Repeal of FCC rules pitting privacy advocates vs. ISPs passes Senate

(courtesy of Jacksonville Business Journal)

While the push for health care reform and Supreme Court confirmation hearings continue to dominate this week’s Washington news cycles, a Senate vote on internet privacy matters taken today is drawing the attention of business owners and consumer advocates alike.

At issue are privacy rules that were put in place by the Federal Communications Commission last year, ahead of the fall elections. The rules required companies to get consumers’ consent before they could share a host of web-browsing data with advertisers and other third parties, but the move put consumer-privacy advocates in conflict with companies that insisted the rules stifled innovation and service.

ISPs like Verizon (NYSE: VZ) and Comcast (NASDAQ: CMCSA) were reclassified as “common carriers” in 2015, a measure that eventually put them under the purview of the FCC, whereas big websites like Google (NASDAQ: GOOG) and Facebook (NASDAQ: FB) are regulated by the Federal Trade Commission. Thus, as Wired notes, Google can sell consumers’ web-browsing data to third parties without the same level of consent requirements that ISPs face.

And it’s not just the ISPs that wanted the rules wiped out. Advertising groups also have lobbied against them, as AdAge reported recently. It cited a statement from several of the groups that read, “Without prompt action in Congress or at the FCC, the FCC’s regulations would break with well-accepted and functioning industry practices, chilling innovation and hurting the consumers the regulation was supposed to protect.” Broadcasting & Cable added that the bill’s sponsor, Sen. Jeff Flake (R – Ariz.), suggested the rules prevent ISPs from adjusting services to customers’ needs.

At the same time, proponents of the rules largely took on the position that they were necessary to protect people from corporate overreach into private information. For example, Sen. Ed Markey (D – Mass.) argued that pulling back on those rules effectively means more companies get to decide how much privacy individuals can enjoy, TechCrunch reported.

That same TechCrunch report noted a further complication of the Senate’s vote: Republicans are pursuing the matter under the Congressional Review Act, which allows legislators to undo regulations passed at the end of a previous presidential administration. That means the stakes are even higher than usual because should Congress undo those regulations, the FCC would be barred from issuing those same rules in the future, the report said.

The resolution still needs to pass the House of Representatives to take effect.

David A. Arnott is the National News Desk Editor with The Business Journals.

 

 

Intel to buy driverless car-tech firm Mobileye for $15 billion

(courtesy of reuters.com/technology news)

U.S. chipmaker Intel (INTC.O) agreed to buy driverless car-technology firm Mobileye (MBLY.N) for $15.3 billion on Monday, positioning itself for a dominant role in the autonomous-driving sector after missing the market for mobile phones.

The $63.54-per-share cash deal marks the largest purchase of a company solely focused on the self-driving sector.

Mobileye’s shares jumped as much as 30 percent to $61.51 in early U.S. trading, while Intel’s shares were down 1.3 percent.

The deal underscores the expanding alliances between automakers and their suppliers as they race to develop self-driving cars, a concept that once seemed a science-fiction dream but is drawing closer to reality.

While Intel is known for hardware chips and Mobileye for collision detection software, the merger promises to create a large portfolio of technologies needed for driverless vehicles.

That includes cameras, sensor chips, in-car networking, roadway mapping, machine learning and cloud software, as well as the data-centers needed to manage all the data involved.

“It’s an area where (Intel) has had very little presence – the automotive market, and so this is a tremendous opportunity for them to get into a market that has significant growth opportunities,” said Betsy Van Hees, an analyst at Loop Capital Markets.

“Mobileye’s technology is very critical … The price seems fair,” she added.

The offer represents a premium of about 33 percent to Mobileye’s Friday closing price of $47.

Intel will integrate its automated driving group with Mobileye’s operations, with the combined entity being run by Mobileye Chairman Amnon Shashua from Israel.

Intel Chief Executive Brian Krzanich said the acquisition was akin to merging the “eyes of the autonomous car with the intelligent brain that actually drives the car.”

