Access Is Not Content
A. Michael Noll
October 7, 2016
© 2016 AMN
Twenty years ago in 1994, Bell Atlantic almost purchased John Malone’s company TCI—but sane minds ultimately prevailed. However, in 2000, Time Warner merged with AOL, and nine years later broke up. And then there were the ill-advised attempts of the telephone companies to enter Hollywood new media. There are lessons here: these kinds of mergers do not work.
Today’s mantra of new media seems to be “repeat the mistakes of the past.” And thus Verizon last year acquired AOL and this year seems about to acquire Yahoo. These acquisitions make no sense–they appear to be nonsense.
Decades ago, America On-Line (AOL) started the email craze, joined years later by Yahoo. These two were significant brands, but both companies failed to reposition themselves as the world of new media and the Internet changed and morphed. They both were left behind. It does not help Yahoo that its servers seem to crash frequently and recently it suffered a massive hacking invasion.
It seems that Verizon is stuck in the past, acquiring decades old brands that no longer matter. Perhaps Verizon wants to potion itself as not only an access provider but also as a content provider. But the prime services offered by AOL and Yahoo are email—a service that Verizon already offers its access customers.
Somehow by now I would have hoped tat the media and communications worlds had learned that access is not content—and that both are “king.” Without access, there is no content—without content, access is useless. They go hand in hand—and are very different industries. Bell Atlantic and the other Baby Bells learned many decades ago that they knew little of Hollywood and content. It seems today that Bell Atlantic’s successor Verizon has forgotten these lessons and is intent on returning to the past of AOL and Yahoo.
Wow, what nonsense!
I was struck today by a Washington Post story by Cecilia Kang and Will Hobson that considers the potential impact of new apps like Periscope (owned by Twitter) and Meerkat on the highly lucrative live-sports media sector.
Noting that its “live” aspect has largely protected televised sports from piracy and other digital-age erosions of control, Kang and Hobson suggest that this protection now faces a challenge from these new apps:
Just hold a smartphone up to a television to record and stream what’s airing, and suddenly piracy is easier than ever. That stunning recognition arrived this past weekend when droves of boxing fans skipped the $100 pay-per-view fee and watched the much-anticipated match between Floyd Mayweather Jr. and Manny Pacquiao free Saturday evening. Dozens of live streams of the fight were available through Periscope, and even though the app shut down 30 illegal streams, users gloated about their ability to watch…
“One of the challenges now is just the logistics of managing the takedown process. . . . We’re talking about real-time activity. Taking something down in half an hour may be half an hour too late,” said Douglas Masters, an intellectual property lawyer at Loeb & Loeb in Chicago.
Though they point out that “[m]edia firms say the onus should be on Periscope and similar apps to police themselves,” Kang and Hobson also note that:
Twitter, which owns Periscope, required HBO and Showtime, who co-produced the pay-per-view telecast, to alert it to illegal streams of the Mayweather-Pacquiao fight. Only then did it take down those accounts.
The article also makes clear that, while these apps have yet to significantly impact their business, major sports content providers are beginning to take seriously the potential impact of this emerging “live streaming” trend. And, given the huge amounts of money involved, I’m pretty sure they’ll be putting increasing pressure (including legal action, as necessary) on these new live streaming apps and, in the case of Periscope, it’s corporate owner Twitter. As the article suggests, Twitter is increasingly involved in content hosting and other business arrangements with cable networks and sports leagues, and will probably not want to jeopardize these relationships by being too closely tied to technologies that seriously threaten the latter’s revenue stream.
That being said, the introduction and expanding use of these live streaming apps are yet another development suggesting that the massive financial power of live sports media may finally be experiencing at least a little of the disruption and revenue erosion the rest of the traditional media industry has already been grappling with in the digital age.
Other efforts to move in this general direction include:
Verizon and cable operators reportedly pay more than $6/mo. per subscriber to carry ESPN. While offering tiers or a la carte options can free non-sports fans of this financial burden (plus whatever margin operators add to their own cost), Michael Nathanson, of MoffettNathanson Research estimates that ESPN would cost a whopping $36.30 per month in an a la carte world.
As someone who hasn’t watched a lot of sports since I was a teenager, I’d be OK with this model, though some of my friends and colleagues might not be very happy with it. But perhaps we can all agree that some shaking up of the status quo in sports programming is a potentially healthy development, especially if it keeps more dollars in consumers’ pockets and less flowing to an industry marked by substantial cartelization and monopoly power (in both professional and college sports).
In the last post in this series I reviewed several different points of view regarding the pros and cons of cellular carriers using “LTE Unlicensed” (LTE-U) to expand their network capacity. In this post I’ll take a closer look at movement in this direction among U.S. carriers.
[Note: The deployment of LTE in unlicensed bands is referred to by multiple names, including “LTE Advanced in unlicensed spectrum,” “LTE Unlicensed” (LTE-U) and, most recently “Licensed Assisted Access” LTE (LAA). In this post I’ll refer to it as LTE-U, though other names may appear in some excerpts included in the post.]
The two U.S. cellular providers that have so far expressed most enthusiasm for LTE-U are Verizon and T-Mobile.
[B]ased on the discussions I’ve had this week, it appears that Verizon…, Vodafone and other carriers last year decided they wanted to make LTE-U a reality–and they decided they didn’t want to wait for the 3GPP to standardize the technology. So they teamed up with some network technology companies to design real-world tests of the technology…
Verizon clearly has high hopes for the tests and the technology–it has said that it plans to commercially deploy it in the 5 GHz and 3.5 GHz bands in 2016. Verizon is not the only carrier that supports LTE-U/LAA. T-Mobile announced this year that it too will deploy what it calls LAA in the 5 GHz band in 2016. T-Mobile CTO Neville Ray said he believes the carrier can get LAA-capable handsets this year.
As Dano notes, “[h]owever, not all carriers are on board.” Specifically, he points to comments from Tom Keathley, senior VP of wireless network architecture and design for AT&T. As one might expect from a carrier that has invested in a network of more than 30,000 WiFi hotspots, AT&T’s concerns include the risk that LTE-U deployments will not share unlicensed spectrum fairly and efficiently with WiFi.
Keathley said that current approaches to LTE-U are vague about how exactly to check for existing users in unlicensed bands, and how long LTE users can occupy unlicensed spectrum.
Dano also cites comments from Eric Parsons, an executive at Ericsson, a leading wireless network equipment vendor, regarding how these spectrum sharing issues might be dealt with in different regions of the world. As Parsons explains, “there are very specific guidelines in Europe and Japan that cover these areas, but countries like the United States don’t have specific guidelines.”
T-Mobile, which has less licensed spectrum to work with than its competitors (see here for T-Mobile CEO John Legere’s perspective on this issue), seems particularly interested in LTE-U. In anticipation of commercial deployments in 2016, it has announced plans for multiple tests of the technology, in cooperation with Alcatel-Lucent and Qualcomm, Ericsson and Nokia.
In a January 5, 2015 blog post T-Mobile chief technology officer Neville R. Ray shed some light on the company’s plans:
Currently, there is approximately 550 MHz of underutilized spectrum in the 5 GHz Unlicensed National Information Infrastructure (UNII) band, which is available for any use within the FCC’s rules for the UNII band. LAA is a new and innovative approach that allows for licensed and unlicensed spectrum to work seamlessly together. And, we’ve already begun work with our various chipset, radio infrastructure and device partners to bring LAA production trials to life this year and bring the technology to our customers in the near-future.
During T-Mobile’s February 19, 2015 yearend earnings call, Ray provided an update on the company’s LTE-U plans: