Ownership

[Commentary] The repeal of network neutrality isn’t great news for consumers. Giant internet service providers that control their own media empires will be able to push you toward their content while serving up their rivals’ content at molasses-slow speeds. Consumers could be driven into walled content gardens where what you read and watch will be partly determined by which company provides your internet service. That’s probably bad for you. But it would be good for us.

As 2017 grinds to a halt, two media business stories promise to have a substantial impact on streaming video. 1) The Federal Communications Commission voted on Dec. 14 to overturn Obama-era regulations on net neutrality, which, simply put, prevented internet providers from playing favorites in terms of speed and bandwidth, and 2) the impending merger of the Walt Disney Company and certain major components of 21st Century Fox. 

Here are five fights the tech world will be watching closely in 2018:

1. Net neutrality
2. Election transparency
3. AT&T-Time Warner merger
4. Cryptocurrency
5. Sex-trafficking

At the end of the day, each action the Federal Communications Commission took described below has furthered Sinclair’s efforts to merge with Tribune at the expense of consumers.

Gift 1: Creating the Landscape for Sinclair to Merge by Reinstating the UHF Discount

Gift 2: Feeding Into Sinclair’s Business Model by Eliminating the Main Studio Rule

Gift 3: Sweeping Away Legal Problems With the Merger by Relaxing Media Ownership Rules

Gift 4: Giving Sinclair Benefits in the ATSC 3.0 Transition

Gift 5: Proposing to Eliminate the National Ownership Cap

For decades, Rupert Murdoch has used his media properties to establish a direct line to Australian and British leaders. But in the 44 years since he bought his first newspaper in the United States, he has largely failed to cultivate close ties to an American president. Until now. Murdoch and President Donald Trump — both forged in New York’s tabloid culture, one as the owner of The New York Post, the other as its perfect subject — have traveled in the same circles since the 1970s, but they did not become close until recently, when their interests began to align more than ever before.

AT&T and Time Warner have agreed to move the breakup date for their proposed merger until Jun. 21, 2018.  Each would have been able to terminate the deal if it had not closed by Apr. 22, 2018, but the Justice Department suit to block the deal does not begin until March 15, which would have been cutting it too close. AT&T and Time Warner informed the Securities and Exchange Commission of the change Dec. 21.

When Chad Pierce and his family bought a new house this year, they made sure of one thing: that getting Internet service wouldn't be a problem. But, Internet service wasn't readily available—and Charter wouldn't extend its network to the house unless the Pierce family paid $16,000 to cover most of the company's construction costs. The house is about 550 feet from the road, Pierce said. "Needless to say, we were pretty devastated," Pierce said.

3:04 p.m. December 20, 2017: “This just came out,” said President Donald Trump. “Two minutes ago, they handed it to me. AT&T plans to increase U.S. capital spending [by] $1 billion and provide [a] $1,000 special bonus to more than 200,000 U.S. employees, and that’s because of what we did. So that’s pretty good. That’s pretty good.” The Republican lawmakers surrounding the president applauded. The moment represented a big win for AT&T, which Trump's Justice Department is suing to block an $85 billion acquisition of Time Warner.

Google-parent Alphabet said Eric Schmidt will step down from his post as executive chairman in January and transition to a role as technical adviser. Schmidt, who joined Google in 2001 and served as its chief executive until 2011, also will continue to serve on Alphabet’s board. Google co-founders Larry Page and Sergey Brin, Google Chief Executive Sundar Pichai “and I all believe that the time is right in Alphabet’s evolution for this transition,” Schmidt said.

On the same day the Federal Communications Commission voted to repeal its 2015 network neutrality rules, the Walt Disney Company announced a deal to buy most of 21st Century Fox. The all-stock transaction is valued at roughly $52.4 billion. If approved, Disney would go from being “a juggernaut to being a megajuggernaut.” Disney hopes the acquisition of Fox’s sports and entertainment content will give it new market power in the growing online distribution market (streaming services). The FCC’s move is not unrelated.