While traditional pay-TV operators continue to lose subscribers, it's likely that if virtual MVPD subscriber numbers were available and counted, pay-TV subs increased in Q2, nScreenMedia analyst Colin Dixon blogged. Moderating pay-TV subscriber losses would be uplifting news for programmers, many of which are cheering the rise of vMVPDs, he said: Those same content companies undoubtedly "will show no restraint" when seeking price increases from vMVPDs and are all busy building direct-to-consumer offerings in anticipation of "the pay TV party ... com[ing] to an end." Another Tuesday report also said over-the-top viewers are watching more vMVPD content (see 1808140014 or 1808140011).

Over-the-top viewers are spending more time watching virtual MVPDs, blogged comScore Tuesday. Nearly half the time spent by OTT households with a vMVPD such as Sling TV, DirecTV Now, PlayStation Vue, Fubo, Philo, YouTube TV and Hulu Live is spent with that service, said analyst Susan Engleson. OTT adoption rose 17 percent year on year, said the firm. VMVPDs “are a prime example of viewers utilizing digital mediums to watch live content formerly only available on linear TV,” Engleson said. Though penetration is at 5 percent of U.S. households, it rose 58 percent. The average OTT household with a vMVPD service uses 1.5 times more over-the-top services than the average OTT household. Engleson sees those numbers accelerating due to competitive price points and low barriers to entry for consumers because no installation is required: “We will continue to see significant growth in virtual MVPDs in the years to come.” Other providers are testing or have announced plans for a vMVPD offering, “indicating that they take this trend seriously,” she said. With cable companies adding the ability to access Netflix via a set-top box, “it may be that future generations do not distinguish between a streaming box and a cable box at all -- there will just be one place consumers go for their entertainment,” she said.

Cable officials pressed the FCC to prevent duplicative state and local regulations and fees and other regulatory barriers hindering cable operator deployment of facilities and services. The agency should "address ongoing efforts by local franchising authorities to subject non-cable services delivered over cable systems to duplicative regulations and fees," said a filing on a meeting officials of NCTA, Comcast, Charter Communications and Cox Communications had with Matthew Berry, Chairman Ajit Pai's chief of staff, posted Tuesday in docket 17-84 on accelerating wireline broadband rollout.

The FCC Office of Engineering and Technology signed off on Altice USA plans for a variety of both indoor and outdoor wireless citizens broadband radio service product trials in the 3.5 GHz band in anticipation of a planned mobile service to rollout in 2019. In applications for special temporary authority, approved last month, last week and Tuesday (see here, here and here), Altice said it plans testing for six months in the 3650-3700 MHz band in two sections of Long Island, New York, and in the 3550-3700 MHz band in Arkansas. CEO Dexter Goei, in an earnings call with analysts this month, said the CBRS testing "may be a good complementary capacity" to its own WiFi network and MVNO partner Sprint's network, as Altice remains on track to launch a mobile service in 2019. The company didn't comment Tuesday.

Cable and leased programming access interests remain at odds and with very different views of the video distribution market, according to FCC docket 07-42 reply comments that were due Monday in response to a Further NPRM on a leased access rules update that includes rescinding a 2008 order that never took effect (see Notebook section 1806070021). None of the reasons Congress mandated a set-aside of channels for leasing by programmers unable otherwise to secure a spot on a cable system’s channel lineup still exist 34 years later, NCTA said, saying leased access advocates are ignoring "seismic shifts." It opposed any new leased access rules and said the agency should eliminate requirements on cable system operators. The American Cable Association backs NCTA's call for revisiting the rules on part-time leased access programming and said the FCC should vacate altogether the 2008 leased access order. Charter Communicators also opposed additional leased access requirements. Leased Access Programmers Association (LAPA) President Charlie Stogner said there's no good reason not to institute the 2008 order and said cable arguments about the difficulty dealing with part-time leased access run contrary to the fact, and ad inserts pose the same challenges. LAPA Vice President Duane Polich said the issues that spawned the 2008 order "remain true today," with barriers thrown up by cable operators the reason leased access use by video programmers dwindled. He said despite cable arguments alternative distribution routes are available to such programmers, "the internet is not cable" given the robustness and viewing ease of cable. Citing changed competitive dynamics, the George Mason University Technology Policy Program said the leased access rules "are likely no longer constitutional" because cable no longer has "bottleneck monopoly power" over TV content.

