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Take the Gloves Off

Take the gloves off. Let the fur fly. Go crazy on each other.

That’s the best advice for Fox Networks and Cablevision Systems as they ramp up the venom and vitriol in their battle over retransmission of Rupert Murdoch’s beloved Fox broadcast network on the Dolan family’s Cablevision cable system. Cablevision has taken its message of self-righteous indignation to the dark channel once occupied by Fox. Fox has countered by accusing Cablevision’s of “posturing” and denying subscribers access to the its content on the Web.

This is great!

Staging the ugliest, nastiest public battle possible may be the cable industry’s last best chance to learn how utterly self-defeating these high-profile fights really are.

Cablevision will carry Fox, make no mistake. It may be another day or another week, but both companies have far too much to lose to let the spat run on. And the battle won’t end until the audiences of both companies have begun to question the value of both parties’ services.

Part of the reason for the timing in this fight is due to the confluence of a bad economy, the sea change in media distribution and with the broadcasters’ maturing request to “carry my cable channel,” all of which has station owners demanding a lot more money.

Remember, Congress amended the Communications Act in 1992 to give local broadcast stations a choice of “must-carry” or insisting that cable operators pay for a station’s consent to retransmit the signal in the local market. At first, broadcasters used retransmission consent to get carriage for cable networks. Now they want cold, hard cash.

Cable operators are calling for retransmission reform in the form of forced arbitration and standstills, while both parties negotiate. But that’s simply asking the government to stay in the fight (only more on cable’s side).

You want real retransmission reform? Kill must-carry/retransmission consent and turn these negotiations over to the marketplace. Of course, this would mean that some weaker stations don’t get carried, but isn’t that the marketplace working, too?

If ESPN is worth more than $4 per subscriber, isn’t a broadcast net worth a lot more than the 50 cents or 75 or whatever it gets now? And if Cablevision doesn’t want to pay that price, shouldn’t it be allowed to sell Fox a la carte?

Here’s what I can’t get my arms around: Are cable subscribers who watch over-the-air broadcasts a protected class that must be guaranteed access? Aren’t there enough alternatives that we can assume they will get out of the way of a flood or tornado without cable being required to carry broadcast stations?

Let’s be honest: This isn’t about giving citizens up to date emergency information. This isn’t about tornados, as much as it is about Hurricanes, as in Miami Hurricanes. Sports remain the must-have, no-substitute programming that gets Congress up in arms. Are we really asking the government to step in to ensure our uninterrupted New York Giants schedule?

A new wrinkle, and something Fox may regret, was bringing online into the equation, though perhaps that was unavoidable. Fox Broadcasting Co., a subsidiary of News Corp., blocked, if only briefly, Cablevision high-speed Internet customers from accessing content on Fox.com and Hulu. Fox’s actions raise far bigger questions about the future of the online video market and the public-interest obligations of broadcasters.

Already, public-interest groups are sounding the alarms. “This move is also an example of a major user of public spectrum abusing the public interest,” said Free Press research director S. Derek Turner. “Fox’s willingness to harm Internet users as a side effect of their dispute with Cablevision over broadcasting content is a disturbing escalation of the retransmission battles, one where consumers are caught in the middle.”

And from Public Knowledge: “It’s bad enough that millions of consumers in New York and Philadelphia are being deprived of programming distributed by cable. Blocking websites, however, is totally out of bounds in a dispute like this.

“This case shows the dangers of unchecked media consolidation and of a retransmission consent regime badly in need of reform.”

Regardless of whether or not the retransmission laws are changed now, cable operators and broadcasters are unwittingly begging the government to insert itself in their business even more.

If access to online starts becoming part of the retransmission equation, it will, without doubt, force the government - the FCC - to step into this mess. Senate Communications Subcommittee chairman John Kerry (D-Mass.) said Saturday he will introduce legislation that would keep TV station signals on cable systems during retrans impasses, and would make the Federal Communications Commission a referee.

Shake hands and come out fighting.

Wired

Welcome to the 30th Anniversary edition of Multichannel News, the first of three special editions this year commemorating three decades of our coverage of your cable-TV industry.

In this special issue, we’ll highlight the most innovative people, products and moments that have come together to give the U.S. one of the most sophisticated wired networks in the world.

Looking through our first year of coverage, it struck me how much has changed and yet how much has remained the same: In the inaugural issue of Sept. 15, 1980, a headline on page 23 noted, “NCTA Studies Computer Nets” about a new subcommittee the industry formed to study “the special problems of computer networks.”

