FCC names teams to review Comcast-TWC, AT&T-DirecTV mergers

Two lawyers formerly with the Justice Department's Antitrust Division will lead FCC review teams looking into the proposed mergers of Comcast and Time Warner Cable, and AT&T with DirecTV.

Hillary Burchuk, trial attorney with the FCC's office of general counsel, will lead the team reviewing Comcast's plans to acquire Time Warner Cable, as well as a related transaction in which Charter Communications will acquire 1.4 million Time Warner Cable subscribers. Another 2.5 million Comcast subscribers will become part of a spinoff company controlled by Charter.

Burchuk was formerly an attorney in the Justice Department's Antitrust Division, and was among the team that worked on that department's review of the Comcast and NBC Universal merger in 2011. Government regulators approved that deal subject to a number of conditions.

Jamillia Ferris, who served in the Justice Department from 2010 to 2013, will head the team reviewing the AT&T-DirecTV transaction. Her tenure at the Justice Department included a stint as chief of staff and counsel to William Baer, assistant attorney general of the Antitrust Division. Among the cases she oversaw was the Apple ebook price fixing lawsuit. She most recently has been in private practice with Hunton & Williams.

In an interview in May, before her appointment to the FCC, she told Variety that the government would likely look at a number of potential impacts from the mergers. "Horizontal competition won't be the only way they look at market dynamics and the competitive effects of the transaction," she said. "For example, you can expect that they will examine whether the combined company will have enhanced buying power that results in less or lower quality output when negotiating with content providers. DOJ may also analyze whether that power harms competition with other media companies trying to access content."

The FCC also announced that its general counsel, Jonathan Sallet, will chair a steering committee that will oversee both of the transactions, with members including William Lake, chief of the Media Bureau; Mindel de la Torre, chief of the International Bureau; Julie Veach, chief of the Wireline Competition Bureau; and Roger Sherman, chief of the Wireless Telecommunications Bureau.

William Rogerson, a professor at Northwestern University, will serve as senior economist overseeing the transactions. He argued against the Comcast-NBC U merger in 2010, after producing a study commissioned by the American Cable Assn. Shane Greenstein, professor at Northwestern's Kellogg School of Management, will serve as senior economic consultant on the transactions.

Wall Street analysts said that the announcements signaled that the FCC was about to start its 180-day clock to review the transactions, although that time frame is informal. In a report issued on Monday, Bernstein Research's Paul de Sa wrote that the selections of team members signal a coordinated, efficient review process with the Department of Justice, which also must greenlight the mergers. Bernstein's analysts predict that both transactions will be approved with conditions early in 2015.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Samsung earnings hit by slowing China sales

SEOUL, South Korea — Samsung Electronics Co. said operating profit declined to a two-year low in the second quarter, hit by the strong local currency and slowing demand for smartphones in China.

The result highlights how dependent the company has become on smartphones for its earnings. Sales growth in high-end Android devices has waned after several years of rapid expansion. Growth remains robust in emerging markets where cheap competitors have sprung up.

The South Korean electronics giant said Tuesday its operating income was 7.2 trillion won ($7.1 billion) for the three months ended June 30, down 24 percent from a year earlier. That was significantly below analysts' expectations of about 8 trillion won. The company releases its full quarterly financial results later in the month.

The figure was the lowest since the second quarter of 2012 when Samsung's income was 6.5 trillion won. Since then, Samsung's operating profit hasn't fallen below 8 trillion won, largely driven by robust sales of Galaxy smartphones.

Quarterly sales fell 10 percent from the previous year to 52 trillion won.

Samsung, which usually doesn't elaborate on its financial performance until its full report later in the month, issued a rare statement to explain its result, which Nomura analyst Chung Chang-won described as "very disappointing."

The company blamed the lower profit on the South Korean currency's appreciation against the U.S. dollar and the euro, as well as most emerging market currencies. The won hit a 6-year high against the U.S. dollar earlier this month.

It also said sales of medium- and low-end smartphones were weak in China and in some European countries because of stronger competition and sluggish demand. Fewer consumers in China bought handsets that run on 3G mobile networks as they waited for faster 4G networks.

