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Takeaway: The Register partially ruled in favor P. All this means is that P hasn't drowned yet; it's just treading water in the middle of the ocean.


  1. Fool's Gold: The Register ruled in favor of P regarding whether the Merlin deal is admissible.  But this is not a preliminary victory for P.  All this means is that the P-Merlin deal isn't getting thrown out, not the Register is endorsing the agreement.  That decision now falls back to the CRB judges to rule on the probative value of the P-Merlin deal as a benchmark.  The other ruling that came from the Register is that the judges are allowed to consider the Pureplay Agreement as evidence to determine its impact on existing market agreements.  In summary, the Merlin agreement is in, but will be tested for statutory influence. 
  2. P May Have Already Lost: The fact that the CRB judges were compelled to ask the Register whether it should throw out P-Merlin to begin with suggests that the judges already have reservations about the probative value of the P-Merlin deal as a valid benchmark.  Note that P conceded multiple times in its Response to the judges questions that P-Merlin was influenced by the Pureplay agreement, which it is also called the "prevailing statutory rate” that it was able to achieve a "discount off" of.  All the judges in every Webcaster proceeding leading into this one were clear that the willing buyer/seller standard is to assume no statutory influence (including the Web III Remand, which are the same judges presiding over Web IV).   

We will be hosting a two-part event this Thursday to discuss both the bull and bear cases regarding Web IV.

  1. P: Webcaster IV = Powder Keg (12pm EDT) – Our bearish thesis discussing the implications of the Web IV outcome on P’s business model.
  2. Speaker Series: David Oxenford, Counsel to Webcasting Companies (2pm EDT) – Fire-Side Chat on the relevant Web IV statutes and the Services' arguments.

In the interim, let us know if you have any questions or would like to discuss further.

Hesham Shaaban, CFA