AT&T has deployed 5G in parts of 19 markets, with plans to cover 200 million POPs by the end of next year, Chief Financial Officer John Stephens said Wednesday on Q1 results. “Our plans for 5G are going quite well,” he told investors and analysts. “We’re very optimistic. We’re leading in 5G.” But the company won’t see an uptick in revenue until next year, he said. The stock closed down 4.1 percent to $30.79 as analysts said some results like video losses lagged behind expectations. The FirstNet build has hit 53 percent competition, with a goal of 60 percent by the end of Q3, Stephens said. “We’re well ahead of schedule.” Putting new spectrum in play is “working and it’s working in the quality of the network,” he said. Customers get that the quality of the network is improving, said CEO Randall Stephenson. “We’re not going out and doing a lot of aggressive promotions and we’re not doing pricing to try to get customers to stay,” Stephenson said. “It is happening just organically.” AT&T customers like the 5GE, or 5G evolution, service and are finding it to be faster than 4G, he said. “It is truly a step-change difference in product capability,” Stephenson said. “This is the No. 1 area that I am most pleased with.” FirstNet now has 570,000 subscribers at 7,000 agencies, with many new customers, Stephenson said. “This is driving a not inconsequential impact in subscriber gains,” he said. “We continue to be more enthused about [FirstNet] than when we won the bid.” AT&T reported 204,000 postpaid net losses in Q1 “with losses in tablets offsetting gains in wearables and phones.” The company added 79,000 postpaid smartphones, but lost 428,000 tablets and other branded computing devices. Postpaid churn was 1.17 percent, up from 1.06 percent the same quarter last year. DirecTV Now, AT&T’s streaming service, lost 83,000 subscribers and the number of premium video subscribers declined by 544,000. Stephenson warned that more losses are on the way. Net income attributable to AT&T fell to $4.1 billion, from $4.66 billion. Total revenue rose almost 18 percent to $44.83 billion compared with a year ago. Wells Fargo’s Jennifer Fritzsche saw results as mixed. “Mobility offered a pleasant surprise as the postpaid phone additions were in stark contrast to where the Street was looking,” she said. “While Entertainment Group financials were in-line, the video losses continue to be worse than expected.” New Street’s Jonathan Chaplin saw the results as “uninspired.” The quarter “was a mixed bag for AT&T: subs grew in Wireless, but were worse than expected in the Entertainment group,” Chaplin told investors.
The FCC is starting to look at a decision by the 4th U.S. Circuit Court of Appeals, which raises questions about a 2016 order implementing a provision in the 2015 budget law, said Mark Stone, deputy chief of the Consumer and Governmental Affairs Bureau, at an FCBA event Wednesday evening. The order allows robocalls to cellphones for purposes of government debt collection (see 1608110038). The court severed the debt-collection exemption “from the balance of the automated call ban” and remanded the issue to a lower court for “further proceedings as may be appropriate.” The debt-collection exemption “fails strict scrutiny review” and is “fatally underinclusive,” the court ruled Wednesday in American Association of Political Consultants v. FCC. “By authorizing many of the intrusive calls that the automated call ban was enacted to prohibit, the debt-collection exemption subverts the privacy protections underlying the ban,” the court said. “The impact of the exemption deviates from the purpose of the automated call ban and, as such, it is an outlier among the other statutory exemptions.” Judge Robert King wrote the order, supported by Judges Barbara Keenan and Marvin Quattlebaum.
Arguments against SpaceX getting special temporary authority for communications between its Ku-band earth stations and first batch of Starlink broadband satellites planned for May launch come "from a fundamental misunderstanding," the company told FCC International Bureau staff in a phone call Tuesday, per a filing. Even if SpaceX had its related satellite constellation modification and earth station license approvals in hand months ago, the STA would be needed because regular licenses don't cover communications with non-geostationary orbit satellites during orbit raising, only once they get to their assigned orbital positions, it said. The volume of OneWeb opposition to the license modification application seems to indicate it's "more focused on stymying others from providing broadband to consumers than it is in providing service itself," SpaceX said. OneWeb didn't comment. Free State Foundation President Randolph May blogged Tuesday that the FCC should be skeptical of SpaceX's STA ask. There don't seem to be extraordinary circumstances warranting an STA or reasons why the agency shouldn't first resolve the interference concerns raised in connection with its pending modification application, he said. The company didn't comment on that.
Don't let the direct broadcast satellite rules revision proceeding become a promotion of use of DBS spectrum for other services, said satellite operators in docket 06-160 replies posted Tuesday, after initial comments urged the FCC to delve into 12 GHz band use (see 1903270006). Multichannel video and data distribution service operators -- urging two-way terrestrial mobile service in the 12.2-12.7 GHz band -- don't give any good reasons why, instead "recycl[ing] a litany of excuses" about why MVDDS deployments have "been practically non-existent," OneWeb said. It opposed allowing fixed satellite service downlinks to operate under primary status in the 12 GHz band. SES said it and other satellite operators use the 12 GHz band for FSS on a nonconforming basis, and allowing FSS protected status would meet demand for more FSS downlink spectrum. Beyond its previously urged extension of the license term for nonbroadcast DBS satellites to 15 years and requirement applicants that DBS services at reduced orbital spacing coordinate with existing DBS systems within six orbital degrees, AT&T said the FCC should decline here to address aggregate interference. Intelsat urged rejecting use of a corporate guarantee as an alternative to a surety bond. It also filed an opposition to 2016 petition for reconsideration filed by SES and New Skies seeking clarification of U.S. market access rules adopted the year before (see 1609200049), defending the U.S. two-step licensing process related to ITU submissions as giving equal opportunity to U.S. and other licensed operators.
