July 2014

Senator Asks FTC to Look Into Facebook Mood Experiment

Sen Mark Warner (D-VA) has asked the Federal Trade Commission to look into whether Facebook’s experiment on the ability to manipulate emotions on Facebook using the data of 700,000 unwitting users may have violated the company’s privacy agreement with the federal government.

“As the collection and analysis of ‘big data’ continues to increase and as it assumes a larger role in the business plans of Internet-based companies, it is appropriate that we consider questions about what, if any, oversight might be appropriate,” Sen Warner wrote to the FTC.

Aereo Lays Out New Survival Strategy in Letter to Judge

In a letter to US District Judge Alison Nathan, Aereo hints at a new plan.

"Under the Second Circuit’s precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal," writes its lawyers. "After the Supreme Court’s decision, Aereo is a cable system with respect to those transmissions." And the implications of Aereo now wrapping itself under the cable system banner? "If Aereo is a 'cable system' as that term is defined in the Copyright Act, it is eligible for a statutory license, and its transmissions may not be enjoined (preliminarily or otherwise)," continues its lawyers.

Aereo reports that it is proceeding to file the necessary statements of account and royalty fees, and asserts that the Supreme Court's decision has overruled the 2nd Circuit decision in Ivi, a predecessor digital TV transmitter which once attempted to gain legitimacy through the paying of compulsory license fees. Even if the judge doesn't accept the argument, Aereo says there are still issues to be addressed about the "scope" of any preliminary injunction.

EU Begins Questioning Facebook Rivals Over WhatsApp Deal

European Union antitrust officials have started questioning rival firms about Facebook's proposed $19 billion acquisition of messaging service WhatsApp, ahead of a formal review that could be a test case for how to apply EU competition law to the new world of social media.

Officials at the European Commission, the EU's central competition authority, have in recent weeks sent detailed questionnaires to several technology and online-messaging companies, asking about the merger's effect on competition in their markets, according to people familiar with the matter.

The questionnaires also drill down into a relatively new area for merger reviews: how the companies control and use personal data when they offer services, some of the people said.

The commission's questioning of rivals comes before the EU opens a formal merger review that will provide one of the first in-depth looks at the app economy and social media through the lens of competition law, antitrust lawyers and technology executives say.

As Moguls Descend on Sun Valley, Let the Deal-Making Commence

It didn’t take long for the consolidation buzz to begin at the Allen & Co. conference, a get-together of honchos from the media and technology worlds known as a venue for deal-making. Speculation about mergers that could remake the media landscape was already flying at the entrance to the Sun Valley, Idaho resort.

Discovery Communications CEO David Zaslav could be smack in the middle of a consolidation wave. He predicted that the two big pending marriages in pay-TV distribution -- AT&T’s proposed purchase of DirecTV and Comcast’s proposed merger with Time Warner Cable -- would hang over the discussions and might give content owners like Discovery more reason to consider mergers of their own.

“You’ll probably see some more consolidation on the content side in order to balance that scale,” Zaslav said. “There’s a lot of people asking the question, are they big enough?”

Dish tells FCC will participate in 2015 spectrum auction

Dish Network said it plans to take part in the Federal Communications Commission's large sale of low-frequency airwaves planned for mid-2015. Dish's Chairman Charlie Ergen and other executives met with the FCC's Chairman Tom Wheeler, four commissioners and numerous wireless officials, giving the most explicit pledge so far by the satellite TV provider to "meaningfully participate" in the so-called "incentive" auction."

The incentive auction offers opportunities for competitive providers and new entrants to bid on and win much-needed lowband spectrum, which will facilitate the deployment of mobile broadband services," wrote Dish Senior Vice President Jeffrey Blum.

Charlie Ergen, Dish Hit With $1.5 Billion Lawsuit

Dish Network and its chairman, Charles Ergen, have been slapped with a lawsuit over the bankrupt wireless company LightSquared. In the lawsuit, filed in US District Court in Colorado, Harbinger Capital Partners accuses Ergen, Dish Network and others of engaging in “an illegal scheme of involving mail and wire fraud, bankruptcy fraud, torious interference, and abuse of process.”

Harbinger and its co-plaintiffs are seeking more than $1.5 billion in damages in the lawsuit, which claims the defendants tried to strip the investment fund of its control of bankrupt wireless company LightSquared. According to the lawsuit, the alleged racketeering action was aimed at stripping Harbinger of its right to control LightSquared and to make decisions during LightSquared's Chapter 11 proceedings, rights that Harbinger claims to have acquired “pursuant to its multi-billion dollar investment” in LightSquared.

