Broadband Cable Association of Pennsylvania


April 25, 2012

In the U.S., most media deals must receive a green light from the Federal Communications Commission, which regulates television, cellphone and satellite airwaves as well as cable lines.

Lobbyists generally must file notices when they talk to FCC commissioners or FCC staff on a pending deal or other proceeding that is before the agency. Those notices have to be filed within a few days of the meeting and must disclose the date of the conversation, who was in the meeting and what was discussed. They are made public through an FCC database. Companies don't have to provide detailed specifics about their conversations, although some do. If a proposed deal like News Corp.'s former offer to buy British Sky Broadcasting Group PLC were before the FCC and a lobbyist for a company involved spoke with the FCC chairman, the company would have to file a notice of the conversation.

The issue of contact between News Corp.'s lobbyist and a U.K. regulator's office produced heated dialogue between James Murdoch, deputy chief operating officer, and the lead questioner at a media-ethics inquiry on Tuesday. It isn't uncommon for company lawyers and lobbyists to pick up details about what the FCC is considering on deals or other proceedings. Veteran FCC lobbyists often can get information from agency officials they have interacted with in the past. And it wouldn't be surprising if a company lobbyist told his bosses about information he was picking up from regulators, although such internal company communications would rarely become public. Once the FCC reaches a decision on a merger, it is likely to give company officials a heads-up. Last Nov. 22, FCC Chairman Julius Genachowski called AT&T Inc. CEO Randall Stephenson and top AT&T lawyers to give them the bad news that he was seeking an extra review of AT&T's proposed deal to buy T-Mobile USA. The move scuttled the plan. Wall Street Journal

The prime-time television ratings drop took center stage at the Digital Content NewFront presentations in New York, with former ABC Entertainment Chairman Lloyd Braun seizing on the numbers as an opportunity to talk about changing viewing habits -- and the rise of digital media.

In an onstage conversation with MediaLink Chairman and digital guru Michael E. Kassan, introductions had barely been concluded before the topic was broached: The four broadcast networks have lost viewers in recent weeks. And, unlike in years past, audiences aren't gravitating to the cable networks. Braun, who joined the world of digital media after being forced out in 2004 as the top programming executive at ABC, referred to a trend reported in the New York Times as evidence that viewers are moving away from watching television shows live, when they initially air. Viewers increasingly are using online services, such as Netflix Inc., to get caught up on past seasons of award-winning shows, such as the PBS series "Downton Abbey" or AMC's "Mad Men," and watch current episodes through digital on-demand offerings, he said. "There is no reason anymore -- for most of this kind of programming -- to watch it live," Braun told a group of advertising buyers attending Microsoft Corp.'s digital advertising presentation Tuesday.

The trend has been on the horizon for years, Braun noted, adding with obvious frustration that advertisers continue to pay higher rates to air commercials during prime-time TV, despite the gradual erosion of the audience. He said he expects the trend to continue, as buyers attend next month's presentations by the major networks of new fall shows and commit billions of advertising dollars for the upcoming season. This year's ad sales season, known as the upfront market, is expected to raise nearly $9.2 billion in commitments from advertisers. "What I think has been driving people crazy on the digital side, we've all seen these charts which show time spent on the Internet versus where the [ad] spend is going," said Braun, co-founder of BermanBraun, an independent media company that develops television, feature film and digital programs. "There's this huge gap where the audience is spending time online and with tablets and smartphones, and the ad dollars are not commensurate with that."

The desire to grab advertisers' attention -- and dollars -- is behind the Digital Content NewFronts, during which five major online distributors will highlight their new shows for buyers. Microsoft brought out some star power -- including U.S. Olympic gymnast and gold medalist Dominique Dawes, now a Fox Sports analyst, actress Felicia Day of "The Guild" and Kate Snow, NBC News correspondent with "Rock Center With Brian Williams" -- to promote the content available through its MSN portal and through the Xbox Live service offered via its game console.

Ross Honey, Xbox Live general manager of entertainment and advertising, sought to portray the Xbox 360 as a broad-based home entertainment device that offers more than video game play. It has struck some 50 content deals in recent months, including agreements with cable giant Comcast Corp. and Time Warner Inc.'s premium cable network, HBO, that offer subscribers access to TV shows via the game console. The Xbox Live service has grown 30% in the last year to 40 million members, Honey said. Indeed, Xbox 360 consoles outsold other individual devices that connect the TV to the Internet, including Blu-ray disc players.

Entertainment usage on the Xbox Live has more than doubled, year over year, Honey said. "In the U.S., entertainment usage has surpassed multiplayer gaming on Xbox Live," Honey said, referring to the video game industry term for players who connect via the Internet to oppose one another. "That's a profound event. When Xbox Live started 10 years ago, what it was all about was mutliplayer gaming. Now, Xbox Live really is an all-in-one entertainment platform." Los Angeles Times

Comcast Corp. has accused Bloomberg LP of lying to the government in the latest twist in the battle between the two media behemoths. Last month, Bloomberg said in a filing with the Federal Communications Commission that Comcast was ignoring the conditions that the regulatory agency put on the cable giant as part of approving its acquisition of NBCUniversal. Comcast told the FCC on Tuesday that the charge was "demonstrably false."

The specific issue is where Bloomberg TV is placed on the cable dial in relation to Comcast's CNBC. Bloomberg has argued that as part of the FCC's approval of the deal, Comcast is required to put Bloomberg TV near CNBC and other news channels. Comcast has countered that it only has to do that if it were to start placing similar channels next to each other on the dial, a practice known in the industry as "neighborhooding." In April, Bloomberg sent a letter to the FCC charging that Comcast in fact had created new neighborhoods for news channels on cable systems it owns in Crescent City, Fla., and Claxton, Ga., without moving Bloomberg TV. "Comcast is favoring its own programming content and discriminating against competitors," Bloomberg told the FCC.

On Tuesday, Comcast said neither of the accusations were accurate. In its response to Bloomberg, Comcast included a declaration from Michael Davies, an area vice president for the cable company's southeastern holdings. He denied Bloomberg's claims that between 2011 and 2012 it created a neighborhood of news channels that included Comcast's CNBC and MSNBC along with CNN and Fox News channels. Those channels, he said, had been together prior to the Comcast-NBCUniversal deal closing.

In Crescent City, Fla., Comcast said not only did it not create a news neighborhood, but that some of the channel's Bloomberg said were held by news networks were actually held by other entertainment channels. "Bloomberg's continued presentation of erroneous facts should further call into question the basis for its complaint," Comcast told the FCC. In its response, Bloomberg said it had used Comcast's own reporting of its channel positions to Tribune Media Services, which produces television listings and on-screen programming guides as the basis for its accusations. Comcast in latest complaint says Bloomberg lied to FCC Los Angeles Times

AOL is launching an online video network that will gather its programming onto one platform, the latest bid by a major Internet destination to be a player in Web television. The company announced the AOL On Network on Tuesday at a presentation of programming to advertisers in New York. It said the network will feature 14 content channels available online, on mobile, on tablets and through TV-connected devices. AOL On will pull from some 320,000 short-form videos from AOL and its many publishers. The company also announced seven new original series. The event Tuesday was part of the inaugural Digital Content NewFronts, in which digital outlets like YouTube and Yahoo are presenting their programming slates in the style of television upfronts. Associated Press