Cable

cable, franchising, related issues

Comcast Unhappy With Free Market Title I Nirvana. Demands “Access Charges Bailout” But No Reg Oversight.

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It says something about the messed up world of telecom today that the “Connect America Fund” the FCC will vote on tomorrow has become the “what the heck are we going to do about IP-based interconnection” proceeding. In particular, the rather high-profile spat between AT&T and Comcast (andother cable companies) over access charges illustrates exactly the kind of cosmic cluster#@$! we predicted would happen if the FCC failed to classify broadband as a Title II telecom service. AT&T is100% right on the key argument: Comcast has the access charge regime it fought for and deserves. Letting Comcast collect access charges as if it were a traditional telecom provider subject to Title II, while shielding it from any actual oversight or obligations as a Title I information service, is nothing more than an undeserved windfall to the company that tore up the social contract in the first place.  If they don’t like the outcome, then perhaps they should have thought about it before they declared Jihad on Title II.

More below . . . .

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How NCTA Protects Us From An Army of Lazy, Easily Frustrated Terrorists Inspired By “Family Guy.”

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All of these years, I wondered why you find folks in the cable industry who are such a pain in the neck about maintaining and getting stuff from their “public file.” Now I understand that this was really a last line of defense against an army of terrorists and saboteurs bent on destroying our way of life. Unfortunately, according to the National Cable & Telecommunications Association (NCTA), the FCC’s recent action approving the technology for the broadcast white spaces may undermine this defense of our vital public infrastructure. How? Read below. And pray, PRAY, that the FCC heeds this warning and helps NCTA protect us from the army of lazy, easily frustrated terrorists inspired by Family Guy to destroy cable head ends that apparently surrounds us.

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What the DoJ Documents Tell Us About the Comcast/NBCU Merger

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In all the hoo ha about the Comcast/NBCU Merger, few folks troubled to read the Department of Justice Competitive Impact Statement, Complaint, andConsent Decree. That’s rather unfortunate, as these documents sets forth a straightforward case under the antitrust laws for program access conditions for online competitors and for network neutrality. Here’s the short version:  Comcast pre-merger makes almost 30 times more money from providing cable service than from programming revenues. Even adding all of NBCU’s revenue, Comcast will still make more than twice as much from selling cable service ($34 billion) as from programming ($16.9 billion). Anyone who can do basic arithmetic would therefore conclude that yes, Comcast’s incentive to protect its cable business from erosion by online distributors (or even from traditional rivals) outweighs the potential gain from increasing programming distribution. As an added bonus, for those ideologically committed to believing otherwise, turns out Comcast’s own documents agree with the simple arithmetic and not the fun theoretical models their experts submitted. Which is why (among other reasons) DoJ continued oversight is not merely something extra. It really matters.

Lets break this out some below …

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The Fox/Cablevision Retrans Mess And FCC Learned Helplessness — The Insanely Long Version

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[This is a much longer, wonkier version of a post I did on the Public Knowledge blog, for those who can’t get enough explanation of Section 325.]

I feel a good deal of sympathy for FCC Chairman Julius Genachowski over the ongoing fight between Fox and Cablevision. My brother the educator likes to say that “responsibility without authority is trauma.” Or, in other words, if you are responsible for something, but don’t actually have the authority to do anything about it, then the only thing you can do is suffer when things go wrong. So it is for Genachowski and Fox/Cablevision — under the FCC’s current rules. But here’s the funny thing. The FCC actually has fairly strong statutory authority to take action. So while Genachowski is in a bind, he can actually fix the problem. He even has a vehicle all teed up and waiting in the form of Public Knowledge’s Petition to change the “retransmission consent” rules (I’ll explain what those are below).

So how on Earth did the FCC get reduced from the “cop on the beat” to pathetically tweeting the playoffs? The answer lies with over 15 years of deliberately learned helplessness and rulemaking that I can only charitably describe as auto-castration. Twice, in 1992 and 1999, Congress explicitly directed the FCC to make sure that broadcasters don’t abuse the retransmission consent negotiation process (or as we telecom policy wonks like to call it, “retrans”). Each time, the FCC went out of its way to develop rules that systemically divested itself of all capability to act. So although Congress gave the FCC the job of consumer protection cop, the FCC kept angling for the job of “palace eunuch” to the Media Barons. For 15 years, the FCC has loooooovvvved its job as Palace Eunuch for the Media Barons, wearing a very impressive Palace Eunuch uniform with those great big baggy pants and the cute little fez and toy sword it waves impressively when it tells members of the public to move along and stop trying to hold big media companies accountable for their public interest obligations.

