TIME Regulation

FCC Spectrum Auction Raises Over $30 Billion in Battle for Airwaves

FCC’s first spectrum auction in six years raised three times more than expected

Companies have bid more than $30 billion to get a slice of the mid-range frequency spectrum auctioned off by the Federal Communications Commission last week.

The FCC offered what is called AWS-3 frequencies, which are a mid-range spectrum similar to those controlled by Dish Networks. Auction 97, as it’s called, kicked off Nov. 13. It’s one of the first to offer that type of frequency and one of the biggest sales of new frequencies since 2008.

Pre-sale estimates put the value of the airwaves at $10.1 billion, but interest from companies pushed the bidding well over that value. The final and winners won’t be revealed until the auction ends and the FCC awards certain frequencies.

Certain airwaves are more valuable than others. A New York City block of frequencies sold for a reported $1.19 billion.

The spectrum is a valuable commodity because it allows wireless companies to add more capacity for cellular data and other wireless services. New frequencies, which may only be bought through an FCC auction, have been in short supply until now and companies are battling to get a slice to be able to increase their services and speed.

Dish, America Movil, T-Mobile US and AT&T are all said to be participating in the bidding.

This article originally appeared on Fortune.com

TIME privacy

What Is Uber Really Doing With Your Data?

The Hamptons Lure Uber Top Drivers Amid NYC Slow Summer Weekends
Th Uber Technologies Inc. car service application (app) is demonstrated for a photograph on an Apple Inc. iPhone in New York, U.S., on Wednesday, Aug. 6, 2014. Bloomberg—Bloomberg via Getty Images

"I was tracking you"

Uber has had a rocky few days. On Monday, it was revealed that the ride-sharing app’s senior vice president, Emil Michael proposed the idea of investigating critical journalists’ personal lives in order to dig up dirt on them. On Tuesday, the company published a blog post clarifying its privacy policy. And Uber is investigating its top New York executive for tracking a reporter without her permission, TIME learned Wednesday.

What is Uber really up to, and what are its employees allowed to do?

What Uber does with your data

Uber has a company tool called “God View” that reveals the location of Uber vehicles and customers who request a car, two former Uber employees told Buzzfeed. Corporate employees have access to the tool, though drivers do not. But a wide number of Uber employees can apparently view customers’ locations. (Uber did not confirm or deny the tool’s existence to TIME, but it’s worth noting that “God View” is a widely used term in the gaming world.)

Still, several previous incidents appear to confirm the existence of Uber’s so-called God View.

Venture capitalist Peter Sims said in a September blog post that Uber had once projected his private location data on a screen at a well-attended Chicago launch party:

One night, a couple of years ago, I was in an Uber SUV in NYC, headed to Penn Station to catch the train to Washington DC when I got a text message from a tech socialite of sorts (I’ll spare her name because Gawker has already parodied her enough), but she’s someone I hardly know, asking me if I was in an Uber car at 33th and 5th (or, something like that). I replied that I was indeed, thinking that she must be in an adjacent car. Looking around, she continued to text with updates of my car’s whereabouts, so much so that I asked the driver if others could see my Uber location profile? “No,” he replied, “that’s not possible.”

At that point, it all just started to feel weird, until finally she revealed that she was in Chicago at the launch of Uber Chicago, and that the party featured a screen that showed where in NYC certain “known people” (whatever that means) were currently riding in Uber cabs. After learning this, I expressed my outrage to her that the company would use my information and identity to promote its services without my permission. She told me to calm down, and that it was all a “cool” event and as if I should be honored to have been one of the chosen.

And this month, a Buzzfeed reporter arrived for an interview at Uber’s New York headquarters only to find the company’s top manager in the city, Josh Mohrer, was waiting for her. According to Buzzfeed, Mohrer said, “There you are,” while gesturing at his iPhone. “I was tracking you.” Mohrer didn’t ask for permission to track Johana, Buzzfeed reports.

Of course, Uber also uses customer data for the humdrum daily task of connecting riders with drivers as well as resolving disputes and reaching out to customers.

What Uber says it can do with your data

Uber says it only uses your data for “legitimate business purposes” and that its team audits who has access to its data on an ongoing basis. “Our data privacy policy applies to all employees: access to and use of data is permitted only for legitimate business purposes,” a spokesperson told TIME. “Data security specialists monitor and audit that access on an ongoing basis. Violations of this policy do result in disciplinary action, including the possibility of termination and legal action.”

And in its privacy policy, Uber says that it can use your personal information or usage information—that includes your location, email, credit card, name or IP address—”for internal business purposes” as well as to facilitate its service for pickups and communicating with customers.

Uber clarified in a blog post Tuesday that “legitimate business purposes” include facilitating payments for drivers, monitoring for fraudulent activity and troubleshooting user bugs.

Another important point: Uber says it can hold on to your data even if you delete your account. The company claims it keeps your credit card information, geo-location and trip history “to comply with our legal and regulatory obligations” and “resolve disputes.” Users have to provide a written request in order to completely delete an Uber profile along with all their data.

MORE: A Historical Argument Against Uber: Taxi Regulations Are There for a Reason

So did Uber do anything wrong?

Strictly by its own standards, it appears that Uber may not have violated its own rules when Josh Mohrer tracked Buzzfeed’s reporter. There’s no indication Mohrer shared the information outside Uber—which would disqualify it from being “internal”—but it’s hard argue that he tracked the reporter for a “business purpose.” (Maybe it saved Mohrer time? Or he was showing off the feature? It’s hard to say.)

At the Uber Chicago launch party where Peter Sims’ location was reportedly tracked, the data was shared with people outside the company, as non-employees were at the event. That’s hard to justify by Uber’s rules. However, Uber’s privacy policy was updated in 2013, and the Chicago launch party occurred “a couple of years ago,” by Sims’ telling. So it’s unclear whether the move violated Uber’s privacy rules at that time.

Should you delete your Uber account?

If you’ve lost all trust in Uber and think that other ride-share apps like Lyft (or plain old taxis) are better, than yes, perhaps. But there isn’t any evidence that Uber is inappropriately using customer data on a widespread scale. And if you do delete your account, remember: unless you write in, Uber will still have your data.

TIME Google

Google Barge Project Scrapped Over Fire Safety Concerns

Google Mystery Barge
In this Tuesday, Oct. 29, 2013, file photo, two men fish in the water in front of a Google barge on Treasure Island in San Francisco. The barge portion of the Google barge mystery is only half the story. Jeff Chiu—AP

The Coast Guard expressed concern over lack of oversight in the secretive project

Concerns over fire-safety led Google Inc. to halt construction of its “Google barges,” a secretive project that had attracted significant public curiosity.

“These vessels will have over 5,000 gallons of fuel on the main deck and a substantial amount of combustible material on board,” wrote Robert Gauvin, the Coast Guard’s acting chief of commercial vessel compliance, in a March 2013 email to Google’s contractor on the project, Foss Maritime Co. The Wall Street Journal broke the story using documents obtained through the Freedom of Information Act.

Google had previously said the barges, located of the Maine coast and in San Francisco Bay, were to be “an interactive space where people can learn about technology.” The West Coast barge was eventually moved out to storage 80 miles away, while the Maine barge was dismantled and scrapped.

Read more at The Wall Street Journal

TIME Regulation

Feds Sue AT&T for Allegedly Slowing Unlimited Data Plans

AT&T Asks U.S. Judge to Throw Out Sprint's Antitrust Lawsuit
The AT&T Inc. logo is displayed at the company's new store in Chicago, Illinois, U.S., on Friday, Sept. 30, 2011. Bloomberg/Getty Images

"The issue here is simple: 'unlimited' means unlimited."

The Federal Trade Commission is suing AT&T for allegedly misleading customers by slowing data speeds for wireless customers who had unlimited data plans but went over a certain usage point, the agency announced Tuesday.

According to the FTC, AT&T did not properly inform customers who had unlimited plans that their speeds would still be lowered after they exceeded certain data thresholds in a given month. Speeds were reduced by as much as 90 percent in some cases, making basic phone functions such as web browsing and watching video almost impossible, the FTC said.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

AT&T throttled speeds for 3.5 million customers at least 25 million times, the FTC alleges, while it also said that customers who canceled their contracts due to the lowered speeds still had to pay expensive termination fees, the FTC alleges.