Another story, under the headline “Second Qube System Takes Bow in Cinci Subs,” detailed the first foray into interactive TV. (One ad for ESPN was particularly funny: “Sign up TV’s Rookie Sensation. ESPN - cable TV’s allsports network - has grown to 4.7 million homes in just its first year!”)

I became enamored of the cable TV industry in the early 1990s, covering the business side as a reporter for The Wall Street Journal, and I’ve been hooked ever since. Few industries are as complex (technology, regulation, programming, etc.) and none are so embedded in popular culture. Multichannel News has matured as the industry has matured, from the days of “I Want My MTV” to TV Everywhere.

One early motto for the magazine was “No hype, just facts,” which could just as easily describe our mission today, and yet it’s so much more. We strive every minute, online and in print, to ensure that not only are the stories fair and accurate, but that they are relevant. We constantly work to provide the quality of reporting and analysis that you have come to expect from us.

Finally, this celebration really isn’t about us as much as it is about you. Without loyal readers who have come to trust our voice and rely on our coverage of the industry, we couldn’t be as successful as we are today. It’s because of you that we not only exist, but thrive. Today, Multichannel News is proud to be the only magazine in America devoted exclusively to news that affects the U.S. cable-TV industry.

Thanks again for reading us. We invite you to share your memories from the last 30 years with us. Drop us a line at mcnletters@nbmedia.com.

Change Is Good

Readers may have noticed a few changes in the design of our magazine over the past few weeks.

We didn’t want to make a big fuss about it, but as we prepared to celebrate our 30th year, we wanted to bring our look into the future as well.

By changing a few things here and there, we hope to make the news more relevant to you and more helpful in your job.

Nothing has changed about the way we report the news and offer analysis. We still deliver the most comprehensive business news about the cable-TV industry. And fairness and accuracy are still the guideposts for everything we do.

Perhaps most importantly, we wanted to make sure the reporting that we put into the print magazine is available and easy to navigate on multiple platforms.

The redesigned book will open with a section of several pages of news and analysis, filled with bold stories that will introduce you to the ideas, products and personalities that are shaping the cable industry. This first section is followed by four weekly sections that dig deeper into specific silos of the business - technology, programming, regulation and finance.

Finally, we’ll have a community page that welcomes voices and viewpoints from around the cable industry.

You’ll notice the big design improvements from editorial/ creative director Anthony Savona and art director Alberto Gonzalez, and a vision pushed by our CEO, Steve Palm, in very specific areas:

• More lively colors. Who says a trade magazine has to have dull colors? Expect bolder shapes and brighter shades and fonts that are easier on the eyes.

• More infographics. Why not make it easier for readers who just want the numbers? We’ll deliver more snapshots of the data and analysis we’ve aggregated to help make the magazine a faster, more informative read.

• More online. At the end of most stories, readers will notice a box pointing them to additional information online, usually on our site - a story, video or chart - that complements a particular story.

• More analysis. Readers can get their news on the cable industry from many places. But at Multichannel News you get the whole story. Expect more context on complicated stories and issues.

• More community. We’re offering a page to you. That’s right, a page dedicated to your ideas, tweets, emails, suggestions - and your complaints.

In coming weeks, we’ll continue to make adjustments to the design.

We ask that you help us with feedback. What would you like to see? E-mail us your thoughts at mcnletters@nbmedia.com.

Who's Right(s)?

As Time Warner Cable draws a line in the digital sand to give its subscribers unfettered access to TV content, some programmers are peeved that the big cable operator didn’t ask for “rights” to deliver their programming to an iPad.

In our cover story this week, Todd Spangler takes an in-depth look at both sides of the argument. The iPad app lets TWC customers stream live TV to their tablet over their in-home TWC Internet connection. But programmers such as Discovery Communications, Fox Cable Networks and Viacom said the service was essentially another distribution channel, which required negotiations (read: money).

It’s highly doubtful the dispute will actually go to court: Do networks really want to sue the cable operators that pay them more than $30 billion a year in license fees and have the ultimate power to boot them from the box?

Far from apologizing, Time Warner Cable has taken its fight public, where opinion usually falls with the least-expensive option. Here, TWC has a distinct tactical advantage. Subscribers certainly like the new app, and will reasonably ask why programmers aren’t making the content available. TWC helpfully explains its side on its website, describing the dissenting networks as “those who are solely focused on finding additional ways to reach into the wallets of their own viewers.”

Says TWC: “We will continue to fight to ensure that you have access to the content you pay for, no matter which screen in your home you choose to view it on.”

Programming networks are forced to deny this logic in a more important court: that of public opinion. Programmers will have to provide a passionate response about how content is still king and worth every penny - at a time when the very definition of TV is in flux, and the FCC is considering mandating that cable and satellite operators provide viewing access on multiple devices.

