“There would be no question that I would be perfect to run it,” Karmazin said. “But there is no chance that I will ever take another job outside of Sirius XM. I just renewed my contract. It’s exactly what I want.”

Exactly what he wants, except maybe for that perennially-under-a-dollar share price–though according to Karmazin, that’s going to change. “I think today, you’ll start to see quarter after quarter of growth,” he said. “You’ll see us making free cash flow. You’ll see us with…over $2.5 billion of revenue. We’ll start to make money, and we’ll start to keep investing in content. And I think our future will be great.”

Unassuming guy, that Karmazin…

With Clearwire struggling to build out a next-generation network that will go up against Verizon Wireless (VZ) and AT&T (T) for future mobile customers, Sprint has little choice but to throw more money at it. But it’s not alone in doing so. Fellow partners Comcast (CMSCA), Time Warner Cable (TWC), Intel (INTC), Eagle River Holdings and Bright House Networks are also making additional investments, though together they total only $500 million.

Oddly absent from this list is Google (GOOG), which participated in a May 2008 investment round that pumped $12 billion into Clearwire but has evidently decided to sit this one out. Said Google spokesman Andrew Pederson: “We have already made a significant financial investment, and at this point we think the best way we can continue to add value is through continued product and strategic cooperation.”

One wonders if the shared mission of which the two companies boasted when the deal was announced has somehow changed in the ensuing year.

Certainly, requiring Comcast (CMCSA) to disclose more information about its traffic management practices seems a mere slap on the wrist for a company that deliberately interfered with BitTorrent traffic in violation of Internet openness principles. But Comcast, which wants a court to reverse and vacate the FCC decision, feels even it was too much.

“The order is unlawful because it enforced mere policy–not any provision of federal law–against Comcast,” the company said in a brief filed with the D.C. Circuit Court of Appeals this week. “The commission’s action was procedurally improper and violated bedrock principles of fair notice…the FCC erred in enforcing mere policy…and this court can and should dispose of this case on that ground alone.”

In other words, since the FCC’s Network neutrality principles haven’t yet been codified, Comcast can’t be held accountable for violating them. The FCC, of course, disagrees. In a filing of its own, it wrote, “[FCC] determinations were lawful and reasonable….Congress created the FCC for cases such as this one.”

Indeed. And while it’s true that those Net neutrality principles Comcast ran afoul of aren’t yet official rules, they clearly will be soon.

Evidently, McCain views such rules, which would require Internet service providers to treat all Web traffic equally, as “onerous federal regulation” at best and, at worst, another one of those “government takeovers.”

“The [Obama] administration can’t resist imposing regulations on the Internet–particularly since Google Inc. and other Internet content providers were promised the imposition of such regulations as these companies seek to control what consumers see and don’t see on the Internet–despite the fact that these regulations will only serve to hurt consumers,” McCain wrote in an op ed in the Washington Times.

“The wireless industry exploded over the past 20 years, in part due to limited government regulation. Wireless carriers invested $100 billion in infrastructure and development over the past three years, which has led to faster networks, more competitors in the marketplace and lower prices in the United States compared to any other country….Regulation kills innovation. Let’s not kill the Internet.”

McCain, it should be noted, received some $894,379 in contributions from AT&T (T), Verizon (VZ), Comcast (CMCSA) and other telecom industry interests over his career–all of them opposed to the Net neutrality regulations the FCC hopes to implement.

“The Internet is an extraordinary platform for innovation, job creation, investment, and opportunity,” Genachowski said during an event at the Brookings Institute. “It has unleashed the potential of entrepreneurs and enabled the launch and growth of small businesses across America. It is vital that we safeguard the free and open Internet.”

To that end, Genachowski proposed that the FCC formalize its four principles of network openness. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled:

• to access the lawful Internet content of their choice.
• to run applications and use services of their choice, subject to the needs of law enforcement.
• to connect their choice of legal devices that do not harm the network.
• to competition among network providers, application and service providers, and content providers.

To these, Genachowski proposed adding two more: The first would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management. The second would ensure that Internet access providers are transparent about the network management practices they implement.

Under Genachowski’s proposal, all six principles would apple to all platforms that access the Internet, something that will likely prove controversial with the likes of AT&T (T) and Verizon (VZ), whose wireless operations haven’t yet been subjected to the same kind of scrutiny as, say, Comcast (CMCSA), which ran afoul of the FCC last year when it was caught throttling Bit Torrent traffic.

These companies will no doubt argue that the FCC is overstepping its bounds in working to implement such principles. But Genachowski says that’s not the case. “This is not about government regulation of the Internet,” he said. “It’s about fair rules of the road for companies that control access to the Internet.”

