Analyst on Aereo: 'It's Complicated'

When IAC's Barry Diller announced he was throwing his weight (and money) behind Aereo, the video start-up formerly known as Bamboom, the tech and pay-TV worlds were intrigued, to say the least. The company's business model, that of leasing TV antennas (as opposed to charging for the video stream), is a clever attempt to circumvent broadcast retransmission laws by transmitting TV over the internet.

However, says Bernstein Research's Craig Moffett, Aereo's plans are more perplexing than that.

Initial press from Diller's move had observers saying everything from Aereo being the David to cable's to Goliath, and/or being cable's best friend as a retrans bargaining chip. And, while Moffett says the video service start-up has gotten Wall Street's attention, the legality of leasing antennas for internet streams is "more complicated than it sounds."

"The Aereo episode calls to mind a similar legal end run around movie distribution laws by a company called Zediva... (that) offered customers a 'legal' way to stream movies over the internet by operating as a virtual rental store," Moffett said. The company was physically loading DVDs into real DVD players and claiming that customers were renting the discs and players, not the video streams, while it avoided paying retrans fees.

Of course, the courts didn't see things the same way. Check out Zediva's website to see what those "monkeys" are up to these days.

"We aren't lawyers, and we don't know how this will turn out. But," Moffet said, Aereo is "nowhere near as simple as it appears." •

ACA to FCC: Stop Supporting Incumbents

The ACA told the FCC to withhold Connect America Fund support from AT&T, Verizon and other price cap incumbents facing competition in rural broadband services. The group says doing so will curb wasteful spending and spur competition among providers to invest in high-cost areas and ultimately deliver the best service to consumers.

ACA Pres & CEO Matt Polka said incumbent carrier want to retain old "narrowband era" policies that would enable tem to continue to receive support for households that already have broadband service from an unsupported provider. The exec said incumbents would prefer receiving the funds, regardless of consequences to the CAF, and avoid reverse auctions that would reallocate the funds to providers that would serve hard-to-reach areas.

"ACA supports moving expeditiously toward allocating support consistent with the widespread existence of broadband competition," Polka said. Incumbent carriers, however, want to "'turn back the clock' or at least delay the new regime, even though the legacy system is clearly broken."

Instead, Polka offered a handful of recommendations to the FCC that the he says would better serve the needs of consumers. They include: 1) defining areas subject to unsubsidized competition as 'census blocks' where providers not receiving support offer service to a majority of customers within the block; 2) invite public comment on the proposed areas; 3) eliminate legacy support for incumbents as quickly as possible (in the census blocks); and 4) provide Phase I support to price cap carriers until a Phase II recipient begins services the majority of the block. •

Etc.: Cisco Exiting STB Biz? - Hulu Lands Wii - Voluntary Broadband Speed Tests

Strategy: Cisco is considering selling the STB business it bought from Scientific-Atlanta a few years ago for $7B. According to the NYP, Cisco is no longer interested in the STB market as the consoles have become increasingly sophisticated. --- CBS and Turner Broadcasting say they will charge college basketball fans $4 next month to stream the NCAA men's hoops tourney on mobile devices. The move comes after last year's 14-year agreement between the broadcasters and the NCAA for coverage rights to the tournament for $10.8B. --- Last week, NY Knick Jeremy Lin was credited for helping to bring MSG and Time Warner Cable back to the table for continued negotiations over the two sides' current carriage dispute. The two companies reached a deal Friday to restore MSG to the cable company's subscribers. Now, the NBA rookie is being blamed for accelerating the cord-cutting trend. This report says while Lin is giving Knick's fans something to cheer about, he's also forcing many viewers to find illegal ways to watch the games and sever ties with cable for good. --- Verizon is targeting young urbanites in MDUs (multi-dwelling units) with a new campaign for FiOS services. The company has launched a new "hyperlocal" strategy in NY, Philly, LA and Dallas to sign-up 25-39 year-old professionals who rely on communications services and technology.

WebTV: Hollywood heavy hitters are teaming up with deep-pocketed Silicon Valley firms to develop and launch web-based TV series more than ever before. WSJ takes a look at how studios and networks are drawn to the internet as a free-form "creative playground."

OTT: Hulu and Nintendo reached an agreement last week that enables owners of the Wii console to stream videos from Hulu Plus for $8/month. The deal also includes plans to offer the service on Nintendo's handheld 3DS device before the end of 2012.  --- Web reports say Blockbuster is pulling its on-demand streaming app from TiVo DVRs. The company said it is upgrading its platform and will stop supporting the DVR at the end of March. User comments hint that consumers have gotten similar messages about other connected TVs and devices as well. --- Web reports also say Apple TV set-tops are being pulled from retail shelves at Best Buy, Wal-mart and others. Why? Speculation hints that the company is either readying a new version of the STB or its getting even closer to unveiling its Apple HDTV...

