The Nation's Entirely Objective Think Tanks And Consultants Want You To Know Comcast Deal Is Secretly Awesome

from the my-wooden-unreasonable-arguments-are-entirely-my-own dept

Comcast faces obvious regulatory and public relation obstacles in getting its $45.2 billion acquisition of Time Warner Cable approved, given concerns about vertical integration and scale. Comcast last week got a running start on selling the deal to regulators by insisting that allowing them to get absurdly massive would somehow be "pro-consumer." Comcast's other big argument last week appeared to be the idea that the larger company couldn't possibly use its larger size as anti-competitive leverage, because Google Fiber (with all of its 1,000 or so users) and Hulu (which Comcast co-owns) would somehow keep Comcast honest.

If you watched AT&T's ham-fisted acquisition attempt of T-Mobile, you know that this is just about the time when Comcast's lobbyists, PR agencies, "non-partisan" think tanks, consultants and various other policy tendrils all work to create a massive media sound wall insisting that the deal will be really wonderful for consumers. Most reasonable people generally understand that an already universally-despised company with a history of anti-competitive behavior getting much more powerful isn't a great thing, regardless of their beliefs. But buried among the massive wash of complaints about the deal are some folks who'd like you to know the deal is secretly awesome. And not just kind of awesome, but a-benefit-to-humanity-the-likes-of-which-you-may-not-see-again awesome.

Enter Scott Cleland, a "consultant" who has built an entire career testifying as an objective telecom analyst in DC while taking money from ISPs and Microsoft to smear their competitors via incoherent arguments (usually directed at Google, as we've illustrated previously). Cleland offers his two cents on the amazing deal:

"Not only is the Comcast-Time Warner Cable merger pro-competitive, via the improvement of services and innovation for millions of Americans and many thousands of businesses, this merger also is occurring in the most competitive communications marketplace with the most consumer choices ever. It should be approved"...

"Since the last cable-to-cable mergers were approved about a decade ago, every single facet of the communications marketplace has become dramatically more competitive, dynamic, and innovative.”

Yes, when two of the worst-ranked companies for customer satisfaction -- from the worst ranked industry for customer satisfaction -- in one of the least competitive industries in the country get together -- magic happens. History has proven it. So has your incredibly inexpensive and "dynamic" cable and broadband service.

You'll note deal supporters are quick to (correctly) point out this isn't really about market share or competition (at least in telecom), since Time Warner Cable and Comcast don't directly compete. However, supporters-for-hire like Cleland intentionally ignore how a larger Comcast has even more leverage to use regulatory capture, content licensing deals, and ever-expanding broadband usage caps in a broadband market that's actually getting less competitive as AT&T and Verizon back away from it. It's also worth noting that Comcast's historically-low customer satisfaction rankings are thanks to growing too quickly for customer support to keep pace and a lack of competition, and another deal fixes neither. The deal's problems aren't really about competition (at least in telecom), but size and scale.

Yet the Information Technology and Innovation Foundation, a think tank whose donors include telecom companies and the MPAA (ITIF was a big pusher of SOPA/PIPA), wants you to know that you needn't worry, because a bigger Comcast will mean lower bills for you:

"...the economic benefits of the combined efficiencies and economies of scale will flow to consumers in the form of lower prices and/or higher quality service. Comcast expects to save about $1.5 billion in annual operating efficiencies through the deal. The combined company, which will have 30% of the pay TV market, will also be able to drive harder bargains with upstream content providers, resulting in savings that will be passed on to cable subscribers."

I'm not sure in what plane of reality the cable and broadcast industry ever passes on savings to you, but it's not the one most of us inhabit. Whether it's modem rental fees, below the line surcharges, soaring cable TV costs, or the ramping up in usage caps and overages, cable broadband is an industry that prides itself on not competing on price. I guess I should note here that Comcast's David Cohen, on a conference call defending the deal last week, stated "we're certainly not promising that customer bills are going to go down or even increase less rapidly." Apparently the ITIF has no problem making that promise for Comcast.

