|Day's Range||6.70 - 7.50|
Google is getting into checking accounts. Banks should be nervous. Just look at what happened with Gmail.
(Bloomberg Opinion) -- Jeremy Corbyn’s Labour Party is behind in the polls for the U.K. election so it’s unsurprising that he’s chucking out more giveaways to voters. The policy to nationalize BT Group Plc’s fixed-telecoms networks business and provide free fiber broadband to every British household is a humdinger nonetheless.Of course, the chances of this becoming reality are slim given that Corbyn’s best hope of becoming prime minister is a coalition with more moderate political parties. Yet the idea has stimulated even more debate than Labour’s previous plans to re-nationalize the railways and the energy utilities, so it’s at least worth thinking about. Taking it at face value, the policy would be a huge mistake that would achieve the opposite of its stated aim of accelerating Britain’s sluggish rollout of fiber broadband.First, there’s the cost. A Labour government would add 15 billion pounds ($19 billion) to an existing 5 billion pound broadband spending pot, according to Shadow Chancellor John McDonnell. Even assuming that would cover the required capital expenditure — a big assumption — it would cost at least the same again to nationalize Openreach, BT’s networks division.McDonnell says the state would pay for the acquisition by giving BT’s shareholders government bonds as compensation. Yet why would investors, especially those outside the U.K. protected by treaties against asset expropriation, exchange an 8.1% annual dividend yield from their BT stock for the less than 1% returns from U.K. gilts? The network spending itself would be funded by an increased tax on the likes of Facebook Inc., Alphabet Inc. and Amazon.com Inc. But the G-20 will probably adopt new international tax standards next year to try to curb Big Tech’s avoidance tactics. So a Labour government might not even be able to whomp up these levies without breaching the new guidelines.Then there’s the speed of rolling out the networks. While the U.K. is well behind the pace on high-speed broadband rollout (it’s 10th in the European Union’s 2019 connectivity rankings), a tortured nationalization process isn’t the answer. BT would have no incentive to keep investing during that period.The same’s true for private competitors such as John Malone’s Virgin Media, Vodafone Group Plc and Comcast Corp.’s Sky. Increased competition has at least accelerated the pace of the rollout: The proportion of homes with fiber access has doubled in two years.Infrastructure investors have also been attracted by the returns promised by fiber, prompting a flurry of investment from KKR & Co., Macquarie’s infrastructure fund and Goldman Sachs Group Inc. McDonnell’s comments have certainly caused some consternation. TalkTalk Telecom Group Plc. said it had paused talks to sell a fiber project, for which Goldman-backed CityFibre Ltd. was the lead bidder. Should Labour ever get the chance to offer free broadband to everyone through a state-owned provider, tens of thousands of private sector jobs would be jeopardized. How would other companies be able to compete?And full-fiber broadband might not even really be necessary. The adoption of next-generation 5G mobile networks promises the ability to transmit far more data at far greater speeds. That would make fiber to every home redundant in parts of the country.There are better and more thoughtful ways to get fiber installed sooner: Making it easier to get permits to build the network; permanently reducing business tax rates for new fiber; and making it obligatory for customers to accept fiber upgrades. If McDonnell is willing to hand over 15 billion pounds to BT shareholders to snap up Openreach, why not use the funds to subsidize the rollout directly?To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Britain’s Labour party pledged to offer all consumers free fiber broadband within a decade by nationalizing phone carrier BT Group Plc’s Openreach unit at a cost of 20 billion pounds ($26 billion).BT shareholders would get newly-issued government bonds in return for their shares, Labour’s shadow chancellor, John McDonnell, said in a speech in Lancaster, England on Friday. Shares of BT fell as much as 3.7%.It’s the biggest new pledge of the election campaign from Labour, which already has plans to nationalize the postal service, the railways and water and energy utilities. The broadband effort would be financed in part with taxes on multinational companies such as Amazon.com Inc., Facebook Inc. and Alphabet Inc.’s Google. While the proposals may win over some voters, Labour may not be in a position to implement them. It has an average of 29% support in recent polls, trailing the Conservatives at 40%.“A Labour government will make broadband free for everybody,” party leader Jeremy Corbyn said at the campaign event at Lancaster University. “This is core infrastructure for the 21st century. It’s too important to be left to the corporations.”McDonnell said the new broadband pledge would be funded by asking “tech giants like Google and Facebook to pay a bit more” in proportion to their activities in the U.K. “So if a multinational has 10% of its sales, workforce, and operations in the U.K., they’re asked to pay tax on 10% of their global profits,” McDonnell said.While Labour puts the cost of the plan at about 20 billion pounds, BT’s Chief Executive Officer Philip Jansen said the proposal would cost almost five times that amount.BT shares were down 1.6% as of 12:29 p.m. in London, suggesting shareholders aren’t too worried about the nationalization risk. That gives the company a market value of about 19 billion pounds.