February 2002

DIGITAL DIVIDE
White House Spurns Tech Programs (WSJ)
Clinton Links Net To Terror, Digital Divide Policies (WP)
A Lesson in Computer Literacy from India's Poorest Kids (BW)

TELEVISION
Beyond the Box: How Will Television Evolve? (HBS)

BROADBAND
A Contest Of Connections (WP)

MEDIA & GOVERNEMENT
Pentagon Buttons Propaganda Office's Lips (USA)

DIGITAL DIVIDE

WHITE HOUSE SPURNS TECH PROGRAMS LEFT OVER FROM CLINTON PRESIDENCY
Issue: Digital Divide
Despite Bush Administration acknowledgements of the success of several
popular technology initiatives, officials have been moving to dismantle
Clinton-era programs devoted to ending the digital divide. This has included
opposition to tax incentives for companies bringing broadband Internet
access to rural and poor areas as well as the "e-rate" program credited for
wiring thousands of inner-city schools and libraries. The most recent and
controversial cut is the Technology Opportunities Program (TOP). The program
was created to fund innovative uses of technology and provided matching
grants for technology projects at schools, libraries and other public
facilities. The Administration has created block grants that could be used
to fund TOP programs, but there are concerns that that state and local
officials will bypass technology programs and use the funds for other
purposes.
[SOURCE: Wall Street Journal, AUTHOR: Yochi J. Dreazen]
(http://online.wsj.com/article_print/0,4287,SB1014760589610593200,00.html)
(requires subscription)

A LESSON IN COMPUTER LITERACY FROM INDIA'S POOREST KIDS
Issue: Digital Divide
Sugata Mitra, head of research efforts at New Delhi's NIIT, a fast-growing
software and education company, conducted an experiment providing PC and
Internet access poor New Delhi children. He discovered that with days, and
with out assistance, the kids had taught themselves to draw on the computer
and to browse the Net. As a result of his experiment, Mitra is convinced
that 500 million children could achieve basic computer literacy over the
next five years, if the Indian government put 100,000 Net-connected PCs in
schools and trained teachers in some basic "noninvasive" teaching techniques
for guiding children in using them. An interview with Mitra appears at URL
below.
[SOURCE: Business Week, AUTHOR: Thane Peterson]
(http://www.businessweek.com/bwdaily/dnflash/mar2000/nf00302b.htm)

CLINTON LINKS NET TO TERROR, DIGITAL DIVIDE POLICIES
Issue: Digital Divide
Former U.S. president Bill Clinton on Tuesday called on the global
information technology industry and governments to consider the ways in
which technology can develop globalization into a force toward a more
integrated world. Speaking on the first day of the World Congress on IT,
Clinton said that in addition to the money being earmarked for defense
spending, a healthy proportion should be set aside to "spread the benefits,
using technology, so there are fewer terrorists." He called for a new round
of debt relief for developing nations so more remote places in the world can
access a computer or the Net, get education and health information, and
expand their choices. "Distance education may be the only route to higher
education in some parts of developing countries," Clinton added.
[SOURCE: Washington Post, AUTHOR: Adam Creed]
(http://www.washtech.com/news/regulation/15378-1.html)

TELEVISION

BEYOND THE BOX: HOW WILL TELEVISION EVOLVE?
Issue: Television
The idea that television and the PC will converge in one device is over
rated, said James Ackerman, CEO of OpenTV, but they are becoming "cousins"
in more and more homes. Speaking at a Cyberposium 2002 panel on technology
and change in the entertainment and media industry, experts predicted a
gradual consumer movement from linear to on-demand programming. Panelists
indicated that the growth of on-demand, commercial-free television will
require the industry to develop new economic models. "The cost of creating
new programs isn't coming down. We need to find new economic models for
consumers to pay for content," said Ackerman "If you want to see the future
of television, go out and buy a TiVo," agreed Thomas McGrath, executive vice
president of the Viacom Entertainment Group. "Over 80 percent of consumers
with TiVo never watch a commercial at all." That trend will have dramatic
economic consequences for the industry, he added, since networks won't be
able to produce new programs without advertising revenue.
[SOURCE: Harvard Business School Bulletin, AUTHOR: Julia Hanna]
(http://hbsworkingknowledge.hbs.edu/pubitem.jhtml?id=2789&sid=-1&t=special_r
eports_cyber2002)

