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Weekly Update May 3, 2013

Legislative and Political

UW System reserves projected to grow another $150 million

Money in reserve funds at the University of Wisconsin System is projected to grow by another $150 million by the end of June, according to UW figures. Lawmakers lambasted UW officials after learning a week and a half ago the UW System had more than $1 billion in reserve as of June 2012, of which $648 million was unrestricted. The total reserve will climb to nearly $1.2 billion by the end of this June, when the fiscal year ends, UW officials told lawmakers Wednesday. The figures university officials gave to legislators did not say how much of that money would be restricted. The total increase over the year would be $150 million, or 14%. "It continues to show that the UW System has plenty of resources," said Rep. Dale Kooyenga (R-Brookfield). "Let's just put a pause on tuition, and let's put a pause on more (taxpayer money)." UW System spokesman David Giroux cautioned that the figure was "a very high-level, very preliminary projection" and that it wasn't possible to know whether the cash balance would grow or shrink by the time the fiscal year ends in June. Kooyenga is part of the Assembly's "CPA caucus" that asked questions earlier this year that led to a review by the nonpartisan Legislative Fiscal Bureau and Legislative Audit Bureau that uncovered the reserve. He also sits on the budget-writing Joint Finance Committee, which will decide in the coming weeks how much money to put toward the UW System. Lawmakers from both sides of the aisle are united in freezing tuition after students faced 5.5% annual increases in recent years.

Letter from Rep. Petryk: Joint Finance Committee work continues

The second Executive Session of the powerful Joint Finance Committee took place on Tuesday, April 30th. It was another successful day of debate and votes on various budget provisions contained within the Governor’s budget bill, Assembly Bill 40. The Committee remains focused on controlling government spending with the goal of not raising taxes on Wisconsin’s taxpayers, altering the way our state government is run through reviewing the Wisconsin tax code and our education system, and reinvesting in our state’s future through programs for our most vulnerable citizens while creating a business-friendly climate for better job creation.

Regulatory and Industry

Tom Wheeler to be nominated for FCC head

President Barack Obama will nominate venture capitalist Tom Wheeler to head the Federal Communications Commission on Wednesday, a White House official told POLITICO. Pending confirmation, the agency’s soon-to-be senior Democrat, Commissioner Mignon Clyburn, will serve as its acting leader, the official added. Wheeler, 67, is a longtime Obama loyalist. During Obama’s first presidential campaign, Wheeler and his wife, Carol, spent six weeks in Iowa, where they worked the phones and knocked on doors for the candidate. Wheeler also raised hundreds of thousands of dollars for Obama’s two presidential campaigns. He told C-SPAN’s Brian Lamb, “The six weeks that I spent in Iowa are going to rank right up there as the best six weeks of my life.” The White House official said of the nomination: “Tom Wheeler is an experienced leader in the communications technology field who shares the president’s commitment to protecting consumers, promoting innovation, enhancing competition and encouraging investment.”

FCC Chairman Nominee Wheeler in His Own Words

Former telecom trade association chief and current venture capitalist Tom Wheeler, nominated yesterday to replace Julius Genachowski as chairman of the Federal Communications Commission, has been hailed for his industry expertise. In a blog that he has written regularly since joining Core Capital Partners several years ago, Wheeler offers a few hints at where he might stand on important telecom policy issues. I scanned through these and pulled out a few excerpts to share with readers.

CenturyLink's Beal to carriers: Transform or perish

CenturyLink CTO Matt Beal delivered a blunt challenge to his fellow telco service providers at GENBAND's Perspectives13 conference in Orlando. They can transform the way they do business to the point that Alexander Graham Bell would be unable to recognize it, or perish at the hands of those inside or outside the industry who will. "Our customers are voting with their feet, and they're going to go to that company that provides this transformative experience," Beal said during an afternoon keynote. The transformative experience, he emphasized, means recognizing that humans are "a visual species" who want more from their carriers than a voice connection; all services must surround broadband and be convergent and able to be changed at a consumer's whim.

Broadband and Internet

Can a Buffalo Help Sell DSL Service?

