My little birdies were right - the FCC won’t be voting on the AT&T-BellSouth merger tomorrow at a special meeting called by Chairman Kevin Martin. Martin, who had originally proposed that the merger be approved by the FCC with no conditions, was thwarted by his two Democratic fellow commissioners, Michael Copps and Jonathan Adelstein, who want some conditions imposed on the merger.
Martin has already had to postpone a vote on the deal twice before given that without the two commissioners’ approval, the FCC is deadlocked. Republican commissioner Robert McDowell has recused himself from a vote given past lobbying activities against the incumbent telcos, leaving only Republican commissioner Deborah Taylor Tate to side with Martin. McDowell may now be forced by Martin to vote anyway in order to break the stalemate.
AT&T had offered a set of last-minute conditions it would agree to and the FCC put those out for public comment on October 15 at the request of Copps and Adelstein. AT&T blamed the third delay on “self interest of commercial entities and their litany of unreasonable demands,” presumably a reference to net neutrality advocates who saw an opening in the Commission’s delays to push for strong conditions that would bar AT&T from discriminating against third-party providers in the broadband services it provides.
But, the truth is that the Democratic party is preparing for a sweep that could wrest the House of Representatives (and, less likely, the Senate) away from the Republicans. Copps and Adelstein are just feeling their oats at a time when the Democratic party has remarkable and unexpected momentum.
Given the magnitude of the negative fall-out if the deal isn’t ultimately approved by the FCC, it’s probable that McDowell will pitch in and get the approval done. But that’s going to be a black mark on the Republicans and a less-than-glorious outcome for the FCC.
Posted by Cynthia Brumfield at 11:00 PM | Print | Comments (0)
I’m a little late to this, but the FCC has shot down, in no uncertain terms, efforts by Logan International Airport to block free Wi-Fi options that compete with its own $8/day service. In a rare unanimous decision, the Commission ruled in favor of Continental Airlines, which had sought to offer a free Wi-Fi option in its first-class lounge area but was told by the Massachusetts Port Authority (Massport), which runs the airport, that only one service could be offered throughout the entire facility.
Continental asked the FCC to rule on the dispute because the airport authorities cited Commission regulations in barring the competitive Wi-Fi options. The Commission’s ruling didn’t mince words — it rebuked Massport straight down the line, particularly on bogus interference and safety issues. Glenn Fleishman has this detailed explanation of the decision.
Posted by Cynthia Brumfield at 8:55 PM | Print | Comments (0)
Microsoft’s “iPod killer” is about to hit the marketplace. The Zune site, which has been just a place-holder with cool graphics, is now live and is pitching accessories, but not the Zune itself.
The company plans to release more details on November 10 with market availability to begin on November 14. Zune User has posted five video commercials for the Zune, which aren’t bad and are clearly aimed at hip youngsters.
The video spots, like a Zune “arts” web site set up by Microsoft, and indeed like the Zune itself, all stress social networking. Stay tuned.
Posted by Cynthia Brumfield at 6:15 PM | Print | Comments (1)
Rolling Stone has a cover story in its November 16 issue on the new breed of under-30 Silicon Valley billionaires (OK, only a couple are actually billionaires) who congregate twice a month in what they jokingly call the “Young Guns” secret society. And it should make for fascinating reading based on this excerpt — the full piece is presumably available only in print.
The club includes Mark Zuckerberg, founder of Facebook, Blake Ross, creator of Firefox, Seth Sternberg, founder of Meebo and Chad Hurley, co-founder of YouTube, among others, (although Hurley often doesn’t make the get-togethers because he now has a family.) Despite their fame and fortunes, this bunch is not a hard-partying crowd.
Writer David Kushner sat in on one Young Guns gathering at a bar in San Francisco, where the scene was ripe for misbehavior. But this group of rich and brainy nerds wasn’t tempted by the hotties and booze all around them.
But the richest guys in the bar cower together at their table like Weird Science geeks at the high school prom. The wilder the scene gets, the more oblivious they become.