Despite all the drama, the rights issue will be negotiated. But time is not on cable’s side. Relative to competitors like Apple and Netflix, cable operators have lagged in the delivery of multiplatform TV programming. Delaying the rollout of such an innovative product and denying consumer demand seems counter to good business.

Right or wrong, Time Warner Cable has now forced the players to deal with the issue more quickly.

Dewey Defeats Truman: CNN Tweets Confuse Obama Healthcare Decision

CNN, which is in the midst of a very tough prime time ratings cycle, did not do itself any favors Thursday morning, jumping the gun on the hotly anticipated healthcare decision out of the Supreme Court, both on air and online.

The speed of electronic journalism ran into the denseness of legal opinion, causing the news network to report in a series of tweets and in its initial on-air reporting that the centerpiece of the Obama healthcare law, the individual mandate, had been struck down, which would have been a big win for Republicans. Instead, turns out it was upheld, which was a big win for the Administration.

Oops.

Here is the history of a tweet campaign that failed.

CNN Public Relations ‏@CNNPR

RT @CNNPolitics: BREAKING NEWS: #SCOTUS struck down individual mandate for #healthcare. #CNN

CNN Breaking News ‏@cnnbrk

Supreme Court strikes down individual mandate portion of health care law. http://on.cnn.com/LvVRcK

Expand

CNN Public Relations ‏@CNNPR

RT @jimacostacnn: Hold on everybody. Hold on. Let’s keep reading.

Expand

CNN Public Relations ‏@CNNPR

RT @AliVelshi: Supreme Court UPHOLDS individual mandate & #Obama Health Care law. Earlier reports that it was struck down were incorrect.

Scotusblog.com, which said that it was on a conference call with numerous news outlets as it live blogged from the court, got it right, saying the mandate had been upheld as a tax.

The confusion was that Chief Justice John Roberts, reading the opinion, said that the mandate could not be upheld under the Commerce Clause, as the Administration had argued it could. But that was essentially mooted by the 5-4 decision that the mandate could be Constitutional under Congress’ taxing authority.

CNN sent its regrets that it did not wait to digest the opinion.

“In his opinion, Chief Justice Roberts initially said that the individual mandate was not a valid exercise of Congressional power under the Commerce Clause,” said CNN in a statement. “CNN reported that fact, but then wrongly reported that therefore the court struck down the mandate as unconstitutional. However, that was not the whole of the Court’s ruling. CNN regrets that it didn’t wait to report out the full and complete opinion regarding the mandate. We made a correction within a few minutes and apologize for the error.”

A CNN source on background said that the on-air correction was made at 10:14:30, as well as online and via social media.

According to reports–Fox had no immediate comment–that news operation also miscalled it.

In the wake of the confusion, The Sunlight Foundation sent out a list of some tweets from Republican legislators celebrating their victory before having to rescind all that celebration. Sunlight in its e-mail attributed it to CNN misreporting, but conceded to B&C that that was based on its assumption they were prompted by CNN, and before they learned of the Fox miscue.

Lesson. Everybody makes mistakes. So, lets’ be more careful out there. Electrons can sometimes move faster than our ability to organize them into accurate bundles of info.

There'll Always Be an Olympics

Comcast/NBCU and the British Embassy got together Friday to welcome the Olympic Games with a cocktail party at the Ambassador’s residence for the ambassador and a few hundred of his closest friends spread out over the residence ballroom, dining room, drawing room and gardens.The event included a green-screen station where partygoers could play at being Olympic champions against a London street view or Olympic stadium. Also moving through the crowd to the pulse of iPhone camera flashes was one of Olympic torches–from an Irish leg–that had made the circuit around Britain. The flame, rather than the torch, is passed, so there are numerous torches.

Viewing stations for the opening ceremonies were large-screen TV’s set in ornate gilded frames mimicking the portraits that populated the walls of the staircase that led to the main milling-around areas, portraits that included a massive one of King George the Third, the last King of America (not including Elvis).

The main hosts were Britain’s and Comcast/NBCU’s respective top Washington representatives, Ambassador Peter Westmacott and Comcast/NBCU exec David Cohen. Also among the host of hosts were Comcast/NBCU Washington President and former NCTA chief Kyle McSlarrow, and former SVP government affairs and former FCC Commissioner Meredith Attwell Baker. There were current FCC members as well: Republican Robert McDowell and Democrat Mignon Clyburn.

Comcast/NBCU will also host a couple of Olympic viewing parties at their Washington offices next week to show off the next generation of Ultra-HD, 16 times the resolution of the current high-def picture.

