agencies seem to be on the same page when it comes to the deal.

One FCC insider noted that the agency has never approved a deal that the Justice Department sued to block.

For now, both AT&T and T-Mobile parent Deutsche Telekom say they are willing to fight for the deal. AT&T has asked for an expedited hearing on the matter.

Bernstein analyst Craig Moffett thinks the DOJ’s lawsuit means the deal is doomed. “Yes, technically there are alternatives. Indeed, AT&T has already indicated that it will ‘vigorously contest’ the DOJ’s decision,” he says. “But with the Department of Justice having sued to oppose the deal, and with the FCC now having made public comments that are unambiguously supportive of the DOJ’s opposition, AT&T’s acquisition of T-Mobile can be considered all but definitively dead.”

But other analysts disagree. BTIG’s Walter Piecyk thinks AT&T will take the DOJ to the mat over this deal in a battle that could rival the one Oracle fought to clear its merger with PeopleSoft.

“We expect AT&T to fight the Department of Justice in court in order to acquire T-Mobile USA just like Oracle successfully did in 2004 in order to acquire PeopleSoft,” Piecyk said in a note to clients. “While AT&T’s challenge might be more challenging, it is incentivized by a large breakup fee of $3 billion in cash, spectrum that we estimate is worth at least $1 billion and a data roaming agreement. Of course, AT&T could still work out a settlement with DOJ, but the body language from Deputy Attorney General James Cole at the press conference today seemed a bit aggressive.”

Finally, Barclays analyst James M. Ratcliffe says the deal is still viable, though AT&T’s chances of pushing it through are a bit diminished. “The DOJ’s filing to block the AT&T/T-Mobile merger comes as something of a surprise, with the timing much earlier than we had expected, given that the FCC is nowhere close to completing its review of the deal,” he says. “We believe that the deal is by no means dead, as the DOJ has stated that the ‘door is open’ for AT&T to propose remedies, but the fact that the DOJ took this strong step this early in the process makes the probability of completion much lower. We now view the probability of success at 35-40 percent, down from our previous 75 percent view.”

Earlier on Wednesday, the Department of Justice filed suit seeking to block the deal on the grounds it would harm competition. AT&T said it was surprised by the government’s move and vowed to fight in court.

In a statement to AllThingsD, the German telephone giant said the U.S. government is wrong to block the proposed $39 billion deal.

“Deutsche Telekom is very disappointed by the DOJ’s action, and will join AT&T in defending the contemplated merger against the complaint in court,” DT Executive Vice President Philipp Schindera said. “(The) DOJ failed to acknowledge the robust competition in the U.S. wireless telecommunications industry and the tremendous efficiencies associated with the proposed transaction, which would lead to significant customer, shareholder, and public benefits.”

Schindera did say he appreciated the apparent willingness of regulators to discuss possible remedies.

AT&T has been lobbying heavily in favor of the deal, most recently pledging to add call-center jobs in the U.S. if the deal were approved. Meanwhile, Sprint and some consumer groups have vigorously opposed the deal, saying it would harm competition and lead to higher prices.

In a statement, AT&T general counsel Wayne Watts said the company was “surprised and disappointed” by the DOJ move and will seek an expedited hearing to make its case to the courts in favor of the deal.

Here’s his full statement:

We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

· Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
· Allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97% of the population;
· Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.

Update: Sprint, meanwhile, was predictably pleased with the DOJ move, calling it “a decisive victory for consumers, competition and our country.”

“By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first,” Sprint Senior VP Vonya McCann said in a statement. “Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision — one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.”

The carrier also said it will promise that no U.S. call center jobs will be lost when the deal closes. The company didn’t say where the new jobs will be based.

“At a time when many Americans are struggling and our economy faces significant challenges, we’re pleased that the T-Mobile merger allows us to bring 5,000 jobs back to the United States and significantly increase our investment here,” AT&T CEO Randall Stephenson said in a statement.

Of course, critics are sure to note that there’s nothing stopping AT&T from bringing back jobs without buying T-Mobile.

