July 2004

Benton's Communications-related Headlines for 7/19/04

For upcoming media policy events, see http://www.benton.org/calendar.htm

Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
(headlines( at )benton.org) -- we welcome your comments.

BROADCASTING
Big Trick
'Upfront' Ad Sales Cast Doubt on Broadcast's Clout
Networks Grant Affiliates Power to Pre-empt
DGA Releases Annual Employment Survey
Clear Channel Scales Back Ad Time
Why Not Use the "White Space" in the FM Band to Create More Community=
Voices?

CABLE
Cheaper by the Dozen
Regulating the Internet

TELECOM
'Last Mile' to Local Service Growing Longer for AT&T

CONTENT
Family Movie Act Moves Ahead in House

BROADCASTING

BIG TRICK
With nearly half of all Americans saying they are more interested in this=20
presidential election than they were four years ago, why give them the=20
political coverage they want when you can sell it them on cable? NBC will=20
supply wall-to-wall coverage of the Democratic convention this -- just not=
=20
on NBC affiliate TV stations. Instead, cable network MSNBC will be the=20
showcase. Like other broadcasters, NBC is offering only three hours of=20
coverage of the convention -- about the same schedule as in 2000. MSNBC,=20
CNN and Fox News hope to capture news-hungry political junkies and promote=
=20
their big-name talent. They're seeking more than the spike in ratings such=
=20
events generate: a shot at building a permanent following among newshounds=
=20
that fit in the channels' demographic.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA437175?display=3DTop+of+the+Week
(requires subscription)

'UPFRONT' AD SALES CAST DOUBT ON BROADCAST'S CLOUT
With negotiations mostly done, upfront sales for the 2004-05 TV season are=
=20
projected to be up 6.4% to $15.5 billion. But the story within that story=20
is the broadcast-vs.-cable battle. With more viewers watching cable=20
networks, ad dollars are following eyeballs. Cable networks appear to have=
=20
taken $600 million that typically would have gone to broadcasters. The=20
result is that cable network sales should rise 20% to $6.4 billion. The six=
=20
broadcast networks are expected to finish down 1.4% to $9.1 billion. Add to=
=20
broadcasters' woes the fact that advertisers usually end up canceling 3% to=
=20
4% of what they reserve upfront. A stall in the economy or another=20
terrorist attack could mean even worse numbers.
[SOURCE: USAToday, AUTHOR:Michael McCarthy]
http://www.usatoday.com/usatonline/20040719/6375575s.htm

NETWORKS GRANT AFFILIATES POWER TO PRE-EMPT
Believing that the FCC was poised to act on a 3-year-old Network Affiliated=
=20
Stations Alliance (NASA) complaint about the restrictive contracts, ABC,=20
NBC and Fox loosened contract provisions that limited the affiliates' right=
=20
to reject network shows for local substitutes. (CBS dropped such limits in=
=20
2001.) The development could shift some power back to the independently=20
owned affiliates, making it easier, amid a furor over indecency, for=20
affiliates to pre-empt network shows they deem offensive. NASA still wants=
=20
the FCC to set new rules clarifying the affiliates' right to reject network=
=20
programs, partly because it's unclear if the changes apply only to current=
=20
contracts or to future deals as well. Also, Fox still requires that=20
affiliates reserve all their new digital channels for Fox shows, NASA says.
[SOURCE: USAToday, AUTHOR: Paul Davidson]
http://www.usatoday.com/usatonline/20040719/6375577s.htm

DGA RELEASES ANNUAL EMPLOYMENT SURVEY
On Friday the Directors Guild of America released its annual employment=20
survey documenting the hiring of women and minorities among the top 40=20
prime-time drama and comedy series in 2003-04. The survey shows a mild=20
increase in the hiring of African American directors since 2000, while the=
=20
presence of women and minorities in the director's chair have declined. The=
=20
DGA singled out "Everybody Loves Raymond," "Friends," "JAG," "CSI,"=20
"Malcolm in the Middle," "According to Jim" and "Yes, Dear" as particularly=
=20
egregious offenders, while "Cold Case" "The Practice," "Third Watch,"=20
"Frasier" and "ER" had made efforts to diversify hiring.
[SOURCE: Current, AUTHOR: James Hibberd]
http://www.tvweek.com/news/web071604.html

CLEAR CHANNEL SCALES BACK AD TIME
Radio averages 15 minutes of advertising an hour, compared with 12.5=20
minutes for television and some "drive time" radio programs squeeze 22=20
minutes of advertising into each hour. With so much time available for=20
advertisers, they have been able to pay less for ads. But Clear Channel is=
=20
launching "Less Is More," a plan to reduce inventory and, eventually, raise=
=20
the price of radio advertising. Under its new rules no station can run more=
=20
than 15 minutes of advertising in a single hour. In addition, no commercial=
=20
break will run longer than four minutes or contain more than six=20
commercials. Clear Channel also plans to cut promotional inventory -- those=
=20
spots that advertise contests, or segments coming up later. Clear Channel=20
stations must comply with the promotional limits by Oct. 1, and the=20
commercial limits by Jan. 1. As the market leader with 1,200 stations=20
around the country, Clear Channel will likely be copied by smaller radio=20
groups.
[SOURCE: Wall Street Journal, AUTHOR: Sarah McBride at=
sarah.mcbride( at )wsj.com]
http://online.wsj.com/article/0,,SB109018737288866819,00.html?mod=3Dtoda...
s_marketplace
(requires subscription)
NYTimes: http://www.nytimes.com/2004/07/19/business/media/19adcol.html

WHY NOT USE THE "WHITE SPACE" IN THE FM BAND TO CREATE MORE COMMUNITY=
VOICES?
The New America Foundation hosted a policy briefing on low power FM radio=20
on Friday. The debate on LPFM continues as the Senate Commerce Committee is=
=20
scheduled to consider a bill on the subject on Thursday. LPFM stations are=
=20
small, localized services that don't pose a threat to big broadcasters,=20
said Paul McLane, editor of Radio World=92s U.S. edition. =93Tiny stations=
are=20
moving onto the dial already and the world has not fallen apart,=94 he said.=
=20
But the National Association of Broadcasters are fighting any expansion in=
=20
the number of LPFM stations saying they will interfere with established=20
full-power stations. =93Easily $2 million has been spent
in 3-4 years to see if we can get a church on the air,=94 said Cheryl Leanza=
=20
of the Media Access Project at the briefing. The bill to be considered this=
=20
week, introduced by Sen John McCain (R-AZ) would eliminate congressionally=
=20
imposed limits on LPFM licensing.
[SOURCE: Communications Daily]
(Not available online)

CABLE

CHEAPER BY THE DOZEN
Consumers are saving money choosing their own line-up of cable channels and=
=20
the Consumers Union wants Americans to have the same freedom to save here.=
=20
In the past year, 15% of Canadian have opted for a la carte, says Jean-Paul=
=20
Galarneau, spokesman for Videotron, Canada's third-largest cable company.=20
Of those, the overwhelming majority patch together a full lineup of 20 or=20
more additional channels. Canadians who buy Videotron's 20-channel =E0 la=20
carte tier pay roughly $36 a month in U.S. dollars versus the $42 they'd=20
pay for the next largest package of channels. Americans, who pay $40-$50=20
for a set lineup, could enjoy similar savings if they were permitted to=20
weed out channels they didn't want, argues Consumer Union.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA437178?display=3DWashington
(requires subscription)

REGULATING THE INTERNET
The Progress & Freedom Foundation hosted a conference on Friday addressing=
=20
regulation of the Internet. Vanderbilt Law School Professor Christopher Yoo=
=20
presented finding from his research -- =93The Economics of Net Neutrality:=
=20
Why the Physical Layer Should Not Be Regulated.=94 Professor Yoo argued that=
=20
net neutrality regulation proposals are =93mistaken,=94 saying they are=20
unnecessary and would have =93perverse=94 effects. He said neutrality=
proposals=20
were =93rooted in concerns about vertical
integration=94 that were =93more imaginary than real.=94 Professor Yoo=
argued in=20
his report that the residential broadband market is not concentrated,=20
because it is a national
geographic market not a local one. MCI Senior Director of Global Policy &=20
Planning Richard Whitt countered that, to consumers, the broadband market=20
is local. =93It doesn't help a consumer to know that Verizon offers DSL in=
=20
Maryland if they happen to live in SBC territory in Illinois.=94 Mr. Whitt=
=20
said =93just because some of the larger ISPs are national in scope does not=
=20
mean that their purchasing decisions about broadband platforms can be made=
=20
on a national basis. The essence of a local broadband platform is that it=20
is local.=94 Whitt insisted there was =93indeed significant concentration=
and=20
power=94 in residential broadband market and the wholesale access=
requirement=20
=97 or open access =97 was =93the most effective and least intrusive=
remedy.=94 He=20
said open access should be coupled with =93vigorous FCC action to promote=20
alternate broadband platforms.=94
[SOURCE: Communications Daily, AUTHOR: Susan Polyakova, Brigitte Greenberg]
(Not available online)

TELECOM
=18
'LAST MILE' TO LOCAL SERVICE GROWING LONGER FOR AT&T
Faced with rising costs, plummeting profit and an uncertain regulatory=20
environment, AT&T soon will decide whether to abandon its nationwide foray=
=20
into local phone service. If it decides to give up, the ramifications=20
could be huge. Only a company as big as AT&T can roll out new technologies=
=20
in the mass market to bypass existing networks. AT&T's dilemma is=20
precipitated by a federal court ruling in March that threw out key phone=20
competition rules written by the FCC to implement the 1996 Telecom Act. The=
=20
rules had allowed AT&T and other carriers to lease from Baby Bells at=20
regulated wholesale rates the lines and equipment necessary to provide=20
local service; because building local networks from scratch would be=20
prohibitively expensive, the act required the Baby Bells to lease theirs to=
=20
rivals. Ironically, AT&T had laid or strung many of the local lines when it=
=20
was Ma Bell.
[SOURCE: Los Angeles Times, AUTHOR:James S. Granelli]
http://www.latimes.com/business/printedition/la-fi-att19jul19,1,308447.s...
?coll=3Dla-headlines-pe-business
(requires registration)

CONTENT

FAMILY MOVIE ACT MOVES AHEAD IN HOUSE
The Family Movie Act (H.R. 4586), sponsored by Rep. Lamar Smith (R-TX), is=
=20
making its way through the House. The bill would address a lawsuit by the=20
seven major Hollywood studios and the Directors Guild of America against=20
ClearPlay, one of a half-dozen filtering services, and allow the sale of=20
DVD players with filtering technology. The technology does not alter movies=
=20
before or after they are purchased. Rather, the technology is programmed=20
into a DVD player, which offers an off-on switch and 14 degrees of=20
filtering, or is available separately for computers. A movie viewer could=20
opt to block strong action violence or gory, brutal violence; disturbing=20
and gruesome images; and crude sexual content. Or, to a lesser degree,=20
viewers could block =93highly sensual dialogue and situations,=94 =93highly=
=20
provocative and revealing clothing=94 or =93vain or irreverent references to=
=20
God or a deity.=94 Drug use, racial and social slurs and crude humor also=
can=20
be isolated. The Directors Guild of America said the move by Congress would=
=20
=93erode the nation=92s copyright laws by permitting companies to market=20
software that edits the content of films.=94 =93This legislation is about=
much=20
more than giving consumers a choice in what they watch and don't watch,=94=
=20
the DGA said in a statement. =93Unidentified employees of electronic-editing=
=20
companies make the choices of what is edited out of each film they review =
=97=20
it is their choices that govern and not the consumer=92s.=94
[SOURCE: Multichannel News, AUTHOR: Glenn Maffei]
http://www.multichannel.com/article/CA437108?display=3DPolicy
(requires subscription)
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/16/04

The digital TV transition is back on the agenda next week as is the
performance of broadcasters. For these and other upcoming media policy
events, see http://www.benton.org/calendar.htm

A LA CARTE
NCTA, Disney, Viacom, Other Programmers Pan A La Carte
NCTA-Funded Study: A la Carte Hikes Rates
A La Carte Cable Option Benefits Consumers and Creative Artists,
Reduces Indecent Programming and Media Concentration

INTERNET
Common Sense Should be Applied to 'Broadband Gap'
Broadcasters to House: Copyright fees Killing Internet Radio

QUICKLY
D.C. Not High on Regulating Nielsen
A Cellphone Boycott Fails to Produce Sounds of Silence

A LA CARTE

NCTA, DISNEY, VIACOM, OTHER PROGRAMMERS PAN A LA CARTE
The National Cable & Telecommunications Association study below was just a
part of the filings at the FCC yesterday as the Commission seeks input on
an a la carte report to Congress due in the fall. NCTA and some of the
country's biggest TV programming companies offered lengthy economic
analyses as proof that government-mandated a la carte TV would be an
economic debacle for consumers and the companies. The lobbying group also
pointed out that many cable channels are optional as it is: subscribers
don't have to buy expanded basic and a number of premium channels and
packages are offered a la carte already. NCTA's filing included the
opinions of University of Chicago Law Professors Geoffrey Stone and David
Strauss of the U. of Chicago, who found that government-required a la carte
or themed tiers would impinge on cable operators' First Amendment rights.
"There is no government interest of sufficient importance to justify the
substantial burdens of an a la carte requirement. And
even if the government did have a substantial and important interest in
enabling cable customers to lower their bills and keep out unwanted
programming by purchasing only those program networks they wanted, an a la
carte requirement would still fail the test," NCTA said, summarizing the
professors' paper. C-SPAN wrote that it is not insulated from the effects
of an a la carte pricing requirement and that its ability to produce
quality public affairs TV could be destroyed. The Alliance for Community
Media feared the implications of a la carte for public, educational and
government (PEG) access channels. They asked that such channels continue to
be made available to all cable subscribers.
[SOURCE: Communications Daily, AUTHOR: Brigitte Greenberg]
(Not available online)
USAToday reports about the pro-a la carte comments filed by Consumers
Union. The organization wants an a la carte option to be available to cable
operators that want to offer it, which would require legislation striking
down programmer contracts that require their channels to be included in
packages. If consumer acceptance is high, operators might have to offer a
la carte as an option alongside an expanded basic package. That would also
serve viewers offended by indecent programming, Consumers Union says. A la
carte would enable subscribers to drop channels that air shows they deem
offensive. Consumers Union says programmers are exaggerating the effects of
a la carte, especially because expanded-basic packages would still be
offered. Today's programming tiers force subscribers to pay for channels
they don't watch and have helped drive up cable prices 56% since 1996, or
three times the inflation rate, Consumers Union says. The top 10 cable
networks account for 50% of viewing and the top 20 for 75%, according to
Nielsen ratings. And because viewers in the typical household watch just 17
channels, "Consumers are forced to buy a lot of channels they don't watch
in order to get the ones they do want,'' the group says. The system also
shuts out new programmers who don't have the resources to woo cable
companies to put them in their bundles, the group argues, and it favors
channels in which cable operators own a stake.
[SOURCE: USAToday, AUTHOR: David Lieberman and Paul Davidson]
http://www.usatoday.com/usatonline/20040716/6371927s.htm

