The collective licensing model around how music royalties are paid to performing rights organizations (PROs) seems to be breaking down, a broadcast lawyer said. With Sony ATV withdrawing from the American Society of Composers, Authors and Publishers (ASCAP) and BMI, “music services have one more rights organization with whom they have to negotiate in order to play music,” Wilkinson Barker lawyer David Oxenford said in a blog post (http://xrl.us/bobvjj). “And this publishing company is free to set royalty rates as it sees fit, not supervised by a government agency or rate court.” If more large publishing companies withdraw from the PROs, “as some have threatened, then the process becomes even more difficult for services, as they have more groups with whom they have to negotiate,” he said. This fracturing of music licensing makes life more complicated, especially for smaller players in the music universe, he said. Smaller services will have trouble securing all the necessary rights, “and getting access to all music, if the fracturing of music rights continues.” Smaller publishers may be left with the PROs “and end up with higher administrative costs as there are fewer rightsholders among whom those costs can be distributed,” he added.
The U.S. Export-Import Bank approved an $87.1 million loan guarantee to Spain-based Hispasat Canarias for the assembly and purchase of a satellite to be manufactured by Virginia-based Orbital Sciences Corp. The Ku-band satellite, Amazonas-4A, is expected to launch in 2014 “and will occupy the company’s orbital slot over Brazil,” Ex-Im said in a press release (http://xrl.us/bobvho). It will provide coverage to North America and South America and respond “to the increasing demand of direct-to-home and high-definition television broadcasts,” it said.
Telecoms will need to remain vigilant about cost control in order to offset “relatively flat” revenue growth during the next five years, research firm Ovum said Tuesday. Telecom revenue will grow just 2 percent annually through the end of 2018 due to increased competition from over-the-top providers, continued consumer focus on devices and apps rather than services, as well as low consumer tolerance for “usage-sensitive billing”; cutbacks in capital expenditures (capex) help, but only go so far, Ovum said. “Service providers will keep a tight rein on their capex budgets, but they do need to spend heavily on technology -- both their customers and the competition demand this,” said Matt Walker, Ovum’s principal network infrastructure analyst, in a news release. “What’s changing is that operators are more smartly attacking their operating expense (opex) budgets, which opens new opportunities for vendors.” Opex savings can come in the areas of network rollout, network operations, network optimization, customer experience and service quality management, Ovum said. Such internal opex costs total $126 billion for the telecom industry. “If you're an operator, this is a huge cost that needs to be managed,” Walker said. “As operators look to lower operating risks and their cost bases, one option is additional services projects that involve the transfer of employees” (http://xrl.us/bobvpc).
Increased competition in pan-European business communications could boost Europe’s economy by nearly 775 billion euros (around $1 trillion) over 15 years, said a WIK-Consult study for the European Competitive Telecommunications Association (ECTA) and International Telecommunications User Group (INTUG) (http://bit.ly/VhOe4X). Since Europe’s telecom market was liberalized in the 1990s, “significant attention has been given to the impact of increased competition on the services and prices available to consumers” and small- to mid-sized companies, it said. But while only about 2 percent of companies in the EU could be described as multi-site or multinational corporations (MSC/MNC), they form a major part of the European economy, it said. Although MSC/MNC business communications make up a large part of the telecom market, policymakers and regulators generally assume that larger businesses are well-informed and exert significant buying power when they purchase communications services, it said. As a result, there are few reports on their experiences with such services, but several surveys suggest that competition in this area is less well-developed than expected. The WIK report surveyed 112 multi-site and multinational businesses whose operations cover all countries in the EU27. Key findings included that: (1) Large companies primarily want communications “services” such as the Internet and mobile services, rather than the technological elements that underpin them. They seek service reliability, bandwidth and technical resilience, among other things. (2) Business communications services (BCS) usually encompass a bundle of different products and services, ideally tailored to the needs of each company. (3) Businesses overall prefer using a single supplier that handles a range of services rather than separate suppliers for each site and/or service. (4) End-user choice of suppliers is often limited. (5) Businesses most often complained about being unable to buy fixed and mobile services from the same operator. (6) The complexity and tailored nature of business services mean switching providers can be pricey and problematic. The problem in Europe is that the fragmented retail market, where several players compete for different customers with different requirements across Europe, means it’s not possible to assess specific market shares in the provision of cross-border business communications, the report said. In the few cases where national regulators have examined their retail markets for business communications, incumbents’ market shares have been higher than expected, often greater than those shares are for provision of broadband services to consumers and smaller companies, it said. It appears that national incumbent telcos may also be strongly positioned to provide mobile services to businesses, it said. There’s also a mixed regulatory picture on key wholesale products used for BCS, it said. All this provides “compelling evidence” that a cross-border retail market may exist for provision of bespoke (tailored) communications to larger businesses, it said. The report recommended that EU and national policymakers rethink their approach to acknowledge the importance of having competitive markets for communications in the business sector via consistent treatment of wholesale access for BCS. Such changes can’t happen until the EU e-communication framework directive is next revised, but the European Commission could consider several interim solutions, it said. One could be to describe the retail market for tailored business communications to larger businesses and identify it as a cross-border market subject to prior competition regulation. A second option would be rules to address the short-term regulatory gap, akin to the mobile roaming regulation, which would need political consensus with the European Council and Parliament, the report said. A more harmonized market definition of BCS and conditions for business access would help meet the demands of large corporations, it said. ECTA and INTUG urged the EC to move quickly to create a single digital market for business.
