February 2004

MORE TALK OF INDECENCY
Hearing Today: H.R. 3717, the 'Broadcast Decency Enforcement Act of 2004
FCC's Martin Ponders Indecency on Pay TV, Radio
Stevens: Keep Heat on Broadcasters

POLICYMAKERS
Key Legislators Talk Telecom Policy
Norquist Taking the Heat on Broadband

PUBLIC BROADCASTING
Public Broadcasting Faces Crucial Year in Congress
PBS HD Channel to Launch March 1

QUICK HITS
Hearing: Reauthorization of the Satellite Home Viewer Improvement Act
Voluntary Collective Licensing
Lifting the Curtain on E-Voting
Bundles of Trouble: The FCC's Telephone Competition Rules
Study Says Media Usage is Double Current Measures

MORE TALK OF INDECENCY

HEARING: H.R. 3717, BROADCAST DECENCY ENFORCEMENT ACT OF 2004
Subcommittee on Telecommunications and the Internet (Commerce)
Today, February 26, 2004 at 09:30 AM (eastern) 2123 Rayburn House Office
Building
To testify: ABC TV President Alex Wallau; Alan Wurtzel, NBC; Gail Berman,
Fox Broadcasting; Bud Paxson, Paxson Communications; Harry Pappas, Pappas
Telecasting; John Hogan, Clear Channel. Find link to Webcast at URL below.
[SOURCE: House of Representatives]
http://energycommerce.house.gov/108/Hearings/02262004hearing1216/hearing...

FCC'S MARTIN PONDERS INDECENCY ON PAY TV, RADIO
Speaking to the Reuters Technology, Media and Telecommunications Summit,
FCC Commissioner Kevin Martin noted that regulators are considering if
television and radio signals delivered via satellite and cable should
adhere to the same indecency standards as broadcast stations. Satellite
radio and television providers are licensed by the FCC, which could
potentially hold them accountable, Commissioner Martin said. But he
conceded that companies like Sirius Satellite Radio could argue that since
consumers pay for their products, they would not have to comply.
Commissioner Martin would like to see the FCC affirm local television
stations' right to offer alternative programing if they object to a show
and for cable companies to allow customers to block channels they find
offensive and not have to pay for them.
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=4439539

STEVENS: KEEP HEAT ON BROADCASTERS
In a related story, the likely Senate Commerce Committee chairman, Ted
Stevens (R-AK), told the Quello Symposium on communications policy that the
bill moving through the House to increase indecency fines by tenfold does
not go far enough, given what broadcasters make selling ads. Sen Stevens
said Congress needs to look at indecency and TV violence, and to consider
mandating a family hour.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA386262?display=Breaking+News
(requires subscription)
In a related story...
HOWARD STERN SHOW SUSPENDED ON CLEAR CHANNEL
Clear Channel announced that it will not air the Howard Stern show on
stations in Fort Lauderdale, Fla.; Rochester, N.Y.; Orlando, Fla.; San
Diego; Pittsburgh; and Louisville, Ky., until the company is "assured that
his show will conform to acceptable standards of responsible broadcasting."
[SOURCE: wall Street Journal]
http://online.wsj.com/article/0,,SB107776280485639689,00.html?mod=mm%5Fm...

POLICYMAKERS

KEY LEGISLATORS TALK TELECOM POLICY
Senate Commerce Committee Chairman John McCain (R-AZ) spoke to a Media
Center Forum on a wide range of issues including media ownership, the
transition to digital TV and public television. 1) Concerning media
ownership, Sen McCain said "there are many who believe that what happened
with Clear Channel is a miner's canary for the rest of the broadcasting
industry." Although a self-called "de-regulator" and small government
advocate, Sen McCain said regulation of how American receive their
information and knowledge is a special category. He would like to see the
consolidation trend slowed noting that the FCC's relaxation of ownership
rules went too far. For example, in Los Angeles, one corporation could own
three TV stations, eight radio stations, one Internet service and "several
other media outlets." In Sen McCain's home state, USAToday publisher
Gannett owns both the Arizona Republic and Ch. 12 which he finds nothing
wrong with. But if the corporation were to be allowed to own two or three
more stations, "I think that would have dangerous implications." Sen McCain
said, "once consolidation takes place, I don't think there's any way you
can force anybody to unload their property, and I wouldn't be in favor of
that as well. So before that happens, we at least should have far more
careful scrutiny" of media consolidation "than the FCC has given it."
Concerning the proposed Comcast-Disney merger, Sen McCain said he's "very
worried about vertical integration." 2) The senator blamed the National
Association of Broadcasters for the slow pace of the digital television
transition, although he saw some hope with the costs of DTV sets falling
from unaffordable to very expensive. "I would think it will be another 3
or 4 or 5 years before we could start getting some of that analog spectrum
back," he said adding that it will be long overdue. 3) Sen McCain said he
has "always been skeptical" of public TV, conceding "I'm not the greatest
fan." Nevertheless, he said he thinks PTV "is fine," but said he hopes one
day "they can get enough donors to support themselves."
House Telecom Subcommittee Chairman Fred Upton (R-MI) spoke to members of
the Association of Public Television Stations about the transition to
digital TV, reauthorization of public broadcasting, the next budget for
public broadcasting, indecency and reform of the Telecommunications Act of
1996. 1) On digital
transition, public TV came in for praise for being "leaders in
multicasting." Concerning the APTS plan to return analog spectrum early,
Rep Upton said, "We want to help you return the analog... and that's
something we want all broadcasters be able to do." The Congressman is
planning a roundtable discussion on DTV in the spring and will invite PTV
leaders. 2) A General Accounting Office report expected in April may set
the groundwork for a reauthorization of public broadcasting in 2005 -- the
last time that was done was 1989. 3) Public broadcasting may suffer
appropriations cuts because difficulties with the budget. 4) Rep Upton
saluted public TV stations for an "unblemished" record of broadcast
"decency and thoughtfulness." 5) Telecom Act reform is very unlikely in
2004, but Rep Upton plans to begin hearings in order to set the groundwork
for a re-write of the Act by the next Congress.
[SOURCE: Communications Daily, AUTHOR: Paul Gluckman & Dinesh Kumar]
(Not available online)

