A hostile Comcast takeover bid for Fox would put Fox's management "in a pickle," since the Murdoch family is said to be in favor of Disney's offer because taxes would be lower, but rejecting the much higher Comcast bid could result in shareholder lawsuits, Kagan's Derek Baine wrote in a blast email. The analyst said many Fox investors don't like the dual voting structure that gives the Murdoch family and its super-voting stock 40 percent of the shares while owning less than 20 percent of the equity. He said there could be a bidding war with Disney, since it's betting heavily on Fox-related content for its over-the-top services (see 1805090002). To avoid that, Comcast and Disney might want to negotiate an agreement to split the assets, with Comcast getting Star TV and Sky, Baine wrote. Comcast reportedly is mulling a cash offer for Fox (see 1805080004).
New York state rejected Charter Communications' claim the attorney general had improper intentions complaining about accuracy of the company’s advertised broadband speeds (see 1805010036). New York plans to move to dismiss Charter’s affirmative defense of “unclean hands,” a doctrine that says a party asking for judgment must not have done anything unethical involving the lawsuit's subject, wrote Assistant AG Mihir Kshirsagar in a Monday letter to New York Supreme Court Judge Peter Sherwood in case 450318/17. Kshirsagar responded to Charter’s March 19 filing that said AG "disagreements with the FCC and its desire to regulate beyond the governing federal agency are the real reasons behind the Complaint.” The company "does not challenge the legitimacy of OAG's legal claims or the facts, but rather attacks the State's 'policy decisions,'" the assistant AG said. “The doctrine does not apply to the government's exercise of lawful enforcement authority. … Personal viewpoints or motivations of prosecutors are irrelevant to proving or disproving the allegations.” The operator's claim “would waste resources on a distraction that is entirely irrelevant to the adjudication of whether Charter actually fulfilled its promises to New Yorkers,” he said. AG Eric Schneiderman resigned Tuesday after assault allegations he denied (see the personals section of this publication's issue).
Lack of an FCC role in AT&T's proposed buy of Time Warner is a key reason the proposed Turner arbitration terms (see 1711280063) aren't sufficient as a fix of noncompetitive harms the deal raises, DOJ said in docket 17-cv-02511-RJL post-trial brief (in Pacer) filed Tuesday. The U.S. and the court never before lacked FCC assistance in crafting and supervising behavioral conditions, Justice said, calling Turners' arbitration offer "half baked." It said being part of New AT&T would be the "end of Time Warner's agnosticism" on distributors since New AT&T wouldn't want TW content distributed in ways that put more competitive pressure on AT&T-owned DirecTV. Justice said the companies are trying to "rewrite" merger law by carving out "a safe harbor for 'minor' price increases" when Section 7 of the Clayton Antitrust Act focuses on harms to competition and not on the individual consumer, while annual harms of hundreds of millions of dollars "plainly evidences a 'substantial' distortion of the competitive process." It said FCC program access rules won't prevent anticompetitive harms from the deal, since the agency's Comcast/NBCUniversal order adopted remedies because it didn't consider program access rules sufficient to prevent price increases. The department said the court should opt for either a permanent injunction or targeted divestiture, with the options for the latter ranging from a targeted divestiture of Turner to a targeted divestiture of DirecTV. It said behavioral remedies are less effective at protecting competition than structural ones since they can't foresee all possible routes of improper influence over the acquired company. DOJ finds no examples of any Section 7 case in which the court ordered only behavioral relief over the U.S.' objections that survived appellate review. The companies filed their post-trial brief last week in U.S. v. AT&T and TW (see 1805040002).
If regulators force dismantling of the video bundle, it will benefit consumers who want single channels to the detriment of consumers who want multiple channels and the cost savings that come with bundling, American Enterprise Institute adjunct scholar Bronwyn Howell blogged Monday. Also suffering will be the distributors whose lost revenue will mean they won't be able to afford to buy the same bundle items as before, she said: Success of a bundling strategy relies on knowing distribution of consumer preferences, not just aggregates.
FCC Chairman Ajit Pai -- on a sweep of Gulf Coast states this week (see 1804270068) -- met with Cable One representatives from the company's Mississippi markets, the operator said Wednesday. The company said Pai discussed Cable One's fiber deployment in the state and regulatory hurdles to high-speed internet expansion. Pai tweeted Thursday (for example, here) from parts of Florida.