Below, Genachowski’s speech in full:

Preserving a Free and Open Internet: A Platform for Innovation, Opportunity, and Prosperity
Prepared Remarks of Chairman Julius Genachowski Federal Communications Commission
The Brookings Institution
Washington, DC
September 21, 2009

I’d like to thank Brookings for hosting me and this discussion about the future of broadband and the Internet.

We’ve just finished a summer of big-ticket commemorations, celebrating the 40th anniversaries of the Apollo landing and of Woodstock; 1969 was also a good year to be a kid in New York, with Joe Namath calling the Super Bowl, and the Knicks’ season that ended with the legendary Willis Reed in Game 7. I grew up a long fly ball from Shea Stadium and soaked up every minute of the Miracle Mets’ season. Maybe that’s why I tend to believe in miracles.

But perhaps the most momentous birthday from that famous summer of 1969 went by just a couple of weeks ago with little mention. Just over forty years ago, a handful of engineers in a UCLA lab connected two computers with a 15-foot gray cable and transferred little pieces of data back and forth. It was the first successful test of the ARPANET, the U.S.-government-funded project that became the Internet–the most transformational communications breakthrough since the printing press.

Today, we can’t imagine what our lives would be like without the Internet–any more than we can imagine life without running water or the light bulb. Millions of us depend upon it every day: at home, at work, in school–and everywhere in between. The Internet has unleashed the creative genius of countless entrepreneurs and has enabled the creation of jobs–and the launch of small businesses and the expansion of large ones–all across America.

That’s why Congress and the President have charged the FCC with developing a National Broadband Plan to ensure that every American has access to open and robust broadband. The fact is that we face great challenges as a nation right now, including health care, education, energy, and public safety. While the Internet alone will not provide a complete solution to any of them, it can and must play a critical role in solving each one.

Why has the Internet proved to be such a powerful engine for creativity, innovation, and economic growth? A big part of the answer traces back to one key decision by the Internet’s original architects: to make the Internet an open system.

Historian John Naughton describes the Internet as an attempt to answer the following question: How do you design a network that is “future proof”–that can support the applications that today’s inventors have not yet dreamed of? The solution was to devise a network of networks that would not be biased in favor of any particular application. The Internet’s creators didn’t want the network architecture–or any single entity–to pick winners and losers. Because it might pick the wrong ones. Instead, the Internet’s open architecture pushes decision-making and intelligence to the edge of the network–to end users, to the cloud, to businesses of every size and in every sector of the economy, to creators and speakers across the country and around the globe. In the words of Tim Berners-Lee, the Internet is a “blank canvas”–allowing anyone to contribute and to innovate without permission.

It is easy to look at today’s Internet giants–and the tremendous benefits they have supplied to our economy and our culture–and forget that many were small businesses just a few years ago, founded on little more than a good idea and a no-frills connection to the Internet. Marc Andreessen was a graduate student when he created Mosaic, which led to Netscape, the first commercially successful Web browser. Mark Zuckerberg was a college student in 2004 when he started Facebook, which just announced that it added its 300 millionth member. Pierre Omidyar originally launched eBay on his own personal website. Today more than 600,000 Americans earn part of their living by operating small businesses on eBay’s auction platform, bringing jobs and opportunity to Danvers, Massachusetts, Durham, North Carolina and Lincoln, Nebraska, and many other communities in both rural and urban America. This is the power of the Internet: distributed innovation and ubiquitous entrepreneurship, the potential for jobs and opportunity everywhere there is broadband.

And let us not forget that the open Internet enables much more than commerce. It is also an unprecedented platform for speech, democratic engagement, and a culture that prizes creative new ways of approaching old problems. In 2000, Jimmy Wales started a project to create a free online encyclopedia. He originally commissioned experts to write the entries, but the project only succeeded after moving to volunteers to write them collaboratively. The result is Wikipedia, one of the top 10 most visited websites in the world and one of the most comprehensive aggregations of human knowledge in our history. The potential of collaboration and social media continues to grow. It is changing and accelerating innovation. And we’ve seen new media tools like Twitter and YouTube used by democratic movements around the globe.

Even now, the Internet is beginning to transform health care, education, and energy usage for the better. Health-related applications, distributed over a widely connected Internet, can help bring down health care costs and improve medical service. Four out of five Americans who are online have accessed medical information over the Internet, and most say this information affected their decision-making. Nearly four million college students took at least one online course in 2007, and the Internet can potentially connect kids anywhere to the best information and teachers everywhere. And the Internet is helping enable smart grid technologies, which promise to reduce carbon dioxide emissions by hundreds of millions of metric tons.

