Friend and foes of statewide video franchising bill AB- 2987 in Cal. may have set a new state lobbying expense record for a single bill in the April-June quarter, spending $23.3 million trying to sway lawmakers, an average $256,000 per day. AT&T alone spent an average $196,000 daily pushing the bill. So far, lobbying by AT&T and Verizon has helped the bill pass the Assembly and 3 Senate committees without a single “no” vote. The bill is awaiting final Senate floor consideration, perhaps this week. Lobbying expense reports filed with the Cal. Secy. of State show AT&T between April and June spent $17.8 million on AB-2987, while Verizon spent $1.7 million. The incumbent cable industry spent $3.8 million, at first trying to stop the bill in the Assembly. But after the bill’s unanimous late-May Assembly passage, cable companies changed their focus to getting amendments like a municipal franchise opt-out provision that would ease the sting of state video franchising for the cable industry. Comcast was the single biggest cable lobbyist, spending $3.1 million. Veteran bill-watchers called spending on AB-2987 unprecedented. Consumer groups and municipalities, still opposed to the bill, said the phone companies’ spending offers a textbook example of wealthy special interests buying public policy.
Revenue at Gannett’s TV stations’ websites rose 63% in Q2 from the same period a year ago, the company said. That growth, combined with increased political ad spending, helped fuel overall broadcast revenue for the quarter, with sales increasing 3.8% to $205.4 million from $197.9 million last year. Gannet also said June broadcast sales rose to 3.3% $60.3 million, compared to the same month last year.
Telemundo received it best-ever 2nd-quarter ratings, averaging 3.8 for its weekday prime time schedule, it said. The rankings confirm the rapid growth of Telemundo’s adult audience, officials said.
The FCC’s air-to-ground auction opened Wed. and at the close of the 4th round at our deadline Va.-based Unison Spectrum was the high bidder for the coveted nationwide license with a high bid of $3.8 million. A 5th round was getting underway. Unison isn’t considered among the prime contenders for the spectrum, which will be used to offer broadband on commercial airliners. Verizon Airfone is considered by many to be the leading contender, followed on many lists by AirCell (CD April 4 p10). In another auction development, the FCC granted a motion by AirCell to withdraw from the auction, but that wasn’t a surprise since the company has indicated it will bid as part of AC BidCo. In a big day for auctions, short form applications for the June advanced wireless services (AWS) auction were also due Wed. The number of contenders will be of more interest than usual since the FCC will keep bidder identity secret as the auction develops unless a sufficient number file short forms so that the FCC considers the auction likely to be competitive. Based on past auctions, the FCC is likely to release lists of potential bidders within the next 2 weeks.
NTIA plans no update of a minority broadcast media ownership study, as sought in April by the National Assn. of Hispanic Journalists ahead of expected FCC rule loosening, the Assn. said. NTIA’s John Kneuer told Assn. pres. Veronica Villafane that though no study will occur, the White House wants “American media [to] reflect the diversity of the nation’s people,” it said. Kneuer has been nominated to become director of NTIA, whose 2000 report found 3.8% of broadcast stations owned by minorities (CD April 6 p9). An NTIA official didn’t comment.
The U.K. Office of Communications awarded 12 wireless licenses for 1781.7-1785 MHz, paired with 1876.7-1880 MHz, it said Wed. The licenses, sold by auction April 20, are for a total of 6.6 MHz spectrum for such low-power purposes as private GSM mobile phone networks in office buildings or universities. Winners included BT, Cable & Wireless U.K. (England), COLT Mobile Telecom, and O2. The auction raised about Pounds 3.8 million ($7 million).
XM got double doses of federal regulatory inquiry this week, it said. In an SEC 8-K released just before its Thurs. earnings report, XM said the FCC and FTC are scrutinizing it on XM radio power emissions and compliance with several FTC rules. The regulatory inquiries added a layer of uncertainty to an otherwise optimistic quarterly report.
Telco entry into video distribution will be a boon for content owners, said Citigroup analysts Jason Bazinet and Mike Rollins. Phone companies lack the scale that cable operators have, so they will paying much more to programmers in carriage fees, Bazinet said: “We believe telco video entry creates $3.8 billion in incremental value” annually the next 3 years, to be distributed unevenly among existing cable networks and operators. Disney will see the largest benefit, largely due to ESPN, said Bazinet. The analysts said they see telco entry into video as a way to protect the voice business from cable competition. “We haven’t seen anything to suggest that the incremental video profit is going to be significant. We think the telcos are looking at this as a way to protect what they have in voice,” said Rollins.
Rates on some inmate payphone calls from Wash. state jails and prisons will drop sharply under a new Corrections Dept. deal with Chicago-based FSH Communications. The pact replaces an expiring state inmate payphone contract with AT&T that priced intrastate long distance calls at $1.10 a minute. The FSH contract sets an in-state long distance rate equal to about 17 a minute on a typical, 20-minute call. The deal, to take effect in the summer, prices an intrastate interexchange call at a flat $3.15 paid from inmate debit account or $3.50 collect. Local calls will cost what intrastate long distance calls do. Under the AT&T contract, a local call was $2. The new deal doesn’t change rates for out-of-state long distance, which will stay $4.95 the first minute and 89 a minute after. The new contract guarantees the state $5.1 million yearly in payphone commissions. The AT&T deal had a 40% commission on revenue, which in the 2004- 05 fiscal year yielded $3.8 million for the Corrections Dept. to spend on unfunded inmate needs. Inmates’ families long have complained that Wash. tied Ariz. for the nation’s highest inmate phone rates, harming inmates and their families.
FCC Chmn. Martin wants a vote on a broad media ownership inquiry soon after Robert McDowell’s delayed nomination gets Senate approval, said industry sources. After being rebuffed in his attempt to put a notice of proposed rulemaking on the Commission’s meeting agenda last year (CD March 20 p2), Martin wants to resuscitate the item within months of McDowell’s starting the job, said the sources. There was speculation the chairman would try to get a vote on the matter at McDowell’s first meeting, but we're told that’s now less likely. What’s unclear, according to Hill sources, is when the Senate hold on McDowell’s nomination will be lifted.