The deal, which is being opposed by Sprint and a number of consumer groups, requires approval from the Federal Communications Commission and Department of Justice.

Microsoft’s legal eagle Brad Smith didn’t even bother to pretend the software giant’s filing of a formal antitrust complaint against Google with the European Commission wasn’t a wee bit ironic.

Wrote Smith in a blog post late last night:

“There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step.”

But take it the company did, noting: “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law.”

Google, no surprise, disagreed, via a statement from a spokesman.

“We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we’re happy to explain to anyone how our business works.”

Here is the whole Microsoft post, in which Smith outlines Microsoft reasons for its action:

Adding our Voice to Concerns about Search in Europe

30 Mar 2011 9:00 PM

Posted by Brad Smith

Senior Vice President & General Counsel, Microsoft Corporation

Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law. We thought it important to be transparent and provide some information on what we’re doing and why.

At the outset, we should be among the first to compliment Google for its genuine innovations, of which there have been many over the past decade. As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive. Google has done much to advance its laudable mission to “organize the world’s information,” but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.

We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market. By the European Commission’s own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo!.

At Microsoft we’ve shown that we’re prepared to work hard and invest literally billions of dollars annually to offer Bing, a search service that many now regard as the most innovative available. But, hard work and innovation need a fair and competitive marketplace in which to thrive, and twice the Department of Justice has intervened to thwart Google’s unlawful conduct from impeding fair competition. In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down. And last year the DOJ formally objected to Google’s efforts to monopolize book content, a position affirmed by a federal district court in New York just last week. Unfortunately, even this has not stopped the spread by Google of new and disconcerting practices in the United States.

As troubling as the situation is in United States, it is worse in Europe. That is why our filing today focuses on a pattern of actions that Google has taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers.

How does it do this? Google has built its business on indexing and displaying snippets of other organizations’ Web content. It understands as well as anyone that search engines depend upon the openness of the Web in order to function properly, and it’s quick to complain when others undermine this. Unfortunately, Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers.

On PCs it is usually not difficult for people to navigate to any search engine. Google in fact makes this point virtually every time someone raises antitrust concerns about their practices. Their defense ignores the hugely important fact that there are many other important ways that search services compete. Search engines compete to index the Web as fully as possible so they can generate good search results, they compete to gain advertisers (the source of revenue in this business), and they compete to gain distribution of their search boxes through Web sites. Consumers will not benefit from clicking to alternative sites unless all search engines have a fair opportunity to compete in each of these areas.

Our filing details many instances where Google is impeding competition in these areas. A half-dozen examples below help illustrate some of our concerns.

First, in 2006 Google acquired YouTube–and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google.

Second, in 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It’s done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service.

Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

Third, Google is seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week, in the decision involving Google’s effort to obtain exclusive and unfettered access to the large volume of so-called “orphan books–books for which no copyright holder can readily be found. Under Google’s plan only its search engine would be able to return search results from these books. As the federal court said in rejecting this plan, “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.” This is an important initial step under U.S. law, but it needs to be reinforced by similar positions in Europe and the rest of the world.

Fourth, Google is even restricting its customers’–namely, advertisers’–access to their own data. Advertisers input large amounts of data into Google’s ad servers in the course of managing their advertising campaigns. This data belongs to the advertisers: it reflects their decisions about their own business. But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.

This makes it much more costly for Google’s advertisers to run portions of their campaigns with any competitor, and thus less likely that they will do so. That is a significant problem because most advertisers figure that they have to advertise first with Google. If it’s too expensive to port their advertising campaign data to competing advertising platforms, many won’t do it. Competing search engines are left with less relevant ads, and less revenue. And while this restraint isn’t visible to consumers, its effects are nonetheless felt across the Web. Advertising revenue is the economic propellant fueling the billions of dollars needed for ongoing search investments. By reducing competitors’ ability to attract advertising revenue, this restriction strikes at the heart of a competitive market.