At the same time, we have also seen great strides in the center of the network. Most Americans’ early exposure to the Internet was through analog modems, which allowed a trickle of data through the phone lines to support early electronic bulletin boards and basic email. Over the last two decades, thanks to substantial investment and technological ingenuity, companies devised ways to retrofit networks initially designed for phones and one-way video to support two-way broadband data streams connecting homes and businesses across the country. And a revolution in wireless technologies–using licensed and unlicensed spectrum–and the creation of path-breaking devices like the Blackberry and iPhone have enabled millions of us to carry the Internet in our pockets and purses.

The lesson of each of these stories, and innumerable others like them, is that we cannot know what tomorrow holds on the Internet, except that it will be unexpected; that the genius of American innovators is unlimited; and that the fewer obstacles these innovators face in bringing their work to the world, the greater our opportunity as citizens and as a nation.

Notwithstanding its unparalleled record of success, today the free and open Internet faces emerging and substantial challenges. We’ve already seen some clear examples of deviations from the Internet’s historic openness. We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks) and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. We have even seen at least one service provider deny users access to political content. And as many members of the Internet community and key Congressional leaders have noted, there are compelling reasons to be concerned about the future of openness.

One reason has to do with limited competition among service providers. As American consumers make the shift from dial-up to broadband, their choice of providers has narrowed substantially. I don’t intend that remark as a policy conclusion or criticism–it is simply a fact about today’s marketplace that we must acknowledge and incorporate into our policymaking.

A second reason involves the economic incentives of broadband providers. The great majority of companies that operate our nation’s broadband pipes rely upon revenue from selling phone service, cable TV subscriptions, or both. These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers’ rational bottom-line interests may diverge from the broad interests of consumers in competition and choice.

The third reason involves the explosion of traffic on the Internet. With the growing popularity of high-bandwidth applications, Internet traffic is roughly doubling every two years. Technologies for managing broadband networks have become more sophisticated and widely deployed. But these technologies are just tools. They cannot by themselves determine the right answers to difficult policy questions–and they raise their own set of new questions.

In acknowledging the existence of challenging competitive, economic, and technological realities for today’s Internet, I want to underscore that this debate, as I see it, isn’t about white hats or black hats among companies in and around the network. Rather, there are inevitable tensions built into our system; important and difficult questions that we have an obligation to ask and to answer correctly for our country.

When I worked in the private sector I was fortunate to work with some of the greatest innovators of our time. That taught me some lessons about the importance of innovation and investment. It also taught me the importance of developing clear goals and then being focused and practical in achieving them, making sure to have the best input and ideas from the broadest group possible.

I am convinced that there are few goals more essential in the communications landscape than preserving and maintaining an open and robust Internet. I also know that achieving this goal will take an approach that is smart about technology, smart about markets, smart about law and policy, and smart about the lessons of history.

The rise of serious challenges to the free and open Internet puts us at a crossroads. We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.
I understand the Internet is a dynamic network and that technology continues to grow and evolve. I recognize that if we were to create unduly detailed rules that attempted to address every possible assault on openness, such rules would become outdated quickly. But the fact that the Internet is evolving rapidly does not mean we can, or should, abandon the underlying values fostered by an open network, or the important goal of setting rules of the road to protect the free and open Internet.

Saying nothing–and doing nothing–would impose its own form of unacceptable cost. It would deprive innovators and investors of confidence that the free and open Internet we depend upon today will still be here tomorrow. It would deny the benefits of predictable rules of the road to all players in the Internet ecosystem. And it would be a dangerous retreat from the core principle of openness–the freedom to innovate without permission–that has been a hallmark of the Internet since its inception, and has made it so stunningly successful as a platform for innovation, opportunity, and prosperity.

In view of these challenges and opportunities, and because it is vital that the Internet continue to be an engine of innovation, economic growth, competition and democratic engagement, I believe the FCC must be a smart cop on the beat preserving a free and open Internet.

This is how I propose we move forward: To date, the Federal Communications Commission has addressed these issues by announcing four Internet principles that guide our case-by-case enforcement of the communications laws. These principles can be summarized as: Network operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

The principles were initially articulated by Chairman Michael Powell in 2004 as the “Four Freedoms,” and later endorsed in a unanimous 2005 policy statement issued by the Commission under Chairman Kevin Martin and with the forceful support of Commissioner Michael Copps, who of course remains on the Commission today. In the years since 2005, the Internet has continued to evolve and the FCC has issued a number of important decisions involving openness. Today, I propose that the FCC adopt the existing principles as Commission rules, along with two additional principles that reflect the evolution of the Internet and that are essential to ensuring its continued openness.

The fifth principle is one of non-discrimination–stating that broadband providers cannot discriminate against particular Internet content or applications. This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider. The Internet must continue to allow users to decide what content and applications succeed.

