Yesterday morning's CES keynote with Panasonic President Toshihiro Sakamoto brought big news to the world of cable with the announcement of Panasonic's new line of HDTVs and set-top boxes integrating tru2way technology. Joined onstage by Comcast's CEO, Brian Roberts, Sakamoto said, "Panasonic will not only deliver a Panasonic Viera Plasma HDTV with tru2way technology later this year, we are also announcing the first portable DVR and digital cable set-top boxes powered by tru2way technology, all of which truly allow consumers to maximize their enjoyment of digital cable television programming.”

The Viera televisions equipped with tru2way will eliminate the need for a set-top box and will eliminate clutter and confusion that stems from multiple components. The Viera Plasma HDTV is expected to be available at retail later this year.

Also announced was a portable DVR which will allow users to record programs at home and then watch them later, acting like a portable DVD player. The tru2way device has a fold-up 8.5" screen and speakers, and docks with a set-top box. Named the AnyPlay, it is expected in Comcast markets in early 2009.

I personally like the idea of the portable DVR, though I doubt people will choose a large portable DVD player-type device over the smaller pocket-sized digital media players they most likely already own. However, it's not hard to imagine the technology spurring a new movement in bridging the gap between those smaller media players and the home DVR.

by Tony Brown, a junior at the University of Missouri

Talk of open development was a hot topic today, with everyone from Jerry Yang of Yahoo! and Rob Stoddard of NCTA to the editors of CNET calling open source development and new industry standards the keys to creating more useful and marketable consumer electronics.

Yang’s keynote address highlighted the release of Yahoo! Go 3.0, the site’s software offering for mobile phones. In it, he explained that leaving Yahoo! Go open sourced was imperative to the continued development of the software. “Having the ability for third party software to interact with Yahoo! Go makes it easier for users to receive relevant content,” Yang said.

Yahoo! Go offers widgets to perform many different tasks, including eBay, MySpace, and MTV News integration. The hope is that software developers and other websites will develop software to work with Yahoo! Go and ultimately make the Internet more efficient and useful to consumers on mobile phones.

In a CNET-hosted panel titled “The Next Big Thing in CE,” Stoddard, along with George Kliavkoff of NBCU agreed that open-sourcing and creation of (and conforming to) industry standards would allow consumers to integrate different technology components with ease. In a discussion about the future of content delivery, both agreed that portable devices must be able to connect to televisions, computers, and DVR set-tops and share content without limitation. One of the major current limitations of programming that is available online is that it is unable to be transferred to mobile devices, they said.

by Tony Brown, a junior at the University of Missouri

In a long-delayed and eventful meeting that wrapped late last night, the FCC gave the cable industry what some consider a rare victory, on a decision related to the 2009 DTV transition. It was one of several sweeping issues the FCC considered in the meeting. From Shirley Brady at Cable360.net (click here for the full post):

In a move designed to not penalize cable subscribers who still have analog TVs after the the digital TV transition deadline of Feb. 17, 2009, the FCC last night ruled that cable operators must transmit broadcasters' local digital and analog TV signals for a three-year period starting the next day (Feb. 18) and not charge broadcasters for carrying those signals. All-digital cable systems are exempt from the requirement to carry analog signals. The three-year sunset clause was a win for the National Cable and Telecommunications Association, the cable industry's lobbying arm on the Hill, which fought Martin's initial proposal that operators carry a must-carry station's analog and digital signals until a system is all-digital. The NCTA pushed for the three-year limit as a compromise on digital must-carry, although the FCC reserved the right to extend the three-year sunset clause.

The move pleased NCTA’s Kyle McSlarrow, who issued this statement:

The U.S. Senate Commerce Committee addressed Internet safety in a hearing today about protecting children online. In opening remarks Committee Chairman Daniel Inouye (D-HI) referred to the “distinguished and lovely panel” – apparently directed in particular to one of the five panelists, Miss America 2007 Lauren Nelson. The central thrust of testimony was the importance of educating parents, students, teachers and school administrators on encouraging safe online use, rather than relying only on technology tools. Sen. Mark Pryor (D-AR) asked if parental controls and filtering tools are the answer. Panelists agreed they play a role in protecting children online, but aren’t the silver bullet. Sen. Jay Rockefeller (D-WV) seemed more dismissive of parental control tools, remarking earlier in the two-hour hearing that “blocking doesn’t seem to work.”

