Madison Square Garden Co. sales in the quarter ended Dec. 31 rose 4 percent to $387.9 million from the year-ago period, as MSG Media revenue rose 10 percent to $156.8 million, the pay-TV programmer and sports venue owner said in a Wednesday news release (http://xrl.us/boe87x). That unit’s ad and affiliate fee revenue rose, as companywide operating income surged 69 percent to $81 million.
KCOH(AM) Houston can sell itself to La Promesa Foundation, over the objections of a Democratic member of Congress whose district includes the city, and Rev. Jesse Jackson, said an FCC Media Bureau letter Wednesday (http://xrl.us/boe85r). It said Rep. Sheila Jackson Lee and Jackson opposed the deal because it might mean KCOH’s format that’s “geared toward” blacks in Houston would disappear. It’s “well settled policy that the Commission does not scrutinize or regulate programming, nor does it take potential changes in programming formats into consideration in reviewing assignment applications,” said the letter, signed by Media Bureau Audio Division Chief Peter Doyle.
The FCC Wireline Bureau wants more input on the Connect America Cost Model, specifically relating to modeling voice capability and Annual Charge Factors (ACFs), the bureau said in a public notice Tuesday (http://xrl.us/boe8re). The bureau wants to know whether it’s reasonable to model voice capability based on a per subscriber basis; if the specific inputs used for the cost of voice capability are reasonable; and whether the approach toward calculating ACFs is reasonable. Responses should be submitted in the virtual workshop by March 7.
The “catastrophic issue” with Internet governance is that “some country” exercises major control over this vital area, and “improperly and misleadingly” claims that to broaden intergovernmental participation “would result in handing over the key issues to other countries,” Iran said in comments on the ITU secretary general’s draft report to the World Telecommunications Policy Forum (WTPF) in May. The fundamental question is whether Internet governance is “transparent and democratic and open,” Iran said. Many governments, especially in developing countries, think the governance of the Internet is “not transparent as the relevant information is not actually clear and transparent,” it said. Internet governance “is not democratic since government has either no role or little advisory role,” it said. Internet governance is not democratic because governments are not treated on equal footing with other players, it said. “It is there under almost private or less inclusive, non-collective management,” it said. The Internet has been used for disseminating “false, untrue, misleading, inciting, provocative information, propaganda, cultural attack” adversely impacting “culture, dignity, customs, tradition, conviction belief, friendship, family life, honor of peoples in certain circumstances” in some countries while boosting political stability and peace in certain others, it said. The WTPF is not a treaty conference and does not produce prescriptive regulatory decisions. ITU members at the forum discuss and exchange views and information on emerging policy and regulatory matters, especially global and cross-sectoral issues.
Liberty Global agreed to buy Virgin Media in a cash and stock deal, the companies said. Virgin Media shareholders will get $17.50 cash for each share they hold, plus a fraction of a share in Liberty Global’s Class A and Class C stock, they said. The deal puts Virgin Media’s enterprise value at $23.2 billion, or about $47.87 a share, they said. The transaction will create the world’s largest cable operator, adding Virgin’s 4 million video customers to Liberty’s 18 million. The combined entity will pass 47 million homes, mostly in western Europe, and sell at least one product to 25 million households (http://xrl.us/boe8y6). The companies see additional growth prospects in selling mobile phone services, which account for just 14 percent of current Virgin sales and 2 percent of Liberty Global sales. Plus, they said the deal could save both companies $180 million from the buying power that comes with increased scale. Savings could come from the ability to buy cheaper mobile handsets and network equipment, plus increased leverage in programming rights negotiations, Evercore Partners analyst Bryan Kraft wrote in a note to investors. If the transaction closes, current Virgin shareholders will hold about 36 percent of the stock in the new company, representing about 26 percent of the vote, ISI analyst Vijay Jayant wrote in a note to investors. He said he expects the combined company to accelerate share repurchases after the deal closes. Liberty had already announced a $1 billion buyback plan for 2013 and Virgin said it would buy back up to $1.75 billion a year for two years after closing. A law firm in New York said it was recruiting Virgin Media shareholders as plaintiffs to potentially sue the company’s board over the deal. The firm of Levi & Korsinsky said it will investigate whether Virgin’s board breached its fiduciary duty to shareholders by not shopping the company around to other potential buyers before agreeing to sell to Liberty.
