FairPoint claimed its recent move to offer voluntary retirement to its union workers and other labor reductions have enabled it to save $6.6 million. Earlier this month, FairPoint offered its Communications Workers of America employees an early retirement package. Forty-six union workers accepted the program, which took effect March 30. The move would result in annualized operating expense savings of around $3.8 million, the company said. Under the program, FairPoint will provide severance payments of about $2.3 million. Additionally, the company is laying off 32 non-union employees in an effort to “consolidate operating functions.” This would enable savings of about $2.8 million.
A DirecTV unit is selling $4 billion in senior notes, the company said Tuesday (http://xrl.us/bmw6ne). It’s issuing $1.25 billion of 2.4 percent bonds due in 2017, $1.5 billion at 3.8 percent due in 2022, and $1.25 billion of 5.15 percent due in 2042, it said. DirecTV may use the money to buy back stock, it said.
The White House renewed an emphasis on wireless broadband in President Barack Obama’s FY 2013 budget, released Monday (www.budget.gov). “High-speed, wireless broadband is fast becoming a critical component of business operations and economic growth,” the budget said. “The United States needs to lead the world in providing broad access to the fastest networks possible.” The budget also proposes significant funding for cybersecurity research. In total, the 2013 budget proposes $140.8 billion for federal R&D, 1.4 percent more than the 2012-enacted level. The overall increase is the same as the rate of inflation.
It appears that the FCC wants to “pick winners and losers rather than letting the markets work,” AT&T CEO Randall Stephenson said about the agency’s scrutiny of spectrum transactions. Specifically, he criticized the agency for applying the spectrum screening standards differently when reviewing AT&T’s T-Mobile USA deal than when evaluating the Qualcomm spectrum transfer that was approved earlier, he said during AT&T’s earnings call Thursday. Meanwhile, the carrier lost $6.7 billion in Q4 partly due to the deal breakup fee paid to T-Mobile, other charges and benefit plan costs.
Google spent nearly as much as AT&T and Comcast on lobbying in Q4 2011, according to quarterly federal lobbying reports available last Friday. Facebook and Netflix also accelerated their Washington spending as debate over online copyright issues intensified in the fourth quarter. Spectrum legislation, the recently dissolved AT&T/T-Mobile transaction and controversy over possible LightSquared GPS interference also drove communications industry lobbying in the fourth quarter, the disclosure reports showed.
DirecTV Latin America (DLA) will launch an LTE service in Brasilia, Brazil, this month with a goal of expanding it to four to five cities in Brazil in 2012 if tests are successful, DLA President Bruce Churchill said at the UBS conference. LTE will be bundled with DLA’s satellite service in Brazil, where it has 3.5 million subscribers, up from 2.8 million in June, Churchill said. DLA also may add LTE to Mendoza, Argentina, where it had been selling a WiMAX service that attracted about 10,000 subscribers. The WiMAX service used 3.6 GHz spectrum, but there “were not a lot people developing in that band” and the equipment required is expensive, Churchill said. DLA will spend about $100 million on new satellites in each of the next three years, Churchill said. Part of the added cost will be for two new satellites that are scheduled to go into service 2014-2015, co-located as replacements at 95 degrees west. Inmarsat will operate the satellites, leasing transponders to DLA, Churchill said. The Space Systems/Loral-built satellites will deliver service to DLA’s Pan Americana region, including Central America and parts of South America, in increasing capacity for HD and 3D programming, Churchill said. The satellites will launch aboard Arianespace’s Ariane-5 rocket from Spaceport in French Guiana. DLA ended Q3 with 1.5 million subscribers in Argentina and about 500,000 in Colombia. Sky Mexico, in which DLV has a 41 percent stake, has 3.8 million subscribers and an entry level program package that carries a $12-$13 monthly fee.
Public Knowledge asked the FCC to clarify how it and other organizations can challenge whether redacted information in the AT&T/T-Mobile and other proceedings should be made part of the public record. Too much of the time, AT&T and T-Mobile have stamped as confidential information they want to keep out of the public view, which is not the kind of “competitively-sensitive information” the FCC ought to protect in protective orders, Public Knowledge said in a letter signed by Legal Director Harold Feld (http://xrl.us/bmfba3).
Renata Hesse, senior FCC counsel for transactions, asked AT&T in a letter why the company concluded that building out LTE to 97 percent of the nation makes economic sense only if the company is able to also buy T-Mobile. According to an earlier filing, posted on the FCC website by mistake, AT&T’s top officials rejected a proposal earlier this year to expand the system to the same coverage levels prior to the merger announcement, citing the $3.8 billion expected cost (CD Aug 12 p1). “We understand that AT&T’s senior management concluded the transaction would improve the likely return on the additional LTE deployment to create a business case for this deployment where one would not exist absent the transaction,” the letter said. “Although AT&T has stated that it has not quantified the transaction-related changes in the business case for extending its LTE footprint, we ask that you supplement your filing with any documents or analyses explaining why the changes in cost, revenue, and/or profitability are likely to be large enough to change the overall business case for the additional deployment.” AT&T spokesman Mike Balmoris said the company expected the FCC to ask more questions on that topic given the detailed review underway. He said the additional information “will further confirm that we would not be able to deliver 4G LTE to 55 million more Americans without our merger with T-Mobile."
Free Press urged AT&T/T-Mobile deal supporters in Congress to reconsider, given AT&T’s recent FCC filing (CD Aug 12 p1) showing the carrier could deploy in rural areas for $3.8 billion. The nonprofit on Wednesday wrote the 76 members who signed a June 24 letter to the commission and Justice Department saying the deal would bring broadband to unserved rural areas (http://xrl.us/bmah8p). “Recent press reports reveal that in January AT&T decided that, rather than spend $3.8 billion to build out its network, it would spend 10 times that amount to take over T-Mobile and use the promise of rural deployment as a carrot to win approval,” Free Press political adviser Joel Kelsey said. “In AT&T’s eyes, eliminating a competitor from the market is a better business plan than investing in its network.” AT&T disagreed. “Once again, Free Press is twisting words and misrepresenting facts,” a company spokeswoman said. AT&T’s letter to the FCC “makes clear the dramatic scale of our commitment to bring 4G LTE mobile broadband to 97 [percent] of all Americans,” she said. “Simply put, AT&T would not be able to deliver 4G LTE to 55 million more Americans without this merger."
Top AT&T executives rejected a proposal earlier this year from the company’s marketing organization to expand the carrier’s LTE footprint beyond its current goal of covering 80 percent of the U.S. population by the end of 2013. AT&T disclosed that in an FCC filing on a recent meeting with key agency staff. The company promised in March to expand its LTE offerings to cover 97 percent of Americans if its buy of T-Mobile is approved. The filing explains in some detail why the company concluded it couldn’t justify the cost of this aggressive rollout without the T-Mobile buy. The filing pegs the cost at $3.8 billion.