SBD/May 10, 2013/Media

ESPN Reportedly Looking To Subsidize Wireless-Data Plans With Mobile Carriers

McCain singled out ESPN, saying all cable subscribers absorb its high cost
ESPN has had "discussions with at least one major U.S. carrier to subsidize wireless connectivity on behalf of its users," according to sources cited by Sharma, Ante & Troianovsky of the WALL STREET JOURNAL. The company would "pay a carrier to guarantee that people viewing ESPN mobile content wouldn't have that usage counted toward their monthly data caps." ESPN is "considering arrangements with wireless carriers that would ensure their users can watch, surf and play as much as they want without being hit with stiff overage charges." The identity of the carrier in the talks "isn't clear, although both Verizon Wireless and AT&T have flagged their interest in such an arrangement." However, sources said that no deal is "imminent, and ESPN isn't sure if the economics will work out." There also are "concerns that deals of this nature could attract the scrutiny of telecom regulators." For content providers like ESPN that "generate revenue from showing ads on mobile phones and tablets, the new approach would ensure that carriers' monthly data caps aren't artificially restricting the potential of their business." Sources said that ESPN has received feedback from "at least one big carrier that significant numbers of its mobile users reach their monthly cap before the end of the month, after which their usage drops off" (WALL STREET JOURNAL, 5/10).

PICK YOUR POISON: In N.Y., Claire Atkinson reports U.S. Sen. John McCain (R-Ariz.) Thursday "singled out" ESPN in his bid to "give consumers the option to cherry-pick channels rather than pay for a programming package." McCain said, "Whether you watch ESPN or not, and admittedly I do all the time, all cable subscribers are forced to absorb this cost." ESPN responded by "arguing it delivers more consumer value than any other programmer and reaches 115 million fans a week across TV, Internet and mobile devices." Although a similar effort in '06 "went nowhere, McCain seems to believe that cash-strapped consumers are now at the breaking point with their cable bills" (N.Y. POST, 5/10). DEADLINE.com’s David Lieberman wrote the bill “won’t pass,” because two things have changed since ‘06, the last time McCain “tried -- and failed -- to promote a la carte cable pricing.” He is “no longer on the Commerce Committee which likely would have to move the legislation forward” and the Television Consumer Freedom Act of 2013 has a "provision that would strip licenses from broadcasters who move programming to pay TV.” The provision ensures that the broadcast lobby “will join cable to do everything in their power to defeat McCain’s bill” (DEADLINE.com, 5/9).
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