Here is your recap of cable and Internet service industry news from around the US and the world for the week of July 31, 2017:
US Congress to Consider Bill to Limit Online Tax Collection
A new bill that limits states from collecting state sales tax from online purchases has been introduced in the US House of Representatives by Rep. James Sensenbrenner (R-WI). The bill, H.R. 2887 titled the “No Regulation Without Representation Act,” would prohibit states from making retailers collect that state’s sales tax if they do not have a physical location in the state. Christopher Cox, counsel for national trade association NetChoice, said, “Even a business located in a single jurisdiction is now threatened with having to comply with 46 different state regulatory regimes for definitions, tax rates, rules, and audits.”
And Jeff Bezos Takes The Lead From Bill Gates (Temporarily)
As mentioned in the July 17 Rewind, Internet giant Amazon’s pending purchase of Whole Foods has caused the stock prices of a few other companies to take a dip, while Amazon’s value has gone up. And up. So much so that Amazon founder Jeff Bezos’ net worth just increased $1 billion causing him to briefly take the title of the world’s richest person from Bill Gates. Amazon’s stock then went back down a bit and Gates took back the number one richest person position. At the beginning of the year, Bezos was at number four. Now he is resting at number two.
Verizon Reported to Cap Some Netflix Customers
Several Verizon customers have reported that Verizon has capped their download speed to 10 Mbps or below when streaming video from Netflix. Some have claimed that YouTube viewing was also capped. Verizon admitted to capping some users but said that it was just a “video optimization test” and shouldn’t have affected customer’s download speeds. I guess they were testing to see if they could get away with it. Verizon customers complained on Reddit and other online forums.
Facebook Offers Free Internet in Some Areas
Free Basics is Facebook’s solution to potential Facebook users who would join Facebook if only they had an Internet connection. Global censorship activist group Global Voices studied the service and was not impressed. They found that it offered little to benefit users while collecting vast amounts of personal data from them. It does not provide email to users, has limited local language choices, and does not let them truly browse the web. Free Basics only allows them to go to a few sites selected by Facebook, like Wikipedia, BBC news, and Accu Weather. And of course, Facebook.
Kaspersky Labs Releasing Free Anti-Virus Software
Russian anti-virus software maker Kaspersky Labs has announced they will be offering a free version of its anti-virus software in the US to combat global cyber threats. They will be releasing it worldwide soon. Kaspersky had recently been removed from the US Government’s list of approved vendors due to fears they were colluding with the Russian government. The software company denies any connection to the Russian or any government.
Viewers Continue to Jump From Sinking Pay TV Ship
Across the board, tradition cable and satellite TV continues to lose viewers. The numbers from the second quarter of 2017 don’t look good.
- AT&T lost over 350,000 viewers across AT&T Uverse and DirecTV
- Comcast saw 45,000 cut the cord
- Charter lost 90,000, between legacy Charter, TimeWarner, and Bright House customers
- Alltice dropped 37,000 viewers
- Verizon came out the best with loss of only 15,000 viewers in the quarter
Somewhat softening the blow of viewer loss for AT&T is the addition of 125,000 customers to AT&T's OTT offering, DirecTV Now. That doesn’t help too much against the 350,000 viewer loss AT&T suffered in cable and satellite.
Congress Looks Into Net Neutrality
House Republicans want to hear from executives of tech and telecom rivals — including Facebook, Google, AT&T, Comcast, Amazon, Netflix, Charter, and Verizon. They have asked them to appear before the U.S. Congress in September and answer questions about net neutrality. While I have little faith that Congress will protect the people as opposed to the corporations, at least they are asking questions. They need to invite the Electronic Freedom Foundation or some other consumer group too.
Charter Says “No” to Sprint
Sprint Chairman, Masayoshi Son, who is also the CEO of Sprint owner, Softbank, proposed a merger with Charter Communications over the weekend but Charter responded with a polite “no.” "We understand why a deal is attractive for SoftBank, but Charter has no interest in acquiring Sprint," Charter said in a statement. Then word got out that Softbank may be planning to make an offer to purchase Charter. Charter is valued at over $100 billion while Sprint is a little shy of $33 billion.
Discovery Communications to Acquire Scripps Interactive
Discovery Communications and Scripps Networks Interactive have announced a $14.6 billion deal which will combine the two cable networks giants. The companies are known mostly for nonscripted and lifestyle programming. Scripps owns HGTV, Travel Channel, DIY Network, and the Food Network, among others, while Discovery's networks include The Discovery Channel, Animal Planet, TLC Velocity, Oprah Winfrey Network, and the Science Network. The merger is expected to save the combined companies $350 million in "significant cost synergies."
WebMD to be Acquired by Internet Brands
Internet Brands, which currently owns such web properties as eDoctor.com, DentalPlans.com, eHealthForum.com, and Lawyers.com, announced it will be adding WebMD.com to its fold. WebMD is one of the top 50 sites on the Internet, logging more than 71 million visitors in June of this year. Internet Brands is paying $2.8 billion for WebMD, more than double the $1.1 billion price that private equity firm KKR paid for Internet Brands itself in 2011.
Windstream Finalizes $227 Million Broadview Network Purchase
Windstream Holding’s purchase of Broadview Network finally overcame all the legislative hurdles to come to reality. The merger was announced back in April of this year. Windstream purchased pioneer Internet service provider Earthlink earlier this year. Windstream is the ninth largest residential telephone company in the US and is based in Little Rock, AR. It services more than 8 million people in 21 states.