NCTA-FUNDED STUDY: A LA CARTE HIKES RATES
To everyone's surprise, a National Cable & Telecommunications
Association-funded study concludes that a la carte pricing is no good.
Under three scenarios, the Booz Allen Hamilton study found, the forced sale
of cable networks a la carte would cause rates to rocket higher and clobber
niche networks denied the scale afforded by highly penetrated tiers. Just
the cost of making a la carte technology available would raise even current
tiered customers rates rise by 7-15%. In all, the NCTA billed the study,
which the lobbying organization filed with the FCC, as a strong refutation
of claims that a la carte would empower consumers to control the cost of
their monthly cable bills.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA436405?display=Breaking+News
(requires subscription)
NCTA Press Release
http://www.ncta.com/press/press.cfm?PRid=518&showArticles=ok
The a la Carte Paradox: Higher Consumer Costs and Reduced Programming Diversity
http://www.ncta.com/pdf_files/Booz_Allen_a_la_Carte_Report.pdf

A LA CARTE CABLE OPTION BENEFITS CONSUMERS AND CREATIVE ARTISTS, REDUCES
INDECENT PROGRAMMING AND MEDIA CONCENTRATION
Providing consumers with the right to choose which cable and satellite
networks they wish to subscribe to will enhance viewpoint diversity, reduce
media concentration, and promote free, creative, diverse, informative,
important, and entertaining television, the Center for Creative Voices in
Media told the FCC in comments filed Thursday. "Cable and satellite
programming packages and bundles are inherently un-diverse, larded with
networks unwanted by consumers that are in the package only because they
are affiliated with broadcast media conglomerates or cable operators," says
CCVM Executive Director Jonathan Rintels. "These cable network bundles are
shaped not by consumer choice, but by the conglomerates' and cable
operators' demands. Today's status quo chokehold of media conglomerates and
cable operators over cable carriage is not acceptable. It is inherently
anti-consumer, anti-diversity, and anti-creative artist. By restricting
independent networks' access to cable carriage, take-it-or-leave-it cable
network packaging reduces diversity of viewpoints and voices, thus damaging
not only television, but ultimately our democracy and culture."
[SOURCE: Center for Creative Voices in Media Press Release]
http://www.creativevoices.us/cgi-upload/news/news_article/FCCALCComments...

INTERNET

COMMON SENSE SHOULD BE APPLIED TO BROADBAND GAP
Langberg calls the "broadband gap" the overblown concern that other
countries are deploying high-speed Internet access faster than the United
States. The problem is one of demand, not supply. Half of online households
in the United States have broadband, up from less than 10% four years ago.
Almost all residents of suburban and urban America now have access to
either cable modem or DSL service. More people will switch to broadband,
Langberg predicts, when they are enticed with attractive new services that
offer clear benefits to offset the extra cost of broadband. He concludes,
Politicians and regulators should be working hard to remove any unnecessary
barriers to continued broadband growth. But going further -- into subsidies
or policies deliberating favoring one approach to broadband over another --
would be a big mistake. We shouldn't mess with the free market just because
a small number of valley entrepreneurs and venture capitalists are nervous
about how long it will take them to profit from the broadband boom.
[SOURCE: San Jose Mercury News, AUTHOR:Mike Langberg]
http://www.mercurynews.com/mld/mercurynews/business/technology/9168618.h...

BROADCASTERS TO HOUSE: COPYRIGHT FEES KILLING INTERNET RADIO
Internet radio webcasters told the House Judiciary Internet & Intellectual
Property Subcommittee that burdensome copyright rules are forcing radio
stations off the Internet, instead of encouraging them. The National
Association of broadcasters offered Congress a five point plan: 1) exempt
the sound recording fee for streams to stations' local,
over-the-air audience; 2) reform the sound recording fee, including the
"willing buyer, willing seller" standard; 3) reform statutory license
conditions to make them consistent with broadcast practices; 4) eliminate
copyright liabilities for ephemeral recordings that exist only to enable a
licensed or exempt broadcast; and 5) ensure that reporting and record
keeping requirements do not preclude broadcasters from streaming. The
recording industry countered that new technologies are making piracy easier
and what's needed is legislation requiring a broadcast flag, encryption or
other copyright protection measure.
[SOURCE: Communications Daily, AUTHOR: Terry Lane]
(Not available online)

QUICKLY

D.C. NOT HIGH ON REGULATING NIELSEN
Although most seem to agree that Nielsen's "Local People Meters" provide
more accurate TV ratings than old-style diaries, they can't seem to how
accurate the sampling is or how to improve it. Speaking at a Senate
Commerce Committee hearing, Communications Subcommittee Chairman Conrad
Burns (R-MT) said that legislation is not the answer, but that more
cooperation and less acrimony is needed for the industry to figure it out.
Senator Barbara Boxer (D-CA) also said legislation was not the answer but
pointed out that it was tough to separate the issues of ratings accuracy
from the agendas of politics and the billions in advertising dollars at
stake. Fox and Univision were Nielsen's main critics at the hearing,
calling the company a foreign-owned, unregulated monopoly [which sounds
pretty close to Fox, by the way]. Nielsen countered that News Corp. is
bankrolling a campaign of "disinformation and half-truths" that could
itself have the result of skewing the minority viewing sample. [Why can't
we just get along and make lots of money?]
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA436408?display=Breaking+News
(requires subscription)
See links to testimony at
http://commerce.senate.gov/hearings/witnesslist.cfm?id=1269

A CELLPHONE BOYCOTT FAILS TO PRODUCE SOUNDS OF SILENCE
To protest the high rates paid for cellphone service, Lebanon's fledging
consumers union asked subscribers to turn off there phones for one day.
"Our goal is more than just getting people to switch off their phones,"
said Zuheir Berro, the president of Lebanon's Consumer Protection
Association, the main organizer. "The long-term goal is to get citizens to
start feeling responsible for their actions." But for the Lebanese, maybe a
cellphone boycott was not the best place to start. In the region, the
Lebanese are know as cellphone addicts who don't hesitate to take calls
during movies or even funerals. See how the protest went at the URL below.
[SOURCE: New York Times, AUTHOR: Neil MacFarquhar]
http://www.nytimes.com/2004/07/16/international/middleeast/16leba.html
(requires registration)
--------------------------------------------------------------
...and we are outta here. Have a great weekend and... Go Cubs!
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/15/04

People meters get their day in Congress today (see story below). For this
and other upcoming media policy events, see http://www.benton.org/calendar.htm

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. While the summaries are
factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.

BROADCASTING/TELEVISION
A Vote for Local TV
Viacom Renews Election-Coverage Pledge
Noncoms Want More Money
Minorities Make News Comeback
House Debates a la Carte on Cable
Nielsen Critics Seize on New Ratings Data

FCC LEADERSHIP
The Games Bush Plays With Good Nominees Are Counterproductive

QUICKLY
Searching for Ways to Fight Junk E-Mail
CDT Releases Report on ICANN and Internet Governance
Judge Denies Motion to Dismiss Napster Case
Living the Broadband Life
New Publication: Broadband Facts

BROADCASTING/TELEVISION

A VOTE FOR LOCAL TV
$1.5 billion is likely to be spent in advertising during the 2004
elections. Ads will be targeted in "toss up" states like Florida, Ohio,
Missouri, Nevada and New Mexico. Television station owners in local markets
are likely to reap the lion's share of that money. A scant 0.1% of
television ad spending in 2000 was on the major networks, with the
remainder going to local spot advertising. For perspective, 25% of national
political ad spending went to networks in presidential campaigns between
1972 and 1992. Companies such as Hearst-Argyle, Sinclair Broadcasting,
Emmis, and Journal Communication are likely to be the big financial winners
this election season.
[SOURCE: CNN|Money, AUTHOR: Krysten Crawford]
http://money.cnn.com/2004/07/13/news/midcaps/politicalads/index.htm

VIACOM RENEWS ELECTION-COVERAGE PLEDGE
Responding to a June 15 call from Sen John McCain (R-AZ) and FCC Chairman
Michael Powell to detail plans for political coverage during this election
year, Viacom renewed its pledge to air five minutes of political coverage
every night on its stations' evening-news programs. "You will remember we
made the same commitment during the 2000 election season, and we fulfilled
that promise with numerous hours of substantive political coverage," wrote
Viacom co-president Les Moonves. "Many of our stations also sponsored and
aired live debates between candidates." Mr. Moonves urged Sen McCain to
drop his push to make stations offer free advertising time to federal
candidates. "We do not and have not needed any laws or regulations to
determine the amount of time or resources our stations should devote to
this vital subject," he wrote. "That is simply part of our responsibility
as a broadcaster, and we take that responsibility seriously."
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA436226?display=Breaking+News
(requires subscription)

NONCOMS WANT MORE MONEY
CPB President Kathleen A. Cox; Kevin Klose, President and CEO, National
Public Radio; John Lawson, President and CEO, Association of Public
Television Stations; and PBS President/CEO Pat Mitchell are asking Congress
for more money. Corporation For Public Broadcasting Reauthorization Bill
introduced by Sen. John McCain and expected to be marked up next week,
would fund CPB through 2011 at $416 million for FY 07; $432 million for FY
08; $450 million for FY 09; $468 million for FY 10 and $487 for FY 11. It
would also allocate $140 million over four years for programming and
equipment related to the digital transition (through 2009, the FCC's
proposed giveback date if all goes well), as well as $50 million for
satellite interconnection systems in 2005, with the same amount annually,
plus a 4% annual raise, through 2011. Although they are grateful for the
funds and the efforts of Sen McCain, the executives fear that these funding
levels could "jeopardize" their service's effectiveness.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA436248?display=Breaking+News
(requires subscription)

MINORITIES MAKE NEWS COMEBACK
An annual Ball State survey for the Radio-Television News Directors
Association finds that minorities make up 21.8% of local TV news staffs, up
from 18.1% in 2002. The news management gains were even more impressive,
with minorities accounting for 12.5% of TV news directors, compared with
6.6% in 2002. Some of those gains, however, are either just recouping
earlier losses or may be attributable to improved response rates. Still,
both radio and TV percentages are well below the 32.8% minority population.
Ball State changed the methodology to boost the response rate, says survey
author Bob Papper, plus the margin of error is probably in the 3%-4% range,
which means that, statistically, the numbers have changed little in the
last decade, which is cause for concern, says Papper. Women in the news
workforce remained virtually the same at 39.1% vs. 39.3%, with women TV
news directors at 25.2%, down slightly from 2003.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA436158?display=Breaking+News
(requires subscription)

HOUSE DEBATES A LA CARTE ON CABLE
The House Subcommittee on Telecommunications and the Internet jumped into
the a la carte debate Wednesday with a hearing on the subject that has
gained some traction on two fronts: empowering consumers to control their
cable costs and to block indecent content. Many executives in the cable
industry are against a la carte pricing saying it would actually raise
cable costs for consumers and doom channels targeted at minority audiences.
They point out that the cable industry already offers consumers free
channel-blocking technology. Janet LaRue, chief counsel for Concerned Women
for America, said cable's mandatory purchase of large tiers effectively
required consumers to pay for offensive programming in order to obtain the
channels they wanted -- something rarely seen in other markets. "We don't
have to pay for food we don't intend to eat," she added, demanding new
legislation in the absence of industry action.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA436234?display=Breaking+News
(requires subscription)
Someday, the Subcommittee on Telecommunications and the Internet will make
the hearing's testimony available online at:
http://energycommerce.house.gov/108/Hearings/07142004hearing1336/hearing...
See testimony delivered by cable execs at:
http://www.ncta.com/press/press.cfm?PRid=517&showArticles=ok

NIELSEN CRITICS SEIZE ON NEW RATINGS DATA
The Senate Commerce Committee will hold a hearing today on Nielsen Media
Research's new method for measuring local television audiences. Critics
claim that black and Hispanic viewers have been undercounted under the new
system, which could discourage networks and marketers from developing and
advertising on programs aimed at these viewers. Nielsen executives have
said the new system provides a more accurate picture of what people are
watching. Senator Conrad Burns, the Montana Republican who is chairman of
the communication subcommittee of the Senate Commerce Committee, said he
was concerned about the questions being raised about Nielsen, whose ratings
have been used for decades to help set TV advertising rates. "Lots of
dollars are involved here," he said. "It has an impact on the broadcast
industry that concerns me."
[SOURCE: New York Times, AUTHOR: Raymond Hernandez]
http://www.nytimes.com/2004/07/15/business/media/15nielsen.html
(requires registration)

FCC LEADERSHIP

THE GAMES BUSH PLAYS WITH GOOD NOMINEES ARE COUNTERPRODUCTIVE
Jonathan Adelstein has been a member of the FCC since December 2002 and his
term is to run out when the current Congress ends later this year. A year
ago February, Senate Minority Leader Tom Daschle (D-SD) submitted
Adelstein's name to President Bush for a full term on the FCC, set to
expire on June 30, 2008. But 17 months have passed. No nomination has
emerged from the White House. When George W. Bush became president, he
reached a handshake agreement early on with Sen Daschle to follow the
standards reached between President Clinton and then-Majority Leader Trent
Lott: To be spurned by the White House, nominees had to personally attack
the president or fail the FBI background check, or have expressed views
that were fundamentally inimical to the existence or basic function of the
agencies or commissions on which they were going to serve. Commissioner
Adelstein is just one of more than 20 Democrats recommended by Sen Daschle
have been shelved or ignored -- nominees for a variety of agencies, boards
and commissions. Commissioner Adelstein is seen as thoughtful,
hard-working, straightforward, knowledgeable, insightful, capable of
helping us navigate through the difficult issues of the communications age.
Ornstein concludes that the case highlights "a combination of the overall
White House contempt for Congress and its hostility to [Sen] Daschle and
Democrats more generally. It is foolish in the extreme."
[SOURCE: Roll Call, AUTHOR: Norman Ornstein]
http://www.rollcall.com/pub/50_6/ornstein/6210-1.html