BROADBAND

A CONTEST OF CONNECTIONS
Issue: Broadband
The AT&T Corp., Sprint Corp., WorldCom and a coalition of ISP and local
phone companies have spent over $10 million dollars on a campaign to block
the Tauzin-Dingell bill expected to pass the House this week. The bill would
free regional telephone companies from regulations that require they give
competitors access to their local networks at wholesale prices. Staunch
supporters of the bill, the Baby Bells argue that they need the new
incentives to make it worthwhile to lay fiber-optic cable. Rivals of the
bill believe the Bells are more interested in casting off regulations and
rewriting the Telecommunications Act of 1996 that required they provide
access to their local networks before offering long-distance data and
telephone service. The bill is expected to experience a tough battle in the
Senate.
[SOURCE: Washington Post, AUTHOR: Juliet Eilperin]
(http://www.washingtonpost.com/wp-dyn/articles/A7677-2002Feb26.html)

MEDIA & GOVERNEMENT

PENTAGON BUTTONS PROPAGANDA OFFICE'S LIPS
Issue: Media & Government
The Pentagon will close the Office of Strategic Influence created
post-September 11 to communicate the United State's point-of-view on the
U.S. war on terrorism. The office fell under harsh criticism last week when
it was reported to have proposed the spreading false information to foreign
journalists.
[SOURCE: USA Today, AUTHOR: Associated Press]
(http://www.usatoday.com/news/washdc/2002/02/26/propaganda-office-closing.ht
m)

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INTERNET
Internet Oversight Board's Leader Proposes Large Government Role
(WSJ)
Mexico's E-Revolution (WIRED)

OWNERSHIP
Oligopolies Are On The Rise (WSJ)
Clear Channel Uses High-Tech Gear To Perfect The Art Of Sounding
Local (WSJ)

INTELECTUAL PROPERTY
Napster Wins One Round In Music Case (NYT)
Movies Get Framed (WP)
Online Group to Give Advice Regarding Copyrights (NYT)

INTELECTUAL PROPERTY

NAPSTER WINS ONE ROUND IN MUSIC CASE
Issue: Intellectual Property
In a ruling in the Napster case, Judge Marilyn Patel wrote that while the
evidence before the court has been limited, she was concerned that the five
major record labels have created joint ventures to distribute music over the
Internet. Judge Patel, of Federal District Court in Northern California, is
therefore allowing Napster to seek evidence that the record companies
colluded to monopolize the digital music market. If Napster is able to show
illegal collusion, it could invalidate the record companies' lawsuit. As
part of its defense, Napster has asserted that the record companies, hoping
to maintain a dominant market position, have colluded to prevent alternative
methods of distribution, and have offered anticompetitive licensing terms to
would-be Internet competitors. The record companies maintained that Napster
abetted copyright infringement, a position supported by Judge Patel's order
for Napster to stop the wholesale exchange of information it had no
permission to distribute.
[SOURCE: New York Times, AUTHOR: Matt Richtel]
(http://www.nytimes.com/2002/02/23/technology/23MUSI.html)
(requires registration)

MOVIES GET FRAMED
Issue: Intellectual Property
[Editorial] Jack Valenti responds to accusations that the movie industry is
deliberately withholding exhibition of movies over the Internet and stifling
digital innovation through enforcement of copyright ownership. Valenti
argues that, given the financial fragility of the film industry, every
producer longs to use the Internet as a distribution channel. As yet,
though, there is little way to assure fair rent or sale prices over the
Internet. Valenti rejects the idea that copyright owners are stifling
innovation. He suggests that the critics' definition of 'innovation' is
legalizing the breaking of protection codes, without which there is no
protection for creative work. While Valenti admits that broadband's
popularity is limited by unavailability of movies over the Internet, he also
suggests that the film industry will remain hesitant to release movies
unless strong protection for copyrighted material is implemented for
Internet exhibitions.
[SOURCE: Wahington Post, AUTHOR: Jack Valenti (chairman and CEO of the
Motion Picture Association)]
(http://www.washtech.com/news/media/15327-1.html)

