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Proposed Merger Guidelines, Viasat Satellite Trouble, Fiber Association Partnership

The Federal Trade Commission wants stricter guidelines for mergers after losses in court.

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Photo of Jonathan Kanter via Department of Justice website

WASHINGTON, July 19, 2023 – The Justice Department and the Federal Trade Commission proposed Wednesday stricter guidelines for Big Tech mergers.

The guidelines are aimed to boost scrutiny of planned mergers by Big Tech companies like Amazon, Microsoft and Alphabet’s Google.

The new guidelines, currently in draft form, encapsulate the agencies’ push to keep pace with the digital age and a changing market. They detailed a revised approach to corporate mergers, updating how markets are defined and expanding what regulators can consider when they approve or block deals. The proposed rules apply to both vertical and horizontal mergers.

As per the FTC, a vertical merger refers to a transaction between two businesses operating in different stages of the supply chain within an industry. On the other hand, horizontal mergers involve companies that either compete directly or operate in similar segments of the market.

“As markets and commercial realities change, it is vital that we adapt our law enforcement tools to keep pace so that we can protect competition in a manner that reflects the intricacies of our modern economy,” Assistant Attorney General Jonathan Kanter said in a statement. “Simply put, competition today looks different than it did 50 — or even 15 — years ago.”

In a briefing on Tuesday, a senior FTC official said the agency heard from judges that they wanted more precision in the guidelines. As a result, the proposed guidelines will include citations to actual cases. The official emphasized the guidelines aren’t new law, but clarify existing case law.

The initial merger guidelines were issued in 1968, but have undergone updates over time. In 2021, the FTC withdrew the previous version of the vertical merger guidelines released in 2020, citing identified flaws as the reason for their withdrawal.

The proposal comes a week after an appeals court denied the FTC’s latest attempt to suspend the $69-billion purchase of video game company Activision Blizzard by Microsoft, which makes Xbox gaming consoles. Before that, in January, the agency lost a lawsuit against Facebook parent Meta over its acquisition of virtual reality company Within Unlimited.

Viasat broadband satellite malfunctions

Viasat’s recently launched ViaSat-3 Americas broadband communications satellite experienced a malfunction on July 12 that could affect its performance, according to a company statement.

“An unexpected event occurred during reflector deployment that may materially impact the performance of the ViaSat-3 Americas satellite,” the company said in a statement “Viasat and its reflector provider are conducting a rigorous review of the development and deployment of the affected reflector to determine its impact and potential remedial measures.”

ViaSat-3 Americas launched from Kennedy Space Center, Florida, on April 30 aboard a SpaceX Falcon Heavy rocket. Plans called for the spacecraft to reach its orbital location within three weeks.

“We’re disappointed by the recent developments,” added Viasat Chairman and CEO Mark Dankberg. “We’re working closely with the reflector’s manufacturer to try to resolve the issue. We sincerely appreciate their focused efforts and commitment.”

The company stated that it is working on refining contingency plans to mitigate the economic impact of the malfunction. Options being considered include redeploying satellites from the existing Viasat fleet to improve coverage and allocating new ViaSat-3 satellites to enhance bandwidth over the Americas.

Further updates on the status of ViaSat-3 Americas and any required contingency measures will be provided during an earnings call set for Aug. 9.

ViaSat-3 Americas is the first of three new ultra-high-capacity Ka-band satellites the company plans to place into geostationary orbit to vastly increase its available capacity and coverage. According to Viasat’s website, each is capable of providing 1 terabit per second of throughput capacity.

Following its acquisition of UK satellite operator Inmarsat, which closed on May 30, Viasat said it has 12 broadband Ka-band satellites in space, with eight additional Ka-band satellites under construction.

Broadband Forum and Fiber Broadband Association partner for improved fiber advancement

Broadband Forum and the Fiber Broadband Association signed an agreement in principle Wednesday to advance high-capacity, low latency fiber broadband capabilities.