What would seem to work, the witnesses and Senators generally agreed, is making Internet safety education a mandatory part of computer education for all children. Cited as a model is a Virginia program incorporating Internet safety into the school curriculum. Lan Neugent, Assistant Superintendent for Technology and Human Resources with the Virginia Department of Education, remarked that “Internet safety cannot be covered in a single lesson or unit or by using a single program or resource…. It must be integrated into the curriculum as part of a teacher’s daily practice.” He also cited several other elements that must be in place for Internet safety programs to operate effectively: technical assistance, professional development for teachers, and implementation monitoring. Clearly understanding the direction of the hearing, Sen. Bill Nelson (D-FL) announced his intention to offer legislation establishing a grant program to fund the development of online safety courses.

This Associated Press article declares that cable companies will charge customers more for set-top receivers because of the FCC’s new rules requiring video providers to deploy receivers containing separable security (i.e., detachable CableCARDS), as opposed to the current embedded security. The article declares the increases due to the new FCC rules are a sure thing (“Higher rates are definitely coming,” it proclaimed). At Cox, we will fully comply with the FCC separable security mandate and we have no plans at this time to raise prices on receivers due to the mandate. However, increasing costs may be passed on to customers in the future due to the cost of compliance.

Also in the article, several cable players criticized the FCC’s decision late last week, just before the July 1 effective date, to deny Cable’s petition for an exemption, but granting a temporary exemption to Verizon and other video providers. The National Cable & Telecommunications Association (NCTA) said in a statement: “The Commission’s 11th-hour action on the many long-standing waiver requests doesn’t bode well for consumers. There’s nothing in these decisions to stave off a $600 million set-top box tax likely to affect the great majority of cable customers while providing no benefit to consumers. In addition, customers are being treated differently based on the provider to which they subscribe, the unfortunate outcome of a flawed process.”

Multichannel News reported that a bill has been introduced on Capitol Hill that would force cable operators to create a family-friendly programming tier, comply with existing federal indecency rules for broadcast stations and/or rebate customers who have blocked channels in a tier. This legislation would seem to force a version of a-la-carte and a view of indecency rules on the cable industry and consumers, but do consumers really want this?

Consider this. Most of the major cable operators reported outstanding first quarter 2007 performance, including significant success with digital cable which features dynamic parental control features. Cox even saw an up tick in basic analog cable. Cable TV is performing well in the face of ongoing stiff competition from satellite and new telco competitors. Cox customers are showing increased satisfaction with their services thanks to new programming choices as well as high definition, On DEMAND and DVR innovations which are increasing the value of their video service and the convenience associated with its use. Consumers direct the free market with their wallets. Americans clearly love their cable TV, and Government intervention threatens this love affair by threatening private investment and further innovation.

The FCC released a report this week concluding there’s too much violence on TV and that it’s harmful to children. Further, the Commission urged Congress to enact limits on violent content and pushed for a la carte delivery of cable channels. We haven’t digested the report yet, so we can’t comment on all of its conclusions and content. But we do know that managing what children see, and don’t see, on TV is of critical concern for our customers.

While we believe in a customer’s right to choose the programming that is right for them, we know not all programming is appropriate for all members of the family. At Cox, we think a big part of the answer is ensuring customers have the tools to make viewing choices that are appropriate for their family. We’ve found that by providing our customers not only the right resources, but also the right education on how to use them, they can and do effectively manage TV viewing in their home and are empowered to make smart choices for their family. That’s the primary goal of our Take Charge initiative—to provide appropriate tools and education on how to get the most out of them—and the response from our customers has been extremely positive. Clearly, the debate will continue. Stay tuned.

A panel of execs kicked off the Cable Television Public Affairs Association (CTPAA) FORUM conference in D.C. this morning. Before they took the stage, the group’s president, Mark Harrad of Time Warner Cable, revealed that CTPAA is disappearing. At least, the unwieldy acronym will bid adieu. The group will live on with a new name—Association of Cable Communicators (ACC)—that, he said, better reflects the full array of accountabilities of the industry's PR professionals today.

Back to the panel: It covered familiar ground, with moderator Mark Robichaux of Broadcasting & Cable covering the gamut of topics from a la carte to retransmission consent. This one quickly became the Robichaux and Willner Show, as the wittily dry reporter goaded always-quotable Insight Communications CEO Michael Willner, who delivered the best quips and most memorable insights. He started by giving props to bloggers, revealing that at the height of the company’s prolonged high-speed Internet outage last summer, they turned to blogs “to learn what we didn’t know about (our own network).” Of the rapid rise of blogs and other new-media outlets companies must pay attention to, he said, “If we’re not listening as much to our constituents as we are speaking to them, we’re only doing half our job.”

