December 2010

Hulu CEO visits FCC to discuss Comcast-NBC merger

Jason Kilar, chief executive of the network-backed online television platform Hulu, made a marathon tour through the Federal Communications Commission Dec 1, answering questions from commissioners and the chairman's staff on how Comcast and NBC Universal's proposed merger could affect video distribution on the Internet.

According to a filing with the FCC, Hulu representatives talked in five separate meetings with Commissioners Mignon Clyburn and Meredith Baker; the chairman's chief of staff Eddie Lazarus and senior counsel Rick Kaplan; and John Flynn, head of the team reviewing Comcast and NBC's merger. In the meetings, Kilar and Hulu's legal staff responded to questions about the relationship between online video programming distributors (“OVPD”), such as Hulu, and cable and telecom services that offer paid television subscriptions. Specifically, the company discussed revenue models and cost structure, program acquisition, advertising sales and audience measurement. During their meetings with FCC officials, the executives also talked about how companies like theirs will provide more competition in the future video marketplace, "to the benefit of consumers, content owners and advertisers."

US can't advocate open Internet abroad while denying it at home

[Commentary] Federal Communications Commission Chairman Julius Genachowski should be applauded for his announcement that he would proceed on open Internet rules and for recognizing that "no central authority, public or private" should be a gatekeeper to the Internet.

If the United States can't preserve open, neutral Internet access, our diplomats and trade representatives will be hard-pressed to object to Internet gate-keeping -- such as censorship and filtering -- by foreign countries. Whether a corporation wants to prioritize favored Internet traffic for commercial reasons, or a government wants to censor unfavorable traffic for political reasons, the same network tools, like deep packet inspection (DPI), are at work to control what gets through to end users, and when. Without lots more competition among access providers, there needs to be a check on their power to discriminate and commercially regulate Internet activity. The battle for open Internet access abroad is growing as a trade and diplomatic priority. We have rightfully asserted that access to information is a human rights issue for the world's citizens and a critical trade issue for companies that drive the information economy. To wage that campaign successfully abroad, we can't undermine the commitment to Internet freedom here. The government has a clear interest and duty to protect public access to the open Internet at home.

[Black is president of the Computer & Communications Industry Association.]

Timeshifting TV Viewers Shifting Up Fast

According to a new study from The Nielsen Company, with almost 100 million US viewers watching timeshifted TV, these viewers grew at a much faster year-over-year rate than the number of traditional in-home TV viewers. The emergence of the DVR as a widely distributed device has changed viewing behaviors in many homes. The average person living in a DVR home watched 24 1/2 hours of DVR playback during the second quarter of 2010.

Americans Ignore Internet Ads Far More Than TV

A majority of Americans say they ignore Internet ads -- far more than television, radio and newspaper ads. Some 63% of consumers say they tend to ignore or disregard all Internet ads. Among this group, 43% say they don't pay attention to banner ads and 20% ignore search ads. The research was produced by AdweekMedia/Harris Poll, from a recent online survey done by Harris Interactive. Farther down the list was television ads -- only a 14% number. Radio was at 7%; newspapers ads, 6%. Overall, almost all Americans say they ignore some ads -- 91%.

Voice as an Application: Life after POTS

[Commentary] Plain Old Telephone Service (POTS) has been a chief revenue source for service providers since the early 20th century. Over the last decade that has changed dramatically as evidenced by the number of voice lines cut every month across the country. Some larger incumbents have gone so far as to call for an “end of life” to what once was the mainstay of their business.

While there has certainly been erosion in the number of POTS lines, it is not the death knell for voice. Like many technologies before it, voice is simply evolving. POTS, a service that was once the only revenue source for service providers, is rapidly becoming an application that can be bundled into a suite of communications and entertainment services—each essential to a diversified revenue stream. Today’s voice service can be infrastructure-based or cloud-based. It can be delivered over traditional technology, like tip and ring, or via wireless or cable modem over a variety of network architectures and a variety of media, ranging from DSL to cable to fiber. Or, like the Skype App on the iPhone & iPad, it can even be an application that runs on a mobile device. The dilemma for today’s wireline network operators is how to create voice applications that generate revenue and compete against cloud-based services like Google and Skype. One solution could be to meld current and future technological capabilities with the habits of today’s consumers. [Vela is Director of Solutions Marketing & Strategy for Occam Networks]

Effective Date Set For Updated, Upgraded E-Rate Program

The Federal Communications Commission's Sixth Report and Order (6th R&O) in its Schools and Libraries Universal Service Support Mechanism proceeding (more commonly known as “the E-rate program”) – first adopted last September – has finally been published in the Federal Register. This means that the revised rules will take effect on January 3, 2011.

