March 26, 2023

DealBook: Liberty Bids $2.5 Billion for Rest of Belgium’s Telenet

Liberty Global, the international broadband arm of John  Malone's media and telecom empire, has been expanding in Europe.Scott Olson/Getty ImagesLiberty Global, the international broadband arm of John  Malone’s media and telecom empire, has been expanding in Europe.

Liberty Global, the media company controlled by John C. Malone, offered on Thursday to buy the roughly half of Belgium’s Telenet Group Holding that it did not already own for about $2.5 billion in cash, as it continues its push into Europe.

Under the terms of the proposal, Liberty Global will begin a tender offer of 35 euros a share, about 14 percent higher than Telenet’s one-month average volume-weighted closing price.

Shares in Telenet climbed more than 12 percent in afternoon trading on Thursday, to 34.88 euros.

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Liberty Global, the international broadband arm of Mr. Malone’s media and telecom empire, has been expanding in Europe in recent years largely through acquisitions like the German cable providers Kabel Baden-Wuerttemberg and Unitymedia. And it bought a controlling stake in Telenet in 2007.

Based in Mechelen, Belgium, Telenet has become one of the biggest television and broadband Internet service providers in the country, with 2.2 million residential cable-TV subscribers and 1.3 million Internet customers as of Dec. 31. But its profit has fallen over the last two years, down to 16.8 million euros in 2011.

Mike Fries, chief executive of Liberty Global.Brendan McDermid/ReutersMike Fries, chief executive of Liberty Global.

Still, its stock price has leaped 37 percent over the last five years.

“We believe this is the right time for Telenet to become a wholly-owned part of Liberty Global’s pan-European platform in its next stage of development, particularly in light of the competitive and regulatory outlook in Belgium,” Mike Fries, Liberty Global’s chief executive, said in a statement. “We are proud of the success Telenet has achieved over the years and of the many innovations it has brought to Belgian consumers.”

Liberty is being advised by Morgan Stanley and the law firm Freshfields Bruckhaus Deringer.

This post has been revised to reflect the following correction:

Correction: September 20, 2012

An earlier version of this article misstated the number of Telenet customers. The company has 2.2 million, not billion, residential cable-TV subscribers and 1.3 million, not billion, Internet customers.

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Obama Opposes Parts of 2 Antipiracy Bills

The comments by the administration’s chief technology officials, posted on a White House blog Saturday, came as growing opposition to the legislation had already led sponsors of the bills to reconsider a measure that would force Internet service providers to block access to Web sites that offer or link to copyrighted material.

“Let us be clear,” the White House statement said, “online piracy is a real problem that harms the American economy, threatens jobs for significant numbers of middle class workers and hurts some of our nation’s most creative and innovative companies and entrepreneurs.”

However, it added, “We will not support legislation that reduces freedom of expression, increases cybersecurity risk or undermines the dynamic, innovative global Internet.”

The bills currently under consideration in Congress were intended to combat the theft of copyrighted materials by preventing American search engines like Google and Yahoo from directing users to sites that allow for the distribution of stolen materials. They would cut off payment processors like PayPal that handle transactions.

The bills would also allow private citizens and companies to sue to stop what they believed to be theft of protected content. Those and other provisions set off fierce opposition among Internet companies, technology investors and free speech advocates, who said the bills would stifle online innovation, violate the First Amendment and even compromise national security by undermining the integrity of the Internet’s naming system.

Though the Obama administration called for legislation this year that would give prosecutors and owners of intellectual property new abilities to deter overseas piracy, it also embraced the idea of “voluntary measures and best practices” to reduce piracy.

Whether Congress can produce a compromise is uncertain, particularly in the House of Representatives, where Republicans have fought bitterly over the antipiracy legislation and party leaders, who control the chamber, are loath to offer further opportunities for intraparty battles.

