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Comcast Aquires FreeWheel For A Modest Three Hundred & Twenty Million Dollars!


Throughout the years, Freewheel has turned into the go-to promotion serving stage for numerous TV organizes that stream their substance on the web. Furthermore its going to wind up some piece of one of the most amazing merchants of substance online and off.

That is since Freewheel is going to be obtained by Comcast, sources say. The arrangement, which ought to be published soon, is supposed to be evaluated at around $320 million, as per one source. (Overhaul: A source near the circumstances affirms the arrangement is almost finished, yet budgetary terms haven’t yet been concluded.)

Freewheel is one of the biggest stages utilized by TV systems and significant film wholesalers to serve ads close by their substance on the web. Since being established in 2007, the organization has built up customers that incorporate Mlb.tv, ESPN, FOX, NBC Universal, Sky, Turner, and VEVO, around others.

Photo. CatchPoint)

Why Comcast thinks it should be allowed to buy Time Warner Cable — and how the merger process will play out


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Summary:Everyone is talking about “regulatory hurdles” standing in the way of Comcast buying its biggest rival. Here’s why the company thinks the legal issues aren’t a problem — plus an easy-to-follow explanation of how the process works.

Many consumers wonder how regulators could allow the biggest cable company in the U.S. to swallow its largest rival: wouldn’t that be a violation of antitrust law? Unsurprising, Comcast executive, David Cohen, thinks it’s ok — and even pro-consumer — for his company to acquire Time Warner Cable. On Thursday afternoon, he explained why.

Cohen says Comcast has four answers to the antitrust concerns. Here’s a rough summary: 1) there’s no antitrust issue in the first place since  the deal is not a ”horizontal transaction” and consumers will have the same amount of choice as before; 2) Comcast is already subject to a bunch of pro-consumer rules as a result of its purchases of NBC, and those rules will expand to Time Warner Cable customers; 3) the merger will improve service for consumers by letting the companies invest in more infrastructure; 4) current FCC regulations and antitrust laws already force companies to be on their best behavior.

He added that the “sky is not falling,” and suggested critics get past the “hysteria” and accept that antitrust concerns are “truly antiquated in light of today’s market.” It’s another story, of course, whether regulators will actually buy these arguments. To understand what lies ahead, here’s a plain English overview of how the regulatory process works and how it could play out.

Just what are the “regulatory hurdles” Comcast must clear?

The proposed merger is a stunner but many reports qualified it by citing “high regulatory hurdles.” These “hurdles” are actually laws, and Comcast has two sets of them to worry about.

First, these type of telecom deals require the blessing of the Federal Communications Commission. Specifically, the FCC will vote on whether or not Comcast buying Time Warner Cable is in the “public interest.” That term is as broad as it sounds and means the agency can look at all aspects of the deal, including the winners and losers.

Second, there is the Justice Department which, along with the FTC, enforces America’s antitrust laws. It’s important to note that Justice can’t stop Comcast from merging with Time Warner Cable — or with AT&T or Google or anyone else for that matter. But it can file a lawsuit asking the courts to declare that a company is violating the Sherman Act. Even a hostile signal from Justice could lead Comcast to fold its cards rather than take a chance in court.

How long does the approval process take?

Comcast and Time Warner Cable executives predict this could be a done deal by the end of 2014. That sounds optimistic. Even though the FCC could complete a required notice and comment period in a month or two, and sign off on the deal, it will take much longer than that.

We can expect a few rounds of back and forth as the companies offer various concessions to appease the government’s competition concerns. The Comcast-NBC deal took around 13 months from the deal’s announcement to final approval. If this deal is approved, it will take at least that long.

What are the key factors that will determine if the deal is approved?

Comcast is pointing to the overall number of cable subscribers the combined company will have, and say it will divest 3 million subscribers to keep its market share below 30 percent. The companies also say they’re not competitors in the first place, since they operate in different geographic markets and since they will still compete with satellite services and, as Comcast points out, with services like Google Fiber and Netflix.

These arguments may be a red herring since, as Om points out, it’s all about the broadband — meaning what the companies really want is to sell internet service, which is more profitable and growing much faster than TV.

A wild card in the whole deal is net neutrality, a concept that would require broadband providers to treat all internet traffic equally. In light of a recent court ruling, this is no longer the law — but for Comcast it is thanks to the terms of its merger with NBC, which requires Comcast to uphold net neutrality principles (aka the open internet order) until 2018. Net neutrality is likely to come up as bargaining chip between the FCC and Comcast in the current deal.

So, bottom line, will the deal get approved?

