Tue, Jun. 30, 11:23 AM
- Cable and wireless firms are on the (legal) clock, as a D.C. appeals court is setting an expedited schedule for them to provide briefs on the set of challenges to FCC net neutrality rules.
- Firms will need to provide their opening briefs (20,000 words or fewer) by July 30, meaning final briefs will be due Oct. 13, and oral argument could begin by year's end.
- The disputes now are largely around Title II reclassification (Internet access as a utility) and interconnection, rather than bans on blocking/throttling or paid prioritization.
- Represented/related companies: VZ, TMUS, S, CMCSA, CHTR, TWC, CVC, CTL, FTR, CCOI, DISH, DTV
Tue, Jun. 30, 9:48 AM
- U.S. wireless firms are all trading higher out of the open as RBC Capital raises price targets on AT&T (T +0.2%), T-Mobile (TMUS +1.3%) and Sprint (S +1.1%).
- Verizon (VZ +0.2%) is also up comparably with AT&T.
- The firm's best rating of the three goes to T-Mobile, with an Outperform. RBC raised its price target to $41; it's currently trading at $39.17.
- AT&T gets a Sector Perform rating and a raised price target of $37 (currently trading at $35.83), and Sprint gets a Sector Perform and a higher target of $6 (currently at $4.56).
Mon, Jun. 29, 5:24 PM
- Confirming a recent Bloomberg report, Microsoft (NASDAQ:MSFT) states AOL, just acquired by Verizon (NYSE:VZ), will "assume management and sales responsibility for all of Microsoft's display, mobile and video advertising inventory in nine key global markets -- the United States, the United Kingdom, Canada, Brazil, France, Germany, Italy, Spain, and Japan."
- AOL will handle ad inventory for MSN, Outlook Mail, Xbox, Skype, mobile apps, and other Microsoft properties. The WSJ reports "Microsoft’s roughly 1,200 advertising employees — from engineering to sales — will be getting offer letters to join AOL."
- In addition, AOL and Microsoft have signed a 10-year search/search ad pact that will make Bing AOL's search provider, starting Jan. 1, 2016. AOL has thus far been relying on Google (NASDAQ:GOOG) search. AOL's search ops had Q1 revenue of $116.4M (+19% Y/Y), and 2014 revenue of $402.6M (+4%).
Mon, Jun. 29, 4:33 PM
- Bloomberg reports Microsoft (MSFT) is shutting down its display ad business, and handing over related operations to AOL (just bought by Verizon) and private AppNexus. 1,200 jobs will be affected. Some of the employees will be laid off, and others offered positions elsewhere at Microsoft.
- The report comes a few days after Satya Nadella stated in an employee memo Microsoft has to "make some tough choices in areas where things are not working." The company had 128K employees as of June 2014, but has since carried out major layoffs.
- Twitter, Yelp, LinkedIn, Zillow, and others have reported seeing display ad challenges this year. Many of the affected firms have mentioned being hurt by industry adoption of programmatic (automated) ad-buying platforms that are often displacing traditional ad sales.
- Earlier: Microsoft selling Bing image-collection assets to Uber
- Update: The Microsoft/AOL deal is official. As part of the tie-up, Bing will power AOL search.
Fri, Jun. 26, 11:59 PM
- Despite some friendly talk around consolidation, Cablevision (NYSE:CVC) is an "un-acquirable asset," says a key telecom industry analyst.
- Craig Moffett of MoffettNathanson thinks shares are overvalued and artificially high since a wave of roiling M&A action following the breakup of Comcast's takeover bid for Time Warner Cable.
- The company has too much competitive overlap with Verizon (NYSE:VZ) FiOS, he says.
- "After factoring in its already below-market trailing growth rates, and its FiOS-affected forward growth prospects, Cablevision's shares appeared markedly overvalued even before the latest round of speculation," Moffett writes.
- Today: CVC +4%.
Fri, Jun. 26, 5:46 PM
- Sprint (S -1.3%) chief Marcelo Claure has become the highest-paid CEO among U.S. telecoms, the Financial Times notes, having earned $22M for just under eight months of work.
- Randall Stephenson of AT&T (NYSE:T) earned $24M last year -- but for a full year's work. Lowell McAdam of Verizon (NYSE:VZ) earned $18M last year, and T-Mobile's (NYSE:TMUS) John Legere $19M.
- For the period between his Aug. 11 start date and March 31, Claure earned a base of $923K, a bonus of $2.4M (including a $500K "golden hello"), and $18M in stock and options. During that time, Sprint's stock price has fallen 16.4%.
- A Sprint spokesman pointed to the difficulty of making apples-to-apples comparisons with other CEOs, considering one-time payments like the signing bonus.