NORQUIST TAKING HEAT ON BROADBAND
The presidents of the Progress and Freedom Foundation, the Pacific Research
Institute and the Competitive Enterprise Institute as well as scholars at
the Hoover Institution and the Manhattan Institute have all signed a letter
to White House informal advisor Grover Norquist accusing him of being
pro-regulatory when it comes to broadband policy. "Your position on
telecommunications deregulation is contrary to the views of the vast
majority of free-market economists and policy analysts," the letter states.
"Your continuing advocacy of the pro-regulation position is destructive to
the cause of limited government. To the extent your efforts are successful,
the effect will be to reduce capital formation, slow job creation, impede
productivity growth and stifle individual liberty and economic freedom."
Norquist said he remains a proponent of deregulating telecom. If the
scholars who wrote yesterday's letter have a proposal for a national
broadband policy that they want him to support, he said, "that's news to me."
[SOURCE: Washington Post, AUTHOR: Griff Witte]
http://www.washingtonpost.com/wp-dyn/articles/A6925-2004Feb25.html

PUBLIC BROADCASTING

PUBLIC BROADCASTING FACES CRUCIAL YEAR IN CONGRESS
Public broadcasting and the Corporation for Public Broadcasting (CPB) face
a crucial year in Congress. Through its recent appointments to the CPB
board and its budget proposals, the Bush Administration has sent signals
that it wants to limit the editorial independence of public broadcasting.
Some Members of Congress, too, have criticized certain public broadcasting
programs as biased and have called for more government oversight. This
criticism makes public broadcasting all the more vulnerable in a year when
the CPB faces congressional reauthorization. A reauthorization bill gives
opponents of public broadcasting forums for their attacks and legislative
avenues for making public broadcasting less about serving the public
interest and more about avoiding controversy. "The editorial independence
of public broadcasting must be saved," said Common Cause President and CEO
Chellie Pingree. "With media consolidation so pervasive, in some
communities the only locally owned media outlet is the public television
station and radio station. Public broadcasting remains our last, best hope
of informing citizens about issues vital to our democracy as it does not
depend on commercial revenues and ratings for its existence.
There's much more at the URLs below.
[SOURCE: Common Cause Edit Memo]
http://www.commoncause.org/news/default.cfm?ArtID=284
http://www.commoncause.org/publications/022404_PBS_Edit_Memo.pdf
The House Subcommittee on Labor, Health and Human Services, Education
(Appropriations) held a hearing on CPB funding yesterday.
http://appropriations.house.gov/index.cfm?FuseAction=AboutTheCommittee.S...

PBS HD CHANNEL TO LAUNCH MARCH 1
PBS will become on March 1 the first broadcaster to provide a fully
packaged 24/7 channel consisting entirely of High Definition and Widescreen
content. The PBS HD Channel will be available from local PBS stations that
have transitioned to digital broadcasting, as well as through local digital
cable systems that have agreed to retransmit the digital signal of their
local public television station. There are currently 236 local PBS stations
on the air with digital signals, reaching more than 85 percent of U.S. TV
households. The PBS HD Channel joins a suite of PBS digital services,
including PBS KIDS Channel and PBS YOU ("Your Own University") and the VOD
cable package,
"PBS KIDS on Demand."
[SOURCE: PBS Press Release]
http://www.pbs.org

QUICK HITS

HEARING: REAUTHORIZATION OF THE SATELLITE HOME VIEWER IMPROVEMENT ACT
On Tuesday Rep Lamar Smith (R-TX), Chairman of the Subcommittee on Courts,
the Internet, and Intellectual Property (Judiciary), said of renewal of the
Satellite Home Viewer Improvement Act (SHVIA), "there are some areas I
think we can agree on. Inevitably, I think we are moving towards
reauthorization, perhaps for 5 years, and we can talk about more of the
details later on." Satellite operators are looking for expanded rights to
offer distant network signals into some local markets, arguing that it
could help speed the transition to digital television.
[SOURCE: House of Representatives Committee on the Judiciary and
Communications Daily, AUTHOR: Jeanene Timberlake]
http://boss.streamos.com/real-live/hjudiciary/4749/100_hjudiciary-live_0...

