Cable Operators

'TV Everywhere’ Takes Heat From Advocates

1/10/2010 2:00 AM Eastern

TV Everywhere, the cable industry’s collective effort to get more video content to a growing online audience, came under new fire last week from various advocacy groups, including Free Press, the Media Access Project and the publisher of Consumer Reports.

The groups charged collusion and anti-competitive conduct, saying that cable and satellite operators and telcos that are kicking the tires on TV Everywhere couldn’t help but agree not to compete in their respective territories if the model was going to work. They want regulators to ask cable companies some “tough questions.”

Free Press also tied its criticism to the proposed Comcast-NBCU merger — Comcast, along with Time Warner Inc., is a major player in TV Everywhere. Comcast had no comment, but Time Warner Inc. in a statement said it was just giving viewers the chance to watch shows anywhere they want to, via the internet, at no additional charge. The media company added it would “continue to pursue many other ways to distribute in a safe and secure way over the Internet our content to people, whether or not they subscribe to a video service.”

National Cable & Telecommunications Association president Kyle McSlarrow had a lot to say about the subject. One of his arguments held that cable’s critics were allowed to have different opinions, just not different sets of facts.

The facts, according to McSlarrow, are that TV Everywhere is just one of many online video concepts being tested by companies that are putting their content on a variety of competing platforms.

“As publicly announced, TV Everywhere envisions separate, bilateral agreements between one content company and one or more individual distributors,” he said. “It is purely vertical in nature — like any arrangement between a content company and a distributor.”

But that is one of the problems Free Press and company have with it. The groups said they don’t want cable’s pay model transferred to the net. Last week, the advocacy groups said their problem was not with charging for the service — it was the idea that the content would then unavailable on other platforms, or the exclusivity translated into agreements not to compete in each others’ territory.

“When we look at TV Everywhere,” Free Press senior adviser Marvin Ammori said last week, “we see an effort that appears to be designed to foreclose the disruption of old business models and the expansion of competition.” He said it was “particularly important” to look at TV Everywhere through the lens of the Comcast-NBCU model. “This is precisely the kind of combination of a distributor and a content company that we should be worried about,” he said (see Access, page 21).

They are looking for a receptive audience in Washington, calling on Congress, the Federal Trade Commission and the Justice Department to investigate their charges.

Their criticisms of TV Everywhere aren’t new, as they concede. What is new is the attention that could be put on the Comcast deal when Justice and the FTC get the companies’ Hart-Scott-Rodino Antitrust Improvement Act filings, which were expected at press time, and when they present their public-interest case to the Federal Communications Commission later this month.

Free Press argues that the deal represents a new kind of merger, with online content implications, given Comcast’s major role in TV Everywhere and NBC’s partnership in online video site Hulu.

While Free Press policy director Ben Scott said the TV Everywhere and Comcast-NBCU merger were separate issues, he added that “in the context of the meger review, the TV Everywhere question becomes all the more urgent.” He said that Comcast-NBCU would be a combo with maximum incentive to preserve the traditional cable model.

Media Access Project associate director Matt Wood said that the merger highlights potential harms if Hulu goes away or is “drastically altered.” Media Access Project associate director Matt Wood said that the merger highlights potential harms if Hulu goes away or is “drastically altered.” Separately, MAP and the other groups teamed with the American Cable Association, the Parents Television Council, unions and others to take aim at the deal in letters to President Obama and Congress last week.

Thedeal.com, a news Web site covering mergers and acquisitions, certainly saw the request for an investigation as aimed squarely at the Comcast/NBCU merger. “Activists opposing media consolidation are voicing a new reason for fighting the proposed $37 billion merger of Comcast and NBC Universal: Internet video,” read the lead of its story, by former B&C Washington bureau chief Bill McConnell.

While Ammori and company talked collusion, he said he thought TV Everywhere was worth a look even if there actually aren’t any horizontal agreements among competitors. “When it comes to the unilateral conduct of one-on-one agreements, cable operators have so much market power in certain regions based on market share that is possible that it is worth investigating.”

Coming to TV Everywhere’s defense was Songwriters Guild of America president Rick Carnes, a content creator who welcomes the chance for another outlet. The complaints of Free Press and others are “confounding” to someone like him, said Carnes. He argued that in their zeal to curb gatekeepers, the advocacy groups would create an Internet full of “gatecrashers” whose illegal downloads would make it hard for him to make a living.

“TV Everywhere sounds a lot like an attempt to create that reasonably priced, flexible-use, large-catalog, content-delivery system,” he said in a blog post last week.

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