Disney/Fox will likely shed its Sky stake, but Hulu's fate is unclear, said analysts after Comcast's $40 billion auction bid over the weekend that was accepted by Sky's independent committee (see here). Comcast will likely follow up with deal that has it buying the rest of Sky from Disney/Fox "for the same stupendous price," and possibly as part of a swap where Disney takes Comcast's stake in Hulu, MoffettNathanson analyst Craig Moffett wrote Monday. He downgraded Comcast stock to neutral. He said Sky could be "an albatross" for Comcast given its satellite TV business and that satellite video distribution "is increasingly becoming obsolete." He said expanding Sky's nascent over-the-top business will be a challenge, with a variety of programmers going direct to consumer, meaning Comcast will have to ramp up creation of its own video content. BTIG's Richard Greenfield wrote investors Monday that given cord-cutting and cord-shaving trends, Disney/Fox and Comcast/Sky are "actually depressing" examples of legacy media staying locked in a comfort zone. He said Disney/Fox will likely tender its Sky stake as part of Comcast's offer to Sky shareholders since there's not an obvious strategic benefit to Disney/Fox remaining an investor in Sky. The analyst said Disney wants Comcast's Hulu stake, but Comcast isn't likely to sell since it can thus prevent Hulu from becoming a Disney-branded OTT service. He said with the Sky deal, Comcast is signaling that a deal for Charter Communications seems unlikely and that U.S. expansion isn't a priority. Instead, Discovery could be the next acquisition target for Comcast given Discovery's investments in Europe in recent years, Greenfield said. Comcast plans to keep its stake in Hulu, an informed person said. U.K. M&A rules are such that it couldn't make a side deal with Disney to sell its portion, the person noted. Comcast didn't comment. The company closed down 6 percent at $35.63.

Oral argument is scheduled Feb. 1 on challenges to the FCC's net neutrality rollback, said an order (in Pacer) of the U.S. Court of Appeals for the District of Columbia Circuit Friday, in Mozilla v. FCC, No. 18-1051. It said the three-judge panel is usually revealed 30 days before argument. Petitioner and intervenor briefs seeking to vacate the order were filed in August (see 1808210010 and 1808270040). Responses of the DOJ/FCC and supportive intervenors are due Oct. 11 and Oct. 18, respectively. The Supreme Court is reviewing appeals of a 2017 D.C. Circuit ruling upholding the prior commission's 2015 net neutrality order.

The FCC Office of Managing Director made nonsubstantive revisions to authority citations in the Code of Federal Regulations to conform with Administrative Committee of the Federal Register regulations and Office of the Federal Register document drafting handbook, said an order Friday.

The North Carolina Broadcasters Association met FCC staff about the hurricane response Friday, according to tweets from FCC Chairman Ajit Pai and aide Zenji Nakazawa. “Broadcasters in N.C. are stepping up,” said Nakazawa. Friday’s FCC disaster information reporting system report showed improvement in the number of cable and wireline subscribers out of service in North Carolina, with 176,388 out, compared to 270,688 Thursday (see 1809200058). Out-of-service cellsites in North Carolina went to 2.1 percent from 3.7 percent, and all public safety answering points are operational. Two North Carolina TV stations are off-air, along with 20 FM and two AM stations. The deadline for regulatory fees was extended two days for entities in areas affected by Florence, said an Office of the Managing Director public notice Friday. Fees are now due Thursday for companies in affected counties in North Carolina, South Carolina, Georgia and Virginia, the PN said, listing the counties. All other regulatory fee payers still have their fees due on Tuesday, the original date.

A federal court gave broad meaning to "automatic telephone dialing systems" covered by Telephone Consumer Protection Act robocalling restrictions. "The statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator," said the unanimous opinion Thursday of a three-judge panel of the 9th U.S. Circuit Court of Appeals, in Jordan Marks v. Crunch San Diego, No. 14-56834. It reversed a district court summary judgment in favor of Crunch Fitness. Marks claimed three text messages from Crunch violated the TCPA, but the lower court found the system used wasn't an ATDS. The 9th Circuit noted Congress left ATDS alone in revising the TCPA after an FCC 2015 ATDS decision: "Because we infer that Congress was aware of the existing definition of ATDS, its decision not to amend the statutory definition of ATDS to overrule the FCC’s interpretation suggests Congress gave the interpretation its tacit approval." Since the 1991 TCPA, "no Court or FCC ruling has so expansively defined an [ATDS] as the Ninth Circuit has," emailed Scott Goldsmith of Dorsey & Whitney, who wasn't involved in the case: "By defining an ATDS as equipment that simply has 'the capacity to dial stored numbers automatically, the Ninth Circuit may have just rendered every smart phone user a potential TCPA violator. The ruling may be short-lived, however, as the FCC is poised to issue its new TCPA ruling" (see 1809190036). He said the D.C. Circuit, when it overturned the 2015 definitions (see 1803160053), "did so with the concern that the FCC’s interpretation could render every day smart phones an ATDS subject to the TCPA. Ironically, the Ninth Circuit’s ruling in Marks appears to do just that." It's likely Crunch will seek Supreme Court review of the ruling, which "conflicts" with a 3rd Circuit June ruling on autodialer functionality in Dominguez v. Yahoo, Goldsmith told us Friday. Crunch didn't comment. The National Consumer Law Center believes the ATDS definition should be broad (see 1809200059) but contain a carve-out for "ordinary use of a smart phone," emailed Senior Counsel Margot Saunders, noting the D.C. Circuit "recommended that the FCC use its exemption authority to deal with that issue."

