Two cable industry trade associations have asked the Federal Communications Commission to start collecting more fees from satellite television operators to cover the FCC’s regulatory expenses — a move satellite providers argue will cause consumers to suffer bill shock from increased prices.

The American Cable Association and the National Cable & Telecommunications Association have filed comments with the FCC asking the commission to impose the same regulatory fees on satellite subscribers that cable companies are likely to pay in 2015 — 95 cents a year per subscriber.

The FCC has proposed initially charging satellite operators $0.12 this year per customer, or about one cent a month. The two cable lobbying groups want that 12 cent fee doubled to 24 cents and then raised an additional 24 cents each year until it reaches parity with what cable companies pay.

“The FCC is off to a good start by declaring that Dish and DirecTV should pay regulatory fees to support the work of the agency’s Media Bureau for the first time and proposing setting the initial per subscriber fee at one cent per month in 2015,” said Matthew Polka, president and CEO of the ACA. “But given the FCC proposes that cable operators pay nearly 8 cents per month, per customer, it must do more, including requiring these two multibillion dollar companies with national reach to shoulder more of the fee burden next year that is now disproportionately borne by smaller, locally based cable operators.”

The satellite industry has filed their own comments with the FCC objecting to any significant fee increases, claiming it will cause consumers to experience bill shock and that satellite companies pose less of a regulatory burden on the FCC in comparison to cable operators.

The ACA counters that even if the satellite companies were required to pay the full 95 cents this year — the same rate small independent cable operators pay — it would add a trivial $0.08 a month to customer bills — less than a 0.4% increase on the lowest priced introductory offer sold by satellite providers.

The ACA reminded the FCC it did not seem too concerned about rate shock when it imposed a 99 cent fee on IPTV providers like AT&T U-verse in 2014 without a phase-in.

DirecTV and Dish argue the FCC has jurisdiction over cable’s television, phone and Internet packages — a more complex assortment of services. Satellite providers currently only sell television service, so charging the same fee cable companies pay would be disproportionate and unfair, both claim.

Despite the sudden introduction of the IPTV fee last year, AT&T managed to use the opportunity to turn lemons into lemonade.

AT&T added a “Regulatory Video Cost Recovery Charge” on customers’ bills after the FCC assessed a 99 cent fee on IPTV services like U-verse in 2014. But AT&T charged nearly three times more than what it actually owed. U-verse customers were billed $0.24 a month/$2.88 in 2014 for “regulatory fee cost recovery.” But AT&T only paid the FCC $0.99 for each of its 5.7 million customers. It kept the remaining $1.89 for itself, amounting to $10,773,000 in excess profit.

This year the FCC expects to collect $0.95 from each U-verse subscriber, a four cent decline.

Customers paying $7.99 a month for what used to be called Hulu Plus will be able to add Showtime to their Hulu subscription for an extra $8.99 a month — two dollars less than what Showtime will charge Apple TV and other online video customers.

Showtime Networks’ online streaming service will launch in early July for $10.99 a month, $4 less than HBO Now, which charges $14.99. But Hulu customers will get an extra 18 percent discount if they bundle Showtime with Hulu’s premium option.

Hulu customers who subscribe to Showtime will have access to every Showtime original series ever produced along with Showtime’s full catalog of the same movies, documentaries, specials and sports programming available to cable television customers. Hulu will also carry the east and west coast feeds of Showtime’s primary channel for those who want to watch live events.

The partnership is designed to strengthen Hulu’s competitive position against Netflix and Amazon’s video services.

Showtime CEO Matt Blank doubts Showtime’s online streaming service will cannibalize its existing subscriber base, although most satellite and cable providers charge at least $5 more per month for the premium movie channel ($13.99-16.99 through most cable/telco/satellite providers).

[flv]http://www.phillipdampier.com/video/Bloomberg Showtime CEO Broadband-Only Customers Are an Opportunity 6-4-15.flv[/flv]

Showtime CEO Matt Blank explains to Bloomberg News why selling Showtime online for $10.99 a month ($8.99 for premium Hulu customers) will not hurt existing distributors like cable and satellite providers. (4:22)

Cablevision has treated its broadband subscribers to a free speed boost for those signed up for the basic Optimum Online Internet tier. The old speed of 15/5Mbps has today been raised to 25/5Mbps, meeting the FCC’s minimum speed to qualify as broadband service.

Cablevision continues to sell its base Internet service at a non-promotional price of $39.99/month, considerably lower than most other cable operators.

“We are taking the next step as New York’s premiere connectivity company to provide a better, faster data experience both inside and outside the home at no additional cost,” Kristin Dolan, chief operating officer of Cablevision, said in a statement. “This speed increase, along with Optimum WiFi, provides a superior broadband experience to meet and exceed the needs of our customers.”

