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Peacock Launches on Roku After NBCUniversal Reaches Agreement

Phillip Dampier September 21, 2020 Competition, Consumer News, Online Video, Peacock No Comments

NBCUniversal’s Peacock streaming service app is now finally available on Roku devices and Roku-enabled televisions, almost 10 weeks after the new streaming service launched.

Peacock’s appearance on Roku came after NBCUniversal and Roku reached a deal guaranteeing NBCU’s networks (and corresponding apps for 11 NBCU networks, 12 NBCU-owned local stations, and 23 Telemundo-owned local stations) will remain available on the Roku platform and in return, Roku will support Peacock. The deal was seen as crucial by analysts, because Roku has an installed user base of over 43 million accounts, with an estimated 100 million viewers in households across the country.

“We are pleased that NBC agreed to a very positive and mutually beneficial partnership to bring Peacock to America’s No. 1 streaming platform,” said Tedd Cittadine, Roku’s vice president of content acquisition. “We are excited by the opportunities to integrate NBC content within the Roku Channel while we also work together with Peacock on the development of a significant and meaningful advertising and ad tech partnership. This is a great outcome for consumers and we look forward to growing together with Peacock as they bring their incredible content to the Roku platform.”

Roku is also pleased whenever a significant content provider signs a deal with the company. Roku traditionally takes a 20% cut of all subscription revenue when a customer signs up for a service on the Roku platform. It receives at least 30% of the advertising time on free streaming services, allowing Roku to sell advertising and keep the money. NBCU appeared to be reluctant to accept those terms, and that is likely what caused the delay in debuting Peacock on Roku. Neither party would disclose the terms in the contract. Comcast is the parent company of NBCU.

Comcast CEO Brian Roberts said last week Peacock had signed up at least 15 million new users over the last two months. But Roberts would not disclose how many were actually paying for the service. Peacock’s free, ad-supported tier offers over 13,000 hours of classic and current NBC programs, including entertainment, news, and sports. A small catalog of original series and other premium content is also available for $4.99 a month (or $49.99/yr), and users who want it all — without ads — can pay $9.99 a month (or $99.99/yr). Roberts likely needs a much larger subscriber base to make Peacock a viable proposition, making its availability on the Roku platform crucial.

Some analysts fear carriage disputes like this could open a new front in the “retransmission consent” wars, where national and local networks are blacked out when cable or satellite providers refuse to pay their asking prices. If Roku insists on being compensated in return for making services available in its app store and if content providers cannot reach an agreement, services could suddenly disappear, or never appear at all. HBO Max is still unavailable on Roku because parent company AT&T has yet to sign a contract with Roku, and Peacock remains unavailable on Amazon’s Fire TV platform and Samsung’s Smart TVs.

AT&T Reportedly Looking for a Buyer for DirecTV, But Some Are Skeptical a Deal Can Be Done

Just five years after buying DirecTV for $49 billion, AT&T is looking to sell the satellite TV service after losing over 10 million customers because of repeated price hikes, network blackouts, and the ongoing shift to streaming online video.

The Wall Street Journal reported Friday that AT&T was in talks with private equity firms, potentially including Apollo Global Management and Platinum Equity about the possibility of acquiring DirecTV and taking the service private.

Regardless of who buys the service, AT&T might lose $30 billion on the five-year-old venture, buying high and selling low at a price that could drop below $20 billion. AT&T is rapidly losing its television customers. More than six million people have dropped TV packages from AT&T’s U-verse TV and satellite provider DirecTV in the last two years. Craig Moffett, an analyst with MoffettNathanson, told the New York Post even at a rumored discount sale price of $20 billion, AT&T may have “overvalued” the “albatross.”

Moffett is skeptical buyers will close a deal, considering AT&T’s remaining 17.7 million television customers are still in the mood to cancel, with an “astounding” 18% of customers leaving each year.

But even with the customer losses, DirecTV moves a lot of money through its operations, making it at least look attractive on certain buyers’ books. DirecTV’s cash flow helped AT&T’s own unimpressive earnings, adding $22 billion to AT&T’s balance sheet since buying the satellite company. A buyout by a private equity firm could further slowly drain DirecTV by saddling it with debt, secured in part by its still healthy cash flow. A buyer could also attract investors by borrowing even more to pay out handsome dividend bonuses. That could leave DirecTV hopelessly hobbled in debt, leaving DirecTV in an “inevitable” position of having to merge with its chief competitor, Dish Network, or face eventual bankruptcy. If that were to happen, rural Americans could face a satellite TV monopoly as their only choice for live video entertainment.

