Forty percent of smartphones returned through the supply chain are “no-fault-found” returns, said Jim Hunt, senior vice president-business development at Genco, a third-party logistics provider for the consumer electronics channel. Genco, which handles the product returns for AT&T Wireless and U.S. Cellular, makes “plug-and-play” repairs to phones including jack and display replacement, but not soldering work, Hunt said in an interview. The company is working with carriers on what Hunt called a “recent phenomenon” owing to increasingly sophisticated phones. “Four out of 10 phones that are returned don’t have anything wrong with them,” Hunt said. He described a “fairly significant level of buyer remorse” due to customers not understanding the complexities of the latest generation of smartphones. “It’s easier to say it’s broken than to admit they don’t understand how the phone works,” he said. The occurrence is particularly evident with Android phones because of the open architecture that allows users to download “any number of things,” he said. Games are a major culprit because they consume a lot of storage, and the closer a phone comes to reaching storage capacity, “it slows down to nothing,” said Hunt. “They come back and say the phone isn’t working, so take it back.” Under the current retail model, the staff members at wireless stores are motivated to sell accessories, not provide customer support, he said. “It’s easier to take the phone back and give them another phone rather than help a customer resolve an issue.” Hunt worked with a consulting company to determine the cost of no-fault-found returns to carriers and learned that “a $100 bill gets wrapped around every one that loops its way into the return process.” Original equipment makers don’t assume responsibility for the returns because they're not due to defective product, so “carriers are absorbing cost and it’s killing them,” he said. Genco is seeing fewer returns because phones have a longer life cycle than they did three or five years ago. “If you look at Samsung and Apple phones, fewer folks are flocking to the next new model than they did three years ago, because the changes are more incremental,” he said. “People are holding on the units longer.” Genco gleaned that through the number of returns it sees from AT&T and U.S. Cellular due to fewer phones being sold, and less “repair incidence” per phone due to smartphones that are “more robust and sustainable,” he said.

The FCC should reject a petition by Council Tree and Bethel Native Corp. seeking further changes to the commission’s auction rules, Verizon Wireless said in comments filed at the FCC. In May, Council Tree and Bethel asked the FCC to reconsider a March order which rejected longstanding petitions asking for revisions to the auction rules in place during the AWS-1 and 700 MHz auctions (http://bit.ly/ZBN3O3). The two previously challenged the rules in federal court in Philadelphia. Three years ago, the 3rd U.S. Circuit Court of Appeals found problems with the FCC’s revised designated entity rules used during the auction, but let the auction results stand (CD Aug 25/10 p1). “Council Tree seeks here to undo the results of Auction 73 [the 700 MHz auction], which took place in 2008,” Verizon said (http://bit.ly/166dkCP). “Council Tree’s theory is and has always been that the competitive bidding rules used by the Commission to determine eligibility for preferred designated entity (DE) status are unlawful and thus that any FCC spectrum auction in which DE eligibility was determined using those eligibility rules must be vacated. Despite making various procedural and jurisdictional missteps throughout this quest, Council Tree succeeded in having a federal appellate court address the merits of this issue. Unfortunately for Council Tree, it lost.”

Alaska Communications Systems is concerned that the Connect America cost model under development by the FCC Wireline Bureau “dramatically understates the cost of construction and operation of broadband-capable networks in the Alaska price cap territories served by ACS,” it told FCC Wireline Bureau officials Friday, an ex parte filing said (http://bit.ly/1aDaHzo). The commission’s proposed requirement of five years to extend broadband to 100 percent of eligible locations in the state is not workable, ACS said, “as it fails to account for the unusually short construction season and limited labor pool in the state.” ACS requested a 10-year build out period. Alaska has the lowest population density of all U.S. states, with 1.2 residents per square mile, ACS said in a presentation to staff (http://bit.ly/1aDb7pm).

Comments are due July 31 on an FCC proposal to “streamline or eliminate legacy regulations contained in the Computer Inquiry proceedings,” said a public notice released Wednesday (http://bit.ly/1aD9NTy). Reply comments will be due Aug. 30 in docket 95-20. The FNPRM was released along with an order partially granting USTelecom’s petition for forbearance from several rules and requirements (CD May 20 p9).

