Cable Companies Negotiating To Control What TV Shows You Can Watch Online

from the this-won't-end-well dept

Earlier this week when Hulu cut off Boxee, supposedly at the request of its content partners, there was some speculation that the real pressure may have come from the cable companies who are losing customers at a pretty rapid clip. And, while the content companies pretend to deny it, the fact that people can get so much content for free online is almost certainly contributing to that situation.

Now, in theory, this should be a good thing for the TV guys -- who you would think want as many people watching their shows/channels as possible. But, the problem is the business model. Doesn't it always seem to come down to the business model? The TV networks make so much money by selling the channels to the cable companies, that they're scared to death of losing that revenue. We saw a hint of this late last year when Viacom and Time Warner Cable played a big game of chicken over channels like Comedy Central and MTV.

However, now reports are coming out that the cable companies are negotiating with TV programmers to offer their TV content exclusively via their cable internet offerings. In other words, forget Hulu and routing around the cable company and the $80/month they're charging you. You'd have to keep your cable, even if you don't want it, just to get access to many TV shows over the internet (well, legally). Not surprisingly, both the cable companies and the TV programmers seem to like this sort of deal: the programmers continue to get their big fees from the cable companies, and the cable guys avoid losing many more subscribers. Comcast's CEO Brian Roberts is even saying "Online video is our friend, not our enemy."

And, to some extent he's right. If Comcast is going to survive it does need to look at online video as a friend, rather than an enemy -- but the problems may come about if they think that they can force customers to only get online TV if they keep their cable TV service at such a high price. Because, while these deals may make sense for the TV networks and the cable guys, they seem to be forgetting the customers -- many of whom have received a nice taste of TV online for free, and aren't going to be happy about having to pay up for it. The problem is that these cable guys aren't adding any new value. In actuality, it seems like they're looking to take away value from what's already out there -- and that never works. It will likely just lead to increased piracy, increased anger at the cable companies, and a continuing of the downward spiral. But, these days, watching old school companies accelerate their own downward spiral happens so often, you almost have to assume it's likely.

Filed Under: cable companies, exclusivity, internet, networks, tv, video
Companies: comcast, hulu, nbc universal, time warner, viacom

Cable Companies Hold Off On Digital Conversion To Avoid Confusion (And Potential Lawsuits)

from the makes-sense dept

There's tremendous confusion out there about February's required switch for broadcast TV from analog to digital. For example, an awful lot of people who have cable or satellite TV don't realize that this conversion basically has no impact on them. It's only for over-the-air TV (you know, the kind you used rabbit ear antennas for). Many assume, incorrectly, that it has something to do with cable TV's "digital TV" or (even less related) needing to get HDTV. Digital TV and HDTV are two separate things. Yet, there has been some accusations that cable companies are taking advantage of this confusion to get people to upgrade, even if they don't need to. In response to such criticism, cable TV operators have now all agreed to put their own digital conversion plans on hold until after the over-the-air conversion is complete, to avoid "complexity." It might also help them avoid lawsuits for misleading consumers...

Filed Under: cable companies, confusion, digital tv

Sorting Out Truth From Fiction In The Cable/Telco Customer Retention Mess

from the smoke-and-mirrors dept

Back in March, we wrote about a complaint to the FCC by cable companies about how Verizon was abusing the number portability system to try to retain customers. In April, Kevin Martin took his expected position in siding with Verizon, the telco. However, it appears that only Martin was convinced. All the other FCC commissioners went in the other direction and sided with the cable companies, smacking down Verizon and telling it to stop.

What's impressive, though, is the response and the amount of misinformation flying around. Even before the official vote, Verizon's policy guys put up a blog post claiming that this decision would hurt customers. That resulted in a spirited discussion in the comments on that post between Verizon's public policy guy and a cable lobbyist. There have also been some interesting discussions among public policy followers, with some, like James Gattuso, buying Verizon's take that this is bad for consumers, and others, like Karl Bode, noting that Verizon's spin on this appears to be pure "nonsense."

