The pay-TV industry faces a consumer perception problem amid its busiest period of consolidation, according to experts, executives and research. AT&T is seeking FCC and Justice Department approval to buy DirecTV in a deal worth about $67 billion (http://soc.att.com/1ofKgX0), and Comcast wants the OK to buy Time Warner Cable in a deal valued at about $66 billion (http://bit.ly/1pXn6kP). Some experts said those companies’ reputations might suffer further if the deals are completed. If the past is a guide, multichannel video programming distributors (MVPDs) -- the second-lowest-rated industry in American Customer Satisfaction Index consumer research behind only ISPs -- may suffer more as the buyers digest mergers and acquisitions, said ACSI and others.

AT&T’s plan to buy DirecTV could be used to allow set-top box manufacturers to sell retail boxes for DBS customers as they do for cable, but such an initiative may not find support, said consumer electronics industry observers and communications attorneys in interviews this week. DBS companies are excepted from rules imposed by the FCC on cable companies intended to create a viable retail set-top market, and DirecTV customers can buy TiVo boxes, but there’s interest among CE companies in expanding their market, said a CE company official. Though getting the FCC or legislators to change rules or impose deal conditions or enact new laws requiring DBS companies to make retail competition with their boxes possible would be difficult, getting such rules imposed as conditions on AT&T/DirecTV would be a viable possibility, said Chadbourne and Parke technology, media and telecom attorney James Stenger.

Windstream’s announcement last week that it will form a publicly traded real estate investment trust (REIT) with its fiber and copper assets will likely lead other wireline companies, and possibly cable operators, to watch its implementation closely, said observers in interviews. While many telecom companies have assets that qualify for REITs, larger telcos would have a tougher time during the regulatory review processes, they said this week.

President Barack Obama weighed in on net neutrality in remarks that net neutrality advocates widely say condemn paid prioritization deals and may even warrant FCC reclassification of broadband as a Title II Communications Act service. Others said it’s a stretch to read Obama’s words that way or to contend there’s any split between him and the independent agency. FCC Chairman Tom Wheeler launched a rulemaking for crafting net neutrality rules earlier this year and has defended it as asking questions, not yet prescribing any one path forward.

The licensing rights of performing rights organizations (PROs) continued Wednesday to be a point of emphasis in comments for the Justice Department consent decree review (CD Aug 6 p7; Aug 4 p12). NAB asked DOJ to bar PROs from selectively licensing to certain licensees with the threat of catalog withdrawal (http://bit.ly/1ogM9mn). The Information Technology and Innovation Foundation (ITIF) said PROs should be allowed to license additional types of licenses beyond performance rights (http://bit.ly/1oDNmUe). The National Music Publishers’ Association (NMPA) criticized the Future of Music Coalition (FMC) for disputing (http://bit.ly/1s8RKxq) NMPA’s position that direct negotiations, as opposed to consent decrees, would benefit songwriters.

The demise, at least for the time being, of Sprint’s buy of T-Mobile was good news for the FCC and Chairman Tom Wheeler, taking a potentially divisive issue off the table and removing some uncertainty leading up to the TV incentive auction, said analysts and industry officials Wednesday. Meanwhile, Sprint said Dan Hesse is being replaced as CEO by Marcelo Claure, 43, a member of the Sprint board and CEO of Brightstar (http://bit.ly/1mmVioO). Brightstar is a subsidiary of Japan’s SoftBank, which owns a majority of Sprint. Wheeler, who had signaled concerns about a Sprint/T-Mobile deal (CD July 22 p1), released a statement Wednesday, saying: “Four national wireless providers are good for American consumers” (http://bit.ly/1nsToT1). “Sprint now has an opportunity to focus their efforts on robust competition.”

An FCC order on circulation would generically ask the agency’s Federal-State Joint Board on Universal Service to examine changes to USF contribution methodology without recommending how the group should proceed, said agency and industry officials in interviews this week.

The FCC could be headed for a 3-2 vote Friday on an order that would impose a text-to-911 mandate on AT&T, Sprint, T-Mobile and Verizon, plus interconnected over-the-top (OTT) text providers and smaller carriers. The FCC is also slated to vote an accompanying further NPRM. While eighth-floor discussions are ongoing, the two Republican commissioners, Mike O'Rielly and Ajit Pai, have concerns about the order, agency and industry officials said.

Recognizing changing consumer Internet demands, the FCC issued a notice of inquiry (http://bit.ly/1srx6Gz) Tuesday asking if it should raise the benchmarks for defining “advanced telecommunications capability” in preparation for its national broadband progress report. Because of a “tremendous growth in the online video and audio markets in the past few years,” the NOI asked as expected (CD June 4 p1) if the agency should modify its current broadband benchmark of 4 Mbps download and 1 Mbps upload. “The demand for video services and the introduction and use of new services on the market” may mean the old benchmark “no longer allows consumers the ability to ‘originate and receive’ the broadband services identified in section 706” of the Telecom Act, NOI said. Republican commissioners concurred in part and expressed concern that higher benchmarks could bring more regulation.

The Justice Department consent decree review should result in an improved negotiating posture for songwriters, music publishers and performing rights organizations (PROs), said Broadcast Music Inc. (BMI), songwriters and music attorneys Tuesday. The Future of Music Coalition (FMC) doubted whether the abolition of consent decrees would help independent songwriters and publishers, in comments (http://bit.ly/1s8RKxq) posted Tuesday. DOJ’s Antitrust Division is reviewing the existing consent decrees for PROs American Society of Composers, Authors and Publishers (ASCAP) and BMI (CD June 5 p9). Comments on the review are due Wednesday and are expected to highlight a divide between the music industry and broadcasters (CD Aug 4 p12).