The market outcome for the license fee under the retransmission consent paradigm may not be socially efficient, the Phoenix Center said in a white paper. The paper, released Thursday, said broadcast regulation “creates a type of positive information externality,” and private transactions don’t typically account for externalities, Phoenix said in a news release (http://bit.ly/JMx7nv). That means “the market price for the retransmission fee is theoretically ’too high,’ both relative to the socially-optimal price and the market price of an otherwise-equivalent cable network,” it said. This “spread” is a consequence of a disharmony “between the historical and continuing policy of the broadcast social contract and the ‘market’ approach embodied in the retransmission consent regime.” For there to be a true market solution to retrans consent, “Congress must eliminate, or meaningfully reduce the scope of, the social contract, including the various protectionist and support mechanisms given to the broadcast industry,” the paper said (http://bit.ly/190kpKN). Revising rules for network non-duplication and syndicated programming exclusivity would allow customers of multichannel video programming distributors access to highly desired network and sports programming, it said. However, given the retransmission of distant signals is also governed by contracts between networks and affiliates, “it is unclear how much help repeal of the exclusivity rules will actually provide.” Congress could amend the retransmission consent provisions of the Communications Act to allow the FCC to authorize interim carriage of a station by an MVPD pending the conclusion of a new agreement, it said. “This solution would continue to satisfy Congress’ substantial interest in having local commercial broadcast stations appear in MVPD channel packages."

The FCC International Bureau dismissed Gogo’s request for special temporary authority to communicate with the Eutelsat 172A satellite at 172 degrees east in the 14.0-14.5 GHz and 11.7-12.2 GHz bands. That satellite isn’t authorized to operate in the 11.7-12.2 GHz frequency, the bureau’s Satellite Division said in a letter to Gogo (http://bit.ly/1bSYLor).

Update the E-rate program now, 26 members of the House told all five FCC commissioners in a letter dated Wednesday. The House sponsors of the letter -- Reps. Jared Polis, D-Colo.; Chris Gibson, R-N.Y.; Jared Huffman, D-Calif.; Don Young, R-Alaska; and Suzan DelBene, D-Wash. -- sought colleagues’ signatures for a draft of the letter earlier in December (CD Dec 10 p10). “We ask the Commission for swift action to bring high-speed broadband to our students on an expedited basis,” said the final copy of the letter, advocating for school broadband speeds of 100 Mbps now and 1 Gbps by 2017. The letter included several recommendations, such as that the FCC should create an “update fund within the E-rate program to connect every school and library, particularly those in rural areas, to high-speed broadband.” The FCC should up its transparency and accountability and simplify its paperwork, the letter said. The agency has been in the process of updating the E-rate program in recent months, and President Barack Obama has also voiced support for updates, calling the initiative ConnectEd. A spokeswoman for DelBene told us the letter would have been sent to the agency Wednesday.

SES, SpeedCast and AsiaSat donated satellite and service capacity to help restore communication links to survivors of Typhoon Haiyan in the Philippines. The companies provided the capacity to NetHope, a group of nongovernmental organizations, SES said in a news release (http://bit.ly/J5uEmQ). It said that includes 36 MHz of capacity on SES’ NSS-11 satellite and uplink services and ground infrastructure from SpeedCast and AsiaSat.

Ex-Commissioner Deborah Taylor-Tate and Education Networks of America met Nov. 13, 14 and 15 with FCC Wireline Bureau staff and aides to several commissioners, they said in an ex parte filing posted online Tuesday (http://bit.ly/18RnrOi). The group said it supports the FCC’s goals for modernizing the E-rate program, and offered ideas on streamlining the application process for E-rate funds. The E-rate program should also be able to provide partial funding “in situations that merit such treatment,” they said in a presentation that was included with the filing(http://bit.ly/18RnARR). They recommended exemption of schools, libraries and their underlying providers from paying into the Universal Service Fund on services and service components. They also suggested a standing committee of “E-rate constituents” to help ongoing improvement of the rules.