It's always hard to know where the for-hire astroturf ends and genuine-but-just-plain-wrong opinion begins (which is the entire point of astroturf). Enter TechFreedom, a non-profit think tank that, like most such groups, doesn't disclose its funding -- professing its insights are driven solely by its honest Libertarian leanings (perhaps that's even true, I'll give them the benefit of the doubt). The think tank believes the deal will be truly nifty, and consumers don't have to worry about Comcast bullying Internet video startups because Comcast has kindly agreed to keep adhering to the FCC's dead net neutrality protections:

"When Comcast bought NBC Universal in 2011, it agreed to a long list of conditions required by the FCC, including special protections for online video distributors and Net Neutrality rules. These remain in effect even though the D.C. Circuit Court has struck down the same rules in the FCC’s Open Internet Order. The deal will extend these protections to eight million Time Warner Cable subscribers."

Well, no. People crying over the FCC's freshly-deceased net neutrality protections fail to remember (or never knew) that the rules didn't do all that much. They don't really cover wireless whatsoever, and the language of the rules (because it was crafted predominately by industry) allows for all manner of discrimination -- just as long as the carrier uses faux-technical justifications to claim it's for the protection and safety of the network (don't worry, regulators won't check). The rules did restrict outright blocking of competing content and services on fixed-line networks, but generally no incumbent ISP is dumb enough to do that and incur heavier regulation prompted by public outcry. It's also worth noting that most of the conditions attached to the NBC acquisition were suggested by Comcast itself and, like the neutrality rules, don't do much of anything by design.

TechFreedom goes on to pretend the deal will make service better and lower consumer bills (again, as if rate reductions ever happen in the cable industry), before finishing its love letter to industry with the claim that it's not broadband carriers that are responsible for limited sector competition -- it's all the local governments' fault for being jerks:

"Those concerned about broadband competition should focus on the real problem: barriers to entry created by local governments and the pricing of rights of way and pole attachments,” added Szoka. “That’s what’s made it hard for companies like Google, Verizon and Centurylink to build fiber networks. Last summer, Szoka explained in Wired that it’s local governments, not cable companies, that are to blame for hampering broadband competition."

While I knew that towns and cities could occasionally be annoying in TV franchise and pole attachment negotiations, I was just as shocked as you to learn that awful protectionist bills write themselves, politicians bribe themselves, and you pay $70 for a 3 Mbps DSL line because your Mayor is mean. I'm equally amazed to learn that mediocre, over-priced broadband isn't the product of limited competition, regulatory capture or myopic investors too short-sighted to wait for investment returns, but entirely because of the villainous machinations of Billy and Janet Burbit on the Podunk town council. Nefarious, indeed.

For the record I do think the deal could bring a few small improvements to some users. Comcast might be an upgrade for users in markets where Time Warner Cable has historically been even worse at providing either faster speeds or improved television services and set top boxes (looking at you, New York City). It's again those Comcast usage-cap "trials" where my attention is fixated, as all the upgrades and promises in the world don't matter if Comcast insists on arbitrarily throttling the pipe to the detriment of smaller businesses and startups. Deal supporters like to insist regulators will crack down should this happen, but so far regulators have dumbly nodded in agreement that usage caps and per gigabyte overages are just "creative pricing innovation."

Over the next few months you'll start to notice a pattern of editorials popping up in papers and on websites around the country. They'll all cling to the same talking point insightful logic, with none of the outlets noting any author's financial ties to industry. Be aware that these individuals and groups, no matter how specious, wooden and incoherent their arguments might be, are simply looking out for your well being as consumers because they're good people. That said, Comcast might want to tread carefully. Part of the reason the AT&T/T-Mobile deal put a bad taste in regulators' mouths (aside from it being based entirely on lies, totally unnecessary and reducing competition) was AT&T's hubris in making pretty much any bizarre claim they wanted, from the idea that reducing competition increased competition, to the argument that the inability to acquire T-Mobile would harm children and make the Internet explode.

That's not to say the Time Warner Cable/Comast merger isn't still totally awesome. I'm just saying that those who want the deal to succeed (whether you're paid to take that position or not) might just want to dial back the bullshit just a tad this time around.

