September 2013

Ferrero, Cartoon Net Pledge to Limit Food Marketing to Kids

The government may not be able to regulate food marketing to children, but it may not have to. On the same day Michelle Obama used her position as First Lady to push companies to market healthier food to children, two companies joined the Children's Food and Beverage Advertising Initiative (CFBAI), the industry's self-regulatory group that sets nutrition standards for marketing food to kids under 12.

Ferrero USA, a subsidiary of the global chocolate and confectionery company, which makes such products as Nutella and Tic Tac, pledged not to advertise to children under 12. The company joins other members of the CFBAI including the Coca-Cola, Hershey, and Mars, which also do not direct ads to kids. Cartoon Network also pledged it would not license its characters to food companies unless they meet the CFBAI's nutrition standards for marketing food to kids. CFBAI's director Elaine Kolish, who spoke during the White House's "Convening on Food Marketing to Children," said the day was "inspiring" and "uplifting." In other words, food marketers did not get beat up the way they often do by food advocates. "We weren't scolded. It was a request to go further," Kolish said.

Kagan Says Retransmission Blackouts Squeeze Stocks

Stocks of both broadcasters distributors can feel the pinch of a prolonged blackout, according to a recent analysis by research stalwart SNL Kagan, but it appears that the bigger a combatant is, the better they can whether the financial storm.

In a research report, SNL Kagan noted that Journal Communications, whose six stations in Milwaukee and Green Bay (WI), Omaha (NA), and Palm Springs (CA) went dark to Time Warner Cable subscribers in those areas on July 25, the stock has dropped about 20% ($2.02 per share) to $7.30 each on Sept 16. During the same period, Time Warner stock has fallen about 4%. But Kagan noted the Time Warner decline may be more to the residual effects of a larger dispute with CBS, which was resolved on Sept 2, after the broadcaster’s owned and operated stations pulled their signal to about 3.2 million TWC subscribers in New York, Los Angeles and Dallas for one month.

Cell Phone Activities 2013

Fully 91% of American adults own a cell phone and many use the devices for much more than phone calls.

In our most recent nationally representative survey, we checked in on some of the most popular activities people perform on their cell phones and found:

81% of cell phone owners send or receive text messages
60% of cell phone owners access the internet
52% send or receive email
50% download apps
49% get directions, recommendations, or other location-based information
48% listen to music
21% participate in a video call or video chat
8% “check in” or share their location

T-Mobile, Verizon join forces on 600 MHz auction band plan

T-Mobile US joined forces with Verizon Communications to propose a band plan for the upcoming incentive auctions of 600 MHz broadcast TV spectrum. The partnership is notable in light of the fact that T-Mobile and Verizon have long been on opposite sides of the debate over the auctions, especially on whether to cap the amount of spectrum Verizon and AT&T can win in the auctions.

In a letter to the Federal Communications Commission, T-Mobile and Verizon said any band plan the FCC settles on for the 600 MHz band should satisfy four principles that they have agreed on. That includes 1) maximizing the amount of paired spectrum available for mobile broadband; 2) allowing for the cost-effective and timely development of network equipment and end-user devices; 3) facilitating a single 3GPP band class to provide interoperability across all paired blocks in the 600 MHz band; and 4) allocating for supplemental downlink use any unpaired spectrum not needed to protect 600 MHz broadband operations against interference.

SoftBank ups its Sprint stake again, now past 80 percent

A series of recent stock transactions has pushed Tokyo-based SoftBank's ownership in Sprint to more than 80 percent. SoftBank now owns 80.1 percent of the Overland Park-based wireless carrier, a Sprint spokesman said. The move is expected to give SoftBank some tax benefits beyond its $21.6 billion purchase of a 78 percent stake in Sprint in July.

France Pushes EU to Regulate US Internet Companies

France plans to push for new Europe-wide regulations and tax rules on US Internet giants when European Union leaders meet next month to discuss the bloc's digital challenges. According to documents reviewed by The Wall Street Journal, France is calling on the European Commission, the bloc's executive arm, to draw up proposals by spring 2014 aimed at "establishing a tax regime for digital companies that ensures that the profits they make on the European market are subject to taxation and that the revenues are shared between the Member States, linking the tax base to the place where the profits are made."

