WASHINGTON, July 1, 2014 – AT&T and DirecTV have no doubt their merger will actually strengthen broadband, competition and consumer choice, contrary to naysayers. Both companies had to fend off fears of market consolidation in back-to-back hearings on Tuesday, June 24, before the House Judiciary Committee and Senate Judiciary Committee.
This proposed merger isn’t like that of Comcast and Time Warner Cable, said AT&T Chairman and CEO Randall Stephenson. AT&T and DirecTV offer mostly complementary services with little overlap. A merger would allow both companies to “respond to consumer demand.”
Specifically, DirecTV doesn’t have the broadband platform to adapt to the modern Internet landscape, said DirecTV Chairman and CEO White. By the same token, AT&T doesn’t have DirecTV’s programming. It hardly makes any money at all from its U-Verse video service, Stephenson said.
A merger with AT&T would let DirecTV integrate video with broadband, serve users with complementary over-the-top offerings, optimize video service, and manage content cost increases, White said. What’s more, Stephenson said AT&T could cut video subscriber costs by 20 percent or more.
“When complementary providers join forces, the net result is downward pressure on prices and increased incentive to invest in innovation, integration, and infrastructure,” Stephenson said. .
AT&T would also be able to build out a “fixed wireless” solution at 15-20 Megabits per second (Mbps) and “enhance high-speed broadband service to at least 15 million customer locations, most of them rural, within four years of the transaction closing,” Stephenson said. AT&T’s Gigapower offering could be expanded to two million locations in the U.S.
“Combining with AT&T will enable us to meet our greatest challenge and better compete in today’s marketplace,” White said. “We will unlock new growth opportunities to provide new services to customers at a better value. As we offer subscribers better and more innovative services, cable operators and other competitors will have to respond in kind. The result will be more competition and a better video experience for all Americans.”
Others at the hearing weren’t as thrilled. Michigan Democratic Rep. John Conyers said the merger may spur “too much” and “too rapid” consolidation in the telecommunications industry.
“I am concerned about the loss of a competitor for paid television services in many of the largest markets,” Conyers said. “We should also consider whether smaller video providers in the aftermath of the sheer size of a combined AT&T-DirecTV, could face increased content prices, potentially driving some of them out of business.”
Public Knowledge senior staff attorney John Bergmayer questioned the sincerity of AT&T’s promises to provide fiber to 15 million customers, and even more so, building out Gigabit to two million homes. He called these “marginal upgrades and not new build-out.”
“The remaining two million of AT&T’s 15 million number likewise does not consist of new buildout, but instead references fiber-to-the-premises upgrades to AT&T’s existing network,” he added. “These upgrades are for the most part already in the planning.”
Ross Lieberman, Senior Vice President of Government Affairs at the American Cable Association, also expressed concern that while AT&T can “buy its way out of programing cost problems” by acquiring DirecTV, small and medium-sized operators “without AT&T’s financial resources and scale” will be forced out of business.
And in rural communities with few competitors, a merger would further reduce options for residents, incentivizing AT&T to inflate prices.
Both Lieberman and Bergmayer suggested that AT&T “actually invest” rather than make empty promises.
Stephenson fired back, saying that “two million with fiber to the home is a significant capital investment” and not something to be scoffed at.
In the merger’s defense, Sen. Mike Lee, R-Utah, said regulators should be wary of acting against AT&T and DirecTV. Doing so may backfire and cause as much harm to consumers as consolidation. In fact, Lee agreed that in some cases like AT&T’s, mergers represent intelligent decisions on part of telecom companies adapting to the industry.
“It’s essential in considering important transactions, such as the one before us, that we apply rigorous economic analysis,” Lee said. “By ensuring we protect competition, and not any individual company or competitor, we can help to create market conditions that benefit the consumers.”
FCC Seeks Comment on Higher Broadband Speeds and Increased Security Measures for Certain Carriers
FCC will consider raising the speed standard for certain carriers that receive fixed monthly funding from the agency.
WASHINGTON, May 19, 2022 – The Federal Communications Commission voted at its open meeting Thursday to seek comment on enhancing the Alternative Connect America Cost Model program, which would raise speed deployment obligations and align security goals with the Infrastructure, Investment and Jobs Act.
The ACAM program, established in 2016, provides fixed monthly funding to certain carriers serving high-cost and hard-to-reach areas in return for commitments to provide broadband service to all eligible locations.
The ACAM broadband coalition requested that broadband deployment obligations be raised from the current federal standard of 25 Megabits per second download and 3 Mbps upload to 100/20 Mbps, the standard now set by the IIJA that will then be required of ACAM carriers to deliver.
Baseline cybersecurity proposal
The FCC is also requesting comment on whether it should “require A-CAM carriers and carriers receiving high-cost support to have a baseline cybersecurity and supply chain risk management plans.”
