October 2014

Comcast to Follow 1 Million Who’ve Fled Bankrupt Detroit

Detroit lost more than 1 million residents and three-quarters of its retail businesses on its way to bankruptcy. Now Comcast wants to go, too.

The largest US cable-television company says it will shed 2.5 million customers in Detroit and other Midwestern and Southern communities as part of a plan to buy No. 2 Time Warner Cable. Relinquishing the markets will help keep Comcast’s market share below 30 percent of U.S. pay-TV homes -- a level that regulators once set as a limit and Comcast has volunteered to honor.

Carriers Double Caps On Data to Poach Users

Wireless carriers battling for cellphone customers are offering to "double the data" -- a promotion that has little cost in the near term but which could be trading away future revenue growth.

The new promotions reflect the intensely competitive battle for wireless customers now that virtually every American has a cellphone. Adding data is a cheap way for carriers to sweeten their offers. The plans lower the per-megabyte cost of the data service that subscribers need to stream TV shows, play online games or surf the Internet. But for now, that doesn't matter much, because the carriers are basically drowning subscribers in data they aren't likely to use soon.

(Oct 1)

Authors Guild Met With DoJ to Seek Investigation Into Amazon's Practices

Authors are looking to escalate their fight with Amazon by seeking a government investigation into what they say is the online retail giant's abuse of its market power.

The Authors Guild, the country's largest advocacy group for writers, met with Justice Department officials in early August, people familiar with the matter said. The Guild, which has more than 8,500 members, raised concerns that Amazon is violating antitrust law as it puts pressure on Hachette Book Group in a dispute over revenue from e-books. The meeting took place after the Authors Guild e-mailed Bill Baer, head of the antitrust division of the Justice Department, requesting that the department open an investigation into Amazon, one of the people said.

TV Broadcasters Await Spectrum Valuations From FCC

For years, the broadcast station industry generally greeted the idea of selling off their spectrum warily, if not with outright hostility, but the Federal Communications Commission’s planned auction is changing the equation.

Broadcasters who choose to relinquish their spectrum -- which would then be sold off to wireless carriers -- could come away with a cut of up to 85% of revenue from the auction, FCC and industry sources say. The preliminary estimate is that the auction could bring in $45 billion. Larry Patrick, who heads a broadcast industry-focused brokerage, said in some cases the FCC’s valuations for spectrum are twice what the station owners had been hoping for.

Google Fiber Leaves a Digital Divide

When Google launched its fast Internet service in Kansas City in 2012, the Web giant said it wanted to spread broadband widely and close the “digital divide.” But a survey suggests the company is far from achieving that goal.

The survey, in six low-income Kansas City (MO) neighborhoods, found that just 10% of residents subscribe to Google’s Fiber service. An additional 5% use a slower version that is free for seven years, after a $300 installation fee. By contrast, 42% of the residents surveyed in five nearby middle- and higher-income neighborhoods signed on to Google Fiber. An additional 11% took the slower version. Both surveys were conducted door-to-door by research firm Haynes & Co.; the one involving middle- and higher-income neighborhoods was commissioned by brokerage firm Sanford C. Bernstein.

Here’s the single biggest thing holding Google Fiber back

Laying down high-speed fiber is expensive. Digging trenches in the ground and stringing cables along utility poles is expensive. Getting permission to do all that is expensive. But it turns out that all of that is a fraction of the cost of offering TV programming, according to the head of Google Fiber, Milo Medin. And it's a cost Google can't avoid paying. Video "is the single biggest impediment" to Google Fiber's deployment, Medin told an audience at the COMPTEL telecom conference.

"It is the single biggest piece of our cost structure." Why is Google so down on TV? Because as important as Internet access is, Americans still love their triple-play bundle. You can't sell Internet these days without also offering a TV package. "If you're going to pull customers to your broadband and other services, you've got to lead with video," said Jeff Gardner, the chief executive of Windstream. But in video, Google has a distinct disadvantage. Not only does it lack its own programming, in contrast to big incumbents such as Comcast that own large content production operations, but Google is also paying a lot more for programming than some other players.

DirecTV, NFL Extend 'Sunday Ticket' Package

DirecTV reached a deal with the National Football League to continue broadcasting its prize "Sunday Ticket" package of football games for the next eight years, clearing the way for AT&T's $49 billion purchase of DirecTV.

DirecTV agreed to pay an average price of $1.5 billion a year, according to a person familiar with the matter. That is 50% higher than the satellite-TV provider's previous "Sunday Ticket" deal, which called for average payments of $1 billion a year over four years. A DirecTV spokesman said that the new deal includes a 6% increase per year, which is "on the low end of our guidance."

ESPN, TNT Score $24B NBA Renewals

ESPN and Turner Broadcasting System will pay some $24 billion over a nine-year term that will conclude with the 2024-25 season to air National Basketball Association games.

Reports indicate that ESPN, whose current contract averages $480 million, will pay about $1.4 billion for each year of the new deal, which includes the launch of an over-the-top systems outside of the pay-TV ecosystem. For its part, Turner will allocate some $1.2 billion per season, which features a new 12-game slate in the second half of the seasons, and more content for its Bleacher Report digital property. TNT spends some $440 million per season under its present contract.

Facebook taps DC office head to manage global policy

Facebook announced that Joel Kaplan, who is based out of the firm's growing Washington (DC) office, will become the social network's Vice President of Global Policy, a position created to manage growing interest from foreign and domestic lawmakers over privacy, copyright and security issues. Kaplan, currently the vice president of US Public Policy, succeeds Marne Levine, who will be moving over to Instagram to be its first chief operating officer.

Kaplan, a former senior aide in the George W. Bush White House, was tapped to lead the company's Washington office in 2011. At the time, Kaplan's hire was seen as a way to shore up Facebook support from Republicans, though Facebook has gone on to tap Hill talent from both sides of the aisle as it works to increase its policy profile. The office currently has around 50 employees. Kaplan will remain based in Washington; his replacement has not yet been announced. In his new role, Kaplan will be in charge of working with governments and non-profits across the world to explain Facebook policies and products. Levine has held the position since it was first created in 2010.

Egypt Seizes Newspapers to Censor an Article

The Egyptian authorities on Oct 1 confiscated all the copies of one of the country’s largest private newspapers in order to censor an article, just days after President Abdel Fattah el-Sisi vowed in an American television interview that there was “no limitation on freedom of expression in Egypt.”

(Oct 2)

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