“These are very very ambitious ideas,” Jansen said Friday in an interview on BBC Radio 4. “The Conservative Party have their own ambitious ideas for full fiber for everybody by 2025.”“How we do it is not straightforward, it needs funding,” Jansen said, putting the cost of such a roll-out over eight years at “not short of 100 billion pounds.”Lower Value?BT has been working to speed up its own full-fiber build and Jansen said the company’s shares have fallen on the recognition that “we’re going to be investing very very heavily.” Shareholders “are nursing massive losses on their investment” in BT if they’d bought it a few years ago, he said.Investors could get burned, as Openreach’s business would likely be undervalued in an expropriation, New Street analyst James Ratzer said in an email, adding that nationalization “rarely works well for shareholders.” Analysts at Jefferies put Openreach’s value at 13.5 billion pounds, flagging annual costs for operations and to service its high pension deficit.Labour’s McDonnell said the party has taken advice from lawyers to ensure its broadband plan fits within European Union state aid rules in case the U.K. is still in the bloc when the plans are carried out.Britain LaggingCorbyn’s plan is meant to solve a connectivity gap: Britain lags far behind other European nations when it comes to full-fiber coverage, which allows for gigabit-per-second download speeds. About 8% of the country is connected -- just under 2.5 million properties, according to a September report by communications regulator Ofcom. That compares with 63% for Spain and 86% for Portugal.As policymakers and regulators have been creating conditions to spur more competition with BT, rivals including Liberty Global Plc’s Virgin Media and Goldman Sachs Group Inc.-backed CityFibre have been jumping in to commit billions of pounds to infrastructure plans.“Those plans risk being shelved overnight,” Matthew Howett, an analyst at Assembly, said in an email. “This is a spectacularly bad take by the Labour Party.”The Labour announcement caused TalkTalk Telecom Group Plc to pause talks to sell a fiber project as the industry seeks clarity.Analysts are skeptical the government could roll out fiber more effectively than private industry and Howett pointed to delays and budget overruns from a state-led effort in Australia.It’s not the first time radical ideas have been proposed for BT’s Openreach unit, a national network of copper wire and fiber-optic cable that communication providers including BT, Comcast Corp.’s Sky and Vodafone Group Plc tap into to provide home internet to customers.BT was forced to legally separate the division from the rest of the company in recent years over concerns about competition, and that it wasn’t investing fast enough to roll out fiber, and some investors have suggested the company should fully spin it out into an independent, listed business to unlock value.‘Fantasy’ PlanNicky Morgan, the Conservative cabinet minister with responsibility for digital services, dismissed Corbyn’s plan in a statement as a “fantasy” that “would cost hardworking taxpayers tens of billions” of pounds.The Conservative Party’s own proposal for full-fiber broadband across the U.K. by 2025 -- eight years ahead of a previous government goal -- has raised eyebrows across the telecom industry, as some executives and analysts expressed skepticism about whether it’s doable, whether there’s consumer demand for the ultrafast internet service and how companies would make money.‘A Disaster’TechUK, the industry’s main trade body, called Labour’s plan “a disaster” for the telecom sector. “Renationalization would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT,” said Chief Executive Officer Julian David.The announcement will provide more fodder for the arguments by Prime Minister Boris Johnson’s Conservatives that a Labour government risks plunging the country into an economic crisis. Chancellor of the Exchequer Sajid Javid over the weekend released analysis estimating Labour would raise spending by 1.2 trillion pounds over five years. McDonnell at the time called it “fake news.”McDonnell said Parliament would set the value of Openreach when it’s taken into public ownership and that shareholders would be compensated with government bonds. Under Labour’s plan, the roll-out would begin in areas with the worst broadband access, including rural communities, followed by towns and then by areas that are currently well-served by fast broadband.According to elections expert John Curtice, Corbyn’s chances of forming a majority government are “as close to zero” as it’s possible to get. The election is still hard to predict, and it is possible that Labour could yet win power, either on its own or with the support of smaller parties.(Updates with Corbyn remarks in fourth paragraph, McDonnell in fifth.)\--With assistance from Jennifer Ryan and Kit Rees.To contact the reporters on this story: Alex Morales in London at email@example.com;Thomas Seal in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, ;Tim Ross at firstname.lastname@example.org, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. stock futures rise after White House economic adviser Larry Kudlow says the U.S. and China are 'getting close' to reaching a phase one trade agreement; Nvidia issues a weak revenue forecast for the fourth quarter; Amazon challenges the Pentagon's awarding of a $10 billion cloud contract to Microsoft.
