October 2012

When you are in a hole, you usually stop digging. And yet struggling T-Mobile USA, after failing to sell itself to AT&T, may be about to dig even deeper into the U.S. market: It is in talks to purchase prepaid mobile carrier MetroPCS PCS.

In many ways, it actually makes sense for T-Mobile's parent, Deutsche Telekom, to bulk up in the U.S. with the deal. It would eliminate a low-cost competitor and give the combined companies 29.5% of the prepaid market, according to Sanford C. Bernstein. Total subscribers would be 42.5 million, against 56 million for Sprint, 111 million for Verizon Wireless and 105 million for AT&T, as of the second quarter. If T-Mobile were to structure the deal as a reverse merger, as some analysts have suggested, it would give the company a U.S. stock listing. That would allow it to finance itself separately and let Deutsche Telekom sell down its exposure over time. MetroPCS's spectrum holdings are geographically complementary with T-Mobile's. And a deal would significantly bolster the latter's presence in the top 100 markets, as well as giving it crucial bandwidth to build a next-generation LTE network. One key opportunity is for T-Mobile to move subscribers off MetroPCS's network, which uses a different technology, and eventually to turn it off. That would both free up spectrum and allow the combined company to save money by merging cell sites, among other things. But it can be a painful process.

Senate Commerce Chairman Jay Rockefeller (D-WV) is coming to the Federal Trade Commission's defense in the wake of criticism from some advertisers and GOP lawmakers over the agency's efforts to ensure consumers have a robust "do-not-track" option.

In a letter set to be delivered to FTC Chairman Jon Leibowitz, Chairman Rockefeller urged the commission to continue to work with the World Wide Web Consortium, or W3C, on developing standards for a do-not-track option. Leibowitz has been a strong proponent of giving consumers a choice of whether they want to be tracked online. Most major Internet browsers now include a do-not-track option. The W3C, a group that sets technical standards for the Web, has convened a working group that includes privacy advocates, advertisers, Internet browser makers, and others aimed at developing voluntary standards for how websites should respond to consumers' do-not-track choices. The group is meeting in Amsterdam this week to continue its work despite disagreement between privacy advocates and advertisers on how to proceed.

The Karl Rove-backed American Crossroads super PAC and Crossroads GPS non-profit group spent more than $20 million in late September on TV and radio ads attacking President Barack Obama and congressional Democrats.

The Crossroads ad buys are part of a wave of spending from conservative groups in the second half of September that swamped liberal outfits, a POLITICO analysis of federal data indicates. And they’re not slowing down. The two groups are about to launch a week-long advertising campaign in key battleground states worth $16 million. That includes $11 million on a spot focusing on the stimulus bill and the unemployment rate. Top-spending liberal organizations such as House Majority PAC and Priorities USA Action simply couldn’t compete last month, as has been the case for most of the 2012 campaign. Of the 10 groups spending the most in late September to directly support or oppose federal candidates, $47.4 million came from identifiably conservative entities while liberal groups spent $21.8 million, records show.

The American Cable Association, which has long argued about the price of sports' rights' impact on price its small and midsized members have to pay for channels, was smarting at the $12.4 billion price tag for the new Major League Baseball TV deals.

"The plain truth is that these MLB deals will send monthly pay-TV bills streaking skyward," said ACA president Matt Polka. "They will make life hard for families whose incomes, hammered by the recession, can't keep pace with the greed of broadcasters, cable networks and sports leagues. And these MLB deals follow the announcement of equally harmful deals between the National Football League and CBS, NBC, Fox and ESPN worth more than $42 billion. Cable or satellite TV service consisting of a few dozen channels at a reasonable price is a great deal. But insane sports contracts are destroying a business model that once balanced the interests of consumers, pay-TV operators, programmers and advertisers." "If sports leagues, broadcasters, and programmers are unable to moderate themselves, then ACA will have no choice but to join with consumers to seek intervention in this increasingly broken marketplace," he said.