- Sprint's 14A filing
Fri, Jun. 26, 3:24 PM
- While Verizon (NYSE:VZ) closed on its $4.4B deal for AOL on Tuesday, not every investor is settling for the $50/share price.
- About 60% of AOL shares were tendered. And at least 5% of shareholdings weren't sold to Verizon and their investors are seeking appraisal on the shares -- where a judge awards a higher price for the shares, and which they can do for a few months before they could abandon the plan and accept the deal.
- Appraisal requests are growing as an investing tactic after a record 40 cases were filed last year (and 28 so far this year).
- Objecting funds include Brigade Capital Management and Verition Fund Management. With AOL shares trading above $50 the past few weeks, some buyers were likely funds that intended to seek appraisal.
Thu, Jun. 25, 7:04 PM
- While FCC Chairman Tom Wheeler signaled today that the agency wouldn't bow to demands for greater spectrum set-asides for competitors to AT&T (NYSE:T) and Verizon (NYSE:VZ), the Justice Dept. sent a letter urging the FCC to think about moves to spread the spectrum, including a greater set-aside.
- William Baer with the DOJ's antitrust division asked the FCC to consider “the well-established competition principle that those with market power may be willing to pay the most to reinforce a leading position.”
- In a low-band "broadcast incentive" auction coming next year, the FCC has proposed setting aside 30 MHz per market for competitors other than the two telecom leaders, like Sprint (NYSE:S) and T-Mobile (NYSE:TMUS). T-Mobile has been vocal about pushing for a 40 MHz reserve and is hopeful that Baer's letter means it still may happen: “There would be no point in writing the letter if they didn’t want the FCC to take another look," says T-Mobile's Andy Levin.
- More FCC auction coverage
Thu, Jun. 25, 2:35 PM
- FCC Chairman Tom Wheeler says that he is circulating a draft with changes to the spectrum bidding procedures ahead of an open meeting designed to "revamp our outdated spectrum auction bidding policies" and help small businesses in the mobile marketplace.
- Notably, he proposes a first-ever cap on total bidding credits, reducing an incentive for large corporations to game the system: "We will not allow small businesses to serve as a stalking horse for another party." (Dish Network (NASDAQ:DISH) was loudly criticized by rivals after using designated entities to bid for $13.3B in spectrum with a $10B payment; AT&T (NYSE:T) had proposed a much smaller cap of $10M.)
- And he's sticking to the previous 30 MHz set-aside for smaller firms, though key "smaller firms" like Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) had pressed for a larger set-aside of as much as 40 MHz (in T-Mobile's case, with an aggressive media campaign).
- He also recommends dropping a requirement for small businesses to offer facilities-based wireless in order to qualify for bidding credits, and to create a new rural business bidding credit.
- More FCC auction coverage
Thu, Jun. 25, 10:15 AM
- Verizon (NYSE:VZ), up 1.2% early today, has a new multi-year deal with Scripps Networks Interactive (NYSE:SNI) to supply Verizon's new video offering with lifestyle programming from HGTV, Food Network, Travel Channel, DIY and Cooking Channel.
- More than 45 series are part of the deal, including popular shows like House Hunters and Cutthroat Kitchen.
- Verizon notes that young millennials' over-the-top video consumption rose 21% last year, and smartphone viewing is growing rapidly as a portion of that (up 10% from 2014).
- Verizon had previously given a few clues as the look of the service, which wil work on competitor networks and Wi-Fi as well as mobile devices, and will have a premium tier while exploring ad-supported data options to help keep bits streaming to viewers.
- Previously: Verizon hints at video service details (Jun. 24 2015)
- Previously: Verizon closes speedy $4.4B AOL deal (Jun. 23 2015)
Wed, Jun. 24, 6:21 PM
- With its AOL deal closed, Verizon (VZ -1%) is providing some peeks at what an upcoming video service may look like.
- "We see the world shifting very quickly to mobile and we believe that mobile will represent 80 percent of consumers' media consumption in the coming years," said CFO Fran Shammo. "And the Verizon-AOL partnership will allow us to capture that shifting opportunity."
- Verizon may get around the data-bucket problem with ad-supported data -- which may be vital as it seeks uptake with consumers facing a variety of options for mobile and over-the-top video. The company believes its plan there fits with recent FCC net neutrality regulations.
- The service will work on competitors networks and Wi-Fi and will have some kind of premium tier, which might be pay-per-view.
- As for content, so far it has 200 hours promised from DreamWorks Animation's youth-focused AwesomenessTV, as well as rights to the Live Earth Concert and an NFL partnership providing live football for $5/month.
