The financial and technological proposals are incredibly complicated, but they provide the kinds of details that broadcasters have wanted to see before they decide whether to let the federal government auction …
Tom Wheeler gave as good as he’s gotten today when he addressed a potentially hostile audience of TV and radio station owners at the NAB Show in Las Vegas. “Trust me. I get the skepticism,” he told the group which has been irked by his efforts to block local station cooperative agreements, among other things. “Here’s the former head of the cable AND the wireless industry at the NAB Show telling you he’s your friend….There is no more ridiculous metaphor.” But he assured the audience that now “I have the American people as my client.” And they would be best served if broadcasters think differently about their medium.
“We are at an inflection point where broadcast licensees can move from being the disrupted, to being the disruptor,” much like Netflix, the FCC chairman says. Instead of just hitting up pay TV providers for retransmission fees, local stations can create vibrant local news and entertainment online services. “It can be the basis for a fixed and mobile-delivered cable-like service. You possess the two most important components of a successful digital strategy: compelling content – specifically, the most important content: local content – and the means to promote it. …For all the wonderful things the Internet has done, one place that it has yet to deliver on its promise is local content.” Net neutrality would ensure that these services are carried online. But “your window of opportunity won’t stay open forever,” he says, nothing that others including Yahoo and Verizon are preparing deals to offer competitive content.
Comcast Sets Stage For Testy Senate Hearing, Telling FCC That Time Warner Cable Acquisition Serves Public
UPDATE, 10:06 AM: Comcast EVP David Cohen just fleshed out in a press call some of his company’s arguments for the Time Warner Cable deal. To those who say the combined company would be too big he says that “in this particular case we think big is good” — it would be better able to offer new and improved services. And if Comcast is wrong “it doesn’t make any difference really because, as a customer, you’ll have the exact number of choices as you had before the transaction.” The only change: With Comcast instead of TWC as a broadband or video provider consumers’ “choice will be better.” He adds that Comcast is focused “like a laser” on improving the customer experience. (Sound familiar?)
PREVIOUS, 8:09 AM: This is the kind of thing you’d expect the cable giant to assert in a regulatory filing — and that will be roundly contested, including tomorrow at a Senate Judiciary Committee hearing on the $45.2B deal. Content companies that might oppose the deal “have strong relationships” with the committee, which oversees copyright matters, Guggenheim Securities’ Paul Gallant says. What’s more, the committee includes two strong critics of media consolidation: Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.).
Comcast detailed its public interest arguments in a 175-page document delivered to the FCC this morning. It “lays out in considerable detail how Comcast and TWC are better together for millions of customers and businesses, describing the exciting enhanced services and other concrete consumer benefits that will be available because of the transaction,” Comcast EVP David Cohen says in a blog post. In addition to cable and Internet services, Comcast owns NBCUniversal.
The company indirectly takes issue with Netflix CEO Reed Hastings’ claim that Comcast imposed an “indirect tax” on the streaming video company in a recent deal: Netflix agreed to pay Comcast directly to access its broadband lines in a way that will deliver the best possible transmissions to its customers. Comcast says it has “no economic incentive” to hit up so-called edge providers because its customers “place a high premium on being able to access any Internet content they want.” Comcast would have about 30M broadband customers after acquiring TWC.
The National Association of Broadcasters is upset, but consumer groups are gleeful, after the FCC followed Chairman Tom Wheeler’s lead and approved orders that limit TV stations’ ability to jointly negotiate ad sales and retransmission consent deals. In a 3-2 vote on party lines, commissioners said that a station that sells at least 15% of the ads for a would-be rival will be considered to own the station — which could run afoul of ownership caps. Broadcasters can get a waiver if they demonstrate that the arrangement serves the public, or doesn’t affect the smaller station’s programming. Companies have two years to either secure a waiver or unwind sidecar deals. In a separate, 5-0 vote the FCC barred joint retransmission consent negotiations involving two of the four highest-rated stations in a market. Wheeler says that the changes will promote competition and diversity. TV station collaborations represent “a growing end run” around the FCC’s ownership limits.
Former Commissioner Michael Copps, now with Common Cause, says that he hopes the vote “marks the long overdue start of a new era of public interest leadership.” Another FCC vet, former Chairman Michael Powell — now CEO of the National Cable and Telecommunications Association — also praised the retransmission consent rules saying that “such coordinated behavior harms consumers by artificially inflating the cost of watching over-the-air broadcast stations on cable systems.” But NAB’s Dennis Wharton says that the vote threatens the ability of “free and local TV stations to survive in a hyper-competitive world dominated by pay TV giants.” He adds that “the public interest will not be served by this arbitrary and capricious decision.”
