September 2011

Cable operator Mediacom blasts FCC

A major cable operator has blasted the Federal Communications Commission for not taking an active role in trying to keep programming costs down.

In a letter to FCC Chairman Julius Genachowski, Rocco Commisso, the chairman and chief executive of Mediacom, a New York-based cable operator with about 1.14 million subscribers in 22 states, criticized the regulatory agency for not being aggressive in trying to keep programming costs down. "I am deeply disappointed with the Commission's lack of interest in keeping multichannel television services affordable," Commisso wrote. "Content owners have been unwilling to exercise the slightest measure of self-restraint, and are emboldened by the Commission's unwillingness to even try to impose some limits or speak out against programmers' practices." Commisso said that by not acting, the FCC has "cost Americans billions of dollars, as programming owners have increased their rates well in excess of inflation." Much of Commisso's beef is about having to pay broadcasters more in so-called retransmission consent fees to retransmit their local television stations.

Formerly bankrupt companies become M&A targets

Hundreds of businesses crawling out of bankruptcy in the hands of hedge funds and other financial owners are hanging the "for sale" sign on their doors. Distressed debt investors such as Paulson & Co, Avenue Capital and Silver Point Capital that took control of bankrupt companies during the financial crisis are looking to cash in on their investments as the economy recovers. As a result, once-bankrupt companies in sectors such as media and technology that ended up in the hands of hedge funds and buyout shops are expected to come to the market soon, bankers said.

The list of media companies includes: Vertis Holdings, Charter Communications, RHI Entertainment, the Journal Register, Young Broadcasting, and ION Media Networks. Tech companies include Satelites Mexicanos and MagnaChip Semiconductor.

FCC Picks Robbins for Managing Director

Federal Communications Commission Chairman Julius Genachowski announced the appointment of David B. Robbins as Managing Director of the Commission. Robbins will begin September 12, 2011. He will succeed Steve VanRoekel, who left the agency earlier this year for a post at USAID and is currently the U.S. Chief Information Officer.

Robbins joins the FCC from the U.S. Small Business Administration (SBA), where he served as Associate Administrator for the Office of Management & Administration, leading a number of the SBA's core functions, including human capital management, facilities management, security, records management, executive secretariat, administrative services, and grants management. At SBA, he also served as Director of the Loan Management & Accounting Systems Modernization Program. Robbins began his distinguished public service career at the Federal Trade Commission (FTC), where he served as an Assistant Director, Attorney, and Senior Program Manager in the FTC's Bureau of Consumer Protection. In addition, before joining the FTC, Robbins spent more than fifteen years working in the private sector as an executive, senior manager, IT professional, and attorney. Robbins received his J.D. from Seton Hall University School of Law in 1995, and a B.S. in Computer Science from Rutgers University/Livingston College in 1986.

The FCC’s Office of the Managing Director (OMD) is responsible for the administration and management of the Commission. Specifically, OMD manages the Commission's budget and financial programs, human resources, contracts, purchasing, communications, computer services, physical space, security, the Commission meeting schedule, and distribution of official FCC documents.

Who gets Starz digital rights now? Probably no one

Starz dropped a bomb on Netflix, announcing to the world that it was ending negotiations for a renewal of their deal and pulling its content from the streaming service next March. That’s led many to speculate about who might pick up those rights when they lapse. The most likely outcome isn't that Starz’s streaming content goes to one of Netflix’s competitors, but that the network keeps the digital rights to itself and makes them part of its TV Everywhere services with cable companies, who can offer the programming online for their paying customers.

Starz already gets a substantial amount of money from its cable partners, and it hopes to get more by rolling out TV Everywhere-type services. The problem is that its cable partners won’t want to pay more to compete with Netflix, which would offer the same content on the same devices at a heavily discounted rate. Starz currently makes about $7 per subscriber from its existing partners. But a Netflix renewal, even one valued at $300 million a year, would pay substantially less than that: With about 22 million streaming subscribers forecast for the third quarter, that comes out to just a little more than $1 per user, and Netflix’s subscriber base continues to grow. Since Netflix charges $7.99 per subscriber, it simply can’t compete with the amount that Starz makes from the cable guys. And if the financials don’t work for Netflix — which has been leading the way in terms of writing big checks — they seem even less favorable for everyone else.

