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$1.5B to $2B could be perceived as a bargain relative to VZ's $3.1B purchase. It's all a play on words. But you have to find it interesting that Fibertower was a key focus of theirs. And what to make of "Respectable Manner"? Interesting way to describe how you are proceeding.
Craig Eder Moffett
I know with a huge transaction like Time Warner on your plate, it's hard to as a CFO to even imagine what comes next. But we already hear people talking about, well, what about the synergies that could come from the satellite business with DISH Network or more content? Or is there a sort of – how do you think about the different options that come after Time Warner?
John Stephens
So the first thing is probably paying down some debt. That's the first thing. That's the thing that comes first. And we have a great tremendous cash-generation machine, where we can buy these assets. So let me get that, first that will be our focus. But if you look at things like what comes next? Well, quite frankly, we need to get through the FiberTower and work through it in a very respectable manner the FCC to get approval for that, then we will move to that auction that is going to be coming up probably, here hopefully by the end of 2018, but certainly, really
Fibertower is a HUGE priority for AT&T
https://seekingalpha.com/article/4074190-ts-t-management-presents-4th-annual-moffettnathanson-media-and-communications-summit-results?part=single
Craig Eder Moffett
Let's talk about network densification and particularly the path to 5G for a minute. You looked at Straight Path, decided not to chase it. How confident are you – you've got your FiberTower spectrum and you have some spectrum, but how confident are you in the millimeter wave business as a business plan? Have you seen enough yet to give you confidence that there's a real return on investment there for building out the density that's going to be required at the spectrum adds?
John Stephens
Yes. So let me say it this way, we're extremely confident of our overall wireless network strategy. For us, it's a comprehensive strategy. It doesn't just rely on millimeter wave working or not working. It's comprehensive. It's the deep spectrum position we have, it's the deep fiber. We have more fiber out there than I think anybody based on our Legacy business, it’s based on what we're doing with fiber-to-the-prem, based on the number of businesses just passed. It's based on all of it.
So the millimeter wave is an important piece to it. Our FiberTower holdings – opportunity for FiberTower holdings because we don't have FCC approval yet. But we do think we're going to get a meaningful footprint out of that at a very, very attractive price that will allow us to build out in the 30-gigahertz space. You guys can look at the filings. They have somewhere under license, somewhere in the, just under 400 megahertz nationwide. So we'll work through – they've got some challenges that they'll work through in the FCC, we're encouraged that we’ll get a meaningful footprint to build off of.
But we – our strategy doesn't just rely on that. We can get fiber-to-the-home with Airgig – excuse me, broadband-to-the-home with Airgig. We can get broadband-to-the-home with fiber. We can get broadband-to-the-home with fixed wireless local loop. When you think about most of the nonurban areas of the country and you think about the low-band spectrum we're going to have in service, there's going to be a tremendous mobile broadband speed capabilities that you can get from that process. So we're optimistic about millimeter wave helping. I think it's small cells backhaul, will be very good.
I think getting 5G not necessarily the no way the 5G into the core network will be very, very helpful. We will see how millimeter wave, as a broadband replacement to the home, works out. We're interested in it because we’ve got so much local footprint that we can leverage off of that millimeter wave to the home and offload it on to our own network, making owners’ economics really sensible. The challenge for others is if you don't own that network, you have to pay freight to somebody on that and that's what causes it.
So we love for it to work for us because we're in the best economic position, but it's not our only game. The network team has done a great job of having multiple choices in this ongoing trip or ongoing path to the best – continuing in the best quality, highest speed, deepest network.
Craig Eder Moffett
I know with a huge transaction like Time Warner on your plate, it's hard to as a CFO to even imagine what comes next. But we already hear people talking about, well, what about the synergies that could come from the satellite business with DISH Network or more content? Or is there a sort of – how do you think about the different options that come after Time Warner?