Filed Under: acquisition, cable, television
Companies: at&t, comcast, hulu, time warner

CBS Admits Aereo Supreme Court Win Wouldn't Hurt CBS, Might Make Things Better For Everybody

from the we-really-feel-for-you dept

Last year CBS joined a number of broadcasters in whining incessantly about how if Aereo was allowed to continue living, the "struggling" networks would be forced to pull their content from over the air broadcasts and move to cable. It's part of a long, long history of broadcasters pretending that if things don't go just they way they want them to, they'll surely go out of business. The threat to pull broadcasts was aimed at scaring Congress into passing protectionist legislation, and as we noted at the time it's something CBS should just shut up and do -- given the public could probably come up for better uses for their spectrum.

After insisting for some time that big bully Aereo will drive poor little CBS out of business (the same CBS that posted record earnings last year and 20% higher profits in the fourth quarter), it's rather amusing to see CBS CEO Les Moonves insist in an interview with CNBC that CBS won't feel any financial impact from a Supreme Court win. In fact, Moonves notes the win will likely result in a slew of new innovative products as cable companies -- and in response the networks themselves -- rush to follow Aereo's lead:

"Look, we expect that the Supreme Court will do the right thing and side with the people who are providing the content. Not the people who are taking our content and using it illegally, which is our point of view. However, if that should happen, if the worst should happen, there are so many other alternatives that will not; so this will not affect our bottom line. Obviously the networks collectively could do their own version of Aereo, there's a way to put our signal on cable without putting it over the air. There's also over-the-top for us. So, there are many, many alternatives to allow people to receive our signal no matter what happens. It's something that the Supreme Court will decide, but it's not anything that we're deeply concerned about because we have alternatives."

In other words, an Aereo Supreme court win not only wouldn't dent CBS in the slightest (something we already knew), it would result in a variety of new ways for people to receive content. In fact, it seems like an Aereo win would probably be good for pretty much everybody but Aereo. Should Aereo win, they would suddenly face all of the satellite, cable and pay TV companies offering similar or better services over the Internet to help slightly reduce retransmission fees. That would in turn result in broadcasters coming up with more innovative Internet TV services of their own to balance any retransmission fee losses.

More products, more options for consumers, more innovative services, more money for everyone and less time in court; it sounds like a real nightmare scenario for CBS and everybody involved.

Filed Under: broadcast, cable, les moonves, supreme court, television
Companies: aereo, cbs

Nielsen Backs Off Reporting Data On Cord Cutters Because The Cable Industry Prefers Fantasyland

from the Plato's-cave dept

For many years we've discussed how the cable industry is in stark denial about cord cutting, insisting at different points that the cord cutter was a mythological beast akin to yeti or unicorn, despite very obvious stats showing they're a small but growing and very important statistical reality. When the industry wasn't busy insisting that cord cutters didn't exist, they were busy trying to argue that they were an irrelevant niche market of uneducated, middle-aged dolts (not that there's anything wrong with that) living in mom's basement, even though the data shows that cord cutters tend to be young and highly educated.

As such, it has been fun watching the legacy TV industry (and those that exist and profit comfortably within it) perform 180s when confronted with data that has become less and less "negotiable." For example, one of cord cutter's biggest opponents was former Sanford Bernstein analyst Craig Moffett, who spent years insisting to any media outlet who would listen that cord cutters weren't real, only to recently move to his own firm, where he now readily admits cord cutting is an important trend (you're to ignore the fact he was not just wrong, but aggressively wrong, for many years).

Also amusing to watch has been TV ratings firm Neilsen, who has an obvious vested interest in keeping TV ecosystem executives happily believing whatever they'd like to believe about the current TV ad market. Nielsen over the years has gone out of their way to proudly proclaim cord cutting was "purely fiction," yet despite this certainty, the firm only about a year ago announced they would finally begin the process of figuring out how to track viewership on alternative devices (consoles, iPads, smartphones) and services like Netflix and Hulu. Around the same time, Nielsen began manipulating their definitions, calling people who don't watch TV on a TV "zero TV households" -- just so they didn't have to use the term "cord cutter" and admit what they'd spent years denying.