Our read here at Gigaom is that Comcast, which has enormous lobbying clout, will likely have the FCC on its side; it certainly doesn’t hurt that the agency’s new chairman, Tom Wheeler, is a former lobbyist for the cable industry. This means the biggest obstacle to the deal is likely to lie with President Obama, who can tell the Justice Department to put the brakes on the deal. The Department has been aggressive in the past at enforcing antitrust laws, including against Apple and AT&T (see below), but it’s too soon to say how this will turn out.

Two other major mergers that went through — and one that didn’t

Comcast and Time Warner Cable value the proposed merger at $45 billion, which is a gargantuan deal, but hardly the biggest. Here are some others:

AOL buys Time Warner (Announced in 2000, valued at $186.2 billion)

Still, the granddaddy of all corporate deals– and hands-down the worst merger in tech history. It was announced in January, 2000 and received final approval from both the FTC and the FCC exactly a year later.

Comcast buys NBC Universal (Announced in 2011, valued around $30 billion)

Some people are still scratching their heads about how this got through. Here’s how the Wall Street Journal sums it up: “Comcast spent roughly a year under the microscope after it reached a deal in late 2009 to acquire a controlling interest in NBCUniversal from General Electric Co. In January 2011, Comcast agreed to an array of commitments with Justice, the FCC and state attorneys general in order to secure regulatory approval.”

AT&T (almost) buys T-Mobile (Announced in 2011, valued at $30 billion)

The idea that America’s biggest phone carrier should buy the fourth-biggest biggest, and one popular with low-income customers, set off a series off yelps, including from Om, that became so loud, the Justice Department sued to stop it months later. The deal is now dead as a doorknob.

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WORTHY OF AWARDS


The Chicago Innovation Awards – Part 3

John Jonelis

Time Share Gulfstream JetI’ve jumped aboard a Gulfstream G450 to interview the legendary Loren Bukkett. I want his take on the Chicago Innovation Awards. He finally puts away his phone and turns to me. “Okay, let’s talk,” he says.

I take that to mean he’s already finalized all the deals that peaked his interest. Nice to have a large staff to handle the details. But here in the jet cabin, it’s just Loren, his wife Aussy, and me.

Aussy is doing some form of shorthand on a tablet computer. That woman hasn’t spoken since I climbed in the plane. Maybe Loren asked his wife to keep it buttoned. Maybe he wants to control what information gets out. At this point, I’m afraid to ask her a direct question. I even wonder if this is their secret strategy to keep outsiders off balance. If so, it’s working.

They give out so many honors at the Chicago Innovation Awards tonight that I can’t keep it all straight. So much glitz and pizzazz. Jumbo screen. Music. Entertainment. Applause. Streaming internet content. I appreciate the way they present a standardized set of videos to highlight the mission of each winner. A professional job and it moves things along nicely. With sponsors like Disney, Comcast, and Wrigley, they can afford to do it right.

Chicago Innovation Awards

Chicago Innovation Awards – jaj

I pull out my notes. “Let’s do the ‘Up-and-Comer’ category first.” I proceed to read off the list but Loren waves me to a halt.

“We’ll do it my way,” he says. And he goes on to tell me about every company that won an award at that event. He does it in depth. No notes. No prompts. At his age, that kind of memory astounds me.

“Now John, keep in mind that for twelve years, every company with an award from this group is a success. And there are a lot of them. That’s impressive and gives an old investor like me a feeling of confidence. Of course my people check out these companies in depth, but you can’t help but come away with some degree of certainty—a belief deep down that every one of them will find a way to make it.”

“You said they’ll break that perfect record this year.”

“That’s the awards to those two politicos, not the companies. No as I see it, what we have here is a large pool of opportunity. I already set some wheels in motion. Don’t ask me which ones.” He clasps his hands behind his neck and leans back. “When you get to be my age, you either turn into a curmudgeon or you win back some of that idealism you enjoyed as a youth. These days, a big part of my strategy includes companies that are doing-well-by-doing-good. I saw a few tonight. One of them is BriteSeed.

I nod. “I saw them pitch earlier in the year—at BNC I think. They made a big impression on me.” I splash three fingers of his excellent Hennessy into each of our snifters. Maybe the combination of spirits and altitude will keep him loose.

“It’s a hot sector,” he says. “Their SafeSnipstm technology could be life-saving. Imagine it on a large scale. No more surgical accidents. Billions of dollars saved.” He leans toward me and lowers his voice. “Keep your eye on Northwestern Global Health and their rapid HIV diagnosis. And Recall-Connect built an automated system to match defective medical implants with patients. No more wading through reams of paper files. Medline came out with an anti-viral face mask. Preventing disease is real attractive to me, but this one’s a family company, so…”

“No need for investors?”