John Stephens
So the first thing is probably paying down some debt. That's the first thing. That's the thing that comes first. And we have a great tremendous cash-generation machine, where we can buy these assets. So let me get that, first that will be our focus. But if you look at things like what comes next? Well, quite frankly, we need to get through the FiberTower and work through it in a very respectable manner the FCC to get approval for that, then we will move to that auction that is going to be coming up probably, here hopefully by the end of 2018, but certainly, really
Craig Eder Moffett
The millimeter wave ..
John Stephens
Yes. I look at 1400 megahertz of spectrum auction at offer. I would assume that anybody who buy a Straight Path would be interested in buying any more may be limited, so that participation that will give us an easy path to finish that off. You can think of things like that, it's a very easy, doable.
AT&T, Verizon’s 5G Will Be a Cable Killer First, Say Cowen
http://www.barrons.com/articles/at-t-verizon-cowen-ponders-the-path-to-5g-1494278083?mod=yahoobarrons&ru=yahoo&yptr=yahoo
http://videos.cowen.com/detail/videos/recent/video/5421979431001?autoStart=true
Cowen & Co.’s telecom analyst Colby Synesael today offers up some thoughts on what the impending arrival of so-called 5G wireless services means for AT&T (T), Verizon Communications (VZ), in the form of a 25-minute video.
I thought I'd bring you the highlights, though you're welcome to watch the entire 25-minute video at Cowen’s Web site if you like.
One of the first uses of 5G, opines Synesael, will be to try and surpass cable networks for broadband into the home -- watch out Comcast (CMCSA):
There is clearly a business model for fixed wireless; there is a very clear to be made for how will AT&T and Verizon actually make money off on these services; ultimately what they’re going to do is go after the large market share which is currently being held by the cable companies in the form of broadband services which you and I receive in our houses.
In the realm of cellular, Synesael thinks 5G will be “game-changing” and a “disruptor,” but mostly because it will “disrupt inefficiencies that are here in this world,” rather than making the phone faster.
He refers to “new business models” being enabled, alluding to things such as “vertical” markets, and “all-in-solutions” for industries.
Things such as faster smartphone downloads will take some time. Faster speeds will probably arrive sometime late next year or at the beginning of 2019, he says, but “True 5G mobile offerings in the market are still arguably a few years away,” so “more of a 2020-plus event."
5G will bring the “original vision of big data to fruition,” because it will create a world with “sensors just about everywhere we go” that will “be taking information on a constant basis,” which will be used to “create service offerings that you and I will hopefully find of value."
5G will be focused in “first world” countries for the first several years, he opines.
On the technical side, Synesael notes the giant cost savings that could come with 5G. For example, while today’s networks cost $2.13 to provide a gigabit per second of bandwidth. With 5G networking, all that could come down to 24 cents per gig.
Synesael also looks at the regulatory angle, which is intriguing with the bidding war for Straight Path Communications (STRP).
As he notes, the recently concluded FCC auction of public airwaves in the 600 megahertz band saw an average value per megahertz of 93 cents, while Straight Path has generally been valued at less than a penny per megahertz. (To be clear, that’s megahertz per “POP,” or potential customer.)
The value of Straight Path, however, has gone up “significantly” of late, he notes. Synesael thinks 5G will “initially” use the kinds of “millimeter wave” spectrum that Straight Path has, but that down the road, it will probably use all available frequency blocks.
Synesael notes that Verizon and the others will have to put up hundreds of thousands of “small cells” around the country to server 5G. They can’t simply rent space with American Tower (AMT) for each of those small cells they way they do today for the regular cell towers. So, they’ll probably need to seek ways to bring down the cost of fiber optics, which is the single largest expense of a cell site, he writes.
The carriers will probably invest in fiber of their own because there are lots of uses for that fiber, so it’s easier for the carriers to “sweat the asset” to get a proper return on investment. The carriers will probably repurpose some existing fiber routes, he writes, such as the fiber currently being deployed for enterprise data services, but also new investments. He notes Verizon’s decision to purchase from Corning (GLW) 12.5 million miles of fiber cabling each year through 2020.