DirecTV customers report innovation at the satellite service seems to have disappeared since AT&T took over. Very little has changed with the service in the past few years, except for AT&T raising prices and getting stingier with promotions. Many rural DirecTV customers still depend on satellite television because of a lack of over the air reception or broadband service. For these customers, saving money on television service means having to bounce back and forth between Dish Network and DirecTV, trying to keep a discounted promotion active on their account. If the two satellite services eventually merge, that will cease.

After AT&T acquired Time Warner (Entertainment), insiders report many of AT&T’s legacy businesses, including DirecTV and U-verse, have become afterthoughts. AT&T’s bigger priorities now lie with its new 5G wireless service and HBO Max, its new online video service. But the company’s most profitable businesses continue to be cell phone service and selling wired broadband internet access, which together now earns the company over $180 billion annually.

Digital TV Upgrade Will Make Room for a New Over-the-Air Slimmed Down Pay TV Package

Phillip Dampier August 25, 2020 Competition, Consumer News, Evoca, Online Video, Video No Comments

The forthcoming conversion of digital over-the-air TV stations from ATSC 1 to ATSC 3.0 will open up space for a new pay TV service that will bundle dozens of local and national channels with a video on demand service selling for as little as $20 a month.

Evoca is launching a consumer trial of its new service in Boise, Ida. in September, with plans to gradually expand service to small and medium-sized communities around the country.

Parent company Edge Networks is still negotiating with programmers, but will eventually sell a package of over 80 channels at a price it claims will be “less than half the cost of cable” TV. New customers will be offered a temporary promotional rate of $20 a month, but the service will eventually cost $49.95 a month. How can it afford to charge less? By offering customers a receiver that combines free, over the air local channels with a lineup of pay cable networks and, eventually, streaming services like Netflix and Hulu. Evoca won’t have to pay local station retransmission fees since customers will be watching those channels directly over the air.

About half of Evoca’s lineup will be delivered over two existing ATSC 3.0 low power TV stations owned by Cocola Broadcasting and leased to Evoca in Boise, compressing 20 encrypted digital channels on each station (KBSE-LD on Channel 33 and KCBB-LD on Channel 34). Boise is located in the Treasure Valley, an optimal place to receive unobstructed low power television signals. Evoca’s set-top box has a connection for a UHF-TV antenna. A basic indoor antenna is offered by the service. ATSC 3.0 signals are expected to be more reliable in fringe reception zones than the existing ATSC 1 standard, which gives Evoca confidence it can supply quality reception. Evoca will also carefully identify which zip codes are likely to receive good reception from the two stations and will not sell the service in areas that cannot get good reception.

The rest of Evoca’s lineup will be delivered over the customer’s home internet connection (at least 5 Mbps recommended). An included set-top box integrates everything together, so customers won’t know or care if they are watching a standard over the air signal, one of Evoca’s compressed and encrypted ATSC 3.0 channels, or a video stream from the internet.  Evoca claims to support both HD and 4K video, where available.

Evoca’s launch market of Boise was not chosen randomly. The company is based in Boise. It will seek to offer the service in cities where cable companies have either given up on selling television packages or charges above average rates for a below average lineup. Most Boise residents are currently served by Sparklight, formerly Cable One, which was among the first to deprioritize selling television service. Sparklight’s still available TV package is costly and many subscribers have dropped it.

Evoca also has an edge attracting older viewers because it will bundle dozens of digital networks like Cozi and Me-TV that favor classic TV shows and movies. These digital over the air channels are often not included on cable lineups.

Evoca TV Trial for Boise Residents

If you live in Boise, you could be among the 200 customers selected for “early access” to Evoca when it launches September 1. Early adopters will receive a free receiver (a $100 value), free antenna, an Evoca t-shirt, and a preview package of 60+ channels for $20 a month until the end of 2021. On January 1, 2022 the price will increase to $49/month. For more information, visit the Evoca website. At the moment, the most compelling channels are those already provided over the air for free, and there are a handful of on-demand services to fill some sizeable gaps in the current lineup. Evoca claims it is close to reaching deals with more familiar cable networks and will bring those to the lineup in the coming months. A cloud based DVR service is also planned for sometime in the future.

Assuming the service achieves success in Boise, expect it to expand to other cities in Idaho and Montana first, then Nevada and Utah, and finally parts of Texas and Oklahoma. The company claims it is interested in providing nationwide service, but that will highly depend on its ability to lease at least two low power television stations in each market it intends to serve. Considering the fact many low power stations are owned by hedge funds or other investors that have parked home shopping or other free-to-air networks on their stations hoping to monetize them later (or offer to close them down so the spectrum can be used by cell phone companies), Evoca may not have too much trouble finding other partners to support an expansion. But reception of low power signals can vary widely, especially in difficult terrain areas.