Fifth, this undermining of competition is reflected in concerns that go beyond Google’s control over content. One of the ways that search engines attract users is through distribution of search boxes through Web sites. Unfortunately, Google contractually blocks leading Web sites in Europe from distributing competing search boxes. It is obviously difficult for competing search engines to gain users when nearly every search box is powered by Google. Google’s exclusivity terms have even blocked Microsoft from distributing its Windows Live services, such as email and online document storage, through European telecommunications companies because these services are monetized through Bing search boxes.

Finally, we share the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.

Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They’ve urged us to share our knowledge of the search market with competition officials. As they’ve pointed out, the stakes are high for the European economy. On any given day, more than half of all Europeans use the Internet, and more than 90 percent of them look for information about goods and services on the Web. Indeed, the European Commission’s Digital Agenda made clear that commerce is moving online, where two-thirds of Europeans begin their shopping process. It’s therefore critical that search engines and online advertising move forward in an open, fair and competitive manner.

There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.

We readily appreciate that Google should continue to have the freedom to innovate. But it shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That’s what it’s doing now. And that’s what we hope European officials will assess and ultimately decide to stop.

Please see this disclosure related to me and Google.

“This transaction causes me concern because of its potential impact on the ability of consumers to search online for competitively priced airline fares in a market that has seen rapid growth,” wrote Koster wrote in a letter to Assistant Attorney General Christine Varney dated Feb. 9 (full letter below). “Ensuring that new sellers can gain meaningful entry into this market, and that all sellers can compete against each other fairly, is our mutual concern.”

Evidently a broadly held one, too.

Because Koster’s letter wasn’t the only one Varney received yesterday. Rep. Howard Coble (R-NC) and Rep. Thomas Petri (R-WI) also wrote to her, again urging close scrutiny of the deal. “We ask that your ongoing review pay particular attention to competitive issues involving consumers, the online ad market and the protection of intellectual property,” they wrote (full letter below). Their chief concern: The possibility that Google might use its dominant position in search and advertising to steer consumers to its travel services, limiting competition.

This, of course, is something that Google insists it would never do. “This acquisition will inject more competition into flight search, not less, and give consumers more options,” the company said in a statement. “Of course, the antitrust laws aren’t designed to protect incumbent companies from new competition, but to make sure that consumers benefit from more competition and innovation.”

Tell that to the DOJ, which has been reviewing the proposed $700 million deal for months and, as NewEnterprise recently noted, has prepared documents for a possible challenge to the acquisition.

At a very first glance, some of the new rules imposed by the feds might seem like they require the new company to offer up programming to any online player that wants to pay up.

And technically, they do. But the new rules have plenty of conditions and limits. So the bottom line is you’re not much more likely to get access to “30 Rock” via YouTube, or CNBC via iTunes, then you were before.

The new FCC and DOJ rules do give, say, Google the ability to buy access to some of NBC U shows or channels. But it would require Comcast’s competitors to do the same thing, first.

That is: Unless the people who are reluctant to put their stuff online because they don’t want to upset Comcast go ahead and put their stuff online, Comcast doesn’t have to, either. So it’s theoretically possible, but not probable.

And if it happens, it will happen haltingly. If Viacom sells someone online access to its MTV lineup of reality shows, that might require Comcast to offer up its reality show lineup on Bravo. But it wouldn’t entitle an online outlet to the police procedurals on USA.

The government also gives the option to, say, Netflix, to set up shop as another cable operator, and buy access to all of NBC Universal’s programming. But it would have to buy all of it–just like Time Warner Cable and Cablevision do when they make a carriage deal for NBC U’s shows.

And again, Comcast wouldn’t have to do that unless its peers did. Which means that if Netflix really wanted to set up shop as a direct competitor of the cable guys, it can do so. But it would have to operate exactly like the cable guys, just like the satellite guys did when they entered the market a couple of decades ago.

So if Netflix, or Apple or whoever really wants to offer a full suite of cable programming, at cable prices, it could. But that would be very, very expensive: Analyst Rich Greenfield estimates that the bill for NBC U’s programming alone would run a new entrant $1 billion a year.

Just as, or even more, important, is that those kind of bundled, take-it-or-leave-it deals are exactly the kind of thing that the cord-cutting crowd complains about.

