In an unusually passionate meeting that included multiple disruptions from protesters, the FCC today approved Chairman Tom Wheeler’s delicately crafted proposed rule-making plan for net neutrality policy in a 3-2 vote on partisan lines. “What we’re dealing with today is a proposal, not a final rule,” he says adding that it’s an issue “I understand in my bones.” The agency is “dedicated to protecting and preserving an Open Internet” and will continue to consider mechanisms to protect it — including the possibility of reclassifying the web as a so-called Title II common carrier service, making it easier to regulate. Today’s vote begins a four month period when the public can comment on what should be in the rules that the FCC ultimately adopts.
Wheeler’s proposal follows a January ruling by the U.S. Court of Appeals for DC to vacate the net neutrality rules the FCC adopted in 2010. Justices said that the agency had overstepped its authority – in part because it had classified the Internet as an information service, subject to light regulation.
The FCC chairman says that the fastest way to get new net neutrality rules is to stick with the current classification arrangement. He challenged those who’ve said that regulations without such a reclassification might … Read More »
FCC Chairman Tom Wheeler’s leadership and negotiation skills are being tested ahead of a Thursday meeting when the agency is scheduled to consider his new net neutrality rules. He’s having trouble rallying fellow Democrats Mignon Clyburn and Jessica Rosenworcel to support a proposal that would limit “commercially unreasonable” practices by Internet providers — but would still enable them to create a so-called fast lane for companies willing to pay for speedy transmissions. Wheeler’s hands were somewhat tied in January when the D.C. Court of Appeals remanded earlier FCC net neutrality rules saying that they went too far as long as the agency classified the Web as a lightly regulated information service. That’s why consumer and activist groups want the FCC to reclassify the Web as a common carrier service, which the agency would have a clear right to regulate.
“The open Internet’s impact on the creative community cannot be overstated,” says a letter to the FCC today signed by artists and musicians including Mark Ruffalo, Eddie Vedder, Roger Waters, Michael Stipe, Eric McKeown, Joe Perry, Tom Morello, Fred Armisen. “The Internet has enabled artists to connect directly with each other and with audiences….And it has allowed people — not corporations — to seek out the film, music and art that moves them.”
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In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom recap one heck of a week in the business of providing services that looks more or less like television across all kinds of delivery platforms. The NCTA cable-TV conference opened in Los Angeles, attracting numerous big-name speakers such as the FCC chairman, but big deals also seemed to be breaking out everywhere. There was talk of a massive deal between AT&T and DirecTV Networks; a $20-billion swap of subscribers between Charter and Comcast, and Viacom’s $757 million acquisition of the UK’s Channel 5. Along the way, DreamWorks Animation’s Jeffrey Katzenberg seemed to write off his core business, and got roundly whacked by another media mogul, Jeff Bewkes of Time Warner. In a word, “ouch.”
Listen to the podcast in your choice of audio formats here:
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Two years ago TV broadcasters kicked up a fuss when the FCC made a simple decision: It ordered them to put online info about the political ads that they air — info they already were required to make available on paper to anyone who visits the station. Broadcasters lost that fight. But it seems that many, possibly most, simply refused to comply with the rules according to complaints against 11 stations filed at the FCC today by two public interest groups: The Campaign Legal Center and the Sunlight Foundation. They say that broadcasters they checked failed to identify on an FCC site what candidate was being referred to in political ads, the issue the ads addressed, and who sponsored the ads. The lapses mean “the public does not have the information it needs to understand who is speaking on the public airwaves and attempting to influence their views on political issues,” says Campaign Legal Center Policy Director Meredith McGehee. Sunlight Foundation Managing Editor Kathy Kiely says the public filings “are often the only way we can track political activities and spending by dark money groups that aren’t required to disclose those activities with the Federal Election Commission.” They filed complaints against WDIV (NBC/Detroit), KNXV (ABC/Phoenix), WTVJ (NBC/Miami), WMUR (ABC/Manchester-Boston), WFLA (NBC/Tampa), WTVT (Fox/Tampa), WWJ (CBS/Detroit), KMGH (ABC/Denver), WCNC (NBC/Charlotte), KMSP (Fox/Minneapolis), and WTVD (ABC/Durham). The FCC’s order initially applied to large stations, but all … Read More »
Tom Wheeler had a bracing message for attendees of the National Cable Show being held this week in LA: When it comes to his new rules for Net Neutrality — which consumer groups complained would allow the creation of a for-pay Internet fast lane — cable companies should “put away the party hats.” His open Internet rules designed to comply with court rulings that remanded the FCC’s previous ones “will be tough, will be enforceable, and will be in effect with dispatch.” What’s more, “all options on the table.” If Internet providers still tip the scales to favor certain services, then he would consider reclassifying the Web to make it a regulated common carrier service instead of largely unregulated information service. “I know in my bones how hard it is to start a company with innovative ideas. Now, as Chairman of the FCC, I do not intend to allow innovation to be strangled by the manipulation of the most important network of our time, the Internet.” He adds that cable companies should back off from their efforts to persuade states to bar municipalities from creating competitive broadband systems. The FCC “has the power — and I intend to exercise that power — to preempt state laws that ban competition from community broadband.”
If you have any interest in the subject, then you should check out the entire speech. Here it is: Read More »
In this week’s podcast, Deadline Executive Editor David Lieberman and host David Bloom catch up on several big developments in the fast-changing business of video delivery. The two Davids talk everything from the controversy over the FCC’s latest net-neutrality proposals to what the Supreme Court oral arguments on Aereo suggest about a coming decision and a potentially very big content deal between HBO and Amazon that Apple downplayed. They also check in on the latest in Time Warner Cable’s efforts to push its Los Angeles Dodgers channel, and Netflix’s possible price hike for newcomers after another big quarter.
