June 2012

AT&T Special Access Petitions Granted

AT&T petitions to deregulate special access service in San Francisco/Oakland and San Antonio will be de facto granted after there was no vote June 25 on a special access reform proposal by Federal Communications Commission Chairman Julius Genachowski that would have blocked that approval by suspending all such pending petitions and eliminating the competitive benchmarks for deregulating the service.

An FCC official speaking on background said the petitions (as well as one by Windstream) were being granted under the old rules and after "productive discussions among the commissioners," but added that "pursuant to ongoing discussions we expect the Commission will soon vote on an order setting out a path to reform them." Under FCC rules, telcos are required to lease special access lines to competitors. But the FCC deregulated AT&T and others' special access lines in 2009 in cases where competitive triggers are met. Those lines are the "last mile" dedicated broadband lines to businesses, which incumbent local exchange carriers like AT&T dominate. By contrast, residential customers can generally choose from cable or phone lines for their service.

Office of Management and Budget Approves FCC Online Public File Rules

[Commentary] The Office of Management and Budget (OMB) has once again rubber-stamped and approved a Federal Communications Commission information collection request in apparent defiance of its statutory obligation to take a hard look at the burdens imposed under the Paperwork Reduction Act (PRA).

As I reported previously, the FCC adopted burdensome rules requiring television stations to replace their existing locally-maintained public inspection files with digital files to be placed online on an FCC-hosted website, including stations' detailed political records. What is a bit of a surprise, and frankly disappointing, is that the OMB took less than two weeks to approve the FCC's request even though the proposed rules appear to clearly violate the standards of the PRA, and lengthy comments were filed by multiple parties informing the OMB of that fact. The new regulations will without question increase burdens on TV stations (including thousands of pages of copying, significant costs, and countless hours of employee time), while needlessly duplicating records already required to be maintained online by the Federal Election Commission. If such rules are not something the OMB should withhold approval of, or at least take a long hard look at, you have to wonder what level of burden is required to trigger a denial under the PRA. Very few FCC regulations that I can think of historically have imposed more paperwork burdens on stations than the online public/political file regulations.

Microsoft to Buy Yammer for $1.2 Billion

Microsoft will buy Yammer, a social network service for businesses, for $1.2 billion in cash, as it seeks to strengthen its enterprise software business and compete more directly with Salesforce.

Under the terms of the deal, Yammer will be added to Microsoft’s office division and will continue to be led by David Sacks, its chief executive. Yammer, which calls itself “the enterprise social network,” is a sort of Facebook for business. Its Web-based service allows companies to create private social networks, where employees can privately chat, shares files and collaborate on projects. Though Microsoft’s suite of software has become ubiquitous in homes and offices, the company has fallen behind on social networking applications for businesses. The company offers SharePoint, a collaboration platform, but the service is primarily used to share and manage documents. With Yammer, Microsoft will be able to pin its applications to a social graph flush with communication tools.

On Orbitz, Mac Users Steered to Pricier Hotels

Orbitz Worldwide has found that people who use Apple’s Mac computers spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.

The Orbitz effort, which is in its early stages, demonstrates how tracking people's online activities can use even seemingly innocuous information—in this case, the fact that customers are visiting Orbitz.com from a Mac—to start predicting their tastes and spending habits. Orbitz executives confirmed that the company is experimenting with showing different hotel offers to Mac and PC visitors, but said the company isn't showing the same room to different users at different prices. They also pointed out that users can opt to rank results by price. Orbitz found Mac users on average spend $20 to $30 more a night on hotels than their PC counterparts, a significant margin given the site's average nightly hotel booking is around $100, chief scientist Wai Gen Yee said. Mac users are 40% more likely to book a four- or five-star hotel than PC users, Mr. Yee said, and when Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms.

Many teens addicted to social media, texting

Nine out of 10 teens text and use social media sites — a good chunk of them daily — but they still prefer communicating face to face, according to a survey.

Many U.S. teens say they are addicted to social media and texting and often want to unplug. But they feel positive overall about how social media sites such as Facebook and text messaging have helped them connect with friends and family. The mixed feelings that teens have about digital communication sheds new light on a population growing up immersed in online technology. Research is scant on the behavioral and developmental effects of technology on youth. A national survey of more than 1,000 people between the ages of 13 and 17 by the child advocacy group Common Sense Media shows how pervasive mobile communications has become for that age group.

Vivendi ordered to pay Liberty Media $950 million

The French media company Vivendi has vowed to appeal the verdict of a federal jury that determined it must pay the American media conglomerate Liberty Media about $950 million in a dispute that dates back to Vivendi's 2002 financial collapse.