Fast forward to this week with the news that Nielsen is bowing to broadcaster pressure to delay publicizing data the cable industry may not like. After fielding complaints from NAB, Nielsen is withholding broadband-only household data from the firm's local TV ratings service "for the time being." Their explanation:

"In early 2013, the decision to include broadband-only homes in Nielsen's television universe estimate was made to measure the media behavior of the average U.S. viewer in this fast-changing and evolving technological landscape,” Nielsen Senior Vice President-Insights and Analysis Pat McDonough said in a statement. “This change was made with specific and strategic measurement benchmarks in place as a way to study how this small segment of the vast viewing audience might affect the larger sample. "Based on a thorough evaluation of the viewing patterns in broadband-only homes and industry feedback on the need to maintain stable measurement in local television," she continued, "we have decided to exclude broadband-only TV homes from local TV measurement and ratings for the time being."

That's long-winded code for: "the cable industry wants to remain in fantasyland and our data upset them, so because they pay us we're allowing them to remain willfully oblivious until they're better able to acknowledge reality." There's been a lot of pressure for Nielsen to modernize their viewing analytics, and pretty clearly those folks will be waiting a little longer. Kind of amusingly, you'd be hard-pressed to find TV ratings operations or analysts that even try to include (genuine) piracy statistics, lest that data further force the cable and broadcast industry to actually pay attention to the real world and changing consumer trends.

Filed Under: cable, cord cutting, ratings, television
Companies: neilsen

Apple's Promised TV Revolution Will Be More Of The Same Crap, Thanks To Terrified Cable & Broadcast Executives

from the killing-innovation-in-the-cradle dept

For countless years we've all been inundated with rumors that a television revolution would soon be delivered any day now by Apple, whose legendary former CEO at one point claimed he had "cracked the code" on delivering a truly disruptive, intuitive and innovative TV platform. Yet this miracle TV revolution never seems to materialize, and it's not (outside of perhaps Apple's marketing machine) really the fault of Apple. The road toward TV disruption is littered with the corpses of countless similar projects from the likes of Sony, Microsoft and Google. With a few small successes, every last one of them has inevitably run, face-first and at full-sprint, into a restrictive broadcast-industry content licensing wall used to prevent disruption.

The press certainly shares some of the blame as well for over-hyping products on demand, as most recently made evident by the collapse of Intel's TV ambitions. Intel's OnCue system was presented in 2012 as the next great TV revolution that was sure to arrive any day now. That was, until a slow drip of reports indicated that they too couldn't get around broadcast-industry licensing restrictions. That technology has since been sold on the cheap to Verizon, who'll utilize the useful bits and sit on the rest, afraid of offering anything that could possibly cannibalize their legacy TV FIOS user base.

Apple has been hammering their head against this same brick wall for the better part of a decade now, and even though the business and earnings potential of a well-built Apple-based hardware partnership could potentially be immense, the broadcast and cable industry is too terrified to budge. Rumors have ranged over the years from an Apple TV set to a live a la carte TV subscription service, and now have skidded to an underwhelming halt with Apple having to settle for what's just an Apple TV hardware and GUI refresh with a lovely coat of underachieved ambition. From the Wall Street Journal:

In 2012, the Journal reported that Apple was talking with cable operators like Time Warner Cable about a set-top box and was approaching media companies to gain rights for an ambitious Internet-based digital-video-recording service through the box. At the time, it was looking to offer full seasons of current shows, as well as live programming. Last year, it approached media companies with a proposal to pay extra for ad-free programming.

But it couldn't complete a deal. Programmers resisted the idea of ad-free TV, and Time Warner Cable balked at some of Apple's early proposals, which included Apple essentially taking over the cable operator's video-on-demand service.

Worse, the Journal notes, is that Apple was only able to acquire "just the most recent five episodes of current-season shows," and is having to battle for the ability to fast-forward commercials three days after they air (which they may not even get). So Apple's ambitions went from Steve Jobs dreaming about revolutionizing the sector, to yet another product intentionally hamstrung so it underwhelms (in much the same way the industry has relentlessly crippled Hulu). Can't you just feel the cutting edge excitement?