QUICKLY

SEARCHING FOR WAYS TO FIGHT JUNK E-MAIL
Two systems -- Yahoo's DomainKeys standard and Sender ID, which is backed
by Microsoft and the Pobox.com e-mail service -- are being tested now to
best fix the authentication problem and, hopefully, curtail email spam.
Sender ID has attracted the most interest. It counts on the fact that
though e-mail headers are easy to forge, IP addresses -- the unique set of
numbers attached to every Internet domain -- are not. In this system, a
domain name owner publishes its IP address in a public database. When a
message arrives that claims to be from the domain name, the recipient's
e-mail program automatically checks the information in the header and
compares it with the information in the database. If it matches, the
message goes through. If it doesn't match, the message is quarantined or
blocked. DomainKeys takes an approach that is based on public-private key
cryptography. Sent messages include an encrypted digital signature created
by the e-mail provider's private key. When the message arrives at the
recipient's e-mail server, the server checks a database for the sender's
public key. If the public and private keys match up, the signature can be
decrypted and the sender's identity validated. If not, the message can be
blocked by spam filters.
[SOURCE: Los Angeles Times, AUTHOR:Chris Gaither]
http://www.latimes.com/business/printedition/la-fi-email15jul15,1,558584...
(requires registration)

CDT RELEASES REPORT ON ICANN AND INTERNET GOVERNANCE
In the context of ongoing global debates about Internet governance, CDT has
released a report calling for continued reform at the Internet Corporation
on Assigned Names and Numbers (ICANN). The report calls on ICANN to focus
on its limited mission and bottom-up, consensus-based approach, which
remains the best model for managing core Internet naming and numbering
functions. ICANN is meeting July 19-23 in Kuala Lumpur.
CDT Report, "ICANN and Internet Governance: Getting Back to Basics" [PDF]:
http://www.cdt.org/dns/icann/20040713_cdt.pdf
More on ICANN:
http://www.cdt.org/dns
[SOURCE: Center for Democracy and Technology]
(http://www.cdt.org)

JUDGE DENIES MOTION TO DISMISS NAPSTER CASE
U.S. District Judge Marilyn Patel ruled Wednesday that a suit may continue
against Napster investors like Bertelsmann and venture capital firm Hummer
Winblad. The suit alleges that their support for Napster promoted piracy
and cost the music industry $17 billion in lost sales. Judge Patel said the
plaintiffs, including music publishers, songwriters and record labels, had
the right to try to prove their allegations.
[SOURCE: Reuters, AUTHOR: Sue Zeidler]
http://www.reuters.com/newsArticle.jhtml;jsessionid=NFNAFW5SDFFH0CRBAE0C...

LIVING THE BROADBAND LIFE
For readers with a dial-up connection, I'll type this slowly. W h a t d o
e s i t m e a n t o h a v e a b r o a d b a n d c o n n e c t i o n
? In San Diego, 55% of households have gone high-speed. See what it means
to people's daily lives.
[SOURCE: New York Times, AUTHOR: Katie Hafner]
http://www.nytimes.com/2004/07/15/technology/circuits/15broa.html
(requires registration)

NEW PUBLICATION: BROADBAND FACTS
USTA is offering new publication on broadband penetration. Description from
USTA website: Broadband penetration has shown remarkable growth over the
past year. Service providers, stung by the downturn in traditional telecom
services revenue, have found broadband subscribers to be a welcome additive
to the bottom line. How long will this trend continue? What technology and
market dynamics are continuing to push the growth in DSL, cable modems, and
other high-speed access services? Where do things stand, and where are we
likely to be over the next few year? This publication includes a unique
compilation of research and analysis from the Federal Communications
Commission, Digital Tech Consulting, eMarketer, InStat/MDR, Leichtman
Research Group, Parks Associates and the Pew Internet & American Life
Project. Cost: $90
[SOURCE: United States Telecom Association]
http://www.telecom-bookstore.com/merchant.mv?Screen=PROD&Store_Code=UTB&...
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/14/04

The kids.us Internet domain and a la carte cable pricing are the topics of
the day. For these and other upcoming media policy events, see
http://www.benton.org/calendar.htm

TELEVISION
Noncoms Make Case for Cash
ACA: Big Programmers Deny Consumers Choice
Sat Bill Is Blow To Broadcasters

RETHINKING REGULATION
Powell Calls for Legislative Rethink
MCI's Layers Approach Said to Discourage Industry Investment

CONTENT
Studios Set Deals In Bid to Get PCs To Show Movies
File-Sharing Thrives as Net Users Find New Outlets
Study Finds Film Ratings Are Growing More Lenient

QUICKLY
DoJ Asks Carriers for Massive Amounts of Data in Merger Review
VOA Staff Members Say Government Losing Voice

TELEVISION

NONCOMS MAKE CASE FOR CASE
At the Senate Commerce Committee hearing on reauthorizing the Corporation
for Public Broadcasting, documentary film producer Ken Burns took center
stage. In an eloquent pitch for continued funding that was being lauded
even before it was through, Burns argued that none of his films could have
been made for commercial television, and even if they had been they would
have lost an essential quality by being interrupted every eight minutes
so viewers could be pitched a half-dozen products. Public broadcasting, he
said, "gives us attention and memory amid the cacophony of the marketplace.
Without that "duration," he said, "we do not learn, remember or care." Some
senators raised concerned about the perceived "left" bias of public
broadcasting. Burns argued that far from being a "hotbed" of thinking
outside the mainstream," local noncommercial stations are "essentially
conservative institutions, sometimes criticized as too conservative, too
middle of the road." No senator challenged him on the point. Peter Frid,
CEO of New Hampshire Public TV, also testified asking for 1) more CPB board
seat assignments for local stations (there are currently two of nine) and
2) support for a proposal being floated to trade an early return of
noncommercial station's analog spectrum for a cut of the proceeds from that
spectrum's auction.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA435719?display=Breaking+News
(requires subscription)
Commerce Committee Chairman John McCain (R-AZ) said he hoped to schedule on
July 20 a mark-up of his bill to reauthorize CPB. His bill is basically a
straightforward reauthorization, but with the addition for more
representation for station managers on the CPB board. Sen McCain said his
bill would also give CPB "explicit" authority to award grants for
production and acquisition of local programming, including local digital
programming. Quoting from a recent GAO report, he said 79% of public TV
stations had reported producing too little local programming, and 85% of
radio stations complained they don't have enough money for local
programming. Sen McCain expressed hope the bill could be passed this year.
[SOURCE: Communications Daily, AUTHOR: Dinesh Kumar]
(Not available online)
See links to testimony at:
http://commerce.senate.gov/hearings/witnesslist.cfm?id=1265

ACA: BIG PROGRAMMERS DENY CONSUMERS CHOICE
Walt Disney, Viacom, News Corp., NBC and Time Warner are to blame for a
dysfunctional programming market, the American Cable Association told the
FCC this week. Powerful cable programmers are using their muscle to block
small cable operators from removing expensive sports channels and racy
content from expanded basic in an effort to force consumers to buy as many
cable networks as possible. "These restrictions and obligations eliminate
the flexibility to offer more customized packages in local markets," the
trade group said. "For this to occur, certain media conglomerates would
need to temper economic self-interest with a heightened concern for the
public interest in localism, consumer choice and reasonable cable rates."
ACA said programmers should be forced, through new laws or regulations, to
allow distributors greater freedom in the retail packaging of cable networks.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA435723?display=Breaking+News
(requires subscription)

SAT BILL IS BLOW TO BROADCASTERS
Senators John Ensign (R-NV) and John McCain (R-AZ) have introduced a new
version of a bill to reauthorize the Satellite Home Viewer Improvement Act.
The bill would allow satellite companies to import distant analog network
signals to unserved subscribers. The National Association of Broadcasters
does not like the bill. "NAB strongly opposes the Ensign/McCain
legislation," the association said in a statement. "The paramount goal of
SHVIA reauthorization should be to ensure consumer access to local
television stations that provide news and lifeline information to local
audiences, not distant out-of-market stations. Congress should promote
carriage of analog or digital signals in all 210 markets, a goal that this
legislation fails to accomplish. "Moreover, the Enign/McCain proposed
changes to EchoStar's 'two-dish scheme' relegates Hispanic and religious
television viewers to second-class citizenship for over three more years.
Three Congressional committees have passed reasonable, compromise
legislation that extends SHVIA, and we're hopeful that their proposals
prevail."
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA436008?display=Breaking+News
(requires subscription)

RETHINKING REGULATION

POWELL CALLS FOR LEGISLATIVE RETHINK
At the Innovation summit in California, FCC Chairman Michael Powell spoke
about the impossibility of enforcing ancient media rules in a drastically
changed communications environment. "I think this country has a bigger
question it doesn't want to deal with," Chairman Powell said. "The notion
that the First Amendment changes when you change channels is odd. It's more
than odd--it's dangerous." Evening out of the treatment broadcast and cable
channels receive would require significant changes in the law, however, and
that's unlikely to happen anytime soon, Chairman Powell said. "There really
has been a dramatic rise in the American public complaining about"
indecency, he said. "If Congress is sensitive to anything, it's to that
kind ...of heightened concern." He said a company's regulatory treatment is
more a matter of "from whence they came rather than what they're really
doing now."
[SOURCE: C-Net|News.com, AUTHOR: David Becker]
http://news.com.com/Powell+calls+for+legislative+rethink/2100-1033_3-526...

MCI'S LAYERS APPROACH SAID TO DISCOURAGE INDUSTRY INVESTMENT
Current US telecommunications is based on a silos approach: there are rules
for telephony, for cable, for broadcasting, etc. But with advances in
technology, the lines are blurring between these silos, making it harder to
effectively regulate the sector. In response, MCI has proposed that IP
services should be regulated based on horizontal layers rather than
"vertical silos." MCI suggests that the lower physical network facilities
layer should be regulated based on market power, rather than legacy service
or labels, while the higher applications and content layer should be
unregulated. For example, the company says under the model, VoIP would
reside on the unregulated applications layer, while universal service and
interconnection issues reside on the regulated network layer. The idea has
gained some traction in DC, so a bunch of people who don't like the
proposal got together on Tuesday to bash it. A new report from the New
Millennium Research Council fins the proposal would lock in the worst
elements of existing telecommunications rules and discourage new industry
investment. The report was written by a really diverse "let the market
rule" gang: Wayne T. Brough, Chief Economist at Citizens for a Sound
Economy; Braden Cox, Technology Counsel with the Competitive Enterprise
Institute's Project on Technology and Innovation; James L. Gattuso of the
Heritage Foundation; David P. McClure, CEO of the US Internet Industry
Association; Andrew Odlyzko, University of Minnesota; Stephen B.
Pociask, President of TeleNomic Research; Adam Thierer, Cato Institute;
Glenn A. Woroch, University of California at Berkeley.
[SOURCE: Communications Daily, AUTHOR: Susan Polyakova]
(Not available online)
See NMRC Press Release:
http://www.newmillenniumresearch.org/news/event_071304.pdf
and Report: http://www.newmillenniumresearch.org/news/071304_report.pdf

CONTENT

STUDIOS SET DEALS IN BID TO GET PCs TO SHOW MOVIES
Walt Disney and Time Warner have entered partnerships with IBM, Intel,
Microsoft, Panasonic, Sony and Toshiba to create a content-management
system that will allow consumers to play movies and other digital content
on a wider variety of equipment. The move will help make the PC the
entertainment hub of the home, allowing the machine to distribute content
to televisions and other players around the home. The partners also hope to
protect content from piracy while allowing consumers more viewing options.
Under the new system, a consumer buying a DVD would be able to show it on
several machines, such as a home computer, a home-entertainment system and
a portable movie player. Copies of the content could be made, but the
technology would set limits on its usage. Individual studios, for example,
would be able to specify limits based on time -- that a movie might expire
after say, 90 days -- or on the number of viewings, say, 20. Those limits
are being worked out by the studios, but the system also will be able to
accommodate different limits for different movies.
[SOURCE: Wall Street Journal, AUTHOR: Sarah McBride at sarah.mcbride( at )wsj.com]
http://online.wsj.com/article/0,,SB108975778647462848,00.html?mod=todays...
(requires subscription)
See also:
Reuters
http://www.reuters.com/newsArticle.jhtml;jsessionid=CQZHMBYB4UCMACRBAEOC...
News.com
http://news.com.com/Tech%2C+Hollywood+heavyweights+create+content+coalit...

FILE-SHARING THRIVES AS NET USERS FIND NEW OUTLETS
UK-based technology firm CacheLogic released a study Tuesday finding that
Internet users download twice as many films, games and music as they did a
year ago. "One of the biggest myths put forth by the music industry -- that
they are winning the war on file-sharing -- is simply wrong," said Andrew
Parker, co-founder of CacheLogic. "It's a case of displacement," he added.
"Users are just moving to new networks." The number one reason for the
increased traffic is broadband Internet connections. The popularity of
file-sharing is costing the largest Internet service providers $10 million
per year each in bandwidth and network maintenance costs, CacheLogic said.
It estimates Internet users around the globe freely exchange a staggering
10 petabytes -- or 10 million gigabytes -- of data, much of it in the form
of copyright-protected songs, movies, software and video games.
[SOURCE: Reuters, AUTHOR: Bernhard Warner]
http://www.reuters.com/newsArticle.jhtml;jsessionid=DH2RNW1UZ2ZBCCRBAELC...