Tue, Jun. 23, 10:06 AM
- Just 42 days after announcing a deal, Verizon (VZ +0.8%) has wrapped its $50/share cash acquisition of AOL, as its tender offer expired at midnight last night.
- AOL will no longer be traded on the NYSE and is a wholly owned subsidiary of the telecom. Some 60.4% of shares were validly tendered, and other shares have been converted into a $50 cash right.
- Tim Armstrong will continue to lead AOL operations, but now by reporting to Marni Walden, Verizon's executive VP of product innovation and new businesses. Bob Toohey, president of Verizon Digital Media Services, will report to Armstrong.
- Previously: Verizon CFO: We're keeping Huffington Post, not buying Dish Network (Jun. 15 2015)
- Previously: AOL chief to net $179M from Verizon deal (May. 14 2015)
- Previously: Not the old AOL: Verizon purchase all about ads (May. 12 2015)
Thu, Jun. 18, 3:48 PM
- Reuters reported that Cablevision (NYSE:CVC) was dropping a lawsuit against Verizon (NYSE:VZ) over an anti-FiOS ad.
- In fact, the lawsuit is alive and being transferred, Cablevision says.
- “No lawsuit was dropped, it is merely in the process of being transferred to the same court that is already hearing our prior false advertising lawsuit against Verizon," Cablevision said in a statement. "Verizon continues to put out advertisements that are false, misleading and designed to trick consumers, and we will not stand idly by.”
Thu, Jun. 18, 12:51 PM
- In another sign of content assets staying put at Verizon (VZ +1%) after its deal for AOL is complete, Arianna Huffington says she's signed a new four-year deal to stay at the helm of the Huffington Post.
- “After all my meetings and conversations with Tim [Armstrong] and the Verizon leadership, I am convinced that we will have both the editorial independence and the additional resources that will allow HuffPost to lead the global media platform shift to mobile and video,” Huffington reportedly says in a memo to staff.
- As Verizon agreed to a $4.4B deal to buy AOL last month, speculation centered on whether the telecom would keep content assets like Huffington Post and TechCrunch.
Wed, Jun. 17, 10:36 PM
- Crown Castle (NYSE:CCI) may be the wireless tower operator that benefits most from the growing emphasis on "small cell" deployments, Reinhardt Krause suggests.
- The Houston-based tower operator spent $1B each on small-cell specialists Sunesys and (four years ago) NextG -- and has a key customer, Verizon (NYSE:VZ), pushing into small cells as its 4G LTE network gets stuffed.
- Small cells -- roughly suitcase-sized modules that fit well in outdoor public spaces -- are useful for filling in coverage gaps between full-sized towers and solving urban coverage challenges. But Verizon also may see it as a chance to tap unlicensed spectrum if the government establishes Wi-Fi-like networks.
- The catch is if small cells end up displacing full-size towers, which have nice profit margins. But many see the two approaches as complementary.
- Along with Verizon, Sprint (NYSE:S) is expected to invest in small-cell deployments in 2016. "Small cells will be a central pillar of (4G) network architecture for Verizon and Sprint in the second half of 2015 and especially 2016 and for T-Mobile and AT&T moving forward," writes Macquarie's Kevin Smithen.
- Zayo Group (NYSE:ZAYO) -- a lessor of fiber connections -- is also showing interest in taking part in small cell deployments. Meanwhile, Crown Castle's fiber buys mean it can become more Zayo-like. Small cells accounted for 7% of CCI revenue in 2014, more than at competitors American Tower and SBA Communications.
Wed, Jun. 17, 8:12 PM
- In an audit that New York City plans to release tomorrow, the city slams Verizon (NYSE:VZ) for failing to deliver FiOS fiber connections to anyone who wanted them, a promise the company made in 2008.
- In signing a franchise agreement with NYC then, Verizon said all comers would be served by 2014 -- but there are more than 40K requests for service and about three-quarters of those have been outstanding for 12 months or longer, according to the audit.
- Verizon, meanwhile, says the main reason buildings don't have service is in its struggle to get access from landlords.
- Lowell McAdam's ascension to the CEO role four years ago has seen the company focus on its wireless operations, and sell off wireline assets in three states as well as stop plans to build FiOS in new territories.
- A Verizon spokesman says the company's invested $3.5B in the city's FiOS network and that Verizon and the city both want more people on it. He said the audit appeared to be politically based, linked to the city's upcoming union negotiations.
- Previously: Union accuses Verizon of leaving landlines broken (Jun. 09 2015)
- Previously: Citigroup: Altice's next move may be $34B in Verizon wirelines (Jun. 03 2015)
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