The Motion Picture Association of America, the Hollywood lobbying group that has been most visible in its support for the current bills, said in a statement on Saturday that it welcomed the administration’s call for antipiracy legislation. But, the trade group added, “meaningful legislation must include measured and reasonable remedies that include ad brokers, payment processors and search engines.”

Hollywood and the music industry have broad political support for their efforts, and the Chamber of Commerce and labor organizations have pushed for the legislation. But they often find themselves facing off against the libertarian views of leaders in the technology industry.

Opponents of the House bill, the Stop Online Piracy Act, and the Senate bill, the Protect IP Act, have focused most of their attention on the proposed blocking by Internet service providers of Web sites that offer access to pirated material.

In December, a group of influential technology figures, including founders of Twitter, Google and YouTube, published an open letter to lawmakers saying that the legislation would enable Internet regulation and censorship on par with the government regulation in China and Iran.

That argument struck a chord with the Obama administration, which through the State Department and other channels has been pushing other countries to loosen restrictions on Internet access.

In its statement Saturday, the White House said any proposed legislation “must not tamper with the technical architecture of the Internet.” Parts of the bills that provide for filtering or blocking through the Domain Name System — the Internet’s address book — could drive users to unreliable routes through and around the blocked sites, the White House said. That would “pose a real risk to cybersecurity and yet leave contraband goods and services accessible online.”

The statement did not threaten a presidential veto, but it made plain what types of piracy enforcement measures the White House would not accept.

The statement was attributed to Victoria Espinel, the intellectual property enforcement coordinator at the Office of Management and Budget; Aneesh Chopra, the administration’s chief technology officer; and Howard Schmidt, a cybersecurity coordinator for the national security staff.

Jenna Wortham contributed reporting from New York.

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An Uproar on the Web Over $2 Fee by Verizon

The $2 monthly fee, which takes effect Jan. 15, will apply to people who make one-time credit or debit card payments on the phone or online. Subscribers who write checks or have the company charge their credit or debit cards or deduct from their bank accounts each month will not have to pay the new fee.

But Verizon customers nonetheless flooded Twitter with denunciations of the company, setting up online petitions and vowing to use paper to cost the company more money than it would raise through the new fee. Others noted that the people who tended to pay at the last minute were often those who lived paycheck to paycheck.

The outsize reaction in many ways reflects the year that is now concluding. The economy has not improved much, consumers are fresh off their victory in getting Bank of America to rescind its own move to levy a small new monthly fee and airlines and other companies continue to ask customers to pay à la carte for goods and services that were once part of the standard price.

Then there was Verizon, making the announcement in the dead week between Christmas and New Year’s and calling its new charge a “convenience” fee.

“These fees are going to cover the costs of those last-minute payments,” said David Samberg, a Verizon spokesman. “We don’t want anyone to have to pay this.”

So how can customers avoid it? In addition to using a check, automated bank transfer and credit or debit card, Verizon customers can also pay at a Verizon store, by money order, or by using a bank or other company’s online bill payment service. They may also use a Verizon gift or rebate card, or make a last-minute, one-time phone or Web payment by handing over their bank account number and their bank’s routing number.

Verizon Wireless followed other Internet service providers, including Comcast, that have decided to charge fees to customers for certain phone payments. ATT, Verizon’s biggest rival, has not announced plans to impose charges for electronic payments and a company spokesman declined to speculate on whether it might do so.

Gerry Purdy, a principal analyst with MobileTrax, a market research firm, said it made sense that Verizon was charging for over-the-phone payments, because carriers typically must pay a third-party service to handle those transactions. But Internet payments do not require a third party, he said.

“That’s the one that surprises me, because most people won’t charge you for paying on the Internet,” Mr. Purdy said. “When you book a plane ticket online, you don’t get charged a fee.”

Verizon may be imposing a $2 fee on one-time online payments to pressure customers to enroll in an automatic payment option, Mr. Purdy said, because it creates a higher probability that the payments will come in on time.

