Daily Digest 5/14/2018 (Electoral Dynamite)

Sen. Lisa Murkowski (R-Alaska) isn’t ruling out the possibility of bucking her GOP colleagues and voting for the Democrats’ Congressional Review Act net neutrality measure. “Senator Murkowski has not taken a firm stance on the CRA,” said her spokeswoman. “But CRA or not, she believes a bipartisan, legislative solution would be the best path to ensure certainty within the industry.” This answer would seem to put her in the “undecided” column alongside Sen. John Kennedy (R-LA).

If the government approves Sprint and T-Mobile’s bid to merge, customers of lower cost pre-paid plans — say from Boost and MetroPCS — could face changes. Both Sprint and T-Mobile also sell prepaid services at lower costs and under different brand names: Sprint has Boost and Virgin Mobile USA, while T-Mobile offers MetroPCS. The two also wholesale their networks to such third-party resellers as Consumer Cellular, Republic Wireless and Ting; AT&T and in particular, Verizon, are less open to the resellers. These prepaid and resold services have allowed many customers to lower their bills by buying only the level of data they need; some also rank higher in customer-satisfaction surveys than these carriers’ own subscription services. Weaving together Sprint and T-Mobile’s networks could upgrade those services, but the combined company could also choose to consolidate its own prepaid brands. Meanwhile, resellers—in trade jargon, MVNOs, short for “mobile virtual network operators”—that now offer service from both firms would find themselves tied to one. 

A coalition of 11 carriers and corporations, eight industry associations and the nation’s largest port authority have sent the Federal Communications Commission an auction proposal for the Citizens Broadband Radio Service (CBRS) spectrum band that represents a middle ground between rules currently in place and a proposal submitted recently by organizations representing mobile carriers. CBRS auction plans have pitted the mobile carriers, who want larger license areas to support mobile 5G services, against those who want to use the spectrum for fixed wireless broadband and who argue that they can only afford licenses for smaller areas and for shorter time periods. The coalition CBRS auction plan calls for five county-based CBRS priority access licenses (PALs) for every U.S. county and two census tract-based PALs for every census tract. License terms would be seven years and would be renewable based on performance criteria.

President Donald Trump pledged  to help Chinese telecom giant ZTE return to business, days after the company said it would cease “major operating activities” because of the US government’s recent trade restrictions, a dramatic shift in tone for a president who has long accused China of stealing US jobs. “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” President Trump tweeted. “Too many jobs in China lost. Commerce Department has been instructed to get it done!” The comment could presage a reversal of one of the Trump administration’s toughest actions to date against a Chinese company.

Randall L. Stephenson, AT&T’s chief executive, said in a staffwide memo  that the company had made a “big mistake” by hiring President Trump’s personal lawyer, Michael Cohen. “Our company has been in the headlines for all the wrong reasons these last few days and our reputation has been damaged,” Stephenson wrote. “There is no other way to say it – AT&T hiring Michael Cohen as a political consultant was a big mistake.” Stephenson insisted in the memo that “everything we did was done according to the law and entirely legitimate.” Nonetheless, he added, retaining Cohen “was a serious misjudgment.” “In this instance,” he continued, “our Washington DC team’s vetting process clearly failed, and I take responsibility for that.” Stephenson also said the company’s top lobbyist, Bob Quinn, was retiring. The Wall Street Journal reported that Quinn is being forced to leave. Quinn joined AT&T in 1993 and took over the Washington office in October 2016. The DC office will now be run by the company’s general counsel, David McAtee. “David’s number one priority is to ensure every one of the individuals and firms we use in the political arena are people who share our high standards and who we would be proud to have associated with AT&T, “ Stephenson wrote.

The Dallas Morning News is updating this story

In another seeming flareup of his chronic foot-in-mouth disease, Trump lawyer Rudy Giuliani on May 11 told the Huffington Post that the president “denied the merger” sought by AT&T and Time-Warner. Then, on May 12, the White House told CNN that Giuliani got it wrong, and that the Department of Justice alone blocked the deal. Giuliani was arguing that business relationships of Donald Trump’s longtime personal lawyer Michael Cohen did not contradict Trump’s campaign promises to end “pay-to-play” schemes and to “drain the swamp” because Cohen did not get for his newfound clients what they wanted. "The president denied the merger. They didn’t get the result they wanted,” Giuliani said. White House spokesperson Sarah Sanders told CNN that Giuliani got Trump’s role in the decision wrong, saying “the Department of Justice denied the deal.” The DOJ’s antitrust chief, Makan Delrahim, has sworn under oath that there was no political influence on his decision to block the deal — even though he has reversed his position publicly.

[Commentary] AT&T's hiring of Michael Cohen in January 2017 to advise the company on an $85 billion acquisition of Time Warner looked like a smart strategy. In retrospect, AT&T's contract with Cohen appears to have been a complete failure. In November 2017, 10 months after AT&T retained Cohen, the Justice Department sued to block the company's purchase of Time Warner, citing antitrust concerns. Whatever efforts Cohen made to grease the skids did not work. The only visible evidence of President Trump taking a friendlier posture toward AT&T during the period when the company paid Cohen a total of $600,000 is the shout-out President Trump gave AT&T in December 2017, during a White House event marking passage of a Republican tax bill. Short of persuading AT&T to oust Zucker or sell CNN — something the Trump administration would like AT&T to do — Cohen may have had little chance of paving the way to regulatory approval of the Time Warner acquisition. Still, the exposure of his apparent ineffectiveness on behalf of AT&T adds insult to the ongoing injury of his federal investigation for possible bank fraud, wire fraud and campaign finance violations.

Earl Comstock, a high-ranking deputy to Commerce Secretary Wilbur Ross, is quietly pushing for President Donald Trump to support a congressional effort to restore the net neutrality rules, He is advising that President Trump back a resolution that would reverse the Federal Communications Commission repeal, a move that would put President Trump in direct opposition to Ajit Pai, his hand-picked FCC chairman. “The White House is a bigger place than people sometimes realize,” said Matt Schlapp, chairman of the American Conservative Union (and registered as a lobbyist for Verizon and Comcast). 

Comstock’s advocacy frequently puts him at odds within the Commerce Department with David Redl, who heads its National Telecommunications and Information Administration. They refer to internal Commerce frustration over Comstock’s direct hand in matters involving NTIA and FirstNet, the government’s public safety broadband network effort. Comstock’s tight oversight within Commerce even prevented Redl from supplying advance testimony to Congress in time for his first hearing, spurring a complaint from Rep. Marsha Blackburn (R-TN) over what she dubbed a “snafu.” During Redl’s confirmation process, then-White House telecom aide Grace Koh received a July 26 message from an AT&T official relaying an unnamed Hill source’s intelligence: “Sounds like Earl is working pretty hard to kill Davids nom.” The email, obtained by POLITICO through a Freedom of Information Act request, alleged that Sens. Ted Cruz (R-TX) and Mike Lee (R-Utah) grew concerned after “conversations with Ross” over Redl’s positions as a House staffer. By Aug. 1, Sec Ross told Sens Cruz and Lee he backed Redl, but the lawmakers kept demanding documents over what they deemed Redl’s insufficient objections to an Obama-era decision to cede internet governance to the international community.