UPDATE, 4:04 PM: Activist group Public Knowledge is first out urging government officials to reject the AT&T-Leap deal. “Since the federal government said ‘no’ to AT&T’s efforts to take over T-Mobile in 2011, AT&T has been slowly buying up smaller companies and wireless licenses all over the country,” the group’s SVP Harold Feld says. Low income consumers would be hurt if AT&T eliminated Leap’s pre-paid wireless offering. “This is getting ridiculous. The Justice Department and the Federal Communications Commission need to say ‘no’ to this latest effort by AT&T to buy out its rivals and rebuild ‘Ma Cell.’”
PREVIOUS, 2:21 PM: Leap Wireless’ stock price is up nearly 110% in post market trading after AT&T said that it would pay $15 a share — an 88% premium over Friday’s $7.98 closing price — to buy the mobile provider, which has about 5M subscribers. In addition to the $1.2B in cash for the stock, AT&T will assume $2.8B in Leap’s debt, and give its shareholders a right to the proceeds from the sale of some spectrum in Chicago. AT&T says that it will keep Leap’s Cricket brand mobile service, which reaches 96M people in 35 states. In addition, the company will use Leap’s unutilized spectrum to help expand AT&T’s 4G wireless broadband service. Strangely, the companies’ release does not include any comments from executives. But it says that the deal will result in “increased competition, better device … Read More »
Now there are two: Guggenheim Digital Media and KKR have dropped out of the bidding for the video streaming service, CNBC reports from the Allen & Co. conference that draws hundreds of moguls each year to Sun Valley, Idaho. The sole remaining bidders for Hulu are DirecTV and the Chernin Group/AT&T partnership. Meanwhile, Bloomberg is reporting that Time Warner Cable offered to acquire a stake in the company. Hulu’s owners Fox and Disney want about $1B for the company. (Comcast also is a co-owner but relinquished control over Hulu’s affairs as a condition to win government approval to buy NBCUniversal.)
Related: Reports: Hulu Deal Expected In Under 2 Weeks
The free-for-all to acquire Hulu might be turning into a tag-team match. Telco titan AT&T is considering a partnership with the Chernin Group, founded and run by ex-News Corp exec Peter Chernin, to make a run at the streaming service, AllThingsD reports. AT&T isn’t among the seven bidders for Hulu that emerged last month, but the Chernin Group is. In fact, Chernin helped create the premium video service with he was at News Corp, which co-owns Hulu with Disney and Comcast. The LA-based Hulu board began seeking the latest round of bidding in March and is expected to make its next move in the next several weeks.
This is a nightmare scenario for broadcasters, although it appears from The Wall Street Journal’s report this morning that no deals are imminent. The story says that Aereo — the controversial Barry Diller-backed service that streams broadcasters’ over-the-air signals to its subscribers — has been chatting with companies including Dish Network and AT&T about potential package deals. Citing “people familiar with the matter,” the story says AT&T could offer broadband customers a deal that includes Aereo’s TV programming. Dish also could use Aereo as part of a small and low-cost package of channels that it would stream to subscribers. These ideas likely won’t move beyond the talking stage as long as broadcasters — including all of the leading networks — are asking the courts to rule that Aereo infringes on their copyrights. They say it appropriates their programming without their permission, and without paying them a dime. Aereo counters that it merely streams local signals that broadcasters already provide for free to anyone who has an antenna.
Related: Aereo Expands New York Service And Launches First Ad Campaign Read More »
A coalition of broadcasters, wireless providers, and chip makers Thursday urged the FCC to adopt guidelines to minimize potential conflict between broadcasters and wireless companies as the agency strives to cope with rising stress on bandwidth. Because of ever-increasing demand for mobile devices, the FCC proposed in September that broadcasters voluntarily give up some of their allotted bandwidth in exchange for a share of the proceeds when that bandwidth is auctioned to wireless broadband providers. The National Association of Broadcasters initially worried that broadcasters in smaller markets would be more likely to give up spectrum than those in urban markets. But it has turned out that a number of broadcasters in larger markets are willing to sell spectrum rights. Coalition goals cover a range of technical issues that are intended to protect TV and wireless signals against interference from each other and for minimum and maximum size specifications for individual segments of spectrum. The coalition also specifically calls for the FCC to expedite spectrum coordination with Canada and Mexico. In addition to NAB coalition members include Intel, AT&T, Verizon, T-Mobile and Qualcomm. You can read a copy of the coalition letter here.
