Broadcasting&Cable

Motion Picture Association of America chairman Chris Dodd congratulated US Trade Representative (USTR) nominee Robert Lighthizer on his appointment and called for working together to protect intellectual property and expand markets. The Trump Administration does not see eye-to-eye with the studios on the Trans-Pacific Partnership, however. The TPP is a historic Pacific Rim trade agreement with 11 other countries that TV and film producers had been pushing for as a way to expand trade and access to Asia-Pacific markets.

While MPAA hailed the agreement Trump has called it a bad deal that he wants out of and pledged that his negotiators will strike better ones. The USTR is the lead negotiator on such trade deals. “The MPAA congratulates Robert Lighthizer on his appointment by President-elect Donald Trump for USTR," said Dodd in a statement. "The American film and television industry is a key driver of the U.S. economy, and effective trade policies are crucial to its continued success. Our sector employs nearly two million American workers, while generating $16.3 billion in exports and registering a positive trade balance with nearly every country around the world."

The Federal Communications Commission is allowing foreign investors to own up to a 49% equity stake in TV and radio station owner Univision, including up to a 40% stake by Mexico's Televisa. That came in a declaratory ruling this week after a petition by Univision and Televisa went unopposed. The FCC said it granted the petition "because this increased level of foreign investment in Univision will facilitate investment from new sources of capital in Univision that would not otherwise be available and encourage reciprocity by foreign governments."

Televisa supplies over a third of Univision's programming and bought an equity stake in Univision in 2010 (10% equity, 14.4% voting interest). Univision and Televisa had sought the declaratory ruling in advance of an initial public offering that could increase the foreign investment beyond the current 25%. "We find that the public interest would not be served by refusing to grant Univision’s petition for a declaratory ruling to permit foreign ownership of Univision Holdings...above the statutory cap of 25% and up to 49%."

Senate Commerce Committee Chairman John Thune (R-SD) has announced the Republican membership of the committee in the 115th Congress. They are, in order of seniority: Sens Thune, Roger Wicker (R-MI), Roy Blunt (R-MO), Ted Cruz (R-TX), Deb Fischer (R-NE), Jerry Moran (R-KS), Dan Sullivan (R-AK), Dean Heller (R-NV), Jim Inhofe (R-OK), Mike Lee (R-UT), Ron Johnson (R-WI), Shelley Moore Capito (R-WV), Cory Gardner (R-CO) and Todd Young (R-IN). New to the committee are Sens Young, Inhofe, Lee and Capito. Exiting are Sens Marco Rubio (R-FL), Kelly Ayotte (R-NH) and Steve Daines (R-MT). Sen Rubio, who was instrumental in pushing for bills freeing up more unlicensed spectrum, is moving to the appropriations committee. Subcommittee members have not yet been named.

Veteran cable critics Sens Rob Portman (R-OH) and Claire McCaskill (D-MO) have started out the new Congress by pressing Charter and Comcast on fees and promotions. That came in joint letters to Charter president Thomas Rutledge and Comcast president Brian Roberts dated Dec 23. Sens Portman and McCaskill head up the Senate Permanent Subcommittee on Investigations, which held a hearing on cable fees and customer service last year in conjunction with a report it issued at the same time. Both the report and the hearing were rough on pay-TV providers, who pledged to do better.

In a joint release Jan 3, Sens McCaskill and Portman said they were pressing Charter and Comcast over what they characterized as "the misleading placement of fees on customers’ bills, and inadequate advertising disclosure for service promotions." They want more information on both from the companies. Citing the hearing in the last Congress, they said in letters to the two companies, as they signaled in the hearing, they thought that using separate line items like the "broadcast TV surcharge" for retrans fees or "Regional Sports Network Fees" charge for the cost of that programming "obscured" the real cost of programming when it was grouped with regulatory fee line items and charges.

USTelecom has petitioned the Federal Communications Commission to reconsider its broadband privacy framework order. The FCC Democrats voted Oct 27 to require Internet service providers to get their subscribers' permission (notice and choice) before sharing web browsing and app use histories with third parties for marketing and other purposes.