Evoca produced this video demonstrating how to set up the service. (1:30)

Stop the Cap Requests FCC Time Extension or Postponement of Charter’s Data Cap Petition

August 20, 2020

Ms. Marlene H. Dortch
Office of the Secretary
Federal Communications Commission
445 12th Street SW
Washington, DC 20554

Regarding Docket: WC 16-197

Dear Ms. Dortch,

We are writing to express concern about the FCC’s apparent rush to judgment over Charter’s petition to sunset two important conditions the company agreed to in return for approval of a highly profitable merger deal involving Time Warner Cable and Bright House Networks. The accelerated pace of this proceeding is very odd, considering Charter has claimed in the press it has no plans to implement data caps and cannot act on the Commission’s decision before the spring of 2021.[1]

This docket is full of comments from consumers that are overwhelmingly opposed to Charter being allowed to impose data caps. Despite assertions from some cable companies that data caps are “popular” with consumers, the comments in this docket speak for themselves. Few, if any consumers support data caps and they are not popular and never have been.[2] Consumers do not express support for data caps by choosing providers that impose them. In most cases, they have no other reasonable choice. Mediacom’s comments on data caps do not reflect consumer sentiment anymore than Charter’s comments did, and the fact is its 60 GB allowance tier is an anomaly in the broadband marketplace.[3] We also note Mediacom did not disclose what we suspect is an extremely low percentage of customers finding that plan adequate for their needs. Again, we point the Commission to comments in this docket filed by actual consumers to get an understanding of how much they dislike data caps.

Also appropriate for consideration are the candid conclusions reached by former Time Warner Cable executives admitting that consumers overwhelmingly rejected the company’s “budget” data allowance plans, and to such an extent the company discontinued them several years ago.

Speaking at the Deutsche Bank Media, Internet and Telecom Conference in Palm Beach, Fla., in March 2014, Time Warner Cable Inc. Chairman and CEO Rob Marcus said very few broadband subscribers opted for its internet plan that caps data use at 30 gigabytes per month. In fact, the number of subscribers taking the use-based service tier is running only “in the thousands” — a very tiny slice of the MSO’s roughly 11 million US broadband customers.[4]

Many of the groups that have supported Charter’s petition are also recipients of donations from the cable company and their views must be considered in that context. Many were specifically invited by Charter to participate in this proceeding. At least one, the Niagara Falls Boys and Girls Club, remarkably and publicly repudiated its own initial support for Charter’s petition after we publicly asked why the organization took a stand on an issue that seems far afield from its mission.

As a Buffalo TV newscast noted:

“After a quick whirlwind of events, the Niagara Falls Boys & Girls club went from supporting a measure after receiving a donation from Charter to then distancing themselves entirely.

But if this wasn’t enough of a Nancy Drew novel for you, we have this update:

Charter is apologizing to the Niagara Falls Boys & Girls Club.

[…] The reality of the situation is there’s nothing illegal here. What stands out is that the Niagara Falls Boys & Girls Club has only submitted one FCC comment, as far as WGRZ can determine. The comment came after they received a donation from Charter Communications, and the letter was in support of an initiative that Charter Communications wants regulators to approve.

This situation, and others that WGRZ has also discovered, raises serious questions about the position non-profits are put in after they receive a donation from a large company.”[5]

At the same time, consumers with no financial interest in Charter beyond being customers are continuing to share their views with the Commission to this day. They are overwhelmingly hostile to the idea of Charter being given an early sunset to the very modest deal conditions imposed by the FCC. We believe consumers should have the benefit of a much longer comment window to express their concerns. The current 14-day extension is wholly inadequate.

Additionally, with the presidential election less than 80 days away and the recent decision by the president to withdraw the nomination of Commissioner Michael O’Rielly to serve a second term, we feel this petition should be addressed by the Commission during the next Administration and after his replacement is confirmed and seated, which would still allow for a decision prior to the fifth anniversary of the merger order, the earliest the imposed deal conditions can sunset.

Because the FCC did not invest any time and energy to defend the related court challenge of other Charter deal conditions before the D.C. Circuit, it is clear the FCC has much higher priorities under consideration at the moment. Therefore, it should move to delay further consideration of this matter, accept additional input from interested parties, and assure a decision will be forthcoming early next year, before the fifth anniversary of the merger order. This would not harm Charter and would clearly demonstrate the Commission was not rushing this petition through, which could give the perception the FCC was unfairly biased towards Charter to the detriment of consumer interests.