AT&T delighted Internet enthusiasts, but not its shareholders, today by announcing the three-year investment effort. The company says it will expand its U-verse TV, broadband, and voice rollout by one-third making it available to 33M “customer locations” by the end of 2015. There’ll be a lot more fiber optic cable in the system, enabling it to accommodate faster broadband speeds. In addition, AT&T will expand its 4G LTE network to cover 300M people by the end of 2014 — up from current plans to reach 250M by the end of 2013. “This is a major commitment to invest in 21st Century communications infrastructure for the United States and bring high-speed Internet connectivity — 4G LTE mobile and wireline IP broadband — to millions more Americans,” CEO Randall Stephenson says. Read More »
AT&T and T-Mobile USA have reached a temporary agreement to enable roaming on their networks to customers of both providers in areas most affected by Sandy. Customers will be able to place calls as they normally do, but the calls will be carried over whichever network is up and running in their area, CNET reports. The companies say there will be no roaming charges or fees associated with the calls and subscribers’ current service agreements will remain in place. The arrangement is possible because both carriers run on GSM and UMTS networks. Yesterday the FCC said that 25 percent of cell sites in Sandy’s path had been knocked offline. The FCC said today the number had improved by a few percentage points but couldn’t provide an exact number, according to PC Magazine.
Separately, Verizon worked to repair damage at its Lower Manhattan headquarters where 3 1/2 of 5 basement floors were still flooded. Switching equipment on upper floors wasn’t damaged but connections for incoming lines remain under water. Verizon was also working to restore telephone hubs in other locations downtown. The company announced this afternoon that workers had successfully erected a temporary wireless antenna in Jersey Ci]oty across the Hudson River from Lower Manhattan.
Shares are up about 1% in pre-market trading after AT&T reported that gains in its wireless and digital operations outweighed the losses in its conventional wired phone business in Q2. The company reported net income of $3.9B, up 8.7% vs the same period last year, on revenues of $31.6B, +0.3%. The revenue figure was just a little behind the $31.7B that Wall Street expected. The latest figure would be +2% if you strip out AT&T’s Advertising Solutions business which it sold in May. But the earnings, at 66 cents a share, were well ahead of the 63 cents analysts forecast. The company says that wireless data revenues grew 18.8%, or $1B from last year. AT&T had 105.2M wireless customers, up 1.3M in the quarter. With 5.1M smartphone sales in Q2, about a third of AT&T’s post-paid customers now have a 4G-capable device. The telecom giant also says that it added 155,000 U-verse TV customers, bringing the total to 4.1M. About 90% of the new TV customers also subscribe to the U-verse broadband service. Read More »
Company watchers have been waiting to see what former Justice Department anti-trust chief and New York City schools chancellor Joel Klein will do at News Corp — when he isn’t helping Rupert Murdoch to manage his UK scandals. The partial answer, announced this morning, is a collaboration with AT&T to offer digital products for K-12 teachers, students and their parents. Although short on details, AT&T Mobility CEO Ralph de la Vega says they “plan to bring to market a 4G mobile tablet-based experience that we believe will significantly enhance teaching and learning.” Beginning in the upcoming school year, the companies say, AT&T will “provide 4G tablets, device management and technical services, and connectivity over the AT&T Wi-Fi network and AT&T 4G network.” Read More »
The 10.3% jump in AMC Networks‘ shares to $39.20 is a surprise on the first trading day after Dish Network dumped AMC, IFC, and WE — costing the channels 14.1M potential viewers. There was no big news event or even an upbeat analyst report today. But I hear that some Wall Streeters were impressed by AMC’s settlement this weekend with AT&T U-verse. Although the companies didn’t say how much more AT&T agreed to pay for the channels, some believe it to be at least 10%. The deal also seemed to indicate that the troubles with Dish are isolated, and not the beginning of an industrywide abandonment of AMC. And there’s a sense that AMC has already been beat up enough. Its stock was down 20% from early May when Dish announced its plans to the closing bell on Friday. With today’s jump AMC is down 12% over that period — and is back into positive territory for 2012.
