Wednesday, July 1, 2015

Archive: July, 2010

POSTED: Saturday, July 31, 2010, 4:19 AM

We'll be back Monday, August 9.

Til then, scroll through the archive at  

Happy Summer -

Joseph N. DiStefano @ 4:19 AM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 1:52 PM

Alliance Bank, of Broomall, has won a preliminary injunction from Federal Judge Joel Slomsky ordering New Century Bank, Phoenixville, to halt plans to rename itself as Customers 1st Bank. (Judge's decision is here.)

The two banks run competing branch networks in Philadelphia's western suburbs. New Century boss Jay S. Sidhu, who formerly ran Sovereign Bank, said in April his bank was changing its name to Customers 1st Bank to avoid confusion with failed lenders in California and New York with similar names. But Alliance complained it had already trademarked the name "Customers First" and uses it on its checking accounts.

Slomsky, in his ruling, noted the U.S. Patent and Trademark Office had refused to trademark the name for Sidhu's bank. He called New Century's proposed logo "strikingly similar" to one Alliance already used. The judge ordered New Century to refrain from using the name, and to post a $150,000 bond, pending a permanent decision or additional court action.

Joseph N. DiStefano @ 1:52 PM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 1:02 PM

IMS Health Inc., a Connecticut-based drug data management company, is consolidating 1,000 workers, from buildings it owns at 660 Germantown Pike, Plymouth Meeting, and other space in Blue Bell, to smaller quarters in the Highview I and II buildings at the Providence Corporate Center, Collegeville.

The Highview buildings were left vacant when drugmaker Pfizer Inc. bought Wyeth last year and cancelled plans to expand Wyeth's neighboring research and development site. IMS's lease allows Pfizer to "buy out of" Wyeth Pharmaceutical Co. leases that expired Dec. 31 and in 2013, Stephen Spaeder, senior vice president at landlord and builder BPG Properties Ltd., which built and owns Highview, told me.

Spaeder said IMS is paying modest initial rents in the mid-$20s per square foot per year. IMS's old buildings totalled 212,000 square feet; the Highview complex totals 150,000. IMS will likely sell the old buildings, spokesman Gary Gatyas told me. The move allows IMS to put more of its workers in one "campus-like" location at "highly competitive" terms, Bill Nelligan, president of IMS Health's Americas division, said in a statement.

Joseph N. DiStefano @ 1:02 PM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 9:11 AM

Congress will review the problems at housing-finance lenders Fannie Mae and Freddie Mac before November's elections after all, US House of Representatives banking committee boss Rep. Barney Frank (D-Mass) and his lieutenant Rep. Paul Kanjorski (D-Pa.) promised last night. Kanjorski added that he expects the government-backed mortgage finance giants to repay billions in bailout costs.

"The committee will continue its series of hearings on the future of housing finance in September," they said in a statement. Kanjorski "will conduct an oversight hearing of the (Government-Sponsored Enterprises), and the full committee will continue its examination of policy options for restructuring the nation's housing finance system."

The pair passed over assigning (or accepting) responsibility for Fannie's and Freddie's multi-billion-dollar deficits, and instead took credit for the ensuing bailouts: "By passing the legislation in 2008 that allowed the Bush administration to put the GSEs into conservatorship and by finally enacting strict prohibitions against the sort of reckless, predatory and subprime loans that have been made in the mortgage market, we have completed the initial, defensive steps needed in the housing area."

Frank added: "We will continue our efforts as we move to the next phase, a complete restructuring of the tangle of housing finance tools so that we move forward in a way that protects taxpayers, prevents economic turmoil and appropriately serves all aspects of the housing market," said Frank.

Kanjorski: "The landmark Wall Street reform law has laid the foundation for reforming our housing finance system by altering securitization rules, protecting against inflated appraisals, and holding rating agencies accountable... In September we will examine taxpayer protection issues in greater depth.  In particular, we intend to explore the Federal Housing Finance Agency's recent efforts to recoup funds from the issuers of the underwater securities purchased by Fannie Mae and Freddie Mac.  We also will examine the present policies related to calculating guarantee fees, including whether these charges are appropriately priced to cover risks and provide a reasonable return...

"As our housing markets begin to stabilize, we will begin to consider innovative ideas for recovering the costs resulting from the decision to place Fannie Mae and Freddie Mac into conservatorship.  Twenty years ago, we found a way for industry to pay back the sizable U.S. Treasury payments for resolving the savings-and-loan crisis.  We can do it again." More from the House Financial Services Committee here.

Joseph N. DiStefano @ 9:11 AM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 4:21 PM

The Obama stimulus, economists Mark Zandi of Moody's and Alan Blinder of Princeton told us in a  30-page report this week, has helped stabilize the big ugly recession, and keep it from turning into a bigger uglier depression.

The bank bailouts, now mostly repaid, helped more, they added. But the stimulus helped.

How long will we be paying for this? In the case of one stimulus program, the Build America Bonds, those payments will go on for decades -- and the cost will grow, as the temporary program gets renewed, if some in Congress get their way.

