Judge Considers Limits on Apple’s Future E-Book Deals

In a sometimes testy hearing in United States District Court in Lower Manhattan, Judge Denise L. Cote said that she was considering a plan in which Apple would negotiate contracts with publishers in a staggered fashion — possibly six to eight months apart — to prevent them from engaging in another price-fixing conspiracy.

Judge Cote ruled in July that Apple colluded with publishers to raise the price of e-books before the introduction of its iPad in 2010. Those charges were brought against Apple and five major publishers by the Justice Department in 2012. The publishers all settled, but Apple held out and went to trial.

The judge’s proposal was a scaled-back version of the guidelines put forth by the government last week, when it suggested that Apple be forced to end its agreements with the five settling publishers and avoid entering similar agreements with producers of movies, TV and music. Apple responded by calling the proposal a “draconian and punitive intrusion” into its business.

The publishers who settled also objected to the Justice Department’s proposed remedy, saying that it would fundamentally change their existing settlements.

In court on Friday, Judge Cote said that she wanted an injunction to be tailored so that it would encourage innovation in a rapidly changing e-book business and yet prevent collusion on price in the future.

“I have no desire to regulate the App Store,” she said.

But Judge Cote also slammed the publishers for lacking “contrition” and said that she feared future collusion in the e-book market. Although the publishers eventually agreed to settlements, none of them admitted wrongdoing.

Judge Cote said that the publishers had played “a rough and tumble game” and engaged in “blatant price fixing.”

“None of the publisher defendants have expressed any remorse,” she said. “They are, in a word, unrepentant.”

Lawyers for Apple and the government said in court that they would meet in the next week and discuss the judge’s proposal. Another hearing is expected later this month.

Apple and the Justice Department declined to comment.

Hachette Book Group, HarperCollins and Simon & Schuster settled in April 2012; Penguin Group USA and Macmillan settled later. Penguin has since merged with Random House, which was not named in the lawsuit.

F.C.C. Considers New Spectrum Rules for Wireless Companies

Not so in the air across the continent, where the Federal Communications Commission has long set limits on how much of the airwaves one company can control.

Now, pushed by small and medium-size telecommunications companies, the government plans to begin setting new rules to govern how much of the airwaves, or spectrum, a single carrier can hold. A big goal for those small companies, which compete with the behemoths Verizon and AT&T, is a measure that would give greater importance to so-called beachfront spectrum.

Those are the highly sought-after airwaves that travel farther between antennas and pass more easily through buildings, making them especially attractive in urban areas where the largest, most profitable clusters of mobile device users congregate.

It may sound esoteric, but the issue is known to every cellphone user who has experienced a dropped call or a smartphone browser stuck endlessly loading a Web page. After years of limiting companies to no more than one-third of the available airwaves in a given territory, the F.C.C. on Friday will begin the rule-making process on whether new technologies require limits to be redrawn, recalibrated or perhaps removed.

The F.C.C.’s decision, which probably will not be final for about a year, will have broad effects on consumers and companies. It plays a part in another matter the agency is expected to consider on Friday: rules for auctioning off newly reclaimed airwaves.

In that effort, the commission is aiming to take back portions of the airwaves used by the military or by television broadcasters. It is offering cash incentives for companies to give up their spectrum. The airwaves would be auctioned, with a portion of the proceeds going back to the original private-sector license holders.

By giving more weight to the best-performing spectrum, the F.C.C.’s overall limits could increase competition by restricting the big companies from buying too much of the airwaves, said Matt Wood, policy director for Free Press, a consumer advocacy group. “It is not the sheer amounts that matter,” he said. “It is where it is located on the radio dial that makes certain spectrum more valuable to a wireless company’s business.”

Some wireless company executives disagree, saying that the fact that some airwaves can travel farther than others is meaningless in a large city like New York, where so many users are congregated that a company already has to put in extra towers to keep airwaves from being overloaded. Overloading, of course, results in dropped calls.

Nevertheless, the quest for new rules is being welcomed by large and small mobile phone companies alike, each looking for a competitive advantage. Public interest groups that often oppose the companies’ efforts to trade spectrum also favor changes.

“There are a lot of competing interests here,” said Walter G. D. Reed, a partner at Edwards Wildman Palmer in Providence, R.I., who has worked on telecommunications issues. And the F.C.C.’s challenge is how to allow companies like AT&T and Verizon expand their businesses while ensuring that smaller carriers do not get shut out.