E-Rate, the federal program that provides schools and public libraries with $2.25 billion annually in deep discounts on telecom and Internet access services and internal connections, is celebrating its 10th birthday. A new report released this week demonstrates that E-Rate plays an important role in improving students’ grades, training teachers, and providing all community members with the technology skills and knowledge necessary to compete successfully in the global economy. Cox Communications believes strongly in the value of E-Rate and was one of the chief corporate sponsors of the report, "E-Rate: 10 Years of Connecting Kids and Community." It was developed by the Education and Libraries Networks Coalition and the National Coalition for Technology in Education and Training.

We are proud of the strong school and library partnerships that we’ve forged through our participation in E-Rate. For Cox, though, the most telling statistics about the program do not involve the amount of money committed through it (more than $19 billion to date), but the fact that it has raised classroom connectivity rates above 90% for all schools -- rich or poor; rural, urban or suburban; high minority or low minority population. As the Chief Technology Officer of Nevada’s Clark County School District, which is profiled in the report, concludes: "The district wide network (which is supported by the E-Rate) creates an element of equity..."

An encouraging development regarding DirecTV and Major League Baseball's reported exclusive deal that would deny cable TV customers access to the MLB Extra Innings PPV package: In response to a letter from Sen. John Kerry (D-MA) expressing concern about the exclusive arrangement, FCC Chairman Kevin Martin said the Commission would investigate.

In Kerry’s letter, he wrote, “I am opposed to anything that deprives people of reasonable choices. In this day and age, consumers should have more choices – not fewer. I'd like to know how this serves the public – a deal that will force fans to subscribe to DirecTV in order to tune in to their favorite players. A Red Sox fan ought to be able to watch their team without having to switch to DirecTV.” Martin wrote back to Kerry saying he also is concerned about the reported deal and has asked both DirecTV and MLB for information. “Once we have this information, we will report to you on the deal's implications for consumers and any recommended changes to the law to ameliorate any harm to consumers,” Martin wrote to Kerry.

In Kevin Maney’s recent USA Today article he cites that the FCC 1968 Carterfone Decision could serve as a good example for the cable industry on how regulation can produce innovation and price competition. That ruling paved the way for any person to pull in radio transmissions & connect them to a regular telephone network - allowing a person to get on a radio, patch into a Carterfone on land, connect the phone line & complete a call. According to Maney, the ruling ‘unbundled’ the telephone system & opened the door for competition in the market.

The FCC’s integration ban is unsuited to the increasingly competitive converged world of video communication services. According to the FCC, the purpose of the ban was to create a competitive market for cable set-top boxes, so people could buy their own set-tops instead of having to rent them from a cable company. In actuality, the recent denial of cable's waiver requests would mean that, starting in July, consumers would be paying another $2 to $3 per month.

FCC Chairman Kevin Martin testified before the Senate Commerce Committee’s Oversight Hearing On Telecommunications Issues earlier today. Addressing the price of basic cable, Martin said it has “gone up at a disproportionate rate...when compared against over communications sectors.” (Click here for his complete remarks.) In response, the National Cable & Telecommunications Association released the following statement: “A real analysis of today’s marketplace shows the actual price of cable’s bundle of video, Internet and telephone services is 20 percent lower than the price of the same package of services 10 years ago. Chairman Martin's comments reflect an outdated, incomplete and wholly inaccurate analysis that doesn't reflect the realities of today’s marketplace, where consumers enjoy more competition, greater choice and better services than ever before.”

Satellite providers Dish Network and DirecTV are raising prices, effective early February, for the fifth consecutive year. DirecTV is hiking its two most popular packages 11.1% and 10%, while Dish is increasing the price of three of its four packages an average of 5.9%. However, that’s probably new news, if you rely on consumer press for such coverage. A quick search of recent articles about cable and satellite price increases reveals decidedly one-sided coverage. We found scant coverage specifically about the satellite increases, and those articles generally featured no commentary, no quotes, no consumer reaction. Conversely, a slew of articles about cable price increases included a heavy helping of commentary and quotes from consumers, consumer advocates and regulators. (Much of the coverage was driven by the FCC’s cable pricing survey, released in December, that excludes satellite TV prices.)

