December 8, 2011 (AT&T/T-Mobile Break-up fee could be tax-deductible?)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY, DECEMBER 8, 2011
Another busy day, fellow wonks http://benton.org/calendar/2011-12-08/
WIRELESS/SPECTRUM
AT&T’s Breakup Fee Less Taxing?
AT&T vows to keep pursuing T-Mobile merger
Department of Justice questions if the AT&T and T-Mobile deal is still active
AT&T, Sprint Propose Antitrust Trial After Government’s Case
AT&T raises static over FCC review
Chairmen Upton, Walden Probe FCC on New Spectrum Screen Standards/AT&T Report Release - press release
Spectrum auctions might be included in GOP's payroll-tax bill
Rep Eshoo Frustrated With Latest Twist In Spectrum Debate
Test results prompt new round in GPS, LightSquared fight
Officials urge John Deere to drop campaign against LightSquared [links to web]
Will Clearwire, Sprint build a 4G monster or a mouse? - analysis
AT&T cites Apple’s iPhone as driver for record smartphone sales [links to web]
Canaccord: iPhone smartphone share to grow 42% this quarter [links to web]
Verizon confirms family data plans coming in 2012 [links to web]
Verizon Wireless Customers Finding Themselves At Least a “G” Short of 4G
Smartphones, dumb drivers - editorial
CONTENT
Tech groups ask House leaders to slow down online piracy bill
Chairman Issa unveils hashtag for online piracy effort
Justice Department Confirms E-Book Probe
Newspaper companies put their money where the clicks are [links to web]
Cable TV networks feel pressure of programming costs
Media Moguls See Online Video by Netflix, Hulu as Top Issue to ‘Navigate’
INTERNET/BROADBAND
DC gets 100 gigabit network, maybe politicos will finally get broadband
Cablevision Sues Verizon Over Claims in Advertisements for Internet Speeds [links to web]
FTC's Leibowitz Criticizes Plan to Add Top-Level Domains [links to web]
TELECOM
Two lawsuits filed over FCC's Universal Service order
FCC workshop participants: Interconnection critical to PSTN phase-out
Definitive Answers Elude FCC Workshop on PSTN Phase-Out
TELEVISION
Despite law against it, stealth commercials frequently masquerade as TV news
Schmidt Reckons Most TVs Will Have Google TV By Mid-2012 [links to web]
Republicans vs. Democrats TV survey results: Lefties want comedy, right wingers like work [links to web]
Cable TV networks feel pressure of programming costs
Media Moguls See Online Video by Netflix, Hulu as Top Issue to ‘Navigate’
FCC Won't Make Cablevision Carry GSN on Basic During Carriage Complaint Process [links to web]
ELECTIONS AND MEDIA
Twitter and Campaigns
POLICYMAKERS
Sen Grassley Still Plans to Block FCC Nominees [links to web]
OPEN GOVERNMENT/GOV PERFORMANCE
White House: Don't cut E-Government Fund [links to web]
Sunlight Foundation chides Obama administration on transparency [links to web]
Senate Ponders Cameras In High Court... Again [links to web]
IT Dashboard: Accuracy Has Improved, and Additional Efforts Are Under Way to Better Inform Decision Making - research [links to web]
LOBBYING
Food and Media Companies Lobby to Weaken Guidelines on Marketing Food to Children - op-ed [links to web]
STORIES FROM ABROAD
EU ends antitrust investigation into IBM [links to web]
EU Trouble Looms For Google As Lawsuit Seeks $31 Million Over AdWords [links to web]
Everything Everywhere Sets Out $2.4 Billion U.K. Mobile Web Plan [links to web]
Nokia prepares to lose its bling tone [links to web]
MORE ONLINE
The Cyber Security Industrial Complex [links to web]
As budgets get stretched, schools turn to free digital tools [links to web]
In health technology, an enthusiasm gap between startups and doctors [links to web]
South Bay leads nation in job growth [links to web]
WIRELESS/SPECTRUM
TAX BREAK FOR AT&T?