Comcast is advising shareholders to vote down a proposal requiring it to do an annual report on its lobbying policies and spending. The proposal is on the agenda for the company's June 11 annual meeting, said the proxy statement filed Monday with the SEC. The board's recommendation said the information "is generally publicly available in appropriate detail" and the proposal would "incur unnecessary expense." The shareholder proposal was brought by groups including Friends Fiduciary Corp., Swift Foundation and Sisters of St. Joseph of Boston. They said Comcast not disclosing membership in or payments to trade associations or the amounts used for lobbying "leaves a serious disclosure gap." Similar proposals were part of the proxy votes this year for Charter Communications (see 1803160005) and AT&T (see 1803130003). Charter said Monday its shareholder proposal was voted down; AT&T said last week its shareholder proposal also was voted down.
Electronic delivery of subscriber notices has both cost-savings and environmental benefits, NCTA, Comcast and Charter Communications representatives told FCC Media Bureau Chief Michelle Carey, said a docket 17-317 filing posted Tuesday. The cable interests asked for flexibility to electronically ship mandatory notifications as long as the methods used are 'reasonably calculated' to reach customers, and that approach would obviate the need to keep updating the rules. They said the FCC should clarify that operators can direct customers to company websites for certain required information by putting the online address in printed or electronic materials. They spoke against the idea of must-carry/retransmission consent election notices be put in a broadcasters' public file, since cable operators would need to cull through hundreds of such files. MVPDs and broadcasters have been at odds over the public file elections issue (see 1802160005).
Cable operators are “ready to deploy” on-demand and live HDR services through a “harmonized approach” to HDR10, blogged Arianne Hinds, CableLabs principal architect-video and standards strategy research and development, Thursday. Cable operators’ “roadmap” is to start with HDR10 and then “build further optimizations into their networks from there,” said Hinds. The strategy’s “benefit” is that it leaves room “for all other solutions,” including hybrid log-gamma HDR, “as conversion from HDR10 to HLG is a relatively simple process,” she said. “Other more complex solutions can also be subsequently deployed as the corresponding network components are added to support these services.” For content producers, there's the benefit of having a clearly defined “starting point for their cable network business partners,” she said.
The American Cable Association brought its arguments to FCC Media Bureau staffers for waiver of rules requiring video programming distributors to make audible emergency information available for analog-only cable systems on a secondary audio stream (see 1803150047), said a docket 12-107 filing posted Thursday.
Charter Communications stock closed down 12 percent Friday at $263.32 after the company reported accelerating video losses. CEO Tom Rutledge in a Q1 earnings calls said integration of Charter with Time Warner Cable and Bright House Networks "is going quite well and pretty much as planned." But, he added, "It has lumpy aspects." He said a move to an app-based video delivery system should help cut capital costs. He said there's still potential for video growth, but little profit margin in the video business, so such growth is "relatively immaterial" to the company's future. Charter said it ended the quarter with: 16.4 million residential video customers, down 122,000; 22.87 million residential internet customers, up 331,000; and 10.37 million residential voice customers, down 52,000. Q1 a year ago, it had residential video losses of 100,000. It said Q1 revenue was $10.7 billion, up 4.9 percent. Rutledge said 20 percent of legacy TWC and 60 percent of legacy BHN footprints remain analog, though the company's all-digital effort should be done by year's end. He said 45 percent of Charter's footprint has access to 1 Gbps, and such service should be virtually universal by year's end. He said the company is raising minimum speeds to 200 Mbps at no additional cost faster than planned. Mobile service should launch in the middle of this year, with the company doing a field trial, and modifying several hundred of its retail stores, he said. He said Charter is testing in bands including 3.5 GHz and 28 GHz, and it's working toward a combination of small cells with its existing terrestrial network and DOCSIS products to offer high-capacity low-latency fixed wireless and mobile services. Chief Financial Officer Chris Winfrey said churn is up due to a focus on disconnects of non-paying subscribers, but sales are up and by the end of Q2 or early Q3, those disconnect numbers should taper off.