The FCC move to ax the domestic geographic coverage requirement for non-geostationary orbit (NGSO) fixed satellite service systems, if it faces any opposition at all, might see resistance from Alaska interests. It's unclear how much sentiment there is among satellite operators for keeping the requirement, industry lawyers said. At least some operators argued in favor of maintaining the rule when another company sought a waiver of that requirement.
The Ka- and Ku-bands have “served us well,” enabling satellite broadband, but “we need to grow out of them,” with the Q- and V-band critical for the industry’s additional spectrum needs, said Hughes Executive Vice President-Engineer Adrian Morris Tuesday at VSAT Congress. Citing the unified front the wireless industry presents on spectrum issues, he urged a more unified satellite voice and more cooperation between low Earth and geostationary orbit constellation interests. He said it will be tough for satellite to retain all spectrum rights, but said it will have more success with a focus on necessities. The industry needs some dedicated bands, but co-primary status “is not a bad place to be,” he said. He said Hughes is “strongly looking” at Q-band technology, in large part because Earth station hardware advanced to enable use of the band. The very small aperture terminal (VSAT) industry is struggling with data price wars squeezing mar- gins, said Susan Bull, Comsys senior consultant. Demand is growing for satellite-enabled mobile services, but they also are becoming a commoditized service, she said. Almost all 2.3 million consumer VSAT sites in service are in North America, with attempts at offering consumer services in developing markets having failed, Bull said. She said new Hughes and ViaSat efforts to expand into developing markets could succeed, though challenged by affordability issues. Bull said the industry is still struggling to see how it can compete with terrestrial data providers, especially since bandwidth around the globe sometimes is being sold way below cost. VSAT’s key problem—latency—will be tackled by low Earth orbit (LEO) and medium Earth orbit satellites and high-altitude platform stations, and VSATs need to bounce from LEOs to geostationary satellites, and integrate with terrestrial wireless networks, she said. The satellite industry is moving toward a configurable standard production of satellites, assembled “in a Lego-type situation,” which should drive down costs, said Bull. She said there’s growing VSAT distrust of satellite operators as the latter move into VSAT operator markets.
The FCC, in its report on video programming, faces arguments against and for further steps, including a push to ensure online video distributors aren't subject to cable rules. Replies on the 19th annual report were due Thursday. Verizon -- echoing its calls for retransmission rules changes and elimination of the network nonduplication and syndicated programming exclusivity rules (see 1710110016) -- said in docket 17-214 comments posted Monday that legacy cable regulations on OVDs "would be highly inappropriate." Regulation would be contrary to the agency's goal of promoting video competition, it said. Cable "remains uniquely burdened" with antiquated regulations, despite choice and competition, Charter Communications said. It pressed the agency to declare the market highly competitive and eliminate regulations based on a lack of competition, looking for routes to regulatory parity. NCTA said similar in initial comments last month. NCTA now pitched for seeing the set-top box marketplace as filled with rivalry. It said apps, the emergence of devices like Roku and MVPD investment in alternatives to set-tops -- plus the growth of streaming services -- eclipsed set-top use. It said app use came despite Section 629 of the Communications Act, which requires promotion of competition in the set-top market. Predictable pay-TV claims about a broken retrans regime "should be taken with a proverbial grain of salt," since pay-TV providers were complaining about negotiating with TV stations even before retrans fees became substantial, NAB said. It said proposals for negotiation reforms are without merit and contrary to statute, saying the FCC lacks authority over carriage of TV stations' signals without broadcaster consent. The multichannel TV sector is "broken," with major programmers using leverage and must-have networks to impose tying and bundling requirements, indie cable network INSP said. It said the report should conclude independent cable networks are in jeopardy, program carriage rules and enforcement need strengthening, and conglomerate programmers should be barred from bundling and tying. Citing "overwhelming evidence" of sizable video competition, Comcast rejected American Cable Association criticisms of its NBCUniversal's minimum penetration terms for its regional sports networks. It said the agency should declare the area competitive "at all levels."
Indications the Justice Department is pushing AT&T for divestitures as part of its proposed buy of Time Warner (TW) (see 1711080047) point to Justice swinging back toward favoring structural rather than behavioral conditions for problematic deals, experts said. On the behavioral remedies on vertical deals in recent years, such as Comcast's buy of NBCUniversal, "most people think they're failures," said University of Baltimore Venable professor of law Robert Lande. The Obama administration was more favorable to employing behavioral conditions than was the George W. Bush administration, experts said, citing the Bush administration's 2004 antitrust guidelines. DOJ didn't comment Monday.
