AT&T’s plans to become biggest WiFi player in US put in question

WASHINGTON - The US Department of Justice (DoJ) has announced it has filed an antitrust lawsuit against AT&T, the second largest US mobile phone operator, to block its intention of merging with T-Mobile. The DoJ fears the combination will dominate the market too heavily, resulting in ‘higher prices, fewer choices, and lower quality,’ sending AT&T’s plans to become the country’s biggest WiFi player into turmoil.

Experts in the industry believe the main drive behind the merger, considered by many to be a takeover of T-Mobile, is AT&T’s desire to expand its wireless internet capabilities. 

Although AT&T bought the WiFi operator Wayport in 2008 and is the biggest WiFi hotspot provider in the US - in places such as Starbucks and McDonalds - it does not yet offer WiFi calling capacities. By acquiring T-Mobile’s WiFi calling services, it could also reach those customers who make WiFi calls from home - approximately 40% of all WiFi users. The merger would also make AT&T the biggest phone operator in the US, since it would control over a third of all wireless subscriptions in the US.

The Federal Communications Commission (FCC), which has been investigating the merger for several months now, has not released its finding as of yet.  “The [DoJ] has done its job. Now the FCC should do its job, follow the law, and reject the takeover of T-Mobile,” said Harold Feld, the Legal Director of Public Knowledge, a US public interest advocacy organisation.

Published previously in the September issue of E-Commerce Law & Policy, London 2011, copyrights apply at all times. Picture: Mobile.huddler.com

Gambling Commission and IOC to exchange data on match fixing

LONDON - The UK Gambling Commission has plans to start sharing information with the International Olympic Committee (IOC) on suspicious betting activities and match fixing, the Department for Culture, Media and Sports (DCMS) has announced. The legislative changes needed are ‘to come in ahead of the 2012 Olympic’, the DCMS said in a statement on 17 August.

Under the current regime, the Gambling Commission (GC) can only share information if the governing body is specifically listed in the Gambling Act 2005. The DCMS’ statement read that ‘it is planning to amend [the Gambling Act] in order to add the IOC [to the list] and we are also consulting on whether any additional sports bodies should also be included’. 

John Cloke, an Associate at DLA Piper, remarks that “the existing list has a domestic focus but DCMS has recognised that it would also be appropriate to include international bodies, in particular the IOC, given the 2012 Olympics in London”. 

However, Andrew Danson, Senior Associate at K&L Gates in London, said that “it is curious that  the consultation presents the proposed changes as updating an outdated list. I don’t think that explanation stacks up - the governing bodies originally in the Act are all UK-based whereas the proposals to extend the list all relate to international governing bodies based overseas. It’s not an update, it’s a change of approach”. Danson also stressed that “data protection law is an obvious issue, particularly as the GC may now pass personal data overseas”.

The DCMS consultation closes on 9 November.

Published previously in the August issue of World Online Gambling Law Report, CPP, copyrights apply at all times, London 2011. Picture: liberalfair.com

PayPal joins battle against copyright pirates

LONDON - PayPal has announced it has agreed a partnership with the City of London Police (CoLP) and the International Federation of the Phonographic Industry (IFPI), the trade body that represents the music industry, to cut funding to websites deemed ‘illegal’ by the IFPI and CoLP. 

Although PayPal has always banned the use of its services for items that infringe or violate any copyright under its Acceptable Use Policy, the partnership is expected to bring an end to thousands of illegal websites - many operating from Russia and the Ukraine - that sell music illegally on the net.

The partnership follows the announcement, in March, that payment processors Visa and MasterCard also agreed to withdraw their services from copyright infringing websites. “We knew that when illegal  services could no longer take payments from credit cards they would try to work around the restriction”, said Frances Moore, Chief executive of IFPI. “That is why we and the CoLP approached PayPal.”

The partnership is an indication the payments industry is moving further against pirate websites  by cracking down on the way they are funded. Brett Rowland, Counsel at Sidley Austin, called the agreement “a significant development”, while Rohan Massey, Partner at McDermott Will & Emery UK LLP, thinks PayPal’s move is “a step in the right direction”. 

Dawn Osborne, Partner at Palmer Biggs Legal, said PayPal’s decision is “in line with the trend that intermediaries are expected to help against all forms of illegality”. Massey also recognises the “trend to try and limit unlawful behaviour by applying pressure to payment providers”.  

However, Consult Hyperion’s Director Dave Birch thinks PayPal’s decision “is a dangerous precedent. I assume PayPal will now stop Saudi consumers from buying alcohol and French shoppers from buying fake Chanel perfume.”

Forcing payment processors, auction websites and online retailers to follow PayPal’s example by law would be “wrong”, said Birch. “How is eBay supposed to know whether my Rolex is real or fake? How is PayPal supposed to know whether I'm actually in the US or not?”