VOLUNTARY COLLECTIVE LICENSING
The Electronic Frontier Foundation (EFF) announced the release of a report
outlining its favored solution to the music file-sharing controversy. The
EFF white paper recommends that the music industry adopt a model similar to
that used by radio stations today, known as voluntary collective licensing.
The proposal suggests a way that artists and copyright holders can get paid
and music fans can share music freely at a reasonable charge without
feeling like criminals. "Voluntary collective licensing aligns the
interests of the music industry with music fans," said EFF Senior
Intellectual Property Attorney Fred von Lohmann, "The more people share
music, the more artists and copyright holders should receive compensation
for their creations."
The report, entitled "A Better Way Forward: Voluntary Collective Licensing
of Music File Sharing," is part of the organization's "Let the Music Play"
campaign.
[SOURCE: Electronic Frontier Foundation Media Advisory]
http://www.eff.org/share/20040224_eff_pr.php

LIFTING THE CURTAIN ON E-VOTING
On March 2, primary voters in California, Georgia and Ohio will use
e-voting systems for the first time and will be a precursor to the expected
50 million voters who will cast electronic ballots for president this
November. But there has been very little media coverage of the inherent
problems with these systems by traditional outlets. Online news magazine
Salon contributor Farhad Manjoo demonstrated how a moderately knowledgeable
techie could hack into Diebold machines and tamper with election results.
"If you've got a copy of Access and can get physical access to the county
machine -- or, some activists say, if you discover the county's number and
call into the machine over a phone line -- the vote is yours to steal,"
Manjoo wrote. Because of the threat to democracy, substantial debate on
e-voting's effects on the democratic process is still required,
Lewellen-Biddle Taylor write, and the broadcast media, in keeping with
their FCC license obligations, has a duty to provide it.
[SOURCE: Media Channel, AUTHOR: Mark Lewellen-Biddle and Danielle Taylor]
http://www.mediachannel.org/views/dissector/affalert147.shtml

BUNDLES OF TROUBLE: THE FCC'S TELEPHONE COMPETITION RULES
A Heritage WebMemo on FCC rules on unbundled network elements (UNEs) that
have been challenged in court. The rules, the result of provisions in the
Telecommunications Act of 1996, aimed to increase competition in the local
telephone service market. But the rules get it wrong, argues Gattuso: 1)
Rather than fostering real competition, the rules undercut it by allowing
competitors to lease facilities at artificially low prices. 2) The FCC
erred in relying on state-by-state regulation in this case; federal
regulation is appropriate because telecommunications service is a key part
of interstate commerce. Whatever the court decide, Gattuso concludes, the
FCC should review UNE rules to reflect real competition from wireless and
Internet telephony.
[SOURCE: Heritage Foundation, AUTHOR: James L. Gattuso]
http://www.heritage.org/Research/Regulation/wm432.cfm

STUDY SAYS MEDIA USAGE IS DOUBLE CURRENT MEASURES
Ball State University Professors Michael Holmes and Bob Papper have written
Middletown Media Studies, a new report on how media usage is measured. The
researchers find that phone surveys and diaries grossly underestimate media
consumption. When comparing reports of media use by phone, by diary entry
and by actual observation, the researchers found that people underestimate
the hours they watch TV by one-half. They also found that people spend up
to one-fourth media-use time using more than one medium simultaneously.
Nielsen Media Research dismissed the study pointing out that in 55 markets,
People Meters are activated as soon as someone turns on the TV. The study
was funded the university's $20 million grant from the Lilly Endowment.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA386366?display=Breaking+News
(requires subscription)
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. Headlines are compiled by
Kevin Taglang (ktaglang( at )etpost.net) -- we welcome your comments.
--------------------------------------------------------------

KIDS AND MEDIA
A Report on Childhood Obesity

BROADCASTING
White House Pushes Fines, Fees on Broadcasters

VoIP
Senate Panel Hears VoIP Arguments

PRIVACY
Covering Tracks: New Privacy Hope for P2P

QUICK HITS
Study: HDTV Will Be Cable's Defense vs. DBS
Qwest To Offer DSL Separate From Phone
Microsoft to Launch Plan to Control Spam
Publication: Toward Equality of Access

KIDS AND MEDIA

A REPORT ON CHILDHOOD OBESITY
The Kaiser Family Foundation released a report Tuesday that suggests links
between obesity in children and exposure to television, video games and
movies. One of the main contributors to obesity may be food advertising
targeted at kids. Some of the most compelling evidence summarized in the
report came from studies that reduced children's exposure to media, said
Vicky Rideout, vice president and director at the program for the study of
entertainment media and health at the Kaiser Foundation. "What's really
powerful are the interventions that have succeeded in reducing children's
weight problems by reducing the time spent with media," Ms Rideout said.
"If you find that something is succeeding, you don't necessarily have to
wait for 100 percent proof explaining why it's succeeding." Childrens'
cable channel Nickelodeon is already responding with a "Let's just play"
campaign that encourages physical activity and restricting commercials to
the beginning and end of shows [hey, just like PBS]. But advertising
executives are not ready to accept all the blame and endorse changes in
their industry. They prefer expansion of public education programs to
promote healthy eating and exercise [what we need is more advertising!].
[SOURCE: New York Times, AUTHOR: Nat Ives]
http://www.nytimes.com/2004/02/25/business/media/25adco.html
(requires registration)