Mr. Samberg would not say how many people would have paid the fee this month if it existed now. A study conducted by Javelin Strategy Research, a firm that focuses on financial services and payments, found that 23 percent of adults make a last-minute payment to a biller once a month.

Those who would pay it today are people like Grace Lusich, an administrative assistant in San Jose, Calif. She no longer has a bank account after bad experiences with what she believed were unfair overdraft charges. Now, she uses a prepaid debit card from Walmart called the MoneyCard.

“A lot of people in America who are having a hard time paying their bills need a little leeway to wait for the money to come in,” she said. She said she called Verizon each month once she knew her paycheck had been direct-deposited onto her card. Then she makes the payment without ever talking to a human being.

“If you go into their store and an associate helps you, they’re not charging you for that,” she said. “But with the phone, no one is helping me. It’s all automated. And they’re going to accept personal checks, which will cost them more in the long run?”

Mr. Samberg, the Verizon spokesman, said he did not have a breakout of Verizon’s costs for processing various payments.

Those one-time payments cost Verizon money since it must pay merchant fees to card companies and others. The amount it costs Verizon to accept cards in stores could be less because of quirks in how the card companies set fees. It may also be willing to swallow the costs of accepting cards in its stores in exchange for the opportunity to sell upgrades to people who come in to pay their bills.

“They are punishing people who need to wait until the last second,” said David O’Neill, who recently lost his job at a Borders bookstore that closed. He is a former Verizon Wireless customer but took to Twitter anyway on Thursday to argue that the company’s move helps the 1 percent get richer, since it rewards Verizon shareholders.

“We hope it’s not the case that people are forced into paying this,” said Mr. Samberg. “You look at all of the options and choose the one that is best and easiest for you.”

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Bits Blog: Verizon Wireless Adds $2 Fee for Some Bill Payments

3:47 p.m. | Updated Adding analyst comment.

Verizon Wireless said Thursday that it was preparing to charge a $2 “convenience fee” for customers who pay individual cellphone bills over the phone or on the Internet.

The new policy will go into effect Jan. 15, according to a Verizon statement. Customers who pay with an electronic check or enroll in an automatic payment option will be exempt from the fee. The company said it was encouraging people to use the free options.

“The fee will help allow us to continue to support these single bill payment options in these channels,” Verizon said.

Verizon Wireless follows a trend of Internet service providers, including Comcast, that are opting to charge fees to customers for phone payments. ATT, its biggest rival, has not announced plans to impose charges for electronic payments.

Gerry Purdy, a principal analyst with MobileTrax, a market research firm, said it made sense that Verizon was charging for over-the-phone payments, because typically carriers must pay a third-party service to handle those transactions. But Internet payments are automatic and don’t require a third party, he said, so the fee is unusual.

“That’s the one that surprises me, because most people won’t charge you for paying on the Internet,” Mr. Purdy said. “When you book a plane ticket online, you don’t get charged a fee.”

Verizon may be imposing a $2 fee on one-time online payments in an effort to pressure customers to enroll in an automatic payment option, because it creates a higher probability that the payments will come in on time, Mr. Purdy said.

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AT&T Lobbyist Faces Beltway Test in T-Mobile Deal

IN this covetous town, the delicacies of the Georgetown Cupcake shop stand alone as symbols of wish fulfillment — heaping swirls of luscious confection atop rich, creamy pastry.

Therefore: Operation Cupcake. As the Federal Communications Commission debated final rules last December on how Internet service providers should manage their traffic,  ATT delivered 1,500 of these opulent desserts to the F.C.C.’s headquarters here.

Like many other big corporations, ATT annually blankets power brokers with token holiday gifts, but the cupcake campaign was notable for its military precision. A three-page spreadsheet, stamped “ATT Proprietary (Internal Use Only),” detailed how the desserts were to be deployed to each of the 63 commission offices: four dozen were assigned to the enforcement bureau, 10 dozen to the wireless divisions, 12 cupcakes to each of four commissioners, and 18 to the chairman, and so on.