Samsung “has acquired key talent and assets from Boxee,” a Samsung spokesman confirmed Wednesday. He didn’t disclose the purchase price or other terms of the deal, including whether it bought all of Boxee’s assets or just some of them. Samsung also didn’t say whether it was hiring all or some of Boxee’s current staff of about 45 people. “This will help us continue to improve the overall user experience across our connected devices,” the spokesman said. It also wasn’t clear if Boxee will keep its offices in Tel Aviv and New York. Boxee confirmed it “will be joining Samsung,” but declined further comment. News reports pegged the purchase price at about $30 million. That would be only slightly more than the $26.5 million Boxee said it received in three rounds of funding from Spark Capital, Union Square Ventures, General Catalyst Partners, Pitango Venture Capital and SoftBank. “For many years, we're going to continue seeing many devices connected to the TV,” Boxee CEO Avner Ronen predicted at a recent Piper Jaffray conference (CD March 15 p13). But “eventually, there’s no real reason for it to continue and there should be consolidation” among the devices, he said then.

Comcast’s Telemundo Station Group bought the network’s Philadelphia affiliate, WWSI-TV Atlantic City, N.J., from ZGS Communications, said the buyer in a news release Tuesday. The deal gives Telemundo Station Group 16 full-power stations in the U.S. and Puerto Rico, it said. Starting in September, WWSI will relocate to shared facilities with NBC’s owned and operated affiliate WCAU Philadelphia, it said. WWSI will begin broadcasting a Spanish-language local newscast in January, start a website for Philadelphia’s Hispanic community and increase its signal coverage with a new antenna, it said (http://bit.ly/16OWSsZ).

Rep. Bobby Rush, D-Ill., and Del. Eleanor Holmes Norton, D-D.C., are scheduled to speak at the FCC’s July 10 workshop on inmate calling services, the commission said Wednesday (http://fcc.us/12e07Wp). After opening remarks by acting Chairwoman Mignon Clyburn, panels will explore the “individual and societal impacts” of high prison phone rates; steps that states have taken to reform rates; and how inmate calling services are evolving to respond to the “unique needs of correctional facilities.” Commissioner Jessica Rosenworcel will also speak. The workshop will begin at 9 a.m. in the Commission Meeting Room, and will be streamed live on fcc.gov/live.

The FCC Media Bureau granted three petitions Tuesday to exempt Comcast, Time Warner Cable and Cebridge Acquisitions doing business as Suddenlink Communications from municipal rate-setting for basic-video and some other prices in communities in Illinois, Kentucky and Louisiana, respectively, said filings posted in FCC docket 12-1. All three petitions cited video competition from DirecTV and Dish Network. The deregulation for Comcast in Illinois (http://bit.ly/12ml56m) will affect just under 37,000 households including the communities of Sterling, Princeton and Peru. The deregulation in Kentucky for TWC (http://bit.ly/1b82EJJ) will affect just under 21,000 households, including the communities of Morehead, Lancaster and Lebanon. Suddenlink’s deregulation (http://bit.ly/17TWqOx) will affect over 18,000 households in Alexandria, La.

Investor Barry Diller’s settlement with the FTC agreed to “a small fraction of the fines” to which the agency thinks it’s entitled to avoid “time and expense of a court challenge,” he said in a statement responding to an FTC consent decree Tuesday (CD July 3 p11). Diller said he bought the Coca Cola shares at the heart of the FTC settlement “in my personal capacity. I was not made aware of the necessity to file, and the moment I became aware, I filed promptly and complied with all regulations -- the only infraction was in the timing.” The settlement “highlights the need for the antitrust agencies to make explicit that officers and directors that choose to align their interests more closely with the shareholders they serve should be subject to higher” Hart-Scott-Rodino Act thresholds, he said.

A kids’ safety advocate disagreed with the FCC order denying his and Clarity Media’s applications for review of Media Bureau dismissal of the company’s waiver requests to start a wireless truck-stop TV service with AMBER Alerts (CD July 3 p3). “The FCC has missed an opportunity to save lives,” said President Marc Klaas of the KlaasKids Foundation, named after his daughter who died in a 1993 kidnapping (CD Aug 3/11 p12). “A lot of underserved and underprivileged truck drivers won’t be able to assist the families and law enforcement officials who so desperately need their help,” he said by email Wednesday. “We plan to continue our fight and urge the public to join us.” Klaas plans to meet with his counsel on the matter “and they're pondering any and all options,” said his spokesman. A spokeswoman for Clarity’s owner Pilot Flying J declined to comment.