January 2010

Comcast Still Has Persuading To Get NBC

Before Comcast Corp. can transform the entertainment business by taking control of NBC Universal, it must convince Washington that the plan won't hurt rivals and consumers.

And the promises the cable company has made so far don't impress opponents who want federal regulators to attach strict conditions to the deal. To show that it would not abuse its control over NBC's broadcast networks, cable TV channels and movie studios, the nation's largest cable provider is making nine pledges, including a vow not to move the NBC broadcast network to cable and a commitment to expand public interest programming.

But consumer groups and competitors say Comcast is offering token concessions that don't address their biggest fears about the NBC combination. "Comcast is either promising to do what it was already planning to do or simply what it is required to do by law," says Corie Wright, policy counsel at the public interest group Free Press. "I don't think Comcast can just tie a bow around the status quo and call it a public interest commitment."

Comcast is quick to defend its position. "We think we have made significant and meaningful commitments that are designed to ensure the deal is pro-consumer," says Comcast Executive Vice President David Cohen. Now it is up to Washington to decide.

The Justice Department and the Federal Communications Commission are examining Comcast's plans to buy a 51 percent stake in NBC Universal from General Electric Co. for $13.75 billion. Those reviews could last up to a year. Congressional hearings are also scheduled for February.

Next News From Haiti: Pulling Out

The devastation in Haiti has, in the words of the Pew Research Center, dominated the "public's consciousness" in a way that few international disasters ever have.

Dozens of television channels showed a celebrity telethon on Friday, raising at least $57 million.

The attention has come in large part because of the news media's reportorial muscle, the kind that is harder to flex in a challenging economic climate. In an event of this magnitude, "you cover it first and worry about the money second," said Paul Friedman, an executive vice president for CBS News. Executives acknowledge that the worries arise now. They say, however, that the same technology that let reporters and camera crews arrive ahead of aid shipments will let them withdraw staff from the country but return with relative ease when events call for it.

Apple's tablet and the future of literature

[Commentary] It is important to bear in mind that technology is not the sworn enemy of literature as Apple prepares to unveil its much-anticipated new tablet computer. Still, the collision of technology and literature in this case may well prove explosive.

A well-designed Apple tablet, embedded in the right business model, has the potential to blow up the book business as we know it, ultimately upending the whole rickety edifice of publishers, booksellers and agents, much as the digital revolution (and Apple) have done to the music business. The result will be a seismic change in the literary culture. Ubiquitous tablets will make books cheaper and more readily available. Tablets will also change the nature of books. And a tablet will offer not just text but also sound, images and video -- which will all be commonplace in books someday, in a balance we can't yet foresee. This may undermine the primacy of text.

"The history of literature," Alvin Kernan reminds us, "has always been closely involved with such worldly things as royal courts, patronage, copyright laws, middle-class leisure, nationalism, democratic educational systems, steam-driven rotary presses, free markets and Linotype machines." Sparks always fly when technology and literature get together. We can expect that this time, as usual, they will burn down the old and light up the new.

Corporate Antagonism Goes Public

Business negotiations are moving from closed and discreet to open and political.

"There's a code of the past that we keep things in the boardroom and don't go public," said Bobby Calder, chairman of the marketing department at Northwestern University's Kellogg School of Management. "What you're seeing is, I think, a realization that you can go outside and gain some negotiating power." The campaigns play to populist sentiment, asking the public to do the right thing, an approach that also draws from politics. They create a public spectacle, a narrative that distills dull subjects like contract negotiations into a good-guy, bad-guy conflict — a Harvard Business School case study turns into a shootout with Liberty Valance.

The tactics are examples of what economists call signaling: when two parties in a transaction have different information, one can transmit messages about his status or power by sending signals — or, in this case, buying advertising meant to show that the public is on his side. And these signals can conflict, creating another hazard: by going public with customers, companies are explicitly criticizing the people on the other side of the negotiations, as Time Warner did with Fox and Conan O'Brien had been doing almost every night on NBC's own network, until his final show on Friday. "You can't do that too many times — you destroy trust, you destroy a sense of protocol," said Vanderbilt's David Owens. "Negotiations have been done the way they've been done for a reason."

Internet freedoms and Internet radicals

[Commentary] Secretary of State Hillary Rodham Clinton's warnings about bloodthirsty, oppressive regimes who hijack the Internet "to crush dissent and deny human rights" were themselves hijacked by a radical "media reform" group, Free Press, that ironically seeks to dramatically increase state intervention in both the Internet and media.

Rather than simply commending Hillary Clinton's uncontroversial defense of Internet freedom, Free Press used — or should I say, abused — the speech to launch a ridiculous attack on American companies. Explicitly comparing American phone and cable corporations with repressive overseas regimes in Iran and China, Free Press Executive Director Josh Silver conflated the network neutrality debate in the U.S. to the struggle for human rights in the rest of the world.

