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Consumer Group Wants to Tax Netflix

Light Reading
LR Cable News Analysis
Light Reading
2/25/2011

Happy Friday, cable gang. Regulatory heat leads today's industry roundup, including a push by one consumer group to get Netflix Inc. (Nasdaq: NFLX) to pay into the Universal Service Fund.

  • It's "legitimate" to ask bandwidth hogs like Netflix to pay into the Universal Service Fund, insists Consumer Federation of America (CFA) Director of Research Mark Cooper. (See Genachowski Tees Up USF Reform.)

  • Charlie Ergen, known for his prowess at the poker table, is keeping his cards close to the vest concerning what he intends to do with the spectrum Dish Network LLC (Nasdaq: DISH) stands to gain by acquiring DBSD North America and gaining control of TerraStar Networks. Speaking on Thursday's earnings call, Ergen insisted he doesn't have a "grand strategy" for that spectrum. Yeah, right. (See Dish Network Bleeds 156,000 Subs, Dish's Big Spectrum Buy Meets Static and Charlie Ergen's Spectrum Grab .)

  • Lobbying from Time Warner Cable Inc. (NYSE: TWC) and other parties with an interest in the Federal Communications Commission (FCC) 's proposed rulemaking on retransmission consent is intensifying as the Commission prepares for its March 3 meeting. (See Cable Guys Debate Gov't Role on Broadband.)

  • With Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cablevision Systems Corp. (NYSE: CVC) and other pay-TV providers hawking apps for Apple Inc. (Nasdaq: AAPL)'s iPad, will MSOs begin selling tablet computers directly to subscribers, as Verizon Communications Inc. (NYSE: VZ) is now with this $300 tablet from Samsung Corp. ? (See Comcast Invades the iPad .)

  • Liberty Global Inc. (Nasdaq: LBTY) Chairman John Malone -- who works hard to avoid paying taxes -- can blame a lower income tax benefit on Liberty Global Inc. (Nasdaq: LBTY)'s $42 million drop in fourth-quarter net earnings. (See Liberty Global Reports Q4.)

  • Patricia Gottesman, the former top marketer at Cablevision, was named CEO of social media monitoring firm Crimson Hexagon.

  • The FCC is seeing big traffic to its National Broadband Map, generating 500,000 visitors last week in just the first 10 hours after its launch. (See National Broadband Map Details Disparities.)

    — Steve Donohue, Special to Light Reading Cable

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    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 5:12:04 PM
    re: Consumer Group Wants to Tax Netflix


    I realize Ergen doesn't want to announce his plans with that spectrum he's bound to get until he truly has it in hand, but hard to believe he isn't ready to pull the trigger on 1-3 strategies.  Which option are you betting on?  I think he'd like to keep some for himself for a mobile broadband play, but I think he'd also be eager to sell some off if he can fetch a good price. JB


     

    DCITDave
    DCITDave
    12/5/2012 | 5:12:01 PM
    re: Consumer Group Wants to Tax Netflix


    With any spectrum asset, it could be just a wait and see kind of buy. It's reasonable to assume it'll only become more valuable over the next few years. So maybe he really doesn't have a plan, except that you should buy valuable stuff when it goes on sale.


    Of course, that doesn't match with his track record, but maybe he's a goldbug, too. :)

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 5:11:50 PM
    re: Consumer Group Wants to Tax Netflix


    Sure, that's a reasonable assumption that he'll bide his time and weigh his options.  I guess I'd just be surprised if he doesn't already have several options under consideration and decide to pull the trigger when he thinks one of them can get a decent return. But staying true to form, Ergen's not about to reveal what those options are, but there's a good amount of plausible speculation out there now on what he might do.  But if he was forced to do something right away, I'd wager that he'd sell some off to T-Mobile and/or Leap. JB.

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