February 2001

INTERNET
Record Industry Takes Action Against 'Open Napster'Clones (WSJ)
Art's Cold Welcome on the Web (NYT)
Filtering firm stops selling lists of sites kids visit(WSJ)

FCC
FCC Warned of Talent Shortage (WP)

INTERNET

RECORD INDUSTRY TAKES ACTION AGAINST 'OPEN NAPSTER'CLONES
Issue: Intellectually Property
With legal victory against Napster all but assured, the record industry has
begun to move against hundreds of Napster clones that also offer free music
downloading via the Internet. The Recording Industry Association of America
has sent about 60 legal notices to the Internet-service companies that
provide Web connections that run Napster-like software, but aren't
associated with Napster. Legal observers say the issues against the Open
Napster servers are clear-cut, especially now that the appeals court has
ruled that the Napster service abets copyright infringement on a massive
scale. Besides the Open Napster computers, the record industry also must
deal with Gnutella, a file-sharing system that doesn't rely on central
computers and thus is much harder to shut down in court.
[SOURCE: Wall Street Journal (B9), AUTHOR: Lee Gomes]
(http://interactive.wsj.com/articles/SB98289811070492178.htm)
(requires subscription)

ART'S COLD WELCOME ON THE WEB
Issue: Intellectual Property
(Op-Ed)In the controversy around Napster, writes Paulina Borsook, the issue
of how artists should be compensated in the digital age seemed to get lost.
She believes the larger problem is "the idea that somehow on the Net nothing
created should be paid for." Borsook suggests that perhaps one good outcome
from the Napster decision will be that the record companies finally do
figure out a way to implement a royalty structure like hose Ascap and BMI
use to compensate musicians and songwriters for performances and recordings
of their works. "But don't expect those same Netizens to consider authorship
of a work of art on the Net to be important - or to pay for online content.
[SOURCE: New York Times (A21), AUTHOR: Paulina Borsook, author of
"Cyberselfish: A Critical Romp Through the Terribly Libertarian Culture of
High Tech."]
(http://www.nytimes.com/2001/02/23/opinion/23BORS.html)

FILTERING FIRM STOPS SELLING LISTS OF SITES KIDS VISIT
Issue: Internet
N2H2, an Internet filtering company which makes the "Bess" Internet
filtering software, said Thursday it has stopped selling its "Class Clicks"
lists that report the Web sites students visit on the Internet and how much
time they spend at each one. After N2H2 announced its deal with marketing
research firm Roper Starch last September, Privacy groups called the
filtering company a "corporate predator," and were concerned over reports
the information would be sold to the Defense Department for recruiting. The
Bess filter is used by 14 million students in the United States in 40% of
the schools that use Internet filters to screen out objectionable Web sites.
A law passed during the closing moments of last year's Congress requires
libraries and schools to install Internet filters, or lose federal funds
earmarked for technology. N2H2 spokesman Allen Goldblatt has denied that
his company collected any identifiable data about kids for sale. Goldblatt
said his company and Roper Starch has "mutually decided" to drop their
relationship.
[SOURCE: USA Today (Online), AUTHOR: Associated Press]
(http://www.usatoday.com/life/cyber/tech/2001-02-23-kids-privacy.htm)

FCC

FCC WARNED OF TALENT SHORTAGE
Issue: FCC
The Federal Communications Commission is facing a shortage of engineers top
agency aides told commissioners at the first meeting run by new chairman
Michael Powell. The commission estimates 30 percent to 45 percent of its
engineers are nearing retirement age and it loses other staff members each
year to companies offering higher salaries.
[SOURCE: Washington Post (E02), AUTHOR: Staff Writer]
(http://washingtonpost.com/wp-dyn/articles/A44100-2001Feb22.html)

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CABLE
Supreme Court Lets Stand Federal Law
That Limits Number of Cable Subscribers (WSJ)

INTERNET
Is Online Journalism On Its Way Out? (WP)
'Facing History' Online (NYT)

INTELLECTUAL PROPERTY
Napster to Offer Record Labels Proceeds (WSJ)

