Ongoing Electronic Comment Filing System woes at the FCC bothered all industry lawyers we queried, with many filings still unavailable and at times ECFS not working, as it has at times throughout the week (see 1705080042 and 1705100062).
The skinny bundle in the U.S. "is a fiction" for now, though an $8-$12 monthly package will be offered at some point, akin to what's available in other markets internationally, Discovery Communications CEO David Zaslav said in an analyst call Tuesday. So-called skinny bundle offerings in the U.S., with prices closer to $40 monthly, are "overstuffed turkeys." He said subscription VOD offerings like Netflix and Amazon Prime are effective, but "we as an industry need to complement that with a quality offering ... that's a true skinny bundle in the spirit of what's working around the world, and I think that'll happen." Discovery said Q1 revenue was $1.6 billion, up 3 percent due to gains in global distribution sales and progress in expanding digital and direct-to-consumer businesses. Zaslav said since the start of the year, the company has expanded its Amazon SVOD channels partnership and Eurosport Player streaming service and entered into a number of new digital partnerships, including creation of a streaming over-the-top service in Europe.
A draft rulemaking notice on earth stations in motion (ESIM) set to be voted on at next week's FCC commissioners' meeting shouldn't face any particular pushback or raise notable controversy and likely will garner at most suggested tweaks from industry operators, a satellite industry insider told us. With growth of satellite applications like in-flight connectivity and maritime services, the proposed rule changes NPRM are aimed at a cleanup of the Part 25 rules governing satellite communications, the insider said.
Comcast and Charter Communications' testing some wireless collaboration is likely unwelcome news in the wireless industry, experts told us. The team-up could open the door to potentially a fifth facilities-based wireless carrier joining the market -- either cable ISPs collectively, or by providing wholesale service to a smaller wireless operator, said technology consultant Ira Brodsky of Datacomm Research. In a note to investors, New Street Research analyst Jonathan Chaplin said, "A new entrant with deep pockets and ... a near national fiber footprint is obviously not good for wireless carriers in an already competitive market."
Sinclair and Tribune overlap in 14 markets, but Sinclair is confident its planned $6.6 billion deal -- $3.9 billion purchase plus assumption of $2.7 billion in debt -- won't require any station sales since the overlaps have no impact on competition, Sinclair CEO Christopher Ripley said. Station swaps, on the other hand, "are high on the list of priorities," he said in an analyst call after Sinclair/Tribune was announced Monday. "Swaps are definitely on the table."
Satellite operators and WTA suggested a variety of changes to rules the FCC adopted between 2001 and 2004, in filings (see here, here and here) posted Friday in docket 16-251. The comments deadline in the Regulatory Flexibility Act rules review is May 15. Intelsat recommended eliminating Section 25.170's requirement for satellite operators to annually report satellites and spectrum unavailable for service, contact information for interference resolution and construction process and expected launch dates of authorized replacement satellites. It said the Section 25 requirement is largely redundant given other filings and notices, and requires something of satellite operators that terrestrial operators don't need to do. It also recommended modification of Section 25.119 rules requiring prior approval of pro forma transfers of control of non-common carrier satellite and earth station licenses, calling it "illogical" non-common carrier licenses holders "must undergo the labor- and time-intensive process of submitting an application for FCC approval" even though the agency recognizes pro forma transfer applications don't raise public interest issues. It recommended discontinuation of Form Schedule S, which contains technical information regarding proposed space station operations -- information that could be provided in spreadsheets and narratives "without having to use the burdensome Schedule S software." EchoStar and its Hughes Network Systems listed six Part 25 rules and two Part 2 rules they said should be eliminated or revised as "duplicative, unduly burdensome and no longer in the public interest." They include 25.111(e), requiring submission of a paper copy of an application to the International Bureau; 25.112 (a)(3), (b), not allowing applications for satellite use of spectrum prior to international allocations for such use; and 25.114, requiring separate space and earth station applications operating in the same network. WTA suggested eliminating or revising several Section 54 reporting requirements. One regulation it singled out for deleting was the Section 54.305 rule that provides high-cost support to a carrier acquiring exchanges from an unaffiliated carrier, with WTA saying it has created "orphan" exchanges that require separate accounting and come with high costs while getting little USF support. WTA also said Form 477 filing requirements should be annually, calling the current, twice-a-year requirement "very time consuming and expensive" for RLECs.
