John Eggerton

Consolidation Critics Lay Into AT&T/DirecTV

The news that AT&T was trying to buy DirecTV drew jeers from some familiar anti-consolidation voices.

"You can’t justify AT&T buying DirecTV by pointing at Comcast’s grab for Time Warner, because neither one is a good deal for consumers," said Delara Derakhshani, policy counsel for Consumers Union. “On the heels of Comcast’s bid for Time Warner Cable, AT&T is going to try to pull off a mega-merger of its own," said Derakhshani. "These could be the start of a wave of mergers that should put federal regulators on high alert. AT&T’s takeover of DirecTV is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes. The rush is on for some of the biggest industry players to get even bigger, with consumers left on the losing end."

“The captains of our communications industry have clearly run out of ideas," said Craig Aaron, president of Free Press. "Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition. These takeovers are expensive, and consumers end up footing the bill for merger mania."

“AT&T is willing to pay $48.5 billion and take on an additional $19 billion in debt to buy DirecTV. That's a fortune to spend on a satellite-only company at a time when the pay-TV industry is stagnating and broadband is growing. For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast gigabit-fiber broadband service to every single home in America," said Aaron. He added that the Federal Communications Commission should use its regulatory power to block the “wasteful and anti-competitive” merger in favor of more investment in broadband infrastructure.

“The industry needs more competition, not more mergers,” said John Bergmayer, Senior Staff Attorney at Public Knowledge. “The burden is on AT&T and DirecTV to show otherwise. We'll have to analyze this carefully for potential harms both to the video programming and the wireless markets. The most obvious concern is that customers in U-Verse territories would lose a video competitor, though the transaction would have nationwide effects.”

Dems Seek Wheeler Input On Comcast/TWC, AT&T/DirecTV

Democratic House Communication Subcommittee staffers have signaled that the proposed Comcast/Time Warner Cable merger will be a topic of conversation at the oversight hearing May 20 with Federal Communications Commission chairman Tom Wheeler.

Both the Republican and Democratic memos predate AT&T's announcement of its planned purchase of DirecTV, which is likely to draw some attention at the hearing, said a Democratic aide.

Also look for Title II classification of Internet access to be on the agenda from the Democratic side. The Republican staff memo to members made no mention of the deal, but Dems clearly have concerns.

Calling it one of the key issues before the FCC, they talk about the potential competitive harms raised by critics of the deal and their concern about the amount of video programming -- it singles out the 29 regional sports nets -- and broadband access subs the new company would have.

FCC Launches Cable Rate Study

The Federal Communications Commission has launched its annual survey of basic cable rates.

The commission, per the Cable Act of 1992, picks a random group of cable systems annually and requires them to provide information on the price of service; the availability of programming, including whether they have a "family tier" and the cost of equipment. The FCC must also compare the prices charged by systems subject to rate regulation, and those whose basic rates have been deregulated because the commission has determined they are subject to effective competition.

Operators chosen have until June 30, 2014, to return the questionnaire, which will be used to compile the FCC's annual report on average rates for cable services, programming and equipment.

Telecoms Praise Incentive Auction Framework

Broadcasters were crying foul at the Federal Communications Commission's incentive auction report and order, but telecom carriers were praising the move.

“The Commission has adopted a balanced set of rules that will raise the necessary funds for FirstNet and help our nation achieve its first, nationwide advanced public safety network," said Chip Pickering, CEO of Comptel. "In addition, this action will promote competition in the wireless marketplace and ensure a competitive bidding process where companies of all sizes will have an opportunity to acquire the valuable spectrum needed to supply American consumers with the broadband mobile services they desire."

With AT&T committed to participating in the auction, and Verizon likely to step up as well, there is a better chance that the FCC will have enough money to compensate broadcasters who give up spectrum, pay for FirstNet, the interoperable broadband first-responder network, pay for e-911 and some R&D, and have billions left over to pay down debt, all envisioned by Congress when it authorized the auction.

