June 2014

OWNERSHIP

AT&T/DIRECTV AT SENATE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The AT&T/DirecTV deal got a bit rougher treatment at the hands of both witnesses and legislators in the Senate antitrust subcommittee's hearing on the deal. From the outset, Subcommittee Chairman Amy Klobuchar (D-MN) set the tone. “We’re not here to judge whether the merger is better for the bottom lines of these two companies or their shareholders, we’ll leave that to Wall Street,” Chairman Klobuchar said in her opening statement. "What we’re here to do is to make sense of what it will mean for consumers across the country,” Chairman Klobuchar said. She had questions about the deal's size and impact on programming and over-the-top video competition. Sen. Richard Blumenthal (D-CT) said he has problems with the deal. Sen Al Franken (D-MN) said that when AT&T had promised to offer standalone broadband as part of the deal to buy BellSouth back in 2006, AT&T did not promote that option, but instead "hid" the offering. Sen Franken said that sounded like a promise not kept. AT&T CEO Randall Stephenson did not respond to that characterization, though during a House hearing on the deal earlier in the day, he said a blogger's characterization that AT&T had not fulfilled all its promises in that BellSouth deal was patently untrue.
benton.org/node/189299 | Broadcasting&Cable | NYTimes | WSJ | USAToday
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AT&T: BUYING DIRECTV WOULD CUT OUR COSTS -- BUT PROBABLY NOT YOURS
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Could an AT&T merger with DirecTV result in savings for consumers? Senate lawmakers pressed the two companies' chief executives on that question. But although both firms said that the acquisition would lower their operating costs, consumers wouldn't likely see those savings reflected in their monthly bills immediately, if ever. The most that TV viewers can expect right now, said AT&T chief executive Randall Stephenson, would be that prices simply rise less quickly. That didn't seem very comforting to members of the Senate Judiciary Committee, who kept asking variations of the same question in an attempt to secure a commitment by AT&T to price relief. AT&T expects the DirecTV deal would eliminate the need for both companies to seek profits on the products they each sell to consumers separately. That would give AT&T greater bargaining leverage with content companies. AT&T might be able to save as much as 15 percent on programming costs, said Stephenson. But citing complexities in the programming industry, Stephenson stopped short of predicting any effects on consumers' bills.
benton.org/node/189220 | Washington Post
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AT&T SAYS MERGING WITH DIRECTV WOULD HELP IT CHALLENGE COMCAST. BUT HOW?
[SOURCE: Washington Post, AUTHOR: Brian Fung]
[Commentary] AT&T hit Capitol Hill to sell Congress on its proposed merger with DirecTV. Among its arguments? If the merger goes through, we can go head-to-head with Comcast. AT&T's case boils down to two arguments when it comes to challenging Comcast: A bigger AT&T will lower programming costs and offer a more efficient bundle of services. Testifying before a House subcommittee, AT&T chief executive Randall Stephenson dropped a fascinating statistic. He claimed that for every dollar the company makes off of its video subscribers, $0.60 goes straight to the people who make the content. In other words, 60 percent of AT&T's video revenue turns right around and leaves. This brings us to AT&T's second argument, which is that a DirecTV merger would promote cheaper bundles. AT&T took aim at what it and DirecTV called a "synthetic bundle" — taking, for example, broadband from one company, combining it with video from another, and then selling that as a package to consumers. Because AT&T and DirecTV each have to visit a home to make two separate equipment installations for the synthetic bundle to work, that drives up costs.
benton.org/node/189185 | Washington Post | Reuters
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AT&T’S MERGER BID GETS WARM RECEPTION IN HOUSE
[SOURCE: The Hill, AUTHOR: Julian Hattem]
Members of Congress gave a warm reception to AT&T’s $49 billion proposal to buy DirecTV and suggested regulators should let the deal proceed. Executives from the TV and Internet companies told lawmakers that they need to combine in order to stay competitive with rivals such as Comcast and Verizon, and members from both sides of the aisle seemed to agree. Rep Hank Johnson (D-GA), the ranking member on the House Judiciary’s Antitrust subcommittee, said “the bulk of the evidence demonstrates that each company primarily serves different markets with different services,” which should protect them from fears about antitrust violations. “Although the proposed merger represents a concerning trend towards industry consolidation, there is ample evidence that this transaction would create considerable public-interest benefits,” he said. Judiciary Chairman Bob Goodlatte (R-VA) indicated that federal regulators ought to butt out and let the merger move forward. “It has been demonstrated repeatedly that a free and competitive marketplace yields lower prices, greater innovation, increased investment and better services,” he said. “We should strive to ensure that proposed transactions result in enhanced competitive marketplaces so that the attendant benefits continue to run to consumers.” AT&T and DirecTV executives faced members of the House and will then head to a follow-up in the Senate later.
benton.org/node/189183 | Hill, The | Multichannel News | Revere Digital
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STRONGER UNION COULD BE KEY IN AT&T MERGER
[SOURCE: The Hill, AUTHOR: Julian Hattem]