The revisions adopted in the 6th R&O fall into three conceptual categories: 1) providing schools and libraries with greater flexibility to select and make available the most cost-effective broadband and other communications services; 2) simplifying the E-rate application process; and 3) improving safeguards against waste, fraud and abuse. The FCC is also seeking proposals for a limited pilot program to establish best practices to support off-campus wireless connectivity for portable learning devices, such as digital textbooks, outside of regular school or library operating hours. The FCC has separately announced that applications for the pilot program must be submitted on or before December 17, 2010.

What Netflix Wants Next

Put yourself in Netflix’s shoes and ask: What kind of shows would the TV industry actually be willing to do a deal on without derailing its gravy train, the syndication marketplace? There’s a pretty logical subset of shows to target: serialized dramas.

These are the densely plotted one-hour shows like AMC’s Mad Men that don't get anywhere near the millions per episode that procedural dramas like CSI get in syndication because their episodes can't air out of order. They also don't stay on the air long enough to reach over 100 episodes, a total that guarantees buyers really pay through the nose. If Netflix scooped up serials, it could actually find itself in the position to be something of a saving grace to the TV industry that too often gets burned gambling on these shows only to make nothing on the back-end. Fortunately for Netflix, on-demand consumption actually lends itself to serialized episodes and the number of episodes is irrelevant. The smart money says this is where Netflix will be shopping to keep its momentum going in TV, which the company recently signaled accounts for half of its streams. But there could be a hitch. If you think of the seller that has the most to offer Netflix in serialized shows, it’s HBO. But look inside the trove of shows Netflix currently offers for streaming and you'll notice there’s nothing from the pay-TV king even though rivals like Showtime have licensed their programs.

Spectrum Reform: A Progress Report

Speaking at the Phoenix Center 2010 Annual U.S. Telecoms Symposium, Federal Communications Commission member Meredith Baker offered a progress report on spectrum reform. She identified three strengths:

  1. The Start of a Plan: The National Broadband Plan provides clear recommendations to shift us towards more efficient and effective use of spectrum. The challenge we face is that we have not built from that foundation a truly comprehensive spectrum policy or framework. We need a concerted effort to provide a more predictable and known approach to spectrum. We cannot address spectrum reform on a proceeding-by-proceeding or auction-by-auction basis. We need closer coordination with the National Telecommunications and Information Administration, and a renewed and upgraded mandate for the Commercial Spectrum Management Advisory Committee that has the ability to enhance opportunities for both the federal government and commercial spectrum users.
  2. More Spectrum Awareness: We have collectively recognized the need for more spectrum for mobile broadband across government. The challenge is that this is all terribly hard. We must provide a pipeline of spectrum in 2011 and for the next 5 years. To do so, we need to dedicate resources and funding to the teams responsible for evaluating the 2200 MHz of spectrum, and we should prioritize those spectrum bands that have the most commercial value and are harmonized for international use.
  3. Many Irons in the Fire: The FCC has launched many spectrum-related proceedings, but the challenge now is to complete them.

Myatt Named Media Arts Director at the National Endowment for the Arts

The National Endowment for the Arts announces the new Media Arts Director Alyce Myatt.

Myatt will lead the NEA's Media Arts office, both as a leading voice for the media arts field and as manager of NEA grantmaking in film, video, audio, web-based, and other electronic media. She begins her tenure on January 3, 2011.

Myatt has extensive knowledge of production, creative program development, programming, and philanthropy. Most recently, she served as executive director of Grantmakers in Film + Electronic Media (GFEM), an association of grantmakers committed to advancing the field of media arts and public interest media funding. She was responsible for providing the philanthropic community with activities, services, and publications to increase their knowledge and use of media in this rapidly changing field. She also served as a vice president of programming at the Public Broadcasting Service, and as a program officer for media arts grantmaking for the John D. and Catherine T. MacArthur Foundation.

Today's Quote 12.02.10

"What will happen to advertising-supported Internet content? We need to be mindful not to enact [privacy] legislation that would hurt a recovering economy."
-- Rep Ed Whitfield (R-KY), ranking member House Subcommittee on Commerce, Trade, and Consumer Protection