This is a surprising change, but an unavoidable one, Wells Fargo Securities’ Marci Ryvicker says, as FCC Chairman Tom Wheeler begins to crack down on arrangements that enable rival stations in a market to collaborate on ad sales, programming, and retransmission consent negotiations. …
The FCC is hearing both views this week following Chairman Tom Wheeler‘s recent proposal to restrict local TV joint service arrangements. National Association of Broadcasters CEO Gordon Smith came …
UPDATE, 2:40 PM: Comcast’s Sena Fitzmaurice just responded to the Tennis Channel’s petition, urging the FCC to reject it as “baseless litigation” that “simply reiterates arguments that the court of appeals and the Supreme Court have already rejected.” In 2005 the companies “negotiated and signed an arm’s length contract” that Comcast has fulfilled “in exactly the way the contract requires.” The DC Court of Appeals agreed that Tennis Channel’s plea to be carried as a basic service would have “immense costs and no benefits for Comcast and that, therefore, Comcast’s carriage decision was appropriate and non-discriminatory. When given the opportunity to pursue the case at the Supreme Court, the government’s own lawyers chose not to do so.”
PREVIOUS, 12:55 PM: Tennis Channel has lost a game and a set in its discrimination cases against Comcast, but it still believes that it can win the match if the FCC agrees with a new petition asking it to review the matter again. The filing follows a U.S. Supreme Court decision last month not to review an appeals court decision that vacated a 2012 FCC order. The regulators agreed that Comcast had discriminated against Tennis Channel by putting it on an extra-fee sports tier while putting similar channels that it owns — Golf Channel and NBC Sports Network — on the expanded basic tier. The appeals court concluded that the FCC offered no evidence to refute Comcast’s position that it made a simple financial judgment that few subscribers wanted to watch tennis. Tennis Channel says that the FCC now can return to the case because “there is considerable evidence in the record that satisfies the new tests” the appeals court used to vacate the FCC’s order. If regulators look again, they “will once again conclude that Tennis Channel is correct in its view that Comcast has illegally discriminated against it.”
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom look at the big Dish-Disney deal and what it might mean for other media companies and even a possible sports-free online pay-TV service. They also discuss Disney’s continuing headaches with its Interactive unit, whether FCC Chairman Tom Wheeler’s new rules for local broadcast alliances go far enough and look at the speculation about Carmike, the big exhibitor whose strong quarter fueled speculation that it will be a fat takeover target.
The companies got into trouble after they ran ads for FilmDistrict‘s 2013 thriller Olympus Has Fallen that include the distinctive Emergency Alert System warning sounds, the FCC says today as it proposed what it calls the largest ever penalties for its misuse (watch the ad below). Viacom will be hit hardest with a $1.12M fine for airing the ad 108 times over five days on Spike, VH1, MTV, Comedy Central, MTV2, Centric, and BET. NBCUniversal will have to cough up $530,000 for running the ad 38 times over six days on Syfy, USA, and five regional sports networks. And ESPN follows with $280,000 for running the ad 13 times over four days on ESPN, ESPN2, and ESPNEWS. “The FCC has long prohibited the transmission of actual or simulated EAS Attention Signals or tones in circumstances other than a real alert or an authorized test of the EAS system,” the FCC says. The cable companies said that the rules don’t apply to them because they don’t participate in the EAS program, the FCC notice notes.
You can bet that government officials and opponents of Comcast’s $45.2B planned acquisition of Time Warner Cable will scrutinize its just-released third annual report describing how it has fulfilled the promises it made in 2011 to win FCC approval for the deal to buy NBCUniversal. Opponents already say the cable giant can’t be trusted. ”To the extent that Comcast has a history of breaching its legal obligations to consumers, such history should be taken into account when evaluating Comcast’s proposal for future market expansion,” Sen. Al Franken (D-Minn.) said last week in a letter to FCC Chairman Tom Wheeler. But Comcast says the new 90-page report shows that it has “continued to meet and in many cases exceed our obligations.” For example, it says that its Internet Essentials program has provided home broadband service to more than 250,000 low income families, and has exceeded by 64 the requirement to provide courtesy video and broadband to an additional 600 schools, libraries and community institutions in underserved areas. (The company says that tomorrow it will “make an important announcement about the future of the [Internet Essentials] program.”) For online video Comcast says it has “new or renewed agreements with Amazon and Netflix, among others” resulting in a third year in which it has made these deals to provide programming to potentially competitive services without having to go to arbitration.
