June 2013

Sprint’s Clearwire Acquisition: Who’s Going to Make What?

So, who among Clearwire’s big shareholders stands to make what, should Sprint acquire it along with its massive spectrum stockpile?

With a 12.66 percent in Clearwire, Comcast is the company’s largest shareholder, according to data from Thomson Reuters. At Sprint’s proposed $5-per-share offer, it will make in excess of $442 million. Clearwire’s second-largest shareholder, Crest Financial, holds a 8.25 percent stake worth more than $288 million, given Sprint’s final offer. Crest, however, has been among the most active opponents of Sprint’s proposed acquisition. And it hasn’t yet signed the commitment that other big shareholders like Mount Kellett put their signatures to last week. A company spokesman did not respond to a request for comment. Mount Kellett Capital Management stands to make collect a tidy sum as well: its 7.3 percent stake is worth over $265 million.

You Endure More Commercials When Watching Cable Networks

Adweek has acquired a research report from a Nielsen subscriber examining 20 cable channels' commercial loads in the first quarter of this year. The results: Some nets don’t even fill 40 minutes of programming time per hour.

Nielsen's most recent public "clutter" report, in 2006, pegged the average time for ads, PSAs and promos on cable at 15 minutes, one second. No network tracked in Q1 met that average even though many have pledged to cut down on clutter. Nielsen told Adweek that the average clutter time today is 13:32 on broadcast; 16:59 on cable (so the program time averages barely 43 minutes). "[Ad time] gradually creeps upward, and we're not watching, especially with DVRs in 48, 50 percent of the country," said Brad Adgate, senior vp, research at Horizon Media (no one quoted here was the source of the report). "If you’re watching this on playback, you can certainly avoid the ads, and you can watch a one-hour show in 45 minutes."

Half of US already has smartphones, so mobile carriers push us to spend more

Three major shifts are currently underway in the American cellular landscape. We’re spending record amounts on mobile data, carriers are making hardly any money off new subscribers (hence the push towards data), and usage of Internet-based messaging systems is going through the roof.

With that first shift, according to independent analyst Chetan Sharma, mobile data now accounts for “almost 45 percent of the US mobile industry services revenues, and as we had forecasted a few years back, the cross-over point of 50 percent might occur later this year.” So you’re not just imagining things—your mobile phone bill is creeping upwards. Likely, it’s due to the fact that on your smartphone, you’re using data far more than texting and texting far more than calling.

Hands-Free Distractions

[Commentary] As Americans have become more aware of the dangers of using cellphones while driving, the makers of cars and mobile devices have increasingly sold hands-free and speech-recognition technologies as safer alternatives. But a new report presents compelling evidence that drivers who use such tools are as distracted as people who hold their phone to their ear. Even when drivers keep both hands on the wheel, the report says, a lot of mental energy is required to hold two-way conversations or talk coherently into speech-recognition devices. A spokeswoman for the auto industry said that “people want to be connected in their car just as they are in their home or wherever they may be.” They may, however, place far greater value on getting to their destination without killing themselves or anyone else.

Telecoms chiefs urge rethink of reforms

Europe's leading telecoms executives have called for a fundamental rethink of proposed market reforms, advocating deregulation of the market to secure future investment.

In a strongly worded letter to José Manuel Barroso, president of the European Commission, they call for the relaxation of regulations stopping mergers; the removal of fixed broadband network access at a wholesale level to rivals; and the end of “unequal treatment” of technology companies that have been able to exploit tax loopholes. Signed by the heads of the region’s former telecoms incumbents including France Telecom, Telecom Italia, Deutsche Telekom and Telefónica of Spain, the letter adds that reform of the telecoms framework is urgently needed in light of the fact that up to a third of mobile operators have become “unsustainable.” The letter emphasizes intensifying disquiet within the recession-hit industry that the need to support future investments in fiber and 4G networks is being ignored by Brussels’ pro-consumer agenda.

