February 2014

Comcast Hit With Lawsuit Claiming Racial Discrimination

Comcast has been slapped with a lawsuit by a man who claims to have been subjected to racial discrimination while employed at the company.

In the lawsuit, filed in U.S. district court in Pennsylvania on Tuesday, Karis Rouse, identified in the suit as an African-American male, claims that he was hired as a sales representative at Comcast’s Horsham, Penn., facility in January 2010, eventually rising to sales supervisor. Rouse’s lawsuit claims that it was smooth sailing, including positive performance evaluations and praise for his work, until March 2012, when Erin Kaighn became his direct supervisor. At that point, things began to sour, the suit claims, with Kaighn treating Rouse differently than “the other Caucasian employees she managed.” While under the supervision of Kaighn, Rouse claims, he was “subjected to discriminatory treatment and treated in a disparate manner with respect to the terms and conditions of his employment because of his race.” Among the offenses, according to the suit: Kaighn placing Rouse on a Performance Improvement Plan, despite the fact that no other employees in his position had been placed on such a plan and his performance numbers were better than “some of the other Caucasian employees” who had the same position as him. The lawsuit also claims that Kaighn frequently disparaged another African-American employee under Rouse’s supervision, saying, “you can’t teach dumb” and that the employee “can’t speak English.”

Vodafone Cable Interest Complicates Possibility of AT&T Deal

The possibility that Britain's Vodafone Group will acquire cable assets in Europe is complicating a possible deal with AT&T, people familiar with the matter said. AT&T Chief Executive Randall Stephenson nodded to the concerns in a private meeting with investors at the company's Dallas headquarters, the people said. Stephenson said buying cable companies might be the right stand-alone strategy for Vodafone CEO Vittorio Colao, but it isn't what the AT&T chief would do because the wireless market is a better bet, the people said. The U.S. carrier hasn't lost interest in a deal, the people said. The development highlights the complex signaling that goes on when companies have to navigate possible deals that become public while continuing to manage their stand-alone businesses.

Could Comcast-Time Warner Cable merger go the way of TCI-Bell Atlantic?

[Commentary] On Feb 24, 1994, Verizon predecessor Bell Atlantic and John Malone's Tele-Communications announced that they had agreed to cancel a $33 billion merger agreement.

As the industry weighs the impact of Comcast's merger agreement with Time Warner Cable, I thought it would be good to take a look at what happened to the TCI-Bell Atlantic deal, and whether there are lessons from that failed merger that would be useful to consider when we gauge the prospects of Comcast closing its deal to acquire Time Warner Cable. TCI, which was the biggest US cable operator at the time, announced its merger agreement with Bell Atlantic -- one of seven Baby Bells that were created after AT&T settled an antitrust suit in 1982. Harvard Business School Professor Thomas Eisenmann describes the motivations for the TCI-Bell Atlantic deal, and why it fizzled, in a case study he published in 1999 about TCI. "The Bell Atlantic deal was motivated by a concern that the Clinton Administration would promote competition on terms unfavorable to cable. Malone and [the late TCI founder Bob] Magness felt that TCI needed a strategic partner with capital, technology, and political clout. However, the merger fell apart after Bell Atlantic's stock price declined by over 20 percent in the wake of the announcement, due in large part to shareholders' concerns that the company would cut its dividend to fund ambitious upgrade plans. Malone was also concerned that Bell Atlantic and TCI would have been forced to make unreasonable concessions to the government to secure regulatory approval for the merger," Eisenmann wrote in his TCI case study, titled "Cascading Miracles."

Comcast, Time Warner, And The Future Of The Cable Box

[Commentary] In acquiring Time Warner Cable, Comcast is obtaining a media company with a much different view of the cable box's future and the interplay between broadband Internet and cable television. While Time Warner has been willing to work with partners like Apple TV and Roku to provide cable television programming that doesn't go through actual cable boxes, Comcast's view is different.

Rather than a Roku or smart television future, it seems as though Comcast wants to essentially turn customer's cable boxes into smart devices. Much like other industry stakeholders like Twitter, Comcast is well aware that cable customers are outgrowing their cable boxes and remote controls -- and that new successor devices, like Xfinity sets and smartphone remote control apps, can capture all sorts of additional data that can then be monetized. The smart television revolution, of which Xfinity is very much a part, isn't just about offering a better viewing experience -- it's also about leveraging as much data about viewers as possible for advertisers and other parties. While companies like Amazon use every click a visitor makes to serve them with products and specialized services, cable providers haven't leveraged the data revolution to serve television viewers with customized ads yet. Comcast knows that the future belongs to the parties who can find out exactly how many seconds viewers pause their channel flipping when a show interests them--and they want to make sure it's them obtaining the data, not Roku, Google, or Apple.

