CBS and a committee of its board filed a lawsuit and motion for a temporary restraining order seeking to prevent controlling stockholder National Amusements from “interfering with a special meeting of the Board of Directors” that would redistribute CBS stock to dilute National Amusement’s voting interest, the broadcaster said in a release Monday. Shari Redstone controls National Amusements. The dividend “would dilute National Amusements, Inc.’s voting interest from approximately 79% to 17%,” the release said. The court documents were filed in Delaware Court of Chancery. The special committee was formed in response to the proposed combination of National Amusements-owned Viacom and CBS, and voted Sunday that the proposed deal isn’t in CBS’s interests, the motion said. “The Special Committee believes that the Company and its public stockholders face a serious threat of imminent, irreparable harm in Ms. Redstone’s potential response to the Special Committee’s unanimous decision.” Such a significant change in ownership of a company that controls numerous broadcast licenses is likely to require FCC approval, broadcast attorneys told us. The suit makes it less likely that CBS will buy Viacom, Citibank analyst Jason Bazinet emailed investors. It appears "CBS management and part of the board has effectively decided either to take control away from the Redstones and chart their own course or to in effect be removed,” Barclays' Kannan Venkateshwar emailed. “If the restraining order is allowed by the court, the CBS board is likely to vote on the new shares on Thursday, but the shares won’t be issued till a decision is laid out on the lawsuit itself," Venkateshwar said. “For both CBS and Viacom, this lawsuit is likely to result in a period of uncertainty and a lack of closure one way or the other for some time,” the analyst said. “The lawsuit may take about six months to resolve itself.”

The Department of Commerce is gathering data from U.S. companies on intellectual property transactions, in a mandatory survey. The “BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons” survey requires all U.S. companies with combined inbound transactions of $1 million or outbound transactions of $2 million for FY 2017 to report type, amount and country involved in the IP transaction. Responses are due June 29-30, depending on format. The department’s Bureau of Economic Analysis is authorized to do the survey through the International Investment and Trade in Services Surveys Act. Companies failing to respond face fines up to $45,000, plus potential criminal penalties. Wiley Rein suggested the survey may “be used to support the goals of the Trump Administration’s ‘America First’ policies,” which emphasized IP protection.

Liberty Global will sell its German, Hungarian, Romanian and Czech Republic operations to Vodafone for $22.7 billion, Liberty said Wednesday. It expects the deal to close in mid-2019, pending European Commission approval. Liberty said it will continue its cable ISP operations in the U.K., Ireland, Belgium, Switzerland, Poland and Slovakia and still have its 50 percent stake in the VodafoneZiggo joint venture in the Netherlands. Liberty said its and Vodafone's cable networks don't overlap. In a note to investors, Citi said the deal is likely to get regulatory approval, though odds are good Germany will impose some conditions.

A hostile Comcast takeover bid for Fox would put Fox's management "in a pickle," since the Murdoch family is said to be in favor of Disney's offer because taxes would be lower, but rejecting the much higher Comcast bid could result in shareholder lawsuits, Kagan's Derek Baine wrote in a blast email. The analyst said many Fox investors don't like the dual voting structure that gives the Murdoch family and its super-voting stock 40 percent of the shares while owning less than 20 percent of the equity. He said there could be a bidding war with Disney, since it's betting heavily on Fox-related content for its over-the-top services (see 1805090002). To avoid that, Comcast and Disney might want to negotiate an agreement to split the assets, with Comcast getting Star TV and Sky, Baine wrote. Comcast reportedly is mulling a cash offer for Fox (see 1805080004).

Lack of an FCC role in AT&T's proposed buy of Time Warner is a key reason the proposed Turner arbitration terms (see 1711280063) aren't sufficient as a fix of noncompetitive harms the deal raises, DOJ said in docket 17-cv-02511-RJL post-trial brief (in Pacer) filed Tuesday. The U.S. and the court never before lacked FCC assistance in crafting and supervising behavioral conditions, Justice said, calling Turners' arbitration offer "half baked." It said being part of New AT&T would be the "end of Time Warner's agnosticism" on distributors since New AT&T wouldn't want TW content distributed in ways that put more competitive pressure on AT&T-owned DirecTV. Justice said the companies are trying to "rewrite" merger law by carving out "a safe harbor for 'minor' price increases" when Section 7 of the Clayton Antitrust Act focuses on harms to competition and not on the individual consumer, while annual harms of hundreds of millions of dollars "plainly evidences a 'substantial' distortion of the competitive process." It said FCC program access rules won't prevent anticompetitive harms from the deal, since the agency's Comcast/NBCUniversal order adopted remedies because it didn't consider program access rules sufficient to prevent price increases. The department said the court should opt for either a permanent injunction or targeted divestiture, with the options for the latter ranging from a targeted divestiture of Turner to a targeted divestiture of DirecTV. It said behavioral remedies are less effective at protecting competition than structural ones since they can't foresee all possible routes of improper influence over the acquired company. DOJ finds no examples of any Section 7 case in which the court ordered only behavioral relief over the U.S.' objections that survived appellate review. The companies filed their post-trial brief last week in U.S. v. AT&T and TW (see 1805040002).