Yes, the network neutrality issue is hideously complex and, yes, there are important considerations in terms of actual anti-competitive or harmful behavior. But Free Press stepped over the mark of rational political discussion and entered the theater of political absurdity. Free Press lost its mind by conflating the reactionary butchers of Tehran with American telecoms like Verizon and AT&T. Free Press totally flipped by equating the one-party apparatchiks in Beijing with American cable providers like Comcast or Time Warner cable.

(Keen is author of Cult of the Amateur and is an adviser to Arts+Labs, a technology policy coalition of entertainment companies, software providers, telecommunications providers, artists and creators.)

Clyburn Says Network Neutrality Is in Minorities' Interest (updated w/add'l links)

Speaking at the Minority Media and Telecommunications Council meeting Jan 22, Federal Communications Commission member Mignon Clyburn said network neutrality is not a threat to minority advancement but smart regulation that will help avoid the "damage" done to diversity by radio and TV deregulation.

The minority community has been divided over the issue of network neutrality, with a number of groups cautioning the FCC, and more recently the White House and Congress, that network neutrality rules could widen the digital divide by discouraging the private investment necessary to get broadband to the poorer and minority communities that are currently unserved and underserved.

Commissioner Clyburn made it clear she sided with those who saw the rules instead as a way to prevent "[ceding] control of the most significant communications advancement in our lifetimes." "Together we must ensure that people of color--and all Americans--can 'participate as owners, employees, and suppliers' on-line," she said. "That cannot happen, however, if we passively permit a new set of gatekeepers to erect yet another set of barriers to entry." While broadband adoption has been the focus of much attention in terms of enfranchising the minority community, Commissioner Clyburn said closing the digital divide was about more than that. "[W]hen it comes to communities of color--and other traditionally underrepresented groups -- the broadband story does not and cannot end with adoption. Broadband is not simply a one-way challenge limited to finding ways in which individuals can obtain meaningful high-speed Internet access."

She said it was also about economic empowerment of entrepreneurs who could only succeed so long as they do not face entry barriers too high too surmount. "To my surprise, most of the filings submitted and public statements issued by some of the leading groups representing people of color on this matter have been silent on this make-or-break issue," she said. "There has been almost no discussion of how important -- how essential -- it is for traditionally underrepresented groups to maintain the low barriers to entry that our current open Internet provides."

24 States' Laws Open to Attack After Campaign Finance Ruling

A day after the United States Supreme Court ruled that the federal government may not ban political spending by corporations or unions in candidate elections, officials across the country were rushing to cope with the fallout, as laws in 24 states were directly or indirectly called into question by the ruling.

"One day the Constitution of Colorado is the highest law of the state," said Robert F. Williams, a law professor at Rutgers University. "The next day it's wastepaper." The states that explicitly prohibit independent expenditures by unions and corporations will be most affected by the ruling.

The decision, however, has consequences for all states, since they are now effectively prohibited from adopting restrictions on corporate and union spending on political campaigns. In his dissent to the 5-to-4 ruling, Justice John Paul Stevens highlighted the burden placed on states. "The court operates with a sledgehammer rather than a scalpel when it strikes down one of Congress's most significant efforts to regulate the role that corporations and unions play in electoral politics," he wrote. "It compounds the offense by implicitly striking down a great many state laws as well."

President Obama Addresses This Week's Supreme Court Decision

In this week's address, President Barack Obama addresses the Supreme Court decision to further empower corporations to use their financial clout to directly influence elections and vows that "as long as I'm your President, I'll never stop fighting to make sure that the most powerful voice in Washington belongs to you."

NABPAC: Donating Is A Matter Of Survival

[Commentary] If you are an owner or manager of a television station, you need to write a check to the National Association of Broadcasters Political Action Committees (NABPAC).

TV broadcasting is a highly regulated business. The actions (or inactions) of Congress, the FCC or other federal agencies have a profound impact on the value of stations, how profitable they are and how much everybody gets paid. These days, they may also determine whether more jobs will be slashed. So, it's imperative that you try to shape those actions any which way you can. One way is by supporting the NAB. Most broadcasters do with their dues and, in many cases, their time. The association's boards and committees comprise owners and top managers.

Another critical way is by contributing to NABPAC. Most broadcasters don't. The PAC has been sorely underfunded for years — a fact that has weakened the NAB in all that it is trying to do in Washington on your behalf. In fact, it's become something of an embarrassment for the industry. Broadcasting isn't keeping up with its media neighbors. By making legitimate contributions to campaigns coffers, NABPAC, like other PACs, can reward members of Congress who stand up for broadcasting and open doors to others who hold key committee chairs and leadership positions. Without plenty of NABPAC funds to spread around, NAB can't play in the big leagues of Washington. It's kind of like the Cincinnati Reds trying to win the NL flag on their paltry player budget. Not impossible, but also not likely.

A Big-Picture Look at Google, Microsoft, Apple and Yahoo

[Commentary] It is evident that Google, Microsoft, Apple, and even Yahoo are now competing in numerous different business arenas. Some of their products have been cornerstone revenue streams, and others are just at the beginning of development. But putting them up against each other really helps illustrate each company's focus and their possible future directions of exploration.