The Senate Commerce Committee released yesterday, and posted on its web site today, a Verizon-funded push-poll that not surprisingly finds 1. Most Americans want competition in cable and 2. Most Americans are opposed to “onerous” (that’s the word used by the supposedly independent “bi-partisan” write-up of the poll results) net neutrality regulations.
Now, it’s probably true that most people, in any kind of poll, would say they favor competition in the cable market. It might be true that most people wouldn’t want net neutrality if they understood the debate, but this poll sure doesn’t give even a remotely fair temperature reading on this matter.
Check out the poll’s loaded question on net neutrality:
Which of the following two items do you think is the most important to you:
Delivering the benefits of new TV and video choice so consumers will see increased competition and lower prices for cable TV
OR
Enhancing Internet neutrality by barring high speed internet providers from offering specialized services like faster speed and increased security for a fee
Faced with this choice, is it any surprise that 66% of the 800 registered voters surveyed (91% of whom were clueless about net neutrality) opted for the delightful delivery of benefits of new video choices over the insidious barring of cool new services such as faster broadband and better security?
The survey, conducted by not one but two bought-and-paid-for political polling firms, Public Opinion Strategies and The Glover Park Group, is just routine message manipulation by the pollsters — that’s what they get paid for, and hey, everybody has to make a living. But the fact that once again, the United States Senate is disseminating corporate propaganda on one of its most powerful committee’s web sites, funded by stiffs like you and me, should get everybody hopping mad.
There was a time when the Congress pretended, at least, to not be in the pockets of powerful interest groups. The Senate Commerce Committee has given up even a thin veneer of working for the public. It’s working for Verizon now.
I’d feel this way if the Committee had posted a Google-sponsored poll on its web site, pitching the opposite position. If the political process has become so bad that even pretense of independent-minded lawmaking is too much work, we’re all in trouble.
All of this shameless propagation of corporate-sponsored lobbying dreck reflects nothing other than last-ditch desperation by Committee Chairman Ted Stevens (R-AK), who is almost out of time to pass his telecom reform bill before this Congress is history. After intensive lobbying, Senator Stevens still doesn’t have the 60 votes he needs to shut down a filibuster on the bill.
Posted by Cynthia Brumfield at 10:00 PM | Print | Comments (0)
Time Warner Cable CEO Glenn Britt today came very, very close to saying that his company will charge access fees to third-party Internet content and application providers for their use of Time Warner Cable’s broadband networks. Speaking at Goldman Sachs’ Communacopia Conference, Britt spent much time discussing the issue of network neutrality and said “I think we are going to have to explore different ways of charging” for the costs of the network, shifting some of the burden away from consumers and toward Internet content providers such as Google and Yahoo!.
“Unless we find some way to manage that traffic, and potentially charge for prioritization, this whole Internet phenomenon will come crashing down,” Britt said. He clearly believes that the push for net neutrality regulation is coming from a handful of big companies that are seeking special favors from Washington.
A few large companies, who used to be start-ups, have decided that the prospect of having to pay for differentiated traffic is a scary thing and they’re going to Congress and saying ‘Gee Mr. Congressman or Mr. Senator, now is the time to regulate…the Internet. But don’t regulate me.’
Britt, who is one of the sharpest people in the cable industry and is regarded as a top-notch executive, seemed to get caught in an uncustomary bind when asked by one of Goldman’s analysts whether capital expenditures would rise as a result of all this new investment he said Time Warner would have to make. Britt had prefaced his discussion on network neutrality by saying “in order for the Internet to keep up with it [growing bandwidth consumption]…it’s going to require investment” and therefore someone has to pay for the investment.
But…when asked how much Time Warner Cable would have to “invest” to deliver ever-increasing amounts of speed, Britt said “we have a road map to get to as fast a speed as anybody is talking about at this moment. That’s not a capital issue. It’s an evolutionary issue.”
Then…he added an interesting clarification that doesn’t make sense to me. “The issue with net neutrality is throughput. It’s not how fast you get it but how much of it you get,” Britt said. OK, well, aren’t speed and capacity pretty much the same thing?
Posted by Cynthia Brumfield at 4:34 PM | Print | Comments (1)Yahoo! made Wall Street freak out this morning when, during Goldman Sachs’ Communacopia Conference, CFO Sue Decker predicted that the company’s Q3 revenues would fall at the low end of guidance due to advertising growth slow-down, particularly in the automotive sector. Decker said that “we have seen a little bit of weakness in the last few weeks” in the automotive and financial services sector, which would bring Yahoo! down into the lower end of its revenue forecast of $1.12 to $1.23 billion for Q3 06.
(Detroit’s weakness has also been felt by traditional publishers. The New York Times’ David Carr had this piece yesterday on Time Inc.’s downward spiral, which mentions the impact of decreased automotive advertising on high-profile magazines such as People and Time.)
Within the space of an hour, Yahoo!’s stock had plummeted 11% and was continuing to drop. (see chart).
