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TV Everywhere raising concerns elsewhere

May 13, 2010 | 10:01 am

Much of the talk at this year's cable convention has been about TV Everywhere, the industry's plan to offer cable programming online for free, provided you already subscribe to cable.

Not all the programmers are on board with TV Everywhere yet. Walt Disney Co. and News Corp. are not entirely sold on the concept. Disney, people close to the company say, wants cable companies to pay them to offer its channels online. In other words, Disney wants to double-dip.

Although the industry sees TV Everywhere as a convenient way to offer cable subscribers access to that content online while insuring that the business formula that drives the industry (subscriber pays cable company which in turn pays programmer) remains intact, consumer activists, lawmakers and rival distributors fear it is little more than a bold land grab by a handful of monopolists and want the government to pull the plug before it gets off the ground.

“ 'TV Everywhere’ is designed to crush online competition while being marketed as a consumer friendly feature,” Free Press, a Washington, D.C.-based media watchdog group, said in a filing to the Justice Department titled “TV Competition Nowhere: How the cable industry is colluding to kill online TV.”

Those opposed to TV Everywhere are not necessarily against the concept of consumers paying to watch content online. The fear is that the cable industry is looking to extend its role as gatekeeper from the television to the Internet and doesn’t want to leave room for competition. 

Lawmakers are also concerned about TV Everywhere being little more than a not-so-subtle attempt to limit consumer choice. Senator Herb Kohl (D-Wis.),chairman of the Senate Antitrust Subcommittee, in particular has been outspoken about the concept. In February, he sent a letter to NBC Universal Chief Executive Jeff Zucker criticizing how the network required viewers to prove they subscribed to a pay television service in order to watch its Olympics coverage online. Kohl wrote that the move “raises questions” as to why NBC wouldn’t instead offer viewers “the opportunity to purchase this select Internet content” and “collect revenues directly.”

So far, the cable industry has shown little desire to create a TV Everywhere business that would allow consumers to subscribe to online without also subscribing to cable. That’s because the industry does not want consumers to cut the cord to cable. Furthermore, if the cable companies were to allow that, it would make it more difficult to prevent the programmers it carries to also sell their networks to rival Web services.

The other argument advocates make in claiming that TV Everywhere is anti-competitive is that cable operators won’t compete against each other online. A Time Warner Cable subscriber cannot subscribe to Comcast’s version of TV Everywhere or vice versa. Though cable companies rarely compete head-to-head in the same markets in part because of the cost of laying the pipe to wire homes, they could in the online world. If they don’t, says Free Press, then that’s a prime example of collusion.

“By design, this plan will exclude disruptive new entrants and result in fewer choices and higher prices for consumers,” Free Press said.

-- Joe Flint
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