Therefore, Osborne said “it is refreshing to see Paypal volunteer rather than be brought to the table  kicking and screaming. Presumably, they would prefer to negotiate the terms on which they will help rather than be forced to accept terms imposed by the authorities.”

Published previously in the August issue of E-Finance & Payments Law Policy, CPP, copyrights apply at all times, London 2011. Picture: PayPal.

FOX first major US network to charge for catch up content online

NEW YORK - Fox is to become the first major broadcast network in the US to put its content behind a paywall. Fox Networks and Fox Broadcasting – owned by News Corp – have announced that from early September  new episodes of Fox shows – such as the hugely popular ‘Glee’ and ‘Family Guy’ – can no longer be watched for free on the broadcaster’s website. 

Viewers will have to wait eight days after the show has been aired to continue to watch the content for free or they should subscribe to a participating cable or satellite service if they wish to see shows the day after they have been aired. ‘It will be interesting to see how consumers in the US respond to Fox's proposal and whether it really drives subscriptions to the partner pay-TV services”, says Helen Anderson, a Senior Associate at SNR Denton in London, in a response to Fox’ announcement. “The move may end up fuelling the illegal piracy that the media companies are so keen to prevent.”

Martin Kratz, a Calgary-based Partner at Benett Jones, thinks “it remains to be seen if the 8 day delay is sufficient frustration for the internet savvy viewer to encourage them to seek out the immediate pirate version”. He thinks Fox made a brave decision because “once customers get used to free content on the internet how can you get them comfortable with paying for it?” Kratz believes that in this case Fox has sought a “compromise position” by making the programs available for free after 8 days, and “for those viewers who absolutely cannot wait, the program would be available immediately, on a subscription based service”.

Fox’ move is closely watched by other major broadcasters in the US, such as ABC, NBC and CBS. Erecting a paywall is considered to create many new commercial opportunities, but is also seen as possibly undermining the companies’ traditional advertising and subscription revenues. Fox’ decision “reflects a move away from pure advertising towards a hybrid advertising/subscription revenue model”, explains James Johnston, Partner at Davis & Gilbert LLP in New York City. “Fox complained the pure ad model was not generating sufficient revenue. The advertising/subscription hybrid one creates two potential revenue streams”.

Kratz, believes Fox’ “move may also be seen as a way to drive traffic to the television show itself as the free internet versions can affect the ratings which affect rates for advertising”.  

Although other US broadcasters are expected to follow if the Fox format turns out to be successful, Anderson does not think “it is likely [the Fox model will] translate to the UK catch up services” because of a difference in approach. “Fox sees the commercial opportunity to be the ‘first-view’ window immediately after broadcast and then allow longer free access, the UK sees the commercial opportunity to be more a free taster window followed by pay services.”

Copyrights apply at all times. Published previously in E-Commerce Law & Policy, August issue, CPP, copyrights apply at all times, London 2011. Picture: castofthousands.com.

 

Editorial comment: German fixture lists

BERLIN - Drafting the new Interstate Treaty on Gambling (ITG) in Germany has - so far - not been a smooth process. Only last month the European Commission rejected the draft text of a new ITG, stating it was not compatible with EU law. This was followed by a decision of the leaders of the German Federal States to postpone a final decision on the new legislation until October, which means that it becomes even more unlikely a new regulatory framework will be in place before the current ITG expires on 31 December. 

On top of that, the federal states still have to deal with enfant terrible Schleswig-Holstein. Germany’s most northern state is still campaigning for its own, much more liberal online gambling regime, a scenario that is out of the question for most other states. The State, however, did announce on 22 August its intention to postpone its draft legislation. If that is not enough, the process of market regulation is being further frustrated - and probably further delayed - by the emergence of a new player.

The Bundesliga, the German federal sports body for football, has joined the gambling debate by threatening to charge betting operators for the use of their fixtures lists - the lists with competition times and places, which are subject to copyright, according to the Bundesliga. This way, operators will be prevented from using the Bundesliga’s fixtures lists free of charge, making sports betting impossible without transferring large sums of money to the sports body. 

However, if the Federal States agree to open up their sports betting markets to more competition, the sport body will drop its intellectual property demands - it is, therefore, a blatant attempt to influence the current legislative process. And the Bundesliga’s copyright claims did not fall on deaf ears within Germany’s sports community. A new, potentially lucrative, revenue stream was instantly recognised, so it did not come as a surprise that the national handball, basketball and tennis federations have announced they will follow the Bundesliga’s lead.  

Germany’s football federation’s unexpected move has raised legal questions. Firstly, sports organisations as such are not part of the ITG. The fact that they can use fixture lists is automatically presumed and not explicitly mentioned. Secondly, does a copyright claim on fixture lists actually exist? German lawyers seem unable to agree but the sports organisations certainly think so. Luckily, as it seems, legal experts still have some time to answer this question. 

Published previously in the August issue of World Online Gambling Law Report, CPP, copyrights apply at all times, London 2011. Picture: globalfirepower.com.