The U.S. Federal Communications Commission has voted to take the first step toward revamping its program that subsidizes Internet connections to schools and libraries, with the focus in the future on big bandwidth instead of simple connectivity.
The FCC on Friday voted to launch a notice of proposed rulemaking, or NPRM, focused on updating the 16-year-old E-Rate program. E-Rate, with a US$2.25 billion annual budget, has helped bring Internet service to nearly all U.S. schools, but the program is outdated, commissioners said.
About 80 percent of U.S. schools and libraries say they don’t have enough bandwidth, Margaret Spellings, former U.S. secretary of education, told commissioners at Friday’s FCC meeting. Schools need higher bandwidth to deliver modern technology-focused education, she said.
Commissioners agreed. “We are quickly moving from a world where what matters is connectivity to what matters is capacity,” Commissioner Jessica Rosenworcel said.
Last week, I was called to testify by the House Energy and Commerce Committee on efforts to reform the troubled Federal Communications Commission. The invitation came in response to several of my posts here on Forbes about the communications industry, and its increasingly unhealthy relationship with the FCC as well as state and local regulators. (See the sidebar for links to some of the articles that got the Committee’s attention.) …read more
AT&T plans to acquire Leap Wireless, operator of the Cricket prepaid mobile service, in what would be the latest consolidation of the U.S. mobile industry.
AT&T announced late Friday it has agreed to acquire Leap for US$15 per share, nearly double the company’s closing stock price Friday. Multiplied by Leap’s 79 million shares, that comes out to approximately US$1.185 billion. AT&T would also assume Leap’s $2.8 billion of net debt. The deal needs to be approved by the U.S. Federal Communications Commission and Department of Justice, among other conditions, and AT&T expects it to close in six to nine months.
Leap was widely expected to be the next domino to fall after SoftBank bought No. 3 carrier Sprint for $21.6 billion, a deal that also allowed Sprint to absorb Clearwire. Earlier this year, No. 4 T-Mobile US acquired MetroPCS, another regional budget carrier.
Leap has about 5 million subscribers, a relatively small addition to AT&T’s stated 107.3 million wireless customers. But the acquisition will also give AT&T more spectrum licenses, a key asset to have as operators look toward growing demand for mobile capacity over the coming years. Leap holds licenses covering 137 million U.S. residents, and these are largely complementary to AT&T’s own spectrum, the companies said. AT&T said Leap has unutilized spectrum covering 41 million people, which AT&T will immediately use to further its LTE deployment.
The U.S. Federal Communications Commission has approved the $21.6 billion acquisition of Sprint by Japanese telecommunications group Softbank, saying it promises to bring consumers faster and more advanced wireless broadband Internet service.
The go-ahead from the FCC was the final hurdle to Softbank consummating the deal. Sprint shareholders in late June approved the acquisition that will see Softbank pay $7.64 per share, for a total of $16.64 billion in cash, and invest about $5 billion of new capital into Sprint. It will own 78 percent of the new company.
Friday’s decision also helps clear the way for Sprint to take full control of Clearwire, a struggling but spectrum-rich wireless broadband provider. Sprint already owns just over half of Clearwire, which provides the network for its 4G WiMax service, and is planning to spend $3.7 billion to acquire the rest of the company.
Clearwire shareholders are due to vote on that plan on July 8.
U.S. mobile operators will warn subscribers when they’re heading toward a big bill, after most carriers agreed to send email or text alerts when users are about to exceed their monthly usage limits or start using international roaming.
Carriers serving 97 percent of U.S. mobile users instituted the alerts before a Wednesday deadline, the U.S. Federal Communications Commission said on Thursday. Service providers agreed to provide the alerts in 2011 after a change in the voluntary Consumer Code for Wireless Service, sponsored by the CTIA mobile trade group. Other carriers may also warn their customers but are not participating in the program.
So-called “bill shock” has made headlines over the past several years as ordinary consumers have received bills for thousands of dollars for high voice, text or data use, especially while using international roaming. A recent FCC survey showed that 30 million people in the U.S., or one out of six mobile users, had experienced bill shock, according to the agency.