Everyone is missing what is completely obvious to many on this board. They have automatically assumed that Fibertower's licenses are up for grabs and that Straightpath was completely kosher. Lazy journalism, lazy analysis....I don't know but it doesn't take too much to realize there is the secondary case going on where Fibertower is fighting the FCC. I have said all along that the FCC and under Pai will setup Verizon and AT&T very nicely for 5G. They are the 2 behemoths that can get it up and running the quickest and have the most incentive as a robust 5G network will pound cable, T-Mobile and Sprint. Near guaranteed that AT&T will get all of Fibertower's licenses and the FCC will take a serious cut of the the action similar to Straightpath. It has not gotten out in the press much the shenangians that Straighpath pulled off and the FCC does not want that happening.
Shows you how little some of these publications know. I don't see the FCC preventing AT&T from getting the full load of Fibertower licenses which when you factor in the 24ghz bands are on a near level playing field with what Straightpath held. In order to get 5G up and running you need equipment and those makers are already honing on on the 39/28 ghz band. I would assume 24 ghz will be approved for mobile shortly. The FCC is definitely not going to hamtsring ATT or VZ in getting 5G going in this country and if anything is giving them a leg up by allowing them to acquire much of the spectrum approved in the NPRM. Pai and Trump want the jobs and innovation 5G will bring and with their wireless and fiber backbones ATT and VZ are the top 2 players to make it happen. After them you would think a Comcast/Charter hookup would be next.
Thanks for the post. I would assume we start to see more and more. I just can't imagine the Fibertower deal getting rejected when StraightPath got a free pass for defrauding the FCC.
Not going to happen. Spectrum would be tied up in the courts until 2020. Plus the FCC made their deal on Fibertower when they allowed StraightPath to keep theirs thus solidifying a win for Fibertower in the courts should it come to that. The FCC wants T and VZ to be in the pole positions when 5G gets going. They have the resources, capital, and cash flow to make it happen while T-Mobile does not. T and VZ have all the Fiber already under their control while T-Mobile is simply a wireless carrier.
Tmobile just announced aggressive move to 5G.
Verizon has XO Spectrum locked down.
StraightPath Spectrum still up for grabs.
Puts far more pressure on AT&T to secure Fibertower and have no strings attached.
2018
John C. Hodulik - UBS Securities LLC
Hi. Hey. How you guys doing? First on the satellite business, or the linear TV, are you guys seeing cannibalization from the DIRECTV NOW product? And the churn you mentioned, is there a way you could ascribe it to maybe traditional competitors versus these over-the-top guys? And have you seen that accelerate since the launch of YouTube TV a few weeks ago? That's first.
And then maybe on the Straight Path and FiberTower deals, could you just comment on how quickly you think that gets deployed? And is the holdings of the millimeter wave spectrum that you would have if you were able to successfully complete the Straight Path transaction, is that sort of what you need to sort of fulfill your sort of 5G initiatives? Thanks.
Randall L. Stephenson - AT&T, Inc.
I'll start, John, and I'll let John Stephens clean up after me, okay? On the satellite question, there's obviously some cannibalization of DIRECTV NOW, but it's fairly nominal, to be quite honest with you. The satellite churn that I referenced, I mean, it is heavily concentrated, John, in those customers where we just have a standalone TV product. It's not bundled with broadband or it's not bundled with our wireless service. And so obviously it's a world where the integrated offers are what's winning in the marketplace. And so you can figure out who we're losing those subscribers to; it's traditional cable players.
And so this is where we're going to have to get aggressive in a number of areas, moving aggressively on bundling these satellite customers with our wireless offers and also doing some new things in the marketplace that we think can shore this up. But it's no secret where these are coming from; it's coming from integrated offers from other players in the market. And where we have multi-product bundles in the marketplace, those customers, the churn rates continue to be very strong. And in fact you saw our postpaid phone churn, 0.9%. You put TV or broadband with it, and those churn rates just get even better. So we continue to be big, big advocates of the integrated bundle and multiple service bundles. And so we don't see that changing. It's going to require us to get a little more aggressive in those single-play, standalone TV offers.
