June 2013

FCC Announces Tentative Agenda For June Open Meeting

Federal Communications Commission Acting Chairwoman Mignon Clyburn announced that the following items will be on the tentative agenda for the next open meeting scheduled for Thursday, June 27, 2013:

Improving Broadband Data Collection: The Commission will consider a Report and Order to improve and streamline the collection of broadband subscription and deployment data.
Increasing the Nation’s Supply of Spectrum: The Commission will consider a Report and Order with licensing, service, and technical rules in the H Block at 1915-1920 and 1995-2000 MHz, that would help increase the Nation’s supply of spectrum for flexible-use services, including mobile broadband.
Protecting Customer Propriety Network Information on Mobile Devices: The Commission will consider a Declaratory Ruling clarifying that wireless carriers that collect, or direct the collection of, customer proprietary network information (CPNI) on mobile devices must adhere to statutory and regulatory CPNI requirements in protecting that information.
Status of Universal Service Reform Implementation: The Wireline Competition Bureau and Wireless Telecommunications Bureau will present an update on universal service reform implementation.
Status of the Broadcast Incentive Auction: The Incentive Auction Task Force will present an update on progress towards the television broadcast incentive auction.

Rep. Peter King introduces online gambling bill

Rep. Peter King (R-NY) introduced legislation that would legalize online gambling.

The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 would establish a federal regulatory regime for online gaming. It would let states like New Jersey, Delaware and Nevada that have already legalized Internet gambling in some form to continue to do so. It would create a uniform set of controls and protections to prevent underage and compulsive gambling. Those offering online gambling without a license would face penalties. In addition, the bill would create the Office of Internet Gambling Oversight in the Treasury Department. The new office would set criteria for state and tribal governments to license online gambling operators.

The legislation also includes an “opt-out” provision for any state or tribe “that does not wish to participate in the federal interstate system … and prohibit online gambling or to operate intrastate gaming within its borders as authorized under state or tribal law,” according to a statement from King’s office.

Rep Lofgren: Cellphone unlocking should never be a crime

Legislation backed by the wireless industry that would allow consumers to “unlock” their cellphones doesn’t go far enough to remove the threat of criminal penalties, Rep. Zoe Lofgren (D-CA) said.

“It’s not our job to say how the market works. Once someone buys something, they should own it. Once someone signs a contract, you can sue them, you can charge them a fee. I don’t think using criminal law to enforce the contract is appropriate,” Rep Lofgren (D-CA) said at a hearing of the House Judiciary Committee. House Judiciary Chairman Bob Goodlatte (R-VA) has introduced legislation that would give consumers the right to keep using their cellphones after a contract ends. The bill would overturn a Library of Congress decision that made it illegal to unlock phones purchased after Jan. 26. Rep Lofgren has introduced a rival bill to Goodlatte’s that would allow consumers to unlock their phones, tablets and mobile devices without facing criminal penalties or fines. H.R. 1892, “The Unlocking Technology Act of 2013,” would modify parts of the Digital Millennium Copyright Act that ban “circumvention” of copyrighted works — which includes unlocking a cellphone. Lofgren’s bill would permanently allow consumers to unlock their phones, as well as legalize third-party applications or tools that enable unlocking.

Advocacy groups such as Consumer Union and Public Knowledge have called Goodlatte’s bill a “temporary fix” and are pushing for Lofgren’s alternative.

Is FCC Going Too Fast on Spectrum Auction?

Broadcasters are urging the Federal Communications Commission to slow down plans to hold the much-debated spectrum auction as early as next year, saying “spectrum is going to last a long time … so we need to get it right.” “There are so many unanswered questions,” says the National Association of Broadcaster’s Rick Kaplan. “There are too many things that are too important.”

‘What If’ Scenarios on the Fate of Aereo

As the legal battle against Aereo works its way through multiple arenas, an expert following the case says the best broadcasters could hope for at this point is that a New York Court reverses its decision to allow the Internet streaming service to continue while awaiting trial, “and forces Aereo out of operation.” Unfortunately, however, that scenario is “not likely to happen,” says Harry Cole, an Arlington (VA) attorney who specializes in mass media. “It requires several miracles.”