The reality appears to be somewhere in-between. Verizon is clearly overplaying the situation in claiming that the FCC is saying that it cannot market to customers who have chosen to leave Verizon for cable. That's not what this argument is about, and James Gattuso is incorrect in suggesting that the "question at hand" is really about whether or not Verizon can contact customers who have agreed to switch and ask them not to switch. That's certainly the way Verizon wants you to think about it, but that wasn't really the question. No one is saying that telcos (or cable companies) for that matter, can't try to convince customers not to switch. What the FCC has said is that Verizon cannot abuse its position to block the switch while it tries to convince customers not to switch. That's what Verizon is doing. When it gets the request from the cable companies to switch, it basically goes into procrastinate mode, even though it's required to process the switch. It codes the switch request as a "conflict" which gives it extra time to resolve the "conflict" before obeying the switch request.

That's not the same as simply asking the customer not to switch. It's abusing the technical process for marketing purposes. The FCC has not said that Verizon (as Verizon claims) cannot try to entice customers to stay, or to win back those customers who have decided to leave. All it has said is that Verizon cannot stall and block the change request, once it's been placed, in order to try to win back the customer before the change is made. Once the customer has committed to the change, Verizon should be required to process it, rather than block it. So, don't buy the story about Verizon no longer being able to win back customers or entice them with reasons to stay. That's got nothing at all to do with this decision.

Update: Gattuso responds. I still think he's buying Verizon's spin on this ruling. Verizon is falsely claiming that it cannot market to customers who have decided to leave. That's false. They simply cannot abuse the fact that they have access to certain information from the group that has to make the change to market to them. They can still market to them through other means. In other words, Verizon's complaint here does not fly.

Filed Under: cable companies, customer retention, fcc, number portability, telcos
Companies: verizon

Cable Companies Looking To Buddy Up With Sprint Once Again To Save WiMax

from the let's-see-how-this-works... dept

Remember a couple years ago when all the big cable companies teamed up with Sprint with plenty of fanfare to provide mobile phone service and to compete against Verizon and AT&T? Whatever happened to that? Oh, right, it went nowhere. So, perhaps don't get too worked up over the news today that cable companies Comcast and Time Warner might be teaming up with Sprint and Clearwire to fund their troubled WiMax efforts. If you recall, Sprint and Clearwire had a huge deal (with hundreds of millions in backing from Intel) to WiMax the nation, and that deal also fell apart though everyone knows they've been seeing each other on the sly. They know they can't do it alone, so certainly having some support from Comcast and Time Warner could help move this project forward, but there have been so many false starts and stumbles that you can bet this isn't going to go as smoothly as all the players are about to suggest.

Filed Under: cable companies, wimax
Companies: clearwire, comcast, sprint, time warner

Cable Companies Accuse Verizon Of Shady Practices To Prevent Customers From Leaving

from the so-we-hear-you're-leaving... dept

Comcast and Time Warner have complained to the FCC that Verizon is taking unfair advantage in preventing customers from dropping their phone service. The basic story is that the cable companies have been offering deals on various "bundles" of TV, internet and phone service, all over cable. When customers agree to switch, most want to keep their existing home phone number (which is allowed under number portability rules). The cable companies take care of that part, informing the phone company of the switch -- at which point (the cable companies say) Verizon calls up those customers and offers them cash discounts to stick around. While it's quite common for telcos (or other firms for that matter) to offer customers who cancel deals to stay, this is somewhat different. The customer hasn't called to cancel in this case. It's just because Verizon owns the telephone network that it finds out about the switch and then proactively contacts the customers. Given the FCC's extra friendly terms with the telcos rather than cable co's, anyone think this has a chance of getting anywhere?

Filed Under: cable companies, fcc, number portability, telcos
Companies: comcast, time warner, verizon

Drunk Off Patent Success Against Vonage, Verizon Moves On To Cox

from the who's-next dept

Having successfully sued Vonage over VoIP patents, despite an inferior product and plenty of prior art, it appears that Verizon is seeing who else it can sue for VoIP patent infringement. First on the list is cable provider Cox, who offers VoIP to its customers, just like most cable providers these days. A successful lawsuit against Cox would almost definitely mean additional lawsuits against all the other cable providers, who have also been much more successful than Verizon in actually offering a VoIP service that customers find useful. Of course, in this day and age, it seems that rather than improve the product, the answer is to sue everyone else for patent infringement. Just like the Founding Fathers intended.

Filed Under: cable companies, patents, voip
Companies: cox, verizon