AT&T Is in Talks With Investors on Fiber Build-Out
AT&T is in discussions to create a joint venture that would invest billions of dollars on fiber-optic network expansion. The company is working with Morgan Stanley to help bring in an infrastructure partner to the venture, which is expected to be valued at $10 billion to $15 billion. AT&T is embarking on its biggest plan yet to pursue broadband customers outside its traditional 21-state local phone territory.
US telecoms industry set for M&A negotiations frenzy
In 10 days, the Federal Communications Commission will lift a ban on telecoms companies engaging in merger talks, and Wall Street is betting on T-Mobile US, Sprint, and Dish Network to be the first ones out of the gate. Shares of these companies have soared over the past 12 months on expectations of deal talks, and are trading at up to 31 times forward earnings, versus the S&P 500 telecom services index's .5SP50 18 times.
The rich valuations could discourage acquirers, who also have to assume the risk that antitrust regulators may look askance at more consolidation in the sector after a wave of mergers in recent years, investment bankers and industry experts say. "It seems as though valuations have already jumped to a near certainty a deal will be announced and approved. You have to ask yourself whether T-Mobile is going to be as eager to do a deal as Sprint," said Craig Moffett, an analyst at MoffettNathanson.
SoftBank willing to cede control of Sprint to entice T-Mobile
Japan's SoftBank Group Corp is prepared to give up control of Sprint Corp to Deutsche Telekom AG's T-Mobile US Inc to clinch a merger of the two US wireless carriers, apparently. SoftBank has not yet approached Deutsche Telekom to discuss any deal because the Federal Communications Commission has imposed strict anti-collusion rules that ban discussions between rivals during an ongoing auction of airwaves. After the auction ends in April, the two parties are expected to begin negotiations.
Dish tells FCC will participate in 2015 spectrum auction
Dish Network said it plans to take part in the Federal Communications Commission's large sale of low-frequency airwaves planned for mid-2015. Dish's Chairman Charlie Ergen and other executives met with the FCC's Chairman Tom Wheeler, four commissioners and numerous wireless officials, giving the most explicit pledge so far by the satellite TV provider to "meaningfully participate" in the so-called "incentive" auction."
The incentive auction offers opportunities for competitive providers and new entrants to bid on and win much-needed lowband spectrum, which will facilitate the deployment of mobile broadband services," wrote Dish Senior Vice President Jeffrey Blum.
Liberty Media announces new cable spin-off
Liberty Media Corp is spinning off its cable assets, including a stake in Charter Communications, into a new publicly traded company called Liberty Broadband.
"We believe a separate Liberty Broadband will offer investors greater choice and transparency, and is well-timed with Charter's agreements with Comcast, which will result in Charter owning or serving over eight million video customers," Liberty Media Chief Executive Officer Greg Maffei said.
The plan announced will be a hard spin-off of Liberty Broadband, similar to how Liberty spun off television and movie channel Starz in 2013.
Liberty Broadband will house Liberty's stake in Charter Communications, which was worth $3.31 billion as of March 31, as well as investments in Time Warner Cable and the small location technology company True Position Technologies.
Comcast to bring its X1 service to LA, New York within year of merger
Within a year after its $45 billion acquisition of Time Warner Cable closes, Comcast aims to make its advanced X1 cable service available in areas such as New York and Los Angeles and other markets where it will gain a commanding new presence.
"We'll be within the first markets in a year," said Neil Smit, president and chief executive of Comcast's cable unit.
The new technology would "bring considerably higher Internet speeds to Time Warner Cable customers" in those cities, Smit said, and give them access to such X1 services as Internet applications, viewing recommendations and voice control. Features offered by the cloud-connected X1 cable box system could help Comcast pick up subscribers in major cities where Time Warner Cable's growth has stalled in recent years.
Gaining entry to the New York and Los Angeles markets was part of the strategic rationale behind Comcast's offer to buy TWC.
Comcast deal may offer media companies leverage on fees
Media companies plan to press Comcast for higher fees in 2015, seeing an opportunity to squeeze better terms from the US cable company as regulators review its planned takeover of Time Warner Cable.
Comcast and Time Warner Cable paid nearly $14 billion to content companies in 2013 for rights to distribute their films, television shows and sporting events. Broadcasters and cable television networks have "assignment clauses" in their contracts with Time Warner Cable that require the networks to sign off before Comcast can merge the two cable operators' agreements, according to people who have negotiated agreements in the past. Media executives say most programmers will push for higher rates in return for expanding their deals to cover digital distribution of their content.
Comcast lobbyist Cohen meets his match in FCC's Wheeler
Comcast’s top lobbyist David Cohen is known to be a savvy political operator, having pushed through the No. 1 US cable operator's landmark acquisition of media giant NBC Universal in 2011.
But when it comes to getting approval for Comcast to buy its biggest rival, Time Warner Cable, Cohen must win over someone just as well versed in the ways of lobbyists and the cable industry: Federal Communications Commission Chairman Tom Wheeler.
Comcast will formally request an FCC review of the $45.2 billion Time Warner Cable deal in late March 2014.
Cohen and Chairman Wheeler do not know each other well, according to Cohen, but their paths have crossed in senior political and industry circles. Both men are supporters of President Barack Obama, each helping to raise more than half a million dollars for his re-election campaign in 2012, according to disclosures.
Cohen is no stranger to Obama's White House. Visitor logs put Cohen, who is not a registered lobbyist, there for meetings and receptions 14 times since 2010, including twice at the Oval Office. People who know Cohen and Chairman Wheeler describe them in similar terms: steady negotiators with a strong grasp of the issues at stake, as well as the players at the table.