As the Arizona Republic reported, Cox has responded to the ACC staff’s recommendation that we be fined an unprecedented $2 million for a private easement arrangement proposed by Vistancia real estate developer Shea/Sunbelt and approved by the City of Peoria.

As the story indicates, Cox did not devise or assist in securing this easement from Peoria. Cox did not engage in any anti-competitive behavior and Cox settled with Accipter, the small telecom company that filed a claim with the ACC about the arrangement.

So why this unprecedented fine?

We are not sure, but we think there may be some confusion about so-called “preferred provider agreements” (PPAs), why developers seek them, why we don’t like them, and most importantly how consumers benefit from these common (and lawful) arrangements.

In today’s USA Today, sports reporter Michael McCarthy writes about a $100 million ad campaign NFL Network says it will launch to force carriage of the network by cable operators that don’t yet offer it. At Cox Communications, we already carry NFL Network in most markets on Cox Digital Cable, and the long-term contract we signed last year entitles Cox to carry the eight additional live games the network will be airing starting in November.

We have no beef with the “objective” news element of McCarthy’s story; however, in his accompanying column, he appears to advocate only one side of an argument and seems to be misled on at least one basic business dynamic of cable. “When there are disputes with programmers, they (cable distributors) flip the off button until the beef is settled,” he writes. That’s untrue, or at least misleading. Cable distributors (like Cox) must pay network owners (like NFL Network) for the right to deliver the network to their customers. The distributor is legally forbidden to air the network without the owner’s permission. So, if there’s a dispute and the two parties can’t agree on contract terms, it’s the network owner that denies permission for carriage and, therefore, “flips the off button.”

As for the declaration that cable TV operators are “the most stubborn, monopolistic sector of the media world,” we respectfully suggest reading up on developments in the multi-channel video realm over, say, the last decade—including the fact that satellite TV has been commercially available and viable for about 10 years and enjoys about 25 percent market share. And, for some objective analysis of these disputes between cable distributors and network owners, delving into the dramatically rising cost of sports programming would be a great place to start. For instance, in the case of one certain cable distributor, over 30% of the fees it and its customers pay for the all of the roughly 50 networks on the expanded basic tier of channels goes to two networks—both of them sports channels!

First it was Dish Network and its fixation on pigs and snakes. Now, the latest entry in the oh-so-mature "name-calling" marketing/PR genre is a curious campaign from Verizon likening Cable to a clown. According to the Seattle Post-Intelligencer, Verizon spent $6.05 in postage to send the newspaper a pair of blue plastic clown shoes with accompanying propaganda slamming Cable. So, how successful is a PR stunt that only generates coverage making fun of the stunt? Oh, in Verizon World, it’s probably being branded a raging success, and we should expect a press release any minute touting its phenomenal results.

An essay by Mark Gimein in BusinessWeek posits that the phone companies are afraid of technology:

Ah. Welcome to Telco Land, a strange country where the biggest players talk more and more about innovation yet approach new ideas with baby steps, build little themselves, and when they think about technology are apt to believe it's a threat they have to fight....

Verizon and AT&T are under great pressure to recast themselves as innovators. They lag behind the cable companies in their efforts to sell high-speed Internet access. Their local telephone monopolies are under attack as those same cable companies' offer to provide phone service at lower rates along with TV and data. Looking ahead, wireless technologies ranging from the familiar Wi-Fi to more powerful wireless standards being advanced by researchers in academia and companies such as Intel pose a whole new set of threats.

In response, AT&T and Verizon are rushing to build networks to deliver TV service and high-speed broadband access. They point to them to make the case that, yes, they are technology companies. Verizon is spending billions to roll out a next-generation phone, data, and video network called FiOS (as in "fiber optic") to give its customers faster Internet service and an alternative to cable. While not matching FiOS' impressive speeds, AT&T promises to do something similar with Lightspeed, which it started marketing in parts of San Antonio under the brand name "U-verse" not long after my visit.

How is the cable industry like crack cocaine? If you’re one of the millions of readers who made a surprise bestseller out of Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, then you’re probably not fazed by such an outlandish question. And you won’t be surprised by the co-author’s reasoning on the parallels between our industry and the illicit drug trade. Dr. Steven D. Levitt, the rogue economist himself, addressed the CTAM Summit today, delivering what was likely his canned (but nevertheless intriguing) speech, peppered with some of the more interesting examples from his phenomenally popular book.

