AT&T’s buying DirecTV would put “significant downward pressure” on the prices of their new integrated bundle of products, and could also lead to lower prices on other companies’ products, said Yale University professors Steven Berry and Philip Haile in a presentation submitted to the FCC and posted Friday in docket 14-90 by the companies (http://bit.ly/1oRWFfy). If the deal does cause upward pressure on the prices of other products, it will be “modest and more than offset by the downward pricing pressures,” the filing said. “The net effect on consumer surplus will be demonstrably positive.” The deal will also lead to favorable effects for consumers, because it will allow the merged company to provide a bundle of video and broadband in areas where AT&T currently provides video, they said.

The FCC denied an application for review by DirecTV Sports Net Pittsburgh (DSNP) of an arbitrator’s finding in favor of a cable operator and against the regional sports network. The Media Bureau properly found that the rates and rate renewal increase in the Armstrong Utilities final offer most closely approximate fair market value, the commission said in an order in Thursday’s Daily Digest (http://fcc.us/1n1L9B7). The bureau reached the decision on the final offer for carriage on DSNP in 2011. DSNP failed to explain in its application for review why the challenged provisions “would tip the scales in favor of the DSNP final offer in light of the unchallenged finding that many of the other provisions favor the Armstrong final offer,” said the full commission. It included a dissent from Commissioner Ajit Pai and a partial dissent from Commissioner Mike O'Rielly. The FCC, the Media Bureau and the arbitrator haven’t made a reasonable effort to figure out which offer was closer to the fair market value, Pai said (http://bit.ly/1qOUQ5C). Pai said he’s troubled by the “flawed methodology” used to resolve the case, “particularly because it will set a precedent for resolving future disputes between RSNs” and pay-TV companies. Pai would have preferred the FCC to remand the case to the bureau and request an estimate of the fair market value of Armstrong’s carriage of Fox Sports Net Pittsburgh, he said. O'Rielly backed Pai’s concerns over the methodology, but said he’s willing to let the bureau’s decision stand for a few reasons. O'Rielly said those reasons included because DirecTV “failed to challenge the other portions of the arbitrator’s decision” and didn’t provide an explanation as to why the two provisions it challenged would ultimately tip the scales in the company’s favor (http://bit.ly/1nk5vaD).

The U.S. Copyright Office doesn’t believe Aereo and other services based on Internet retransmission of broadcast TV are eligible to receive compulsory copyright licenses, the office told the company in a letter Wednesday. Aereo has argued in U.S. District Court in New York that the majority opinion in its recent Supreme Court loss means it should be treated as a cable system, and be eligible for the same copyright license such systems use (CD July 11 p10). The office said Aereo recently filed with it to receive such a license. The portion of the Copyright Act that authorizes such licenses- -- Section 111 -- encompasses only retransmission services “regulated as cable systems by the FCC,” the Copyright Office said. “We do not see anything in the Supreme Court’s recent decision … that would alter this conclusion.” The office accepted Aereo’s filings on a provisional basis, because the matter is still open in court, but they could be subsequently rejected “depending on further regulatory or judicial developments,” the letter said. Aereo wouldn’t comment.

The global set-top box market had its highest-ever annual revenue in 2013, said IHS Technology in a news release Wednesday. Worldwide digital box revenue totaled $20.3 billion in 2013, up 3 percent from 2012, IHS said. “Set-top boxes proved to be critical to the strategies of pay TV operators in 2013,” said IHS Director-Connected Home Research Daniel Simmons. Set-tops “increasingly are being transformed into multimedia home gateways (MHG), which combine support for pay-TV services with Internet access, residential gateway services, Wi-Fi and other advanced features,” said IHS. MHGs are being used “to transition from a legacy broadcast-based pay-TV experience to one that is Internet-centric and better positioned to compete with over-the-top (OTT)-rivals,” it said (http://bit.ly/1t4tiut). Revenue from set-tos will continue to grow until 2015 “as Comcast, DirecTV and Dish Network expedite their MHG deployments, driving the higher end of the market,” said firm. It said the market is expected to contract to $20.7 billion by 2018. “Pay TV is nearing saturation across the world, and under such conditions, operators will be increasingly reliant on the technology-based differentiation enabled by STBs to compete for subscribers,” said Simmons.