Even after completion of the IP transition, the wholesale wireline provisions of the Communications Act will continue to be necessary and important, Comptel told an aide to FCC Chairman Tom Wheeler. Regardless of the technology used, “access to consumers is required” to ensure competition isn’t stifled, Comptel said. “It is not economically viable for competitors to replicate the ILEC network in its entirety,” the association of competitive providers said. “Competitors must supplement their reach” by “purchasing from large ILECs wholesale last mile access,” it said. The commission could speed the IP transition by “confirming that IP interconnection for voice services falls under Sections 251 and 252 of the Act,” Comptel said.

"Illustrative model outputs” of version 4.0 of the Connect America Cost Model are available at http://fcc.us/18RrTfQ, the FCC Wireline Bureau said in a public notice Wednesday (http://fcc.us/18RrU3A). The site also contains lists of the census blocks that would be funded if the bureau adopts this version of the model, it said.

AT&T’s $2 billion sale of its Connecticut wireline operations to Frontier Communications (CD Dec 18 p9) shouldn’t have a “material impact” on AT&T’s free cash flow, Credit Suisse said in a research note Tuesday. The assets being sold generate roughly $1.2 billion of AT&T’s annual revenue, which is less than 1 percent of the telco’s total sales, the report said. “While the deal in itself has little impact on AT&T’s financials, we view the move to monetize these fixed line assets as a small positive, as we believe the capital could be used to ramp Project VIP.” Project Velocity IP is AT&T’s plan to invest $14 billion in upgrades to its wireless and fiber network (CD Nov 8/12 p11). The transaction is “attractive” for Frontier, said Andrew Spinola, analyst at Wells Fargo, in a research note Tuesday. “This is a significant transaction, but FTR has experience with these types of transactions and should be well-positioned to manage the process,” Spinola said. “The transaction is also financially attractive as it improves the payout ratio, creates $200MM in synergy opportunities, and increases the scale of the business,” he said. UBS expects Frontier to implement its “local engagement and simplified pricing plans” in Connecticut to drive penetration higher in residential and small and medium enterprises, said analysts Batya Levi and John Hodulik in a research note Tuesday. “We believe wireless backhaul will be a growth driver” of revenue and free cash flow, “as most of the towers had already been upgraded,” while regulatory revenue remains relatively stable, said the UBS analysts.

"The years-long quest upon which the FCC has been embarked to determine whether special access rates are ‘reasonable’ makes Don Quixote’s quest look like child’s play,” Free State Foundation President Randolph May said in a blog post Tuesday bemoaning the special access “debacle” (http://bit.ly/18Rla5C). The FCC is unlikely to ever gather all, or even most, of the requested data, May said, citing an NCTA petition seeking review of the data collection it said violates the Paperwork Reduction Act (http://bit.ly/18RlukP). Even assuming the special access market should be more competitive than it already is, any potential mandated rate reduction would “deter the development of further facilities-based competition,” May said. He also criticized the FCC’s decision to suspend and investigate AT&T’s special access tariff filing proposing to eliminate new long-term discounts (CD Dec 10 p1). “The FCC’s action was a mistake, and it leaves one wondering whether the agency has any appreciation at all of the way its actions can adversely affect the transition to all IP networks that enable less costly, more efficient services,” May said. “The Commission needs to reorient its pro-regulatory mindset in a meaningful way."

Reports that Sprint and T-Mobile could merge have added a new wrinkle to one of the most contested issues on rules for the TV incentive auction -- spectrum aggregation limits, said NAB Executive Vice President Rick Kaplan on the group’s blog Wednesday. “Let’s assume that the FCC is contemplating rules that would ensure that each of the top four wireless carriers has a reasonable shot at acquiring spectrum in the incentive auction,” Kaplan said (http://bit.ly/1bQPfWl). “What happens, then, if those rules are enacted, and Sprint and T-Mobile subsequently reach a deal to merge, but prior to the auction itself? Or, what happens if the two companies participate in the auction independently, benefit from competitive rules designed for them, and then merge with spectrum assets they wouldn’t have had access to had they merged pre-auction?” Kaplan, former chief of the Wireless Bureau, said the association hasn’t staked out a position on spectrum aggregation. But, he said “the rumors of a Sprint/T-Mobile merger seriously raise the stakes for the wireless competition issue; one that has already had more airplay than any other."