The lawsuit accuses Dish Network and others of withholding crucial evidence during LightSquared's 2012 bankruptcy proceedings, adding that the defendants engaged in a ‘troubling pattern of noncredible testimony'” and “wrongfully and deceptively created chaos in the bankruptcy proceedings so that investment fund Harbinger would lose control of the LightSquared board to which it was contractually entitled.”

The suit accuses Dish and others of surreptitiously acquiring LightSquared debt in violation of a credit agreement. The goal, Harbinger claims, was to “dominate the Bankruptcy Proceedings and direct a bargain-basement sale of LightSquared's valuable spectrum assets to Dish.”

Writers Guild of America East to FCC: Ban Paid Priority, Period

The Writers Guild of America East says the Federal Communications Commission should prohibit paid priority and that presuming it to be commercially unreasonable, as FCC Chairman Tom Wheeler has said would be his presumption if the results were disadvantaging competitors, is not enough.

WGAE also says the FCC should broaden network neutrality to prohibit paid priority deals for edge provider access to distribution networks, the "paid peering" arrangements that the Comcast/Netflix deals has put a spotlight on.

"The willingness of Netflix to pay Comcast/NBCU and Verizon huge fees to ensure swift and smooth streaming is economically rational for all the entities (and therefore commercially reasonable)," said WGAE in explaining how a commercially reasonable standard might not protect consumers. "Netflix’s product is made substantially more attractive to customers as a result, and Comcast/NBCU and Verizon gain enhanced revenues. Unfortunately, this also means that customers face upward price pressure, and content creators and distributors who do not pay for this prioritization have a substantially more difficult time attracting viewers."

Broadcasters Supply Sen McCaskill Cable Bill Beef Ammo

Broadcasters are looking to help out with Sen Claire McCaskill's (D-MO) inquiry into pay-TV billing practices and service quality.

In a letter to the senator, who chairs the Senate Consumer Protection Subcommittee, TVFreedom.org (network affiliate associations and the National Association of Broadcasters, among others), shared what it said was independent analysis that showed "3,050 substantial service failures experienced by the five largest pay-TV service providers in the United States during the first five months of 2014."

Sen McCaskill has launched a cable bill service "beef" site where Missourians can register their complaints, saying it was a prelude to possible legislation. TVFreedom, which has been hammering cable ops over their bills as part of a campaign against retrans reforms, was glad to help out, saying it was in furtherance of that effort that it was submitting its independent findings.

"This data highlights concerns regarding pay-TV service and broadband network reliability across the nation," said TVFreedom spokesperson Robert Kenny. "In light of increasing profit margins for the nation’s largest multi-billion dollar pay-TV service providers, unreliable service or faulty infrastructure raises questions about the commitment each of these companies has to consumer service quality."

Dish's Ergen to FCC: Deny Comcast/TWC Merger

Dish told the Federal Communications Commission to disallow the Comcast/Time Warner Cable merger. In meetings with all the commissioners, FCC staffers, and bureau chiefs, Dish Chairman Charlie Ergen said the proposed Comcast/TWC deal presented "serious competitive concerns" and "therefore should be denied."

Comcast and TWC have argued to the FCC and Congress that their merger would allow them to be more competitive with national platforms like Dish, but according to FCC documents, Ergen told the FCC assemblage that the combined company would have too much leverage over the "lifeblood of over-the-top video": high-capacity "cable" broadband connections.

Ergen said Comcast/TWC would have three "choke" points it could use to harm competing for video service: the last mile connection, interconnections, and specialized services. "It will be able to extract lower prices from programmers, which, in turn, will force programmers to extract even higher rates from smaller pay-TV providers like DISH in order to compensate the programmers for lost revenue," Ergen and other Dish execs said. "And a combined Comcast/TWC will have the incentive and ability to restrict programmers’ ability to grant digital rights to competing pay-TV and OTT video providers."

Comcast, TiVo Complete VOD Connection

Comcast confirmed that the company has completed the integration of its Xfinity On Demand service with certain retail-bought TiVo DVRs in all Comcast markets.

Completion of that integration has been expected. The integration enables TiVo devices purchased at retail by Comcast customers to access and stream the company's massive cideo-on-demand library, including its Streampix catalog.

Integration of Comcast’s VOD service is currently limited to TiVo Premiere hardware as well as its newer Roamio models. Those devices can also access Comcast’s live TV lineup, so long as they are paired with a CableCARD security module.

Benton

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