Broadband Cable Association of Pennsylvania

NewsClips

August 21, 2013

About one of every seven people in the world uses Facebook. Now, Mark Zuckerberg, its co-founder and chief executive, wants to make a play for the rest - including the four billion or so who lack Internet access.

On Wednesday, Facebook announced an effort aimed at drastically cutting the cost of delivering basic Internet services on mobile phones, particularly in developing countries, where Facebook and other tech companies need to find new users. Half a dozen of the world's tech giants, including Samsung, Nokia, Qualcomm and Ericsson, have agreed to work with the company as partners on the initiative, which they call Internet.org. The companies intend to accomplish their goal in part by simplifying phone applications so they run more efficiently and by improving the components of phones and networks so that they transmit more data while using less battery power.

For Mr. Zuckerberg, the formation of the coalition is yet another way in which he is trying to position himself as an industry leader. He has been speaking out more forcefully than other tech executives on topics like immigration overhaul, which the industry sees as critical to its hiring needs. With Internet.org, he is laying out a philosophy that tries to pair humanitarian goals with the profit motive. "The Internet is such an important thing for driving humanity forward, but it's not going to build itself," he said in a recent interview. "Ultimately, this has to make business sense on some time frame that people can get behind." But the effort is also a reflection of how tech companies are trying to meet Wall Street's demands for growth by attracting customers beyond saturated markets in the United States and Europe, even if they have to help build services and some of the infrastructure in poorer, less digitally sophisticated parts of the world.

Google, for example, began a program with phone carriers last year that offers wireless users in some developing countries free access to Gmail, search and the first page clicked through from a search's results. Google is also reaching for the sky with Project Loon, an attempt to beam Internet access down to earth from plastic balloons floating more than 11 miles in the atmosphere. Twitter, which is preparing to offer shares to the public in an initial stock offering, has struck its own deals with about 250 cellphone companies in more than 100 countries to offer some free Twitter access, and worked to make sure its service is easy to use on even the cheapest cellphones. These companies have little choice but to look overseas for growth. More than half of Americans already use Facebook at least once a month, for instance, and usage in the rest of the developed world is similarly heavy. There is nearly one active cellphone for every person on earth, making expansion a challenge for carriers and phone makers. Poorer countries in Asia, Africa and Latin America present the biggest opportunity to reach new customers - if companies can figure out how to get people there online at low cost.

The immediate goals of the new coalition are to cut the cost of providing mobile Internet services to 1 percent of its current level within five to 10 years by improving the efficiency of Internet networks and mobile phone software. The group also hopes to develop new business models that would allow phone companies to provide simple services like e-mail, search and social networks for little or no charge. While that sounds far less exciting than, say, Google's idea of delivering the Internet by balloon, Mr. Zuckerberg says small efforts can add up to big changes. "No one company can really do this by itself," he said. New York Times

New cable network Al Jazeera America introduced itself to viewers on Tuesday with reports on political strife in Egypt and the impact of climate change on U.S. cities, shortly after a major pay TV distributor declined to carry the channel. The decision by AT&T's U-verse pay-TV service stemmed from a contract dispute over terms to carry the new network, AT&T spokesman Mark Siegel said. Al Jazeera responded by suing AT&T for breach of contract in Delaware Chancery Court. Globally, Al Jazeera is seen in more than 260 million homes in 130 countries. But the new U.S. channel funded by the emir of Qatar has so far had difficulty getting distributors, in part because Al Jazeera was perceived by some as being anti-American during the Iraq war.

Before AT&T's announcement, Al Jazeera America said it would be available in more than 40 million homes, about 40 percent of U.S. pay TV households and roughly half the reach of Time Warner Inc's CNN. U-verse was launched in 2006 and had 5 million video customers at the end of June in markets such as Texas and California. "We could not reach an agreement with the owner that we believed provided value for our customers and our business," AT&T spokesman Siegel said. Al Jazeera America said in a statement AT&T had "unilaterally" deleted the network and "presented us with circumstances that were untenable - an affiliate that has willfully and knowingly breached its contractual obligations." The network said it had "no choice" but to file a lawsuit over the matter.

Defining the new channel's mission clearly will be crucial for Al Jazeera to gain a foothold in the United States, according to advertisers, executives and industry experts. In its first hour at midafternoon, Al Jazeera pledged to cover "issues that matter to America and the world beyond." Anchors said they would provide in-depth coverage of stories ignored by other media outlets, with bureaus in cities they considered underserved such as Nashville and Detroit. Al Jazeera America hired ABC news veteran Kate O'Brian to be its president and hired on-air talent like CNN veterans Ali Velshi and Soledad O'Brien.

Its news coverage kicked off with reports on Egypt, a Georgia elementary school shooting and wildfires in the western United States, topics covered by cable news competitors on Tuesday. Al Jazeera America also reported on a hunger strike by inmates protesting conditions in California prisons and Kodak's plan to rebound from bankruptcy. It turned to sports with an interview of retired slugger Gary Sheffield about baseball's steroids scandal. A show called "Inside Story" explored the impact of climate change on U.S. cities and working conditions in Bangladeshi factories. Audience ratings data were not yet available.

Media critic Howard Kurtz, speaking on rival Fox News Channel, said Al Jazeera America's early coverage was "not much different, at least so far, than what you might see on Fox News, CNN or MSNBC." One top story on Egypt was "right down the middle" in terms of balance, he said. The network is airing six minutes of commercials per hour, below the 15 to 16 minute average on other cable news outlets. Executives indicated they are willing to lose money in the near term. Advertisers on Tuesday included Procter & Gamble Co's Gillette for its Fusion razors and phone service provider Vonage.

U-verse is the second TV provider after Time Warner Cable to drop the network since it acquired Current TV in January and replaced it with Al Jazeera America. Comcast, DirecTV, Dish and Verizon are carrying the network. Merrill Brown, a former media executive who helped launch cable news network MSNBC, said Al Jazeera America may need to pay distributors if it wants to reach more viewers, particularly since it is not owned by a media conglomerate that can package it with other channels to gain leverage in negotiations. "It's hard to believe they are going to get this thing nationally distributed without paying for carriage," Brown said. Reuters

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