[SOURCE: Wall Street Journal, AUTHOR: Anton Troianovski]
If you find yourself negotiating a merger with a multibillion-dollar penalty for failure, remember this: Breaking up could be tax-deductible. That’s what AT&T CFO John Stephens underscored in comments at an investor conference. He was talking about the $4 billion accounting charge the carrier took last month as its proposed $39 billion acquisition of T-Mobile USA hit the skids in Washington. Stephens said the real hit wouldn’t be that bad, because Uncle Sam will effectively pick up part of the tab. “I certainly expect that will be fully tax deductible,” Stephens said, according to a transcript. “You guys can do the math on that, but essentially it is a much smaller cash impact than the first impressions may give you.” Analysts at UBS AG did the math. Their take: The cash hit of the breakup fee after taxes would be $1.5 billion to $1.8 billion — as little as half of AT&T’s cash payment to Deutsche Telekom.
benton.org/node/106823 | Wall Street Journal
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AT&T WILL FIGHT FOR T-MOBILE
[SOURCE: Reuters, AUTHOR: Nicola Leske]
AT&T plans to forge ahead with its deal to buy T-Mobile despite fierce regulatory opposition, and it has the financial resources to close the acquisition quickly, said AT&T Chief Financial Officer John Stephens. AT&T plans to use the $10 billion cash it had accumulated on its balance sheet to prepare for the closing of the T-Mobile deal, Stephens said. In addition, the company has a $20 billion bridge facility and an $8 billion backup in place. "So we clearly have an ability to close the deal very quickly and have those resources," Stephens said. "That is the plan." Stephens would not say how the company planned to address antitrust concerns. He said any talks with the Department of Justice would not be made public.
benton.org/node/106809 | Reuters
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DOJ QUESTIONS AT&T/T-MOBILE
[SOURCE: IDG News Service, AUTHOR: Grant Gross]
AT&T's decision to withdraw its application to obtain T-Mobile USA's mobile spectrum license at the Federal Communications Commission raises a question about whether the company's proposed acquisition is still active, the Department of Justice has said. The DOJ noted that AT&T has withdrawn its license transfer application at the FCC, with the company saying a withdrawal represents an intent to "abandon the transaction altogether" or to submit a new, substantially changed application. Richard Levie, a special master overseeing the DOJ's antitrust case against the merger, said he believes the DOJ case can move forward without a license transfer application pending at the FCC. "The FCC-related activities have not ... altered the status of this litigation," he wrote. "Although FCC approval is necessary for the proposed merger, so, too, is a favorable ruling from the federal court in this case. As there is no requirement of which the Special Master is aware that one approval must come before the other, the federal court case remains on track."
Levie's order denied a motion by mobile broadband firm LightSquared to quash an AT&T request to depose LightSquared officers. A DOJ spokeswoman declined to comment on the nature of the deposition.
benton.org/node/106808 | IDG News Service
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AT&T, SPRINT TRIAL
[SOURCE: Bloomberg, AUTHOR: Tom Schoenberg, Sara Forden]
AT&T and Sprint Nextel agreed their dispute over AT&T’s planned purchase of T-Mobile USA should be tried after the government’s case opposing the deal while they clashed on the proposed schedule. AT&T and Sprint, in separate filings in U.S. District Court in Washington, said their aim is to avoid interfering with trial of the U.S. Justice Department’s lawsuit scheduled for Feb. 13. Sprint and C-Spire (Cellular South), which also sued to block the $39 billion T-Mobile acquisition, proposed that Judge Ellen Segal Huvelle set a trial date “immediately” after all the evidence is presented in the U.S. case “so that they can be heard prior to the closing of the transaction.” AT&T argued that no trial date should be set until Judge Huvelle hands down a verdict in the Justice Department case. The lawsuits involve different claims and will require different evidence, the company said.