This principle will not prevent broadband providers from reasonably managing their networks. During periods of network congestion, for example, it may be appropriate for providers to ensure that very heavy users do not crowd out everyone else. And this principle will not constrain efforts to ensure a safe, secure, and spam-free Internet experience, or to enforce the law. It is vital that illegal conduct be curtailed on the Internet. As I said in my Senate confirmation hearing, open Internet principles apply only to lawful content, services and applications–not to activities like unlawful distribution of copyrighted works, which has serious economic consequences. The enforcement of copyright and other laws and the obligations of network openness can and must co-exist.

I also recognize that there may be benefits to innovation and investment of broadband providers offering managed services in limited circumstances. These services are different than traditional broadband Internet access, and some have argued they should be analyzed under a different framework. I believe such services can supplement–but must not supplant–free and open Internet access, and that we must ensure that ample bandwidth exists for all Internet users and innovators. In the rulemaking process I will discuss in a moment, we will carefully consider how to approach the question of managed services in a way that maximizes the innovation and investment necessary for a robust and thriving Internet.

I will propose that the FCC evaluate alleged violations of the non-discrimination principle as they arise, on a case-by-case basis, recognizing that the Internet is an extraordinarily complex and dynamic system. This approach, within the framework I am proposing today, will allow the Commission to make reasoned, fact-based determinations based on the Internet before it–not based on the Internet of years past or guesses about how the Internet will evolve.

The sixth principle is a transparency principle–stating that providers of broadband Internet access must be transparent about their network management practices. Why does the FCC need to adopt this principle? The Internet evolved through open standards. It was conceived as a tool whose user manual would be free and available to all. But new network management practices and technologies challenge this original understanding. Today, broadband providers have the technical ability to change how the Internet works for millions of users–with profound consequences for those users and content, application, and service providers around the world.

To take one example, last year the FCC ruled on the blocking of peer-to-peer transmissions by a cable broadband provider. The blocking was initially implemented with no notice to subscribers or the public. It was discovered only after an engineer and hobbyist living in Oregon realized that his attempts to share public domain recordings of old barbershop quartet songs over a home Internet connection were being frustrated. It was not until he brought the problem to the attention of the media and Internet community, which then brought it to the attention of the FCC, that the improper network management practice became known and was stopped.

We cannot afford to rely on happenstance for consumers, businesses, and policymakers to learn about changes to the basic functioning of the Internet. Greater transparency will give consumers the confidence of knowing that they’re getting the service they’ve paid for, enable innovators to make their offerings work effectively over the Internet, and allow policymakers to ensure that broadband providers are preserving the Internet as a level playing field. It will also help facilitate discussion among all the participants in the Internet ecosystem, which can reduce the need for government involvement in network management disagreements.

To be clear, the transparency principle will not require broadband providers to disclose personal information about subscribers or information that might compromise the security of the network, and there will be a mechanism to protect competitively sensitive data.

In considering the openness of the Internet, it is also important to recognize that our choice of technologies and devices for accessing the Internet continues to expand at a dizzying pace. New mobile and satellite broadband networks are getting faster every day, and extraordinary devices like smartphones and wireless data cards are making it easier to stay connected while on the go. And I note the beginnings of a trend towards openness among several participants in the mobile marketplace.

Even though each form of Internet access has unique technical characteristics, they are all are different roads to the same place. It is essential that the Internet itself remain open, however users reach it. The principles I’ve been speaking about apply to the Internet however accessed, and I will ask my fellow Commissioners to join me in confirming this.

Of course, how the principles apply may differ depending on the access platform or technology. The rulemaking process will enable the Commission to analyze fully the implications of the principles for mobile network architectures and practices–and how, as a practical matter, they can be fairly and appropriately implemented. As we tackle these complex questions involving different technologies used for Internet access, let me be clear that we will be focused on formulating policies that will maximize innovation and investment, consumer choice, and greater competition.

I’ve talked about what we need to do; now I’d like to talk about how we should do it. I will soon circulate to my fellow Commissioners proposed rules prepared by Commission staff embodying the principles I’ve discussed, and I will ask for their support in issuing a notice of proposed rulemaking. This notice will provide the public with a detailed explanation of what we propose to do and why.

Equally importantly, the notice will ask for input and feedback on the proposed rules and their application, such as how to determine whether network management practices are reasonable, and what information broadband providers should disclose about their network management practices and in what form. And–as I indicated earlier–it will pose a series of detailed questions on how the Internet openness principles should apply to mobile broadband.

While my goals are clear–to ensure the Internet remains a free and open platform that promotes innovation, investment, competition, and users’ interests — our path to implementing them is not pre-determined. I will ensure that the rulemaking process will be fair, transparent, fact-based, and data-driven. Anyone will be able to participate in this process, and I hope everyone will. We will hold a number of public workshops and, of course, use the Internet and other new media tools to facilitate participation. Today we’ve launched a new website, www.openinternet.gov, to kick off discussion of the issues I’ve been talking about. We encourage everyone to visit the site and contribute to the process.

