October 2005

** Communications Daily reports that the FCC has rescheduled next week's
agenda meeting to Oct. 28. Sources expect the Commission to vote on the
SBC-AT&T and Verizon-MCI mergers at that time. **
For upcoming media policy events, see http://www.benton.org

TELEVISION
DTV Date Still 2009, Says Stevens
2007 DTV Date Has Some Backers, But...
Martin Moving To Support 'Must Carry'
Kids' Television Rules Face Challenge
Texas Statewide Franchise a Grande Idea

RADIO
Pols Back Satellite EAS
Record Labels, Satellite Radio Seen in Showdown
Radio Stations Taking Full Advantage Of The Digital Revolution

OWNERSHIP
FCC to Examine Cable Attribution; Action Seen Before Cap Rules
Viacom Files Separation Papers With SEC

TELECOM
AT&T and MCI Near New Phase of Their Rivalry
Antitrust Group Urges 'Meaningful' Conditions on Bell Mergers
Universal Service Fund Reform High On Busy Fall Telecom Agenda

INTERNET/BROADBAND
Muni Broadband Said to Sell Risks Short; Private Incentives Better
Smaller Video Producers Seek Audiences on Net

QUICKLY -- Reform Group Pushes Campaign Ad Vouchers; Getler Appointed First
PBS Ombudsman; FCC Pleased by First Round Of Channel Elections; MSTV, NAB
Announce Low-Cost Converter Box Project; Miers' Past Shows Signs of Support
for Press Freedom; Network feud leads to Net blackout; FTC Brings Charges
Against Company Flagged In CDT Complaint

TELEVISION

DTV DATE STILL 2009, SAYS STEVENS
Commerce Committee Chairman Senator Ted Stevens (R-Alaska), told
broadcasters Wednesday that he still backed a 2009 hard date for return of
analog spectrum, but was now primarily concerned with keeping the auction
money from that spectrum from being commandeered for
non-communications-related Katrina costs. Sen Stevens said the bill
establishing that hard date would be marked up Oct. 19, though he said he
did not yet have a bill to show anyone or any details. But he reiterated
that it would have to be free of anything not tied to the budget. The DTV
issues not in the hard-date bill, which could range from multicast
must-carry to cable downconversion of the digital signal to use of DTV
spectrum by unlicensed devices, will be addressed in a separate bill that
Stevens said would be introduced as a companion to the hard-date bill. Sen
Stevens said that he had been told by FCC Chairman Kevin Martin that the
Commission could be ready with regulations and DTV channel assignments by
2007, but reiterated his preference for a 2009 date.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA6263732?display=Breaking+News
* Text of Sen Ted Stevens' Speech
http://commerce.senate.gov/newsroom/printable.cfm?id=246916
* Audio of Sen Ted Stevens' Speech
http://src.senate.gov/public/_files/radio/stevensdtv10_05_05.mp3
* Stevens Pushing 2009 End to Analog TV
http://www.multichannel.com/article/CA6263762.html?display=Breaking+News
(requires subscription)
* Stevens Outlines Two-Bill Strategy For Moving On Telecom Issues
http://www.njtelecomupdate.com/lenya/telco/live/tb-NDMT1128545835576.html

2007 DTV DATE HAS SOME BACKERS, BUT...
The heads of some major broadcasting groups said Wednesday they are ready
for the switch to digital, with one even saying she thought moving the hard
date for return of analog spectrum from 2009 to 2007 might be a good idea.
The broadcasters' caveat, however, was that they didn't think viewers, or
government, for that matter, were ready for that date, and that the
government would have to take a comprehensive approach to the switch if
those viewers were to be well-served by the transition. Broadcasters are
concerned that the DTV transition bill coming out of the Senate will deal
only with a hard date, and push off the political flash points of multicast
must-carry and downcoversion of DTV signals, among others, to sometime next
year.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA6263606?display=Breaking+News...
(free access for Benton's Headlines subscribers)

MARTIN MOVING TO SUPPORT 'MUST CARRY'
Will cable operators have to carry the multiple channels that broadcasters
transmit on their digital television frequencies? As the question looms
over the DTV debate, FCC Chairman Kevin Martin has taken steps to support
the idea. Under Chairman Martin, the only one of five commissioners to
dissent in February when the agency chaired by Michael Powell denied a
"must-carry" requirement, the FCC in recent weeks has issued two reports
favoring broadcasters in their disputes with the cable and satellite
industries over the issue. The first of the two FCC reports was issued Aug.
23, when the FCC said the satellite companies DirecTV and EchoStar
Communications must carry all of the multicast digital channels that
broadcasters transmit in Alaska and Hawaii. The agency also ruled that
satellite companies must carry their high-definition programs. In a second
order relating to the Satellite Home Viewer Extension and Reauthorization
Act, issued Sept. 8, the FCC was required to consider the impact of
retransmission consent rules on video competition. On this matter, the FCC
said, "If broadcasters are limited in their ability to accept in-kind
compensation, they should be granted full carriage rights for their digital
broadcast signals, including all free over-the-air digital multicast
streams." Despite the reports, Martin can do little to affect the issue at
the FCC, as the debate about multicast carriage has become one of the
hardest-fought, behind-the-scenes battles in the DTV transition on Capitol
Hill. Broadcasters have been pushing for the requirement in exchange for
accepting a "hard date" for losing their analog spectrum.
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
http://www.njtelecomupdate.com/lenya/telco/live/tb-GCVE1128545229283.html