AT&T’s $49 billion plan to buy DirecTV could strengthen the company’s union, a move that is getting Democratic nods of approval on Capitol Hill. “This transaction presents substantial opportunities for labor standards,” Rep Hank Johnson (D-GA) said in a hearing on the planned merger. “I know everybody doesn’t agree that that is something that is worthy, but I think that is very worthwhile.” “Given the television industry’s famous reputation for opposing organized labor, this merger would have transformational benefit for thousands of employees in this industry, giving labor a strong foothold in the industry,” added Sen Johnson, the top Democrat on the House Judiciary subcommittee on antitrust. AT&T currently has the largest full-time, private union in the United States with 41,000 members. If regulators allow the phone and Internet company to buy DirecTV, that option would extend to the satellite TV firm's 16,000 employees. “We have a long history of working with our union members and collective bargaining,” AT&T Chairman Randall Stephenson told lawmakers. “So with DirecTV, you should assume that DirecTV employees will be offered that same option to collectively bargain or not," he said. "That will be their choice.”
benton.org/node/189181 | Hill, The
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SENS RAISE COMCAST/TWC HEARING CONCERNS WITH FCC, JUSTICE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen Amy Klobuchar (D-MN) and Mike Lee (R-UT) the chair and ranking members of the Senate Antitrust Subcommittee, respectively, have written the Federal Communications Commission and Justice Department to highlight concerns raised in the parent Senate Judiciary Committee's marathon April 9 hearing on the proposed Comcast/Time Warner Cable merger. Among the issues they wanted the agencies to consider in their vetting of the deal was the combined company's share of the broadband video market. "A key element of any analysis of this merger will be the impact it will have on innovation in the markets for Internet and video and, in particular, any impact it may have on the development of online video distribution," they wrote in the letter to FCC chairman Tom Wheeler and William Baer, assistant attorney general for antitrust. Sens Klobuchar and Lee also relayed concerns from the hearing about the deal's reduction of the number of potential outlets for traditional video programming, and its potential to raise prices by raising its rivals' costs. "Because this transaction will materially increase the buying power of the largest buyer in the market for programming, it is important for your agencies to carefully assess the impact of this transaction on the ability of viable content providers of all types to obtain distribution of their content," they wrote. Sens Klobuchar and Lee's last point was about the potential to raise prices for must-have content, including regional sports networks.
benton.org/node/189167 | Broadcasting&Cable
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JOINT STATEMENT OF COMMISSIONERS AJIT PAI AND MICHAEL O’RIELLY ON THREE MORE TV STATIONS GOING DARK UNDER THE FCC’S NEW JSA POLICY
[SOURCE: Federal Communications Commission, AUTHOR: FCC Commissioner Ajit Pai, FCC Commissioner MIchael O'Rielly]
As a result of the Federal Communications Commission’s crackdown, and after more than 58 years of providing service to Central Nebraska and Northern Kansas, KHAS in Hastings, Nebraska went dark on June 13. That same day, KNDX in Bismarck, North Dakota and KXND in Minot, North Dakota also went off the air because of the Commission’s decision. Before the Commission’s restriction on JSAs, agreements were in place to save these three stations: KHAS, an NBC-affiliate, was slated to be purchased by Excalibur Broadcasting; and, KNDX and KXND, FOX affiliates. These transactions, however, were blocked by the Commission’s new rules prohibiting the use of JSAs in these markets. So what has the Commission’s JSA crackdown yielded? Gray Television’s KMOT is now serving as the NBC affiliate and FOX affiliate for Minot through its use of multicast channels, while KXND has gone out of business. And that is not all. Gray Television has also announced that three more stations -- KXJB in Fargo, North Dakota; KAQY in Monroe, Louisiana; and KJCT in Grand Junction, Colorado -- will soon go dark because of the Commission’s JSA restrictions. Their programming will be transferred to Gray stations in those markets. As a result, Gray Television will earn a greater share of local advertising revenue in Hastings, Bismarck, Minot, Fargo, Monroe, and Grand Junction than would have been the case with the JSAs that were originally proposed. Are these the victories for competition that critics of sharing agreements were hoping to see? Or has the real goal all along just been to drive television stations off the air?
benton.org/node/189179 | Federal Communications Commission | B&C | The Hill
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HACHETTE BUYS PERSEUS
[SOURCE: New York Times, AUTHOR: Leslie Kaufman]
Hachette Book Group is bulking up and diversifying, steps that could improve its long-term negotiating position with Amazon, the giant online retailer. Hachette has agreed to acquire the Perseus Books Group, the country’s sixth-largest trade publisher. Michael Pietsch, Hachette’s chief executive, said that the deal was part of Hachette’s “strategic long-term plan to grow in the US market,” and was not related to its monthslong standoff with Amazon over e-book pricing. Still, the acquisition could provide Hachette more leverage in its negotiations with Amazon because it will give the company control over more attractive books.
benton.org/node/189297 | New York Times | WSJ
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INTERNET/BROADBAND