STUDY FINDS FILM RATINGS ARE GROWING MORE LENIENT
Researchers at the Harvard School of Public Health have found that the
movie ratings system run by the Motion Picture Association of America uses
confusing and murky descriptions of movie content and are calling for a
standardized universal rating system that would be used across all
entertainment media. Basically, the researchers have found that a movie
rated PG or PG-13 today has more sexual or violent content than a similarly
rated movie in the past. They found significantly more violence in G-rated
animated films compared with nonanimated films and concluded that
"physicians should discuss media consumption with parents of young children."
[SOURCE: New York Times, AUTHOR: Sharon Waxman]
http://www.nytimes.com/2004/07/14/movies/14MOVI.html
(requires registration)

QUICKLY

DoJ ASKS CARRIERS FOR MASSIVE AMOUNTS OF DATA IN MERGER REVIEW
Cingular-AT&T Wireless merger may be under unprecedented scrutiny as the
Department of Justice has asked carriers not involved with the deal for
data on individual customers including how much each customer paid for
service and the number of minutes used. Although the merger has not faced
much opposition, the DoJ may order the carriers to sell off spectrum or
customers as conditions for approving the deal. Mark Cooper, research
director for the Consumer Federation of America, said Tuesday his group has
launched a campaign to get states to scrutinize the merger. "This is sort
of the central decision, like Nynex-Bell Atlantic was," said Cooper. "If
you approve this merger there are 2 or 3 others that are going to go and
there's nothing you can do. We've made our case about what's wrong with the
merger... This is a bad merger. We've got the facts. We're launching a
campaign around the country to get individual states to look at it."
[SOURCE: Communications Daily, AUTHOR: Howard Buskirk]
(Not available online)

VOA STAFF MEMBERS SAY GOVERNMENT LOSING VOICE
The Broadcasting Board of Governors is rejecting the complaints of Voice of
America staff and is defending a pair of newer, semi-private and separate
media operations that the staffers said do not live up to VOA standards.
The Board is accusing the VOA dissidents of being slow to adapt to
necessary change. Kenneth Y. Tomlinson, chairman of the BBG, disputed the
VOA staffers' complaints. He said the board is not trying to marginalize
the agency, pointing to what he said are the VOA's recently expanded
services to Iran and Pakistan. He said the board created the newer
television and radio networks independently of the VOA, in part -- and with
congressional support -- to avoid red tape. The networks' use of music and
entertainment programming, Tomlinson said, has helped lure a much larger,
younger audience than did the VOA format. Cuts in Eastern and Central
European broadcasts were made to focus more resources on the Middle east.
"The war on terror is a prime requirement," he said. "If you have to choose
between getting information to the Middle East and serving great old
audiences in Poland and the Baltic states, you unfortunately have to go
with the countries in the Middle East."
[SOURCE: Washington Post, AUTHOR: Brian Faler]
http://www.washingtonpost.com/wp-dyn/articles/A47811-2004Jul13.html
(requires registration)
--------------------------------------------------------------
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. While the summaries are
factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/13/04

The Senate Commerce Committee is holding a hearing today on CPB=20
Reauthorization=20
(http://commerce.senate.gov/hearings/witnesslist.cfm?id=3D1265) while the=
New=20
Millennium Research Council is hosting a discussion on the practicalities=20
and risks associated with the Internet-based =91layers model=92 proposed by=
MCI=20
as a basis for
rethinking U.S. telecommunications regulation=20
(http://www.newmillenniumresearch.org/news/event_062404.pdf).
For these and other upcoming media policy events, see=20
http://www.benton.org/calendar.htm

BROADCASTING & POLITICS
Each Convention to Get 3 Hours of Prime Time on TV Networks
NBC Not Worried About Content Issues, Wants Parity With Cable
VOA Changes Prompt Staffer Protests
Wyoming Pols Get Free Time
Pappas Makes Campaign Pledge

PUBLIC BROADCASTING
PBS Pledges Spending Cuts, Reforms
PubCasters Divided on FCC's Tape Retention Proposal

QUICKLY
Seattle: Surveys Support a la Carte Mandates
Powell: New Phone Competition Rules Soon

BROADCASTING & POLITICS

EACH CONVENTION TO GET 3 HOURS OF PRIME TIME ON TV NETWORKS
ABC and CBS said on Monday that they planned to broadcast three hours each=
=20
of the Democratic and Republican conventions in prime time, matching a=20
schedule that NBC announced on Thursday. The coverage corresponds to the=20
highest-profile speakers. For the Democrats, that means former President=20
Bill Clinton on Monday; Senator John Edwards on Wednesday; and Senator John=
=20
Kerry as he accepts the presidential nomination on Thursday. For the=20
Republicans, the prime-time coverage aims to show Gov. Arnold=20
Schwarzenegger of California on Tuesday, Vice President Dick Cheney on=20
Wednesday and President Bush on Thursday. For more coverage of the=20
conventions, viewers must turn to cable stations CNN, Fox News, MSNBC, or=20
CNBC. Spanish speaking Americans can tune into Telemundo. ABC, NBC and CBS=
=20
are also offering additional coverage in the digital TV format.
[SOURCE: New York Times, AUTHOR: Michael Janofsky]
http://www.nytimes.com/2004/07/13/politics/campaign/13tube.html
(requires registration)
PBS plans three hours of prime-time broadcast coverage each night of both=20
conventions. PBS anchor Jim Lehrer said the network viewed extended=20
coverage as "an important public affairs function." Analysts noted that TV=
=20
coverage of the conventions remained a crucial part of the election year.=20
"These are times when Americans sit up and listen and learn at a level that=
=20
they don't ordinarily do," said Thomas Patterson of Harvard University's=20
John F. Kennedy School of Government. "These are still important events=20
even if some of their newsworthiness has dimmed in time." Thomas Hollihan,=
=20
associate dean of the USC-Annenberg School for Communication, said, "The=20
convention is the second most viewed event of the general election campaign=
=20
=97 behind the presidential debates=85. People do tune in."
[SOURCE: Los Angeles Times, AUTHOR: Nick Anderson]
http://www.latimes.com/news/printedition/asection/la-na-coverage13jul13,...
38844.story?coll=3Dla-news-a_section
(requires registration)

NBC NOT WORRIED ABOUT CONTENT ISSUES, WANTS PARITY WITH CABLE
Speaking to TV critics over the weekend, executives from NBC responded to=20
Washington's indecency crackdown this year. New NBC Entertainment President=
=20
Kevin Reilly won't be looking over his shoulder: =93The Washington situation=
=20
is tricky, but there=92s a long history at NBC of being in those waters. You=
=20
know, I harken back to... some of what we've gone through on ER over the=20
years, Seinfeld, Will & Grace -- quality is always defensible, and that=92s=
=20
the game we=92re in. I'm not even thinking about it... Honestly, we=92re=20
looking for the best show we can and if there is some content issue at the=
=20
time we=92re ready to program it, we'll consider that.=94 Mr. Reilly said=
the=20
bigger challenge may be competition from cable, which faces less FCC=20
scrutiny. =93It=92s an uneven playing field, and I frankly think it=92s=
unfair...=20
I think everybody should be held to the same standard.=94
The executives faced criticism from critics over the minimal prime time=20
coverage on the network planned for the upcoming political conventions. NBC=
=20
Universal TV Group President Jeff Zucker suggested the network is meeting=20
broadcasting public interest obligations through its cable networks, "The=20
fact is we will have hundreds
and hundreds of hours of coverage. People will be able to find more=20
coverage than they've ever been able to find of both conventions throughout=
=20
all the networks of NBC. And I think that the amount of coverage that we=20
will have with both conventions is actually completely in line with what we=
=20
did 4 years ago. So I actually think we've got exactly the right amount of=
=20
coverage... If there was any real news going on there, we might look=20
differently... We=92re covering what we think are the newsworthy events: An=
=20
important speech at the Democratic convention on Monday night and one at=20
the Republican convention Tuesday night. I think that for anybody who wants=
=20
to watch gavel-to-gavel coverage of the convention, there are many outlets=
=20
in which they can do so."
[SOURCE: Communications Daily, AUTHOR: Valerie Milano]
(Not available online)

VOA CHANGES PROMPT STAFFER PROTESTS
Nearly half of Voice of America's (VOA) 1,000 staffers have signed a=20
petition protesting what they call the "piece-by-piece" dismantling of the=
=20
62-year-old service, which reaches 87 million people in 44 languages. The=20
petition asserts that the Broadcasting Board of Governors, which oversees=20
U.S taxpayer-funded broadcast outlets, has been funneling money into new=20
radio and TV stations that are not subject to the same journalistic=20
standards and monitoring as VOA. The new broadcast outlets are directed=20
primarily at the Middle East, where the U.S. image is at a historic low.=20
'As broadcast professionals . . . we call on the U.S. Congress to conduct=20
an immediate inquiry into the actions of the Broadcasting Board of=20
Governors,'' the petition says. It goes on to accuse the board of "killing=
=20
VOA" by closing its Arabic radio service, reducing English-language=20
broadcasting and launching services with "no editorial accountability" and=
=20
limited breaking news.
[SOURCE: USAToday, AUTHOR:Barbara Slavin]
http://www.usatoday.com/usatonline/20040713/6359181s.htm

WYOMING POLS GET FREE TIME
KCWY, Sunbelt Communications's NBC affiliate in Casper, has offered 10 free=
=20
minutes of airtime apiece to the eight candidates for Wyoming's single seat=
=20
in the House in advance of the August 17 primary. Each will get five=20
minutes in the 5 p.m. news, repeated in the next day's morning newscast.=20
They will be encouraged to stay positive, rather than attack their=20
opponents, but the station will not censor the messages, says the station's=
=20
general manager. He also says the time will be promoted so that viewers=20
will know to tune in.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA435454?display=3DBreaking+News
(requires subscription)

PAPPAS MAKES CAMPAIGN PLEDGE
Pappas Telecasting stations KMPH Fresno, KUVR Reno, KSWT Yuma, KHGI=20
Lincoln, KPTM, Omaha, and KBBC El Paso are committed to airing at least=20
five minutes of candidate-centered speech per day for the 30 days preceding=
=20
the general election. The six stations are the only ones in the group that=
=20
produce local news. All 25 of the stations the group owns will air "get out=
=20
the vote" public-service announcements starting now and ending on Election=
Day.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA435550?display=3DBreaking+News
(requires subscription)
See more about "get out the vote" public service announcements:
Getting Out the Vote, With Style
[SOURCE: New York Times, AUTHOR: Nat Ives]
http://www.nytimes.com/2004/07/13/business/media/13adco.html
(requires registration)
And see an article on the limits of PSAs:
Activists Cry Censorship in Fight Over Ad
[SOURCE: Los Angeles Times, AUTHOR: Anne-Marie O'Connor]
http://www.latimes.com/news/printedition/asection/la-na-billboard13jul13...
462845.story?coll=3Dla-news-a_section

PUBLIC BROADCASTING

PBS PLEDGES SPENDING CUTS, REFORMS
Responding to a petition signed by 95 public station leaders which said=20
that stations are receiving a "declining return on [National Program=20
Service] investments," PBS has cut $5.85 million from proposed annual=20
assessments to be paid by member stations -- and pledged to move quickly on=
=20
reforms to make its decision-making more visible and accountable to=20
stations. "We're going to do this or otherwise we are the caretakers=20
presiding over the beginning of the end," said PBS President Pat Mitchell=20
during the PBS Board meetings. Budget cuts included some programing, but=20
also $2 million of the promotion budget -- cutting significantly into=20
spending for the "Be More" institutional positioning campaign, ending the=20
Share a Story promotion and an advertising grant program for stations. PBS=
=20
Interactive will reduce the number of websites it will refresh and produce=
=20
this year. The PBS Board opened its meetings to include station=20
representatives and the network will use more rigorous criteria for program=
=20
performance and reform its decision-making processes to make them more=20
transparent to member stations.
[SOURCE: Current, AUTHOR: Karen Everhart]
http://www.current.org/pbs/pbs0412budget.shtml

PUBCASTERS DIVIDED ON FCC=92S TAPE RETENTION PROPOSAL
The Association of Public TV Stations (APTS), which represents more than=20
350 stations, has said it would oppose the FCC's proposal to require all=20
stations to keep recordings of all broadcast programming for 60-90 days.=20
But some stations, realizing the needed technology is fairly cheap and=20
cognizant of their responsibilities to follow FCC rules, plan to support=20
the proposal. But seemingly forgotten is a 1978 court decision which=20
overturned a similar FCC requirement for public broadcasters to keep=20
recordings of programs in which =93any issue of public importance is=20
discussed=94 for 60 days and make it available to the FCC on request. The=20
rule was challenged on the 1st and 5th Amendments and a US Appeals Court=20
found that the rule would have a chilling effect on political speech. The=20
new proposal could also face a legal challenge which could 1) come to the=
=20
same 1st Amendment interpretation or 2) be viewed differently because all=20
programming and all stations would be subject to the rule.
[SOURCE: Communications Daily, AUTHOR: Dinesh Kumar]
(Not available online)

QUICKLY

SEATTLE SURVEYS SUPPORT A LA CARTE MANDATES
Seattle (WA) cable regulators sponsored a pair of surveys a found that 46%=
=20
of people there would pay =93a little extra=94 for more a la carte options=
=20
while 66% said they would opt for a la carte if given the chance by the=20
cable company. =93Because cable operators have not been responsive to the=20
demand for customized programming, the FCC should establish regulations=20
that facilitate consumers=92 choice, whether this is accomplished by=20
requiring cable companies to offer a la carte programs, theme-tiered=20
programs, or some other options,=94 said Tony Perez , who signed the FCC=20
comments filed by Seattle=92s Office of Cable Communications. Seattle's=
cable=20
market is dominated by Comcast (117,000 subscribers) which opposes a la=20
carte. A second cable company, Millennium Digital Media, has about 17,000=20
subscribers.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA435434?display=3DBreaking+News
(requires subscription)

POWELL: NEW PHONE COMPETITION RULES SOON
FCC Chairman Michael Powell said that his fellow commissioners are=20
reviewing now draft temporary telephone competition rules. If adopted, the=
=20
rules would be in place for six months while the Commission craft permanent=
=20
rules. Chairman Powell did not "feel it prudent right now" to provide any=20
details about what the rules suggest.
[SOURCE: C-Net|News.com, AUTHOR: Ben Charny]
http://news.com.com/Powell%3A+New+phone+competition+rules+soon/2100-1037...
266582.html?tag=3Dnefd.hed
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/12/04

There's a full agenda of media policy events this week -- see=20
http://www.benton.org/calendar.htm

Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
(headlines( at )benton.org) -- we welcome your comments.

$$$
House Approves Commerce-Justice-State Appropriations
G.O.P. Hopes Web Sites Will Be a Link to the Small Donor

MEDIA
NAB Says Buck Stops on Cable=92s Desk
Compromising Positions

INTERNET
Online File Swapping Endures
FCC Boss Launches Blog Aimed at High-Tech Industry

REACTIONS TO FCC DECISIONS
The Nextel Deal
Pick-and-Choose vs All-or-Nothing

$$$

HOUSE APPROVES COMMERCE-JUSTICE-STATE APPROPRIATIONS
Late Thursday, the House passed HR-4754, "Making appropriations for the=20
Departments of Commerce, Justice, and State, the Judiciary, and related=20
agencies for the fiscal year ending September 30, 2005." The measure covers=
=20
funding for the FCC. Communications Daily reports that the bill=92s=20
$39.8-billion funding for FY 2005 exceeds the Bush administration=92s=
request=20
of $39.6 billion and last year=92s funding of $37.6 billion. The FCC would=
=20
see a $6-million increase to $280 million for FY 2005, while the FTC
would receive an $18-million increase to $203 million (including =93full=20
funding for the Do-Not-Call program=94). The Commerce Department would get=
=20
$186 million less than last year with a mark of $5.8 billion, $301 million=
=20
less than the Administration=92s request.
[SOURCE: House of Representatives]
http://www.congress.gov/cgi-bin/bdquery/z?d108:H.R.4754:

