Ownership

AT&T plans to separate its telecom operations from its media assets after clinching a takeover of Time Warner, putting veteran AT&T executive John Stankey in charge of the Time Warner business, according to people familiar with the matter. The reorganization would separate AT&T’s wireless business and its DirecTV satellite television business from the newly acquired Time Warner assets, including HBO, Warner Bros., and the Turner cable unit that houses CNN. The new structure would keep AT&T Chairman and Chief Executive Randall Stephenson atop the company with two top lieutenants, in an organization that would resemble Comcast Brian Roberts, Comcast’s chairman and chief executive, has two segment chiefs: one in charge of the cable business and the other heading NBCUniversal. Under the new structure, DirecTV would be combined with the company’s telecom operations, which are run out of AT&T’s Dallas headquarters and include both the wireless and landline business, the people familiar with the matter said. That segment would be run by John Donovan, another AT&T veteran who is currently chief strategy officer.

More than a dozen media consolidation critics—including Common Cause, Consumers Union and the Writers Guild of America West—told Attorney General Jeff Sessions that from all appearances the proposed AT&T-Time Warner merger cannot be saved by "conditions and piecemeal divestitures" and should be blocked.

The Justice Department is the only one vetting the deal, which was structured to avoid the license transfers that would have triggered Federal Communications Commission review on public interest grounds. "Because this merger poses such grave dangers to consumers and creators in mature and emerging markets, we urge the Department to investigate the merger thoroughly, and take whatever action is warranted, based on the evidence uncovered in your investigation, to prevent harm to competition and consumers. And if you conclude, as appears to us from the available information, that conditions and piecemeal divestitures will not be sufficient, then we hope you will challenge the merger in its entirety," they wrote.

Edwin Eisendrath, a former Chicago alderman, is leading an investment group buying the Chicago Sun-Times. He told the Sun-Times he wanted a " group of civic-minded" leaders to save the paper: “A great group has come together and made sure that a genuine voice with honest and good reporting that connects with working men and women thrives.” Terms of the deal were not disclosed, but the Poynter Institute, a journalism organization, reports that the paper sold for what amounts to $1 and the assumption of any costs part of a future shutdown. The deal comes after the Department of Justice's antitrust division announced it was investigating a possible acquisition by Tronc, formerly known as Tribune Publishing, which has newspaper holdings that include the Los Angeles Times and Chicago Tribune. The deal would have put both of Chicago's major newspapers under the same owner.

[Commentary] As we slog away once again on Federal Communication Commission Chairman Ajit Pai’s summer blockbuster reboot “Net Neutrality: The Mummy Returns!,” it’s worth noting in passing the anniversary a previous Pai celebration of industry self-regulation, #DitchTheBox. I bring this up not merely as a fairly bitter bit of Cassandrafreude, but to remind everyone why only those who most desperately want to believe ever put any faith in “industry self-regulation” — especially when that industry is the cable industry.

[A]s an industry, the major broadband providers have recognized that they need some kind of fig leaf concession (preferably cemented into law by a compliant Congress). And so we have seen the cable companies falling all over themselves to swear their undying support for net neutrality and promises to do nothing to harm the open Internet. So a brief review of the history of cable industry self-regulatory promises, and Chairman Pai’s willingness to believe them, seems in order for the day.

[Harold Feld is senior vice president at Public Knowledge]

[Commentary] We’re still picking ourselves off the floor from all the laughing we did when AT&T issued a press release announcing that it was joining the “Day of Action for preserving and advancing the open internet.” Here are some things AT&T could actually do to defend Net Neutrality and the open internet:

1) Quit trying to co-opt the terms “Net Neutrality” and “open internet.”
2) Actually support real Net Neutrality.
3) Get your CEO on the record in support of Title II.
4) Quit suing the FCC over the 2015 Open Internet Order.
5) Stop sending all your lobbyists to lobby against Net Neutrality.
6) In fact, leave Congress out of it altogether.
7) Stop lying.
8) Specifically stop lying about investment.
9) Abandon your merger with Time Warner.
10) If you won’t do that, can you at least pledge to extend John Oliver’s contract when you own HBO? That’s our guy.

