Council Tree and Bethel Native Corp., which challenged in federal court the rules for the AWS-1 and 700 MHz auctions, asked the FCC to reconsider a March order which rejected longstanding petitions asking for revisions to the auction rules. In 2010, 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). “The Reconsideration Order marks the FCC’s latest failure to correct the course first charted under the misbegotten Unlawful Rules,” the designated entities (DEs) said (http://bit.ly/ZBN3O3). “Time after time, culminating in the Reconsideration Order, the FCC has rebuffed Petitioners (and others), electing instead to conduct major spectrum auctions pursuant to the Unlawful Rules.” The March order (http://bit.ly/10YFnbe) errs in finding that the 3rd Circuit’s decision moots the need for other revisions to the rules, the petition said. The order addressed Council Tree’s complaints in a single paragraph, noting that the FCC had altered rules by deleting its impermissible material relationship rule following the 3rd Circuit order. “The FCC adopted the Unlawful Rules just a few weeks before Auction 66 was set to begin,” the petition said. “The rootless, irrational Unlawful Rules turned Section 309(j) on its head, throwing the DE community into disarray at the eleventh hour, and giving the largest incumbent wireless companies a relatively unencumbered path to spectrum acquisition. The FCC refused to grant Petitioners’ requested stay of the Unlawful Rules in advance of Auction 66, allowing those new rules to kill DEs’ bids and facilitate the large incumbents’ dominance. DEs won only 4 percent of the value of spectrum available in Auction 66 (compared to the historical average of 70 percent), while just four companies won 78 percent thereof."
The chairmen of the House Commerce Committee and its Communications Subcommittee said in a joint news release they were “concerned” about FCC chairman nominee Tom Wheeler’s “views on merger conditions.” Fred Upton, R-Mich., and Greg Walden, R-Ore., said the “FCC should use its lawful rule making authority as a public and transparent process if it wants to change industry-wide behavior and stop using closed door, strong-arm merger conditions.” They referenced an April 2011 entry (http://bit.ly/18b5fRr) from Wheeler’s “Mobile Musings” blog in which he advocated FCC approval of the AT&T/T-Mobile merger in return for new regulatory terms and conditions (CD May 1 p1). Such agreements could be “misused to affect whole industries, not just those seeking merger approval,” Upton and Walden said. If Wheeler is confirmed, he should work with Congress to “ensure continued innovation and growth in the communications sector,” reform the FCC to make it “more transparent and efficient,” and “ensure an open, successful incentive auction free from artificial restraints on broadcasters willing to sell and wireless providers willing to buy spectrum,” they said. Separately, Rep. John Dingell, D-Mich., commended Wheeler’s nomination and urged him, if confirmed, to ensure transparency in the commission’s handling of the spectrum auction, according to a news release. “I hope Tom will maintain an open dialogue with the Congress about this matter and others in order to ensure that the Commission adheres to its statutory mandates. Transparency is key to protecting the public interest.” A high-profile position in the U.S. government “is new territory” for Wheeler, and many questions remain about his agenda there, said Medley Global Advisors analyst Jeff Silva in a research note. “We suspect there'll likely be tough love for industry stakeholders large and small across the board,” Silva wrote. “If telecom, media and tech firms believe they have a reliable handle on how they might fare under a Wheeler FCC, based on his resume, they likely will be forced to reconsider in time. Of this we are confident, however: Wheeler will make the trains run on time and he will strive to keep regulatory uncertainty at a minimum. He is decisive, does not shy from controversy and is not averse to correcting mistakes in short order.”
Cable programming costs will continue to rise over the next few years, squeezing the smaller operators, said a report on the U.S. cable industry released Thursday by Moody’s Investors Service (http://bit.ly/15cqVhm). The report forecasts 18 percent annual growth in retransmission fees through 2017. “Smaller cable operators will feel the brunt of escalating costs more acutely than their larger peers,” said the report. Moody’s said smaller companies will pay higher programming fees per subscriber because they lack the negotiating leverage of large companies like Time Warner Cable or Comcast. The report said the rising programming cost might spur increased consolidation because of the advantages of scale, pointing to the recent acquisition of a large portion of Charter Communications by Liberty Media as an example (CD May 2 p13). Moody’s said the effect of the rising programming costs may be cushioned by “an ongoing shift to higher-margin broadband, voice and commercial products.” The report also said the cost hits may not matter as much, as “video comprises a shrinking portion of overall revenue.” Moody’s also weighed in on the likelihood of cable providers having more flexibility in the channels they offer. “Despite lawsuits and political rhetoric, we don’t expect a significant change in the structure of programming contracts that would allow for a la carte options or material changes in consumer programming packages over the next couple years,” said Moody’s.
