Will Netflix end up challenging Comcast’s $45.2B deal to buy Time Warner Cable? It didn’t look that way last month when they made what they described at the time as a “mutually beneficial” interconnection deal that involved Netflix payments to Comcast. …
“We’re ready to intervene,” FCC Chairman Tom Wheeler said this week about the new AT&T plan that has raised the hackles of net neutrality advocates. But that’s short of a full-fledged commitment to deal with an issue that media and entertainment companies will closely monitor. The wireless carrier told an audience at the International CES confab that it will begin to let content providers pick up the tab for some of their 4G transmissions. It’s “similar to 1-800 phone numbers or free shipping for Internet commerce,” AT&T says. In theory, that could range from a studio paying data costs for mobile device users to watch a movie trailer — to ESPN or Netflix helping people to watch their programming. The idea is “a win-win for customers and businesses,” says AT&T Mobility CEO Ralph de la Vega. Net neutrality advocates counter that AT&T’s plan would give well-funded industry giants a huge advantage over challengers in an environment where companies would effectively have to pay in order to reach mobile device users. “In addition to being a ripoff for both consumers and content creators, AT&T’s plan erects a massive barrier in front of anyone hoping to be the next big thing online,” says Public Knowledge Acting Co-President Michael Weinberg.
Tom Wheeler gave students at Ohio State University a lesson in political savvy today in his first policy speech since he became FCC chairman last month. His address alternately preached the virtues of small government, and public interest advocacy — especially on the controversial question of the FCC’s role in regulating the Web. “What the Internet does is an activity where policy makers must be judiciously prudent and should not be involved,” he says. But the longtime industry lawyer and former lobbyist left the FCC a lot of wiggle room to advance what he calls the “Network Compact” to promote communications accessibility, interconnection, and public safety and security. His idea of accessibility “means the ability of [Internet] users to access all lawful content on a network,” he says — adding that’s why the FCC “adopted enforceable rules to preserve the Open Internet.” The FCC needs to be the public’s representative in a transition to what he calls “the fourth network revolution” following the development of the printing press, railroads, and the telegraph. The Internet “is not a law-free zone. It depends upon standards of conduct. And it depends on the ability of the government to intervene in the event of aggravated circumstances.”
This would be just the third veto Barack Obama has made, but the White House says today that he’ll go there if the Senate on Thursday endorses a bill to upend the FCC’s net neutrality rules. The resolution to scrap the regulations — which are due to take effect on November 20 — is similar to one that the House passed in April. The Senate vote could be close: Texas Republican Kay Bailey Hutchinson’s bill has 42 co-sponsors. Supporters include Maine Republican Olympia Snowe, who favors net neutrality but says the issue should be decided by Congress — not the FCC. In today’s “Statement of Administration Policy,” the White House says that “the open Internet enables entrepreneurs to create new services without fear of undue discrimination by network providers.” For example, Comcast wouldn’t be able to favor transmissions over its broadband lines for a service it likes, such as Hulu, over those of a rival such as Netflix. The administration says that disapproval of net neutrality would “threaten the very foundations of innovation in the Internet economy and the democratic spirit that has made the Internet a force for social progress around the world.” If the Senate passes the bill, then the administration statement says “his senior advisers would recommend that he veto the Resolution.”
Liberty Media chairman John Malone is probably getting an earful from his pals in the cable industry this afternoon after he made a comment that’s sure to haunt both him and them. Talking to Wall Street analysts about the growing number of consumers who buy high-speed Internet services from cable companies, Malone said that “cable is pretty much a monopoly now” in broadband. Oops. The executive who once was considered such a monopolist in cable TV that Al Gore referred to him as Darth Vader caught himself, adding, “I don’t want to use that word.” But he may be reminded that he used the M word every time consumer advocates call on federal regulators to crack down on cable — for example, by insisting on net neutrality rules. Malone says consumers won’t cut the cord with cable even as services including Netflix offer movies and TV shows over the Web. Phone companies such as Verizon and AT&T “are not going to aggressively” build out fiber-optic services that could match the speed and security of cable’s broadband, he said. Meanwhile, “the threat of wireless broadband is way overblown. There just isn’t enough bandwidth” for them.
In contrast to Malone’s blunt comments, other Liberty executives said they wouldn’t provide many details about Starz’s new lawsuit against Dish Network. Starz, and in a separate suit Disney, allege that Dish violated their contracts by giving satellite customers free access to the premium channel for about a year. Starz CEO Chris Albrecht says that his company didn’t lose money; Dish pays a fixed annual rate to offer Starz and Encore. But the additional viewers may have helped Starz’s ratings.