“We’ll wait and see. My only concern with Feeding America is scalability. But they won the Social Innovator Award so people need to take that group seriously—very seriously. Any way we can fight hunger, we oughta do it.” He gingerly takes a tiny sip of his cognac as if he’s already had enough to drink. “I’m interested in the People’s Choice Awards winner,” he says. A little company, New Futura, wants to help Latinos achieve the American dream. Naturally I’m attracted to those kinda offerings. Then there’s Moneythink helping high school kids with their careers. That’s about it for the do-gooders.”

“What about Belly?”

He pauses a moment, pats his stomach, then grins. “That’s another hot sector. That company is off and running in 10 markets with half a million customers already. I’m sure they’ll do well. But I’m not in the mobile app or social media space.”

“Doesn’t that limit your exposure to startups?”

“That it does, John. That it does.” He takes another tiny sip of cognac. “Anymore,” he says, in his Midwestern idiom, “Anymore there’s so much money chasing mobile. So many new startups and only a few will pay off. The good ones get bid-up. Way too high for my liking. New York, Boston—all those great centers for venture capital are in love with mobile and social media. Maybe it’s good for Silicon Valley but it doesn’t fit my strategy. That’s why I come to Chicago. Of course I make exceptions.”

“Do you see a bubble?”

“Well, you always need to keep that in mind. For me it’s more a problem of value.”

Anybody that follows Loren Bukkett knows that deep value is his favorite strategy. Then he shifts gears. “Do you know anything about NuMat Technologies?

That catches me off-guard. “Some. I saw them present at the MIT Whiteboard Challenge. Seems like a winner to me but with so many great offerings, the judges at that event looked elsewhere. Do you think the technology is practical? Can they actually store and transport natural gas in bulk the way they suggest?”

“Keep your eye on them,” he says. And suddenly I wish my investment portfolio could stretch that far.

“And Coyote helps trucking avoid dead runs by sharing between companies. That’s the same thinking that put you and me on this beautiful jet. I like that business model.”

He takes more from his snifter and my hopes of getting him to comment on the awards to the governor and mayor are one step closer to reality. “1871,” he says. “That is without a doubt the most significant incubator I’ve come across. They made up their minds to do it right. 50,000 square feet with an option to double. Three universities keep offices there. Venture capitalists too. A successful startup from Northwestern keeps two big rooms to teach folks to code in new languages. Lots and lots of aspiring companies—and you gotta pass their standards to get in! This is one of the new hybrids—part incubator, part accelerator. Most of their companies are outside my investment horizons but every one of them is highly interesting. It must be a great resource for you.”

“Sure, I’ve been there a number of times. They run a lot of events and always invite the community. If they expand, I may take an office there. What’s your opinion on Options City?”

Loren lifts his feet back to the tabletop. “That one hopes to cure a sore point of mine. They want to help the little guy fight back against high frequency trading syndicates. We’re talking trading in-and-out in nanoseconds. Nowadays these guys own 70% or more of the volume on most of the exchanges. And naturally, the exchanges reciprocate by giving them the same privileges as market makers. But they don’t carry any responsibility like market makers. Or risk. They don’t make orderly markets. No, they hit and run. They’re speculators. Why should they get the first look at all the trades?  It’s all driven by greed on the part of the exchanges. I think it should be illegal.”

I’m leaning forward and nodding vigorously. “It’s the High Freaks that changed my approach to trading. I had to slow my timing way down and widen my stops—take on more risk.”

“Well alotta people are going broke because of it. These operations spend upwards of $100,000 a month for the fastest hookup and shortest wire to the exchanges and then run everything by computer algorithm. This new company wants to level the playing field.”

“Can they do it?”

“The jury is still out.”

Loren talks another twenty minutes to cover it all. Food Genius, mentormob, and mobcart, all leverage the Internet to aggregate information and communication. Cummins Allison of all people is selling a document scanner for banks. Borealis makes a light that takes 90% less energy and lasts 30 years.

That leaves Bright Tag, Catamaran, Littelfuse, and SMS Assist. An impressive event in execution, scope, and promise.  It amazes me that so many fine businesses are right here in Chicago.  All they need to succeed is a boost in the economy. 

We clink glasses. “So Loren, I still want to talk in-depth about the awards to the governor and mayor.”

He flashes me a dirty look.

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Continue to Part 4

Go back to Part 1

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.
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Copyright © 2012 John Jonelis – All Rights Reserved

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