BROADCASTING

WHITE HOUSE PUSHES FINES, FEES ON BROADCASTERS
National Telecommunications and Information Administration head Michael
Gallagher told the Media Institute that the Administration wants to see
pending decency enforcement legislation toughened so stations pay the
highest possible fines when they air indecent programming during kids'
shows and shows rated suitable for children such as the Super Bowl. The
White House may ask bill sponsor House Telecom Subcommittee Chairman Fred
Upton (R-MI) to amend the bill with the specific language concerning
children. Additionally, the Administration is proposing fees for spectrum
users that would include digital TV broadcasters. The White House is
proposing a user fee on unauctioned spectrum that would begin in 2005 and
generate $3.1 billion over the first 10 years. The White House is also
asking Congress for fees on analog spectrum that would begin in 2007 and
expire when a station went all-digital and returned the analog channel for
auction. The analog spectrum fee has been proposed for a number of years
without success; it is not expected to pass in this year's budget
legislation either.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA386123?display=Breaking+News

VoIP

SENATE PANEL HEARS VoIP ARGUMENTS
The Senate Commerce Committee held a hearing on Internet telephone service
(VoIP) Tuesday and much of the talk focuses on how to regulate and tax the
new service. Currently, states rely on some $13 billion raised annually
through phone taxes to pay for emergency calling, subsidized phone services
and other social programs. But there's some fears these funds may dry up as
more calling moves to VoIP. And, on the flip side of the coin, other fear
that taxing VoIP may lead to taxes on e-mail and other Internet
applications. Senators seem to agree that VoIP providers should be forced
to follow some federal rules, such as being required to offer 911 service
or comply with law enforcement wiretapping demands, but they are leaning to
a hands-off approach to regulation as VoIP starts to grow. FCC Chairman
Powell testified at the hearing and endorsed telecommunications reform
legislation. He told the committee regulation of new technology such as
VoIP could not be resolved under the Telecom Act of 1996 since it doesn't
allow such services as VoIP to be "harmonized" and makes it difficult to
resolve intercarrier compensation. "The days are numbered on the way we're
doing this under the current statute," Chairman Powell said. "I do believe
there is going to have to be a statute in the future that recognizes these
dramatic technical changes."
[SOURCE: C-Net|News.com and Communications Daily, AUTHOR: Ben Chamy and
Terry Lane]
http://news.com.com/2100-7352_3-5164239.html?tag=nefd_top
See links to testimony delivered at
http://commerce.senate.gov/hearings/witnesslist.cfm?id=1065
Read FCC Chairman Michael Powell's written testimony at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-244231A1.pdf
Politicians Against Web Tax Turn Efforts Toward VOIP
[SOURCE: Wall Street Journal]
http://online.wsj.com/article/0,,SB107765327809137965,00.html?mod=teleco...
(requires subscription)
Few Rules Better for Calls On Internet, Powell Says
[SOURCE: Washington Post, AUTHOR: Griff Witte]
http://www.washingtonpost.com/wp-dyn/articles/A3495-2004Feb24.html

PRIVACY

COVERING TRACKS: NEW PRIVACY HOPE FOR P2P
Responding to Recording Industry Association of America lawsuits against
digital music file swappers, peer-to-peer network developers are trying to
find ways for Internet users to remain anonymous while downloading files.
Efforts have not been very successful yet because in order to download a
song from another computer online, a file swapper's computer must make some
kind of connection to it. That leaves a digital record that can be traced
back to a person's Internet service provider, and from there to the account
holder. Creating more privacy often creates efficiency problems that ruin
the peer-to-peer network. "The bottom line is that you just can't be
anonymous on the Internet if you're going to have some kind of peer
transaction," said Mark Ishikawa, chief executive officer of BayTSP, a
company that tracks and identifies file swappers for music labels and
Hollywood studios. "There is this myth that you can be anonymous. You can
hide, but we can get you."
[SOURCE: C-Net|News.com, AUTHOR: John Borland]
http://news.com.com/2100-1027_3-5164413.html?tag=cd_lede

QUICK HITS

STUDY: HDTV WILL BE CABLE'S DEFENSE VS. DBS
Each year Horowitz Associates surveys cable system staff and consumers and
then issues a report called State of Cable & Broadband. The research found
this year that 68% of cable operator respondents cited HDTV service built
into digital boxes as the key driver for acquisition and retention of
customers, followed by an interactive programming guide (58%),
video-on-demand (55%) and digital-video recorders (54%). But only 5% of all
consumers surveyed, however, were aware that they can get HDTV service from
a cable or satellite provider. And only 38% of cable subscribers surveyed
were aware that they can get DVR service from their operator.
[SOURCE: Multichannel News, AUTHOR: Mike Reynolds]
http://www.multichannel.com/article/CA386126?display=Breaking+News