In breathless prose, Kushner elevates this new breed of web entrepreneurs to revolutionaries who are turning the media world upside down.
Together, they stand for a place where all Americans are intuitively, and seamlessly, online, where the Net is less a destination than an inextricable extension of our lives — from the entertainment we choose to the social networks we form. Partly due to the combined efforts of the guys in this room, the long epoch of top-down culture — when publishers, producers and DJs could dictate the tastes of a generation — is fading faster than anyone predicted.
But this gaggle of geniuses don’t see themselves as doing anything remarkable — they’ve grown up with the Internet and to hear them tell the story, their inventions just seem like helpful tools more than anything else.
“What the old guard is missing is that this doesn’t feel like a revolution to us,” Ross says. “It feels like common sense.”
And although Kushner doesn’t exactly come out and say this, it sounds like these guys get together with each other because, well, they don’t have anybody else to hang out with — at least they don’t seem to have a peer group, aside from each other, capable of understanding them.
“Social life?” Sternberg says. “This is it.” Now they’ve got the future on their shoulders, and they’re doing everything they can to stay true to their grand visions and survive. “It’s incredibly stressful,” says Ross. “People around here see us as iconic figures, but we’re just college students who got thrust into this role.”Posted by Cynthia Brumfield at 5:17 PM | Print | Comments (0)
Virtually all TV networks are rushing to stake their claims in the online video gold rush. From Fox to MTV to ESPN, programs that traditionally have been shown via the TV set are now available online. And while premium channels, such as Showtime, which has tinkered with releasing some shows (“Fat Actress” and “Barbershop”) online, and Starz, which sells a subscription online movie service called Vongo, have experimented with the web, the biggest pay channel of them all, HBO, has stayed away.
That’s about to change, according to Business Week’s Ron Grover, who reports that HBO is preparing to launch a web-based subscription service featuring its hit shows such as “The Wire,” “Deadwood” and “Big Love,” along with, presumably, its slate of post-theatrical Hollywood films.
The Time Warner-owned network supposedly also plans to allow these films to be transported to mobile devices. If HBO does indeed launch an online service, the cable industry (outside of Time Warner Cable, of course) is likely to, um, flip out, as Grover suggests.
Where a new HBO service gets sticky—and why it has taken so long to put together—is that a new broadband offering would put HBO into competition with the cable and satellite operators that now pay the bulk of the estimated $3.5 billion a year in revenues HBO generates. Those “affiliates” generally pay HBO around $6 a month for each of its nearly 30 million subscribers, according to cable industry analyst Kagan Research. The arrangement generated $863 million in cash flow last year.
So HBO would rather do any Web package with the help of the Comcasts of its world. “We’re examining various distribution [possibilities], including broadband platforms, but have yet to determine which is the best model for our business,” says the HBO spokesman. “We’re having conversations with cable affiliates as well as all of our distribution partners, and together we will explore all of our opportunities in that space.”
In the end, however, cable systems should calm down enough to realize that the Internet-based HBO won’t damage the TV-based HBO for a long time to come. And if HBO works with these cable operators to, perhaps, develop a two-fer offering — an HBO TV subscription with an add-on Internet service — everybody wins. While Starz hasn’t yet been able to attract any cable affiliates for its Vongo service, Starz isn’t HBO and doesn’t have its drawing power.
Posted by Cynthia Brumfield at 11:42 AM | Print | Comments (0)
The Center for Digital Democracy and the Public Interest Research Group have asked the Federal Trade Commission to begin an investigation into the online practices of Internet companies to determining whether their data tracking and mining activities violate consumer privacy.
CDD and PIRG allege that the massive data collection that currently undergirds the Internet advertising and target marketing businesses an “poses significant threats to the privacy—and the personal autonomy—of hundreds of millions in the U.S.”
The groups want the FTC to examine the data gathering practices of Yahoo!, Google and, in particular, Microsoft. In the 50-page filing, Microsoft comes under particular criticism.
