Monty Tayloe

Cable providers cutting a deal to provide faster service to certain companies isn’t bad for their other customers, said Cox Communications President Patrick Esser at the NCTA Cable Show’s general session Thursday here in Los Angeles. “I don’t think if Netflix is getting a faster lane that I'm hurting anybody,” Esser said. The cable CEO emphasized that his company would never block customers from having access to Internet content. Blocking access would be “the worst decision” a company could make, Esser said. However, he distinguished allowing access for all from deals granting faster access to certain parties. “We do commercial arrangements in our industry every day,” Esser said. He also commented on the Comcast/Time Warner Cable deal and Charter’s involvement, saying that greater cooperation in the industry is good for all. Several industry observers told us that Cox had been interested in acquiring the 3.9 million divested subscribers from Comcast before the announcement of the deal sending them to Charter. Asked about whether the growth of Comcast and Charter might lead to higher or lower programming costs for Cox, Esser disagreed with the question. “I don’t think it’s a content discussion, it’s a platform discussion,” he said. Platforms and increased use of the cloud are the future of the cable industry, said Rob Lloyd, Cisco president-development and sales. Companies will increasingly update their systems through software updates rather than new hardware, and cloud technology will eventually replace much of the functionality of set-top boxes, he said. These new systems will test new features and be updated in much the same way smartphone apps are, Lloyd said. The cable industry will move to the cloud as the new “manufacturing plan,” Lloyd said.

LOS ANGELES -- Aides to FCC Commissioners Ajit Pai and Mignon Clyburn said they themselves were encouraged by aspects of Chairman Tom Wheeler’s proposed net neutrality NPRM (CD May 1 p3), they said on a panel at the Cable Show. Clyburn aide Adonis Hoffman, clarifying that he was speaking only for himself, said he is “encouraged” that Wheeler’s plan is designed to prevent a “haves and have nots scheme.” Though Pai aide Matthew Berry said those in his office believe net neutrality “is a solution in search of a problem,” he said Wheeler’s plan is more palatable than other net neutrality proposals. “We need to recognize there’s some progress being made here,” Berry said. “The ball is moving in our direction.”

LOS ANGELES -- Cable industry opponents of net neutrality should put away their “party hats,” FCC Chairman Tom Wheeler told the NCTA’s Cable Show Wednesday. It was a speech several attendees described as having an angry or scolding tone. Echoing a blog post Tuesday (see separate story in this issue), Wheeler warned the cable industry that his net neutrality proposal has been mischaracterized as favorable to net neutrality opponents, and that cable has an obligation to uphold the “availability, security and openness” of the Internet. The cable industry’s “limited regulation” in the broadband world is “an unusual situation,” Wheeler said. “The only way to maintain this situation is to uphold your responsibilities."

LOS ANGELES -- Comcast’s agreeing to buy Time Warner Cable and the divestiture of 3.9 million subscribers to Charter Communications (CD April 29 p4) will make the industry more competitive, said analysts at the Cable Show Tuesday. “It’s hard not to say that life is gonna be tougher for people competing with cable than in years past,” said J.P. Morgan’s Philip Cusick. Comcast/Time Warner Cable and the divestitures to Charter has been the dominant topic among show attendees, including speculation about how the deal came to be, several cable officials told us.

LOS ANGELES -- Programmers and cable providers should work together to keep programming costs down and repel challenges from companies outside the industry such as Google, said a panel of cable and content company executives at the first general session of NCTA’s 2014 Cable Show. “The partnership between programmers and operators needs to be solidified or a lot of competitors are going to pass [cable] on by,” said A&E President Nancy Dubuc. Such a partnership seems unlikely while cable companies have to pay programmers high prices for content, said Massillon Cable TV President Bob Gessner, in an interview. “I don’t work for ESPN, I work for my customers” he said.

Relaxing open meeting rules to allow FCC commissioners to meet in larger groups would lead to less contention and quicker decision-making for the agency, said a panel of former FCC commissioners at a Quello Center Communication Policy Forum event Thursday. Former FCC Chairman Richard Wiley moderated the panel of former Commissioners Rachelle Chong, Michael Copps, Susan Ness, Henry Rivera and Deborah Tate, who discussed issues ranging from net neutrality to media ownership. All agreed that increasing dialogue between commissioners could facilitate commission business.

A Supreme Court win for Aereo would mean broadcasters continuing the battle in court and in Congress while cable companies strategize against retransmission consent, several attorneys told us in interviews. Though several observers think the court’s decision may be leaning toward broadcasters, the justices seemed conflicted at Tuesday’s oral arguments (CD April 23 p1). While some investors may have been poised to move money based on news from the court, the oral arguments didn’t show the court leaning convincingly enough in either direction to move markets, Guggenheim Partners analyst Paul Gallant told us. “We were warned not to put too much thought into the oral arguments given that it is never easy to ‘read’ the Supreme Court’s final decision during this part of the case,” said Wells Fargo analyst Marci Ryvicker in an email to investors. The high court decision is expected this summer.

Aereo v. ABC remains too close to call (CD April 21 p3) after oral argument at the U.S. Supreme Court Tuesday, said several communications attorneys who attended the hearing in follow-up interviews. They said a decision, which may be 5-4, seems likely to hinge on what’s safest for the cloud computing industry.

The U.S. Supreme Court’s questions and responses to oral arguments Tuesday in ABC v. Aereo will provide some insight into whether the court will side with broadcasters or streaming TV service Aereo when it issues a decision this summer, said several attorneys, one of whom is involved in the case. Because broadcasters sued Aereo and similar competing service FilmOn in many venues all over the country, multiple lower courts have had the chance to issue rulings based on the same information the Supreme Court will use in its decision, and those rulings have varied widely, said Fletcher Heald appellate attorney Harry Cole. The courts have issued “complete differences of opinion based on essentially the same facts,” Cole said in a webinar examining the case on Fletcher Heald’s CommLaw Blog (http://bit.ly/1eIRjVg). That makes it hard to predict the case now, but the questions the justices will ask may shed some light on how they view the case, several attorneys said.

Those seeking to keep their joint sales agreements under the FCC’s new ownership attribution rules for JSAs will have to either show that their JSA doesn’t give one company undue control or influence over another, or accept attribution and ask for a waiver of the local ownership rule, according to an FCC official and the text of the commission’s media ownership item (http://fcc.us/1eKtYmt). Though approved at the March 31 meeting, the text of the item -- making attributable for ownership cap purposes JSAs that cover more than 15 percent of a station’s sales -- wasn’t released until Tuesday. Much attention in the intervening two weeks has focused on the specifics of the waiver policy included in the order (CD April 1 p4), with public interest groups concerned it might provide a way to get around the new rules, and FCC Chairman Tom Wheeler saying it would allow JSAs that serve the public interest to remain in place.