There is no carriage agreement yet for FiOS to carry 3net, but the 3D network is “actively in discussions with Verizon” and other unspecified companies, a 3net spokeswoman said Wednesday. “There has never been an agreement to carry 3net or 3net programming” with Verizon, but 3net -- the joint venture of Discovery, Sony and Imax -- is “hopeful to conclude an agreement and bring 3net” to FiOS customers, she said. As the 3D network with 24 hours of programming seven days a week nears its second anniversary in the U.S. Feb. 13, it’s “seen a dramatic increase in reach, with 3net programming now available to more than 40 million U.S. households across five program distribution affiliates,” 3net said in a news release (http://xrl.us/boe8xx). DirecTV, Comcast, Service Electric Cablevision and Netflix are already carrying 3net, the spokeswoman said. The network also has a carriage agreement with Google Fiber, but 3net hasn’t launched yet on that service, she said. The Google Fiber launch will come “shortly,” she said. This month, the network will premiere its 30th native, original 3D series, which it called a “worldwide first in the industry.” The joint venture has “benefited significantly from the rise of 3D TV adoption,” with 3D TVs now in about 25 million U.S. households -- “almost one quarter of all homes” there, 3net said. “Significant further growth” is expected in 2013, it said, citing a September CEA report. In comparison, HDTV “achieved low single digit household penetration at the same point in its evolutionary cycle more than a decade ago,” 3net said. “We look forward to further growth in the in-home 3D market as more consumers embrace the format -- particularly as the electronics industry continues to include 3D as a feature available in nearly all” new TVs available to consumers this year, including “every UHD/4K set coming to market,” 3net CEO Tom Cosgrove said in the news release. The company recently launched 3net Studios, designed “to fuel not only the flagship U.S. channel service, but also to make the highest quality native 3D and 4K content available to consumers around the globe through a broad array of international distribution partners,” it said.
Astrium extended its agreement with Intelsat for C-band capacity on Intelsat 907. Under the multi-year agreement, the capacity will be used to connect maritime customers in the Mediterranean, Atlantic Ocean, North Sea and Gulf of Mexico regions, Intelsat said in a press release (http://xrl.us/boe8vg). Securing the capacity supports Intelsat’s customized very small aperture terminal users “in enhancing operations and offering improved connectivity services for business, crew and passengers,” it said.
Low-income residents of Texas and Michigan will have access to discounted cellphones from Life Wireless, the company said Wednesday (http://yhoo.it/WQSWBy). It cited approval from state regulators. The service, run as part of the federal Lifeline program, includes “a basic mobile handset with voicemail, text messaging, call waiting, and other features,” Life Wireless said, noting that smartphones aren’t an option and plans can be for as many as 250 minutes a month. Michigan residents have already begun signing up and those in Texas will have the option later in February, it said. “A cellphone is no longer a luxury item,” Life Wireless Senior Vice President Jim Carpenter said in a statement. On Monday, Life Wireless noted regulators had approved its entry into South Carolina, Oklahoma and Maine (http://xrl.us/boe8qs).
As the telecom world shifts, so does the role of states and that of regulation, panelists told regulators and staff Tuesday gathered at the NARUC Washington meeting to discuss the future of telecom, with a focus on NARUC’s new telecom task force of state commissioners. CompTel Vice President-Regulatory Affairs Karen Reidy reiterated CEO Jerry James’ keynote message (CD Feb 5 p10) that states should oversee IP-to-IP interconnection agreements. “Bandwidth management will continue to increase,” said Home Telecom Senior Vice President-Corporate Operations Keith Oliver, who noted voice alone may no longer need the same regulation as before: “The gigabit home is coming.” CTIA Vice President-Regulatory Affairs Chris Guttman-McCabe observed how much regulation over wireless differs from state to state but said CTIA works with state legislators regardless “and that will continue,” IP transition or not: Such dialogue is “good for the consumers and good for the country.” D.C. Public Service Commission Chair Betty Ann Kane told him that those pro-consumer gestures often happen at the urging of regulators, citing specific examples. “Should regulation be looked at and removed when there’s competition? Yes,” said NCTA Vice President-State Government Affairs Rick Cimerman. He said lack of competition was the basis for regulation, then backtracked to specify he meant “economic regulation” when commissioners questioned him and cited counter-examples. USTelecom Vice President-Industry and State Affairs Robert Mayer pointed to Google Fiber regulation fears: “The decision to not provide traditional voice service as we know it was because the regulatory burden was too onerous and it discouraged investment,” he said. Cimerman said states will have a role but it may not be at the PUC level, and described himself as enormously optimistic for the U.S. tech future, in contrast to the pessimism he said he heard from some others. USTelecom’s Mayer predicted telecom competition will expand, while Home’s Oliver doubted landline broadband would have much competition. The Colorado Office of the Consumer Counsel’s Bill Levis advocated for a strong state role in ensuring basic service and emergency communications.
Samuel Kang, general counsel of the Greenlining Institute, met with various FCC officials to raise questions about the T-Mobile/MetroPCS deal. Kang discussed “(1) the potential changes to competition in the market for low-cost wireless services, (2) the new company’s incentives to make changes to the MetroPCS brand, and the resultant effects on low-income communities and communities of color, (3) the new company’s ability to compete against AT&T and Verizon, and (4) the potential changes to the deployment of advanced services, diversity of spectrum holdings and jobs,” said an ex parte filing (http://xrl.us/boe8gg). Deutsche Telekom is buying MetroPCS to merge it with T-Mobile USA, its U.S. subsidiary. Greenling’s website says it “strives to protect and promote the interests of California’s vulnerable communities."