Alton Drew, Legal and Policy Analyst
Alton Drew provides legal, regulatory, and political risk analysis services for equity analysts, investment bankers, and traders in the areas of broadband, cable, and wireless and wireline telecommunications. Contact him at 404.753.8696 or e-mail him at altondrew@altondrew.com.
IN THE NEWS
During an address to the Joint Center for Political and Economic Studies Media and Technology Policy Forum last Wednesday, Federal Communications Commission member Michael J. Copps expressed his concern that the lack of transparency in network management practices of large broadband distributors may be negatively impacting the ability of minority owned media to get their messages to a larger audience.
Commissioner Copps stressed that the debate " ... is not about content regulation. It is about the freedom to go to the legal content of your choice." Mr. Copps, while describing the FCC as a "consumer protection agency", believes that the FCC should be concerned about discrimination on the internet and that broadband providers should share more information about their network management practices.
Mr. Copps called for "anyone looking to open the doors of opportunity" to get on board with the issue of an open internet and support a net neutrality policy.
Off course not everyone in Washington is in agreement. On October 22, 2009, Senator John McCain, Republican of Arizona, introduced S. 1836, the Internet Freedom Act. The bill would prohibit the FCC from proposing, writing, or issuing any regulations regarding the Internet or IP-enabled services.
It is questionable how much traction this bill would get given that it has been stuck in the Senate commerce committee for the past five months and has no other sponsors listed besides Mr. McCain.
A House companion bill, HR 3924, whose langauge mimics the Senate version, was introduced on October 26, 2009 by Representative Marsha Blackburn, Republican of Tennessee. Her bill has 25 co-sponsors but has been sitting in the House energy and commerce committee since it was introduced.
Source: Federal Communications Commission, The United States Senate, The United States House of Representatives
Published: 5 March 2010
FairPoint Communications, Inc., has petitioned the Federal Communications Commission to convert six of its subsidiaries from rate of return regulation to price cap regulation.
The six subsidiaries are China Telephone Company, FairPoint Vermont, Inc., Maine Telephone Company, Northland Telephone Company of Maine, Inc., Sidney Telephone Company, and Standish Telephone Company.
Under rate of return regulation, regulators identify the assets involved in the generation of telecommunications services and apply a rate of return on those assets that are used to set prices for service.
Price cap regulation is a method of regulation meant to subject certain telecommunications services to more competitive pricing. These services may include common carrier line, special access, and marketing services.
For instructions on how to request an analysis of this update, click on the link, "Legal and Regulatory Risk Analysis Services for Investors" found at the left.
Source: Federal Communications Commission
Published: 2 March 2010
Virgin Mobile seeks eligible telecommunications carrier status
The Federal Communications Commission has announced that Virgin Mobile is seeking designation as an eligible telecommunications carrier in Connecticut, Delaware, District of Columbia, and New Hampshire.
According to the FCC, Virgin Mobile is seeking the designation in order to participate in the universal service low-income Lifeline program. However, the wireless services carrier will not be receiving universal service high-cost support.
Eligible telecommunications carriers are defined as common carriers that may receive universal service fund support under the Telecommunications Act.
Lifeline provides discounted telecommunications services to eligible low income consumers. These services may include voice-grade access services, local usage minutes, access to emergency services, and access to directory assistance.
Source: Federal Communications Commission
Published: 1 March 2010
FCC extends comment period for net neutrality rules
The Federal Communications Commission has extended the deadline for comments on its proposed open Internet or net neutrality rules until April 8, 2010. The extension is in response to a number of requests to extend the comment period past the initial March 5, 2010 deadline.
Source: Federal Communications Commission
Published: 25 February 2010
FCC finds costs, digital literacy barrier to broadband adoption
The FCC today released its National Broadband Plan Consumer Survey where it found that 93 million Americans are barred from broadband adoption as a result of cost and lack of digital skills.
Referring to the digital divide as an opportunity divide, Federal Communications Commission chairman Julius Genachowski noted that in order to "bolster American competitiveness abroad and create the jobs of the future here at home, we need to make sure that all Americans have the skills and means to fully participate in the digital economy."
According to the FCC's survey, 35% of adult Americans do not have high-speed Internet connections at home. Three barriers to broadband adoption were identified.
First, there is affordability. According to the FCC, 36% of American adults who have not adopted broadband find that the monthly fee is too expensive; 10% cannot afford a computer or consider the installation fee as too high; while 10% of non-adopters do not want to enter long-term contracts.
Second, there is digital literacy. Twenty-two percent of non-adopters do not consider themselves skilled enough for broadband or are concerned about privacy or the security of personal information.
Lastly, 19% of non-adopters consider the Internet a waste of time, according to the FCC's survey. These individuals may either find that the content is not of interest to them or they are content with dial-up service.