As it turned out, Ascension had signed a fairly standard cloud deal with Google for its patient data to be stored and processed. This is no different to the arrangements companies in many industries have reached with public cloud providers such as Amazon Web Services or Microsoft. Had Ascension contracted instead with IBM — and if a few dozen IBM workers, rather than Googlers, were able to see patients’ personal data — it wouldn’t have caused a stir.
Expedia Group's vacation rental business Vrbo plans to reposition itself as a family travel site that would offer vacation rentals, resorts, and other features facilitating family vacations. The unit's new general manager Jeff Hurst told Skift Thursday that the move has been in the works behind the scenes for some time. Hurst, who was interviewed […]
Google’s Kubernetes software container platform ultimately forced this Bay Area startup to throw in the towel and sell off the vast majority of its business.
Amazon.com Inc. plans to protest the award last month of a 10-year, $10 billion Pentagon cloud-computing contract to Microsoft Corp. that many assumed would go to Amazon. The controversial JEDI deal has been contested for months, prompting one previous bidder, Oracle Corp. , to file a lawsuit disputing the selection process. "AWS is uniquely experienced and qualified to provide the critical technology the U.S. military needs, and remains committed to supporting the DoD's modernization efforts. We also believe it's critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence. Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias -- and it's important that these matters be examined and rectified," an Amazon spokesman said in a statement to MarketWatch on Thursday.
The AGs are preparing subpoenas, called civil investigation demands, to support the inquiries, according to a report on CNBC. To date, the investigation has focused on Google’s advertising business.
(Bloomberg) -- Nvidia Corp. reported quarterly sales that topped analysts’ estimates, but the chipmaker gave a tepid forecast that suggests demand for gaming graphics chips is recovering slower than predicted.Revenue in the fiscal third quarter was $3.01 billion and profit excluding certain costs was $1.78 a share, the company said. Wall Street was looking for earnings of $1.57 a share on sales of $2.9 billion, according to data compiled by Bloomberg.Revenue in the fiscal fourth quarter will be $2.95 billion, plus or minus 2%, the Santa Clara, California-based company said in a statement Thursday. That compares with an average analyst estimate of $3.1 billion. Gross margin, or the percentage of sales remaining after deducting the cost of production, will be 64%, plus or minus 50 basis points.Nivdia said it expects "strong sequential growth" in its data center chip business, offset by a seasonal decline in sales of GeForce notebook graphics chips and other components for gaming systems.Nvidia shares rose 1% extended trading following the report. Earlier, they closed at $209.79 in New York.Chief Executive Officer Jensen Huang has almost doubled the market value of Nvidia since 2017 by finding new customers for gaming chips. But the majority of sales still comes from that market. The use of graphics chips to speed up artificial intelligence software in data centers has been the biggest driver of new growth.Before Thursday’s results, Nvidia had posted three straight quarters of declining revenue as customers accumulated unused chips and didn’t need to buy as many new ones.Nvidia’s GeForce chips are particularly popular with serious video-game players who will spend more than the price of a laptop on just one component for their machines. That has helped Nvidia dominate this profitable market. This year, Advanced Micro Devices Inc. introduced new chips -- particularly for more affordable systems -- that are more competitive.In data centers, while Huang’s company pioneered the use of accelerators to help with AI work, other companies have designed rival components, including the owners of data centers themselves, such as Google.To contact the reporter on this story: Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Alistair Barr, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The several dozen attorneys general investigating advertising practices at Alphabet Inc's Google are planning to expand their antitrust probe into the unit's flagship Android business, CNBC reported on Thursday, citing people familiar with the matter. The investigation, led by the Texas attorney general's office, is known to have focused on Google's search and digital advertising businesses since it began in September. Google has said it is cooperating with the probe by U.S. states and territories and that previous investigations in several have considered similar issues without charging the company with wrongdoing.
