Jan 18, 2009 (DTV Update)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for SUNDAY JANUARY 18, 2009

A weekend update mainly to alert you to developments in the DTV debate.

THE ECONOMY
   Network Neutrality rules in stimulus trigger backlash
   The Advantages of a Rural Fiber Fund
   Circuit City to liquidate
   EU: Internet Explorer harms competition

POLICYMAKERS
   Inspector General Sees No Misdeeds in Pentagon's Effort to Make Use of TV Analysts
   Congress-YouTube Deal Raises Questions
   Genachowski Honeymoon Period Has Begun
   New Chief Must Bring FCC Up-to-Date
   Sec Gutierrez Names Industry Players to New Terms on Commerce Spectrum Advisory Committee
   Chairman Martin Releases Greatest Hits Album
   Cable's Chief Looks Back — And Ahead

NEWS FROM THE FCC
   FCC's New Video Competition Report
   FCC Report on High-Speed Services for Internet Access
   FCC's Martin Takes Flying J Toward Exit

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DTV TRANSITION

OMNIBUS DTV UPDATE
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
Congress is considering delaying the transition to all-digital television broadcasting until June 12, 2009. In the Senate, Commerce Committee Chairmen Jay Rockefeller is attempting to bring a very simple bill to extend the analog cut-off date and extend the life of the digital-to-analog converter box coupon program. But Republicans, led by Sen John McCain (R-AZ) and Rep Joe Barton (R-TX), are opposing efforts supported by President-elect Barack Obama. Three of four Federal Communications Commission members have expressed concern about the state of preparedness for the Feb 17 transition. FCC Commissioners Copps and Adelstein wrote Congress with their concerns . With the delay in the Senate, the House Commerce Committee plans a hearing on its own DTV bill on Wednesday. [much more at the URL below]
http://benton.org/node/20854
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THE ECONOMY

NETWORK NEUTRALITY RULES IN STIMULUS TRIGGER BACKLASH
[SOURCE: The Hill, AUTHOR: Kevin Bogardus]
Open Internet access rules added to the stimulus package threaten the tentative partnership between technology and telecom companies, which have coalesced behind the bill's $6 billion funding for broadband access. Conditions inserted into draft legislation released by the House Appropriations Committee state that companies applying for broadband grants must adhere to a 2005 policy statement by the Federal Communications Commission (FCC) that says consumers should access the Internet with no controls placed on their web traffic or content. In addition, another provision calls upon the FCC to define what "open access" to the Internet is within 45 days after the stimulus bill has become law. Advocates for an open Internet cheered the addition of the conditions to the stimulus. Many had lobbied lawmakers hard to include such provisions. "The fact that House leadership decided to put such a strong condition on open access is very significant," said Ben Scott, policy director for Free Press, a public interest group that focuses on telecommunications policy. "To me, this signals that we are no longer talking about 'if' with net neutrality. It means we are talking about 'when'." "We didn't want to see this as an open-ended program without some basic consumer protections," said Markham Erickson, executive director of the Open Internet Coalition. "Essentially, it is current law. Plus, it is public dollars." The coalition is made up of several Internet companies, such as Amazon and Google, and many public interest organizations, including Free Press.
http://benton.org/node/20869
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THE ADVANTAGES OF A RURAL FIBER FUND
[SOURCE: App-Rising.com, AUTHOR: Geoff Daily]
In two posts, Daily offers an alternative to government grants to build broadband networks in rural areas. Instead, Daily proposes a Rural Fiber Fund which would use government guarantees to unclog billions from the capital markets to shovel-ready rural fiber projects, and sets communities on the path to a connected future. The proposed fund would include $5 billion in partial loan guarantees available to all models of owner/operator/capital or Backstop guarantees for municipal bond insurers. Allocated on an sliding scale of density relative to percentage. Guarantees would cover all losses on this percentage of the total value of defaulted loans/bonds. A fast-track approval process awards guarantees within 60 days to all market-ready projects. Once granted, projects have 120 days to secure capital before the guarantee expires. $5 billion budget equals at least $20 billion in guarantees enabling $40 billion in investment. The proposal would also include $1 billion in matching grants in rural communities.
An Alternative to Rural Broadband Grants: The Rural Fiber Fund
http://benton.org/node/20868
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CIRCUIT CITY TO LIQUIDATE
[SOURCE: TheDeal.com, AUTHOR: ]
Circuit City Stores will begin liquidating its assets. So far, the electronics retailer is the biggest retailer to fail and will be the first post-holiday season retail casualty. The company has closed 155 stores and now has about 567 US stores that will have to be shut down with going-out-of-business sales. The stores have about $2 billion worth of inventory and around 30,000 employees, according to a press release from the retailer. Circuit City was in talks with two potential buyers, but it was unable to reach an agreement with its creditors and lenders. Circuit City is following the footsteps of Tweeter Home Entertainment Group, KB Toys Inc., Boscov's, Sharper Image, Mervyn's, Linens 'n Things, Whitehall Jewelers and Steve & Barry's. Goody's Family Clothing and Gottschalks Inc. are the most recent retailers to file for bankruptcy.
http://benton.org/node/20857
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EU: INTERNET EXPLORER HARM COMPETITION
[SOURCE: Reuters, AUTHOR: ]
The European Commission accused Microsoft Corp. Friday of violating competition law by including its Internet Explorer Web browser in Windows operating systems. The executive arm of the European Union said it had reached the preliminary view that the company had prevented rival browsers from competing and had infringed EU rules on abuse of dominant position. It said Microsoft had eight weeks to reply to the "statement of objections" it sent to the company, in which it threatened to impose a fine on the U.S. software giant if its preliminary findings were confirmed.
http://benton.org/node/20856
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POLICYMAKERS

