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Companies like Time Warner Cable and Cablevision buy the rights to beam channels to customers’ television sets. But do those rights extend to iPads?
That question has divided the television industry in recent weeks, ever since Time Warner Cable started streaming several dozen TV channels to customers’ iPads. Immediately, channel owners like Viacom and Scripps Networks seized on the streaming capability as a contract violation — in part because they want cable companies to pay them more for the privilege to stream. Legal threats were made last week, and the dispute was brought into public view on Monday when Time Warner Cable introduced a Web campaign that promoted “more freedom to watch on more screens” and asked, “Why do some TV networks want to take it away?” The television industry is, in effect, joining book publishers in being unsettled by the iPad and the new era of tablets. There is little doubt that people will be watching more TV on tablets in the future. What is undetermined is whether people will be watching through an application provided by their cable company, an individual channel’s app, or through a paid service like Netflix.
Dispute Over Time Warner Cable’s Streaming to iPad Bursts Into the Open
This isn't a joke. The buzz from California is that it just may be time to try another AOL-Time Warner.
That $164 billion merger disaster defined a decade of thoughtless deal making, reckless ego and vaporous "synergy." But for Hollywood executives and bankers now toting their iPads like baby blankets, the new technology has brought them back to an old conversation about "content" and its distribution. Just as cable-television upended the distribution of films and television, so too are increasingly mature digital platforms like 20 million-customer Netflix or even Google's YouTube. As these platforms spar with cable-operators and media conglomerates for consumer attention, they are finding it increasingly necessary to differentiate themselves. That means having better movies, better television series, better comedy clips, and even better news to compete against the likes of Comcast and Time Warner. That means traveling so far into the new realms that you end up back at the old: A strategy to marry the newest Internet distribution with the highest-quality old-line entertainment. Just weeks ago, Time Warner began renting its movies, including the "Harry Potter" series, over Facebook. The old-line media companies are trying mightily to defend their turf, whether it is Comcast's purchase of NBC Universal, or the Hulu streaming video service, which was founded by old-media hands, including News Corp., which owns The Wall Street Journal. But eventually, the theory goes, the new dogs will take the next big bite: A full-on deal in which an Internet player like Netflix or Amazon.com will acquire a news organization, studio or TV-production house. Imagine Google grabbing the New York Times, or Facebook buying its own entertainment arm.
Time for a Sequel to AOL-Time Warner?
Growing from a scrappy underdog to one of the biggest technology companies on the planet with a huge base of loyal fans, Apple Inc. is looking for even more friends — this time in Washington.
The company, with a market value greater than that of Microsoft, Google or Hewlett-Packard, is increasingly evolving from a computer maker into a multi-product international powerhouse and a major force in the entertainment and publishing industries. But Apple's aggressive exploitation of its immensely popular iPhone, iPad and sprawling online marketplace for music and digital applications has raised the eyebrows of regulators and lawmakers, who worry the company's dominance might stifle competition. Since its dramatic growth began in 2003 — the value of its shares has skyrocketed to more than $300 billion from $2.5 billion — the company has more than tripled its federal lobbying expenses to $1.6 million last year. In February, the company boosted its forces by hiring the high-powered Washington lobbying firm of Fierce, Isakowitz & Blalock. And Apple Chief Executive Steve Jobs has met with President Obama twice in the last five months, unusual forays into the political arena for the company's co-founder. Those moves help Apple make its case to policymakers and regulators on issues that affect it, as well as help the company learn about potential problems and pending legislation before they become public.
Tech Goliath Apple Has David Mindset in DC
Ham radio enthusiasts nationwide are concerned about a bill in Congress that they say would limit their ability to help in disasters and emergencies. Rep. Pete King (R-NY), chairman of the Homeland Security Committee, introduced legislation last month to reallocate some radio frequencies now used by ham radio to first responders responsible for public safety.
To offset lost revenue from that change, the bill includes a provision that would allow the 420-440 MHz frequencies currently provided free to amateur radio to be auctioned off. Those frequencies are used not just by hobbyists but also by hundreds of thousands of Amateur Radio Emergency Service volunteers and severe-weather spotters working with National Weather Service.
Ham radio operators concerned about losing band
[Commentary] MetroPCS is the first Internet service provider to be hit with a network neutrality complaint.
The complaint is in response to the ways the company deals with its own limitations:
First, the $40 per month price tag extends a fat discount. Unlimited everything can cost $120 on faster networks.
Second, it has also deployed new 4G technology, offering both a $40 tier similar to the 2G product (no video streaming), but also a pumped up version with video streaming, VoIP and everything else – without data caps – for $60 a month. Of course, this network has far larger capacity and is much zippier (reliable at 700 kbps). PC World rated the full-blown 4G service “dirt cheap”.
Third, to upgrade the cheaper-than-dirt 2G experience, MetroPCS got Google – owner of YouTube – to compress their videos for delivery over the older network. This allowed the mobile carrier to extend unlimited wildly popular YouTube content to its lowest tier subscribers.
Busted! Favouring YouTube is said to violate neutrality. The business plan contains differences that “lack any engineering merit”, and the option for consumers to access more content for a higher price irrelevant. Free Press asks, “What if that $60 unlimited plan were $100? What about $600?” The carrier responds that its customers really like YouTube and that they have no financial interest in the matter by making their subscribers happier. The Federal Communications Commission has already erred. Innovators such as MetroPCS and Google should need no defence in supplying customers’ superior choices. Neither consumers nor the Internet are “protected” by rules hostile to co-operative efforts – even if money were to pass between firms – that expand outputs and lower prices. If the FCC is to take such ill-targeted attacks on competitive rivalry seriously, it will do far more to deter the open Internet than to preserve it.
