National Briefing

Wednesday, July 23, 2008

MERGERS & ACQUISITIONS

FCC Member Opposes Radio Deal

Michael J. Copps, a Democratic commissioner at the Federal Communications Commission, voted against the satellite radio merger between XM and Sirius, bringing the total votes on the merger to two in favor and one against.

Republican Commissioner Deborah Taylor Tate and Democratic Commissioner Jonathan S. Adelstein haven't cast their votes on the proposal to create a monopoly satellite radio provider. Adelstein last week indicated that he would support the merger if the companies agreed to several commitments to cap prices for six years and set aside radio spectrum for minority programming.

The firms haven't commented on Adelstein's proposal and have waited about 16 months for their merger to pass through regulatory scrutiny.

LEGAL

Union Pacific Settles Wildfire Case

Union Pacific Railroad will pay $102 million to settle a federal lawsuit over damage from a massive California wildfire caused by railroad employees in 2000. U.S. Attorney McGregor Scott said the settlement is the U.S. Forest Service's largest-ever damage recovery for a wildfire. Union Pacific spokeswoman Zoe Richmond said the Omaha company agreed to settle after a federal judge ruled against it in February. Sparks from welders repairing tracks caused the fire, which burned more than 52,000 acres in the Plumas and Lassen national forests north of Sacramento.

ENERGY

Oil Report Contradicts Pending Bill

A report from the Commodity Futures Trading Commission said yesterday that supply and demand rather than the activities of financial actors and big investors are "the best explanation" for the recent rise in crude oil prices. The report included a review of private trading data available to the CFTC. It did not include more detailed data that the agency requested from big commodity investors. An analysis of that information will not be ready until September, the agency has said.

The report is in stark contrast with the position of Democrats, who say the tremendous growth of financial actors is impacting the price of oil and other commodities.

Meanwhile, the Senate voted to move ahead with a Democratic plan to curb speculation in oil markets, which some blame for the recent run-up in oil prices. The 94 to 0 vote clears a procedural hurdle for the bill, which would require the CFTC to limit trading in oil markets by investors and speculators. Despite the big tally, however, the rival parties are divided on how to address high gasoline prices and an underlying stalemate remains.

INVESTING

More Disclosure Sought on 401(k)s

Millions of participants in 401(k)-style retirement plans would receive more information about the costs of those programs, a move that could help boost savings, under a rule proposed by the Labor Department. The additional information will make it easier for employees to invest in lower-cost mutual funds and other investments, said Bradford Campbell, an assistant secretary at the Labor Department.

The department estimates the disclosures would save participants $6.1 billion over 10 years, including $2.3 billion from lower fees as investment providers compete more on cost. The rest will come from the time participants save tracking down the fees, which are currently found in a range of separate documents.

AUTOMOTIVE

GM, Utilities Plan Hybrid Network

General Motors will work with more than 30 U.S. electric utilities on a network for customers to easily recharge its Volt plug-in hybrid when the car debuts in late 2010 as part of a push for more fuel-efficient models. The automaker is collaborating with power companies such as American Electric Power, Duke Energy and PG&E on universal technical standards for charging the plug-in automobile that will get its energy from a wall outlet and drive 40 miles on a single charge, GM executives said.

TELEVISION

TiVo to Add Amazon.com Content

TiVo, the digital video recorder pioneer, will offer subscribers the ability to purchase from Amazon.com through their televisions. The service will allow users to search and buy books, DVDs and CDs promoted on programs such as "The Oprah Winfrey Show" and "The Colbert Report," TiVo said. Financial terms weren't disclosed.

EARNINGS

United Parcel Service reported that higher fuel costs and a decrease in domestic shipments in the second quarter caused a 21 percent drop in profit, to $873 million from $1.10 billion in the comparable period a year earlier. Revenue increased 7 percent, to $13 billion.

UnitedHealth Group said second-quarter profit fell to $337 million from $1.23 billion. Hefty lawsuit settlements and thinner margins in its health-care services business contributed to the drop. Revenue rose 7 percent, to $20.27 billion.

Caterpillar's second-quarter profit grew 34 percent, to $1.11 billion, as stronger sales in developing countries outpaced slowing growth in North America. Revenue rose 20 percent to $13.62 billion.

Freeport-McMoRan Copper & Gold said second-quarter profit fell 14 percent, to $947 million, on lower copper and gold sales and one-time costs. Revenue was flat at $5.4 billion.

E-Trade Financial said it swung to a loss during the second quarter due to a sharp increase in loan-loss provisions. E-Trade lost $94.6 million compared with profit of $159.1 million. Revenue fell 20 percent to $532.3 million.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.