Murdoch: Telcos To “Knock Out” Cable In High-Speed Arena


CARLSBAD, Calif.: Calling the U.S. broadband infrastructure an “absolute disgrace,” Rupert Murdoch predicted that “the telephone companies are going to knock [cable operators] out” in the high-speed business.

“There are plenty of good cable companies who will  [deliver] up to 10, 20 or 30 Megabit [per second] service,” the News Corp. chairman said at a late-night session of the “D: All Things Digital” conference.  But he chastised operators for “saving their money” and not investing in sufficient capacity for the looming broadband opportunities.

“Verizon is doing a great job,” Murdoch said, noting the slow but steady migration of entertainment content to alternative distribution platforms.

In related remarks about mobile media becoming “a big new thing,” the News Corp. CEO also complimented Verizon Wireless for its “open” platform.  

“I want everything to be open,” Murdoch said, in an oblique reference to the net-neutrality issue, which popped up during several segments of this invitation-only conference run by The Wall Street Journal. Addressing 500 media and technology executives and investors, Murdoch also spoke favorably about Hulu, the Web video service that Fox owns with NBC. He emphasized that News Corp. wants “to monetize our copyrights with the long tail or something else. We want to control content as much as possible.”

Earlier in the day, Sony CEO Sir Howard Stringer, in response to an audience question, asserted that both cable and telephone companies “are trying to protect their networks.” 

“There are gatekeepers everywhere protecting their turf,” he said, noting that he was “a former toiler for Verizon.” (Actually, Stringer was president of Tele-TV, an aborted interactive TV venture set up by Verizon's predecessor Bell Atlantic and other “Baby Bell” companies more than a decade ago.)  

Alluding to the deal that Sony made earlier this week with several MSOs to support the Tru2Way technology, Stringer said that "because we’re a big company, we stand on both sides of these issues.”

Skirting the dual role that Sony plays as a content producer as well as a hardware supplier, Stringer insisted, “We negotiate for the rights of customers.” But he acknowledged that there are “difficulties” because “all our businesses are in the balance of power.”

Defending Beck, O’Reilly

Jeffrey Bewkes, president/CEO of Time Warner, during his hour in the “D” hot seat, emphasized that his company is “the strongest [TV] network group in the world.”  He predicted that, despite the growth of broadband services, in 10 years mass market viewing “will still largely be on TV screens.” 

Bewkes said that some delivery may come via broadband carriers, admitting that: “We have not done as good a job good of explaining how we’re converging into the digital world.”

He singled out the efforts Time Warner companies have made to create special content for digital platforms, such as three to five-minute original Webisodes of  Entourage and other titles. Like Murdoch and many other D speakers, Bewkes focused on the opportunities for wireless services. He made no comments about the looming spin-off of Time Warner Cable properties.

In a curious sequence of audience questions during the day, Bewkes and Murdoch defended hosts of programs on their respective news channels.  In response to a query about Fox News Channel’s controversial host, Murdoch said, “I’m not going to throw off Bill O’Reilly.”

Earlier in the day, during an audience question segment, Gary Shapiro, president of the Consumer Electronics Association and a vehement free trade advocate, asked why Bewkes allows CNN host Lou Dobbs to rant so extensively about immigration and foreign trade.  Bewkes defended Dobbs as a “commentator.”  To a subsequent question about Headlines News host Glenn Beck, Bewkes described him as bringing “another point of view” to the channel.

As for another notable Time Warner “talent,” Bewkes – in response to a question about the controversial ending of HBO’s biggest series – speculated that, “Tony Soprano is probably still alive.”

Diller Foresees More Interactivity
D organizers ushered each speaker on stage with walk-on music.  For IAC Chairman Barry Diller, the song was “Breaking Up is Hard to Do,” and the first series of questions from the Journal interviewer focused on his recently settled brouhaha with John Malone and Liberty Media.

“Malone and I like to control things,” Diller said matter-of-factly, stressing that it was “a horrible thing” to put their lives “into the hands of a judge in Delaware.” He defended his efforts to split up his InterActive Corp. into five companies that better reflect the interactive nature of the different businesses which serve “unique…iterations of Internet life.”

Despite this interactive migration, Diller said that, “Passivity is not going out the window.”  

“Everything is going to have the components of interaction, something that lets people get things …[or] communicate with each other.  It’s a better tool.”

In a separate riff, Diller criticized both sides in the recent writers’ strike.

"Hollywood is so inbred you wonder if its children have any teeth,” Diller said, wondering, “How dumb can you be” to fire off a rocket and then run to where its going to fall and explode. His allusion: permitting a strike to take place at a time when TV viewers are in an exodus from conventional TV viewing to the Internet and mobile media consumption.

“Both sides lost,” Diller declared.

Hulu, Yahoo Video and Beyond

Diller also described Hulu as “a good distribution tool,” before speculating that “maybe it will become something else.” Without offering specifics, he envisioned services supported by a combination of advertising, subscription fees and micro-payments. 

He also alluded to a new news bundling venture that IAC is preparing, but again provided no details.

One on-going topic of the D conference is the outlook for “MicroHoo,” the abandoned effort by Microsoft to acquire Yahoo! At the opening session, Bill Gates and Steve Ballmer, the once and current heads of Microsoft, insisted that the current revived negotiations are an effort to assure an improved online search role

The following morning, Yahoo Founder/CEO Jerry Yang and President Susan Decker defended their decision to reject Microsoft’s offer.

“The process started in a way that was very, very puzzling,” Yang said.  At the end, “We never got through the price door,” added Decker. 

As for Yahoo’s next targets, Decker said that creating  “a new social network by using context” is high on the company’s agenda.  Her focus on social networks refrained a theme heard frequently at the conference.

P4P Brings Comcast Calling

In the D conference’s casual atmosphere, attendees mingle freely and share ideas.  Robert Levitan, CEO of Pando Networks, a developer of peer-to-peer video services, told Multichannel News that he put together a deal with Comcast within two weeks recently. 

After learning of Pando’s relationship with Verizon on the new “P4P” technology – a double-speed enhancement of “P2P” systems – Comcast contacted Pando, Levitan said.  P4P focuses on local peering to accelerate file-sharing.  Although he cannot offer details of the Comcast project, Levitan said he was awed by the aggressive timetable by which it is being implemented.