May 2015

Now It's Official: More Google Searches Are Coming From Mobile Than Desktop

Following years of speculation about the demise of desktop-based search, Google is officially announcing that for the first time, more searches come from smartphones and tablets than from laptops and desktops. Smartphones account for more than half of searches in 10 countries -- including the US and Japan -- according to Google, which didn't release exact percentages or a full list of countries. But it is playing up mobile at its annual AdWords Performance Summit. "The purchase funnel is officially dead," proclaimed Jerry Dischler, vice president of product management at Google. "What we're seeing are these short bursts of activity that we're calling micro-moments. We see the new challenge for marketers is to be there at those moments anytime, anywhere."

The Dreaded Bundle Comes to Internet TV

[Commentary] In short, instead of the Internet killing the bundle, the bundle is coming to the Internet; it would not be surprising if, in the next year or two, half a dozen more neo-bundlers join the game. This may come as a surprise to those who expected the television of the future to resemble, say, a smartphone screen, where every channel would be roughly like an app that you subscribe to à la carte. But overestimating change in the television industry is a rookie mistake. Just why is the neo-bundle model on the rise in Internet TV? For one thing, content companies like ESPN don’t necessarily want the annoyances of dealing, like Comcast or Netflix do, with direct subscribers, who are always threatening to leave and demand that irritant known as “customer service.”

There are also some people, as we’ve said, who really do prefer to buy by the bundle -- buying kitchen knives in big sets remains very popular. But more important is the fact that selling content in a bundle nearly always yields more money for the seller. The neo-bundles are a compromise: they exist to try to maintain some of that economic advantage while also appealing to a generation of people who, when it comes to television or frankly any kind of entertainment, want to get what they want exactly when they want it -- the so-called “now” generation. Apple will release its own version of the neo-bundle in the fall. Perhaps, as with iTunes, the company will once again connect the twain cultures of Silicon Valley and Hollywood. In the meantime, the gap between the norms of the Internet and those of television, if narrowing, remains.

Acquired Content: Cable's Cornerstone

[Commentary] As the cable industry descends upon Chicago for INTX, town cars, taxis and Ubers will undoubtedly pass the Willis Tower. Where most see an obligatory sightseeing stop, I see an analogy for the programming schedule of a basic-cable network. The antennas adorning the top of this landmark skyscraper represent the pinnacle achievement of a cable network -- a showcase of highly acclaimed, attention-getting, critically-applauded original series. Like those originals, the antennas provide the building with even greater height and stature; they send a commanding signal to those in the immediate vicinity.

In today’s challenging environment we must remember that now more than ever, off-network and movie product is an integral, highly successful component of a top-rated basic-cable network. Advertisers pay for results. Off -net series and movies are proven performers with strong historical track records. Cable networks can leverage these established brands to energize their existing audiences, bring in new viewers, grow their cume distribution and provide potent launch platforms for their original series. Acquired content delivers existing mass-market appeal and powerful accumulation of episodes. These qualities give cable networks the versatility and flexibility to turn proven assets into ratings-and-revenue producing machines. The right formula of acquired content can empower, revitalize and even single-handedly drive a network up the cable ranks overnight. We’ve seen it happen time and again. As you admire the Chicago skyline, let it remind you that both famous buildings and top-ranked networks stand on strong foundations -- foundations built from proven materials. Remember that acquired content makes up 72 percent of the 4 pm-midnight programming hours across the top 10 cable networks. Acquired series and movies are the tempered steel and concrete of the top-ranked networks.

[Steve MacDonald is executive vice president and general sales manager of cables sales at 20th Television]

Top Cable Industry Guy Acknowledges People Hate Cable Guys

Two massive losses in Washington (DC) recently by the cable industry -- the adoption of network neutrality rules and the death of Comcast’s Time Warner Cable deal -- have left cable operators “highly conscious” of the industry’s image problems, National Cable & Telecommunications Association chief executive Michael Powell said. “I’m a firm believer that words and messages don’t work if you’re not liked,” Powell said at the cable industry’s annual trade show, which has been redubbed INTX, the Internet and Television Expo. Cable industry executives are “not delusional” about the complaints from consumers -- from ever-higher prices to terrible customer service -- and are working on long-term fixes to those problems, he said. Another issue that the industry isn’t particularly delusional about is the latest threat of piracy that has been introduced by video sharing apps such as Meerkat, Periscope or Vine.