GOP HOPES WEB SITES WILL BE LINK TO THE SMALL DONOR
The Republican National Committee will this month start paying Web site=20
owners 30 cents for every dollar they raise for the party through their=20
sites. Under the program, site owners registered on Commission Junction can=
=20
direct donors from their sites to the Republican National Committee's site=
=20
through a banner ad or other link. Still, by enlisting others to help it=20
raise money, the committee hopes to reach audiences that might not donate=20
otherwise.
[SOURCE: New York Times, AUTHOR: Ken Belson]
http://www.nytimes.com/2004/07/12/business/12rnc.html
(requires registration)

MEDIA

NAB SAYS BUCK STOPS ON CABLE'S DESK
Hearn opens, "Stung by criticism over their alleged lack of local election=
=20
coverage, broadcasters responded by doing what they have been known to do=20
best: Blame the cable industry." In a letter to FCC Chairman Powell and=20
Senate Commerce Committee Chairmen John McCain (R-AZ), National Association=
=20
of Broadcasters President Eddie Fritts complained that cable giants are=20
arguing against so-called multicast carriage rules because they fear the=20
programming commercial broadcasters will make available -- like campaign=20
coverage. =93Since broadcasters have steadily reduced public-affairs=20
programming in an analog world, there is absolutely no evidence or reason=20
to believe that they will undertake more political coverage in a digital=20
world,=94 countered National Cable & Telecommunications Association=
spokesman=20
Brian Dietz after seeing a copy of Mr. Fritts=92s letter. =93It=92s curious=
that=20
the broadcasters are suggesting that multicasting would increase their=20
local public-affairs coverage when they have steadfastly fought against=20
having any public-service obligations applied to their digital signals,=94=
=20
NCTA=92s Dietz added. In June, Chairmen McCain and Powell called on=20
broadcasters to expand their election coverage in light of a study by the=20
University of Southern California=92s Annenberg School and the University of=
=20
Wisconsin, which showed that more than half of the top-rate local news=20
broadcast aired no campaign coverage in the seven weeks leading up to the=20
2002 elections. =93The same study also found when local broadcasters did air=
=20
campaign stories on local news broadcast, only 24% of the stories were=20
about issues,=94 McCain and Powell wrote in their June 16 letter. =93The=20
majority the stories focused on campaign strategy and polling data. While=20
this information is newsworthy and interesting, it does not provide voters=
=20
with the knowledge necessary to make an informed decision on whether to=20
vote for a candidate.=94
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA435152?display=3DPolicy
(requires subscription)
See full text of NAB letter at=20
http://www.nab.org/Newsroom/PressRel/070204lettertoMcCainPowell.htm

COMPROMISING POSITIONS
Faced with the prospect of the FCC regulating network affiliate agreements,=
=20
NBC and ABC have come to term with affiliate stations. The contracts=20
contain two key clauses: one giving affiliates more power to reject network=
=20
shows, the other banning the network from monopolizing the additional=20
channels that stations can offer in digital. (CBS hammered out a deal two=20
years ago while Fox is still working on a new contract.) The bargaining was=
=20
applauded by FCC Chairman Michael Powell, who had hoped a private deal=20
could be brokered. The two sides made little progress until Chairman=20
Powell's staff drafted a plan that gave affiliates most of what they=20
wanted. The affiliates' hand was further strengthened by the Super Bowl=20
debacle. They used the incident as evidence that the networks frequently=20
foist offensive programming on local communities, which they are powerless=
=20
to block.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA435253?display=3DWashington
(requires subscription)

INTERNET

ONLINE FILE SWAPPING ENDURES
Despite entertainment industry attempts to curb online song and movie=20
swapping with lawsuits and education campaigns, more people than ever are=20
using peer-to-peer services. 8.3 million people were online at any one time=
=20
in June using unauthorized services like Kazaa and eDonkey -- up 19% from=20
6.8 million in June 2003. BigChampagne, which tracks Internet file sharing,=
=20
says 1 billion songs were available for free trading in June. That compares=
=20
with 820 million a year ago.
[SOURCE: USAToday, AUTHOR:Jefferson Graham]
http://www.usatoday.com/usatonline/20040712/6356647s.htm
In a somewhat related story, see
E-Commerce Report: Online Battle of Low-Cost Books
[SOURCE: New York Times, AUTHOR: Bob Tedeschi]
http://www.nytimes.com/2004/07/12/technology/12ecom.html
(requires registration)

FCC BOSS LAUNCHES BLOG AIMED AT HIGH-TECH INDUSTRY
FCC Chairman Michael Powell now has his own blog. His motivation is to=20
encourage the high-tech community to contribute more to regulatory debates.=
=20
"I am looking forward to an open, transparent and meritocracy-based=20
communication -- attributes that bloggers are famous for!" Chairman Powell=
=20
wrote in his first posting, adding he wanted to get out of "the Beltway=20
Washington world where lobbyists filter the techies." He specifically asked=
=20
bloggers to send in their thoughts on the coming transition to digital=20
television and possibly using airwave frequencies between television=20
stations for new wireless services. Andrew Schwartzman, a public interest=20
lawyer who has crossed swords and won a court battle initially halting=20
Chairman Powell's attempts to relax media ownership limits, also chided the=
=20
chairman for not seeking input on other issues. "I wish he would do the=20
same outreach with the public interest community," he told Reuters. Powell=
=20
was criticized during the FCC's review of media ownership limits for not=20
holding many official forums for public input on the rules.
Find the blog at http://www.alwayson-network.com/
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
http://www.reuters.com/newsArticle.jhtml?type=3DtechnologyNews&storyID=3...
3324
See also:
LATimes:=20
http://www.latimes.com/business/printedition/la-fi-powell12jul12,1,98802...
ory?coll=3Dla-headlines-pe-business

REACTIONS TO FCC DECISIONS

BALL IS IN NEXTEL'S COURT, BUT CHOICE IS NO SLAM DUNK
There was little reaction from Nextel to the FCC's vote to correct the=20
interference problems the wireless carrier has with public safety=20
officials. Why? Well, the devil's in the details of the order, but that may=
=20
not be released for another month. Although the plan calls for Nextel to=20
get the 10 MHz in the 1.9 GHz band it covets, the wireless carrier's=20
blessing on the deal isn't assured. Guzman & Co. telecom analyst Patrick=20
Comack has said for months that the market would not like the idea of=20
Nextel having to pay more than $2 billion cash to get the 1.9 GHz spectrum.=
=20
The FCC order calls for Nextel to pay a minimum of $3.2 billion cash with=20
no cap on expenses if rebanding costs more than estimated. The company=20
could end up paying more than market value for new spectrum and the deal=20
could still be nixed by a legal challenge. But does Nextel have a real=20
choice to walk away from the deal now that it has done such a good job of=20
making the public aware of the problem? The company needs the new spectrum=
=20
to offer broadband services being provided by competitors and the order=20
that requires Nextel to adhere to "extended best practices" if it doesn't=20
opt for the rebanding plan. These technical guidelines will set a new=20
standard for what is "unacceptable interference" at 800 MHz, will establish=
=20
responsibility for the interference, and will dictate that the responsible=
=20
party must pay to fix the problem. This provision could mean big money to=20
the company down the line. Nextel's choice promises to be a turning point=20
for the carrier and the future of public-safety communications.
[SOURCE: Telephony's Regulatory Insider, AUTHOR: Donny Jackson]
djackson( at )primediabusiness.com

FCC 800 MHz DECISION FALLS SHORT
Steve Largent, President and CEO of the Cellular Telecommunications &=20
Internet Association, called the FCC's decision in the Nextel/800 MHz=20
proceeding =93disappointing=94. CTIA has argued repeatedly that the 800 MHz=
=20
interference problem must be solved quickly, fairly, to the benefit of=20
Public Safety, and in a way that will survive judicial scrutiny. Largent=20
believes the FCC=92s decision fails on all counts. =93The FCC clearly=
didn't=20
keep its eye on the ball. Its primary responsibility in this case is to=20
look out for Public Safety and the American public and that didn't happen,=
=94=20
observed Largent. =93It is unfortunate that the Commission=92s plan does=
less=20
to solve the Public Safety interference problem than other alternatives=20
that were available. Among all of the FCC=92s choices, this one provides=20
Public Safety with the fewest assurances of success.=94
[SOURCE: CTIA Press Release]
http://www.ctia.org/news_media/press/body.cfm?record_id=3D1414

COMPTEL/ASCENT COMMENTS ON FCC PICK AND CHOOSE ACTION
CompTel/ASCENT CEO H. Russell Frisby Jr said: The FCC has once again=20
revised its rules to further limit the choices available to competitive=20
carriers. The FCC's action is an overly broad prohibition on small=20
carriers' ability to opt in to portions of interconnection agreements that=
=20
have already been determined to be in compliance with the law.=20
CompTel/ASCENT believes that the elimination of 'pick and choose' does=20
nothing to promote commercially negotiated agreements between small=20
competitors and the Bells, which continually wield their control over=20
last-mile facilities in an effort to lock alternative providers out of the=
=20
market. The impact on small competitive carriers, and the consumers and=20
businesses they serve, will be great. By doing away with the ability to=20
opt-in to favorable provisions of existing agreements, competitors will be=
=20
faced with more 'take it or leave it' offers from the Bells - the same=20
Bells that have previously demonstrated their intent to thwart=20
facilities-based competition. Moreover, there will be needless litigation=20
costs to competitors, as they will be forced to dedicate their limited=20
resources to legal fees related to contracting interconnection agreements,=
=20
rather than investing in new technologies and networks.
[SOURCE: Competitive Telecommunications Association (CompTel) and the=20
Association of Communications Enterprises (ASCENT Press Release]
http://www.comptelascent.org/news/recent-news/070804.html

ALTS DECRIES FCC REVERSAL OF PRO-COMPETITIVE PICK AND CHOOSE RULES
John Windhausen, Jr., President, Association for Local Telecommunications=20
Services said: The FCC=92s abrupt decision to throw out its pick and choose=
=20
rules is difficult to
understand. The Commission claims that its decision to reverse itself will=
=20
lead to more commercial negotiations, yet the loudest voices in support of=
=20
this change were the
incumbent LECs, the monopolists who have the least incentive to negotiate=20
with competitors. It is the smaller competitive carriers =AD who have no=20
market power =AD that
needed the negotiation rights that Congress put in the 1996 Act, and that=20
the Supreme Court unanimously affirmed. The FCC=92s decision to ignore the=
=20
Congress and the
Supreme Court is a gift to the Bell companies, offered at the expense of=20
consumers and small businesses that rely on the innovative service=20
offerings of the ALTS membership. This is, unfortunately, another example=20
of policy-makers whittling away at the foundations of local telecom=20
competition set forth in the 1996 Telecom Act. ALTS can only hope that this=
=20
latest FCC action does not presage further moves to restrict CLECs=92 access=
=20
to ILEC last mile transmission facilities. The FCC=92s stated goal of=20
promoting facilities-based competition needs to be backed up by concrete=20
action, and today=92s decision is a step in the wrong direction.
[SOURCE: Association for Local Telecommunications Services Press Release]
http://206.161.82.210/NewsPress/070804PR%20on%20Pick%20and%20choose.pdf

USTA PRAISES FCC ACTION ON PICK-AND CHOOSE RULE
Walter B. McCormick, Jr., President and CEO of USTA said: Today=92s decision=
=20
by the Commission will help bring the telecom industry closer to a=20
market-driven environment because it will encourage companies to negotiate=
=20
commercial agreements in good faith instead of allowing some carriers to=20
exploit the system and will help promote further investment in the nation=92=
s=20
communications infrastructure and speed the deployment of innovative=20
services to consumers.
[SOURCE: Unites States Telecom Association]
http://www.usta.org/news_releases.php?urh=3Dhome.news.nr2004_0708
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/9/04

Hearings next week on Corporation for Public Broadcasting Reauthorization
and Nielsen Local People Meter TV Rating System, a forum on the kids.us
Internet domain and a discussion of rethinking telecommunications policy
based on the "layers model." For these and other upcoming media policy
events, see http://www.benton.org/calendar.htm

TELECOM
Nextel Deal Done
FCC Adopts All-or-Nothing Rule
Telecom Rates Battle Heats Up
Spectrum-Based Services in Rural Areas
Critic pans IRS suggestion on VoIP

FCC LEADERSHIP
FCC's Powell Sits on Horns of Dilemma
Senators Back Adelstein

MEDIA
FTC Files Report on Hollywood
Mitchell Defends PBS Path

INTERNET
Internet as Unique News Source
Study: Broadband Market to Triple by 2008

TELECOM

NEXTEL DEAL DONE
The FCC adopted a plan Thursday to resolve the ongoing and growing problem
of interference to public safety radio systems operating in the 800 MHz
band. In recognition of the critical need for the Nation's first
responders to have robust and highly reliable communications systems, the
Commission based its decision on meeting three essential goals: first and
foremost, resolving the interference problem to public safety radio
systems; second, ensuring equitable treatment of all of the affected
spectrum licensees with minimal disruption to users and the public alike;
and third, as the Commission is the federal agency charged with
administering the spectrum for the public good, exercising sound principles
of spectrum management. The decision was unanimous.
The Commission adopted a new band plan for the 800 MHz band to address the
root cause of the interference problem by separating generally incompatible
technologies , with the costs of relocating 800 MHz incumbents to be paid
by Nextel Communications (Nextel). The Commission implemented objective
technical standards - "Enhanced Best Practices" -- for defining
"unacceptable interference" to public safety systems operating in the 800
MHz band and procedures detailing the responsibilities and expectations
regarding abatement of such interference.
To accomplish the reconfiguration, the Commission will require Nextel to
give up rights to certain of its licenses in the 800 MHz band and all of
its licenses in the 700 MHz band. In exchange, the Commission will modify
Nextel's licenses to provide the right to operate on two five-MHz blocks in
a different part of the spectrum -- specifically 1910-1915 MHz and
1990-1995 MHz -- conditioned on Nextel fulfilling certain obligations
specified in the Commission's decision. The Commission determined that the
overall value of the 1.9 GHz spectrum rights is $4.8 billion, less the cost
of relocating incumbent users. In addition, the Commission concluded that
it would credit to Nextel the value of the spectrum rights that Nextel will
relinquish and the actual costs Nextel incurs for to relocate all
incumbents in the 800 MHz band. To the extent that these combined credits
total less than the determined value of the 1.9 GHz spectrum rights, Nextel
will make an anti-windfall payment to the United States Department of the
Treasury at the conclusion of the relocation process equal to the difference.
Nextel released a statement saying it was reserving judgment on the plan.
"The information released today by the Commission contains few details
regarding the obligations its decision would impose on Nextel," the carrier
said. "Once the Commission's order is released, we have an obligation to
review all aspects of the decision to fully understand the implications to
Nextel's shareholders."
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249414A1.doc
NEXTEL GETS 1.9 GHz SPECTRUM BUT MUST PAY BILLIONS
[SOURCE: Communications Daily, AUTHOR: Howard Buskirk]
(Not available online)
Here's links to coverage
* Wall Street Journal
http://online.wsj.com/article/0,,SB108930080395358561,00.html?mod=todays...
* Washington Post: FCC's Powell Stands Up to Verizon Threat
http://www.washingtonpost.com/wp-dyn/articles/A38014-2004Jul8.html
Nextel Must Pay at Least $3.2 Billion for Airwaves
http://www.washingtonpost.com/wp-dyn/articles/A37692-2004Jul8.html
* Los Angeles Times
http://www.latimes.com/business/printedition/la-fi-fcc9jul09,1,4480902.s...
* USAToday
http://www.usatoday.com/usatonline/20040709/6353485s.htm
* New York Times
http://www.nytimes.com/2004/07/09/business/09spectrum.html