The new rules don’t change what carriers charge in those situations but are designed to make sure the customer knows what’s happening.
The days of opening your cell phone bill and getting slapped with unexpected charges should be over.
As of Wednesday, cell phone companies must send customers four types of alerts when they are in danger of being charged beyond their normal plan price. The practice, which tacks on unauthorized or misleading charges on a bill, is known as “cramming” and has been around for decades with landline phone bills.
A 2011 agreement between the Federal Communications Commission and major cell phone companies included today’s deadline that requires them to alert subscribers when they approach, reach and exceed limits on voice, data, text and international roaming charges. Carriers were required to provide two alerts by Oct. 17.
“This is very important consumer protection,” says Jack Gillis, Director of Public Affairs for the Consumer Federation of America. “The bottom line is that cell phone charging plans are so complicated it’s very easy to go over plans, especially with limited plans. This new requirement at the very least will save consumers thousands of dollars.”
According to a 2010 FCC survey, 30 million Americans, about one in six mobile users, have experienced “bill shock,” a sudden and unexpected increase in monthly bills not caused by a change in service plans. In 2010, the agency showcased a 66-year-old customer’s plight of facing an $18,000 bill after a promotional, limitless data plan expired without warning as why more stringent notifications were needed.
The average wireless contract includes a flat fee for a set number of minutes and data each month and any usage that goes beyond the allotment is charged at a much higher rate. The surge in use of tablets has made consuming data and in turn, exceeding limits, much easier.
The FCC and Governmental Affairs Bureau held a workshop Wednesday on bill shock and cramming and according to attendee John Breyault, vice president of Public Policy for the National Consumers League, the FCC reported the number of complaints over mammoth fees has dropped significantly since October.
The NCL advocated for the new regulations to be implemented two years ago, and Breyault says the wireless companies reported being in full compliance of the alerts on Wednesday, which covers 97 percent of the carrier market.
In some cases when companies incur higher taxes or lose a revenue stream they are forced to increase prices to make up the difference, but Breyault says wireless caries did not view overcharges “as profit centers.”
“The dissatisfaction of consumers felts over charges had the companies introduce tiered data plans … there are still problems with these plans and whether or not they are adequate and will offer enough data at a reasonable price.”
Amy Storey, spokeswoman for the wireless association CTIA, told FOX Business that the cost for the alerts
A U.S. House of Representatives subcommittee has voted to approve a bill that would make it official U.S. policy to promote an Internet “free from government control,” with promises that the Republican majority would work with critics of the bill’s wording.
The House Energy and Commerce Committee‘s communications subcommittee approved the Internet freedom bill, an attempt to discourage other countries from advocating for control of the Internet by the United Nations’ International Telecommunication Union and other international agencies.
Some trade groups and subcommittee Democrats had raised concerns that the bill would allow telecom carriers to mount new challenges to the U.S. Federal Communications Commission and prevent law enforcement agencies from prosecuting cybercriminals.
But Representative Greg Walden, an Oregon Republican and subcommittee chairman, said he didn’t intend for the bill to address domestic Internet policy. Although Walden is opposed to the FCC‘s net neutrality rules, he said a congressional policy statement cannot force an agency to change its rules.
Legislation that would make it official U.S. policy to promote a global Internet “free from government control” could restrict the U.S. Federal Communications Commission from using its authority and prevent law enforcement agencies from taking action against cybercriminals, some critics have said.
Democratic members of the U.S. House of Representatives Energy and Commerce Committeeobjected to the bill during a hearing to amend it Wednesday, after some digital rights groups also raised concerns this week.
Supporters of the bill said it’s an attempt to send a clear signal to other countries that the U.S. opposes a takeover of Internet governance by the United Nations’ International Telecommunication Union, but critics questioned if the legislation was a back-handed effort to limit the authority of the FCC.
