Ownership

Apparently, Sinclair Broadcast Group received bids for as many as 10 television stations that could fetch up to $1 billion as it takes steps to win approval of its proposed merger with Tribune Media. Preliminary bids for the stations were submitted the week of Oct 9. Sinclair may sell some or all of the outlets, all in different markets, apparently. The process could be delayed by uncertainty over whether President Donald Trump’s appointees will change rules limiting media ownership and how the administration will enforce antitrust laws. Federal Communications Commission Chairman Ajit Pai has told an opponent of the Sinclair-Tribune deal that the agency may review media ownership rules before ruling on the $3.9 billion transaction.

The Federal Communications Commission announced a settlement with Verizon for possible violations of the FCC’s competitive bidding rules for the E-rate program. Verizon agreed to pay $17.68 million to resolve parallel investigations by the FCC and the Department of Justice, $17.325 million of which will be repaid to the Universal Service Fund (USF). Verizon has further agreed to withdraw any rights it may have to hundreds of millions of dollars in requested and undisbursed E-rate support.

What is unsettling is that many of the changes we are currently making at the Federal Communications Commission have a one-sided benefit, and the impact on consumers, competition, and the public interest are mere afterthoughts. The FCC is a regulatory agency, with a charge that requires us to protect the public interest. This means we should strike and maintain the proper balance, when it comes to consumer and industry interests. Yet, when it comes to the future of our media landscape, the FCC majority is embarking on a path, toward a regulatory-free zone....

In just about every other context and every other Universal Service program, we have acted with haste, to remove existing barriers to entry. But when it comes to the Lifeline program, that provides millions the chance to maintain a dial tone or should be providing millions more the opportunity to afford broadband at home, we erect insurmountable barriers to entry for Lifeline providers wishing to do business.

President Donald Trump continues to publicly belittle big media organizations as "fake news," but in Washington, his administration's moves are a boon to big media companies. Telecommunication and technology companies are being deregulated while smaller media companies worry about their ability to survive. On the campaign trail, populist Candidate Trump vowed to "break up the new media conglomerate oligopolies" and to shut down the biggest media deal of the year. But President Trump's administration has actually encouraged consolidation as part of its deregulatory blitz.

Federal Communications Commission Chairman Ajit Pai has told an opponent of Sinclair Broadcast Group's proposed purchase of Tribune Media that the agency may review media ownership rules before ruling on the $3.9 billion deal, something that could delay a decision on the merger. “Ajit Pai told me in my meeting that he has not decided to approve the merger first, that he may conduct a review of the ownership cap," Christopher Ruddy, chief executive officer of Newsmax Media Inc., said Oct 13. “I can confirm to you on the record that he told me that he had not decided and that he was open to doing the review first. And I encouraged him to do it."

Ruddy said Pai made his statement in a Sept. 27 meeting. The Newsmax chief said the merger would allow too much media concentration that could crowd out independent voices. Newsmax offers a TV channel that appears on cable systems and online.

Microsoft Corp’s secret internal database for tracking bugs in its own software was broken into by a highly sophisticated hacking group more than four years ago, according to five former employees, in only the second known breach of such a corporate database. The company did not disclose the extent of the attack to the public or its customers after its discovery in 2013, but the five former employees described it to reporters. Microsoft declined to discuss the incident.

The database contained descriptions of critical and unfixed vulnerabilities in some of the most widely used software in the world, including the Windows operating system. Spies for governments around the globe and other hackers covet such information because it shows them how to create tools for electronic break-ins.

Silicon Valley’s high-tech denizens complain the public stock markets are marred by a narrow focus on short-term earnings and profits. Now they are actually doing something about it, by launching a new framework for corporate governance, investing and trading called the Long-Term Stock Exchange.

Backed by top Valley figures such as venture capitalist Marc Andreessen and LinkedIn co-founder Reid Hoffman, the LTSE says it plans to seek regulatory approval by the end of 2017 to become the newest US stock exchange. Its key feature: a system in which the voting power of shares increases the longer investors own them. Firms listed on the exchange would need to use such a structure, often called “tenure voting,” while abiding by numerous other rules, such as a ban on tying executive pay to the company’s short-term financial performance. If the LTSE succeeds, it could offer a new incentive for privately held tech giants such as Airbnb and Uber Technologies to go public, at a time when many market veterans and regulators fear the process of going public has lost its luster.

[Commentary] The tools of technology should strengthen, not weaken, democracy. To that end, we should require greater disclosure of the funders of online political advertisements. Tech firms also need to make heavy investments into weeding out fake accounts and false news. Even if tech companies do not adopt the journalistic standards of newspapers, they must offer readers, particularly students, some way of distinguishing fact from opinion. It’s heartening to see companies already making efforts to take some of these steps. Admitting their own shortcomings without delay and showing measurable progress will be key to earning the public’s trust.

Technology offers us hope for a new prosperity and understanding for this century. But it will take enlightened leadership. More than stock prices or product launches, Silicon Valley’s legacy will be defined by whether tech leaders step up to contribute to the larger American experiment.

Google and Facebook are looking to make an early imprint on legislation being drafted in the House and Senate that would force them and other online networks to disclose information about the buyers of political ads. Lobbyists from the Silicon Valley behemoths have met with the staffs of Sens Mark Warner (D-VA) and Amy Klobuchar (D-MN) and Rep. Derek Kilmer (D-WA), all of whom are drawing up bills that would impose new regulations on the industry. The Senate bill is expected to be formally introduced next week.

It is not clear when the House legislation, which has not been previously reported, will be introduced. The companies are keen to show steps they've taken to police themselves when it comes to monitoring and disclosing the ads on their sites, efforts that could be used to fend off heavy-handed regulation as investigations into Russian interference in the election bring unprecedented scrutiny on their businesses.

In 2014, Sprint tried to buy T-Mobile in a deal that ultimately fell apart under scrutiny by the Justice Department and the Federal Communications Commission. Regulators at the time concluded that having four major competitors in the cellular space, not three, would do the most to preserve competition and help consumers. Analysts say that a new agreement between the two companies would likely hand the reins to T-Mobile, which overtook Sprint in 2015 as the nation's third-biggest carrier. Given that T-Mobile was behind the push for many of the industry changes we've seen in recent years, it's possible that T-Mobile could do a lot with Sprint if it led the company. But many of the underlying issues — such as what happens to competition in a world of three national providers — remain.

As recently as last week, staff members at the Justice Department were said to be skeptical of a Sprint/T-Mobile deal. One argument you can expect to hear, analysts say, is that building out the next generation of wireless data — known as "5G” — will be fairly expensive and that it would be cheaper for everyone involved if T-Mobile and Sprint could join forces and build a single 5G network rather than build two of them separately. Another argument you might hear is that Sprint, whose business is weakening, simply can't survive alone and that by teaming up with T-Mobile, the combined company could more effectively compete with AT&T and Verizon.