Powell also said that he hates cable, the name that is, because it does not capture all that his industry has done to build out broadband. "I hate the name," Powell said. "I do think it has a proud history but I think it has to be retired in some way because I think your past can be apart of your glory but it also can be a weight around your ankle. And it also doesn't fairly capture what they do." And while he may hate the name, he loves the record of building out broadband. He said the industry had "successfully deployed the most sophisticated infrastructure in the history of the world in the fastest amount of time of any technology in the history of the world, and increased the capacity of that at exponential rates."

Netflix calls on FCC to reject AT&T merger unless changes are made

Netflix is urging federal regulators to deny the $48 billion merger of AT&T and DIRECTV unless changes are made to the proposal. The online video streaming giant made the call during a meeting with the Federal Communications Commission. "We've been highlighting these concerns and the need for appropriate remedies since last September," said Netflix spokeswoman Anne Marie Squeo. The merger with DIRECTV would make AT&T the largest provider of cable and satellite service, and could make it the largest Internet service provider as well, Netflix said. "Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats, and will exacerbate the anticompetitive behavior in which AT&T has already engaged," according to the filing.

Netflix cited previous interconnection disputes with AT&T. It said the company's purchase of a legacy video service could make it see online video distributors (OVD) -- including Netflix -- as a threat. "AT&T’s investment in a business model that profits by selling bundled programming packages will result in a powerful incentive to protect that model," the filing said. The Netflix filing used strong language, calling on the FCC to "reject the merger as currently proposed."

FCC Announces Appointment of Consumer Advisory Committee

The Federal Communications Commission announces the appointment of the thirty-seven members of the Consumer Advisory Committee, a committee to make recommendations to the FCC regarding consumer issues within jurisdiction of the FCC and to facilitate the participation of consumers (including underserved populations, such as Native Americans, persons living in rural areas, older persons, people with disabilities, and persons for whom English is not their primary language) in proceedings before the FCC. Of the thrity-seven members, 21 represent general consumer organizations/academia, two represent disability organizations, eight represent industry, four represent regulators, one represents seniors, and one represents unions.

FCC Chairman Tom Wheeler reappoints Debra R. Berlyn representing the National Consumers League as Chairperson of the Committee. All appointments and reappointments are effective immediately and shall terminate October 21, 2016, or when the Committee is terminated, whichever is earlier.

The first meeting of the Committee under its renewed charter will take place on June 12, 2015 from 9:00am to 4:00pm at FCC headquarters building.

The Committee’s roster by organization name and primary representative is as follows:
(1) AARP - Christopher Baker
(2) American Consumer Institute - Stephen Pociask
(3) American Foundation for the Blind - Paul W. Schroeder
(4) American Indian Policy Institute, Arizona State University - Dr. Traci Morris
(5) Americans for Tax Reform - Katie McAuliffe
(6) Appalachian Regional Commission - Mark Defalco
(7) Benton Foundation - Amina Fazlullah
(8) California Western School of Law, New Media Rights - Art Neill
(9) Call For Action - Shirley Rooker
(10) Center for Democracy and Technology - Chris Calabrese
(11) Center for Media Justice/MAGNET - Hannah Sassaman
(12) CenturyLink - Melissa Newman
(13) Common Cause - Todd O’Boyle
(14) Communication Workers of America - Debbie Goldman
(15) Consumer Action - Ken McEldowney
(16) Consumer Electronics Association - Julie Kearney
(17) Consumer Federation of America - Irene E. Leech
(18) Deaf and Hard of Hearing Consumer Advocacy Network - Claude Stout
(19) Digital Policy Institute, Ball State University - Barry D. Umansky
(20) Free Press - Lauren Wilson
(21) Google, Inc. - Eve Anderson
(22) International Center for Law and Economics - Geoffrey A. Manne
(23) Massachusetts Department of Telecommunications and Cable - Joslyn Day
(24) National Association of Broadcasters - Ann West Bobeck
(25) National Association of Counties - Yejin Jang
(26) National Association of State Utility Consumer Advocates - Kenneth Mallory
(27) National Association of Telecommunications Officers and Administrators - Mitsuko R. Herrera
(28) National Cable and Telecommunications Association - Stephanie Podey
(29) National Consumer Law Center - Olivia Wein
(30) National Consumers League - Debra R. Berlyn (Chairperson)
(31) National Hispanic Media Coalition - Michael Scurato
(32) New America Foundation, Open Technology Institute - Laura Moy
(33) Program on Information Justice and Intellectual Property, Washington College of Law, American University – Victoria F. Phillips
(34) T-Mobile – Luisa L. Lancetti
(35) TRAIL - Christina Gagnier
(36) Verizon Communications, Inc.- Ann Berkowitz
(37) Wireless Internet Service Provider Association - Alex Phillips

CBO Scores ALERT Act

The ALERT Act of 2015 (HR 1759) would require federal agencies to provide certain information to the public regarding proposed and final regulations. The bill would require federal agencies to submit information for a proposed new supplement to the Unified Agenda of Federal Regulatory and Deregulatory Actions (a semiannual compilation of the federal regulations under development) that would be published monthly. The office of Information and Regulatory Affairs (OIRA) would be required to post that information on the Internet on a monthly and annual basis. With certain exceptions, regulations would not be effective until six months after they have appeared in the proposed monthly report.