Rules & Regs: The FCC said it will re-launch its voluntary nationwide broadband speed tests in March. The agency said it would expand the study to include "more technologies... new regions of the country (and) more data." Read more.

Disputes: Time Warner Cable says its has distributed more than 21K TV antennas throughout its Corpus Christi system as customers have been unable to access the NBC-affiliate KRIS-TV on its channel line-up due to its retrans impasse with Cordillera Communications.

In Court: Reports are saying Apple lost a trademark dispute to a Chinese company that claims rights to the name 'iPad.' A lawyer for Proview Technologies said a lower Chinese court ruled against sales of the tablet as a result. HuffPost has details from Shanghai.

$$$: Former Google CEO Eric Schmidt plans to sell up to 2.4M shares of stock currently worth nearly $1.5B. --- BrightCove raised about $55M in its IPO last week selling 5M shares at ~$11 per. --- Citing uncertainty in its business and financial strategy, Standard & Poor's says it will keep Nexstar Broadcasting on its CreditWatch list.

Advertising: TV's 'sweeps' week is coming up in May... and now online video players want a piece of the action. WSJ has this story detailing plans of companies like YouTube, Hulu and Microsoft to "woo advertisers" in NY over upcoming video offerings. A new event, called Digital Content New Fronts, is looking to "show there's a new game in town." Read more.

Programming: ABC News is airing a special inside look into Apple's 'troubled' manufacturing plants in China tonight. Apple's known to be one of the most secretive companies on the planet, so the piece should be rather eye-opening. --- Oxygen is developing two unscripted series for young women this fall: "Teen Weddings" highlights young couples' "over-the-top weddings," and "Thrift Wars" will follow people shopping in NYC.

Tech: HITS unveiled its new cloud-based HITS On Demand content distribution network Monday that makes thousands of titles from Comcast's platform available to third party operators without having to upgrade local storage. Details at the Comcast Media Center. --- The NCTA posted a new blog entry on its case for basic tier encryption, here. --- Thanks to the folks at Patently Apple, alert patent sleuths found clues to the next generation GoogleTV product which includes a new voice-controlled interface (a la Siri). Read more.

Research: TNS says mobile network providers are missing out on big bucks because consumers are willing to pay more. Huh? According to the firm, 43% of smartphone users in the US and UK are satisfied with the speed of their mobile internet in metro areas, but 36% of Americans and 22% of Brits would pay as much as $10 more per month "for a consistently great mobile broadband experience." --- 3D network 3net, along with its partners Discover, Sony and IMAX, have released a new 50-page guide to 3D video production highlighting workflow planning, production, and delivery of top-quality 3D content. Details here.

SkyREPORT: DISH Network reached a new carriage deal with the Fox-affiliate in New Orleans (WVUE-TV). The station is back on DISH's service, ending a blackout that had lasted more than 2 weeks. --- NFL Hall of Fame QB Fran Tarkenton is launching a sports/business/politics talk show on SiriusXM this week.

Over, Up & Under: A News Corp. exec said the company will begin publication of a new paper to replace the tarnished News of the World. In an email, News International CEO Tom Mockridge said that Rupert Murdoch would be staying in London to oversee the launch of The Sun on Sunday. --- Global Media Telecommunications will launch a Spanish-language (with English subtitles) 24 hour news channel for Latin America, the Caribbean and the US. The company is also launching a handful of "theme channels" for mobile devices. --- DreamWorks Animation agreed to form a JV with China Media Capital, Shanghai Media Group, and Shanghai Alliance Investment, to create a family entertainment company Oriental DreamWorks. --- Japanese MSO Jupiter Telecommunications changed the way it counts its subscribers. The company said it is publishing its subscriber count based on the actual number of households served rather than an adjusted number based on bulk plans in MDUs and other discounted ratios. As of Jan. 31, 2012, Jupiter's new subscriber count totals are 3.63M across all 16 of its consolidated franchises.

Obit: Shane O’Neill, the former head of Liberty Global's content division Chellomedia, has died after a 15-month battle with Creutzfeldt-Jakob disease.

Ha!: What's up wit dat? It's just Fox News' Bill O'Reilly on SNL this weekend. Ooooooo-eeeeeee!

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