December 2009

In the digital age, we need universal, affordable broadband

[Commentary] America needs universal, affordable broadband access. Everyone, no matter their age, race, income or neighborhood, should be able to go online to get whatever they want -- video, audio, photos and text -- from anywhere in the world as fast as anyone else can. In the digital age, countries without high-speed broadband will become second-class nations filled with second-class citizens, able to vote but not knowing why they should; able to work but not knowing how to find a job online. This isn't the first time we've faced a need to connect the nation. In the 19th century, we linked East and West with the transcontinental railroad. In the 20th, we linked driver to destination with the United States Interstate Highway System. Today, we need to link people and ideas. Nearly two dozen other nations now rank ahead of the United States in high-speed broadband. That just won't do.

[Newton is vice president of the journalism program at the John S. and James L. Knight Foundation.]

Benton to FCC: Use USF to Accelerate Digital Transition

In comments filed with the Federal Communications Commission, the Benton Foundation suggests the FCC modernize the Universal Service fund to accelerate broadband deployment and adoption. The size of the universal service fund does not have to be drastically increased, Benton argues, but as soon as possible all support should be directed to broadband deployment and adoption. Merely extending universal service support to broadband, without a commensurate decrease in analog support, could indeed increase costs to consumers who can't afford to pay more. Instead, broadband support should be phased in over a limited timetable while phasing out support for analog service, spurring new competition, and enabling providers to offset the increased cost through increase subscriber services like the addition of voice over Internet Protocol (VoIP) and video to their broadband offerings. The Commission must modernize Lifeline and Link Up to help meet the communications needs of low income consumers. The Commission should expand USF to include equipment and training to make broadband access meaningful. The Broadband Lifeline/LinkUp program must be designed to reach and serve all eligible households. The Commission should streamline Broadband Lifeline/Link Up eligibility and enrollment.

Rural Broadband Won't Be Solved By Profit-Maximizing Means

[Commentary] The foundation of American broadband policy to date has been that the best way to stimulate deployment is to leave it up to the market, to let private, profit-maximizing companies compete to lower prices, improve service, and expand networks. While this model may be working in some areas -- like those with the choice of Verizon FiOS, Comcast DOCSIS 3.0, and a handful of wireless providers -- it isn't working in all areas. In particular, we must come to accept the fact that rural broadband can't and won't be solved through profit-maximizing means. The economics just don't work out. If I'm a carrier with $X dollars to spend, then I have an obligation to my shareholders to invest that money where it has the greatest chance of making the best return, and that's almost always going to mean picking a city over a remote town or even more rural area. This becomes especially acute when we're talking about getting our most rural Americans online as it may be impossible to profitably deliver to them high quality service at a price they can afford. But that doesn't mean rural broadband can't be profitable.

What exactly does Comcast already own? Here's a list

Do people know what Comcast actually owns?

It sells cable video to 24.2 million subscribers, serving 26 percent of multichannel video consumers across the country. It also offers high-speed Internet to 14.9 million households and phone service to 6.5 million VoIP customers.

But Comcast has its fingers in many other pies. Comcast Interactive owns Plaxo, Fandango, Fancast, Daily Candy, and Comcast.net.

Comcast runs what the company calls five "significant programming networks." Its most popular is E! Entertainment Television, which has 85 million subscribers; the Golf Channel, with 73 million; VERSUS, a sports and leisure programming network, with 66 million; G4 ("gamer lifestyle programming") with 57 million; and Style ("lifestyle-related programming") with 51 million. On top of these there's the Comcast SportsNet system, with branches in the Baltimore/Washington area, California, the Mountain states, Boston, Portland, and Chicago. Comcast owns not only sports content but a range of sports entertainment franchises and businesses under the rubric of Comcast Spectacor. Spectacor runs the Philadelphia Flyers hockey team, the Philadelphia 76ers basketball team, and Philadelphia's Wachovia Center Sports Arena. It also operates the Global Spectrum event management company, which runs events around the United States and Canada, the Front Row venue marketing/advertising firm, the New Era ticket processing company, a skating production company, a food services company, and several other ventures.

In addition to all this, Comcast has "non-controlling interests" in a host of related enterprises. These include iN DEMAND, TV One (African-American-oriented programming), MGM, SportsNet New York, FEARnet (horror Web TV on demand), New England Cable News, Music Choice, the Pittsburgh Cable News Channel, and PBS KIDS Sprout. (The last is a partnership between Comcast, HIT Entertainment, PBS, and Sesame Workshop.)

Comcast also has put some investment money into the Clearwire and SpectrumCo wireless ventures. Other Clearwire investors include Intel, Google, Time Warner Cable, and Bright House Networks.