benton.org/node/106807 | Bloomberg
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AT&T STATIC
[SOURCE: Politico, AUTHOR: Kim Hart, Eliza Krigman]
AT&T and the Federal Communications Commission are at odds again — this time over how the agency measures when a company has too much spectrum. The issue arose this week when AT&T said the FCC improperly made a last-minute change to its “spectrum screen” tool, which measures spectrum concentration in particular markets, during its review of the AT&T/T-Mobile deal. The change, AT&T alleges, made it seem like many more markets would be negatively affected by the deal. The staff report released by the FCC last week outlining its opposition to the AT&T and T-Mobile deal found it would lead to “an unprecedented” amount of spectrum concentration in some markets. Tucked into a footnote in the report is a note explaining that the FCC adjusted its “spectrum screen” tool to reduce the amount of spectrum used in the screen by 12.5 megahertz. AT&T Senior Vice President Bob Quinn questioned the FCC staff’s ability to impose that spectrum screen change on its findings of the AT&T and T-Mobile deal, when the change had not yet been adopted in its decision on the AT&T/Qualcomm deal. “The impact of that change was significant in terms of [the] number of markets impacted — estimates indicate the revised screen caused a trigger in approximately 35 percent more markets than the screen currently in place,” Quinn said. “Changes to significant analysis like the spectrum aggregation screen belong in a fully transparent, regularly conducted commission proceeding with opportunity for notice and comment for all parties.” An FCC official said the spectrum screen does not require rule making for updates, adding that the tool has only been updated during merger reviews. The screen is used to show markets the FCC would look at more closely and doesn’t have any actionable effect. The official said the spectrum screen change was less than 3 percent of the total screen. It was changed to reflect that a small slice of spectrum cannot be used for mobile broadband. Moreover, AT&T already had suggested the FCC make tweaks to the tool, outside of a formal rule-making process.
benton.org/node/106824 | Politico
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FCC’S SPECTRUM SCREEN STANDARDS
[SOURCE: House of Representatives Commerce Committee, AUTHOR: Press release]
House Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) sent a letter to the Federal Communications Commission regarding its decision to revise the spectrum screen after reviewing the AT&T / T-Mobile deal. The chairmen wrote, “Throughout the 112th Congress, the Subcommittee on Communications and Technology has taken a hard look at the processes of the Federal Communications Commission (FCC) to ensure that the Commission maintains the highest standard of transparency and predictability in the exercise of its duties. We therefore request additional information on how you decide whether to release staff analyses or other materials surrounding withdrawn items and how the FCC uses the ‘spectrum screen’ process in reviewing the spectrum holdings of FCC licensees. “The FCC apparently changed its spectrum screen in the recently released staff analysis on the AT&T / T-Mobile transaction, a document that was not adopted by the FCC. Moreover, questions remain as to how the Commission uses the spectrum screen.” Members requested the FCC explain what processes it followed in making the decision by December 19, 2011.
benton.org/node/106801 | House of Representatives Commerce Committee
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SPECTRUM BILL
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Republicans are considering including Rep Greg Walden's (R-OR) spectrum bill in a proposal to extend the payroll tax holiday, Speaker John Boehner's office confirmed. The spectrum legislation, which could raise as much as $15 billion through government auctions of airwaves, could help offset the cost of extending a payroll tax holiday and federal unemployment benefits. Republicans have insisted that the payroll tax deal not increase the deficit.
benton.org/node/106793 | Hill, The
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SPECTRUM DEBATE
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
Rep Anna Eshoo (D-CA), the ranking member on the House Communications and Technology Subcommittee, voiced frustration with reports that House GOP leaders are considering including spectrum legislation in a broader bill that might include an extension of a payroll tax holiday and other measures. She said it's important for the committee to continue its work on the issue even if it ends up getting attached to another bill. The subcommittee approved spectrum legislation crafted by the panel's chairman, Rep. Greg Walden (R-OR), on a largely party-line vote last week. Rep Eshoo and other Democrats opposed the bill because of concerns about provisions related to unlicensed spectrum and the governance structure for a national broadband network for public safety. "It is my understanding that the Republican leadership is considering placing this in an omnibus," Rep Eshoo said. "But this is without the benefit of a full committee markup. These are complex issues. Congress does not do spectrum legislation but for maybe once a decade, if that," she added. "I'd like to see the fullness of the effort optimized."
