Dish Network LLC (Nasdaq: DISH)'s proposal to build a Long Term Evolution (LTE) network that will support mobile video services is poised to "create tens of thousands of new jobs throughout the United States," Dish Chairman Charlie Ergen will tell a House hearing today on "The Future of Video."
According to his prepared testimony, Dish's goal is to "build the most advanced wireless network in the U.S. to compete against well-established incumbents, but we need to begin as soon as possible to have a chance." Dish is waiting for the Federal Communications Commission (FCC) to approve new rules that will let the company use its spectrum only for terrestrial services. However, Dish is already working with Qualcomm Inc. (Nasdaq: QCOM) to develop handsets that would support both terrestrial and satellite links just in case. Still, some view Dish's plan to go it alone on wireless as a bluff, believing that the company is simply posturing in order to raise the value of its spectrum and that it would rather partner with a wireless carrier than take on the burden of building everything itself. (See Qualcomm to Make Dish's Mobile Broadband Chip .)
Ergen's testimony on AutoHop, a feature that automatically skips ads on prime-time broadcast TV programming recorded on the company's new Hopper HD-DVR, should induce some chuckles. As part of his defense of the feature, Ergen will tell the panel that AutoHop is there in part to protect the kiddies. The presence of AutoHop "means that allowing your kids to watch TV doesn't have to mean they have no choice but to see commercials for junk food and alcohol," Ergen's testimony reads. Dish and major TV broadcasters are fighting over AutoHop in the courts. (See Dish, Broadcasters Go to War Over Ad-Zapper .)
Here's a preview of what else will be said at the hearing, based on prepared testimonies. The hearing is expected to focus on competition between the traditional pay-TV industry and emerging over-the-top (OTT) video competition.
Netflix Inc. (Nasdaq: NFLX) General Counsel David Hyman will hammer on the company's position against the use of "discriminatory" data caps and the effect they can have on OTT video players. "When you couple limited broadband competition with a strong desire to protect a legacy video distribution business, you have both the means and motivation to engage in anticompetitive behavior," he'll explain. (See Netflix Cranks Up the Net Neutrality Heat .)
Sky Angel LLC CEO Robert Johnson will go a step further to claim that incumbent pay-TV providers and some of their programming partners remain "willing to engage in anti-competitive tactics in order to harm emerging competitors." Sky Angel, a company that sells OTT subscription video packages, has picked a fight at the FCC over claims that Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK)'s refusal to secure a distribution deal with Sky Angel shows that the cable industry discriminates against OTT competition.
National Cable & Telecommunications Association (NCTA) President and CEO Michael Powell will testify that "the Golden Age of video is today" and will play up cable's TV Everywhere efforts. He'll also argue: "claims and concerns that cable operators will use their control over broadband networks to stifle online video are simply not borne out by the facts. To the contrary, cable's broadband networks are the engines that have enabled online video service to emerge and flourish."
Roku Inc. SVP of Product Management Jim Funk won't advocate any specific legislation, but will ask that "there continue to be an open marketplace for competition" in the broadband video device and content market. Roku offers access to video-on-demand (VoD) content from operators such as Time Warner Cable Inc. (NYSE: TWC), Verizon Communications Inc. (NYSE: VZ) and Dish (but not yet with Comcast Corp. (Nasdaq: CMCSA, CMCSK)), and the average Roku user streams more than 10 hours of video per week, Funk will say.
Also set to testify Wednesday are Michael O'Leary , senior executive VP of global policy and external affairs at the Motion Picture Association of America ; David Barrett, president and CEO of Hearst Television Inc.; and Gigi Sohn, president and CEO of Public Knowledge . The hearing, set for 10 a.m. ET, can be streamed here.