The agreement will give the FBA the opportunity to contribute to current and future specification work and represent the needs of fiber broadband providers within the Broadband Forum community in the Americas.

It will also give the FBA’s Technology Committee leadership team increased insight of Broadband Forum’s work across all areas of fiber broadband service delivery from inside the building, across the fiber access network to the cloud, according to a statement.

The FBA is a national association focused solely on connecting every home, business, and community in North and Latin America with fiber broadband.

“We are pleased to sign an agreement in principle with the Fiber Broadband Association and we look forward to its members’ engagement and contributions,” said Ken Ko, Managing Director at Broadband Forum in a statement. “The largest operators have traditionally contributed the most to industry standards, but now, operators of all sizes have a level playing field.”

The Broadband Forum is a non-profit industry consortium dedicated to developing broadband network specifications.

“The Fiber Broadband Association represents the full fiber ecosystem with 51% of their members being Network Operators and the other half represent the supply side of the industry, with the fiber manufacturers, equipment vendors, engineering consultants and deployment specialists, so its value cannot be overstated.”

Former Reporter Enoch Eicher studies Multimedia Journalism at Taylor University in Upland, Indiana, where he is an editor of the university’s newspaper. He is an avid photographer, videographer and graphic designer. He has been the student body vice president at Taylor University.

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Nvidia Navigates Export Rules, FCC on High-Cost, Kansas Awards Fiber Grants

Department of Commerce continues to combat the export of U.S. semiconductors to adversarial nations

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Photo of U.S. Department of Commerce Secretary Gina Raimondo

December 4, 2023 – Commerce Secretary Gina Raimondo said Saturday that the department is ready and willing to impose further export restrictions on any products made by graphics card maker NVIDIA that assists adversarial nations in developing their artificial intelligence capabilities, according to a story from Fortune

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” Raimondo said at the Reagan National Defense Forum in Simi Valley, California, according to Fortune. 

Nvidia, which has been focusing on its development as an AI company, has restructured its advanced chips to access the Chinese market, which is worth at least $400 million in sales. In response to exports restrictions imposed by Commerce in August 2022, Nvidia tweaked its A100 chip series to comply with U.S. rules, limiting the processing capabilities and re-releasing the chips under a new name, the A800 series.

In October 2023, Commerce imposed additional licensing requirements based on performance threshold to limit the export of high-performance computing chips, to include the A800 series. Less than a month later, Nvidia had introduced a series of GPUs with limited computing capabilities in compliance with Commerce export requirements, made available to Chinese customers.

Commerce has said it is trying to limit risks of the chips being used in foreign military operations.

In response to Secretary Raimondo’s recent claims, Nvidia told Broadband Breakfast, “We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”

The advanced chips are central components to the rise of artificial intelligence, autonomous machines, cloud and high-performance computing.

FCC issues guidance to high-cost support recipients 

The Federal Communications Commission released guidance Wednesday for recipients of high-cost support, outlining the coordination necessary between the recipients, state broadband offices and Tribal entities to avoid overbuilding in areas supported by multiple broadband programs. 

The FCC notes that the recipients of the high-cost programs, which include the Rural Digital Opportunity Fund, Enhanced Alternative Connect America Cost Model, and Connect America Fund, must participate in the broadband map challenge process as states prepare to deliver money from the $42.5-billion Broadband Equity, Access, and Deployment program.

“Full participation of high-cost support recipients in BEAD Program challenge processes is critical to ensuring that the FCC’s high-cost funding is not duplicated by the BEAD Program,” the FCC said in the guidance. 

“Participation in the BEAD Program challenge process also ensures state broadband offices receive information about high-cost program supported deployments beyond the valuable information provided on the Broadband Funding Map,” it added. 

These recipients should coordinate with their respective state broadband office by taking steps to ensure that the National Broadband Map accurately reflects the locations they serve, the speeds they provide to the locations, and the technologies they are using to serve those locations, the FCC emphasized. 