The U.S. District Court in Los Angeles committed no “abuse of discretion” when it denied Fox the preliminary injunction it sought against features of Dish Network’s Hopper DVR service, the 9th U.S. Circuit Court of Appeals ruled Monday, upholding the district court’s September denial (CD July 15 p17) . The district court denied Fox’s injunction request because it said Fox “had not shown a likelihood” that the “Dish Anywhere” and “Hopper Transfers” features “would irreparably harm Fox before final adjudication,” said 9th Circuit (http://1.usa.gov/1qDwAUb). “Contrary to Fox’s arguments in this appeal, the district court committed no legal error and made no clearly erroneous factual findings in so ruling.” The lower court also “did not commit legal error by characterizing the irreparable harm forecasts of Fox’s executive as speculative,” said the 9th Circuit. Instead, the lower court said Fox’s “lack of evidence that the complained-of technology, available for several years, had yet caused Fox’s business any harm weighed against Fox’s argument that it would be irreparably harmed absent a preliminary injunction,” said the 9th Circuit. “In so finding, the district court did not hold Fox’s evidence to a more rigorous standard than our law requires and so did not abuse its discretion.” Moreover, “in light of the evidence that advertisers are adapting to the changing landscape of television consumption,” the lower court committed no “clear error” when it found lack of evidence to support Fox’s assertion it would lose ad revenue from the Dish technologies “absent an injunction,” the appeals court said.

Google Play, not YouTube, is Google’s “next multibillion dollar opportunity,” said a CreditSuisse equity research note to investors Monday. “Google Play has grown over the last two years from essentially zero to a level equal to YouTube in size and should contribute ~$4.4 billion in revenue this year.” The analysts cited the growth of mobile games as the driving force behind the prediction: “The proliferation of connected devices is ushering in the growth of mobile games and Google Play along with Apple’s App Store are the platforms facilitating monetization, and for Google, this is the first tangible benefit of its ownership of Android.” Apple and Amazon have faced scrutiny from federal regulators over unauthorized in-app purchases (CD Jan 16 p12).

Herring Networks continued to urge the FCC to act swiftly and approve AT&T’s proposed buy of DirecTV. Herring has had positive experiences and fair consideration extended by the telco video providers when seeking distribution, including AT&T’s U-Verse, it said in a letter posted Monday in docket 14-90 (http://bit.ly/1zCet6V). DirecTV is primarily a video service and doesn’t offer customers bundled services like broadband, video and voice, “thus its ability to compete long term against incumbent providers that offer broadband services is in question,” it said.

The 9th U.S. Circuit Court of Appeals upheld a September 2013 denial of Fox’s request for a preliminary injunction against Dish Network’s Hopper DVR service, said Dish. Dish is pleased that the court “sided again with consumer choice and control by rejecting Fox’s efforts to deny our customers access to the Dish Anywhere and Hopper Transfers features,” Dish said Monday in a news release (http://bit.ly/1sVdv19). The decision “had nothing to do with the merits of our claim and does not address the fact that ‘Dish Anywhere’ is both illegal and in violation of our existing distribution agreement,” a Fox spokesman said. “We will now move forward and fully expect to prevail at trial.” Fox sued Dish for breach of contract and infringement last year. The court denied Fox’s petition for a rehearing on the matter earlier this year (CD Jan 27 p3).

The FCC should relax or eliminate rules barring cross ownership of newspapers and broadcast outlets in the same market, said Aspen Institute President Walter Isaacson in a letter to the FCC (http://bit.ly/1s444ih) posted Friday in docket 14-50. The rule is out of date, and Internet news outlets “have undermined the economic viability of many newspapers,” said Isaacson. “It would seem that we should be encouraging, not forbidding, owners of broadcast outlets to buy or invest in newspapers.” Journalism benefits “from being able to combine print, video, and audio,” he said. “We need to do all we can to encourage investment in newspapers and improve the business models for local journalism.” Isaacson used to run Time Warner’s CNN and more recently wrote a biography of Apple founder Steve Jobs.

Advertising software company Canoe certified multiplatform video service provider Vubiquity’s AdVU service suite as integrated with the Canoe VOD digital ad insertion platform, said the companies in a news release Wednesday. Canoe is backed by cable operators Bright House, Comcast, Cox, and Time Warner Cable, the release said. Programmers can use metadata asset management service AdVU to “efficiently create, coordinate and manage” submission of video assets for VOD DAI, they said. “Certification from Canoe is an important proof point and with that we hope another step forward for the industry toward wide adoption of DAI,” said a Vubiquity spokesperson.