Matt Daneman

The FCC, in its report on video programming, faces arguments against and for further steps, including a push to ensure online video distributors aren't subject to cable rules. Replies on the 19th annual report were due Thursday. Verizon -- echoing its calls for retransmission rules changes and elimination of the network nonduplication and syndicated programming exclusivity rules (see 1710110016) -- said in docket 17-214 comments posted Monday that legacy cable regulations on OVDs "would be highly inappropriate." Regulation would be contrary to the agency's goal of promoting video competition, it said. Cable "remains uniquely burdened" with antiquated regulations, despite choice and competition, Charter Communications said. It pressed the agency to declare the market highly competitive and eliminate regulations based on a lack of competition, looking for routes to regulatory parity. NCTA said similar in initial comments last month. NCTA now pitched for seeing the set-top box marketplace as filled with rivalry. It said apps, the emergence of devices like Roku and MVPD investment in alternatives to set-tops -- plus the growth of streaming services -- eclipsed set-top use. It said app use came despite Section 629 of the Communications Act, which requires promotion of competition in the set-top market. Predictable pay-TV claims about a broken retrans regime "should be taken with a proverbial grain of salt," since pay-TV providers were complaining about negotiating with TV stations even before retrans fees became substantial, NAB said. It said proposals for negotiation reforms are without merit and contrary to statute, saying the FCC lacks authority over carriage of TV stations' signals without broadcaster consent. The multichannel TV sector is "broken," with major programmers using leverage and must-have networks to impose tying and bundling requirements, indie cable network INSP said. It said the report should conclude independent cable networks are in jeopardy, program carriage rules and enforcement need strengthening, and conglomerate programmers should be barred from bundling and tying. Citing "overwhelming evidence" of sizable video competition, Comcast rejected American Cable Association criticisms of its NBCUniversal's minimum penetration terms for its regional sports networks. It said the agency should declare the area competitive "at all levels."

Indications the Justice Department is pushing AT&T for divestitures as part of its proposed buy of Time Warner (TW) (see 1711080047) point to Justice swinging back toward favoring structural rather than behavioral conditions for problematic deals, experts said. On the behavioral remedies on vertical deals in recent years, such as Comcast's buy of NBCUniversal, "most people think they're failures," said University of Baltimore Venable professor of law Robert Lande. The Obama administration was more favorable to employing behavioral conditions than was the George W. Bush administration, experts said, citing the Bush administration's 2004 antitrust guidelines. DOJ didn't comment Monday.

Telecom technology and industry convergence is disrupting business models and regulation, speakers said Thursday at an annual event at Hogan Lovells. Competition policy has become harder due to the hazier definitions of markets, said NERA Economic Consulting Managing Director Chris Dippon. Along with new opportunities, convergence "destroys old business models," Verizon Associate General Counsel Robert Griffen said.

DOJ antitrust chief Makan Delrahim and President Donald Trump deny White House involvement in the agency's review of AT&T's planned buy of Time Warner. Delrahim in a statement Wednesday said he has "never been instructed by the White House on this or any other transaction under review by the antitrust division." An White House in an accompanying statement said, "The President did not speak with the Attorney General about this matter, and no White House official was authorized to speak with the Department of Justice on this matter.” Justice was reportedly pushing for a divestiture of Turner Networks or of DirecTV as a condition of approving AT&T/TW (see 1711080047). Commissioner Jessica Rosenworcel tweeted Wednesday that if the DOJ is using antitrust law to force a sale of Turner's CNN because of opinions of its coverage, "You can dislike consolidation but still find this extremely disturbing if true." Sen. Al Franken, D-Minn., said the deal shouldn't go forward because of media consolidation worries, but signs the Trump administration is trying to attack media organizations it doesn't like would be "profoundly disturbing." Other Senate Democrats also raised new questions about the DOJ's independence from Trump given the AT&T/TW review demands, including House Communications Subcommittee ranking member Brian Schatz, D-Hawaii. “Any suggestion that the deal be conditioned on selling off a news channel because of its coverage is offensive to both the First Amendment and the rule of law,” said Sen. Ed Markey, D-Mass., in a statement. Dish Network's CEO voiced concerns Thursday about AT&T/TW (see 1711090004). DOJ, meanwhile, said “there is no legal obligation” for Antitrust Division head Makan Delrahim to recuse himself from involvement in the department's review of AT&T/TW based on earlier comments he made that the proposed merge doesn't pose a “major antitrust problem,” said Assistant Attorney General-Legislative Affairs Stephen Boyd in a letter to Sen. Elizabeth Warren, D-Mass. Warren sought Delrahim's recusal over the comments, which she said could “undermine public confidence in the Division's ability to reach an unbiased final decision” on AT&T/TW. The full version of Delrahim's comments show he “indicated the proposed merger should and would get a full and complete review” by Antitrust, “that the review would be based on the law and the facts,'” Boyd said. “We can assure you that [Antitrust's] merger enforcement will be based on application of the law to the particular facts and circumstances presented by any proposed merger.”