Media General, Young Broadcasting to Merge

Media General and privately held New Young Broadcasting announced a definitive agreement to combine the two companies in an all-stock merger transaction.

The new company will retain the Media General name and will remain headquartered in Richmond, VA. Media General owns 18 network-affiliated stations, and Young owns or operates 12 network affiliates. The combination will create a company with 30 stations operating in 27 markets, reaching 16.5 million, or 14%, of U.S. TV households. On a pro forma basis, 2012 revenues were $605 million, including approximately $115 million of political revenues. The balance of network affiliations will include CBS (11), NBC (9), ABC (7) Fox (1), CW (1) and MyNetworkTV (MNT) (1). Sixteen of the 30 stations are located in the Top 75 DMAs. Media General says the new company “will be more geographically diverse and will have a presence in more markets that generate strong political revenues. Its increased size will enhance its ability to participate in retransmission revenue growth, share growth of national and digital advertising, and syndicated programming purchasing.”

Station retransmission Fees Up, But ESPN Still King

While broadcasters’ retransmission fees are expected to rise, over-the-air TV will likely never get the size of fees paid to ESPN, which, at the top of the heap, gets more than five times what broadcasters do.

“The audience for ESPN is probably the most passionate out there, and if all of a sudden a carrier drops ESPN, that audience will leave,” Robert Folliard, a Dow Lohnes associate who works with affiliates, said. “With broadcast, people will leave but you don’t have that passion.” Currently, broadcasters get about $1 per month for each subscriber from the television service providers that carry their stations. ESPN gets $5.54, according to SNL Kagan Associate Director Robin Flynn. Broadcasters may, however, be moving toward parity with other cable channels, which individually earn more in retransmission fees than broadcasters do but not as much as ESPN, they say.

With the big cities covered, AT&T starts filling in its LTE gaps

AT&T has arrived at the same comfortable point in its LTE rollout that Verizon Wireless hit about this time last year. It’s now built out the 4G network in 261 markets, blanketing 200 million people. That means all of the major and mid-sized cities are covered, and Ma Bell can start focusing on the small cities and towns in between.

AT&T announced a list of 22 new markets receiving the LTE upgrade, and last week it took its new network live in another 11. AT&T’s goal is to reach 250 million people covered by the end of the year, which will mean covering a lot of smaller cities and towns. It’s planning 77 new market launches this summer alone. To put it in perspective, Verizon has launched LTE in 491 markets, yet it’s footprint encompasses 287 million people. From here on out, we’re going to see AT&T add hundreds of more names to its coverage list, but each new name will only add incremental gains to its total population covered.

Say goodbye to the connected device price gap. Adding connectivity will soon cost $5

The cost divide between “smart” and dumb devices will shrink in the next few years, with it costing about $5 to add connectivity to things. And at that point there’s no reason why you might not have a connected microwave or smoke detector. But not all of this connectivity will serve the consumer. In the case of appliances they might be used by the manufactures for software updates, diagnostics and perhaps to sell you services. So a connected fridge might not buy your groceries but it would offer to ship a replacement water filter to your door, when it sensed yours was past its prime.

Why AT&T might be interested in Hulu: A big mobile data payday

Hulu apparently has yet another suitor: AT&T is in discussions with the Chernin Group about a joint bid on the online TV portal — they figure their combined financial might can meet Hulu’s high asking price. Why would AT&T, a mobile and wireline phone company, be interested in an online video portal? Through its U-Verse service, AT&T is a video-programming provider selling the equivalent of cable TV to 4.8 million households. It could be interested in Hulu for the same reasons as Time Warner Cable and DirecTV are, to bulk up their TV everywhere services. But AT&T’s interest in Hulu might stem from much more unexpected place: its mobile division. Video is proving to a very tricky proposition for mobile operators. On the one hand, they’ve built these big fat wireless pipes to carry video, but on the other, they’re still charging per-megabyte rates that makes large-scale video usage prohibitive. Video usage is booming on mobile devices, but for the large part it occurs at home on Wi-Fi not on 3G and 4G networks.

Benton

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