July 2013

Vivendi in Talks to Sell African Telecom Stake

French conglomerate Vivendi entered exclusive talks to sell control of African phone operator Maroc Telecom to Emirates Telecommunications for €4.2 billion ($5.5 billion), the companies said, kicking off a potential series of deals that could reshape Vivendi as a smaller company focused on media businesses.

Selling Maroc Telecom would be a crucial milestone in Vivendi's broader effort to pay down a mountain of debt and get rid of its telecommunications assets through sales or spinoffs. The strategy would leave the Paris-based company as a much smaller entity focused on businesses such as Universal Music Group and pay-TV company Canal Plus. The cash deal under discussion with Emirates Telecommunications, also known as Etisalat, values Vivendi's 53% stake in Maroc Telecom at 92.6 Moroccan dirhams a share and Vivendi would receive a total of €4.2 billion in cash for the stake, including €310 million in dividends for 2012, Vivendi and Etisalat each said in statements. [Rabat, Morocco]

Google will pay for free wireless in San Francisco parks

San Francisco is finally getting free Wi-Fi -- at least in 31 city parks.

Six years after a deal to blanket the city fell apart, Supervisor Mark Farrell and Google will announce a plan to bring public wireless Internet access, on the technology company's dime, to parks, recreation centers and plazas across San Francisco. The $600,000 gift from Google will cover the costs of the equipment, installation and maintenance of wireless capabilities for two years. Mayor Ed Lee praised the plan as a "great example" of the "public-private partnerships (that) are key to the delivery of better services for our residents in the 21st century."

Telefónica to Buy KPN's German Unit in $10.7 Billion Deal

KPN NV agreed to sell its E-Plus German mobile business to a unit of Telefónica in an €8.1 billion ($10.7 billion) deal that would create Germany's largest mobile-phone operator.

The Dutch telecommunications company would receive €5 billion in cash and a 17.6% stake in Telefónica Deutschland Holding AG, which would issue new shares to finance the deal. Telefónica's stake in Telefónica Deutschland would fall to 65% from 77%. The deal should help KPN and Telefónica compete with Germany's two top operators, Deutsche Telekom AG and Britain's Vodafone Group PLC. Competition is set to intensify further as Vodafone is buying the country's largest cable operator, Kabel Deutschland Holding. The new Telefónica Germany would have 43 million customers and annual revenue of €8.6 billion, KPN and Telefónica said. They forecast cost and revenue benefits of €5 billion to €5.5 billion under the deal. The transaction requires regulatory clearance, and getting antitrust approval might offer another challenge. Citigroup said that if the deal went through, Germany would move from the second-most competitive market to the least competitive among the five biggest European telecom markets.

KPN's Gift to European Telecoms

KPN may have the key to a turnaround in Europe's troubled telecom sector.

The Dutch operator agreed to sell its German wireless carrier E-Plus to Telefónica Deutschland for €8.1 billion ($10.7 billion) in a cash-and-stock transaction. If approved, the deal could signal a more pragmatic approach from Brussels. So far European authorities have resisted in-country consolidation, arguing fewer operators would lessen competition. But mergers also could help the case for badly needed investment, which is another European priority. Even if Brussels permits four operators to become three in Germany, it may levy substantial remedies, cutting into the deal's benefits.

World leaders are on Twitter, but they’re not using it

According to the latest edition of an annual study of online diplomats from Burson-Marsteller, although 78 percent of world leaders are on Twitter, with European leaders the most likely to be using it, their level of diplomatic engagement on the service varies.

The award for best-connected world leader goes to Carl Bildt, the former prime minister of a country that gives its national Twitter handle to a different citizen every week. Bildt and 44 other global statesmen are mutual followers on Twitter. But Bildt is something of an anomaly. Few if any national leaders tweet using their own thumbs. Only a third of the roughly 227 top ministers or heads of government that Burson-Marsteller profiled can say they represent themselves on social media. Of those, only 14 tweet on any kind of regular basis. If digital diplomacy were really taking off, we might expect it to help maintain relationships among world governments, or at least serve as a cheap way to engage in posturing amid international negotiations. Instead, the State Department’s social media efforts are floundering.

Recap: Oversight of Incentive Auction Implementation

The House Commerce Committee’s Communications and Technology Subcommittee held an oversight hearing on the Federal Communications Commission’s implementation of provisions of the Middle Class Tax Relief and Job Creation Act which authorized broadcast spectrum incentive auctions. Lawmakers and witnesses all agreed on the importance of the auction, which could be the last time that a significant amount of low-frequency spectrum becomes available. Low-frequency spectrum is particularly valuable because it is able to travel farther and penetrate walls. Gary Epstein, the co-lead of the FCC's Incentive Auction Task Force, said the FCC is still planning to hold the auction by 2014, but he expressed little confidence that the agency will meet the goal.

Subcommittee Chairman Greg Walden (R-OR) said the key to getting the auction right for broadcasters and wireless companies is that broadcasters exiting the business should get market value for their stations, that broadcasters remaining in the businesses get certainty about their continued viability, and that wireless companies be "courted as participants not subjected to economic manipulation." Chairman Walden said that certainty for broadcasters means they will not be interfered with by stations in Canada and Mexico, and that the FCC should take into account unique challenges like those of low-power translators, which boost TV signals over tough terrain to hard-to-reach places.

