January 23, 2013
Google Fiber, the Internet search giant's super-fast Internet experiment in Kansas City, Mo. that operates at a speed 100 times faster than a typical broadband connection, could be coming to a city near you. During Google's fourth-quarter earnings call, Google Chief Executive Larry Page and Chief Financial Officer Patrick Pichette made it clear Google Fiber is not a "hobby" for the company. "It's been great to see the success there with the initial roll-out," Page said. He cautioned: "We are still in the very early stages of it." But he emphasized: "We are excited about the possibilities there."
Pichette said Google Fiber installations are growing each week. "People just love the product," he said. "It's not a hobby," he added. "We really think we should be making a good business with this opportunity." "We are going to continue to look at the possibility of expanding." For the time being, Pichette said Google is "debugging" the product and the experience for users. But, he said, such super-fast Internet is "what people are dying to get everywhere."
Last month Google Chairman Eric Schmidt said Google was delivering 760 megabits per second to the customer, and taking 720 megabits a second from customers. He made the remarks during the New York Times Dealbook conference in New York. Schmidt said Google is thinking about rolling out the service to other cities but did not specify which ones. Los Angeles Times
AT&T says it will acquire Alltel Corp's spectrum for $780 million in cash, Business Wire reports. The wireless carrier signed an agreement with Atlantic Tele-Network Inc, which operates under the Alltel name in the United States, to gain Alltel's licenses, networking hardware, retail stores, and about 585,000 of its 4.6 million subscribers. "We are pleased that AT&T recognizes the value of our U.S. wireless retail operations and is acquiring these assets," Alltel CEO Michael T. Prior says in a statement. "Alltel's customers will benefit from access to a nationwide 4G network, a larger device selection, additional retail locations and a broader range of product offerings."
The acquisition is being reviewed by the Federal Communications Commission and the Department of Justice with an answer expected halfway into the 2013. Alltel has subscribers in rural areas of six states: Georgia, Idaho, Illinois, North Carolina, Ohio, and South Carolina. Alltel uses cellular technology called CDMA, that same technology used by Verizon Wireless and Sprint. The company's customers would need to convert to AT&T's preferred service, GSM, once the merger is through. Initial reports suggest that the switching over will not affect AT&T cash flow.
The acquisition may confuse people who remember the Verizon merger from four years ago. Verizon acquired most of Alltel's properties for about $22 billion, becoming the largest wireless carrier in the country. This included the bulk of Alltel's 13 million customers in 34 states. However, Verizon later had to divest 105 of Alltel's operating markets in 24 states as a condition set by the DOJ and the FCC to complete the Alltel acquisition - 79 of which were picked up by AT&T shortly after the Verizon deal. In the latest acquisition, AT&T will be acquiring Alltel's remaining operating markets. Chris Morran of The Consumerist describes the buzz as a "shell game," where consumers have to try to keep track of the mergers and divestitures in the ever-changing wireless market.
The announcement comes weeks after AT&T terminating its bid for T-Mobile USA, ending a nine-month-long controversy over the merger's monopolistic implications. AT&T announced in March that it planned to acquire T-Mobile USA for $39 billion, which would have made it the largest wireless provider in the country. The company is currently the second-largest wireless provider, behind Verizon. The deal came under fire from competitors and regulators. Sprint Nextel said the prospective merger would lead to a duopoly between AT&T and Verizon, who together would have controlled 80 percent of the market. The DOJ sued AT&T in August over concern about higher consumer prices and reduced competition and choice.
The Alltel acquisition, however, is not expected to cause as much controversy as the deal is much smaller than AT&T's last attempt. AT&T will likely have less trouble seeking FCC approval than it will converting Alltel's markets from CDMA to GSM, Engaget projects: "Besides regulatory approval, which shouldn't prove to be a major obstacle, the company also faces challenges integrating Alltel's existing infrastructure with its own," Terrence O'Brien writes. Christian Science Monitor
The Dodgers have agreed with Time Warner Cable on a new television contract that will provide the team with a channel of its own, according to two people familiar with the deal but not authorized to discuss it. Time Warner Cable now has secured the television rights to the two most popular teams in Los Angeles - the Dodgers and the Lakers - within two years. The Dodgers' deal is expected to be finalized and announced Thursday. The team has not yet submitted the deal to Major League Baseball for approval, but the control of the channel is expected to rest with the Dodgers' owners rather than with Time Warner. The Dodgers had no comment.
The Dodgers' current contract with Fox Sports expires after the 2013 season. The team had discussed a new deal with Fox last fall, worth at least $6 billion over 25 years. However, as MLB and the Dodgers debated how much of that money would have to be contributed to baseball's revenue-sharing program, the Fox exclusive negotiating window expired, enabling Time Warner to initiate negotiations with the team. Fox was believed to be willing to restructure its offer but was not believed to be willing to significantly raise the amount. The Time Warner Cable deal is believed to be worth between $6 billion and $7 billion. Fox Sports launched a second local cable channel - now called Prime Ticket - to carry the Dodgers in 1997. Fox Sports previously lost rights to Lakers games to Time Warner Cable, and the departure of the Dodgers would leave Fox with the Angels, Clippers, Ducks and Kings as the anchor teams for two channels. Los Angeles Times
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