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Monthly Archives: August 2012

Broadband Tax May Expand High Speed Internet Access

ExtremeTech reports that the Federal Communications Commission is considering levying a tax on all broadband internet connections nationwide. The tax would be similar in setup to the Universal Service Fund, a government-imposed tax that appears on all phone bills in order to fund nationwide access to phone service. The new similar fund is called the Connect America Fund, with the goal of providing broadband internet access for all.

According to the FCC, as many as 18 million Americans could gain access to broadband internet over the next decade as a result of the new tax. Currently, 19 million Americans have no access to broadband internet, mostly those in rural areas not served by cable or phone company internet service providers; if everything goes according to plan, almost everyone in the United States would have broadband internet access by 2020.

Companies standing to gain from a government subsidy to provide broadband high speed internet are in support of the fee. These include major technology companies like AT&T, Sprint, and Google, who would all likely be involved in the creation of these new high speed networks to serve rural customers. Other companies and organizations oppose the tax, because they believe that the FCC is moving forward on the Connect America Fund without the oversight of Congress. Some also worry that these subsidies will lead to greater governmental control over the internet, which could be a worry for freedom of speech and privacy activists.

As an increasingly large portion of our modern economy relies on high speed internet to survive, it really is important to get as many people in America connected as possible. America lags behind smaller, more tech-savvy nations like South Korea and Japan in this race. Whether it should be done by government subsidy is another question to ask. What does everybody think?

ESPN Maintains Cable TV Rights for Major League Baseball

According to Sports Business Daily, ESPN has re-upped with Major League Baseball, giving the Worldwide Leader and its family of networks MLB cable TV rights into the next decade with an eight-year extension to the current deal. The deal is worth $5.6 billion, for an average of about $700 million per year, which more than doubles the $306 million ESPN currently pays MLB every year for cable TV baseball broadcast rights. The only additional benefits of the deal are additions in digital rights, international rights, and radio rights. The deal gives ESPN continued exclusive rights for Sunday Night Baseball (meaning no other games can air at that time slot), as well as Monday and Wednesday night games that will not be blacked out in local markets, as they have been in past deals. The deal also ensures highlight packages for the networks’ Baseball Tonight program.

ESPN will also carry one Wild Card playoff game; in the current deal, ESPN does not have the rights for any MLB playoff games. There is no word if any of ESPN’s games will be aired on ABC (as they are part of the same Disney parent company).

The fact that ESPN was willing to more than double the value of its previous deal shows how important live sports broadcasts are to the continued success of cable TV networks. NBC Sports Network was attempting to poach some of the MLB broadcast rights away from ESPN in order to shore up its own brand, but ESPN has maintained the rights. Now with control of MLB, NFL’s Monday Night Football, and a good half of the NBA regular season and playoffs (shared with TNT), ESPN controls the cable TV broadcasting for three of the four major team sports in America. Any other network looking to dethrone the Worldwide Leader will have to compete in some other way; that had to be the reason for ESPN spending all of that money.

DIRECTV Moves NBC Sports Network Closer to Other Sports Channels

Perhaps to give a boost to the fledgling sports channel, or at least to locate it more closely within the channel lineup to similar channels like the ESPN family of networks, NFL Network, MLB Network, and NHL Network, satellite TV provider DIRECTV will be moving the NBC Sports Network to channel 220 from its current place much further up the dial at channel 603. The change will occur in the weeks to come, with DIRECTV subscribers notified by message when the change has occurred.

Until the 2012 London Olympics, NBC Sports Network was mostly known as the channel that used to be called Versus and OLN (Outdoor Life Network), where NHL hockey ended up after the 2004-2005 lockout killed ESPN’s interest in airing the sport. The Olympics gave NBC Sports Network by far its most consistently high ratings, as the cable channel aired sports all throughout the day alongside other NBC-owned channels like CNBC, Bravo and MSNBC.

The channel is still not easily found in some cable and satellite systems, because it is not located in the channel guide near other similar channels. This move from channel 603, where it was surrounded by TVG, which shows only horse races and paid programming, and Pursuit, a channel dedicated to fishing and hunting. It will now be the final channel in DIRECTV’s early-200s sports block, following after the Tennis Channel, Golf Channel, and NBA Network. NBC Sports Network will definitely need the boost as it is possible the channel’s flagship programming, NHL on NBC coverage, will be cancelled or delayed this year due to the labor differences and impending lockout between the NHL owners and the NHL players.

NBC Sports Network’s programming thus far has focuses on live events, hockey and the Olympics, and in doing so has been good in providing competition for the empire of ESPN and its related channels. To continue to compete, NBC Sports Network needs to be a recognizable, easy-to-find channel. Now, on DIRECTV, it will be.