The rest of the discussion was noteworthy for its lack of news. CEO Terry Semel did continue the Internet giant’s backpedaling from the notion that it would pioneer the creation of original video content. “Having exclusive content is always exciting but let’s just go back to the recent history,” he said. “We did not have any of the video content relevant to the Winter Olympics or the Summer Olympics but if you go back to the Internet and find who had the largest audience for these events, it was Yahoo! Sports.”
Yahoo! did cut a deal to sell subscription NFL game packages overseas, so exclusive content is still an important element in the company’s mix of services. “I think the balance is most important,” Semel said, referring to the blend of original or exclusive video content and content syndicated or made available by others.
Semel also hinted that Yahoo! is working with its telco partners on the creation of services beyond just the co-branded portal it sells to AT&T, BellSouth and others. “We look at other opportunities in such things as wireless and IPTV” with the phone company partners.
Update: Yahoo! filed a form 8-K with the SEC immediately following the Goldman Sachs’ talk in which the company elaborates a bit.
—Over the last few weeks, we are starting to see some advertising weakness in some of the most economically sensitive categories.
—This is having an impact on our expected Q3 results, leading us to believe we are likely to report results in the lower half of the business outlook ranges we provided in our earnings release on July 18, 2006 (furnished on a Current Report on Form 8-K on July 18, 2006).
—It is too early to tell whether the advertising weakness is due to an economic issue or specific issues in advertisers’ client businesses. Growth is still positive, but it is slower in Q3 than it was in the first half of the year.
Update: Investors are not only scared about Yahoo!, but the news issued by Decker has spooked the market on other tech players, including Google, eBay and Amazon, all of which depend to varying degrees on advertising (Google, of course, being number one). But, the knee jerk reaction of investors doesn’t take into account that these other businesses are not nearly as dependent on automaker advertising as Yahoo! and more traditional media are.
Posted by Cynthia Brumfield at 12:03 PM | Print | Comments (0)
The FCC’s AWS auction is over and now it’s time for the fun to begin. The Washington Post’s Frank Ahrens has this article on the auction’s outcome in which old-Washington-hand-turned-analyst Blair Levin predicts that consumers will see new services based on the awarded spectrum within 18 months.
“There’s no bad news for the consumer in this auction,” said telecommunications analyst Blair Levin at Legg Mason. “At a minimum, it will increase the efficiency and improve the quality of the networks.” Levin said he thought consumers might experience the benefits of the FCC auction within a year and a half.
As the article points out, the most interesting winners are the cable companies, which, collectively through their SpectrumCo venture, spent $2.4 billion on the licenses. Richard Greenfield from Pali Capital sent out a research note this morning with the following estimates on how much each cable company spent in the bidding.
| SpectrumCo Partners Auction Wins | ||
| Company | Share | Dollar Amount |
| Comcast | 52% | $1.25 billion |
| Time Warner | 29% | $700 million |
| Cox | 10% | $240 million |
| Brighthouse Networks | 4% | $100 million |
| Sprint/Nextel | 5% | $120 million |
| Source: Pali Capital | ||
With the drama of the bids now over, Greenfield has a host of questions for the cable operators, including what, exactly, do the companies plan to do with the spectrum.
How do they see wireless evolving within the cable bundle? So far the biggest “buzz” around the Sprint joint venture has been the ability to program your DVR from a Sprint cellphone, which seems quite a bit secondary to programming your DVR from an Internet connection (which cannot even be done today, without a third-party Slingbox).
Although I said yesterday that we might start getting answers to these and other questions as cable chieftains take the podium at some high-profile investor conferences this week, Greenfield points out that they are still under a gag order under the auction’s quiet rules until they send in their final down payment checks, which should be about another ten days.
Posted by Cynthia Brumfield at 8:41 AM | Print | Comments (0)
The big news for today is Microsoft’s announcement of a “beta” version of Soapbox, a clear YouTube wannabe. Soapbox will be available on MSN Video and integrated with the Redmond giant’s portfolio of online services, including Windows Live Spaces and Windows Messenger.
As is the case with YouTube, users will be able to upload videos, search for videos and rate videos. Microsoft seems to have added enhancements that improve the video sharing concept, such as allowing viewers to continue watching selected videos while searching for new videos. With YouTube, users have to exit video viewing in order to hunt for new videos.
Although it’s understandable why Microsoft feels compelled to compete in the video sharing business, and the cost and technical barriers to entry are low, Soapbox feels imitative and therefore not all that interesting. Marketwatch’s Bambi Francisco nails it on the head when she writes
Not only is MSN a bit late to the party, it’s a bit of an old-timer entering a game at which the young are ruling the roost.
When it comes to video sharing or social networking or any of the youth-oriented Web 2.0 services, big companies are not in a position to jump into the market and challenge an innovator. Why? Because the “cool” quotient is critical to success and first-movers tend to create and dominate the playing field.
Microsoft may capture some portion of middle-aged or corporate users with Soapbox, but the rocket is still YouTube’s to ride — that is until a hipper alternative comes along. As Bambi writes
No matter how fancy and integrated the MSN video service is, I’m not sure if the MSN has the right brand or image to appeal to the new generation. It’s just that simple.Posted by Cynthia Brumfield at 8:00 AM | Print | Comments (1)
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