On Straight Path and FiberTower, so we've talked at length about when the standards are going to be out for 5G. I think we're now in 2018 time horizon.
John J. Stephens - AT&T, Inc.
2018.
Randall L. Stephenson - AT&T, Inc.
And so having equipment and handsets, we're talking 2019 before we start deploying in 2020 when you probably have what I would call scaled offerings. If we get both Straight Path and FiberTower accomplished, it pretty much fills our spectrum requirements we need for a long period of time as it relates to 5G deployment, John. So right now this is all preparing for the future of 5G, and the standards are on track, and we hope to be deploying and putting this spectrum to work in the 2018-2019 timeframe, scaling in 2020.
John J. Stephens - AT&T, Inc.
John, with regard to that on – as Randall said, the FiberTower itself gives us a base of 39 gigahertz nationwide to really build on and plan on. And so that in and of itself is a great starting point and gives our network team an opportunity to incorporate that planning into our project evolution and this next-generation network. When you look at Straight Path, it really has two holdings, the 39 gigahertz, which would complement FiberTower's and give us that depth that we would prefer, and so that would be great, but it also adds a strong 28 gigahertz piece, which we could incorporate into our network and use that way, or we could, as we've done in the past, use as an opportunity for spectrum swaps to take advantage of other opportunities.
I can give you a perfect example; this last quarter I mentioned that we had about a $100 million gain on the spectrum swap with Verizon, where we traded some PCS and AWS – three licenses to get both of ourselves in a better position to serve our customers. So that's where I'd leave us. The 39 gigahertz would be a great depth of position, and quite frankly with FiberTower an opportunity to really plan on that build as we go into project evolution.
Agreed Helloyah. Courts take precedent over Government Regulatory Authority. Happened in the NextWave case as well. But I do believe the FCC can have some influence over Fibertower and AT&T to the extent of make sure all parties are greased so that we can get a move on with this 5G thing. A couple of the petitions will go a long way in outlining that there is a chance the BK court can tie this up even further than the 2019 date. As of late Pai is in the corner of ATT/Verizon and I don't blame him. They are the two companies that can drive the next wave considering their wireless dominance and fiber infrastructures. ATT/Verizon probably had some influence in the STRP outcome as what should have happened was a 100% forfeiture of licenses because of outright fraud but that would have STRP in the courts for years with the licenses under remand.
I think there are many people who are bitter at selling for a tax loss considering they would still be in the game for a nice pay day. I don't know what to make of Condoe but he or she appears elusive, evasive, and vague. What I do know is that I though the responses by the Fibertower and AT&T attorneys to the petitioners that came from the Bankruptcy angle were very weak and Levy and Fahy did a great job in their replies of pointing that out. Generally the FCC is very strict on the petition and reply process but they let some very weak ones roll on in to be publicly posted. Obviously Levy and Fahy stood out with their thoughts and rationale and I think the FCC will take serious notice of what they submitted especially regarding the potential abuse and fraud in the BK courts. As I have stated the Tom Scott Issue should be in the spotlight. You simply cannot have one individual so biased from all angles being defendant, plaintiff, judge, jury, and executioner on a single matter. $300M to $1M valuation of wireless spectrum assets within the course of one year and you have been driving the entire process??? Was the Judge more concerned about his cushy position at a law firm and his golf game while all this was going on? After the unsecured creditors valuation and the SEALED FLYYN DOCUMENT the judge should have had an unbiased party do the valuation work. That in itself is cause to reopen the BK case and the fact that 94% of the assets have sat in limbo means...how could the plan ever have been consummated?
