Reports indicate IPO fever has gripped the country, with many folks cashing in on other investments to jump aboard the Facebook train. But investors should be paying close attention to Washington, where the prospect of online privacy regulations could put a heavy dent in the company's bottom line. I appeared on C-SPAN's Washington Journal on Thursday morning to discuss Facebook's DC office and the company's lobbying efforts; you can watch the video here. Facebook's initial public offering is expected to raise $16 billion for the social networking giant by offering 421 million shares at an opening price of $38 each. It will be third-largest public offering in U.S. history behind General Motors and Visa, valuing the company at a staggering $104 billion just eight years after Mark Zuckerberg created the original site in his Harvard dorm.
While much of Silicon Valley and Wall Street are positively giddy about the prospect of all that new wealth, two Senate Democrats were less than pleased with Facebook co-founder Eduardo Saverin's decision to renounce his U.S. citizenship last year ahead of the IPO. CQ's Ambreen Ali reports Chuck Schumer of New York and Bob Casey of Pennsylvania introduced a bill Thursday that would make it easier for the IRS to ban wealthy ex-pats from every visiting the U.S. again. The bill would require the IRS to assume individuals with a net worth of more than $2 million that renounce their citizenship are doing so for tax reasons, forcing such individuals to provide a "very, very good reason" to the IRS for why they are doing so or be banned from the U.S. for life, according to Schumer.
Saverin was forced to pay an exit tax on his holding in lieu of a capital gains tax, but Schumer said that amount was as much $100 million less than he would have paid had he stayed in the U.S. The Facebook co-founder has said his decision wasn't based on taxes, but that hasn't stopped him from being savaged in the press as ungrateful to his adopted nation. Regardless, the bill would appear to have an uphill climb toward becoming legislation, particularly in the House.
House Votes to Ease Exports of Satellites: CQ's Frank Oliveri reports the House approved an amendment to the fiscal 2013 defense policy bill (HR 4310) on Thursday that would ease export controls on commercial satellites and related components. Satellite makers have pushed the Defense and State Departments to remove commercial satellites from the list of defense and space-related technologies that require a special government license to be exported. The bill stills bans outright exports to nations such as China, Iran, and North Korea that are considered national security threats. The amendment was based on a bill (HR 3288) from Rep. Howard Berman, D-Calif., and approved by voice vote. It enjoyed broad bipartisan support, which bodes well for its prospects in the Senate. Cellphone Privacy Bill Gains Steam: Ambreen Ali reports that a bill (HR 2168) to protect the privacy of consumers and their geolocation data drew praise during a House Judiciary Subcommittee on Crime hearing Thursday. Members of both parties had kind words to say about the measure, which would require law enforcement officials to obtain a warrant before they could subpoena wireless carriers or GPS providers for location data about customers. A companion measure (S 1212) from Sen. Ron Wyden, D-Ore., is currently pending in the Senate. Broader privacy legislation is a tough sell at present, as there doesn't seem to be much agreement on the need for legislation outside of the White House and a few Senators. But several bills in front of Congress would update the Electronic Communications Privacy Act to address newer technologies.Any opposition to the bill is likely to be driven by law enforcement groups, which argued at the hearing that the probable-cause threshold is too high and could prevent them from solving crimes. That stance is not surprising, since law enforcement organizations consistently push for greater authority to prosecute crimes with less judicial oversight, particularly in the digital arena. Rep. Trey Gowdy, R-S.C., sided with the law enforcement representatives at the hearing, but stopped short of opposing the bill.
FCC Chairman Pushes Wireless Medical Devices: Federal Communications Commission chairman Julius Genachowski announced Thursday that the FCC will consider allowing greater use of wireless devices that monitor individuals' health and collect information for medical providers. The proposal would attempt to foster innovation by allowing medical devices to share the 2360-2400 MHz band of spectrum. Twitter Supports Do Not Track: Twitter announced Thursday that it supports Do Not Track technology and will give users the option to turn off information collection features while using Twitter. The micro-blogging service becomes the first major social networking site to honor Do Not Track, which has been pushed by the Obama administration as a voluntary alternative for Web companies eager to avoid privacy regulations. The Federal Trade Commission has also urged companies to adopt Do Not Track technologies or face the possibility of new rules requiring them to do so. Twitter's announcement drew support from Sen. John Kerry and Rep. Edward Markey, both Massachusetts Democrats that have offered some version of online privacy legislation.