Public Knowledge released this video today showing FCC Chairman Ajit Pai has ‘gone rogue’ with favors for his Big Telecom friends but none for you. (1:15)
Public Knowledge released this video today showing FCC Chairman Ajit Pai has ‘gone rogue’ with favors for his Big Telecom friends but none for you. (1:15)
WASHINGTON (Reuters) – The U.S. Federal Communications Commission voted on Thursday to effectively deregulate the $45 billion business data services market in a win for companies like AT&T Inc, CenturyLink Inc and Verizon Communications Inc that will likely lead to price hikes for many small businesses.
The 2-1 vote is a blow to companies such as Sprint Corp and others that claim prices for business data are too high and backed a 2016 plan under former President Barack Obama that would have cut prices.
It marked a significant step in FCC Chairman Ajit Pai’s aggressive agenda to roll back many existing telecommunications rules and Obama era regulations.
Small businesses, schools, libraries and others rely on business data services, or special-access lines, to transmit large amounts of data quickly.
The services are used, among other applications, to connect banks to ATM machines or gasoline pump credit card readers. Wireless carriers rely on them to get data from an end user to a node in a major network or the so-called backhaul of mobile traffic.
Thursday’s vote scrapped most regulatory requirements in the business data services market, although some price caps in areas with little competition will be retained.
Democratic FCC Commissioner Mignon Clyburn, who accused her Republican colleagues of siding with “the interests of multibillion-dollar providers,” said the ruling “opens the door to immediate price hikes” to small businesses. The rule deregulates pricing in a majority of counties and more than 90 percent of buildings using the services.
Pai defended the decision, saying regulatory requirements had threatened competition and investment.
Pai plans as early as next week to unveil plans to dismantle the Obama administration’s “net neutrality” rules, even as he favors a free and open internet under a different regulatory scheme.
He declined to discuss his plans, but said he had met this week with executives at Facebook Inc, Oracle Corp, Cisco Systems Inc and Intel Corp to discuss internet issues.
In recent days, the independent Small Business Administration Office of Advocacy, the European Union and Democratic members of Congress have raised concerns about the lifting of net neutrality rules.
Under Obama, then FCC Chairman Tom Wheeler in April 2016 proposed a sweeping reform plan for business data services that aimed to reduce prices paid. Wheeler had proposed maintaining and lowering lower price caps using legacy data systems with a phased-in 11 percent price reduction.
Sprint, which backed Wheeler’s proposal, told the FCC in a March 22 letter that “thousands of large and small businesses across the country were paying far too much for broadband because of inadequate competition.”
CenturyLink praised Thursday’s decision as something that aligned regulations with “competitive market realities.” Comcast Corp said the vote would help minimize “burdensome and investment-killing regulations, specifically on new entrants.”
Advocacy group Public Knowledge said the decision “doubles down on incumbent market power, forcing businesses, hospitals, schools, and ultimately consumers to pay more for essential connectivity.”
(Reporting by David Shepardson; editing by Andrew Hay and Tom Brown).
FILE PHOTO: The logo of Verizon is seen at a retail store in San Diego, California April 21, 2016. REUTERS/Mike Blake/File Photo
(Reuters) – Verizon Communications Inc on Thursday reported its first-ever quarterly loss of subscribers, even as it offered an unlimited data plan, raising questions on whether the No. 1 U.S. wireless carrier may need a larger acquisition than Yahoo to diversify its business.
Verizon has been struggling to fend off smaller rivals T-Mobile US Inc and Sprint Corp in a maturing market for U.S. wireless service, and in February offered an unlimited data plan for the first time in more than five years.
While it has pursued other revenue streams, including a $4.48 billion deal for Yahoo Inc’s core business, analysts have questioned if it should pursue a more transformative combination.
“We continue to believe that the company needs a strategic transaction to support their wireless business for the long-term,” analysts at New Street Research said in a note.
Meanwhile, Verizon’s main competitor AT&T Inc plans to diversify its business through an $85.4 billion acquisition of Time Warner Inc, which would give it control of cable TV channels like HBO and other coveted media assets.
Verizon’s shares were down 1.2 percent at $48.33 in midday trade.
Earlier this week, Verizon Chief Executive Lowell McAdam said in an interview with Bloomberg News that he is open to deal talks with companies ranging from Comcast Corp to Walt Disney Co.
On Thursday, Chief Financial Officer Matthew Ellis clarified the comments, saying that while the company would consider deals that are in the interest of shareholders, it is confident in its assets.
“The ecosystem is constantly changing, and if there’s somebody who comes to us with an idea of how we can kind of leapfrog forward in that environment, we’re going to listen to them,” Ellis said in an interview with Reuters. But he added, “We are very confident with the strategy that we have.”
In the first quarter, Verizon said it lost 307,000 retail postpaid subscribers or those who pay a monthly bill. Analysts on average were expecting net additions of 222,000, according to market research firm FactSet StreetAccount.
Churn, or customer defections, among wireless retail customers who pay bills on a monthly basis, increased to 1.15 percent of total wireless subscribers, compared with the average analyst estimate of 1.03 percent, according to FactSet.
Ellis noted that churn rose in the first half of the quarter but came down in response to the relaunch of unlimited plans. “It really was a tale of two halves,” he said.