QWEST TO OFFER DSL SEPARATE FROM PHONE
"Naked DSL" may be coming your way, but don't delete this email from your
spam folder. Qwest is the first regional Bell telephone company that will
offer high-speed digital-subscriber-line (DSL) Internet service to
customers who are not regular phone subscribers as well. This company
policy change will allow more consumers to choose alternative local phone
service providers or even go all-wireless for phone service. Consumer
advocates endorsed the move by the Denver company. "We love lots of
different pricing options for consumers," says Chris Murray, legislative
counsel for Consumers Union Qwest's new a la carte DSL service is
particularly timely, he says, because more consumers are experimenting with
alternative ways of making calls. The other regional Bells may follow suit,
but not anytime soon, it appears. Why did Qwest make the move? "We decided
we'd rather not lose the customer," said Qwest Chairman and Chief Executive
Richard Notebaert.
[SOURCE: Wall Street Journal, AUTHOR: Shawn Young shawn.young( at )wsj.com]
http://online.wsj.com/article/0,,SB107766524136738263,00.html?mod=teleco...
(requires subscription)

MICROSOFT TO LAUNCH PLAN TO CONTROL SPAM
"Caller ID for E-mail" is a new system being launched by Microsoft that
will allow computers to recognize whether incoming e-mail is from a
legitimate Internet address. Rather than using filters to try to identify
and weed out spam, the new approach seeks to spot legitimate e-mail and
automatically segregate everything else. Microsoft's Bill Gates introduced
the system during a keynote address to a computer security conference in
San Francisco.
[SOURCE: Washington Post, AUTHOR: Jonathan Krim]
http://www.washingtonpost.com/wp-dyn/articles/A3385-2004Feb24.html
See Also:
Latest Ideas for Fighting Spam Not the Greatest
[SOURCE: San Jose Mercury News, AUTHOR: Dan Gillmor]
http://www.mercurynews.com/mld/mercurynews/business/technology/8035672.htm

PUBLICATION: TOWARD EQUALITY OF ACCESS
The Bill & Melinda Gates Foundation and a number of other national civic
organizations, released a new report finding that public libraries have
helped close the digital divide by providing free, public access to
computers and the Internet, particularly for people without access at home
or work. The report, "Toward Equality of Access: The Role of Public
Libraries in Addressing the Digital Divide," also identifies significant
challenges libraries face in sustaining and improving this service and
recommends the public and private sectors work together to ensure that
libraries can continue to provide this vital access to technology for years
to come.
http://www.gatesfoundation.org/nr/Downloads/libraries/uslibraries/report...
--------------------------------------------------------------

BROADCASTING
Broadcasters Devise Plans To Placate FCC
By Skipping Ahead, FCC Leaves Public Behind
Comcast Might Want DTV Must-Carry
FCC, McCain: Open Doors to Big-Market LPFMs
FCC: Let's Re-Think UHF Rule

TELECOM
Should Broadband be the Universal-Service Goal?
Wi-Fi's Growing Pains
Internet Phone Fees Spark FCC Debate
Vodafone's Failed Bid Raises Fears

CONGRESSIONAL CALENDAR
Reauthorization of the Satellite Home Viewer Improvement Act (2/24)
Voice Over Internet Protocol (2/24)
Broadcast Decency Enforcement (2/26)

Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. Headlines are compiled by
Kevin Taglang (ktaglang( at )etpost.net) -- we welcome your comments.

BROADCASTING

BROADCASTERS DEVISE PLANS TO PLACATE FCC
In response to FCC Chairman Michael Powell's call to broadcast networks to
voluntarily curb indecent programming, Fox will begin a six-week print and
public service announcement (PSA) campaign today urging parents to use the
V-chip. In addition, the network will expand its standards and practices
department and has entered a "consultative" relationship with Henry J.
Kaiser Family Foundation, a non-profit that will brief Fox creative
executives about the organization's research and discuss how Fox programs
can incorporate health-related messages into story lines. CBS will also run
a PSA campaign to encourage parents to use the V-chip which allows parents
to program their TVs to block programs with specific content ratings. In
addition, CBS will delay the transmission of some live events.
[SOURCE: Wall Street Journal, AUTHOR: Brian Steinberg at
brian.steinberg( at )wsj.com]
http://online.wsj.com/article/0,,SB107750519573436327,00.html?mod=mm_med...
(requires subscription)
See note below about decency enforcement hearing this week in House.

