Matt Daneman

Comcast ended its bidding for Fox's nonbroadcast assets (see 1807190022) when it decided it "couldn't build enough shareholder value" to justify the cost, CEO Brian Roberts said in a Q2 earnings call Thursday. He said Sky, for which it's vying with Disney (see 1807120001), "will fit well." He said Comcast's focus on connectivity means it's increasingly investing for its xFi service, and it now offers 1 GB speeds across virtually its entire footprint. Comcast Cable CEO David Watson said the company is putting more focus on expanding its broadband-only customer segment. Asked about growth of virtual MVPDs, Roberts said Comcast is "benefiting more from that competition than we're losing," with NBCUniversal having more distributors and through increased data traffic the company is seeing. For Q2, Comcast revenue rose 2.1 percent to $21.7 billion from the year-ago quarter, it said. The 260,000 added broadband customers gave it one of the highest Q2 results in 10 years, it said. The operator ended the quarter with 21.1 million residential video customers, down 136,000; 24.4 million residential broadband customers, up 226,000; and 10.2 million residential voice customers, down 32,000. Its Xfinity Mobile service ended the quarter with 781,000 subscribers, up 204,000. Comcast shares closed Thursday up 4 percent to $34.75. BTIG analyst Walt Piecyk wrote investors that losses from Comcast's wireless business since its May 2017 launch have topped $1.2 billion, while subscriber growth seems to have flattened out at 200,000 per quarter, lower than expected. He said Comcast isn't likely to end its wireless push given the 5G threat to wired broadband, and it makes sense for Comcast to build a wireless network atop its growing fiber investments.

Wireless advocates and Globalstar remain at loggerheads about increased interference in the 5.1 GHz band that Globalstar is blaming on sharing that band with outdoor Unlicensed National Information Infrastructure operations. Numerous wireless advocates in RM-11808 reply comments posted Tuesday repeated their arguments that the company hasn't shown it's suffering harmful interference or proven any such interference is due to U-NII-1 operations (see 1807090003). Globalstar, citing more than 800 noise measurements taken globally since May 2014 that show a sizable increase in the 5.1 GHz noise floor since the FCC allowed outdoor U-NII-1 operations, said opponents haven't shown any data of their own despite knowing about the company's issues since at least November. It said its own consultant considered and dismissed all other possible sources, and no one else has identified a plausible alternate source. Without an FCC investigation and exploration of possible fixes, rising noise levels might hit "extreme levels in the near future" and seriously degrade Globalstar service, it said. Since rules protect Globalstar's licensed operations from unlicensed harmful interference, the company hasn't explained why the U-NII order framework for addressing interference issues in the U-NII-1 band is deficient, CTIA said. It said what Globalstar seeks would put "unnecessary costs and burdens" on Wi-Fi and LTE-U operations and "the mere issuance" of an NOI could chill investment due to regulatory uncertainty. Globalstar is relying on "deeply flawed" measurement data and technical analysis, NCTA said. It said the company's only supporters are its own customers and "opportunistic" satellite companies wanting to use Globalstar's inquiry about U-NII-1 rules as a proxy for their own concerns about terrestrial sharing in other bands. The Dynamic Spectrum Alliance and Open Technology Institute at New America said the FCC should be "skeptical" of incumbents challenging band sharing and that adopting the Globalstar petition would set "a regrettable precedent" undermining agency and NTIA efforts for more efficient spectrum use. Qualcomm said Globalstar's interference analysis includes signals from outside the U-NII-1 band and alleges interference from nationwide U-NII-1 operations using measurements from a single point over the Midwest, while the claimed 2 dB increase in the noise floor comes from a technique that measures noise levels in 1 dB increments. It said Globalstar claims run contrary to U.S. advocacy at the ITU that the FCC’s U-NII-1 framework be applied worldwide. Hewlett Packard Enterprise and Ruckus Networks similarly opposed the petition (see here and here).

Though Fox had raised concerns about the regulatory heavy lifting that a deal for its nonbroadcast assets with Comcast might represent (see 1806260038), antitrust issues and the DOJ's AT&T/Time Warner appeal likely didn't play a notable role in Comcast taking itself out of the Fox running, some experts told us. But others see the AT&T/TW appeal raising notable regulatory concerns for the MVPD. Comcast didn't comment.

The FCC's referring a deal to its administrative law judge traditionally has been the kiss of death to a transaction, but some see Chairman Ajit Pai's announcement that he has circulated a draft hearing designation order (HDO) on Sinclair's $3.9 billion buy of Tribune (see 1807160023) as possibly aimed more at stopping the deal as it's currently crafted. It also could put the deal on the back burner for now.

With some seeing a DOJ signal about aggressive antitrust enforcement and others scratching their heads, experts were all over the map about DOJ's planned appeal of the AT&T/Time Warner decision (see 1807120068). Some questioned whether the decision to appeal was politically motivated. Given President Donald Trump's animus toward TW's CNN, repeated as recently as this week, "you've got to think he's happy" about an appeal, said antitrust lawyer Seth Bloom. Similar political questions were raised about DOJ challenging the merger, which closed last month (see 1806150002). There was no clear consensus as to whether DOJ would appeal (see 1806130036). Justice didn't comment Friday.