Samsung, which earlier this year vowed to aggressively expand its tablet sales, acknowledged it faced some challenges in selling tablet computers. Consumers weren't replacing their tablet PCs as often as smartphones, while smartphones with a giant screen of 5 or 6 inches, such as Samsung's Galaxy Note series, replaced demand for smaller tablets that measure about 7 or 8 inches.

"Expectations have been lowered on Samsung," said Will Cho, an analyst at KDB Daewoo Securities. "With intensified competition in the mid- and low-end smartphones, it will be tough to stay as lucrative as in the past."

About three in every 10 smartphones sold globally were made by Samsung in 2013 and the company's handset sales will likely improve during the current quarter. But Cho said how much profit it can take would be more important than how many handsets it can sell because most sales growth would come from cheap smartphones.

In the cheap smartphone market, Samsung faces an uphill battle against brands such as Xiaomi and Lenovo.

Xiaomi, an upstart Chinese company that is moving into other Asian countries, surprised the industry with its $100-level smartphones that were snapped up by fans. Counterpoint Technology Market Research said last month that Xiaomi's $130 smartphone Redmi was the most-sold mobile device in China in April, beating Apple's iPhone and Samsung's Galaxy.

Samsung shifted its focus to affordable smartphones, tablets and wearable devices, such as the Gear smartwatches, to offset falling profit but they are yet to arrest the declining earnings from smartphones and components in mobile devices that Samsung supplies such as memory chips and display screens.

Shares of Samsung closed 0.2 percent higher in Seoul as the company gave an outlook that appeared to reassure investors.

"The company cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup," it said. "Samsung expects stronger smartphone sales and this will have a positive impact on the company's display panel businesses."

But some analysts were not convinced about Samsung's long-term prospects.

"Though we anticipate some positive earnings impact for the component businesses (in the third quarter), we see growing uncertainty over Samsung's future earnings in the long-term," Chung, the Nomura Financial Investment analyst, said in a commentary.

Chung cited Apple's upcoming release of the iPhone 6, the increasing difficulty in standing out from a plethora of other Android devices and the falling appeal of premium smartphones, a reminder of the PC market that came to be flooded with cheap almost identical products.

Samsung is expected to announce an upgrade of the Galaxy Note series in the fall around the time when Apple usually upgrades its iPhone.

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Shares drift after US pulls back from highs

TOKYO — Stock markets drifted lower Tuesday after U.S. indexes pulled back from record highs and investors awaited fresh data from China and corporate earnings.

In Europe, France's CAC-40 lost 0.4 percent to 4,387.15 and Germany's DAX dropped 0.6 percent to 9,853.92. Britain's FTSE 100 fell 0.3 percent, to 6,802.08.

In both Europe and the U.S., investors are watching for earnings reports that could provide a gauge of the strength of the recovery. U.S. markets looked set for a lackluster start, with Dow and S&P 500 futures both down 0.2 percent.

U.S. indexes last week rallied to new highs following a government report that showed the world's largest economy generated a stronger-than-expected 288,000 jobs in June.

In Asia, Japan's Nikkei 225 index tracked Wall Street's declines, slipping 0.4 percent to 15,314.41 despite fresh data showing the current account surplus was larger than expected in May.

South Korea's Kospi regained lost ground, rising 0.1 percent to 2,006.66 after Samsung announced a double-digit drop in its operating profit in the April-June quarter from a year earlier due to the strong won and slowing smartphone sales in China.

Hong Kong's Hang Seng ended flat at 23,541.38. Elsewhere in Asia, shares were lower in Australia, New Zealand and Singapore but rose in Taiwan, Indonesia and Malaysia.

China is due to release inflation figures, which are a key indicator for both policy and economic performance, on Wednesday. Meanwhile, investors are also watching for the outcome of a presidential election Thursday in Indonesia, the world's most populous Muslim nation and the third-largest democracy.

"With a lack of strong catalysts for the market today, investors are likely to position themselves for tomorrow's data from China ... and developments from the Indonesian elections," IG said in a market commentary.

In energy markets, U.S. crude for August delivery was down 17 cents to $103.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 53 cents to close at $103.53 on Monday.

In currency trading, the euro slipped to $1.3595 from $1.3608 on Monday. The dollar fell to 101.78 yen from 101.82 yen.