BY SKIPPING AHEAD, THE FCC LEAVES PUBLIC BEHIND
Meredith McGehee, Director of the Alliance for Better Campaigns (ABC),
calls on the FCC to complete proceedings to define the public interest
obligations of digital broadcasters before finalizing rules to complete the
transition to digital TV including cable must-carry. ABC and other
advocates are working to get the FCC to revitalize public interest
standards including 1) political discourse; 2) children's educational
programming; and 3) diversity of independent programming. Broadcast
television is our nation's public square, writes McGehee. It is the one
medium that targets and reaches the public as a whole. Citizens will be
ill-served by broadcasters unless the FCC takes action ensuring that
broadcasters air at least a minimum amount of public affairs programming,
including candidate- and issue-centered discussion in the period just
before elections.
[SOURCE: The Political Standard (Alliance for Better Campaigns), AUTHOR:
Meredith McGehee]
http://www.bettercampaigns.org/standard/display.php?StoryID=304

COMCAST MIGHT WANT DTV MUST-CARRY
Prudential Equity Group analysts are guessing that if Comcast wins its
battle for Disney, the cable giant will change its stance on digital
must-carry and argue that cable operators should give digital broadcasters
a 6-megahertz spectrum allocation, as opposed to the requirement to send
just a primary signal. Officially, Comcast is saying that its policy on
must-carry has not changed. The analysts offer the following reasons for a
possible switch: 1) full digital carriage would push channels like MTV and
Bravo off the basic tier and on to digital tiers of cable systems, 2) the
FCC would impose the same condition on satellite operators DirecTV and
EchoStar and 3) in markets where Comcast owned TV stations, the company
would control even more programming.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA382828?display=Breaking+News

FCC, McCAIN: OPEN DOORS TO BIG-MARKET LPFMs
There may be some momentum building for expanding low power FM radio
stations (LPFM) in big(ger) cities. Last week, the FCC released a report to
Congress on the Low Power FM Interference Testing Program that endorses a
2003 Mitre study showing no harmful interference would be created if a
current law banning LPFM stations within two channel stops of an existing
full power station was eliminated. "There appears to be no public interest
reason to retain third-adjacent minimum distance separation requirements,"
the FCC said in the report to Congress. Senate Commerce Chairman John
McCain (R-AZ) has announced he'll introduce legislation making the
recommendation law. "Four years ago, broadcasters masqueraded their concern
about competition in grossly exaggerated claims of interference. Today, the
FCC has stripped the broadcasters of this disguise," said Sen McCain. The
National Association of Broadcasters maintains that the Mitre study is
"deeply flawed" and expansion of LPFM would create too much interference.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell ]
http://www.broadcastingcable.com/article/CA385446?display=Breaking+News
See the FCC report at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-244128A1.pdf
See statement by Sen McCain
http://www.mediaaccess.org/programs/lpfm/McCainPressRelease.htm

FCC: LET'S RE-THINK UHF RULE
UHF television stations have poor reception relative to VHF stations which,
19 years ago, led to a FCC rule that counting UHF stations at one-half
their audience reach when tallying station groups' compliance with the
national ownership cap. But with so many viewers relying on cable to
deliver TV signals, the Media Access Project and Capitol Broadcasting have
asked the Commission to do away with the UHF discount. On Thursday, the FCC
began a proceeding to gather public comment on whether or not the discount
is still needed. For more information, see the URLs below or contact FCC
staff Debra Sabourin or Patrick Webre at (202) 418-2330.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell ]
http://www.broadcastingcable.com/article/CA382819?display=Breaking+News
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-320A1.doc
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-320A1.pdf

TELECOM

SHOULD BROADBAND BE THE UNIVERSAL-SERVICE GOAL?
Building on the success of the Universal Service Fund (USF) to bring
telephone service to the vast majority of US households, Jackson asks if it
is time to start making broadband connections the goal of USF. Universal
service reform in the near future seems inevitable since revenues from long
distance service are down and demands for funds are going up. FCC
Commission Kevin martin has floated an idea that each phone number --
whether connected by traditional copper lines or wireless -- be assessed a
$1/month fee to fund universal service. If broadband was the standard of
universal service, there would be significantly more flexibility in
customer communications choice, because VoIP would be a viable option for
those with broadband connections. It also could provide flexibility to
regulators, as cable-modem, broadband wireless and broadband-over-power
line technologies could be used to satisfy the universal-service mandate as
an adjunct to traditional copper lines, which may not be the most efficient
way to serve some areas. Jackson admits that broadband may be too lofty a
goal while many Americans still don't have traditional phone service, but
it may be time to start considering broadband since it appears to be the
foundation of future communications.
[SOURCE: Telephony's Regulatory Insider, AUTHOR: Donny Jackson
(mailto:djackson( at )primediabusiness.comdjackson( at )primediabusiness.com)]

Wi-Fi'S GROWING PAINS
Business Week has a special report this week on wireless fidelity's
short-range-radio functionality. The technology promises transmission of
data, including songs and movies, at sizzling speeds. A range of articles
cover 1) why technology won't achieve the status it deserves until it
overcomes several obstacles now keeping it stuck in a techno-limbo, 2) a
Wi-Fi future, 3) new rivals already arriving, and 4) a Wi-Fi how-to. Wi-Fi
enables people to wirelessly connect to the Internet at speeds 100 times
the speed of a dialup connection. What does the future hold for Wi-Fi. Some
predict it will be in half of both homes and businesses connected to the
Internet by the end of the decade. Wi-Fi is already connecting to data cell
phone networks, allowing people to check email when they leave Wi-Fi
network areas. In the not distant future, cell phones will be able to place
calls over both wireless carriers networks and the Internet. Wi-Fi is also
being incorporated in consumer devices -- refrigerators, gaming consoles,
printers and televisions -- allowing them all to interact. For example a
song may be streamed from a computer to a stereo or a video could go from
the PC to the TV screen. But there's hurdles to realizing this potential.
First, there's security concerns must be overcome. Second, there is a lack
of comprehensive roaming agreements that would let any customer who buys
Wi-Fi service from a phone company, for instance, use the technology
anyplace in the country. And the biggest hurdle, at least for frequent
travelers, is the lack of in-flight Wi-Fi networks.
[SOURCE: BusinessWeek]
http://www.businessweek.com/technology/tc_special/tc_04wifi.htm