Happily for Genachowski, he can trade in the silly, baggy Eunuch pants for bold, powerful “man pants” the Republican women keep talking about as the fashion accessory for the season. Or Genachowski could do nothing, which will give him time to go shopping for a nice pair of those little pointy shoes with the bells on the toes to go with the baggy Eunuch pants.

Wonky legal details below . . . .

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Genachowski Enters FCC In 12-Step Program To Stop Consumer Abuse

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“The first step in recovery is admitting you have a problem.” So goes the self-help cliché. For regulatory agencies, the first step is admitting that industry has a problem and that the wonderful happy world of the unregulated market – no matter how wildly competitive it might or might not be – doesn’t always protect consumers and that in fact, sometimes, free market dogma to the contrary, you actually reach the best result for everyone by having government set basic rules of disclosure and enforcement (the classic paper on this being George Akerlof’s oft-cited “The Market For Lemons”). The recent experience with the meltdown of the financial services sector and its ongoing tribulations provide rather vivid proof that “trusting the market” and waiting for “proof of a problem.”

Which brings me to FCC Chairman Julius Genachowski’s latest app release for Genachowski 2.0 – the Relaunch. With network neutrality on the backburner until after the election, Genachowski has taken the opportunity to get the agency on track with its substantive agenda. In addition to moving forward for the second month in a row on significant National Broadband Plan Items (White Spaces last month, CableCARD and Mobility Fund this month), Genachowski has started taking the FCC in the welcome direction of consumer protection.
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SkyAngel Files Program Access Complaint — Has Media Bureau Really Changed, Or Will They Again Sit On Sidelines?

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Some people wonder why I remain so down on the Media Bureau. “Harold,” they say. “Why do you keep saying the Media Bureau are in the pocket of the cable industry? Aren’t they just all fired up and rarin’ to go on the upcoming cable set top box proceedings?”

Perhaps I am allowing the experiences of the past to cloud my vision of a hopeful tomorrow. Perhaps, despite an utterly abysmal track record on cable matters, the cable folks in the Media Bureau have now turned over a new leaf. Perhaps now they will at least process complaints in less than three years, so that companies other than cable operators might feel they get some due process — if not actual justice — at the FCC. Who knows?

Which is why I shall watch the developments around the Sky Angel program access complaint with considerable interest. Sky Angel used to distribute programming by satellite, making it eligible for the “program access” rules that require cable operators with affiliated programming to make that programming available to rivals. (I’ve written about these rules at length before here.)

From what I can tell from the limited data available, Sky Angel is now a “Christian IPTV distributor.” It resembles a cable/satellite-like service (or “MVPD” for “multichannel video programming distributor”) in every way except for the fact that it does not own its own facilities. It distributes its programming online. We generally call these things “over the top” video distributors. According to the Broadcasting and Cable story (since I haven’t been able to find a copy of the complaint), the Discovery Channel has decided to terminate its distribution contract with Sky Angel four years early — apparently because Sky Angel has switched its distribution model to become a pure over-the-top distributor.

My problem is, that this looks very similar to a complaint a company called VDC (“Virtual Digital Cable”) filed three years ago. The Media Bureau has yet to process that complaint, but there’s no rush — since the company went bankrupt and shut down while waiting for Media Bureau action.

More below . . . .

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MA Elects Public Access Programmer To U.S. Senate

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Never underestimate the power of local media, although I can’t really say if this made a difference. But Senator-elect Scott Brown (R-MA) has his own public access cable show he uses to keep in touch with his constituents.

It shall be interesting to see if this has any impact on his approach to cable issues, although I suspect he is unlikely to get on a committee where this would matter.

Somewhat more seriously, it underscores the importance of staying in touch with your constituents, and the importance of PEG regardless of political allegiance. Brown won, among other reasons, because he actually went out and campaigned. This also wasn’t some clever act of pretending to stay in touch with constituents. Looking at his record here, he has been doing local cable show for years, and doing local events.

If one truth is emerging from the spate of special elections from NY-29 to last night’s MA race, it is that politicians cannot phone in their campaigns and expect the party affiliation (either their own or their opponent’s) to carry the day. Ya gotta work it. So the next time local cable access programmer asks for an interview, don’t snort “Wayne’s World, right” and blow them off. Take a lesson from Scott Brown — commitment to local media matters.

Stay tuned . . . .

Retrans Food Fight! Why This Administration Will Deal With Cable After All.

