Like Rasputin stumbling forward from yet another assassination attempt, FCC Chairman Kevin Martin is going after the cable industry again. One day following his humiliating defeat on a slate of cable regulatory proposals, Martin floated a new anti-cable item that he wants the Commission to vote on -- capping cable ownership at 30%.
This go-around Martin seemingly has the support of two of his fellow commissioners and he might just pull this one off. But the question must be raised: why? What is it about cable that has Martin so obsessed?
As Jim Gattuso and Adam Thierer document, since Martin assumed the Chairmanship, he has, among other initiatives:
1. Relentlessly and in varied ways sought to force cable operators to sell their channels on an a la carte basis.
2. Pursued must-carry rules that would force cable distributors to carry every digital broadcast signal from every broadcaster carried.
3. Implemented with little room for maneuvering a set-top box integration ban that forces cable companies to remove their security technology from set-top boxes.
4. Proposed a rule that would ban exclusive service contracts between apartment owners and cable television providers.
All of the above is on top of his recently aborted efforts surrounding the 70/70 rule, efforts that would have spawned a whole retinue of nightmarish regulations. And Martin was successful in moving a plan that would slash the costs operators charge for leased access.
Yes, yes, yes. The cable industry is not a model of free market competition. A lot of people hate their cable operators. Rates do keep rising. And the industry is consolidating.
But all those things are true of the phone industry too. Yet Martin seems to not only ignore the telephone industry's problems, but he actively favors telcos. If he's so worried about ownership concentration in the communications world, he ought to take a look at the incumbent phone business where, at most, three companies survive (but I'm not saying he should impose caps on telcos...far from it).
I don't think, as some people say, that Martin is in the hip pocket of the telcos, which are nonetheless glad to see him pursue his weird obsession. A lot of Martin's proposals would also rebound to the detriment of those telcos who are pursuing their own cable-like video businesses.
Adding a layer of confusion to Martin's baffling motives is the fact that many of his ideas, such as the 30% cap, face uphill battles, if not at the FCC itself, then in the courts. A federal appeals court in 2001 struck down a comparable set of ownership caps as unconstitutional and I don't see how anything has changed that would make a new set of ownership caps any more sustainable.
And what would a 30% ownership cap do? It certainly wouldn't lower cable rates, a goal that Martin has said he is pursuing.
At the end of the day, it's still a mystery why Martin is so laser-like focused on cable. Was he psychologically traumatized as a child by something cable-related? Did a cable installer drill through his cat (which actually did happen once to somebody)? I float these less-than-rational motives because his cable agenda seems to be logically inconsistent with his supposed free-market Republican philosophy and his actions when it comes to other industries.
And it's not like he hasn't got a lot of other issues to deal with, such as the impending national digital TV transition. As Ted Hearn at Multichannel News notes, this move to impose a new ownership cap on cable "could strike some as a misuse of agency resources, especially when FCC officials can block any large cable transaction without a 30% rule on the books."
That's right. Martin doesn't even need an official rule to block further cable consolidation. The FCC has the ability to block any communications mergers with no rule in place at all, just as it did when DirecTV and EchoStar sought to merge.
The fact that he doesn't even need an ownership cap to achieve his objectives highlights just how freaking weird Martin's war on cable is. What Martin doesn't seem to realize is that his tactics are backfiring, at least to a limited extent. He's starting to look a little crazy and cable emerged from the most recent battle looking like a truly clever adversary.
Posted by Cynthia Brumfield at 1:44 PM | Print | Comments (2)In what I think is a first for a cable company, Comcast has created a senior executive position for intellectual property matters. The nation's number one cable company announced this morning it has hired James Finnegan as VP of Intellectual Property Strategy.
Finnegan, who is not a lawyer (another unusual aspect to this announcement), will report to Arthur Block, SVP, General Counsel and Secretary, Comcast Corporation, and Tony Werner, EVP and CTO for Comcast Cable. Finnegan has 17 years' experience at AT&T and Lucent and was most recently VP of Intellectual Property for Qimonda AG in Munich, Germany.