Wireless industry executives say that they would welcome almost any new standards because that would remove the uncertainty cast by the agency’s past practice of weighing potential spectrum deals case by case.

“Spectrum policy in this country needs to be built on a full factual record and rational economic policy,” Joan Marsh, vice president for federal regulatory issues at AT&T, said in an interview. “Carriers need a clear and reliable understanding of when and under what circumstances spectrum acquisitions will be permitted, something we do not have today. This proceeding will provide the vehicle to meet both goals, and take spectrum policy out of merger-specific proceedings and place it in an industrywide rule-making, subject to judicial review.”

The F.C.C. staff has circulated its proposals to the five-member commission, but the agency would not discuss the possible outcomes before the Friday meeting.

This article has been revised to reflect the following correction:

Correction: September 29, 2012

An article on Wednesday about the Federal Communications Commission’s consideration of new rules governing wireless airwaves, or spectrum, described incorrectly the groups to which the agency will offer cash incentives in exchange for their giving up portions of spectrum they control. The cash payments, which will come from the proceeds of public auctions of the spectrum, are available only to companies, mainly broadcasters, that give up spectrum — not to the military and other government agencies that currently control wireless airwaves. (The F.C.C. is also trying to secure spectrum controlled by the military and those federal agencies.)

F.C.C. Considers New Spectrum Rules for Wireless Companies

Not so in the air across the continent, where the Federal Communications Commission has long set limits on how much of the airwaves one company can control.

Now, pushed by small and medium-size telecommunications companies, the government plans to begin setting new rules to govern how much of the airwaves, or spectrum, a single carrier can hold. A big goal for those small companies, which compete with the behemoths Verizon and AT&T, is a measure that would give greater importance to so-called beachfront spectrum.

Those are the highly sought-after airwaves that travel farther between antennas and pass more easily through buildings, making them especially attractive in urban areas where the largest, most profitable clusters of mobile device users congregate.

It may sound esoteric, but the issue is known to every cellphone user who has experienced a dropped call or a smartphone browser stuck endlessly loading a Web page. After years of limiting companies to no more than one-third of the available airwaves in a given territory, the F.C.C. on Friday will begin the rule-making process on whether new technologies require limits to be redrawn, recalibrated or perhaps removed.

The F.C.C.’s decision, which probably will not be final for about a year, will have broad effects on consumers and companies. It plays a part in another matter the agency is expected to consider on Friday: rules for auctioning off newly reclaimed airwaves.

In that effort, the commission is aiming to take back portions of the airwaves used by the military or by television broadcasters, offering cash incentives for companies or other groups to give up their spectrum. Those airwaves would be auctioned, with a portion of the proceeds going back to the original license holder.

By giving more weight to the best-performing spectrum, the F.C.C.’s overall limits could increase competition by restricting the big companies from buying too much of the airwaves, said Matt Wood, policy director for Free Press, a consumer advocacy group. “It is not the sheer amounts that matter,” he said. “It is where it is located on the radio dial that makes certain spectrum more valuable to a wireless company’s business.”

Some wireless company executives disagree, saying that the fact that some airwaves can travel farther than others is meaningless in a large city like New York, where so many users are congregated that a company already has to put in extra towers to keep airwaves from being overloaded. Overloading, of course, results in dropped calls.

Nevertheless, the quest for new rules is being welcomed by large and small mobile phone companies alike, each looking for a competitive advantage. Public interest groups that often oppose the companies’ efforts to trade spectrum also favor changes.

“There are a lot of competing interests here,” said Walter G. D. Reed, a partner at Edwards Wildman Palmer in Providence, R.I., who has worked on telecommunications issues. And the F.C.C.’s challenge is how to allow companies like AT&T and Verizon expand their businesses while ensuring that smaller carriers do not get shut out.

Wireless industry executives say that they would welcome almost any new standards because that would remove the uncertainty cast by the agency’s past practice of weighing potential spectrum deals case by case.

“Spectrum policy in this country needs to be built on a full factual record and rational economic policy,” Joan Marsh, vice president for federal regulatory issues at AT&T, said in an interview. “Carriers need a clear and reliable understanding of when and under what circumstances spectrum acquisitions will be permitted, something we do not have today. This proceeding will provide the vehicle to meet both goals, and take spectrum policy out of merger-specific proceedings and place it in an industrywide rule-making, subject to judicial review.”

The F.C.C. staff has circulated its proposals to the five-member commission, but the agency would not discuss the possible outcomes before the Friday meeting.