“It seems to me that Cable is the crack cocaine of media,” he told the crowd of marketers, adding that the two otherwise dissimilar enterprises capitalize on an efficient delivery mechanism to distribute a product into people’s brains more inexpensively. He added that, like crack, Cable’s success or failure rides largely on government enforcement and “regulation.”

How does a scholarly economist from Minnesota know so much about the crack biz? Levitt first explained that he turned what would surely be a career-stunting liability for most economists—he’s horrible at math—into an asset, because he eschews typical economics and instead tackles questions that no other economist would touch. He mines economic realities from seemingly economics-free real-world situations. His knowledge of the economics of crack came via a colleague who, as a sociology grad student in the 1980s, inadvertently infiltrated a Chicago gang and spent seven years entrenched in their operation, exploring the sociology and business of crack, which are surprisingly similar in structure to legal businesses like fast food or Cable, Levitt said. (He even described crack, like Cable, as a “franchised” business.)

Shawn Gold is Senior Vice President of Marketing & Content for MySpace.com, the social networking phenomenon nearing a staggering 100 million members. So, when your site adds more than 400,000 new users a day with virtually no advertising, what does the chief marketing guy do exactly? Asked that as he keynoted the CTAM Summit in Boston today, Gold chuckled at the obvious question and answered that his role is mainly to build and position the brand, reward users, influence what goes into the site’s massive database, and to package all of that for the benefit of advertisers. Okay, so maybe his job isn’t so simple after all.

Gold acknowledged that the older generation—basically, anyone over 30 in this case (sigh)—tends to be “freaked out” by the fact that the site’s young users “put themselves out there” and invite strangers into the personal details of their lives. He also has fielded numerous complaints—again, mainly from us old fogies—that the majority of the profiles on the site are unwieldy, frenetic and often a complete mess. “But if you’ve ever seen a teen’s room, it makes perfect sense,” he said. While many of us non-GenY-ers still may not quite get it and question the appeal of obliterating the walls of anonymity online, we nevertheless make up MySpace’s fastest-growing segment of users. The 35+ crowd on MySpace now numbers 26.6 million, Gold reported.

Judy McGrath, Chairman and CEO of MTV Networks, officially opened the Cable & Telecommunications Association for Marketing (CTAM) Summit this morning, reminding us that the iconic MTV will celebrate its 25th birthday this year. I spent the next several minutes trying to expunge nostalgic images of parachute pants, Madonna in “Material Girl” mode and ’80s big hair. I snapped out of my sentimental interlude in time to catch a glimpse of a slide sporting the more than 100 entertainment brands MTV has since spawned. And to reinforce the point that her baby has come a long way, McGrath showed one of the network’s earliest spots. A short-shorts-clad young woman roller-skates through town with a clunky “portable” TV (tuned to MTV, of course) perched on her shoulder and its taut, plugged-in power cord trailing behind. “Now, that was the height of mobility back then,” McGrath said.

More than music has changed in the 25 years of MTV. “We’re all about media brands; we're not just TV brands anymore,” McGrath proclaimed, adding that the network now counts “streams as well as eyeballs” and enters no deals that don’t offer multiple platforms to disseminate the company’s content. As McGrath went on to talk more about mobility, video streaming and social networking, my mind tuned back in to MTV, circa ’81, as the lyrics of the first video played on the network roller-skated through my head. Video killed the radio star. In my mind and in my car, we can’t rewind, we’ve gone too far...

Following up on the news from yesterday that Cox Digital Telephone and other cable phone services dominated the latest J.D. Power and Associates customer satisfaction study: Of course we couldn’t pass up the opportunity to toot our own horn with a press release, which gives specific results from the three regions in which Cox Communications ranked highest in customer satisfaction. And, just in case you weren’t aware, it clarifies that Cox is the largest cable telephony provider in the nation.

Okay, that's it for the shameless self-promotion (for now, at least).

Broadcasting & Cable reports that the FCC voted 4-1 today to approve the $17.6 billion acquisition of Adelphia Communications by Comcast and Time Warner.

