Cable: Allow Encryption, Enforce Carriage

Two cable-related debates prompted a pair of the industry's largest interest groups to address the FCC in separate instances seeking favorable regulatory action. At issue are 1) independent cable operators' desire to be excluded from certain program carriage rules, and 2) the greater industry being able to encrypt its basic service tier.

To begin, the ACA urged the FCC to "uphold the intent of Congress" by exempting indie cable ops from rules designed to monitor the conduct of operators making program carriage choices that protect their financial interests. The group said program carriage mandates of the 1992 Cable Act are intended to ensure vertically-integrated cable operators, not independent companies, refrain from discriminating against programmers in which they have no ownership ties.

In its comments, the ACA said the majority of its members have no affiliation with any programming vendors and have long-supported independent video programmers. ACA President & CEO Matt Polka said the organization, "believes that the FCC must avoid any outcome that would reverse nearly 20 years of settled law of excluding independent cable operators" from the mandates.

The NCTA added that expanding the rules (and adopting procedural changes) will encourage more program carriage complaints and are steps in the wrong direction. The group said since passing the act in 1992, "only a handful of complaints have been filed and not a single one has resulted in a finding that the rules were violated... There is, in short, no basis in policy or law for these efforts."

Secondly, the ACA and the NCTA both urged the FCC to allow cable operators that have already upgraded their systems to digital to green-light the encryption of those basic service tiers. The groups said that permitting all-digital systems to encrypt their basic tiers will reduce costs to consumers, promote innovation and investment, reduce pollution and fuel consumption (by alleviating service calls) and assist the industry in combating signal theft.

The NCTA also detailed its stance that cable's video competition has no similar encryption ban as the multichannel industry has changed significantly over the past several years. "When the encryption rule was adopted in 1994, cable was the dominant MVPD, and there were few competitors," the group said. Today "DBS and telco IPTV providers - each requiring set-top boxes for each of their subscribers - serve approximately 40% of the marketplace with all-digital service on a fully encrypted basis."

The group also took aim at OTT services, saying companies like Netflix and its 23.8M subscribers, are not barred from encrypting the content they provide to their customers. •

FiOS TV Coming to Xbox

Blurring the lines of pay-TV vs. OTT, Verizon and Microsoft unveiled plans Tuesday that will bring the wireless company's FiOS TV product to the electronics giant's Xbox 360 gaming units. The collaborative effort will enable Xbox LIVE Gold members who subscribe to both FiOS TV and Verizon's internet service to access select live TV channels through their Xbox consoles.

Customers will soon have access to a FiOS TV app for the Xbox that, once downloaded, will enable the viewing of (initially) 26 channels, depending on their respective subscription package. In addition, the new service will integrate voice and gesture commands through Kinect (motion-detection tech) for Xbox 360.

The service package will run $90 per month with a 12-month Xbox LIVE Gold membership including a complementary video game. The announcement comes on the heels of Microsoft's deal with Comcast that will deliver even more linear channels to the Xbox console.

In related news, Microsoft is also rumored to be exploring original, scripted TV content. Deadline reports the computer maker is looking for an experienced executive to lead its scripted endeavors… •

Etc.: TWC/Insight Deal Hits Snag - Cain "Reassessing" - DISH Loses Two Execs

The Merger That Might Not Be? The FCC posted its initial analysis of the proposed AT&T + T-Mobile deal  online last night (click here) and DISH (very quickly, nice work Mark) issued this statement: "DISH Network applauds the FCC for releasing the staff report on the AT&T/T-Mobile merger.  As the expert agency on commercial wireless matters, the Commission has staff expertise not found anywhere else in the federal government and is in a unique position to analyze claims made by the Applicants.  As long as this transaction remains pending, the public and the courts should have the benefit of that expertise."

M&A: Time Warner Cable's $3B deal to acquire Insight cable systems in Indiana, Kentucky and Ohio apparently hit a snag in Louisville. The town is threatening to rescind a cable franchise agreement if the acquisition doesn't include keeping a Louisville customer service center open that employs upwards of 900 people. TWC execs are on hand to negotiate with the city despite not having any operations there. Read more. --- NewNet Communication Technologies is reportedly buying the former Motorola Solutions' WiMAX business from Nokia Siemens. Financial terms were unavailable, but NewNet will acquire the entire product portfolio, employees, assets and active customer contracts. --- Bloomberg is reporting the indie film company Lions Gate is in merger talks with Summit Entertainment, the studio responsible for the "Twilight" teen-vampire movies.

Disputes: The latest between Fox Sports and LA Dodgers: The team says by trying to prevent it from soliciting offers for its TV rights, Fox parent News Corp. is unfairly trying to avoid competition. The club says Fox's complaints "have no merit" and are designed to keep the Dodgers from putting their TV rights on the market. Bloomberg has details. --- A potential retrans fight looms for DISH Network as its contract with Titan Broadcasting is set to expire this week. Titan's stations include the CBS and Fox affiliates in Sioux City; the Fox and CW affiliates in Omaha and Fresno; and the CW affiliate in Greensboro. DISH is singing a familiar tune: Titan is making "outrageous demands" that would hurt the satellite company's customers and... that ain't happnin'. Reports say Titan stations are telling DISH subs to prepare for a blackout.

