OWNERSHIP
Cingular Wins AT&T Wireless, Beating Out U.K.'s Vodafone
Ownership Rules Up for Grabs
Mega Media Mergers: How Dangerous?
Powell Warns About Comcast-Disney Local Concentration [includes brief
Comcast-Disney update]
Cable Can't Escape Rate Rage
On Russian TV, Whatever Putin Wants, He Gets
INTERNET
Internet Policy Working Group "Solutions Summit"
The Economic Impact of Taxing Internet Access
Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. Headlines are compiled by
Kevin Taglang (ktaglang( at )etpost.net) -- we welcome your comments.
OWNERSHIP
CINGULAR WINS AT&T WIRELESS, BEATING OUT U.K.'s VODAFONE
You may have read on the train this morning that Britain's Vodafone was
leading the bidding war, but... AT&T Wireless and Cingular Wireless will
announce this morning a $41 billion deal to combine the two companies into
the largest wireless carrier in the US with 46 million customers, wireless
spectrum in 49 states and coverage in 97 of the top 100 markets. The
combined 2003 annual revenues of the two companies would have exceeded $32
billion. "For shareholders, the transaction provides a handsome return on
investment," Mr. Zeglis said in the news release. "For customers, this
means all the advantages only the nation's largest wireless company can
provide. For employees who become part of the combined company, this means
more opportunities than they otherwise would have had with AT&T Wireless as
a standalone company." Stan Sigman, president and CEO of Cingular Wireless
said in the release, "This combination is expected to create customer
benefits and growth prospects neither company could have achieved on its
own and will mean better coverage, improved reliability, enhanced call
quality and a wide array of new and innovative services for consumers."
Cingular is a joint venture between SBC Communications Inc. and BellSouth
Corp.
[SOURCE: Wall Street Journal, AUTHOR: Anita Raghavan
anita.raghavan( at )wsj.com, Almar Latour almar.latour( at )wsj.com and Jesse Drucker
jesse.drucker( at )wsj.com]
http://online.wsj.com/article/0,,SB107686092482730235,00.html?mod=home_w...
(requires subscription)
See Also:
Cingular's $41 Billion Offer Wins Bidding for AT&T Wireless
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
http://www.nytimes.com/2004/02/17/business/17WIRE.html?hp
(requires registration)
OWNERSHIP RULES UP FOR GRABS
We will not know for a couple of months which FCC ownership rules have
survived challenges in court. And no one seems comfortable predicting how
the United States Court of Appeals Third Circuit will rule. The National
Association of Broadcasters urged the court to strike down a limit
preventing duopolies among the top four rated stations in a market. "That
prohibition actually prevents the benefits of consolidation where the FCC
found they were most needed," argued the NAB lawyer. There was little
feedback on this argument or that offered by a Clear Channel representative
who said the FCC violated the intent of the deregulatory 1996
Telecommunications Act by reducing the number of stations an owner can
possess in small markets. "[The 1996 Telecommunications Act is] neither
regulatory nor deregulatory," said Media Access Project President Andrew
Schwartzman. Permitting only deregulation would eviscerate the FCC's
authority to protect the public interest, which he said Congress never
intended.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA381658?display=Top+of+the+Wee...
MEGA MEDIA MERGERS: HOW DANGEROUS?
If the Comcast-Disney merger happens, the cable giant's CEO Brian Roberts
and News Corp's Rupert Murdoch be gatekeepers to 33 million US homes, top
creative talent, and man, many news outlets galore. They will have their
hands on the newest technologies as entertainment goes ever more digital.
The recent deals by the two companies show that controlling more content is
not as important now as controlling distribution systems as well. "These
deals are all about the ability to deliver entertainment to customers when
they want it and how they want it," says Kathryn R. Harrigan, a professor
of business strategy at Columbia University's Graduate School of Business.
"[The Comcast bid] is such a beautiful, huge vertical play. You have to
have this scale to compete." The future of the media world is tilted toward
the companies that control access to America's homes. The three giants --
Comcast, Time Warner, and News Corp. -- collectively can reach more than a
third of U.S.
But at the same time many business pundits are celebrating the idea,
politicians and public interest advocates are questioning it. "When is the
endpoint to all of this? Why not have Rupert Murdoch buy another company,
then Comcast another, and on it goes. At some point, you'll have many
voices -- and one ventriloquist," said Arizona Senator John McCain
(R). "In a world where a few entrepreneurs control the media, they can
wink and nod at each other, rather than cut prices and offer a diverse set
of views and entertainment," warns Gene Kimmelman, co-director of Consumers
Union. And what about programming? "Smaller independent channels would be
forced into cable Siberia, the premium tiers, whereas the Disney channels
would get on the basic tier," says Jonathan Rintels, executive director of
the Center for Creative Voices in Media, representing independent
screenwriters and production houses. "They'll shrivel up and die or be
forced to merge with a media colossus."
The Comcast move may spur new mergers from Viacom, NBC and/or Time Warner.
"Yesterday's unthinkable deal becomes tame in comparison with what's coming
next," says Center For Digital Democracy's Chester.
This is the cover story for the latest Business Week.