Federal Emergency Management Agency officials expect the same kinds of problems to be uncovered during the first national test of the wireless emergency alert system as during a Washington-area test in April, they told reporters Friday. Preliminary results likely won’t be released immediately, an FCC official said. The test was delayed until Oct. 3 because of Hurricane Florence (see 1809170035). The April test saw many subscribers not getting the alerts (see 1804050053). Industry observers expect similar glitches Oct. 3. “The test will assess the operation readiness of the infrastructure,” a FEMA official said: “We expect there to be fairly similar results” to the April test. Government officials spoke on a conference call with reporters on the condition they not be identified. “Almost all [wireless] phones across the country” will receive the warnings, “but we know there are some anomalies in the network,” a FEMA official said. More than 70 percent of the cellphones will likely “receive and display” the message, the official said. The FCC will work closely with FEMA and industry to assess the test, a commission official said. FEMA officials noted 2016's Integrated Public Alert and Warning System Modernization Act requires the system be tested every three years. WEAs can warn of severe weather, active shooters and Amber alerts. WEAs fall into three categories -- warnings of imminent threats from severe weather to active shooters, amber alerts for missing children and the presidential-level alert, a FEMA official said. The national presidential-level alerts are only issued during extreme emergencies, such as a declaration of war or if there were coordinated terrorist attacks in major cities, the FEMA official said. Those concerned about the test continue tweeting, now using a new hashtag: #GoDark103. “What are you solving by participating in #GoDark920 or #GoDark103?” @realchrishanken tweeted Friday. “You don’t like Trump. I get it. I don’t like him either. But these presidential alerts have been around for longer.”

Turning over nondisclosure agreements signed by FCC commissioners or other staff would reveal staffers who now have or have had access to classified materials, which could subject them to harassment and unwanted attention, the agency said Wednesday, denying our Freedom of Information Act request. It said such a request fell under FOIA exemptions 6 and 7(E), covering personnel files that would constitute an invasion of personal privacy and records that would disclose techniques and procedures for law enforcement investigations, respectively. The agency provided a blank Standard Form 312, the federal government's classified information nondisclosure agreement.

New York Times Co. asked a court to order the FCC to release documents that "will shed light on the extent to which" Russian government agents and nationals "interfered" with the notice-and-comment process for the agency's 2017 decision to "abandon" net neutrality regulation. "Despite the clear public importance of the requested records, the FCC has thrown up a series of roadblocks, preventing The Times from obtaining the documents" under a Freedom of Information Act request, said a complaint Thursday in the U.S. District Court for the Southern District of New York in case No. 1:18-cv-08607. The Times said it repeatedly narrowed its FOIA request in the hopes of expediting release of the records. The FCC has responded "with protestations" it lacked "technical capacity," invoked "shifting rationales for rejecting" requests and misapplied a FOIA privacy exemption "to duck the agency's responsibility," the publisher said. The FCC is "disappointed that the New York Times has filed suit to collect the Commission’s internal web server logs, logs whose disclosure would put at jeopardy the Commission’s IT security practices for its Electronic Comment Filing System," emailed a spokesperson. "Just last week the U.S. District Court for the District of Columbia held that the FCC need not turn over these same web server logs under the Freedom of Information Act.”

Hurricane Florence is still affecting communications service in North Carolina, the only state for which the FCC’s disaster information reporting system is still active. Thursday’s report showed 270,688 cable and wireline subscribers out of service in the state, compared with 283,327 Wednesday (see 1809190048). Out-of-service cellsites in North Carolina went to 3.7 percent from 4.3 percent. Two public safety answering points in North Carolina still were rerouting 911 calls to other PSAPs. One TV station, Free Life Ministries’ WHFL-CD Goldsboro, remained out of service, along with 21 FM stations and two AM stations.

Pushback from some major cities against the draft order on next week's agenda on local and state regulatory authority over small-cell deployments (see 1809140012) is no surprise, since those markets will enjoy 5G rollout regardless of what potentially onerous regulatory burdens they enforce, said FCC Commissioner Brendan Carr at a Media Institute lunch Thursday. Earlier that day, he likewise defended the order at another event (see 1809200007). He told the luncheon that the support the FCC has gotten from smaller cities and rural areas for the draft order is more important than concerns. He said cutting regulatory burdens for deployment is expected to free up sizable economic resources that then change the business case for deploying in smaller communities. The draft order is patterned in many ways after laws in multiple states on small-cell deployment, with "reasonable" caps on fees and shot clocks for dealing with applications, he said. Asked about lack of a "deemed granted" provision in the draft order, he said that wasn't seen necessary because of the shot clock language. Carr sounded what have become familiar themes about the heated U.S.-China rivalry over leading in 5G deployment. The last such major tech inflection point was the move from 3G to 4G, and the U.S. global dominance then "transformed our economy," Carr said, saying China sees being first in 5G as "a chance to flip the script" and dominate tech space. He said, along with freeing up spectrum for 5G, the U.S. has an "infrastructure challenge."