In a remarkably thoughtful statement, Republican FCC Commissioner Robert McDowell has announced that he will not cast the tie-breaking vote that would clear up the logjam at the Commission blocking final approval of the AT&T-BellSouth merger. At the direction of Chairman Kevin Martin, the Commission’s General Counsel Sam Feder had, earlier this month, given McDowell a green light to vote on the deal in an “authorization memo” even though McDowell had recused himself due to conflict-of-interest concerns.
As McDowell details in his statement, his previous work for Comptel, a group that represents competitive telephone companies and that now objects to the AT&T-BellSouth merger, poses a clear conflict of interest from a range of perspectives. First, McDowell pledged before the Senate during his confirmation hearing that he would uphold the highest ethical standards regarding the merger.
Secondly, in March 2006, McDowell signed an ethics agreement prepared by the FCC’s Office of General Counsel in which he promised to “disqualify himself from participating in any particular matter involving specific parties in which COMPTEL is a party, or represents a party” for up to a year after he became commissioner. McDowell didn’t assume that position until May 2006.
McDowell said that General Counsel Feder’s opinion that he can go ahead and vote on the deal is, in essence, relatively cold comfort that McDowell is on firm ethical footing in doing so.
In all candor, however, I had expected a memorandum making a strong and clear case for my participation. Instead, the Authorization Memo is hesitant, does not acknowledge crucial facts and analyses, and concludes by framing this matter as an ethical coin-toss frozen in mid-air. The document does not provide me with confidence or comfort.
Moreover, the Office of Government Ethics (OGE) also hasn’t given McDowell the safety net he needs, with OGE Director Robert Cusik saying that “were the decision up to him [as opposed to the FCC’s Feder], he would decide against authorization.” Finally, the Virginia State Bar, of which McDowell is a member, has conflict of interest ethics obligations that make it difficult for McDowell to participate. McDowell said that his discussions on this matter with his private attorneys were privileged although he was not encouraged by their advice.
McDowell further said he felt like he had been used as a pawn in the ongoing fight to get the deal pushed through the FCC and now that he is out of the equation, maybe the four remaining commissioners and AT&T will cut out the game-playing and get back to negotiating a compromise.
Now that I am removing that chess piece from the board, I hope that the twin pillars of sound negotiations are restored: good faith and sacrifice.
Public interest groups embrace McDowell’s decision. Gigi Sohn, head of Public Knowledge, said in a statement:
In the end, he was correct to recuse himself from the AT&T takeover of BellSouth. This is too important a transaction to be clouded by the ethical questions that would have come up had the Commissioner taken part in the proceeding.
As for Chairman Martin, who has aggressively pushed for the deal’s approval with as few conditions as possible, the response has been muted.
With Commissioner McDowell having made his decision, I will continue to try to work with my colleagues to bring our consideration of this merger to conclusion.Posted by Cynthia Brumfield at 5:15 PM | Print | Comments (0)
The broadcast networks, along with top TV programmer Viacom, could announce the creation of their own YouTube-esque consortium as early as this week, the New York Times’ Richard Siklos and Bill Carter report (here or here). NBC Universal, the News Corporation, Viacom and, likely, CBS are in talks to create a web site that showcases their traditional TV content and the activity is accelerating.
While the networks (and Viacom) want to ride the gravy train that led to YouTube’s superstar status, there are so many problems with this idea that it’s hard to know where to begin. For one thing, the various participants have so many divergent agendas and deals (not to mention egos) to manage that it seems to me this kind of organization is DOA.
“They really want to do it,” one executive briefed on the talks said of the partners involved. However, this executive predicted, doubting the ability of the competitors to play well together: “Ten minutes after they do it they’ll want to kill themselves.”
More importantly, however, the idea of TV programmers responsible for, say, over 90% of commercial broadcast TV programming (and a good chunk of cable programming) banding together to funnel their content to their own jointly owned web site is bound to raise the eyebrows, if not the investigative instincts, over at the Department of Justice. It all depends on how such a deal is structured —- specifically, whether the broadcast networks (and Viacom) decide to grant their own web site exclusivity or not.
There’s a lot of history here in the annals of antitrust law, some of which favors the idea of such a consortium and some of which spells trouble ahead for the programmers. And it all hinges on whether the programmers plan to grant their own web site exclusivity.
The history that favors this kind of banding together: in 2004 the DOJ cleared (thanks Seth!) a comparable consortium, the studio-backed online movie venture Movielink. What led to the Department’s clean bill of competitive health is the fact that the Movielink studios had no intention of limiting their online distribution to that web venture. Or, in the words of the DOJ, Movielink had not “decreased their [the studios] incentives to license movie content to competing video-on-demand (VOD) providers.”