Many like to argue that Apple managed to help revolutionize music sales and can do the same here, but it's precisely the cable and broadcast executive fear of that history that has made securing flexible licenses such a Sisyphean feat. On the bright side, like any good disruption-phobic legacy industry, they can only delay inevitable evolution, not kill it. It might be Apple, it most-likely will be somebody else, and it may take the better part of the next decade -- but it's coming eventually whether the myopic and timid cable industry likes it or not.

Filed Under: cable, television, time warner
Companies: apple

Comcast: Allowing Us To Get Immensely, Inconceivably, Ridiculously Massive Is 'Pro Consumer'

from the now-witness-the-fire-power-of-this-fully-armed-and-operational-battle-station dept

Comcast has confirmed reports that the company will be acquiring Time Warner Cable in a deal estimated to be worth around $45 billion. With the ink on their NBC acquisition only just dry to the touch, the deal will tack 8 million broadband subscribers onto the company's existing 22 million broadband customers. Comcast is already the nation's largest fixed-line broadband company, largest cable TV provider, and third largest fixed-line phone company -- and that's before you include the company's NBC or other assets. From a geographical perspective the deal makes sense; Time Warner Cable filling in Comcast's coverage gaps and in particular giving Comcast the prized markets of Los Angeles and New York City, where Time Warner Cable has traditionally under-performed.

The problem is less of market share (the two companies didn't compete directly) but one of consolidated power; allowing one, massive company to control both the content and the conduit to your home across the vast majority of the country -- then just hoping they'll play nice with smaller competitors, startups and consumers. Never worry, insists Comcast, who states that they'll divest a few of these markets (most likely to failed Time Warner Cable suitor Charter Communications) so that they won't be quite as absurdly massive as they might have been.

In a memo (pdf) paving the way for what's sure to be a tough attempt at regulatory approval, Comcast's David Cohen trots out Google Fiber as an ambiguous example of why vertical integration and market dominance concerns no longer apply:

"In today’s market, with national telephone and satellite competitors growing substantially, with Google having launched its 1 GB Google Fiber offering in a number of markets across the country, and consumers having more choice of pay TV providers than ever before, Comcast believes that there can be no justification for denying the company the additional scale that will help it compete more effectively."

Except, well, not. Google Fiber is only available in two actually-deployed markets currently, and despite being a great price-disruptive product in those locations, likely won't be expanding beyond more than a handful of cities. As for "growing" national telephone competitors, both AT&T and Verizon are in the process of gutting regulations across dozens of states so they can begin hanging up on unwanted DSL and phone customers they don't want to upgrade. They're effectively ceding all competition on the fixed-line front in half of their markets so they can focus on wireless, signing co-marketing deals with cable directing those users to what will be their last fixed-line choice for broadband.

That choice is going to be Comcast, and with less competition than ever across huge swaths of the United States, you can be certain the company will be bringing their planned usage caps to your neck of the woods before long -- impacting consumers, startups and small businesses across the country. Again, no sweat argues Comcast. In a "public interest benefit summary," (pdf) Comcast again states you don't have to worry about any of this, because, well, Google Fiber and Netflix. Or something like that:

"A number of online businesses like Apple, Google, Amazon, Hulu, Netflix, and a host of smaller companies are entering the online video space and trying to position themselves as competitors. While we view online businesses as complementary to our business, previous antitrust concerns about further cable consolidation are truly antiquated in light of today’s marketplace realities."

Right, because there's no way that a massive company like Comcast with that kind of lobbying power and market leverage could find it easier than ever to squeeze these companies through restrictive content licensing deals, regulatory capture, or usage caps, right? And oh, just a reminder Comcast, you own Hulu, and alongside other broadcast owners have worked hard to ensure it never disrupts the legacy TV apple cart. All in all, Comcast would prefer you not worry your pretty little head about any of this stuff as we wait to see whether new FCC boss Tom Wheeler (formerly a lobbyist for the cable industry) approves Comcast's latest adorable growth spurt.

