Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (53 page)

58.
“
Television Viewers, Retransmission Consent and the Public Interest”: Hearing Before the Subcomm. on Communications, Technology and the Internet of the S. Comm. on Commerce, Science and Transportation.
111th Cong. 23–45 (2010).

59.
Jesse Ward, “Fox vs. Cablevision,”
National Telecommunications Cooperative Association: New Edge
, October 18, 2010,
http://www.ntca.org/new-edge/video/fox-vs-cablevision
.

60.
Joe Flint, “Washington Weighs in on Disney-Cablevision Fight,”
Los Angeles Times
, March 3, 2010, available at
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/03/washington-weighs-in-on-disney-cablevision-fight.html
.

61.
Bruce Edward Walker, “Proposed Retransmission Rules May Ease Broadcast Blackouts,”
Heartlander
, May 31, 2011,
http://news.heartland.org/newspaper-article/2011/05/31/proposed-retransmission-rules-may-ease-broadcast-blackouts
.

62.
Wayne Friedman, “Kagan: Retrans Revs Are Future Goldmine,”
MediaPost Publications
, January 5, 2009,
http://www.mediapost.com/publications/article/97766/kagan-retrans-revs-are-future-goldmine.html?print
; Sergio Ibarra, “Analyst Sees Stations’ Retrans Revenue Tripling,”
TV Week
, January 5, 2009; “SNL Kagan Releases Broadcast Retransmission Fee Projections through 2017,”
PRWeb
, May 25, 2011,
http://www.prweb.com/releases/2011/5/prweb8483711.htm
.

63.
Ryan Nakashima, “CBS Sales of Shows Partially Offset Drop in 3rd-Qtr Ad Revenue; Moonves in Talks with Oprah,” Associated Press,
StarTribune.com
, November 5, 2009,
http://www.startribune.com/templates/Print_This_Story?sid=69314097
; Scott Canon, “In a Tangled TV Market, It's Hard for Rivals to Uproot Established Cable Providers,”
Kansas City Star
, July 18, 2010.

64.
Ron Chernow,
Titan: The Life of John D. Rockefeller, Sr.
(New York: Vintage, 2004), 140.

65.
CBS Corporation, “CBS and Comcast Sign Ten-Year Content Carriage Agreement,” news release, August 2, 2010,
http://www.cbscorporation.com/news-article.php?id=666
.

66.
Applications and Public Interest Statement of Comcast Corporation, General Electric Company, and NBC Universal, Inc., In the Matter of Applications for Consent to the Transfer of Control of Licenses
, Federal Communications Commission, May 4, 2010, 121;
Competition in the Media and Entertainment Distribution Market”: Hearing Before the H. Comm. on the Judiciary
, 111th Cong. 137 (2010), 147.

67.
“Cable: E!”
NBC Universal
, accessed March 9, 2012,
http://www.nbcuni.com/cable/e
.

68.
In November 2009, John Malone characterized the deal as “heavily engineered” to fit the needs of GE and Comcast. See “John Malone and David Faber,” video of interview, 37:54–38:28
CNBC
, November 23, 2009,
http://video.cnbc.com/gallery/?video=1340949341
(“It's a heavily engineered deal; [it] obviously was custom-tailored for both sides’ needs. The way I see it, it de-leverages GE, and allows them to get their basis out of the whole thing, and then to the degree they want to sell down in the future, it's going to be nicely profitable. For Brian, it's a way to get into content, and get some market power in content, without betting the farm. He can easily afford the cash that's going in. He's getting a mark-up on the programming assets he's putting in. And Vivendi is probably going to walk away with a little more money than they could expect. So they're probably pretty happy. So I think it's custom-tailored for the needs of the participants.”).

69.
Kelly Riddell and Rachel Layne, “Comcast, GE Value Cable Channels at Up to $7 Billion” (Washington, D.C.: Benton Foundation, December 1, 2009),
http://benton.org/node/30166
; David Goldman and Julianne Pepitone, “GE, Comcast Announce Joint NBC Deal,”
CNNMoney
, December 3, 2009,
http://money.cnn.com/2009/12/03/news/companies/comcast_nbc/index.htm
.

70.
David Carr, “A Big Deal, but Not a Good One,”
New York Times
, October 25, 2009, available at
http://www.nytimes.com/2009/10/26/business/media/26carr.html
.