Some have argued that the FCC should not take affirmative steps to protect the Internet’s openness. Let me be clear about what this is about, and what it isn’t.

The fundamental goal of what I’ve outlined today is preserving the openness and freedom of the Internet. We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth, and a foundation for democracy in the 21st century. We have an obligation to ensure that the Internet remains a vast landscape of innovation and opportunity.

This is not about government regulation of the Internet. It’s about fair rules of the road for companies that control access to the Internet. We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.

This is not about protecting the Internet against imaginary dangers. We’re seeing the breaks and cracks emerge, and they threaten to change the Internet’s fundamental architecture of openness. This would shrink opportunities for innovators, content creators, and small businesses around the country, and limit the full and free expression the Internet promises. This is about preserving and maintaining something profoundly successful and ensuring that it’s not distorted or undermined. If we wait too long to preserve a free and open Internet, it will be too late.

Some will seek to invoke innovation and investment as reasons not to adopt open Internet rules. But history’s lesson is clear: Ensuring a robust and open Internet is the best thing we can do to promote investment and innovation. And while there are some who see every policy decision as either pro-business or pro-consumer, I reject that approach; it’s not the right way to see technology’s role in America.

An open Internet will benefit both consumers and businesses. The principles that will protect the open Internet are an essential step to maximize investment and innovation in the network and on the edge of it–by establishing rules of the road that incentivize competition, empower entrepreneurs, and grow the economic pie to the benefit of all.

I believe we share a common purpose–we want the Internet to continue flourishing as a platform for innovation and communication, with continued investment and increasing deployment of broadband to all Americans. I believe my fellow Commissioners share this purpose, and I look forward to working collaboratively with them in this endeavor.

In closing, we are here because 40 years ago, a bunch of researchers in a lab changed the way computers interact and, as a result, changed the world. We are here because those Internet pioneers had unique insights about the power of open networks to transform lives for the better, and they did something about it. Our work now is to preserve the brilliance of what they contributed to our country and the world. It’s to make sure that, in the 21st century, the garage, the basement, and the dorm room remain places where innovators can not only dream but bring their dreams to life. And no one should be neutral about that.

While Comcast (CMCSA) had forecast a slowing of subscriber growth in its second quarter, the decline it’s now seeing is far worse than expected. “It is across all units,” said Roberts. We’re really not seeing a surging of disconnects. We’re just not seeing a surging of orders.”

Is that entirely econalypse-related? Or might it be due to competitive pressure from telcos? Roberts conceded that the market is an “intensely competitive one, but said Comcast has really just been dragged down by the souring economy. “I think there’s a general slowing of consumer expectations….” he said. “There are fewer opportunities to sell things.”

This Weekend Update is particularly exciting because of all the things happening here at All Things Digital. There is, of course, the upcoming D7 Conference, which promises to be more tech-extravaganza fun than a tweet from @sockington (if only half as cute), but this past week has also seen the launch of our very own iPhone app, meaning ATD has gone mobile–smart news for your smartphone (we’re still working out potential taglines).

Like past D: All Things Digital conferences, D7 boasts a great lineup of speakers and industry leaders. This year, the gang that’s all here is full of personality, wit, chutzpah and all that other good stuff that’s sure to make this one of the most interesting and revelatory events yet.

For instance, Microsoft (MSFT) is rumored to be debuting its latest upgrade to its search engine, Kumo, at D7. The conglomerate sorely needs a win here, especially in its losing battle to the ubiquitous Google (GOOG) for market share in search. Search was a big topic in general this week as Kara Swisher liveblogged Yahoo’s (YHOO) “chalk talk” and interviewed one of its speakers, head of Yahoo Labs and Yahoo Search Strategy Prabhakar Raghavan, an exchange in which Kara gets Raghavan to exclaim WOO! for “web of objects.” In addition, Google search bigwigs Larry Page, Eric Schmidt and Marissa Mayer could be found across several universities this week dispensing “be more lazy” speeches to fresh graduates.

This was also the week with the IPO for OpenTable, the online restaurant reservation company being the first in Silicon Valley to go public in a long time. Kara Swisher and John Paczkowski give their takes on the offering.