Beyond the disparity of press coverage, the satellite price hikes underscore an important and frequently glossed-over reality: the pressure of rising programming costs. All video providers purchase the same networks from the same owners and therefore face the same reality of rapidly rising wholesale programming costs. When Verizon recently increased its video prices 8%, wholesale costs were a big factor, just as they are with the satellite providers’ latest increases. Until content providers drop their wholesale prices, or reduce their price increases, it’s unrealistic to expect retail video prices to drop significantly—whether the provider is cable, satellite or telco.

Not unexpectedly, network neutrality is back on the legislative agenda. In response, two academics—David Farber from Carnegie Mellon University and Michael L. Katz from University of California at Berkeley—authored a thoughtful Washington Post column (“Hold Off On Net Neutrality”) on Friday. In it, they caution that unintended consequences could result from misguided legislative intervention.

The Internet needs a makeover. Unfortunately, congressional initiatives aimed at preserving the best of the old Internet threaten to stifle the emergence of the new one.... Network neutrality is supposed to promote continuing Internet innovation by restricting the ability of network owners to give certain traffic priority based on the content or application being carried or on the sender's willingness to pay. The problem is that these restrictions would prohibit practices that could increase the value of the Internet for customers.

Click here for the entire column. And click here, here and here for past posts in which we’ve expressed similar caution about network neutrality and argued that the marketplace—not legislation—should be the arbiter of what’s best for consumers and for the Internet’s future.

A recent Wall Street Journal editorial (“Franchise Freedom”) was a wake up call for those of us who communicate about Cable. In a few short paragraphs, the editors somehow managed to color the mammoth and glacier-like former Bell companies as the champions of competition and cable companies as anti-competitive incumbents who are “crying foul” at the prospect of having to earn our customers’ business. An opinion on the FCC’s recent ruling on video franchising, the editorial goes so far as to levy accusations that Cable is blocking the franchise applications of the RBOCs by pulling the strings of the local franchising authorities (LFAs) – causing them to slow roll applications and make unrelated demands for things such as parking garages and community swimming pools.

In “Martin FCC Purges Per-Channel Rates,” Ted Hearn at Multichannel News notes a change in the FCC’s cable pricing survey that stayed largely below the radar immediately following the Commission’s release of the survey last week:

Although the FCC has routinely crunched the per channel data in previous reports, it did not do so in the latest one. “This [per-channel] data is [sic] not included in the 2005 price survey report because of the weaknesses associated with using it,” the FCC said. “If cable operators offered consumers the option to purchase channels individually, it would be appropriate to consider the prices charged to consumers for those channels.”

One possible reason for the new policy: While the price of cable programming tiers has risen, inflation-adjusted per-channel cable rates have declined in the decade before January 2005.

The FCC contends the per-channel analysis is irrelevant because consumers can’t buy channels a la carte and can’t get refunds for channels they block. In the FCC report and in virtually every quote issued about it last week, the Commission focused on a “93% increase” in cable prices since 1995. But according to MCN, the per-channel rates can still be extrapolated from the survey: “For the decade, nominal per-channel cable rates rose 19.6%, from 51 cents to 61 cents. Inflation, according to the Bureau of Labor Statistics, was 25.05% for the same period. Since inflation outpaced per-channel rate hikes, real per-channel cable rates actually declined, a result that clashed with Martin’s emphasis on bundled cable rates.”

The FCC voted along party lines, 3-2, to treat service providers differently in video franchising. The Commission didn’t release an order, and likely won’t for several weeks, so we can’t comment on all of the details. But based on what has been reported, it’s a disappointment that the FCC appears determined to create an uneven, unfair playing field slanted decidedly in the telcos’ favor. Of course, it’s far from a done deal, with lawmakers questioning the FCC’s authority on the matter and cities likely to sue. (Here’s the official NCTA response.)

The other matter on the FCC’s meeting agenda was release of the 2005 cable pricing survey. No surprise there, since details had been leaked for months. NCTA head Kyle McSlarrow on Tuesday called the study “almost entirely useless as a foundation for any policy decision.” Although we haven’t seen the full report, based on the data that have been released, the conclusions of the study just aren’t true for Cox Communications. The FCC’s chief contention is that speeding the entry of AT&T, Verizon and other large telcos into the cable business will reduce prices. Truth is, Verizon and AT&T’s video services are already priced well above $35.94, which is the FCC-reported average price of cable in markets with at least two wireline competitors. Verizon’s FiOS service is $47.98 ($42.99 + $4.99 for a required converter) and AT&T’s U-Verse starts at $59. The FCC’s report claims that cable prices in markets with video competition from the telcos are about 20% lower (or $7) than in markets without telco video. Again, in Cox markets at least, that’s just not the case. Our prices in competitive markets aren’t distinctly different – only about 3% lower than in other markets. So, our prices are essentially the same whether we’re competing directly against satellite or telco video.