Filed Under: broadband, cable, television
Companies: comcast, time warner cable

Fake Cable Ad Apparently Hits Too Close To Home; Bogus Defamation Claim Censors Video In Canada

from the what-is-defamatory? dept

Back in March, we had written about an absolutely hilarious fake cable ad by the good folks at Extremely Decent Films. It's funny, and you can watch it again here... if you're not in Canada: Why not in Canada? It appears that YouTube has pulled the video based on a defamation claim. I confirmed this by logging into a Canadian server on my VPN, and got the following: This raises all sorts of questions, none of them good. There's nothing defamatory in the video at all. I don't care how ridiculous Canada's defamation laws are (and they are kind of ridiculous), this video isn't defaming anything. It doesn't name a particular cable company, and it's clearly parody anyway. It makes no statements of fact about any particular cable company anyway. Furthermore, it's clearly focused on the US, not Canada (at 24 seconds it shows a map of the US). So, it seems like an interesting question to know who made the defamation claim against the video? Furthermore, this is the first time I've seen that particular error message on a YouTube video (it's usually a copyright claim). I'm curious as to how carefully YouTube reviews the defamation claims and if the counternotice process is the same as with a copyright claim. Either way, it seems like whoever decided to file such a claim on the video basically decided to censor a video because they don't like what it says... and, of course, that's only going to serve to give it that much more attention (yet again).

Update: YouTube has now reinstated the video, telling us: "Sometimes we make the wrong call. When it's brought to our attention that a video has been removed or blocked mistakenly, we act quickly to reinstate it." It's still not clear who made the original defamation claim, unfortunately.

Filed Under: cable, canada, censorship, defamation, parody, takedown, youtube

Pace Of Cord Cutting Continues To Quicken

from the ramping-up dept

While we've discussed cord cutting before, it seems like the entertainment industry has been slow to respond to it. It was only recently that Nielson seemed to acknowledge its occurrence, for instance, and even once television stations faced the facts and attempted to embrace internet streaming, they did so with the kind of guile and tact you'd expect out of a drunken giraffe. Lots of time delays, restrictions, and barriers to entry that will turn away the kind of person who is likely a cord-cutter. In other words, they're doing it wrong.

And they had better start learning to do it right, because the pace of cord cutting is ramping up. This from Moffett Research's Craig Moffett, former offerer of terrible broadband infrastructure advice and someone who previously indicated that cord cutters were "poor nobodies."

Moffett Research founder and analyst Craig Moffett said mid-day Tuesday that evidence of cord cutting has become more apparent in the latest set of figures...For the second quarter, publicly traded pay TV companies recorded a combined video subscriber decline of 380,000, "about the same as last year," Moffett said. "Household formation, however, was better than a year ago, meaning that the change in pay TV penetration was worse."

In other words, the pool of potential customers has risen with no correlative rise in subscribers. That's an indication that more households are foregoing cable television entirely and, what with the ever-growing interest in entertainment from the public, that had better represent a huge concern for the industry. Television providers have done a horrible job of making their content available in the way customers want it, when the customers want it, and they result has been a declining subscriber base.

What's more, the crowning jewel that keeps much of that pay-TV revenue coming in has been live sports entertainment and if you look at the flagship station for that kind of thing, ESPN, the ratings hits have been massive. Couple that with a clearly stated goal by Google and others to expand sports streaming over the internet and you have a recipe for the decimation of cable TV.

All this, rather than giving customers what they want, how they want it, and when they want it -- and, hey, welcome to the reality party, Craig! Why don't you stick around awhile this time?

Filed Under: broadband, cable, cord cutters, cord cutting, craig moffet, tv

The Tiny Bit Of Competition Remaining In The Broadband Market Is On The Verge Of Extinction

from the scare-quotes-now-mandatory-when-referring-to-broadband-'competition' dept

America, prepare for the coming of your new Broadband Overlords. Karl Bode at Broadband Reports points out the inevitable.

In most areas cable has already won the broadband wars, with inexpensive DOCSIS 3.0 upgrades allowing them to offer speeds that cash-strapped, smaller telcos simply can't match. As I noted the other day, things are looking even brighter for most cable operators given that AT&T and Verizon have all-but stopped next gen upgrades, and are willfully driving DSL customers they don't want to cable, strengthening cable's dominance across most of America over the next five to ten years.