The decision that spells possible doom for a TV programmer-backed YouTube rival is a 1980 U.S. District Court ruling in a case brought by the Justice Department against the studios after they formed a premium cable channel, Premiere, to take on HBO. (The decision is United States v. Columbia Pictures Industries, Inc., 507 F. Supp. 412 (S.D.N.Y 1980), but for the life of me I could find no link to it online.) Unlike Movielink, Premiere would have retained for itself some form of distribution exclusivity — that, of course, would have been its competitive trump card over HBO.
The judge in the Premiere case agreed with the feds that Premiere was a violation of the antitrust laws and the whole venture was dropped.
It’s likely, then, that the networks (and Viacom) would not make their YouTube-like venture exclusive, which raises the question: why do it? If Movielink, which is faltering and beset by stronger rivals that offer the same, if not better, movies, serves as an object lesson, the TV programmers should scrap this notion and get on with the business of licensing their content to the growing array of web sites hungry for TV content.
Posted by Cynthia Brumfield at 10:10 AM | Print | Comments (0)Skype co-founders Janus Friis and Niklas Zennstrom have discovered broadband-powered TV and are busy at work on their code-named Venice Project, which aims to do for Internet-delivered video what Skype did for VoIP. The service is currently in trial mode with 6,000 people and the Financial Times’ Andrew Edgecliffe-Johnson got to see a demo of the work-in-progress at a Starbucks in London, conducted by none other than Friis himself.
Even though the planned service relies on P2P technology, the content will be legit, according to the plan, with big name TV and movie companies jumping on board. It’s not clear that any big-time content providers have joined forces with Friis and Zennstrom and in fact the only confirmed “artist” whose work will appear on the new service is supposedly Paris Hilton. (Say what? Paris Hilton? She allegedly has a deal with Warner Music. She actually sings? This is terribly confusing.)
In any event, the technology sounds kind of cool even if the founders’ plan to sign up broadcasters, movie studios and record companies appears to be kind of iffy.
The service, currently being trialled by 6,000 people, is capable of displaying high-quality, full-screen video on a computer screen. Users download a piece of software to their PC or Mac (although the service can be transmitted to a TV, it is currently designed for computer screens) and can then search for channels from a menu on the left hand side of the screen.Posted by Cynthia Brumfield at 8:47 AM | Print | Comments (0)
A control bar at the bottom allows them to search for programmes and pause, rewind or fast-forward what they are watching. On the right is a menu of interactive tools, allowing users to share video playlists with friends or comment on programmes.
In the “that’s so funny I forgot to laugh” category, Gizmodo’s Brian Lam has played a practical joke on the blogosphere. Last week, Lam promised that the iPhone would be announced this week, sparking all kinds of chattering among the top bloggers, which leaked into the traditional press even.
The problem is that the iPhone Lam referred to is not the long-rumored, possibly market-shifting device that Apple is said to be developing, which combines all the cool features of an iPod with mobile voice capabilities. It’s a phone made by Cisco’s Linksys division that connects to a wireless router. It’s actually two phones, one called the iPhone Dual-Mode Internet Telephony Kit for Skype (CIT400) and the other WIP300, the iPhone Wireless-G Phone for Skype.
Ha ha ha — get it. It’s an iPhone, but not from Apple. It retails for $179.99 and it does pretty much the same thing as Netgear’s Skype phone, so far as I can tell, except Cisco has a mobile phone add-on. Moreover, Cisco is riding the wave of Skype’s announcement last week of a $39.99/year unlimited Skype Out service for North American calling.
The Linksys phone looks more like a regular cordless phone than Netgear’s model does, but the style factor doesn’t reach the level of what Apple can do, as Om points out in this seriously flawed analogy.
At least from design perspective, the Linksys phones are like George Clooney, while Apple’s iPhone would certainly be Cary Grant.
(I say seriously flawed because Om is obviously no judge of what appeals to today’s thinking woman. He seems to imply that George Clooney is a pale imitation of Cary Grant, but for so many of us, Clooney is in his own category. Intelligent, socially responsible, handsome in a masculine way but with a classic sense of style…but here I digress.)
Brian Lam himself likens the Cisco iPhone to those phoney Bruce Lee films (Bruce Le, Bruce Li) that came out after the iconic Kung Fu master died, with Cisco looking to fake out consumers by riding on Apple’s “i” phenomenon.
Fans would hear the name, glance at the spelling, see the false idols, and move on. How can anything live up to the name?
But really, it’s just another VoIP handset that Cisco has added to its product line that keeps Linksys competitive. No big deal. Maybe a tiny bit of exploitation on Cisco’s part by playing up its apparently trademarked iPhone moniker, but that’s about it.
Now everyone can go back to the rampant speculation about if and when Apple will release its voice-enabled iPod (we can no longer, of course, say Apple’s iPhone.)
Posted by Cynthia Brumfield at 7:12 AM | Print | Comments (1)
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