Supreme Decision on Indecency

The Supreme Court on Thursday vacated a lower court decision  that the FCC's enforcement of indecency rules was unconstitutional. In a unanimous decision, the court ruled 8-0 that the FCC failed to give broadcasters fair notice prior to airing broadcasts of "fleeting expletives" and "momentary nudity" that would be considered indecent.

The case stems from challenges to the FCC's indecency rules by Fox and ABC after each network aired material that the agency deemed offensive. While both Fox and ABC said they were pleased with the decision, the ruling can be seen as a set-back to broadcasters hoping the nation's top court would eliminate the FCC's authority to police public TV and radio airwaves.

Perhaps more importantly, the Supreme Court ruling dodges larger constitutional issues that the FCC's indecency rules violate the First Amendment. The court said that while the broadcasts in question could be found indecent, the Commission's "standards were vague" and, because the Court resolves cases on fair notice grounds under the Due Process Clause, "it need not address the First Amendment implications."

"The Supreme Court left untouched its 1978 Pacifica ruling -- and a less-rigorous standard of scrutiny of broadcast regulation -- upholding the FCC's indecency order against George Carlin's 'filthy words' routine," said Stifel Nicolaus analyst Chris King. "If the justices had overturned Pacifica and applied "strict scrutiny," the implications for broadcast regulation -- and the potential broader fallout -- would have been greater."

Outside of the broadcasters, response was varied:

• "The FCC must expeditiously implement the Court's decision to put an end to years of litigation and uncertainty regarding the Commission’s regulation of indecent content on America's airwaves," FCC Commissioner Robert McDowell said. "As a matter of good governance, it is now time for the FCC to get back to work so that we can process the backlog of pending indecency complaints – which currently stands at just under 1.5 million involving about 9,700 TV broadcasts. Some (dating) back to 2003."

• "The decision leaves in place the FCC's authority to protect children from indecent programming," said Senate Commerce Committee Chair Sen. Jay Rockefeller (D-W.VA). "This is a victory for those of us who believe that we must be doing more, not less, to give the FCC and parents all across America the resources they need to protect their children from indecent programming."

• "The U.S. Supreme Court gave the FCC the green light to continue imposing indecency fines on the networks for fleeting expletives and brief nudity," chimed Family Research Council President Tony Perkins. "The public airways are just that - public. The networks using them have a moral duty to the American public to provide content that is acceptable for all viewers." •

Video on Tablets Up, PCs Down

As paid video reaches consumers from a variety of new distribution channels, viewing on tablets and smartphones is becoming more popular than on home computers. According to a new study of residential pay-to-view habits, mobile devices are inching ever closer to becoming consumers favorite tools for watching video.

A new J.D. Power & Associates survey says 18% of customers now use a tablet for viewing paid video content, making them the most-often-used handheld device, up from 11% in 2011. Usage by wireless phone customers increased to 16%, up from 14% last year. Overall, the firm says, 29% of video service customers watch paid content on some type of handheld device, while viewing on a PC or Mac declined to 39% - an 11% y/y drop.

Age seems to be a factor, as the study found a stark difference in the usage and viewing practices of paid content by Gen Y and Baby Boomer customers... in addition to significant differences in their satisfaction levels. The firm says satisfaction with video service providers among Baby Boomer customers increased 19 points (748) from last year, while satisfaction  among Gen Y customers has declined 18 points (752) during the same time. The J.D. Powers study says Gen Y satisfaction has declined in part due to lower ratings for cost of service and customer service, while satisfaction among Baby Boomers has increased due to higher ratings for billing, ease of use and variety of videos/programming provided.

The study also finds that when selecting a video service provider, 21 percent of Gen Y customers consider mobility a factor, compared with only 9 percent of Baby Boomer customers, further highlighting the different needs of these two generations.

Nearly one-fourth (23%) of customers view paid content via gaming consoles, compared to those who view via handheld devices (29%). However, customers who view content on a gaming console watch 6.3 hours per week, compared with 5.3 hours on a PC/Mac; 4.9 hours on a wireless phone; 4.5 hours on a music player; and 4.4 hours on a tablet. •

Cable/VW Cross Promo Grows - CBS Eyes ESPN (Radio) - SlingBox's New Rival

Strategy: Verizon Wireless and Comcast expanded their cross-promotion strategy in 22 markets across 10 states with a strong presence in Indiana and Michigan. Other areas added include markets in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, South Carolina and Tennessee. Verizon Wireless also began its cross-promo relationship with Time Warner Cable in parts of Alabama, North and South Carolina; Northeast Ohio and Wisconsin. --- MAVTV is re-launching on July 4 to "reach the working class" with programming to "rock the soul of the adventurer." --- TV One, the cable net for African-Americans has redesigned its logo and tagline: "Where Black Life Unfolds."