The FCC can’t process Sinclair buying Tribune until terms and buyers of all the related divestitures are known, said the American Cable Association in a meeting Thursday with Media Bureau staff, recounted a filing posted Monday in docket 17-179. Under recently amended terms, Sinclair won’t temporarily hold ownership over any to-be-divested Tribune stations, ACA said. ACA has said even a temporary transfer to Sinclair pending a divestiture could activate after-acquired clauses (see 1803130042) in some retransmission consent contracts. ACA and bureau staff discussed whether the commission will request data and information from the parties seeking to acquire the divested stations. In a letter to Commissioner Jessica Rosenworcel posted Monday, Heritage Broadcasting of Michigan CEO Peter Iacobelli said Sinclair/Tribune would have disastrous effects on localism and retrans: “This merger will result in the overwhelming anti-competitive market environment.”

Analysts see Comcast's supposedly working toward an all-cash offer for Fox as carrying multiple challenges. The reported offer could "face a stiff fight" for Fox and Sky "and will likely end up with neither," New Street Research analyst Jonathan Chaplin emailed investors Tuesday. If it does buy both, New Comcast might have to separate its cable and content businesses, though "it would be hard not to be excited about a phenomenal Cable asset coupled with a global content powerhouse," he said. Any Comcast interest in Fox is "just dumb" given the amount of debt Comcast would take on, the antitrust issues raised and the lack of synergies between the two, Ross Gerber, Gerber Kawasaki Wealth and Investment Management CEO, tweeted Tuesday. Disney, meanwhile, "is in such a good position they don’t need Fox, although it puts them in a more dominant position." Gerber said the company should put its focus on its ESPN and over-the-top apps. Comcast's interest in Sky and possible interest in Fox underscore its focus on differentiation through original content, while possibly pointing to "a large-scale Internet-delivered video strategy," Kagan analyst Tony Lenoir emailed. But a Fox bid could start a bidding war with Disney, which is counting on Fox programming assets for its over-the-top service, he said. Comcast didn't comment.

As the world moves toward mass-market data pricing, only scale and network efficiencies can take satellite operators to that level of pricing, meaning the industry should expect horizontal mergers and operator/equipment provider partnerships to get to that scale, Northern Sky Research analyst Gagan Agrawal blogged Monday. "The ride will be rough and gambled with a lot of risk money, but it’s hard to see the industry register long term growth otherwise."

Senate Judiciary Antitrust Subcommittee ranking member Amy Klobuchar, D-Minn., and seven other Senate Democrats are urging the FCC and DOJ to “closely review” T-Mobile’s proposed buy of Sprint. Several Democrats criticized T-Mobile/Sprint after the carriers announced the agreement, with several asking for hearings about the deal’s effect on the U.S. wireless sector (see 1804290001, 1804300057, 1805010072 and 1805020050). The FCC and DOJ must ensure T-Mobile/Sprint “does not threaten to harm consumers or competition in the wireless market,” the Senate Democrats said in a letter to DOJ Antitrust Division head Makan Delrahim and FCC Chairman Ajit Pai we obtained. The agencies should consider “the impact of reducing the number of national wireless carriers from four to three,” how “the proposed merger would affect lower-cost options for wireless service,” whether “specific regions, particularly rural areas, would be disproportionately affected” by the deal and “the proposed transaction’s likely effect on innovation of wireless networks and other technologies,” the letter said: The agencies also “carefully consider T-Mobile and Sprint’s direct competition against each other as the two lower-cost alternatives to AT&T and Verizon.” Lower-cost options “are especially important for Americans who rely on mobile broadband as their primary or only internet connection,” the letter said. Despite the carriers’ argument that T-Mobile/Sprint will help them deploy 5G, T-Mobile “has shown that it is already capable of rapidly creating and expanding a nationwide network independently when it deployed nationwide LTE faster than Verizon and AT&T. The transaction would also eliminate Sprint as an independent force for innovation.” The FCC, DOJ, Sprint and T-Mobile didn’t comment.

Fusion closed a $600 million buy of cloud and business service assets from Birch Communications, Fusion announced Monday. The cloud deal included 50 million shares of Fusion stock and refinancing of $444 million of Birch indebtedness, Fusion said. The buyer said it completed a planned divestiture of all interests in its carrier services business, leaving cloud and businesses services as its sole focus. Fusion didn't disclose divestiture details but will say more in an SEC filing later this week, a spokesman said.