The petitions to the FCC, especially Levy and Fahy should carry some weight with the FCC and make them think this through. The first step is the FCC and if that does not work out then the next step is to work to review the BK plan. I would say the problem but it is more there are many complexities and moving parts to this is the primary assets have been in question and in limbo for so long that the FCC could impose something favorable to former shareholders and if not a court reviewing the BK plan could also do the same.
#1 - The assets in question were part of the pre-effective state of the BK plan.
#2 - The BK plan said sure the assets are only worth $1-$2M and Tom Scott as the financial guy is all good. Even though he led the company to BK and didn't spend the money of $10-15M to preserve a $300M asset??? Hey you the Creditors your opinion doesn't mean anything even though your argument are legitimate and the shareholders...well you are out altogether so anything you say we will toss to the trash.
#3 - The major point of one of the replies was how does a wireless spectrum asset go from $300M to $1M in 2 years? There was never a devaluation that occurred to that magnitude in such short order ever????
#4 - Go back and review the Terrestar case where a similar cast of characters was involved. They devalued lesser important or valued spectrum to a far less extent to walk away with it all than Tom Scott and Fibertower.
#5 - What I also don't understand and could come under extensive scrutiny as the petitions mentioned is how in the world did Tom Scott become the be all end all spectrum evaluator??? Here is a guy who valued the spectrum at $300M+ for years on end and then......$1 to $2M in BK? Does this sound like and individual or CFO you want running or valuated anything?
Hats off to to the petitioners as they nailed it and hopefully are opening some eyes at the FCC as to what has taken place. Very difficult for the FCC to allow the deal not to go through given what STRP actually did(or didn't) do considering substantial service. Also very difficult for the FCC to not put some caveats on the deal to totally screw the unsecured creditors and shareholders. The FCC would be perceived as an approver of fraud as Levy made a point of.
It is possible but I highly doubt it. I would assume AT&T purchased Fibertower and had all their ducks in a row at the FCC. Trump/Pai administration doesn't hurt at all either to push it right through and allow AT&T full access to all the licenses.
It is going to be tough for the FCC to deny ATT with FTWR after STRP. The one threat and it is a big one no matter how small the chance is the reopening of the BK plan. Threat in the sense it delays planning as ultimately I believe AT&T will end up with the spectrum no matter what. But time is money and they may find it more convenient to pay the shareholders as part of the transaction and not risk major delays in the courts no matter how small the chances are.
Those are good questions rfarmer and I wish I had an answer as near exactly what the unsecured creditors claimed has come true. They had approximately $30M at stake and Samberg could have anywhere near $50M to $200M at stake. That would go a hell of a long ways towards his philanthropic activities or some swanky manhattan property. Do they have insights we don't? I would bet Samberg knows the details but does he come out sweeter with the new Fibertower and what he may have done there? If there is the slightest chance the Bankruptcy Case can be reopened and looked at then AT&T will want to nip that in the bud one way or the other. If the easiest and quickest is to fight it then they will, if it is to pay off the common shareholders then they will. ATT and VZ want to get up and running with 5G/Fixed wireless and the FCC/Pai/Trump/Desire for Jobs Numbers want them to do so as well. Of all the players out there ATT and VZ and move this 5G to market the fastest and in the greatest scale. There were significant petitions to deny but I would have expected more but that leads me to believe other players who have an interest similar to the common shareholders in benefiting financially off of this have other plays in mind. Or at least that is my wishful thinking. There were solid arguments put forth as to why the BK plan can be reopened and that is a threat to AT&T moving forward with their plans. They will want to eliminate that threat and time is more a concern rather than thought. So long story short I thinkg a Samberg/Unsecured Creditors are either already part of the deal or they have another play outside of the box of the FCC process.
A good outcome is the FCC looks at both Fibertower and AT&T and has them clean up the loose ends of this with some type of compensation for the former common shareholders. I think enough has been outlined to have it in the minds of the FCC that something has taken place here and people got screwed over and the potential to reopen the BK case is there which would inconvenience the move to 5G which I believe the FCC, ATT, and VZ want to go at in an aggressive manner.