INSPECTOR GENERAL SEES NO MISDEEDS IN PENTAGON'S EFFORT TO MAKE USE OF TV ANALYSTS
[SOURCE: New York Times, AUTHOR: David Bartow]
The office of the Defense Department's inspector general said in a report Friday that it had found no wrongdoing in a Pentagon public relations program that made use of retired officers who worked as military analysts for television and radio networks. inspector general's office, noting the absence of a clear legal definition of propaganda, said there was an "insufficient basis" to conclude that the program had violated laws prohibiting the government's domestic use of it. It also said investigators had been unable to document any instance where military analysts had used their special access — scores of meetings with senior officials, trips to Iraq and Guantánamo Bay, hundreds of pages of briefing materials — "to achieve a competitive advantage for their company." Moreover, while the report said two senior Pentagon officials had complained in sworn testimony that the outreach to military analysts had become "politicized," and while it documented one instance in which an analyst had lost access because of critical war commentary, it also found there was not enough evidence to conclude that the Pentagon "undertook a disciplined effort" to assemble a contingent of influential analysts "who could be depended on to comment favorably on DoD programs." The report dismissed as merely a "personal view" one e-mail message, written by a senior public affairs official at the Pentagon, that urged her superiors to cultivate a core group of military analysts "that we can count on to carry our water." It also discounted repeated references in Pentagon documents that described military analysts as administration "surrogates." These references, the report said, simply reflected the fact that several of the officials who catered to the analysts had previously worked in political campaigns.
http://benton.org/node/20867
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CONGRESS-YOUTUBE DEAL RAISES QUESTIONS
[SOURCE: CongressDaily, AUTHOR: Andrew Noyes]
Some high-tech watchdogs are worried about a relationship unveiled this week between popular video-sharing site YouTube.com and Congress. The Google-owned site launched two new platforms where people can watch videos uploaded by members of the House and Senate. The announcement, however, is prompting questions about the propriety of lawmakers singling out a commercial Web tool. Critics also cite privacy concerns -- namely, what happens to data collected about users who view lawmakers' videos. Center for Digital Democracy's Jeff Chester warned Google is "taking a lobbying tactic developed in part by C-SPAN years ago -- offer members of Congress a free service so they can be seen by the public." On his Web site, he warned that such an "electronic or digital campaign contribution helps insure that Congress will think twice about biting -- or regulating -- the video hand that feeds [it]."
http://benton.org/node/20866
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GENACHOWSKI HONEYMOON PERIOD HAS BEGUN
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
One element repeatedly surfaces in discussions with media lobbyists and some former top Federal Communications Commission officials when talking about the possible next chairman: Julius Genachowski's business experience. In addition to being a legal scholar who clerked for two Supreme Court justices, he is also a venture capitalist who was an executive with new-media companies, most notably Barry Diller's IAC. "He's been in the private sector and has had to raise money," said one former top Republican FCC official. "He's got to know how bad things are for some of these businesses." "He's worked for Silicon Valley, and is somebody who understands that there needs to be investment and that decisions of the government can very profoundly affect companies and what they plan to do," said a veteran cable lobbyist. The economy is job one for Obama, so there is hope from those representing regulated media and opposed to new Internet regulations that priming the engines of commerce might be higher on the Democratic agenda than usual. While Genachowski is expected to focus on broadband, given that issue's prominence in the Obama economic stimulus package, he is also associated with some strong criticisms of media content. Genachowski is a founding board member of Common Sense Media. While that group advocates parental control and technological solutions over government crackdowns on content, it has also released a study (actually a study of other studies) in conjunction with the National Institutes of Health that concluded media exposure is bad for kids' health—from making them fatter, to encouraging drug, alcohol and tobacco use, to hurting their grades.
http://benton.org/node/20865
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NEW CHIEF MUST BRING FCC UP-TO-DATE
[SOURCE: TVWeek, AUTHOR: Josef Adalian]
[Commentary] Does Julius Genachowski believe the Federal Communications Commission should play an activist role in dictating how broadcasters use the so-called "public" airwaves. Such a notion is hardly radical; just the opposite. The FCC has always existed as a watchdog organization to keep networks and local stations in line. And that's the problem. Ideally, Mr. Genachowski would declare the FCC is getting out of the business of regulating what broadcasters can and cannot air at certain hours. He would recognize the lunacy of trying to protect kids from so-called obscene content on a few channels when the rest of their media universe offers easy access to such content. Such a move would be brave, yet it probably also would be political suicide. Adalian proposes a new compromise: lift any content on broadcasters in exchange for a tax that would support public broadcasting.
http://benton.org/node/20864
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SEC GUTIERREZ NAMES INDUSTRY PLAYERS TO NEW TERMS ON COMMERCE SPECTRUM ADVISORY COMMITTEE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Another parting gift from the outgoing Bush Administration: Commerce Secretary Carlos Gutierrez has named a host of industry players to new, two-year terms on the Commerce Spectrum Advisory Committee. The members, says Gutierrez, "are spectrum policy experts, appointed as 'Special Government Employees' from the private sector and balanced in terms of their points of view." They will consult with the head of the National Telecommunications & Information Administration, which is the arm of Commerce that advises the president on spectrum policy.
http://benton.org/node/20863
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CHAIRMAN MARTIN RELEASES GREATEST HITS ALBUM
[SOURCE: Federal Communications Commission]
Federal Communications Commission Chairman Kevin Martin issued a comprehensive report showing the Commission's success in creating a regulatory environment that advanced consumer protections and promoted investment and industry competition - setting the rules of the road so that players could compete on a level playing-field.
http://benton.org/node/20861
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CABLE'S CHIEF LOOKS BACK -- AND AHEAD
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
A Q&A with National Cable & Telecommunications Association president Kyle McSlarrow. The cable industry's point man looks back on a rocky year in Washington, and tells why he's looking forward to a new administration.
http://benton.org/node/20862
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NEWS FROM THE FCC