RADIO
Traditional Radio Stations Make Play
for Online Listeners (WSJ)
The FCC's Earplug Answer to Indecency (WP)

NOTICE
Senate to Hold Hearing on Transition to Digital TV (Senate)

OWNERSHIP

SUPREME COURT LETS STAND FEDERAL LAW THAT LIMITS
NUMBER OF CABLE SUBSCRIBERS
Issue: Ownership
The U.S. Supreme Court left intact a 1992 federal law that put limits on the
number of subscribers a cable television company can reach. The justices
rejected an argument by Time Warner, which said that such limits -- intended
to preserve diverse cable TV programming -- violate the Constitution's First
Amendment free-speech protection. Time Warner, now part of AOL Time Warner
also lost a bid to overturn a section of the statute that limits on the
number of channels a cable operator can fill with its own programming. In
1997, the justices upheld another provision of the 1992 law that required
cable systems to set aside up to one-third of their channels for local
broadcast stations. Cable companies had argued the law violated their
free-speech rights by forcing them to carry stations they would rather drop.

[SOURCE: Wall Street Journal (Interactive), AUTHOR: A WSJ.COM News
Roundup](http://interactive.wsj.com/articles/SB982683323438363369.htm)
(requires subscription)

INTERNET

IS ONLINE JOURNALISM ON ITS WAY OUT
Issue: Journalism
Content-driven Web sites are a dying breed on the Net. Salon.com, for
example, premiered to rave reviews for its irreverent, politically incorrect
style. Now its stock, which had hit $14.25 a share, is worth 75 cents. When
Jim Cramer founded TheStreet.com, he attracted such blue-chip partners as
the New York Times. Now the Times has bailed out and the financial news
service is struggling. And those are the sites that are only wounded or
weak, consider the vanquished: APBNews.com, Voter.com, Pseudo.com and
Disney's Go.com. "There is no prognosis; the patient has died," says New
York magazine columnist Michael Wolff, whose own Internet company went belly
up. "Virtually everyone who took public money is either going to go out of
business or be merged out of business." And yet millions of people still
click on these news-related sites, major media companies are still pouring
big bucks into them, and their sheer speed has changed the journalistic
culture. The business side of the Net is gloomy, but what of the actual
content? Some media companies are still drawing heavy traffic: MSNBC.com
(9.8 million visitors last month), CNN.com (7.7 million), NYTimes.com (3.4
million), USAToday.com (2.7 million) and washingtonpost.com (2.6 million),
according to Media Metrix. The larger problem is content supported by
advertising revenue isn't working. "Some of these things are bad ideas and
will die," Andersen says. "Some of them are good ideas and will survive. And
some won't have time to prove they are good ideas."
[SOURCE: Washington Post (C01), AUTHOR: Howard Kurth]
(http://washingtonpost.com/wp-dyn/articles/A31505-2001Feb20.html)

'FACING HISTORY' ONLINE
Issue: Nonprofits
"Facing History and Ourselves," a 25 year-old Brookline, Massachusetts-based
organization, provides interdisciplinary programs, resources and speakers to
help educators and young people examine racism, prejudice and anti-Semitism.
This fall, the organization plans to launch an on Online Campus, a distance
learning initiative that will allow educators from around the world to take
part in the group's programs. The prototype Online Campus already includes
the program's "Holocaust & Human behavior" primary resource book, and
another, "The Hidden History of the American Eugenics Movement," is being
created online. "Facing History's" five-year-old Web site
(www.facinghistory.org) offers complex but easily navigated paths for
teachers, students and parents interested in examining history and human
behavior. "This is not distance learning -- this is close and powerful
learning! We need to invent another term," says Margot Stern Strom,
co-founder of "Facing History.
[SOURCE: New York Times (Online), AUTHOR: Margaret W. Goldsborough]
(http://www.nytimes.com/2001/02/21/technology/21EDUCATION.html)
(requires registration)