FCC ADOPTS ALL-OR-NOTHING RULE
The FCC adopted an all-or-nothing rule that requires a requesting
telecommunications carrier seeking to adopt terms in another carrier's
interconnection agreement to adopt the agreement in its entirety, taking
all rates, terms, and conditions from the adopted agreement. The
Commission based its decision on two key determinations. First, the Order
concludes that the current pick-and-choose rule is not compelled by the
language of section 252(i) of the Communications Act. Second, the Order
finds that the new all-or-nothing rule will promote more give and take in
negotiations, which will produce mutually beneficial agreements that will
be better tailored to meet carriers' individual needs. In addition, the
new rule is expected to reduce negotiation time, expenses, and possible
areas of dispute, while at the same time providing adequate protection
against potential discrimination. Based on these determinations, the Order
concludes that the benefits of adopting the all-or-nothing rule outweigh
the burdens, and therefore replaces the pick-and-choose rule.
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249406A1.doc

TELECOM RATES BATTLE HEATS UP
A study by University of California-Berkeley Professor Yale Braunstein
found that current phone network lease rates have saved SBC's California
customers at least $300 million a year. Customers who switched carriers
saved up to 34%, while competition drove SBC customers' bills down as much
as 22%, the study found. But the rules that set those rates were overturned
by a court and have now expired. California phone regulators postponed a
decision Thursday on rival proposals that would increase the rates
competitors pay SBC for use of its infrastructure by more than 20%.
[SOURCE: San Jose Mercury News, AUTHOR:John Woolfolk]
http://www.mercurynews.com/mld/mercurynews/business/technology/9114576.htm

SPECTRUM-BASED SERVICES IN RURAL AREAS
To help ensure that wireless service offerings are available in rural
areas, the FCC on Thursday 1) adopted a default definition of "rural" as a
county with a population density of 100 persons or fewer per square mile;
2) determined that smaller licensing areas may be appropriate in some
spectrum blocks to encourage deployment in rural areas, and that licensing
areas will continue to be established on a service-by-service (or
band-by-band) basis, as appropriate; 3) eliminated the cellular
cross-interest rule, which currently applies only in Rural Service Areas
(RSA) and transitioned to case-by-case competitive review for all
applications involved in transactions involving cellular licenses; 4)
allowed licensees, at their option, to grant a security interest in certain
wireless licenses to the U.S. Department of Agriculture's Rural Utilities
Service (RUS), subject to the Commission's prior approval of any transfer
of control; 5) increased permissible power levels for base stations in
certain wireless services that are located in rural areas or that provide
coverage to otherwise unserved areas, 6) amended its rules to permit
certain geographic-area licensees to comply with construction build-out
requirements by demonstrating that they provide "substantial service" and
7) concluded that re-licensing and market-based mechanisms aren't
necessarily mutually exclusive and that the two approaches can be
complimentary in certain circumstances.
Commissioner Copps issued a strong partial dissent concerning 1)
eliminating the rule that prohibits cellular carriers from merging, 2)
maintaining the rule that allows companies to meet their build out
requirements by serving only urban markets and ignoring rural customers,
and 3) allowing corporations to mortgage their spectrum licenses,
essentially allowing them to use a public asset as collateral when seeking
loans.
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249405A1.doc
Statement by Commissioner Copps
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249405A3.doc

CRITIC PANS IRS SUGGESTION ON VOIP
Rep Chris Cox (R-CA) sent a letter Wednesday to President Bush asking him
to "direct the IRS immediately to affirm that [the] 100-year-old tax does
not apply to the Internet, but only to traditional analog voice services."
"If IRS analysis suggests that (affirming) this will prevent Washington
from raising new revenue from this tax, that would be very good news for
American consumers--and more than 100 years overdue," wrote Rep Cox, the
fourth-most-senior Republican in the House. "When it comes to consumer
excise taxes, only alcohol and tobacco are taxed more heavily at the
federal level than phone service," Rep Cox wrote in his letter to President
Bush. "Telephone customers are then hit with state and local tax rates that
can run up to three times the rates paid on other goods. That is why the
House has voted to liberate consumers from this regressive tax."
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
http://news.com.com/Critic+pans+IRS+suggestion+on+VoIP/2100-1036_3-52612...

FCC LEADERSHIP

FCC'S POWELL SITS ON HORNS OF DILEMMA
A look at the tenure of FCC Chairman Michael Powell. His proponents say his
tenure, despite its highly publicized problems, will be lauded. "It's been
a struggle, but he has turned the ship in a deregulatory way," says Scott
Cleland, head of the Precursor Group. "Did he get everyone to go there
immediately and on his terms? No. But they are going to follow him."
Critics say Chairman Powell has focused too much on a sweeping free-market
agenda while not maintaining strong political alliances and neglecting the
short-term consequences for influential interest groups. Jeffrey Bray,
managing director of Babson Capital Management, says he has shifted most of
his company's telecom investments outside the U.S. "The inability of the
FCC to execute on major decisions has driven investors away" and makes it
impossible for companies to make "capital and customer decisions" with any
competitive certainty, he says. Mr. Bray and others say they expected more
from Chairman Powell, a Republican who was appointed as a commissioner by
President Clinton and chairman by President Bush. His penchant for
cutting-edge technology made him acutely capable of mapping out a strategy.
Plus, he knew how Washington worked; the 41-year-old former Army officer is
the son of Colin Powell, now the secretary of state.
Insiders suggest that Chairman Powell will step away from the FCC after the
presidential election.
[SOURCE: Wall Street Journal, AUTHOR: Anne Marie Squeo at
annemarie.squeo( at )wsj.com]
http://online.wsj.com/article/0,,SB108932376100259068,00.html?mod=todays...
(requires subscription)

SENATORS BACK ADELSTEIN
Sens John McCain (R-AZ), Byron Dorgan (D-ND), Ernest Hollings (D-SC),
Conrad Burns (R-MT), and Daniel Inouye (D-HI) have written President Bush
asking him to renominate Jonathan Adelstein to a second term on the FCC. "A
significant number of issues critical to American consumers are pending
before the Commission. We need someone with his knowledge and experience on
the job at the FCC," they wrote, asking for word on the status of the
nomination. Senate Minority Leader and Commissioner Adelstein's former
boss, Tom Daschle (D-SD), submitted his name for renomination a year ago,
but the White House has not yet sent it to the Senate. If the White House
fails to act, Commissioner Adelstein would have to leave at the end of the
current legislative session, which could be as soon as October.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA434763?display=Breaking+News
(requires subscription)

MEDIA

FTC FILES REPORT ON HOLLYWOOD
The Federal Trade Commission issued its fourth report since 2000 on
entertainment violence; the results are mixed. The FTC credited studios,
music labels and video game makers for better following self-imposed
guidelines, including clamping down on the sale of R-rated movie tickets to
underage teens and providing better rating information to parents. But the
commission also faulted them for continuing to "advertise violent and
explicit movies, games and music in media widely watched by teens." It also
chided the online music business for being lax in keeping children from
downloading songs with explicit lyrics
[SOURCE: Los Angeles Times, AUTHOR:Richard Verrier]
http://www.latimes.com/business/printedition/la-fi-ftc9jul09,1,5393822.s...
(requires registration)

MITCHELL DEFENDS PBS PATH
The Motion Picture Association of America and Public Broadcasting Service
President Pat Mitchell flirted, but did not wed. Now Ms. Mitchell is trying
to convince PBS stations that she is "thrilled, excited, passionate and
committed to be here." PBS faces a budget crisis, increased competition
from cable and pressure from a Republican-controlled Congress. Ms. Mitchell
said to solve the crisis, PBS plans will rely less on affiliate station
dues and more on self-financing independent producers and on donations made
through its new NPR-style foundation. Recently, stations nearly revolted
after PBS attempted to raise dues by 7.5 percent. Critics say the
traditionally progressive-minded institution is trying to appease
Republican congressional critics by launching a show hosted by conservative
commentator Tucker Carlson. Ms. Mitchell countered that PBS is simply
trying to broaden its audience.
[SOURCE: TelevisionWeek]
http://www.tvweek.com/news/web070804.html#mitchell

INTERNET

INTERNET AS UNIQUE NEWS SOURCE
New research by the Pew Internet Project shows that during some of the most
turbulent weeks of the Iraq war nearly one quarter of Internet users (24%)
went online to view some of most graphic war images that were deemed too
gruesome or horrific for newspapers and television to display. Further, of
those who have seen the images, 28% actively sought them out. Overall,
however, Americans are conflicted about the idea of these disturbing images
being available online. By a 49%-40% margin, Americans disapprove of the
posting of such images. A strong cultural divide emerges between Internet
users and non-users: Internet users approve of the images being online by a
small margin of 47% - 44%, while non-users disapprove by an overwhelming
58% - 29% margin. The horrific nature of many of the war-related images
that have appeared online have left Internet users with a range of
feelings. "Millions of Internet users want to be able to view the graphic
war images and they see the Internet as an alternative source of news and
information from traditional media," said Deborah Fallows, Senior Research
Fellow at the Project, and co-author of the report. "But many who do
venture outside the traditional and familiar standards of the mainstream
news organizations to look at the images online end up feeling very
uncomfortable."
[SOURCE: Pew Internet & American Life Project]
http://www.pewinternet.org/PPF/r/87/press_release.asp

STUDY: BROADBAND MARKET TO TRIPLE BY 2008
The Yankee Group is estimating that by 2008 there will be 325 million
broadband subscribers worldwide. About 200 million subscribers will be
using DSL service, up significantly from the 85 million people expected to
be using that technology by the end of 2004. DSL is expected to add between
25 million and 30 million subscribers per year, while rival cable modem
technology will account for around 8 million new subscribers annually. In
North America, though, cable service will maintain its lead, growing from
34 million at the end of last year to about 75 million in 2008. Satellite
is expected to experience strong growth, also. By 2008, it's expected to
have more than 12 million subscribers, or 4 percent of the market.
[SOURCE: C-Net|News.com, AUTHOR: Dinesh Sharma]
http://news.com.com/Study%3A+Broadband+market+to+triple+by+2008/2100-103...
--------------------------------------------------------------
Have a great weekend. We'll see you again Monday.
--------------------------------------------------------------
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. While the summaries are
factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/8/04

There's an open meeting of the FCC this morning. See the agenda and find
link to Web cast at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249217A1.doc. For
additional upcoming media policy events, see http://www.benton.org/calendar.htm

TELECOM
Dissents Possible as Powell Changes Stance on Nextel Plan
FCC May Charge Nextel More
Congress Runs Into VoIP Divide
Concerns Arise As Internet Callers Pick Own Area Codes
AT&T Fights for Local Service

SATELLITE
House Judiciary Advances SHVIA Renewal

INDECENCY/CONTENT
F-Word Not Banned, Says FCC
FCC Proposes Mandatory Program Logging
Powell Interview Demonstrates Confusion over First Amendment

QUICKLY
Fewer Noses Stuck in Books in America, Survey Finds
Universal Service Proceeding

TELECOM

DISSENTS POSSIBLE AS POWELL CHANGES STANCE ON NEXTEL PLAN
The Nextel rebanding saga continues as now FCC Chairman Michael Powell is
considering a plan that would *not* require Nextel to pay for the 1.9 GHz
spectrum per se, just setting aside $2 billion-$3 billion to pay for public
safety retuning (although some of that money could be returned to the
carrier), and contributing more spectrum for a public safety buffer. That
move could potentially inoculate the FCC against some claims it violated
the Anti-Deficiency Act and the Miscellaneous Receipts Act by illegally
selling off spectrum.
[SOURCE: Communications Daily, AUTHOR: Howard Buskirk]
(Not available online)

FCC MAY CHARGE NEXTEL MORE
The Post is reporting an update to the Nextel story above. It appears some
commissioners feared granting Nextel the airwaves without additional
payment would appear to Congress and Nextel's rivals like a giveaway of
public resources. So FCC Chairman Michael Powell, hoping to win unanimous
support for a solution, yesterday reverted to a previously discarded plan
that would ask Nextel to give up existing spectrum and make payments
totaling $5 billion -- or roughly $1.3 billion to $1.5 billion more than
what the company proposed to pay. Most of the additional payment would go
to the U.S. Treasury. But the FCC ruling seems to be headed to court no
matter what it is. Verizon Wireless, the nation's largest cellular
provider, has vowed to sue if Nextel gets the new airwaves it wants, and
some members of Congress have warned the FCC that it could be violating
federal law by granting airwaves outside an auction process.
[SOURCE: Washington Post, AUTHOR: Yuki Noguchi]
http://www.washingtonpost.com/wp-dyn/articles/A35659-2004Jul8.html
(requires registration)

CONGRESS RUNS INTO VOIP DIVIDE
At a House Subcommittee on Telecommunications and the Internet hearing
Wednesday the debate over how to regulate Internet phone calls started
showing early signs of dividing along traditional partisan lines. "We will
never know VoIP's tremendous potential if we saddle it with unwarranted
government regulation," Subcommittee Chairman Fred Upton (R-MI) said in his
opening remarks at one of the first hearings to address VoIP regulation. He
also warned that "VoIP providers should not be regulated like common
carriers." The panel's ranking member, Rep Ed Markey (D-MA) said the need
for "consumer privacy rules, billing protections, fraud protections" and
affordable residential service "does not disappear simply because a voice
call travels in packets rather than dedicated circuits." "I think there's a
more traditional wing of the (Democratic) party that thinks VoIP is very
similar to regular phone service and should be treated in similar ways,"
said Robert Atkinson, vice president of the Progressive Policy Institute.
"Then there are folks who look at VoIP as more of an Internet application
and think it should be treated as we treat the Internet," Atkinson said.
"As a general rule, you could say that New Democrats are in the latter
camp. Republicans who are more deregulatory in nature are also in that
camp." The Cato Institute's Adam Thierer cautions that many "splits are not
party-based but geography-based when it comes to telecommunications. It's
often a rural-versus-urban or suburban issue. Often it comes down to
parochial interests."
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
http://news.com.com/Congress+runs+into+VoIP+divide/2100-7352_3-5260162.h...