In addition, the FCC guidance emphasizes that high-cost support recipients should engage with each relevant Tribal government annually to obtain the necessary consent, permits, and other approvals as soon as practicable, even if the recipient has not begun deployment. 

The Tribal engagement obligation set by the FCC represents an opportunity for Tribal governments and high-cost support recipients to coordinate on many issues critical to the deployment and adoption of communications technologies on Tribal lands.

Kansas awards $28.5 million in state broadband grants

Kansas announced it is awarding $28.5 million in broadband grants Wednesday to twelve internet service providers through the state’s Lasting Infrastructure and Network Connectivity program. All of the funding dedicated to broadband infrastructure is going toward deploying fiber technology.

One of the largest awards is to the Prairie Band Potawatomi Nation, a native American tribe, which will bring fiber-to-the-home connectivity to all of the nation’s 204 residences, as well as to 10 Tribal government services locations on the PBPN reservation. 

Additionally, included in the awards is funding for Kansas’ first carrier-neutral Internet Exchange Point, which will be located on the campus of Wichita State University. The IXP stands to reduce IP transit pricing to below 10 cents per megabit, an expected 90% reduction in cost as compared to current transport and transit pricing through Kansas City, Missouri. 

The awards will also expand middle mile infrastructure through two economically distressed counties in north central Kansas. 

The state funds will be matched by the ISPs for a total of $33.9 million in additional investments.

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Broadband Roundup

Supply Chain Improvements, Bill for Broadband in Public Parks, FCC Grants Alert System Compliance Extension

The Biden administration announced Wednesday a list of new measures to promote supply chain resiliency.

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Photo of Congressman Raúl Grijalva, taken by Gage Skidmore 2018. 

November 30, 2023 – President Joe Biden announced at an inaugural meeting Wednesday new measures to improve national supply chain resilience, many of which are targeted at bettering semiconductor manufacturing. 

These new measures will see the development of a geospatial mapping protocol that will be used to account for and track trade disruptions of raw materials, with a special focus on ones that are involved in semiconductor manufacturing.

Additionally, the US plans to develop a resilience center to assess risks and supply chain vulnerabilities specifically inside national ports alongside looking at how to better implement CHIPS and Science funding.

In July of 2022, the Biden administration signed into law the CHIPS and Science Act, which was broadly supported by lawmakers, putting $52 billion into semiconductor research and development and a 25 percent investment tax credit to promote manufacturing. 

More recently, Biden has announced tech innovation hubs supported by CHIPS Act funds, four of which will focus directly on improving semiconductor production and manufacturing. 

Legislation put forth to expand broadband to public parks 

Congressman Bruce Westerman, R-Arkansas, and Congressman Raúl Grijalva, D-Arizona, introduced legislation Wednesday that would bring broadband connectivity to public parks and lakes. 

The Expanding Public Lands Outdoor Recreation Experiences Act would include increasing broadband connectivity in those visitor centers and surrounding areas as well as create digital passes for visitors to use when going to those parks. 

“The increasing popularity of outdoor recreation is a boon for local economies and job creation, but we must make sure our public land management agencies have the tools, resources, and staff they need to keep up,” said Grijalva. 

The broader legislation looks to improve access to public lands and waters, modernize visitor experiences and reduce overcrowding. 

FCC granted emergency alert development extensions to broadcasters

The Federal Communications Commission granted extensions to certain national broadcasters Wednesday, allowing them more time to acquire equipment needed to comply with national emergency alert system requirements. 

There are two ways that broadcasters can transmit emergency messages, either to devices connected to the internet using what is called the Integrated Public Alert and Warning System or over audio channels, which is referred to as the legacy emergency alert broadcast system. 

Historically, messages sent via IPAWS transmit more information to the recipient than ones that are formatted for being transmitted via the legacy system. Because of that, in 2022 the FCC required emergency broadcasters to alert constituents via the IPAWS unless they were unable to. 

