October 2011

Tom Tauke, Verizon's executive VP for policy, said that he thought there were enough senators supporting network neutrality rule-blocking legislation to force a vote in the Senate, and said he expected that vote would happen, perhaps as early as the next few weeks.

The measure is highly unlikely to pass given that Democrats control the Senate and the rules were backed by a Democratic majority at the Federal Communications Commission and praised by a Democratic President who made network neutrality a campaign issue. The House has already passed an infrequently used legislative Congressional Review Act motion that would invalidate the agencies network neutrality rules, a move which gained new attention after an effective date of Nov. 21 was finally established for those rules. There has yet to be a Senate vote. And there were several unsuccessful legislative efforts to defund implementation of the rules. Tauke says the FCC is relying on a telecom statue to extend its authority to impose rules over the Internet that it can extend to price and interconnection regulation. "We think that is wrong, and from a policy perspective very dangerous." He said Verizon was more concerned about the assertion of jurisdiction than the rules themselves. "This is really about whether the FCC has the authority to regulate the Internet space," he said.

[Commentary] Hot on the heels of Amazon signing publishing deals with authors, and thus doing an end-run around their publisher partners, another major e-reader company says it plans to do the same: Kobo is launching its own publishing arm and looking to sign deals with authors directly. All of this is more proof (as if we needed any) that the Internet is potentially lethal to middlemen. Does this mean that traditional publishers will soon be extinct? No. But it does mean that they are going to have to work harder to try to do what Amazon is already doing — namely, making it easier and more profitable for authors to reach their readers.

For months now, Amazon has been busy ramping up its publishing unit, which it beefed up earlier this year with the hiring of publishing-industry veteran Larry Kirshbaum. It has signed deals with popular authors like Tim Ferriss, as well as thriller writer and former CIA operative Barry Eisler, who turned down a $500,000, two-book contract with a traditional publisher to self-publish and then accepted a deal from Amazon instead. Although Kobo is a relatively small player in the U.S., it has a strong presence in Europe, and CEO Michael Serbinis says adding publishing services for authors is now “table stakes” for a digital-book distributor — which raises the possibility that number two player Barnes & Noble could be the next to join the fray.

Google confirmed one of the most open content secrets around: YouTube is partnering with programmers to launch dozens of new YouTube channels—as many as 100—with thousands of hours of exclusive premium content in a bid to create a digital-age cable universe with global reach.

The first channels are set to premiere next month, with more rolling out through 2012. It’s billed by some as Google meets Hollywood but it’s not that narrow. Programmers range from celebs (Madonna, Rainne Wilson, Ashton Kutcher), athletes (Lance Armstrong, Shaquille O’Neal) and major media outlets (WSJ, Hearst Magazines, Thomson Reuters) to the internet-native companies that rank among YouTube’s most visited sites, including Machinima, Demand Media, and Maker Studios. Crossover programmers from TV are also there in force: Ben Silverman, Electus; Lloyd Braun and Gail Berman, BermanBraun; and Brian Bedol, Bedrocket. IGN is partnering with new News Corp. sibling Shine on a channel. CSI creator Anthony Zuiker, Tony Valenzuela and other writers will provide scripted programming for Collective Digital Studio to co-produce and market on BlackBoxTV. These aren’t channels in the conventional cable sense, expected to be programmed linearly up to 24/7.

The content will be exclusive to YouTube for 18 months. It also with be available globally. That’s a major departure from some of the entertainment premieres we’re used to seeing, where rights are carved up by geography and windowed in to the most slots possible. The plans include financing the new channels, up to $5 million in some cases, according to sources. Rather than an investment or a funding that might imply equity, Google is providing the money through grants with a nearly 50-50 rev share (some deals vary) after proceeds are used for payback.

LightSquared accused GPS manufacturer Trimble of lobbying against the broadband company out of narrow financial interest.

Weeks after the FCC granted its controversial waiver to LightSquared in January, Trimble board members sold nearly $20 million of stock, according to SEC filings compiled by LightSquared. The waiver granted more flexibility for how retailers can use spectrum purchased from LightSquared, a critical element of the company’s business plan. The GPS community said it fundamentally changed the nature of the network LightSquared planned to build, introducing GPS interference problems. But LightSquared denies that, arguing that its network plans remained the same before and after the waiver. The February stock sales comprise “three times the highest amount of stock board members and top managers had unloaded in any one month going back to 2007,” Jeff Carlisle, head of regulatory affairs for the broadband company, said in a release. “This demonstrates that Trimble insiders clearly viewed LightSquared as a financial threat to its commercial business.” “And that explains Trimble's motivation in leading the public relations and lobbying campaign against LightSquared,” he added.