It’s become “increasingly clear,” following last week’s iTunes 11 launch and “a series of industry executive meetings,” that Apple will launch an ad-supported streaming radio service in 2013, BTIG Research analyst Richard Greenfield said Friday at his company’s website. Greenfield met with executives within the music industry, he told us, declining to identify them. “While Pandora investors may have breathed a sigh of relief when iTunes 11 did not include an iRadio service, at launch, as some had speculated, we believe Apple is laying the groundwork for such a product in the first half of 2013,” he said at the BTIG site. The radio service “appears to be a product that will materialize far sooner than some form of Apple Television product, which continues to be a work in progress,” he said. Apple’s “pursuit of the television will take longer to come to fruition than investors are likely expecting,” he predicted. ITunes 11 has made Apple’s current-generation “Radio” product “far more prominent, adding it to the horizontal feature bar that runs across the top of the screen” now, he said. “While the service underlying that Radio button is unappealing to most consumers today, we believe the radio service can easily be updated to incorporate” advanced functionality, he said. He still believes that an iRadio product is “critical for Apple to create a local advertising/commerce strategy, tying together Maps, Passbook, Siri and a new music service (which we are calling iRadio for now),” he said. Music downloading via iTunes has “slowed as Internet radio services such as Pandora grow and subscription, cloud-based music streaming services such as Spotify proliferate,” he said. “Entering the radio business gives Apple another critical tool to capture time spent in the car and the ability to learn a tremendous amount about the consumer,” he said. IRadio will be “vastly superior to Pandora because Apple is unwilling to settle for compulsory music licenses,” he said, predicting Apple will seek “direct deals with labels at premium rates enabling iRadio to offer a superior feature set including a global solution” and “extended caching so that wireless dead-zones are no longer a problem whether driving, flying or underground.” Apple didn’t immediately comment on its plans or Greenfield’s comments.
Nine Democratic senators urged FCC Chairman Julius Genachowski not to proceed with any rule changes that would relax the commission’s media cross-ownership rules, in a letter made public last week. The letter followed news that the commission is planning a vote to allow waivers of a ban on cross-ownership among daily newspapers and TV stations in top-20 markets (CD Nov 23 p5). The senators said the commission should avoid such a decision, which they said has the potential to harm minority communities who would suffer from further media consolidation. TV and radio ownership by women and minorities “remains at abysmally low levels,” the senators said, noting the recent broadcast ownership figures released Nov. 14 by the Media Bureau (CD Nov 21 p15). The letter was signed by Democratic Sens. Patrick Leahy, Vt., Tom Harkin, Iowa, Barbara Boxer, Calif., Patty Murray, Wash., Ron Wyden, Ore., Jon Tester, Mont., Al Franken, Minn., Jeff Merkley, Ore., and Independent Bernie Sanders, Vt. The FCC had no comment.
T-Mobile USA completed its deal to sell long-term lease agreements on its 7,100 towers to Crown Castle International (CCI), CCI said Friday (http://xrl.us/bn39ng). Under the deal signed Sept. 28, CCI agreed to pay $2.4 billion for 28-year leases on the towers and will have the option to buy the towers for an additional $2.4 billion at the end of the lease period (CD Oct 1 p16). The deal had an “immediate deleveraging effect” for T-Mobile owner Deutsche Telekom, which the company said will reduce its net debt (http://xrl.us/bn39mw).
Four technology industry groups said they have some concerns with the draft Federal Information Technology Acquisition Reform Act, in a letter sent last week to the bill’s author, House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif. While the groups said they support the goals of modernizing the government’s approach to IT acquisition and federal data center consolidation, they objected to at least four legislative items relating to the bill’s definitions and the creation of new IT procurement centers. The letter was signed by TechAmerica Senior Vice President-Global Public Sector Trey Hodgkins; BSA Vice President-Government Relations Katherine McGuire; Information Technology Industry Council Director of Government Relations Andy Halataei; and Roger Waldron, president of the Coalition for Government Procurement.