Commissioner Geoffrey Sparks indicated that the FCC will focus its efforts on harmonizing ACAM’s modification proposal with cyber security standards indicated in the Broadband, Equity, Access and Deployment program, which is managed by the Commerce Department’s National Telecommunications and Information Administration and that will be disbursing billions in broadband infrastructure funding.
“Networks that are subsidized or built with federal funds must be secure,” Sparks said. “This is evident in the constant barrage of attacks on American networks from hostile state and non-state actors.”
FCC Chairwoman Jessica Rosenworcel, who said the FCC is looking to align its goals with the IIJA, concluded that “this is not the only effort we’re making to ensure that new broadband programs are working hand-in-glove with long-standing FCC efforts.”
Treasury Department Joins FCC, USDA and NTIA in Collaborating on Broadband Funding
Agency leaders sign pact to formalize information-sharing on broadband deployment projects.
WASHINGTON, May 13, 2022—Just in advance of the deadline for the release of the funding requirements under the Infrastructure Investment and Jobs act, the four principal federal agencies responsible for broadband funding released an interagency agreement to share information about and collaborate regarding the collection and reporting of certain data and metrics relating to broadband deployment.
The agencies are the Federal Communications Commission, the U.S. Department of Agriculture, the National Telecommunications and Information Administration of the Commerce Department, and the U.S. Department of the Treasury.
The Memorandum of Understanding is the latest development in federal efforts to coordinate high-speed internet spending, and the Treasury Department is the new addition to agreement.
The other three agencies signed a prior memorandum in June 2021 to coordinate the distribution of federal high-speed internet funds. That June 2021 Memorandum of Understanding remains in effect.
The respective Cabinet and Agency leaders announced that their agencies will consult with one another and share information on data collected from programs administered by the FCC, the USDA’s Rural Utilities Service, programs administered or coordinated by NTIA, and Treasury’s Coronavirus Capital Projects Fund and State and Local Fiscal Recovery Fund.
“No matter who you are or where you live in this country, you need access to high-speed internet to have a fair shot at 21st century success. The FCC, NTIA, USDA and Treasury are working together like never before to meet this shared goal,” said FCC Chairwoman Jessica Rosenworcel. “Our new interagency agreement will allow us to collaborate more efficiently and deepen our current data sharing relationships[and] get everyone, everywhere connected to the high-speed internet they need.”
Agriculture Secretary Tom Vilsack said, “When we invest in rural infrastructure, we invest in the livelihoods and health of people in rural America. High-speed internet is the new electricity. It is necessary for Americans to do their jobs, to participate equally in school learning, to have access to health care and to stay connected.”
“USDA remains committed to being a strong partner with rural communities and our state, Tribal and federal partners in building ‘future-proof’ broadband infrastructure in unserved and underserved areas so that we finally reach 100 percent high-speed broadband coverage across the country.”
“Our whole-of-government effort to expand broadband adoption must be coordinated and efficient if we are going to achieve our mission,” said Alan Davidson, Assistant Secretary of Commerce for Communications and Information and head of the NTIA, the agency responsible for administering the vast bulk of the broadband funding.
“This MOU will allow us to build the tools we need for even better data-sharing and transparency in the future,” he said.
“Treasury is proud to work with our federal agency partners to achieve President Biden’s goal of closing the nation’s digital divide,” said U.S. Treasury Secretary Janet L. Yellen. “Access to affordable, high-speed internet is critical to the continued strength of our economy and a necessity for every American household, school, and business.”
As part of the signed agreement, each federal agency partner will share information about projects that have received or will receive funding from the previously mentioned federal funding sources. More information on what the interagency Memorandum of Understanding entails can be found on the FCC’s website. The agreement is effective at the date of its signing, May 11, 2022.
Christopher Mitchell: Former Sen. Heitkamp’s Attacks on Gigi Sohn for FCC are Wildly Off-Base
Former North Dakota senator sounds practical, but she is misreading quotes or taking them out of context.
Gigi Sohn is still up for confirmation by the Senate to complete the Federal Communications Commission – an independent agency in the executive branch of the federal government that has been stuck at a 2-2 split of Democrats and Republicans since President Biden took office. The FCC is supposed to operate with five commissioners, with the party of the President in power having 3 seats.
She was the obvious choice in December of 2020, when it was clear that Joe Biden would take office. With decades of history in telecom and media-related policy as well as a recent stint as Counselor to Tom Wheeler when he was Chair of the FCC, she would be among the most-qualified people to serve on it since I began working in telecom in 2007. And by among, I mean at the top.
I’ve known Gigi for many years and respected her from the first time I saw her in action. She isn’t a political agent trying to figure out the best path to the top. She has strong beliefs, and she’ll tell you what they are in a wonderful Long Island blur of passion. She respects other beliefs and ideas but she isn’t going to pretend she agrees with you when she doesn’t.
Maybe my word isn’t that persuasive, because I tend to agree with Sohn on many issues. But a lot of people with far more credibility among conservatives have spoken up on Gigi. So I hadn’t written anything about this because I assumed it would take time but Gigi would get confirmed. Plus, I focus my work outside DC and there is a lot going on that is keeping us busy.