For now, Cablevision’s other widely available broadband tiers: Optimum Online Ultra 50, Optimum Online Ultra 75 and Optimum Online Ultra 101 are unchanged.

Bougues Telecom to Patrick Drahi: No thanks!

In a unanimous decision, the board of Bouygues Telecom has turned down an extremely generous offer by Patrick Drahi to acquire the wireless company and combine its operations under Altice’s Numericable-SFR brand.

The merger would have made Altice the largest mobile provider in France by far, kicking Orange to second place and likely ending a vicious price war that has long benefited French consumers with inexpensive wireless service.

Drahi’s debt-financed cash bid of $11.2 billion “vastly overvalued” Bouygues’ mobile assets and would have led to shareholders breaking out in spontaneous dancing on Wall Street if the deal involved two American wireless companies, according to French business observers.

But Bouygues’ board drove home its rejection, pointing out the vote against the deal was unanimous and any short-term gains were not in the best interests of Bouygues Telecom or its shareholders:

The board is convinced that the telecom market is at the dawn of a new era of growth driven by the exponential development of digital applications. It considers Bouygues Telecom uniquely positioned to benefit from this growth, knowing we have a strong and sustainable competitive advantage through our spectrum portfolio and a 4G network known as one of the best in the market.

The board also considered the fact there were significant regulator headwinds against any deal involving Patrick Drahi and Altice SA — a distraction that wasn’t worth disrupting Bouygues’ current business plan.

France’s Economic Minister Emmanuel Macron came close to declaring the deal reckless, stating that the scale of the proposed consolidation of France’s competitive mobile phone sector would hurt employment, investment, and consumers.

“The group,” a Bouygues news release said, “has always strived to write an industrial story that creates value in the long-term with its employees and suppliers, and in the interests of its customers, while respecting its commitments in terms of investment for the development of French infrastructures.”

That has been widely interpreted as a criticism of Drahi’s ruthless business style, which seems to focus on short-term gains that open investors, employees, vendors and consumers to significant risk if Drahi’s brand of cost-slashing and debt accumulation turns out to be unsuccessful.

Mobilicity, a struggling independent wireless carrier serving some of Canada’s largest cities, will end its efforts to compete with larger wireless companies if a court approves its sale to Rogers Communications, Canada’s largest mobile operator.

Late this afternoon, sources told The Globe and Mail Mobilicity accepted an offer from Rogers in excess of $400 million to acquire the wireless company’s assets and transfer some of its wireless spectrum to Wind Mobile Corp., one of the last remaining Canadian independent carriers, to appease regulators, who could still block a deal with Rogers.

The federal government’s wireless telecom policy has stressed the importance of having at least four wireless providers competing in every region. Wind has managed to achieve that in Ontario, B.C. and Alberta, but lacks enough coverage elsewhere. Mobilicity landed itself in financial trouble soon after launch, finding the costs of network construction high for a company with below-expected customer numbers.

Mobilicity has been under creditor protection since September 2013 and has only managed to keep 157,000 active customers on its discount cellular network. Rogers is said to be interested in Mobilicity primarily as part of a tax write-off strategy. Mobilicity had non-capital loss carry forwards of $567-million by the end of 2013, which offers Rogers a reduction in its tax bill of about 25 to 30% of that amount.

Observers predict Mobilicity could continue for a time, if in name only, as part of Rogers’ larger portfolio of wireless brands. Rogers already controls two other Canadian wireless brands: Fido and Chatr.

As late as yesterday, Rogers and Telus were both fighting to acquire Mobilicity after it became clear there would be no “white knight” for Mobilicity that would satisfy competition regulators or creditors. Telus attempted an acquisition twice, only to be rebuffed by the Competition Bureau. A last-ditch effort by Wind Mobile to acquire its comparatively sized competitor was a flop with creditors who expected a higher bid.

Mobilicity’s network coverage was always one of its biggest challenges. The company only managed to offer direct coverage in parts of the Greater Toronto Area, Ottawa/Gatineau, Calgary, Edmonton, and Greater Vancouver. Mobilicity’s network also relied on very high frequencies that had a challenging time penetrating buildings, and its lack of network densification led to complaints about dropped calls and poor coverage overall.

The disposition of an earlier plan submitted by employees and Mobilicity’s founder to transform the company into an MVNO — providing independent wireless service using its acquirer’s network, isn’t known at press time.

[flv]http://www.phillipdampier.com/video/BNN Clock ticking on Rogers and Telus to conclude Mobilicity takeover 6-22-15.flv[/flv]

As late as yesterday, BNN was reporting Telus and Rogers were both competing to acquire Mobilicity. It appears Rogers has won. (2:23)