benton.org/node/106822 | National Journal
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LIGHSQUARED TEST RESULTS
[SOURCE: National Journal, AUTHOR: Sara Jerome]
The government began testing whether LightSquared's proposed wireless service interferes with GPS devices after concerns were raised in Congress, agencies, and industry earlier this year. The next phase in the debate begins this month: a clash over what the results mean. LightSquared CEO Sanjiv Ahuja will begin to present his company's findings on the interference issue in a briefing with Capitol Hill staffers Dec 7. But the results from government tests won't arrive until later this month when federal agencies send their findings to the Commerce Department. LightSquared's effort to get a jump on the government tests is an early attempt to shape the conversation about the results, which the company hopes will move it forward to winning approval to launch its wireless operations. The government test results will be revealed in two rounds, according to Save Our GPS and LightSquared representatives. A test of problems for consumer devices is expected to become public mid-month, while a test of high-precision GPS devices used by industry is expected next year. The government results will land at the Commerce Department, which is expected to present a recommendation on the issue after it sees the findings. But the Federal Communications Commission will ultimately decide what happens, since LightSquared's government approval is contingent on the company satisfying the FCC that it has resolved its inference issues.
benton.org/node/106782 | National Journal
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CLEARWIRE/SPRINT NETWORK
[SOURCE: GigaOm, AUTHOR: Kevin Fitchard]
Once again, Sprint and Clearwire have thrown their lots together, agreeing to pursue their 4G future as a team. The technology is different, but the situation remains the same: Sprint needs a mammoth LTE network, and only Clearwire is in a position to build it. To do that, Clearwire needs cash, and while Sprint has committed to pony up $1.6 billion and to match any equity Clearwire raises, that investment will only be enough to plant the seeds of the 4G network they want to grow. If the two of them want to take on Verizon Wireless and AT&T in the coming mobile broadband war, Sprint and Clearwire will need to check their caution at the door. With more than 100 MHz of spectrum, Sprint and Clearwire can build the biggest, baddest mobile broadband network in the industry; the only thing holding them back is depth of their pocketbooks. It’s pretty clear, though, that both operators are still thinking conservatively.
benton.org/node/106780 | GigaOm
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VERIZON NETWORK FAILURE
[SOURCE: Wall Street Journal, AUTHOR: Ina Fried]
Verizon Wireless customers are reporting what appear to be widespread network issues affecting customers in various places across the United States. Customers took to both Twitter and the Verizon Wireless support forums to kvetch about their lack of high-speed data service. Posters from locations ranging from Houston to Boston and Iowa to New Hampshire reported problems accessing the company’s data networks.
Verizon said that the problems are limited to its fastest 4G LTE network.
benton.org/node/106806 | Wall Street Journal
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SMARTPHONES AND DRIVING
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] Can you safely talk on a cellphone — or for that matter, check your email or scroll through Google Maps — while driving? Well, of course you can. But those other folks with their hands off the wheel and their eyes off the road are a public menace. Unfortunately, that sums up the attitude of many American motorists, who widely acknowledge using their phones while behind the wheel but insist they're safe drivers. Meanwhile, the number of people worried about the other guy is soaring. Lawmakers haven't caught up. Thirty states ban cellphone use by novice drivers, but none do so for all drivers. A total cellphone ban would avoid the problem of legislating for yesterday's technology, and reduce the number of accidents. Meanwhile, if you value your life and the lives of others, don't dial and drive.
benton.org/node/106821 | Los Angeles Times
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CONTENT
SLOWING SOPA
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
Several technology industry groups wrote to House leadership asking them to slow down the controversial Stop Online Piracy Act aimed at reducing digital copyright violations. The groups -- including the Consumer Electronics Association, the Information Technology Industry Council and TechAmerica -- warn the unintended consequences of the legislation and its Senate counterpart, PROTECT IP, could undermine the economic benefits created by the rapidly-growing digital economy. "Not only is a growing amount of economic activity facilitated by the Internet, but future economic and social growth is dependent on this critical infrastructure," the groups state. "Congress — working with all stakeholders — can develop legislation that will address online piracy while ensuring that the Internet continues to foster creativity, innovation, and growth."
