January 2015

Comcast’s Lobbying Machine Faces Test in Washington

When Comcast heard rumors that President Barack Obama was preparing to call for tough new Internet regulations, the cable giant’s influence machine swung into action. Chief Executive Brian Roberts telephoned Valerie Jarrett, Obama’s senior adviser. He pressed her for information and stressed that Comcast opposed such a move, according to people familiar with the call. But Jarrett told him nothing and the last-ditch lobbying fell flat. A few days later, on Nov. 10, President Obama called for the “strongest possible rules” to make sure broadband providers treat all Web traffic equally -- a change that would regulate Internet service like a public utility. The news took Comcast by surprise. Comcast boasts one of the biggest corporate lobbying operations in Washington, spending $17 million in 2014, second only to Google Inc. That presence is being tested now like never before. In addition to the threat of new Internet restrictions, Comcast is facing intense scrutiny from regulators on its merger with Time Warner Cable.

How to Avoid Spectrum Crunch

[Commentary] America has enormous infrastructure needs that will require the federal government, together with local governments, to make significant, high-value investments. In one critical area -- the revolution in mobile broadband communications -- the government doesn’t need to invest its own money, but instead can encourage private investment and make a profit for taxpayers along the way.

That is exactly what is happening now at the Federal Communications Commission’s 2015 spectrum auction, as the agency is facilitating the sale of spectrum that will be repurposed for mobile broadband use. Bidding has topped $44 billion, and the proceeds will fund the first-ever nationwide network for first responders, pay down the deficit, and cover adjustment costs for federal agencies that previously used the spectrum. The auction is an important step toward President Obama ’s goal of freeing up 500 megahertz of spectrum by 2020, nearly doubling the amount available for mobile broadband use. The Obama administration will continue to take an all-of-the-above approach to making more spectrum available, one of the most critical infrastructure projects of the 21st century.

[Furman is the chairman of the White House Council of Economic Advisers and Smith is the US Chief Technology Officer]

Google’s Call Can’t Be Ignored by Wireless Investors

[Commentary] Google, which makes the bulk of its money from online advertising, benefits from anything that lowers barriers to Internet access. And, unlike traditional carriers or even the Google Fiber offering, the company won’t need to worry about making a return on billions of dollars of network assets. Indeed, it might not even need to turn a profit in wireless to accomplish its broader goals.

The implication is that Google could significantly undercut existing wireless carriers on pricing, particularly if it were able to shift a good portion of data usage on to Wi-Fi networks, says Craig Moffett, an analyst with MoffettNathanson. There seems little doubt that the entire industry would be better off without Google’s presence. So why are Sprint and T-Mobile apparently agreeing to partner with it? This looks like a classic prisoner’s dilemma: Sprint and T-Mobile are each pushed toward inking a deal, despite the risk to the overall industry, out of fear that its rival would beat it to the punch if it balks. If T-Mobile’s recent subscriber gains are any indication, though, price is a powerful card to play. For wireless carriers, Google’s entrance to the game is the last thing they need.

Google’s Internet Access Efforts Are Led by a Geek’s Geek

Craig Barratt is Google’s senior vice president, Access and Energy, and is helping the company its planned move into cellphone service. Barratt is leading Google’s effort to extend Internet access, via fiber-optic lines, drones and satellites.

In practice that means delivering Google search and other services to more people, with fewer constraints from broadband and wireless providers. The job requires him to connect disparate projects, lobby regulators and dance delicately with potential partners and rivals. Barratt’s role is crucial to Google’s plan to make its service competitive and profitable. People familiar with the strategy say Google hopes to rely as much as possible on local Wi-Fi networks, and as little as possible on Sprint and T-Mobile.

FCC Releases Agenda for Open Meeting Thursday, January 29, 2015

The Federal Communications Commission will hold an Open Meeting on Thursday, January 29, 2015. The FCC will consider:

A Report and Order to ensure that accurate caller location information is automatically provided to public safety officials for all wireless calls to 911, including for indoor calls, to meet consumer and public safety needs and expectations, and to take advantage of new technological developments. A 2015 Broadband Progress Report examining whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion; and a Notice of Inquiry asking what immediate action the FCC should take to accelerate the deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.
An Order announcing the conclusion of the Ninth Notice of Inquiry Concerning the Development of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion.
Whether to take an enforcement action.