As it turns out,  ATT had begun its $39 billion courting of T-Mobile about the same time. The resulting deal, announced a week ago, would transform the industry if approved. It would narrow the field of major wireless providers to three and vault ATT into the No. 1 spot, ahead of Verizon; consumer advocates say the combination will lead to higher prices.

As interested parties lobby for and against the merger, one person will be pulling at the levers of power more often and with more influence than anyone else, according to both friends and foes: ATT’s chief lobbyist, James W. Cicconi. A master strategist, Mr. Cicconi (pronounced si-CONE-ee) internalizes the art of regulatory and legislative war — and Operation Cupcake is but one of the efforts to come out of his shop.

Tutored by James A. Baker III in the ways of politics in the administrations of Ronald Reagan and George H. W. Bush, Mr. Cicconi, 58, plays hardball — literally, as a pitcher in an adult baseball league, flinging fastballs toward batters more than a decade younger.

His roots are in Texas, and he never forgets the lesson of the Alamo: the Texans lost. Other battles have different lessons for him. He once took his staff on an overnight retreat to Gettysburg, Pa., where it toured Cemetery Ridge and Little Round Top and absorbed lessons on battlefield tactics.

In 13 years at ATT, Mr. Cicconi has helped guide the company through roughly a dozen mergers, large and small, and he has made his share of enemies in Washington. As a testament to his power, however, few of them will criticize him on the record.

“He’s smart, he’s savvy, he’s strategic,” says Gigi B. Sohn, president of Public Knowledge, a media and consumer advocacy group that has often wrestled with him. “I don’t think there’s a lobbyist in town who I disagree with more on the issues, but I have the utmost respect and admiration for the way he does his job. He’s always thinking three steps ahead of the competition.”

MR. CICCONI, senior executive vice president for external and legislative affairs, is not alone, of course, in spreading ATT’s corporate message. Five other executives rate a similar rank, and four more are group presidents or chief executives, all under ATT’s chairman and C.E.O., Randall L. Stephenson.

Nor is Mr. Cicconi’s lobbying effort a one-man show. He oversees a division that spent $115 million on lobbying over the last six years, putting it among the top five corporate spenders in the country, according to the Center for Responsive Politics, which tracks lobbying and campaign spending.

ATT employs an army of outside lobbyists, including at least six prominent former members of Congress, including the former Senate majority leader Trent Lott, a Mississippi Republican, and former Senator John Breaux, a Louisiana Democrat.

Over the last two decades, ATT employees and its political action committees have pumped more campaign contributions into federal politics than any other American corporation, the Center for Responsive Politics reports. In the last election cycle, ATT contributions found their way to 390 representatives and 70 senators.

“They are a behemoth,” says Dave Levinthal, editor of, the center’s online lobbying database. “When you have dozens of former federal officials doing your bidding in Washington with a detailed knowledge of how Washington works, it is exponentially easier to grease the skids of government.”

As Congress discusses the merger, Republicans and Democrats will duel over the balance of market forces and regulatory intervention. The White House will strive to balance the president’s campaign promises to get tough on antitrust issues while trying to prove he is not anti-business.

In advocating for the T-Mobile merger, ATT and Mr. Cicconi have their work cut out for them. The Justice Department’s antitrust unit will aim to determine whether the deal will substantially limit consumers’ choices. After the merger, ATT and Verizon would together control nearly 80 percent of the cellular market, with Sprint a distant third.

(Verizon declined to comment on Mr. Cicconi or on ATT’s deal to acquire T-Mobile.)

And the F.C.C., which along with Justice must approve the merger, wants to reapportion the scarce broadcast wavelengths on which wireless broadband operates. The T-mobile deal would result in fewer potential bidders in its airwave auctions.

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