The FTC created an agency-wide pandemic response team and a pandemic-specific plan to address evolving COVID-19 issues, according to documents we obtained through a Freedom of Information Act request. Chairman Joe Simons declined to share the plan's annex with Sen. Maria Cantwell, D-Wash., calling it “nonpublic” in a March 13 letter to the Senate Commerce Committee ranking member. Federal guidance on COVID-19 hasn’t "always kept up with the most pressing concerns expressed by FTC staff,” Simons wrote. He recommended a “timely and consolidated” source or site for federal agencies to plan for and “adapt to quickly changing circumstances.”
Democratic commissioners will likely dissent when the FCC declares broadband is deployed in a reasonable and timely manner, current and former officials predicted in interviews this week. The Communications Act Section 706 report's statutory deadline is Monday (see 2004030074) and a vote isn't expected much sooner. An official said this report follows methodology used in last year's, with updated deployment figures and a few other changes. Commissioners' aides are determining whether there's opportunity to revise the language.
State regulators will scrutinize Frontier Communications as the midsize carrier goes through bankruptcy, commissioners told us Wednesday. Some felt reassured by the company pledging uninterrupted service and no change to selling some systems in the U.S. Northwest and West.
Cable operators have been adding residential broadband share for a decade, and the pace picked up during the pandemic, when people are highly reliant on the service, New Street Research's Jonathan Chaplin wrote investors Tuesday. He said that trend isn't expected to reverse. Residential trends will face some headwinds from the recession, as household formations slow, pay TV declines, business failures accelerate and advertising drops, the analyst said. Residential broadband should grow through the recession, and cable is well positioned to take advantage of that, he said. Charter Communications reported it added 119,000 internet subscribers in March due to its 60-day free offer for new customers with students or educators in the household. The cabler said residential internet connects, excluding the free offer, also were up this March over March 2019.
Roku pulled back its 2020 forecast, citing economic uncertainties due to COVID-19. It expects Q1 revenue to be slightly higher than projected due to effects of sheltering at home, with other metrics generally in line with the prior outlook. “While we believe that our offerings to consumers, content providers and advertisers will enable our Company to deliver value in these uncertain times," there are "wider business and consumer impacts, as well as the duration of the pandemic,” said Chief Financial Officer Steve Louden Monday. Roku expects Q1 revenue of $307 million-$317 million vs. a midpoint outlook of $305 million in February's shareholder letter. The streaming media provider estimated it had 39.8 million active accounts March 31, a net increase of nearly 3 million since Dec. 31. Streaming hours will be 13.2 billion, a 49% year-to-year bump, it said. In early Q1, Roku completed the rollout of its “Are you still watching” feature, which exits video playback after long periods of user inactivity, a feature that will moderate streaming hour growth, the company noted. CEO Anthony Wood said Roku has been working with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix, “which has been affected by social distancing.” Wood expects some marketers to pause or reduce ad spending near term. Tuesday, Pivotal Research raised its 2020 net new active accounts forecast to 11.5 million from 10 million and sliced platform monthly revenue per average active accounts from 21% growth to a 2% decline “to attempt to account for what appears to [be] 40-50% declines in on-line video CPMs,” analyst Jeffrey Wlodarczak wrote investors. The combination drove a reduction in Pivotal's 2020 revenue growth forecast from 40% to 23%. The company's path to profitability is "unclear," as it looks to navigate "a likely recession while expanding its workforce to support its next leg of growth," Wedbush's Michael Pachter wrote investors. It will take time to achieve profitability in international markets, said the analyst, "while declining advertising demand puts the current year at risk." Roku's Q1 report is May 7. The stock closed 10.3% higher Tuesday at $106.53.
Broadband use on Easter set a new Sunday high, with average consumption of 17.3 Gb per subscriber, topping the previous high of 15.97 GB on March 22, OpenVault said Tuesday. It said downstream consumption was 16.3 Gb per subscriber, up 37.9% over March 1, before pandemic social distancing measures started taking effect. It said upstream usage was 0.97 GB, up 51.7% over March. 1. OpenVault said the spike was likely due to videoconference-enabled virtual Sunday visits to friends and family. Average home monthly usage in the U.S. in March was around 400 Gb, up around 20% from the end of last year (see 2004060038).
Broadband Deployment Advisory Committee member Eve Lewis, assistant city attorney in Coconut Creek, Florida, emailed Tuesday she's “optimistic” about discussions between industry and local governments on permitting during the COVID-19 pandemic (see 2004130050). “Often times, the largest hurdle is opening channels of communication among all stakeholders,” Lewis said: “This effort seeks to do that.”
Sen. Mark Warner, D-Va., endorsed FCC-proposed revised TV white spaces rules Tuesday. Commissioners unanimously approved an NPRM in February seeking comment on letting devices operate with higher power in less-congested areas (see 2002280055). “This digital divide impacts nearly every aspect of life for Virginians living without access to broadband," he said. This "contrast has become worryingly more stark” amid the COVID-19 pandemic, Warner added, writing Chairman Ajit Pai and other commissioners. “Even in normal times, this lack of broadband access prevents students from achieving their full potential, denies seniors and veterans access to telemedicine" and has other harms.
Carriers will lead the bidding in the July citizens broadband radio service band auction, but questions remain about the COVID-19 pandemic's effect on credit markets, said Joe Madden, chief analyst at Mobile Experts. The FCC delayed the auction for a month to July 23 (see 2003250052). Speakers Tuesday said another delay isn’t likely.
Some antitrust litigation is slowing down due to COVID-19, but antitrust enforcers are “very much” still investigating, FTC Commissioner Noah Phillips said Tuesday. He told a Politico webcast that merger and acquisitions filings have decreased. He said the agency is handling the pandemic “as best we can,” moving its Hart-Rodino-Scott M&A reviews to an online program (see 2003270059). The agency is “steady as she goes,” he said, noting a joint statement with DOJ warning of criminal liability for antitrust enforcement: “We’re very much still here.”