Axel Springer buys 88 percent stake in Business Insider

Axel Springer has acquired 88 percent of Business Insider at a cost of $343 million. This means the German media conglomerate, which previously owned 9 percent of the publication co-founded by Henry Blodget, Kevin Ryan, and Dwight Merriman in 2007, now owns 97 percent of the primarily business-and tech-focused news site.
According to Axel Springer’s announcement, the rest of the company (all 3 percent) will be owned by Amazon chief executive Jeff Bezos’ personal investment vehicle, Bezos Expeditions. Business Insider’s leaders — chief executive Henry Blodget and chief operating officer and president Julie Hansen — will remain in their positions.
The price paid for Business Insider is less than the $560 million reported by Recode last week, but it’s still the most expensive acquisition of a Web-based publication since AOL spent $315 million on the Huffington Post in 2011. So what will Axel Springer get for the hundreds of millions it will spend on the growing news site?
Here’s what the German media company had to say about that in its announcement:

This acquisition is a vital part of Axel Springer’s strategy to broaden its global reach, diversify its English-language offerings and expand its commitment to innovative digital journalism.
The addition of Business Insider’s 76 million unique monthly visitors will increase Axel Springer’s worldwide digital audience by two-thirds to approximately 200 million users, making the company one of the world’s six largest digital publishers in terms of reach.

Recode says Axel Springer might also have been motivated by its failure to acquire the Financial Times earlier this year. The company’s also said to have wanted a Web asset, and Business Insider was “more affordable than publishers like BuzzFeed and Vox Media” despite the record-setting price it fetched as a Web-only news outlet.
Both of those companies have had their suitors, though. Reports surfaced last year that Disney had engaged in acquisition talks with BuzzFeed, and rumors about Vox Media selling to Comcast (one of its investors) have popped up throughout the year. Perhaps Business Insider’s sale will prompt some of these other talks to resume.

Mark Cuban on net neutrality: FCC can’t protect competition

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As someone who takes her cues on net neutrality from Gigaom’s resident expert Stacey Higginbotham or, failing that, John Oliver, this is hard to admit: Mark Cuban may have a point on why the proposed net neutrality regulations may be a cure that’s worse than the disease.

If adopted, he maintained, these regs will open the door to more confusion, more litigation and more overall turmoil, none of which will serve consumers well. Before you throw your device at the wall, just give him a listen. Cuban, the serial entrepreneur who started out as a VAR before founding Broadcast.com which sold to [company]Yahoo[/company] in a $5.7 billion stock deal in 1999. He is now owner of the Dallas Mavericks, co-star of Shark Tank and CEO of of AXS TV  and interestingly a star of new AT&T commercials. The hyphens just keep coming.

Here’s his gist on net neutrality. He doesn’t think the big bad ISPs have behaved all that badly, or all that differently, than they ever have, so why all the hubbub now?

“It’s not like [company]AT&T[/company] and [company]Comcast[/company] have recently become super big companies and changed their actions… One of the tenets of net neutrality is that no legal website should be discriminated against. Well, name me one that has been.” He also pretty much dismisses [company]Netflix[/company] claims that it in fact faced such discrimination.

He sees competition ramping up in both in wired and wireless access — if these markets are so foreclosed why is Google doing broadband? Why is “AT&T going out of its traditional TV markets where they have U-verse to compete with Comcast and Google? That’s one layer. On the other layer you have mobile, with [company]Cablevision[/company] going into Manhattan where [company]Verizon[/company] and AT&T have broadband wireless and putting together an unwired wifi network for $30 a month’

His point is that there is competition, although it may not be the competition we would all like to see.

Cuban is clearly worried about one, well two mega players and neither one is a big ISP. “I would rather see national competition for [company]Google[/company] than no competition for Google. If you put a lid on Time Warner and Comcast and Google just keeps adding more and more markets, who’s going to compete with them?”

Google and [company]Apple[/company] constitute a huge countervailing force for all the ISPs because of their mobile might. “The fastest growing access for Internet is mobile. Who controls access to mobile? Google and Apple. The far greater risk is if Apple decides that the Comcast app is not right, Comcast won’t be able to reach most of its market to give access to its own broadband. Kind of crazy but it’s a possibility.” For the record, he isn’t recommending regulation to stop that either.

His point isn’t that Comcast or Time Warmer or insert-your-least-favorite cable provider here) are so great — he admits they are not — it’s just that the FCC its regulations are ill equipped to deal with fast-changing technologies. The public would be better served to let the cable companies duke it out with each other and, perhaps more to the point, with far scarier competitors including Google and Apple.

