Washington Watch

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Critics ‘Sprint’ to Oppose AT&T/T-Mobile Deal

WASHINGTON —There was no shortage
of petitions to deny the AT&T/
merger last week, but it was
hard to find them in the Federal Communications
Commission docket for
the hundreds — perhaps thousands
— of identical comments informally
slamming the deal.

An online campaign by deal opponent
Free Press by press time had
resulted in a flood of the following
two-sentence message:

“AT&T’s takeover of T-Mobile would
stifle choice and innovation in the
market, harm consumers, and lead
to higher prices and fewer jobs nationwide.
Don’t let AT&T put our mobile
future at risk. Please stand with me
and reject such reckless consolidation of the mobile industry.”

That is the same text of a letter Free Press was encouraging its members to
send to the Senate two weeks ago in advance of a hearing on the deal.

As expected, one of the deal’s harshest critics, Sprint, filed its official petition
to deny the deal, saying it did not buy AT&T’s argument that it needed T-Mobile
spectrum to answer President Obama’s State of the Union call for deploying mobile
broadband to 97% of the country within five years.

“AT&T does not need T-Mobile to expand its LTE network to reach 97% of all
Americans, because its current spectrum holdings and network already reach approximately
97% of the population,” Sprint said in its filing.

But there was also support from unions and other quarters, including the firstever
deal endorsement by the Minority Media & Telecommunications Council.

The FCC has been hammering on cable and telco broadband-network operators
about boosting speeds and availability. The Communications Workers of
America argued in its filing that the fastest way to get to that vaunted highspeed
future is to let the companies merge and start delivering those
10 Megabits per second downstream.

Deal opponents say that even if AT&T did need the spectrum, reconstituting
the twin Bell duopoly of AT&T and Verizon Communications would be too high a
price to pay.

AT&T senior vice president Jim Cicconi called petitioners against the deal “the
usual suspects,” and pointed to support from organized labor, the NAACP, 15 state
governors and others. “Let’s keep in mind that the standard under which the FCC
operates is whether a merger, in this case our merger with T-Mobile, is in the public
interest,” he said last
week. “The answer from
elected officials and
respected state and
national organizations
from every walk of life is
a resounding yes.”

John Eggerton

Minority Groups Differ on Wireless Tie-Up

WASHINGTON — There was a difference of opinion among groups advocating for minority
participation in the telecom future.

The Minority Media & Telecommunications council endorsed the AT&T/T-Mobile
merger in an amicus filing, the first time in its quarter-century history it has endorsed
any merger, saying it does so through the “prism” of securing equal opportunities
for minorities in the media.

The council said it had done its due diligence on
the deal, would monitor evidence and reserve the
right to “modify” its position if it is wrong, but given
the public-interest benefits it has identified, the
merger is needed to ease capacity constraints that
could drive up prices and hurt adoption, particularly
for minority consumers. It also pointed out that the
NAACP also supports the deal.

Studies have found that minorities tend to be
heavier users of wireless for their broadband connectivity
than the general population. That is the
prime benefi t MMTC sees.

MMTC concedes the deal would be a short-term
solution that “would buy the nation the time it needs
to implement a long-term cure for the spectrum
crunch through such mechanisms as spectrum incentive auctions and repurposing
of some government spectrum.”

MMTC also argues that the deal will extend AT&T’s diversity hiring practices and
“neutrality toward unionization.”

In a conference call with reporters, MMTC president David Honig said that while
AT&T supported MMTC’s latest conference with a $100,000 sponsorship, the company
did not provide any funds in connection with its support of the deal and added
that MMTC would have rejected such funds if it had.

Also supporting the deal last week were the NAACP, the United States Hispanic
Leadership Institute and the National Black Farmers Association — the latter group
said the broadband boost will help its constiutents compete with corporate farms.

But not all groups representing communities of color were so sanguine about
the merger.

The National Hispanic Media Coalition said it had also done its due diligence,
and that despite what it said was AT&T’s distinguished and commendable record of
outreach and philanthropy to Hispanics, that was outweighed by “the negative longterm
harms that this acquisition will have on consumers, generally, and people of
color in particular.”

The Center for Media Justice also said it thought the deal would lead to higher
prices, fewer jobs, and be a “real threat” to minorities and the rural poor.

John Eggerton

Retrans Rehash: Players Stake Their Case

WASHINGTON — The Federal Communications Commission has
gotten an earful and then some on retransmission consent.

Broadcasters say retrans fees are crucial to their future
business plans, and only fair compensation for must-have

Cable operators are just as adamant that must-carry rules
are the government thumb on the scale, as are the syndicated exclusivity and network
nonduplication rules.

Here is some of what the FCC has to chew on:

It’s Time [Warner Cable] for a Change: If you ask the nation’s second-largest
cable operator, and the FCC did, the retransmission-consent regime is an artificial
construct that favors broadcasters and a “rising tide of anticompetitive conduct”
and is in need of a complete overhaul. That means not just getting rid of syndicated
exclusivity and network nonduplication rules — which give local broadcasters
exclusive rights to certain over-the-air content in their markets — but mustcarry
rules as well, including the buy-through requirement that compels pay TV
providers to place broadcast stations in the most basic tier.

Time Warner also wants the FCC to prevent the bundling of TV station and
cable channel carriage agreements, and the negotiation of multiple TV station
retrans deals in a single market via joint operating agreements. Those are among
the changes pushed by the American Cable Association in its fi ling (see below).

Don’t Tread On Us: The Walt Disney Co. said it was only reiterating points it had
made before to illustrate that the retransmission-consent regime is working “exactly”
as Congress intended.

That is noteworthy in part because it was last year’s spat between Disneyowned
WABC-TV New York and Cablevision Systems that prompted Sen. John
Kerry (D-Mass.) to call on the FCC to reform retrans.

Disney tells the FCC that is was right to conclude it did not have the authority to
mandate interim carriage or binding dispute resolution, but wrong to suggest that
“isolated but highly publicized” tensions justify government intervention.

Disney said the FCC cannot scrap the syndicated exclusivity or network-nonduplication
rules so long as cable operators continue to have a compulsory license
to retransmit broadcast signals because “they provide the means by which broadcasters
and rights holders directly and efficiently can enforce their privately negotiated
contractual rights to exclusivity.” [Under direction from Congress, the Copyright
Offi ce is currently considering what, if any changes, to make to that license].

Ban Collusive Bargaining: The American Cable Association, which represents
small, independent cable operators, told the FCC in no uncertain terms
that coordinated retrans negotiations among stations in a market that aren’t
co-owned should be a per se violation of good-faith bargaining.

Among ACA’s other must-haves are interim carriage during retrans complaint
proceedings and the investigation of price discrimination against smaller
MVPDs. ACA says change is needed to address “systemic injurious practices
by broadcasters.”

No Comment: The National Cable & Telecommunications Association did not file
comments in the retrans docket, according to a spokesperson. Given that some of
its members have interests on both sides of the issue — think Comcast and The
Walt Disney Co., to name only two — the NCTA prefers to let whichever individual
members that want to (see TWC and Disney, above) weigh in on their own. NCTA
has also historically tried to limit its requests to government to regulate the competition
to remain consistent with its generally deregulatory philosophy.