The bill, similar to a sense-of-Congress resolution that passed last year before the ITU’s World Conference on International Telecommunications (WCIT), allows lawmakers to again question the FCC‘s net neutrality rules and limit the agency’s authority in a coming transition to all-IP networks by telecom carriers, said Representative Doris Matsui, a California Democrat.
Rural telecom and broadband providers in the U.S. face big challenges in connecting their most remote customers, as the U.S. Federal Communications Commission transitions away from old telephone subsidies, a group of providers told lawmakers.
The FCC‘s eligibility rules for carrier subsidies under the new Connect America Fund, a broadband-focused revamp of the agency’s Universal Service Fund, seem to have arbitrary caps and target carriers serving the most rural areas, said John Strode, vice president of external affairs for Ritter Communications, an Arkansas voice and broadband provider. High-cost carriers have their subsidies capped under the new fund, he noted during a Senate hearing Tuesday.
The high-cost carriers are capped “with no examination” by the FCC of why their costs are higher than other carriers, he said. Some carriers have legitimate reasons for high costs, because “some service areas are very, very expensive to serve,” Strode told the Senate Commerce, Science and Transportation Committee‘s communications subcommittee.
The new FCC rules, adopted in November 2011, make it difficult for rural carriers to plan ahead and to invest in new services, Strode said. Ritter has cut costs and laid off workers as a way to offset changes in telecom subsidies and declines in intercarrier compensation rates, he said.
Comcast to Double Speeds of Two of Its Most Popular XFINITY Internet Speed Plans in Colorado at No Additional Cost
DENVER–(BUSINESS WIRE)– Comcast, the nation’s largest Internet service provider, today announced it is increasing the speeds of two of its most popular XFINITY Internet speed plans, Blast! and Extreme 50, in Colorado for no additional cost. Customers will enjoy faster Internet speeds on multiple devices, allowing them to surf, chat, stream HD movies and TV shows, or game online with double the speed. Also for no additional cost, Comcast is increasing the speed of its widely used Performance plan by more than 30 percent. The change is effective immediately. To activate the new speeds, customers just need to re-start their cable modems.
“As customer demands and technology evolve, we continue to increase our broadband speeds to deliver the best, fastest and most reliable Internet experience possible,” said Rich Jennings, Senior Vice President for Comcast’s Mile High Region. “Whether they’re chatting, surfing, streaming, gaming, downloading or Skyping, families will get the superfast, high-performing Internet service they need, with no extra charge.”
Specific speed increases include:
The Blast! plan is increasing download speeds from up to 25 Mbps to speeds up to 50 Mbps. Upload speeds will more than double, from up to 4 Mbps to up to 10 Mbps.
Extreme 50 is increasing download speeds from up to 50 Mbps to up to 105 Mbps. Upload speeds will increase from 15 Mbps to 20 Mbps.
The Performance plan is increasing speeds from 15 Mbps downstream to up to 20 Mbps and from 2 Mbps upstream to 4 Mbps.
In addition, for the third consecutive year, the Federal Communications Commission has shown that Comcast delivers speeds to customers that are even faster than the advertised speeds. Comcast is not only delivering the nation’s fastest Internet, but it is also providing the fastest in-home WiFi with its latest XFINITY Wireless Gateway, an all-in-one device that gives customers reliably fast speeds with the most coverage in their home so everyone can get online and do more on their devices all at the same time.
For more information on Comcast’s XFINITY Internet services, customers can call 1-800-XFINITY or visit www.comcastcorporation.com.
T-Mobile USA CEO John Legere is trying to rebrand the nation’s No. 4 wireless carrier as the only one seeking not to pull the wool over unsuspecting customers’ eyes. By using some colorful language in his characterization of the other mobile operators’ pricing policies in January at the CES, Legere is branding himself as an unfiltered straight-shooter.
And Legere has continued along that path in his remarks yesterday regarding his company’s proposed merger with MetroPCS , a transaction that has seen some vocal and insistent opposition from unhappy shareholders.
