Ownership

The Federal Communications Commission's current model for funding internet builds is now hopelessly outdated. The dominant platform for communications has shifted from the telephone network to the internet. Indeed, the revenue base associated with the traditional telephone network has fallen sharply from a peak of around $80 billion in the 2000s to less than $30 billion today as more and more services—including those now offered by Big Tech—are delivered over the internet instead.

In a major moment in Apple’s efforts to fend off growing scrutiny of its power, Tim Cook took the stand in a trial for the first time as Apple’s chief executive and defended his business from accusations that it hurt app makers to expand its profits.

President Biden’s proposal to expand high-speed Internet access as part of his infrastructure bill affirms that broadband is an essential public service. It embraces the government’s responsibility to counteract the market’s failure to provide adequate Internet access to millions of Americans. By prioritizing universal service, it offers a glimpse of what a more democratic Internet might look like.

SiFi Networks is dangling 10 Gbps capabilities in front of US operators, aiming to entice them to adopt a more European infrastructure model and sign on as tenants on its wholesale fiber network rather than building out the last mile themselves. SiFi has build commitments in place covering 13 cities across seven states. This will eventually yield a projected footprint of “well over” 40 million feet of fiber covering more than half a million homes and businesses.

AT&T unveiled plans to spin out and merge WarnerMedia with Discovery. The company's failed media deals destroyed more than $50 billion in shareholder value. The telecoms sector has long been fascinated with Hollywood as it has railed against the notion that the industry is little more than a collection of “dumb pipes” that act as conduits for value created by other companies. Yet telecoms-media convergence often comes at great cost and companies including AT&T and Verizon have embraced the notion that focusing on the pipes may not be so dumb after all.

Radio and television stations’ local content – particularly news – provides great value for audiences on the major technology platforms. However, broadcasters are not fairly compensated for this valuable content because of the way the markets currently operate. The reason for that is simple – these tech platforms have substantial market power in their provision of services, and they use that power for advancing their own growth and benefit to the detriment of local broadcast journalism.

The upcoming sale of Yahoo and AOL to a private equity firm for $5 billion represents a massive media markdown. At their dotcom bubble peaks, Yahoo and AOL were valued at more than $125 billion and $200 billion, respectively, or $193 billion and $318 billion in 2021 dollars. AOL made one giant mistake. It famously bought Time Warner for $182 billion in cash and stock in 2000, saddling the company with debt just before the dotcom bubble burst and the rise of broadband made AOL's dial-up services virtually obsolete.

Apollo Global Management agreed to pay about $5 billion to acquire Yahoo and AOL from Verizon as the wireless company exits its ill-fated foray into the media business. The private-equity firm is paying $4.25 billion in cash for a 90% share of the media assets. Verizon will keep a 10% stake and $750 million of additional preferred stock in the new company, called Yahoo, that will be formed to operate the business. Verizon Media, which mostly struggled to grow against Alphabet's Google and Facebook, generated $7 billion in revenue in 2020.

The behaviors of platform and social media companies have evolved under the heat of the spotlight. Regulation takes time, and a lot of hearings, to produce tangible results. One upshot of four years of high-profile hearings is that tech companies now know how to play the game. Sometimes the goal isn't to pass a law. Congress uses the bully pulpit to force companies to self-regulate.