Deadline Big Media podcast 82 (.MP3 version)
Deadline Big Media podcast 82 (.M4A version)
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The term is key: FCC Chairman Tom Wheeler says in a blog post that the ability to bar “commercially unreasonable” practices empowers the agency — in a plan he will begin to circulate — to crack down on Internet service providers that discriminate against some content providers. But open Internet advocates fear it’s too squishy, and could allow ISPs to create tiers of service that enable some content providers (Netflix or HBO GO, perhaps) to pay for speedy transmissions. Wheeler hopes to “conclude this proceeding and have enforceable rules by the end of the year.” The plan he will begin to circulate will look at net neutrality violations on a case-by-case basis, an adjustment needed to meet the objections that the D.C. Court of Appeals raised in January when it remanded the FCC’s previous net neutrality rules. But he vigorously objects to the “great deal of misinformation” that characterized his proposal as an effort to gut the principle of open Internet by allowing companies to pay for speedier service. His plan “would establish that behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted,” he says. The court said that the FCC could stop practices it deems not ” commercially reasonable” — and he says that his plan will “establish a high bar for what is ‘commercially reasonable.’” Read More »
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 to broadband providers some of the airwaves now used for TV. The process being circulated by FCC Chairman Tom Wheeler includes a reverse auction, where station owners would indicate how much cash they want for their spectrum and can drop out if the bidding is too low. There’s also a forward auction, where wireless companies would raise their offers in successive rounds. When it’s all done, the FCC will repack the spectrum — making usage efficient by assigning new channels to the broadcasters who stay on the air. There’s also a plan to accommodate low-power TV, translators, and wireless microphones that will be affected by the changes. “Whether television broadcasters participate in the Incentive Auction will be purely voluntary, but participation in the Incentive Auction does not mean they have to leave the TV business,” Wheeler says in a blog post. “New channel-sharing technologies offer broadcasters a once-in-a-lifetime opportunity for an infusion of cash to expand their business model and explore new innovations, while continuing to provide their traditional services to consumers. We will ensure that broadcasters have all of the information they need to make informed business decisions … Read More »
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. Read More »
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. Read More »
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.” Read More »
This isn’t what you usually hear from broadcast execs — and it certainly doesn’t jibe with the industry’s message to Wall Street. But the National Association of Broadcasters takes the bearish view in a new filing at the FCC that responds to a Justice Department attack on arrangements that enable a TV station to handle ad sales, programming, and other chores for rivals in the same market. The FCC is poised to restrict these widely used deals. That would be dangerous, the NAB says, because stations need help: “Largely as a result of marketplace fragmentation and the growing number of options for advertisers (including online), television broadcasters’ revenues and profits have fallen significantly,” it says. Ad sales were lower in 2012 than they were in 2004, and a forecast from SNL Kagan shows that they “will not reach the level of revenues earned in 2004 until the year 2020.” Broadcast lobbyists are singing the blues to counter the Justice Department’s claim in a recent filing that shared services agreements make stations less competitive and diverse. Although the deals are supposed to protect both goals, by propping up weak stations, “our investigations have revealed that these ‘sidecars’ often exercise little or no competitive independence from the other station.” But the NAB says the argument lacks “direct evidence” and its proposal “would harm consumers and the public interest.” The collaborations “have become vital to local station operations.” They need economies … Read More »
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. Many consumer groups and the Justice Department say these cozy so-called “sidecar” deals diminish competition and local progamming, and effectively circumvent FCC caps on the number of stations a company can control in a market. The National Association of Broadcasters says the deals make programming more local and diverse. In any case, “NO pending [merger] deals with any sort of ‘shared’ arrangements will close until/unless they are restructured to exclude such stations and related loan guarantees,” Ryvicker says she was told by her sources in Washington. As a result, she decided it’s time to recommend that investors hold any TV station company stocks they own, but not buy additional shares. She says that she’s “frustrated” because she still likes “the underlying fundamentals of the business, as we see strong core and political advertising revenue trends, robust [free cash flow] generation, and a nice growth trajectory” for income from retransmission consent deals with pay TV distributors. But the growing antipathy to the shared services agreements “is likely to put pressure on trading multiples as well as lead to estimate reductions (especially for those with deals pending before the FCC),” Ryvicker says. “We really … Read More »
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 out swinging with a charge that the regulators are making it hard for broadcasters to promote localism and diversity — objectives called for in the Communications Act — according to notes publicly filed today of his visit yesterday with Commissioner Mignon Clyburn. He says that Wheeler lacks solid evidence and “makes sweeping generalizations” that are “arbitrary and capricious” about the problems that arise when a station handles ad sales, programming, or retransmission consent negotiations for a rival in the same market. These collaborations “greatly foster localism and diversity,” Smith says. He says that Wheeler’s proposals “use a sledgehammer where a scalpel, if anything, is far more appropriate.” Smith also called it “manifestly unfair” to bar TV stations from collaborating when it “permits the cable industry to do so.” All in all, the NAB chief says, the FCC is “not doing everything it could to actually promote localism and diversity.”
Others are pressing regulators to hang tough. There’s already “ample record evidence” showing that station collaborations hurt the public, Andrew Jay Schwartzman and Angela Campbell of Georgetown Law School said in their visit with Clyburn yesterday. “If particular arrangements would serve the public interest … the Commission can and should craft … Read More »
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.” Read More »
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.
Deadline Big Media podcast 75 (.MP3 version)
Deadline Big Media podcast 75 (.M4A version)
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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. Read More »
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.
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