Online video finally chipping away at broadcast TV

A quarter of people in countries with access to high-speed broadband are streaming video to their TV, although more than 80 percent still watch broadcast television as well. But that’s slowly beginning to change: According to survey data from Ericsson, there’s been a slight decrease from 2010 to 2011 in the percentage of folks watching broadcast TV, while Internet-enabled options, such as long-form streaming sites like Netflix, short-form videos aggregators like YouTube and downloaded content are all on the rise. So for all those thinking the Internet is killing television, it’s killing TV like it killed all other media — as in, it’s not. But much like the print media, content owners, television distributors and broadcasters will have to find ways of giving the audience content in the format they want and engaging with their audience while still making money.

NAA: Newspapers Have Had 20 Quarters Of Consecutive Ad Rev Declines

Combined online and print newspaper ad revenues fell 6.9 percent to $5.9 billion in Q2, marking the 20th consecutive decline for the industry, according to the latest figures from the Newspaper Association of America.

The consecutive decreases began in Q306, when combined print and online ad dollars declined a mere 1.5 percent to $11.7 billion. Since that point, newspaper ad dollars have fallen 48.8 percent, and there is no sign of a comeback. On the plus side, if you can call it that, newspaper’s online ad dollars have risen for the sixth consecutive quarter, growing 8 percent to $803 million. Looking back 20 quarters ago to Q306, online ad spending for newspapers has gained about 25 percent. The numbers clearly show that while online ad spending is still growing nicely, it’s still a long way from offsetting the print losses from advertising as well as circulation.

Wireless Industry Association CTIA Predicts Telecom Policy Breakthroughs

Several important policies that CTIA, the U.S. wireless industry association, has been shepherding for months may finally come to fruition. Executives of the Washington, DC-based group tell Forbes that projects including the scheduling of wireless spectrum auctions and limiting taxes on wireless service and the purchase of digital goods, which have long been in limbo at the House of Representatives and/or Senate, have a good chance of being approved this fall.

CTIA is often associated with the country’s wireless carriers but it also represents mobile device makers, chipset designers and operating system vendors, among other companies. CTIA President and Chief Executive Steve Largent says freeing up spectrum and cutting down “discriminatory” taxes are the group’s top priorities. He believes these issues will be resolved in the current Congress even though legislators are already looking ahead to next year’s presidential election.

WEHT, WTVW reportedly merging news departments

The beginning of the combination of WEHT-NEWS 25 and Local 7 WTVW is apparently at hand. Nexstar Broadcasting chairman, president and CEO Perry Sook and co-chief operating officer Timothy Busch visited Henderson (KY) for a meeting with the WEHT staff.

Those sources also report that Local 7, which operates from studios at 477 Carpenter St., in Downtown Evansville, is to be moved into NEWS 25’s studios at 800 Marywood Drive in Henderson. That move is expected to take place sometime in December. It also appears that NEWS 25’s personnel will have to re-apply for their current positions. Layoffs are said to be likely, although it is unclear at this point how many positions will be consolidated. The re-application process for NEWS 25 employees will begin in late September, and the sale of the station to Nexstar is now expected to close at some point between November and January. The changes are being made as a result of Nexstar’s pending purchase of WEHT from Gilmore Broadcasting, along with the spinoff of WTVW to Mission Broadcasting, both of which are awaiting FCC approval. WTVW, which must be sold because of FCC ownership limits in smaller markets, will continue to be operated by Nexstar under a local management agreement.

The FCC Is Watching You . . . or At Least Your Website

Apparently, Federal Communications Commission staffers in the Media Bureau browse broadcast radio and television station websites looking for Equal Employment Opportunity reports.

Google highlights advances in copyright protection

Google, which has faced intense criticism for years over copyright issues, said it has made progress on four copyright-protection initiatives it outlined in December.

The company has finished building tools that now allow it to act on average in 24 hours or less on valid complaints from copyright owners -- the so-called "takedown notices" -- that their content is appearing without permission on Google sites, starting with Blogger and Web search. The tools simplify the process of submitting these complaint notices, which cite the Digital Millennium Copyright Act (DMCA) when requesting that their works be removed from websites. "We built the tools earlier this year, and they are now being successfully used by more than a dozen content industry partners who together account for more than 75 percent of all URLs submitted in DMCA takedowns for Web Search. Our response time for these partners is now well below the 24 hour target," said Kent Walker, a Google senior vice president and general counsel. In coming months, Google will make the tools more broadly available to copyright owners that have a track record of "valid" takedown requests.

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