As USTelecom and cable operators argued before the vote, they want the FCC to "harmonize" its approach with that of the FTC. At the moment, it argues, there are at least a couple of discordant notes in the FCC's approach, which it also argues is arbitrary and capricious. First, it says, was the lack of a cost/benefit analysis of the cost of "foreclosing productive uses of information." For example, it says, the cost of requiring an opt-in regime for marketing of all web browsing info, in contrast to the FTC approach to the edge providers privacy it oversees, which allows more "flexibility" for marketing of nonsensitive information—i.e. not opt-in requirement. Second, USTelecom argues, the FCC treats ISPs as "nearly omniscient," with greater visibility into consumer data than others, a premise USTelecom calls false.

In a move that tacks on technologies that will drive deeper search and discovery capabilities into its X1 platform, Comcast has acquired Watchwith, a company that has built a video metadata platform that can decipher what’s happening inside a movie, TV show or sporting event. Financial terms of the deal, which closed last month, were not disclosed. Watchwith’s deep metadata platform can provide information about what’s occurring within the video, such as which actors are appearing on screen, the location of a given scene, or the start of a memorable scene within a movie or TV show. It does that through the blending of two tools—an editorial tool that enables producers to manually tag specific video segments and an automated media analysis/tagging tool that relies on algorithms and machine learning techniques.

It was a record year for political ad spending, according to ad trackers at Borrell Associates, up 4.6% from the 2012 presidential election to $9.8 billion, but money is shifting toward more targeted ads, with cable in on the new bounty. Broadcast TV remained the big dog at $4.4 billion, more than three times any other outlet. Borrell pointed out that represented a 44.7% share, down from 57.9% in 2012, a $1 billion decline when many were predicting a $1 billion increase. Part of that was President-elect Donald Trump's heavy reliance on earned media and digital media, but it was also because of the general shift to more targeted media. Cable, digital and direct mail gained a total $1.7 billion over 2012. Cable jumped from $891.78 million in 2012 (9.5% of the total pie) to $1,355.28 billion (13.8%), Borrell pointed out. Online and digital exploded from $159.21 million in 2012 to 1,415.38 billion in 2016.

President-elect Donald Trump has added a fourth member to the Federal Communications Commission landing team, the volunteers working on transitioning the agency to Republican majority control come Jan 20. David Morken is the newest member, currently the co-founder and CEO of Republica Wireless parent company, Bandwidth.com. Morken combines a couple of life experiences that appear to hold a lot of weight with the incoming President. He is a former member of the US military (a Marine) and an entrepreneur/disruptor who built an "overnight success" through a decade of hard work growing a business. Bandwidth.com, which started as a URL generating sales leads for other telecoms, built out its network on the theory that Wi-Fi could be the primary network and cellular (Sprint) the backup, which would allow it to charge less ($19 a month at launch) for voice and broadband.

The Justice Department or the Federal Trade Commission have given a clean antitrust review bill of health to the proposed $1.1 billion merger of Internet service providers Windstream and EarthLink. The deal was listed among those that had been granted early termination of their Hart-Scott-Rodino antitrust reviews. Those are conducted by either the Justice Department or Federal Trade Commission—they never say which reviewed a deal when granting early termination, but Justice usually handles telecom transactions. Early termination means they are done with the review and are not suggesting that the merger be blocked or are suing to insure that certain conditions are applied.

The Federal Communications Commission will also need to sign off, but that process will take a while longer. The FCC opened its review docket on the deal Dec. 2 and reply comments are not due until Dec. 23, so there will likely be no decision before early next year. The companies signaled they did not expect the deal to be able to close until first quarter 2017. The companies announced Nov. 7 they had reached a deal for an all-stock deal of $1.1 billion, including debt.

Tribune Media Co agreed to sell Gracenote, which provides media and entertainment metadata, to Nielsen for $560 million.

Gracenote provides reference information for more than 12 million movie and television listings and 200 million music tracks. It is the industry standard for automatic content recognition technology. Combining Gracenote with its measurement framework, Nielsen expects to be able to provide clients with deeper analytics on consumer behavior and offer a better view of audience engagements. “Gracenote’s metadata and content recognition technology fuels the interfaces of the major video, music and in-car infotainment systems that consumers engage with every day. This acquisition provides Nielsen with a significant asset in our mission of measuring and understanding consumer behavior,” said Karthik Rao, president, Expanded Verticals at Nielsen. Tribune acquired Gracenote in 2014. Tribune Media expects to receive approximately $500 million in after-tax proceeds from the transaction, the majority of which will be used to repay existing debt with the remainder to be reinvested in the business. The sale is expected to close during the first quarter of 2017.