The merger has already passed regulatory scrutiny from the Federal Communications Commission, the Department of Justice, and the Committee on Foreign Investment in the United States, but still has to be approved by shareholders in a vote taken at a special meeting to be held on April 12.
Legere was asked about the merger’s prospects at yesterday’s T-Mobile event. The proceedings were focused on kicking off T-Mobile’s new LTE network, touting the iPhone, and announcing its new “Uncarrier” pricing policies.
“It will be approved,” Legere said of the merger, “despite the greedy hedge funds that are trying to take a double-dip out of that process.”
He was referring to Paulson & Co., controller of 9.9% of outstanding MetroPCS shares, and P. Schoenfeld Asset Management, or PSAM, controller of 2% of MetroPCS shares.
Paulson has already flatly said he will vote against the proposed deal as it is currently structured, and PSAM has filed a series of proxy statements with the Securities and Exchange Commission imploring other shareholders to vote the transaction down.
In addition, PSAM, has also called for the resignations of MetroPCS Chairman and CEO Roger Linquist, as well as director Kevin Landry, for “aggressively selling down their positions in PCSstock while simultaneously recommending the T-Mobile transaction to PCS stockholders.”
“I get what they are doing,” Legere said. “If you are an investor, and it’s before the vote, you are rattling your saber around to get more money.”
If this is just the beginning of John Legere‘s open-mouth policy, he may become the most interesting communications executive since… well, since DISH Network‘s Charlie Ergen.
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The proposed merger of MetroPCS and T-Mobile USA has passed all the regulatory hurdles: vetting by the Department of Justice, the Federal Communications Commission, and the Committee on Foreign Investment.
All it has to do now is make it past the stockholders, who get to vote the deal up or down at a special shareholders meeting to be held on April 12. Unlike the governmental scrutiny, however, getting the merger past MetroPCS’ investors may not go as smoothly.
One very persistent major shareholder, P. Schoenfeld Asset Management, or PSAM, which owns 2% of MetroPCS’ outstanding shares, has met every company call for a “yes” vote on the merger with its own call for a thumbs down.
PSAM‘s latest appeal, poses a number of questions for shareholders to think about and for the company to answer. Here are a few:
“How does PCS explain the approximately 23% decline in its share price since the announcement of the Proposed Transaction, a period when the S&P is up 7.2% and the comparable index is up 0.6%?”
“How does PCS explain that its Chairman and CEO Roger Linquist has sold 2 million shares (approximately 28% of his holdings) at an average price of approximately $10 per share since December 12, 2012, and board member Kevin Landry’s Firm, TA Associates, has sold approximately 3.8 million shares since the Proposed Transaction was announced?”
“Why is PCS deducting $1.5 billion of future spectrum purchases from its value relative to T-Mobile?”
“Why is PCS contributing its intellectual property to the combined PCS/T-Mobile while DT is insisting on a royalty for the use of the T-Mobile name through a trademark license?”
PSAM has a powerful ally in its fight against the merger with T-Mobile and its parent company Deutsche Telekom. MetroPCS’ largest single stockholder, Paulson & Co., which owns 9.9% of the company, has filed its intent with the Securities and Exchange Commission to vote against the deal as it is now structured.
Paulson says it agrees with PSAM that “the new company will be saddled with an onerously large amount of debt,” and that “the interest rate on Deutsche Telekom‘s debt financing is far above market, based on the new company’s anticipated credit rating. Specifically, MetroPCS/T-Mobile will pay an egregiously high 7% interest rate on the $15 billion of intercompany debt.”
One more question: Where’s Roger? Earlier this week, a joint announcement from Deutsche Telekom, T-Mobile USA, and MetroPCS listed the board of directors for the proposed new company. What made it interesting was not who was on it but who wasn’t.
Roger Linquist was nowhere to be found on the new board. Will he be out entirely? Two inquiries regarding this to MetroPCS have not been answered.
