December 2010

Senate Commerce Chairman Jay Rockefeller (D-WV) has been investigating "mystery charges" on telephone bills for several months.

Although the investigation is ongoing, Chairman Rockefeller said the practice of third-parties placing charges on phone bills has raised "serious concerns." Investigators are looking at AT&T, Verizon and Qwest to determine the companies' role in "cramming," which the committee defines as a "deceptive practice that involves placing unauthorized mystery charges on telephone bills." So far, investigators have determined that many of the companies allowed to charge consumers have faced customer complaints, received failing grades from the Better Business Bureau, and often charge for services that are offered for free or through existing service plans.

Google’s drive to bring the Internet to living-room TVs and generate fresh advertising sales is being threatened by the failure to obtain popular shows such as “Glee” and “NCIS.” CBS Chief Executive Officer Leslie Moonves and Chase Carey, the No. 2 executive at Fox parent News Corp., say after months of talks they’re in no hurry to let Google TV offer shows via the Web for free. They say there have been no lucrative offers and they aren't sure of the search company’s intentions. The four major networks are blocking Google TV viewers from watching shows that consumers readily see on the Web with PCs out of fear they'll lose ads, re-run revenue and fees from pay- TV systems. The standoff complicates efforts by Google to gain a foothold in traditional TV, where global ad sales of $180 billion this year will be triple those of the Web.

The “commercial disagreement” between Comcast and Level 3 is still ongoing, and while many (including the cable company) portray it as a simple peering disagreement, it’s also illuminating two things about the current state of the Internet: The first is that the lack of competition in access providers is the underlying issue at the core of this dispute, and the second is that this lack of competition means we need to come to some sort of regulatory compromise on net neutrality or lay new pipe to businesses and consumers. Laying new pipe isn't really an option, however, and the Federal Communications Commission is so emasculated, it’s possible that we won't get regulations to solve this problem. If that’s the case the web as we know it is in trouble.

The world is gradually moving toward on-demand viewing based on personalized recommendations. But in a world where viewers choose what to watch based on their own personal interests, what happens to the gatekeepers who previously had toiled to make sure people tuned in to a certain show at a certain time?

When content is discovered, through recommendation engines or by other means, it doesn't matter to the user who made the show, what channel it’s on, or even whether it’s new or not. For users, the result is a steady stream of new and fresh content, and also content that is more relevant and engaging than what one might find by purely channel surfing. And for content creators — especially independent content creators — personalized recommendations serve as a way to level the playing field. No longer does it matter whether a show appeared on broadcast, cable or online; the only factor that matters is whether or not a user might be inclined to watch it. But for programmers — especially those at big media companies — the democratization and personalization of content is a direct threat to their business models. The ability to program a show lineup becomes less important when lead-ins are out of the control of the network. So what’s the future of network programming, and how do media companies reach an audience that is not tuning in to a certain channel at a certain time? How do they get audiences to watch their shows, when an algorithm is in control of the recommendations? In a personalized world, there will be more emphasis on quality of content, certainly, and niche content and the long tail will have its time to shine. But there will also be a place for sponsored placement, of the sort we already see on YouTube, for catching the user’s eye. The question is if that kind of placement will be enough to capture new audiences that otherwise might not tune in.