An Ignoble Experiment

2. FCC gets an earful from all sides as it considers reclassifying broadband

A Comcast (NASDAQ: CMCSA) executive said that he is confident the company will roll out usage-based data pricing nationwide once it completes a series of "robust" trials it is currently conducting in several markets. Speaking at the MoffettNathanson Media & Communications Summit today in New York City, David Cohen, executive vice president of Comcast, said that the company is moving slowly with its usage-based data trials to avoid alienating consumers. "We don't want to blow up our high-speed data business," he said.

Cohen

The company has been testing metered billing in several markets including Savannah, Ga.; Jackson, Miss.; Charleston, S.C.; Huntsville and Mobile, Ala.; and central Kentucky. Last December, Comcast added the Atlanta market. Cohen noted that Comcast has tested a few different models for its usage-based data pricing--but he said that the current model, in which customers are allotted 300 GB of data per month and then charged an additional $10 for every 50 GB of data they use over the 300 GB, seems to be the most popular model.

Comcast is also offering a monthly discount of $5 to light Internet users. Comcast subscribers who select the "Economy Plus" tier will receive monthly credits of $5 on their bills if they consume less than 5 GB of data each month. Subscribers who download more than 5 GB of data will be charged $1 per gigabyte. Cohen said that this low-usage option has been "reasonably popular" with customers, noting that the choice "is attractive to them."

However, when asked if he envisioned a scenario in the future where all high-speed broadband customers would have metered data plans, Cohen said he did not think that would happen. Instead, he said that while he believes that Comcast will have usage-based billing across its footprint, he thinks the "vast majority of customers will not be caught in usage buckets." Instead, he envisions that most customers will use a certain amount of data--whether it's 350 GB or 500 GB per month--that will fall within their data allotment.

For more:
- see this webcast

Read more about: David Cohen, MoffettNathanson
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This week's sponsor is Digital Adware.

By K.C. Neel

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3. CBS' Moonves is paid more than comparable CEOs: compensation expert

As FCC chairman Thomas Wheeler mulls changes to net neutrality rules, representatives from all corners of the industry--from cable and telecom executives to Hollywood and Capitol Hill players--are giving him their two cents on the issue.

The FCC will release proposed new rules regulating the Internet on Thursday, and no one appears happy with what's been floated so far. The new rules are being crafted in the wake of a federal appeals court ruling in January that struck down the existing basis for the FCC's net neutrality guidelines. Wheeler's new proposed rules seek to prevent broadband providers from blocking or slowing down websites but would allow some content companies to pay for preferential treatment. He has also indicated he'll look at turning broadband service into a Title II service, which would treat the delivery mechanism as a common carrier or utility.

More than two dozen cable and telecom industry titans are begging the commission not to reclassify broadband as a Title II service, arguing that "the growth of the Internet and the rapid adoption of mobile technology have been great American success stories, made possible by a light regulatory touch for the entire online ecosystem." They went to say that imposing "common carrier-style regulation upon any part of the Internet would be a dangerous rejection of this successful policy course, potentially impeding the development and adoption of new Internet technologies and services, and threatening future investment in next-generation broadband infrastructure."

At the same time, Hollywood bigwigs are asking the FCC to make sure the Internet remains "free and open." In an open letter signed by 240 Hollywood showrunners and creators, the group wrote that "if Net Neutrality is neutered, the Internet will become like cable television. A few corporate gatekeepers such as Comcast will be allowed to decide what content consumers can access and on what terms. The danger is that blocking, discrimination and paid prioritization could occur."

"That is exactly what has occurred in our traditional film and television business," the content creators wrote. "After decades of consolidation and mergers, seven corporations control 95% of television production and viewing."

And not to be left out, ranking U.S. Senate and House members urged Wheeler to seek Congressional aid. In a letter signed by Mitch McConnell (R-Ky.), John Cornyn (R-Tex.), John Thune (R-S.D.) and others, the lawmakers urged Wheeler to ditch the net neutrality rules he's proposing and work with Congress to develop new statutes rather than "attempting further legal contortions to encumber modern communications networks with last century's rules."

The lawmakers agreed with the ISPs' notion that a light regulatory touch has "freed Internet innovators and users at the edge, the core, and the last mile to offer services, to build networks, and to buy and sell products based on market demand; no government permission has been necessary."

For more:
- see this Wall Street Journal article
- see this LA Times article
- see this Adweek article
- see this Consumerist article
- see this National Journal article
- see this Multichannel article

Read more about: FCC Chairman Thomas Wheeler
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By K.C. Neel

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4. TiVo remains on the fence about Comcast-TWC deal

CBS paid Leslie Moonves $32 million in cash and bonuses last year, about 19 times higher than what CEOs running similar sized companies should make, according to a new study by compensation expert Graef Crystal.

Moonves' cash bonus last year included $20 million for "the successes in his role as president and chief executive officer" and $8.5 million tied to his "leadership in connection with the creation of premium content," New York-based CBS said in its proxy statement this year. Moonves also received a $3.5 million salary.

The CEOs of the top 100 largest U.S. companies made a median income of $13.9 million, up 9 percent from 2013 figures reported by Equliar, an executive pay consulting firm. The median CEO income figure would have been larger, according to Business Management Daily, if it had not been for Google CEO Larry Page, who earned a whopping $1 last year.

Oracle's Larry Ellison again topped the list, raking in $78.4 million in 2013 in a combination of cash, stock and stock options. That was more than twice as much as the second and third place finishers, Robert Iger of Disney and Rupert Murdoch of 21st Century Fox, who took home $34.3 million and $26.1 million, respectively.

For more:
- see this Bloomberg article
- see this Business Management Daily article
- see this New York Times article

Read more about: Oracle, CBS
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By K.C. Neel

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5. Hulu hires Netflix's Jenny Wall as marketing chief

The sides are lining up on whether to support or oppose the proposed merger between Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC), with Netflix (NASDAQ: NFLX) coming out against the merger. The American Cable Association isn't necessarily against the merger but it is mulling provisions to make sure its members aren't disadvantaged. And TiVo is still mulling its position on the merger--but it does want the FCC to pursue rules that would establish a successor to the disparaged CableCARD.

TiVo did give Comcast some praise for its support of the CableCARD. Comcast doesn't lease TiVo boxes but it has integrated its VOD service with TiVo DVRs in some markets. At the same time, TiVo has no direct deals with Time Warner Cable, but settled its pending litigation with the company last June.

In a meeting with the FCC, TiVo CEO Tom Rogers reiterated TiVo's assertion that CableCARD rules should remain until a successor standard is adopted. But the NCTA has repeatedly asked the FCC to end the set-top ban, arguing that the massive number of CableCARDs they have been deployed assures common reliance.

As of last week, the nation's top nine operators have deployed 47 million of the security modules in set-tops, while only 616,000 have been sold at retail, including those installed in TiVo boxes.

For more:
- see this Multichannel article
- see this Wired article

Read more about: TiVo, American Cable Association
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By K.C. Neel

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