They don’t want to have to pay for USA and Bravo and Syfy and MSNBC–they want to pick and choose channels, or shows. And pay a lot less.

“I don’t think cord-cutting was a major focus” of negotiations, Comcast EVP David Cohen said during a press conference this afternoon. And that may be true!

But the net result reads very much as if Comcast wanted to make sure the government didn’t force it to break its business model. And if that was the case, it got what it wanted.

In a 4-1 vote–Commissioner Michael Copps dissented–the FCC is allowing the deal to go through, but with some conditions, most of them relating to the online video business. One key requirement that’s not happening: Comcast isn’t being required to divest itself of its equity in the Web video site Hulu, which a few lawmakers had called for. It will however be required to give up its role in managing Hulu. NBC U jointly owns it with the Walt Disney Co. and News Corp. (which also owns this Web site).

In a statement, FCC Chairman Julius Genachowski said the conditions imposed “include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace.”

Among those conditions, the FCC will also require Comcast to offer Web versions of its TV shows to what it calls “bona fide online distributors” under the same terms it offers them to cable and satellite providers. This would indicate that shows appearing on Hulu will probably end up on Apple TV or YouTube or elsewhere, meaning, as MediaMemo’s Peter Kafka suggested last month that Hulu’s exclusive rights to NBC content are over.

Comcast will also be required to offer broadband to some 2.5 million low-income households for less than $10 a month, and will be required to extend its network to reach 400,000 homes, build out service in six rural communities and provide free video and high-speed Internet access to 600 schools and libraries in underserved areas. This will allow Genachowski to claim some kind of victory on one of the Obama administration’s signature technology policy issues, which is spreading the availability of broadband.

In a dissenting statement, Copps called the merger “a transaction like no other that has come before this commission–ever,” and said “It confers too much power in one company’s hands.”

Harold Feld, legal director at Public Knowledge, a Washington, D.C.-based public interested group, said the organization was largely satisfied with the conditions except for one. It would have liked to see Comcast required to sell broadband service on a wholesale basis. “As longtime supporters of wholesale access, we believe such a condition would go a long way to help consumers by increasing broadband competition,” he said.

Bloomberg reported today that agency staffers are preparing documents for use in a possible case against Google, but a decision on whether or not to bring a case hasn’t been made. Google–clearly eager to get the deal closed, as it has been six months since it first moved to acquire ITA in July–invoked a federal law that gives the government 30 days to rule thumbs up or thumbs down.

Since then numerous companies, as varied as Microsoft, Expedia and Travelocity, have opposed the deal and formed a coalition called Fairsearch.org to air concerns that Google could stop other companies that depend on ITA’s technology from using it, though Google has said it will continue to offer licenses after the deal closes. Orbitz Worldwide supports is neutral on the deal.

Completists will still need to hear from the Department of Justice, which is also reviewing the transaction, but since both Comcast and NBC announced yesterday that they expected the deal to close in January, it’s hard to imagine there’s much in the way of a surprise coming.

It would be great to tell you what restrictions the FCC wants, but the government agency won’t say so publicly, at least for now.

But since a document with the FCC’s proposed restrictions is currently being circulated to officials at Comcast and GE-owned NBC, the information should get out sooner than later.

The FCC also held a “background” press conference on the deal this morning, in which it asked participants not to quote government officials directly. That’s not uncommon in Washington, but that doesn’t make it any less astonishing: The FCC knows about Twitter, right?

Still, in this case, that works out just fine, since FCC officials didn’t provide direct answers to any questions.

The official release below:

JUSTICE DEPARTMENT REQUIRES SIX HIGH TECH COMPANIES TO STOP ENTERING INTO ANTICOMPETITIVE EMPLOYEE SOLICITATION AGREEMENTS

Settlement Preserves Competition for High Tech Employees

WASHINGTON — The Department of Justice announced today that it has reached a settlement with six high technology companies–Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar–that prevents them from entering into no solicitation agreements for employees. The department said that the agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities.

