Maybe it is premature to conclude that the government is the only entity who can facilitate broadband deployment at this juncture. Seeking to raise $500 million in debt to meet coming maturities, Cablevision Systems Corp. ended up with $750 million as investors with a renewed appetite for more lucrative but riskier debt flocked to the offering, according to a person familiar with the situation. Here is the full story.
The proposed “American Recovery and Reinvestment Act of 2009” unveiled yesterday by House Appropriations Chair Dave Obey (D-WI) includes $1.825 billion for Broadband Deployment Grants, another $1 billion for Wireless Deployment Grants (25% to provide voice service in unserved areas and 75% to provide “advanced wireless broadband service” in underserved areas. The bill also appropriates $2.825 billion for broadband loans, loan guarantees and grants in predominantly rural areas by the Rural Utilities Service of the Department of Agriculture. An explanatory report accompanying the bill notes that the Communications Workers of America estimate (using a Department of Commerce model) that each $5 billion investment in broadband would result in 100,000 new jobs. On the positive side, the loans, loan guarantees and Read More ›
President-elect Obama intends to appoint Julius Genachowski, a protege of former FCC chairman Reed Hundt, as the commission’s next chairman. Having been at the FCC with Hundt, Genachowski should have seen industries largely ignored by the commission — cable and wireless — thrive as a result of deregulation while the telephone industry it attempted to reinvent soon crashed. As George Gilder and I noted in a paper this past summer, when the 1996 law passed, there were several cable operators who planned to offer competitive phone services in a venture that included Sprint Corp. These plans were shelved, according to Sprint CEO William T. Esrey, due the FCC’s “pro-competition” policies: “If we provided telephony service over cable, we recognized that Read More ›
Perhaps the most interesting man I met in Israel on my recent trip was Martin Gerstel. Alone on the cover of Business Week when he graduated from Stanford Business School in 1968 (as the nation’s most promising MBA student), he founded Alza Corp. with Alex Zaffaroni and built it into a major pharmaceutical devices company. It was sold in 2000 to Johnson & Johnson for $14B. In 1993, he moved to Israel, the home of his wife, and discovered a cornucopian realm of new technologies, leavened by the arrival of a million highly educated people from the former Soviet Union. He resolved on Compugen (CGEN) as the most promising. It came public as CGEN in 2000 with a valuation of Read More ›
The idea of abolishing the Federal Communications Commission used to be a right-wing fantasy. But now Stanford Law Professor Larry Lessig is on board. With so much in its reach, the FCC has become the target of enormous campaigns for influence. Its commissioners are meant to be “expert” and “independent,” but they’ve never really been expert, and are now openly embracing the political role they play. Commissioners issue press releases touting their own personal policies. And lobbyists spend years getting close to members of this junior varsity Congress. Think about the storm around former FCC Chairman Michael Powell’s decision to relax media ownership rules, giving a green light to the concentration of newspapers and television stations into fewer and fewer Read More ›
Naturally, now that government plans to intervene in the economy with a massive stimulus package, everyone wants their “fair” share. Robert D. Atkinson, president of the Information Technology and Innovation Foundation, is arguing for digitized health records, a smart power grid and faster broadband connections: While creating jobs by upgrading the nation’s physical infrastructure may help in the short term, Mr. Atkinson says, “there’s another category of stimulus you could call innovation or digital stimulus — ‘stimovation,’ as a colleague has referred to it.” Although many economists believe that a stimulus package must be timely, targeted and temporary, Mr. Atkinson’s organization argues that a fourth adjective — transformative — may be the most important. Transformative stimulus investments, he said, lead Read More ›
A report prepared by the staff of the House Energy & Commerce Committee is critical of FCC Chairman Kevin Martin’s leadership. Among the findings: “There are instances in which the Chairman manipulated, withheld, or suppressed data, reports, and information … in an apparent attempt to enable the Commission to regulate cable television companies.” The report mentions that Martin’s actions “have certainly undermined the integrity of the staff. Moreover, it was done with the purpose affecting Congressional decision-making…” Shocking. Oh, and the report notes that there is some friction between Martin and some or all of his four fellow commissioners. The report concludes that Martin’s management style is “heavy-handed, opaque, and non-collegial,” and that his leadership has led to “distrust, suspicion, Read More ›
Hawaiian Telcom has entered Chapter 11 bankruptcy (see this and this), FairPoint Communication’s CFO is under siege as the company looks for a new CEO and Qwest Communications is cutting another 1,200 jobs as it tells investors not to worry about massive debt repayment deadlines. Times are tough for a lot of people, of course. However, phone companies have a special problem: Basic phone service is not profitable. Regulators have matched prices with costs; and they have defined costs narrowly, so as to shift some costs, for accounting purposes, to services which are profitable. As a result, basic phone service has to be subsidized by overpriced calling features such as voice mail, Caller ID, etc.; Internet access; video or wireless Read More ›
Outgoing Federal Communications Commission Chairman Kevin Martin is pushing for action in December on a plan to offer free, pornography-free wireless Internet service to all Americans, despite objections from the wireless industry and some consumer groups. according to the Wall Street Journal. I wonder who is going to decide what is pornography? And does this mean drug abuse, domestic violence, gambling addiction, infidelity, negligent or reckless parenting, over-spending, etc. are okay?
Observers predict stepped-up regulatory battles in telecom, according to the Wall Street Journal, New congressional leaders as well as policy makers in the Obama administration are expected to press for fresh limits on media consolidation and require phone and cable firms to open their networks to Internet competitors, lobbyists and industry officials say. The article overlooks the fact that broadcast ownership limits and forced access policies are restraints on the free speech rights of broadcasters and network providers, and that the constitutionality of new regulation could ultimately be decided by the courts.