Competitive Carriers Association???
Who do they think they are fooling? The FCC gave Straighpath a huge pass on their fraudulent activity simply to avoid shelving the licenses in a legal battle and unable to be used by anyone for years to come.
So if Fibertower falsified their applications and submitted they would have gotten renewals and the Competitive Carriers Association would be okay with that?
Regardless, FiberTower’s and Straight Path’s situations are distinguishable. First, Commission actions taken against Straight Path were in the context of an enforcement proceeding, and involved a negotiation between the Enforcement Bureau and Straight Path, not a
transfer of control proceeding.22 AT&T’s attempted purchase of the Terminated Licenses is not a justification for them to be reinstated.23
Second, the fact patterns between FiberTower’s and Straight Path’s situations are not nearly as similar as Applicants would have the Commission believe. Indeed, the Straight Path licenses met their substantial service requirements and nothing in the Straight Path consent decree or otherwise contradict this key fact.24 FiberTower had every opportunity to meet its substantial service requirements but knowingly failed to do so – and the Commission has repeatedly declined to grant waivers or extensions based on business decisions.25 Furthermore,
the D.C. Circuit’s remand to the Commission is quite narrow, and should be properly limited to an evaluation of the additional 42 licenses referenced by the Court
What will the FCC do?
*FCC imposes 20% fine on StraightPath in response for defrauding the FCC did zero construction and actually filed the paperwork with the FCC claiming they had equipment and service at all locations when they had next to nothing.
*Note the CCA is trying to contend that the cases are not similar and that StraightPath did complete substantial service showings. Yes they filled out the paperwork but what was actuality?
*StraightPath spent next to nothing on any type of Millimeter Wave Services whatsoever.
*What did their Balance Sheet and Cash Flow statements look like with regards to Cap Ex? Couldn’t produce invoices, purchase orders etc…where was the network monitoring of all these links to ensure services?
*Fibertower actually worked with the FCC and took all the right steps to get their licenses renewed and actually had numerous customers including all the big 4 carriers, Clearwire who were supported by Fibertower’s $300M+ backhaul network.
*It was apparent Fibertower thought they had all their ducks in a row leading up to the renewal and thus did not build the “links to nowhere” costing them $12M+ is useless cap ex.
*On top of providing backhaul services in 13 major metro markets Fibertower also invested in R&D and delivered products like spectrum in a box which enabled end users to set up their own wireless links backed by Fibertower’s spectrum.
*The carriers want the 24 / 28 / 39 ghz spectrum now so they can plan their buildouts and prevent others from getting into their backyards.(Comcast, Charter, Altice, Google etc..)
*Cannot plan a buildout if you don’t have a roadmap of your spectrum holdings.
*Thus the slap on the wrists for StraightPath compared to their actions or inactions with regards to the FCC’s rules.
*With Fibertower what do they do?
*3 Bidders for StraightPath’s spectrum with a potential over the top bid on AT&T’s deal from Verizon. Is the 3rd player T-Mobile? Comcast? Google?
*If they don’t return the licenses back to Fibertower then Fibertower has the grounds based on the StraightPath decision to get this tied up in the courts until at least 2020 and the FCC and Carriers cannot afford that.
*Yet you give the spectrum back and then along comes a very viable case to reopen the Bankruptcy Chapter 11 proceedings.
*In the end does the FCC say in order to approve this transaction we have to make everyone happy so the goal of getting the spectrum in the right hands is accomplished with no strings attached.
*The FCC with Trump/Pai wants 5G to take off and they need to put ATT and Verizon first on the glidepath to success. Always keep in mind Sprint/Tmobile and their foreign ties.
*That means formers shareholders are content, Fibertower gets a similar slap on the wrists to that of StraightPath, and the debt holders walk away with something?
*There is a lot of moving parts to this but after the AT&T StraightPath move and Verizon follow up there is little doubt that Fibertower’s spectrum could be sitting in the $1.4B to $2B area.
