Ownership

Discovery Communications has agreed to acquire Scripps Networks Interactive for $11.9 billion, combining two powerhouses of nonfiction television programming at a time of major upheaval in the cable-TV business. The tie-up is a bet that bigger is better as the television industry is upended by cord-cutting and the rise of “skinny” online TV bundles from the likes of Hulu, YouTube, Sling TV and others. The thinking is that a broader portfolio of channels that specialize in nonfiction and lifestyle programming like travel, food and nature could appeal to younger viewers and give the combined company a leg up in negotiations with advertisers and programming distributors.

The deal will create a must-buy network group for advertisers interested in targeting women and help the network command more premium ad rates. Of the top 20 US cable networks, the merged company will control four of the top five with the highest percentage of female viewers—TLC, HGTV, Investigation Discovery and Food Network. Discovery said it would be able to expand Scripps’s channels into more overseas markets, which could help generate significant additional revenue. The combined company is also touting its short-form video production, which will help it gain more viewers and ad dollars on social-media platforms. The deal could put pressure on other media companies, from AMC Networks to Viacom Inc., that must defend their turf on the cable dial.

As congressional Democrats rolled out their new “Better Deal” agenda for the American people, even some in their own ranks were surprised by the level of interest in the party’s new agenda on antitrust and competition policy. One reason for that is that even some members of Congress may not be aware of how significant the commitments are that Democrats are making. After all, to a casual observer/member of Congress, invocations of the interests of “workers” and “small businesses” can easily seem like boilerplate rhetoric — the mom and apple pie of economic policy. But they actually seal the deal on a significant transformation of the party’s approach to anti-trust issues, one that’s actually been building for some time. Democrats are saying, with increasing clarity, that they want to overthrow a legal paradigm that’s existed for about 40 years and which held that consumer welfare — typically as measured by consumer prices — is the sole relevant metric for making antitrust policy.

[Commentary] Legislation or regulations requiring companies to remove content pose a range of risks, including potentially legitimizing repressive measures from authoritarian regimes. Hate speech, political propaganda, and extremist content are subjective, and interpretations vary widely among different governments. Relying on governments to create and enforce regulations online affords them the opportunity to define these terms as they see fit. Placing the power in the hands of governments also increases the likelihood that authoritarian regimes that lack Germany's liberal democratic tradition will criminalize online content critical of those governments and, ultimately, create another mechanism for oppressing their own citizens.

Instead of government intervention, civil society should recognize and build upon the efforts of platforms that address these issues, while also pressing companies to step up to do even more.

[Tara Wadhwa is the associate director of the NYU Stern Center for Business and Human Rights. Gabriel Ng is a fellow at the Center]

Discovery Communications has struck a $14.6 billion deal to buy Scripps Networks, in the latest sign of consolidation in the cable TV industry. The combined group will have a wide-ranging roster of US cable channels, including Animal Planet, TLC and the Discovery Channel, owned by Discovery, and the Food Network and HGTV, owned by Scripps. Together they will have nearly 20 per cent of ad-supported pay-TV viewership in the US. The offer of $90 per share represents a 34 percent premium to Scripps’ unaffected share price as of July 18, and the companies said in a statement that they expect the deal to close by early 2018.

Software made by foreign companies to help Chinese users skirt the country’s system of internet filters has vanished from Apple’s app store on the mainland. One company, ExpressVPN, posted a letter it received from Apple saying that its app had been taken down “because it includes content that is illegal in China.” Another posted a message on its official account that its app had been removed. A search showed that some of the most popular foreign virtual-private networks, also known as VPNs, which give users access to the unfiltered internet in China, were no longer accessible on Apple’s app store there. ExpressVPN wrote that the removal was “surprising and unfortunate.” It added, “We’re disappointed in this development, as it represents the most drastic measure the Chinese government has taken to block the use of VPNs to date, and we are troubled to see Apple aiding China’s censorship efforts.”

Earlier this year, the Yale Law Journal had published a 24,000-word “note” by Lina Khan titled “Amazon’s Antitrust Paradox.” The article laid out with remarkable clarity and sophistication why American antitrust law has evolved to the point that it is no longer equipped to deal with tech giants such as Amazon, which has made itself as essential to commerce in the 21st century as the railroads, telephone systems and computer hardware makers had been in the 20th.