CONCERNS ARISE AS INTERNET CALLERS PICK OWN AREA CODES
Voice Over Internet Protocol (VOIP) is raising worrisome questions for
law-enforcement officials, regulators and emergency agencies in part
because it may accelerate the end of location-based phone numbers as we
know them. The process of freeing phone numbers from fixed locations
started with the spread of cellphones over the past decade. With Internet
phone service, callers from anywhere in the U.S. or around the world can
adopt nearly any U.S. area code they like, a prospect that has already
created a run on desirable area codes such as Manhattan's 212 and Beverly
Hills's 310. Even international callers could obtain US exchanges for
savings in long distance bills and allowing offshore companies to fake
offices and legitimacy with a U.S. area code. But law enforcement officials
can't tap into VoIP calls due to both technological limitations and
regulatory uncertainty and VoIP systems are not connected to 911 emergency
services.
[SOURCE: Wall Street Journal, AUTHOR: Christopher Rhoads at
christopher.rhoads( at )wsj.com]
http://online.wsj.com/article/0,,SB108923965170657887,00.html?mod=todays...
(requires subscription)

AT&T FIGHTS FOR LOCAL SERVICE
The FCC is expected to publish temporary rules on competition in local
markets very soon, but facing the prospect of competitors setting the rates
for leasing parts of their networks, AT&T has reached an agreement with
McLeodUSA to provide local service to some of AT&T's existing customers.
AT&T currently has 6 million customers, 4 million of which use the Baby
Bells' lines.
[SOURCE: C-Net|News.com, AUTHOR: Ben Charny]
http://news.com.com/AT%26%2338%3BT+fights+for+local+service/2100-1037_3-...

SATELLITE

HOUSE JUDICIARY ADVANCES SHVIA RENEWAL
The House Judiciary Committee passed by voice vote a bill, H.R.
4518, extending the Satellite Home Viewer Improvement Act of 1999 for
another five years. The bill has been approved by the House Energy and
Commerce Committee and could reach the House floor within two weeks. The
Senate Judiciary Committee has also passed a SHVIA-renewal, but approval by
the Senate Commerce Committee is pending. The bill would allow satellite
carriers to provide distant network stations and superstations under
compulsory copyright licenses until Dec. 31, 2009. Hundreds of thousands of
DBS subscribers would lose access to ABC, NBC, CBS and Fox programming
after Dec. 31, 2004, without enactment of an extension. And, hey, we don't
want to deny anyone their network TV.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA434527?display=Breaking+News
(requires subscription)

INDECENCY/CONTENT

F-WORD NOT BANNED, SAYS FCC
FCC's Enforcement Bureau Chief David Solomon spoke at a Media Institute
gathering Wednesday about broadcast indecency enforcement. He said that the
Bono decision did not mean the f-word was, per se, off limits noting the
exception for NPR's airing the word recorded in John Gotti tapes. But news
is not a complete shield for indecency as highlighted by the KRON-TV
puppetry of the penis case, in which a morning news show was fined for an
errant puppet. Solomon said that fine was because the on-air newspeople
appeared to be encouraging the "flash." Mr. Solomon said that broadcasters
must do more to self-regulate instead of hiding behind "the mantra of the
First Amendment."
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA434719?display=Breaking+News
(requires subscription)

FCC PROPOSES MANDATORY PROGRAM LOGGING
Traditionally, the FCC has required listeners to provide the Commission
with evidence of indecent broadcast content when considering fines for
broadcasters. But since it can be hard to record or transcribe content
while driving or otherwise engaged, the FCC is now considering requiring
broadcasters to keep recordings of all of their broadcasts for up to 90
days. The FCC wants input on the likely cost to stations, whether the plan
raises any First Amendment issues and whether recordings should be required
only between 6 a.m. and 10 p.m., when indecent broadcasts are prohibited,
or for all 24-hours of the day. The FCC suggested that the recordings could
also be used to monitor compliance with the limits on advertising during
children's TV programs and sponsorship identification requirements. The
FCC, said Commissioner Michael Copps, "has for too long placed inordinate
responsibility upon the complaining citizen" by requiring at least a
detailed description of the broadcast.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA434710?display=Breaking+News
(requires subscription)

POWELL INTERVIEW DEMONSTRATES CONFUSION OVER FIRST AMENDMENT
In a recent interview (see 7/7 Headlines), FCC Chairman Michael Powell
mischaracterized the position of the Center for Creative Voices in Media
and others arguing for more independent voices in TV, saying:
And what is juxtaposed against the media ownership debate? Indecency,
which maybe is what you mean by content. Hollywood was happy to beat
up on ownership liberalization because they want the government to
intervene
so we can promote more independent programming -- which is content. But the
same Hollywood says the government can't say that Howard Stern can't say
the
F word, because that's censorship and inappropriate.
Regrettably, Chairman Powell is misstating our position, which is coherent
and consistent in its dedication to First Amendment principles. For the
government to mandate independent programming is not regulating program
content -- it's regulating the structure of the marketplace. No one is
asking the government to dictate who or what the programs produced by
independents should be. Perhaps they'll all be produced by rabid
conservatives! We don't know and we don't care. The point is that some
programs must be produced by an entity not owned or financially tied to the
network broadcasting the program over the public airwaves. That structure
is critical for a wide diversity of viewpoints to be available to the
public. Government should not intervene in the content of programming,
that's infringement of free expression and violates the First Amendment.
That's why we are opposed to the FCC's regulation of so-called "indecency."
However, the government should -- and often does -- promote a more vibrant
"marketplace of ideas" through rules that structure the media marketplace
to allow the widest diversity of viewpoints and voices as possible.
Examples are rules that say one company can't own too many TV stations, or
a newspaper and a TV station in the same market. These rules are PRO-First
Amendment, expanding the number of voices in the marketplace. The
distinction between regulation of content and structure is crucial. As
Chairman of the FCC, Powell should be aware of it. His comments equating
federal regulation of program content with structural rules promoting MORE,
not less, viewpoint diversity in media, demonstrate unfortunate confusion.
[SOURCE: Center for Creative Voices in Media]
http://creativevoices.typepad.com/blog/

QUICKLY
Fewer Noses Stuck in Books in America, Survey Finds
FEWER NOSES STUCK IN BOOKS IN AMERICA, SURVEY FINDS
The National Endowment for the Arts will release 2002 Census Bureau data
today which describes a precipitous downward trend in book consumption by
Americans. The survey, called "Reading at Risk," finds that fewer than half
of Americans over 18 now read novels, short stories, plays or poetry; that
the consumer pool for books of all kinds has diminished; and that the pace
at which the nation is losing readers, especially young readers, is
quickening. In addition it finds that the downward trend holds in virtually
all demographic areas. The study, with its stark depiction of how Americans
now entertain, inform and educate themselves, does seem likely to fuel
debate over issues like the teaching and encouragement of reading in
schools, the financing of literacy programs and the prevalence in American
life of television and the other electronic media that have been
increasingly stealing time from readers for a couple of generations at
least. It also raises questions about the role of literature in the
contemporary world.
[SOURCE: New York Times, AUTHOR: Bruce Weber]
http://www.nytimes.com/2004/07/08/books/08READ.html
(requires registration)

Comments are due August 6 at the FCC on the recommendation by the
Federal-State Joint Board on Universal Service that would limit universal
service support to one line per customer. Replies are due Sept. 7.
[SOURCE: Communications Daily]
(Not available online)
--------------------------------------------------------------

Benton's Communications-related Headlines for 7/7/04

For upcoming media policy events, see http://www.benton.org/calendar.htm

MEDIA & POLITICS
Broadcasting & Hollywood Donors Favor Edwards
Cable Key to Broadcast Election Coverage

MEDIA POLICY
Media Reformers Look to Struggle Beyond Philadelphia
Michael Powell Lays an Egg
Interview with FCC Chairman Powell
EEO Audits Cleared
Cable to New Programmers: "We are the 'Gatekeepers,' so Drop Dead!"
Media Ownership Regulation Redux: A Reality Check

TELECOM
Nextel Spectrum Swap Nears FCC Decision
Congress Mulls New Net Phone Rules
IRS Eyes Net Phone Taxes

INTERNET
Web Spammers Can Be Beaten in Two Years -- Regulators
California Privacy Law Kicks In

INTELLECTUAL PROPERTY
Judiciary Gets Earful on Copyright

QUICKLY
FCC Extends Filing Periods for Two Media Policy Proceedings... & Appoints=
=20
Commissioner Robert Nelson (Mi PSC)
to serve on the Federal-State Joint Board on Universal Service
How to Build Open Information Societies
EFF Announces Ten Most-Wanted Patents

MEDIA & POLITICS

BROADCASTING & HOLLYWOOD DONORS FAVOR EDWARDS
We might not be the first outlet to tell you: Sen John Kerry picked Sen=20
John Edwards (NC) to be his running mate yesterday morning. How does this=20
play out vis-a-vis media policy? Glad you asked. The Center for Responsive=
=20
Politics reports that the retiring senator raised just a small fraction of=
=20
political donations from the communications sector, but much of this small=
=20
fraction came from mass media and high-tech firms. He won a number of "hard=
=20
money" donations from mass media executives, but didn't directly address in=
=20
his campaign the contentious issue of media ownership. He and Sen Kerry=20
missed a Sept. 2003 Senate floor vote that would have nullified the FCC=20
rules allowing more media consolidation. That motion of disapproval passed=
=20
55-40. Sens Kerry and Edwards voted in favor of the Bipartisan Campaign=20
Reform Act (BCRA) in 2002, a bill opposed by some in the broadcasting=20
community because of its restrictions on ads.
[SOURCE: Communications Daily, AUTHOR: Patrick Ross]
(Not available online)
What will the campaign web site be? Not KerryEdwards.com,=20
KerryEdwards04.com, KerryEdwards2004.com, or KerryEdwards-2004.com -- they=
=20
have all been registered by people outside Sen Kerry's campaign for=20
president. See who has the KerryEdwards URLs, what they are doing with them=
=20
and what they want for them.
[SOURCE: Washington Post, AUTHOR: David McGuire]
http://www.washingtonpost.com/wp-dyn/articles/A32602-2004Jul6.html
(requires registration)

CABLE KEY TO BROADCAST ELECTION COVERAGE
Once again, commercial broadcasters are telling federal policymakers, "The=
=20
future of free, over-the-air television is pay, cable TV." In a letter from=
=20
National Association of Broadcasters President Eddie Fritts to Senate=20
Commerce Committee Chairman John McCain (R-AZ) and FCC Chairman Michael=20
Powell, the lobbying group said the best way for the FCC and Congress to=20
boost broadcast public-affairs programming and election coverage is to=20
guarantee that cable systems have to carry all of a broadcaster's digital=20
signal, including the planned public-affairs programming on some of those=20
extra digital channels. Mr. Fritts also said that broadcasters already do=20
an "outstanding" job of covering campaigns, and argued, as the NAB=20
frequently has, that "politicians frequently reject the many offers from=20
local radio and television stations" for debates and other non-campaign ad=
=20
time.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA434132?display=3DBreaking+News
(requires subscription)

MEDIA POLICY

MEDIA REFORMERS LOOK TO STRUGGLE BEYOND PHILADELPHIA
Media companies and their well-funded lobbyists in Washington aren't going=
=20
to roll over now that an appeals court has decided against rules allowing=20
more consolidation. The struggle now, according to reformers, is for=20
Americans at the grassroots level to demand a media system that ensures=20
diversity, local control and better service of the public interest. While=20
big media still exerts considerable influence over Washington policymaking,=
=20
this is a chance for media reformers to make the review process more open=20
to those beyond the beltway so that ordinary citizens can take a more=20
active role in the shaping of American media.
[SOURCE: MediaChannel.org AUTHOR: Timothy Karr]
http://www.mediachannel.org/views/dissector/affalert221.shtml

CHAIRMAN POWELL LAYS AN EGG
He's bright, personable, an excellent lawyer, a distinguished veteran, and=
=20
the son of the Secretary of State. Yet, Michael Powell's record as the=20
Chairman of the FCC has been one misstep and reversal after another. In=20
telecom and media regulation, his quest to "deregulate" has disintegrated=20
into a search for something -- anything! -- that will pass muster with the=
=20
courts, the Congress, and, most importantly, the American people. Now that=
=20
a U.S. Court of Appeals has tossed out the FCC's new rules that would have=
=20
exponentially increased media concentration and consolidation, Michael=20
Powell's tenure as Chairman, which so many expected would lead to him=20
becoming a star in Republican politics, has come up empty. How will=20
Chairman Powell be remembered? Probably not for the Commission's few=20
accomplishments during his tenure. Rather, he will more likely be=20
remembered for the tremendous opportunity he had to move communications=20
policy forward in this country while at the same time his own political=20
star ascended to the heavens. And how he squandered that opportunity. To=20
use the lingo of Daily Variety when a Broadway show flops, Michael Powell=20
has truly "laid an egg."
[SOURCE: MediaChannel.org AUTHOR: Jonathan Rintels, Executive Director of=20
the Center for Creative Voices in Media]
http://www.mediachannel.org/views/dissector/affalert220.shtml