Comcast is obviously gearing up to handle tricky intellectual property issues related to its broadband businesses. The company is already in hot water following the negative publicity generated by how its high-speed network handles P2P uploads. Comcast is facing lawsuits and possible FCC action over its policy of slowing down uploaders.
But, I've got to wonder if there aren't a lot more interesting things that this VP will handle. Is Comcast planning to implement more technology that implicates intellectual property matters? Is the company's foray into online video distribution via Fancast and other outlets going to ramp up in some complicated ways?
Posted by Cynthia Brumfield at 10:40 AM | Print | Comments (0)Despite the fears of some Republican candidates that the YouTube-powered debate held last night would lack, um, dignity, it turns out that this second CNN-YouTube debate offered even more insight into the candidates' positions than the first one. Although Billiam the Snowman was missing, the direct queries from the American people forced the candidates to get off their anti-Hillary stick and actually answer some good questions.
As gimmicky as the YouTube debates initially seemed, they've turned out to be a great thing for the political process. As CNN Washington bureau chief David Bohrman said "This kind of participatory format is here to stay. Can you imagine going back?"
The full list of YouTube questions along with the candidates' responses are posted here. The most creative question was submitted by editorial cartoonist Nick Anderson, who created a cartoon caricature of Dick Cheney, who asked the candidates about the role of the Vice President.
Posted by Cynthia Brumfield at 10:17 AM | Print | Comments (0)No sooner did I finish my post about Verizon's plan to launch 4G mobile service than I came across this report that AT&T will offer a 3G version of the iPhone next year.
CEO Randall Stephenson spilled the beans at at a meeting of the Churchill Club in Santa Clara yesterday, but offered few other details, including how much the 3G phone would work. One issue, and one big cost factor, is the battery life of the iPhone on a 3G network.
Stephenson also dissed Verizon's plan to open its network to all devices and applications, calling it overblown. He also said that thousands of developers can already create third-party applications for AT&T's network.
(I wish someone would have asked him if AT&T plans to bid in the upcoming 700 MHz auctions. The deadline for notifying the FCC of an intention to bid is December 3.)
Posted by Cynthia Brumfield at 9:31 AM | Print | Comments (2)Two days after announcing its market-shifting plan to "open" its wireless network, Verizon Wireless announced this morning plans to launch a "4G" network using LTE or long term evolution technology.
LTE is an all-IP based technology aimed at delivering true wireless broadband service, with goals of delivering substantially increased upload and download speeds, improving latency and generally enhancing network efficiency. Verizon and Vodafone, which jointly own Verizon Wireless, plan to launch a coordinated international trial of the technology in 2008 in conjunction with technology and handset suppliers Alcatel-Lucent, Ericsson, Motorola, Nokia-Siemens, and Nortel.
LTE is a significant upgrade over both carriers' existing 3G services. In the U.S., Verizon Wireless currently offers an increasingly popular EV-DO wireless service that enables broadband connectivity on the run. Around 32 million of Verizon Wireless' 64 million customers had EV-DO-enabled devices at the end of September, although not all may actually purchase the add-on broadband option.
Vodafone offers 3G service based on a different standard, called HSPA. At the end of September, Vodafone had 21.4 million 3G "registered devices."
Verizon Wireless contends that the open policy announced two days ago will apply to this next-generation network. Even better, execs say, is that the current incompatiblity between GSM-based phones, such as the iPhone offered by AT&T, and Verizon's CDMA-based network, will be moot under an LTE network, which is an iteration of the Universal Mobile Telecommunications System (UMTS) standard.
Although it's not clear exactly what throughputs will actually be delivered once the networks are operational, it is clear that 4G mobile technology takes everybody one step closer to a world where video, gaming and other bandwidth-intensive application are easily offered on mobile devices. Current 3G or 2.5G technology, including Verizon's EV-DO service, is barely capable of delivering even half-way decent broadband Internet connectivity, even though it's state-of-the-art. Let's hope this LTE option will actually allow truly fast downloads and mobile video viewing.
Posted by Cynthia Brumfield at 8:34 AM | Print | Comments (0)
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