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Remember how once whacky old Kevin Martin the Cable Playa Hatah was gone the FCC was gonna forget all about cable? Because, after all, cable was all vibrant and competitive and stuff and who needs dumb old cable when everyone has Broadband?

Item one in communications land for the new year is the first round of retransmission fights. The biggies at the moment are Sinclair/Mediacom, where Mediacom has tried to get the FCC to weigh in on its side, TWC v. Fox, TWC v. Food Network/Scripps Howard (which no longer includes Scripps broadcasting properties), and Cablevision v. Food Network. Although TWC and Mediacom agreed to extensions with the various programmers to continue to try to sort things out, and TWC ultimately reached an agreement with Fox, Cablevision and Food Network ended up in stalemate.

Result, Cablevision has dropped Food Network and HGTV. In the war for the hearts and minds of customers, the Food Network folks have launched web based outreach with clips and fact sheets. Cablevision’s response is a little harder to find, but digging through their customer service led me to this page which basically says “Scripps wanted to much money for their programming, we hope you enjoy the other cooking shows we have.” Unfortunately for Scripps, the broadcast TV fights have significantly overshadowed them.

Which brings us to the first point of importance for all those folks in policyland who keep insisting that “broadcasting is dead.” You will notice that from the perspective of people reporting news to folks outside policyland, keeping broadcast programming was much bigger news than people actually losing popular cable-only programming. Second point – this is Food Network’s first round of negotiations as a stand alone cable company without also negotiating for broadcast properties. This gives them significantly less leverage.

But all these pale beside the third point — cable (and I mean cable, not “MVPD”) regulatory issues remain important and the market power and consumer protection issue don’t disappear because we now have multiple delivery platforms. Millions of people spend billions of dollars on these services and care a heck of a lot about them. Like it or not, and despite all the coventional wisdom about youtube, twitter, teh inerwebz, blah blah, this medium and these programmers dominate — indeed, arguably define — our common national culture. That means cable policy will continue to be a vital part of the FCC’s focus despite a desire to do sexier things like wireless and broadband.

Which means the folks on the 8th Floor need to wake up, grudgingly admit that whacky old Kevin Martin wasn’t so whacky after all, and reopen the proceedings on wholesale cable programming unbundling, retrans, leased access, Section 616 reform, and the other issues around boring cable programming the FCC hoped it could forget about because broadband and wireless would solve evrything and who watched TV anymore anyway.

Stay tuned . . . .

“Will Comcast Join the NAB?” Measuring the Merger On The Trade Association Scale

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Few rivalries in the media world match those of cable operators and broadcasters. Since the first cable regulation by the FCC to prevent cable operators from importing blacked out sports events and “distant signals” that threatened local broadcast content back in the 1960s, broadcasters and cable operators have constantly sought regulatory advantage over one another. Broadcasters once ruled video as its unchallenged masters. Then came cable, which became the dominant platform for delivery of video. But broadcasting continues to aggregate mass audiences and produce more popular programming. Despite all the yapping about how no one can tell broadcast and cable apart anymore, neither one can survive without the other, but both have radically different interests. As a result, the broadcasters and the cable operators, and therefore their trade associations, are constantly at loggerheads.

The fact that Comcast, after acquiring NBC’s broadcast stations, will be eligible to join the National Association of Broadcasters, underscores just how radically and completely the proposed Comcast acquisition of NBC extends Comcast’s reach into every sector of communication. In ideological terms, it is rather like Vatican City joining the Arab League. But that’s not the only powerful trade association Comcast would now be eligible to join. Comcast will also be able to join the MPAA. Depending on how it develops its broadcast spectrum and other wireless assets, it could join CTIA and other wireless trade associations. These, of course, join the already impressive list of trade associations Comcast already belongs to as the largest broadband access provider, one of the largest residential phone companies, purchasers of telecommunications equipment, etc.

So I propose a new metric for measuring antitrust impact of mergers, the uniquely Washington “Trade Association Scale.” How many trade associations will you qualify for after the merger. If the number is too high, that shows you are getting into far too many lines of business to be healthy, because you have too much influence on everybody else’s business. And on the Trade Association Scale, the Comcast/NBC merger ranks a 10 out of 10.

More below . . .

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Update on Program Access — looks like FCC rolls lucky 7 at DC Cir. Casino.

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Wall St. J. reports the court was fairly deferential to the FCC’s predictive judgment. That’s good. But it would be nice if the D.C. Circuit were less of a crap shoot. What makes the FCC’s “predictive judgment” better on program access and on inside wiring than on cable ownership or telco forbearance? Makes it rather Hell to do policy one way or the other.

Stay tuned….