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17 coal miners die after blast in west China

BEIJING — Seventeen coal miners have died after being trapped by a weekend gas explosion in northwestern China, an official news agency reported Monday.

The miners were trapped Saturday by the explosion at a mine 120 kilometers (70 miles) from Urumqi, the capital of the Xinjiang region, the Xinhua News Agency said. It said Monday they had died and the cause of the incident was under investigation.

China has the world's deadliest mines, although the safety record has improved as regulators strengthen enforcement of safety rules.

Xinhua said the pit where the explosion occurred Saturday is mined by Dahuangshan Yuxin Coal Mining Co. Ltd., owned by the sixth agricultural division of the Xinjiang Production and Construction Corps. It is a paramilitary organization that was revived by the central government in the 1980s to aid the region's construction and development.

Three other people working inside the mine were rescued earlier.

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Asian stocks lower ahead of US earnings

BEIJING — Asian stock markets were mostly lower Monday as investors looked ahead to U.S. corporate earnings following last week's strong job numbers.

Oil declined but stayed above $104 per barrel.

China's benchmark Shanghai Composite Index was off 0.1 percent at 2,059.65 points and Hong Kong's Hang Seng was down 0.1 percent at 23,517.08. Taiwan, Sydney, Seoul and Singapore also registered small declines.

Markets gave up some of last week's gains that followed news the United States generated a stronger-than-expected 288,000 jobs in June, a sign an economic recovery might be gaining traction.

"The market saw another piece of evidence that the U.S. economy is gathering steam while at the same time central bank rhetoric remains dovish," said Credit Agricole CIB in a report.

Japan's Nikkei 225 bucked the regional trend, gaining 0.1 percent to 15,445.92.

Taiwan's Taiex shed 0.2 percent to 9,486.92 and Seoul's Kospi was off 0.4 percent at 2,001.27. Sydney's S&P ASX 200 shed just under 0.1 percent to 5,521.80.

On Thursday, the last U.S. trading day before the Independence Day long weekend, the Dow Jones industrial average rose 0.6 percent to close above 17,000 for the first time. The broader Standard & Poor's 500 and the Nasdaq composite also added 0.6 percent.

"Companies in the U.S. are widely expected to report better earnings after the winter slumber," said Desmond Chua of CMC Markets in a report.

In Europe, Britain's FTSE 100 closed unchanged Friday while France's CAC-40 fell 0.5 percent and Germany's DAX shed 0.2 percent.

Oil shed 3 cents to $104.02 in electronic trading on the New York Mercantile Exchange. The contract tumbled 42 cents in the previous session to close at $104.06.

In currency trading, the euro fell to $1.3584 from $1.3594 late Friday. The dollar rose to 102.14 yen from 102.08 yen.

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Oil slips below $104 as supplies set to increase

Oil fell below $104 per barrel on Monday as expectations of increased supply offset strong U.S. job growth.

U.S. crude for August delivery was down 25 cents to $103.81 a barrel at 0620 GMT in electronic trading on the New York Mercantile Exchange. The contract sunk as low as $103.70 on Friday before closing at $104.06.

Brent crude, a benchmark for international oils, was up 2 cents at $110.66 on the ICE exchange in London.

Crude fell despite signs the U.S. economy is steadily improving, which typically would increase demand. Employment grew by an unexpectedly large 288,000 workers in June.

Oil has been sliding since it reached a 10-month closing high of $107.26 on June 20 due to concern about an advance by Islamic militants in controlling Iraqi territory. Since then, it has become clear that there are no imminent disruptions to supplies from Iraq, OPEC's second-biggest producer.

On top of that, an agreement in Libya between the central government and a regional militia was expected to lead to the reopening of two eastern oil terminals that would boost the country's crude exports by about 500,000 barrels a day. Libya currently produces around 350,000 barrels of oil a day.

In other energy futures trading on the Nymex:

— Wholesale gasoline was down 0.5 cent at $3.015 a gallon.

— Natural gas lost 0.7 cent to $4.332 per 1,000 cubic feet.

— Heating oil fell 0.7 cent to $2.922 a gallon.

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Boston firms hosting startups

Some of Boston's big companies are teaming up to house startups in their headquarters to provide mentoring and guidance.