He starts about 10 minutes in. But here is the kill shot: Do you really want the same organization (the FCC) that took 8 years to deal with Janet Jackson’s Wardrobe Malfunction at Super Bowl XXXVIII to be the gating factor in the internet? Ummmm, maybe not.

Listen to the whole thing to find out how you, too, can get in touch with Cuban, such a shy and reserved guy, to ask your own questions on net neutrality; whether the NBA is seeing diminishing returns on data analytics; and why the heck the Celtics let the Mavs steal Rajon Rondo. Whatever.

Businessman and TV personality Mark Cuban speaks onstage at TechCrunch Disrupt at Pier 48 on September 8, 2014 in San Francisco, California.

Businessman and TV personality Mark Cuban speaks onstage at TechCrunch Disrupt at Pier 48 on September 8, 2014 in San Francisco, California.

In our intro section, Jonathan Vanian and I discuss all (or a bunch anyway) of this week’s Kubernetes news — where Mirantis was latest into the pool, working with Google to bring the cluster management framework to OpenStack clouds, joining HP and a raft of other tech vendors endorsing the open-source framework. Interestingly, Spotify blazed its own trail,  Helios as opposed to Kubernetes for its own workloads.

Oh and we wonder what is up, exactly, with HP’s cloud now that Marten Mickos has stepped back from his leadership job — after just six months.

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Rivals launch “Don’t Comcast the Internet” to oppose TWC merger

In the current debate over how the U.S. should oversee the internet, the worst case scenario for many is the web reinvented as cable TV: a service where subscribers pay a lot of money for a limited number of channels, and in which the distributor chooses which shows can even appear on the platform.

Rivals of the telco giant [company]Comcast[/company] fear this is exactly what the company is trying cook up through acquiring its next largest competitor, [company]Time Warner Cable[/company]. The proposed merger is already unpopular with consumer groups, and now industry opponents are going into high gear to try a stop it.

On Monday, a consortium of smaller phone and broadband companies launched a campaign called “Don’t Comcast The Internet” to draw attention to a parade of potential horribles that could arise if regulators allow the merger.

At an event in Washington to kick off the campaign, the group presented antitrust authorities who predicted that a combined Comcast-TWC would stifle would-be competitors. One way it could allegedly do so is by using its market power to pressure content partners to keep their content — which is the lifeblood of both TV and broadband — away from new entrants.

The group also warned of danger to another part of the internet, predicting that younger internet and content companies would struggle to obtain permission from Comcast-TWC to appear before subscribers in the first place.

Nick Grossman of venture capital firm Union Square Ventures said he worried that start-ups could find themselves asking “Will Comcast greenlight it?” as a pre-condition to launching their business on the internet.

Others worried that the Comcast would exploit its set-top box to control the user experience and business ecosystem, much as Microsoft exploited its operating system monopoly in the 1990s.

It’s too soon of course to say if all — or any — of these dire predictions might come to pass. The FCC and the Justice Department still appear to be months away from finishing a review of the merger, a process that Comcast VP David Cohen had earlier predicted would be finished by the end of 2014.

In recent months, however, Comcast critics appear to have gained momentum as approval for the merger, which once seemed a near-sure thing, has come under growing doubt.

Comcast, meanwhile, appeared unfazed by the appearance of the coalition, offering the following statement:

“There’s no real news here — just another group of existing opponents making the same arguments they have already made at the FCC for months, many of which weren’t found to be credible in our past transaction reviews, and all of which we’ve refuted directly with evidence in the FCC record.  The real facts remain the same:  consumers don’t lose choice in the broadband or video markets.  Consumers will see real benefits in faster broadband speeds and better video products, and a host of other benefits.  And there are no transaction-specific harms to this merger.”

The “Don’t Comcast the Internet” crowd consists of industry umbrella groups Comptel, ITTA (The Independent Telephone & Telecommunications Alliance) and NTCA–The Rural Broadband Association. It’s not the first anti-Comcast posse to spring up of late: content providers like Netflix and Dish launched an initiative late last year called “Stop Mega Comcast” to point out the alleged downsides of the deal.

This story was updated on Tuesday at 12:30pm ET to include Comcast’s statement.

Does the FCC want to oversee peering deals like Netflix vs. Comcast?

The FCC will soon pass new rules for how ISP’s must handle broadband traffic and, while it’s expected to impose a policy of net neutrality when it comes to consumers, it’s been less clear how the agency will resolve another thorny internet issue: whether network providers can charge content companies to accept their traffic — and throttle their streams if they don’t pay. On Wednesday, a report surfaced that suggested how the issue will play out.

