Oct 22, 2019

Axios Login

By Ina Fried
Ina Fried

May the force be with you.

Today's Login is 1,481 words, a 5-minute read.

1 big thing: The fight over small-town TV

Illustration: Rebecca Zisser/Axios

TV station owners are taking advantage of FCC rules to quietly take over small-town airwaves, but cable and satellite companies are crying foul to regulators.

Driving the news: Broadcasters aren't supposed to own more than one top-rated outlet in any market, Axios' Margaret Harding McGill reports. But they are snapping up multiple stations anyway in small markets like Parkersburg, W.Va., and Greenville, Miss., as the broadcast TV market is challenged by changes in technology and advertising.

The big picture: Broadcasters have long faced unique regulatory limits on their reach, but now digital competition has shrunk their share of the ad pie. Consolidation, they argue, is how they can compete with digital giants as well as cable and satellite companies while still providing local broadcasts.

  • Cable companies, which pay broadcasters to retransmit TV signals to their customers, say the local TV market consolidation raises their costs and harms consumers.
  • But broadcasters, who scoff at the notion they have more leverage than giants like AT&T and Comcast, argue the arrangements provide rural Americans with network programming and more local news.

Details: The FCC's rules prohibiting broadcasters from owning two top-rated stations in a market aims to protect business competition and diversity of viewpoints.

  • But those rules don't apply to low-power TV stations, which lack the geographic reach of a full-power station, or to multicast channels made possible by the shift to digital television.
  • In tiny St. Joseph, Mo., the News-Press & Gazette Co. owns the CBS, FOX and NBC affiliates, as well as the local newspaper. The company tried to buy the ABC affiliate, too, before withdrawing its bid at the FCC this month.
  • "You’re seeing some stations say, 'We have to have more than one to survive,'" said David Bradley, CEO of News-Press & Gazette.

What they're saying: Critics of the practice say it reduces competition, but broadcasters say it's a choice between having one company providing local broadcast news in a small town, or having none. "You're going to really cut the guts out of local journalism if it keeps going without some changes like this," Bradley said.

What's next: The battle over the future of the media ownership rules will heat up this fall.

  • The Senate Commerce Committee will hear Wednesday from industry officials as it considers reauthorizing legislation allowing satellite companies to import distant broadcast signals.

Meanwhile, Democratic lawmakers are taking FCC chairman Ajit Pai to task after his agency approved Gray Television's request to buy the third-rated TV station in Sioux Falls, S.D., even though Gray already owns the second-rated station.

  • The FCC approval came a day after the Third Circuit Court of Appeals overruled Pai's attempt to relax broadcast media ownership rules to allow such an arrangement.
  • In a letter Tuesday, House Energy & Commerce Committee Chairman Frank Pallone and Communications and Technology Subcommittee Chairman Mike Doyle wrote, "The FCC's technical arguments about why it doesn't have to comply with the court’s decision seem highly suspect, at best, and an intentional flouting of the rule of law at worst."
2. Slack-Microsoft battle intensifies

Photo: Slack

A war of words (and numbers) between workplace messaging service Slack and Microsoft is heating up, as Slack finds itself having to compete in the category it pioneered.

The big picture: Slack, which went public in June via a direct listing, now finds itself up against Microsoft, which has the luxury of including its rival Teams product as part of its big Office bundle.

By the numbers: While Teams has gained ground — it claims 13 million daily active users — Slack maintains it is still dominant when it comes to what workers are actually using.

  • Last week Slack released statistics showing the company has more than 12 million people actively using its product each day.
  • But it says its users are far more active than Microsoft's, with paid customers connected for an average of 9 hours per day and fully engaged with the service for 90 minutes per day.

What they're saying: In an interview, Slack CTO and cofounder Cal Henderson says Microsoft's numbers really aren't all that impressive when you consider the company has been including Teams in the package for 100 million Office 365 customers for two years now and has been pushing Skype For Business customers over to Teams.

  • "Being at 13 million, I'm not sure that's a success in that context," Henderson said. "People pay for Slack because they see value in it."