As the COVID-19 pandemic continues to severely impact the United States, the last thing consumers should face is a higher bill for internet access, either with the imposition of data caps or charging interconnection fees that could force video services to increase pricing. Americans are relying on the internet to stay entertained, informed, work, learn, and shop from home, and manage health care needs through tele-health video conferencing. Charter has told the Commission its network has been more than capable of handling the increased traffic from these activities.

There is no urgency here and no evidence a delay until early 2021 would harm Charter’s interests in any way.

Yours very truly,

Phillip M. Dampier
Founder and President

[1] “Charter Seeks FCC OK to Impose Data Caps and Charge Fees to Video Services” https://arstechnica.com/tech-policy/2020/06/charter-seeks-fcc-ok-to-impose-data-caps-and-charge-fees-to-video-services/

[2] “Reply of Charter Communications” https://ecfsapi.fcc.gov/file/10806999321971/Charter%20Merger%20Conditions%20Sunset%20Petition%20Reply%20(8-6-20).pdf

[3] Mediacom ex-parte communication https://ecfsapi.fcc.gov/file/108172969830849/Mediacom%20August%2017%2C%202020%20ex%20parte.pdf

[4] “TWC Subs Say No to Data Caps” (3/2014) Light Reading: https://www.lightreading.com/services-apps/broadband-services/twc-subs-say-no-to-data-caps/d/d-id/708194

[5] “Charter Regrets Misunderstanding With Niagara Falls Boys and Girls Club.” (WGRZ-TV Buffalo) https://www.wgrz.com/article/news/local/charter-regrets-misunderstanding-with-niagara-falls-boys-girls-club/71-f50b6957-dd26-4560-bb0c-d6d5828c1cd1

Newsmax Media Fighting Hard Against Prospect of Charter Spectrum Data Caps

Newsmax, a conservative media operation, is worried about how data caps will impact its streaming video service.

Newsmax Media is going above and beyond to fight Charter Communications’ efforts to win back the right to impose data caps on Spectrum internet customers, questioning the FCC’s timing on how it is handling Charter’s petition and the company’s claims about why it wants the right to impose caps two years before the FCC’s requirement banning them expires.

The conservative media outlet depends heavily on the internet to distribute its video network — Newsmax TV, and claims Spectrum’s ability to impose data caps and charge video service providers interconnection fees could significantly harm Newsmax’s business.

Last week, Newsmax CEO Christopher Ruddy spoke directly with FCC Commissioner Jessica Rosenworcel, a Democrat. An “ex parte” filing divulging the meeting quickly followed, with Ruddy arguing Charter’s petition was improperly filed too early and questioned why the FCC has hurried to put the matter on its calendar, presumably before the potential demise of the Trump Administration in the November elections.

In June, Charter asked the FCC to “sunset” — or end — the conditions Charter itself agreed to in return for approval of its merger deal with Time Warner Cable and Bright House Networks. The most significant of those conditions required Charter not to impose data caps or usage based billing on its internet customers or charge fees to video streaming companies like Netflix and Hulu for seven years. A loophole in the final order approving the merger allowed Charter to request an early exit from those conditions two years early, if marketplace conditions warranted. Charter’s petition claimed broadband and video services are now subject to a dramatic increase in competition, making the conditions no longer necessary. But critics, including Stop the Cap!, argued against Charter’s petition claiming the broadband industry has remained concentrated and anti-competitive, and data caps are a symptom of that lack of competition.

Ruddy also noted that more recent comments from Charter in its effort to rebut its critics include an attempt to submit new information to the Commission, which should not be permitted because Commission procedure does not allow the public to comment or rebut Charter’s latest arguments.

One potential complication for Charter’s effort to push for a Commission vote is a recent spat between the president and Commissioner Michael O’Rielly. Earlier this month, O’Rielly publicly crossed the president by questioning the authority of the FCC to reinterpret Section 230 of the Communications Decency Act. That reinterpretation is at the heart of President Trump’s demand for a crackdown on social media networks like Facebook and Twitter, which he claims have a conservative bias and are “illegally” critical of both the president and the administration. The president allegedly retaliated against O’Rielly by pulling back his earlier renomination of O’Rielly to serve an additional term at the FCC.

More recently, reports have surfaced in Washington that the president is prepared to nominate someone else, which traditionally would leave O’Rielly with little alternative but to recuse himself from Commission matters, or resign entirely. That would end the Republican majority on the Commission until the president’s nomination was approved by the Senate, which is highly unlikely to happen before the November election. That would leave the FCC evenly divided with two Democrats and two Republicans. Observers suspect Charter’s petition would end up in a tie vote, with the two remaining Republicans in favor of the cable company and the two Democrats opposed. That would stall the matter at least until January, when either President Trump begins his second term or Joe Biden begins his first.

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