Brain Fung

As US officials have pressured allies not to use networking gear from Chinese technology giant Huawei over spying concerns, President Donald Trump has urged American companies to “step up” and compete to provide the next generation of high-speed, low-lag wireless service known as 5G. There’s just one problem: There are barely any US companies manufacturing the technology’s most critical components.

On Oct 20, Bloomberg reported that AT&T is in “informal” talks to buy the media and entertainment giant Time Warner. Now the timeline appears to be accelerating: The two companies are apparently in “advanced” talks that could lead to a deal being hammered out over the weekend. A merger between AT&T and Time Warner would be a historic deal.

For starters, it could suddenly give AT&T control over a massive number of the world's most valuable media brands. It would complete the transformation by the wireless carrier — already the nation's second-largest — into a fully-fledged entertainment powerhouse, launching an entirely new chapter in the history of the telecommunications giant. And it would be no less monumental for the rest of the communications industry, a rapidly consolidating area of business in which Internet providers are increasingly playing a central role in how consumers work and play. The tie-up could see AT&T gain ownership over a dizzying array of household names. Time Warner — not to be confused with Time Warner Cable, which sold to Charter Communications earlier this year — owns HBO, meaning that AT&T could soon have the rights to “Game of Thrones,” “Westworld,” and “True Detective." It would control some of the most successful TV content in history, such as "The Sopranos" and "The Wire." It could also benefit from all the subscription revenue from HBO, the most profitable subscription business in history, whose 130 million subscribers on cable and on HBO's online streaming app pay about $15 a month.

Apparently, Facebook has been in talks for months with US government officials and wireless carriers with an eye toward unveiling an American version of an app that has caused controversy abroad.

The company is trying to determine how to roll out its program, known as Free Basics, in the United States without triggering the regulatory scrutiny that effectively killed a version of the app in India earlier in 2016. If Facebook succeeds with its US agenda for Free Basics — which has not been previously reported — it would mark a major victory for the company as it seeks to connect millions more to the Web, and to its own platform. The US version of Free Basics would target low-income and rural Americans who cannot afford reliable, high-speed Internet at home or on smartphones. The app does not directly pay for users' mobile data. Rather, it allows users to stretch their data plans by offering, in partnership with wireless carriers, free Internet access to resources such as online news, health information and job leads. Exactly what specific services would be offered in the US app has not been determined.

But the idea to bring Free Basics to the United States is likely to rekindle a long-running debate about the future of the Internet. On one side are those who view services such as Facebook's as a critical tool in connecting underserved populations to the Internet, in some cases for the first time. On the other side are those who argue that exempting services from data caps creates a multitiered playing field that favors businesses with the expertise and budgets to participate in such programs. The fight over this tactic, known as “zero-rating,” has largely taken place overseas where local start-ups are mixing with globally established firms in still-nascent Internet economies. But a launch of Free Basics would bring the discussion to US shores in a major way.

If Twitter's biggest challenge is attracting new users to its service and showing investors it's capable of competing with the likes of Facebook, the company's latest move seems to take direct aim at fixing that problem. Twitter is beginning to offer individual users and entities the chance to make money off the videos they post, according to reports. And the terms look pretty favorable to content creators, who will get to take home 70 percent of the ad dollars from their videos. That's somewhat more money than what YouTube or Facebook offer.

In rolling out the change, Twitter moves another step closer to a business model that has defined another industry for about three decades. As anyone who has a cable subscription knows, it isn't Time Warner Cable or Cox that actually make the programming you find in your lineup. Instead, companies like ESPN and HBO produce shows that they then market to distributors. What the folks at Twitter (and to a similar extent, Facebook and YouTube) have done is to graft this model onto the new Internet economy.

Internet providers who oppose the government's network neutrality rules will once again take the issue to court as they ask more than a dozen federal judges to throw out the regulations. A Washington trade group representing cellular carriers, CTIA, will be requesting a rehearing of the case by the US Court of Appeals for the DC Circuit, apprently. Likely joining the group will be AT&T, the trade association USTelecom and a number of others.

The challenge comes weeks after the industry was broadly defeated at the DC Circuit Court, when three judges ruled to uphold the net neutrality rules, which dramatically broaden the government's ability to regulate Internet providers. As written, the rules ban the blocking and slowing of Internet traffic by companies, such as Comcast and Verizon, as well as wireless carriers, such as T-Mobile and Sprint. In defending the rules from the industry's legal assault, the Federal Communications Commission argued that discriminating against some types of online content while giving other types preferential treatment would create an uneven playing field.