November 2013

Windstream is the latest service provider to ask the Federal Communications Commission to take a closer look at AT&T's proposal to eliminate discounts for five-year and longer term plans for its time-division multiplex (TDM)-based special access services.

Echoing comments made by other competitive local exchange carriers (CLECs) such as cBeyond and tw telecom to the regulator, Eric Einhorn, senior VP of government affairs for Windstream wrote in a letter to the FCC that if AT&T's plans move forward it "would be forced either to pay the higher three-year-term rates or purchase the closest bandwidth Ethernet equivalents, which, as discussed below, are frequently not substitutable." Operating both a traditional incumbent local exchange carrier (ILEC) and competitive local exchange carrier (CLEC) via its purchase of NuVox and Paetec, Windstream must purchase AT&T's TDM facilities to serve its growing base of business customers. "Despite investing billions of dollars in recent years to expand and upgrade its network throughout its ... local exchange areas, Windstream's substantial CLEC operations still rely on AT&T's ILEC facilities for last-mile access to serve consumers in AT&T operating territories," Einhorn wrote in a letter to the FCC. "In many cases, it is not economically feasible for Windstream, or any other competitive provider, to extend its non-incumbent facilities over the "last-mile," especially when addressing single-tenant buildings."

[Commentary] Who hasn’t stepped up to support surveillance transparency, much less surveillance reform? Who, despite -- or because of -- being as deeply involved as anyone can be in the National Security Agency’s dragnet, has had nothing to say other than “no comment”? The telcos.

In the current debate over NSA spying, the telecommunications companies (telcos) that provide all of us with our telephone and Internet service, the giant corporations like AT&T and Verizon that own the phone lines and cell towers and fiber optic cables and Internet exchange points that carry all of our data -- and that the NSA is tapping into -- are nowhere to be seen. The telcos’ failure to work with the privacy community to protect their users against government overreach, in contrast with the Internet companies who’ve joined our coalition, is especially disappointing considering that they are the ones who should be helping the most.

It’s no surprise the telcos aren’t fans of transparency reporting by companies. Their numbers would stink. They’d have to tattle on their friends in the intelligence community. And the industry is highly regulated by the Federal Communications Commission. It needs the Justice Department to approve its mergers. It has a well-established revolving door between its legal compliance teams and the law enforcement and intelligence communities. And, of course, the U.S. government is the industry’s single biggest client, with huge contracts -- not least with the Defense Department. So, why rock the boat? One final reason why the telcos haven’t sided with the Internet companies and their users in the NSA debate is that they haven’t been under the same economic pressure.

[Kevin Bankston is Policy Director of the Open Technology Institute at the New America Foundation]

Tribune's plan to reduce costs by knitting together its newspapers more closely may boost profits (if revenue doesn't fall faster). But it also is likely to repel any buyer considering the thorny task of disentangling them.

The Chicago-based media conglomerate said it would eliminate 700 jobs across its eight newspapers as it centralizes business functions, including human resources, distribution and marketing, under managers at its two largest papers, Chicago Tribune and Los Angeles Times. The newspaper division is profitable, so cost cuts will deliver an improved return for owners in the short term, says Bob Bellack, a financial consultant in Los Angeles and a former chief financial officer at the Los Angeles Times who left the company in 2010. Compensation is Tribune's biggest expense, making up 42 percent of costs during the first nine months of the year. Tribune already has started to centralize some non-editorial functions such as advertising sales, and it can't centralize some others, such as printing, notes Bob Schmitz, a consultant at Quest Turnaround Advisors who worked on Sun-Times Media Holdings's restructuring in 2009. Schmitz offers an alternative interpretation of the new moves: Cutting costs in the short term could increase the price Tribune can demand for the publishing unit and underscores its aim to sell the papers as a group, he says. That would be a blow to suitors such as Wrapports LLC Chairman and Chicago Sun-Times owner Michael Ferro, who hoped to merge his company with the larger Chicago Tribune. Tribune plans to have the cuts in place as it moves to spin off the newspapers from the company's broadcast division by mid-2014.

Federal Communications Commissioner Mignon Clyburn announced the appointment of Adonis Hoffman as Chief of Staff and Senior Legal Advisor – Media.

Hoffman is a veteran communications attorney with prior FCC, Capitol Hill and law firm experience. He served as Counsel and Subcommittee Staff Director on the House Foreign Affairs Committee in the 1980s and 1990s, and joined the FCC in 1997 as Counsel in the International Bureau. He served as Deputy Chief of the Cable (now Media) Bureau from 1998-2000, and led the FCC’s Interagency Working Group on Advertising Practices during the tenure of Chairman Kennard. Hoffman became Senior Vice President and Counsel at the American Association of Advertising Agencies (the 4As) from 2000-2010, coordinating the association’s outreach and lobbying efforts at the Federal Trade Commission, FDA and in Congress. In 2010, he established a management consulting firm and think tank focused on global corporate citizenship, and authored Doing Good—the New Rules of Corporate Responsibility, Conscience and Character. In 2008, Hoffman was appointed Adjunct Professor at Georgetown University in the Graduate School’s Communication, Culture and Technology Program. Hoffman received an A.B. from Princeton and a J.D. from Georgetown University Law Center, and is admitted to practice in the District of Columbia, the U.S. Court of International Trade and the U.S. Supreme Court.