DOJ antitrust chief Makan Delrahim and President Donald Trump deny White House involvement in the agency's review of AT&T's planned buy of Time Warner. Delrahim in a statement Wednesday said he has "never been instructed by the White House on this or any other transaction under review by the antitrust division." An White House in an accompanying statement said, "The President did not speak with the Attorney General about this matter, and no White House official was authorized to speak with the Department of Justice on this matter.” Justice was reportedly pushing for a divestiture of Turner Networks or of DirecTV as a condition of approving AT&T/TW (see 1711080047). Commissioner Jessica Rosenworcel tweeted Wednesday that if the DOJ is using antitrust law to force a sale of Turner's CNN because of opinions of its coverage, "You can dislike consolidation but still find this extremely disturbing if true." Sen. Al Franken, D-Minn., said the deal shouldn't go forward because of media consolidation worries, but signs the Trump administration is trying to attack media organizations it doesn't like would be "profoundly disturbing." Other Senate Democrats also raised new questions about the DOJ's independence from Trump given the AT&T/TW review demands, including House Communications Subcommittee ranking member Brian Schatz, D-Hawaii. “Any suggestion that the deal be conditioned on selling off a news channel because of its coverage is offensive to both the First Amendment and the rule of law,” said Sen. Ed Markey, D-Mass., in a statement. Dish Network's CEO voiced concerns Thursday about AT&T/TW (see 1711090004). DOJ, meanwhile, said “there is no legal obligation” for Antitrust Division head Makan Delrahim to recuse himself from involvement in the department's review of AT&T/TW based on earlier comments he made that the proposed merge doesn't pose a “major antitrust problem,” said Assistant Attorney General-Legislative Affairs Stephen Boyd in a letter to Sen. Elizabeth Warren, D-Mass. Warren sought Delrahim's recusal over the comments, which she said could “undermine public confidence in the Division's ability to reach an unbiased final decision” on AT&T/TW. The full version of Delrahim's comments show he “indicated the proposed merger should and would get a full and complete review” by Antitrust, “that the review would be based on the law and the facts,'” Boyd said. “We can assure you that [Antitrust's] merger enforcement will be based on application of the law to the particular facts and circumstances presented by any proposed merger.”
Telecom technology and industry convergence is disrupting business models and regulation, speakers said Thursday at an annual event at Hogan Lovells. Competition policy has become harder due to the hazier definitions of markets, said NERA Economic Consulting Managing Director Chris Dippon. Along with new opportunities, convergence "destroys old business models," Verizon Associate General Counsel Robert Griffen said.
Dish Network is confident of meeting its March 2020 deadline for rolling out a 5G-centric narrowband (NB) IoT network, and is talking with chipset makers and tower owners with hopes of deals in coming months, executives told an earnings call Thursday. They expect to have radios using its AWS-4 and lower 700 MHz E-block spectrum holdings next year, being deployed shortly thereafter.
Time Warner stock closed down 6.5 percent to $88.50 Wednesday after reports (here and here) DOJ was pushing for divestiture of Turner Networks or of DirecTV as conditions on AT&T's proposed $108.7 billion buy of the programmer. AT&T Chief Financial Officer John Stephens told investors it's in active discussions with Justice, but "timing of the closing of the deal is now uncertain." Separately in a statement, CEO Randall Stephenson said that throughout DOJ's review of the deal, "I have never offered to sell CNN and have no intention of doing so.” Turner's assets include CNN. AT&T had expected to close on TW by year's end (see 1711020051). Free Press said it continues to oppose AT&T/TW on media consolidation grounds, and forcing divestiture of content properties such as Turner distribution properties or DirecTV could soften those consolidation harms, but department opposition is problematic if it's based on President Donald Trump's antipathy to CNN coverage: "Everyone should agree that the government shouldn’t base antitrust decisions or FCC rulings on whether it likes a newsroom’s coverage." As a candidate for president, Trump said he opposed AT&T/TW (see 1610220002). If Justice has a problem with a vertical merger like AT&T/TW, the possibility of horizontal mergers in the sector seems "substantially lower" than previously thought, meaning a Disney move for Fox wouldn't pass muster, let alone Comcast buying Charter or any further content assets, BTIG analyst Rich Greenfield emailed investors Wednesday. He raised the specter of Comcast having to sell its NBC or Hulu ownership after the Comcast/NBCUniversal consent decree ends, saying if AT&T/TW is problematic for DOJ, "how is the former okay?" DOJ in a statement said it's "committed to carrying out its duties in accordance with the laws and the facts." Wells Fargo analyst Marci Ryvicker, in an email to investors, said there are no potential buyers for DirecTV, but CNN could command $8 billion to $10 billion and be a strategic fit with CBS. She also said while there's now "a really uncertain spell on M&A in general," Discovery/Scripps Network and Sinclair/Tribune are likely not at risk.
Grandfathered Earth stations and population caps are emerging as key issues for satellite operators as they push for changes in the FCC spectrum frontiers 2.0 draft. General satellite industry sentiment is that the latest draft (see 1710270030) is better for the industry than the original spectrum frontiers order, satellite insiders and officials told us. One big improvement was preserving 4 MHz of high-band spectrum for satellite use in the 48.2-50.2 GHz and 40-42 GHz bands, though not every company feels that's sufficient, said a satellite executive.
Cable experts and insiders see retransmission consent negotiating advantage swinging further toward broadcasters if the FCC revises its local TV ownership rule to allow top-four station consolidation, with that increased leverage leading to higher retrans fee costs. Dual station ownership could be "a real challenge for us," said TDS Telecom Vice President-External Affairs and Communications Drew Petersen. Meanwhile, many say the FCC's proposed case-by-case review of top-four combinations raises unanswered questions.