71.
Liberty Media Corporation, “Q1 2011 Earnings Call,” transcript, May 6, 2011,
http://www.morningstar.com/earnings/PrintTranscript.aspx?id=27506514
.

72.
“Examination of Cable Rates”: Hearing Before the S. Commerce, Transportation and Science Committee
, 105th Cong. 6 (1998) (Testimony of Rep. Billy Tauzin); Jeremy Feiler, “RCN out to Block Comcast,”
Philadelphia Business Journal
, August 19, 2002, available at
http://www.bizjournals.com/philadelphia/stories/2002/08/19/story7.html?page=3
.

73.
Applications and Public Interest Statement of Comcast Corporation, General Electric Company, and NBC Universal, Inc., In the Matter of Applications for Consent to the Transfer of Control of Licenses
, Federal Communications Commission, January 28, 2010, 83.

74.
Chernow,
Titan
, 553.

Chapter 7. The Programming Battering Ram

Epigraph. Dan Shanoff, “ComcastNBC: Online Sports Juggernaut?”
DanShanoff.com
, December 3, 2009, reposted January 18, 2011,
http://www.danshanoff.com/2009/12/comcastnbc-online-sports-juggernaut.html
.

1.
“InterMedia's Hindery Interview on Social Media,”
Bloomberg
, video, May 27, 2011,
http://www.bloomberg.com/video/70253338/
; “John Malone and David Faber,” video of interview, 39:00–40:00,
CNBC
, November 23, 2009,
http://video.cnbc.com/gallery/?video=1340949341
.

2.
Associated Press, “ComcastNBC Merger Without Question ‘Biggest Thing’ in Last 40 Years of Broadcasting,”
National Sports Journalism Center
, December 28, 2009,
http://sportsjournalism.org/sports-media-news/comcastnbc-merger-without-question-biggest-thing-in-last-40-years-of-broadcasting/
.

3.
“’We intend to use sport as a battering-ram in all our pay-television operations,’ said Mr Murdoch a couple of years ago,” “Murdoch United,”
The Economist
, September 10, 1998, available at
http://www.economist.com/node/164106
.

4.
In the Matter of General Motors Corporation and Hughes Electronics Corporation and The News Corporation Limited for Authority to Transfer Control
, 19 F.C.C.R. 473, 535 (January 14, 2004).

5.
Charles B. Goldfarb,
The Proposed ComcastNBC Universal Combination: How It Might Affect the Video Market
(Washington, D.C.: Congressional Research Service, February 2, 2010), 13.

6.
In the Matter of General Motors Corporation
, 19 F.C.C.R. 473, 537.

7.
In the Matter of Applications for Consent to the Assignment and/or Transfer of Control of Licenses
, 21 F.C.C.R. 8203, 8259 (July 21, 2006).

8.
In 1997, SportsNet launched as “a continuous seven-day-a-week, 12-month-a-year potpourri of area sports with the focus on the 76ers, Flyers, Eagles and Phillies,” reported Mike Bruton, “Comcast's Sportsnet Premieres,”
Philadelphia Inquirer
, October 2, 1997, available at
http://articles.philly.com/1997-10-02/sports/25540320_1_sportsrise-comcast-sportsnet-leslie-gudel
. In 2010, CSN Houston became Comcast's ninth regional sports network. See “CSN Houston Marks Comcast's Latest Regional Sports Network,”
Sports Business Daily
, November 9, 2010,
http://www.sportsbusinessdaily.com/Daily/Issues/2010/11/Issue-42/Sports-Media/CSN-Houston-Marks-Comcasts-Latest-Regional-Sports-Network.aspx
.
“Comcast SportsNet (CSN) includes CSN Bay Area, CSN California, CSN Chicago, CSN Philadelphia, CSN New England, CSN Mid-Atlantic, CSN Northwest, CSN Southeast, CSN Southwest, SportNet New York (partial), MountainWest Sports Network (partial), CSS (partial)” (“Who Owns the Media: Media Ownership Charts: Cable and Telecommunications,”
FreePress.net
, last modified January 18, 2011,
http://www.freepress.net/ownership/chart/cable
).

9.
Dish Network complained that Comcast refused to deliver SportsNet Philadelphia to its customers. See Marguerite Reardon, “Telcos and Satellite Get Closer to Local TV Sports,”
CNET News
, August 2, 2010,
http://news.cnet.com/8301-30686_3-20012274-266.html
. For the 1992 act, see Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992).