Folks who have a stake in FCC activities are beginning to respond to Chairman Tom Wheeler’s plan to revive the agency’s net neutrality rules. Consumer groups for the most part applaud his ambition, but fear that his effort will fall short unless the FCC reclassifies broadband as a regulated common carrier service — it’s now deemed a largely unregulated information service. FCC Commissioner Ajit Pai, one of the agency’s two Republican members, says there’s no need for regulation calling net neutrality “a solution in search of a problem.” And industry groups are supportive, but non-committal. Here’s where they stand. We’ve highlighted the key lines, and will add to the collection as more come in.
Chairman Tom Wheeler will try to revive the FCC‘s net neutrality regulations with a view that a decision by the U.S. Court of Appeals in DC last month upheld the agency’s right to set rules for the Internet, even as it vacated much of the FCC’s 2010 Open Internet Order. Verizon had appealed the order, saying that regulators overstepped their authority. The FCC will not challenge the Appeals Court decision, but today the agency will open a docket seeking public comment on Wheeler’s proposals — expected to be formalized by summer. He wants to ban service providers from blocking any legal service. The court said that the FCC had not adequately justified that condition in its 2010 order. He also would ban discrimination — for example, offering some services at faster speeds than others — and require ISPs to be transparent about their network practices. While the court agreed with the FCC’s view that it has some rights to govern the Internet, justices also said that the agency tied its hands a decade ago when it defined broadband as a lightly regulated information service as opposed to a phone-like common carrier service. If the FCC runs into trouble with new rules, Wheeler will keep open the option of asking the FCC to change its mind and classify the Internet as a common carrier, a service that — from a legal perspective — is so important that it needs to be regulated. In addition, Wheeler hopes to promote consumer options by overruling state laws that bar cities and towns from creating public Internet services that might compete with private ones.
Q&A: MLB Advanced Media CEO Bob Bowman On WWE Network, Sony’s Virtual Pay TV Plans, And What’s Next For Streaming Video
The new year has barely started, yet I already have a candidate for the eventual list of 2014′s most influential media execs: MLB Advanced Media CEO Bob Bowman. His sports-focused streaming video and Internet operation is poised to become an entertainment power following the announcements at International CES this month that it will drive two potentially ground-breaking new services. On February 24, WWE will launch a subscription-based online video channel, WWE Network, that will include live and on-demand library programming. (Bowman sat on the WWE board from 2003-2008.) And Sony turned heads with its plan to introduce a Web-based pay TV service that will include live programming from channels that are only available now to subscribers of traditional cable, satellite, and telco video services. MLBAM’s state-of-the-art infrastructure already handles live and on-demand streaming for college basketball’s March Madness, CBS Sports, and ESPN3, as well as Glenn Beck’s TheBlaze TV and in 2012 handled Obama for America campaign videos. As its business grows, financial types wonder whether baseball execs might take MLBAM public. So it’s a heady time for Bowman, who became Michigan’s state treasurer in 1983 at age 27 and went on to become COO of ITT Corp. Deadline checked in with the MLBAM chief to find out more about his plans with WWE and Sony, and the prospects for streaming video. Here are his thoughts, edited for length and clarity.
DEADLINE: Why do you consider the WWE Network so noteworthy?
BOWMAN: Economically it’s one of our largest clients for sure. In that sense it’s incredibly important. But what’s more important than dollars is this is the most vertically integrated brand in America. Vince McMahon controls everything soup to nuts — from the idea in his head to how it appears on every screen around the world. And he just demonstrated [at CES] he’s going to try and change what the economic rules are. He’s in an ideal situation to do that. That’s why a lot of the content players are going to watch this very carefully.
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom take up Charter Communications’ $61.3 billion bid for Time Warner Cable; the potential impacts of an appeals court ruling throwing out FCC net neutrality rules; a stalling home-entertainment industry and Best Buy’s bad holiday. They also look at the surprising shakeup at the top of Yahoo, coming as it does just a week after the company’s big CES shindig. Now at least one much ballyhooed hire departs 15 months later after arriving and there are reports that at least another top executive is out.