It depends on whom you ask as Wall Streeters look for hidden meaning in a letter that AT&T sent to the FCC late last week. The issue at hand is excruciatingly technical: Regulators are considering whether to grant Dish additional time to provide broadband services on some spectrum it wants to buy. Without a waiver, Dish would have to serve 100M people within three years. AT&T urged regulators to reject Dish’s plea, saying that the public would benefit from the fast build-out while a delay would “confer a substantial windfall on Dish.” What’s interesting is the possible subtext. Credit Suisse’s Stefan Anninger sees the letter as a clear sign that AT&T is salivating over Dish’s spectrum following the collapse of the phone giant’s merger plan with T-Mobile. If the government imposes tough build out requirements on the satellite company then it ”could increase Dish’s interest in selling/dealing its spectrum,” he says. He believes that AT&T is interested in “increasing its negotiating leverage when it comes to a potential transaction negotiation with Dish.” But Breen Murray Carret analyst Todd Mitchell says the letter is “a clear indication that an AT&T acquisition of Dish is not in the cards in the immediate future.” Read More »
AT&T shares are down more than 2% in pre-market trading after it dumped a lot of bad news into a 4Q report that includes costs tied to the collapse of its $39B effort to acquire T-Mobile. The phone giant ended the period with a $6.7B net loss, down from a $1.1B profit in the same quarter last year, on revenues of $32.5B, up 3.6%. The revenue figure slightly beat the $32B that analysts expected. But even after excluding several one-time expenses, including those tied to the T-Mobile deal, earnings would have come in at 42 cents a share — a penny shy of the 43 cents that the Street expected. AT&T had to report a $1.12 a share loss, though: T-Mobile cost $4.2B. The company also took a $6.3B charge for actuarial losses from its benefit plans, and a $2.9B asset impairment charge for its directory business. In addition to the unusual items, AT&T lost about 1.1M phone wireline customers to end the year with 39M. The news wasn’t all bleak. AT&T says that it added 208,000 U-verse video customers, bringing its total to 3.8M. It also was a record quarter for smartphone sales. CEO Randall Stephenson says that AT&T starts the year “with the best visibility we’ve had in some time, and we’re well positioned to deliver solid results.” He added the magic words that shareholders of companies like his long to hear: “In short order, we will begin share … Read More »
TiVo shares are up 11.4% in after-hours trading following its latest victory in its campaign to demonstrate that it controls the patents behind some of the most popular features for DVRs — including the ability to watch one program while recording another. AT&T said it will pay TiVo at least $215M through mid-2018 to license its DVR technology, with additional monthly license fees if AT&T’s DVR subscriber base grows beyond an undisclosed level. That heads off a jury trial in Texas over TiVo’s patent infringement claims — on largely the same issues that enabled it to prevail over Dish Network in a similar series of cases that resulted in a settlement last year. AT&T and TiVo dismissed their suits against each other, and agreed to cross license their advanced TV technologies. TiVo CEO Tom Rogers called it ”a great outcome for our shareholders” that also “allows us to avoid significant legal expenses.”
Dish is up 9.1% in afternoon trading partly based on a theory that the satellite company is in AT&T’s sights now that it has abandoned its effort to merge with T-Mobile. Stifel Nicolaus’ Christopher King is among the analysts who say that it makes sense: AT&T craves spectrum, but it has few places to get it. The Justice Department and FCC nixed the idea of a merger with another wireless phone company. Cable operators also are out after their recent agreement to sell the spectrum they control to Verizon Wireless. That would seem to leave Dish, even though it was one of the loudest opponents of AT&T’s deal with T-Mobile. Dish founder Charlie Ergen has been amassing spectrum — including some in the 700 megahertz band, which is where AT&T is building its 4G network — to help create his own national broadband and video-streaming service. The satellite company has said that it would like to find a partner to help pay for his ambitious plan, and identified T-Mobile as a possibility. And even though Ergen says Verizon and AT&T need another competitor, he didn’t rule out a deal with AT&T when asked last month about the possibility. “If the merger is not allowed then it could be” an option, he said in a conference call with analysts. Read More »
There goes the $4B break-up fee that AT&T promised to pay T-Mobile owner Deutsche Telekom if the merger went awry. Meanwhile, shares of Sprint Nextel — which risked being marginalized by the AT&T/T-Mobile combo — are up 7.9% in after-hours trading, after falling 4% during the day. AT&T’s dream deal effectively was cooked after the Justice Department and FCC said that a merger would result in less competition and higher consumer prices. Justice said it would sue to block the deal, and the FCC began a process that promised to drag things out even more. But AT&T says that its decision to scrap the plan doesn’t change the fact that wireless carriers need more spectrum. “The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage,” the company said. “In the absence of such steps, customers will be harmed and needed investment will be stifled.” CEO Randall Stephenson added that his company “will continue to invest” in wireless. He urged lawmakers to approve AT&T’s bid to buy spectrum controlled by Qualcomm, and ”enact legislation to meet our nation’s longer-term spectrum needs.” That’s code for: Let’s pry spectrum away from TV broadcasters.