Financially, Philippe Dauman had a good 2016, with Viacom's former CEO topping the ranks of pay-TV executives in salary and other non-equity compensation, according to our analysis of 2016 proxy statements of publicly traded companies in the pay-TV universe. Benefiting Dauman was a $58 million separation payment he received in August when he left (see 1608220029). That came atop his $3.6 million salary and $9.7 million cash bonus under Viacom's executive short-term incentive plan. He also received equity in the form of Viacom stock and options that the programmer valued at more than $21 million. The company didn't comment. In our analysis, we looked at compensation as two separate silos -- salary and other non-equity items; and stock and stock options. We used dollar value estimates of the equity awards as reported by the companies, and not estimates of future values.
Chairman Ajit Pai said the FCC has been more productive in his tenure than under recent past permanent chairmen, with 49 items adopted in his first 100 days, compared with 34 under Julius Genachowski and 25 under Tom Wheeler during the same time period. Pai's comments were in a talk Friday at the American Enterprise Institute in which he largely recapped agency actions since he took over and described how they fit into closing the digital divide, modernizing rules, promoting innovation, consumer and public safety protection, and operational improvement. Text of the prepared remarks, which we heard live, was posted by the FCC along with a fact sheet.
Viacom is in talks about creation of a skinny bundle package of content, and such offerings from programmers "will be a catalyst for more," CEO Bob Bakish said during an analyst call Thursday. "Everyone acknowledges there's a marketplace opportunity there." While licensing content to subscription VOD offerings, one big Viacom goal is ensuring it's not undercutting itself by creating inexpensive alternatives for consumers to access its content, he said. Pointing to Hulu carrying some Nickelodeon content, he said while Viacom builds out its own consumer products business, it makes sense to have some content available across multiple platforms. Bakish said the uneven subscriber results being reported by different MVPDs reflects differences in execution, and the industry overall needs to put more focus on the product and marketing. He said Charter Communications is retiering some of its channels for new subscribers -- an issue still the focus of talks between the two. Viacom said Q1 revenue was up 8 percent, to $3.26 billion, driven largely by filmed entertainment and more affiliate revenue. The CEO said as part of Viacom's announced turnaround plan (see 1702090029), Paramount has a new leadership team in place and MTV is installing a new team and pivoting to a new programming pipeline with a heavier focus on unscripted content. The programmer's stock closed down 7.7 percent to $37.85.
Globalstar has identified more than 100 countries where it's interested in pursuing approval for terrestrial use of its 2483.5-2500 MHz band spectrum and has been looking into the feasibility of each, CEO James Monroe said in an analyst call Thursday. He said the company hired multiple legal, engineering and consulting firms to pursue regulatory approvals in various countries, and it applied in an unspecified number of countries covering 375 million people. He said Globalstar also expects to file additional applications with other countries' regulatory bodies this year. The FCC approved the company's terrestrial low-power service plans in December (see 1612230060). Globalstar reported sales rose 13 percent in Q1 to $24.7 million, while its net loss -- at $20.2 million -- was down from the $26.9 million loss in Q1 2016. Monroe said new one-way and two-way products were running behind schedule. He said the company was in talks with senior lenders about raising $150 million in refinancing to "provide runway beyond 2017." He said the apparent AT&T/Verizon bidding war over Straight Path (see 1705030056) shows "licensed spectrum matters." He said spectrum closely situated to Globalstar's was found in the AWS-3 auction "and not a scrap of that was unpurchased." Added Monroe, "It's not to say unlicensed spectrum doesn't get used -- we all live on Wi-Fi. But you can't run a service you want to charge a reasonable amount of money for on unlicensed."