“Bank completes acquisition - Montana Standard” plus 4 more

Bank completes acquisition - Montana Standard
Business briefs - Dubuque Telegraph Herald
Student loan jobs at risk - Argus Leader
Many experts say Michigan's recovery will follow national rebound - Detroit Free Press
Cover Story: More, Better, Faster - Multichannel Online

Bank completes acquisition - Montana Standard

Posted: 04 Oct 2009 12:12 AM PDT

By The Associated Press - 10/03/2009

KALISPELL (AP) — Kalispell-based Glacier Bancorp says it has completed its acquisition of a community bank in northern Wyoming.

First National Bank and Trust is based in Powell, Wyo., and also provides banking services in Cody and Lovell. As of last June 30, the Wyoming bank had total assets of about $280 million.

A news release from Glacier Bancorp says First National Bank and Trust will operate as a separately chartered community banking subsidiary of Glacier.

Glacier Bancorp's subsidiary banks now provide services in 60 communities in Montana, Idaho, Utah, Colorado, Wyoming and Washington.

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Business briefs - Dubuque Telegraph Herald

Posted: 04 Oct 2009 07:28 AM PDT

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Student loan jobs at risk - Argus Leader

Posted: 04 Oct 2009 08:33 AM PDT

Student loan reform typically doesn't get folks as lathered up as health care.

Yet the largest overhaul of the financial-aid system since its introduction in the 1960s is raising similar issues: affordability for families, the role of government and keeping jobs in place.

Aiming to get subsidized private companies out of student lending and turn it over to the government, the proposal could save $80 billion the next decade by eliminating subsidies paid to lenders that keep interest rates down.

That savings would be used to make college more affordable for more students by increasing the maximum Pell Grant by $1,400 up to $6,900 and reducing interest rates on student loans.

But the legislation places the 1,200 people who work in student lending services in Sioux Falls in the precarious center of the debate.

Sioux Falls is home to two of the five largest student lenders in the country: Citibank's Student Loan Corp. and Wells Fargo's Educational Financial Services.

These companies originate and service loans through the Federal Family Education Loan Program, or FFELP - the system that accounts for three quarters of all student loans.

"This is a significant book of business that they are involved with and if it goes, the jobs go with it," says Sen. John Thune, R-S.D., who anticipates the legislation, which passed in the House earlier this month, coming before the Senate later this year or the beginning of next.

Should it pass, it could directly and indirectly affect as many as 3,000 jobs statewide, he says.

Or, some argue, the changes could be but another temporary dip in the companies' employment profiles as other sectors require workers.

"Citibank and Wells (Fargo) have large servicing operations, and they would lose out," says Tim Ranzetta, president of Student Lending Analytics in Palo Alto, Calif., a research and advisory firm.

He estimates the legislation could cause national job losses of between 8,100 to 12,150 jobs during the next several years in an industry that employs about 30,000 people nationally.

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Many experts say Michigan's recovery will follow national rebound - Detroit Free Press

Posted: 04 Oct 2009 07:43 AM PDT

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So far, he hasnt seen any signs of improvement in Michigans economy. With sales off 15% on average and thats after some two-for-one deals Andiamo is waiting to see if it will need to offer discounts for holiday parties.

Were just trying to stay alive until the economy turns around, said Vicari.

At Kelly Services, the giant staffing firm based in Troy, top executives say they have noticed an improvement in metro Detroit. The plummeting demand for temporary workers that occurred toward the end of last year came to a halt in late spring, said Christopher Stark, the company's territory leader for Detroit.

Though he hasn't yet seen an increase in local short-term hiring, "the decline has stabilized," Stark said.

Rising demand for temporary workers usually precedes the start of an economic rebound.

Oakland sees gains

Another economic indicator, Oakland County's economy, is also experiencing some positive changes. In previous recessions in Michigan, the county, one of the nation's most affluent, has usually been among the first areas in the state to bounce back.

After a difficult summer, Oakland companies are trying to diversify and enter new markets, but many are still having a hard time getting financing because of the credit crisis, said Maureen Krauss, Oakland County's director of economic development and community affairs.

