August 2012

As Apple and Samsung Electronics dig in for weeks of jostling in a federal courtroom, the contrasting personalities and tactics of their head lawyers are adding to the drama.

On one side is 65-year-old veteran Harold McElhinny, who represents Apple and came of age well before the dot-com boom. He has been involved in a number of high-stakes intellectual property cases, including Fujitsu's fight against International Business Machines in the 1990s and Pioneer's battle against Samsung's television subsidiary in the past decade. Defending Samsung is 49-year-old Charles Verhoeven, an Iowa native who is soft-spoken and intense. He gravitated to patent cases in the mid- 1990s as an associate at Quinn Emanuel Urquhart & Sullivan LLP, where he is a partner.

Stubbornly high U.S. unemployment, a weak housing market combined with a mature business prone to regular programming blackouts has seen more than 400,000 American homes drop their pay-TV service since the start of the year.

DirecTV, the No. 1 U.S. satellite TV provider, revealed its first ever quarterly customer losses, with some 52,000 homes dropping the service in the second quarter. That was more than analysts expected from a company long seen as the best run video provider in the industry. Time Warner Cable, the No. 2 cable provider, said it lost more subscribers than analysts expected with 169,000 customers leaving the service. While a small percentage of Time Warner Cable company's 12.3 million total customers, this is a 10th straight quarter of customer losses. "Basic video subscriber losses aren't getting better," said Bernstein Research analyst Craig Moffett of Time Warner Cable. He said in a client note that the company had done all right overall but "it is hard to shake the perception of an opportunity lost." The biggest U.S. TV distributor, Comcast, lost 176,000 video subscribers, which was considered an improvement as the rate of losses was better than recent quarters. Of the big four distributors, Dish Network, the other major satellite provider, said it lost just 10,000 subscribers, also considered an improvement. The newer entrants to the TV market -- Verizon Communications' FiOS TV and AT&T's U-verse -- added 275,000 customers during the quarter.

Peter Kafka of the Wall Street Journal counters: If you want to evaluate the state of the pay TV business, you have to include the results from the telco guys, who have been taking share from the cable and satellite guys. And you have to look at numbers for the whole year, not a single quarter. Once you do that, you end up with numbers that are basically flat, give or take a few thousand subscribers. You can argue that the pay TV industry’s no-growth or barely-there growth is due to a weak economy and lousy household formation numbers. Or you can argue that it’s because people really are swapping out pay TV for Netflix, Apple TV, etc. Or a mix of both, or whatever. But for now, at least, you can’t argue that the pay TV industry is shrinking.

I was honored to represent the Federal Communications Commission at the White House’s observation of the Americans with Disabilities Act’s (ADA) 22nd anniversary. The Commission joins the White House in celebrating the progress that the ADA and other nondiscrimination laws have made in creating new opportunities for people with disabilities to have access to, among other things, jobs, health care, communication, education, and transportation.

My remarks at the event highlighted 4 areas of accomplishment by the Commission:

1. Adoption of rules (in April 2011) and the launching (on July 1, 2012) of the National Deaf-Blind Equipment Distribution Program, which sets aside $10 million annually from the Telecommunications Relay Service Fund for the nationwide distribution of communications equipment to low income people who are deaf-blind.
2. Adoption of rules (in August 2011) requiring video description to be provided on approximately 4 hours of prime time or children’s television programming each week by local TV station affiliates of ABC, CBS, Fox, and NBC in the top 25 TV markets, as well as on the top 5 non-broadcast networks, i.e., Disney, Nickelodeon, TBS, TNT, and USA. These rules went into effect on July 1, 2012.
3. Adoption of rules (in October 2011) requiring advanced communications services (such as e-mail, instant messaging, and VoIP communications services) and the products used with those services to be accessible to people with disabilities. These rules go into effect in October of 2013.
4. Adoption of rules (in January 2012) that require closed captioned television programs to retain those captions when these are re-shown via Internet protocol. The implementation schedule for these rules begins September 30, 2012.

[Karen Peltz Strauss, Deputy Bureau Chief, Consumer and Governmental Affairs Bureau]

Over the last three years savvy business interests managed to water down a bill to beef up America's cybersecurity – and then Aug 2 it drowned. Key industries played one chamber against the other and one party against the other, knowing precisely where to toss their monkey wrenches.

What they did not do: race to self-regulate to appease Congress the way industries in the crosshairs usually do — a sign that they believed they'd win in the end. A powerful coalition of industries — energy, financial services, technology and others — saw trouble brewing in the Senate, where a tough bill would have forced new digital standards at power plants, water systems and other key sites. So they turned to the House, where a friendly Republican majority passed a bill with voluntary new rules. Eventually the Senate followed suit with voluntary rules of its own. But then the Chamber of Commerce swooped in and said even the voluntary standards were too heavy-handed.