Scripps will sell its 5 Shop At Home-affiliated stations to Multicultural TV Bcstg. for $170 million, it said. The deal follows a spring Scripps decision to unload its Shop At Home assets. In June, it found a buyer for the Shop At Home Network in Jewelry TV (CD June 22 p22). Multicultural gets WMFP (Ch. 62) Lawrence, Mass., WOAC (Ch. 67) Canton, O., WRAY-TV (Ch. 30) Wilmington, N.C., WSAH (Ch. 43) Bridgeport, Conn., and KCNS (Ch. 38) San Francisco.
Having abruptly pulled out of the FCC’s AWS auction, DirecTV will finalize a wireless strategy by year-end that will involve buying a stake in a “separate entity,” CEO Chase Carey told a Goldman Sachs investor conference in N.Y. Tues. While Carey didn’t tip DirecTV’s hand whether that will involve WiMAX or an alternative technology like ancillary terrestrial component (ATC), he said any agreement would “reflect the value we bring to the marketplace.”
Globalstar said it partnered with software firm OCENS to launch a new line of data services for maritime and land- based customers, including faster e-mail and weather updates. OCEANS software will improve data compression rates and speed Globalstar’s data transmission to 38 kbps, Globalstar officials said.
Most rural telcos offer broadband services, but Internet backbone access remains a challenge, the National Telecommunications Co-op Assn. said. All respondents reported offering broadband to some customers, up from 58% in 2000, NCTA said. But “the typical respondent is 125 miles from their primary Internet connection,” and 38% have no alternate provider for connecting to the backbone, NCTA said. Other findings: (1) Most provide DSL service. Other technologies offered by a minority of the telcos: Fiber to the home or curb (28%), unlicensed wireless (22%), satellite (15%) and licensed wireless (13%). (2) About 15% of customers are take 200-500 kbps offerings, 6% get 1 Mbps and 4% subscribe to 3 Mbps connections. (3) 59% of respondents offer video service and 25% more plan to before 2009. (4) About 3/4 plan to offer VoIP but only 3% do so. NTCA said 120 of its 560 companies responded, a 21% return rate.
WYLF(AM) Penn Yan, N.Y., and 2 individuals were fined a total of $38,000 by the FCC for radio rule violations. The station’s petition for reconsideration of an $11,000 penalty for exceeding power limits was denied by Enforcement Bureau Chief Kris Anne Monteith. In a separate case, Jason Duncan must pay $10,000 and Matthew Britcher $17,000 for operating an unlicensed radio transmitter at 103.3 MHz in Bettendorf, Ia. They have 30 days to pay the fine or risk DoJ action that could include a lawsuit, forfeiture orders by South Central Region Enforcement Dir. Dennis Carlton said.
Speakers at an intercarrier compensation reform panel at NARUC were sharply split on whether the Missoula Plan to unify intercarrier rates for similar carriers would fix the compensation system’s problems. Joel Lubin, AT&T regulatory & policy vp, said the plan, backed by AT&T and more than 350 other large and small carriers across the industry, “is a workable means for managing the transition from the narrowband world to the new world that’s dependent on broadband.” He said consumers and the American economy will be the ultimate winners, calling the proposal significant because a group of diverse carriers once “at each other’s throats” came together on terms. The Missoula Plan would move over 4 years from today’s tangle of compensation rates to a unified intercarrier compensation rate for all types of traffic. There would be different rates for large, medium and small carriers. Revenue losses would be balanced by SLC increases, a new restructuring subsidy method and, as a last resort, local rate increases. Lubin said the plan would cut regulatory costs, end most interconnection disputes and advance universal service, and do so “by a rational, logical transition that will put technology in consumers’ hands in a meaningful and efficient way.” Prior intercarrier compensation reforms produced substantial consumer benefits and this one will, too, he said. But the Missoula Plan won’t hit FCC Chmn. Kevin Martin’s goal of intercarrier compensation solutions not raising local rates or hiking universal service costs, said Billy Jack Gregg, W.Va. PSC dir. of consumer advocacy: “This plan does both. It raises local rates through huge SLC increases and requires a 32% increase in a universal service fund that’s already bloated and unsustainable.” The roughly $6 billion in net revenue losses from unifying rates would be made up by SLC raises and universal service subsidy hikes totaling nearly $7 billion, Gregg said. “For consumers, this means only pain, pain, pain,” he said, urging NARUC to oppose the plan. Nan Thompson, a former Alaska regulator now with competitive carrier GCI, said the plan’s subsidy approach would “permanently entrench” incumbents and keep competitors from fielding new technologies that don’t require subsidies. The plan would eliminate many opportunities for regulatory arbitrage but also create new arbitrage opportunities, said John Sumpter of PacWest Telecom: “If this plan’s goal is to eliminate arbitrage, it fails.” Speaking in support of the plan, Bill Hahn of Level 3 Communications said it will end residential rate subsidies that discourage competition, and encourage competition for transit traffic. Consumers won’t face big SLC increases “because the competitive marketplace won’t tolerate them,” he said: “Competition will keep prices reasonable.” Doug Garret, Cox dir. of western regulatory affairs, said the plan might impair competitive carriers’ ability to geographically deaverage rates and offer deals to selected customer classes, while creating new opportunities for regulatory gamesmanship: “AT&T presents this as a choice between higher access charges or higher SLCs. But maybe there’s a 3rd choice, and that is that companies who can spend billions of dollars on a broadband infrastructure to sell video service in competition with cable companies don’t need billions of dollars in ratepayer subsidies.”