In an emailed statement, AT&T senior executive vice president and general counsel Wayne Watts called the FTC’s suit “baffling.”

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program,” Watts said. “We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”

AT&T no longer sells unlimited data plans to new customers and has been trying to phase out the service for years, along with many other major carriers. The company announced in 2011 that it would begin throttling the data speeds of its heaviest users on a regular basis.

Wireless carriers’ practice of slowing speeds for their heaviest unlimited users has also caught the attention of the Federal Communications Commission. “Wireless customers across the country are complaining that their supposedly ‘unlimited’ data plans are not truly unlimited, because they are being throttled and they have not received appropriate notice,” said an FCC spokesperson Tuesday. “We continue to work on this important issue, including with our partners at the FTC, and we encourage customers to contact the FCC if they are being throttled by AT&T or other cellular providers.”

TIME Regulation

More Than 350,000 Customers Have Asked AT&T for a Refund After Bogus Charges

New York City Exteriors And Landmarks
A general view of the exterior of the AT&T store in Times Sqaure on February 21, 2013 in New York City. Ben Hider—Getty Images

Here's how to request yours

Hundreds of thousands of AT&T customers have requested refunds for bogus cell phone charges since the telco reached a settlement with the Federal Trade Commission last week to reimburse consumers, an FTC official told TIME Wednesday. In total, 359,000 individuals have sent in claims to the FTC seeking refunds for unauthorized charges that appeared on their cell phone bills in a practice known as “cramming.” Through cramming, third parties are able to issue unwanted, recurring charges for things like love tips and horoscopes to cell phone users.

Jessica Rich, the director of the FTC’s bureau of consumer protection, said the response from consumers was one of the largest the agency has ever seen. The only case with a larger number of claims that she could recall was a 2012 settlement with Skechers over deceptive marketing for one of its shoe lines, which garnered close to half a million consumer complaints. “We expect this to be a lot higher,” Rich said.

In total, AT&T has agreed to pay $80 million in refunds to customers for cramming charges. The telco giant will also pay $20 million in penalties and fees to the 50 states and Washington, D.C., and a $5 million penalty to the FTC. At the time of the settlement, an AT&T spokesman noted that the company was the first in the telco industry to stop charging customers for premium SMS messages in late 2013. The FTC is currently suing T-Mobile over the same issue.

It’s not guaranteed that all the people who have issued claims will actually receive refunds. An independent claims administrator will review the refund requests to determine if they are valid. “I’m expecting that most of the claims are going to be valid, but if they’re not valid, there will be a way to determine that,” Rich said.

Customers who think they were a victim of cramming can file to claim a refund until May 1, 2015.

TIME Regulation

AT&T to Pay $105 Million Settlement Over Extra Charges on Customers’ Bills

Settlement follows allegations that T-Mobile also engaged in hiding bogus charges in customers' bills

AT&T will pay $105 million to settle allegations brought by the Federal Trade Commission that the wireless carrier unlawfully billed customers for extra charges on their cellphone plans. The practice, known as “cramming,” involves charging customers $9.99 per month for unwanted features from third parties like ringtones, text message horoscopes and love tips.

According to the FTC, AT&T received 1.3 million customer complaints about the bogus charges in 2011 alone. That same year AT&T changed its refund policy so customers could only be reimbursed for two months’ worth of faulty charges, the FTC claims. The charges were listed under a line item called “AT&T Monthly Subscriptions” on customers’ bills, so many did not know they were coming from third parties.

AT&T will offer refunds totaling $80 million to customers who paid cramming charges over the years. The company will also pay $20 million in penalties and fees to all 50 states and Washington, D.C., as well as a $5 million penalty to the FTC.

“This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorize — are fully applicable in the mobile environment,” FTC Chairwoman Edith Ramirez said in a press release.