The issue, known in the industry as peering or interconnectedness, became a hot topic last year as Netflix feeds failed across the country, leaving consumers to shout at their screens and wonder who to blame. Big broadband providers like Comcast and Verizon sought to fault Netflix and the content companies, claiming they should have to pay a toll to offset the large volumes of internet traffic they create.

Netflix and traffic management services like Level 3, however, claimed that the ISPs has deliberately degraded their traffic by refusing to carry out low-cost upgrades to key internet ports. Calling the tactic a form of extortion, the content companies have also accused the ISPs of double-dipping — saying the ISP’s already charge consumers to receive the internet, and those charges should include all infrastructure fees on the backend.

Now, a long report from Bloomberg cited a source that claims to know how FCC Chairman Tom Wheeler plans to resolve this grand conflict.

According to the source, Wheeler is prepared to bless those paid peering deals as part of a larger framework of internet rules. But he will reportedly also do so in a way that permits the likes of YouTube or Vimeo to complain if the ISP’s are not being “fair or reasonable” with their agreements. As the report said:

FCC Chairman Tom Wheeler has decided the rules, scheduled for a vote next month, will permit the agreements but include a procedure for companies to ask for agency review, said the person, who asked to remain anonymous because the plan hasn’t been made public.

This pronouncement, however, may be premature.

Blanket ban or case-by-case?

No one will be surprised if the issue of interconnectedness appears in the first draft of the new FCC rules which, under law, must be circulated by Chairman Tom Wheeler to the other FCC Commissioners at least three weeks before a vote. These are expected to go out (and get leaked to the press) on February 5.

Indeed, Wheeler demanded data from the companies last summer, as part of an investigation into the public outrage that occurred over the stuttering Netflix streams.

The big question now is not just whether Wheeler will include peering agreements in a larger framework of rules, but the way in which such arrangements will be overseen.

According to a source familiar with the debate, ISPs are likely reconciled to the fact that their current paid arrangements with Netflix, which are currently unregulated, will come under the nose of the FCC in the future.

As such, they are now pushing to ensure that any enforcement occurs on a case-by-case basis over whether a given deal is “fair and reasonable,” rather than in response to a bright line rule that outlaws the sort of pay-for-service deals the ISP’s forced on Netflix last year.

The Bloomberg report, which does not cite any documents and on which the FCC declined to comment, suggests that Wheeler has decided to go with the case-by-case approach. While this would nominally ensure fair oversight, it would also allow the ISPs, as they have done in the past, to deploy their formidable legal teams to ensure any complaints would take years to resolve. In other words, this could be a case where ISPs are trying to make the best of a bad outcome.

As such, it’s unclear if the report is a bona fide insight into Wheeler’s thinking, or is instead just an opening salvo in what is sure to be a ferocious spin cycle as the day of the FCC vote gets closer.

Comcast’s next-generation Xi4 set-top box passes the FCC

It looks like Comcast is getting ready to ship its next-generation set-top box to consumers: A filing for the company’s Xi4 set-top box just popped up in the FCC’s database. The filing, which has been approved by the FCC, is heavily redacted but it does give us some clues as to what the new box is all about.

Comcast's next-generation TV sett-op box, as shown in an FCC filing.

Comcast’s next-generation TV set-top box, as shown in an FCC filing.

The new set-top box is being made by Pegatron on behalf of Cisco, which is notable, because its Xi3 predecessor has been made by Pace. The device goes by a range of model numbers, including Cisco CX041AE1 as well as Cisco ATV8100, but it looks like Comcast will be calling the box Xi4v1-C. The box includes support for 2.4Ghz Wifi and Bluetooth, which is likely being used for the remote control. A photo of the FCC label shows a square device, much like what Comcast has been showing off for some time as its next-generation X1 set-top box.

Interesting about these new boxes is that they likely won’t contain a local hard drive anymore. Instead, Comcast is now storing all of it’s customers’ TV recordings in the cloud as part of its cloud DVR.

Comcast has been gradually expanding the footprint of its cloud DVR service over the last several months, and brought it to San Francisco last summer. At the time, Comcast executives told me that the company could eventually offer unlimited storage for TV recordings in the cloud, and possibly even ditch set-top boxes altogether.

