Marketplace - American Public Media

Former FCC head Michael Powell talks future of cable

Thu, 2014-05-01 08:20

Big cable companies continue to just get bigger. In response to Comcast and Time Warner's merger earlier this year, AT&T and DirecTV are thinking of doing the same. Which got former FCC chairman Michael Powell thinking: Why are all these mergers happening?

"One of the things I think is a serious issue is that the economy has been strained," he said. "I think the model has to find a way to find more affordable, more accessible packages, given the strains of the economy."

A la carte, however, is not one of the ways to get around the strain.

"True a la carte...would actually cost consumers a lot more," he said. "If something like ESPN--which is sold to the cable system for a little over $5 a [subscription]--had to be sold a la carte, that product would be sold for $20 or $30."

One of the possible solutions, of course, might lie in the ubiquity of the internet. But Powell--now the CEO of the National Cable and Telecommunications Association--says the so-called internet "fast lane" the FCC had considered is not the answer.

"[Netflix] can't afford to have jittery or interrupted bits," he said. "You want to watch a two hour movie that is uninterrupted, so making sure the network can handle that level of quality is what the buyer wants."

Powell, however, still likes to consume his programming on the big screen, via video on demand. True Detective in particular.

Chancellor Merkel goes to Washington

Thu, 2014-05-01 06:16

German chancellor Angela Merkel will meet with President Obama on Friday to discuss possible economic sanctions against Russia. But Germany's business relationship with Russia complicates the situation.

"So far, Germany seems to have supported the latest EU sanctions, which are targeting far more political officials. But not, like the U.S. sanctions, targeting specific businesses," says Angela Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University.

Germany depends on Russia for about a third of its energy needs. And Germany is also Russia's biggest trading partner in Europe.

"There are more than 6,000 German companies that are actually operating, producing in Russia," says Anders Aslund, a senior fellow at the Peterson Institute for International Economics. "The German business community is very strongly opposed to sanctions against Russia."

AT&T reportedly pursuing acquisition of DirecTV

Thu, 2014-05-01 06:13

AT&T is reportedly discussing an acquisition of DirecTV, according to a story in today’s Wall Street Journal.

Comcast already has a $45 billion merger pending with Time Warner Cable -- it’s being scrutinized for anti-trust implications by the Federal Communications Commission. Comcast would end up with 30 million subscribers if the merger is approved. AT&T would reach approximately 26 million pay-TV subscribers with DirecTV, the biggest satellite TV provider, ahead of rival Dish Network. DirecTV could cost $40 billion to purchase, according to the Journal.

A merged Comcast-Time Warner Cable would become the nation’s biggest cable company (Comcast already has the largest number of subscribers), and would also be a dominant player in the broadband internet market. AT&T already has a mid-sized pay-TV business, as well as delivering video to its large mobile-phone subscriber base. If AT&T were to absorb DirecTV, it would have a bigger national footprint for delivering mobile television and video to smart-devices.

Regulators and lawmakers are scrutinizing the proposed Comcast-Time Warner deal. An AT&T-DirecTV deal, if it happened, would likely raise significant antitrust concerns as well.

On the plus side, AT&T could argue that a merger will enable the company to better compete with a new cable-broadband internet giant, Comcast-plus-Time-Warner. On the other hand, fewer pay-television providers nationwide would shrink the competitive playing field and leave consumers in many markets with few providers to choose among, says technology analyst Carl Howe, vice president at the Yankee Group.

“The FCC is faced with a very difficult choice,” says Howe. “They can try to prohibit such mergers, which leaves a lot of smaller companies that may not be terribly competitive in the market. Or, they can allow these mergers and end up with monopolies. Neither choice is necessarily great for consumers.”

Howe says we could end up with a big-three of internet-telephone-cable-TV companies in the end -- Comcast, AT&T, and Verizon -- just like there were once three over-the-air broadcast networks -- ABC, NBC and CBS -- that dominated media delivery to American households. The new media-telecom behemoths could bundle all their services together for one low -- or not so low -- price, says Howe.

ON THE AIR

KBBI is Powered by Active Listeners like You

As we celebrate 35 years of broadcasting, we look ahead to technology improvements and the changing landscape of public radio.

Support the voices, music, information, and ideas that add so much to your life.Thank you for supporting your local public radio station.

FOLLOW US

Drupal theme by pixeljets.com ver.1.4