benton.org/node/106805 | Hill, The | GigaOM
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SOPA OPPOSITION
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
House Oversight Committee Chairman Darrell Issa (R-CA) rolled out a new Twitter hashtag intended to build support for the online piracy bill he plans to unveil. A bipartisan coalition led by Chairman Issa and Sen Ron Wyden (D-OR) will offer an alternative to the Stop Online Piracy Act (SOPA) that would rely on the International Trade Commission to issue orders against foreign websites dedicated to copyright violations or trafficking in counterfeit goods. "What's better than #SOPA? #OPEN...we'll use this hashtag for our plan to keep the Internet open, protect our artists & inventors," tweeted Chairman Issa.
Chairman Issa said, "Good bills, with good support that leave the House passed, do pretty well. Bad bills that don't leave the House never get a chance to be heard in the Senate. I don't think SOPA will leave the House. I don't think it could pass a House vote today."
benton.org/node/106804 | Hill, The | The Hill
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E-BOOK PROBE
[SOURCE: Wall Street Journal, AUTHOR: Thomas Catan]
The Justice Department confirmed that it is conducting an antitrust investigation into the pricing of electronic books, the latest antitrust watchdog to probe whether there was improper collusion by publishers and Apple Inc. to prevent discounting. At a congressional hearing, Sharis Pozen, the Justice Department's acting antitrust chief, said: "We are also investigating the electronic book industry, along with the European Commission and the states attorneys general." The Wall Street Journal and other media have reported that the Justice Department has been investigating the matter since last year. However, Pozen's comments were the first time the Justice Department publicly confirmed the existence of the probe. The issue that antitrust enforcers are examining is the agency pricing model, which Apple employed when it introduced its iPad tablet in April 2010. The model allowed publishers to set the prices of their books sold through Apple's iBookstore, avoiding the kind of discounting employed by Amazon's rival service.
benton.org/node/106795 | Wall Street Journal
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INTERNET/BROADBAND
DC-CAN
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
Washington (DC) went live with the first link of a 100-gigabit network. The new network, called the DC Community Access Network (DC-CAN), will provide links out to communities east of the Anacostia River, but the ultra-high-speed network will soon serve the entire District. Unlike what Google is building in Kansas City, this isn’t crazy fast fiber to the home, though, it’s a city-owned middle mile network link that other providers can tap into in order to deliver faster broadband to homes and businesses. The 100 gigabit fiber network will connect out to the big long-haul networks run by Level 3 Communications and other providers, offering a way for existing or new ISPs to connect to the larger web. In many areas these middle mile links are owned by AT&T and Verizon, and it can be expensive, difficult or impossible to connect out to them. So while the network may not seem fabulous today, it most decidedly could be. Already 24 community anchor institutions such as libraries, schools and other municipal buildings are connected to the 100 gig network. As the network expands, the city hopes to link up to 199 more. And having a low-cost middle mile network could entice other service providers to hook up D.C. homes and businesses with faster broadband access. The network was funded in part by federal broadband stimulus funds and is expected to be complete by 2013.
benton.org/node/106785 | GigaOm
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TELECOM
USF LAWSUITS
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Core Communications, a small telephone company, and the Pennsylvania Public Utility Commission are suing the Federal Communications Commission over its recent order to convert a multibillion dollar telephone fund into a subsidy to expand Internet access. Both suits allege that the agency's order was "arbitrary and capricious" and a "departure from reasoned decision-making." The Pennsylvania PUC, a state agency, also argues in its filing that the FCC order violates the 10th Amendment, which leaves powers not given to the federal government to the states. Core Communications filed its lawsuit in the 4th Circuit Court of Appeals in Richmond (VA) and the Pennsylvania PUC filed its suit in the 3rd Circuit in Philadelphia. Groups seeking to block the order must file their cases by Friday. A lottery will then determine which court will hear the challenges to the order.
