New York is enjoined from enforcing its broadband affordability law, in a stipulated final judgment (in Pacer, docket 21-CV-02389) approved Wednesday by U.S. District Judge Denis Hurley in Central Islip, Long Island. Hurley ruled last month that ISPs would likely succeed on conflict and field preemption arguments, and granted a motion for preliminary injunction by the New York State Telecommunications Association, CTIA, ACA Connects, USTelecom, NTCA and the Satellite Broadcasting and Communications Association (see 2106110064). Under the stipulated final judgment, the sides agreed to a final judgment in favor of the ISP interest plaintiffs conceding that the state law is preempted by federal law. New York Attorney General Letitia James (D) reserves the right to appeal the stipulated final judgment, declaration and permanent injunction. Her office didn't comment. For our report on the sides settling this case that may go to an appeals court, see here.

Two companies participating in an FCC auction of FM construction permits could face consequences over prohibited communications, said letters from the FCC Office of Economics and Analytics in Tuesday's Daily Digest to Upbeat Frequency and Max Frequency. A July 19 meeting between principals of the two companies to discuss a possible deal to have better bidding eligibility in Auction 109 appears to violate rules on prohibited communications, the nearly identical letters said. The companies disclosed, and though they argued they didn’t discuss bidding strategies, their discussion must have implicated them, the letters said. The companies remain qualified bidders, but “further participation in Auction 109 by you could exacerbate this violation and may increase the likelihood and severity of possible sanctions,” staff said. “We are unable to fully investigate the facts underlying your report prior to the start of bidding, and will refer this apparent violation to the Commission’s Enforcement Bureau for further investigation.” The companies didn’t comment.

The FTC lacks authority and resources to properly enforce against consumer protection and competition violations, the commission tells the House Commerce Committee in testimony prepared for Wednesday’s House Consumer Protection Subcommittee hearing (see 2107210061). In a joint statement, the commission highlighted its weakened authority to obtain monetary relief, resulting from the Supreme Court’s decision in AMG Capital Management v. FTC (see 2106210054). The commission is “facing extremely severe resource constraints,” commissioners wrote, citing a heavy surge in global “mergers and acquisitions.” The pandemic also is causing more complaints about marketplace abuse, the commission said. It cited bipartisan support for some of the legislative proposals the committee is considering at the hearing. It cites the agency’s call for Congress to repeal the telecom common carrier exemption, which it said impedes enforcement against activity like illegal telemarketing. The commission notes broad support for enforcement against nonprofits and for rulemaking and civil penalty authorities, “although some Commissioners would support such measures in more limited ways.” Senate Antitrust Subcommittee ranking member Mike Lee, R-Utah, wrote Tuesday against several recent measures from FTC Chair Lina Khan. He raised concerns about the “diminished role” of minority commissioners and allowing public input only after commissioners voted on agenda items at recent public meetings. He criticized the FTC’s “refusal to grant early terminations of the waiting period for mergers that pose no threat to competition under the Hart-Scott-Rodino (HSR) Act.” Restoring FTC’s authority to “force lawbreakers to return money to scammed consumers and disgorge ill-gotten gains" should be a key priority, says ex-FTC official David Vladeck, now a Georgetown law professor, in prepared remarks. He seeks adequate funding, saying the FTC has “barely” two-thirds of the personnel it had in the early 1980s.

The FCC authorized $311 million in Rural Digital Opportunity Fund Phase I auction support for 48 providers, the agency said Monday. Long-form applicants must submit a letter of credit for each state in which they received authorization and an opinion letter from outside legal counsel by 6 p.m. EDT Aug. 9. “This is a significant down payment on broadband deployment,” said acting Chairwoman Jessica Rosenworcel. The FCC offered 197 winning bidders, including Cox, Frontier, LTD Broadband and Starlink, the opportunity to default on bids for areas already served without penalties after groups raised concerns (see 2012210026). A list of areas where winning bidders opted not to pursue buildout was also released. The areas will “immediately become available for other broadband funding opportunities” and defaulting bidders are “subject to enforcement penalties as warranted.” The Wireline Bureau denied petitions to waive the June 7 deadline to receive eligible telecom carrier designation from AB Indiana for its bids in Florida, and LTD Broadband for California, Kansas and Oklahoma. Both “failed to engage in good faith efforts to pursue and obtain” the designation, the order said, and the bureau plans to release a public notice finding both providers in default. Free Press Research Director Derek Turner said in a statement it’s "encouraging that Acting Chairwoman Rosenworcel wants to get this right" and the FCC "seems determined to do the due diligence" that then-Chairman Ajit Pai "skipped to ensure that federal money actually connects real people ... to affordable services.”

