Regulatory Round-Up: USF Vote Thursday

With the FCC set to vote on the critical Universal Service Fund reform policy tomorrow, all sides are hammering the agency with last minute opinions and pleas. Here's a quick round-up:

• Cable companies told the FCC this week that it was correct in saying different intercarrier compensation rates for VoIP and traditional phone service actually impedes broadband adoption. In response to an AT&T filing, Comcast, Time Warner Cable and Cox expressed their desire to receive fair compensation for what the cable industry sees as similar services. An earlier statement by AT&T contends the two services are different and compensation should not be the same; the cable coalition says the telco is using "last-generation technology" that obstructs the transition to all-IP networks.

• Rural telecom groups criticized the FCC's USF reform proposal in a letter to President Obama this week. In a joint letter, the NTCA, Organization for the Promotion and Advancement of Small Telecommunications Companies and the Western Telecommunications Alliance said the FCC's plan will "completely undercut investment and growth" in broadband deployment by sidestepping the issue while "cultivating an environment of continuing regulatory and economic uncertainty throughout much of rural America."

• The Rural Broadband Alliance, a group of 70 small and rural telcos, says the FCC's USF proposal unfairly benefits incumbent carriers. The group implies the plan is a massive restructuring of USF and intercarrier compensation policy that will "trigger an economic crisis in rural America." The Alliance says the FCC's reforms will risk small businesses and jobs by awarding funds to large incumbents while reducing support for small rural carriers.

• NCTA President Michael Powell wrote in a blog post this week that, considering the "overall objective of delivering broadband to all Americans, it is astonishing that the FCC is considering a regime in which the largest incumbent telcos would be granted the inherent right to all of the available money… before any other industry has a chance to compete… If cable fails to show up to serve, telcos get the money. If cable competes for the subsidy, but is not the best provider, it will lose and the telco gets the money. If cable competes and wins, the consumer is the winner and will get broadband service for the first time from the most efficient and effective provider." •

Sprint Denied Info Access

A U.S. District Judge ruled this week that Sprint will not have access to confidential documents the Department of Justice has in order to help its opposition to AT&T's takeover of T-Mobile. Judge Ellen Huvelle said the government cannot give Sprint open access to the data it collected from AT&T while investigating the proposed $39B deal.

In a hearing in Washington, D.C. Monday, Huvelle said she didn't think allowing Sprint to have access to the privileged information would be "efficient or fair." Court observers say the ruling complicates the case by making it more difficult for Sprint's legal team to coordinate with government lawyers.

Huvelle did not rule on AT&T's request to have the lawsuits thrown out, including the one brought by Cellular South. The judge set another hearing date of Nov. 30 for the DOJ's case against the deal.•

Etc.: Netflix Breaks 'Cardinal Rule' - Spectrum 'Grudge Match' Heads to Supercommittee - AT&T's Wireless Receiver

Alt. Video: Forbes contributor David Coursey says Netflix broke the cardinal rule of business and is now paying the price. "(N)ever give your customers a reason to reconsider their purchase decision…" Read the entire piece, here. WSJ has additional coverage of how the company, with shares trading around $75 for the first time in 18 months, managed to wipe-out about $12 billion of its own value in about 3 months.

Rules & Regs: Politico says the "grudge match" between broadcasters and the wireless industry is forcing supercommittee members to pick sides in the battle over deficit reduction measures.  Most agree there isn't enough spectrum… Nearly no one agrees on who's going to give it up. Read more. And, historians and industry vets out there should read this entry at the Huff Post, which says, among other things, not to believe certain interest's claims that incentive auctions are "unAmerican."

$$$: A new study says TV revenues from five major athletic conferences and the NCAA average ~$784M per year while total TV revs have hit nearly $1.8B per year. Completed by the NCPA (National College Players Association), the study is the organization's look into how athletics generate millions yet scholarships and educational opportunities for students continue to dwindle. Read more.

Analyze This: The International Strategy & Investment Group (ISI) initiated coverage of the cable and satellite industries. The firm said while trends may suggest "a deceleration in growth resulting from business maturation and an increase in competitive intensity… the equity investment opportunity in the sector is highly attractive."  In its initial release, the group issued a 'buy' rating on Cablevision, Charter, Comcast, DISH, DIRECTV and Time Warner Cable.

Tech: AT&T is launching its wireless TV receiver for U-verse subscribers this month, with pre-orders starting on Halloween. The receiver will be available for a one-time fee of $49 and $7 per month rental costs. Check it out here. --- Insiders say Jeff Robbin, the Apple software engineer who built iTunes and helped build the iPod is now working on the company's TV plans.

Retail: A glimmer of hope for holiday sales? The CEA thinks so, as the release of its annual Holiday Sales and Forecast report says consumers plan on speeding 6% more on electronics as gifts this year than in 2010.

Folks: ESPN hired former Yahoo and Microsoft exec Michael Bayle as SVP and GM of ESPN Mobile.

--- Catch today's media market news in The Evening BRIDGE. •

ADVERTORIAL: Cable MSO Summit announces additional keynote speaker focusing on key revenue opportunities

The evolution of enhanced advertising is a story of great expectations, high-profile missteps and significant potential going forward. Canoe Ventures sits at the nexus of opportunity for the cable industry and its ability to capitalize on the platform. Join SNL Kagan and Canoe Venture’s newly elevated Chief Product Officer Arthur Orduna to explore the challenges and opportunities presented by the interactive ad space.

In addition to Mr. Orduna’s keynote Q&A session, the Summit also features a keynote Q&A session with  Michael Angelakis, Comcast Chief Financial Officer.

Additional highlights include panel discussions featuring leaders from the cable, telco, investment, and technology sectors, such as Jay Kreiling (Comcast Corporation), William Abbot (Crown Media), Roy Chesnutt (Verizon), Matt Derdeyn (Charter), Thomas Might (Cable One), Joseph Ambeault (Verizon), Tara Maitra (TiVo), Sean Riley (FOX Networks), T.J. Carella (Goldman Sachs), Edward Huguez (Starz Entertainment) and Chad Gutstein (Ovation).

For the full schedule of the SNL Kagan MSO Summit and registration information, go to www.snlcenter.com/KaganMSO.