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  • February 10, 2012

    Wireless Carriers Urge Removal Of Auction Eligibility Restriction From Spectrum Bill

    Writing to members of a congressional conference committee on Wednesday, Sprint

    Nextel, T-Mobile USA, and various other wireless entities pleaded for removal of a

    provision in House spectrum legislation that would bar the FCC from imposing eligibility

    restrictions on auction participants. The spectrum provisionswhich also mandate

    incentive auctions of broadcast television spectrum and direct allocation of the 700 MHz

    D-block to public safety agenciesare included within a larger House bill on extensions

    to the payroll tax cut that conferees are negotiating. Calling on members of Congress to

    support fair spectrum auctions, Sprint, T-Mobile, and other groups warned that the

    provision barring eligibility restrictions would substantially limit the FCCs ability to

    promote competition . . . facilitate spectrum warehousing, inefficient use of scarce

    spectrum resources, and reduce spectrum auction revenues to the U.S. Treasury. (Other

    signers of the letter include C-Spire Wireless, Leap Wireless, Atlantic Tele-Network,

    Inc., and the Rural Cellular Association.) The groups further argued that placing limits

    on the FCCs authority to restrict auction eligibility would permit unchecked

    participation by the two largest, best-funded wireless carriers in future spectrum

    auctions and discourage smaller competitors from participating, thereby reducing

    auction revenues. In a blog posting, however, AT&T senior executive vice president

    Jim Cicconi countered that any qualified carrier . . . should have a chance to bid on any

    spectrum available in an auction. Charging that Sprint, T-Mobile, and their supporters

    want the FCC to stack the deck in their favor, Cicconi challenged the carriers to be

    prepared to compete in a fair and open auction.

    Verizon, Coinstar To Team Up On Video Delivery Service

    The fast-growing market for online video delivery and streaming gained an important

    new entrant on Monday with the establishment of a joint venture between Verizon

    Communications and Coinstar, Inc. that is expected to put competitive pressure on

    services such as Netflix and Hulu. Coinstar is the owner of the Redbox DVD service that

    enables customers to rent recently-released Hollywood films at a nightly rate of $1

    through a network of more than 35,000 rental kiosks throughout the country. Because

    Verizon already has deals in place with programmers to support its FiOS IPTV service,

    the venture is expected to give Coinstar the leverage it needs to expand its relationship

    with content providers and to add online video streaming to its DVD rental service. For

    Verizon, the venture is expected to bring in new customers that will help the nations

    largest telecommunications company to add further scale and scope. Although Verizon

    and Coinstar disclosed few details about their partnership, a spokesman confirmed that

    the venture intends to launch a combined DVD rental and video streaming service later

    this year that will be open to all prospective customers, regardless of whether they are

    current broadband subscribers of Verizon. Citing projections that nearly half of U.S.

    Wireless Carriers Urge Removal Of Auction

    Eligibility Restriction From

    Spectrum Bill read more

    Verizon, Coinstar To Team Up On Video Delivery

    Service read more

    Web Users With Unsecured Wireless Connections

    Fingered In Copyright

    Lawsuit read more

    Hutchison Strikes $1.7 Billion Deal For Orange

    Austria read more

    Sprint, Orange Join Forces On Global M2M

    Services read more

    Mexico Rejects Proposed Joint Venture Between

    Televisa And Iusacell

    read more

  • PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 2

    homes with televisions will have Internet-enabled sets by 2015, Bob Mudge, the president of Verizons consumer and mass business

    markets division, explained that a goal of the venture is to add the Redbox icon alongside the icons of Netflix, Hulu, YouTube, and

    other streamed services on web-enabled sets. Verizon will own a 65% stake in the joint venture, and Coinstar will own the remaining

    35% interest.