MAYORS STRONGLY BACK NETWORK NEUTRALITY
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
The National Conference of Mayors has approved a resolution supporting Federal Communications Commission’s network neutrality rules and calling for "comprehensive nondiscrimination" -- no paid priority -- to be a "key principle" in any FCC rulemaking creating new rules. That came in a resolution--among 261 pages worth of them--adopted at their annual meeting in Dallas, which ended on June 23. They mayors also called on the White House and Congress to back the FCC, and the latter, if necessary, to "enshrine access to a free and open Internet and give the FCC a clear mandate." As for paid prioritization, which has become a hot-button issue for the FCC's proposed new rules and their "commercially reasonable" standard for allowing some types of discrimination, the mayors were clearly supportive. The mayors also added their support to FCC Chairman Tom Wheeler's plan to preempt state laws that impede municipal broadband, saying they were a "significant limitation" to competitive broadband.
benton.org/node/189165 | Multichannel News
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CONTENT

GOOGLE'S SECRETIVE UPDATES LEAVE SMALL SITES SCRAMBLING
[SOURCE: CNBC, AUTHOR: Ari Levy]
Whether you're a start-up, family-owned, or publicly traded, there's danger in letting your business rely too heavily on Google search for site traffic. One morning in May, Linda Stradley woke up to find her online recipe and cooking business in crisis. The number of visitors to the site, which had reached around 5 million a month, was suddenly down by 44 percent, cutting ad earnings by 56 percent. Google periodically, and without notice, upgrades its service to push spammy websites and content farms lower down in search results. The goal is to create a better Internet, where users are more likely to find the best and most relevant websites based on their search terms. Google said the latest algorithm change, announced in a tweet from the head of its webspam team on May 20, would affect about 7.5 percent of English queries that are noticeable to users. While the updates are targeted at bad actors, for people like Stradley, who aren't trying to game the system, they can be devastating. At 72, Stradley works at least eight hours a day and relies on the income from her website and its more than 3,000 pages. In trying to rebuild her position on Google, she's working with a software consulting firm to migrate her ancient program to WordPress and improve her search engine optimization (SEO). She says the costs will be in the tens of thousands of dollars. Whether in food, travel, personal finance or e-commerce, any website that needs to be discovered needs Google. The company controls 68 percent of the US search market, according to ComScore, and reeled in more than $50 billion in advertising sales in 2013. Sites like Stradley’s whatscookingamerica.net use Google's ad-serving technology and share revenue with the search engine. Google has made over 890 such improvements in 2013, Jason Freidenfelds, a company spokesman, said.
benton.org/node/189145 | CNBC
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SMALL LABELS AND YOUTUBE
[SOURCE: New York Times, AUTHOR: Ben Sisario]
Anxiety about competition and fairness in the digital marketplace runs deep in the independent sector of the music industry. Small labels complain that consolidation by the major record companies has left them squeezed in negotiations with the online music services that now account for a majority of their revenue. Executives and advocates for the indies say they are vulnerable to strong-arm tactics by Internet giants like YouTube, which has recently threatened to block some labels’ videos unless they sign new licensing deals.
benton.org/node/189295 | New York Times
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STUDY: TEENS ARE NOT FLEEING FACEBOOK
[SOURCE: AdWeek, AUTHOR: Garett Sloane]
Who says Facebook doesn’t still have its youth? Almost 80 percent of teens are there, and they are more active on the social network than any other, according to a new survey of 12- to 17-year-olds. Forrester's popularity poll -- taken in the US -- also found that Google+ actually registers with teenagers more than Pinterest and has an adoption rate similar to Twitter’s. "There is a yawning gap between the reality of social usage and what is commonly reported," said Nate Elliott, a researcher at Forrester. The report, polling 4,517 US teens and tweens, also had this to say:
Only 20 percent of teens are on WhatsApp.
About 40 percent are on Snapchat.
Google+ and Twitter show close to the same level of youth adoption at just more than 40 percent, higher than Snapchat.
Tumblr, Vine and Pinterest all had about 30 percent adoption among teens.
YouTube had the highest adoption at more than 80 percent.
Facebook and Instagram had the highest percentage of hyperusers -- the portion of monthly visitors who are there “all the time.”
Snapchat, YouTube and Twitter were the next closest in terms of hyperusage.
benton.org/node/189284 | AdWeek
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DIVERSITY

