October 2016

Sen Markey: FCC Should Review AT&T-Time Warner Deal

Sen Ed Markey (D-MA) says the Federal Communications Commission should get to review the proposed AT&T-Time Warner merger. "[T]he FCC is our telecommunications cop on the beat, and we need it to ensure that marketplace actions don’t harm consumers, stifle innovation, or reduce competition," he said.

There has been talk that the companies might be able to avoid an FCC review by spinning off a TV station and some satellite licenses, which would mean the Department of Justice would review for antitrust issues, though likely with FCC input anyway. But Sen Markey says the deal "demands" a review by both parties. “A review by the FCC would help prevent pay-TV gatekeepers from favoring their own content providers, and blocking minority, diverse, and independent programmers from reaching America's living rooms," he said, echoing FCC Chairman Tom Wheeler's arguments for various regulatory efforts. "A review by the FCC would help ensure that Americans can continue to enjoy watching all the content that should be available to them, and that their right to privacy is maintained even when technologies change.” Sen Markey did not say he opposed, or supported, the deal. But he did say that an FCC review would give it a chance to either "apply pro-consumer, pro-competition conditions if the acquisition is not in the public interest or halt it altogether."

The $85 Billion Question: Will the FCC Review the AT&T-Time Warner Deal?

It’s the $85 billion question. Will the Federal Communications Commission have jurisdiction over AT&T’s blockbuster $85 billion buyout of entertainment giant Time Warner? The reason why this is important is that the FCC is likely to take a more skeptical view of the deal than the Justice Dept. In mergers like these, the Justice Dept.’s job is to ensure that the deal doesn’t run afoul of antitrust laws. The FCC, by contrast, has a more rigorous responsibility: To ensure that the deal serves the public interest. That’s why AT&T wants to avoid FCC scrutiny in this case.

As a technical matter, it would be very difficult for AT&T to absorb CNN and HBO without the broadcast functionality that these licenses provide, according to John Gasparini, policy fellow at DC-based consumer advocacy group Public Knowledge. “It appears that AT&T and DirecTV do not currently have sufficient satellite licenses to forgo acquiring the Time Warner licenses without impacting the operations of big-name properties like CNN and HBO,” Gasparini said. “As a result, it’s more than likely that AT&T and Time Warner will need to secure FCC approval before the deal goes through.” “The only way AT&T could avoid FCC scrutiny is if they deliberately structure this deal in a convoluted way to avoid a transfer of these licenses and thus FCC review,” Gasparini added.

AT&T and Time Warner hope to break the cycle of failed mergers

AT&T’s blockbuster bid for Time Warner might be a boon for investment bankers, lawyers and lobbyists, but it is anyone’s guess whether investors, employees and consumers ultimately would benefit from the combination. AT&T estimated that it could achieve $1 billion in cost savings in three years after buying Time Warner. AT&T CEO Randall Stephenson promised the merger would transform media because AT&T would be able to create new subscription and advertising models. Time Warner movies and popular TV shows like “The Big Bang Theory” could be promoted to AT&T cellphone customers. But some analysts have expressed doubts that such a massive tie-up will pan out the way that Stephenson and Time Warner CEO Jeffrey Bewkes hope — should the federal regulators allow the two companies to come together.

There’s good reason for skepticism: Many mergers fail to live up to the hype. “Most of them don’t work out,” said Rita Gunther McGrath, a management professor at Columbia Business School. “And the success rates for the big ones are abysmal.” Problems include challenges integrating disparate business units, conflicts in corporate culture and getting beat by rivals who respond faster to changes in market conditions.

Frontier’s supplemental CAF-II funding request faces protests from Comcast, Charter

Frontier’s request to the Federal Communications Commission to modify its CAF-II phase one incremental broadband deployment plans is facing a protest from Charter and Comcast, who said that the telecommunication company is asking for funds to build out broadband in areas they already serve.

Frontier initially accepted $283 million annually in CAF II support from the FCC to deploy broadband to more than 650,000 high-cost rural locations throughout its current 28-state service area. In August, Frontier submitted a list of 3,146 census blocks that it had not previously identified with its initial election. It now intends to serve those locations using Phase I incremental support. At issue are rules developed by the FCC’s Wireline Competition Bureau. They require that any service provider who wants subsidies to provide broadband services must complete the required certifications, and the “location in question must be eligible at the time." Charter, which entered into a number of new markets to compete with Frontier and others via its acquisition of Time Warner Cable and Bright House Communications, said in a response filing it already offers internet speeds that exceed 3 Mbps/768 Kbps in 126 of the census blocks designated by Frontier. The cable company said that it “believes that the census blocks in Exhibit A are already served by an unsubsidized competitor, and thus not eligible for Phase I support.” Comcast cited a similar situation. The cable company said that in 19 of the census blocks Frontier had identified, it “already provides broadband service at speeds exceeding 3 Mbps downstream and 768 kbps upstream as of June 2016.”