FCC Acts Against Stations For Kids TV Violations

The Federal Communications Commission's Media Bureau has proposed fining three TV stations a total of $22,000 and admonishing (warning) a fourth for violations of various FCC children's TV ad limits and programming reporting rules.

The violations were self-reported by the station owners in applying for license renewals.

The largest proposed fine is levied on Glendive Broadcasting, owner of KXGN-TV Glendive (MO) for failing to file quarterly children's TV programming reports in a timely fashion. Next largest was the proposed $6,000 hit for Lake Superior Community Broadcasting for a pair of Michigan stations for failing to file electronic copies of the kids programming reports. Finally, the FCC admonished KWGN-TV Denver for failure to comply with commercial limits in kids programming on two occasions.

Writers Guild: It's Time for Tougher Net Regs

The Writers Guild of America West, which was already on the record supporting a Title II approach to new network neutrality regs added its voice to those concerned about Federal Communications Commission Chairman Tom Wheeler's preference for an approach using existing authority to create new rules that pass muster with the courts.

In a letter to Chairman Wheeler signed by almost 250 showrunners and creators, the guild "implored" the FCC to keep the 'net open and free. They are particularly troubled that the FCC's new rules will allow paid prioritization or discrimination among Internet traffic.

"If Net Neutrality is neutered, the Internet will become like cable television," they wrote. "A few corporate gatekeepers such as Comcast will be allowed to decide what content consumers can access and on what terms. The danger is that blocking, discrimination and paid prioritization could occur."

Dozens of House Dems Back Title II

Three dozen Democratic members of Congress have asked Federal Communications Commission Chairman Tom Wheeler to use Title II authority to protect Internet openness.

That letter was part of a flood of advice from the Hill and elsewhere in advance of the FCC's scheduled open Internet rule vote May 15.

"We urge the FCC to use its clear authority under Title II of the Communications Act to reclassify the transmission component of broadband Internet access as a telecommunications service," they wrote. Without such strong protections, they say, the Internet "could devolve into a closed platform in which those who pay the most can overwhelm other views and ideas."

Quartet of Senators Warn Against Limiting Auction Bidders

On the eve of the Federal Communications Commission's vote on incentive auction rules, a pair of senators from each party asked FCC Chairman Tom Wheeler to reconsider auction rules that "will limit participation by certain carriers in many markets across the country."

Signing the letter were Senators John Cornyn (R-TX), Charles Schumer (D-NY), John Thune (R-SD), and Sherrod Brown (D-OH). They said that limiting participation could not only result in less spectrum being put into the market, but less revenue to pay for not only the FirstNet interoperable broadband public safety network but the $20 billion that incentive auction is expected to contribute to deficit reduction.

Cisco Chairman Advises Against Title II

Cisco Chairman John Chambers has told Federal Communications Commission Chairman Tom Wheeler the company "strongly supports" his approach to reinstating open Internet rules.

"Your approach of applying a “commercially reasonable” test to new offerings by Internet service providers allows innovative new products and services to develop, while at the same time protecting consumers and competition," he said in a letter to the FCC chairman dated May 13. By contrast, he said, Cisco was "deeply troubled" by proposals to impose what he called "old fashioned telephone regulations of Title II" to broadband Internet access.

Some GOP Sens Advise Wheeler to Delay Open Internet Vote

A trio of Republican senators, all members of the Commerce Committee that oversees the Federal Communications Commission, has suggested the FCC may want to delay its vote on a draft of new network neutrality rules, which at press time was scheduled for a May 15 vote.

In a letter to FCC Chairman Tom Wheeler, Sens Deb Fischer (R-NE), Kelly Ayotte (R-NH) and Dan Coats (R-IN) said they had "strong reservations" about proceeding to a vote at this time and pointed to recent calls by commissioners Deborah Rosenworcel, a Democrat, and Ajit Pai, a Republican, to delay the vote, and reports that the Republican members of the commission had been "kept in the dark” about the revised proposal circulated (actually, sources said the other Democrats only got a little more time from the chairman's office to vet the proposal).

The senators said they thought the FCC needed to give the proposal a "more thorough examination" before voting, including a "rigorous economic analysis."