WHERE ARE THE WOMEN? THE PRESENCE OF FEMALE COLUMNISTS IN US OPINION PAGES
[SOURCE: Journalism and Mass Communications Quarterly, AUTHOR: Dustin Harp, Ingrid Bachmann, Jaime Loke]
Empirical and anecdotal evidence shows that the news media are male-dominated. This study updates the extant literature on women’s representation in the op-ed pages of ten US newspapers. A content analysis showed that female authors are moving beyond topics traditionally linked to females and are writing columns on topics such as politics and economy. However, they remain a minority, and, thus, women’s voices have yet to gain more visibility in the world of opinion writing in US journalism.
benton.org/node/189149 | Journalism and Mass Communications Quarterly
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EMERGENCY COMMUNICATIONS

STATEMENT OF FCC COMMISSIONER AJIT PAI REGARDING THE ONGOING INQUIRY INTO CONSUMERS’ ABILITY TO REACH EMERGENCY PERSONNEL WHENEVER THEY DIAL 911
[SOURCE: Federal Communications Commission, AUTHOR: FCC Commissioner Ajit Pai]
Earlier this year, I started an inquiry to determine how we can ensure that whenever someone dials 911 from a hotel, motel, or office building, he or she can reach emergency personnel. Like many others around the country, I was moved to act when I learned about the tragic death of Kari Rene Hunt Dunn in Marshall, Texas. My inquiry began with our nation’s hotel industry. In March, I reported my initial findings regarding the status of 911 calling at lodging properties and the steps the industry is taking to ensure that someone who dials 911 will reach emergency personnel directly. Now, there is more news to share regarding the lodging industry’s efforts. For instance, when I launched this inquiry, the Wyndham Hotel Group reported that only 80% of its owned and managed properties allowed direct 911 dialing. Since then, Wyndham reconfigured the telephone systems at the remaining 20% of its properties, and it now reports that every one of its owned and managed properties allow direct access to 911. Similarly, Hyatt initially reported that only 75% of its managed properties allowed direct 911 access, but it now reports that it provides this functionality at 99% of those properties and expects to reach 100% within a few weeks. I applaud these efforts. I also expanded my inquiry beyond the lodging industry back in March because this isn’t just an issue for hotels. In light of the data I’ve gathered from the multi-line telephone systems (MLTS) and lodging communities, I now have a better sense of the scope and nature of the direct dialing issue. And the bottom line is this: There does not appear to be any technical reason why modern MLTS systems can’t allow direct access to emergency personnel. And it shouldn’t cost much to eliminate any access code requirement for existing systems, although it may require technical expertise and coordination with MLTS manufacturers or vendors.
benton.org/node/189286 | Federal Communications Commission
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Analysis

June 2014

US may extend some privacy rights to Europeans

Amazon responds to German antitrust complaint, says it wants a larger commission on e-books

June 25, 2014 (AT&T and DirecTV Visit Congress)

AT&T/DirecTV Gets Hotter Seat In Senate

Hachette Adds Heft to Combat Amazon

Small Music Labels See YouTube Battle as Part of War for Revenue

Net neutrality advocates 'occupy' Google

Google Play Emerges as Powerful Weapon for Internet Giant

Dodgers aren't doing enough to end broadcast blackout