FCC'S NEW VIDEO COMPETITION REPORT
[SOURCE: Federal Communications Commission]
On Friday, the Federal Communications Commission released its 13th annual report on competition in the video delivery market and launched the proceeding for the next report. The FCC finds in the new report that while competition in the delivery of video programming services has provided consumers with increased choice, better picture quality, and greater technological innovation, prices continue to outpace the general level of inflation. In a report on cable prices, the FCC finds that the average monthly price of expanded basic service (the combined price of basic cable service and cable programming service) increased by 3.9 percent over the 12 months ending January 1, 2006; by 4.6 percent over the 12 months ending January 1, 2007; and by 5.0 percent over the 12 months ending January 1, 2008. Chart 1 below shows the trend in cable prices from 1995 to 2008. Over this 13-year period, the price of expanded basic service has grown from $22.35 to $49.65, an increase of 122.1 percent, compared with an increase in the Consumer Price Index of 38.4 percent over the same period.
http://benton.org/node/20859
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FCC REPORT ON HIGH-SPEED SERVICES FOR INTERNET ACCESS
[SOURCE: Federal Communications Commission]
On Friday, the Federal Communications Commission released new data on high-speed connections to the Internet in the United States. Defining advanced services lines as connections that deliver services at speeds exceeding 200 kbps in both directions, the FCC finds that: 1) these lines increased by 15% during the second half of 2007, from 69.6 million to 80.2 million lines; 2) of the 80.2 million advanced services lines reported as of December 31, 2007, 56.4% were at least 2.5 mbps in the faster direction and 43.5% were slower than 2.5 mbps in the faster direction; 3) of the 80.2 million advanced services lines, 69.1 million served primarily residential end users. Cable modem service represented 50.7% of these lines while 32.6% were ADSL connections, 0.1% were SDSL or traditional wireline connections, 2.4% were fiber connections to the end user premises, and 14.1% used other types of technology including satellite, terrestrial fixed or mobile wireless (on a licensed or unlicensed basis), and electric power line.
http://benton.org/node/20858
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FCC'S MARTIN TAKES FLYING J TOWARD EXIT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Apparently, on Friday, his last working day at the Federal Communications Commission, Kevin Martin circulated an item for a vote that would have reversed an earlier Media Bureau decision and allowed a truck stop TV service to share, and potentially interfere with, the spectrum used by broadcasters for electronic newsgathering. Clarity Media (Flying J Truck Stops) has for several years been trying to get waivers to allow it to operate a low-power multichannel digital TV service at a number of its truck plazas using the cable TV relay service spectrum band, which is used by broadcasters extensively for electronic newsgathering. Flying J wants to be able to relay satellite TV to the sets in the cabs of trucks parked for a break or the night--most have overnight cabs with many of the comforts of home, including TV.
http://benton.org/node/20860
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Jan 18, 2009 (DTV Update)

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