Gigi was always under fire by the likes of the Wall Street Journal Opinion page, which has made baseless claims about her not being committed to free speech, using tortured logic around denying mergers. If I went off every time that bunch embarrassed the good work of their reporters, I wouldn’t do anything else.
But then some allies forwarded me claims coming from former North Dakota Senator Heidi Heitkamp – someone I have listened to being interviewed on podcasts and generally thought well of because she sounds practical. But the attacks from Heitkamp on Gigi are so off-base that I had to respond because I’m often working with people in rural communities for whom this issue is not theoretical. They have suffered for more than a decade of federal and state mismanagement of broadband expansion programs. Their towns are struggling as hospitals close and jobs move away to areas with better access. Their children have fewer educational opportunities. They face greater risk from communications failures in natural disasters. Getting this right is important.
Multiple off-base complaints about Gigi Sohn and rural America
Heitkamp makes multiple claims that Gigi’s confirmation would be bad for rural America based on misreading quotes or taking them out of context to pretend that Gigi is not concerned with rural broadband challenges. Like this:
- During an April 2021 interview with Bloomberg Government, saying ‘What [have we gotten] for [the federal government’s existing] $50 billion investment? Not much.’
Is this a sign that Gigi thinks we shouldn’t spend money in rural America? That is what Heitkamp wants you to believe. But the very next passage in that article says this:
- ‘What do we get for a $50 billion investment? Not much,’ she said in an interview. ‘What we don’t want is to be in the position we are today: where we built networks that were for then, and not for now, and not for the future.’
The article is about whether money spent on rural broadband subsidies should be built using yesterday’s or tomorrow’s technology. Gigi has been on the right side of this question – we should be making sure that investments in rural America will permanently solve the problem.
Heitkamp was Senator from 2013-2019, a time when the federal government gave multiple billions of dollars to the biggest telecom monopolies – like AT&T. They didn’t even meet the pathetic requirements of that program. Like, at all.
Don’t just take my word for it. Minnesota’s Blandin Foundation has long been a national model for seeking broadband solutions that really work. That work is run by Bernadine Joselyn, someone I have worked with off and on and who has put real thought into rural policy. Regarding the billions of dollars under Connect America Fund, she was quoted here:
- Those speeds were ‘such a waste of public dollars,’ said Bernadine Joselyn, public policy director for the Blandin Foundation, a Grand Rapids, Minnesota, nonprofit focused on rural issues. ‘If you’re going to make an investment in broadband, you want it to be future proof, especially with public funds. I think it’s reasonable to expect it would benefit a community for decades.’
Heitkamp’s time would be far better used exposing the policies in DC that sent billions to AT&T and bankrupt companies like Frontier that failed to connect rural America. Instead, she is running a national campaign to tank Gigi’s nomination because Gigi dared to suggest that subsidies to rural America should actually benefit rural residents and businesses. Because Gigi also believes that we should balance rural investment with subsidies to cities, where millions more Americans are ignored or poorly served by cable monopolies and where little girls do their homework at Taco Bell in the city of Salinas just like their peers in rural McDonald’s parking lots.
North Dakota once broke free of big monopolies
Here is the savage irony of Heitkamp running down Gigi with this attack. Heitkcamp is positioning herself as the savior of rural America while selling it out to the monopolies that have refused to invest in it. And she does it while knowing that her former constituents in North Dakota won’t be as harmed as the rest of the country because North Dakota is already wired. 77 percent of the rural areas in the state can connect to the Internet via future-proof, fiber networks, compared to just 20 percent of rural Americans as a whole. North Dakota broke free of the big monopolies that refused to invest outside of the cities, when local cooperatives and independent telcos bought the lines from those monopolies decades ago to better serve their subscribers.
Tanking Gigi’s nomination on these grounds sends a message that rural subsidies should continue going to those companies that simply extract wealth from rural areas. Gigi stands to make sure we invest in networks that are accountable to rural communities rather than handing billions to companies that are better at astroturf marketing campaigns than connecting farms with fiber. I understand why the telecom monopolies are frequently happy to bankroll misinformation campaigns to further their interests. I’m confused why so many people are so easily taken by them.
Gigi is deeply respected by the people who oppose damn near everything she does. I want to see Gigi on the FCC for the same reason her opponents do – because she is not the type to sell out for a buck. She is the model for who we need on the FCC.
Editor’s Note: This piece was authored by Christopher Mitchell, director of the Institute for Local Self Reliance’s Community Broadband Network Initiative. His work focuses on helping communities ensure that the telecommunications networks upon which they depend are accountable to the community. He was honored as one of the 2012 Top 25 in Public Sector Technology by Government Technology, which honors the top “Doers, Drivers, and Dreamers” in the nation each year. This piece was originally published on MuniNetworks.org on April 26, 2022, and is reprinted with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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