However, the county has seen an influx of foreign and out-of-state companies looking at the area's bargain-priced office and industrial buildings.

"We're starting to see more activity. We do think things are starting to turn," Krauss said. "The phones are ringing and that's good."

Downsizing isn't done

Even if Michigan's downturn has bottomed, that doesn't mean finding a job will get any easier for the state's 736,000 unemployed residents.

The downsizing of Detroit's auto industry hasn't ended, with several plants slated to close this year and next. And General Motors Co. is reducing its workforce by 4,000 salaried employees.

Normally when a recession ends, the job market is one of the last parts of the economy to recover.

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Cover Story: More, Better, Faster - Multichannel Online

Posted: 04 Oct 2009 06:38 AM PDT

FCC's Broadband Update: Quality Comes At A Price

by John Eggerton -- Multichannel News, 10/5/2009 2:00:00 AM

Washington — After digesting 26 workshops, testimony from 230 witnesses and nearly 41,000 pages of written comments, the Federal Communications Commission clearly sees a need for speed.

That was one remedy that emerged at a public meeting last week as the agency tries to craft a strategy for "delivery of universal, affordable, widely adopted broadband to serve vital national purposes" as part of the American Recovery and Reinvestment Act of 2009. The national broadband plan is due to Congress by Feb. 17, 2010.

At the FCC meeting, chairman Julius Genachowski offered a state-of-the-industry update, rather than strong recommendations. Still, the need for faster Internet lines complicates another key agency mission: service to the about 3 million to 6 million people are who are unserved by basic broadband, defined as a speed of 768 Kilobits per second or less.

The National Telecommunications & Information Administration and the Agriculture Department next month will start to hand out grant and loan money to begin that process. Meanwhile, the NTIA last week introduced interactive online maps to applicants seeking to help close the broadband gap.

The FCC's broadband task force concluded that it was not getting enough information from providers on where and how broadband service was being deployed, and so it was probably underestimating the number of people who did not have access to high-speed connections — a figure it put at 5 million households.

After several presentations at the meeting — dubbed "broadbandapalooza" by commissioner Meredith Attwell Baker — it became clear that the definition of broadband would depend on which applications the FCC decides are necessary to support.

If the baseline standard is set for just e-mail and Web browsing, said the FCC's broadband task force, then 300 Kbps would suffice. But the clear thrust of their presentations was that wouldn't be fast enough for a forward-looking plan that would allow for such high-bandwidth functions as monitoring heart patients, tracking home-energy consumption or proffering two-way video education. They cited billions of dollars in savings from such bandwidth-hungry telemedicine applications, which they pointed out could help bring health-care costs down — another obvious hot-button issue for the administration.

Genachowski said it was only the start of a weeks-long process of reviewing the findings, but task force members seemed to be clearly hinting at a path to higher speeds.

Carlos Kirjner, senior adviser to Genachowski, said, "If we take download speeds as a proxy for performance," there are some applications that require only a few Kilobits per second, while others require 10 Mbps.

"If your vision of universal broadband for America is that every American home can do just e-mail and basic Web access, then that leads to a certain set of requirements for performance, a certain set of requirements for private investment, and potentially a certain type of universalization process," he added.

Then he painted the other picture: "However, if your vision is that every home and business in America should be able to have access to high-quality video for education, access to telecommuting and access to online video for potentially a medical consultation," that will drive a different set of requirements. The same went for a 100-Mbps threshold that would allow for new applications "in the fullness of time."

The FCC changed its definition of high-speed Internet last year and the National Telecommunications & Information Administration used that new, faster definition in its stimulus broadband grant rules. Even though the FCC served as an adviser on that call, then-chairman Michael Copps said the agency would not necessarily stick with that number for the broadband plan.