Source: The Federal Communications Commission
Published: 23 February 2010
Arizona regulators approve Frontier purchase of Verizon assets
Frontier Communications Corporation yesterday announced that the Arizona Corporation Commission has approved frontier's purchase of Verizon Communications' local wireline operations in Arizona. In addition to Arizona, four other states; California, Nevada, Ohio, and South Carolina; have approved Frontier's purchase of Verizon's landlines.
Source: Frontier Communications Corporation
Published: 19 February 2010
DOJ will not investigate Microsoft and Yahoo! ad agreement
The U.S. Department of Justice's antitrust division yesterday announced that "after a thorough review of the evidence, the division has determined that the proposed transaction is not likely to substantially lessen competition in the United States."
At issue is a proposed Google/Yahoo! search advertising agreement. The antitrust division determined that there was likely to be no harm to users of Internet search, paid search advertisers, Internet publishers, or distributors of search and paid search advertising technology.
The antitrust division also determined that there will likely be "more rapid improvements in the performance of Microsoft's search and paid search advertising technology than would occur if Microsoft and Yahoo! were to remain separate.
Source: U.S. Department of Justice
Published: 19 February 2010
FCC releases working recommendations for broadband
The Federal Communications Commission today released recommendations from its national broadband plan designed to address six policy issues:
providing jobs and creating economic opportunity
improving healthcare and controlling costs
providing more educational opportunitues and improving outcomes
promoting energy independence and efficiency
enhancing government performance and increasing civic engagement
increasing public safety and homeland security
Regarding jobs and economic opportunity, the FCC's broadband plan proposes accelerating efforts to deliver employment assistance on a scalable online platform.
To improve healthcare, the plan requires ensuring all providers ahave access to affordable broadband by subsidizing ongoing costs and network deployment via the Rural Health Care Program.
The plan also recommends promoting innovation in the development and deployment of the Next Generation of 9-1-1 networks and emergency alerting systems by fully embracing broadband technologies.
The FCC is scheduled to submit its national broadband plan to Congress on March 17, 2010.
Source: Federal Communications Commission
Published: 18 February 2010
Waxman wants to investigate access charges and traffic pumping schemes
The House Committee on Energy and Commerce yesterday announced that letters were sent from committee chaiman Henry Waxman, Democrat from California, to 24 telecommunications companies to assist in the committee's review of access charges and "traffic pumping schemes."
According to the committee's press release, the committee is trying to determine whether the existing access charge structure creates incentives for incumbent local exchange companies (ILECs) to charge excessive rates for terminating access or completing calls.
A local telephone company charges a long distance company an access charge for completing a call to the local telephone company's customer.
In its letters to the phone companies, the committee cites concerns on the part of long distance carriers that the access charges they pay to ILECs for handing off calls to customers is in excess of what the market would typically demand.
Also, according to the committee, some Internet-based voice service providers are refusing to connect calls to rural areas because of the high access charges.
Written responses to the commitee's letters are due by March 8, 2010.
Source: House Committee on Energy and Commerce
Published: 17 February 2010
Genachowski issues challenge for global leadership on broadband
Speaking yesterday at the Winter Conference of the National Association of Regulatory Utility Commissioners, Federal Communications Commission Chairman Julius Genachowski issued a call for America to pursue global leadership on broadband.
After reiterating the benefits of broadband, from economic growth to education to heath care, and referring to broadband as a general purpose technology, Mr. Genachowski asked whether America was " ... going to take the necessary steps to assume global leadership in broadband and fully realize these economic and social benefits here at home."
Mr. Genachowski cited studies that ranked the United States 16th in the world when it came to broadband adoption with 20 other countries having rolled out national broadband plans. "America's broadband ecosystem is not nearly as robust as it needs to be", added Mr. Genachowski.
Mr. Genachowski identified areas of opportunities for investment. Noting that the majority of Americans do not have broadband fast enough to access remote video learning or diagnostics, Mr. Genachowski stated that approximately 14 million Americans do not have access to broadband.
With a broadband adoption rate of 65%, the adoption rate amongst minority, low-income, rural, tribal, and disabled households is lower, according to the chairman. In addition, American commercial ability to compete is being hampered by a lack of access to broadband by many small businesses.
points out that the communications and technology sector accounts for 13% of GDP, a trillion dollars in revenue a year, a millions of jobs. Modest increases in broadband adoption, according to Genachowski, can yield hundreds of thousands of jobs.
Source: Federal Communications Commission
Published: 17 February 2010
Media General announces new financing structure
Media General, Inc. (MEG) yesterday announced that it has obtained approximately $700 million in financing. The structure includes a $400 million term loan, that is fully drawn, and an additional $70 million revolving credit line, of which approximately $6 million is drawn. The cable company has also issued $300 million in senior notes at a rate of 11.75%.
Source: Media General, Inc.