It was also a week of many faceoffs. Here’s a smattering of those that went tete-a-tete this week:

• Craigslist vs. Henry McMaster. Winner: Craigslist. The online classifieds site retaliated with a lawsuit of its own after the South Carolina Attorney General threatened legal action.
• Microsoft vs. the European Commission: In the latest antitrust case development, Microsoft and the EC have been going head to head over scheduling issues, of all things.
• L’Oréal vs. eBay. Winner: eBay (EBAY). L’Oréal lost its latest lawsuit against the Web auctioneer over trademark-infringing cosmetic products sold on the site.
• CollegeHumor vs. Amazon: More of a prank than a bout, CollegeHumor gamed Amazon’s (AMZN) system by artificially driving up sales of the Three Wolf Moon T-shirts, complete with outlandishly positive product reviews.
• Comcast vs. Disney: Though Comcast (CMSCA) wasn’t pleased with Disney’s (DIS) partnership with online video site Hulu, the two companies were able to put aside their differences to form an ESPN360 pact.

More next weekend, but in the meantime, look out for all our coverage of D7!

Just as MediaMemo predicted, Walt Disney Co. has finally taken a stake in Hulu, the video-streaming site operated by General Electric’s (GE) NBC Universal, News Corp. (NWS) and Providence Equity Partners. Under the terms of the deal announced today, Disney will sign on as a joint partner in the venture and bring full-length episodes of long-absent programs like “Lost” and “Grey’s Anatomy” to Hulu. Financial terms and the structure of the deal weren’t disclosed, but sources say Disney’s stake in the venture will be close to 30 27 percent.

“From our landmark iTunes deal to our pioneering decision to stream ad supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers, and today’s Hulu announcement is the next important step in that ongoing journey,” Disney CEO Bob Iger bloviated. “Disney and Hulu share a focus on delivering the highest-quality entertainment experience and we look forward to working with Hulu to build value for our consumers, our brands and our shareholders.”

A few points worth noting here before the full press release below. This is mostly a broadcast deal. Aside from a smattering of Disney Channel shows, it includes very little cable programming. There is, for example, nothing from ESPN. Presumably, that’s because Disney doesn’t want to upset the folks who actually pay to watch that stuff.

Disney’s decision to join Hulu shows the company is confident that the site’s audience is distinct enough from audiences served by cable, ABC.com and its other sites that there’s no real risk of cannibalizing them. And that runs contrary to what many networks assume about online.

Disappointingly, there’s no mention in the release of classic animation, whether shorts or features.

As MediaMemo has noted, this is a big deal for Hulu, which has now allied with three of the four big broadcast networks.

CBS (CBS) is now the sole holdout among big program providers. When asked about its position, a spokesman replied with this statement: “CBS has long employed open, non-exclusive content partnerships that allow fans across the internet to engage with our programming in such a way that we control our distribution, sales and profit. We continue to discuss similar arrangements with additional partners as we grow our online audience based on the strength of our content, and the passion of the communities it creates. The Company also believes that controlling our own rights for that content–in all media–preserves its value in a multi-platform business system.”

Disney (DIS) to Join NBC Universal, News Corporation and Providence Equity Partners as an Equity Owner of Hulu

LOS ANGELES–Hulu and The Walt Disney Company today announced that Disney, through a subsidiary of ABC Enterprises Inc., has agreed to join NBC Universal, News Corporation and Providence Equity Partners as a joint venture partner and equity owner of Hulu, a leading online aggregator of video content. Upon closing, the agreement will enhance Hulu’s programming line-up through the expanded online distribution of Disney’s most popular current and library primetime series and library feature films. In particular, full-length episodes of hit current and library programs like Lost, Grey’s Anatomy, Desperate Housewives, Private Practice, Ugly Betty, Scrubs, Greek, Hope and Faith, Less Than Perfect, Wizards of Waverly Place, Phineas and Ferb, Who Wants To Be A Millionaire, General Hospital, The View and The Secret Life of the American Teenager will soon be streamed on Hulu on an ad-supported basis.

“From our landmark iTunes deal to our pioneering decision to stream ad supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers, and today’s Hulu announcement is the next important step in that ongoing journey,” said Robert A. Iger, president and CEO, The Walt Disney Company. “Disney and Hulu share a focus on delivering the highest-quality entertainment experience and we look forward to working with Hulu to build value for our consumers, our brands and our shareholders.”

“We’re honored to welcome the Disney team in our mission to help people find and enjoy the world’s premium content, when, where and how they want it,” said Jason Kilar, CEO of Hulu. “With the addition of shows like Lost, Desperate Housewives, Grey’s Anatomy and many more to Hulu, we continue to aspire to deliver a service that users, advertisers and content owners unabashedly love.”