FCC network neutrality rules and efficiency
[Commentary] The economics of cable and satellite TV more or less dictate that you buy content by subscribing to the basic service and paying extra -- sometimes a lot extra -- to get packages of programming that include shows you want to watch.
Thanks to this system, it's not uncommon for people's bills to exceed $100 a month. But in the age of Internet streaming, this model seems archaic. It's no longer necessary for companies like Comcast, Dish Networks or Time Warner Cable to serve as gatekeepers. In theory, we should be able to access any content we want directly over the Internet without having to subscribe to premium channels. Netflix, Hulu, Amazon and other Internet content aggregators offer a somewhat similar -- but I think better -- model. Like the premium TV channels, you have to pay for programming you don't necessarily want to watch. Most individuals are likely to sample only a tiny fraction of the tens of thousands of movies and programs available on Netflix. But because it's an on-demand streaming service, you can watch what you want when you want to watch it. For me, that is a lot more satisfying than watching premium content on cable or satellite.
Netflix and others are changing the way we pay for video
A Federal Communications Commission source says that the government has exhausted its requests for extensions on the filing deadline for asking the Supreme Court to review the Fox profanity decision, but also says that the Solicitor General (SG), with which the FCC has been consulting, still hasn't decided whether to appeal.
In addition, on March 25, the SG asked the Supreme Court for a month extension -- its first -- on the April 4 deadline, on whether to appeal that Jan. 4 decision, according to a lawyer familiar with the case. The SG, which argues government agency appeals before the High Court, has so far sought and gotten, at the FCC's request, the two extensions to the initial Feb. 20 filing deadline for the Fox appeal. The FCC has clearly signaled it needs some help from the courts in order to start acting on indecency complaints, but a spokesman would not say whether or not the FCC was backing the appeal. If the Justice Department does not appeal the Second Circuit decision, the FCC's indecency enforcement powers remain unclear, and unconstitutional in the eyes of at least one circuit. "It's difficult for the Commission to act in this area [indecency], despite a congressional mandate, until the ... case is resolved," said a senior FCC official who asked not to be identified by name. "This is a contentious set of issues in which we historically have been guided by the courts. The Second Circuit decision was so broad in scope that it leaves us little or no ability to address broadcast indecency at this time."
FCC Source: Justice Undecided On Fox Profanity Appeal
Sprint Nextel, the nation’s third largest wireless provider and a leader in advanced wireless broadband technologies, announced its opposition to AT&T’s proposed $39 billion takeover of T-Mobile USA.
The transaction, which requires the approval of the Department of Justice and the Federal Communications Commission, and will likely spark a host of hearings in the U.S. Congress, would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition. The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction.
AT&T and Verizon are already by far the largest wireless providers. If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market. The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated companies with unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete.
“Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs. “This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace. So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly.”
Bill Barloon, Sprint's top congressional lobbyist, suggested Tea Party Republicans may bristle at the proposed mega-merger: "An important part of the Republican Party ran as anti-Wall Street, anti-large government, and anti-large corporation. They represent Main Street America and they know a lot of investment bankers are going to make money on this transaction. So, hopefully they will be receptive to our message."
In the wake of Sprint’s firm resistance Jim Cicconi, AT&T's chief of public affairs, told his competitor to mind its own business. “Rather than becoming distracted by challenging the business strategies of others," Cicconi, "we have always found that the most constructive course is to focus on our own strategies for serving our customers and building our business.”
Sprint Opposes Proposed AT&T Acquisition of T-Mobile USA Tea Party a natural opponent to AT&T deal, Sprint says (The Hill) AT&T Fires Back at Sprint (Politico)
JPMorgan Chase & Co.’s decision to be the sole lender on a $20 billion loan to AT&T is a “credit negative” for the bank and may encourage other lenders to take on more risk, Moody’s Investors Service said.
“JPM’s large AT&T commitment highlights how the risk profile of a capital markets business can change quickly,” analyst Sean Jones wrote in a research note. JPMorgan is the lone underwriter on the bridge loan to AT&T in its $39 billion bid for Deutsche Telekom AG’s U.S. wireless unit T-Mobile USA Inc. Moody’s called the deal a credit negative for JPMorgan’s corporate debt because it shows the bank’s willingness to finance riskier deals to win a spot as an adviser on the acquisition. Even by JPMorgan’s standards, the loan is big at 17 percent of the New York-based bank’s Tier 1 common equity as of Dec. 31, Moody’s said. It’s rare for a loan of that size to be concentrated at a single bank, according to Moody’s.
Moody's says JPMorgan's $20 Billion Loan to AT&T for T-Mobile Deal "Credit Negative" JPMorgan Taking Chances With AT&T Loan, Moody's Says (National Journal) Moody’s raises alarm over $20bn loan to AT&T (Financial Times)
If the merger of AT&T and T-Mobile is approved, T-Mobile USA's employees — who are not unionized — will become part of the Communications Workers of America (CWA). Stan Wylie, executive vice president at CWA Local 7800, near T-Mobile's hometown, said the merger may increase CWA's political clout. Thousands of local employees could become CWA members if the deal with AT&T is approved. "We know there are a lot of T-Mobile employees here who are looking forward to being represented, so we're looking forward to that," Wylie said.
AT&T merger could swell ranks of Communications Workers of America