The merger, said the commission, serves the public interest, complies with all rules and statues and whatever public interest harms there might be are outweighed by public interest benefits, including principally system upgrades that will bring high speed voice and data, HDTV and video on demand to Adelphia's systems that are upgraded, and resolving the Adelphia bankruptcy.

The key conditions the FCC did put on the merger had to do with regional sports networks. Comcast and Time Warner must put disputes over pricing or access to its regional sports networks (RSNs) to arbitration. The companies also cannot deny access to its sports networks to other multichannel programming providers, with, as expected, a carve-out for Philadelphia....

Time Warner Cable and Comcast will divvy up Adelphia systems serving 5.2 million subscribers scattered across 31 states. The two cable operators will further swap systems from their existing portfolios to create stronger geographic clusters. The deal will allow Time Warner to emerge as the largest cable operator in the Los Angeles market, which has been the most fragmented major market in the country. The deal will also allow Comcast to fulfill its promise to regulators to unwind its 21% ownership of Time Warner Cable, something inherited in a past deal. Antitrust regulators frowned on such a significant link between the two largest cable operators—a legacy of the AT&T deal. As part of the various system swaps, Comcast will give Time Warner that stock back.

Click here for the full Broadcasting & Cable article (a subscription may be required to access it). Here's the initial Reuters coverage.

Cable companies ranked highest in five of six regions in the marketing research firm’s annual study of consumers’ satisfaction with their local and long distance telephone providers. Cox Communications alone took the top spot in three of the regions. From J.D. Power and Associates:

As cable companies aggressively entice telephone customers with attractively priced service bundles, many are also outperforming traditional telephone companies in satisfying customers, according to the J.D. Power and Associates 2006 Residential All-Distance Telephone Customer Satisfaction Study (SM) released today.

The study, which measures customer satisfaction with both local and long distance telephone service, finds that cable companies rank highest in customer satisfaction in five of six U.S. regions. In 2005, just one cable company—Cox—led any of the regional customer satisfaction rankings. Cox Communications now ranks highest in three regions, while newcomers Bright House Networks and Time Warner Cable each rank highest in one region. Verizon is the sole traditional telephone company ranking highest in a region.

The 2006 study marks the fourth consecutive year Cox Digital Telephone has dominated in J.D. Power's West region rankings. This is the first year in which the company qualified for inclusion in the study in other regions (based on total subscribers in those areas). Click here for the full press release, “Cable Companies Dominate Customer Satisfaction Rankings for Local and Long Distance Telephone Service; Cox Communications Ranks Highest in Three Regions, While Bright House Networks, Time Warner Cable and Verizon Each Rank Highest in One Region.”

Today’s Chicago Tribune includes a letter from Matt Polka, President and CEO of the American Cable Association, which represents independent cable operators serving about 8 million customers nationwide. Polka blasts claims made by AT&T in a recent Tribune article addressing AT&T’s video franchise agreement with the city of North Chicago. From Polka’s letter:

“This article highlighted a series of claims that telephone companies have used to justify special video franchising legislation, but it overlooked the most critical issues in this debate. Rather than reduce barriers to entering the video market or reduce consumer prices, the radical legislation telephone companies are seeking would merely help them undermine competition and pad their own pockets. Now AT&T has conceded to Wall Street investors that it will not engage in a price war, and Verizon has said it will not price its video service at a discount. So their claims to dramatically lower consumer video prices are empty promises.”

According to a new report from market research firm IDC, Cox Communications is the best-positioned provider of the full triple-play bundle of voice, broadband and video services. According to IDC’s press release announcing the report’s findings: “Competition in the U.S. consumer communications marketplace is red hot as telephone companies and cable TV companies aggressively compete with full service – voice, broadband, video – offerings. Service providers in both industries are committed to bundled service packages as a way to grow their share of residential spending. The beauty of bundled service offerings for providers is their ability to reduce customer churn and increase average revenue per user (ARPU). Based on current position and market momentum, IDC believes Cox is the best-positioned service provider in the U.S. multiplay marketplace.” Click here for the full IDC press release, “IDC Names Cox as Best Bet for Strongest Competitor in U.S. Multiplay Marketplace."