Charter got a temporary license from the FCC Office of Engineering and Technology to run tests in the 3650-3700 MHz band. Tests are to start July 1 and run through the start of 2018, said a report posted by the FCC. The application's purpose is to test “a variety of experimental equipment,” the document said: “The testing will evaluate coverage, capacity, and propagation characteristics in the 3650-3700 MHz band. The proposed operations will advance Charter’s understanding of technology and network potential in the band and will advance deployment of fixed and mobile services.” Tests also will look at coexistence of devices in that band and in the FCC’s adjacent Citizens Broadband Radio Service band, said a filing by the cable ISP. It said it's working with Federated Wireless, one of coordinators in the CBRS band. The tests will take place in the Tampa, Florida area.
Predicting "a hotbed of M&A activity" in cable, Macquarie analyst Amy Yong wrote investors Thursday that possible sellers include Cox, Cable One and Frontier. She said likely buyers could include Charter Communications, while Altice might buy up smaller regional players and overbuilder WideOpenWest could take an opportunistic approach. Yong said increased mergers and acquisitions could be driven by Altice and WOW going public and by "cable-hungry Charter and (maybe) Verizon."
Current pricing of virtual MVPDs is probably too high to attract cord cutters/cord nevers, MoffettNathanson analyst Michael Nathanson wrote investors Thursday. Entry-level bundles are priced at $35-$40 monthly, and economics of wholesale pricing preclude distributors from going lower, he said. Inclusion of broadcast and sports networks "creates a very high bar for distributors" that cuts the ability to be profitable while also keeping pricing low enough to stimulate incremental demand. Nathanson called it "a strong likelihood" that an entertainment bundle of channels will be tested soon. The wholesale cost of such a bundle, if it excludes broadcast-led network portfolios, might be roughly $10 monthly, which could generate more demand, revenue and gross profit than current virtual MVPD bundles, he said.
Verizon, accused by the National Advertising Division of not responding to a Comcast complaint about Fios advertising (see 1706210065), said it will "happily demonstrate [its] performance superiority in a neutral and proper forum." It said it "offered to respond to Comcast's frivolous complaint in the NAD process," but NAD "refused to resolve a conflict of interest" resulting from a former NAD official who had participated in previous Verizon cases and is now representing Comcast "on substantially similar matters." Former Deputy Director David Mallen is now an advertising disputes lawyer at Loeb & Loeb. Mallen didn't comment Thursday. Verizon said it "regrets that NAD was unwilling to address this fundamental unfairness." NAD didn't comment.
Overall consumer spending on over-the-top services in the U.S. will likely peak in 2019 at $130.3 billion, and then decline to $125.7 billion by 2022, with established multiservice operators like Comcast and AT&T still commanding more than 80 percent of the revenue in 2022, Strategy Analytics reported Wednesday. It said annual revenue growth for emerging OTT players like Netflix and Amazon will fall to 4.4 percent by 2022.
NCTA and the American Cable Association have no objection to Form 3 cable systems -- those having semi-annual “gross receipts” more than $527,600 -- paying a separate per-telecast sports surcharge royalty atop the other royalties payable by cable systems under Section 111 of the Copyright Act, they said in a joint filing to the Copyright Royalty Board. Tuesday was the deadline for comments on the proposed CRB rules change.
Cable operators will enjoy reduced costs from FCC amendment of rules to allow companies to send annual notifications via email (see 1706190074), the American Cable Association said in a statement Tuesday. It said the declaratory ruling will have environmental and consumer convenience benefits. It and NCTA petitioned for the rule change (see 1605270023).
Cable's broadband growth may be slowing just as video should come under pressure from over-the-top substitution, with pricing then becoming a chief tool of the cable industry, MoffettNathanson's Craig Moffett Tuesday wrote investors as he downgraded outlooks for Comcast and the cable sector to neutral. He expects pay-TV subscriber declines of 3.2 percent this year, followed by 2.9 percent declines in 2018 and 2019, and 3.3 percent in 2020. The analyst said cable will continue to take market share from satellite, but those gains won't be enough to get the industry back to positive subscriber growth. Moffett said linear-TV providers, pushed by virtual MVPD competition, will increasingly negotiate rights to offer skinnier programming bundles, which will erode gross video profit per customer. He said cable is facing a broadband market that's nearing full penetration. Comcast didn't comment.
Conditions are being suggested for Liberty's proposed buy of General Communication Inc., including a five-year commitment to charge end users "reasonable and non-discriminatory prices" that approximate competitive outcomes, and mandatory service restoration agreements on reasonable commercial terms with other Alaska carriers. Monday was the deadline for comments and petitions in FCC docket 17-114 on the $1.12 billion deal, with replies and oppositions to petitions due July 5 (see 1705220015). GCI's "stranglehold on middle-mile facilities and its resulting effect as gatekeeper on competition ... is of concern and ... the proposed transaction cannot be permitted to exacerbate" it, said fiber network operator Quintillion in its petition to deny posted Tuesday. Along with the five-year commitment, Quintillion suggested the FCC condition approval on the agency adopting reporting requirements to verify direct and indirect federal spending aimed at promoting broadband and telco services in Alaska. It also urged conditions that GCI use a defined percentage of federal Alaska Plan grants and loans for developing middle-mile operations connecting unserved areas, and that for at least five years GCI offer wholesale transport services at commercially reasonable speeds on federally funded or subsidized middle mile facilities to unaffiliated providers at reasonable pricing and on a nondiscriminatory basis. It recommended the FCC bar GCI from over-subscription and throttling that materially degrades performance. Alaska Communications Systems' petition to deny recommended service restoration agreements and said the deal should be predicated on GCI, over the next five years, using any direct or indirect federal support it receives at least partially toward more middle-mile infrastructure linking rural communities with existing networks. ACS said the deal should be conditioned on a requirement any GCI infrastructure that relies on federal support be subject to common carrier requirements including that access be available on reasonable and nondiscriminatory terms. GCI didn't comment Tuesday.
The number of senior citizens with smartphones is climbing, but that hasn't translated into less TV watching and more online video viewing by those seniors, nScreenMedia analyst Colin Dixon blogged Sunday. Pointing to Pew data, nScreenMedia said between 2011 and 2016, smartphone penetration among people 65 and older went from 11 percent to 42 percent, and 32 percent of seniors were using a tablet last year. But Nielsen data shows that although video usage has doubled in the past year among 50-plus smartphone video viewers, seniors still watch only 50-some minutes a week on the devices, suggesting seniors "are snacking on short form content ... not watching long-form video." TV watching among the demographic shows no sign of abating, Dixon said, with seniors using a connected TV watching 370 minutes of TV a week up 16 percent year over year.