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Weekly Update November 9, 2012

Legislative and Political

After a long career, Tommy makes his political exit

Tammy Baldwin's victory over Tommy Thompson for the U.S. Senate marks the end of the former governor's political career. From humble roots in small-town Elroy as the son of a grocery store owner to the corridors of power in Madison and Washington, D.C., Thompson, 70, built a career unlike any other in modern political history. In a concession speech to his supporters Tuesday night, Thompson made it clear he wouldn't fade away but wouldn't run for political office again. He said he decided to run for the U.S. Senate because he thought America, the land of opportunity, was slipping away. "I wanted to so much help lead back America," he said. "To be the country of growth and opportunity. To build America for future generations. I certainly didn't need the job. And I guess I'm not going to get it." For decades, he was simply known as "Tommy," a name that put him on a first-name basis with generations of Wisconsinites. When he visited a Wisconsin town, village or city, he seemed to know everyone by their first name, and often had a story ready to share from his long career. "There is no more important or significant political figure in Wisconsin in the last generation than Tommy Thompson," said Mark Graul, a veteran Republican strategist. "He accomplished lasting and monumental reforms as governor with a legislature that was either Democratic or split- controlled. He got things done."

Walker on election: Wisconsin is very independent

Gov. Scott Walker, reflecting on Tuesday's election, particularly the race for president and U.S. Senate, said Wednesday that Wisconsin voters are very independent. "Every election, we vote the person," Walker said to reporters in . "On a night when is elected to the U.S. Senate, you saw two of the closest House seats two years ago, both members of Congress win by very comfortable margins, Sean Duffy and Reid Ribble. You saw a state, not only was the Assembly majority upheld, but you added two seats to the state Senate. What that tells me is that voters in this state are independent. They listen race by race to what the candidates have to offer. And they're not going to be swung one way or the other but rather by what they think is important by that given race." In Tuesday's election, U.S. Rep. Tammy Baldwin (D-Wis.) defeated former governor Tommy Thompson in the race to replace U.S. Sen. (D-Wis.), who is retiring. Baldwin, a liberal legislator, won just two years after sate voters elected Republican Ron Johnson, a conservative, over former senator Russ Feingold.

Ticket splitters weren't there for Tommy Thompson

In the end, Wisconsin’s marquee election contests – for president and senator – bore a striking resemblance to each other. Democrat won Wisconsin’s presidential vote by 6.6 points. Democrat Tammy Baldwin won her Senate race by 5.5 points. It was once thought these races might go in different directions. Early in the year, almost 10% of likely voters said they planned to split their tickets and back both Obama for president and Republican Tommy Thompson for senator. But these ticket-splitters became a vanishing crowd as partisan lines hardened in the Senate race and Thompson, battered from the right and the left, lost his crossover support. In the exit polls Tuesday, Obama-Thompson voters represented just 3% of the electorate. Only 6% of Obama voters backed Thompson – which was barely greater than the share of Romney voters that backed Baldwin. In short, ticket-splitting was scarce, and it was only marginally helpful to Thompson. Thompson was winning 16% of Democrats back in June, according to Marquette Law School’s polling. He won 5% of Democrats in the exit polls Tuesday, and just 38% of moderates. It was the hope and expectation of the Thompson campaign that he could survive a modest Obama victory (not one this big, but maybe a three- or four-point Obama win). The assumption was that Thompson, based on his image, familiarity and past popularity, would run several points ahead of Romney in Wisconsin. Instead, his share of the vote – 46% -- was slightly lower than Romney’s (46.15%) in Wisconsin. And he got fewer votes than Romney, 1,370,664 compared with 1,403,038 (partly because fewer people voted for Senate than president).

Four counties played big role in Baldwin's Senate win

Four big Wisconsin counties played crucial roles in Democrat Tammy Baldwin's victory over Republican Tommy Thompson in the race for U.S. Senate. Baldwin performed significantly better on Tuesday in Kenosha, Racine, Brown and Milwaukee counties than did fellow Democrat Russ Feingold when he lost two years ago to Republican Ron Johnson. There are numerous reasons for Baldwin's win against the former governor, who was the front-runner going into the race. A day after the election, experts attributed Baldwin's victory to the coattail effect of the presidential race, her funding edge in the early going and her ability to exploit issues such as Thompson's lucrative career in business built on government connections. These and other factors helped Baldwin pick up votes in key counties that were instrumental to her victory.

