BET announced that effective July 1, it would drop infomercials in favor of broader combination of religious and original network shows. BET Pres. Debra Lee said change was based on feedback from viewers. Placement of additional gospel and inspirational programming coincides with BET’s scheduled launch of 2 new digital networks also today -- BET Gospel and BET Hip Hop, joining BET Jazz.
Country of origin cases
LOS ANGELES -- With advertisers, networks and studios all looking for ways to fit current business model into TV’s evolving technologies, product placement frequently has been cited as possible solution. But panelists Wed. at PROMAX here cautioned against potential obstacles. Exec. Producer John Wells said: “I think it would be very easy to integrate products into a show that wouldn’t compromise the content, but advertisers might be concerned about the specific scene in which their product was appearing. If we could find an economic model to make money that would be good but don’t want to have to clear it through 35 people. And a model for how the revenue would be shared between producers of shows and networks from product placement would also have to be detailed.” Wells said actors and their unions would have to have input, including making sure “it wouldn’t reduce their ability to be spokespeople for competing products outside the show.”
In 700 MHz auction notice issued late Wed. (CD June 27 p1), FCC said that, in compliance with legislation passed by Congress, it will honor requests for return of upfront payments by parties that had planned to bid on A-, B- or E- block licenses that won’t be part of announced Aug. 27 auction. FCC Wireless Bureau said deadline for requesting return of upfront payments on those blocks was July 3. Bureau said bidders for Aug. 27 auction could select additional licenses and supplement upfront payments July 22- 26. Additional licenses could be selected, it said, because “qualified bidders could not have anticipated the statutorily mandated changes in Auction No. 44 at the time they submitted their original license selections.”
Yahoo said it would stop rebroadcasting radio stations on Internet and focus instead on its Launchcast service, which provides original music programming on Internet. It also will continue to provide Webcasting for businesses, it said. Yahoo wouldn’t say whether decision would result in write-off of assets -- it paid $5.7 billion for Broadcast.com in 1999. Internet broadcast business had lost money for 6 consecutive quarters. Company said no more than 30 employees would be laid off as result of decision.
Wall Street Week with Fortune will distinguish itself from all other financial broadcasting by reporting track records and conflicts of participants, soliciting “sell” as well as “buy” stock recommendations and attracting “creme de la creme” guests such as Citigroup Vice Chmn. and former Treasury Secy. Robert Rubin, featured on June 29 premiere, co-host Karen Gibbs told PBS annual meeting Tues. She said show would be “more informal and conversational” than under departed founder Louis Rukeyser, livelier without sacrificing depth. “Huge promotional campaign” was planned in N.Y. Times, Wall St. Journal, USA Today and Money and Fortune magazines, as well as on NPR, Gibbs said. In other fall- season programming news, P.O.V. will collaborate with ABC across TV, radio and Internet in delivering story of James Byrd, black man fatally dragged by truck in Tex.; ExxonMobil Masterpiece Theater will air The Forsyte Saga, sequel to original miniseries blockbuster, and singer Josh Groban’s first televised concert; Mystery! will air Tony Hillerman’s Skinwalkers, made on location in Ariz. with almost all-Native American cast; and Frontline will broadcast episodes on spiritual aftermath of Sept. 11 and on FBI agent obsessed with Al Queda who died in World Trade Center crashes after quitting bureau to become complex security director.
AOL Time Warner was pushed further back as nation’s No. 2 cable operator in terms of subscribers when Advance/Newhouse (A/N) said late Mon. that it was severing much of its partnership with AOL-TW and taking 2.1 million subscribers with it. Deal was major blow to AOL-TW, which had been looking to shore up its cable platform, and even to add to it in order to leverage that platform for other products, most notably AOL Internet service and in-house TV and film programming. Analysts who cover AOL-TW called action “disappointing,” but generally maintained their ratings on AOL-TW stock, pointing to depressed stock price as more than offsetting bad news. Under terms of deal, technically involving AOL-TW’s Time Warner Cable div., A/N gets flagship systems in Central Fla. and Tampa, as well as smaller systems in northern Fla., plus systems in Indianapolis, Detroit, Birmingham, Ala., smaller systems in Ala., and one in Bakersfield, Cal. Under old deal, A/N held 1/3 of total partnership totaling 7 million subscribers but now has whole stake just in systems it will operate. A/N said it intended to rebrand, but subscribers should notice few other changes. Although legally AOL-TW’s partnership with A/N still will exist, for all intents and purposes agreement unravels 2 companies’ intertwined interests. Deal is expected to close later this year, pending regulatory approvals.