The investigation, led by the Texas attorney general's office, is known to have focused on Google's search and digital advertising businesses since it began in September. Google has said it is cooperating with the probe by U.S. states and territories and that previous investigations in several have considered similar issues without charging the company with wrongdoing. The Alphabet unit also faces two other major inquiries — a U.S. Justice Department investigation and a probe by the House of Representatives Judiciary Committee — both of which have broad reviews of the big internet companies underway.
Understanding parking — how it’s paid for and how it shapes how we get around and use the limited supply of land in San Jose, especially downtown — is critical in figuring out how government and business are trying to shape the city’s future.
Technology giants are showing a heightened interest in the financial-services industry as they see Chinese tech companies succeeding in payments, an area that could be lucrative for data collection.
An antitrust investigation of Alphabet is expanding to include more of its business practices, according to a published report Thursday. 50 state attorneys general, who represent the 48 U.S. states, Puerto Rico and Washington D.C., are preparing subpoenas that will focus on Google search and its Android platform, in addition to its advertising business, according to CNBC. The investigation was formally announced in September by Texas Attorney General Ken Paxton, who emphasized Google's handling of user data and its dominant advertising business at the time.
The apparent whistleblower who revealed Google is collecting medical records from about 50 million Americans said “Project Nightingale” raised red flags, including a security risk of “placing medical data in the digital cloud.” Google said it’s using the information to improve health care and reduce medical costs, under strict privacy and security standards. Wired Editor-in-Chief Nick Thomson joins "CBS This Morning" to discuss the privacy and security concerns.
Google is calling its upcoming game streaming service "a revolution for the industry". Stadia will be released on November 19th and available in 14 countries. It will let consumers play video games across multiple devices in their home without downloads, making access to games potentially as easy as watching a video on YouTube. Google's vice president Phil Harrison says games are streamed from Google data centres, while a Chromecast Ultra device is plugged into a television to make the connection. (SOUNDBITE) (English) GOOGLE VICE PRESIDENT AND GENERAL MANAGER, PHIL HARRISON, SAYING: "The graphics chip that we have in our version one hardware, which is what gamers will be playing this November, is equivalent to the latest, greatest game consoles combined. It is the most powerful place to play and it delivers the most incredible gaming experience for players." Analysts have said the service could significantly boost returns from Google's huge investments in cloud software and data centers. Wired UK Editor Greg Williams: (SOUNDBITE) (English) WIRED UK EDITOR, GREG WILLIAMS, SAYING: . "If you think about what Netflix did to television for instance and movies or what Spotify has done to music, that idea of streaming on demand when you want it is a really powerful one. Now, Stadia will be slightly different in that it isn't an all you can eat style platform, you will have to pay for some individual games, but what's interesting is that Google has so many advantages in the space right now" The Stadia Founder's Edition package, priced at $129, will enable people to play video games such as Destiny 2 from the launch day. But Google faces competition from gaming and tech companies planning similar services. Analysts have also questioned whether top game publishers will be prepared to shift from the lucrative business of selling games on discs. Nvidia, Sony and Microsoft have also been exploring streaming options. The latter two dominate the $100 billion global games market outside China.