An Ignoble Experiment

2. WSJ: FCC can leverage merger approvals to advance its net neutrality agenda

In a move meant to exploit the hundreds of hours of match coverage it doesn't have room for on its linear pay TV platform, the Tennis Channel is offering a streaming product directly to consumers, even those who don't subscribe to a pay TV service.

Timed to the first day of the French Open, Tennis Channel Plus will run subscribers $59.99 for access to 300 live matches a year from 40 tournaments around the world. Subscribers to the new online channel, which will be housed in the Tennis Channel Everywhere app, can also watch archival footage of historic matches.

Weary of stepping on the toes of its pay TV partners, with which it hasn't always seen eye-to-eye, Tennis Channel executives note the similarity of the offering to streaming apps offered by Major League Baseball, the National Basketball Association and World Wrestling Entertainment, which also market secondary online products to augment their primary pay TV outlets.

According to the Los Angeles Times, the independent, Santa Monica-based Tennis Channel--which touts sports marketing giant IMG and former tennis pros Pete Sampras and Andre Agassi as investors--is giving its pay TV partners a share of the new streaming channel's profits.

"Tennis Channel Plus is not meant to replace the linear Tennis Channel," Adam Ware, head of digital media for indie channel, told the Times. "Instead it is a completely complementary service."

The Tennis Channel currently has around 35 million subscribers.

For more:
- read this Los Angeles Times story
- read this Multichannel News story

Read more about: Tennis Channel
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By Daniel Frankel

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3. AT&T-DirecTV merger may provide much needed cover for Comcast

As it looks to forge new rules on net neutrality, the Federal Communications Commission finds itself between a rock and a hard place.

On one side, pressure is being exerted by federal court rulings, which struck down its previous guidelines for fair and equal access to Internet infrastructure. But as it tries to make compromises--allowing Internet service providers to set up peering deals, for example--it finds itself subject to backlash from consumer groups, politicians, Netflix (NASDAQ: NFLX) and others.

In Monday's Wall Street Journal, writer Ryan Knutson outlined what is perhaps the FCC's most plausible path forward--to use concessions for the ongoing flurry of pay TV/ISP mega-mergers to achieve its goals in a way policy building cannot.

As Comcast (NASDAQ: CMCSA) looks to gain approval for its proposed $45 billion takeover of Time Warner Cable (NYSE: TWC), and AT&T (NYSE: T) seeks to do the same for its planned $49 billion purchase of DirecTV (NASDAQ: DTV), FCC chairman Tom Wheeler has the power to extract the concessions on net neutrality--and other issues--that may not exist in any eventual FCC mandate.

"You got two-thirds of the industry in front of you potentially by the end of the summer, which is enormously tempting to try to create an industry structure around that," said Harold Feld of Public Knowledge, an open Internet advocacy group, to the WSJ. "But it's not as easy as it looks. You'll have a bunch of different companies, many of whom may not be willing to go that far."

To a degree, the paradigm the WSJ predicts is already being put in place. Comcast, for example, is set to adhere to the FCC's 2010 net neutrality laws until 2018 as a condition of its earlier approval for its purchase of NBCUniversal. And AT&T has agreed to abide by those mandates until three years after its tentative deal with DirecTV closes.

The question: Can the FCC get Comcast and AT&T to abide by these conditions on a more permanent basis?

For more:
- read this Wall Street Journal story (sub. req.)

Read more about: Comcast
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By Daniel Frankel

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4. ESPN chairman Bodenheimer bows out

As it seeks to combine the number-one and -two pay TV and Internet service providers, is Comcast (NASDAQ: CMCSA) getting help from the other big media merger currently taking place--AT&T's (NYSE: T) proposed $49 billion takeover of DirecTV (NASDAQ: DTV)?

As Bloomberg explains it, the approval of its deal will give AT&T the scale it would need to compete with a combined Comcast and Time Warner Cable (NYSE: TWC), thus relieving the anxiety of federal regulators.

"This merger will improve Comcast's chances," University of Iowa law professor Herbert Hovenkamp told Bloomberg. "What you want to do in a merger case is show that there are other competitors out there and as a result any opportunity to behave anti-competitively is going to be disciplined by this other competitor."

Then again, there's also a viewpoint that the AT&T-DirecTV deal could harm Comcast's regulatory chances by making lawmakers anxious about industry power concentration in general.

"The government has to decide if they want to have few players in the market or more players," Jeffrey Jacobovitz, a lawyer at Arnall Golden Gregory LLP, told Bloomberg.

From the perspective of news media coverage, at least, the just-announced AT&T-DirecTV deal doesn't seem to have distracted attention away from Comcast's TWC takeover plan, which was announced in February.

For example, news that Comcast is now employing 40 D.C. lobbying firms to champion its position proliferated across the Memorial Day weekend headlines. This, even though AT&T will likely spend as much, or more, on lobbying and various political contributions this year.

For more:
- read this Bloomberg story
- read this NPR Marketplace story

Special Report: AT&T and DirecTV: Complete coverage

Read more about: acquisition, Bloomberg
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By Daniel Frankel

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5. AT&T to roll out fixed wireless network nationwide

Longtime ESPN Executive Chairman George Bodenheimer announced Tuesday he is leaving pay TV's top channel at the end of May after serving there for 33 years.


Bodenheimer (Image source: ESPN)

"I have been proud to represent the men and women of ESPN," said Bodenheimer in a note to colleagues, which was obtained by Multichannel News. "Every day I was asked questions about the future, and my favorite answer was, 'ESPN has the best employees in the business. They know what the mission of the company is, and together we will figure it out…I have great faith that it will always be true.'"

Bodenheimer served as president of ESPN from 1998-2011 before ceding his title to John Skipper and assuming the role of executive chairman. During his tenure as president, the network launched ESPN-HD, ESPN2-HD, ESPN3 and ESPN Deportes, among other spin-off channels.

"It is impossible to completely capture the impact George has had on our company and on so many of us during his remarkable 33 years with ESPN …his is work ethic was unparalleled, his focus on teamwork always clear," said Skipper, in the same company memo. "He believed completely in the collective talent of ESPN's employees, and he combined a realist's pragmatism with an optimist's faith in navigating ESPN through unprecedented growth."

Bodenheimer will now focus his work on advancing the cause of The V Foundation, a non-profit group dedicated to fighting cancer and named after legendary college basketball coach Jim Valvano.

For more:
- read this Multichannel News story
read this press release

Read more about: George Bodenheimer
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By Daniel Frankel

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