October 2010

The Coming Golden Age of Television

[Commentary] Television is emerging as the dominant medium of the digital age. Yes, you read that right. Television.

By just about any measure, television is a very healthy industry -- with viewership, advertising and subscriptions all on the rise. In fact, in terms of overall revenue, TV networks and video programming are among the only media to grow since the advent of the Internet (aside from the Internet itself). For audiences, there's more choice than ever before -- with higher quality and more original programming. But now television is at a critical moment in its evolution. Whether audiences continue to enjoy this golden era of TV will depend largely on whether content creators continue to stay apace of consumer needs and make strategic decisions that favor long-term sustainability over short-term dollars. I believe the best path for TV's next phase is clear. For the past 15 months, Time Warner, along with a growing number of content and distribution companies, has been implementing a new strategy called TV Everywhere. It operates on a simple but powerful premise: If you have access to television in your home -- whether through rabbit ears or a paid cable, satellite or telco subscription -- you should be able to view all the channels you receive on demand on whatever broadband device you wish. TV Everywhere is not about favoring one TV network model over another, or protecting outdated paradigms. It's about harnessing technology to redefine TV in the 21st century in a way that continues to give viewers the best possible experience, and ensures that great programming will continue to be created and enjoyed.

[Bewkes is the chairman and chief executive of Time Warner]

Time Warner Sees Ally in Web

Time Warner's Jeff Bewkes said that his company, which already has deals to enable Comcast Corp. and Verizon Communications Inc. subscribers to watch shows from its cable networks online, has or is close to finalizing similar deals with Dish Network Corp., DirecTV Group Inc., AT&T Inc. and other cable operators as well.

The company also endorsed the Google TV technology, saying it would optimize some of its television websites, including those of TNT, TBS and CNN, for viewing on TVs carrying Google TV. It said it would do the same with its HBO GO website, through which some viewers who subscribe to the premium cable channel can watch its shows online. The arrangement isn't a business deal. Bewkes said Time Warner is tailoring its content to the Internet giant's new Internet-connected TV venture because he believes Google's service will help discovery of its shows and provide another way for users who already pay for access to their cable channels to view them.

In the 500-channel universe, we're definitely lost in space

[Commentary] In the 500-channel universe, which may, of course, contain many more channels than 500, the fun never stops -- fun at such a fever pitch as to sometimes seem threatening, numbing, even agonizing. Somewhere along the way, standards seem to have been not so much lowered as eliminated. "Content" has replaced that archaic term "substance" and seems to promise much less. Style, in many cases, is content; that's not even really news anymore. The bar has been lowered so many times that it now just lies there on the floor, lifeless and limp, the outmoded relic of other eras. Originality is now really too much to expect from a movie industry enslaved by economics and the need to produce film franchises fit for clone upon clone after clone. In television, on CBS, there are those endless "CSI" franchises. ABC's "Grey's Anatomy"and "Private Practice" are essentially the same show. On ABC Sunday nights, "Desperate Housewives" flows fairly effortlessly into "Brothers and Sisters" -- their temperament and attitude are identical and they seem to even share the same musical score.

Pentagon: The global cyberwar is just beginning

The Pentagon is rapidly preparing for cyberwar in the face of alarming and growing threats, say senior defense officials, who add that sophisticated attacks have prompted them to take the striking step of investigating the feasibility of expanding NATO's collective defense tenet to include cyberspace.

But as such planning intensifies, the military is struggling with some basics of warfare - including how to define exactly what, for starters, constitutes an attack, and what level of cyberattack warrants a cyber-reprisal. Equally tricky, defense officials say, is how to pinpoint who is doing the attacking. And this raises further complications that go to the heart of the Pentagon's mission.

FCC, Phoenix Center trade barbs on jobs study

The Federal Communications Commission (FCC) pushed back after the free-market think tank the Phoenix Center unveiled a study arguing that regulatory policies in the communications sector could have an adverse impact on employment.

Paul de Sa, chief of the FCC office of strategic planning, questioned the findings. "In its latest 'study,' the Phoenix Center appears to have reached its conclusions before conducting the research," he said. "The study goes to great lengths to prove the obvious: investment in communications creates jobs." But the report ignores the FCC's record with policies that "both catalyze investment and create jobs," he said, noting the agency approving White Spaces order, approving the Harbinger and Verizon-Frontier transactions, and cutting costs around pole attachments. "Instead, the Phoenix Center arbitrarily assumes that the FCC's actions will reduce investment and concludes that employment will fall. In this challenging economy, we need solutions, not spin," he said.

