The FCC’s recent loss in the U.S. Court of Appeals for the D.C. Circuit in Comcast v. FCC/Tennis Channel could indicate an approaching court defeat for the commission’s Open Internet order, said NetCompetition Chairman Scott Cleland in a blog post Monday (http://bit.ly/18MkIte). Cleland said Verizon’s appeal of the Open Internet order deals with the same issue of the FCC’s definition of discrimination by ISPs as last week’s Tennis Channel decision and the 2010 Comcast v. FCC decision, which also went against the commission. Cleland said between those two cases, there are “six of the fourteen D.C. Circuit judges that so far are known to disagree with the FCC’s interpretation of the law concerning regulation to prevent ‘discrimination’ by ISPs.” Cleland also said some of the language used in the court’s opinion in Tennis Channel could come back to haunt the FCC in the Verizon case. He said Judge Brett Kavanaugh’s analysis of the FCC rules Comcast v. FCC/Tennis Channel as incorporating “antitrust principles” could lead to the commission’s case against Verizon being seen the same way. Cleland said the FCC doesn’t have evidence demonstrating that Verizon has “market power,” which the court’s Tennis Channel ruling said was required for the FCC to regulate a company for discrimination. The FCC order’s focus on “openness” could also present a problem, since the term is not mentioned in any actual statute, said Cleland: “On the margin, this new decision should make Verizon more confident and the FCC less confident in the outcome of” Verizon’s appeal of the Open Internet order.
Proxy advisory firms Institutional Shareholder Services (ISS) and Egan-Jones released opposing opinions Friday on the merits of SoftBank’s bid to buy 70 percent of Sprint Nextel. ISS recommended that Sprint stockholders vote in favor of SoftBank’s $20.1 billion offer because of its “strategic merits,” which include providing capital Sprint needs to complete upgrades to its network. ISS said it has “not developed a view” on Dish Network’s $25.5 billion counteroffer for Sprint because that offer remains preliminary. “Shareholders may not themselves affirmatively choose that offer over the SoftBank transaction, as Dish has not yet made its offer directly through a tender,” ISS said in its report. Sprint touted the ISS report in a news release Sunday, saying its board has recommended stockholders vote in favor of SoftBank’s bid, calling the Dish bid an “unsolicited proposal” (http://bit.ly/ZEOflA). Dish did not comment. Meanwhile, Egan-Jones reversed its earlier recommendation of SoftBank’s bid Friday, saying Sprint stockholders should reject SoftBank’s bid “in its current form.” Uncertainty over which bid will prevail is creating “strong potential for an improved offer” from SoftBank, it said. Sprint stockholders are to vote on SoftBank’s offer June 12.
SAG-AFTRA voted to approve the 2013 SAG-AFTRA Commercials Contract and 2013 SAG-AFTRA Radio Recorded Commercials Contract, the union said Friday (http://bit.ly/17TgX5J). The contracts, of which 96 percent of members voted in favor, cover the period between April 1, 2013, and June 30, 2016, and deal with “performers working in commercials made for and reused on television, radio, the Internet and new media, and will result in wage increases and other payments totaling $238 million,” the release said.
Sea Launch’s Failure Review Oversight Board issued its final summary report on the failed Jan. 31 launch attempt of the Intelsat 27 satellite. The board concluded that the failure “was isolated to the Zenit 3SL first stage hydraulic power supply unit with no other contributors identified,” Sea Launch said in a news release Monday (http://bit.ly/VC6feh). The launch failed about 40 seconds after liftoff over the Pacific Ocean (CD Feb 4 p15). “Corrective actions are expected to be complete on the existing flight units in the June/July timeframe and do not involve any design changes to the flight hardware,” said the report. It said the board cleared the Zenit 3SL for return to flight pending the closure of the corrective actions, “which they affirmed will preclude a similar failure in the future."
The U.S. Court of Appeals for the D.C. Circuit denied a petition from David Schum asking that it mandate an FCC hearing for transferring radio licenses from DFW Radio in Dallas to Bernard Dallas LLC. The petitioner filed requests in nine filings beginning in 2006, the petition said. The petitioner provided the commission with substantial evidence that Zwirn, the defunct hedge fund associated with Bernard, “used Cayman Island-based subsidiaries to provide loans to petitioner’s company ... to fund and ultimately to control the Zwirn onshore hedge fund and the Zwirn hedge fund manager,” it said. The FCC “has ignored all nine requests made over this eight year period choosing instead to make rulings on the petitions without requiring the necessary documentation from Zwirn,” it said. Three circuit judges found that the petitioner “has not shown that he has a clear and indisputable right to mandamus relief,” they said in an order (http://bit.ly/ZIrblL).