INTERNET PHONE FEES SPARK FCC DEBATE
The FCC may rule soon on a petition filed by AT&T asking for an exemption
from local carriers access fees for calls it routes over the Internet. SBC
Communications claims that since 2002, AT&T has dodged several hundred
million dollars in access fees by routing some of its long-distance calls
over its VoIP network. Insiders say Democrat Jonathan Adelstein recently
agreed to join Republicans Michael Powell and Kathleen Abernathy in denying
the petition. In exchange for Adelstein's vote, Chairman Powell may have
made concessions that ultimately could subject other Internet phone service
providers to access fees. That, in turn, could mean complex billing systems
and higher charges for VoIP providers.
[SOURCE: USAToday, AUTHOR: Paul Davidson]
http://www.usatoday.com/usatonline/20040223/5947888s.htm
See note below on Senate hearing on VoIP this week.

VODAFONE'S FAILED BID RAISES FEARS
Investors are worried that Vodafone's failed bid for AT&T Wireless may mean
a new round of reckless spending by European telecommunications companies.
There's some speculation Vodafone may make a bid now for SFR, Vivendi
Universal's cellphone unit, or even bid for the entire French group. Dutch
telecom group KPN is discussing taking over U.K. wireless operator mmO2.
And France Telecom has launched today a $4.88 billion purchase of Wanadoo's
directory business Pages Jaunes.
[SOURCE: Wall Street Journal, AUTHOR: Jo Wrighton at jo.wrighton( at )wsj.com ]
http://online.wsj.com/article/0,,SB107749259086736131,00.html?mod=teleco...
(requires registration)
See Also:
TELECOMS BET ON NEW SERVICES TO BOOST SALES
For an alternative view of investor confidence in European telecom.
[SOURCE: Los Angeles Times, AUTHOR: Paul Tobin, Bloomberg News]
http://www.latimes.com/business/printedition/la-fi-mobilephones23feb23,1...

CONGRESSIONAL CALENDAR

* Hearing: Reauthorization of the Satellite Home Viewer Improvement Act
Tuesday, February 24, 2004
Subcommittee on Courts, the Internet, and Intellectual Property
4:00 p.m. in 2141 Rayburn House Office Building
[SOURCE: House of Representatives Committee on the Judiciary]
http://boss.streamos.com/real-live/hjudiciary/4749/100_hjudiciary-live_0...
See Also:
Accelerating The Transition To Digital TV: The Satellite Home Viewer
Improvement Act Can Help
The Progress and Freedom Foundation has released a commentary by Thomas M.
Lenard arguing that Congress should use SHVIA renewal to accellerate the
transition to digital television. "Policy measures such as extending the
distant signal retransmission rights of satellite providers to include
digital signals can help complete the migration to MVPD [multi-channel
video program distributor, such as cable or satellite] at essentially zero
cost." This would help "free up large blocks of valuable spectrum for the
many new and innovative wireless technologies that are on the horizon."
See more at the URL below and find a link to the commentary there.
[SOURCE: Progress and Freedom Foundation Press Release]
http://www.pff.org/news/news/2004/022004shvia.html

* Hearing: Voice Over Internet Protocol (VOIP)
Tuesday, February 24 2004 - 9:30 AM - SR - 253
Members of the US Senate Commerce Committee will hear testimony on the
appropriate federal and state regulatory treatment of Internet telephone
service (VoIP), including obligations related to intercarrier compensation,
disability access, E-911, universal service, and assistance to law
enforcement. Senator McCain (R-AZ) will preside. FCC Chairman Powell is
expected to testify along with Vonage Chairman Jeffrey Citron, Time Warner
Cable Chairman Glenn Britt, CenturyTel
Chairman Glen Post, NARUC President Stan Wise and Kevin Werbach, founder
of Supernova Group.. The hearing will be Webcasted; see the URL below.
Communications Daily is reporting that Sen John Sununu (R-NH) will
introduce a bill soon classifying VoIP as an information service subject to
just light FCC regulation. The bill would also address, but not resolve,
universal service, law enforcement, Internet tax and enhanced 911 (E911) as
they releate to VoIP.
[SOURCE: US Senate Commerce Committee]
http://commerce.senate.gov/hearings/witnesslist.cfm?id=1065

* House Telecom Subcommittee will discuss broadcast decency enforcement for
the 3rd time on February 26. A vote on HR-3717, a bill to increase
indecency fines by a factor of ten, is expected March 2. The bill's main
sponsor, House Telecommunications Subcommittee Chairman Fred Upton (R-MI)
is trying to limit the number of amendments to the bill fearing the could
slow or deny eventual passage of the bill.
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MERGERS
It's Not Enough to Be Just a Phone Company
Martin Perry Named FCC Chief Economist