Copps Takes a Bow

In what was billed as the largest-ever collection of current and former FCC commissioners, the National Cable & Telecommunications Association Thursday hosted a Minority Media & Telecommunications Council salute to retired commissioner Michael Copps, who exited the agency at the end of December.

NCTA headquarters was an appropriate venue, since the association is headed by one of Copps’s former chairman, Michael Powell, and now employs one of his former top aides, Rick Chessen.

There was no lack of quorum at this meeting of FCC minds, with 14 former commissioners and a video from former chairman Bill Kennard. Actually, there technically was, since only two of the three current commissioners were there. FCC chairman Genachowski had a conflict, but sent chief of staff Zac Katz to speak for him.

The afternoon event was filled with lots of hugs and a few tears as former colleagues — Copps’s policy foes remain friends and fans, something of a anomaly in Washington — stepped up to the mic, and the Mike, to wax eloquent.

FCC Commissioners past and presentThere also were a few jabs. Former chairman Dick Wiley, whose broadcast clients were rarely enamored of Copps’s passionate opposition to loosening media ownership rules, said that in a town divided into red states and blue states, he was “true blue.” But Wiley also praised Copps as a statesman whose door was always open and whose principled stands were always based on a thorough vetting of the record. He also gave Copps props for stewarding the DTV transition as well, something Wiley himself was instrumental in achieveing.

Copps got in a good-natured counter jab at Wiley. An emotional and touched Copps, in his closing remarks, said: “This is not farewell,” then added: “I think Dick may come out to these things to make sure it is final.”

Katz boiled the chairman and FCC staffs tribute to three words: “We miss you.”

Commissioner Robert McDowell threw in a couple of roast-like jokes, saying he wanted to thank Copps for being such a caring steward of his public office. “I don’t mean his position as commissioner, but his actual physical office, which I now occupy.”

He also said the Roosevelt Room is still called the Roosevelt Room (Democrat Franklin is a Copps hero), “but there are pictures of Teddy up there,” McDowell added.

But on a serious note, McDowell echoed his praise at Copps’s last public meeting. “His style ran counter to the culture in Washington,” he said, “leaving a bipartisan legacy that is almost unheard of these days.” McDowell pointed out that he voted with Copps 100% of the time during the latter’s six-month tenure as acting chairman.

Commissioner Mignon Clyburn said that there were two sermons she recalled from her childhood: If we disagree, we should do so without being disagreeable, and the world would rather see a sermon than hear it. She said Copps embodied those precepts.

Copps was lauded as the conscience of the FCC, a devoted public servant, and someone who not only kept the door open for those defending the public interest, like former commissioner Gloria Tristani, but put out the welcome mat.

It was almost impossible to tell the Republicans who had butted heads with Copps over the years with those who stood with him in his battles against consolidation and for a more diverse and inclusive media.

Former Republican commissioner Harold Furchtgott-Roth said Copps was responsible for the fact that there were still media ownership rules, something that he himself had worked to remove.

Furchtgott-Roth suggested there was nobility in that cause. He said that when they made a movie, Jimmy Stewart should have played the part: “If there ever was a Mr. Smith that came to Washington,” he said,”it was Michael Copps.” A close-up of Copps on a big screen behind the dais showed just how much the comparison meant to him.

Another former Republican commissioner, Kathleen Abernathy, called Copps a gentleman, a scholar, a man of integrity, and a “worthy opponent.”

Gary Knell, president of NPR and head of Sesame Workhop in another life–” I traded in Big Bird for Nina Totenberg” he quipped–said that his goal for NPR was to develop a civic and civil dialog steeped in diversity, taking that plan directly from Copps’s drawing board for the media in general.

Former commissioner Jonathan Adelstein, now running the USDA’s Rural Utilities Service, talked about the old days of field hearings on media ownership rules. He talked about getting 1 million signatures on a petition opposing loosening the rules, and wondered what they could do today with all the social media out there. He said Powell, whose rule changes he and Copps were opposing, should “thank his lucky starts” it was just a whistle-stop tour, while Copps later suggested that he was contemplating firing up that engine once more. “Sign me up,” said Adelstein.

Copps, himself a former acting chairman, got several shout-outs for his handling of the DTV transition which came under his watch after Republican chairman Kevin Martin (not in attendance) exited with the election of Barack Obama. And he was praised for his obvious appreciation of the work of the FCC staff, which he thought of as family. Staffers at the FCC still talk fondly of Copps’s address to the troops after he was named acting chairman, setting a tone of collegiality that had been notable for its absence.