Comcast Keeping NBC's Broadcast Business

Speaking at the annual UBS media conference, top Comcast executives said they saw significant upside to helping NBC get to "third, second or first place." Company chief operating officer, Steve Burke, said he defined the NBC broadcast network as three businesses, "To us, it's the network, the broadcast stations and TV production. When you look at those three as an ecosystem, it's a good business but it's got its challenges." Burke said: "Network rankings are cyclical. There's a lot of reasons why the guy in last place can put on more shows, while the guy in first place waits too long to retire shows." He later told investors, "There's a chance the broadcast business economics might get better," with an improving ad climate and on better ratings. He added that NBC had a valuable role since many of the shows that power the top cable network, USA and other cable properties were derived from the network. The company sees a much bigger use of NBC for promoting its cable assets.

NBC On Record Opposing Consolidation

NBC Universal, which claims its pending merger with Comcast would be a boon for consumers, warned of dire consequences nine years ago when Time Warner and AOL wanted to combine. In a July 24, 2000 letter to the Federal Communications Commission, NBC wrote, "Given the size and scope of the proposed merged company, AOL/Time Warner will have both the ability and the incentive to discriminate against unaffiliated content providers such as NBC." The Peacock network also urged the agency "to establish firm principles of non-discrimination in the treatment of unaffiliated content providers in the broadband services marketplace" -- a step that Comcast is now trying to prevent the FCC from taking. The letter was signed by NBC Executive Vice President and General Counsel Rick Cotton, who observed during a Friday press briefing that predictions about the dominance of a merged Time Warner-AOL never materialized. Of course, if he and others at NBC had gotten their way, the deal might never have been approved.

Comcast/NBCU: Broadcast Wanes, Interactive Ad Push Soars

Advertising is not a big part of the proposed Comcast NBCU merger -- yet. It represents only about 20% of the new NBCU's total revenues, a figure the new owners intend to change. The road to revenue growth is paved with interactive ad riches -- a long, twisted path through cable, online and mobile. The big question is, how long will it take for those options to ramp up? The new NBCU will control about one-fifth of TV viewing in the U.S., a one-third stake in the leading online video service Hulu and full ownership of Comcast's online video service Fancast. It will provide Comcast and other cable operators with tremendous scale to roll out Project Canoe, an addressable ad program providing advanced local advertising solutions. Trials targeting consumers by geographic location -- as well as needs and interests -- using the cable set-top box have been successful so far, supported by major marketers including Procter & Gamble and Kraft Foods. The hope is that marketers will pay a premium for such targeted interactive connections, which they can continue to mine over time.

The Holiday Season of Internet TV. Time to Cancel Your Cable Subscription

[Commentary] This holiday season is shaping up to be the season of Internet TV. Finally the time has come for Americans to watch TV through the Internet, and not just on laptop screens but on living room flat panel HD TV screens . Devices and services like AppleTV, Roku, Boxee, and Netflix let you watch popular movies and TV shows directly on your TV screen. To the delight of TV viewers but the annoyance of cable companies, it is time for many Americans to give themselves or loved ones a long-hoped-for gift. For them, it its time to cancel their ever-more-expensive cable subscriptions.

Americans Still Watch 99% Of Video On TVs: Nielsen

Web video may be the buzz of the TV industry, but Americans still spend the vast majority of their time watching video -- approximately 99% -- on traditional televisions, according to Nielsen's latest "three screens" report. In the third quarter, the average American spent 31 hours, 19 minutes per week watching traditional TV, compared with 31 minutes watching time-shifted TV, 22 minutes of Internet video and just 3 minutes on a mobile phone, according to Nielsen's Anytime Anywhere Media Measurement (A2/M2) Three Screen Report for the period. Even among those 18-24 -- a cohort that typically consumes the most online video of any age group -- viewing is largely on TVs, with the demographic registering 22 hours, 44 minutes of traditional TV watching in the period compared with 35 minutes of Internet video and 19 minutes spent watching time-shifted TV. Nielsen's definition of "TV watching" includes live usage plus any playback viewing within the measurement period, while "time-shifted TV" is playback primarily on a DVR but includes playback from VOD, and services like Time Warner Cable's Start Over.

FTC Officials Urge Action On Privacy

Federal Trade Commission Chairman Jon Leibowitz and his colleague, independent member Pamela Jones Harbour, told a privacy workshop Monday that the time is ripe for action to improve consumer data privacy both online and offline. "I'd argue that we're at another watershed moment in privacy, and that the time is ripe for the commission to build on the February behavioral targeting principles and to take a broader look at privacy writ large," said Chairman Leibowitz. Both Chairman Leibowitz and Commissioner Harbour noted that the Internet has enabled much broader and deeper collections of personal information. The officials said that posting privacy policies on a Web site and offering consumers the choice to opt out may not be enough since most consumers do not read or understand such notices.

Benton

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