Build America Bonds are taxable bonds, used to fund local-government spending, that yield interest rates that are higher than the usual tax-free muni rates -- that's supposed to attract nervous investors -- yet are cheaper than traditional munis, for the towns and states that sell them, because 35 cents of every dollar of interest the towns have to pay is being subsidized by federal taxpayers.

BABs were cooked up while the bond market was still partly frozen from the 2008 credit crisis, and Congress worried states, cities and townships, foundering as income and property tax collections fell, wouldn't be able to borrow any more money without paying ruinously high rates.

Since governments tend to borrow for 10-, 20- and 30-year periods. That makes BABs a longterm comittment. In Pennsylvania alone, state government and local agencies issued over $2 billion in BABs from January through June of this year.

Some in Congress want to extend the program. House Ways and Means Committee chairman Sander Levin last week rolled out an "American Jobs and Closing Tax Loopholes Act" that would extend new BAB issues into 2013. He praised BABs as an American success story that saved millions of jobs, according to the Bond Buyer newspaper. Republicans balked previous efforts; in a concession, Levin has agreed to cut the future federal BAB subsidy to 30 percent.

Joseph N. DiStefano @ 4:21 PM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 3:30 PM

At Kevin Werbach's Supernova conference this morning: Wharton professor David Chu led founder Josh Kopelman, now of Conshohocken's First Round Capital; Marc Berejka of the U.S. Department of Commerce; and Andy Weissman of Betaworks in a discussion of how startup funding has changed.

They didn't say much about some obvious changes - the way there's less money in venture-capital funds than there was ten years ago, and fund returns are lousy, making it tough to raise more. Instead they focused on the online social networks and local groups by which "angel investors" and others with capital find good ideas and people they trust:

Kopelman: "The Internet has changed... the power system… When I cofounded my first company, Infonautics, in 1991 the ecosystem was v different… You would go to venture capital, and the (specialty VC trade) press would write about you." From places like Philly, as a result, "my ability to connect with VCs anywhere in the country was limited."

By contrast, investors and company founders trade information at Ycombinator, Hacker News and other sites. "There's Philadelphia Startup Leaders and other local networks. Power is much more in hands of entrepreneurs" versus investors. "There are different gatekeepers in the system."

The role of venture capitalists has also changed. "Conventional wisdom had always been, you choose a firm and specifically a partner that you want to work with. Now there’s a third leg to the stool: Firms are beginning to offer networked or structured value within the firm... For example: We have a CEO mailing list. CEOs are constantly exchanging questions: 'Can you recommend a good PR firm?' 'How many shares should I give to a VP of marketing post-A round?'"

Kopelman told the story of how Mint Software, backed by First Round, launched in 2007 "with a goal of 25,000 users" - but got swamped by 17,000 in its first day. "The site crashed." They found the problem, in installed software,  and quick sent a note on the CEO list asking who knew how to fix it. While Kopelman and other investors were making frantic direct calls to customer service, two of the network CEOs reached the software firm's own CEO - asleep in bed in Germany - and fixed the problem in ten minutes. "That's the power concentrated networks of peers and cohorts bring. As more and more firms build these networks, partners will be chosen on the basis, not just of individual or firm reputation, but also (social) network reputation."

Angel List is an unbelievable tool... Yelp... Dreamit Ventures... Techstars... all these closed and open networks (which) entrepreneurs have at their disposal to reach venture caplitalists. The connectivity (used to be) all thru personal relationships and conferences Today youre seeing that blogs and social media are really disrupting that. That’s a really positive thing…

Weissman: "When I worked at AOL in the mid '90s our thesis was that readers wanted to go one place for best of everything… We were wrong..." Given the "fragmentation" of media, the way "old and new media" are jumbled on the Internet, "people like Josh and us are trying to create organizations that reflect the way business we interact with work… 'Network' implies that the way the pieces fit together can be loosely coupled.... We’re trying to build a structure that reflects the way users experience this." 

Berejka said that, despite all the apparent fragmentation, "We have to recognize there is a stark trend toward agglomeration or consolidation" by big companies. While in the 1990s policymakers worked on the principle of "do no harm, light touch," today's problems "are more complicated."  The FCC "is trhing to keep the internet open." The Commerce Department is trying to balance the rights of "intellectual property" and privacy against the demands of multiple users. 

Meanwhile, are "parts of the country being left behind?"


Joseph N. DiStefano @ 3:30 PM  Permalink | 0 comments
POSTED: Friday, July 30, 2010, 3:03 PM

Kevin Werbach interviewed Comcast executive vice president David L. Cohen and held a Q&A today at Werbach's yearly Supernova Internet conference, at the Wharton School in West Philly. Excerpts:

  On where Comcast "fits" with Apple, Google, and other big tech companies: "As a partner." Quoting Eric Schmidt, boss of sometime Comcast rival Google Inc., without Comcast and other cable companies' broadband wires, "'Google wouldn't exist'... Obviously one of the great attractions to our (online) customers is the accessibility to Google. We can't exist without everyone in that ecosystem. And they can't exist without us."

  On Comcast's conflicts with the FCC and other powers: "There have been relatively (few) fights about what we’re doing, and more fights about the role of government in controlling content, in what we do, and what we might do in the future."