Following the closing, content available to Hulu users will include:

• Full-length episodes of ABC primetime programs like Lost, Grey’s Anatomy, Desperate Housewives, Ugly Betty, Samantha Who?, Scrubs, Private Practice and popular late night talk show Jimmy Kimmel Live
• Full-length episodes of hit ABC Family series like The Secret Life of the American Teenager and Greek
• Popular series from ABC Daytime and SOAPnet like General Hospital and The View
• Classic series from ABC’s library like Hope and Faith, Less Than Perfect, Commander in Chief, Who Wants To Be A Millionaire and Dancing with the Stars
• Select hit programs from Disney Channel like Wizards of Waverly Place and Phineas and Ferb which can be easily accessed from a new DISNEY location in the Channel section of Hulu.com
• Popular library titles from The Walt Disney Studios
• Short-form content including webisodes, sneak peeks and episode recaps from ABC Entertainment, ABC Family and SOAPnet
“Hulu, quite simply, now has the best premium content on the web,” said Peter Chernin, president and COO, News Corporation. “With three major networks and over 150 leading content providers providing content, combined with the best video user interface anywhere on the web, Hulu offers consumers the finest premium online video experience available today.”

“Hulu has shown that if you make quality content available on the web and combine it with an unbeatable user experience, viewers will come, and so will advertisers,” said Jeff Zucker, president and CEO, NBC Universal. “The addition of some of the best content Disney/ABC has to offer will only enhance Hulu’s standing as a top site for high quality video entertainment.”

Jonathan M. Nelson, CEO of Providence, said “Hulu is creating significant value for users, advertisers and content owners. This balance, together with aggregated professional content and an expanding base of over 200 brand advertisers, is establishing Hulu as a compelling online video monetization platform. Hulu is a bright spot in the new media landscape.”

The transaction is subject to customary closing conditions, including regulatory review. As an equity partner, Disney will have three seats on the Hulu Board that will be held by Mr. Iger; Anne Sweeney, co-chair, Disney Media Networks and president, Disney/ABC Television Group; and Kevin Mayer, executive vice president, Corporate Strategy, Business Development & Technology. All other current directors from News Corp, NBC Universal and Providence will remain on the Hulu board.

This weekend, AllThingsD.com is distributing awards for Best Performance in a ToS Slapdown, Fastest Disappearing Subscriber Base, and Best Conference to Attend in February If It’s Cold Where You Live. If all involved keep their remarks on topic, things should move along quickly.

BoomTown followed this week’s Facebook drama from the first rumblings of dissatisfaction (and jaded irony) with the copyright changes in the social network’s Terms of Service on through to full-on rallying cries by the likes of Perez Hilton for mass desertion. The drama ended–for now–with CEO Mark Zuckerberg’s public apology and rollback of the changes. If you don’t speak Facebook, you’ll be relieved to know that BoomTown has provided a handy translation. Also, Yahoo (YHOO) CEO “Hurricane Carol” Bartz found an appreciative audience in BoomTown for her Friday Memos, which discuss topics as closely related as the company’s maybe-impending reorg and Saturday night chick flicks.

MediaMemo noted this week that on the Web, the New York Times really is the paper of record, as it beats the online reach of its print counterparts almost as handily as Gawker Media beats the reach of the Los Angeles Times. And Comcast (CMCSA) is feeling the subscriber pinch–it lost more on the basic end and added fewer on the high-end than analysts expected, which is especially bad news during hard times, when people traditionally cling to their cable as they might cling to a security blanket. Elsewhere in the content wars, Hulu was at the center of some interesting questions: Was the content provider forced off of Boxee by the big cable companies? Why did it disappear from CBS’s (CBS) TV.com? And maybe most interestingly, how can the cable guys build their own Hulus?

Digital Daily reported that Sprint’s (S) subscriber base is shrinking too, though CEO Dan Hesse is optimistic about the future, which includes the debut of Palm’s (PALM) new Pre handset. The company is “bullish” about its potential. Google’s (GOOG) adventures in Italy took an interesting turn this week, wrote Digital Daily. The family pressing charges against four of its executives–in reaction to a video in which classmates taunt their son, who has Down Syndrome–decided to drop them. The court, however, is allowing the case to proceed without the family’s involvement. And U2 learned the hard way this week that all it takes is one leaked digital copy of an album–in this case, their latest effort, “No Line on the Horizon”–to facilitate the distribution of millions of unauthorized copies.

In Personal Tech, Walt Mossberg test-drove Unigo, a new site aimed at providing first-hand info on colleges to students (and parents) during what can be a truly stressful time. In Mossberg’s Mailbox, Walt offered advice on working with Microsoft Publisher documents on a Mac, improving searches with Surf Canyon (even the beta version) and using a smartphone as a modem. In the Mossberg Solution, Katie Boehret took a look at Trulia.com, which aims to offer an insider’s view of real estate, and in a special MossBlog, Walt and Katie reported from the World Mobile Congress in Barcelona–not a bad place to go in February, especially from Washington, D.C.

More next week.

I just figured it was another commercial until I looked up. Then he did his little dance with everything hanging out.”

