April 2011

Sirius XM Delivers on Merger Condition

Sirius XM has implemented its merger condition to lease channels on a long term basis to entities not affiliated with the company. The leases, which represent four percent of the full-time audio channels on both the Sirius and XM platforms, help ensure consumers have programming options available to them on issues unique to their communities.

The lessees and their planned programming include:
Howard University (licensee of WHUR-FM and WHUT-TV)

One channel each on Sirius and XM - Music and talk programming for the African American community
One channel each on Sirius and XM - Music and talk programming for the African American community, with programs from Historically Black Colleges and Universities

BYU Radio (licensee of KBYU-FM and KBYU-TV)

One channel each on Sirius and XM - Music and talk programming for the Mormon community

Eventus/National Latino Broadcasting

One channel each on Sirius and XM - Spanish language talk programming
One channel each on Sirius XM - Spanish language music programming

WorldBand Media

One channel each on Sirius and XM - Spanish language talk programming

KTV Radio

One channel on XM - Korean language music and talk programming

New America Foundation and Consumers Union Discuss Wireless Interoperability

The New America Foundation, in cooperation with the Consumers Union, gathered representatives from the leading wireless services providers and consumers groups to discuss how requiring mobile broadband service providers to interoperate would affect consumer choice and pricing.

Currently, most mobile phones work with only a single network provider. After consumers end their contracts with a network provider, they are unable to use the phone on competing networks, even if the competitor uses the same mobile technology. “As the mobile industry becomes increasingly consolidated, interoperability between technologies will allow consumers to more freely move amongst the providers,” said Parul Desai, Communications Policy Counsel at the Consumers Union. Desai cited a recent survey conducted by the Consumers Union that found more than 80 percent of respondents wanted to be able to change their networks but keep their devices. Consumer groups, along with the wireless company Sprint have urged the Federal Communications Commission to mandate fourth generation wireless devices, which use the same band of spectrum to broadcast, be interoperable with each other. This would allow consumers to use a single device across different carriers as long as they use the same transmission technology, be it Long Term Evolution (LTE) or WiMax.

Verizon Eliminates Early Termination Fees For DSL

Verizon Communications is trying to reverse DSL declines by eliminating early-termination fees and simplifying pricing for bundles that include DirecTV service -- although cancellation fees will still apply to the satellite TV operator's piece of the bundle. The telco said the new DSL strategy "represents a changed approach to structuring Verizon's copper-based bundles" rather than a limited-time promotion. The company lost almost 1.5 million digital subscriber line customers in 2010. Previously Verizon charged DSL subscribers early termination fees of $165 per year, prorated at $15 per month. However, customers who add DirecTV services to a Verizon bundle must sign a two-year agreement and early cancellation fees apply.

Privacy Legislation’s Potential Impact on Online Media

Although advertising industry groups are predictably resistant to any kind of regulation, their initial reactions to privacy legislations proposed by Sens John Kerry (D-MA) and John McCain (R-AZ) seem more muted than concerns they had prior to the bill’s introduction.

Big tech companies like Facebook, Microsoft, eBay, Hewlett-Packard and Intel expressed support for the bill. The trade groups are probably relieved about the absence of Do Not Track, which they fear encourages users to block all cookies and customization indiscriminately, and requires potentially costly support from ad servers, ad networks and sites. Apple is the latest browser maker to experiment with Do Not Track support, after Mozilla and Microsoft; Google favors an alternative approach that maintains user opt-outs.

Passage of the Kerry-McCain bill or something similar will have the following effects on the online media landscape:

Online content sites: Don't call me a conspiracy theorist, but some traditional publishers like the Wall Street Journal might be perfectly happy without web-wide behavioral targeting. They could tout the value of their online/offline audience and promote contextual targeting and sponsorships. As noted, publishers would able to follow and target a user within their own site, which would benefit portals like Yahoo and AOL, which have huge audiences and broad variety of content.
Online advertising ecosystem: The bill’s restrictive approach to behavioral targeting favors search advertising over display ad formats. It also weakens industry efforts to deliver attribution, i.e., understanding and valuing the longer-term effects of seeing brand advertising. The data sharing guidelines could force data miners (Experian, Audience Science, BlueKai) and ad networks (DoubleClick, ValueClick, 24/7 Real Media) to secure more formal contractual relationships with content sites that have registered users. And the legislation seems to leave room for third parties to take user info and create anonymized groups of targetable customer “types” based on demographics and behavior.
Social targeting: Today, most third-party social targeters (Lotame, 33Across, Media6Degrees, Rapleaf) base their analysis on tracking user behavior with their own cookies, rather than getting access to API data from Facebook or Twitter. Legislation may make them pay for access, and even then, Facebook to-date has been stingy about data sharing. Likely it’s saving that targeting opportunity for itself.

Google Fiber and Creating the Next Generation ISP

With its plans to bring gigabit broadband to Kansas City, Kansas, Google is changing the fate of that city, but it’s also setting out to build a new generation of Internet Service Provider, one designed for the type of world where connectivity drives innovation, and is an irrefutable aspect of our lives.