The Congressional Budget Office estimates that preparing the monthly supplemental reports for 3,000 to 4,000 final regulations each year would cost less than a million dollars a year, subject to the availability of appropriated funds, over the 2016-2020 period. Enacting HR 1759 could affect direct spending by some agencies (such as the Tennessee Valley Authority) because their operating costs are covered by receipts from the sale of goods, fees, and other collections. Therefore pay-as-you-go procedures apply. Because most of those agencies can make adjustments to the amounts collected, CBO estimates that any net changes in direct spending by those agencies would not be significant. Enacting the bill would not affect revenues.

Throw a Lifeline Across the Digital Divide

[Commentary] While the old adage “content is king” remains true, that content is now being provided by a flood of new entrants, along with traditional media companies. But to take advantage of new, diverse offerings, consumers need access to broadband. For too many Americans, however, broadband remains out of reach. Nearly half of adults with annual incomes of less than $30,000 do not have broadband access at home.

Today, a full three decades after the creation of Lifeline, the program still only funds voice service. It has been stuck in a bygone era since its inception and is in need of serious reform. Over the past few months, I have outlined a vision for changes that I believe are needed to usher the program into the digital era and ensure that we are meeting the statutory directive for universal service. Reforming Lifeline is not going to entirely undo the digital divide, for we need public-private partnerships to address issues other than affordability to encourage broadband adoption. But with carefully calibrated reforms and collaboration between regulators and the industry I believe Lifeline has the potential to become a much more effective tool in tackling this chronic problem. I look forward to working with National Cable & Telecommunications Association and its members to accomplish this result.

Florida ISP Uses Dark Fiber to Boost Bandwidth, Lower Costs

Florida-based Internet service provider Joytel expects to expand service and offer higher bandwidth and better pricing as the result of an agreement with Allied Fiber -- the company that set out several years ago to build a nationwide dark fiber network and now has completed the portion of the network connecting Miami (FL) and Atlanta (GA). “Allied Fiber is a game changer in terms of the economics in the telecom industry,” said Joytel CEO Mark Marques. “I’ve been looking for this product for the past 10 years.” Few network operators offer dark fiber these days. Also differentiating the Allied Fiber offering is that the company allows network operators to tap into its network at any splice point along its network route. “In Florida, they’re spaced every 5,000 feet -- less than a mile,” said Allied Fiber CEO Hunter Newby. The company also offers network operators the ability to co-locate in its regeneration sites located every 60 miles.

Do We Really Need Libraries?

[Commentary] In New York City, supporters of public libraries say that respect for -- and repair of -- the libraries is long, well, overdue. A new campaign, Invest in Libraries, puts forth that in the past 10 years, the city government has reduced funding for public libraries by nearly 20 percent and 1,000 workers or so have been trimmed from the payroll. The campaign calls on the city to increase its support in various ways, such as restoring $65 million in operating funds. But with a world of information at our fingertips -- virtually anytime, anywhere -- do we still need physical book-and-mortar libraries? After all, as New York City is reminding us, upkeep and operation costs can be expensive. And as a 1983 British conference on libraries observed, "we are a long way off producing true cost benefit data where you can assign a credible cash figure to the value of using any type of library." The answer seems self-evident. We are asking the same question more than 30 years later and many libraries are teeming with people.

As the British study pointed out, there is a lot of opportunity when reckoning with naysayers "for developing costs per benefits but we do need to spend more time establishing exactly what these benefits are." The proceedings of the 1983 conference, by the way, were titled: "" What are the benefits of libraries in this day and age? Like a good librarian, Tony Marx of the New York Public Library has some answers. Today's libraries still lend books, he says. But they also provide other services to communities, such as free access to computers and Wi-Fi, story times to children, language classes to immigrants and technology training to everyone. "Public libraries are arguably more important today than ever before," Marx says. "Their mission is still the same -- to provide free access to information to all people. The way people access information has changed, but they still need the information to succeed, and libraries are providing that." Or as Andrew Carnegie said many years ago: "A library outranks any other thing a community can do to benefit its people. It is a never failing spring in the desert."

Benton

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