DOJ appeals AT&T/Time Warner court decision
AT&T CEO Randall Stephenson said this morning that he was not surprised by the
Justice Department's news
, and that he had already told his board of directors to expect an appeal.
The company plans to move forward with the integration of Time Warner rather than waiting around for a final court decision
.
"It could take up to a year before oral arguments are heard and a final decision made," wrote Jefferies analyst John Janedis in a research note. "If the DOJ were to win, we think T would appeal, ultimately sending the case to the Supreme Court."
"We do not expect T to pull back on the strategy of integrating this asset," wrote analyst Jennifer Fritzsche of Wells Fargo. "However, one contact suspected that while the DOJ doesn't want to unwind the deal in its entirety, the goal might be to require the sale of its Turner assets." Time Warner's Turner assets include CNN, which President Trump has said AT&T will not purchase under his administration.
All of Time Warner's content assets should be kept out of AT&T's hands, according to the arguments made by the DOJ during the original trial. The government argued that AT&T can withhold access to Time Warner content from competing distributors, in order to pressure consumers to switch to an AT&T distribution channel, like DirecTV or U-Verse.
AT&T promised the court that Time Warner would negotiate content distribution deals without regard to AT&T's interests as a distributor. "When you think about it, it's a hard argument to accept," points out analyst Craig Moffett of MoffettNathanson. "It amounts to
'I trust you when you say you won't take into account your own best interests
.' "
Moffett thinks the case could make its way through the DC Circuit Court of Appeals within a few months, but he does not think a reversal of Judge Leon's decision is out of the question.
"We're not as sure as everyone else that Judge Leon's decision will be upheld on appeal," he told investors. "One would have to assume that the odds are actually relatively low. But they are not zero."
FCC moves on C Band
The FCC has adopted a
Notice of Proposed Rulemaking
that would free up more midband spectrum for 5G. The so-called C Band spectrum between 3.7 GHz and 4.2 GHz is currently used by fixed satellites to deliver programming to broadcast TV, radio and cable networks. The FCC is ready to make some of this spectrum available to mobile operators.
"We seek comment on ways to open up some or all of this band for terrestrial wireless broadband use," said FCC chairman Ajit Pai in a statement. "Most notably, we tee up a number of market mechanisms for reallocating Cband spectrum."
Commissioner Michael O'Rielly said the proposal presents too many options for spectrum allocation. "The record clearly supports a market-based approach, but the item veers off seeking comment on various auction mechanisms, many of which were not suggested in the record and some of which are incredibly complex or downright troubling," O'Rielly wrote in a statement. The commissioner also took issue with a proposal that would allocate 160 megahertz of the spectrum to fixed wireless broadband, saying that this would effectively eliminate two 100 megahertz blocks that could be used for mobile broadband.
One-touch-make-ready
The FCC's next open meeting is set for August 2, and Pai said this week that he will ask the commission to adopt a federal "one-touch-make-ready" policy, meaning that one company's construction crews can move another company's equipment in order to make utility poles ready for small cells. Time and money are saved when incumbents on a pole do not have to send their own crews to make a pole ready for another company's equipment. But many providers prefer to send their own crews to move their own equipment.
AT&T, Comcast and the Communication Workers of America all opposed "one-touch-make-ready" laws that were adopted by state governments in order to help Google attach its fiber to utility poles in Tennessee and Kentucky. The laws were adopted in Louisville and in Nashville, but a federal judge later overturned the Nashville ordinance. saying that the city's privately-owned utility poles should be subject to federal, not local, regulation.
Now Pai wants to make "one-touch-make-ready" a federal law. But not all privately-owned utilities are subject to federal law. States currently have the option to assume responsibility for regulation of their pole attachments, and at least 20 states have exercised this option.
Small cells and 5G
New
research
from iGR highlights the integral role that small cells will play in 5G, and forecasts carrier capital spending and operational spending on small cells. The report includes detailed profiles of outdoor small cell solutions and vendors.
5G small cell growth is projected to significantly outpace LTE small cell growth in the years ahead. But LTE has a big head start, and iGR predicts that it will take some time for the number of 5G nodes to catch up. And 5G will not put a stop to LTE small cell deployments -- healthy growth is projected through 2022. Access the full report
here
.