INTELLECTUAL PROPERTY

NAPSTER TO OFFER RECORD LABELS PROCEEDS FROM A NEW
SUBSCRIPTION-BASED VERSION
Issue: Intellectual Property
Napster has offered record labels $1 billion over five years to let
consumers swap copyrighted music through a new version of the popular
service. Each record company's precise proceeds would depend on how many
times its recordings were downloaded. Hank Barry, Napster's chief executive,
said the plan was designed to offer guaranteed revenue to record labels,
which had balked in private negotiations about receiving a percentage of a
revenue stream that might not materialize. Thomas Middelhoff, Bertelsmann's
chairman and CEO, appealed to heads of other record labels to halt the legal
assault on Napster, arguing the new version of the service could expand the
music industry to the benefit of all players. Nevertheless, record industry
executives question how well the latest Napster proposals will fly with
songwriters and music publishers. Richard Parsons, co-chief operating
officer of AOL Time Warner said his company won't talk about new business
models until Napster closes its existing service.
[SOURCE: Wall Street Journal, AUTHOR: Don Clark]
(http://interactive.wsj.com/articles/SB98270917386359154.htm)
(requires subscription)
See Also:
NAPSTER OFFERS $1B IF RECORD COMPANIES DROP SUIT
[USA Today (), AUTHOR: Associated Press]
(http://www.usatoday.com/life/cyber/tech/review/2001-02-20-napster-offer.htm
)

RADIO

TRADITIONAL RADIO STATIONS MAKE PLAY FOR ONLINE
LISTENERS
Issue: Radio
With a variety of choices available to music listeners, radio-industry
experts say close integration between radio stations' on-air broadcasts and
the Web is crucial to keep their audience. According to a recent
Arbitron-Edison Media study, 22% of Americans above age 12 say they have
visited a radio station Web site. Of those visitors, only a small number
return every day, with 68% of those polled visiting just once a month.
Internet-only audio continues to grow, providing programming that people
want to hear," says Joan FitzGerald, director of marketing and research &
development at Arbitron. Internet-savvy youngsters raised on Napster will
make new demands, like customization and music on demand, when they grow up.
"If radio doesn't supply it, the Web will," says Tom Barnes, a new-media
consultant. David Schwartz, former editor-in-chief of Mix magazine, says
that "radio must reevaluate its strengths in the wake of the Internet," just
as radio did in the wake of television.
[SOURCE: Wall Street Journal (Interactive), AUTHOR:
Flip Michaels]
(http://interactive.wsj.com/articles/SB979352848590215929.htm)

THE RADIO LISTENER: THE FCC's EARPLUG ANSWER TO INDECENCY
Issue:
A Birmingham resident recently learned of the FCC's official stance on
indecent language on radio. Angela Woods of Hueytown, AL. called in a local
radio station to complain about The host's use of a vulgar word for female
genitalia. After being berated on air by the deejays, Woods penned an angry
complaint to the Federal Communications Commission. Last week she received a
reply stating that no FCC action could be taken in the case as the vulgarity
did not meet the agency's standards for "patently offensive" material. To
merit sanction material must "depict or describe sexual or excretory
activities or organs in a patently offensive manner as measured by
contemporary community standards for the broadcast medium." Consider this:
if the hosts of the radio show had used the same word while describing a
sexual act, it would be more likely to get them fined than if they used it
as the synonym for "wimp." It boils down to this: the radio industry, and
the view of the new FCC chairman -- Michael Powell -- is if listeners are
offended by a show, they should turn it off. Broadcasters will be the first
to say that all shows are not for everyone - the equivalent of designating
some radio programs, "G" and others "R." It's an odd stance for
organizations use the public's property to make a living.
[SOURCE: Washington Post (C01), AUTHOR: Frank Ahrens]
(http://washingtonpost.com/wp-dyn/articles/A27476-2001Feb19.html)

HEARING NOTICE
SENATE TO HOLD HEARING ON TRANSITION TO DIGITAL TV
Issue: DTV
Senator John McCain (R-AZ), Chairman of the Committee on Commerce, Science,
and Transportation, announced a hearing on digital TV. The hearing,
scheduled for Thursday, March 1, at 9:30 a.m., will examine the progress of
the transition from analog to digital TV. Senator McCain will preside.
Witnesses will be announced at a later time.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/107-14.html)