[SOURCE: BusinessWeek, AUTHOR: Tom Lowry, Ronald Grover, Catherine Yang,
Steve Rosenbush, Peter Burrows]
http://www.businessweek.com/magazine/content/04_08/b3871001_mz001.htm
POWELL WARNS ABOUT COMCAST-DISNEY LOCAL CONCENTRATION
How will the proposed Comcast-Disney merger fare with regulators? "Any
merger of this sort of monumental size and this level of vertical
integration and distribution across so many platforms is unquestionably
going to have to go through one of the finer government filters," said FCC
Chairman Michael Powell. "I can't say what the result would be." Although a
FCC rule prohibiting local cable-broadcast television crossownership was
abolished a couple of years ago, regulators still might look closely at how
the merger would affect communities. Comcast, for example, would be the
dominant cable-TV company and owner of the ABC affiliate in such large
markets as Philadelphia, Chicago and San Francisco.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA381388?display=Breaking+News
MERGER UPDATE
Even before regulators get a chance to review the deal, Comcast must make
it happen. Many media outlets are reporting today that the Disney board has
rejected the Comcast bid as too low and expressed support for CEO Michael
Eisner. Disney will hold its annual shareholder meeting March 3 in
Philadelphia.
The LA Times has an article today looking at what other companies may enter
the bidding for Disney. Considered briefly are possible bids from
Microsoft, John Malone's Media Liberty and Barry Diller's InterActiveCorp,
Time Warner (assuming a resolution to its SEC problems), and Viacom.
See
http://www.latimes.com/business/printedition/la-fi-bidders17feb17,1,4529...
The Wall Street Journal, however, is reporting that Viacom announced it
would not make a bid for Disney as Comcast tries to complete the deal.
CABLE CAN'T ESCAPE RATE RAGE
Congress is frustrated by cable rate hikes and is looking into ways to
address the issue without turning to rate regulation again. Sen. Mike
DeWine (R-OH), chairman of the Senate Antitrust Subcommittee, wants to make
sure cable systems can't deny popular regional sports nets to satellite and
overbuilder competitors. Sen DeWine is also examining ways to strengthen
uniform-pricing rules that require cable systems to offer a standard,
system-wide price for their programming packages. Sens DeWine and Herb Kohl
(D-WI), the subcommittee's ranking member, have also asked the General
Accounting Office to study why the growth of satellite TV competition has
failed to blunt cable rate hikes.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA381608?display=Washington&pub...
ON RUSSIAN TV, WHATEVER PUTIN WANTS, HE GETS
More than a dozen years after the collapse of the Soviet Union, what
Russians see, especially on the news, remains subject to the only rating
system that counts: the Kremlin's. Television is the only way to reach the
entire country and across the spectrum of TV stations, there's an
uncritical deference to the nation's elected leader. All the stations are
either owned by the state or by state-owned corporations.
[SOURCE: New York Times, AUTHOR: Steven Lee Myers]
http://www.nytimes.com/2004/02/17/international/europe/17RUSS.html?hp
(requires registration)
INTERNET
INTERNET POLICY WORKING GROUP "SOLUTIONS SUMMIT"
On Thursday, March 18, 2004, the FCC's Internet Policy Working Group (IPWG)
will hold the first in a series of a "Solutions Summits" at which leaders
in government and industry can discuss creative ways to address policy
issues that arise as communications services move to Internet-based
platforms. The initial meeting will focus on 911/E911 issues, and on the
particular challenges and opportunities created for emergency services in
expanding 911/E911 access to VoIP users and increasing the use of IP
technologies in emergency services networks. Participants will include
members of the public safety community, industry representatives, and FCC
staff. The event, which is open to the public, will be held at FCC
headquarters, 445 12th Street, SW, Washington, D.C. starting at 2:00 pm and
ending at 5:00 pm.
For additional information on the Working Group, please visit the Internet
Policy Working Group website at: www.fcc.gov/ipwg. For questions about the
working group contact: Robert Pepper, Chief of Policy Development, at
(202) 418-2030, Robert.Pepper( at )fcc.gov, or Jeff Carlisle, Senior Deputy
Chief, Wireline Competition Bureau, at (202) 418-1500,
Jeffrey.Carlisle( at )fcc.gov.
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-243851A1.pdf
THE ECONOMIC IMPACT OF TAXING INTERNET ACCESS
The conservative Heritage Foundation weighs in on the Internet access tax
debate with a "WebMemo." The Internet Tax Freedom Act of 1997, the authors
write, imposed a moratorium on taxing Internet access, which expired in
November 2003. The House passed legislation to continue the moratorium, but
the Senate has failed to pass a corresponding bill. Critics of the House
bill contend that it does more than extend the moratorium and threatens
states' ability to collect sales taxes. Even if this were the case, though,
economic analysis predicts that such taxes would reduce GDP, disposable
income, and employment.
The Heritage Foundation is a think tank whose mission is to formulate and
promote conservative public policies based on the principles of free
enterprise, limited government, individual freedom, traditional American
values, and a strong national defense.
[SOURCE: Heritage Foundation, AUTHOR: Norbert J. Michel and William W. Beach]
http://www.heritage.org/Research/InternetandTechnology/wm424.cfm
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