“I’m proud of what we’ve done together to harness technology to advance the American dream for the 21stcentury. I know you’ll continue to fight hard to fulfill this agency’s vital mission, and I look forward to continuing to work together until my last day at the agency, and to count you as family and as an inspiration for long after that.”
The iPhone toss, more refreshing than a sauna Nokia CEO Stephen Elop, appearing on Finnish TV, decided to help the program’s host make up his mind about a new phone.
The host pulled out his iPhone on air, which prompted a “how embarrassing” comment from Elop. The host told Elop he actually wanted to lose the iPhone and get a Nokia phone. Elop then said, “I can take care of that for you” and tossed the iPhone aside, which landed with an audible crash.
The TV presenter remained unfazed and Elop said, with a smile, he would replace what’s left of the iPhone with a Nokia. Here’s the video.
Wait, that’s not all BlackBerry CEO Thorsten Heins also had a go at Apple‘s iconic phone, just not physically.
Days before BlackBerry’s great hope for redemption, when the BB Z10 was about to go on sale in the U.S., Heins told the Australian Financial Times newspaper in an interview that “The user interface on the iPhone, with all due respect for what this invention was all about, is now 5 years old.”
But he did admit “I do not believe that Apple is worried much about BB10 stealing sales. … [I]t will be extremely hard to get customers who have an iPhone to switch over to a BB10 device. It would have been much easier to convert customers to BB10 a couple of years ago when there was a larger BlackBerry install base at the high end.”
All over but the shouting MetroPCS and T-Mobile USA got the last of the regulatory approvals for their merger out of the way this week when the Committee on Foreign Investment in the U.S. signed off on the deal, which was necessary because the German company Deutsche Telekom is the parent of T-Mobile. The FCC and the Department of Justice have already given the venture the OK .
However, on April 12 there will be a special shareholders meeting, at which the proposed deal will be put up to a vote, and there has been opposition to its going through.
P. Schoenfeld Asset Management and Paulson & Co., together holders of almost 12% of MetroPCS’ outstanding shares, have been vocal in their criticism of the merger. They have questioned the high debt the deal would put on MetroPCS’ shoulders as well as a high interest rate on that debt .
I want to thank Chairman Genachowski for his dedicated service on behalf of the American people. Over the last four years, Julius has brought to the Federal Communications Commission a clear focus on spurring innovation, helping our businesses compete in a global economy and helping our country attract the industries and jobs of tomorrow. Because of his leadership, we have expanded high-speed internet access, fueled growth in the mobile sector, and continued to protect the open internet as a platform for entrepreneurship and free speech. I am grateful for his service and friendship, and I wish Julius the best of luck.
The country’s top telecommunications regulator told a staff meeting of his decision Friday morning. His impending departure was reported Thursday by several news outlets.
The chairman of the FCC is leaving the agency, reports said Thursday evening.
Julius Genachowski, a Democrat appointed by President Barack Obama in 2009, plans to announce his resignation tomorrow, according to Bloomberg. His departure creates a second vacancy in the five-member Federal Communications Commission: on Wednesday, commissioner Robert McDowell, senior member of the FCC‘s Republican minority, said he would step down in the coming weeks after a seven-year tenure. Genachowski said then he had “no news” on his own intentions, although Reuters reported that he was “widely expected to leave in coming months as well.”
McDowell’s announcement perhaps freed up Genachowski to resign, since it meant the chairman could leave without creating a 2-2 split between the panel’s Democratic and Republican members. The Obama administration can now put forward two nominees at once, one from each party, paving the way for a smooth Senate confirmation.
As chairman, Genachowski focused on expanding access to mobile broadband, in contrast to his predecessors. Engadget notes that he expressed concern over the government‘s harsh stance on phone-locking. And his FCC “levied no fines for broadcast indecency,” Bloomberg reports, “after a flurry of penalties under Republican chairmen from 2003 to 2008.”