Dish Network is confident of meeting its March 2020 deadline for rolling out a 5G-centric narrowband (NB) IoT network, and is talking with chipset makers and tower owners with hopes of deals in coming months, executives told an earnings call Thursday. They expect to have radios using its AWS-4 and lower 700 MHz E-block spectrum holdings next year, being deployed shortly thereafter.

Time Warner stock closed down 6.5 percent to $88.50 Wednesday after reports (here and here) DOJ was pushing for divestiture of Turner Networks or of DirecTV as conditions on AT&T's proposed $108.7 billion buy of the programmer. AT&T Chief Financial Officer John Stephens told investors it's in active discussions with Justice, but "timing of the closing of the deal is now uncertain." Separately in a statement, CEO Randall Stephenson said that throughout DOJ's review of the deal, "I have never offered to sell CNN and have no intention of doing so.” Turner's assets include CNN. AT&T had expected to close on TW by year's end (see 1711020051). Free Press said it continues to oppose AT&T/TW on media consolidation grounds, and forcing divestiture of content properties such as Turner distribution properties or DirecTV could soften those consolidation harms, but department opposition is problematic if it's based on President Donald Trump's antipathy to CNN coverage: "Everyone should agree that the government shouldn’t base antitrust decisions or FCC rulings on whether it likes a newsroom’s coverage." As a candidate for president, Trump said he opposed AT&T/TW (see 1610220002). If Justice has a problem with a vertical merger like AT&T/TW, the possibility of horizontal mergers in the sector seems "substantially lower" than previously thought, meaning a Disney move for Fox wouldn't pass muster, let alone Comcast buying Charter or any further content assets, BTIG analyst Rich Greenfield emailed investors Wednesday. He raised the specter of Comcast having to sell its NBC or Hulu ownership after the Comcast/NBCUniversal consent decree ends, saying if AT&T/TW is problematic for DOJ, "how is the former okay?" DOJ in a statement said it's "committed to carrying out its duties in accordance with the laws and the facts." Wells Fargo analyst Marci Ryvicker, in an email to investors, said there are no potential buyers for DirecTV, but CNN could command $8 billion to $10 billion and be a strategic fit with CBS. She also said while there's now "a really uncertain spell on M&A in general," Discovery/Scripps Network and Sinclair/Tribune are likely not at risk.