The FCC established IB Docket No. 12-343 as the pleading cycle for SoftBank’s proposed purchase of 70 percent control of Sprint Nextel. SoftBank agreed in October to buy the ownership stake for $20.1 billion cash (CD Oct 16 p1). Petitions to deny the deal are due Jan. 4; oppositions are due Jan. 22, and replies Feb. 1, the FCC said Friday. “The applicants assert that the proposed transaction will benefit consumers by promoting greater wireless competition and broadband innovation and deployment,” the FCC said in a public notice. “The applicants also contend that, because SoftBank and Sprint are not competitors, and SoftBank has no attributable interests in any other U.S. wireless carriers, its acquisition of a controlling interest in Sprint will not have adverse competitive effects or other public interest harms."
Threats to Internet freedom will remain even after the World Conference on International Telecommunications completes its work and the U.S. must continue to work with its “allies around the world to make the case for Internet freedom,” said FCC Chairman Julius Genachowski Friday during a press conference after the commission’s monthly meeting. “There are major threats to Internet freedom globally and a real risk of the balkanization of the Internet globally, suppression of speech, deterrence of economic opportunities around cloud computing,” Genachowski said. “These are dangerous and the forum next week in Dubai will be one at which it’s going to be important to prevent steps that would move toward the balkanization of the Internet,” he said. “This won’t be the last international forum where these issues come up or where the threats will require a great deal of hard work. … This is going to be an issue that will be with us for a long time.”
Congress must require radio stations to pay performance royalties to artists whose work is broadcast over terrestrial radio, Public Knowledge said Friday. Jodie Griffin, one of the group’s attorneys, said the Internet Radio Fairness Act “cannot claim to achieve true parity until it also requires AM/FM radio to pay sound recording royalties, just like other radio services.” Some lawmakers on the House Judiciary IP Subcommittee echoed the call for terrestrial performance royalties at a recent hearing (CD Nov 28 p3).
In addressing the transition to a packet-mode public switched telephone network, the FCC should focus on updating its competition policies, an attorney for Cbeyond, EarthLink, Integra Telecom and tw telecom told an aide to Commissioner Jessica Rosenworcel, an ex parte filing said (http://xrl.us/bn383q). The commission should ensure that competitors can obtain ILEC packet-mode, last-mile facilities and IP interconnection for the exchange of VoIP traffic on “just and reasonable rates, terms and conditions,” the CLEC representative said.
State members of the Federal-State Joint Board on Universal Service will have to find a more pithy way of arguing the FCC violated the U.S. Constitution. Its 9,000-word amicus brief, which said the FCC violated the 10th Amendment when it decided last year to transition intrastate terminating traffic rates to zero, was rejected by the 10th U.S. Circuit Court of Appeals Friday. The Joint Board “is granted leave to file an amicus brief,” the court said, but the brief must “include no more than 810 words.” Commissioner James Cawley of the Pennsylvania Public Utility Commission, who wrote the brief, had expected the court to make an exception for the congressionally created advisory board (CD Nov 30 p10). “I was wrong,” he told us Friday. Cawley plans to confer with his colleagues on the Joint Board on the best way to proceed. They have two weeks to file.
Senate Majority Whip Dick Durbin, D-Ill., offered an e-commerce tax provision as an amendment to the 2013 Defense Authorization Act. The amendment reflects the Marketplace Fairness Act (S-1832) and its House counterpart (HR-3179), which would require online retailers to collect and remit sales tax to the states in which their customers are based. Opponents of the legislation have criticized the legislation because they said it places unfair burdens on small businesses and deprives states of their right to determine sales tax rates for themselves. EBay urged lawmakers to reject the amendment because it would “throw a new tax barrier” in front of small businesses who sell their products on the Web, according to a news release. At our deadline, the Senate had not yet voted on the amendment.