August 2011

FCC refereeing airwaves fight

New lobbying battles at the Federal Communications Commission are increasingly forcing regulators to determine “property rights” in the sky, as more business sectors rely on mobile technologies that are crowding the nation’s limited airwaves.

The battles now before the FCC pit oil rigs in the Gulf of Mexico against educational TV programmers on shore, makers of wireless patient devices against military test-flight centers, and automobile collision avoidance radar against scientists listening for life in the universe. “Battles that were put off years ago are going to come to a head,” said Paul Sinderbrand, a partner at Wilkinson Barker Knauer who represents the Wireless Communications Service Coalition, which includes companies like AT&T and NextWave. The nation’s airwaves are a hot commodity these days, and more and more companies are coming to Washington to make sure they get their fair share. The fight for the valuable spectrum — which powers everything from over-the-air TV stations to sophisticated smartphones — has largely been framed as a battle between broadcasters and wireless companies, as Congress makes plans for the FCC to auction off some spectrum to the highest bidder. But new skirmishes are developing on the spectrum front as more companies try to elbow their way into an increasingly crowded space — and the FCC has to play referee.

Network Solutions Fetches $560 Million

Web.com Group Inc., a provider of online marketing and website services to small and medium-sized business, has agreed to acquire Network Solutions, one of the largest Internet domain-name registrars, for about $560 million in cash and stock.

Network Solutions competes with GoDaddy Group Inc., which agreed last month to sell itself to private-equity firms KKR & Co., Silver Lake Partners and Technology Crossover Ventures for $2.25 billion, including debt. GoDaddy.com, the company's flagship Web property, is the world's largest registrar of domain names. Including debt, the Web.com deal is valued at about $764 million. Jacksonville, Fla.-based Web.com will pay $405 million in cash and issue 18 million shares, valued at about $155 million as of Wednesday's closing price of $8.65 per share, to private-equity firm General Atlantic LLC, the majority owner of Network Solutions. General Atlantic and other Network Solutions shareholders will own 37% of Web.com's stock after the transaction is completed. The acquisition will give Web.com access to around two million small businesses that are registered with Network Solutions, Web.com Chief Executive David Brown said in an interview Wednesday. Web.com hopes to sell website-building, online marketing, e-commerce and related services to these new customers, Mr. Brown said. Small and medium-sized businesses are using local online search, social networks such as Facebook and smartphone applications in an effort to reach more customers, he added. Web.com already reaches about one million businesses. In addition to domain names, GoDaddy.com sells e-commerce, security and other services to individuals and businesses looking to manage their online presence. Web.com, however, focuses purely on businesses.

Fashion for focus may cast its gaze on media giants

[Commentary] Activist investors’ sudden interest in McGraw-Hill, home to local television stations, textbook publishers, aviation trade publications and the Standard & Poor’s credit rating agency, has revived the question of whether the diversified media conglomerate’s days are numbered.

So, too, should Rupert Murdoch’s troubles with the News of the World, which he told members of the British parliament accounted for less than 1 per cent of the wider News Corp group. This implied that he had been too thinly spread thinking about other arms of the business such as Fox News, Avatar, HarperCollins and Dow Jones to keep on top of the crisis brewing at a single UK tabloid. The question is not a novel one. The great US conglomerates of the 1960s and 1970s are now memories preserved by architectural relics. History and the cycles of corporate fashion suggest that new media conglomerates will soon emerge – some, perhaps, by buying the assets McGraw-Hill looks likely to shed. Old conglomerates that see the sense in focusing their energies might have to put up with smaller skyscrapers in future but they will be on firmer foundations.

Murdoch’s Cleanup Effort Draws Criticism

News Corp.’s Rupert Murdoch told British lawmakers he’s the “best person” to clean up the company after a phone-hacking scandal. Fifteen days later, it isn't clear how he'll accomplish that.

The committee the New York-based media company set up to address the allegations isn't sufficiently independent and lacks a clear mandate to investigate wrongdoing, said corporate governance experts and investors. News Corp., led by Murdoch, has structured the new “management and standards committee” around too many insiders, said Jeffrey Sonnenfeld, a professor at Yale University’s School of Management. “There really should be outside investigators doing all of this,” Sonnenfeld said in an interview. “News Corp. has a history, obviously, of disappointing internal reviews.” Two members were executives at News International, the unit that included the tabloid where the hacking took place, until they resigned to work on the committee. Though attorney Anthony Grabiner was hired as independent chairman to oversee the committee’s work, he reports to Joel Klein, a News Corp. executive vice president and board member.

