An Ignoble Experiment

2. Pai calls for end to NFL's cable, satellite blackout rules

Even as the FCC and other regulatory bodies continue to review Comcast's (NASDAQ: CMCSA) $45.2 billion bid to take over Time Warner Cable (NYSE: TWC), the two companies plan to spend more than $130,000 on a dinner honoring FCC Commissioner Mignon Clyburn, multiple reports say.

Clyburn (Source: FCC)

The dinner is part of a fundraising event for the Walter Kaitz Foundation which annually recognizes diversity in the cable industry. As a presenting sponsor, Comcast coughed up a $110,000 donation and TWC chipped in another $22,000 to be a benefactor, the Washington Post reported.

Both Comcast and Clyburn defended the situation, which has drawn some raised eyebrows among the MSO's critics.

Clyburn's office issued a statement that the function had been cleared with "the requisite ethics approval" and that "it makes sense to honor a champion of diversity and inclusion, the first African American woman on the commission and the only woman in the commission's 80-year history to serve as its chair," the Post article continued.

The Consumerist, meanwhile, took issue with the honor, quoting from a blog post by Carrie Levine, research director for Citizens for Responsibility and Ethics in Washington, that noted that two companies honoring an FCC commissioner "at the exact same time they're trying to get approval for a merger … doesn't look so good."

Techdirt added a voice of skepticism, noting "Diversity is a good thing and we're all for it. It's also great that Comcast and TWC want to 'support' diversity. But the questionable optics here are quite troubling--even if it's technically legal."

For its part, Comcast strongly defended its position by noting, among other things, that criticism of its actions was "insulting."

According to Latest.com, spokeswoman Sena Fitzmaurice further added that Comcast "absolutely dispute(s) the notion that our contributions have anything to do with currying favor with Commissioner Clyburn or any honoree. Such claims are insulting and not supported by any evidence. They are purely fiction. We have supported the organization year in and year out regardless of who the dinner honorees have been."

While Fitzmaurice additionally told the Post that Comcast's position as an "industry leader" made it important to provide financial support of the Kaitz Foundation, opponents like Techdirt and Consumerist were not appeased.

"Comcast can be as insulted as they want, but the facts say that watchers are right to shoot some serious side-eye at this arrangement," Consumerist concluded, while Techdirt added the event "creates the perception that people in the public sector are in debt to the very companies they're supposed to be regulating."

For more:
- The Washington Post has this story
- Consumerist has this story
- Techdirt has this story
- Latest.com has this story
- Citizens for Responsibility and Ethics in Washington posted this blog item

Read more about: Mignon Clyburn, ComcastTWC
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This week's sponsor is Clearleap.

By Jim Barthold

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3. Report: Verizon will deliver cable TV over 4G LTE

Sports fans have an ally in FCC Commissioner Ajit Pai, who is taking on the powerful National Football League for them.

Pai (Source: FCC)

Pai, speaking at a news conference in Buffalo, called NFL blackout rules "outdated" and said he'd like his fellow commissioners to do something about it.

"Right now the FCC is officially on the side of blackouts. We should be on the side of fans," Pai said, according to multiple reports. "The FCC shouldn't get involved in handing out special favors or picking winners and losers. And in my view, there is no reason for the FCC to be involved in the sports blackout business."

Pai is the first FCC commissioner to stick his neck out and oppose the blackout rules that the FCC instituted in 1975. Those rules stated that the home team had to sell out its stadium 72 hours before game time or the contest would be blacked out in their market by cable and satellite providers.

Pai said he wants FCC Chairman Tom Wheeler to put the matter to a vote which is not something Wheeler has indicated he'll do.

The NFL, of course, is a conservative organization, so it's unlikely to touch something that it doesn't think is broken, noting that the rules protect arrangements the league has with network broadcasters.

"We are 99 percent sold out (nationally) so it has very little impact on our business," NFL Commissioner Roger Goodell said recently. "But it could have an impact on the overall business model for free television. We think that's devastating to our consumers and consumers in general."

Pai, who has met with NFL bosses, was unimpressed by their arguments.

"In my own view, their arguments don't persuade me," he said.

For more:
- NY Daily News has this story
- SFGate has this story
- the AP has this story (via USA Today)

Read more about: Ajit Pai, blackout rules
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By Jim Barthold

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4. OTT shift drives hike in Olympia, Wash. subscribers' cable tax

Verizon (NYSE: VZ) is reportedly planning to use its 4G LTE mobile wireless network to deliver cable TV programming within a year.

Spokesman Jim Gerace told Radio and Television Business Report that "no one has a wireless network better positioned to do this than we do."

While Verizon maintains it can do video over wireless with its existing network, things will improve noticeably if the carrier gets a big share of broadcast spectrum being put up for auction later this year.

Video over mobile wireless is no pipe dream for Verizon, which could see some serious competition in that space if AT&T (NYSE: T) succeeds in acquiring DirecTV (NASDAQ: DTV) and cable operators continue to enhance video data options for their growing number of nationwide Wi-Fi hotspots.

"To do over-the-top you have to have a rich spectrum portfolio," broadband analyst Scott McClelland told the publication. "By year's end, America's four national wireless broadband ISPs will be offering speeds capable of supporting new over-the-top streaming services nearly ubiquitously."

The trick will be getting content, and Verizon has a leg up there, too, with its FiOS TV service.

Verizon CFO Fran Shammo hinted at a video play during a presentation at the recent Oppenheimer Investor Conference, noting especially the "huge runway for tablets" that would be a logical screen for wireless video.

"Multicast is a few years out … that's the pivotal start to change the way content is delivered on the mobile handset," Shammo said in remarks covered by Wireless Week.

On the other hand, the network appears to be ready.

"We engineer for a consistent 8-12 Mbps. We think that the quality of the network is going to be even more important in the data environment than it was in the voice environment," he concluded.

For more:
- Radio & Television Business Report has this story
- Wireless Week has this story

Read more about: Verizon, cable over LTE
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By Jim Barthold

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5. Lack of 4K infrastructure hinders technology's potential, report says

City fathers in Olympia, Wash., are using the increased popularity of over-the-top (OTT) viewing as a reason to wring more money from an already stressed source, raising the tax on Comcast (NASDAQ: CMCSA) cable customers by $5 a month starting Jan. 1, 2015.

The city's finance director, Jane Kirkemo, told The Olympian that revenue levels in the city coffers are sinking "because more and more people are shifting from cable to other Internet services."

Since Olympia can't tax satellite or Internet service providers, it's going after Comcast's subscriber base for money to finance projects such as building maintenance. The city expects an annual income of $800,000 a year from the tax, Kirkemo said, but collections are expected to decline by $10,000 to $15,000 a year.

Depending on how many Comcast subscribers the city has, this could be a politically unwise decision when elections roll around, Councilwoman Jeannine Roe told the newspaper.

"I think we pay too much for our cable right now," she said, adding that cable is caught in a generational bind, as is the city. "Young people just don't watch their TV anymore."

And that, said Mayor Stephen Buxbaum, leaves the city with "very limited options available as a municipal corporation to raise revenue."

For more:
- The Olympian had this story

Read more about: Washington state, Olympia
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By Jim Barthold

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