"The idea is to create an industry-specific location that works well with (startups)," said Bill Jacobson, co-founder and CEO of Workbar. "By working with leading industry companies, startups in a specific sector can have space and access to mentorships."

Workbar, which offers shared office space in Cambridge and Boston, along with several other locations, is working with Boston area companies to match early-stage startups with big companies that can help guide them along the way. Called Centers of Excellence, the large companies house and support the startups within their offices.

"It's about developing those relationships," said Ernesto Humpierres, a co-founder of Socrex, a startup that aggregates non-traditional credit information for people with little credit history. Socrex, along with three other financial technology startups, is working out of Digital Federal Credit Union's Boston office.

At DCU, the startups have access to the bank's leadership team for everything from marketing advice to technology help. Even DCU's CEO is getting involved.

"The goal for us is just to learn what's the next best technology that's going to be coming," said David Araujo, vice president of information systems for DCU. "There's so many things we can think of for our users, but at the end of the day there's a lot of young, innovative companies that we can learn from."

Araujo said the immediate goal is not to invest or partner with the companies, but its something DCU is not ruling out.

"We're really there to help them along, but if we can benefit at some point in time, fantastic," Araujo said. He said the best-case scenario is for the companies to develop tools and services that DCU will one day use.

Jacobson is in discussions with a Boston marketing company to create a marketing technology Center of Excellence, and said he is also looking to create design and education technology versions.

"The idea is for younger companies, startup companies to have a little bit more centered knowledge and connections in their industry," Jacobson said.

The marketing center is close to being finalized, Jacobson said, but the others are in their early stages.

Shared office space for startups is on the rise in Boston. National companies WeWork and Coalition have expanded into Boston, and the Cambridge Innovation Center is in the process of opening space for 300 startups in the Financial District.

"There's a ton of co-working spaces in Boston, but there wasn't anyone who had a differentiator for us," Humpierres said. "This gave me access to the experts at DCU and the contacts in the industry."

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How to handle emergency with push-button ignition

In your column you gave advice on what to do if someone experienced a stuck throttle. With a traditional key I understand the steps you mentioned. But our next vehicle may be equipped with a push-button ignition. How would we handle an emergency situation like a stuck accelerator or unintended acceleration? Also, one of the vehicles we are interested in has a push-button transmission, not a normal gear shifter. Does shifting to neutral still apply?

We currently have a vehicle with electronic rather than mechanical door locks and a fob-in-pocket push-button ignition on the dash. I don't care for either of these. If the car battery goes dead, the doors cannot be unlocked from the outside. You must use an emergency key stored in the fob to unlock the rear hatch and pull a cable to mechanically unlock the front door. If you are inside the vehicle when the battery fails and the doors are locked — exceptionally rare, of course, but still a possibility — you must pull an emergency door release lever to open the door.

As modern and slick as this technology is, I can't help but wonder what the true benefits are. A remote keyless entry system opens doors from the outside and a key-in-the-ignition switch started and stopped the engine. Mind you, these electronic systems aren't necessarily bad but I don't see any real advantage.

In reference to dealing with a stuck throttle or unintended acceleration, the push-button ignition switch does suggest a possible complication. In order to shut off the engine, one must depress and hold in the button for a short period of time — a demanding and difficult procedure when dealing with an emergency.

To deal with a stuck throttle/unintended acceleration with a system like this, shift the transmission into neutral, then steer and brake the car to a safe stop — as I suggested in my earlier column. Again, modern engine management systems will prevent the engine from over-revving in neutral in this situation.

Whether the shift mechanism is push-button, floor-mounted or on the steering column doesn't matter. Immediately shift into neutral and then deal with the situation.

I love my Dodge Intrepid, but the headlights have never been adequate. I keep the lenses polished and clear but the lights are worse than the 6-volt bulbs in my 1951 Ford sealed-beam headlights. What can I do? I need better lights to drive at night.

Age and your eyes may be part of this, but regardless, you can upgrade the halogen bulbs in your composite headlamp assemblies. Probably your best choice would be to install a xenon HID (high-intensity discharge) headlamp kit. HID headlamps are original equipment on many newer vehicles and offer a significant improvement in lighting. The installation isn't quite as simple as replacing the standard bulb — it requires a ballast assembly and additional wiring harness. Prices are in the $100-$300 range for the kit.