Politix: Social media, cable, politics and quick response team efforts paved a new road as this short report from Says Huff Post: Daniel Sinker noted on Twitter that Herman Cain’s web team had acted fast [as Mr. Cain addressed new allegations, before the allegations were public, on CNN]: a Google search of “Ginger White” produces an ad alongside the search results: “Truth About Herman Cain — Get Past the Allegations and Lies.”  We presume all cable network and MVPD marketers made note. Of course, that fast action may not work as subsequent reports said Cain was "reassessing" his campaign. -PSM

Gov't: The FCC granted AT&T’s request to withdraw its application to acquire T-Mobile and will release its staff report on the deal (the final report issued to Commissioners designed for public release from the start). It was expected to be posted on the FCC site late Tuesday. The FCC will keep the docket open, meaning ex partes on the merger will have to be reported publicly. The staff report concluded that AT&T and T-Mobile failed to show the transaction would outweigh public harm. --- Facebook reached a settlement with the FTC Tuesday regarding its policy on changing privacy controls. The social network agreed to first obtain users' approval before making any changes in the way it collects personal data and subject itself to independent 3rd party audits for 20 years. Sen. John Rockefeller (D- W.VA) commended the FTC for using its authority on the 800M-member strong company saying, "Consumer privacy is a right, not a luxury."

$$$: Reports emerged (again) Tuesday that suggest Facebook is eyeing an IPO to debut between April and June 2012 that it hopes will value the company around $100B. --- In related news, Fortune's Dan Primack expects social-gaming developer Zynga to go public "within the next two weeks" with a target raise price of a cool $1 billion. --- Liberty Media completed the elimination of its tracking stock structure, folding both Liberty Starz and Liberty Capital into Liberty's two remaining series of common stock, LMCA and LMCB.

In Court: A federal appeals court issued a temporary stay until Dec. 13 of the FCC's ruling that MSG and Cablevision give AT&T and Verizon access to MSG's RSNs.

Tech: Ahead of equipment manufacturers, Comcast is notably months-deep into "operational readiness" trials for CCAP. The cable giant is prepping for a big move to all IP services and wants to be ready to support CCAP devices from whoever makes 'em. LightReading has details.

Online: Internet movie ticket hub Fandango enjoyed a 60% y/y increase in Thanksgiving weekend movie ticket sales this year spurred by a 23% increase in purchases made on mobile devices.

Mobile: Researchers at IEEE say 2012 will be an epic year for… smartphone hacking. The org has already found malware (bad stuff) in more than 2K apps, which doesn't even account for the apps where the harmful programs are effectively hidden. Learn more at IEEE. --- In ironically related news, Bababoo released a new app called SocialDial allowing users to call and text Facebook and LinkedIn connections without actually having to know their phone numbers. (We're not implying there's malware involved…)

Advertising: Ad-supported streaming media is ridiculously hot right now, as Americans viewed 7.5B video ads in October alone. comScore said Hulu generated the highest number of video ad impressions (1.3B) while video ads accounted for nearly 15% of ALL videos viewed during the month. (More on the comScore report, below). --- Funny ad spot via AdWeek depicts the next generation of 'PC v. Mac' in Samsung v. iPhones… and Apple fans in general. Check it out.

Up, Down & Over There: German media outlets say Hulu is looking to expand in Germany. We got our tip from GigaOm here. --- Work is nearly complete on an 8K+ mile-long undersea cable connection that will link the Persian Gulf region with Europe and India. Reuters has the story.  --- South Asian service provider Mela is teaming with NJ-based Telugu Magic TV for distribution of 11 live channels for the Telugu community in North America. Mela said it will also acquire TMTV's STB subs in the deal. --- Rogers launched a daily-deals site for Canadians called RDeals.

Research: The total US audience for online video viewed an all-time one-month high of 42.6B videos in October, says comScore, as 184M internet users watched an average of 21.1 hours per viewer. YouTube, Facebook and VEVO were the 3 most popular video sites with 161M, 60M and 57M unique viewers during the month, respectively. More details at HMM. --- In-Stat says the popularity of video-calling is making its way from the PC to the TV… and by 2015 the total number of active video-communication users will surpass 380M, up from 63M in 2010. --- Remember terrestrial radio? Ha. BIA/Kelsey says the radio industry experienced "nominal" OTA growth with 2011 revenues of $14.1B, a 1.2% y/y increase, online revenues (not surprisingly) jumped 15% to $479M.

Ratings: It seems CNN's lead in nightly news ratings was short-lived. NYT reports ratings in November show MSNBC has moved back ahead of CNN… both still firmly behind Fox News Channel. Details and specific numbers, here.

SkyREPORT: NSR's annual DTH study says the global DTH market continues to drive satellite demand and revenue despite the troubling economic climate. The report said DTH services utilized 950 Ku-band 36 MHz TPEs last year delivering nearly 17K SD, HD and 3D TV channels to 140M subs worldwide generating more than $75B in revenues. --- Inmarsat selected both OnAir and Gogo to distribute its Global Xpress Ka-band network to provide in-flight broadband connectivity to the commercial airline industry.

People: Big news from the EchoStar camp: Denver Business Journal is reporting that two high-ranking executives have left the company in favor of local employment in other industries. Former E* CFO David Rayner has taken the same position at the Boulder, Colo.-based smart grid tech firm Tendril, and DISH CMO Ira Bahr is leaving the satellite company after 11 years for new work at the Denver-based resort club Inspirato. --- James Murdoch was re-elected as BSkyB Chair, but not without nearly a quarter (24%) of shareholders voting against him. Reports also say an additional 10% actively withheld their support. --- GlobeCast appointed Emma Brackett as new VP of WorldTV, reporting directly to CEO Lisa Coelho.

Letters to the Editor: I'm tired of not seeing the Thursday night games because the NFL is trying to mess with the established order of having other networks air live games. Doesn't the NFL make enough money already with the game broadcasts on Fox, CBS, NBC, and ESPN? Please put Thursday night up for bid on "normal" channels and end the running battle with the MVPD's for carriage of the lame NFL network. -Arch Hughes

--- Catch today's media market news in The Evening BRIDGE. •