The Department of Justice’s Antitrust Division filed a civil antitrust complaint today in U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.

According to the complaint, the six companies entered into agreements that restrained competition between them for highly skilled employees. The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees. An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.

“The agreements challenged here restrained competition for affected employees without any procompetitive justification and distorted the competitive process,” said Molly S. Boast, Deputy Assistant Attorney General in the Department of Justice’s Antitrust Division. “The proposed settlement resolves the department’s antitrust concerns with regard to these no solicitation agreements.”

In the high technology sector, there is a strong demand for employees with advanced or specialized skills, the department said. One of the principal means by which high tech companies recruit these types of employees is to solicit them directly from other companies in a process referred to as, “cold calling.” This form of competition, when unrestrained, results in better career opportunities, the department said.

According to the complaint, the companies engaged in a practice of agreeing not to cold call any employee at the other company. The complaint indicates that the agreements were formed and actively managed by senior executives of these companies.

The complaint alleges that the companies’ actions reduced their ability to compete for high tech workers and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition for employees. None of the agreements was limited by geography, job function, product group or time period. Thus, they were broader than reasonably necessary for any collaboration between the companies, the department said.

The department said in its complaint:

Beginning no later than 2006, Apple and Google executives agreed not to cold call each other’s employees. Apple placed Google on its internal “Do Not Call List,” which instructed employees not to directly solicit employees from the listed companies. Similarly, Google listed Apple among the companies that had special agreements with Google and were part of the “Do Not Cold Call” list;

Beginning no later than May 2005, senior Apple and Adobe executives agreed not to cold call each other’s employees. Apple placed Adobe on its internal “Do Not Call List” and similarly, Adobe included Apple in its internal list of “Companies that are off limits”;

Beginning no later than April 2007, Apple and Pixar executives agreed not to cold call each other’s employees. Apple placed Pixar on its internal “Do Not Call List” and senior executives at Pixar instructed human resources personnel to adhere to the agreement and maintain a paper trail;

Beginning no later than September 2007, Google and Intel executives agreed not to cold call each other’s employees. In its hiring policies and protocol manual, Google listed Intel among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list. Similarly, Intel instructed its human resources staff about the existence of the agreement; and

In June 2007, Google and Intuit executives agreed that Google would not cold call any Intuit employee. In its hiring policies and protocol manual, Google also listed Intuit among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list.

The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive no solicitation agreements. Although the complaint alleges only that the companies agreed to ban cold calling, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices.

Today’s complaint arose out of a larger investigation by the Antitrust Division into employment practices by high tech firms. The division continues to investigate other similar no solicitation agreements.

Adobe Systems Inc. is a Delaware corporation with its principal place of business in San Jose, Calif., and 2009 revenues of nearly $3 billion. Apple Inc. is a California corporation with its principal place of business in Cupertino, Calif., and 2009 revenues of more than $42 billion. Google Inc. is a Delaware corporation with its principal place of business in Mountain View, Calif., and 2009 revenues of more than $23 billion. Intel Inc. is a Delaware corporation with its principal place of business in Santa Clara, Calif., and 2009 revenues of more than $35 billion. Intuit Inc. is a Delaware corporation with its principal place of business in Mountain View, Calif., and 2009 revenues more than $3 billion. Pixar is a California corporation with its principal place of business in Emeryville, Calif.

The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street N.W., Suite 7100, Washington D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

HP has agreed to pay $55 million to settle allegations that it paid kickbacks to vendors who helped it win government business. The settlement follows a tentative agreement reached earlier this month in which HP resolved, without admitting wrongdoing, allegations that it had paid millions of dollars in kickbacks or “influencer fees” to systems integrators for preferential treatment on government contracts they were working on, though it had reasonable grounds to believe doing so was illegal.

“Contractors must deal fairly with the government when doing business with federal agencies,” Tony West, assistant AG for the civil division of the Department of Justice said in a statement. “As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks.”

HP, for its part, continues to deny that it engaged in any illegal conduct. “We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue,” it said in a statement of its own.