Local governments should join forces to oppose an FCC NPRM to expand the over-the-air reception devices (OTARDs) rule for 5G (see 1904150035), Best Best attorneys said in a Monday legal alert. “If approved, the Rule would limit localities’ authority to regulate placement of hub and relay antennas of a certain size -- regardless of whether an occupant at the site where the equipment is deployed is using the network,” the local government lawyers wrote. “In doing so, the FCC seeks to extend a Congressional directive that protects consumers’ right to install satellite dishes … to network elements that would otherwise be subject to zoning oversight.” The rule may permit wireless companies to install antennas without notifying local agencies or facing local control, they said. Comments on the FCC NPRM are due 30 days from Federal Register publication. The FCC didn't comment.
Verizon held what CEO Hans Vestberg called the “first earnings call in the 5G mobility era” Tuesday, and as usual the first major carrier to report quarterly. Vestberg was asked about the company’s emphasis on high-band versus mid-band frequencies for 5G. The high band isn’t “coverage spectrum,” but “the throughput and speeds are enormous” in limited areas, he said. “No one else in the whole industry” knows more about 5G than Verizon, he said. Its initial 5G launches are “performing as expected” and the company is on pace to begin services in new markets in the second half of the year, Vestberg said: “As more features within the network enhancements become available … we are providing increased coverage, improved capacity and greater throughputs.” Vestberg emphasized Verizon is in “the very early stages” on 5G. Most handsets that come out next year will have chipsets for high-band spectrum, he said. Phones by Samsung, Motorola and LG available this year will be 5G ready, he said. “The whole ecosystem, from chipsets, to equipment is ramping up quickly,” Vestberg said: “We are in the forefront of technology here, so of course we are … on the edge of the demands and the supply on equipment at the moment.” Verizon added a net 61,000 retail postpaid customers in Q1, including 174,000 postpaid smartphone net adds. Retail postpaid churn was 1.12 percent. Verizon also reported $5.2 billion in profit, compared with $4.7 billion in the year-ago quarter and revenue of $32.1 billion, up 1.1 percent. “Results were a bit mixed, as wireless top-line beat on strong ARPU [average revenue per user], but wireless margins were far weaker than expected, and adds were a touch soft,” said New Street’s Jonathan Chaplin: “On the strategic front, there was little news as the company continues to emphasize their cost-cutting and mmWave 5G efforts.” Other analysts agreed the results were mixed. “Somewhat elevated churn was a disappointment in contrast to a quiet backdrop,” Macquarie’s Amy Yong told investors. “Verizon has a small window to take the charge on 5G and it continues to focus on network leadership. But, signs of commercialization have been slow.”
The Rural Utilities Service will begin accepting applications Tuesday for the ReConnect program’s three funding categories, says a notice for that day's Federal Register. The $600 million program provides loans, grants and loan-grant combinations to facilitate rural broadband deployment (see 1812130064).
T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure met with FCC Commissioner Jessica Rosenworcel about T-Mobile's buy of Sprint, said a filing posted Monday in docket 18-197. The executives “described the affirmative case for the transaction and responded to questions,” the companies said. New Street’s Blair Levin told investors the deal is unlikely to be approved as-is. “Staffs at the DOJ and FCC have significant concerns about the deal on a number of traditional antitrust type issues, including on the claims of efficiencies, potential price increases, and the impact on competition in the next several years,” he said. T-Mobile Chief Technology Officer Neville Ray also attended, and blogged Monday about the deal (see 1904220040).
The FCC released formerly confidential information about incentive auction reverse auction bids that didn’t win, said a public notice Monday. The information is being released because a promised two-year deadline, dating from the April 13, 2017, close of the auction, has now passed. The agency released the data only on winning bidders when the auction closed in 2017. “Today we are making available information about non-winning bids and other related data regarding bidding in the reverse auction,” the PN said. The information will be useful to non-winning broadcasters to see how close they came to getting an auction payout, said Fletcher Heald broadcast attorney Peter Tannenwald in an interview. The details also could show which broadcasters were open to unloading their stations but didn’t get the chance, BIA/Kelsey Chief Economist Mark Fratrik told us.
Representatives of New America’s Open Technology Institute met with an aide to FCC Commissioner Brendan Carr about the future of the Lifeline program. “We reiterated OTI’s longstanding support for Lifeline and our concern that a budget cap could cause eligible Americans to lose access to vital communications services and discourage wireless providers from participating in the program,” the group said in docket 17-287. OTI said the FCC should “fully implement” the national verifier before taking on other systemic changes to the program. Last we were told, Carr hadn't yet voted on the USF budget NPRM (see 1904030026), and he declined to comment about the matter to us on April 12.