KIDS' TELEVISION RULES FACE CHALLENGE
Who can stand up against kids? Apparently Viacom, Walt Disney and General
Electric Co.'s NBC Universal. These companies are opposing new FCC rules
aimed at ensuring there's a minimum of educational television for children
on broadcast television. The government has long set guidelines for
broadcasters to set aside a certain amount of educational programming for
children -- currently, three hours per week -- with commercials limited to
12 minutes per hour of kids' programming on weekdays and 10.5 minutes on
weekends. But the FCC has formulated new rules to take into account the
nation's move toward digital transmission of TV signals and the phaseout of
analog broadcasting. Moving to digital transmission will allow stations to
broadcast several channels where they could only show one before. The new
FCC rules would extend the children's programming requirements to those new
channels, something the major entertainment companies are resisting. They
argue that the new channels could be useful for formats that are not
conducive to kids' shows, such as weather or news channels. (Can we really
not conceive of educational weather or news programming for children?) The
rules also would limit the amount of time broadcasters can put commercial
Web addresses on the screen, which the companies think would be a handicap
in a digital world where people can hop from a TV show to a Web site with a
single click. In addition, the rules would limit broadcasters' ability to
pre-empt educational programming for things such as sporting events.
(Obviously, from a business perspective, you can only schedule kids TV
during football games.)
[SOURCE: Washington Post, AUTHOR: Arshad Mohammed]
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/05/AR200510...
(requires registration)

TEXAS STATEWIDE FRANCHISE A GRANDE IDEA
Grande Communications Networks, an established overbuilder, this week took
advantage of an exception in a new Texas law that allows current cable
competitors with low penetration to rescind their local contracts in favor
of statewide licensing. A new Texas telecommunications-competition law does
not let incumbents like Time Warner Cable or Charter Communications Inc.
apply for a statewide operating authority. The law does, however, include
exceptions for nonincumbent operators that serve fewer than 40% of cable
homes within their municipal franchises. That exception allows Grande to
apply for the state license.
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
http://www.multichannel.com/article/CA6263888.html?display=Breaking+News
(requires subscription)

RADIO

POLS BACK SATELLITE EAS
Almost two dozen legislators have written to FCC Chairman Kevin Martin to
ask that satellite radio be required to deliver emergency information to
its subscribers. The FCC has an open proceeding into proposed changes to
its Emergency Alert System, including applying it to digital TV stations as
well as analog. Chairman Martin is hoping to unveil new EAS proposals this
month.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA6263869?display=Breaking+News...
(free access for Benton's Headlines subscribers)

RECORD LABELS, SATELLITE RADIO SEEN IN SHOWDOWN
The record industry may next aim its legal guns at satellite radio due to a
dispute involving new portable players which let listeners record and store
songs. The record industry, led by major labels, such as Vivendi Universal,
Warner Music Group Corp, EMI Group Plc and Sony BMG, believe the recording
capability is a clear copyright violation and could take revenue away from
paid download music services. Two music industry sources said that the two
sides were in talks to resolve the issue and could go to court over the matter.
[SOURCE: Reuters]
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

RADIO STATIONS TAKING FULL ADVANTAGE OF THE DIGITAL REVOLUTION
In a survey of randomly sampled news, talk and news-talk stations in the
top fifty markets, News Generation has found that stations across the
country are protecting traditional radio's turf by taking advantage of the
digital revolution and opportunities created by the Internet. More than
half of the stations surveyed are streaming 90% of their on-air content,
and 40% are streaming 100% of their on-air content.
[SOURCE: Radio Ink]
http://www.radioink.com/HeadlineEntry.asp?hid=130769&pt=todaysnews

