NAB said it remains opposed to government-mandated performance royalties for broadcast radio, following reports Clear Channel reached an agreement with record label Big Machine to share some of its ad sales with performers. “Beyond our respect for private contracts, we take no position on free-market agreements negotiated between broadcast companies and other businesses,” an NAB spokesman said.
The FCC Wireless Bureau reinstated a renewal application by the Somerville Independent School District in Texas. It had been rejected after the district failed to respond on time to an FCC request for more information on whether it had met requirements for demonstrating substantial service applicable to education broadband service licensees. The district built a WiMAX system using its EBS licenses that provide Internet in several areas of the school, the order said (http://xrl.us/bnahkr). “While the original dismissal was correct, we find that the public interest would best be served by reinstating the renewal application and allowing the licensee to provide educational broadband services."
Comcast and Bloomberg each asked the FCC to review a Media Bureau decision (CD May 3 p6) that would force the cable operator to carry Bloomberg’s TV network on a channel near other news networks. Separately, Comcast sought a 45-day extension to comply with aspects of the bureau decision. Comcast asked the commission to overturn the bureau order. Bloomberg filed its application for review to “preserve its position on a limited number of matters and to mitigate future efforts by Comcast to avoid its obligations to carry Bloomberg Television ("BTV"),” its attorneys said (http://xrl.us/bnagzs). The cable operator argued the order was flawed and “virtually ensure that Comcast -- without having engaged in any discriminatory activity -- could now face additional ‘neighborhooding’ claims from other news channels, compounding the upheaval this Order will cause,” said its application for review (http://xrl.us/bnag8t). “Ironically, the only way Comcast could avoid this result (other than blowing up its existing cable lineups) is to affirmatively neighborhood all news channels -- the precise obligation the Commission declined to adopt.” Separately, Comcast asked the commission for a 45-day extension to Aug. 15 to complete some of the channel changes required by the order which called for the operator to put the channel in a news neighborhood in the top 35 markets. Compliance “will require Comcast to realign on the affected headends nearly 400 channel lineups that include BTV but where BTV is not on a channel located in a news neighborhood,” the operator said. Much of the work can be done by the original July 1 deadline, but in more than 130 channel lineups Comcast said it “will need more time, primarily because it will be required to move a network currently placed in or adjacent to the news network in order to make room for BTV."
The FCC Wireless Bureau sought comment on Arizona Water’s request for a waiver of the FCC’s Jan. 1, 2013, narrowbanding deadline. The company serves more than 84,000 customers in 22 water systems in eight counties throughout Arizona. It asked for a 12-month extension (http://xrl.us/bnagy9). Comments are due June 26, replies July 6.
Netflix’s announcement that it’s building its own content delivery network (CDN) to support video streaming is likely not an emerging trend, said Wells Fargo analyst Gray Powell. Few content providers are large enough to build their own CDNs, Powell said. The bulk of Netflix traffic is carried over Limelight Networks and Level 3 Communications, which signed 3-year contracts with Netflix 18 months ago, Powell said. Netflix accounts for 11 percent of Limelight revenue, and Powell estimated that Netflix accounts for 1.5 percent of Akamai revenue. In Netflix’s announcement, Ken Florance, vice president-content delivery, noted that YouTube has long had its own CDN, and given Netflix’s “size and growth, it now makes economic sense for Netflix to have one as well.” Netflix will continue to work with its commercial CDN partners for the next few years, Florance said, but eventually most of its data will be served by Open Connect, which currently serves 5 percent of Netflix data. The new network will reduce Netflix’s dependency on third-party CDNs, who were hit “hard” by the Netflix news on Tuesday, said Paul Ausick, analyst at financial website 247wallst.com. Akamai dropped 3.2 percent Tuesday after falling 5 percent early. Limelight Networks closed down 12.6 percent, while Level 3 Communications rallied to close up 1.9 percent after opening 1.3 percent lower. On the Netflix strategy, Ausick said, “It’s hard to see how a private CDN is going to improve Netflix’s bottom line,” adding that Netflix needs to concentrate on expanding its content offerings to keep ahead of Amazon and Hulu and the “many other streaming video challengers to the company’s once indomitable position.” Content now costs more, he noted, and how a CDN helps with that “is not immediately apparent."