AT&T stopped billing people for premium SMS content in December 2013. The company says it was the first in the industry to end the practice. “While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services,” AT&T spokesman Marty Richter said in an email.

The FTC has been especially focused on bringing penalties against telecom and Internet companies over the last year. T-Mobile was accused of similar cramming practices in July, but the wireless carrier is disputing the claims in court. Apple and Amazon have also faced FTC allegations that their app store policies allowed children to easily rack up massive charges of in-app purchases on their parents’ devices.

TIME Regulation

FCC Ends Rule That Led to NFL ‘Blackouts’

Tom Brady
New England Patriots quarterback Tom Brady throws a pass during pre-game warm-ups before playing the Kansas City Chiefs on September 29, 2014. Matthew J. Lee—The Boston Globe/Getty Images

The FCC brushed aside the NFL's objections that blackouts were needed to drum up attendance at undersold games

The Federal Communications Commission unanimously voted Tuesday to revoke its support for “sports blackouts,” in which a sports team can suppress local broadcasts of its games until it has sold a certain percentage of stadium seating. But the FCC said blackouts could continue as part of separate agreements between teams and local broadcasters, raising questions about whether the rule change will really lead to fewer blackouts.

The little-known rule, which was first put into effect in 1975, disproportionately affected NFL games, which were blacked out if the team hadn’t sold 85 to 100 percent of its tickets 72 hours before kickoff.

The FCC called the rule an “unnecessary and outdated” means of drumming up ticket sales. “Television revenues have replaced tickets sales as the NFL’s main source of revenue, and blackouts of NFL games are increasingly rare,” the FCC said in a statement announcing the decision.

TIME Regulation

Obama Administration Unveils New Rules to Fight Tax Inversions

U.S. Treasury Secretary Jack Lew
U.S. Treasury Secretary Jack Lew Mark Wilson—Getty Images

The U.S. Treasury Department said Monday it will take steps to curb the practice of companies moving their headquarters overseas by trimming the tax benefits of those transactions — known as corporate tax inversions — and, in some cases, stopping them entirely.

“Inversion transactions erode our corporate tax base, unfairly placing a larger burden on all other taxpayers, including small businesses and hard-working Americans,” Treasury Secretary Jacob Lew said. “It’s critical that this unfair loophole be closed.”

Lew told reporters on a conference call that he believes the best way to curb a practice that is increasingly popular with corporations, which can generate millions of dollars in tax savings, is through comprehensive tax reform with anti-inversion provisions and he also urged Congress to pass new legislation to tackle the issue.

“Now that it’s clear that Congress won’t act before the lame-duck session, we’re taking initial steps that we believe will make companies think twice before undertaking an inversion to try to avoid U.S. taxes,” Lew said.

Lew announced a new set of measures meant to make inversions less appealing to U.S. companies, including by eliminating some of the ways those companies gain access to deferred earnings of foreign subsidiaries without incurring associated taxes. The Treasury will also require that owners of U.S. companies own less than 80% of a newly combined entity, thus making it more difficult for them to invert in the first place.

“These first, targeted steps make substantial progress in constraining the creative techniques used to avoid U.S. taxes, both in terms of meaningfully reducing the economic benefits of inversions after the fact, and when possible, stopping them altogether,” Lew said in a statement before adding that the “Treasury will continue to review a broad range of authorities for further anti-inversion measures as part of our continued work to close loopholes that allow some taxpayers to avoid paying their fair share.”

The Treasury’s new regulations will go into effect immediately, but will not be retroactive, meaning that they will affect any transactions that are completed after Monday, according to a senior Treasury official. “For some companies considering deals, today’s actions may mean that those transactions no longer make economic sense,” Lew said.

President Obama issued a statement applauding the actions taken Monday by Lew and the Treasury Department “to help reverse this trend.” Obama said that he has personally asked Congress “to lower our corporate tax rate, close wasteful loopholes, and simplify the tax code for everyone.”

Fortune magazine ran a cover story this summer detailing the practice of corporate inversions and the possibility of pending legislation to combat the transactions. A potential high-profile deal between Burger King and Canadian doughnuts and coffee chain Tim Horton’s, which would see the U.S. fast food company move its headquarters to the tax haven north of the border, is part of the wave of similar transactions invigorating the debate over the best way to keep U.S. companies’ tax dollars from going overseas.