Kabel Deutschland board agrees to Vodafone’s €7.7bn cash offer

The board of Kabel Deutschland has agreed to a €7.7 billion cash bid from Vodafone, the mobile phone group, in a move by the UK group to go beyond its traditional mobile telephony business into consumer broadband and television services.

The offer values each Kabel Deutschland share. The offer also includes €3 billion of net debt, taking the proposed enterprise value for the deal to €10.7 billion. Kabel Deutschland was valued at €5 billion in an initial public offering in 2010. Kabel Deutschland is Germany’s leading cable provider of television, telephony and broadband services to approximately 8.5 million households in 13 of Germany’s 16 federal states.

African Entrepreneurs Deflate Google’s Internet Balloon Idea

Google’s latest pet project, called Loon, is meant to deliver the Internet to new parts of the world via solar-powered balloons soaring through the stratosphere. Yet some technologists in Africa say the project may be unrealistic as a competitive networking solution for their continent.

For one thing, the service would only provide 3G connectivity, meaning that it would need to compete with cellular networks that are expanding and becoming ever cheaper to use. “In Kenya, most parts of the country have 3G access,” says Phares Kariuki, previously a technology consultant to the World Bank, who now leads an effort to build a supercomputing cluster at iHub, the tech startup space in Nairobi. And even if Google managed to deliver faster speeds from future balloon fleets, they’d be solving the wrong problem, Kariuki adds: “The barrier to Internet adoption is not so much the lack of connectivity. It’s the high cost of the equipment.” People in poor areas simply can’t afford laptops and smartphones, Kariuki says, and generally prefer cheap feature phones.

FTC Reviewing Google’s Waze Acquisition

Google’s $1.1 billion acquisition of the mapping company Waze has drawn regulatory scrutiny.

Google confirmed that it has been contacted by the Federal Trade Commission regarding the acquisition. The company and the FTC both declined to comment on the nature of the inquiry, but it’s pretty obvious what’s going on here. Google Maps is a leading mapping and navigation service. Waze was a rising rival. Google’s acquisition of Waze could be problematic. Not only does it remove a potential competitor from the mapping space, it consolidates a ton of mapping data in Google’s hands, further extending the company’s dominance. Could that be harmful to competition and consumers? That’s what the FTC hopes to determine.

Snowden Exits Hong Kong; Ecuador Says He Seeks Asylum

Edward Snowden, the fugitive former contract worker accused of leaking classified U.S. National Security Agency documents, traveled from Hong Kong to Moscow and aims to seek asylum in Ecuador, the foreign minister of Ecuador and WikiLeaks indicated in separate statements. Meantime, U.S. authorities pledged to continue pursuing Snowden. Ecuador's Foreign Minister Ricardo Patino, was quoted on his official Twitter account as saying Mr. Snowden had requested asylum. Mr. Patino is on a trip to Vietnam.

Debate over government’s use of electronic data has been helpful

[Commentary] President Barack Obama promised to try to declassify more about two electronic surveillance programs at the center of a renewed national debate on security and privacy. He should.

Over the past week, that debate has been enriched by congressional hearings and the slow release of new information, clarifying how these programs operate. The government collection of Americans’ phone metadata — which numbers are calling which others and when — remains surprising in the vast amount of information that is sopped up. But the National Security Agency (NSA) claims that it is using only a tiny fraction of the information, querying the database for links to fewer than 300 numbers last year. If so, that raises two questions. First, couldn’t the public have known about the data collection before? No terrorist would have been surprised that the U.S. government is looking for and tracking a limited set of suspect phone numbers. Second, does the government even need to maintain its own vast database of phone records?

Could the program work about as well with telecommunications firms keeping the data? If so, why didn’t the NSA work with Congress to pursue that policy in the first place? Though there’s no guarantee that these companies will be strong advocates for their customers when proceedings are secret, at least there would be some opportunity for outside pushback against any overly broad or otherwise unjustified data demands. We don’t see an argument for anti-government hysteria in these considerations. We do, however, want as informed a debate as possible about how the government is balancing security and privacy.

Benton

Search