Published: 13 February 2010
For a detailed political risk analysis of this item, contact us at altondrew@altondrew.com or 404.753.8696.
Copyright@2010 Alton Drew Group
IN THE NEWS
During an address to the Joint Center for Political and Economic Studies Media and Technology Policy Forum last Wednesday, Federal Communications Commission member Michael J. Copps expressed his concern that the lack of transparency in network management practices of large broadband distributors may be negatively impacting the ability of minority owned media to get their messages to a larger audience.
Commissioner Copps stressed that the debate " ... is not about content regulation. It is about the freedom to go to the legal content of your choice." Mr. Copps, while describing the FCC as a "consumer protection agency", believes that the FCC should be concerned about discrimination on the internet and that broadband providers should share more information about their network management practices.
Mr. Copps called for "anyone looking to open the doors of opportunity" to get on board with the issue of an open internet and support a net neutrality policy.
Off course not everyone in Washington is in agreement. On October 22, 2009, Senator John McCain, Republican of Arizona, introduced S. 1836, the Internet Freedom Act. The bill would prohibit the FCC from proposing, writing, or issuing any regulations regarding the Internet or IP-enabled services.
It is questionable how much traction this bill would get given that it has been stuck in the Senate commerce committee for the past five months and has no other sponsors listed besides Mr. McCain.
A House companion bill, HR 3924, whose langauge mimics the Senate version, was introduced on October 26, 2009 by Representative Marsha Blackburn, Republican of Tennessee. Her bill has 25 co-sponsors but has been sitting in the House energy and commerce committee since it was introduced.
Source: Federal Communications Commission, The United States Senate, The United States House of Representatives
Published: 5 March 2010
FairPoint Communications, Inc., has petitioned the Federal Communications Commission to convert six of its subsidiaries from rate of return regulation to price cap regulation.
The six subsidiaries are China Telephone Company, FairPoint Vermont, Inc., Maine Telephone Company, Northland Telephone Company of Maine, Inc., Sidney Telephone Company, and Standish Telephone Company.
Under rate of return regulation, regulators identify the assets involved in the generation of telecommunications services and apply a rate of return on those assets that are used to set prices for service.
Price cap regulation is a method of regulation meant to subject certain telecommunications services to more competitive pricing. These services may include common carrier line, special access, and marketing services.
For instructions on how to request an analysis of this update, click on the link, "Legal and Regulatory Risk Analysis Services for Investors" found at the left.
Source: Federal Communications Commission
Published: 2 March 2010
Virgin Mobile seeks eligible telecommunications carrier status
The Federal Communications Commission has announced that Virgin Mobile is seeking designation as an eligible telecommunications carrier in Connecticut, Delaware, District of Columbia, and New Hampshire.
According to the FCC, Virgin Mobile is seeking the designation in order to participate in the universal service low-income Lifeline program. However, the wireless services carrier will not be receiving universal service high-cost support.
Eligible telecommunications carriers are defined as common carriers that may receive universal service fund support under the Telecommunications Act.
Lifeline provides discounted telecommunications services to eligible low income consumers. These services may include voice-grade access services, local usage minutes, access to emergency services, and access to directory assistance.
Source: Federal Communications Commission
Published: 1 March 2010
FCC extends comment period for net neutrality rules
The Federal Communications Commission has extended the deadline for comments on its proposed open Internet or net neutrality rules until April 8, 2010. The extension is in response to a number of requests to extend the comment period past the initial March 5, 2010 deadline.
Source: Federal Communications Commission
Published: 25 February 2010
FCC finds costs, digital literacy barrier to broadband adoption
The FCC today released its National Broadband Plan Consumer Survey where it found that 93 million Americans are barred from broadband adoption as a result of cost and lack of digital skills.
Referring to the digital divide as an opportunity divide, Federal Communications Commission chairman Julius Genachowski noted that in order to "bolster American competitiveness abroad and create the jobs of the future here at home, we need to make sure that all Americans have the skills and means to fully participate in the digital economy."
According to the FCC's survey, 35% of adult Americans do not have high-speed Internet connections at home. Three barriers to broadband adoption were identified.
First, there is affordability. According to the FCC, 36% of American adults who have not adopted broadband find that the monthly fee is too expensive; 10% cannot afford a computer or consider the installation fee as too high; while 10% of non-adopters do not want to enter long-term contracts.
Second, there is digital literacy. Twenty-two percent of non-adopters do not consider themselves skilled enough for broadband or are concerned about privacy or the security of personal information.
Lastly, 19% of non-adopters consider the Internet a waste of time, according to the FCC's survey. These individuals may either find that the content is not of interest to them or they are content with dial-up service.