INTERVIEW WITH FCC COMMISSIONER POWELL
Michael K. Powell, a Republican, was nominated 31 July 1997 as a member of=
=20
the FCC by President William J. Clinton and confirmed by the U.S. Senate on=
=20
28 October 1997. President George W. Bush appointed Powell chairman of the=
=20
FCC on 22 January 2001. Gartner Fellow Kenneth McGee met recently with=20
Chairman Powell in his Washington, DC, office to discuss issues and=20
policies concerning broadband, telecommunications, media ownership and=20
content issues and digital TV.
On Media ownership Powell said: Here's the truth: the ownership debate is=20
about nothing but content. Don't be fooled. I mean, this is my greatest=20
warning to the American public. It's easy to go after every ill in society=
=20
by claiming it's the media's fault. It's the American pastime, right?=20
Anything you don't like, it's the media's fault. What scared me in that=20
debate is that it's not about the ownership rules at all. The vast majority=
=20
of people don't even know what the rules say, to be perfectly candid. Name=
=20
all six of them. Name what they actually do. Nobody can. They became a=20
stalking horse for a debate about the role of media in our society. I can=20
expect and understand consumer anger and anxiety about that. But the=20
ownership rules are not the cause or the cure. It was really an invitation=
=20
for people with particular viewpoints to push for a thumb on the scale, for=
=20
content in a direction that people preferred. The danger with that? It's=20
easy to say, "I'm comfortable with that when the government's doing it for=
=20
something I like. But I get really scared when it's something I don't." And=
=20
what is juxtaposed against the media ownership debate? Indecency, which=20
maybe is what you mean by content. Hollywood was happy to beat up on=20
ownership liberalization because they want the government to intervene so=20
we can promote more independent programming =97 which is content. But the=20
same Hollywood says the government can't say that Howard Stern can't say=20
the F word, because that's censorship and inappropriate.
http://www4.gartner.com/research/fellows/asset_91308_1176.jsp
[SOURCE: Gartner, a provider of research and analysis on the global IT=20
industry]

EEO AUDITS CLEARED
The federal appeals court in Washington last week denied a petition by 45=20
state broadcaster associations that would have blocked the FCC from=20
auditing broadcast stations' and cable systems' compliance with new=20
minority- and gender-recruiting rules that require them to establish and=20
keep detailed records of their hiring-outreach programs. The FCC is also=20
working on finalizing the new recruiting rules, which were unveiled last=20
month. The new rules require broadcasters and cable systems to track and=20
report to the FCC the gender and ethnic data of their employee ranks. That=
=20
data will be used only to track industry trends--the FCC is forbidden from=
=20
using the information to judge whether individual stations are complying=20
with a requirement to conduct broad hiring outreach efforts. The biggest=20
open question is whether individual station data will be kept confidential.=
=20
The state broadcasters associations have asked that stations' data be kept=
=20
secret to prevent activist groups and individuals from using the=20
information in discrimination lawsuits. Public comment in this proceeding=20
is due July 29; reply comments are due August 9.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA434216?display=3DBreaking+News
(requires subscription)

CABLE TO NEW PROGRAMMERS: "WE ARE THE 'GATEKEEPERS,' SO DROP DEAD!"
As a new national debate emerges over the failure of U. S. television=20
journalism to effectively report on key issues of concern it is time to=20
turn our attention to the narrow programming landscape of cable=20
television. Programmers who want to offer Americans services that provide=
=20
for independent points of view, have no chance of emerging on the=20
multi-channel dial (or the electronic program guide). Cable conglomerate=20
Comcast now controls the future of almost all potential new=20
programmers. As CableWorld magazine recently reported, "Comcast has become=
=20
the =85kingmaker, with the power to make or break a digital network. =
Without=20
a carriage commitment from Comcast, it is difficult for start-ups to raise=
=20
the investment capital they need." And as the article also makes clear,=20
Comcast is "not looking" to place any new channels on its systems. Four=20
"specific criteria" must be met before Comcast will "invest" in and carry a=
=20
programming service: "It needs to be unique to the channel lineup; it needs=
=20
to be inexpensive to program; it needs to appeal to a specific demographic;=
=20
and preferably that's a younger demographic, because it needs to make its=20
money on advertising revenue as opposed to relying heavily on affiliate=20
revenue." Given the hold that the gang of six media giants has over=20
broadcast, cable, and satellite programming, and the lack of opportunity=20
for real content diversity, it's time to address breaking up the TV=20
oligopoly. If the country is to have a serious independent press and in=20
order to foster a robust culture of ideas, breaking up big cable must be=20
high on the policy agenda.
[SOURCE: Center for Digital Democracy]
http://www.democraticmedia.org/news/marketwatch/needleye.html

MEDIA OWNERSHIP REGULATION REDUX: A REALITY CHECK
A forthcoming Cato Institute book "Media Myths: Making Sense of the Debate=
=20
over Media Ownership Regulation" provides the facts for Thierer's argument=
=20
that the Third Circuit Court of Appeals got it all wrong when overturning=20
the FCC's relaxation of media ownership rules. In sum, Thierer thinks there=
=20
are more than enough media outlets in the US to justify loosening ownership=
=20
restrictions. Look out for that coming book 'cause if something so dense=20
hits you in the head it could really hurt.
[SOURCE: Cato Institute, AUTHOR: Adam Thierer]
http://www.cato.org/tech/tk/040630-tk.html

TELECOM

NEXTEL SPECTRUM SWAP NEARS FCC DECISION
FCC Chairman Michael Powell and Commissioner Kathleen Abernathy have cast=20
votes in favor of the Nextel proposal and the proposal is expected to gain=
=20
the final vote it needs for approval. Nextel's future depends on moving to=
=20
less cluttered airwaves than those it now shares with police and fire=20
emergency communications across the country. But Nextel's competitors have=
=20
lobbied vigorously against the company's plan, and Verizon Wireless has=20
laid the groundwork to challenge it in court. Nextel has proposed=20
exchanging some of its existing airwaves and paying $850 million to=20
relocate public-safety groups and other, smaller private carriers to=20
clearer spectrum where cellular traffic won't interfere with=20
emergency-dispatch calls. Additionally, the company would be required to=20
set aside about $3 billion in case moving public-safety communications=20
costs more than $850 million. Any amount not used by public safety would be=
=20
returned to Nextel. Sen Frank Lautenberg (D-NJ) has asked the General=20
Accounting Office to review whether the FCC's spectrum-exchange proposal=20
violates federal laws against the private sale of public resources.
[SOURCE: Washington Post, AUTHOR: Yuki Noguchi]
http://www.washingtonpost.com/wp-dyn/articles/A32610-2004Jul6.html
(requires registration)
Additional coverage in USAToday
http://www.usatoday.com/usatonline/20040707/6345790s.htm

CONGRESS MULLS NEW NET PHONE RULES
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-FL) are introducing=20
legislation aim at giving the FCC, not state regulators, the power to=20
oversee rules regarding phone calls made over the Internet. would=20
potentially increase the amount that customers pay for certain VoIP=20
services by importing a handful of controversial taxes and regulations from=
=20
the analog world. (Neither the states nor the FCC, however, would be able=20
to directly set prices or rates for VoIP service.) Under the bill, Rep=20
Boucher said, the FCC would have the option to regulate three key areas for=
=20
VoIP companies that link with traditional phone networks. The three areas=20
are enhanced 911, universal service, and access charges. Rep. Charles=20
Pickering (R-MS) and Sen. John Sununu (R-NH) also have introduced bills=20
related to VoIP. The Boucher-Stearns bill is numbered HR4757. The House=20
telecommunications subcommittee plans to hold a hearing Wednesday titled=20
"VoIP: Will the Technology Disrupt the Industry or Will Regulation Disrupt=
=20
the Technology?"
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
http://news.com.com/Congress+mulls+new+Net+phone+rules/2100-7352_3-52581...
tml?tag=3Dnefd.top

IRS EYES NET PHONE TAXES
On Friday (while you were leaving the office early to drive to the beach),=
=20
the tireless IRS and Treasury Department were posting a notice announcing=20
they were considering applying an existing federal excise tax on phone=20
calls to voice over Internet Protocol (VoIP) calls, a move that echoes=20
similar attempts by state officials to tax or regulate the technology. The=
=20
3% excise tax is only temporary though... it was enacted in 1898 to help=20
pay for the Spanish-American war. "They're looking at VoIP and any other=20
potential technologies that are flying under the radar," said Glenn=20
Richards, a partner at Shaw Pittman in Washington who represents VoIP=20
companies. "Clearly they're trying to extend their jurisdiction to apply=20
the excise tax to as many 'calls' as they can. It's got to be a revenue=20
issue for them. If everyone starts migrating to new platforms, they're=20
facing a decrease in excise taxes." IRS spokeswoman Tara Bradshaw said that=
=20
the agency is in the "very beginning of the process" of updating its=20
regulations on what is covered by the tax code's definition of telephone=20
service. "We're just requesting information," she said. "We're not creating=
=20
new rules at this point. We're just requesting comments."
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
http://news.com.com/IRS+eyes+Net+phone+taxes/2100-7352_3-5258809.html?ta...
nefd.lede

INTERNET

WE SPAMMERS CAN BE BEATEN IN TWO YEARS -- REGULATORS
Software makers and regulators have the means to bring spam under control=20
within two years, if they work together, say officials of the United=20
Nations' International Telecommunications Union (ITU) which is holding a=20
three-day meeting this week. The ITU says spam drains national economies=20
around the world of about $25 billion a year and estimates that lost=20
productivity -- through time wasted in clearing e-mail boxes -- could be=20
four times that amount. Officials said the conference would examine=20
legislation that could enable governments to crack down on Internet service=
=20
providers, or ISPs, who allow spammers to use their systems. International=
=20
cooperation would also enable regulators to assemble dossiers on companies=
=20
and individuals engaged in spamming or in "phishing" and provide the basis=
=20
for criminal prosecutions in the perpetrators' home countries.
[SOURCE: Reuters, AUTHOR: Robert Evans]
http://www.reuters.com/newsArticle.jhtml;jsessionid=3DIS3NYATRNDUDQCRBAE...
Y?type=3DinternetNews&storyID=3D5600362

CALIFORNIA PRIVACY LAW KICKS IN
The California Online Privacy Protection Act (OPPA) of 2003 went into=20
effect July 1. The legislation requires companies doing business with=20
Californians online to post a conspicuous privacy policy on their Web=20
sites, disclose the kinds of personally identifiable data that they collect=
=20
and share with third parties, clearly mark their privacy statements; abide=
=20
by their policies; inform consumers of processes to opt out of data=20
sharing; and publish a date it goes into effect. The statute is the first=20
of its kind in the nation. Privacy experts commended the new policy as=20
clear and easy to read.
[SOURCE: C-Net|News.com, AUTHOR: Stefanie Olsen]
http://news.com.com/California+privacy+law+kicks+in/2100-1028_3-5258824....
?tag=3Dnefd.top

INTELLECTUAL PROPERTY

JUDICIARY GETS EARFUL ON COPYRIGHT
Resistance is building to legislation co-sponsored by Senate Majority=20
Leader Bill Frist and Minority Leader Tom Daschle, would amend the=20
copyright act to make it a criminal offense to "intentionally aid, abet,=20
induce, or procure" copyright infringement. A group of computer companies,=
=20
fair-use advocates and electronics manufacturers has written the members of=
=20
the Senate Judiciary Committee to try to delay action on the bill. The bill=
=20
is backed by Hollywood, which is trying to protect its intellectual=20
property from easy digital pirating.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA434212?display=3DBreaking+News
(requires subscription)
Hey, there's more!
CDT CALLS FOR HEARINGS ON COPYRIGHT INDUCEMENT BILL
The Center for Democracy and Technology sent a letter to Senators Hatch=20
(R-UT) and Leahy (D-VT) Tuesday calling for hearings on S. 2560, the=20
"Inducing Infringement of Copyright Act of 2004." While intended to=20
penalize bad actors who intentionally cause copyright infringement,=20
credible concerns have been raised about the bill's potential unintended=20
consequences for valuable technologies.
[SOURCE: Center for Democracy and Technology]
http://www.cdt.org/copyright/20040706cdtletter.pdf
Consumers Union also sent a letter to the Senate about the bill, see
http://www.consumersunion.org/pub/core_telecom_and_utilities/001218.html...
e

QUICKLY

On May 27, the FCC began a factual inquiry into the households that rely=20
exclusively on over-the-air broadcasting for their television service and=20
how to minimize adverse impacts on all households in the transition to=20
digital television. The Commission recently extended the filing period for=
=20
the proceeding. Comments are now due August 11 and the date for filing=20
reply comments has been extended until September 7, 2004.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-2002A1.doc

On May 25, 2004, the FCC began an inquiry regarding the provision of a la=20
carte and "themed-tier" services on cable television and direct broadcast=20
satellite systems. Comments in the proceeding are now due July 15; reply=20
comments are due July 30, 2004.

The FCC has appointed Robert Nelson, Commissioner of the Michigan Public=20
Service Commission, to serve on the Federal-State Joint Board on Universal=
=20
Service. Mr Nelson can be contacted at the Michigan PSC, 6545 Mercantile=20
Way Lansing, Michigan 48911. [Go Lugnuts!]

How to Build Open Information Societies: A collection of best practices and=
=20
know-how from Europe and CIS
This publication presents a collection of knowledge-based best practices=20
accumulated by the United Nations Development Program (UNDP) in Europe and=
=20
the Commonwealth of Independent States (CIS). Its main purpose is to=20
identify and share UNDP's know-how by showing how ICT can promote=20
socio-economic development and good governance. Case studies and examples=20
from 19 countries illustrate different e-governance programmes and=20
applications - from a diverse range of initiatives including support for=20
policy formulation, customs reform, youth sexual education, rural=20
deployment of ICTs and training, country database building, and others.
Available free via the online bookstore at UNDP Eastern Europe and CIS=20
Sub-regional Resource Facility:
http://www.ecissurf.org/index.cfm?module=3DBookStore&page=3DBook&BookID=...

EFF Announces Ten Most-Wanted Patents
The Electronic Frontier Foundation's Patent Busting Project announced which=
=20
patents the organization will target first in its campaign to rid the world=
=20
of frivolous patent infringement lawsuits. After sifting through dozens of=
=20
software and Internet-related patents submitted to its patent busting=20
contest, EFF targeted ten whose crimes have made them enemies of the public=
=20
domain. All the most-wanted patents are dangerously overbroad; many pose a=
=20
threat to freedom of expression online. And every single one of the=20
targeted patents is held by an entity that has threatened or brought=20
lawsuits against small businesses, individuals, or nonprofits.
[SOURCE: Electronic Frontier Foundation Press Release]
http://www.eff.org/news/archives/2004_06.php#001665
Ten "most wanted" patents
http://www.eff.org/patent/wanted
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------