ONLINE GROUP TO GIVE ADVICE REGARDING COPYRIGHTS
Issue: Intellectual Property
Concerned that corporations are using cease-and-desist orders to intimidate
sites whose content may be protected by the First Amendment, the Electronic
Frontier Foundation and several law schools have created a searchable
cease-and-desist database to inform recipients of their rights. These
notices typically accuse Web publisher of copyright or trademark violations
and warning that "your conduct may result in legal action against you."
"People get these letters and wonder, `Does this mean I have to take
everything down and go home?' " said Wendy Seltzer, a fellow with the
Berkman Center for Internet and Society at Harvard Law School. "What we try
to do with this site is to clarify what it is they have to worry about and
what's more likely to just be someone blowing hot air."
[SOURCE: New York Times, AUTHOR: Amy Harmon]
(http://www.nytimes.com/2002/02/25/technology/ebusiness/25CHIL.html)
(requires registration)

OWNERSHIP

OLIGOPOLIES ARE ON THE RISE
Issue: Ownership
Easing government regulations and economic rewards are pushing American
industries to consolidate into oligopolies. A ruling last week by a federal
appeals court striking down regulations barring cable operators from owning
television stations is just one of many vanishing rules that are resulting
in a flurry of mergers. For example, the thousands of family-operated cable
television companies that operated twenty years ago have been replaced by
the current possibility of three companies owning two-thirds of the market.
While a certain amount of consolidation is thought to improve efficiencies
and bring down consumer costs, oligopolies can destroy competition vital to
preventing companies from pushing prices above costs.
[SOURCE: Wall Street Journal, AUTHOR: Yochi J. Dreazen, Greg Ip and Nicholas
Kulish]
(http://online.wsj.com/article/0,4286,SB1014589181477203560,00.html?mod=Page
%20One)
(requires subscription)
See Also:
IMPATIENT COURT PRESSES THE F.C.C. TO DEREGULATE
[SOURCE: New York Times, AUTHOR: Amy Harmon]
(http://www.nytimes.com/2002/02/25/business/media/25REGS.html)

CLEAR CHANNEL USES HIGH-TECH GEAR TO PERFECT THE ART OF SOUNDING LOCAL
Issue: Ownership
Radio giant Clear Channel is using the power of technology and it's national
reach to bring DJs from large markets into smaller communities, thus cutting
staff costs and expanding their national brand. Operating over 1200 U.S.
stations, Clear Channel grew from a single FM station by taking advantage of
a 1996 law that struck down a nationwide ownership cap of 40 stations and
allowed companies to own 8 stations in the largest markets. Now stations in
the Clear Channel family share DJs via a practice called, "voice-tracking".
Popular voice personalities record customized programs to make it sound as
if they are local residents of various smaller communities. This practice
enables a small station in Boise to pay $4000 to $6000 a year for an on-air
personality instead of having a local DJ on staff. The result is the
creation of multiple identities for many DJs who live in one city and do
"local" shows in several other markets.
[SOURCE: Wall Street Journal, AUTHOR: Anna Wilde Matthews]
(http://online.wsj.com/article/0,,SB1014589283422253080,00.html?mod=todays%5
Fus%5Fpageone%5Fhs)
(requires subscription)

INTERNET

INTERNET OVERSIGHT BOARD'S LEADER PROPOSES LARGE GOVERNMENTAL ROLE
Issue: Internet
A major restructuring was recommended by the president of the Internet
Corporation for Assigned Names and Numbers (ICANN) calling for governments
to nominate one-third of the board and eliminating participation by the
general Internet community. Currently the general Internet community elects
5 of the 19 board members. The new proposal would reduce the number of board
members to 15 with one third nominated by governments, one third through a
committee process and the rest appointed by four policy and technical
groups. ICANN has long been criticized for being beholden to corporate
interests and the proposal is expected to draw criticism from public
interest groups.
[SOURCE: Wall Street Journal, AUTHOR: Associated Press]
(http://online.wsj.com/article/0,,SB1014605787304403400,00.html?mod=technolo
gy_main_whats_news)
(requires subscription)

MEXICO'S E-REVOLUTION
Issue: Digital Divide
When Mexico launched an e-gov revolution last year, the goals were lofty:
free e-mail accounts for every Mexican, online educational, health and
government services. But the initiative had no funding in 2001 and received
only $73 million for 2002. It remains unclear how the cash-strapped
government will pay for the thousands of computers needed to network 10,000
communities by 2006. Under the plan, computers with Internet connections
will be available through library, school and office kiosks allowing access
to 85 percent of the Mexican population. Currently, only 6 percent of the
population has Internet access. The initiative remains a priority for the
government as e-government transactions are considered to be far less
corruptible than direct interactions.
[SOURCE: Wired, AUTHOR: Julia Scheeres]
(http://www.wired.com/news/print/0,1294,50622,00.html)