DirecTV and Dish services lost more subscribers (478,000) in Q2 than in any previous quarter, and the top six cable companies lost about 276,000 video subscribers vs. a loss of about 190,000 subscribers in Q2 2017, Leichtman Research Group reported Monday. Top phone providers’ video subscriber deficit narrowed to about 45,000 vs. a loss of 270,000, for the fewest net losses for telcos since Q3 2015, said LRG. AT&T U-verse had its first net video additions, 23,000, since Q1 2015. Though the largest pay-TV providers in the U.S., with 95 percent of the market, lost about 415,000 net video subscribers in Q2, the number was “the fewest net losses in the traditionally weak second quarter since 2014,” said analyst Bruce Leichtman, comparing it to a pro forma loss of about 660,000 in Q2 2017. DirecTV and Sling TV added about 383,000 subscribers in Q2, up from 270,000 net adds in the prior-year quarter, for a total of 4.2 million subscribers, helping to offset overall pay-TV losses as consumers opt for less expensive services and providers change strategies. Of the top pay-TV providers’ 91.3 million subscribers, the top six cable companies have about 47.4 million, 30.6 million are satellite-TV customers, phone companies have 9.1 million and top internet-delivered pay-TV services have 4.2 million subscribers, said LRG.

A third of U.S. broadband households feel online video services are “poor protectors of their data” compared with pay-TV providers, said a Wednesday Parks Associates report. “While traditional companies in the pay-TV marketplace use data in all of their decisions, new companies in the entertainment ecosystem such as Google take data use to the next level," said Parks analyst Brett Sappington. Companies built in the age of big data “iterate their services, software, user experiences, and content investment decisions much more quickly than traditional players,” but traditional pay-TV players have the advantage of consumer trust, Sappington said. Roughly a fifth of U.S. broadband households are “highly sensitive” to collection and use of information about themselves and their activities, said the report. Parks recommends pay-TV providers and cable networks continue to gain data-oriented expertise and integrate data-centric features into their offerings that are “transparent to consumers" about data being gathered while offering subscribers incentives for data collection. Among other findings: 42 percent of U.S. broadband households would have more confidence in sharing data if they could access a website or app that shows what data is being collected; 40 percent of households strongly believe it’s impossible to keep data private from companies whose products they use; and more than half of consumers don’t believe they get much in return for sharing data. Parks projects the North American pay-TV market will shrink to 73 percent market penetration by the end of 2023 vs. 79 percent this year.

A lower court denial of Comcast's motion to compel arbitration of subscriber claims it fails to properly disclose the true pricing of cable packages was correct since the subscriber agreement terms "indisputably" violate California's McGill rule, said a docket 18-15288 appellees' brief (in Pacer) filed Wednesday in the 9th U.S. Circuit Court of Appeals. The McGill rule makes void contracts that deny consumers their non-waivable rights to pursue claims for public injunctive relief, appellees Charles Tillage and Joseph Loomis said. They said the lower court also correctly rejected Comcast’s argument that the McGill rule is preempted by the Federal Arbitration Act (FAA) since every other court that has considered the issue has done likewise. Comcast's appeal said (in Pacer) the Supreme Court has been clear the FAA mandates enforcement of arbitration agreements and can't be contravened by state laws that disfavor or discourage arbitration. It said McGill "disproportionately invalidates" arbitration agreements, upending the purpose of the FAA.

BeIN Sports hasn't shown its sports programming properties are similarly situated to Comcast-affiliated NBC Sports Network and Universo, the FCC Media Bureau said in Friday's Daily Digest, dismissing beIN's carriage discrimination complaint (see 1803160069) against Comcast. The bureau said term sheets that beIN and Comcast exchanged before the complaint "show significant uncertainty" about what programming beIN Sports would provide. BeIN outside counsel didn't comment Friday.

Consolidated Communications is the first ISP to add virtual MVPD Philo, the telco said Wednesday.