December 2012

FCC Moving the Wrong Way on JSAs

[Commentary] The word I'm getting out of the Washington is that the Federal Communications Commission may prohibit the formation of new virtual duopolies through joint sales agreements and give broadcasters two years to unwind existing ones. That's the wrong way to go. It should be relaxing the rules to allow more combos or at the very least grandfathering the existing ones.

The foes of media consolidation are correct in saying the duopolies reduce the number of independent voices, but those voices are fading away anyway. The could take the advice that Sinclair General Counsel Barry Faber gave when he visited the FCC this week: just punt. In a new and separate proceeding, the FCC could build its own database of duopolies and virtual duopolies and do a serious analysis of their impact on broadcasters and their viewers. But if the FCC is determined to crack down on the virtual duopolies, it should at the very least grandfather the existing combos and avoid a major disruption in the industry and the likely devaluation of publicly traded, duopoly-heavy groups like Nexstar and Sinclair.

Sprint Is Said to Suggest Dish Partnership

Sprint Nextel has approached Dish Network about a partnership that would allow the satellite-TV company to offer mobile-phone service over the carrier’s network, two people familiar with the matter said.

Under the potential arrangement, discussed in recent months, Sprint would get access to Dish’s mobile airwaves, which aren’t currently being used, the people said. The companies could then share revenue from customers who sign up for a Dish wireless service, or Dish may pay Sprint a fee to use the network, according to one of the people, who asked not to be named because they aren’t authorized to speak publicly. The deal would vault Dish into the mobile-phone market without it having to build its own network, letting the company offer wireless service to its 14 million satellite-TV customers. Dish, which publicly expressed interest in such partnerships, said it won’t make a decision on the matter until a regulatory ruling on its airwaves that may come as soon as next week.

How T-Mobile’s smartphone pricing could change the US wireless industry

T-Mobile’s decision to end phone subsidies is upending the established business and device distribution models of the U.S. wireless industry, separating the handset from the service.

It’s a model that’s thrived in Europe and other countries, but it’s one that’s failed to gain traction in the U.S. except in the prepaid market, namely because U.S. consumers like getting even the most sophisticated high-end phones on the cheap. In T-Mobile’s Value Plan customers pay the full cost of their device, either up front or in installments, or bring their own compatible handsets. In exchange, T-Mobile will offer them cheaper rates, in many cases $20 a month cheaper than it would charge for a subsidized phone plan. Do the math: that’s $480 in savings over two years, which in many cases is much more than the up-front discounts operators are offering on subsidized phones (For instance, a Samsung Galaxy S III subsidy on T-Mobile is $350 including rebate). Given that T-Mobile’s subsidized rates are already much cheaper than its major competitors, the savings from T-Mobile’s Value Plans are compounded. The repercussions of T-Mobile’s strategy will be felt far beyond the point-of-sale and monthly bill, though.

If successful, T-Mobile’s elimination of subsidies could have a huge impact throughout the U.S. mobile ecosystem, changing how we value our devices and our relationships with our carriers and handset manufacturers.

The rise of phone financing
Greater portability of handsets between carriers
Less carrier control
A larger selection of devices
Huawei and ZTE could become household names
The development of a vibrant phone resale market

NYT editor: Journalism pre-dates newspapers and will outlast newspapers

In a recent “Ask Me Anything” interview with Reddit users, the Washington bureau chief for the New York Times had some refreshingly reasonable things to say about how the web has helped improve journalism, and how the practice of journalism will survive even if newspapers don’t.

Cyber Early Warning Deal Collapses After Russia Balks

An accord involving the United States, Russia and other countries requiring that each nation provide advance warning of government cyber operations that might otherwise spark unintentional conflict collapsed after Russia dissented, U.S. officials said.

The 57-nation Organization for Security and Cooperation in Europe failed to reach the unanimous consensus needed to adopt the resolution. It was aimed at building trust and open communication to avoid cyberwar. The politically-binding agreement by the United Nations-recognized organization would have operated similarly to the way that Russia and America decades ago drew red lines to avoid nuclear war. “Russia today killed in the OSCE the first-ever set of multilateral cyber confidence building measures,” a U.S. official close to the discussions said in a statement. “These proposed transparency measures, agreed affirmatively by 54 of the 56 representatives, would have established the foundation for long-term international cyber risk reduction in the political-military field.” The official called the move a “profound reversal” of two years of constructive cooperation on cyber issues across multiple international forums, including the UN.