Insurance Policy strategy in case things don't work out with Fibertower?
Insurance Policy to hamstring the competition now that AT&T has locked up Fibertower and Straightpath for the near future?
If the Fibertower deal is shot down then the $1.6B thrown at StraightPath can do nothing but help Fibertower.
I see it as positive for the common shareholders of Fibertower.
Sandpaints and Others:
As I understand it one can replay to the ATT/Fibertowers attorney's rebuttals to the Petitions by April 13th. As I have stated I found their response to the questioning of the Bankruptcy by petitioners very weak.
Interested parties must file petitions to deny no later than March 30, 2017. Persons and entities that file petitions to deny become parties to the proceeding. They may participate fully in the proceeding, including seeking access to any confidential information that may be filed under a protective order, seeking reconsideration of decisions, and filing appeals of a final decision to the courts. Oppositions to such pleadings must be filed no later than April 6, 2017. Replies to such pleadings must be filed no later than April 13, 2017. All filings concerning matters referenced in this Public Notice should refer to ULS File Nos. 0007652635 and/or 0007652637, as appropriate.
Moreover, to the extent the Bankruptcy Petitioners could have any interest as former shareholders of old FiberTower, their allegations raise private, contractual disputes. And, “t is well established that the Commission is not the proper forum for resolving private contractual disputes.”62
But the FCC does have to take into consideration that the Unsecured Creditors and Common Shareholders can take justifiable and with merit legal actions to inhibit the use of the licenses in the near term by AT&T.
I would think after looking very foolish with regards to the StraightPath fiasco where blatantly and right under their noses the FCC was essentially snookered by StraightPath that they would be walking very carefully with regards to Fibertower. StraightPath essentially defrauded the FCC and the people and got away with it and Fibertower is walking the line as well. The FCC as one petitioner mentioned does not want to be associated with defrauding the public and shareholders yet they do want to put the spectrum to good use in aiding the public. The story that can be well documented regarding Fibertower may be one of them being able to weasel their way through this but it will be covered in a blanket of fraud and deception with the FCC asleep at the wheel....not once....but twice with regards to 2 smaller companies holding 5G spectrum.
Bottom line is that the FCC has to take into consideration the facts leading up to the strong possibility that the Bankruptcy Plan can be reopened and that these licenses can continue to be put into remand for years. The rebuttal by the counsels for AT&T and Fibertower fail to provide a single point as to why the bankruptcy plan cannot be reopened other than it is a done deal and it cannot be reopened. A bankruptcy plan can be reopened and it was clearly outlined in one of the pleadings as to why it can and should be reopened.
They failed to address that the plan was contingent on the assets that were 94% in remand with the courts, unwinding the bankruptcy plan would not have adverse affects on parties involved(how could it as 94% of the assets key to the plan were under remand and the other 6% were generating little or no revenue),and that the valuation methodologies were very suspect during the process.
I would assume that the FCC would take a strong look at this and have additional questions as to the merit of those(Shareholders and Unsecured Creditors) looking to reopen the BK plan and their chances of success and want this risk removed.
Thanks Sandpaints. This is not the simplest of processes.
Sandpaints / Important:
You will need to submit or provide it to each of the parties attorneys.(AT&T and Fibertower). It is not in the Public Notice at all but I was informed by the FCC that you do need to do that. I will find out the information later today and provide it to you all.
FCC Licenses on The Balance Sheet:
2007 - $342M
2008 - $288M
2009 - $288M
2010 - $288M
2011 - $288M
11/2011 - $106M
07/2012 - BK Filed, FCC Moves to Terminate 692 of the 738 Licenses.
09/2013 - Debtors claim(Tom Scott Analysis) that the 692 Licenses subject to the remand of the BK Court are worth $0 and the 46 Licenses are worth between $1M and $2M.
2017 - Rights to Licenses sold to ATT for ???