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DIGITAL DIVIDE
The Digital Dividend (MIT)
Jamaican Jails Going Online (WIRED)

RADIO/TELEVISION
Ownership Ruling Is Latest Boon to Industry Once Seen as Doomed
(NYT)
Copyright Arbitration Panel Sets Royalty Fees For Internet Radio
Broadcasts (WP)

DIGITAL DIVIDE

THE DIGITAL DIVIDEND
Issue: Digital Divide
[Commentary] Stuart Brotman argues that it is the business community, not
the government, who should lead efforts to close the digital divide.
Brotman refers to "digital dividends", which are possible outcomes that can
be achieved by the private sector through widespread penetration and use of
digital technologies. Within companies the "digital dividend" would
translate into better-trained employees, increased global sales and
marketing opportunities, and a more diverse supply chain. While the
government would not be expected to lead the effort, it would be critical
for the business community to work closely with policymakers. The government
would be relied on to offer tax incentives and attractive regulations to
support the business community underwriting expansion of digital
technologies.
[SOURCE: Technology Review, AUTHOR: Stuart N. Brotman]
(http://www.technologyreview.com/articles/brotman0302.asp)

JAMAICAN JAILS GOING ONLINE
Issue: Digital Divide
Maximum security prisoners in Jamaica may soon have access to the Internet.
As part of a rehabilitation program, Reverence for Life, the government is
considering adding an Internet component to give participants much needed
social, vocational and cognitive training. The program is the brain-child of
Camella Rhone, director general of Jamaica's Ministry of Industry, Commerce
and Technology. Initial hi-tech expertise and training will be provided by
Harvard University's Berkman Centre for Internet & Society, but the cost of
hardware, software and Internet access falls on the Jamaican government. A
country with a population of only 2.6 million, Rhone says that Jamaica can
not afford to give up on any adults, even prisoners. The country's prisons
will also serve as a perfect laboratory for the Berkman Centre.
[SOURCE: Wired News, AUTHOR: Mark Baard]
(http://www.wired.com/news/politics/0,1283,50403,00.html)

RADIO/TELEVISION

OWNERSHIP RULING IS LATEST BOON TO INDUSTRY ONCE SEEN AS DOOMED
Issue: Ownership
A recent decision by the Federal appeals court has given large television
networks new opportunities to increase profits and expand their reach. Heavy
lobbying has resulted in nearly a decade of loosening of regulatory
conditions that have allowed networks to own the programs they broadcast and
own more local television stations around the country. This week's ruling
would allow the large networks to own and operate cable systems. This
cross-ownership will give the networks increased negotiating power when
buying syndicated programs and increase their ability to cross-promote
programs. While the recent ruling may be a boon for the major networks, The
National Affiliated Stations Alliance has voiced fears that it will damage
local news coverage and hopes Congress or the FCC will step in to keep the
current limits on station ownership.
[SOURCE: New York Times, AUTHOR: Bill Carter]
(http://www.nytimes.com/2002/02/21/business/media/21NETW.html)

COPYRIGHT ARBITRATION PANEL SETS ROYALTY FEES FOR INTERNET RADIO BROADCASTS
Issue: Intellectual Property
A panel assigned by the US Copyright Office recommended that Webcasters pay
record companies 0.14 cents for each song streamed to Internet listeners.
Traditional radio stations should pay 0.07 cents for each tune that is
simulcast online from their AM/FM transmissions. The panel suggested rates
are approximately 10 times higher than what Webcasters proposed, but still
well below what the recording industry requested. The rate recommendation,
which still must receive official endorsement from the librarian of
Congress, also includes special rates for non-commercial Webcasting of
recorded music: 0.05 cents for each all-Internet play or 0.02 cents for
radio simulcasts.
[SOURCE: Washington Post, AUTHOR: Steven Bonisteel]
(http://www.washtech.com/news/media/15268-1.html)

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RADIO
A Sixth Low-Power FM Radio Station Premiers (WP)
Arbitration Panel To Rule On Internet Radio Royalties (NYT)

INTERNET
Cable TV Lobby, Including Comcast, Tells FCC: Give Us A "Closed"
Broadband 'Net (CDD)
Grid Project to Wed Web Services(NYT)