10.
“Up until recently the regulations only required them to do this for video feeds that are distributed via satellite. Channels that are transmitted locally on terrestrial cable infrastructure, such as local sports, have been exempt. Many people in the industry have referred to this as a loophole in regulation that has allowed cable companies to deny access to these sports channels to TV competitors. In January, the FCC voted to close this loophole. And as of June 21, cable operators are required to offer local sports feeds at fair rates to competitors. Dish argues that Comcast is violating this regulation” (Reardon, “Telcos and Satellite Get Closer to Local TV Sports”).

Section 628 of the Cable Television Consumer Protection and Competition Act of 1992 was enacted to “increase the availability of satellite cable programming and satellite broadcast programming” (Cable Television Consumer Protection and Competition Act of 1992 § 628[a]). The FCC enacted rules to further the goals set out by Congress in the act. See Federal Communications Commission, “General Cable Television Industry and Regulation Information Fact Sheet,” June 2000, available at
http://transition.fcc.gov/mb/facts/csgen.html
.

11.
In the Matter of Applications of Comcast Corporation, General Electric Company and NBC Universal, Inc. for Consent to Assign Licenses and Transfer Control of Licenses
, 26 F.C.C.R. 4238, 4255 (January 20, 2011).

12.
“
The Comcast/NBC Universal Merger: What Does the Future Hold for Competition and Consumers?”: Hearing Before the Subcomm. on Antitrust, Competition Policy and Consumer Rights of the S. Comm. on the Judiciary
, 111th Cong. 12 (2010) (statement of Colleen Abdoulah, President and CEO of WOW!).

13.
Keith Klovers, “Americans’ Addiction to Sports Programming,” memo to the author, April 15, 2010.

14.
National Basketball Association, “Comcast SportsNet, Portland Trail Blazers Announce a New Regional Sports Network,” news release, May 21, 2007,
http://www.nba.com/blazers/news/Comcast_Sports_Net_Portland_T-225869-1218.html
; Brian Frederick, “Blazer TV Access: Stop Hogging the Ball, Comcast,”
OregonLive.com
, October 15, 2010,
http://www.oregonlive.com/opinion/index.ssf/2010/10/blazer_tv_access_stop_hogging.html
; Mike Rogoway, “FCC's Ruling on ComcastNBC Won't Unlock Blazers on Satellite TV,”
OregonLive.com
,
January 19, 2011,
http://blog.oregonlive.com/siliconforest/2011/01/fccs_ruling_on_comcast-nbc_cou.html
; Brian Frederick, “Comcast Is Holding Trail Blazers Fans Hostage, You Could Be Next,”
Huffington Post
, August 16, 2010,
http://www.huffingtonpost.com/brian-frederick/comcast-is-holding-trail_b_681627.html
.

15.
In the Matter of Herring Broadcasting, Inc. v. Time Warner Cable Inc., et al.
, 23 F.C.C.R. 14787, 14817 (October 10, 2008) (testimony of Paul Tagliabue, available at
http://ecfsdocs.fcc.gov/filings/2009/04/22/5515359636.html
; testimony of Frank Hawkins, available at
http://ecfsdocs.fcc.gov/filings/2009/04/22/5515359633.html
; John Eggerton, “Comcast Would Move NFL Network off Tier If Service Drops Price: Roberts,”
Multichannel News
, last modified April 18, 2009,
http://www.multichannel.com/article/209442-Updated_Comcast_Would_Move_NFL_Network_Off_Tier_If_Service_Drops_Price_Roberts.php
.

16.
In the Matter of Herring Broadcasting, Inc. v. Time Warner Cable Inc., et al.
, 23 F.C.C.R. 14787, 14825.

17.
“Critical to the settlement was the [NFL's] decision to reduce the price it charged for the network, from a monthly subscriber fee of 70 cents to an average of a little over 50 cents through the life of the contract. … [T]he league will presumably offer Time Warner, Cablevision and Charter terms similar to those given to Comcast to gain footholds in those systems” (Richard Sandomir, “Comcast and NFL Network Agree to 9-Year Deal,”
New York Times
, May 19, 2009,
http://www.nytimes.com/2009/05/20/sports/football/19nflnetwork.html?_r=1
).

18.
“
The Comcast/NBC Universal Merger
” (Written Testimony of Andrew Jay Schwartzman, President and Chief Executive Officer of Media Access Project).