For the last week or so we’ve been fascinated by the possibility that Verizon will create a streaming video business. But don’t forget Dish Network, which also owns Blockbuster video. “If Verizon can do it, why can’t we?” Dish Network CEO Joseph Clayton asks Bloomberg. He added that “there’s not a lot of infrastructure you have to put in place for this. The expense is the programming.” Dish is already talking to TV networks about potential licensing deals. Dish also wants to amass wireless spectrum so it can do an end-run around cable and phone company broadband services. Clayton notes that Dish has more opportunities now than it did just a few weeks ago to forge partnerships that might give it better access to the airwaves — and offer a full range of video, voice, and data services.
T-Mobile is a potential ally if its merger with AT&T collapses following Justice Department and FCC attacks on the $39B deal. That appears more likely today: Justice put its antitrust case against the companies Read More »
You rarely see a company that does as much business with federal regulators as AT&T does attack them as ferociously as the phone giant did today. AT&T is livid over an FCC staff study that concluded its $39B wireless phone acquisition of T-Mobile would be anti-competitive and result in lost jobs. The report, released yesterday, ”is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis,” AT&T Senior EVP External & Legislative Affairs Jim Cicconi said in a blog post. He adds that the report “cherry-picks facts to support its views, and ignores facts that don’t,” and “treats its own speculations as if they were fact.” Calling the staff effort ”not the fair and objective analysis to which any party is entitled,” Cicconi also blasted the FCC for releasing the document. AT&T withdrew its merger application at the agency after the FCC moved to block it, although the phone company hasn’t formally abandoned the effort to acquire T-Mobile. By making the report public, he says, the FCC showed that “this was intended more for advocacy and to impact public perceptions. And neither is a proper basis for action by a regulatory agency.” Read More »
UPDATED: The merger of the wireless companies was already on the ropes after August when the Justice Department said it would challenge the deal in court on antitrust grounds. Now FCC Chairman Julius Genachowski is circulating a draft order that would add an important additional barrier to the deal: It would ask an administrative law judge to consider whether the combo would serve the public interest — after the end of the Justice trial, due to begin in February. That would significantly delay and complicate the AT&T and T-Mobile’s merger plans. The last time the FCC did this — in 2002 when Echostar wanted to merge with DirecTV — the companies scrapped their plan.
Genachowski’s proposal follows a conclusion by FCC staff that consumers would be harmed if AT&T and T-Mobile merge. “The record clearly shows that — in no uncertain terms — this merger would result in a massive loss of U.S. jobs and investment” as AT&T cuts costs to make the economics of the deal work, a senior FCC official says. The agency found that there’d be less competition in 99 of the 100 biggest markets. (The exception is Omaha.) Staffers also concluded that the deal would not improve deployment of 4G services. If the FCC decides not to approve a merger like this, then it has to send the case to an administrative law judge for a court-like hearing that would look at whether the deal would serve the public … Read More »
Most major cable companies have committed to supply broadband Internet access to low-income households for $9.99 a month, the Federal Communications System is expected to announce Wednesday. FCC chairman Julius Genachowski has made expanded broadband access a top priority, and he told the New York Times that with cooperation of the big cable companies “we can make a real dent in the broadband adoption gap.” No federal funds are being invested. The plan relies on the cooperation of private companies. Comcast, for example, began offering $9.99 monthly broadband to some low-income households this year after promising the F.C.C. that it would do so when it acquired control of NBCUniversal.
The low introductory price is meant to appeal to new customers who have never had broadband, either because it was not available or because of the cost or perceptions that it was not relevant to their lives. In addition to the low introductory price, a tech company will offer refurbished computers to low-income households for $150 and Microsoft will provide software. Morgan Stanley will help develop a microcredit program to make it easier for families to afford them. Job websites and education companies also will offer content that, in theory, will underscore the value of online access.
For eligible households — those with a child enrolled in school lunch programs who are not current or recent subscribers to broadband — the $9.99 monthly price will apply for a two-year … Read More »