Liberty Media contended that Vivendi, under its former chief Jean-Marie Messier, fraudulently concealed the dire nature of the company's finances and liquidity from Liberty Media and other investors. Vivendi agreed in December 2001, amid much fanfare, to buy the lucrative USA cable network, the Syfy channel and USA's robust television production studio, assets then managed by Barry Diller, in a stock and cash deal estimated at $10 billion. Liberty Media owned 21% of USA — a stake then valued at nearly $2 billion. But the French company's cataclysmic stock collapse in 2002 erased much of the value of Liberty's holdings in Vivendi. The USA Network deal closed in 2002. Liberty had asked the federal jury in New York to grant it an award of 841 million euros. After a four-week trial and nearly two days of deliberations, the jury on Monday returned an award of 765 million euros, or about $950 million.

News Corp.’s Murdoch Said To Consider Splitting Company

Apparently, Rupert Murdoch is considering splitting his News Corp. media company into two, one unit focusing on publishing and the other on entertainment.

Murdoch, who is chairman and chief executive officer of News Corp., is overseeing internal discussions on whether to separate the New York-based company’s businesses. The talks are at a late stage. “I don’t think most corporate shareholders want to have exposure to U.K. newspaper assets,” said Alex DeGroote, an London-based analyst at Panmure Gordon. “But I think Rupert Murdoch wants the assets, so there’s a conflict between what shareholders want and what Rupert wants, so one way around that is de-merge them.”

FCC Asks Court to Delay USF Challenge

The Federal Communications Commission has asked a court to hold off deciding a challenge to its Universal Service Fund/intercarrier compensation reform order, saying its petition is supported by the National Cable & Telecommunications Association, Verizon, AT&T and others.

The FCC argues in its petition that the court should hold off since it is currently considering similar issues in petitions to reconsider its decision last fall to reform the fund and migrate support from traditional telephone to broadband. Those, says the FCC, are "the sufficiency and scope of the agency's new universal service system" and "the reasonableness of the Commission's plan to reform its intercarrier compensation system." The FCC argues that letting it proceed first could narrow the scope of questions "because the reconsideration petitions currently pending before the FCC raise issues central to the case before this Court -- and because the issues raised on reconsideration substantially overlap with those raised in this litigation -- the Court should "hold the appeal in abeyance pending the Commission's further proceedings," the FCC told the Tenth Circuit Court of Appeals.

NAB, Harris: FCC Needs to Build In More Planning Time to TV Station Relocation

The National Association of Broadcasters and tech powerhouse Harris Corp. told the Federal Communications Commission that there could be chaos unless broadcasters have the flexibility to take more than three years after spectrum auctions to relocate and repack their signals.

The FCC held a workshop on its design of a program to reimburse broadcasters for channel relocations after the FCC reclaims some broadcast spectrum for wireless broadband through reverse auctions, and the general agreement was that the FCC needed to provide sufficient opportunity for planning of those moves. In introducing the panel discussion, which was moderated by the Media Bureau's Rebecca Hanson, Bureau Chief Bill Lake said the FCC's goals in coming up with a plan and spending up to $1.75 billion to do so were simplicity, promptness and fairness. He said the reimbursement was not meant to be Christmas or winning the lottery. He also said the workshop was more about teeing up the right questions to ask when the FCC issues its first notices of proposed rulemaking this fall. Currently, the deadline for the FCC and broadcasters to complete what amounts to a second DTV transition is within three years after the end of the auction. While that deadline was set by Congress, Jane Mago, who represented the National Association of Broadcasters, said the FCC could ultimately control the time period by tying the end of the auctions to when broadcasters had had sufficient time to plan for their moves

Help the White House Shape Strategy for Intellectual Property Enforcement

The U.S. Intellectual Property Enforcement Coordinator is starting the process of gathering input for the Administration’s new strategy for intellectual property enforcement. The overarching objective of the Strategy is to improve the effectiveness of the U.S. Government’s efforts to protect our intellectual property here and overseas. Victoria Espinel wants to make sure as many people as possible are aware that the Administration is working on this so it can get the very best thoughts and recommendations possible. Part of the process of gathering public input is to publish a “Federal Register Notice” where the Administration formally asks the public to give their ideas.

Beyond recommendations for government action as part of the next Strategy, the Administration is looking for information on and recommendations for combating emerging or future threats to American innovation and economic competitiveness posed by violations of intellectual property rights. Additionally, it would be useful to the development of the Strategy to receive submissions from the public identifying threats to public health and safety posed by intellectual property infringement, in the U.S. and internationally as well as information relating to the costs to the U.S. economy resulting from infringement of intellectual property rights.

Benton

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