benton.org/node/106791 | Hill, The
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PSTN PHASE OUT
[SOURCE: Connected Planet, AUTHOR: Joan Engebretson]
Before the traditional phone network can be phased out, steps should be taken to ensure that the networks replacing it are interoperable, said several stakeholders who participated in a Federal Communications Commission workshop convened to explore issues associated with a public switched telephone network (PSTN) phase-out -- an idea floated by AT&T a couple of years ago that is now gaining momentum. Ensuring interoperability is no easy task, considering that the tightly integrated and monolithic phone network of yesteryear has been gradually transitioning to a more competitive and fragmented marketplace. Walter Johnson of the FCC’s Office of Engineering and Technology framed the issue in a question at yesterday’s workshop. “How do [we] create a common language when so many [parties] bring a piece of the solution to the table?” he asked. “This is the critical question,” answered Harold Feld of consumer group Public Knowledge. “It starts with interconnection.”
benton.org/node/106798 | Connected Planet
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PSTN PHASE OUT II
[SOURCE: Telecompetitor, AUTHOR: Joan Engebretson]
A Federal Communications Commission workshop about transitioning the public switched telephone network (PSTN) to new technologies helped frame the issues involved but ultimately raised more questions than it answered. Perhaps that’s not surprising considering the complexity of the issue. The potential phase-out of the PSTN has been top of mind within the telecom industry, given the ongoing transition to IP based networks. AT&T has gone as far to say it would like to be relieved of the requirement to provide traditional POTS service throughout its local service territory. And the FCC’s recent decision to transition today’s voice-focused Universal Service program to focus instead on broadband has given the issue even more prominence.
FCC organizers and others came up with several important questions that received little or nothing in the way of constructive answers, including:
Should a sunset date for the PSTN be established and if so, when should it be?
Are there certain elements inherent in today’s PSTN—such as 24-hour battery backup–that might not need to be a requirement of the replacement infrastructure?
Should carrier-of-last-resort requirements be maintained and if so, how should they be structured?
Perhaps a second FCC workshop about transitioning the PSTN, scheduled for December 14 and targeted to focus on “economic, technological, and policy issues” will hold more answers.
benton.org/node/106797 | telecompetitor
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TELEVISION
STEALTH COMMERCIALS MASQUERADE AS TV NEWS
[SOURCE: Washington Post, AUTHOR: Paul Farhi]
Alison Rhodes is passionate about child safety, and in hundreds of TV news interviews, the self-styled “Safety Mom” has talked up products designed to increase it. During a segment on WTTG’s morning news last year, for example, Rhodes showed off a home electronic monitor made by ADT and a backpack with a built-in alarm known as the iSafe bag. “It’s amazing,” she gushed to Fox5 host Tony Perkins about the backpack. “It really is amazing.” What neither Rhodes nor WTTG mentioned to viewers was this: The companies Rhodes mentioned on the air had paid her to plug their products. In effect, Rhodes’s appearance was a kind of stealth commercial dressed up as a traditional product-review interview. Such product-friendly segments aren’t just potentially deceptive; they’re illegal, under a federal law that prohibits “payola” or “plugola,” as the practice is commonly known. Yet similar types of segments have grown as TV stations have expanded their early-morning newscasts over the past decade, packing them with “expert” reviews. And they are especially rife during the holiday gift-giving season. Rhodes is one of a small army of hosts and reviewers of fashion, toys, electronic gadgets and other consumer-oriented topics who pop up on morning news shows with advice about what to buy. The advice almost always involves products from companies that have paid the expert to slip in a few favorable words. The disclosures about this arrangement can range from minimal to nonexistent.