AT&T Wireless (AWS) asked FCC to reduce “significantly” proposed forfeiture of $2.2 million for alleged violations of Commission’s Enhanced 911 Phase 2 requirements on carrier’s GSM network. In response to notice of apparent liability last month, AT&T Wireless said that when it realized that Enhanced Observed Time Difference (E-OTD) equipment would lag behind its limited GSM launches in 2001, “it did not identify this disparity as a development that rendered its waiver application substantially incomplete or inaccurate” in violation of FCC rules. Like other mobile carriers, AT&T Wireless and Cingular Wireless sought waivers last year from Commission for E911 Phase 2 location capability requirements that took effect Oct. 1. In case of GSM portions of Cingular and AT&T networks, agency said it received information on waiver requests too close to regulatory deadline to act on them. In response filed last week, AT&T said penalties proposed for its alleged violations of E-911 rules were “unjustified.” It said any violation of section of rules that required sale of at least one E-OTD handset starting in Oct. was minor. “Compliance with this rule was and is technically infeasible and the proposed forfeiture for this alleged violation should be eliminated entirely,” AT&T said. Carrier said that when it first submitted request to use E- OTD solution for Phase 2 for GSM part of its network it “reasonably believed” equipment would be available by deadline. “From the beginning, however, AWS viewed its waiver application as a statement of intent and plan of action, rather than a binding commitment to delay GSM deployment until E-OTD equipment became available,” AT&T said. Carrier told Commission it now was clear that agency expected it to disclose vendor delays in equipment availability “even before it knew the full scope of the problem or when and how it could be fixed.” AT&T said it needed to gather relevant data and develop solution before returning to FCC with presentation. In case of proposed forfeiture for alleged violation of deploying Phase 2 service within 6 months of request from public safety answering point, AT&T Wireless said that portion of fine should be reduced significantly “because the factual basis for the allegation is incorrect and any violation that did occur was minor.” Company argued it couldn’t have done anything to get E-OTD installed on its GSM network faster and that any delay in filing altered waiver request didn’t delay equipment rollout or harm public safety. Carrier took exception to notice that characterized its decision to not file modified waiver request earlier as “egregious misconduct.” Notice of apparent liability said that contrary to AT&T’s statement in original waiver petition, it had started to roll out its GSM network without location-capable handsets. FCC notice, which proposed $1.2 million fine for that portion of alleged violations, also said carrier had failed to make supplementary filing that informed Commission it would miss that part of Phase 2 deployment schedule.
Decision on copyright fees for streaming media was “extremely disappointing to the radio industry,” said James Yager of Benedek Bcstg., speaking at Bcst. Cable Financial Management (BCFM) conference in Orlando. He said decision (CD June 21 p8) “doesn’t take into account the realities of streaming.” Getting Congress to overturn decision could take years, Yager said: “The broadcast industry likely will have no choice but to take this issue to the courts.” Ronald Gertz, CEO of Music Reports, said setting royalty rate same for radio-originating and Web-only webcasters wasn’t fair because Webcasters “don’t have to devote resources to maintaining an FCC license.” BCFM Pres. Buz Buzogany said potential impact was “huge” and “it penalizes traditional broadcasters and rewards Internet-only concerns.”
U.S. Appeals Court, D.C., backed off on key issue that arose in its Fox TV Stations v. FCC decision (CD Feb 20 p1), but refused to rehear arguments on national media ownership caps in decision released Fri. Court said it was “better to leave unresolved” interpretation of phrase “necessary in the public interest” that it used in original decision to define whether FCC rules should be retained. Some in industry had interpreted that language to mean higher standard for retaining FCC rules, leading to several new bids for Commission to eliminate variety of rules, based on earlier Appeals Court ruling.
SBC/Ameritech’s interLATA long distance entry bids in Ohio and Ill. are encountering new obstacles. Group of 9 Ohio CLECs filed motion with Ohio PUC for dismissal or suspension of Ameritech’s Sec. 271 case. They said Ameritech’s May 31 proposal to double rates for many unbundled network elements (UNEs) and residential UNE platforms (UNE-Ps), if granted, would reverse recent competitor gains by putting wholesale rates higher than Ameritech’s retail rates. CLECs said FCC rules for approval of Sec. 271 applications required that local market be irreversibly open, and proposed increase effectively would close market. CLECs urged dismissal on ground that Ameritech hadn’t met Telecom Act requirements, or at least suspend 271 case until PUC ruled on Ameritech’s UNE rate increases. In related matter, Ohio PUC refused to reconsider May decision imposing $8.5 million penalty on Ameritech for wholesale and retail service-quality shortfalls in 1999-2001 and reducing its monthly recurring rate for residential loop UNE-P to $11.64 from $13.14. In Ill., KPMG Consulting told Ill. Commerce Commission (ICC) that its tests of Ameritech’s operation support systems (OSS) wouldn’t be completed by current Sept. 20 target. KPMG said it couldn’t predict when tests would be completed. Tests originally were to have been finished in May. KPMG officials said testing was designed to continue until Ameritech passed, but Ameritech still hadn’t met “dozens” of standards, in some cases missing by wide margins. KPMG said misses included Ameritech failure to provide CLECs with accurate updates on customer service records and directory listings, deficiencies in providing timely and accurate responses during tests of order processing, inconsistent handling of CLEC reports of line troubles. KPMG said part of problem was that Ameritech often disagreed with KPMG over test procedures, nature of measurements and whether results should be counted as meeting standards. Ameritech said it had legitimate differences with KPMG over how tests were being conducted and had asked ICC staff to intervene on some matters. Ameritech said it had paid $27 million on KPMG’s tests in its 5 states, and criticized KPMG for poor coordination between Ill. tests and those it was performing in other Ameritech states.