I have a 2007 Chevy 1500 V8 that can burn E85. I got the flex fuel option when E85 was about 65 cents per gallon less than gas. Now I am seeing a difference of about 25 cents, which means it doesn't make sense to burn E85. Is there a formula for figuring the break-even point? If you use E85 on every fill, will that harm the engine or make it run rough?

There's no perfect answer here. E85 prices vary state-to-state from about 10 to 25 percent less than gasoline, thus the economics vary tremendously. The EPA combined mileage estimates for a 2014 Chevy 5.3-liter K1500 4WD are 18 mpg on gasoline and 13 mpg on E85 — a difference of more than 25 percent. Compare this with the percentage difference in cost between fuels and you'll have your answer for that fill-up. While there is no benefit to engine reliability or durability, E85 won't harm your engine.

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Website sells work of disabled artists

Allen Chamberland has lived on disability for the past decade, but a startup that sells the work of disabled and homeless artists might just change that one day.

About three years ago, Chamberland began doing paper cuttings, intricate designs cut out of a single sheet of paper.

"At first, it started as a hobby to give me something to do," said the 49-year-old South End resident, who was diagnosed with chronic obstructive pulmonary disease, which makes it difficult for him to breathe.

He never thought he'd be successful at it until a chance encounter last year with Liz Powers, who was looking for works by homeless and disabled artists for a show at Boston's Prudential Center. By the end of the show, a dozen of Chamberland's works had sold.

So last December, Powers and her brother, Spencer, started ArtLifting, a low-profit LLC with a website that initially featured the work of Chamberland and three other artists.

"It was very clear these artists would benefit from having a way to sell their work not just once a year but every day," Spencer Powers said. "And it was also clear that customers loved their work."

Within one month, the company sold $11,000 worth of work, with 55 percent of the profits going to the artists ­­— compared to a typical gallery split of 50/50 — and the rest going toward overhead.

"That first month was a shocker to us," Spencer Powers said. "It showed we could build something great."

The company's first corporate client, Jay Connolly, bought more than two dozen for the commercial buildings his Beverly firm, Connolly Brothers, Inc., owns and manages.

"People have actually come down to our management office and asked what ArtLifting is," Connolly said. "Some of the people in our office even went and bought the original works once they saw the prints."

In May, ArtLifting was one of 128 finalists in the Boston startup accelerator and competition MassChallenge, entitling the company to free office space, mentoring and a chance at a share of 
$1.75 million in cash prizes. Its goal is to one day reach homeless and disabled artists across the country.

"A month or so ago, somebody saw my work on ArtLifting, and because of that, I'm having my first solo show in Cambridge in October," Chamberland said. "If things keep going like this, I won't have to live on disability anymore. And that feels great."

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Hurricane gets public popping into Boston museums

Hurricane Arthur turned out to be a boon for businesses on Cape Cod, but with the festivities already over on Boston's Esplanade, Back Bay businesses missed out on the throngs of revelers the Fourth of July usually brings.

Mark Kielpinski, who owns By the Bay Designs and the Village Toy Store in Brewster, said he nearly tripled the number of staff at his stores for the day because on the Cape, at least, "cloudy weather makes the ultimate shopping day."

"There's no doubt that when the sun shines on the Fourth of July, it tends to be quieter," he said.

In Boston, however, the opposite appeared to be true.

"We're probably a little less busy than last Fourth of July, probably because of the bad weather," said Elizabeth Christensen, a shift supervisor at the Pavement Coffeehouse on Newbury Street. "I hope we'll have a better day tomorrow."

Many people in the city for the holiday headed instead for museums or the New England Aquarium, where there was a 50-minute wait to get in by mid-afternoon.

"The line would normally be closer to 15 minutes," said Christine Rohrer, manager of visitor experience, "but because of the rain and because the fireworks were moved up by a day, all of those things tend to increase attendance."

A little more than three hours after it opened, the Boston Children's Museum already had sold more than 2,000 tickets and, like the aquarium, had a line that stretched out the door.

Said museum spokeswoman Jo-Anne Baxter, "When it rains, people want to find something fun and educational to do with their kids."

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