– A Comcast viewer describes the porn clip the cable provider mistakenly aired during last night’s Super Bowl broadcast.

With $3.2 billion in investments from the likes of Comcast (CMCSA), Intel (INTC), Time Warner Cable (TWX), Google (GOOG) and Brighthouse Networks, the new Clearwire has quite a few masters to serve, though CEO Benjamin Wolff insists none will have a direct hand in the company’s operations. “We have very little in common with a joint venture,” he said during a conference call on Monday, claiming Clearwire’s investors have no say in the timing of network launches. Hard to believe that’s the case when a $1 billion investor like Intel holds a seat on Clearwire’s board. But if it is, Wolff’s lucky. Because with Verizon (VZ) and AT&T (T) planning to bring a competing fourth-generation network called LTE (long-term evolution) online in the next year or so, Clearwire can’t afford any unnecessary distractions lest it lose that all important time-to-market advantage. “The credit markets are lousy” will only work as an excuse for slowed deployment for so long …

With U.S. broadband speeds lagging far behind European and Asian countries, Comcast is finally doing its part to bring the country’s lousy broadband Internet services into parity with those of other industrialized nations. You know, like Iceland. Or South Korea.

Comcast (CMCSA) plans to aggressively deploy its next-generation wideband service to 10 million homes by the end of the year, the company said Wednesday. Based on the ultrafast Data Over Cable Service Interface Specification (DOCSIS), the service should provide download speeds far in excess of those currently offered by the company. It’s to be offered in two tiers. The fastest, Extreme 50, will provide up to 50 megabits per second downstream and up to 10Mbps of upstream speed. Price: $139.95/month. Ultra will get you up to 22Mbps downstream and up to 5Mbps of upstream for $62.95/month.

And what about the 150Mbps service Comcast CEO Brian Roberts demonstrated at the Cable Show last year? The one fast enough to download the entire “Encyclopedia Britannica” and “Merriam-Webster Visual Dictionary” in less than four minutes? Still a ways off, apparently.

PREVIOUSLY:

• The Median U.S. Broadband Speed? Finland’s Divided by 10

Our industry is not immune to what goes on in the global economy. And yet as I travel, given the current circumstances, people still see a certain buoyancy in the market.”

– Microsoft CEO Steve Ballmer, Sept. 26, 2008

Wall Street’s 777-point selloff Monday–one of its worst days since 1929–hit many tech stocks harder even than the overall market on Monday. Said Ross Sandler, senior Internet analyst at RBC Capital Markets, “Tech took it on the chin disproportionately.”

Indeed, it did. And a couple of other places as well, from the looks of things.

A quick overview of the carnage:

• Amazon (AMZN) fell 10 percent to $63.35
• Apple (AAPL) fell 17.9 percent to $105.26
• Cisco (CSCO fell 8.5 percent to $21.79
• Comcast (CMCSA) fell 13 percent to $18.01
• Dell (DELL) fell 9.4 percent to $15.41, a new 10-year low
• eBay (EBAY) fell 12 percent to $19.95
• Google (GOOG) fell 12 percent to $381.00, a new 2-year low
• Intel (INTC) fell 10.1 percent to $17.27, a new 2-year low
• Microsoft (MSFT) fell 8.7 percent to $25.01
• Oracle (ORCL) fell 9 percent to $18.77
• Qualcomm (QCOM) fell 13 percent to $39.88
• Research In Motion (RIMM) fell 12.8 percent to $61.73
• Sirius XM (SIRI) fell 18 percent to $0.62
• Sun (JAVA) fell 11.7 percent to $6.75, a new 13-year low
• Yahoo (YHOO) fell 10.8 percent, to $16.88, a new 5-year low

Seems the tech industry “buoyancy” to which Microsoft CEO Steve Ballmer referred last week was more of a noneffervescence. Certainly, that’s the impression one gets from reading the statement Microsoft just issued calling on Congress to revisit its vote against the financial bailout plan. “Microsoft strongly urges members of the U.S. House of Representatives to reconsider and to support legislation that will re-instill confidence and stability in the financial markets,” General Counsel Brad Smith said in a statement. “This legislation is vitally important to the health and preservation of jobs in all sectors of the economy of Washington State and the nation, and we urge Congress to act swiftly.”

What was that you were saying about “buoyancy” again, Steve?

Still, to be fair, the tech sector does appear to be gaining some ground in early trading today. The tech-heavy Nasdaq rose 2 percent to 2,027, reclaiming some of Monday’s ugly 9 percent loss. Apple shares are up 2.7 percent at $106.70 as I write this. Google shares are up 4.5 percent at $398.06. Microsoft is up 2.5 percent at $25.63. Even Yahoo is on an upward track, up 2.43 percent at $17.29.