Kyle McSlarrow, president of the National Cable & Telecommunications Association, didn’t hold back in a year-end media briefing earlier today. His ire was directed toward the FCC and his timing surely was not coincidental. The Commission is set to meet tomorrow and is expected to release the ’05 cable price survey and to take action on new rules that could further ease franchising requirements for AT&T, Verizon and other telcos entering the video business.

Addressing the price survey, McSlarrow said, “It is unclear to me why a report that was clearly finished at the beginning of this year was kept under wraps or why it has been subject to selective leaks of information.” He further derided the report as “almost entirely useless as a foundation for any policy decision,” noting that the data in it are almost two years old. He further declared it “severely limited” in its focus only on analog expanded basic cable, which ignores the reality that most cable customers subscribe to digital and that satellite TV providers DirecTV and Dish Network have significant video market share, yet are excluded from the report. Of the satellite competitors, McSlarrow noted that they have aggressively increased their prices, as has Verizon. As for the so-called Section 621 proceedings the FCC is expected to address tomorrow, McSlarrow said, “Based on what we know, I think it’s a proposal that has to be dramatically pared back. The case has been made by the telcos that they’re being held back from getting franchises. There’s no evidence in the record at all to support that.”

Early in his remarks, McSlarrow exasperatedly declared that the current agenda of the FCC “represents one of the most sweeping regulatory examples of government micromanagement.” Asked later by a reporter if FCC Chairman Kevin Martin has a grudge against the cable industry, he replied, “You’d have to ask him. All I can say is I just think there is a fundamental misunderstanding of what actually our industry is doing. It’s almost like they are moving through a time warp.” How misunderstood? How far into a time warp? Stay tuned for news out of the FCC meeting tomorrow.

Today’s CableFAX Daily notes our Friday post about the misleading way cable price increases are frequently reported. Citing Friday’s USA Today’s article, CFD agrees that FCC Chairman Kevin Martin will apparently tie rising cable prices to proposed plans making it easier for the telcos to receive video franchises. While the FCC’s annual price survey isn’t out yet, CFD did its own calculations:

It appears that the avg monthly rate of cable has increased about 5% from $41.29 for Jan 1, ’04 and about 7% in areas where there’s effective DBS competition. If those numbers hold, expect cable to point out that Verizon plans to raise its rates for new customers 7.6% in Jan to $42.99. The most basic AT&T package listed on its Website (over 190 channels) starts at $59.99. Martin, however, will probably base his argument on the idea that the avg rate declines where wireline overbuilder competition exists.

As the familiar holiday song goes, “It’s the most wonderful time of year.” If only that were true in the halls of cable TV companies; you see, this is the time of the year when we are assailed by the media over rising video prices. These reports rarely get into the real issues impacting the cost of TV, leaving readers with a sour taste in their mouths and the wrong impressions of cable providers.

Today, we see coverage in USA Today: “Trying to spur competition and beat back cable TV prices, Federal Communications Commission Chairman Kevin Martin has proposed rules to make it easier for phone companies and others to jump into the video business.” The story goes on to discuss a “cozy duopoly” between satellite and cable and refers to a forthcoming FCC study which purportedly shows a $7.40 difference in the average price of cable TV in markets where a third wireline competitor is present.

While we welcome competition from a fourth, fifth, or sixty-fifth competitor in our markets, there are a few problems with such a rudimentary analysis of potential benefits:

Walking into the office today, I actually felt pretty good about myself and the work I do here at your friendly neighborhood cable company. But after reading The Wall Street Journal this morning, I suddenly feel like the dirty, destructive, dangerous, evil criminal I apparently am. Yes, according to an opinion piece in the WSJ, I shill for “the most pernicious monopoly in America.” And all this time I innocently thought we simply delivered entertainment and communications services. Silly insidious me.

Of course, the message that I am pernicious was delivered by a lobbyist—or, I should say, “senior adviser”—for AT&T. Yes, the same AT&T whose financial prospects are exponentially improved by passage of the statewide video franchises heralded in this exposé of the evil cable guys. The same AT&T whose logo should be drawn in the margin beside the dictionary definition of “monopoly.” The same AT&T that’s essentially the Humpty Dumpty of today’s American economy (all the king’s horses and all the king’s men are certainly trying to put it back together again—the “it” being Ma Bell, inarguably one of the largest monopolies ever). But if a “senior adviser” to AT&T declares that Cable is the monopolistic devil and the offspring of Ma Bell the valiant knights of communications commerce, then surely it is thus. I’m so thankful we cleared that up.