Frontier has a new marketing campaign, centered around a “6 feet tall, 8 feet long and 2,000 pound” Buffalo named Frank. The tier 2 telco with extensive rural markets says the campaign will begin immediately and will include broadcast, print, digital and social media, billboards, truck wraps, and more. Frank’s first mission is to push Frontier’s $19.95 DSL service. Frontier launched this promotion back in February. The deal requires customers to also subscribe to Frontier home phone service. It offers a three-year price lock, with no termination or contract required. Frank also appears to be pushing FiOS Internet from Frontier, suggesting that this promotion also includes FTTH service, which Frontier acquired from Verizon back in 2010. Regardless of access method, the $19.95 deal is for 6 Mbps broadband.

Facebook Dominance Threatened By New Social Services

Facebook Inc (NASDAQ:FB) dominance may be under threat as it has lost millions of users every month in its biggest markets, according to Independent data. The latest social networks like Instagram and Path are the new destination for those who are wishing to have new and fresh experience, reports Guardian. Facebook Inc (NASDAQ:FB), which enjoys the status of biggest social networking site of the world, lost 6 million users in the United States last month, a decline of 4 percent according to an analyst at SocialBakers. This number goes up to 9 million if we consider the past six months. In UK, Facebook lost 2 million monthly users in the last six months. The attraction of Facebook is fading in countries like Canada, Spain, France, Germany and Japan. The bad news for Facebook is that these are the markets where Facebook Inc (NASDAQ:FB) has expanded most in terms of users.

Cellular and Wireless

Is the mobile industry failing theft victims?

It's a horrible thought for consumers who can't live without their their pricey, feature-laden mobile phones: What can they do when that piece of hardware is stolen? Unfortunately for the victims, not a lot. It's a pressing issue for more and more people, given that mobile-phone theft has reached epidemic proportions. As theft rise across the country, the crime has become the equivalent of the rash of car break-ins during the 1980s. But while the auto industry helped deter that trend with improved antitheft technology, mobile-phone carriers and handset makers aren't responding to the rising crime wave in a similar fashion, according to The New York Times. The reason may be financial. Some lawmakers are charging that mobile-phone companies actually have a vested interest in the status quo, given that a stolen phone means the victim will be forced to buy another expensive iPhone from Apple or Google Android device such as Samsung's Galaxy S4.

Half of companies will require BYOD by 2017

About half of the world’s companies will enact BYOD (bring your own device) programs by 2017 and will no longer provide computing devices to employees, a new Gartner report predicts. Ultimately, only 15 percent of companies will never move to a BYOD model, while 40 percent will offer a choice between BYOD and employer-provided devices, according to the report by Gartner analyst David Willis, which was announced Wednesday. While mobile computing helps make on-the-go workers more productive, the average cost of more than $600 per employee per year for company-provided devices has been difficult for many to shoulder, Willis wrote. This along with other factors, such as increased employee satisfaction, has helped drive the BYOD movement, he added. So far, BYOD adoption is most common in companies with between $500 million and $5 billion in revenue, but there are significant differences according to geography, said Gartner. The U.S. adoption rate is double that of Europe, but the highest rate is in India, China, and Brazil, according to the report.

IPTV and Video

TDS Telecom's IPTV, hosted services drive Q1 revenues to $217 million

TDS Telecom, the wireline subsidiary of Telephone and Data Systems, reported that first-quarter 2013 results rose to $217 million as it expanded its TDS TV service to more residential customers and new sales of its managedIP products to business customers. Inside TDS Telecom, the ILEC segment grew 2 percent $141.5 million, while the CLEC division declined 3 percent to $42.6 million. Meanwhile, TDS' Hosted and Managed Solutions (HMS) unit, which offers a host of cloud, managed services and data center services to businesses, rose to $35.6 million. Driven by continued sales of service bundles, TDS Telecom saw some slight gains in both broadband and IPTV, adding 200 and 1,100 customers, respectively. Hulu Sets New Revenue Record, Tops 4 Million-Subscriber Mark

OTT video provider Hulu set a new record for revenue in 1Q 2013, as viewers streamed more than 1 billion videos in a single quarter, according to a blog post from acting CEO Andy Forssell. Forssell and Hulu management offered insights into Hulu’s recent performance at the Hulu Upfront conference in New York City. Subscriptions to Hulu Plus, the company’s ad-supported subscription service, doubled in 2012 and continued to grow rapidly in 1Q, setting new records for subscriber additions in surpassing the 4 million-subscriber mark, Forssell related. Nonexistent just two years ago, mobile video viewing continues to grow significantly, Forssell continued. Hulu forecasts it will account for 15% of total video consumption in 2013-2014. “Living room” viewing, which accounts for 29% of content consumption, is also growing.