AT&T and Verizon's Cellco Partnership were by far top recipients of C-band flexible use overlay licenses in Auction 107. Per our breakdown of an FCC Wireless Bureau public notice Friday, Verizon received 3,518 licenses and AT&T 1,620. Others included U.S. Cellular with 253 licenses, T-Mobile (141) and Canopy Spectrum (83). Acting Chairwoman Jessica Rosenworcel called the licenses "the sweet spot for 5G deployment [due to] the right mix of capacity and propagation that will help us reach more people in more places faster. With these licenses in hand, more carriers can deploy mid-band 5G." The C-band auction was approved under former Chairman Ajit Pai and was “no walk in the park,” Commissioner Brendan Carr said Monday. “We must do more than implement the tough spectrum decisions the FCC made over the last few years if we are going to extend U.S. leadership in 5G,” he said: “We must move forward with a number of new spectrum proceedings too.”

New York will continue defending its broadband affordability law, with a pact between the state attorney general and ISP plaintiffs a procedural step on the way to appeal, said an AG office spokesperson Friday. New York reserved appeal rights while agreeing not to enforce its law, in the agreement with ISP associations including the New York State Telecommunications Association (NYSTA), USTelecom and CTIA. See our bulletin. “The parties have conferred and agree that the Court’s holdings on preemption” in its June 11 preliminary injunction order “resolve the substantive legal issues in this matter and render the entry of final judgment appropriate,” said the stipulated final judgment (in Pacer). New York reserves the right to appeal the stipulated final judgment, declaration and permanent injunction, it said. “Defendant expressly reserves all appellate rights in this matter.” Assistant AG Patricia Hingerton asked (in Pacer) Judge Denis Hurley to order the proposed stipulation be filed by the parties Friday in case 2:21-cv-02389 at U.S. District Court in Central Islip, New York. Hurley ruled last month that ISPs would likely succeed on conflict and field preemption arguments, and granted the motion for preliminary injunction by NYSTA, CTIA, ACA Connects, USTelecom, NTCA and the Satellite Broadcasting and Communications Association (see 2106110064). New York appealed June 30 to the 2nd U.S. Circuit Court of Appeals (see 2106300071). “It looks like the parties agreed to take steps to move the appeals process forward,” emailed New York Public Utility Law Project Executive Director Richard Berkley. “This case would never have ended after a decision by the trial court; it was always going to be appealed. So this would save the time of having to fight it out in the lower court, then start moving it up the appeals courts' ladder.” ISP groups declined to comment.

AT&T added nearly 800,000 postpaid phone subscribers in Q2, it reported Thursday, joining Verizon in adding them amid continuing competition from T-Mobile (see 2107210054). AT&T also beat profit estimates and grew HBO Max. CEO John Stankey told analysts AT&T's spinoff of WarnerMedia, combining it with Discovery (see 2105160003), is in early stages. “No news is good news,” he said: “It's a lot of work with the regulatory agencies and document production and providing information that's responsive to their requests so that they can begin the reviews.” Executives said the wireless adds were the most for any Q2 in the past 10 years. AT&T added 1.16 million wireless customers, compared with some analyst estimates of 300,000 and 2.8 million total domestic HBO Max and HBO subscribers. Postpaid churn was 0.87% vs. 1.05% in the year-ago quarter. “Gross adds are up, churn is at record low levels and our average promotional spend per net add is significantly lower than a year ago,” said Chief Financial Officer Pascal Desroches. COVID-19 drove down results a year ago, Desroches said. “While the pandemic is still having some impact on our results, we're seeing our businesses emerge stronger than before.” AT&T’s $5 billion, 10-year deal with Dish Network (see 2107190003) will be good for both companies, Stankey said: “When somebody is going to be successful, it’s always nice for us to be successful along with them.” Profit was $1.9 billion, up from $1.6 billion a year ago. Revenue was $44 billion, up from $41 billion. The AT&T and Verizon results raise some questions, New Street’s Jonathan Chaplin told investors. “Low churn at AT&T and Verizon ought to result in slower growth for the share gainers (T-Mobile; Cable); however, the strong growth in Wholesale revenue at Verizon suggests strong adds at Cable, and we suspect T-Mobile will do just fine also,” he said: “We still need to untangle the mystery of too much growth in US wireless.” Results were “inarguably very strong,” said MoffettNathanson’s Craig Moffett. “Solid growth comes with the asterisk of extreme promotionality that is still suppressing” earnings and growth is “lagging well behind Verizon’s, despite much faster unit growth,” he said.