Comcast-TWC merger delayed, FCC says 7,000 docs wrongly held back

Comcast’s plans to swallow its largest rival Time Warner Cable has suffered another setback as the FCC announced Monday it would once again halt its “shot clock,” which is the 180-day time period during which the agency seeks to complete its review of proposed mergers.

In a letter published on Monday, the [company]FCC[/company] said it had to impose the delay upon discovering that Time Warner Cable improperly classified more than 7,000 documents as attorney-client privileged.

The misclassification, which the FCC says it discovered in early December, meant that the agency has not been able to properly review aspects of the proposed merger, which has significant implications for consumers and for both the telecom and entertainment industries.

As the FCC explained, the delay has meant that the agency had to conduct portions of its review process anew:

The effect of these late disclosures has been to slow down the Commission’s review of the Comcast/TWC/Charter transaction, in particular because sections of the review that staff had thought were complete now must be reopened to take account of the additional documents that have been disclosed.

From the letter, it appears that [company]Time Warner Cable[/company] held back the documents in the first place by designating them as attorney-client privileged, which companies can use to withhold documents in a legal or regulatory matter. The privilege can only be invoked in very specific circumstances (typically when a lawyer is providing advice to a client), however, and a company must still put the documents in questions on a list it shows to the other side.

While the process of designating documents as attorney-client privileged can give rise to disputes, it is unusual for such a large number of documents to be misclassified.

The mistake has drawn what appears to be a rebuke by the FCC in its letter (emphasis mine):

While the Commission can understand and accept that minor errors can occur when preparing both documents for production and privilege logs; it expects applicants to promptly correct errors, without prompting, when they occur. Here, however, the magnitude of the errors, with respect to both the document production and the privilege log, is material and the delays in rectifying them were substantial so that the tardy productions have interfered with the Commission’s ability to conduct a prompt and thorough review of the pending applications

The upshot is that the merger review process will be delayed by another three weeks until January 12, 2015, according to the letter.

This delay comes after the FCC stopped the shot clock in November after content companies, including [company]Disney[/company] and [company]Viacom[/company], went to court to prevent disclosing sensitive contracts as part of the merger review process.

When [company]Comcast[/company] announced the proposed merger in February, executives predicted that the deal would go through by the end of the year. The latest delays do not necessarily mean the deal is in trouble, though anti-trust experts generally agree that the longer a merger review draws on, the less likely it is to go through.

Meanwhile, the FCC also said the shot-clock delay does not affect a Tuesday deadline by which parties interested in the merger must submit reply comments.

Here’s Monday’s letter:

FCC Letter Re Shotclock

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Comcast customers can finally watch HBO Go on their Rokus

Hell has frozen over for Comcast customers: Subscribers to the company’s Xfinity cable TV service can now watch their favorite HBO shows via HBO Go on Roku streaming devices. Re/code was first to report about a deal between the two companies Monday, and Roku confirmed the breakthrough with a blog post Tuesday, which reads in part:

[blockquote person=”” attribution=””]”Just in time for the extra holiday streaming time, we’re pleased to announce Comcast has been added to the list of participating television providers that support HBO GO and SHOWTIME ANYTIME on your Roku device. We are glad to be able to bring this long-awaited feature to Xfinity TV customers.”[/blockquote]

Roku first added a HBO Go app to its streaming boxes in 2011. But as with any of these apps that require users to also get the channel as part of their TV line-up, the app needed users to authenticate with their TV provider — and that’s where Comcast didn’t play ball. Comcast did give subscribers access to HBO Go on mobile devices, but not on anything connected to a TV. One reason was that the company wanted to own the experience on the TV screen, and preferred that users access HBO shows through its own catch-up service.

However, Comcast’s hardball stance eventually caught the eye of regulators. At a time when the company is looking to merge with Time Warner Cable, that alone may have been enough to bring Comcast back to the table and give Roku some advantage in striking a deal.

That could also be good news for other device manufacturers. Comcast is still blocking HBO Go access on Sony’s PS3, Samsung’s smart TVs and Amazon’s Fire TV, all of which likely can’t wait to get a similar deal.

Comcast has integrated its X1 platform with IFTTT

Users of Comcast’s Xfinity X1 set-top box can now make use of IFTTT to receive messages on their TV or even change the channel upon a certain event. Comcast’s Chief Business Development Officer Sam Schwartz unveiled the integration at a press event in San Francisco Wednesday, where he showed off a recipe that linked a WeMo switch to the X1, allowing users to change the channel whenever the switch was used. Other possible integrations include messaging on the TV, or the ability to switch to a sports channel whenever a viewer’s favorite team is in the news.