Shooting blanks on wireless policy

[Commentary] The Federal Communications Commission is designating that unused TV channels be made available for low-power wireless devices. The move - pushed by tech giants Microsoft, Google, HP, and Dell -- is hailed as "liberalization", paving the way for "Wi-Fi on steroids." The exact same hype, including a similar "licence-exempt" plan, inspired a 2005 bandwidth set-aside for WiMax (at 3.6 GHz) that has since flopped.

The TV Band initiative is likewise a debacle in the making. Technology defines what is possible, but economics reveals the options that are best. Complex value trade-offs exist; state bureaucrats are flummoxed. The FCC has spent years pondering how white space devices should operate, rejecting every "smart radio" design submitted. They aim to protect viewers of over-the-air TV from reception interference. But how much protection, and at what cost? Each mandate forces new Wi-Fi radios to be better behaved in order to reduce the threat to Aunt Minnie's rabbit ears - but that raises their price or hampers their performance. For example, the FCC will not allow the new mobile devices to use more than a tiny splash of power (a small fraction of that permitted with Wi-Fi). Moreover, the radios must avoid any channel with a TV station on it or next to it - blocking off three channels per local TV broadcast. Such top-down restrictions are what produced vast "white spaces" to begin with.

Wi-Fi on steroids? Try Wi-Fi on a walker.

TV Auction's Big Question: How Much?

Wall Street seems skeptical about the National Broadband Plan's proposal to induce broadcasters to give up all or some of their spectrum in exchange for a cut of the money when it's eventually auctioned off to wireless broadband operators.

Any attempt to evaluate the so-called incentive auction is thwarted by the fact that there has been virtually no public discussion of what percentage of auction proceeds broadcasters would receive. One of the reasons for that: Allowing broadcasters to receive anything at all from an auction of spectrum requires congressional approval. Enabling legislation has been introduced, but it's a long way from getting the green light. At the heart of the FCC plan is the contention that broadcast television is, at best, a mature industry, and at worst, an industry in decline, while wireless broadband, where the FCC would reallocate the spectrum, is on the rise. Some also see in the plan a bureaucratic determination that broadcasters may not be the best judges of how to deploy and monetize their spectrum.

"Broadcasters are effectively being told their current business model may not be best use of spectrum," a financial analyst says.

"For a broadcaster to hear that, when you're serving the public interest and just spent millions to get your station digital ready, from the perspective of many of the broadcasters I cover, that's not what they want to hear." Broadcasters want time to judge whether nascent services such as digital subchannels and mobile DTV will bear fruit, says Mark Fratrik, vice president of BIA/Kelsey.

Let TV Stations Lease Their Own Spectrum

[Commentary] The National Broadband Plan envisions greatly expanded wireless broadband capability to promote economic growth. The problem with the plan is that it proposes to accomplish this by repurposing 120 MHz from television broadcasters, who understandably have reacted with shock and indignation.

However, broadcasters could turn this assault into potentially attractive new business models by becoming interactive, wireless broadband service providers. Simply put, if the broadcast spectrum is repurposed to broadband, broadcasters are best situated to make that transition. Although broadcasters, as mobile broadband providers, may present new competitive possibilities to existing mobile providers, they might also present themselves as potential business partners to providers in need of expanded spectrum. It would require rulemaking, but no legislation. This solution also provides an appropriate market mechanism that would signal the best economic use of the spectrum while also preserving over-the-air broadcasting services. Nothing in the plan forecloses broadcasters from developing — alone or in partnership with others — and providing flexible broadband services. The FCC should provide the means for broadcasters to make this change, rather than making the assumption that broadcasters are not up to the task.

Frustrated House still waiting for Senate action on 420 bills

The House ran another legislative lap around the Senate in September, widening the gap in the number of bills the chambers have passed this Congress to more than 400. With only a lame-duck session remaining, the House since January 2009 has passed 420 bills that have sat on the Senate shelf. The gulf in productivity has led to an escalation in tensions between the chambers, culminating in a veritable staring contest last month over the expiring George W. Bush-era tax cuts. House Democratic leaders have frequently griped at the disparity, and the caucus chairman, Rep. John Larson (D-CT), said that the slow pace of legislating in the Senate, where bills can be held up by the filibuster and other rules, "infuriates" members of the House.

Device owners read more books, magazines and newspapers

People who own digital reading devices such as Amazon's Kindle, the Sony Reader and Apple's iPad spend more time on books, magazines and newspapers than folks without those gadgets, according to a poll by the Harrison Group.

Tablet and e-reader owners between 18 and 64 years old reported spending 50% more time reading magazines. Users of tablets such as the iPad said they spent nearly 75% more time reading newspapers and 25% more time reading books. Those who own dedicated reading devices such as the Kindle spend 50% more time reading newspapers and 45% more time reading books, according to the poll.

People evidently are watching 25% less television and spending 20% to 30% less time cruising the Web.

Benton

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