Broadband Cable Association of Pennsylvania


April 25, 2014

Netflix Inc. is about to take a small but significant step to make its streaming-video service easier for viewers to access.

Netflix has reached a deal with Atlantic Broadband, a small Quincy, Mass. cable operator, to integrate its streaming service as an app through TiVo Inc. set top boxes provided by the cable operator, according to people familiar with the matter. Atlantic Broadband, a wholly owned subsidiary of Cogeco Cable Inc. serves about 230,000 residential and business customers in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina.

"Now, watching Netflix is as easy as changing the channel," David Isenberg, Atlantic Broadband's chief marketing and strategy officer, said in a statement. Netflix content is a "tremendous complement" to Atlantic Broadband's live TV and on-demand programming, he added. Last year, Netflix began appearing on TiVo boxes with some pay TV operators in Europe. Netflix could come to more cable boxes provided by other TiVo partners if the cable companies work out the agreements, a TiVo spokesman said. Cable companies that use TiVo boxes include Suddenlink, Mediacom, Cable One and Blue Ridge Communications, a small provider in Pennsylvania. Netflix has been talking with cable providers for months about the company's desire to have its streaming service accessible through set-top boxes, which it believes will help retain and win new subscribers.

Among the three providers that announced agreements with Netflix, RCN is the largest with about 350,000 subscribers in Washington, Chicago, Philadelphia and other cities. Atlantic Broadband, a unit of Cogeco Cable Inc, has 230,000 customers in several Eastern states. Grande serves 140,000 customers in Texas. To access Netflix under the new arrangement, customers must subscribe to the TiVo DVR service and to Netflix.

Even on the powerful eighth floor of the Federal Communications Commission, almost no one on Wednesday had previewed Chairman Tom Wheeler's new proposal to regulate how broadband providers manage their networks. It wasn't an unusual event, say people who know and work with the chairman, a nearly 40-year veteran of telecom policy, much of it as an industry lobbyist.

Mr. Wheeler has been in the job less than six months but his mode of operation is already clear: He often unilaterally stakes out positions on issues facing the agency, like the Internet rules, even when they are sure to be unpopular with large swaths of industry. "I think that he stepped on the toes of just about every sector of industry on one thing or another," Andy Schwartzman, a public-interest advocate and law professor at Georgetown University, said of the 68-year-old chairman. "His greatest asset is that he is comfortable in his own skin, and is not looking for his next job."

Mr. Wheeler's determined and unapologetic style will be put to the test not only on the rules affecting how traffic flows over the Internet, but also on several other major cases coming up at the commission, including Comcast Corp.'s proposed acquisition of Time Warner Cable, next year's planned spectrum auction, and media ownership rules that affect how many TV stations companies can control in a single market. He also will have final say on deals like a potential merger of Sprint and T-Mobile. These are all issues that could mold the future of the broadband, cable, wireless and broadcast industries, and determine how consumers access voice, video and data services at home, work, and on mobile devices. For now, his greatest challenge may be the "Open Internet" rules, which Mr. Wheeler previewed in a blog post published Thursday. Advocates of "net neutrality," the concept that all Internet traffic should be treated equally by broadband providers, are outraged that the proposal may allow content companies to pay broadband providers for preferential treatment.

But Mr. Wheeler indicated in a December speech at Ohio State, his alma mater, that he was open to such paid arrangements, and nothing he has said since has contradicted that. "There are reports that the FCC is gutting the Open Internet rule. They are flat out wrong," Mr. Wheeler said in a statement late Wednesday defending his proposal. "There is no 'turnaround in policy.' The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court's decision, behavior that harms consumers or competition will not be permitted." The commission will vote May 15 to take comment on the proposal, with a final vote expected later this year.

The rollout of the net-neutrality proposal and subsequent pushback are characteristic of Mr. Wheeler's leadership as chairman: announce his intention to act, follow through in a timely manner despite criticism and meet his critics head-on. A similar pattern was seen when the FCC cracked down on broadcasters controlling two TV stations in the same market, and when the FCC announced its intention to set aside airwaves in the coming spectrum auction for the smaller wireless carriers. Mr. Wheeler "appears to be a fairly straight shooter," said Michael Weinberg, vice president of the consumer-advocacy group Public Knowledge. "When he says things, he appears to mean them."