ANTITRUST
Judge Tells Microsoft to Share Code (NYT)

RADIO

A SIXTH LOW-POWER FM RADIO STATION PREMIERS
Issue: Radio
WRYR (97.5 FM) made its inaugural broadcast on February 18. It is only the
sixth low-power FM station to begin broadcasting since the FCC began issuing
licenses two years ago. Low-power station licenses were offered to promote
the notion that airwaves are public property. Under a torrent of
applications, Congress was pressed by existing broadcasters to tighten
restrictions on low-power stations. In December 2000, Congress laid down
rules that effectively pushed low-power FM out of urban areas and into rural
areas. Although more than 3,400 licenses have been issued, most stations
have remained little more than dreams. WRYR is run by an environmental group
in Marlyand's Chesapeake Bay. Its founder, Michael Shay has taped bluegrass
ensembles, lined up feeds from environmental groups, contacted black
watermen and visited with gospel groups. He says his station will celebrate
the Chesapeake's diversity.
[SOURCE: Washington Post, AUTHOR: Manuel Roig-Franzia]
(http://www.washtech.com/news/media/15226-1.html)

ARBITRATION PANEL TO RULE ON INTERNET RADIO ROYALTIES
Issue: Radio/ Internet
This week an arbitration panel will rule on the royalties an Internet
company must pay companies for songs played online. Internet radio operators
and radio stations that stream their music via the Web are concerned that
high fees will prohibit the growth of Internet radio into a full-fledged
business. While resolving the royalty issue will be a major factor in the
success of online broadcasters, they must also deal with regulatory fights,
lack of interest by advertisers and rising costs.
[SOURCE:NY Times, AUTHOR: Bob Tedeschi]
(http://www.nytimes.com/2002/02/18/technology/ebusiness/18ECOM.html?pagewant
ed=print)

INTERNET

CABLE TV LOBBY,INCLUDING COMCAST, TELLS FCC: GIVE US A "CLOSED" BROADBAND
'NET
Issue: Broadband
The cable industry is pressing the FCC to classify the cable modem business
as an "information service". Comcast and the National Cable
Telecommunications Association have told the FCC that they oppose policies
supporting "forced access" requirements, meaning open-access provisions that
would favor an open marketplace. Public interest advocates and cable's
Internet competitors are calling for an open access policy similar to the
current policy governing telephone-based Internet service. Those policies
force large cable and telephone companies to interconnect with local
telephone and broadband Internet providers on a nondiscriminatory basis. In
addition to the "closed access agenda", cable lobbyists are asking that the
FCC prevent local governments and communities from requesting that a certain
portion of bandwidth be set aside for "public, educational and governmental"
(PEG) use.
[SOURCE: Center for Digital Democracy, AUTHOR:CDD]
(http://www.democraticmedia.org/news/washingtonwatch/cableletter.html)

GRID PROJECT TO WED WEB SERVICES
Issue: Internet
In a paper presented yesterday at a conference in Toronto, four computer
scientists laid out a plan for marrying Web services with grid technology.
Grid technology is a worldwide computing project that hopes to bring
supercomputing to individuals. Web services promise a new level of computer
automation and convenience to consumers over the Internet. The long-range
goal for marrying these two technologies is to transform computing by
allowing large scale sharing of resources, concepts and infrastructures.
[SOURCE: New York Times, AUTHOR: Steve Lohr]
(http://www.nytimes.com/2002/02/19/technology/19GRID.html?pagewanted=print)

ANTITRUST

JUDGE TELLS MICROSOFT TO SHARE CODE
Issue: Antitrust
Federal judge Colleen Kollar-Kotelly has ruled that Microsoft must give nine
states that are seeking tougher sanctions against the company access to the
software code for its flagship Windows operating system. Kollar-Kotelly made
the order during a conference call late on Friday with lawyers representing
Microsoft and the nine states that object to the government's settlement
with the company. Microsoft has long maintained that its Internet Explorer
browser is an integrated feature of Windows and could not be removed without
damaging the operating system. Last week, the dissenting states asked to be
able to inspect the code for Windows. "It seems to me that if your side has
access to it, then the other side, frankly, should have access to it," the
judge said to Microsoft's lawyers, according to a transcript of a conference
call released later.
[SOURCE: New York Times, AUTHOR: Steve Lohr]
http://www.nytimes.com/2002/02/19/technology/19SOFT.html
(requires registration)

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