Broadcasters were required to comply with this by December 12 of this year. However the National Association of Broadcasters and REC Networks, a broadcast advocacy group, filed a joint request for a 90-day compliance extension.

They explained that Sage Alerting Systems, a manufacturer of firmware needed to encode and decode emergency messages, is not able to meet supply demands for broadcasters to update equipment by the December 12 deadline. 

As a result, the FCC waived the deadline and granted a 90-day extension to emergency broadcast participants who are customers of Sage Alerting Systems. 

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FCC Fines TracFone, Rip and Replace Extensions, Kansas State Internet Exchange Point

The FCC’s Enforcement Bureau has entered into a settlement with TracFone for subsidy program violations.

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Photo of Kansas Gov. Laura Kelly taken by K-State Research and Extension, 2023.

November 29, 2023 – The Federal Communications Commission announced Wednesday that the Enforcement Bureau and TracFone Wireless, a Verizon Subsidiary, have reached a $23.5 million settlement for TracFone’s violation of broadband subsidy program rules

After TracFone was acquired by Verizon, the company self-reported instances in which it violated the FCC’s regulatory rules for the Lifeline and Emergency Broadband Benefit programs, according to the agency  

During an investigation into TracFone, the agency found that the company reported improperly claiming support for customers jointly-enrolled in subsidy programs and improperly using inbound text messages to make claims for customers who had not been using those services for at least 30 days, according to a press release.

According to the FCC, TracFone also conceded that some of their field enrollment representatives used false tax documents to enroll customers in the lifeline and EEB programs.

“Whether attributable to fraud or lax internal controls, or both, we will vigorously pursue allegations of misconduct that harms critical FCC programs designed to help those most in need of communications-related services,” said Enforcement Bureau Chief Loyaan A. Egal.

As part of the settlement, TracFone has entered into an improvement plan agreement with the Enforcement Bureau.

Wireline Bureau grants more rip and replace extensions 

The FCC’s Wireline Competition Bureau announced in an order Wednesday that it has granted rip and replace extensions to Montana providers Triangle Telephone Cooperative Association Inc. and Triangle Communication System Inc.

The rip and replace program requires service providers to remove and replace any equipment they use that was manufactured by Huawei Technologies Company or ZTE Corporation that were installed prior to June 30, 2020, because of security concerns. 

Triangle Telephone filed for an extension on October 18 and on November 10th, requesting an extension to replace the equipment by Map 29, 2024 as opposed to their original deadline of November 29 of this year.

Triangle Communications filed their request for extension on October 18 and November 16 of this year requesting for additional time up until July 13, 2024, as opposed to January 13, 2024. 

Both petitioners cited supply chain disruptions and delayed equipment delivery as factors preventing them from replacing existing equipment alongside poor weather conditions and a decreasing number of employees. 

Both providers were granted the extensions they had requested. 

Additional funding from Congress has been requested by president Joe Biden to finance the rip and replace program, as a report published by the Federal Communications Commission in July of 2022 noted that the program’s initial $1.9 billion would not be enough to support providers. 

In October of this year the FCC’s Wireline Bureau issued extensions to two other providers who cited that they were unable to completely replace the equipment due to lack of funding. 

Kansas awards $5 million to internet exchange point 

Kansas Gov. Laura Kelly on Wednesday announced that the state had awarded $5 million to help fund the construction of the first carrier-neutral internet exchange point at Wichita State University.

The construction of this carrier-neutral internet exchange point will allow for the operation of cloud services and streaming content networks to operate more efficiently alongside local and regional internet networks, explained a press release. 

The endeavor will be undertaken by Connected Nation, a Kentucky non-profit, and Hunter Newby, founder of Newby Ventures investment firm, working with them to build and operate the internet exchange facility. 

Tom Ferree, CEO of Connected Nation, said that the exchange point will support Wichita State and the economy well “by improving the entire regional broadband landscape — preparing Wichita, and Kansas more broadly, for the future evolution of the Internet and all that it will enable.”

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