France also wants to regulate the main platforms for Internet and digital applications—which would include Google, Apple, Amazon, and Facebook. European governments are increasingly alarmed by the growing might of US companies in the Internet economy. France, Germany and the UK have been pushing to change tax rules that allow US Web giants to avoid paying much corporate tax in Europe. Meanwhile EU countries also have assailed US Web companies for harvesting Europeans' data for profit without proper protections—concerns that alleged spying by the US National Security Agency has only amplified. Proposals like France's—including one to study taxing "data transfers outside Europe"—have long been sought by telecoms including France's Orange SA, Telefónica SA and Vodafone PLC, who say the "over the top" companies rely on the Internet for services while paying a fraction of the tax of telecommunications companies that build the networks. The telecoms compete against voice-over-IP services such as Microsoft's Skype and Google Talk.

What is America's Broadband Agenda?

[Commentary] What is America's broadband agenda today? The desire for broadband Internet to be available to everyone wanting it is a noble and worthwhile goal, but in order to be successful it requires a set of interconnected strategies.

If we build it, they won't just come. Giving someone a device to access the Internet won't do it either. It requires a combination of infrastructure, device availability and education, in the form of digital literacy and other public awareness efforts, to get us to that goal. A recent report by Ev Ehrlich of the Progressive Policy Institute, Shaping the Digital Age: A Progressive Broadband Agenda, sets out a series of interconnected strategies for a "progressive broadband agenda" reflecting some of the nuances that are inherent in achieving the goal of meaningful Internet use for everyone in the United States. With broadband, we are looking to do what's fair and just for everyone. While it would be much easier if there were a straightforward solution, a national conversation that explores all facets of America's broadband agenda is critical.

[Christina Gagnier is an intellectual property attorney and partner at Gagnier Margossian LLP]

Cable Companies Make PPI List of Investment 'Heroes'

Comcast, Time Warner Cable and CenturyLink made the Progressive Policy Institute's list of top nonfinancial company "investment heroes for 2013”, which ranks companies from the Forbes 150 by capital expenditures on additional plant, property, and equipment over the past fiscal year. PPI called those companies bright spots in a gloomy picture, "companies that continue to place big bets on America's future, creating jobs and raising productivity in the process." Comcast leads the cable operators at $5.714 billion, while Time Warner Cable was next at $3.095 billion. CenturyLink was third at $2.919 billion.

Are Internet companies easy targets for the green movement?

Internet giants may be on the forefront of green innovation compared to behemoths in other industries like manufacturing. But what’s their motivation?

GigaOM’s Katie Fehrenbacher put that question to executives from Facebook and Switch at Structure:Europe in London. Switch EVP of data center technology Mark Thiele said that while public perception isn’t the Internet giants’ entire motivation, protecting their brands is a big factor, especially because they’re so vulnerable to criticisms from Greenpeace and other environmental groups.

Report: TV Everywhere Falls Short

Despite all the rapid growth and media attention, “cord cutters” and over-the-top (OTT) video services don’t pose a serious threat to pay-TV providers, at least not yet, says Altman Vilandrie & Co. Ominous signs are there, however, particularly when it comes to competition for fast growing mobile device viewing, according to an Altman’s annual survey of consumer viewing habits.

Less than 5% of US consumers watch online video regularly instead of subscribing to cable TV, an insignificant year over year increase, researchers said. Most of those who “cut the cord” did so for reasons of affordability or perceived value of their cable service, “not because online video was a complete substitute,” Altman Vilandrie said. While not a complete substitute, 80% of consumers under 35 now watch TV shows and movies online weekly, along with nearly half of older viewers. “Mobile device viewing is exploding with more than a quarter of people under 45 watching TV shows and movies on a tablet weekly,” according to the market research company.

Benton

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