The topic of the season in Cable is clearly going to be sports programming costs. Amid the ongoing debate/battle NFL Network is having with Time Warner Cable and other cable companies on carriage of the network and the channel’s broadcast of eight live games, Comcast Chairman and CEO Brian Roberts weighed in yesterday. Following a speech in Washington, D.C., Roberts opened up about the pressure of rising sports programming costs. He admitted Comcast is “conflicted” since it owns sports networks, but called it a serious issue and advocated “dialogue.” Noting the flood of new sports networks being launched by pro leagues and regional college conferences, Roberts said, “I don’t know the answer, but I’m here to tell you that I’m worried that there is a sea change occurring, a tipping point, with the amount of new sports channels that are getting created and how that cost gets distributed.” From Multichannel News:

Roberts -- whose company pushed into sports programming long ago -- raised an issue that has soured relations between cable operators and sports programmers in recent years. More and more, operators want to create sports tiers to take pricing pressure off expanded basic and reduce regulatory pressure. Last week, Federal Communications Commission chairman Kevin Martin called expanded basic a “tying” arrangement....

Comcast, under pressure from the FCC, caved in last month and launched Mid-Atlantic Sports Network, the pay TV home of Major League Baseball’s Washington Nationals. The MSO raised expanded-basic rates by $2 per month for 1.6 million customers to cover MASN’s cost -- a move that drew negative publicity. Comcast had balked at carrying MASN largely over the regional sports network’s license-fee demands.

Roberts alluded to the MASN dispute by suggesting that in the eyes of regulators, fan access to the games of the home team right now seems to outweigh cable operators’ interests in managing costs.

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.

The Barton Bill (more precisely, the Communications Opportunity, Promotion, and Enhancement Act, sponsored by Rep. Joe Barton [R-Texas]) passed the House yesterday, 321 to 101. It grants RBOCs national franchises to offer video services. A network neutrality amendment offered by Rep. Edward Markey (D-Mass.) failed 152 to 269, although there are still net neutrality provisions in the legislation. For Cable, the Barton Bill is a mixed bag. As we’ve maintained all along, competition should be on a level playing field where providers are treated fairly, and the Barton Bill language is fairer than previous versions and would seem to encourage a field where all players are following the same rules at the same time. However, the net neutrality language in the current draft Senate bill sponsored by Sen. Ted Stevens (R-Alaska) takes more of a wait-and-see approach on regulating the Internet than the Barton Bill, directing the FCC to watch for problems and inform Congress if serious problems arise. Net neutrality means different things to different people, making it a problematic issue to regulate, and we believe that the current language in the Stevens bill strikes the right balance. Hearings on the Senate bill are expected to start as early as next week.

Here's the response to the Barton Bill from Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association.

Today, the FCC released the “a la carte” report that its chairman, Kevin Martin, promised in the Senate Commerce Committee’s Open Forum on Decency in November. Surprisingly, the report contradicts a 2004 FCC report by then-chairman Michael Powell and another independent report requested by Senator John McCain (R-AZ) and issued by the Government Accounting Office. Unlike those findings as well a large body of analysis by other academic economists, the Martin report claims that cable customers would pay less if allowed to choose channels individually. Minutes later, Senator McCain announced he would ignore his GAO report and the 2004 FCC analysis and introduce legislation requiring multi-channel video providers to offer consumers an a la carte option.

The head of the National Cable & Telecommunications Association (NCTA), Kyle McSlarrow, vehemently blasted the new FCC report. “Most studies conclude that a mandated a la carte regime would be more expensive for consumers and result in less diversity in programming. It is disappointing that the updated Media Bureau report relies on assumptions that are not in line with the reality of the marketplace.... The notion that the government knows better how to improve on a competitive marketplace is not supported by the evidence,” McSlarrow said in a statement. [Click here for the NCTA brief, "The Pitfalls of A La Carte."]

Of course, this unwarranted interest in a la carte got turbo-charged two years ago by the “wardrobe malfunction” at the Super Bowl halftime show. Ever since, the rhetoric has been loud and fairly constant, fueled in huge part by a small band of special-interest activist groups.