Officials from AT&T and T-Mobile offered competing plans for how the FCC should structure its auction of spectrum licenses. Joan Marsh, AT&T's vice president of federal regulatory affairs, argued that the FCC should allow "unfettered participation" by all qualified bidders. She argued that unrestricted competition for the spectrum is the only way to maximize the government's revenue. But Kathleen Ham, T-Mobile's vice president of federal regulatory affairs, warned that the auction is the government's "last, best chance" to prevent Verizon and AT&T from dominating the wireless industry. Republicans on the subcommittee largely sided with AT&T's call for few limits on auction participation, while Democrats encouraged the FCC to use the auction to promote industry competition. Democrats also argued that the FCC should set aside a large amount of spectrum for unlicensed use.

Rick Kaplan, executive vice president of strategic planning for the National Association of Broadcasters, argued that the FCC should ensure that TV stations that choose not to participate in the auction do not have to bear any of the costs of the subsequent reshuffling of frequencies. Preston Padden, the executive director of a group representing TV stations that want to sell their licenses, urged the FCC to pay the broadcasters based on the value of their spectrum, rather than the value of their business.

For more on the hearing, see http://benton.org/node/156171

Seventeenth Quarterly Status Report to Congress Regarding BTOP

The National Telecommunications and Information Administration (NTIA) provides this Quarterly Report on the status of the Broadband Technology Opportunities Program (BTOP or Program). This Report focuses on the Program’s activities from January 1 to March 31, 2013.

As of March 31, 2013, 182 BTOP projects remained in active status, and 42 BTOP projects had completed their project activities. BTOP recipients deployed more than 6,500 network miles during the past quarter, bringing the total number of miles to more than 93,000. Through March 2013, recipients were deploying infrastructure in 47 states, four territories, and the District of Columbia. NTIA expects the pace of network construction to remain strong through summer 2013. BTOP recipients connected approximately 1,800 community anchor institutions, which is an increase of 15 percent from last quarter and brings the total number of institutions connected to more than 14,000 across 44 states, 3 territories, and the District of Columbia. Through March 2013, 65 BTOP recipients installed more than 42,000 new workstations in Public Computer Centers (PCCs) across 38 states, one territory, and the District of Columbia. Recipients installing workstations also continue to develop and implement training programs and educational courses. During the quarter, PCCs provided 1.13 million hours of training to 340,000 users. Through March 2013, Sustainable Broadband Adoption (SBA) grant recipients reported that nearly 540,000 households and 4,800 businesses subscribed to broadband services, many of whom received digital literacy or job training. During the second quarter of FY13, BTOP recipients spent more than $194 million in federal grant funds. These funds were matched by recipient contributions of nearly $85 million. Cumulatively, federal outlays for the Program totaled $2.8 billion through March 31, 2013, while total recipient matching contributions exceeded $1.1 billion.

FCC Releases NPRM on Modernizing the E-rate Program for Schools and Libraries

The Federal Communications Commission released a Notice of Proposed Rulemaking (NPRM) in order to initiate a thorough review and update of the E-rate program (more formally known as the schools and libraries universal service support mechanism), building on reforms adopted in 2010 as well as the FCC’s reforms of each of the other universal service programs. There is strong evidence and growing consensus that E-rate needs to sharpen its focus and provide schools and libraries with high-capacity broadband connections. In June, President Barack Obama announced the ConnectED initiative aimed at connecting all schools to the digital age. The ConnectED initiative seeks to connect schools and libraries serving 99 percent of our students to next-generation high-capacity broadband (with speeds of no less than 100 Mbps and a target speed of 1 Gbps) and to provide high-capacity wireless connectivity within those schools and libraries within five years. The FCC seeks comment on ways to comprehensively modernize E-rate, including improving the efficiency and administration of the program. Comments in the proceeding are due September 16, 2013; Reply Comments are due October 16, 2013. [WC Docket No. 13-184]

See The 10 States With The Fastest Internet Connections

In the latest Akamai State of the Internet report, Vermont, New Hampshire and Delaware top the list of states with the fastest average connection speeds, and make the top 10 states with fastest peak connection speeds, too.

"One key thing that stood out was the significant levels of growth [in connection speeds], for the most part. We saw double digit percentage growth — which is an encouraging trend," said David Belson, editor of Akamai's report. Belson says it's not just smaller populations that contribute to faster connection speeds. "It may also be states with stronger competition for broadband services," he says. "At least on a community level, if there's only one provider, the chances of getting very high speed services for reasonably prices is low. But when you put Verizon FiOS and Comcast and RCN and others in the same neighborhood, there's more contention for the customer dollar. So you'll see them start getting more competitive for speed and pricing."

Sen Wyden: Weak oversight of NSA may lead to massive location tracking

In a speech at the Center for American Progress, Sen Ron Wyden (D-OR) denounced the combination of an "always expanding, omnipresent surveillance state" and a covert corpus of law that hardly restraints it. "That's not the way we do it in America!" he said, his voice rising. "We don't keep laws secret!"

"You simply cannot have an informed debate," he continued. "And when the American people are in the dark, they cannot make fully informed decisions about who should represent them." Most tellingly, Wyden repeatedly invoked the possibility of the NSA doing location-tracking. In its first report on the leaks, The Guardian said that the location data is part of what the NSA gets in its dragnet collection of telephone data; but the secret Verizon court order it published didn't specifically mention location data. "Most of us here have a computer in our pocket that can potentially be used to track and monitor us 24/7," Sen Wyden remarked early on, before vaguely warning of the prospect of "a surveillance state that cannot be reversed." Later he added: "Without additional protections in the law, every single one of us... may be and can be tracked and monitored anywhere we are at any time." And again: "Today, government officials openly tell the press that they have the authority to effectively turn America's cell phones and smartphones into location-enabled homing beacons." Sen Wyden blamed this on Congress's lenient post-9/11 lawmaking (in which he has lately been a vocal dissenting minority) and the Foreign Intelligence Surveillance Court's subsequent sweeping expansion of the NSA's reach.

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