The Consumer Federation of America supports arguments the Department of Justice made in an April letter on spectrum aggregation and competition (CD April 15 p7), the group said in a filing at the FCC. “A careful examination of the dispute reveals that the DOJ analysis rests on well-established fundamentals of the wireless market that the DOJ has consistently articulated and promoted throughout the entire history of U.S. wireless broadband service,” CFA said (http://bit.ly/ZIqnO0). “Access to spectrum is a critical (bottleneck) input for wireless service and different frequency bands have different propagation characteristics that significantly affect the economic costs of provisioning wireless networks and therefore the competitive structure of the sector.” CFA said the FCC should give industry critics of the letter little weight.
T-Mobile doesn’t want to keep AT&T and Verizon Wireless from bidding in an incentive auction of broadcast TV spectrum, but merely to restrict any company from buying too much spectrum below 1 GHz, T-Mobile representatives said in a meeting with Wireless Bureau Chief Ruth Milkman, Gary Epstein, head of the Incentive Auction Task Force, and other FCC officials. “AT&T and Verizon’s presence in the 600 MHz band is important to T-Mobile because the two companies enjoy volume purchasing power, promote international standardization, and command attention from the global supply chain,” T-Mobile said (http://bit.ly/19CNgnH). “Without their presence in the band, T-Mobile’s equipment costs and product development cycles would likely increase.” But a cap still makes sense, T-Mobile told the FCC in an ex parte filing on the meeting. “The precise implications of the cap will vary depending on how much spectrum becomes available during the 600 MHz incentive auction and the concentration of a carrier’s holdings in a particular market, but AT&T and Verizon will likely be able to acquire substantial amounts of spectrum in most counties under reasonable spectrum clearing estimates,” the filing said. “If, however, the amount of spectrum recaptured is especially low, or if an incumbent’s below-1 GHz spectrum holdings are especially high in an individual market, then strict application of a one-third cap could prevent a dominant incumbent from acquiring spectrum in that particular market."
Dish Network’s revised bid of $4.40 per share for at least 25 percent ownership of Clearwire is “not actionable,” Sprint Nextel CEO Dan Hesse said Monday in a letter to Clearwire’s board (http://bit.ly/10Tw3zU). Dish revised its offer last week, besting its initial bid by 29 percent, and a buyout offer from Sprint by a dollar per share. The revised bid also prompted Clearwire to postpone a shareholder vote on Sprint’s offer until June 13 (CD June 3 p18). Sprint claims Dish is asking for “specific governance rights” that Clearwire can’t provide without the approval of Sprint and other shareholders who together own 80 percent of Clearwire; Sprint currently owns nearly 51 percent of the company, Hesse said. The rights Dish seeks include veto power over changes to Clearwire’s organizational documents if they negatively affect Dish -- something that “runs afoul of Delaware law,” Hesse said. “Having invested billions I am sure you understand why Sprint is not willing to give up rights that were fundamental to the investment it made.” A Clearwire spokeswoman said the company’s special committee is still reviewing Dish’s bid, and will not comment until that review is completed. Dish did not respond to a request for comment.
Sen. Frank Lautenberg, D-N.J., the fifth-ranking Democrat on the Senate Commerce Committee, died Monday due to complications from viral pneumonia, his office said. He was 89 years old. Lautenberg announced in February he would not seek re-election when his term expired in 2014. New Jersey Gov. Chris Christie (R) will be responsible for appointing a temporary successor in the Senate. He did not say Monday whom he would select. Following Lautenberg’s death there are now 12 Democrats and 11 Republicans on the Senate Commerce Committee.
Most TV viewing on mobile devices occurs in the home, driven mainly by convenience, and not to avoid advertising, the Council for Research Excellence said in a study. The study, “TV Untethered,” examined how mobile media devices impact overall TV viewing behavior, CRE said in a press release (http://bit.ly/10MbGb6). About 82 percent of participants said they viewed mobile content on a tablet and 64 percent viewed content on a smartphone, it said. The study was done by research firm Chadwick Martin Bailey and had about 6,000 participants, it said. Nearly 50 percent of participants cited “more convenient” as their top reason for viewing video on a mobile device, it said. “Only 5 percent cited ‘fewer ads.'” Content availability often drives device selection, it said.