EchoStar Seeks Patent for Satellite TV Subscriber Weather Stations

EchoStar, the company behind HughesNet satellite internet and a company working with DIRECTV and DISH Network, has filed a patent application for weather stations that could be installed on the roof of a satellite TV subscriber to monitor how storms are having an impact upon satellite reception, as well as delivering hyperlocal weather reports to subscribers. According to FierceCable, if EchoStar succeeds in developing the technology, DIRECTV, DISH Network, and HughesNet could use these weather stations to compete with local weather programming as supplied by cable competitors.

The company is seeking to eliminate the loss of signal that sometimes occurs due to rain fade during strong storms. If these new weather stations are in place, EchoStar notes that satellite TV customer service representatives may be able to tell if outages are caused by weather or other technical problems, which can result in developing better technology and fewer costly service calls. These weather stations will also compete with Weatherscan, which is available from Comcast, Time Warner Cable, and other cable providers and offers detailed local weather information. Weatherscan is not available on DISH or DIRECTV.

With the new weather stations, weather reports will be accessible via a set-top box and recordable via DVR. Other features include weather alerts that are set up by the customer; for example, a customer might want to be notified of freezing conditions ahead of time in order to protect plants outdoors, or avoid watering if rain is impending.

There is no word on how soon EchoStar might begin trying to commercialize these weather stations, as the patent has not yet been approved. The inventor is listed as Samuel Whitley, an EchoStar engineer based in Cheyenne, WY. The patent application was submitted in 2010. Check back at the TV, Internet and Phone Blog for updates as they become available about this possible new innovation in satellite TV technology.

CNN Struggling in Cable TV News Election Coverage

The flagship 24-hour cable TV news channel, CNN, is struggling, with its prime-time audience having plunged more than 40% compared with four years ago, with competitors Fox News and MSNBC having posted double-digit increases in viewership in the same time. According to the Los Angeles Times, change is long overdue in how CNN covers the presidential election and other major events, but there is some debate as to what that change should be.

Many pundits believe to compete with the other cable TV news channels, CNN will have to abandon its mantra that “News is the Star,” coined by creator Ted Turner decades ago when CNN was just a fledgling cable channel trying to get a foothold. Cable TV subscribers are increasingly wanting more opinion-based news coverage, particularly when it comes to political news, with more liberal viewers tuning into the left-leaning MSNBC and more conservative viewers attaching themselves to the coverage provided by the right-wing punditry of Fox News. Many analysts believe that CNN, in order to compete, will have to provide more opinion-based coverage. They are already doing so with Piers Morgan, who has replaced Larry King as the network’s flagship interviewer, and is definitely not shy about voicing his opinion.

In the past few years, the only times CNN has really been atop the ratings was with big, short-term news events, such as the shooting in Aurora or the Sikh Temple shooting. But once that news has been broken, viewers return to the more opinion-based networks.

CNN is at a turning point. The network is responsible for popularizing the 24-hour cable TV news cycle, but that cycle is even quicker now due to Twitter and online websites breaking news much more quickly. News can no longer be the star; so what will CNN do to find their next star?

Cable TV News is No Longer Where News Breaks

For a generation of people, say those younger than 30, though there are many who are older than that for whom this is often true, cable TV news is no longer where news is broken. Social media, particularly Twitter, is now where much of the world’s political, economic, even sports news is broken. This presents a challenge not only for journalists who are scrambling to keep up with the social media world, but for cable TV news networks like CNN, MSNBC, and Fox, who are often reacting to the news rather than breaking it.

The 24-hour cable TV news model largely replaced the afternoon editions of daily newspapers in major cities, with the ability to break news quickly on screen rather than having to wait for a publishing time shouldering aside the older, slower model. Now the same thing is happening to cable TV news with what’s going on with Twitter, online news sites, and other media.

So what should cable TV do? David Frum, a CNN contributor, has three ideas:

  1. Focus on the personalities on the networks. News is no longer the star, as it has already been broken online, so the only reason for people to tune in is if the cable TV news networks give them something they’ll want to watch. This means people need to like and trust the people on screen.
  2. Use the 24 hours of programming to actually deepen the knowledge of what news stories are breaking. The time should not be used to break news, but rather expand on the news that is broken online.
  3. Cable TV news audiences are niche audiences. Appeal to these niche audiences by providing smarter, more in-depth programming.

Will cable TV news go extinct? Probably not. But some changes need to be made to bring it up to date in the 21st Century.

Avoiding Europe Helps Major US Cable TV Companies

Despite declining subscriptions, major cable TV companies like Comcast and Time Warner Cable are heading upwards in the S&P media index this year, and the main draw isn’t what the cable companies are doing, it’s what they’re not doing: business in Europe. The two largest US cable companies appeal to investors who want to avoid the fallout from Europe’s debt crisis and fluctuating currency, according to a report from GulfNews.com.

These gains do not mean cable companies are out of the woods, however. The specific gains show nothing about what the cable companies’ business is doing; portfolio managers are using the relatively consistent US companies as protection against European and Latin American investments, which are currently much more volatile. None of this takes into account whether or not customers are likely to switch to services like Netflix or satellite TV from DIRECTV. Even with declining subscriptions, other cable services like Charter Communications are up this year as well.

