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Posted at 04:51 PM ET, 06/26/2012

Dish Network: We skip ads to protect kids from junk food, alcohol

Dish Network chairman and satellite pioneer Charlie Ergen built an empire by rankling the broadcast and cable industry.

He’s at it again with a commercial-skipping technology called AutoHop, which he will defend on Wednesday to House lawmakers in a “Future of Video” hearing. He says the technology is what consumers want. And, he adds, it’s good for families.

“AutoHop technology takes the DVR to a new level, giving consumers the choice to more easily view their preferred programming when they want, while skipping what they don’t want to see,” Ergen said in prepared written testimony for the Communications and Technology Subcommittee hearing.

“This 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,” he adds.

Of course the hearing is much broader than the ad-skipping debate and the lawsuit broadcasters have thrust on Dish. Broadcasters have alleged the satellite firm is violating copyrights and contract agreements.

And they said Ergen arguments sound far-fetched.

“Mr. Ergen’s professed pro-parent stance rings hollow given that his Auto-Hop technology only eliminates ads on ABC, CBS, FOX and NBC,” said Dennis Wharton, vice president at the National Association of Broadcasters. “Given that cable networks carry far more advertising for hard liquor products than do broadcast TV stations, it’s hard to view this as anything more than a DISH Network stunt designed to hide the fact that AutoHop violates U.S. copyright laws.”

The House hearing is the second congressional hearing on the future of video amid a swirl of questions on how regulators should support competition and protect consumers who are increasingly turning to the Internet for their video news and entertainment.

Federal officials have taken a fresh interest in video competition, questioning if decades-old rules on program access and retransmission consent still make sense in a world where consumers increasingly turn to the Internet for video.

The Justice Department is investigating if cable firms including Comcast are unfairly hampering online video competitors such as Netflix and Hulu by imposing Internet data caps on consumers. Justice is also looking at whether cable firms’ “most-favored nation” deals with content partners give anticompetitive preference to their own television services and make it hard for Netflix and Hulu to compete.

As consumers turn to online competitors, “issues such as discriminatory data usage caps and IP interconnection must be examined with a much more discerning eye,” Netflix general counsel David Hyman says in his written testimony.

Dish’s Ergen and Netflix’s Hyman will be joined in the hearing by executives from Roku and Sky Angel, who will testify that their firms are trying to present online alternatives to cable and broadcast services.

The cable industry has argued that it needs to create new billing models to deal with the costs of maintaining its networks and boosting capacity.

Many telecom and cable firms have turned to data caps or usage-based pricing models meant to charge the heaviest users more.

“As we continue to invest billions annually in fixed cost networks, we must continue to explore fairer and more efficient ways to price service, including potential models that require heavier users to pay more for the additional network resources they use, rather than have lighter users subsidize power users,” Michael Powell, chief executive of the trade group the National Cable and Telecommunications Association, says in prepared testimony.

Related:

FCC chairman supports broadband data caps amid Netflix protests

DOJ investigates cable firms’ data limits

Verizon to offer free text and voice, increases data prices

By  |  04:51 PM ET, 06/26/2012

 
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