MEDIA & POLITICS
Pollsters Faulted for Failure to Predict Edward's urge and for Subsequent
News Coverage

DIGITAL TV
New Digital TV Multicast Service

CALENDAR
VoIP and Indecency on Congressional Agenda Next Week

COMICS
Jenny, who can I turn to

MERGERS

IT'S NOT ENOUGH TO BE JUST A PHONE COMPANY
Just as the Comcast-Disney bid shows it is not enough to be just a media
content provider or distributor, the Cingular-AT&T Wireless merger shows it
is not enough to just be a phone company. Consumer markets for traditional
phone services, data transmission, mobile calling and even television are
converging into one industry. The buzz word is bundles -- companies are
vying to offer packages of services like wireless and traditional phone
minutes. Cingular is owned by SBC and BellSouth and the boards of those two
companies obviously saw the purchase of AT&T Wireless as crucial to their
future. Bundling services slow "churn," the rate at which customers leave
to purchase services from competitors. Consumers like the convenience of
receiving just one bill for all there telecommunications.
[SOURCE: New York Times, AUTHOR: Matt Richtel]
http://www.nytimes.com/2004/02/19/business/19wire.html
(requires registration)
See Also:
Wireless Firms Look at Phones as Limitless
Wireless phone acting as television, audio system and even the home
computer? Sure, we can do that.
[SOURCE: Washington Post, AUTHOR: Yuki Noguchi and Griff Witte]
http://www.washingtonpost.com/wp-dyn/articles/A52915-2004Feb18.html

MARTIN PERRY NAMED FCC CHIEF ECONOMIST
To the delight of economists everywhere, CommDaily is running a profile of
Martin Perry who has just joined the FCC. He's an antitrust expert, an
economist, mathematician, lawyer and he loves dogs. Mr. Perry is noted for
his expertise in vertical integration and he has advised the Justice
Department on merger reviews in the past. "I think that one of the reasons
why I'm here... is that some of the most complicated issues have to do with
vertical relationships. These are issues that have been
challenging for years," said Perry. If the proposed merger of Comcast and
Disney ever makes it to regulators to review, Mr. Perry will play a large
role at the FCC.
[SOURCE: Communications Daily, AUTHOR: Brigitte Greenberg]
(Not available online)

MEDIA & POLITICS

POLLSTERS FAULTED FOR FAILURE TO PREDICT EDWARD'S SURGE AND FOR THE
SUBSEQUENT NEWS COVERAGE
Sen John Edwards got a big media boost after his surprisingly strong finish
in Wisconsin. But even the pollster who runs the service used by TV
networks and the Associated Press admits that results of the primary in the
Dairy State "exposed the biggest polling goofs in my memory." The incident
raises the question of whether or not media organizations are overdependent
on polling. If Sen Edwards' support was properly measured over the weekend,
for example, news coverage would have been much different Tuesday night and
Wednesday. The bounce Sen Edwards has seen has helped him raise needed
funds and continue his candidacy. And for the actual winner of the
Wisconsin primary? "Virtually every news outlet, based on public opinion
polling, created the expectation and standard that John Kerry would have a
big victory," he said. "So anything that was short of a big victory almost
inherently becomes a disappointment." Polling for the race ended Sunday
afternoon before a debate between the candidates and before the Milwaukee
Journal Sentinel endorsed Sen Edwards.
[SOURCE: New York Times, AUTHOR: Jim Rutenberg]
http://www.nytimes.com/2004/02/19/politics/campaign/19MEDI.html
(requires registration)

DIGITAL TV

NEW DIGITAL TV MULTICAST SERVICE
U.S. Digital TV (USDTV) will launch a mini wireless cable service in Salt
Lake City next month and move into 29 other markets by year-end. The
service uses spare digital television capacity at 4-5 local TV stations to
deliver a mix of high-definition cable networks and local programming.
USDTV charges consumers ~$20/month and gives local stations a portion of
the subscriber revenue.
[SOURCE: Communications Daily, AUTHOR: Mark Seavy]
(Not available online)

CALENDAR

* Senate Commerce Committee will hold a hearing on Internet phone service
February 24.

* House Telecom Subcommittee will discuss broadcast decency enforcement for
the 3rd time on February 26. A final markup of HR-3717, a bill to increase
indecency fines by a factor of ten, is expected the week of March 1.

COMICS
...and something too funny to pass up...
eBay ended an auction for the phone number 867-5309 which was made famous
in the 1981 by Tommy Tutone. Bidding for the number in the 212 area code
had reached $80,300. The seller had claimed that new number portability
rules allowed him to assign the number to the buyer. But Verizon and the
New York Public Service Commission say that is not the case: the carrier,
not the customer, owns the phone number. And, of course, the record company
owns the song.
Jenny don't change your number.
[SOURCE: Communications Daily]
(Not available online)
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Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. Headlines are compiled by
Kevin Taglang (ktaglang( at )etpost.net) -- we welcome your comments.
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