This is all before you factor in the fact that the cable industry appears poised for a new round of consolidation, with Liberty's John Malone clamoring for a series of deals that could include a Charter acquisition of Time Warner Cable and Cox, or a Time Warner Cable acquisition of Cablevision.

In most areas of the US, cable companies enjoy cushy duopolies, if not outright monopolies. This has never worked out well for the customers, who are routinely subjected to terrible prices and worse service. Unfortunately, the few non-cable companies providing broadband connections seem to be more than happy to cede ground rather than upgrade or repair existing infrastructure.

Karl Bode has been documenting these activities for several months, especially the more egregious anti-consumer actions of Verizon. Most notably, Verizon has used the damage caused by Hurricane Sandy as an excuse to dump its DSL offering and replace it with a service that offers less but costs more.

Verizon has been going around telling many Sandy victims who have been waiting almost eight months for DSL repair -- that repairs will never happen. In its place, Verizon is giving those users "Voice Link," a service that lets users connect home phones to the Verizon Wireless network. The problem? Voice Link is no replacement for DSL: it's buggy, it lacks many features (like named callerID), doesn't include data service, and actually is less reliable than many POTS lines during a storm. It's simply not an even exchange.

At first glance, this looks like nothing more than a bottom line-oriented move by Verizon. Sure, it screws existing customers and makes the company appear to be exploiting a natural disaster to protect profit margins, but it doesn't explain why Comcast willingly repaired its existing infrastructure post-Sandy. After all, Comcast wouldn't have done it if it couldn't justify the expenditure.

There's another reason both AT&T and Verizon are willingly ceding market share to cable companies. Both telcos would rather push existing customers to their LTE offerings, which are apparently profitable enough to cover any lost customers. For Verizon, the positives for ditching fixed line services are even greater, thanks to a rather symbiotic relationship with cable providers -- further bad news for customers seeking competitive options.

Consumer advocates remain worried that Verizon's co-marketing partnership and spectrum deal with the cable industry contains either a documented or undocumented "gentlemen's agreement" that Verizon will limit future expansion of FiOS to prohibit more intense landline broadband competition. As we discussed, that would mean that the company's already stalled FiOS upgrades would remain that way as a courtesy, in exchange for being able to sell LTE service to millions of new cable customers.

All of this points to a small handful of cable companies controlling the American broadband experience. Verizon and AT&T are both actively attempting to gut regulations prohibiting them from (advantageously) fleeing markets. The broadband speeds and connectivity that cableco cheerleaders and spokespeople proudly hail as "capable" will very likely remain at their current "adequate or below" level. Smaller competitors will be squeezed out of the market by the unified front of wireless providers and cable companies.

In addition to the negatives listed above, Susan Crawford at Wired suggests this could lead to widespread adoption of metered billing, something most cable providers are hesitant to put into practice due to its massive unpopularity -- but who cares about massive unpopularity when the public has no alternatives where they can take their business?

It works out to be the perfect storm for the two industries, both of which will likely see gains in market share for their most profitable offerings.

Filed Under: broadband, cable, competition, dsl

Why The Networks Are Really Afraid Of Aereo: Time Warner Cable Says It Might Offer Aereo-Like Service

from the getting-around-their-transmission-fees dept

The TV networks' fight against Aereo, including their recent hilarious threats to pull their networks off the air and put them on cable always seemed really exaggerated. Aereo is a tiny startup, with a questionable business model and not that many customers. It does some nice things, but how many people were really going to sign up? Of course, the truth is that the networks aren't that scared of Aereo itself, but if what they're doing is shown to be legal, others might follow. Others like... the big cable companies. Like Time Warner Cable.

Time Warner Cable's CEO, Glenn Britt, just admitted that they're watching the Aereo case closely, and might offer an Aereo-like service themselves, if Aereo continues to win its lawsuit.

“What Aereo is doing to bring broadcast signals to its customers is interesting,” Time Warner Cable chief executive Glenn Britt said in an interview with The Washington Post. “If it is found legal, we could conceivably use similar technology.”