Mr. Wheeler rarely consults with his fellow commissioners on policy issues before circulating his proposals, said an FCC official. This lack of consensus-building could someday backfire on him, if he miscalculates support on the commission, which is made up of three Democrats and two Republicans. Most observers point to Mr. Wheeler's age and experience as a factor in his take-no-prisoners style. As a former head of lobbying groups representing the cable and wireless industries, he has long had a hand in shaping telecom policy. Some who know him attribute his style to his background as an executive accustomed to being the boss. "He very much would like to function as a cabinet secretary as opposed to a multi-member commission," the official said.

An industry official called Mr. Wheeler "no shrinking violet. "He's probably one of the most aggressive chairmen that industry has seen in terms of taking on a lot in his agenda." While some of his critics question his industry ties, others say the fact that he is unlikely to go to work for industry again is a welcome change. "At 68 years old, he's financially comfortable. Whatever he does next will not require him to have ingratiated himself to anyone. And I cannot say the same thing about all of his predecessors," Mr. Schwartzman said.

The one battle Mr. Wheeler doesn't appear to have an appetite for also revolves around net neutrality. Public-interest groups have pressed the administration to reclassify broadband as a public utility, so it would be subject to much greater regulation. Those close to the chairman say he views reclassification as a last resort if the courts strike down the Web rules for a third time. Taking that step would likely set off a fierce backlash, driven by the broadband industry. With his attention focused on freeing up more spectrum for wireless carriers and the transition to next-generation phone networks, the last thing Mr. Wheeler wants is to be swallowed up in a fight over broadband reclassification. FCC officials framed Mr. Wheeler's proposed open Internet rules on Thursday as the only solution that could be enacted quickly and still survive a legal challenge. Wall Street Journal

Former U.S. Rep. Marjorie Margolies has run her bid to retake her old 13th District seat like an economic stimulus plan for a handful of political consultants. She spent more than she took in for the last three months of 2013 and the first three months of this year. But did she violate a federal law in the process?

State Sen. Daylin Leach, a rival in the May 20 Democratic primary election, filed a Federal Election Commission complaint this week accusing Margolies of illegally spending campaign cash on primary expenses when that money was reserved for the general election. Contributions reserved for the general election must be held separately so a candidate who loses the primary election can refund it to campaign contributors. The Margolies camp counters that a 2009 FEC ruling on a similar case, involving a Republican Congressional primary in New Hampshire, proves they broke no law. The FEC ruling there found the candidate had enough money at the end of the financial reporting period to cover the cash reserved for the general election. Margolies filed a report last week showing she finished the last quarterly reporting period in the black - just barely - with $2,800 left for the primary and $157,000 for the general.

Leach yesterday called on Margolies to drop out of the race for the seat, which represents parts of Northeast Philly and Montgomery County. One of her consultants, Ken Smukler, dismissed Leach's complaint as a campaign stunt. "Daylin Leach has become the carnival barker of this Congressional race, frantically trying to get attention for his desperate campaign," Smukler said. Here's how Leach responds: "It's sort of Politics 101 to say, whenever someone attacks you or complains about something, that it's desperation."

Margolies yesterday hired attorney Karl Sandstrom, a former FEC commissioner, to handle the complaint. He vouched for her claim that the 2009 FEC ruling shows she did nothing wrong. Leach and his attorney, Adam Bonin, adamantly disagree that the complaints are comparable. They cite the federal rule in question, which says candidates must have cash "at all times equal to" the amount of money set aside for the general election. Leach's complaint tracks Margolies' spending day to day, showing what appears to be use of general election money in mid-January. Both sides agree on one thing: The FEC won't decide anything about Leach's complaint until well after the primary. Philadelphia Daily News

The campaign staffer who plagiarized content for Democratic gubernatorial frontrunner Tom Wolf's platform document has been fired. The staffer, who was not identified, copied material from Johnson Controls Inc. policy papers and used them in Wolf's "A Fresh Start" plan, said campaign spokesman Mark Nicastre. "We have terminated the person responsible," Nicastre said in an email. The duplications were brought to light by the campaign of Democratic nomination rival Allyson Schwartz Thursday. Wolf said he would make sure such duplications never happen again.

Former Pennsylvania Sen. Rick Santorum is giving signals that he could be a candidate for president in 2016, as he was in 2012. He is attending events that are in the conservative Republican's wheelhouse, such as the March for Life rally in Washington, D.C., in January. That rally marked the 41st anniversary of Roe v. Wade. Now comes the announcement that Santorum will address the National Rifle Association's annual meeting in Indianapolis on April 25. Santorum will participate in a leadership forum to discuss his support for the Second Amendment. Santorum is also the chairman of Patriot Voices, a conservative advocacy group that he founded.,