Investor confidence is not enough to keep cable companies going, however. Constant innovation is necessary as many customers are cutting the cord and going toward watching more programming online. Young people especially are watching more and more programming on the internet, legally and illegally, and this is the cable companies’ current and future customer base slowly dwindling. Time Warner Cable, Comcast and Charter are making up for that somehow by also being internet service providers, and thus providing the service that people are looking for beyond just cable television. That diversification, and bundling of services, is key to the future success of cable companies, and their continued health in the market. Their current health, however, is measured in stability; these are not businesses that are going to grow exponentially, but there is little risk in the investment, and for right now for investors that’s enough.

30 Percent of Native American Tribal Areas Lack High Speed Internet Access

According to a Federal Communications Commission (FCC) report, more than 19 million people in the United States do not have access to high speed internet, with rural areas making up the majority of the unserved and underserved areas. This includes more than 30 percent of Native American tribal areas that do not have access to high speed internet from broadband internet providers. The FCC study was the eighth annual study on broadband internet, which is seen as important for jobs and global competitiveness in economy and education.

While the majority of Americans have access to high speed internet, with cable and satellite providers bringing service to most of the country, as many as 100 million Americans do not subscribe to high speed internet service. The FCC report concluded that more efforts should be made to make the service more available and more affordable in homes, schools and businesses throughout the United States.

While the FCC is encouraging increased access, some lawmakers have taken up the cause of broadband providers who refuse to bring high speed internet to rural areas due to the lack of profit in these less populated areas, but are blocking community efforts to build up their own nonprofit broadband networks. Many of these Native American tribal areas are located in the underserved rural areas, where the only options are either slow dialup internet access or expensive satellite internet access, which is still slower than the broadband offered by cable and phone companies.

Areas that are underserved when it comes to broadband internet access are at an economic and educational disadvantage. With commerce increasingly depending more and more on the internet, people in rural areas have trouble applying for jobs, working from home, and acquiring the knowledge necessary to compete in today’s world. In order to keep America competitive with other industrialized nations, something needs to be done to make broadband internet more affordable for the general populace.

FX Gets Rights for Summer Blockbusters on Cable TV

Though FX, a cable channel that is part of the Fox empire, is known for its original programming, with groundbreaking shows like Louie and Sons of Anarchy making it one of the premier locations on the cable TV dial for original shows, it is summer blockbuster movies that draw a lot of eyes to the channel, with up to 80% of its programming time daily devoted to hit movies. According to the Seattle Post-Intelligencer, FX has landed most of this summer’s biggest hit movies, paying as much as $200 million for the basic cable rights for The Avengers, Men in Black 3, The Amazing Spider-Man, and, most recently, last weekend’s number one box office hit, The Bourne Legacy.

Airing hit movies that many people have already seen on basic cable is known as “flypaper strategy,” with the hope that viewers will run across a movie they’ve already seen as it’s in progress and hang around to watch it to its finish, with movies acting as “comfort food” that draws and keeps eyes on the network. During primetime, FX leads into its original programming with big movies that would appeal to the same audience who might be interested in whatever particular show might follow, with action movies airing before Justified and Sons of Anarchy and comedies before Wilfred and Louie.

FX has been more aggressive than competing channels this summer to obtain blockbuster movies as its competitors have been focused on popular network shows heading into syndication. Summer blockbuster movies take about two years to move from theatrical release to basic cable, appearing on pay TV channels like HBO and Cinemax about a year after their release and a few months after their release on DVD. What this means is that these blockbuster movies should show up on FX sometime in 2014.

Rural Illinois Lacks High Speed Internet Access

Slightly more than 13 percent of the state of Illinois does not have access to broadband high speed internet, according to a recent article. This is a problem many rural communities in the United States face, as cable companies and other internet service providers have not found it profitable to service certain rural areas, leaving those areas without high speed internet, which is becoming more and more of a necessity in today’s web-connected world.

Because of the lack of high speed internet access, rural electric and telephone cooperatives are trying to extend their services to include fiber-optic broadband internet. Non-profit organizations trying to bring high speed internet to rural communities are facing some pushback from cable companies, who don’t want to compete with nonprofits for service, even though they are not providing high speed internet service to these areas. This leaves local potential internet customers driving into larger towns to use the WiFi at businesses like Starbucks and McDonald’s.

The only option for many of these rural potential customers is satellite internet, which is quite expensive and does not offer the same speeds as the web services brought by fiber optic cables. Many rural customers cannot afford this satellite internet access and must make do with dial-up or using the internet at libraries or businesses in the larger towns nearby.

The lack of internet access in rural areas puts people at an economic disadvantage, and the blocking of nonprofit companies and collectives from creating fiber optic networks in these rural communities is a real problem. It is important to keep everyone connected.

HughesNet is launching a new satellite to bring more affordable and reliable internet services to those people who are not in the service area of cable companies and DSL companies. Hopefully when that is up and running, satellite internet will truly be a viable option for these rural communities.