This article originally appeared on Fortune.com

TIME Regulation

The Fed Is Staying the Course, and That’s Great

Janet Yellen, chair of the U.S. Federal Reserve, listens to a question during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington on Sept. 17, 2014.
Janet Yellen, chair of the U.S. Federal Reserve, listens to a question during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington on Sept. 17, 2014. Bloomberg/Getty Images

Why boring monetary policy is good

The Federal Reserve’s monthly statement Wednesday was typically dull. Basically, the Fed is staying the course, because the economy is continuing a path of gradual improvement.

The Fed continued its “taper,” reducing the monetary stimulus it’s pumping into the economy by $10 billion for the 10th consecutive month, while announcing that this stimulus—known as “QE3”—should end on schedule next month. The Fed also continued to signal it won’t raise interest rates above zero “for a considerable time,” despite speculation it might soften that language. Fed Chair Janet Yellen then devoted most of her news conference to a mind-numbing discussion of procedural arcana involving “policy normalization principles” and “overnight RRP facilities.”

This is not exciting stuff. But boring monetary policy is an excellent thing to have, especially just six years after a spectacular financial crisis. At the time, the Fed took all kinds of unprecedented actions to save an economy that was contracting at an 8% annual rate and shedding 800,000 jobs a month. Some critics thought those actions would fail to prevent a depression. Others thought they would lead to hyperinflation, a devastating run on the dollar, or a double-dip recession. Instead, we’ve had 54 straight months of job growth. The jobless rate is down from 10% to just over 6% percent. The stock market is booming. Last year, the U.S. had its largest one-year drop in child poverty since 1966, and this year is looking even better. Two of the Fed’s inflation hawks actually dissented from the latest statement, arguing it “does not reflect the considerable economic progress that has been made.”

In other words, things are OK.

Things are not great; as Yellen pointed out, many American families are still dealing with aftershocks of the crisis, including tight credit, lingering debt, depressed wages and a shortage of jobs. Incomes for the non-rich have grown modestly since 2010 and not at all since before the crisis, although tax cuts for the middle class and the poor, tax increases for the rich, and expanded government benefits for the vulnerable have helped offset those trends. It’s true that our recovery from the Great Recession has been slower than previous recoveries from ordinary recessions. But it has been much stronger than previous recoveries in nations that endured major financial crises—and much stronger than Europe’s current recovery. The euro zone’s output has not yet reached pre-crisis levels; it’s still struggling with 12% unemployment and a risk of deflation.

We’re doing a lot better than that. We had more effective bank bailouts, more generous fiscal stimulus—until Republicans took over the House after the 2010 midterms and began demanding austerity—and much more accommodative monetary policy. It’s all worked remarkably well. We’ve faced some headwinds—the contagion from the near-collapse of Greece in 2010, the turmoil after we nearly defaulted on our debt in 2011—but the economy has continued its path of slow but steady growth. That’s why Yellen was able to discuss those mind-numbing “policy normalization principles,” the guidelines the Fed will follow as it starts raising rates and reining in its bloated balance sheet in 2015. We’re approaching normal. And the Fed’s forecast for the next few years also looks pretty decent.

It doesn’t look fantastic. But in 2008, the U.S. suffered a horrific financial shock, with a loss of household wealth five times worse than the shock that preceded the Depression. We’re still dealing with the aftershocks. Many Americans still don’t feel like the economy is working for them, an understandable reaction to persistent long-term unemployment, stagnant wages, and continuing foreclosures.

But as dull as it sounds, it’s working better every year. The lesson of our current plight is not that the system doesn’t work. It’s that financial crises really suck.

TIME Regulation

Regulators Promise to Be Tough on Big Banks

Senate Banking Committee Holds Hearing On Wall Street Reform
Federal Reserve Board of Governors member Daniel Tarullo testifies during a hearing before Senate Banking, Housing and Urban Affairs Committeeon Sept. 9, 2014 on Capitol Hill in Washington, DC. Alex Wong—Getty Images

As implementation of financial reform law continues

A top Federal Reserve official said Tuesday that regulators would spend the next year holding the biggest banks’ proverbial feet to the fire, while working to exempt small, community banks from regulatory requirements designed for the goliaths of Wall Street.