Milo Medin, the head of Google’s fiber efforts, explained his goal is nothing short of causing a revolution — a revolution that may spread to other towns. “As I said, we’re still having conversations with other markets, and will try to build out in other areas in [Kansas City],” Medin said. So maybe Austin, Texas — which was passed over — shouldn't lose hope yet? When he formed the company that became Excite@home Medin helped take the web from dial-up speeds to speeds of 4 Mbps to 5 Mbps, and he draws a similar parallel between his efforts there and what Google is trying to do. “It’s a little bit like first days of @home, when the web was all optimized for dial-up, and no one had always-on connections,” he said. “Back then, people asked why would we need that, but the need for bandwidth seems to be insatiable … and there are business like Netflix that exist today because of it.”

Welcome to a New Era of Spectrum Speculation

Reportedly, LightSquared, the company trying to create a wholesale, fourth-generation, wireless network, is thinking about an initial public offering. While part of me loves the idea of reading the details behind the network operator that doesn't yet have a network in the S-1 filing, there’s a huge part of me that says the company is planning to take investors for a ride using the current spectrum crisis as cover for a questionable business plan. Because, at the end of the day, what LightSquared has right now is 53 MHz of spectrum, an interference problem with GPS in some of that spectrum, and lots of plans. Yes, back in the days of the bubble, IPOs were built on less, but I think LightSquared may be milking the spectrum crisis. The rallying cry of that crisis claims the U.S. will run out of spectrum by 2013 and the demand for mobile broadband will overtake the nation’s cellular networks and grind them to a halt.

The Broadband Speed Divide

The federal government released an incredible amount of data about where broadband Internet is available and where it isn't. The data is confusing and hard to work with, but it does tend to show major gaps in broadband coverage.

To start, the data released by the National Telecommunications and Information Administration shows that somewhere between five and ten percent of Americans lack any kind of broadband connection. Major institutions have inadequate connections. Two-thirds of schools have connections with capacities less than what they need. Only four percent of libraries report having optimum broadband connections. Our interest, however, is in rural broadband. NTIA reports that a gap remains between rural and urban residents in their adoption of broadband, but the gap is narrowing. In 2010, 66% of urban residents and 54% of rural residents had broadband connections. This year, the rates are 70% and 60% respectively. In rural areas, 9.4 percent of residents told NTIA that they didn't have broadband because it was unavailable. In urban areas, that reason was given by only 1% of those asked.

The Broadband You Deserve

[Commentary] It’s a wonder anyone in the rural U.S. bothers to have an Internet connection – certainly anyone living more than 10 minutes from a town of any reasonable size. Not only are the available options painfully slow – though the satellite ISPs tout their wares with phrases such as “blisteringly fast” – they are expensive and the “service providers” (their words, not mine) do everything in their power to keep you in their talons once they have you signed up.

Public Inspection File Rule: FCC Asks If It's Really Necessary

The Federal Communications Commission has invited comments on whether or not the local public inspection file requirement is really necessary. Since the FCC has assiduously ignored – for more than five years – a petition for rulemaking seeking the abolition of those requirements, this invitation should puzzle some and thrill others. As it turns out, the obligations imposed by the public file rules constitute “information collections” (per the Paperwork Reduction Act), and we all know what that means: periodically (like every three years) the FCC must justify such requirements to the Office of Management and Budget.

The current OMB approval is set to expire on September 30, 2011, which means that, if the FCC plans to keep those rules on the books, it’s got to re-justify the rules to OMB’s satisfaction. That process entails two opportunities for public comment stretching over at least 90 days. With less than 180 days to go before expiration, the FCC has now started that process. Among the questions on which the FCC is now inviting comment are:

a) whether the public file rules are “necessary for the proper performance of the functions of the Commission, including whether the [collected] information shall have practical utility”; and
b) the accuracy of the Commission’s burden estimate.

The FCC will be accepting comments through June 17, 2011. After that, the FCC will bundle up any and all comments submitted and send them over to OMB, along with a statement in support of the rules (assuming that the FCC is not persuaded by the comments to drop the rules entirely). OMB will then provide an additional 30-day comment period. If OMB declines to approve the rules, the FCC will be unable to enforce them.

Internet service providers cracking down on heavy users

People who watch lots of movies and videos on the Internet will run into a toll booth if they get their Internet service through AT&T.

Starting May 2, AT&T will set Internet usage caps for its DSL and U-verse customers. Repeatedly go over the cap, and you'll pay extra. Charter Communications, the other major Internet service provider in St. Louis, imposed a cap in November. But it has no plans to charge people extra when they go over the limit, says a company spokeswoman. It may cut their service instead. The Internet service providers say the limits will stop heavy users from clogging the system and slowing service to others. Consumer groups counter that the caps are ploys to keep customers from dropping pay-TV channels in favor of cheaper Internet video. Caps are arriving as customers turn to the Internet for more of their entertainment, streaming movies over services such as Netflix or Amazon, TV shows from Hulu or videos from YouTube. Increasingly, they watch them on TVs hooked to the Internet. Internet video watching rose 45 percent in the year ending in January, according to figures cited by Consumers Union. Such video streaming services pose competition to pay-TV channels offered through AT&T, Charter and other cable, satellite and phone companies.

Benton

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