Source: The Federal Communications Commission
Published: 23 February 2010
Arizona regulators approve Frontier purchase of Verizon assets
Frontier Communications Corporation yesterday announced that the Arizona Corporation Commission has approved frontier's purchase of Verizon Communications' local wireline operations in Arizona. In addition to Arizona, four other states; California, Nevada, Ohio, and South Carolina; have approved Frontier's purchase of Verizon's landlines.
Source: Frontier Communications Corporation
Published: 19 February 2010
DOJ will not investigate Microsoft and Yahoo! ad agreement
The U.S. Department of Justice's antitrust division yesterday announced that "after a thorough review of the evidence, the division has determined that the proposed transaction is not likely to substantially lessen competition in the United States."
At issue is a proposed Google/Yahoo! search advertising agreement. The antitrust division determined that there was likely to be no harm to users of Internet search, paid search advertisers, Internet publishers, or distributors of search and paid search advertising technology.
The antitrust division also determined that there will likely be "more rapid improvements in the performance of Microsoft's search and paid search advertising technology than would occur if Microsoft and Yahoo! were to remain separate.
Source: U.S. Department of Justice
Published: 19 February 2010
FCC releases working recommendations for broadband
The Federal Communications Commission today released recommendations from its national broadband plan designed to address six policy issues:
providing jobs and creating economic opportunity
improving healthcare and controlling costs
providing more educational opportunitues and improving outcomes
promoting energy independence and efficiency
enhancing government performance and increasing civic engagement
increasing public safety and homeland security
Regarding jobs and economic opportunity, the FCC's broadband plan proposes accelerating efforts to deliver employment assistance on a scalable online platform.
To improve healthcare, the plan requires ensuring all providers ahave access to affordable broadband by subsidizing ongoing costs and network deployment via the Rural Health Care Program.
The plan also recommends promoting innovation in the development and deployment of the Next Generation of 9-1-1 networks and emergency alerting systems by fully embracing broadband technologies.
The FCC is scheduled to submit its national broadband plan to Congress on March 17, 2010.
Source: Federal Communications Commission
Published: 18 February 2010
Waxman wants to investigate access charges and traffic pumping schemes
The House Committee on Energy and Commerce yesterday announced that letters were sent from committee chaiman Henry Waxman, Democrat from California, to 24 telecommunications companies to assist in the committee's review of access charges and "traffic pumping schemes."
According to the committee's press release, the committee is trying to determine whether the existing access charge structure creates incentives for incumbent local exchange companies (ILECs) to charge excessive rates for terminating access or completing calls.
A local telephone company charges a long distance company an access charge for completing a call to the local telephone company's customer.
In its letters to the phone companies, the committee cites concerns on the part of long distance carriers that the access charges they pay to ILECs for handing off calls to customers is in excess of what the market would typically demand.
Also, according to the committee, some Internet-based voice service providers are refusing to connect calls to rural areas because of the high access charges.
Written responses to the commitee's letters are due by March 8, 2010.
Source: House Committee on Energy and Commerce
Published: 17 February 2010
Genachowski issues challenge for global leadership on broadband
Speaking yesterday at the Winter Conference of the National Association of Regulatory Utility Commissioners, Federal Communications Commission Chairman Julius Genachowski issued a call for America to pursue global leadership on broadband.
After reiterating the benefits of broadband, from economic growth to education to heath care, and referring to broadband as a general purpose technology, Mr. Genachowski asked whether America was " ... going to take the necessary steps to assume global leadership in broadband and fully realize these economic and social benefits here at home."
Mr. Genachowski cited studies that ranked the United States 16th in the world when it came to broadband adoption with 20 other countries having rolled out national broadband plans. "America's broadband ecosystem is not nearly as robust as it needs to be", added Mr. Genachowski.
Mr. Genachowski identified areas of opportunities for investment. Noting that the majority of Americans do not have broadband fast enough to access remote video learning or diagnostics, Mr. Genachowski stated that approximately 14 million Americans do not have access to broadband.
With a broadband adoption rate of 65%, the adoption rate amongst minority, low-income, rural, tribal, and disabled households is lower, according to the chairman. In addition, American commercial ability to compete is being hampered by a lack of access to broadband by many small businesses.
points out that the communications and technology sector accounts for 13% of GDP, a trillion dollars in revenue a year, a millions of jobs. Modest increases in broadband adoption, according to Genachowski, can yield hundreds of thousands of jobs.
Source: Federal Communications Commission
Published: 17 February 2010
Media General announces new financing structure
Media General, Inc. (MEG) yesterday announced that it has obtained approximately $700 million in financing. The structure includes a $400 million term loan, that is fully drawn, and an additional $70 million revolving credit line, of which approximately $6 million is drawn. The cable company has also issued $300 million in senior notes at a rate of 11.75%.
Source: Media General, Inc.
Published: 13 February 2010
For a detailed political risk analysis of this item, contact us at altondrew@altondrew.com or 404.753.8696.
Copyright@2010 Alton Drew Group
