Lawsuits Filed over FCC's USF Reform

Two lawsuits have been filed against the FCC's Universal Service Fund reform package approved in October. The suits claim the Commission's plan, dubbed the Connect America Fund and designed to subsidize broadband service expansion in rural areas, is a "departure from reasoned decision-making."

According to reports, a small telco named Core Communications filed the first suit against the order in the 4th Circuit Court of Appeals in Richmond, VA. The second comes from the State of Pennsylvania's Public Utility Commission (PUC) and was filed in the 3rd Circuit in Philadelphia.

At issue, among other concerns, is the argument that the FCC lacks the authority to implement the changes within the Connect America Fund. The Pennsylvania PUC's suit is not seen as a surprise as the Commission's plan would reorganize much of the responsibility for running the program from the state to a federal level.

The agency's 740-page order, released in November, dedicates a significant amount of real estate to explaining why the FCC believes it has the right to execute the plan.

Other groups interested in blocking the order have until today (Dec. 9) to file their complaints. Which court will ultimately hear the cases will be determined by a lottery process to follow the deadline. •

Anti-Muslim Groups Force Boycott at TLC

Muslim civil rights organization Council on American-Islamic Relations (CAIR) said that advertisers are being pressured by anti-Muslim groups to drop spots on TLC's new reality series "All-American Muslim."  The Muslim advocacy group said the advertiser boycott is coming from internet sites such as "Bare Naked Islam" which feature threats of violence against American mosques and right-wing groups Florida Family Association and American Decency.

CAIR is reporting that some major advertisers have already "buckled to the hate-filled views" of the boycott's promoters. Home improvement retail chain Lowes is the first company to pull its support of the reality show while American Decency is conducting an ongoing campaign against "offending" advertisers.

"While all Americans have the right to voice their views, no matter how bigoted, advertisers who seek to reach the tolerant majority of consumers should not pander to those who promote religious and ethnic hatred," said CAIR National Executive Director Nihad Awad. "The program's detractors are using every stereotype in the book to defame American Muslims and to demonize Islam. This fear-mongering campaign, by targeting any manifestation of pluralism in America, sums up what Islamophobia is all about in our society today." •

Etc.: Verizon v. Netflix - Favorable Ruling for Netflix on Facebook - Murdochs' Psychologist Session

Strategy: Don't look now, but Blockbuster isn't the only one sizing up a fight with Netflix. Verizon is now reportedly working on a "major partnership" with Coinstar's Redbox to launch its own movie streaming service. According to TechCrunch, the service (internally dubbed Project Zoetrope) could launch as early as May. Read more. --- News Corp. COO Chase Carey doesn't think moving sports to a specialty tier is a good idea and that the pay-TV industry should "respect the business models" already in place. At this week's UBS conference, Carey also said, "If ESPN is worth $4, then Fox [News] is worth $5." Company Town has the story. --- Verizon CEO Lowell McAdam said he company has been working on family data plans "for a couple of years" and they should hit the market sometime next year. AllThingsD has that story. The exec also said Verizon will cut the cord to its out-of-region LTE/DIRECTV combo opting instead to focus on "getting Comcast up and running." Bernstein's Craig Moffett called the move "the first direct fall-out from Verizon's ground-breaking deal with the cable industry." --- ZDNet says Microsoft is mulling ways on how to monetize Skype, here.

Disputes: Verizon recently asked Google not to include its Google Wallet on a certain smartphone (the Galaxy Nexus). Now some are saying the request may have violated federal rules for openness. Free Press legal reps say Google Wallet competes with mobile payment systems from Verizon and AT&T - and by trying to manipulate the market could have violated C-block conditions. Read more.

Rules & Regs: Lawmakers passed legislation this week that would ease a 1988 law barring disclosure of movie-rental history without a customer's written permission. HR 2471 would allow consumers to give a one-time consent to release the data - a move that will clear obstacles to an agreement Netflix previously signed with Facebook that enables users to share their favorite movies. --- The FCC decided Wednesday that it wouldn't force Cablevision to put the Game Show Network back on its basic tier while the agency examines the nets' carriage complaint against the cable company.

In Court: A group of LCD manufactures including Sharp, Samsung and 6 others, agreed to pay $388M to settle price-fixing allegations.  The litigation originally grew from a U.S. DOJ investigation that led to guilty pleas by Sharp, LG and others for illegally manipulating costs of the TV screens. Details here.

Footprint: Charter is launching its whole-home solution service powered by TiVo Premiere in Texas.

Rumor Mill: So when will we really see a Google TV? Says Head Googler Eric Schmidt: "By the summer of 2012, the majority of televisions you see in stores will have Google TV embedded on it."

Tech: Does voice control signal the end of TV remote? Is THIS what Steve Jobs implied when he said he finally "cracked" the Apple TV? No one knows for sure, but Bloomberg has the scoop.

Mobile: Nokia is said to be shopping its luxury smartphone subsidiary Vertu. FT says Goldman Sachs will oversee the sale with an estimated value between $268M and $402M.

Deals: LightSquared signed a wholesale 4G-LTE network agreement with FreedomPop, the Niklas Zennstrom (Skype co-founder) start-up that plans on offering free broadband and voice services in the US. --- VOD network Music Choice inked a deal with iN Demand to handle all transport of its on-demand service beginning in February.

Up, Down & Over There: Some new research from Motorola Mobility on British TV viewers: 29% watch TV on a mobile device; about 10% watch more than 30 hrs/week; and GB has 2xs the amount of Twitter users than Germany and France. --- The Sony/Discovery/IMAX 3D JV 3net will launch in selective markets outside the US in 2012 and beyond. Company Pres. Tom Cosgrove told attendees of the Digital TV Summit that he sees 3net as a content distributor with the channel owning upwards of 80% of its library. --- Speaking of 3D, the BBC said it will experiment with delivering some of its Olympic coverage in the dimension-busting technology. --- SeaChange International subsidiary On Demand Group launched a premium TV subscription video-on-demand (SVOD) for Cablevision in Mexico.

SkyREPORT: GlobeCast expanded its satellite capacity over Russia and the Commonwealth of Independent States (CIS) with a new Ku-band platform on the Yamal-201 satellite.

Programming: Talk about commitment viewing… SpikeTV is launching "Ink Master," a tattoo competition reality series, in January.

Labor: McGraw-Hill said it will cut about 550 jobs from its textbook unit as it proceeds to split into two companies. The new McGraw-Hill Education unit will reduce its executive ranks by about 20% and its workforce by about a tenth. The company said the move will save about $50M annually.

People: CableFAX published its annual list of the top 100 most powerful peeps in cable. Check it out. --- Comcast officially promoted Neil Smit to CEO of Comcast Cable Communications.

Education: The SCTE is teaming up with Georgia Institute of Tech College to create a "Cable Industry Management Development Program" designed to advance mid-level cable engineering and operations management professionals. Course description and registration information can be found here.

Humor: Ever wonder what it would sound like if the Murdoch's sat down at the psychologist's office and hashed out their family issues? Thanks to screenwriter Etan Cohen (Men in Black III, Tropic Thunder), now you'll know. At least in a satirical sense, that is. Hat tip to Scott Myers at GITS for the post.

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