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Policy Watch: Stimulating Rural America

Jeff Baumgartner
1/27/2010

The telcos came up big in the latest batch of broadband funds, the Comcast Corp. (Nasdaq: CMCSA, CMCSK) and NBC Universal deal is officially on the clock, and the Federal Communications Commission (FCC) is asking wireless carriers to explain their pricey early termination fees. Here's a glance at what's happening on the regulatory front:

  • The Rural Utilities Service (RUS) on Monday awarded $313 million more for the broadband end of the Recovery Act, doling out cash for 14 more largely fiber-based middle- and last-mile infrastructure projects.

    Among the biggest winners: Rural Telephone Service Co. Inc. ($101 million for unserved/underserved portions of Kansas and a tiny part of Nebraska); United Utilities Inc. ($88 million in grants and loans to provide middle-mile connectivity to 65 communities in Southwestern Alaska); and North Central Telephone Cooperative (NCTC) ($49 million to provide a triple-play service bundle, including data service exceeding 20Mbit/s, for remote and rural portions of Northern Tennessee).

    It's still early in this process, but the cable guys are still coming up on the short end of the stimulus stick. (See Recovery Act: Cable Shortchanged and Recovery Act: Cable Bids for Broadband Funds.)

  • Comcast and NBCU filed their formal Hart-Scott-Rodino paperwork on Monday, a move that starts the Justice Department's review of the proposed deal. (See Comcast to Take Control of NBC Universal.)

    The first Senate antitrust panel is slated for Feb. 4, with three more committees expected to hold hearings.

    As for possible conditions on the deal, at least one, the so-called terrestrial loophole, is off the table following recent action at the FCC.

    However, National Association of Broadcasters (NAB) president Gordon Smith said during an interview on C-SPAN's Communicators series Friday that he expects the deal to face "lots of caveats and conditions." (See FCC Tightens 'Terrestrial Loophole'.)

    But it appears that the feds won't have to press Comcast to maintain the status quo between NBC and its broadcast affiliates. In an address to the Congressional Internet Caucus' State of the Net Conference in the nation's capital today, Comcast chairman and CEO Brian Roberts reiterated that the MSO is committed to ensuring that NBC remains a free, over-the-air network.

  • The FCC isn't just targeting cable these days. It's also keeping a sharp eye on the wireless guys, asking them to justify their unpopular practice of charging early-termination fees (ETFs).

    Targets include all the major carriers, and Google (Nasdaq: GOOG), too. The FCC is asking about that company's $350 ETF for the recently introduced Nexus One smartphone. (See Nexus One Has a $174 Bill-of-Materials and Google Introduces 'Nexus One' Phone.)

    The Commission has asked the wireless carriers to respond by Feb. 23.

    — Jeff Baumgartner, Site Editor, Cable Digital News

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