benton.org/node/106784 | Washington Post
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CABLE TV COSTS
[SOURCE: Los Angeles Times, AUTHOR: Meg James]
Inflation in programming costs is the new reality for cable networks. No longer able to simply stock their channels with reruns of "Seinfeld," "Golden Girls" and old movies, cable programmers have ratcheted up spending in the last five years to distinguish themselves with marquee franchises such as ESPN's "Monday Night Football" or provocative original shows including AMC's "Mad Men" and FX's "Sons of Anarchy." But while the spending increases are staggering, cable channels remain the most profitable divisions of many media conglomerates, including Walt Disney Co., NBCUniversal, News Corp. and Time Warner. ESPN, for example, is Disney's biggest profit engine and News Corp.'s cable channels deliver more than half of that company's operating income. Viacom Inc.'s children's network, Nickelodeon, has the industry's highest cash flow margin — a measure of how efficiently a company converts its sales dollars to cash — at nearly 65%, SNL Kagan's report found. The margin for financial news network CNBC approaches 60%. So far, rising costs have been offset by rising returns. Over the last decade, cable networks have increased their advertising revenue an average of 9% a year, according to SNL Kagan, which reported that annual programming expenses over the last five years have risen at the same rate. Last year, cable networks collected $22.3 billion in ad revenue and nearly $25 billion in fees from their affiliates and cable and satellite television operators such as Time Warner Cable and DirecTV. That brought cable networks' total revenue in 2010 to nearly $48 billion. But Wall Street is concerned that the media industry will be unable to sustain its high margins.
benton.org/node/106820 | Los Angeles Times
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NAVIGATING ONLINE VIDEO
[SOURCE: Bloomberg, AUTHOR: Edmund Lee]
News Corp. Chief Operating Officer Chase Carey said the biggest challenge facing the company is digital-distribution deals with Internet companies such as Netflix and Hulu.
“The digital space is incredibly important,” Carey said at a UBS AG media and communications conference in New York. “Over the next five years, it’ll be the number one issue we’ll have to navigate.” Media companies such as News Corp., Time Warner, Viacom and CBS are experimenting with online distribution of television and movie content. The efforts have the potential to create new revenue streams for media companies, though they need to be careful not to cannibalize revenue from cable operators and other partners, Carey said. “They’re an exciting new dimension to the business,” he said. Deep-pocketed players have emerged to offer distribution over the Internet. Aside from Hulu and Netflix, Amazon markets a streaming service and Apple Inc. offers digital downloads. Verizon Communications, the second-largest U.S. telephone company, could soon offer a Netflix competitor. Digital distribution, also known as “over the top,” may make the most sense for older video, including TV shows and movies that are generating little revenue elsewhere, said Carey and David Zaslav, chief executive officer of Discovery Communications Inc. Discovery, whose programs include “Deadliest Catch” and “Man vs. Wild,” cut a deal that allows Netflix to offer its shows well after they’re on cable channels.
benton.org/node/106816 | Bloomberg
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ELECTIONS AND MEDIA
TWITTER AND CAMPAIGNS
[SOURCE: Project for Excellence in Journalism, AUTHOR: Mark Jurkowitz]
A detailed examination of more than 20 million Tweets about the race for president finds that the political discussion on Twitter is measurably different than the one found in the blogosphere-more voluminous, more fluid and even less neutral. But both forms of social media differ markedly from the political narrative that Americans receive from news coverage, according to a new study by the Pew Research Center's Project for Excellence in Journalism, which examines campaign coverage and the online conversation from May 2-November 27. One distinguishing factor about the campaign discourse on Twitter is that it is more intensely opinionated, and less neutral, than in both blogs and news. Tweets contain a smaller percentage of statements about candidates that are simply factual in nature without reflecting positively or negatively on a candidate. In general, that means the discourse on Twitter about the candidates has also been more negative. The political discussion on Twitter has also fluctuated with events more than it has in the blogosphere, where the authors seem to have made up their minds and where the tone about candidates shifts relatively little. On Twitter, the conversation about a candidate sometimes changed markedly from week to week, shifting from positive to negative and vice versa. Finally the new study found that the candidate conversation on Twitter is tremendously active-indeed the number of statements about candidates on Twitter vastly outnumber those offered in blogs by a factor of more than 9 to 1.
benton.org/node/106812 | Project for Excellence in Journalism
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