"There is no other industry in the world like broadcasting,” the CEO of the National Association of Broadcasters (NAB) Gordon Smith told his annual convention. “No other industry has, at its core, such an overarching focus on bringing communities together and serving the public good,” Smith opined. “No other media industry is as dedicated to supporting our local communities.” That “overarching focus” on “serving the public good” is being stealthily watered down, with the industry’s support, by the Trump Federal Communications Commission. In little-noticed decisions, the agency has been removing regulatory requirements to protect broadcast localism, shield a diversity of local voices, and avoid the establishment of a dominant national broadcaster.

Exhibit One: imagine broadcast localism without a local broadcast studio. The Trump FCC, voting along party lines, is now preparing to eliminate this “fundamental” part of a licensee’s local community obligation.
Exhibit Two: skirting Congress’ mandate that no single broadcaster have more than 39 percent of the national audience.
Exhibit Three: using contracts to get around local ownership rules.
In short, the Trump FCC has set the stage for a dramatic overhaul of the national landscape. It took no time for one company to seize the opportunity.

Sinclair Broadcast Group, owner of more TV stations than anyone else and a Trump election ally, quickly embraced the new reality. It now appears that broadcast localism, a diversity of local voices, and the congressional mandate against one company dominating local broadcasting are about to become casualties of the Trump FCC.

[Tom Wheeler is the former Chairman to the Federal Communications Commission]

If Congress grants an exception to legacy news publishers to pressure Google and Facebook, it might lead to the kind of concessions publishers have won in Europe. In the US, pressure on Facebook and Google has been successful in helping publishers gain traction, but the culture of European publishing and the vigor of its regulatory environment is totally different from the free-market roots of the US news industry.

Whatever the outcome, a larger question remains about the right relationship between journalism and the most powerful companies in the world. This is a long-term issue, which is unlikely to be settled by one group or cartel gaining regulatory concessions but, rather, by a more profound change in the regulatory and commercial environment.

Three of the largest internet service providers and the cable television industry’s primary trade association have spent more than a half-billion dollars lobbying the federal government during the past decade on issues that include network neutrality, according to a MapLight analysis.

Comcast, AT&T, Verizon and the National Cable & Telecommunications Association (NCTA) have spent $572 million on attempts to influence the Federal Communications Commission and other government agencies since 2008. The amount represents more than $100 for each of the 5.6 million public comments on the FCC’s proposed elimination of net neutrality rules. Despite the resources devoted to the rollback by the big internet service providers, net neutrality advocates haven’t been totally bereft of support in the nation’s capital. Amazon, the world’s largest online retailer, has spent $41.1 million lobbying in the nation’s capital. Facebook, which boasts 2 billion unique monthly users, has spent almost $43.3 million.

Google operates a little-known program to harness the brain power of university researchers to help sway opinion and public policy, cultivating financial relationships with professors at campuses from Harvard University to the University of California, Berkeley. Over the past decade, Google has helped finance hundreds of research papers to defend against regulatory challenges of its market dominance, paying stipends of $5,000 to $400,000, The Wall Street Journal found.

Some researchers share their papers before publication and let Google give suggestions, according to thousands of pages of e-mails obtained by the Journal in public-records requests of more than a dozen university professors. The professors don’t always reveal Google’s backing in their research, and few disclosed the financial ties in subsequent articles on the same or similar topics. The funding of favorable campus research to support Google’s Washington, D.C.-based lobbying operation is part of a behind-the-scenes push in Silicon Valley to influence decision makers. The operation is an example of how lobbying has escaped the confines of Washington’s regulated environment and is increasingly difficult to spot.

Microsoft introduced an initiative, the Microsoft Rural Airband project. Microsoft will invest an unspecified amount of money with existing rural broadband carriers to bring broadband to 2 million people in rural America by 2022. Microsoft will help fund projects that use TV white spaces spectrum for wireless broadband. It’s a technology they believe in and have deployed in 20 projects across the globe, serving about 185K subscribers.

TV white spaces spectrum is in the 600 MHz band and offers good propagation and distance characteristics. Microsoft is also calling on federal, state, and local governments to play a role. They are advocating appropriate spectrum use policies with the FCC to ensure nationwide unlicensed use of three channels below the 700 MHz band. They are calling on matching funds from any federal and state infrastructure spending to include TV white spaces technology options.