Matt Daneman

Discovery Communications told us it doesn't anticipate its planned $14.6 billion takeover of Scripps Networks Interactive will require FCC review. It didn't comment when asked for clarification Tuesday. Some had speculated SNI might turn in its FCC licenses or that any license transfers to Discovery would be routine and not necessitate opening a docket (see 1707310062).

Discovery Communications’ planned $14.6 billion takeover of Scripps Networks Interactive is largely expected to sail through regulatory reviews, experts told us. The deal might not need FCC review since SNI broadcast licenses could just be turned in and Discovery potentially could use its existing arrangement to transmit Scripps programming to MVPDs the way it does its own, said a communications lawyer with cable and content clients. Even if one or two need to be transferred, that often is done with a simple licensing application that doesn’t require the FCC open a docket, the lawyer said. Discovery said it didn't anticipate antitrust problems with its SNI bid but didn't comment on FCC review. Meanwhile, The Wall Street Journal reported SoftBank CEO Masayoshi Son was considering making a bid for Charter, to merge it with SoftBank subsidiary Sprint.

AT&T launched 5G service in Indianapolis and Austin, and expects to be in 20 markets by year's end, executives said on a Q2 earnings call Tuesday. It's testing LTE licensed assisted access -- combining licensed and unlicensed spectrum -- in San Francisco, where users are seeing 750 Mbps peak speeds -- and it will expand testing in San Francisco and into Indianapolis in coming weeks. It said it still expects to close on its Time Warner buy by year's end, and its integration team is close to done with its advertising and bundling plan. For the quarter, AT&T had consolidated revenue of $39.8 billion, and had 2.3 million wireless net adds in the U.S. and 8,000 total broadband net adds. It said it had total video subscription losses of 199,000, with growth at DirecTV Now offsetting some traditional TV subscriber declines. CEO Randall Stephenson said AT&T soon will unveil the names of additional states that agreed to opt in to FirstNet, beyond the five revealed so far. “The timeline has been set and the opt-in process is underway,” he said. States are eager to get started on construction of the network “and so are we,” he said. Stephenson said AT&T will look at all of its options as construction starts.

Analysts are split on the likelihood of Discovery Communications joining with Scripps Networks. Credit Suisse analyst Omar Sheikh in a note to investors Wednesday called the reported deal talks unlikely to come to fruition since previous such talks probably died due to disagreements over price and structure, and those hurdles seemingly haven't changed. A combination would have more negotiating leverage with MVPDs and advertising agencies, he said. Citi's Jason Bazinet said the idea of Discovery/Scripps talks is "credible," adding the two likely will come to an agreement due to the pressures on the cable industry and to low valuations. He said a combined entity would have more leverage with emerging digital distribution platforms like Hulu, Sling, Vue and YouTube, and also make the launch of a non-sports bundle easier. Neither Scripps nor Discovery commented Wednesday. Scripps stock closed at $76.89, up 14.7 percent, while Discovery closed at $27.18, up 4.3 percent. Scripps also reportedly has held merger talks with Viacom. Viacom didn't comment.

The FCC's administrative law judge shouldn't have a role overseeing transactions, and the function of the ALJ in FCC proceedings should be rolled back or eliminated, Commissioner Mike O'Rielly said during the agency meeting Thursday. The comments came after commissioners voted 2-1 to reverse the ALJ finding that Cablevision discriminated against the Game Show Network (see 1707130048). "The ALJ function isn't working as intended," O'Rielly said, saying the agency and Congress should work out "an alternative procedure." Since commissioners rule on ALJ decisions anyway, he said that "it's adding an unnecessary layer." He said the process of referring a takeover to the ALJ "is a cop-out" intended as an indirect means of killing the deal. Asked about the idea, Chairman Ajit Pai and Commissioner Mignon Clyburn said it's too soon to form opinions.

Much of Sky Angel's legal fight with Discovery and its Animal Planet network may involve what Discovery knew about how Sky Angel distributed content and when did it know its signals were being carried online to Sky Angel subscribers. In dueling briefs filed Tuesday in the 4th U.S. Circuit Court of Appeals (see here and here, in Pacer), Sky Angel cited emails and other communications with Discovery since 2007 that noted its internet distribution, while Discovery/Animal Planet said that throughout dealings with Sky Angel, it never knowingly allowed distribution of its linear networks over the internet, regardless of the distributor. Sky Angel is appealing a 2016 verdict in favor of Discovery (see 1609120042) after the former over-the-top MVPD's 2013 suit claiming breach of contract after Discovery ended their affiliation agreement (see 1303070045). Sky Angel, which now distributes via Dish Network, in 2010 filed a still-open program access complaint against Discovery. The lower court verdict wrongly focused on Discovery's view of the contract rather than on agreed-upon language, as well as whether the programmer was dissatisfied, Sky Angel said in its opening appellant brief. Thus the lower court ruling focused on Discovery internal policy "rather than on any information of which Sky Angel would have been aware," it said. It said U.S. District Court in Greenbelt, Maryland, erred when it found the phrase "high-speed data connection" in the affiliation agreement to be ambiguous. Such a connection "need not be the public Internet, [but] that is an obvious possibility," Sky Angel said in a reply brief (in Pacer) also filed Tuesday. It said Discovery doesn't explain how such a term "can be interpreted to exclude 'the public Internet.'" The lower court's finding "is only reviewable for clear error, and Sky Angel's appeal never comes close to -- or could come close to -- the clear error standard," Discovery/Animal Planet said in an appellee brief. It said Sky Angel, faced with sizable evidence the termination right was exercised in good faith, "takes the Court through a maze of detours and dead-end turns" by arguing for de novo review that gives no deference to the lower court's previous ruling, instead of clear error review. Discovery/Animal Planet said it hadn't allowed any distributor at that time to distribute via IPTV in part because it didn't have internet distribution rights for some licensed content, and due to security and signal quality concerns, and that letting any distributor do so could trigger most-favored nation obligations to other distributors.