   Cohen (who is chairman of the Penn trustees) compared the FCC to 1990s Penn professors who vetoed laptop connections because they didn't want students to be distracted in class: "The unintended consequence of that rule produced a silly result. Our concern about government involvement and unintended consequence derives from that story. Not that government is ill intended (or wants to) impede innovation. But the unintended conseqeuences of legislation and regulation, that takes a long time to do and a long time to fix, could... retard investment and retard innovation."

  On why we should trust Comcast not to limit our Internet choices to programs it controls: "There's not a lot of incentive" to block rival content. "Therefore an intrusive government role to protect the system from theoretical steps we could take is unnecessary… This whole discussion continues to be a solution in search of a problem."

   On government's proper role in regulating Internet service: "A light and evolving and appropriate involvement by the government that protects the incentives to invest and the incentive to innovate... (and) also does not create disincentives for us to invest, and the regulatory uncertainty." 

   On the "secret discussions" between cable operators and other technology users: They're  "designed to find that sweet spot and that middle ground that works for the entire community." Companies want "regulatory certainty, incentives to invest," and "a wide-open Internet. It's just a question about the means... Lots of different players in the ecosystem share this view."

   On Obama and his FCC boss: Julius "Genachowski has to be most qualified chairman of the FCC we have ever had." He has tech cred, and he's deep into policy -- but he also "also come with a business background.... He deserves more credit than he has gotten for leading a dialogue... and put out creative and constructive ideas… and say(ing), 'I don’t really know everything.'"

    On why Comcast is buying NBC: "It gives us a little bit of final sophistication. It’s consistent with (Comcast CEO) Brian Roberts' vision, for 10 or 15 years, that content and distribution do well together… But the No. 1 reason for the deal from our perspective is the ability to accelerate... the delivery of what we think consumers demand, which is what we call 'anytime, anywhere television.'" 

   Forget the old days of Sunday dinner with the family, then "Wonderful World of Disney," are over. "My family doesn’t watch television (together) anymore. People want to watch what they want to watch where they want to watch it." That's why Comcast needs control of programming rights, and technology, so it can be "the owner of the customer relationship" across different media.

   On why that doesn't make Comcast a monopolist: "We don’t have enough of the marketplace to be able to change history for everyone else.... Combined NBC and Comcast content will rep about 12 percent (of U.S.television) by revenue or ratings.... We can't be successfulby distributing it exclusively on the Comcast platform."

   On corporate culture clashes: "We are not going to try to Comcast the NBC Universal people… We are going to try to make the NBC culture more comfortable than it’s been in the GE world." NBC and Universal will "operate as  a freestanding creative content company." Comcast will "try to improve the family feel of the organization without trying to impose a Comcast discipline or a Comcast approach to biz issues or solving problems.... The headquarters are remaining separate." Though, by the way, "80 percent of NBC Universal is neither NBC nor Universal. It’s the cable channels," the same business "we are already in."

   On why independent online video doesn't threaten Comcast: "We view video over the Internet as a complement to our cable subscription business...  You can't produce the content that’s being produced in America today without subscription revenues.... Even if video over the Internet becomes the dominant way people watch video they still have to watch it over our high-speed data business...

   "We think we’re pretty well positioned to take advantage of all of the developments we see taking place...  We stand ready to be the right kind of partner to facilitate innovation for everyone in the world."

Joseph N. DiStefano @ 3:03 PM  Permalink | 0 comments
POSTED: Thursday, July 29, 2010, 10:08 AM

Internet gambling could go from being mostly banned in the United States to being legal, licensed, casino-controlled, and taxed, soon, thanks to US Rep. Barney Frank, D-Mass., who pushed HR-2267 through in a bipartisan 41-22 vote in his House banking committee last night. Rep. Jim Gerlach, R-Pa., is among the local lawmakers on the committee who voted Yes.

Looks like the bill well get added as an amendment on a larger "must-pass" law, sparing House and Senate members a public debate and vote on gambling that could otherwise make them unpopular, according to FBR Capital Markets casino-stock analyst Edward Mills, who was there watching. "Frank cares a lot about this bill," he told me. Credit card bets are prohibited, but debit card debts that drain the family savings account are allowed.

How'd this happen? The casinos got to help write the bill - and the government gets a big cut: 2% of your bet deposit goes to the US Treasury, and up to 6% to state or Indian-tribal treasuries (though states can opt out if they really want to), Mills says. The feds will also collect a separate wager tax, and will try to collect income taxes on your gambling profits. In all, supporters claim oline gambling will add $42 billion over 10 years to the U.S. Treasury, and $30 billion for the states and participating tribes.

Isn't online gambling competition for casinos? This bill is written to make it relatively "easy to comply" for existing gambling operators and casino owners, says Mills. By contrast, it bans online-betting entrepreneurs who've already been convicted of breaking U.S. betting laws from getting the new licenses.

Joseph N. DiStefano @ 10:08 AM  Permalink | 0 comments
About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at,, 215.854.5194 or 302.652.2004.

Reach Joseph N. at or 215 854 5194.

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