CTA President Gary Shapiro doesn’t lose sleep over "innovation taking over the world or robotics replacing human masses,” he told C-SPAN’s The Communicators, to be televised this weekend. “I worry every day that our government is going to choke off new avenues of innovation” through antitrust crackdowns on Big Tech, he said. “Look what we did during COVID. Look how the tech industry basically saved, in a sense, the white-collar environment for those lucky enough to work at home and fundamentally changed the world.” Shapiro can live with some of the six antitrust bills that cleared the House Judiciary Committee last month (see 2106230063), he said. “It’s reasonable to look at merger filing fees, as long as they’re not discouraging mergers,” he said. “The government should have a shot” to review transactions “on an objective basis, but it should be time-constrained so it’s not sitting around there for two or three years.” Other measures, including shifting the burden of proof on purchases or giving states more leeway in antitrust reviews, “I just don’t understand,” he said. “I think you’re going to see consumers so upset when they figure out that their politicians are trying to screw up the things they love. I mean, consumers love these services.” There’s “no question” that some things Huawei has done to become “a force around the world” involved intellectual property theft from American companies, which “I find pretty difficult to swallow,” he said. “We lost some revenue” due to Commerce Department export restrictions on Huawei, “but that’s life,” said Shapiro. “We follow the law.” Huawei didn't comment Thursday. CES will return to Las Vegas as a physical show in early January with “wider aisles” and “very strong participation,” said Shapiro. The show has signed on 1,000 exhibitors so far, he said. CES 2020, CTA’s last in-person Las Vegas show, drew 4,400 exhibitors. As “great” as CES 2021 was as a virtual show, Shapiro said, “we have all learned that it’s not the same as being there.”

Use of Copyright Act Section 119 distant signal compulsory licenses letting direct broadcast satellite operators import distant local TV broadcast signals without negotiating with those stations has plummeted since passage of the Satellite Television Community Protection and Promotion Act (STCPPA) of 2019, but that decline seems to reflect the overall decline in DBS subscribership, Copyright Office Director Shira Perlmutter said in a June 21 letter to House and Senate Appropriations committees leadership released Wednesday. It said cord cutting and a decline in use of the license also seems to come from a concentration of broadcast channel owners, resulting in possibly more difficulty in negotiating retransmission licenses. A CO study of Section 119 licenses post-STCPPA said the annual satellite royalty receipts from the licenses peaked in 2010 at more than $96 million, and by 2019 were down to about $8.7 million. Royalty receipts dropped more than 50% in 2020 to about $4.3 million, it said. Now only Dish Network is eligible to carry the Section 119 licenses, since AT&T's DirecTV hasn't negotiated license agreements to provide local-into-local network service in 12 of 210 designated market areas and use of the license is contingent on providing such service in all 210, Perlmutter reported. Given factors outside 119 affecting DBS, effects of STCPPA on that market "cannot yet be determined," CO said.

Amazon again supplanted Facebook in Q2 as top lobbying spender in tech and telecom, with NCTA and Comcast rounding out the top four. Huawei, Twitter, the Information Technology Industry Council and Telecommunications Industry Association had the sectors' largest percentage increases compared with the same period last year. Broadcom, BSA|The Software Alliance and the Computer and Communications Industry Association had large decreases. Amazon spent $4.86 million in Q2, up almost 11%. Facebook paid $4.77 million, down 1%. NCTA disbursed $3.26 million, down more than 10%. Comcast spent $3.25 million, down almost 11%. AT&T spent just over $3 million, down more than 10%. Verizon expended $2.76 million, up almost 9%. Charter Communications was little changed at $2.57 million, and CTIA at $2.5 million was also flat. Microsoft spent $2.47 million, a 15% decrease. T-Mobile spent $2.4 million, down 8%. NAB fell 5% to $2.18 million. Qualcomm gained 8% to $2.13 million. Google reported $2 million, a more than 23% increase. Apple had $1.64 million, an almost 11% increase. ViacomCBS paid $1.6 million, up 39%. Dell's $1.12 million was a 23% increase. Huawei spent just over $1 million, a 523% increase. IBM was $980,000, down more than 5%. Disney spent $830,000, down more than 6%. Cox's $810,000 was down almost 13%. Twitter spent $660,000, a 69% increase. ITI spent $600,000, rising 43%. USTelecom was relatively unchanged at $570,000. Lumen had $520,000, an almost 9% increase. The Internet Association disclosed $390,000, up more than 14%. Broadcom posted $360,000, down 40%. BSA was $290,000, down almost 31%. ACA Connects was level at $160,000. NTCA also spent $160,000, an 11% decrease. ICANN spent $85,000, similar to Q2 2020. TIA spent $70,000, a 40% increase. CCIA's $30,000 was down 25%.