NTCA and WTA back the American Cable Association petition that some smaller MVPDs be waived from compliance with FCC Dec. 20 talking guide requirements (see 1806180050). In a docket 12-108 posting Tuesday, NTCA said the FCC assumed demand from big MVPDs would create supply of compliant devices, but "such has not proven to be the case" and full compliance would require some smaller MVPDs to largely re-engineer video distribution networks at great cost. WTA said the one commercially available option that covers all the accessibility features required is TiVo's Quattro system, but the cost of upgrades for small providers to deploy that is at least $100,000. WTA said more affordable options that use CableCARD don't cover all accessibility features, and analog systems can't use such plug-in devices. Rural Alabama MVPD Pine Belt Communications -- also backing the ACA petition -- said it looked into possible compliance offerings and didn't find one that doesn't involve a systemwide upgrade, which is "neither practical nor affordable."

Satellite and terrestrial interests are lining up on opposite sides over whether increasing interference Globalstar says it's seeing in the 5.1 GHz band is attributable to sharing that band with outdoor Unlicensed National Information Infrastructure operations. That the FCC will act on Globalstar's call for a notice of inquiry on mobile satellite service sharing with U-NII (see 1805220006) has doubters. Michael Calabrese, director of the Wireless Future Program at New America, told us the FCC isn't likely to reopen the 2014 sharing rules governing the band without more direct evidence of harmful interference.

DOJ's requirement that Disney sell 22 Fox regional sports networks to buy Fox's other nonbroadcast assets (see 1806270016) was logical, given the power New Disney would wield in sports programming otherwise, experts said Wednesday. Sports Fan Coalition (SFC) Chairman David Goodfriend said such conditions would be even more likely in a Comcast/Fox, given what would be New Comcast's ability to use sports programming as a club against MVPD competition. Comcast didn't comment. Fox approved a Disney deal (see 1806260038), though a shareholder vote hasn't been scheduled.

Top U.S. priorities at the ITU plenipotentiary meeting this fall in Dubai include improved ITU transparency and management, and avoiding a global regulatory framework for emerging technologies like artificial intelligence and IoT, said FCC International Bureau Multilateral and Regional Affairs Branch Chief Kelly O’Keefe at an FCBA event Wednesday. Roxanne McElvane Webber, bureau deputy chief-global strategy and negotiation division, said the U.S. has waged "a big campaign [with] big people behind it" for Doreen Bogdan-Martin, chief of ITU’s Strategic Planning and Membership Department, to be elected ITU telecommunication development sector secretary. FCC Chairman Ajit Pai and NTIA Administrator David Redl have endorsed her (see 1803130029). McElvane Webber said broadband investment globally outside the U.S. is principally mobile, with "a very, very pronounced disparity" by gender in uptake. She said the division wants and is trying to promote more formal talks with industry about what companies are finding in different countries and international regions. O'Keefe said that, like the U.S., numerous countries are trying to extend broadband networks to remote and rural areas, though methods of doing so vary. She said other countries also are following how the U.S. approaches 5G deployment issues such as spectrum availability and infrastructure. She said the division also fields a lot of questions from other countries about over-the-top regulation, though the FCC doesn't do that.

Some experts and advocacy groups criticized the Supreme Court's 5-4 Ohio v. American Express issued Monday as having significant implications for tech firms in two-sided markets. The dissent by Justice Stephen Breyer raised the idea of the opinion treating internet retailers differently from other businesses in antitrust evaluations. It's "an enormous setback for consumers who rely upon the antitrust laws to promote market competition," Public Knowledge said, "a particularly dangerous setback that will open the door for communications and internet platforms to continue building dominant market positions virtually impenetrable to innovation from smaller competitors." The decision was "a HUGE victory for platform providers who can now escape antitrust liability" by claiming -- and not proving -- even a fraction of overages on one side of the two-sided market went to customers on the other side, tweeted economist Hal Singer. Open Markets Institute called the decision "a huge and intellectually unjustifiable obstacle to effective antitrust enforcement." OMI said special treatment of two-sided markets "greatly rais[es] the burden that plaintiffs must carry at the very earliest stages of litigation" and gives more power to monopolies. OMI said it argued in its amicus brief that federal law traditionally looked at both credit card companies and communications firms as intermediaries, but the decision makes tech platforms into "de facto regulators of these markets." OMI said DOJ and the FTC should "use their full legal authorities" to "limit the damage from this poorly reasoned decision" and Congress should "take immediate action." Others defended the decision. The court was "exactly right" when it said plaintiffs didn't meet the burden of proof when they focused on the fees paid by merchants, tweeted International Center for Law & Economics Executive Director Geoffrey Manne. "Gov’t can’t meet its burden by showing 'some' effect on 'some part' of the market. Output didn’t go down and price didn’t go up. If it were pointing to a real effect, they would have." The U.S. and states sued AmEx for contractual provisions with merchants stopping them from steering consumers from using their credit cards in favor of another that charges lower merchant fees. Justice Clarence Thomas wrote the majority opinion holding anti-steering provisions don't violate the Sherman Act.