Suits Against News Corp. Rise as Probe Goes On

The amount of civil litigation that News Corp. faces related to alleged phone hacking continues to grow.

About 35 privacy-invasion lawsuits have been filed against News of the World, the tabloid at the center of the phone-hacking scandal. That is up from about two dozen in April. News Corp.'s U.K .newspaper unit, News International, has set aside about £15 million to £20 million ($24.4 million to $32.6 million) to cover civil litigation. That figure includes funding for a compensation program for victims seeking settlements. News International in April admitted liability in eight civil suits. But only two suits have been settled or otherwise resolved. News Corp. last month closed the 168-year old News of the World.

Facebook Explores Changes to News Feed

In moves that would change how consumers, developers and marketers use Facebook, the social network is exploring an expansion of the information users see on its home page.

The changes are designed to address some of the biggest frustrations by third-party developers and marketers on Facebook: standing out in the News Feed. The News Feed is a stream of information that users see on Facebook's home page; the information is currently filtered by the social network. While advertisers have created online campaigns with the intention that consumers would share their messages in the News Feed, Facebook's algorithms don't display every piece of content that is shared, limiting the impact of the campaigns, said Ian Schafer, chief executive of New York-based digital marketing firm Deep Focus. "It's wasted potential," he said. Now Facebook engineers are working to create an unfiltered News Feed that would open the floodgates of information about users and the games they win, the companies they "Like" and the actions their friends take.

Germany Investigating Facebook Tagging Feature

A German regulator said that he had asked Facebook to disable its new photo-tagging software, saying he was concerned that its facial recognition feature amounted to the unauthorized collection of data on individuals.

Johannes Caspar, the data protection supervisor in Hamburg, who has been aggressive in investigating the online practices of companies like Google and Apple, warned that the feature could violate European privacy laws. The software, called “suggested automatic tagging,” lets Facebook users assign digital name tags to people in their photographs. Photos that are uploaded later are scanned for physical features and can be tagged and stored. Caspar said he had asked Facebook to disable the feature in Germany and respond in two weeks to his concerns. Under German law, the regulator could fine Facebook up to 300,000 euros ($429,000).

California may OK donations via text

Making political campaign contributions to state political candidates, parties and political action committees could become easier in California if a plan to allow texting contributions is approved by a state agency that oversees election laws.

The California Fair Political Practices Commission is looking at the issue of texting contributions as a mechanism to include citizens in the political process who normally do not participate in campaigns and election The California effort comes after the Federal Election Commission issued an advisory opinion in November recommending against a proposal by CTIA-The Wireless Association to allow small contributions to federal campaigns through text messages. At the time, the FEC said it was concerned that text contributions would make it more difficult to determine whether corporate funds were being used for political contributions or to keep anonymous donors from exceeding the $50 reporting thresholds.

FCC Seeks Additional Input in USF/ICC Reform

In the Federal Communications Commission's Universal Service Fund/Intercarrier Compensation reform proceeding, a number of parties have offered specific proposals for reform, including a proposal by the State Members of the Federal-State Universal Service Joint Board (State Members), the “RLEC Plan” put forward by the Joint Rural Associations, and the “America’s Broadband Connectivity Plan” filed by six Price Cap Companies (“ABC Plan”). The FCC now seeks comment on how these proposals comport with the FCC’s articulated objectives and statutory requirements. The FCC invites comment on specific aspects of the proposals and on additional issues that are not fully developed in the record.

Issues include: Separate support for mobile broadband, Elimination of rural/non-rural carrier distinctions, Connect America Fund (CAF) support for price cap areas, Reforms for Rate-of-Return carriers, Consumer equity, High-cost areas, CAF Support for Alaska, Hawaii, Tribal lands, U.S. Territories and Other Areas, Interim Reforms for Price Cap Carriers.

Comments due August 24, 2011. Reply comments are due August 31, 2011.

NASUCA Says FCC Should Seek Additional USF/ICC Reform Input

The National Association of State Utility Consumer Advocates asked the Federal Communications to seek comment on the industry-mediated Universal Service Fund/Intercarrier Compensation reform plan and the plan submitted by the State Members of the Federal-State Joint Board on Universal Service simultaneously. NASUCA also recommended that the FCC ask commenters to contrast the industry proposal with the State Plan.

Benton

Search