--------------------------------------------------------------

DIGITAL DIVIDE
Bush Staff Wants to Slash Programs Set Up to Help Close 'Digital
Divide'(WP)

INTERNET
Lawmakers Again Grill Icann Over Group's Net-Name Policies (WP)
Search Results Becoming More Commercial (SJM)

EDTECH
Teenagers Try Online Learning (NYT)

CABLE
Average Cable Bill Rose 5.8% In a Year (WP)

INTELLECTUAL PROPERTY
EU Commits to Copyright Protection; Critics Warn It Could Boost
Prices

DIGITAL DIVIDE

BUSH STAFF WANTS TO SLASH PROGRAMS SET UP TO HELP CLOSE 'DIGITAL DIVIDE'
Issue: Digital Divide
Even as the "digital divide" widens, the Bush administration wants to slash
government programs providing computers and Internet access to poor and
underserved areas. The Commerce Department budget proposal for the fiscal
year starting Oct. 1 will suggest cutting the Technology Opportunities
Program, a favorite of the Clinton administration and many leading
technology executives, by about 65%. During a press conference earlier this
month, the new chairman of the Federal Communications Commission, Michael
Powell, likened the digital divide to "a Mercedes divide -- I'd like to have
one, I can't afford one."
A federal retreat from efforts to encourage Internet use among minorities,
the poor and people in rural areas would be a significant shift of U.S.
policy from that of the Clinton administration, which first popularized the
phrase "digital divide." Some experts worry that the cut would send the
wrong message amid an economic slowdown that already has reduced
philanthropic giving by some leading technology companies.
[SOURCE: Wall Street Journal (Interactive), AUTHOR: Ted Bridis]
(http://interactive.wsj.com/articles/SB982190280535779663.htm)
(requires subscription)

INTERNET

LAWMAKERS AGAIN GRILL ICANN OVER GROUP'S NET-NAME POLICIES
Issue: Internet
Lawmakers aggressively questioned the Internet's oversight body Icann, for
the second time this month, raising concerns about whether the group is
acting in the best interest of the public. Icann was questioned about
critics' claims that the group operates in secrecy and lacks clear policies
for dealing with Internet names. Icann operates on a mandate from the
Department of Commerce, though there is considerable confusion over exactly
what the group's powers are, and should be. The lawmakers also questioned
the way Icann has governed itself. During last fall Icann elections, there
were allegations that several at-large board members were unfairly elected.
Icann again faced questions about its selection late last year of seven new
top-level domains to join the likes of ".com" and ".net." Several sponsors
of domains that weren't selected have complained that the vote was heavily
influenced by special interests, and have criticized Icann for requiring a
$50,000 application fee from anyone who wanted a shot at a new top-level
domain.
[SOURCE: Wall Street Journal (Interactive), AUTHOR: Jason Anders]
(http://interactive.wsj.com/articles/SB982180455397426931.htm)
(requires subscription)
See Also:
WEB NAMING GROUP HIT FROM WITHIN
[Source: Washington Post (E03), AUTHOR: Ariana Eunjung Cha]
(http://washingtonpost.com/wp-dyn/articles/A7107-2001Feb14.html)

SEARCH RESULTS BECOMING MORE COMMERCIAL
Issue: Internet
Internet search engines and directories are increasingly turning towards a
pay-for-placement model, where companies bid against one another for top
billing. Search engines, which once tried to be pure navigational tools that
made their money from banner advertisements, are now hurting for revenues
due to the online advertising slump. "Six years ago I wouldn't have called
the Web a very commercial realm, but now a significant portion is all about
business," said Srinija Srinivasan, Yahoo's editor in chief. "For that
segment, I think there's absolutely a place" for paid search results, she
said.
[SOURCE: San Jose Mercury News, AUTHOR: Deborah Lohse]
(http://www0.mercurycenter.com/svtech/news/indepth/docs/search021501.htm)