Henderson says that Slack's not being part of a big software company's bundle actually gives it a competitive advantage against Microsoft and others. That allows Slack to work as a partner across all the software a business uses, from Microsoft and Google to Salesforce and Workday and startups.

Henderson insists Slack is doing well — even at companies that are big Microsoft Office users.

  • "We've seen some of our fastest growth in Microsoft shops," Henderson said, noting that at least 70% of the company's top 50 customers use Office 365.

What's next: Expect more tough words at Slack's Spec user conference, which kicks off today in San Francisco.

3. Senators' data portability bill targets social media

Three prominent tech critics in the Senate will introduce new legislation Tuesday requiring social media giants to give consumers ways to move their personal data to another platform at any time, Kim Hart reports.

Why it matters: The bill's goal is to loosen the grip social media platforms have on their consumers through the long-term collection and storage of their data. Allowing users to export their data — like friends lists and profile information — could give rival platforms a chance at competing with Facebook or Google's YouTube.

Details: Democratic Sens. Mark Warner (Va.) and Richard Blumenthal (Conn.), along with Republican Sen. Josh Hawley (Mo.) are introducing the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act.

  • In addition to data portability, the bill would also require communications platforms with over 100 million U.S. monthly active users to make their services interoperable.
  • It would require platforms to give users the option to designate a trusted third-party service to manage their privacy, content, online interactions and account settings.

The big picture: The bill follows on other legislation from Warner and Hawley:

  • The DASHBOARD Act, requiring transparency about data monetization;
  • And the "Do Not Track Act" allowing users to opt out of some data collection, similar to the FTC's "Do Not Call" list.

Flashback: In the early days of the wireless industry, consumers avoided switching wireless carriers because they'd have to switch numbers.

  • In 1996, Congress mandated "number portability," requiring carriers to allow consumers to keep their phone numbers when switching carriers.
  • It's widely credited with boosting competition among wireless providers.

What they're saying: Warner, who spent a large part of his career in the wireless industry, believes data is similar to phone numbers in making consumers feel locked in to a single platform.

Between the lines: Tech companies have long argued they are different from the telecom giants and therefore shouldn't be regulated the same way.

  • But policymakers are increasingly seeing parallels between the dominant telecom providers and the major tech platforms, and are finding similar ways to try to rein them in.
4. Google hires Microsoft veteran to run G Suite

In its bid to take on Microsoft Office, Google has hired someone who knows the product well: former Outlook boss Javier Soltero.

Why it matters: Google and Microsoft are in a tough battle to win the hearts, minds and email accounts of business customers. While G Suite has gained share, especially for email, Microsoft has pivoted Office from a desktop software to a subscription service.

Details: Soltero, who will run the consumer and business sides of G Suite, will report to Google Cloud CEO Thomas Kurian.

  • Soltero's most recent assignment — before he left Microsoft last November — was running Cortana, Microsoft's digital assistant.
  • Soltero joined Microsoft in 2014 when it bought his startup, Acompli, which Microsoft turned into the mobile version of Outlook.

Go deeper: Diane Greene steps down as Google's cloud chief

5. Take Note

On Tap

Trading Places

  • Apple CEO Tim Cook is now chairman of an advisory board to China's Tsinghua University School of Economics and Management. A number of other U.S. tech and business leaders are on the board, which Cook first joined in 2013.
  • Twitch has hired former Zynga executive Doug Scott as chief marketing officer.


  • Facebook said Monday it had disrupted new coordinated information attacks from Iran and Russia and also announced some new rules around election-related posts. (Axios)
  • Sources say that SoftBank is close to a deal that would give it control of WeWork in exchange for another infusion of cash. (CNBC)
  • Adobe, which is already testing Photoshop for iPad, plans to demo Illustrator running on Apple's tablet at its upcoming Max conference, with a product launch planned for next year. (Bloomberg)
  • Zoox has raised $200 million to further fund its self-driving car ambitions. (Axios)
  • TikTok bans two dozen accounts for promoting ISIS (Axios)
6. After you Login

What's better than the neighborhood dive bar? A teeny-tiny replica of the neighborhood dive bar.

Ina Fried