Powell was a gracious host. He praised MMTC for “forcing public policy to have a conscience” and said the fact that 14 commissioners had attended was an extraordinary testament to an extraordinary career.” He called Copps one of the country’s most passionate and dedicated public servants. He also praised his integrity and consistency, values Powell holds particularly dear.

Everett Parker, age 99, MMTC board member, former director of the Office of Communication of the United Church of Christ, and a seminal figure in the defense of the broadcast public interest standard Copps has held high, sent along a message: I’m not retired and you better not be, because we need you.”

Copps said he would continue working on the issues he remains passionate about. Almost on cue as this item was being written, an e-mail came from the Benton Foundation with this blog item from Copps on one of the hot topics of the day, broadcast disclosure

Among others offering their praise for the public servant and the man were former commissioners Deborah Taylor Tate; Meredith Attwell Baker (in asbentia); Susan Ness; Andrew Barrett, who praised Copps as a family man; and Henry Rivera, MMTC chair emeritus.

Netflix Founder Hastings on Comcast Xbox Policy: 'In What Way is This Neutral?'

Netflix founder Reed Hastings vented on his Facebook page Sunday about Comcast’s policy of not counting xBox video VOD downloads toward its usage caps, while applying downloads of other services like, well, Netflix.

“Comcast [is] no longer following net neutrality principles,” he wrote. “Comcast should apply caps equally, or not at all. I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu. When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap.

The same device, the same IP address, the same wi fi, the same internet connection, but totally different cap treatment. In what way is this neutral?”

Comcast argues that because the Xbox video does not travel over the public Internet, the company is in compliance with FCC network neutrality rules, which have a carve-out for private networks.

“Comcast is committed to an open Internet and has pledged to abide by the FCC’s Open Internet rules — and our policies with respect to XfinityTV and the Xbox 360 fully comply with those rules and our commitments,” the company said in a statement when it first caught flak from public-interest groups for the Xfinity policy. “Any XfinityTV service that travels over the public Internet, including XfinityTV.com and our Xfinity TV app on mobile devices, counts toward our data usage threshold, as they always have. The Xfinity On Demand content that we will deliver to Xbox 360 will not travel over the public Internet and is delivered in much the same way as we deliver your video service to your set-top box. Your Xbox 360 essentially acts as an additional cable box for your existing cable service via the Xbox 360. As a result, our data caps do not apply.”

It's Two, Two, Two DeMints In One

As far as broadcaster interests were concerned, Senator Jim DeMint (R-S.C.) was playing both the good cop and bad cop at a Commerce Committee hearing Tuesday on the migration of video online. DeMint alone among the senators in attendance pressed Aereo TV investor and acolyte Barry Diller about his service, which broadcasters are essentially unilaterally opposed to.

He suggested to Diller that his antenna farm/cloud DVR service for delivering TV station signals over the Internet seemed to be a case of intercepting and retransmitting content without paying for it, and did not seem assuaged by Diller’s explanation that it was just a technological advancement on the in-home TV antenna and DVR.

Certainly broadcasters don’t see it Diller’s way, and appeared to have a champion in DeMint.

But DeMint also put in a strong plug for his bill, the Next Generation Television Marketplace Act, which would deep-six the retransmission consent-must carry regime through which TV stations are compensated for cable and satellite retransmissions.

He said that the current communications regs were written for a time and marketplace that no longer exists.

That sentiment was shared by virtually all of the senators and witnesses at the hearing, but there was not a similar agreement on just how the 1996 Telecommunications Act should be modified to reflect the advent of the ‘net.

He called the compulsory license and retrans regimes government interventions that meddle in the marketplace and are in need or repeal, hardly music to the ears for broadcasters increasingly seeking and getting cash for their valuable signals.

DeMint said he hoped the Commerce Committee would hold a hearing on his bill. Committee Chairman Jay Rockefeller did not immediately accede to that request, but did say he expected to be sitting next to DeMint in the future.

DeMint is currently the ranking member of the Communications Subcommittee, and is likely the next ranking member of the full committee after Sens. Kay Bailey Hutchison (R-Tex.) and Olympia Snowe (R-Me.) exit at the end of this session, or even the chairmanship if the Senate were to come under Republican control after the election.

FCC Commissioners To Be Sworn In

According to several sources, new Democratic FCC commissioner Jessica Rosenworcel is expected to be sworn in today (May 11), likely by her now former boss, Sen. Jay Rockefeller (D-W. Va.). Republican nominee Ajit Pai is expected to be sworn in Monday, but not clear by whom.

Both were approved unanimously by the Senate Monday, May 7, but were awaiting White House paperwork, which has now reportedly been completed.

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