The record $280 million decision against Dish Network for Do Not Call violations could prompt similarly situated companies to pay much closer attention to the practices of third-party marketers they hire, Telephone Consumer Protection Act compliance lawyer Christine Reilly of Manatt Phelps told us Tuesday. Dish said it plans to appeal, while government enforcers said the penalty should cause other lawbreakers to take notice. The litigation brought by the FTC and several states and now the "catastrophic" amount of penalties and damages signal to companies using third-party agents to make telemarketing calls that they "need to be careful about what it is they're doing," Reilly said.

Mediacom has seen "steady deterioration" of its video business due to pricing and over-the-top competition, said Senior Vice President-Legal and Public Affairs Tom Larsen. Cord-cutting "is the video issue of our time as consumers learn they have choice" via OTT, said American Cable Association President Matt Polka. The cable executives spoke on C-SPAN's The Communicators in a segment to be televised this weekend that has been put online. The biggest obstacle to cable offering skinny bundles is programmers, Larsen said. "They would rather continue to reap the cash from that model," with growth coming outside that model via OTT providers, he said. They also are the hurdle to a la carte offerings, Polka said, saying creating skinny bundles has been difficult enough due to penetration requirements in carriage agreements. He said OTT services now have the a la carte offerings the public demands. Cable operators broadly are "more upbeat" because of the regulatory philosophies of the Trump administration and Congress, Polka said. FCC Chairman Ajit Pai is clearly deregulatory, Larsen said, but "he is still not going to address some of the issues." Polka said internet privacy regulations need to cover edge providers instead of focusing on ISPs. "The Googles of the world, the Amazons, are the ones that take this data and monetize it," Polka said. Larsen said cable ISPs are wary of the Title II Communications Act regulations adopted by the Wheeler FCC, but Mediacom "had to take a gamble" and committed to spending $1 billion over three years to be an all-DOCSIS 3.1 network. He said 1 GB network speeds were launched in Q1 in 500 communities it serves, with another 900 to get the speed upgrade by year's end.

Growing demand for in-flight connectivity could affect how both airlines and satellite operators view obsolescence, industry insiders said at a Washington Space Business Roundtable event Thursday. Moves to wider channels and increased interest in the V- and Q-band mean obsolescence for installed in-flight connectivity systems will come sooner from changing technology than from problems with parts, said Bill Milroy, chief technology officer at antenna maker ThinKom. ViaSat Vice President-Space and Satellite Broadband Richard VanderMeulen said satellite operators are trying to provide LTE-like service today and expect to have to provide 5G-level service in the near future, and airlines ultimately will have to decide whether to prioritize the customer experience or eking out extra life of aircraft. As in-flight connectivity offerings follow the same 4G-to-5G trend of higher speed and capacity, "we're going to have to change our expectations about obsolescence," said Inmarsat Vice President-Enterprise Tim Johnson. SmartSky Networks Vice President-Digital Aviation Bruce Holmes said that beyond in-flight connectivity, an increased number of worldwide broadband networks will lead to "the Holy Grail of air space management" -- pre-computed flight plans avoiding any conflicts of flight paths and maximizing fuel and time efficiency. VanderMeulen said growth of those global networks could also lead to the point where airline passengers have choices of multiple data providers on a flight. He said the Department of Homeland Security laptop ban will have minimal effect on in-flight connectivity demand, since phones are the leading consumers of data on flights. Johnson expects carriers disproportionately affected by such a ban would find work-around for high-value customers, like providing tablets. Asked about typical per-customer connection speeds on a flight, operators largely demurred, saying the focus was on optimized service. Milroy said ThinKom often sees spectral efficiency that can work out to 250 Mbps per aircraft. While for many operators that averages out to 150-200 Kbps per passenger, "of course that number is going up and up," he said. Euroconsult earlier this month predicted more than 17,000 commercial aircraft will offer in-flight connectivity by 2021, up from 6,500 in 2016 and that as of the start of the year, more than 80 airlines installed or committed to in-flight connectivity.

The solution to increasingly congested Wi-Fi networks in dense urban areas lies primarily in middle-band spectrum, particularly in the 5.9 GHz band and potentially the 6 GHz band, said Wi-Fi Alliance CEO Ed Figueroa Wednesday. Having 80 MHz and 160 MHz channels is paramount, but that kind of channelization is tough to find in low bands, while high-frequency bands carry propagation limitations, he said at a Microsoft/New America’s Wireless Future Project panel.