May 2011

The grumbles are beginning to pop up over AT&T’s attempted $39 billion takeover of T-Mobile. Here is a rundown of public comments from wireless carriers, and some subtext to explain their positions in terms of self-interest:

• Verizon: Some industry analysts say Verizon Wireless, jointly owned by Verizon and U.K.’s Vodafone, could get a lift if AT&T strips low-cost rival T-Mobile from the market. At the same time, AT&T could be distracted for a year or more securing all the necessary government clearances for the deal, and then integrating T-Mobile into the fold. The lull might help Verizon poach subscribers from its biggest competitor.
• Sprint: If the merger goes through, Sprint will be a distant No. 3 in the U.S. wireless market, which is increasingly looking like a two-man race.
• MetroPCS: Wireless companies may privately grumble about the AT&T-T-Mobile deal. But they also have to position themselves under the basket to pick up any rebounds. In this case, rebounds would be any subscribers or other assets the government might force AT&T and T-Mobile to sell as a condition of their merger. Spectrum — or the airwaves that carry signals for phone signals and wireless-Internet data — will be a particularly hot ticket for MetroPCS if its rivals need to throw assets overboard.
• Leap Wireless: Smaller, localized carriers such as Leap do matter in the proposed mega-merger. The Department of Justice is expected to scrutinize the AT&T deal for its effects on competition for wireless service in individual towns and cities — the markets where Leap’s Cricket wireless service and other mid-tier carriers sometimes beat up on big dogs like AT&T and Verizon.

NBC appears to have reached a peace accord on the retransmission issue with its local television station partners. The network and its affiliates are positioning this as a win for them and consumers. Though the two sides have not said what the split of so-called retransmission consent fees would be, the idea is that the stations have a better chance of getting more money from distributors if they team up and have NBC fronting for them than if they go it alone. But NBC’s plans may hit a bump in the road in the form of the Federal Communications Commission.

Earlier this year, after getting heat from Congress following several high-profile disputes between cable operators and programmers that led to or nearly led to service disruptions, the FCC launched a proceeding to review its retransmission consent rules to determine whether there were some actions it could take that would limit disruptions to consumers and make for smoother negotiations between programmers and distributors. One of the aspects the FCC said it wanted to look at was the role a network played in the negotiation efforts of its affiliate. Specifically, the FCC said it wanted comments on “whether it would be a per se violation for a station to agree to give a network with which it is affiliated the right to approve a retransmission consent agreement with an MVPD (Multichannel Video Programming Distributor) or to comply with such an approval position.” Although NBC’s deal with its affiliates is not specifically what the FCC is seeking comment on, it is virtually the same thing. By turning over negotiating rights to NBC, the affiliates are basically letting the networks sign off on the contracts. Cable operators are likely to make noise at the FCC about NBC’s efforts. Distributors would rather negotiate with one station in one town than a network representing multiple stations.

The PROTECT IP Act, a bill aimed at cracking down on rogue sites that steal content or sell counterfeit goods, is on the fast track.

Introduced by Sen. Patrick Leahy (D-VT) just two weeks ago, the bill will go before the Senate Judiciary Committee, which he chairs. It's likely to sail through the committee, especially because 12 of the committee's 18 members are co-sponsors. The content community—TV programmers, the movie and music industries, book publishers, and entertainment unions—has been pushing for legislation for years. A version of this bill legislation passed the committee 19-0 last year, only to be stopped by Sen. Ron Wyden (D-OR), who put a hold on it. Google Executive Chairman Eric Schmidt has come out strongly against the bill. A group of 13 public interest organizations, including the Electronic Frontier Foundation, Public Knowledge, and the Center for Democracy and Technology, chimed in with a letter sent Wednesday to Leahy and ranking member Sen. Chuck Grassley, R-Iowa. Acknowledging the Protect IP Act as an improvement over last year's version, the groups said they are still concerned about provisions that would allow Internet service providers to interfere with domain name look up services as well as what they consider overly broad requirements for search engines and hyperlinks.

Sen. Al Franken (D-MN) is pressing Apple and Google to require all apps made for iPhones, Androids and other devices to have privacy policies that detail when those games and other tools track a user’s location and why.

Sen Franken expressed concern that neither tech company has such a rule in place, even though they maintain the largest clearinghouses of smartphone apps, according to a letter Sen Franken sent to both companies’ CEOs. “Requiring that each app in your stores have a clear, understandable privacy policy would not resolve most of the privacy concerns in the mobile market,” wrote Sen Franken, chairman of the Senate Judiciary Committee’s new privacy panel. “But it would be a simple first step that would provide users, privacy advocates and federal consumer protection authorities a minimum of information about what information an app will access and how that app will share that information with third parties,” he added.