Netflix is not a part of the Internet

[Commentary] The deal between Comcast and Netflix has been the subject of some thoughtful analysis of its potential implications for the broader Internet economy. But overall, the public discussion of the deal has generated more heat than light.

One source of confusion is the assumption that Netflix must somehow be an injured party here -- that it had “no recourse“ but to “capitulate” to Comcast’s demands because the ISP had it “over a barrel.” A source of confusion about the deal is a misunderstanding of the business Netflix is actually in. Netflix is not an “Internet” company. It’s business is not premised or contingent on the organization or underlying technology protocols of the Internet the way Facebook’s business is, or Google’s. Netflix is in the business of producing, licensing and distributing movie and TV content, full stop. It uses the Internet as one of its platforms for delivering that content (the US Postal Service is another), but moving bits around on the Internet is merely a necessary step to engaging in its main business of getting content in front of consumers. As for whether the arrangement with Comcast means Netflix will now get preferential treatment -- of course it does, but so what? In the content business, at least, big distributors always have preferential access to the market. That’s why indie record labels and movie studios sign with the majors for distribution. Access to the market is a function of scale and market size, and smaller distributors, by definition, don’t have those things, so they have a harder time getting their content in front of consumers. That may seem wrong, or unfair on some level. But it’s not a new phenomenon in the content business and it certainly didn’t start with the Netflix-Comcast deal.

[Sweeting is Principal Concurrent Media Strategies]

Comcast deal won't lead to Netflix price hike

Rest easy, Netflix fans -- the online video service is unlikely to jack up costs following its big deal with Comcast to boost streaming speeds. But the partnership raises big questions about the future of Internet video.

The Comcast deal is novel in that it's the first time Netflix has had to pay an Internet service provider for direct access to its network. Netflix already connects directly for free with some smaller ISPs like Cablevision, as well as a number of international providers. Dan Rayburn, an analyst with Frost Sullivan, says the agreement will save money for Netflix, since it can now cut out the middlemen and deliver to Comcast directly. Other analysts are skeptical of that claim, but are still confident there won't be a big impact on consumers.

IT Reform Bill Passes House

The House passed, on a voice vote, a bill to reform how the government builds and buys information technology systems. Similar legislation is awaiting a hearing in the Senate.

The Federal Information Technology Acquisition Reform Act would limit each federal agency to one person with the title chief information officer and give that person authority over the agency’s IT spending. It would also create centers of excellence across government to assist with complicated IT acquisitions and require the government to publicly post performance metrics on a much greater percentage of its IT projects. The legislation, sponsored by Reps Darrell Issa (R-CA) and Gerry Connolly (D-VA), was bolstered by congressional and public ire at the poor performance of HealthCare.gov, the Obama Administration’s online health insurance marketplace, which was largely unusable during its first two months online.

A Cord-Cutter's Lament

[Commentary] As a confirmed cord-cutter, I have four Rokus and subscriptions to Netflix, Hulu Plus and Amazon Prime. I also have an antenna on my roof that does a pretty good job with local channels, but the vast majority of my viewing--probably more than 99%--is on Netflix, Hulu and Amazon. It's not that I don't like my local channels--I just don't think about them very often. I get all the programs I need, on my own schedule, online. I do watch broadcast networks when they manage to score some kind of big-event programming. Like the Super Bowl, the Academy Awards or the Olympics. And so for the past two weeks, I've watched far more live television than usual, and I discovered something interesting and completely unexpected. I like it.

[Monroe is Co-founder and SVP of programming, Net2TV]

What the Mainstream Media Doesn't Understand About the Road to a Society without Mass Surveillance

[Commentary] Stopping and reversing mass surveillance requires a massive public response, with leaders within government, within the leading nonprofits, and at the top of industry taking part. Whether or not the anti-National Security Agency organizing will succeed remains an open question, but it can't happen overnight. All online organizing is now, understandably, frequently compared to the effort to defeat the Stop Online Piracy Act. Yet sparse media coverage of the anti-SOPA cause means people remember the protests against that bill as a one-day affair -- a blackout by major web platforms -- even though the blackout was the end of two years of organizing, privately and publicly.

FCC Announces Release Of FCC Speed Test App For iPhone

Federal Communications Commission Chairman Tom Wheeler announced the launch of the FCC Speed Test app for iOS devices in the iTunes App Store.

The FCC Speed Test app is an expansion of the Measuring Broadband America program from fixed to mobile broadband. The Measuring Broadband America program, which has released three reports on fixed broadband networks, is a private-public partnership designed to bring greater clarity and competition to the broadband service marketplace. Testing data will provide valuable information to consumers, industry, and the Commission on the deployment of networks across the United States.

Benton

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