Comcast to Double Speeds of Two of Its Most Popular XFINITY Internet Speed Plans to Customers Throughout South Florida at No Additional Cost
WEST PALM BEACH, Fla.–(BUSINESS WIRE)– Comcast, the nation’s largest Internet service provider, today announced it is increasing the speeds of two of its most popular XFINITY Internet speed plans, Blast! and Extreme 50, to its customers in Monroe, Miami-Dade, Broward, Palm Beach Counties and the Treasure Coast for no additional cost. Customers will enjoy more than twice as fast Internet speeds on multiple devices, allowing them to surf, chat, stream HD movies and TV shows, or game online with double the speed. Also for no additional cost, Comcast in April is increasing the speed of its widely used Performance plan by more than 60 percent.
“As customer demands and technology evolve, we continue to increase our broadband speeds to deliver the best, fastest and most reliable Internet experience possible for our customers,” said Amy Smith, Comcast’s regional senior vice president in Florida. “Whether chatting, surfing, streaming, gaming, skyping or downloading, families will get the superfast, high-performing Internet service they need, with no extra charge.”
Specifically, the Blast! plan is increasing download speeds from up to 25 Mbps to speeds up to 50 Mbps and upload speeds from up to 4 Mbps to up to 10 Mbps, while Extreme 50 customers will receive download speeds up to 105 Mbps (formerly 50 Mbps) and upload speeds up to 20 Mbps (formerly 15 Mbps). The Performance plan is increasing to speeds up to (20 or 25) Mbps from 15 Mbps downstream and to (4 or 5) Mbps from 2 Mbps upstream. To activate the new speeds, customers just need to re-start their cable modem.
For the third year in a row the Federal Communications Commission has shown that Comcast delivers speeds to customers that are even faster than the advertised speeds. Comcast is not only delivering the nation’s fastest Internet, but it is also providing the fastest in-home WiFi with its latest Xfinity Wireless Gateway, an all-in-one device that gives customers reliably fast speeds with the most coverage in their home so everyone can get online and do more on their devices all at the same time.
For more information on Comcast’s XFINITY Internet services, customers can call 1-800-XFINITY or visit www.comcastcorporation.com.
The Committee on Foreign Investment in the United States has given its approval for the merger of MetroPCS and T-Mobile USA, leaving a shareholder meeting April 12 as the final hurdle.
Earlier this month, both the Department of Justice and Federal Communications Commission signed off on the proposed merger between the companies, leaving one final regulatory hurdle to clear: the Committee on Foreign Investment, an inter-agency committee that reviews national-security issues surrounding transactions that could result in control of a U.S. business by a foreign entity.T-Mobile is a wholly owned subsidiary of Deutsche Telekom.
The two companies announced today that they have received approval from this last regulator, which found no “unresolved national security concerns” related to the proposed transaction.
MetroPCS is holding a special shareholders meeting on April 12 to vote on the deal, and the board has sent a letter to investors urging them to vote in favor. The board unanimously agrees that this deal is in the best interest of MetroPCS. Shareholder P. Schoenfeld Asset Management hedge fund has asserted its opposition.
Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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For the fourth week in a row, MetroPCS Chairman and CEO Roger Linquist has reported selling at least 100,000 shares of his company’s stock.
The most recent SEC filing, reporting a 100,000-share sale, was dated yesterday, the same day that MetroPCS received approval from the Federal Communications Commission for its merger with T-Mobile USA. A shareholder vote on the merger is set for April 12, when the deal could be derailed by opposition shareholders.
Just ahead of the FCC giving the go-ahead for the merger, MetroPCS sent a letter to stockholders urging them to ignore attempts to dissuade them from voting for the transaction. The letter was signed by Linquist, who still has direct control of more than 3.8 million shares and indirect control of 1.3 million.
If MetroPCS prevails in getting stockholder approval, it still has to get the Committee on Foreign Investment to sign off on the merger as T-Mobile is a subsidiary of German company Deutsche Telekom.
Including the most recently reported sale of 100,000 shares, Linquist has sold about 408,000 shares since mid-February.
Fool contributor Dan Radovsky has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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