Unanswered questions lingered Tuesday as Apple ended its two-hour news conference in Cupertino, California, by treating its audience to a surprise guest performance by U2. One question was whether the newly introduced Apple Watch will revolutionize the smart watch category the way iPhones transformed smartphones into a vast global business.
Sprint said it reached LTE agreements with 15 rural and regional carriers as part of its Rural Roaming Preferred Program to provide carriers with access to Sprint’s LTE network. The program, developed with the Competitive Carriers Association, will now include 27 carriers across 27 states with a combined population of more than 38 million people, Sprint said Friday. The new carriers are: Kentucky-based Bluegrass Cellular, New York- and Pennsylvania-based Blue Wireless, Alabama-based Pine Belt Wireless, Kansas- and Oklahoma-based Pioneer Cellular, Alabama- and Georgia-based Public Service Wireless, Idaho-based Syringa Wireless, and nine Rural Independent Network Alliance (RINA) member carriers and their partners (http://bit.ly/1qAKCby).
Dish Network spectrum is valuable for Verizon, wrote New Street Research analysts in an email to investors Sunday. With 38 percent of industry revenue and just 16 percent of industry capacity, Verizon has a tremendous amount of value at stake if capacity utilization were to approach 100 percent, they said. Verizon should increase its share of industry capacity slightly in the upcoming FCC spectrum auctions, and “Dish is the only asset that would meaningfully narrow the gap,” they said. Dish may have lost two near-term options with AT&T’s plan to buy DirecTV “and the path to value realization may be less clear as a result,” they said. “The intrinsic value of Dish’s assets is unchanged,” New Street said. The most compelling transaction for both affected parties would be for Verizon to acquire Dish, said the analysts.
Small, independent telcos are deploying some form of broadband services to 96 percent of K-12 schools in their service areas and 98 percent of public libraries, an NTCA survey found. About 75 percent of schools receive fiber to the premises, 17 percent use copper, 5 percent receive fiber to the node and less than 1 percent use fixed wireless, said the association in a news release Tuesday (http://bit.ly/1sxQWzu). Nearly 47 percent of public libraries are connected via FTTP, 38 percent use copper, and 13 percent receive FTTN, it said. NTCA members offer an average maximum speed of 435 Mbps down and 62 Mbps up to schools, and an average of 296 Mbps down and 47 Mbps up to public libraries. Schools on average buy 65 Mbps down and 13 Mbps up, while libraries take 17 Mbps down and 2 Mbps up, said NTCA. “The results of this survey are a clear indication that NTCA members and other small, rural providers understand the importance of these anchor institutions having high-quality broadband service,” NTCA Economist Rick Schadelbauer. The FCC considers an E-rate order Friday, and it may be a party-line vote (CD July 9 p1) (See related story above.)
FCC Chairman Tom Wheeler, echoed by what would make up a majority of commissioners, said Wednesday that bringing down inmate phone rates is a “top priority.” He backed making the agency’s 2013 interim interstate rates permanent and dealing with “unreasonably high” intrastate rates, and said additional charges that are tacked on to phone charges “need to be addressed if not attacked.” Commissioner Mignon Clyburn, whom Wheeler called the “North Star” on the issue for the commission, told us she’s hopeful for action sometime this year. Whether the permanent cap would be the same as the interim ones, of 21 cents per minute for debit and prepaid calls and 25 cents a minute for collect calls (CD Aug 12 p1), has not been decided, an FCC spokesman said.
FCC Chairman Tom Wheeler has sidestepped likely partisan Capitol Hill battles surrounding E-rate for now due to the nature of his overhaul, apparently focusing on Wi-Fi and not immediately touching the fund’s contribution rate and size, lobbyists and observers told us. They predict political rancor will come in later phases of the E-rate revamp when those parts will be inevitably addressed. The prime Hill critics now are Democratic architects of the original 1996 Telecom Act E-rate provisions, who question the proposal in more granular ways and urge the agency to listen as E-rate beneficiaries express fears, sending a critical letter Tuesday. The FCC will vote on Wheeler’s item Friday, and it’s been controversial among FCC Republicans. (See separate report in this issue.)
Global mobile game revenue is expected to hit $28.9 billion by 2016, Juniper Research projected in a report released Wednesday. That would be more than 38 percent higher than the $20.9 billion expected for 2014, it said. Due to the “domination” of casual gamers playing free-to-play titles, developers’ approaches have shifted away from “bulk acquisition” of unique players, it said in a news release. Under the new strategy, developers are increasing lifetime value by analyzing, “re-engaging” and monetizing users, allowing for higher returns on investment, it said. Tablet users will spend more on in-game purchases and generate more revenue per device than smartphone users, it projected. Despite the mobile game growth, dedicated game devices such as the PS4 and Xbox One will “continue to serve a niche gaming audience,” it predicted. Console game software will increasingly “embrace elements” of mobile games, as “reflected by” the introduction of PlayStation Now, Sony’s coming cloud game service that will let users play games through online streaming on a per-game or subscription basis, said Juniper.
Netflix leads use cases for connected TVs, said research from Leichtman Research Group released Friday that showed that 49 percent of Netflix subscribers surveyed said they streamed video weekly from the Internet via a video game or Blu-ray player, smart TV or streaming media box, compared with 8 percent of non-Netflix subscribers. For Netflix subscribers, that’s up from 38 percent in 2012 and 24 percent in 2010, Leichtman said. Some 49 percent of U.S. households have at least one TV connected to the Internet, with 24 percent of adults watching video from the Internet using a connected TV at least once a week, compared to 13 percent two years ago, and 5 percent in 2010, it said. Netflix streaming video users have remained consistent on TV usage, with roughly three-fourth of respondents saying they watch Netflix on a TV. The number of Netflix members that subscribe to another pay TV service has slipped to 80 percent from 85 percent in 2012 and from 88 percent in 2010, Leichtman said. The number of households that don’t have a pay TV service but get Netflix is now 48 percent, up from 29 percent in 2012 and 16 percent in 2010, it said. Fifteen percent of Netflix subscribers share their subscriptions with others outside of the household, Leichtman said. Thirty-one percent of adults watch video daily on non-TV devices including home computers, mobile phones, iPads and tablets, Leichtman said, while 58 percent do so on a weekly basis, up from 18 percent daily and 46 percent weekly two years ago, it said. Some 34 percent of households watch any form of over-the-top video -- including connected TVs and other devices -- daily and 61 percent weekly, it said. The data is based on a telephone survey in April with 1,211 adults age 18 and older from throughout the continental U.S. The random sample of respondents was distributed and weighted to best reflect the demographic and geographic make-up of the U.S., Leichtman said, and has a statistical margin of error of +/- 2.8 percent.
A bipartisan group of House lawmakers asked the FCC to revamp the E-rate program. They sent a letter Monday signed by 46, 38 belonging to the New Democrat Coalition. “Focus E-rate on broadband services, Wi-Fi updates, and filling the infrastructure gap, with continued support for connectivity services, to ensure universal access to the most up to date technology” and ensure E-rate participants pay for “the best service at the lowest price” through competitive Internet service offerings and purchaser coordination, the lawmakers urged. They also back increasing E-rate’s transparency, accountability and funding stability, with an application process that’s simplified and streamlined. The New Democrat Coalition helped drive the letter forward, a Democratic aide familiar with the coalition’s effort told us. Coalition Chairman Ron Kind, D-Wis., and member Jared Polis, D-Colo., spearheaded the letter within the coalition, the aide said. He said Reps. Charlie Dent, R-Pa., and Chris Gibson, R-N.Y., were “instrumental” in gathering Republican signatures. Expect the letter to be the first step in a broader New Democrat Coalition digital literacy focus, the aide said, citing strong coalition member interest since a presentation on the relevant data a few months back.
Disney is looking at more ways to tap into the success of Frozen, the highest-grossing animated film of all time and the best-selling title ever released on Blu-ray, said CEO Bob Iger on an earnings call Tuesday. The company is studying “other forms of storytelling,” including interactive, he said. Results in Disney’s Interactive segment were “significantly better than we anticipated” when the company reported Q1 results, said Chief Financial Officer Jay Rasulo. Interactive revenue for Q2 increased 38 percent to $268 million from the year-ago quarter, and operating results for the segment swung to a profit of $14 million from a loss of $54 million, driven by the strength of Infinity, which launched in Q4. Iger said in Q&A the company is looking for growth from consumption of new media platforms, including short- and long-form entertainment. Iger cited the recently launched Disney Movies Anywhere app that allows users to buy and play new Disney movies within an iTunes app or to stream content purchased via iTunes without downloading it again on a mobile device. Disney plans to grow the consumption of media on mobile platforms including smartphones and tablets. Commenting on Disney’s recent distribution agreement with Dish Network, Iger said “the bet that’s being made” is that the offering for ABC, ESPN and Disney content has the potential to “attract people who may not have already signed up for multichannel service” and get them to “sign up for something instead of nothing.” He called the offering “complementary to the pay-TV model,” comparing it to Disney’s Watch apps. Iger said it’s Dish’s responsibility to “get critical mass from a program perspective” for the service to take off. “We don’t intend to participate in that pursuit at all,” he said. He called the initiative a “smart thing to do” and “something that we should certainly try.” On whether the Dish deal is critical to business, he said, “No, but it’s certainly critical that it gets critical mass from a programmer’s perspective in order to bring it to market.” Disney is open to working out similar deals with other distribution partners “but we have not engaged in any of those discussions yet,” he said.