It’s not just Amazon, however, that animates concerns about competition and market power, and Khan is not the only one who is worrying. The same issues lie behind the European Union’s recent $2.7 billion fine against Google for favoring its own services in the search results it presents to its users. They are also at the heart of the long-running battle in the telecom industry over net neutrality, and the ability of cable companies and Internet service providers to give favorable treatment to their own content. They are implicated in complaints that Facebook has aided the rise of “fake news” while draining readers and revenue from legitimate news media. They even emerge in debates over the corrupting role of corporate money in politics, the decline in entrepreneurship, the slowdown in corporate investment and the rise of income inequality.

LinkedIn may very well succeed in its effort to stop a San Francisco (CA) startup from using the data of its members. But the Sunnyvale (CA) company, now a division of Microsoft, has certainly lost the moral high ground. In fact, the job-hunting and networking site is guilty of blatant hypocrisy. HiQ Labs makes software that analyzes data from public LinkedIn profiles to help employers determine which workers are likely to leave or stay. But at a hearing at U.S. District Court in San Francisco, lawyers representing LinkedIn argued that HiQ was causing significant harm to its business because members expected LinkedIn to protect their privacy. LinkedIn’s most valuable currency is “trust with customers,” said Donald Verrilli, a partner with Munger, Tolles & Olson law firm in Washington. That sounds very noble. But the very idea of a social media giant serving as the champion of privacy rights seems suspect. When a service tells you it’s free, that means it’s making money another way. And more likely than not, you’re the product.

[Commentary] Microsoft recently made a Very Serious Announcement about deploying unused television airwaves to solve the digital divide in America. News outlets ate it up. Here's what's really going on: Microsoft is aiming to be the soup-to-nuts provider of Internet of Things devices, software, and consulting services to zillions of local and national governments around the world.

Microsoft doesn't want to have to rely on existing mobile data carriers to execute those plans. Why? Because the carriers will want a pound of flesh—a percentage—in exchange for shipping data generated by Microsoft devices from Point A to Point B. These costs can become very substantial over zillions of devices in zillions of cities. The carriers have power because, in many places, they are the only ones allowed to use airwave frequencies—spectrum—under licenses from local governments for which they have paid hundreds of millions of dollars. To eliminate that bottleneck, it will be good to have
unlicensed spectrum available everywhere, and cheap chipsets and devices available that can opportunistically take advantage of that spectrum.

[Susan Crawford is the John A. Reilly Clinical Professor of Law at Harvard Law School.]

New legislation introduced by Reps David Price (D-NC) and Jared Huffman (D-CA) would protect local television markets across the country from corporate consolidation by permanently ending the so-called “UHF discount,” an obsolete Federal Communications Commission loophole that the Trump Administration wants to revive to benefit right-wing media conglomerates.

If the UHF discount is allowed to go into effect, a series of pending corporate mergers, including one with the Sinclair Broadcast Group and Tribune Media, would dramatically reduce competition among local TV stations across the country. Specifically, the Local and Independent Television Protection Act:
Requires the FCC to act within 90 days to permanently end the UHF discount; and
Grandfathers any stations owned prior to September 26, 2013, which is commensurate with the FCC’s previous efforts to end the UHF discount.
The legislation is cosponsored by Reps. Anna G. Eshoo (D-CA), Raúl Grijalva (D-AZ), Ro Khanna (D-CA), Jerry McNerney (D-CA), Jamie Raskin (D-MD), Jan Schakowsky (D-IL), and Jackie Speier (D-CA).

Apparently, tech companies like Facebook and Google that have become essential elements of 21st-century life should be regulated as utilities, top White House adviser Steve Bannon has argued. Bannon’s push for treating essential tech platforms as utilities pre-dates the Democratic “Better Deal” that was released this week. “Better Deal,” the branding for Democrats’ political objectives, included planks aimed at breaking up monopolies in a variety of sectors, suggesting that anti-monopoly politics is on the rise on both the right and left.

Bannon’s basic argument, as he has outlined it to people who’ve spoken with him, is that Facebook and Google have become effectively a necessity in contemporary life. Indeed, there may be something about an online social network or a search engine that lends itself to becoming a natural monopoly, much like a cable company, a water and sewer system, or a railroad.