Service: CBS officially announced its new nationwide sports radio network: CBS Sports Radio. Cumulus Media will service as exclusive distribution and sales partner. --- Local reports say Charter is launching 38 new HD channels on its line-up in Central Massachusetts. --- Adap.tv lauched its Campaign Optimizer platform that enables media buyers to see ad-run results before running any spots by using historical data on billions of impressions.

Tech: Belkin said it is launching a STB dubbed @TV to compete with EchoStar's SlingBox. The box will retail for $150 with a separate mobile app for $13. --- CrowdOptic is testing new features for TV viewers using the Yahoo! Connected TV platform. Together the technologies will create an interactive broadcast system with real-time social-TV tools during live sporting events on mobile devices. CrowdOptic says its working with "premium partners" and should launch by the end of the year. --- More and more reviews keep emerging that flirt with the idea that Samsung's new Galaxy S III smartphone could actually be the mythical creature known as... "the iPhone killer." --- Fresh off the announcement of the Connected TV Marketing Association (CTVMA) comes news that LG Electronics and TP Vision have established the Smart TV Alliance with a handful of other Japanese TV manufacturers. The group will focus on developing a non-proprietary connected-TV ecosystem to aide app developers and platform-agnostic services.

In Court: A U.S. District Court judge ruled this week that Comcast does not have to identify its subscribers that a handful of adult-entertainment companies allege have illegally downloaded porn vids via BitTorrent.

WebTV: Last month Hulu increased its viewers to 38M... 2M of which are paid subs. Check out CEO Jason Kilar talk about the future of TV on CBSNews.com.

Deals: CenturyLink signed a 5-year deal to provide communications services to the U.S. Army base at Fort Stewart, GA.

Over, Up, & Under: Technicolor shareholders have voted in favor of a bid by Vector Capital of €1.56 ($1.96) per share. When the deal closes, Vector will own between 18% and 30% of the STB-maker's shares valued at €167M ($209M) and €191M ($240M). --- Dutch FTTH operator Glashart Media is launching a live TV app for the iPad that allows subscribers view 10 live TV channels throughout their home. The service is free for now, but starting next year subs will have to pay €3.95 ($4.95) per month. --- Rogers Media received approval from the Canadian Radio-television and Telecommunications Commission to acquire Saskatchewan Communications Network (SCN).  The deal is expected to close later this month, with Citytv Saskatchewan to launch on July 1. --- SiriusXM Canada is petitioning the Radio-television and Telecommunications Commission to approve a 90% reduction in its required artist royalties to better compete with broadcast radio and other rivals. The company says it "has been losing money at a disturbing rate."

People: The FCC is seeking a director of digital strategy. Salary starts at $124K; deadline for submissions is July 2. Info here. --- Univision appointed Keith Norman to VP of Political Advocacy and Government Sales.

Cool!: Universal Studios is releasing a new box-set of 15 Alfred Hitchcock films on Blu-ray called "The Masterpiece Collection." In related, but decidedly less cool news, the entire series of "Friends" is also being released on Blu-ray. Ha.

Clarification: Yesterday's report in The Evening BRIDGE, derived and credited from our colleagues at SNL Kagan, did not quite get the circumstances of reporter Deborah Yao's story on Starz's VP-Digital Media Mara Winokur's comments correct at the Digital Content Monetization 2012 conference in NYC. Ms. Winokur's comments were more about the home video and VOD industries than Starz's own conundrums, as she noted during the conference. She clearly stated that Starz's current strategy for VOD purchase and rental is to manage the licensing almost on a "title by title, partner by partner" basis. Not referencing the recent termination and non-renewal of Starz's former deal with Netflix. -PSM

Letter to the Editor (re: Monday's Maxwell): Another disturbing trend is if I hold a door for a young lady or man under the age of 35 there is little or no acknowledgement. Still one more, why do the younger waiters and waitresses take your order, say "is that all" and when I say yes they spin around and vanish without a smile. Are these college grads forced to work in restaurants as first jobs as we did? Is this the first time in their lives they are graded on actual performance or are customers like some invisible person on the other end of a text stream that is intruding on their time? I definitely have to consider leaving these restaurants or leaving no tip which is something that will be extremely difficult for me to do since I have been used to excellent service and cheerful attitudes for the last 50 years of my life. The economy is not so great but you need to bring or find your "A" game in times like these. I hope that old cultural norms and niceties (and laws) aren't forever lost. -John Bishop

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