AT&T takes swipe at Google Fiber’s buildout woes, touts its community outreach approach

AT&T isn’t wasting any time taking a swipe at Google Fiber’s move to halt further fiber-to-the-home (FTTH) builds due to network installation costs and local ordinances that that make fiber builds a challenging prospect.

Google Fiber recently announced that it plans to halt the builds while CEO Craig Barratt will step down. What’s more, Google Fiber also plans to lay off workers in this division, but did not reveal when or how many employees will be let go. While AT&T did not directly call out Google Fiber, its recent blog post, which called out the number of markets Google Fiber serves, clearly had the service in mind. “What some of our competitors are just starting to realize (one after 6 years and only 8 metros) is that this endeavor is challenging,” said Eric Boyer, SVP of Wired and Wireless products and services for AT&T, in a blog post. “Connecting customers at scale and investing capital today in the future of connectivity is a big deal.” Boyer added that in order to build fiber into more locations, AT&T conducts community outreach in areas where it wants to build out GigaPower, rather than asking cities and towns to realign existing laws regarding utility pole attachments. “Expanding the availability of faster wired and wireless speeds begins with a conversation with cities and customers – not a checklist dictating terms or by pushing cities to enact lopsided legislation,” Boyer said.

Why the establishment was blindsided by Donald Trump

[Commentary] If you are reading this sentence, you participate in a minority cultural practice. You get your news by reading traditional newspapers, whether in print or online. Let some facts sink in. Barely more than a decade ago, the majority of Americans with a high school degree or above were daily readers of traditional print newspapers and their news sites. This is no longer true. Now, at best, about 40 percent of American adults “often” get their news from newspapers and their websites. In contrast, roughly 60 percent often get their news from television. Of course, television has dominated since the era of the broadcast big three. What’s new is reading’s precipitous decline.

The country’s conversational universe has split between those who primarily get their news by reading and those who primarily depend on watching and listening. I say primarily because of course few people are exclusively in one camp or the other, and many of us also participate in circulating news via social media. But where we spend most of our time matters. On that we are split. Understanding American public opinion now means discerning three things: what the conversation sounds like on TV and radio, what it sounds like in traditional text-based journalism, and how these two conversations differ. Understanding our political dynamics means spotting how those streams do or don’t mingle, and tracking the eddies, riptides and surf storms their convergences generate. In this campaign, we haven’t seen a silent majority suddenly awoken. Instead, we’ve seen a coming-of-age of a vocal minority that was nearly invisible to another vocal minority, the community of readers of traditional text-based journalism, a community dominated by the professional classes. Over the past nine months, these two minorities have been battling for the country’s soul.

[Danielle Allen is a political theorist at Harvard University]

How Facebook, Twitter silence conservative voices online

[Commentary] The recent news that Facebook staffers had sought to delete Donald Trump’s posts calling for restrictions on Muslim immigration as violating the company’s hate speech policies has revived the ongoing controversy about ideological neutrality in the social networks. This time at least, the Facebook employees were overruled by CEO Mark Zuckerberg on the grounds that this would amount to political censorship, but the issue raises the question: Is there a problem of anti-conservative bias in the social media? And if so, what’s the answer?

It should be noted that Trump is not a standard conservative — indeed, many conservatives say he’s not a conservative at all — and plenty of people on the right have denounced his proposed Muslim ban. But this is far from the only instance in which major social media platforms have been accused of political censorship toward right-leaning content. Last May, allegations were made that Facebook had suppressed conservative views from its “trending topics;” while Facebook claimed that its internal investigation found no evidence of systematic suppression, the company also announced that it would modify the process of trending topic selection to minimize the potential for abuse. To stop the fragmentation, these companies’ leadership should make a good-faith effort to live up to their promise of political inclusiveness and free debate. The conversation on curbing harassment while protecting speech is important; but it must include a truly diverse base of advocates.

[Young is a contributing editor for Reason magazine and a columnist for Newsday.]

18-year-old arrested in cyberattack on Ariz. 911 system

A teenager has been arrested in connection with a cyberattack on the county's emergency call-in system. Meetkumar Hiteshbhai Desai, 18, was taken into custody after the Surprise (AZ) Police Department, northwest of Phoenix, notified the Maricopa County Sheriff's Office of more than 100 hang-up 911 calls within a few minutes late Oct 25.

Desai was booked into a Maricopa County jail on suspicion of three counts of computer tampering. Interference with critical infrastructure could have disrupted the 911 system in the Phoenix area and potentially other states. Investigators traced the calls and discovered they originated from a link posted to Twitter, according to the statement. The link was to a site named "Meet Desai" and its domain was hosted out of San Francisco. When the link was clicked, it continually called 911 and would not let the caller hang up.