OVERNIGHT TECH: AT&T makes the case for $49 billion DirecTV deal

THE LEDE: AT&T and DirecTV filed paperwork Wednesday at the Federal Communications Commission (FCC) hoping to convince regulators that the proposed $49 billion merger between the two companies is in the public interest.

AT&T told the FCC that the merger will allow the combined company to offer the kinds of products that consumers want, including video content across multiple devices and “bundled” offerings that include television and Internet services. While DirecTV offers satellite television, it has no Internet component, and while AT&T offers Internet, the company doesn’t have television offerings that can compete with cable giants Comcast and Time Warner Cable, AT&T said.

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“This transaction will unite two companies with uniquely complementary assets to create a strong, national competitor that delivers consumers an unparalleled combination of broadband, video and wireless services,” the company wrote in the filing.

The cost savings from the deal will allow AT&T to build out its wireline Internet service to 2 million households and its fixed wireless Internet service to 13 million households, largely in underserved rural areas, the company said. Additionally, AT&T pledged to, for three years after the deal is closed, uphold the FCC’s now-defunct net neutrality rules and offer standalone AT&T Internet service and DirecTV television service at reasonable prices.

“In sum, this transaction will enable the combined AT&T and DIRECTV to meet the challenges of this new competitive marketplace with improved services and bundles, foster increased competition in broadband and video, and give consumers better choices than are possible today from either company on a standalone basis,” the company said. “For these reasons, the transfer applications should be approved promptly.”

The proposed deal to combine AT&T and DirecTV, first announced last month, drew early criticism from public interest groups, who said it — combined with the proposed $45 billion deal to combine Comcast and Time Warner Cable — would lead to too much consolidation in the telecom industry.

Lujan pushes broadcasters on “bubbles”: Rep. Ben Ray Lujan (D-N.M.) wants to change the systems that determine what broadcast television content reaches viewers. During a Wednesday hearing held by the House Commerce Subcommittee on Communications, Lujan repeated his concerns about Designated Market Areas (DMAs). The 210 DMA regions are created by Nielsen based on county lines, and the FCC requires that broadcasters use those regional guides to determine which programming to offer in those areas.

But the guidelines can hurt consumers who would prefer to get one area’s programming but, because of their DMA, get programming from a less relevant media market, Lujan said. “Clearly something is broken when local, rural Americans are left in the dark and don’t know what’s happening in their backyard.”

Lujan compared the FCC’s media ownership rules — which were criticized for being outdated during Wednesday’s hearing — to the older rules regarding DMAs. “We should get rid of an antiquated rule that was written in the 70s but not an antiquated rule that was written before,” he asked. Jane Mago, general counsel at the National Association of Broadcasters, defended the rules, saying they are designed to reflect the interests of the people in those areas and are updated regularly.

House Judiciary to examine net neutrality rules: The House Judiciary Committee will hold a hearing on net neutrality on Friday, June 20, according to a committee aide. Witnesses have not yet been announced. The hearing comes as the FCC tries to rewrite its net neutrality rules, which kept Internet providers from blocking or slowing traffic to certain websites before they were struck down by a federal court earlier this year. 

The proposal in front of the agency from Chairman Tom Wheeler — which considers multiple paths forward but puts emphasis on one plan that would allow Internet providers to charge websites for better access to users — has drawn ire from lawmakers on both sides of the aisle. While Democrats say Wheeler’s proposal doesn’t adequately protect Internet users, Republicans want Wheeler to drop the agency’s rules entirely.

Comcast responds to Dems' calls for hearings: In response to calls from House Commerce Democrats for a hearing on the $45 billion deal to combine Comcast and Time Warner Cable, Comcast issued a statement highlighting the congressional hearings that have already taken place. "To date, there have been two congressional hearings and nearly 10 hours of testimony dedicated to the Comcast and Time Warner Cable transaction where we had the opportunity to present the numerous pro-consumer, pro-competitive benefits of our transaction before Congress,” the company said in a statement.

The Judiciary Committees in both chambers have held hearings dedicated to the merger. Congress has also held “other hearings on issues related to our industry where our deal has been discussed in Congress,” Comcast said, pledging to work with Congress and regulators as the deal moves forward.

States protest FCC sports blackout rule: The National Conference of State Legislatures is warning the Federal Communications Commission not to eliminate its rule on sports blackouts. The regulation, which the FCC voted unanimously to consider dropping in December, prohibits games from being shown nationwide if they are blacked out at home due to low attendance and, according to the state group, makes it possible for millions of low-income fans to watch football every Sunday.

Getting rid of the rule, the group warned in a letter on Wednesday “puts the local broadcast model at risk and may cause sports leagues to move sports programming from free, [over-the-air] broadcast to pay television. Such a change would be detrimental to many in our communities.” 

Rubio to drop spectrum bill: Sen. Marco Rubio (R-Fla.) this week will introduce the Wireless Innovation Act, he announced in a speech on Wednesday. The bill reallocates some of the nation’s airwaves currently held by the government for commercial businesses, sets up a new process for spectrum auctions starting in 2018 and makes it easier for agencies to give up their licenses. Additionally, Rubio said that he would also be introducing legislation calling for the FCC to allow more Wi-Fi use and expand wireless infrastructure around the country.

“Our world has gone wireless, and it did not take long to occur,” he said. “That is why I am proposing a wireless innovation agenda with ideas that I believe will ensure the United States is prepared to face the wireless future – an agenda to ensure that Americans can participate in the wireless economy and take advantage of wireless technology to improve their economic well-being."

Court calls for warrant to track phones: A federal appeals court on Thursday ruled that law enforcement agencies need to obtain a warrant before getting location information about someone’s cellphone. The 11th Circuit Court of Appeals ruled against the government’s attempt to get locations about four people’s cellphones from their wireless company, which was a victory for privacy and civil liberties groups.

“There is a reasonable privacy interest in being near the home of a lover, or a dispensary of medication, or a place of worship, or a house of ill repute,” the three-judge panel wrote in their decision. “In short, we hold that cell site location information is within the subscriber’s reasonable expectation of privacy.”

 

ON TAP

The American Enterprise Institute is holding an event on cybersecurity featuring House Intelligence Committee Chairman Mike Rogers (R-Mich.), FCC Chairman Tom Wheeler, FTC Commissioner Maureen Ohlhausen and former NSA Directors Keith Alexander and Michael Hayden beginning at 8:45 a.m.

Beginning at 11 a.m., the ACLU, Microsoft and The Washington Times are holding an event on surveillance and privacy including Hayden as well as Sen. Mike Lee (R-Utah), the chairman of the Privacy and Civil Liberties Oversight Board and the head of the ACLU’s Washington legislative office.

Public Knowledge and Rep. Zoe Lofgren (D-Calif.) are presenting a panel at 12:30 p.m. on cellphone unlocking and the Digital Millennium Copyright Act, featuring copyright law experts from the Electronic Frontier Foundation and the University of Colorado Law School.

 

IN CASE YOU MISSED IT

Democrats are divided over whether to use the looming expiration of a law governing satellite television to push through sweeping policy changes.

House Majority Leader Eric Cantor’s (R-Va.) stunning loss in his Tuesday primary could deal a blow to the tech industry’s efforts to enact immigration reform by the end of the year.

Despite calls from Democrats, the top House Republican on telecom issues isn’t planning to hold hearings on the proposed multi-billion dollar deals to combine giants in the telecom industry.

poll sponsored by civil liberties organizations shows that many people in the country want to update the law that allows the government to search emails without a warrant.

 

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