Within the span of 2 years the FCC licenses went from $288M to $1-2M and the debtors based on an analysis from Tom Scott get to walk off with everything? The Unsecured Creditors posted a rebuttal of the valuation but it seemed to fall on deaf ears with the court. What is not so certain is what is the status of the 692 licenses subject to the remand of the BK court. Do they reevaluate based on the sale price or simply hand them over to the debtors/att?
I don't think it was ever given any consideration at all considering the valuation done on the business.
$34M in cash straight to the Debtors.
That left the following:
Debtors owed about $100M
Unsecured Creditors owed about $30M
They then valued the business between $4M and $5M and handed it to the debtors. Note the entire lot of 728 licenses was valued at $1M to $2M.
692 licenses are still subject to the remand of the bankruptcy court.
Average Joes 10-15%
Solus / Samberg 20-30%
That leaves a balance of 55-70% outstanding.
You have to assume many funds, investment cos etc...dumped and took the tax write off. In the year leading up to the common share extinguishment 1.5X to 2X the share balance of 48M traded. I would assume as I always have that various players linked to Solus / Samberg and others scooped this up for the sub nickel prices it traded at. Either way they come out with the riches. If it all goes to the debtors or the courts and fcc include the common shareholders it is a small price to pay of the overall riches for what they pulled off.
Do you or anyone think that Samberg and Unsecured Creditors will file petitions? Pucillo I am sure has put himself in a win win no matter what happens.
I am along the same lines but have much further detail. Not sure if all that detail is necessary at this time but from what I know it is better to put it all out there with the FCC on the front end.
Petition to Deny Format
https://www.publicknowledge.org/assets/uploads/blog/Howtofileapetitiontodeny.pdf
Understood. But I think a core theme coming from numerous petitions may move the needle.
What I am putting together is not emotional but sticks to the facts and focuses on:
1 The Valuation Process of the Licenses $300M to $1 or $2M within 2 years time window all being done by the same unbiased individual.
2 The Licenses being in Remand with the FCC
3 The Bankruptcy Plan never being consummated as a result of the licenses being in remand.
4 The ability of the Unsecured and Common Shareholders to re-open the bankruptcy plan as a result of 1,2 and 3.
You have to assume that the Unsecured Creditors Committee are also all over this. I would also think Samberg is as well unless he is playing both sides of the fence somehow. Anyone else out there crafting their petition? It would help if many of us sent something in and they all held the same theme.
Chapter 11 case is still subject to being re-opened due to:
Plan never being fully consummated.
Valuation of the assets during chapter 11 proceedings.
690+ Licenses in remand with the FCC.
I would think the terms would be announced shortly so as not to hold this up. AT&T is not stupid and they are well aware of the cast of characters they are dealing with along with their methods during the BK process. I would assume they want this passed as quickly as possible. The acceleration of 5G plans has literally blown me away. At one point I was thinking 2022 and then things were fast forwarded 3-4 years. I am still going to draft something up and plan on sending it in. The core issues for this purpose would be:
1 - Their BK plan was never consummated leaving it open to being re-opened.
2 - The Process utilized in valuing the assets. The who and how.
3 - The 692 licenses currently subject to the court.
Basically all 3 are intertwined. Anyone else have thoughts. Thanks.
I am definitely putting something together. It is difficult without knowing the particulars of the deal to question the transfer. I am for the the transfer but only under certain condition obviously.
Thanks but common shareholders also have to have some rationale behind denial. This seems to pertain more to an outside of what had happened during BK to the common shareholders.
Codesilver, you scour the FCC website and find these but what is your opinion on how to react to this? Without knowing the particulars of the transaction I cannot respond in the best manner. If shareholders are cut in on the action by X% then I am for it. If shareholders are left in the dark then I am against it. Sort of lends itself to a wishy washy reponse should I craft one and send it in. What is your opinion? Thanks.
Thank You. I missed the earlier post. We should get a good healthy discussion going on this.
Link? Is this from the FCC site?