Bloomberg

How Maine Saved the Internet

[Commentary] The town of Rockport (ME) opened its own gigabit-scale municipal fiber optic network -- meaning it can transmit a thousand megabits of data a second. It is the first such network in Maine.

Most importantly, the Rockport network provides a replicable model for towns and cities across the country. Rockport's town-owned gigabit network doesn't directly serve subscribers, which means Rockport isn't competing in the private market. Instead, the town is making its network -- made up of so-called dark fiber, which carries a potentially unlimited amount of communications data -- available to any private service provider.

Creating jobs and competing with other countries depend on ubiquitous, inexpensive fiber connectivity, so we need all the help we can get.

[Crawford is John A. Reilly visiting professor in intellectual property at Harvard Law School]

Cisco Cutting 6,000 Jobs as CEO Forecasts Stagnant Growth

Cisco Systems is cutting 6,000 jobs and forecasting little to no revenue growth in the current quarter amid a slump in demand from phone and cable companies, and weakness in emerging markets.

The world’s largest networking-equipment maker, which has about 74,000 employees, said it will take a pretax charge of as much as $700 million. Including the latest round of firings, which represent about 8 percent of the workforce, Cisco has eliminated more than 18,000 people since 2011.

Amazon Walks Line as Prices Keep Antitrust Cops at Bay

Amazon’s treatment of customers means more to US antitrust authorities than how the largest Web retailer pressures publishers and movie studios.

Successfully going after Amazon at this stage “would be breaking new territory under the antitrust laws,” David Balto, a former policy director at the Federal Trade Commission, said.

That hasn’t damped debate about the tactics Chief Executive Officer Jeff Bezos is using against Hachette Book Group, Walt Disney and film studio Warner Bros. The question is whether he’s pushing Amazon toward the same monopolistic territory that tripped up Microsoft, Standard Oil and AT&T.

FCC Has No Authority to Preempt State Municipal Broadband Laws

[Commentary] However one feels about municipal broadband as a matter of public policy, as a matter of law the Federal Communications Commission has no authority to preempt state laws limiting municipal entry into the broadband marketplace under Section 706 which sanctions regulation to ensure competitiveness.

Indeed, when the Supreme Court first looked at the issue of preemption in municipal broadband in Nixon v. Missouri Municipal League, the Supreme Court went out of its way to note that “it is well to put aside” the public policy arguments favoring municipal broadband to support any “generous conception of preemption.”

Why? Because the issue of preemption is one of statutory interpretation and, as such, “the issue does not turn on the merits of municipal telecommunications services.”

[Spiwak is president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]

Murdoch’s Fox Withdraws Time Warner Takeover Offer

Rupert Murdoch’s 21st Century Fox withdrew its unsolicited takeover offer of $75 billion for Time Warner, giving up after the attempt to reshape the media industry sent Fox shares tumbling and Time Warner’s board refused to engage in talks.

Telefonica Offers $9 Billion for Vivendi Brazil Unit GVT

Telefonica offered to buy Vivendi’s Brazilian Internet-provider unit GVT for 6.7 billion euros ($9 billion) to expand in a fast-growing broadband market and address antitrust concerns in the country.

Vivendi would get 11.96 billion reais ($5.3 billion) in cash and shares in Telefonica’s Brazil unit. Vivendi would also get a right to buy a stake of about 8 percent in Telecom Italia from Telefonica.

Big Phone Companies Weigh in for Telcordia Versus Neustar

Ericsson AB’s Telcordia Technologies was fairly recommended over Neustar as the winner of a telephone-numbers management contract, associations representing the largest US telephone companies told regulators. The Federal Communications Commission shouldn’t reopen bidding and should “promptly” move to award the contract, CTIA-The Wireless Association and the US Telecom Association wrote in a filing.

President Obama Campaign Donor Wins FCC Waiver From Auction Rules

A private-equity company owned by a campaign donor to President Barack Obama won a waiver from the Federal Communications Commission that may help it bid in airwaves auctions.

Grain Management may not have qualified for benefits reserved for small businesses because airwaves leases to AT&T and Verizon Communications caused it to exceed the program’s income limits.

“Certainly there has not been a waiver like this,” Andrew Jay Schwartzman, a Georgetown University law professor, said. “The circumstances have not arisen” with the revenue of the largest wireless providers entering the picture.

David Grain contributed more than $60,000 to President Obama’s presidential campaign and the Democratic National Committee in 2008, and $22,500 in 2012, Federal Election Commission filings show. He was also one of President Obama’s top fundraisers for the 2008 election, bringing in $200,000 to $500,000, according to the campaign.

“We are very excited about the waiver” because it appears to relax rules for companies other than Grain, too, and may help small and minority businesses participate in the forthcoming wireless auctions, Nicol Turner-Lee, vice president at the Minority Media & Telecom Council, said.

Verizon Beats Earnings Estimates on Stronger User Gains

Verizon Communications, the largest US wireless carrier, exceeded profit estimates on stronger customer gains even as rivals including T-Mobile US brought more price competition to the industry.

While subscriber growth drove the profit gains, wireless margins and the size of customers’ phone bills were smaller than analysts expected. More than 82 percent of those new customers were tablet buyers, Verizon said.

With the company selling more tablets than phones and offering discounts on data plans, customers’ monthly phone bills will likely shrink, putting more pressure on wireless margins, said Kevin Smithen, an analyst with Macquarie Securities USA.

The average size of customers’ monthly bills grew 4.7 percent to $159.73. Verizon’s wireless service margins expanded to 50.3 percent. Verizon’s Edge plan spreads the phone charges over 20 months and lowers service plan charges by $10 or $25 a month depending on the data allotment.

While the shift threatens to erode wireless service revenue and margins, the move may help keep customers from switching to T-Mobile, which was the first carrier to offer phone financing in early 2013.

Fox and Time Warner Need Each Other

[Commentary] Twenty-first Century Fox CEO Rupert Murdoch's plan makes sense, and Jeffrey Bewkes, Time Warner's whip-smart chief executive officer, will eventually find a partner. Why?

Because even very powerful programmers such as Time Warner need increased heft to deal with the ever-more-concentrated US distribution market.

To control their own destiny, to ensure that they're able to reach viewers on their own terms (rather than paying unlimited tribute to ComcastTimeWarnerCable), programmers will need all the firepower they can muster. That means having as much sports and high-value content as possible on their side of the table. In turn, that means getting bigger.

[Crawford is John A. Reilly visiting professor in intellectual property at Harvard Law School]