How broadband is defined will have huge cost implications, according to Kirjner. To bring speeds of only 768 Kbps to the roughly 5 million U.S. homes without broadband would cost about $20 billion in capital and operating expenditures. Throttle up to 10 Mbps, though, and 35 million homes are "not passed by appropriate infrastructure" — and costs jump to $50 billion. Building out to 100 Mbps would cost an estimated $350 billion.

Whatever the cost, FCC broadband consultant Blair Levin conceded that private industry will foot most of the bill.

"We have to recognize that most of this [broadband] ecosystem is funded by the private sector, and we expect that to continue," said Levin, But government has a role to move whichever levers are necessary to improve the health of that ecosystem, he said.

For cable, one upside from last week's meeting was the potential to grow its subscriber base. The FCC called for the first-ever study into the factors preventing some 33% of potential broadband subscribers from signing up.

The National Telecommunications & Information Administration has only one more year to hand out $7.2 million in broadband-stimulus money in concert with the Agriculture Department. Last week, the NTIA posted an online mapping tool that shows the areas the 2,200-plus bidders for the first tranche of that money said are unserved and underserved.

Incumbent network operators will check those maps to find out where they may face government-subsidized competition. Those incumbents will have 30 days to comment on the maps, including making their case for whether their region should be classified as unserved or underserved.

The NTIA and RUS will start handing out the first tranche of the $7.2 billion in stimulus money in November.

As the Federal Communications Commission tries to encourage private investment to quicken the overhaul of the nation's broadband infrastructure, Wall Street reminded the agency of the only big speed bump that would discourage such investment: Regulatory surprises.

A number of high-powered investors representing more than $100 billion in collective buying power warned that overregulation or regulatory uncertainty would be a big turnoff to the capital investment needed — an outlay the FCC has estimated at anywhere from $20 billion to $350 billion.

FCC chairman Julius Genachowski acknowledged that such investment was a must. The agency needs to get a handle on the kind of regulatory environment that would spur investment by cable operators and telecom companies, he said.

But Genachowski turned the broadband capital hearing over to Republican commissioner Robert McDowell, who has long cautioned that the wrong regulation or regulatory arbitrage — the government picking winners and losers — could hurt the broadband rollout.

The chairman's announcement of his intention to expand and formalize network-neutrality principles came in for some criticism as one of the things that could hurt that investment.

Christopher King, a telecom and cable analyst at Stifel Nicolaus, put it bluntly: "When you look at the telecom sector or the cable sector, one of the things that scares them to death is network neutrality to the extent that could stifle investment down the road."

Extending network-neutrality rules to wireless carriers — as Genachowski proposes — is seen by investors as a "bait-and-switch" regulatory environment, said King, given that the FCC auctioned the 700-Megahertz band for billions of dollars, without signaling that it might impose access conditions on the winners after the fact.

Thomas Aust, senior analyst with GE Asset Management — which controls over $110 billion in assets, including the GE pension fund — said another problem with network neutrality is that it could remove potential investor upside from a growing advertising sector. "Some of the more extreme discussions about network neutrality make me concerned about inhibitions on new services," said Aust.

He said that if the rules, intentionally or unintentionally, skew the balance to one side or another, then "one side may be prevented from deploying services." In terms of future capital expenditures, Aust said he was "particularly interested in" rules regarding contextual and location-based advertising, location-based advertising and marketing. "There is a whole realm of services that marketers definitely want and smart networks can provide," he said. "The prospects for those services may be disrupted."

One investor who was not down on network neutrality was Venture Capitalist Phil Bronner of Novak Biddle Venture Partners. While he agreed that it's important that a regulatory environment not go through "significant changes," network-neutrality rules could be good for venture capitalists banking on innovative applications, he said.

"A lot of broadband payback comes from the innovation that comes from applications," said Bronner. "Letting a thousand flowers bloom is critical for that."

With regulatory uncertainty, Aust said, companies can't accurately predict revenues or cash flows and must maintain surplus for uncertain times. The pernicious effect of that, he said, is that providers must raise prices to build that regulatory rainy-day fund. "The uncertainty that can be created in the regulatory environment can have the perverse effect of actually raising prices to all users," he said. — John Eggerton

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