December 03, 2018
D.C. Readers: You're invited! Join Axios' Kim Hart this Wednesday for a breakfast-time conversation on how AI will impact our economy, jobs and day-to-day lives. RSVP here.
- Kim will interview both chairs of the Artificial Intelligence Caucus, Reps. John Delaney and Pete Olson, plus former undersecretary of defense for policy Michèle Flournoy and former Pennsylvania Gov. Ed Rendell.
1 big thing: The many faces of the digital divide
We tend to think of a single "digital divide" separating the haves and have-nots in the online world, but inequality in the internet era takes on a vast number of forms.
Economics and geography play the biggest role, with those in cities enjoying far greater connectivity than those in rural areas. Similarly, people with more wealth tend to have more and faster connections. While those are the two biggest factors, there are also differences across race, education and age.
The bottom line: Not all online access is equal. People in rural areas often have significantly fewer and slower options than their city-dwelling counterparts.
- And while many low-income households in cities have some broadband access, it's far more likely to be limited to a cellphone, which is less versatile for doing homework and applying for jobs.
The big picture: Over the weekend, Axios took a deep dive into the many digital divides in America, looking at the debate over how much access kids should have to cellphones, iOS vs. Android, the impact of 5G and other issues.
There's lots to dig into, but here are a couple of points that stand out to me...
- For all the talk about Silicon Valley executives keeping their kids away from smartphones, most of the country sees early access to technology as a key means of gaining the skills needed for the jobs of the future.
- Speaking of smartphones, those at the high end of the economic ladder have their choice of iPhone or Android, while those who can't afford several hundred dollars for their phone are likely to have only Android options. That means they are likely to see more ads and have less built-in privacy protection.
- Privacy: You pay Google with data, Apple with cash
- The "homework gap": 12 million schoolchildren lack internet
- New inequality trend: How parents approach screen time
- Where the death of local news hits hardest
- The bottom line: Wealth is driving how people get the internet
- What the government is doing on internet access
- Electricity 2.0: Small cities rush to innovate on wifi
- The high price of free Facebook in the Philippines
- What's next: How the online world reflects inequality
2. A truce in the tariff war with China
It may not be a long-term deal, but there's at least a 90-day truce in the ongoing trade war with China.
Quick take: This means that, at least for now, we won't see tariffs imposed on additional Chinese-made goods, including Apple's iPhone.
Plus: Chinese President Xi Jinping also indicated that his country would now be open to approving Qualcomm's deal to buy NXP Semiconductor.
- Reality check: There's just one problem with that — the deal has been terminated and Qualcomm says it has moved on.
- "Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap,” it said in a statement.
ITI CEO Dean Garfield offers this response, via a statement:
"We’re encouraged by this progress and urge both leaders to stay focused on the benefits of an open and rules-based trade relationship...
"For the United States, those benefits include increased business opportunities for startups and other small businesses, greater exports for American companies, and more jobs for American workers...
"For China, it would enhance trade and investment opportunities in markets around the world and serve as an important signal that China accepts established norms and rules for international commerce."
Consumer Technology Association CEO Gary Shapiro says in a statement:
"While China's restrictive measures should be addressed, tariffs are taxes — and these past five months since the tariffs went into effect hurt U.S. businesses and consumers...
"Through September, the tech industry alone paid $349 million more on imported goods from China — a nearly 200 percent increase compared to last year — and more than doubling the 10% tariff rate would likely hurt consumers, put several American companies out of business and displace thousands of American workers."
3. Qualcomm and Apple not close to a deal, after all
In other Qualcomm news, last week CEO Steve Mollenkopf suggested that his company and Apple might the "on the doorstep" of a resolution to their long-running legal battle.
Not so fast. In San Diego Federal Court on Friday, Apple's lawyers suggested in that there were no talks.
Apple lawyer Juanita Brooks said, per Mlex (subscription required),"We are not engaged in settlement discussions and haven’t been in many months. We are ready for trial.”
Qualcomm said Mollenkopf has made it clear in the past that a “resolution” could come from either a settlement or from a decision out of court.
- The judge in that case, one of many disputes around the world between the 2 companies, set an April 15 trial date.
Why it matters: The case is a huge one, pitting together two giants of the tech world used to getting their way.
- In pushing forward in court, Qualcomm has lost revenue from one of its biggest customers, while Apple has been forced to go without Qualcomm's modems, which often support features rival chips don't.
- That said, Apple has managed to make that transition, going exclusively with Intel modems for the latest-generation iPhones.
4. Nexstar nabs Tribune TV stations
Nexstar Media Group has agreed to acquire Tribune Media for around $4.1 billion, as first reported by Reuters and confirmed by Axios.
Why it matters: This would make Nexstar the country's largest owner of local television stations, Axios' Dan Primack reports.
- This comes just months after Sinclair Broadcast Group saw its $3.9 billion deal for Tribune Media fall through, after it was accused of lying to regulators.
Between the lines: A source says that Nexstar's all-cash bid of $46.50 per share was "less than a dollar" per share better than the runner-up offer from buyout firm Apollo Global Management.
- Other bidders included Cerberus Capital Management, while a proposal led by entertainer and media entrepreneur Byron Allen ultimately never materialized due to financing difficulties.
- The deal remains subject to regulatory review, with expectations that it may not close for at least one year. Nexstar also is likely to divest certain stations.
Go deeper: The local TV consolidation race is here
5. Take Note
- Business Insider's Ignition conference runs today and Tuesday in New York.
- A new report says updated Apple AirPods could come in early 2019, with a more substantial overhaul due in 2020. (The Verge)
- After the end of trading on Friday, Microsoft passed Apple to become the most valuable company in the world by market cap. For a refresher on how Microsoft has reached that point, check out this story from earlier in the week. (Axios)
- Senators issue a fresh call for privacy and data protection legislation in the wake of Marriott's data breach. (CNET)
6. After you Login
Need a little Monday morning pick-me-up? Try this.