Mobileye supplies cameras, chips and software for driver- assist systems – the building blocks for self-driving cars – to more than two dozen manufacturers.

The company was an early supplier of vision systems to Tesla, but the two companies had an acrimonious and public breakup last summer after the driver of a Tesla Model S was killed while operating the vehicle using Tesla’s Autopilot system.

Intel said it expects the vehicle systems, data and services market to rise to $70 billion by 2030.

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Mobileye, founded in 1999, accounts for 70 percent of the global market for driver-assistance and anti-collision systems. It employs 660 people and had adjusted net income of $173.3 million last year.

Analysts said that mounting a counterbid would be difficult as Mobileye’s Shashua would remain in charge and the combined entity would be based in Israel.

Shashua and two other senior Mobileye executives stand to do well by the deal: together they own nearly 7 percent of the company. Shmuel Harlap, Israel’s biggest car importer and one of Mobileye’s earliest investors, also holds a 7 percent stake.

Mobileye and Intel are already collaborating with German automaker BMW (BMWG.DE) on a project to put a fleet of around 40 self-driving test vehicles on the road in the second half of this year.

At the same time, Mobileye has teamed up with Intel for its fifth-generation of chips that will be used in fully autonomous vehicles that are scheduled for delivery around 2021.

Last October, Qualcomm announced a $47 billion deal to acquire the Netherlands’ NXP, the largest automotive chip supplier, putting pressure on other chipmakers seeking to make inroads into the market, including Intel, Mobileye and rival Nvidia NVDIA.O.

The Qualcomm-NXP deal, which will create the industry’s largest portfolio of sensors, networking and other elements vital to autonomous driving, is expected to close later in 2017.

For a dozen years, Mobileye has relied on Franco-Italian chipmaker STMicroelectronics to produce chips that the Israeli company sells to many of the world’s top automakers for its current, third-generation of driver-assistance systems.

Mobileye’s relationships with automakers, leading suppliers and STMicroelectronics will continue uninterrupted, the companies said in their statement, and Mobileye’s current product roadmap will not be affected.

(Additional reporting by Edward Taylor, Eric Auchard and Narottam Medhora; Editing by Luke Baker, Mark Potter and Saumyadeb Chakrabarty)

 

Mumbai-based conglomerate agrees to buy Jacksonville company

(courtesy of Jacksonville Business Journal)

A Mumbai-based technology company signed an agreement to purchase Jacksonville-based CJS Solutions Group LLC, which does business as The HCI Group, early Monday morning.

Tech Mahindra LTD will purchase an 85.7 percent stake in the company for an upfront price of $89.5 million and plans to buy the remaining stake over a three-year period, according to a statement from Tech Mahindra.

If the The HCI Group achieves all of its milestones during that three-year period, the Indian information technology giant will purchase the remaining stake for $130.5 million, bringing the total transaction to $220 million.

HCI Group Inc. is headquartered in Jacksonville, and has an international headquarters in the United Kingdom. The company provides “healthcare IT solutions in more than 10 countries in North America, Europe, Middle East and Asia Pacific, helping healthcare organizations plan, implement and sustain enterprise information technology systems.”

The company was founded by Jacksonville-native Ricky Caplin.

Caplin told the Jacksonville Business Journal that he views the merger of his company with $4.5 billion Tech Mahindra, as a tremendous opportunity.

“I plan to work with city leadership to position Jacksonville as the primary growth spot for Tech Mahindra, which if we capitalize on this opportunity, it will allow us to attract other international companies and technology firms,” he said.

Tech Mahindra currently operates a U.S. headquarters in Dallas, Texas.

The HCI Group will operate as an independent business unit of Tech Mahindra. A statement from HCI Group says the companies will be positioned “to offer new innovative and end-to-end integrated solutions to customers.”

The HCI Group’s financial advisor for the transaction is Allen & Company LLC, with Nelson Mullins Riley & Scarborough LLP serving as its legal counsel.

Derek Gilliam is a reporter for the Jacksonville Business Journal. He covers commercial and residential real estate and related industries as well as economic development and health care.