There's a lot more behind the scenes here. Britt is posturing, in part, because every few months or so we see yet another flare up between the networks and various cable providers over how much the cable guys need to pay to retransmit the networks over their wires. If you have a TV service, you've probably lived through one of these fights, where you're told you might lose (and sometimes actually do) a popular channel for a while if the company doesn't come to its senses. Those fees have gone up and up and up and are a big part of why cable bills are so ridiculously high these days.

What Britt is now saying is that if Aereo is found to be legal, TWC would seriously consider offering their customers a similar service and then they could tell the networks to get lost the next time they demand a crazy amount to be included. This is why the networks are so freaked out about Aereo. They're not so concerned about that one company, but that the cable companies will finally realize they've been paying ridiculous sums of money to rebroadcast those channels, when they might be able to deliver the same content, legally, online for free.

Filed Under: cable, glenn britt, retransmission
Companies: aereo, time warner

Hilarious And Ridiculous: Networks Threaten To Pull Channels Off The Air If Aereo & Dish Win Lawsuits

from the call-their-bluff dept

The entertainment industry has a long, long history of claiming that if copyright law doesn't go their way, they'll all go out of business. It's the adult version of "if you don't do it my way, I'm taking my ball and going home." If court cases don't go their way, or if the law isn't changed, we've been told over and over and over again for the last century (and more frequently in the last two decades) that the industry will take its ball and go home, because they won't create under such awful circumstances (even if those circumstances really aren't particularly different than they've operated under for years). The latest? First, Fox's COO, Chase Carey, claims that if they lose the Aereo case, they might shut down Fox, the network TV channel, and move all its content to cable TV channels.

“If we can’t have our rights properly protected through legal and governmental solutions, we will pursue business solution. One solution would be to take the network and make it a subscription service. We’re not going to sit idly by and let people steal our content.”

That came out about the same time as another quote from a TV exec, Garth Ancier, who has worked at Fox, NBC and WB, basically saying the same thing, arguing that an unnamed "two" of the four major networks are considering shutting down if the Aereo case (and possibly the Dish Auto Hopper case) goes against them.

“I know two that are talking about it,” he says, leaving open the possibility that the others might be as well. He declines to specify which, saying he’d heard it in a “talking over coffee” setting and didn’t want to betray a confidence....

“To say it’s serious is probably an overstatement,” Ancier says. Rather, it’s a contingency plan the networks in question are keeping in their back pockets in case they can’t prevail over Aereo and Dish in court or find some other way to stave off the threat they represent.

Let's be the first to call bullshit on this. No networks are stupid enough to shut down over this, and if they are, good riddance. Put that spectrum to better use. First of all, network TV shows get a lot more viewers. By a wide margin. Yes, there's an occasional cable show (Game of Thrones) that sneaks in to the top ratings, but it's pretty rare. The cable shows that get the most viewers are still viewed a lot less often than most network shows. If you look at Nielsen's latest rankings for last week, the top 10 network shows all scored higher ratings than the top cable show (Walking Dead). And by the time you're at the 4th most popular cable show, you're talking about a show that's getting just around half of the tenth most popular network show.

No network with any business sense at all is going to give up that prime position for getting viewers, and shunt themselves off into the hinterlands of cable TV. And, seriously, if they do want to cede that position, I'm sure there are plenty of smart folks willing to take over that position. And, of course, nothing that Aereo or Dish Hopper is trying to do does anything to threaten the traditional business model of network TV in the first place: ads. In fact, both serve to increase viewers. The real issue is that the networks have gotten fat and happy off of the money they get from cable and satellite companies for carrying the networks, and they don't want that gravy train to go away. So, an artificial situation came up that let them get lots of money, and now that it might go away (and reality is that it won't go away for a long long time) they're threatening to take their ball and go home?

This is clearly bullshit whining from the networks hoping that lawmakers will protect their revenues from cable and satellite providers. It has nothing to do with "stealing content" as Carey claims. Policy makers would be well served to call the networks' bluff. Let the cases play out and let's see (1) if the networks really give up their prime real estate and (2) if others don't rush in to make use of it.

Filed Under: auto hopper, cable, chase carey, copyright, garth ancier, hopper, nab, network tv, threats
Companies: abc, aereo, cbs, dish, fox, nbc