Verizon Opens Up, Wells Fargo Writes Down
Verizon Wireless surprises everyone by opening its network to non-Verizon phones. Wells Fargo finally joins the ranks of banks smarting from the housing slump. And the FCC approves rules that increase regulation of the cable industry.
EWS AT A GLANCE
Verizon opens its airwaves
Verizon Wireless said it will allow customers to use any compatible device or software on its network, starting in late 2008. The announcement marked a sharp reversal for Verizon. (The Wall Street Journal) There are a few caveats, though: Verizon must approve all devices, and the handsets have to run on the CDMA standard rather than the more widely used GSM—so no iPhone, for example. And Verizon hasn’t announced the pricing scheme. (BusinessWeek.com) But the move won applause from advocates of opening up the U.S. wireless market. “It’s small step for Verizon but a pretty big step for the wireless industry,” said Shahid Khan at IBB Consulting. (The Washington Post)
Wells Fargo takes home-equity hit
Wells Fargo, the No. 2 U.S. mortgage lender, is setting aside $1.4 billion in the fourth quarter to cover losses from home equity loans. Wells Fargo had avoided most of the recent mortgage turmoil, and the news sent its stock down 4.5 percent in extended trading. (MarketWatch) The $1.4 billion reserve will cover the liquidation of a $11.9 billion portfolio of the bank’s riskier home equity loans. Wells Fargo also said it will tighten lending standards. “Wells is one of the most conservative and strongest lenders,” said David Olson of industry tracker Wholesale Access. “If Wells is taking this big a writeoff, others will need even more serious writeoffs.” (Reuters)
FCC settles for cable compromise
The Federal Communications Commission approved sharply scaled-back rules last night that modestly increase regulation of the cable industry. The rules require cable companies to provide the FCC with more detailed information about subscriber numbers. They also lowered the price some small community programmers will pay to lease channels. (The Washington Post) FCC commissioners balked at heftier proposals pushed by FCC Chairman Kevin Martin, following a lobbying blitz from cable companies. Commissioners from both parties accused Martin of overreaching and issuing misleading data on cable provider market share. (The New York Times, free registration required)
Facebook plays the Grinch
Facebook’s new Beacon feature is spoiling Christmas for some online shoppers, and those shoppers are really mad. Beacon broadcasts members’ online purchases like a newsfeed for their “friends,” even when the member is not using Facebook. The issue prompted MoveOn to start a “Facebook, stop invading my privacy!” campaign a week ago, and more than 24,000 people have signed up so far. The petitioners want people to “opt-in” to the newsfeed when they purchase from participating retailers, rather than opting out. Matthew Helfgott, 20, found out his girlfriend is getting him gloves for Christmas, thanks to her Beacon. “She was ticked off,” Helfgott says. (MarketWatch)
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