FCC Looks to Bring More Emergency Information to the Visually Impaired

The Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA), Congress aimed to ensure that folks with disabilities have “better access to video programming”. In the two years since the CVAA was enacted, the Federal Communications Commission has taken multiple steps to comply with that statutory direction. But one important component of “video programming” remains to be addressed: emergency information during non-news programs. Existing rules already provide that all pertinent emergency information broadcast during regular or special newscasts must include an aural component for visually impaired persons. But what about announcements broadcast outside of newscasts? The FCC has issued a Notice of Proposed Rulemaking (NPRM) looking to expand the existing rules to require that emergency information be provided aurally using the same secondary audio stream that is now used for various purposes.

ITU’s Touré: Key Treaty Issue Can Be Resolved

ITU Secretary-General Hamadoun Touré said that he believed the issue of who the WCIT-12 telecom treaties apply to -- operating agencies or recognized operating agencies -- would be resolved by the time the conference in Dubai ends next week.

The U.S. has said that is one of the key issues at the conference, which is attempting to revamp/update International Telecommunications Regulations. "There is no real contradiction with other positions," he said. "I believe that, as a negotiator, I see things in common. What is happening is that one camp tells you what it wants to see in the document, the other camp is telling you what it doesn't want to see. In reality they are saying the same thing. The discussions are ongoing, and we will see what are the issues that may be difficult for each of the two parties, and then we will come to compromises. I am sure this issue will be resolved." For Ambassador Terry Kramer's part, he has said that the U.S. is not likely to negotiate on the definition issue because of the "scope creep" of expanding the definition. "Scope creep" just about sums up the U.S. concerns about the conference in general.

FCC’s Plan for Fixing Its Political Ads Transparency Site? It Won’t Say

When the Federal Communications Commission passed a rule earlier this year to require TV stations to post political ad buying information online, public interest groups (and ProPublica) welcomed the policy as a means to get an unprecedented look at how billions of campaign dollars flow around the country. But, in practice, attempts to create a full picture of political ad spending from the TV station files exposed deep flaws in the FCC’s effort as well as spotty compliance by the stations themselves. “The reviews are abysmal,” says Campaign Legal Center Policy Director Meredith McGehee, who has been tracking the issue closely as a member of the Public Interest Public Airwaves Coalition. “The information posted has not been as helpful as expected.” Now, the commission is refusing to even talk about the future of its own transparency initiative.

NCTA's Powell: Escalating Sports Costs Could Invite Government Scrutiny

National Cable and Telecommunications Association president Michael Powell warns operators, programmers and sports leagues that they need to be careful that escalating sports rights costs don't blow up their business model and prompt government intervention.

In an interview for C-SPAN's The Communicators series, Powell was asked by Lynn Stanton of Telecommunications Reports what would happen when sports programming costs exceed the ability of consumers to subsidize them. Powell called it the "billion-dollar question." He said operators are facing the choice of either absorbing the cost, which he said they have been doing to some degree, or passing it on to consumers still trying to recover from a painful recession.

Why Your Computer is Getting Cheaper but Your Broadband Bill Isn’t

Using the most recent data from the Bureau of Labor Statistics, we compared the prices of wireline broadband to that of computers, computer software, and wireless cell phones. We also tracked those against the entire Consumer Price Index. Here’s what we found:

While the price of these other technology-driven products and services has continued to fall over the last few years—personal computer prices have dropped over 44 percent in five years—the prices for wireline broadband have mostly been flat. So why haven’t wireline broadband prices budged in recent years? The high, fixed costs of broadband means that there hasn’t been a big rise in competition among providers, according to Scott Wallsten, Vice President for Research and Senior Fellow at Technology Policy Institute. Indeed, most Americans don’t have more than two options when it comes to wireline broadband providers. In the meantime, people who don’t have broadband want it badly and the for those who do have it, it’s become increasingly indispensable. The result is that there hasn’t been much downward pressure on prices.

Benton

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