The FCC will also hear presentation on the new Consumer Help Center that provides an easier-to-use, more consumer-friendly portal for filing and monitoring informal consumer complaints, as well as accessing educational materials.

Statement From FCC Chairman Tom Wheeler on the Passing of Peggy Charren

I am saddened to hear of the passing of Peggy Charren, the founder of Action for Children’s Television, and the driving force behind the passage of the Children’s Act of 1990.

I had the honor and privilege of working with Peggy in the 1970s and 1980s. Parents across America owe a debt of gratitude to Peggy, who singlehandedly turned the vast wasteland that was children’s television programming in the 1960’s and 1970’s into the plethora of educational, informational and entertaining programming families enjoy today. Peggy’s fearless determination to ensure that children’s programming was more than mere program-length commercials resulted in landmark legislation and FCC rules that gave real meaning to the FCC’s mandate to promote the ‘public interest, convenience and necessity.’ Peggy Charren was a national treasure.

She will be missed.

Telefónica poised to sell O2 to Hutchison Whampoa for £10 billion

Li Ka-shing’s Hutchison Whampoa has entered into exclusive talks to buy the British mobile business of Telefónica for £10.25bn, a move that would create the UK’s largest mobile group.

Hutchison confirmed that the two companies have entered “several weeks” of negotiations over the potential acquisition, although Frank Sixt, Hutchison’s finance director, said there was “still work to do” to reach a definitive agreement. The proposed deal would involve Hutchison paying £9.25 billion in cash and a further £1bn in deferred payments. Assuming regulatory approval, the tie-up would be completed around mid-2016. The merger would transform the British mobile market. Ofcom, the industry regulator, has long sought to maintain at least four competitors to keep prices low for consumers. Hutchison’s Three network, in particular, has been crucial in setting the lower end of pricing with cheap tariffs giving large bundles of data and calls.

UK mobile merger set for poor reception from users if prices rise

The proposed merger of two of the UK’s four mobile operators by Telefónica and Hutchison Whampoa raises the possibility of higher prices for the British phone user, sector experts warn.

British consumers have long benefited from some of the lowest prices for mobile tariffs in Europe. But the move announced on Friday by Li Ka-shing’s group to buy O2 from its Spanish owners, a £10.25bn deal that would create the UK’s biggest mobile group, could put that at risk. A key reason for the low prices has been the activities of Three, the smallest British mobile group, which has long set out its stall of being as challenging and disruptive to the “big three” of EE, Vodafone and O2 as possible. Three has kept its own prices low -- setting a benchmark for the market -- and given away 4G superfast mobile in “all you can eat” data bundles. The group has also campaigned to cut roaming costs for consumers, and lower the cost of connecting calls with the larger groups. Some analysts believe such activities are likely to come to a stop once Three is catapulted from the smallest to the largest mobile operator, with more than 40 percent of the market by subscriber numbers.

Europe Pulls Welcome Mat for US Tech Companies

One message so far from the corridors around the World Economic Forum in Davos: US technology companies are very worried about the backlash they are now facing in Europe.

From their standpoint, Europe risks shooting itself in the foot by rejecting the cutting-edge technologies they have brought to the continent. But they would say that, wouldn’t they? Look at it from the European point of view. Europe once led the world in mobile technology: The Global System for Mobile Communications, developed in Europe, became the global standard. But that was a long time ago. Now, most innovation in information and communications technology comes in waves from across the Atlantic. With America’s vibrant capital markets giving them billions of dollars in risk capital, they can absorb the successful European tech enterprises -- look at Skype Technologies, swallowed by Microsoft. These US companies -- Google , Facebook , Amazon and others -- are disrupting industry after industry. Publishing, telecoms and retailing have already been convulsed. Now, the companies, and Google in particular, are turning their gaze from consumer-oriented to business-oriented platforms.

Benton

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