ACA Warns FCC of Regulatory Failure

The ACA says the FCC will surely fail its mission to expand broadband services to rural communities if incumbent telcos are allowed to manipulate the Universal Service Fund program by demanding funds for markets where they face competition. With ILECs seeking USF support in high-cost areas, the ACA is urging the Commission to adopt "competitively neutral" reforms to counter what ACA President and CEO Matt Polka calls "monopoly-era" market forces.

"The FCC has a real opportunity to rely on the USF to fund broadband facilities and services in rural communities, which the country must include in the Internet revolution," Polka said. "Without a doubt, the FCC will fall short of its mission if major phone companies insist on ballooning the size of the high-cost fund and demand on receiving USF money in markets where they face competition."

The letter comes on the heels of Polka's plea to FCC Chair Julius Genachowski to eliminate impediments for cable ops seeking to merge with CLECs as the joint efforts serve public interest by fostering greater competition with those same incumbent telcos. Earlier this week, Polka wrote to the Commission saying, "Mergers between cable companies and CLECs promote competition, putting downward pressure on rates, increasing the offering of innovative services, and enhancing service quality." •

Inside European Pay TV Climate

New data is emerging from across the pond that suggest the European pay-TV market should look toward new services to boost revenue while continuing to build subscriber bases.

Digital TV Research says UK pay-TV revenues are quickly reaching maturity and operators must find other revenue streams to ensure continued growth. Pay-TV revs are forecast to reach $9.3B this year - a nice spurt from $3.3B in 2006. However, spanning the next 5 years, the research firm says pay-TV revs will only climb by another $250M with ARPU falling as operators convert subs to bundles.

"Digital TV penetration has almost reached saturation," says Digital TV's Simon Murray. And thanks to FTA services, "digital pay-TV isn't expected to climb much and will remain below 58% of TV households."

Despite the prediction, and a well-documented economic downturn, European pay-TV providers have continued to add new subscribers. According to a report from Strategy Analytics, Europe's top-10 operators have added around 1.5M new subs so far this year. BSkyB remains the largest provider in the region with more than 10.1M subs in Q111 and French IPTV ops SFR and Free both saw their strongest sub growth this quarter in four years.

"Pay TV in Europe has shown remarkable resilience," SA's Ben Piper says, "especially when viewed against the backdrop of persistently high unemployment rates and strained household budgets." •

Etc: TWC Subsidizes E*'s Slingbox - Don't Sell Hulu! - Lingerie Football Fantasy?

People: Steve Jobs has relinquished his CEO title at Apple and been replaced by COO Tim Cook ... Jobs was elected Chairman ... all effective immediately.

Strategy: Time Warner Cable said that it will subsidize purchases of the Slingbox (via a $300 rebate) for subscribers of its $99/month Wideband service. Cool x 2. Says our own PSM: "Gotta love it... subsidizing EchoStar's Slingbox is a sort of in-your-face to Viacom. There's more than one way to move a signal around a home." NYT has details. --- Two years after acquiring Marvel Studios, Disney is eliminating the movie/comic book producer's marketing department in an effort to reduce film costs.

M&A: Sprint said AT&T's re-submissions on updated economic analysis of its proposed T-Mobile takeover are "fatally flawed" and the deal would still create "serious anti-competitive harms" if allowed. --- BTIG Analyst Richard Greenfield says selling Hulu would be a mistake of "epic proportions" and current owners (Disney, News Corp., NBCU and private equity firm Providence Equity Partners) should be bending over backwards to retain the unique video service and let it blossom.

Scandal du Jour: Bloomberg reports that British opposition Labor Party officials are demanding Prime Minister David Cameron come clean on whether he knew that former News of the World's Andy Coulson was receiving payments from News Corp. while he was employed as the country's head of communications.

Distribution: The Tennis Channel netted a new multi-year affiliation deal with the NCTC for digital-basic positioning among the group's member companies. The two sides' previous deal was set to expire Sept. 4... smack in the middle of TC's coverage of the U.S. Open. Member companies that opt to pass on the new agreement will miss the remainder of the tournament.

Mobile: WSJ says Sprint will be the first to get Apple's iPhone5 in mid-October. Verizon and AT&T shouldn't be far behind... --- Vizio's 8" tablet with WiFi now supports the Hulu Plus subscription service for $7.99 per month.

Programming: MTV2 is kicking off the 2nd season of LFL (Lingerie Football League) this Friday with the return of LFL Presents: Friday Night Football on MTV2 (10pm ET). The show will feature 20 live games throughout the regular season. LFL enthusiasts can also use the league to play fantasy(!) here. (We'll stop there.) --- Sony/Discovery/IMAX joint 3D venture 3net is expanding its native 3D content with a programming block for kids with 30 hours of original content. --- FOX Soccer scored an exclusive long-term deal with UEFA Europa League (the UEFA Cup)  to become the only stateside network to carry both the UEFA Champions League and UEFA Europa.

Research: A recent Adweek/Harris Poll survey says about 6-in-10 parents (57%) allow their kids to watch more TV and play more video games during the summer.

Deals: Texas-based Grande Communications opted to use TiVo Premiere for the company's DVR, VOD and multiroom services. --- Media research firm TRA announced a partnership with dunnhumby to use the company's data and analytics products to drive TRA's TV viewer-to-shopper behavior solution to increase effectiveness for ad agencies and TV networks.

Tech: ThinkOptics, Broadcast Interactive Media and Remotec unveiled a joint project dubbed the iWavit TVAid - an app that turns a users iDevice into a fully-integrated universal remote control with a built-in EPG. --- CableLabs verified a new line of hybrid QAM/IP STBs and video gateways made w/ CableCARD slots from Entone.

SkyREPORT: Eutelsat extended its distribution agreement with Greek pay-TV provider Forthnet for another 5 years. --- DIRECTV extended its MDU distribution pact with Multiband for another 4 years.

Up, Down & Over There: Google, Indonesian media platform Skynindo, Australian-based telco Telstra and satco NewSat, Bollywood content provider Hungama Digital Media and Taiwanese tech firm ALi Corporation all joined CASBAA as corporate members. --- Integral Systems awarded Optimal Satcom a subcontract to provide the Mexican government with a satellite capacity management system for it the country's new MEXSAT system providing communications for military, civil and humanitarian needs.

Folks: The Center for Policy on Emerging Technologies appointed former World Bank corporate strategist Dr. Nagy Hanna as a senior fellow. --- Miramax hired 14-year NBCU vet Beth Minehart as its new digital boss as the studio moves forward with plans to rent movies via Facebook.

--- Catch today's media market news with The Evening BRIDGE. •