U.K. satellite TV operator BSkyB will begin adding broadband service at no extra charge for TV customers this week, CEO James Murdoch told analysts during a quarterly earnings call last Fri. The firm has been registering customers for no-charge broadband since it announced the deal July 18 (CD July 19 p7), Murdoch said. Broadband subscriber data -- including how many new subscribers the high-speed broadband offering attracts -- won’t be made public until quarterly results are revealed in Nov., Murdoch said. “This is an important year for us,” Murdoch said, noting HD, broadband and interactive endeavors, and calling 2006 the beginning of BSkyB’s “next phase of growth.” The satellite TV firm tallied 38,000 HD subscribers at the end of June, he said. That number was fewer than hoped, Murdoch said, after the service was held up by “hiccups in the supply chain” -- namely, a shortage of Thomson-built HD boxes due to a rush by World Cup soccer fans. BSkyB expects to fulfill the rest of its 90,000 installation orders by Sept., he said. The satellite TV operator launched 10 dedicated HD channels in May. BSkyB’s total subscriber count neared 8.2 million in the quarter, though the growth rate slowed to 77,000 from 83,000 new subscribers added in the same quarter of 2005. Quarterly net profit dropped 35% to $232 million, in line with forecasts, as revenue rose 4% to $1.9 billion. Officials said the lower profit was due to a higher tax charge, operating expenses and finance costs in the quarter.
BSkyB Tues. surprised U.K. telecom competitors with a Pounds 400 million, 3-year plan to bundle free high-speed Internet service for its satellite TV customers. Taking on giants BT, NTL and France Telecom, BSkyB said it aims to have 3 million broadband customers by 2010, providing broadband via Easynet DSL. The DBS operator, 38% owned by News Corp., is known as a pay-TV pioneer willing to bet high on the future of the TV and telecom markets. But Sky shares dropped by around 4% on the NYSE after the announcement.
Money manager Mario Gabelli must pay $130 million to resolve civil fraud charges involving FCC spectrum auctions, the Manhattan U.S. Attorney’s office said Thurs. A Justice Dept. complaint named Gabelli and 38 others as parties to an alleged scheme to misuse the FCC designated-entity (DE) process in auctions 1995-2000. Gabelli set up bogus companies to bid as DEs in auctions limited to small businesses, or to qualify for bidding credits and favorable financing in others, DoJ said. The companies “existed only on paper solely to certify that they met the FCC’s eligibility rules,” DoJ said. A company Gabelli owns has applied to bid in the Aug. AWS auction, outraging FCC Comr. Adelstein. DoJ charged that none of those Gabelli set up as small businesses “possessed any relevant telecommunications experience or knowledge,” nor did they control their companies. Those were controlled by Gabelli, who later transferred some licenses to 3rd parties at substantial profit, the complaint said. The govt. charged Gabelli and his affiliates with violating the False Claims Act, saying they unjustly enriched themselves by submitting false certifications of eligibility to the FCC. Lawyer R.C. Taylor filed the original suit under the False Claims Act’s whistleblower provisions, entitling him to $32.2 million of the recovery. FCC Chmn. Martin said Thurs. the FCC probably is powerless to bar investor Mario Gabelli from participating in future spectrum auctions. “I think that the settlement itself encompasses the actions the government will take against him,” Martin said after the agency’s agenda meeting. “I think the government committed in the settlement that they wouldn’t take any other action.”
Sirius bested XM in Q2 subscriber additions, according to separate announcements Thurs. by the satellite radio providers. Sirius added 600,460 net subscribers -- up 64% from 366,000 added in 2005’s Q2 -- for 4,678,207 total, it said. XM reported adding 398,000 net subscribers in Q2, for almost 6.9 million total. XM subscriber acquisitions for the quarter were down 38% from the 640,000 added in 2005’s Q2. XM earlier cut its year-end forecast to 8.5 million subscribers from 9 million, blaming Q2 product availability problems and “overall softness” at retail. XM shares opened 5% lower before rebounding Thurs. morning. Sirius shares were up modestly in midday trading.