Lobbying against allowing the FCC’s viewability rule to expire next week continued as broadcasters held talks with aides to commissioners, Media Bureau officials and wrote letters to the agency to make their case for keeping the mandate. A rule requiring cable operators to deliver the DTV signals of must-carry stations to analog cable subscribers is set to expire June 12 and a draft order lays out a way for the rule to largely sunset (CD June 4 p4). Bert Ellis, a holder of several station licenses, argued for extending the rule for three years or “until the number of analog cable households falls below five percent, whichever is sooner.” His suggestion came in a conversation with bureau Chief Bill Lake, a filing said (http://xrl.us/bnafo2). Lawyers for NAB met with an aide to Chairman Julius Genachowski and separately with an aide to Commissioner Mignon Clyburn to ask how the agency would enforce the statutory viewability standard if the FCC’s rule is allowed to expire, ex parte notices show. “We discussed how an equipment-based approach raises multiple barriers for consumers including the cost of boxes, education around the need for boxes, ordering boxes and installation/setup,” the notices said. An attorney representing Entravision and KVMD Licensee Co. asked the rule be extended. “The viewability issue is truly one where the process is not broken and there is no need for change,” Thompson Hine attorney Barry Friedmam wrote on behalf of Entravision (http://xrl.us/bnaf4d). “The viewability requirements enable those broadcast stations that cannot negotiate retransmission consent agreements to secure the same cable carriage as their more successful competitors.” NRJ TV CEO Ted Bartley wrote Genachowski to warn of the risks of letting the rule expire (http://xrl.us/bnaf6f). “Independent broadcasters already fight an uphill battle to compete in an environment dominated by large, vertically integrated companies,” Bartley said. “Allowing the viewability rule to sunset would significantly and negatively impact our ability to serve our local markets.” Outside the agency, the National Black Religious Broadcasters raised concerns about letting the rule expire. “This would be grossly unfair to black religious broadcasters throughout the country,” Rev. Sheldon Williams, NBRB president, said in a news release (http://xrl.us/bnagdp). “By extending the viewability rule, it will signal the FCC commitment to small and independent broadcasters."
As Disney is now doing for food marketing, broadband stakeholders should do so the Internet is used widely and for positive ends, FCC Chairman Julius Genachowski said. The company’s marketing policy for food ads targeted at children makes sure the commercials “don’t contribute unnecessarily to childhood obesity,” which is a “very dangerous trend,” he told an FCBA luncheon. “We need to do the same kinds of things when it comes to broadband for all communities,” which “requires changes in social norms” sometimes, Genachowski said in a Q-and-A when asked about a recent news article on some poor kids spending more time with media online and on TV than richer peers (http://xrl.us/bnafjj). Disney said earlier Tuesday that all food and drinks advertised, sponsored, or promoted on Disney Channel, Disney XD, Disney Junior, Radio Disney and Disney-owned websites targeted to families with younger kids “will be required by 2015 to meet Disney’s nutrition guidelines.” The policies “are aligned to federal standards, promote fruit and vegetable consumption and call for limiting calories and reducing saturated fat, sodium, and sugar,” the company said (http://xrl.us/bnafi7). The firm’s decision to expand its previous ban on using its cartoon characters to sell junk food is “another significant step in this continued battle against obesity,” said Deborah Tate, co-chairman of the Healthy Media Commission. “Through this industry led, voluntary and self-regulatory leadership -- rather than heavy-handed government regulation,” she said “we can truly make a difference in children’s’ weight and in the end in their overall lifestyle in the years ahead.” Tate, a former FCC commissioner, hopes Disney will be the first of many media companies “across all devices and platforms” adopting “these self-regulatory guidelines and family friendly policies."
Rep. Mike Doyle, D-Pa., hailed the FCC’s decision to halt approval of pricing flexibility requests by telecommunications carriers as a “major first step” in addressing special access reform. The agency said Monday that it intends to suspend consideration of pricing flexibility petitions pending development of a new framework (CD June 5 p3). Doyle, a member of the communications subcommittee, said in his statement Tuesday that the commission’s pricing flexibility triggers “have not functioned in a manner that promotes competition” in the wireless and wireline marketplaces. Doyle urged the FCC to enact stronger rules on special access pricing, terms and conditions.
Sales of the devices that route Internet traffic fell 7 percent Q1 after dropping 13 percent Q4, Dell'Oro Group researchers said Tuesday. “For several quarters now, we have seen a dramatic slow-down in core router demand, driven partly by normal investment cycles, but also by macroeconomic uncertainty,” said Shin Umeda, vice president at Dell'Oro Group. “The good news is that we believe that we are on the cusp of a new investment cycle in which network operators will upgrade to 100 gigabit technologies that offer 2.5 to 10 times more capacity than what is generally deployed today. We expect to see a meaningful market uptick in the second half of this year."
The 3rd U.S. Circuit Court of Appeals in Philadelphia upheld a lower court’s judgment in favor of Verizon in a case regarding when ILECs must provide particular network elements on an unbundled basis (http://xrl.us/bnae9f). The Pennsylvania Public Utility Commission filed the appeal, arguing that the lower court was in error in how it interpreted the relevant section of the Communications Act. “Since [the act] is ambiguous ... we defer to the interpretation offered by the FCC because it is consistent with the regulation and reflects the agency’s fair and considered judgment,” the court said. “Indeed, we would reach the same result absent such deference because Verizon’s position better comports with the language of [the act] and the FCC’s guidance regarding impairment analysis.” The opinion was written by Judge Marjorie Rendell.