But analysts viewed the results as disappointing.
“They badly missed on every important subscriber metric, and it just underscores that the wireless business is a severely growth-challenged business at the moment,” said Craig Moffett, an analyst at MoffettNathanson in an interview.Net income attributable to Verizon fell to $3.45 billion, or 84 cents per share, in the first quarter ended March 31, from $4.31 billion, or $1.06 per share, a year earlier. Excluding items, earnings per share was 95 cents.
Total operating revenue fell to $29.81 billion from $32.17 billion a year earlier.
According to Thomson Reuters I/B/E/S, analysts had expected adjusted earnings per share of 99 cents and revenue of $30.77 billion.
(Reporting by Anjali Athavaley in New York; Editing by Saumyadeb Chakrabarty, Bernard Orr).
Ajit Pai, Chairman of U.S Federal Communications Commission, delivers his keynote speech at Mobile World Congress in Barcelona, Spain, February 28, 2017. REUTERS/Eric Gaillard
WASHINGTON (Reuters) – The U.S. Federal Communications Commission voted 2-1 on Thursday to reverse a 2016 decision that limits the number of television stations some broadcasters can buy.
The decision could lead to a possible acquisition by Sinclair Broadcast Group Inc of Tribune Media Co, some Democrats in Congress said.
Tribune did not discuss any tie up, but said in a statement the FCC decision “will serve the important interest of localism by enabling broadcasters to better serve their communities.”
FCC Chairman Ajit Pai said he plans to take a new look at the current overall limit on companies owning stations serving no more than 39 percent of U.S. television households.
Democratic FCC Commissioner Mignon Clyburn called the vote a “huge gift for large broadcasters with ambitious dreams of more consolidation.” She said it “will have an immediate impact on the purchase and sale of television stations.”
Her concern was echoed by the top Democrat in the U.S. House of Representatives, who a day earlier urged the Federal Communications Commission to cancel the vote.
House Democratic Leader Nancy Pelosi warned that the changes could be harmful to consumers, hitting their wallets and their access to an independent media voice, as she cited press reports of a possible acquisition by Sinclair Broadcast Group Inc of Tribune Media Co stations.
In a letter, Pelosi and Representative Frank Pallone, who is the ranking Democrat on the House Energy and Commerce Committee, urged Pai to drop the plan, which could allow the Sinclair-Tribune tie-up.
“That would be bad news for consumers in Tribune’s markets in two ways: First, consumers would lose an independent voice in their media market; and second, consumers could see their cable bills go up because Sinclair charges cable operators more than Tribune for retransmission consent,” they wrote.
Another Democrat, Representative Anna Eshoo, wrote Pai asking him to drop the plan, saying that further consolidation “will ensure there are fewer independent news outlets serving as a counter-balance to misleading or inaccurate information.”
Meredith Corp spokesman Art Slusark said on Thursday the vote “may open up the opportunity for more acquisition opportunities … We are always interested in adding quality properties to our broadcast portfolio.”
Under rules adopted in 1985, stations with weaker over-the-air signals could be partially counted against a broadcaster’s ownership cap. But last year, the FCC under Democratic President Barack Obama said those rules were outdated after the 2009 conversion to digital broadcasting, which eliminated the differences in station signal strength. It revoked the rule in September.
There is a dispute over whether the FCC has the authority to amend the 39 percent ownership limit.
The 2016 decision did not require any company to sell existing stations, but could bar acquisitions. Twenty-First Century Fox Inc in September challenged the FCC rule in court.
Reuters reported in March that Sinclair had approached Tribune to discuss a potential combination, which would hinge on regulations being relaxed.
Pai said the FCC previously effectively tightened ownership rules and then companies previously below the national cap suddenly exceeded it. He said the FCC “did not examine whether the facts justified a more stringent cap.”
Pai, who was named by U.S. President Donald Trump to head the FCC in January, said it will begin a comprehensive review of the national cap this year. That could launch a new wave of consolidation in the broadcast television industry.
Clyburn cited comments from CBS Corp Chairman and Chief Executive Leslie Moonves in February that Pai would be “very beneficial to our business.” Moonves said the company would like to acquire more stations if the cap is lifted.
(Reporting by David Shepardson; Editing by Jonathan Oatis and Dan Grebler)
Fox Networks Group is nearing a deal with Charter Communications that will keep several Fox-owned channels from disappearing from the Spectrum cable dial.
Recently, Fox has stopped running ads attacking Charter’s potential disruption of FX, National Geographic, and a number of Fox regional sports networks. Fox has also extended its deadline several times, and Fox programming continues uninterrupted on Charter’s cable systems as the talks continue.
Now FNG president and COO Randy Freer is ready to say publicly, “we’re working out the issues.”
Broadcasting & Cable reports one of those issues could be the ongoing lawsuit between Fox News Channel and Charter that was filed after acquiring Time Warner Cable. Charter began paying Time Warner Cable’s considerably lower FNC affiliate fee in markets where Charter’s original cable systems were under contract at a higher rate. One part of the agreement may be a settlement of that lawsuit.
There is no word on exactly when a final agreement will be reached, but it is increasingly unlikely the negotiations will result in any dropped channels for Charter customers.