TEENAGERS TRY ONLINE LEARNING
Issue: EdTech
A growing number of teenagers are participating in fully accredited online
courses as an attractive alternative to going to high school. Class.com
serves 27 students full time around the country and the Florida Online High
School, a state-run online program, serves 45 students who receive their
entire high school curriculum online and delivers courses to hundreds more
who are being taught at home by their parents. Administrators of online
programs stress that most of the students they serve are actually in
schools, where they use computers in the schools' libraries or guidance
offices to take one or two supplemental courses. In fact, many of those
administrators say that they discourage students from doing all their high
school work online. "I think they would be doing the child a disservice,"
said Sandra Feldman, president of American Federation of Teachers.
"Especially when you are talking about high-school-age children...You would
have to have a pretty good reason to have a teenager alone at a computer all
day," she said.
[SOURCE: New York Times (E1), AUTHOR: Lisa Guernsey]
(http://www.nytimes.com/2001/02/15/technology/15SCHO.html)
(requires registration)

INTELLECTUAL PROPERTY

EU COMMITS TO COPYRIGHT PROTECTION; CRITICS WARN IT COULD BOOST PRICES
Issue: Intellectual Property
The European Parliament approved a law to allow publishers and music and
film producers to employ "technical protection measures," including
encryption, to prevent people from making unauthorized copies of their works
and would make it illegal, in most cases, to circumvent such measures. The
law is expected to be endorsed without major changes by European Union
governments and formally transposed into national law over the next couple
of years. "Copyright owners now have wider protection here than in the
U.S.," said Enrico Boselli, the Italian Member of Parliament who shepherded
the draft law. But critics warned that the law does little to pave over
practical differences between individual European countries and could result
in higher prices for consumer electronics in the short term. Some European
countries have long imposed levies on recording equipment to compensate
musicians, composers, authors and producers for losses resulting from
unauthorized copying. Some countries, including France and Germany, are now
expanding such levies to include personal computers, scanners, printers and
devices used to record on compact discs.
[SOURCE: Wall Street Journal (A15), AUTHOR: Brandon Mitchener]
(http://interactive.wsj.com/articles/SB982159222697782071.htm)
(requires subscription)
See Also:
EUROPE GETS A GUIDELINE TO PROTECTING COPYRIGHTS
[SOURCE: New York Times, AUTHOR: Paul Meller]
(http://www.nytimes.com/2001/02/15/business/15DIGI.html)
(requires registration)

CABLE

AVERAGE CABLE BILL ROSE 5.8% IN A YEAR
Issue: Cable
A new FCC survey has found that the average monthly cable-television bill
climbed 5.8% nationwide over the one year period ending in July. The rise in
cable prices far outpaced the average rate of inflation for other goods and
services - 3.7%. Congress ended federal price controls on cable-TV bills on
March 31 in hopes of spurring competition. An increase in costs for
programming presented the single largest contributing factor to the rate
hikes, according to cable operators.
[SOURCE: Washington Post (E01), AUTHOR: Christopher Stern]
(http://washingtonpost.com/wp-dyn/articles/A6003-2001Feb14.html)

--------------------------------------------------------------

INTERNET
Napster Must Halt Online Music Swaps (WP)
ICANN Governance Hearing Set for February 14 (Senate)
'Kournikova' E-Mail Spreads Virus (WP)

FCC
FCC Commissioner Ness Won't Seek a Second Term (WSJ)

TELEVISION
Black and White Viewers Are More In Tune on Top 20 (WP)

PRIVACY
Privacy Coalition Announces New Privacy Initiative (EPIC)

INTERNET

NAPSTER MUST HALT ONLINE MUSIC SWAPS
Issue:
A federal appeals court ruled yesterday that Napster must prevent its
millions of devotees from swapping copyrighted songs. The decision is likely
to lead the company to shut down much of its free service. The 9th U.S.
Circuit Court of Appeals rejected Napster's arguments that the swapping was
legally protected fair use under copyright laws because Napster makes no
money off of the swapping. "Direct economic benefit is not required to
demonstrate a commercial use," the three judges wrote in their opinion.
"Rather, repeated and exploitative copying of copyrighted works, even if the
copies are not offered for sale, may constitute a commercial use." The
appeals court ordered a lower court to reword an earlier injunction; until
the new injunction is issued, the site can operate as usual.
[SOURCE: Washington Post (A01), AUTHORS: Streitfield and Stern]
(http://washingtonpost.com/wp-dyn/articles/A61907-2001Feb12.html)
See Also:
NAPSTER SUFFERS SETBACK IN APPEALS COURT RULING
[SOURCE: New York Times (A1), AUTHOR: Matt Richtel]
(http://www.nytimes.com/2001/02/13/technology/13NAPS.html)
(requires registration)