No other company displays these unfortunate traits more aggressively than Microsoft, and thus we respectfully request the commission to examine closely all facets of Microsoft’s new approach to data collection via its Digital Advertising Solutions/adCenter marketing apparatus: the MSN Web portal, Windows Live search engine, Hotmail e-mail service, Messenger instant messaging network, Xbox 360 gaming system, Office Online productivity suite, Windows Mobile software platform, Microsoft TV online video service, Spaces blogging service, and Soapbox videos. Especially disturbing is Microsoft’s use of data gleaned from its Hotmail service (which attracts over 30 million users every month) to sharpen its ad-targeting efforts, and those of its adCenter clients. Like Google and Yahoo, then, Microsoft is actively rewriting the rules that govern the online marketplace. It is the FTC’s job to make certain that these rules reflect more than corporate self-interest. The public interest matters, too, and it is the FTC’s responsibility to protect and promote that vital perspective, by issuing an injunction against the most egregious of Microsoft’s and other companies’ new invasive advertising practices…Posted by Cynthia Brumfield at 10:16 AM | Print | Comments (0)
When Time Warner issued its Q3 06 earnings report yesterday, the operational data on Time Warner Cable were difficult to decipher. The nation’s number two cable operator just acquired a bunch of cable systems from Adelphia and has made other acquisitions and divestitures. Because of these changes, the numbers for Time Warner Cable weren’t sufficiently comparable for me to say much about how the operator performed during the quarter.
But, PaliCapital’s Richard Greenfield has gone through Time Warner cable’s SEC filings (including, I think, Time Warner Cable’s S-1, which is a prelude to a public stock spin-off) as well as yesterday’s earnings report to come up with a historical sense of what’s happening at the recently enlarged cable company.
One key take-away from Richard’s analysis is that sequential voice service growth has slowed at Time Warner Cable, a puzzling conclusion given that Time Warner’s peers, including Cablevision Systems, are still going gangbusters on their VoIP offerings, with Cablevision reporting 22% VoIP penetration at the end of Q2 06. Pro forma (both historical and recently acquired Time Warner systems) VoIP penetration is at 10%. And net adds for Q3 06 were only 187,000, down from the 214,000 during Q2 06 and the 250,000 in Q1 06.
During the earnings call, Time Warner President Jeff Bewkes was asked about what appeared to be a slow-down in voice growth.
So you definitely ask yourself, have we hit a ceiling? No, it is very clear to us that we have not. We have several systems already over 20% — Albany, Syracuse, Binghamton — all heading towards 25%. And with offerings like the $99 triple-play bundle, which we introduced in every division in September, we don’t see why we cannot get there and keep moving up across our footprint. And, as Dick [CEO Dick Parsons] said, we have not yet put it into our Adelphia and Comcast systems or mostly our Adelphia systems. We have really high hopes for pretty rapid progress there as we integrate those.
Bewkes also said that getting the first 10% of customers is far easier than getting the second 10% of customers.
Posted by Cynthia Brumfield at 8:54 AM | Print | Comments (0)
Canadian cable company Videotron wants content providers to pay transmission fees for the bandwidth they use on broadband networks. CEO Robert Depatie said during a speech that companies transmitting content over broadband networks are, in essence, receiving free shipping.
“If the movie studio were to mail a DVD…they would expect to pay postage or courier fees,” Depatie said.
“Why should they not expect a transmission tariff?”
Depatie didn’t spell out how such a tariff regime would work, but, as Depatie’s comments make clear, the idea of charging content providers for their use of broadband networks is clearly not limited to U.S. broadband providers. Although Canadian cable operators share the same mind-set and basic structure as their U.S. peers, Depatie’s comments raise the question in my mind of whether non-U.S. broadband providers are in favor of charging content providers for using their networks.
Is the concept of charging content providers for network use a distinctly North American idea? I’d be interested in hearing about the positions of non-North American cable and telecom providers on the whole issue of network neutrality.
Posted by Cynthia Brumfield at 7:54 AM | Print | Comments (0)
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