Baldwin campaign defined Thompson as corporate sell-out

If there’s one phrase that explains U.S. Rep. Tammy Baldwin’s win Tuesday in Wisconsin’s Senate race, it could be this: “Tommy. He’s not for you anymore.” From the earliest days of the race, Baldwin, D-Madison, hammered on the theme that the state’s popular former long-time governor, Tommy Thompson, was a multi-millionaire who had sold out to corporate interests and no longer cared about average people. In mid-August, Thompson emerged from a bruising four-way primary in which his fellow Republicans painted him as a big spender who was not conservative enough. As Baldwin cranked up her campaign, Thompson was out of money and unable to respond to the onslaught or the image of Baldwin as a champion of working people and the vulnerable.

Wisconsin's new US Senate delegation a study in contrasts

Wisconsin will soon have what could be one of the oddest pairings of U.S. senators — tea party favorite Ron Johnson and proudly progressive Tammy Baldwin. While Republican Johnson and Democrat Baldwin represent near opposite ends of the political spectrum, they also are a fair picture of the state of politics in Wisconsin, UW-Madison political science professor David Canon said. Consider that voters here ousted liberal Sen. Russ Feingold of Middleton in favor of Johnson two years ago, but on Tuesday voted in Baldwin, one of the most liberal members of the U.S. House of Representatives.

Mark Miller to step down as Senate Democratic leader

Mark Miller has decided to step down from his post as Senate Democratic leader. Miller's office issued a statement Wednesday saying he plans to quit his post when the current legislative session ends in December. The Monona Democrat ran unopposed in Tuesday's elections. The statement doesn't say why he chose to quit his leadership position and his spokeswoman didn't immediately return telephone messages. Miller served as Senate Democrats' leader when they fled the state in 2011 to protest Republican Gov. Scott Walker's contentious law that stripped most public workers of nearly all their union rights. He helped Democrats seize the Senate majority last June in recall elections stemming from the union law fight. Republicans took the chamber back in Tuesday's elections, though.

Regulatory and Industry

AT&T to Invest $14 Billion in Networks, Lifts Dividend

AT&T, the top U.S. telephone company, said it will invest $14 billion over three years to improve the networks that deliver wireless communications, high- speed Internet access and television services. The company is devoting $8 billion to the network that handles mobile data and calling and $6 billion to wireline equipment, Dallas-based AT&T said today in a statement. It also forecast that per-share earnings will rise at a mid-single digit percentage rate in the coming three years, while lifting its quarterly dividend by 2.3 percent to 45 cents a share. Chief Executive Officer Randall Stephenson is taking steps to help AT&T fend off phone competitors led by Verizon Communications Inc. as well as cable providers such as Comcast. The upgrades will help the company reach a wider customer base, bringing the potential market for U-verse TV, Internet and calling packages to 33 million locations.

A Deeper Dive on AT&T’s Investment Plans

I watched the entire webcast of AT&T’s analyst conference yesterday, where the big news was the company’s plan to invest $14 billion over three years to bring broadband to 300 million customers located in largely rural areas. We reported on the basic facts about the company’s new program, dubbed Project Velocity IP (VIP) yesterday, but today I thought I’d take a deeper dive into the topic, drawing on some of the additional details that were revealed at yesterday’s event.

TDS Telecom's wireline bundle efforts drive up revenues 5%

TDS Telecom reported on Wednesday that its dedication to delivering a triple play bundle to its wireline subscribers and its managed services penetration both helped drive up Q3 2012 operating revenue 5 percent to $220.4 million. While TDS offers satellite video services via a relationship with Dish Network, in areas where it offers its own IPTV service, it has found that broadband penetration continues to rise. During the quarter, ILEC triple play penetration increased to 31 percent up from 28 percent year-over-year. "Churn, on our triple play customers, is very low at roughly 0.5% per month," said Vicki L. Villacrez, Assistant Treasurer, Financial Planning and Analysis, for TDS Telecom, during the earnings call. "We have had measurable success with our bundled offerings with 66% of our residential customers on a double or triple play bundle, up from 61% last year."