ICANN GOVERNANCE HEARING SET FOR FEBRUARY 14
Issue: Internet
The Senate Communications Subcommittee will hold hearings on Wednesday,
February 14 examining the structure of ICANN, the organization in charge of
creating and distributing Internet domain names, and the effort underway to
expand available domain names.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/107-13.html)

'KOURNIKOVA' E-MAIL SPREADS VIRUS
Issue: Internet
A new computer virus disguised as a photo of teenage tennis star Anna
Kournikova overwhelmed e-mail servers throughout Europe and North America
yesterday. Anti-virus researchers expected more computer infections Tuesday
in Asia. The virus (technically, a worm) sends itself to everyone in the
address books of Microsoft Outlook e-mail software on Windows computers,
although Macintosh users and those using other e-mail programs can still
spread the virus manually. The virus comes as an attachment named
"AnnaKournikova.jpg.vbs" - although the ".vbs" may not necessarily be
visible - and carries the message "Hi: Check This!" At least three subject
lines have been identified: "Here you have," "Here you go" and "Here you
are" -- all followed by a smiley face.
[SOURCE: Washington Post (E04), AUTHOR: Anick Jesdanun]
(http://washingtonpost.com/wp-dyn/articles/A61851-2001Feb12.html)

FCC

FCC COMMISSIONER NESS WON'T SEEK A SECOND TERM
Issue: FCC
Democrat Susan Ness, the most senior member of the Federal Communications
Commission won't seek a second term at the agency. With Ms. Ness' planned
departure, President George W. Bush must recruit three new nominees to an
agency responsible for regulating key new economy technologies like wireless
devices, cable and telephone networks, as well as broadcasting. Only three
members of the commission can be of the same party, which means that
President Bush must now find a Democrat and two Republicans. Ms. Ness has
been active in policies affecting the transition to digital television,
children's television, international negotiations over spectrum management
and other issues.
[SOURCE: Wall Street Journal (Interactive), AUTHOR: Mark Wigfield]
(http://interactive.wsj.com/articles/SB982015859727514659.htm)
(requires subscription)

TELEVISION

BLACK AND WHITE VIEWERS ARE MORE IN TUNE ON TOP 20
Issue: Television
A television show has brought African American and white households closer
than they have been in a decade -- when it comes to their TV-viewing habits,
anyway. "Who Wants to Be a Millionaire," a show that has been chastised for
its virtually all-white pool of contestants, had two editions rated among
the eight programs on the Top 20 lists for both black and white households.
The last television show to rate this highly on both lists was in 1996 -
ABC's "Monday Night Football." To underscore the apparent cross-over appeal
of winning a million dollars, consider this: four of the top five shows in
black homes -- UPN sitcoms "The Parkers," "The Hughleys," "Moesha" and
"Girlfriends" -- rank below No. 110 with whites. CBS's now-canceled "City of
Angels," which featured a mostly minority cast, ranked No. 7 in black homes
but No. 89 in white homes.
[SOURCE: Washington Post C01), AUTHOR: Lisa de Moraes]
(http://washingtonpost.com/wp-dyn/articles/A61822-2001Feb12.html)

PRIVACY

PRIVACY COALITION ANNOUNCES NEW PRIVACY INITIATIVE
Issue: Privacy
The Privacy Pledge The Privacy Coalition, a nonpartisan coalition of
consumer, civil liberties, educational, library, labor, and family-based
groups, presented "The Privacy Pledge." The goal of the pledge is to set the
standard for privacy proposals in congress. Members of the coalition
include: American Library Association, American Civil Liberties Union
(ACLU), Center for Media Education, Electronic Privacy Information Center
(EPIC), and the UAW.
[SOURCE: Electronic Privacy Information Center]
(http://www.epic.org/privacycoalition/coalition_press_release.html)

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