    Web Users With Unsecured Wireless Connections Fingered In Copyright Lawsuit

    In a development that could impact providers of free Wi-Fi services and broadband subscribers who rely on wireless routers, Liberty

    Media Holdings LLC has asked a Massachusetts federal court to rule that broadband subscribers with wireless routers may be held

    liable for copyright violations when other persons illegally download copyrighted content through unsecured wireless network

    connections. Libertys complaint targets fifty defendants in Massachusettsincluding several unnamed John Doeswhose IP

    addresses were traced to illegal downloads of an adult film copyrighted to Liberty. The lawsuit claims that the defendants in question

    (1) used the BitTorrent file sharing website to download the material in question directly, or (2) contributed indirectly to illegal

    downloading activity by neglecting to secure their wireless network connections. Asserting that the defendants failed to adequately

    secure their Internet access, whether accessible only through their computer when physically connected to an Internet router or

    accessible to many computers by use of a wireless router, Liberty told the court that the defendants negligence allowed others to

    unlawfully copy and share Plaintiffs copyrighted motion picture and caused financial harm to Plaintiff. The lawsuit seeks actual or

    statutory damages from each of the defendants. While an attorney for two of the defendants termed Libertys argument as novel,

    officials of Liberty offered no comment.

    Hutchison Strikes $1.7 Billion Deal For Orange Austria

    Hong Kong-based telecommunications conglomerate Hutchison Whampoa solidified its presence in Europe with an agreement to

    acquire wireless provider Orange Austria (OA) in a deal valued at 1.3 billion (U.S. $1.7 billion). Owned by private equity firm Mid

    Europa Partners and France Telecom (FT), which hold stakes of 65% and 35%, respectively, OA was established in 2008 and ranks as

    the third-largest wireless carrier in Austria with a 20% share of the national market. A spokesman for Hutchisonwhich already

    controls 3Austria, the fourth-largest mobile phone service provider in the countryconfirmed his companys intention to combine OA

    and 3Austria and thus boost significantly Hutchisons nationwide footprint and revenue potential. The transaction adds to Hutchisons

    growing stable of European assets that span Great Britain and Italy in addition to Austria. The deal also furthers FTs strategy of

    disposing non-core wireless assets in mature European markets to boost shareholder value and enable FT to sharpen its focus on higher

    growth markets in Africa and the Middle East. Last month, FT struck an agreement to sell its Swiss wireless subsidiary, Orange

    Switzerland, to Apax Partners, and FT is also reported to be seeking a buyer for its wireless assets in Portugal. Contingent upon receipt

    of regulatory approvals, the parties aim to complete the transaction by mid-year. Predicting that the deal will generate cost and other

    synergies of at least 500 million, Hutchison described the transaction as one that creates a strong and competitive top three player in

    the Austrian market.

    Sprint, Orange Join Forces On Global M2M Services

    Multinational corporate customers of Sprint will soon gain seamless worldwide access to machine-to-machine (M2M) data services

    under a partnership forged by Sprint and France Telecoms Orange Business Services unit on Tuesday. M2M facilitates wired or

    wireless communications among a range of devices that support point of sale, telematics, smart grids, product shipments, healthcare,

    automotive, and other functions. Manufacturers are increasingly building M2M-capable cellular modules into a wide range of

    industrial devices, thereby providing wireless network operators with another key source of revenue. Owing to Oranges global IP

    network that supports 2.5 million M2M connections in 220 nations, the partnership will enable Sprint to offer its domestic and global

    corporate customers worldwide M2M connectivity without having to negotiate separate service agreements with wireless operators in

    each country. Sources say the partnership will also provide Sprint customers with (1) a single, dedicated entity for managing global

  • PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 3

    M2M connectivity, (2) faster project deployment and more efficient cost control, and (3) a one-stop shop and M2M support process for

    each country in which the customer operates. Noting that his company recognizes that its customers compete in the global economy

    and . . . expect their processing, monitoring, diagnostic and distribution applications to work seamlessly wherever their business takes

    them, Yijing Brentano, the vice president of international wholesale for Sprint, said: we look forward to working with Orange . . . as

    a vital partner as we equip U.S. business customers with a strong global M2M capability.

    Mexico Rejects Proposed Joint Venture Between Televisa And Iusacell

    Grupo Televisaa dominant player in Mexicos cable, broadcast, and satellite TV marketswill likely be forced to alt