Liberty Media officially became Sirius XM’s majority shareholder on Friday when it converted all its preferred Sirius XM stock into 1.29 billion common shares, Sirius XM said in an 8-K filing Monday at the SEC. The conversion, combined with an all-cash purchase of 50 million shares earlier last week, gave Liberty Media control of 50.2 percent of Sirius XM stock, the filing said. Liberty Media executives Mark Carleton, Robin Pringle and Charles Tanabe immediately joined the Sirius XM board to replace departing members Leon Black, Lawrence Gilberti and Jack Shaw, the filing said. Jim Meyer, who recently succeeded Mel Karmazin as Sirius XM CEO, also joined the board, the filing said. The FCC International Bureau granted Liberty Media approval for de jure control of Sirius XM on Jan. 3 (CD Jan 4 p9).
Sky launched a new paid subscription service, “Sky Go Extra,” which lets customers download films from Sky Movies and content from channels such as Sky 1 and Sky Atlantic to watch on up to four Internet-connected devices, the company said. Sky Go Extra, available for about $8 a month, is the first mobile TV subscription service in the U.K. and Ireland to offer Hollywood movies to download and watch offline, Sky said. Sky Go Extra customers who subscribe to the Sky Movies pack will be able to download blockbuster releases around six months after they have ended their runs in theaters, it said. Once downloaded, customers can store the films on their portable devices for up to 30 days, it said. Moreover, all titles are available exclusively to Sky Movies subscribers and will not be available on any other online movie subscription service for a least a year after they first appear on Sky Movies, it said.
A strategic cooperation agreement launched Monday will promote harmonious development of the industry, said the European Telecommunications Network Operators’ Association and the Latin American Association of Research Centers and Telecommunications Enterprises. Under the agreement, the two organizations will exchange studies analyzing the main problems in the sector, and share good practices, market research, reports and other relevant news, they said. They'll also publicize each other’s events. Key areas for cooperation include telecom regulation, online content policies, new business models development and best practices such as sustainability and smart energy.
Microwave radio frequency device distributor Dal-Tech Devices agreed to pay $10,000 to settle potential civil liability for “apparent violations” of the U.S.’s Iranian Transactions Regulations, the Treasury Department’s Office of Foreign Assets Control (OFAC) said Friday. Dal-Tech’s prior owners and management apparently violated the regulations by making an unlicensed sale and shipping $3,226-worth of radio frequency management devices to Austria, with knowledge that they would be shipped on to Iran, OFAC said. When the devices were returned without being delivered, Dal-Tech re-exported them to Iran via Slovenia, OFAC said. Since Dal-Tech did not voluntarily disclose the matter to OFAC, it constitutes “an egregious case,” OFAC said. “Dal-Tech’s prior management at least had reason to know that the company’s goods were ultimately destined for Iran.” Dal-Tech had not been the subject of previous OFAC enforcement action. The OFAC settlement coincides with a Deferred Prosecution Agreement with the office of the U.S. Attorney for Delaware, OFAC said (http://1.usa.gov/UB2QZa).
Meredith said it wrote down $7 million in fiscal 2013’s Q2. The charge was related to some layoffs and other business “realignments,” the company said. It said it will give an update on its strategic growth initiatives and earnings outlook when it releases earnings, Jan. 24.
The FCC needs to take “both near-term and longer-term steps to address statistical and data-related shortcomings” of USF regression-analysis based caps, NTCA told aides to Chairman Julius Genachowski and Commissioner Mignon Clyburn on Thursday, an ex parte filing said (http://xrl.us/bobd4p). The agency should refrain from extending the caps to other components of USF support, or applying them in full effect, “in light of the many obvious and significant issues that remain to be worked through,” the association said. NTCA also called for “Commission-level oversight” of the caps to high-cost loop support.