Broadband and Internet

Bonding telcos' love affair with copper through VDSL2

Fiber is the darling of the last mile access game, but the near-term reality for most incumbent telcos is that a hybrid copper/fiber implementation is the best method to deliver higher bandwidth and compete with cable MSOs, which are offering 50 and even 100 Mbps service over their existing Hybrid Fiber Coax (HFC) networks. Fortunately, there's still plenty of life left in existing copper lines. Service providers are essentially leveraging three approaches to the hybrid copper/fiber architecture: Fiber to the Building (FTTB), Fiber to the Node (FTTN), and Fiber to the Curb/Cabinet (FTTC).

What Obama’s re-election means for IT

While technology wasn’t addressed a whole lot during the presidential campaign, experts say Obama’s re-election will have an impact on IT – particularly in the areas of cyber security, privacy and piracy. What can IT expect from the over the next four years? It’s unlikely the administration’s technology agenda will change much during Obama’s second term, given that the most pressing issues — cyber security, online privacy and electronic piracy — remain unresolved. However, in order to get Congress to act, the president may be forced to come at these issues differently than before. Since lawmakers haven’t been able to craft bills that are acceptable to both parties, the White House could take some matters into its own hands.

Cellular and Wireless

Verizon plans to complete its LTE rollout by mid-2013

Verizon Wireless customers still waiting for 4G LTE to hit their town should get their wish by the middle of next year. Speaking at a Wells Fargo Securities technology conference yesterday, Chief Financial Officer Fran Shammo confirmed that the carrier is eyeing mid-2013 as the completion date for its LTE rollout. That timeframe is around six months earlier than the company had previously predicted, according to news site Fierce Wireless. "I was confident in the first quarter when I said that you'll see an acceleration of our growth through the year, and I think that's proven to be correct," Shammo said. Verizon has been very aggressive at doling out its LTE network. Early last month, the carrier said it would surpass its year-end goal of hitting 400 markets with LTE two months ahead of schedule. By October 18, the company had already reached 417 markets in the U.S. iPhone Falls to Galaxy S III as World’s Most Popular Smartphone

Samsung may have lost big to Apple in the courtroom, but it’s just scored a victory in the marketplace. The Samsung Galaxy S III has stolen the title of the world’s most popular smartphone from the iPhone for the third quarter of 2012, according to data from Strategy Analytics. The victory, however, likely won’t stick. While the GSIII has been on sale for the entire quarter — from July 1 to Sept. 30 — the iPhone 5 first went on sale Sept. 21, just nine days before the close of the quarter. Many iPhone buyers were likely waiting for the 5, and sales will likely pick up for Q4. The numbers support this. Sales of the iPhone 4S fell drastically from Q2 to Q3, from 19.4 million phones to 16.2. Although Apple’s own statistics don’t break out iPhone sales by model, they also showed a big dip, which Apple attributed to anticipation for the next model.

IPTV and Video

ABI: OTT Video Ad Dollars to Quadruple

Over-the-top (OTT) video revenue will quadruple to reach $32 billion by 2017, up from a forecast $8.2 billion in 2012, according to ABI Research. OTT subscription services, e.g. Netflix, have been paving the way, but the Scottsdale, Arizona-based market research firm expects the number of OTT rentals to exceed OTT subscription revenues by 2014. “Connected CE and mobile devices continue to push consumer behavior towards newer forms of media distribution like OTT and multiscreen services,” noted ABI practice director Sam Rosen. “Pay TV services will continue to thrive, by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers.”

Did Amazon Just Launch a Netflix Killer? Hardly.

Amazon is gunning for Netflix and Hulu. That's been the conventional wisdom anyway, with many expecting the ecommerce giant to launch a stand-alone video streaming service to compete with those companies. This week, Amazon watchers got the clearest sign yet that this is exactly where they're headed. But don't call it a Netflix killer yet. Without telling anyone, Amazon started offering its Prime membership for a monthly price that will look familiar to Hulu and Netflix subscribers: $7.99. It's the first time they've offered Amazon Prime for anything other than an annual fee. Its library of streaming TV shows and movies still comes bundled with free two-day shipping on Amazon purchases and one borrowed ebook from the Kindle lending library.