Sinclair is selling as much as $564.1 million in stock, the broadcaster said in a news release Thursday (http://bit.ly/12sCJF7). It said the offering, expected to be complete Tuesday, of 18 million shares and as many as 2.7 million more at $27.25 apiece will “fund pending and future potential acquisitions” and “general corporate purposes.” The company agreed last month to buy Fisher Communications in a $373.3 million deal (CD April 16 p14), and also said Thursday it finished the purchase of four TV stations from Cox Media Group for $94.4 million (http://bit.ly/10v60gI).
The Extreme Ultraviolet and X-ray Irradiance Sensor (EXIS) is complete and will fly on the National Oceanic and Atmospheric Administration next-generation geostationary weather satellites. The EXIS is the first of six instruments and it will give NOAA’s Space Weather Prediction Center “some of the most important early warnings of impending solar storms,” NOAA said in a press release (http://1.usa.gov/105aoDd). The Geostationary Operational Environmental Satellite-R (GOES-R) series satellites are scheduled to launch in 2015, it said. EXIS was built and tested by the University of Colorado’s Laboratory for Atmospheric and Space Physics, NOAA said.
Telesat reported consolidated revenue of about $217 million for the quarter ending March 31, about $23 million more than the same period last year, it said in a press release (http://bit.ly/ZpQRyl). The growth was mainly due to the deployment of the Nimiq 6 satellite last year and higher equipment sales, it said. At about $50 million, operating expenses were 40 percent lower than last year, Telesat said, mainly due to special compensation payments “to executives and certain employees in connection with the cash distributions made to Telesat’s shareholders in 2012.” Telesat had a net loss of about $96 million for the quarter, compared to a $97 million net income for the same period last year, it said. Fleet utilization was 91 percent for its North American fleet, and 84 percent for the international fleet, it said. Last month, the company launched the Anik G1 satellite to 107.3 degrees west (CD April 17 p18).
Executive Chairman Eric Schmidt said Google would be willing to take “significant business hits” to promote the free flow of information. He and Jared Cohen, director of Google Ideas, discussed a wide range of Internet topics at a Thursday event promoting their new book, “The New Digital Age” (http://bit.ly/11F0Ocx). Schmidt said “the core value of Google is the power of information,” and one of the harshest lessons he has learned while at the company is “that not everyone agrees.” He said Google believes “more information solves most problems.” Those lines blur for private information, the protection of which Cohen called the “ultimate shared responsibility.” He said companies, governments and citizens must make sure there are clear ways to safeguard their security and information. “The most important conclusion we came to was the role that parents have,” he said. “No matter what society you go to, kids are coming online faster and younger than at any other time in history. And they're coming online so fast that what they're doing and saying outpaces how physically mature they are. So our view is that parents need to talk to their kids about the importance of online privacy and security years before they talk to them about sex.”
Intelsat reiterated its concerns with the regulatory fees proposed by the FCC last year. There’s “no rational basis for tripling the already extremely high annual regulatory fees paid by satellite licensees,” it said in an ex parte filing in dockets 12-201 and 08-65 (http://bit.ly/18v4iRh). Intelsat expressed its concerns in a meeting Tuesday with staff from Commissioner Mignon Clyburn’s office.
The U.S. will soon see even faster broadband speeds due to private investment, Broadband for America said in a Thursday blog post (http://bit.ly/11EWERY). “The U.S. broadband market has seen major developments and convergence in recent years driving competition between different industries,” it said. “In this dynamic and competitive landscape companies are investing dramatically in their networks to maintain and grow their customer base.” The BFA post highlighted recent announcements about infrastructure upgrades and expansion from Washington Post Co.’s Cable One, Comcast, Time Warner Cable, Verizon, AT&T and Cisco. All those companies except the Post are members of the group, its website said.
The SEC approved Sprint Nextel’s proxy statement related to SoftBank’s proposed buy of 70 percent ownership of the No. 3 U.S. carrier, SoftBank said Thursday. Sprint planned to begin mailing the proxy statement to its shareholders Friday, in advance of a planned June 12 vote on the deal. SoftBank said it and Sprint are continuing to work toward winning U.S. regulators’ approval of the proposed deal, and anticipate closing the purchase by July 1 (http://bit.ly/YheAmR).