At a Senate Banking Committee hearing, Fed Governor Daniel Tarullo said regulators will require the nation’s biggest, riskiest financial institutions—those deemed Too Big To Fail—to maintain generous “crash pads” to protect against potential losses in the case of the next financial crisis.

Meanwhile, he said, small, community banks would not be subject to those same requirements and, in fact, should also be exempt of other, paperwork-heavy regulations under the Dodd-Frank financial reform law, like the so-called Volcker Rule. Community banks’ “balance sheets are pretty easily investigated by us and their lending falls into discreet categories,” which makes many of the most burdensome regulations unnecessary, Tarullo said.

The biggest banks’ crash pads, known as “capital surcharges,” will exceed the minimal standards required by international regulators and may be as high as 3.5%, Tarullo said. Shares of the biggest banks, like Goldman Sachs and Morgan Stanley, which may find themselves subject to stricter requirements this year, dipped temporarily during Tarullo’s testimony, before climbing again and leveling off in the afternoon.

Sen. Heidi Heitkamp (D-N.D.) and Sen. Mike Crapo (R-Idaho), the committee’s top Republican, both returned repeatedly to the need to scale back the regulatory burden on small, community banks. “Too big to fail has become too small to succeed,” Heitkamp said.

Tarullo’s tough talk on big banks comes just a month after 11 of the biggest banks in the country failed to produce workable plans, known as “living wills,” designed to help regulators shut them down should they find themselves at the brink of collapse, as they did in 2008 and 2009. Living wills are necessary, the regulators said, so that the burden of bailing them out does not fall on taxpayers. In August, the Federal Reserve and the Federal Deposit Insurance Corp. dismissed the 11 biggest banks’ living wills as “unrealistic” and grossly inadequate.

Tarullo was joined by Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation; Tom Curry, the Comptroller of the Currency; Richard Cordray, director of the Consumer Financial Protection Bureau; Mary Jo White, chair of the Securities and Exchange Commission; and Tim Massad, chairman of the Commodity Futures Trading Commission. Those six top regulators are in charge of writing, implementing and enforcing the bulk of the 400 some-odd rules mandated by the 2010 Dodd-Frank financial reform law.

Sen. Elizabeth Warren (D-Mass.) applauded the assembled regulators for requiring the biggest banks to take seriously their living wills, but worried that, unless regulators are willing to “use the tools they have at their disposal”—like limiting banks’ growth—the biggest financial institutions will simply continue to drag their feet throughout the process. She wanted to make sure, she said, that “we’re not going to be back here a year from now having the same conversation.” Both Tarullo and Gruenberg insisted they would use their agencies’ “tools” to force banks to come up with workable living wills by next August.

What was perhaps the dramatic highlight of a rather staid three-hour hearing came in the last 20 minutes, when Warren, joined by Sen. Richard Shelby (R-Ala.), demanded to know why regulators had failed to refer bank executives to the Department of Justice for prosecution for crimes committed in the lead-up to the financial crisis. During Savings and Loan Crisis in the 1980s, 800 executives were convicted and the FBI investigated 5,500, all on referrals from banking regulators, Warren said—whereas this time around, JP Morgan chief Jamie Dimon actually received a $8.5 million raise after negotiating a successful settlement with the government.

“Banks have admitted to breaking the law and have settled with the U.S. for $35 billion dollars, but despite the misconduct at these banks, not a single senior executive… has been criminally prosecuted,” Warren said. “The message to every Wall Street banker is loud and clear: if you break the law, you will not go to jail, but you might end up with a much bigger pay check.”

Shelby, who had clearly been enjoying watching Warren berate the regulators, piped up. “People… whoever they are, shouldn’t be able to buy their way out of culpability, especially when it’s so strong it defies rationality,” he said, gesturing at Warren. “I agree with her on that.”

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