Puerto Rico fixed wireless and fiber ISP AeroNet expects to have service 100 percent restored by early January, President Gino Villarini emailed us Friday. He said the company began re-establishing infrastructure immediately after Hurricane Maria and expects to be 90 percent restored by early December. He said damage was mostly broken antennas, wear damage, and damaged and cut fiber, plus 15 collocated towers fell down. Restoration will cost more than $3 million, he said. Communications network recovery in Puerto Rico has been hampered by lack of electricity (see 1711010012). Villarini said minus the power outage, about 70 percent of its customers would have service Monday, but actually about 50 percent do. He said that for the first four weeks after the hurricane, recovery efforts also were hampered by employee issues. "We had a lot of issues without housing, food and gas," he said, with employees staying at AeroNet facilities and the company providing meals and gas. He said the FCC expedited a company request for special temporary authority to operate backhaul radios in the 5.9 GHz band, with approval in about two days. As of Monday, 48 of 78 counties had more than 50 percent of their cellsites out of service, down from 49 the previous day, according to the FCC's latest Maria status report. It said 47.8 percent of cellsites in Puerto Rico and 38 percent of cellsites in the U.S. Virgin Islands were out. It said two Puerto Rico TV stations and 61 AM and FM radio stations are confirmed or suspected to be off-air.

AT&T remains confident it will close on Time Warner by year's end, despite word DOJ is considering challenging the deal, analysts said Thursday. That close could come by month's end, analyst David Barden of Bank of America emailed investors Thursday. The Wall Street Journal that day reported the agency is discussing possible settlement terms. BOA said it's standard for the agency to work along multiple fronts for merger reviews. BOA said new DOJ antitrust chief Makan Delrahim is positioning himself to have the last word on any conditions, and the company expects any conditions to be reasonable. It said the time Delrahim is taking has to do with coming up to speed on the takeover rather than with material issues. Wells Fargo's Jennifer Fritzsche emailed investors the issue might be more about Justice increasing leverage in negotiating conditions than a serious intent to block the deal, saying the DOJ would face an "uphill battle" in court trying to block the vertical merger. If the department does push back, that might indicate horizontal mergers -- like Sprint/T-Mobile -- might not fly with the administration, Wells Fargo said. DOJ didn't comment. AT&T said when the agency reviews any transaction, "it is common and expected for both sides to prepare for all possible scenarios. For over 40 years, vertical mergers like this one have always been approved because they benefit consumers without removing any competitors from the market. While we won't comment on our discussions with DOJ, we see no reason in the law or the facts why this transaction should be an exception." Time Warner closed down 3.8 percent to $94.70. BOA said AT&T Senior Executive Vice President-External and Legislative Affairs Bob Quinn indicated this week DOJ wouldn't likely approve consolidation of two national wireless carriers without creation of a fourth facilities-based player, since that would likely face political and career antitrust staff opposition. BOA said an MVNO-based cable provider also wouldn't fit that bill of a facilities-based operator. AT&T didn't comment on that.

The FCC Office of Engineering and Technology's looking for input on the Technological Advisory Council’s hunt for technical regulations in need of modification (see 1708310035) got suggestions on new filing requirements for internal reorganizations and reforming rules on marketing and operation of RF devices before authorization. Monday was the deadline for docket 17-215 comments.

Many small and mid-sized cable operators will have options for accessible user interfaces by the Dec. 20, 2018, deadline, letting them meet accessibility obligations, and others will be able to meet at least some, the American Cable Association said in an FCC docket 12-108 filing posted Tuesday. Consumer groups representing the deaf or hard of hearing pushed for the agency to keep the due date. Monday was when comments on compliance for small and mid-sized MVPDs were due, replies due Nov. 13 (see 1709280057). ACA said commercial options available include the advanced user interface developed by TiVo, and various "plug-in" devices like the TiVo Bolt and a simpler digital terminal adapter under development. Those plug-ins are only partial solutions for some operators since they aren't compatible with QAM-delivered VOD, all-analog systems or systems not offering broadband, ACA said. But it said likely as much as 97 percent of all domestic MVPD subscribers will have access to three or more MVPDs that can provide a talking guide that meets agency requirements. The FCC "set generous compliance deadlines" in its 2013 user accessible interface order, and the ability of people with disabilities to access video programming outweighs "any challenges that may remain" for meeting the deadline, said Telecommunications for the Deaf and Hard of Hearing, the National Association of the Deaf, American Foundation for the Blind, Cerebral Palsy and Deaf Organization, and Hearing Loss Association of America.