OWNERSHIP

FCC TO EXAMINE CABLE ATTRIBUTION; ACTION SEEN BEFORE CAP RULES
Changing media ownership rules is becoming a chess match at the FCC. The
Commission likely will review cable ownership attribution rules, and act on
them before setting national ownership limits. Separating the two items
would help align broadcast TV and cable system rules on the thresholds for
media properties to be considered owned by a media firm for antitrust
purposes. National cable ownership limits have been an open question at the
FCC for four years. "We've been waiting 4 years, and because it's to the
benefit to the cable industry that no rules be in place, this has been
given extremely low priority," said Andrew Schwartzman, of the Media Access
Project (MAP). "The delay in acting on this is outrageous, and it's all the
more outrageous that the only piece the cable industry would like to have
resolved, attribution, gets bumped ahead of the caps." MAP may "have to
seek assistance from a higher authority if they drag their feet
indefinitely," Schwartzman said, declining to be more specific. His group
and the National Association of Telecommunications Officers and Advisors
want a 20%-30% national cable ownership cap. FCC Chairman Kevin Martin is
expected by analysts to address newspaper-broadcast cross-ownership rules,
which could let one firm own a newspaper and TV station in the same market,
before
tackling controversial national limits. A push for broad media deregulation
by Chairman Martin's predecessor, Michael Powell, failed when the public
protested, Congress intervened and courts rejected some regulations.
[SOURCE: Communications Daily, AUTHOR: Jonathan Make]
(Not available online)

VIACOM FILES SEPARATION PAPERS WITH SEC
Viacom Wednesday filed the paperwork with the Securities & Exchange
Commission to split itself into two companies, New Viacom and CBS Corp.
Although separate, the two companies will be commonly controlled--with
Sumner Redstone atop both. As such, they have agreed not to acquire assets
that would limit the other in terms of media ownership. For example, Viacom
would not buy a newspaper in a market if it would mean CBS would have to
divest a station there. Jeff Chester, executive director of the Center for
Digital Democracy, plans to work against the split: "We will work to slow
down and oppose this transfer given Viacom's anti-public interest position
on kids." That was a reference to the company's decision this week to ask a
federal appeals court to throw out the FCC's new rules on digital and
analog kids TV programming.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA6263814?display=Breaking+News...
(free access for Benton's Headlines subscribers)
* Viacom Releases Split Details
http://www.multichannel.com/article/CA6263727.html?display=Breaking+News
(requires subscription)

TELECOM

AT&T AND MCI NEAR NEW PHASE OF THEIR RIVALRY
The decades-old rivalry between AT&T and MCI is coming closer to taking new
shape as the nation's two biggest phone companies, Verizon Communications
and SBC Communications, near completion of their separate deals to acquire
the long-distance companies, which could close before year end. Both deals
still need regulatory clearances, but if approved as expected, the
long-distance acquisitions will pit Verizon against SBC in heightened
competition for the same business customers over which AT&T and MCI had
long battled. Verizon and SBC made their respective bids for MCI and AT&T
because each long-distance company has highly prized customer bases of
corporate and government enterprises. The regional phone giants can offer
something to those prime customers that AT&T and MCI couldn't: wireless
services. The enlarged companies are likely to try to reshape the way
businesses use and buy wireless services, which could lead to more advanced
office functions on devices like cellphones and BlackBerrys. It also may
spark the development of offers that finally tempt more companies to
centralize their wireless purchasing. The deals still need approval from
the Federal Communications Commission, antitrust regulators and officials
in several states. Consumer advocates have protested that removing AT&T and
MCI deprives large numbers of consumers of their most accessible
alternative to buying phone service from the regional Bell companies, and
some businesses are concerned that they won't have the Bells as
alternatives if they don't like what they are hearing from AT&T and MCI.
Analysts expect the price competition in business services to moderate
after the mergers, which could make it harder for business customers to
find bargains on standard services. But most analysts anticipate few
serious regulatory obstacles. Regulators could impose some conditions, such
as requiring the companies to sell off some overlapping local data lines or
making the Bells sell high-speed Internet connections to consumers without
requiring them to also pay for phone service on that line. The companies
would probably regard such conditions as minor concessions.
[SOURCE: Wall Street Journal, AUTHOR: Shawn Young shawn.young( at )wsj.com]
http://online.wsj.com/article/SB112855062651260992.html?mod=todays_us_ma...
(requires subscription)

ANTITRUST GROUP URGES 'MEANINGFUL' CONDITIONS ON BELL MERGERS
Regulators must place "serious and meaningful" conditions on the SBC-AT&T
and Verizon-MCI mergers to prevent competitive harm and "remonopolization,"
the American Antitrust Institute (AAI) said Wednesday. The mergers probably
will be approved "one way or another," said AAI President Albert Foer.
"Only binding conditions can prevent violations of law." AAI officials said
the FCC must impose 4 conditions and enforce them through strong oversight:
1) The merging firms must expand their business operations outside their
traditional service regions; 2) Regulators must impose "network neutrality"
ensuring price and service quality are the same no matter what network
choices end users make. AAI Senior Research Fellow Jonathan Rubin said this
concept goes beyond content neutrality to include matters like the "speed
of connectivity." Rubin said "if this sounds like the old common carrier
regulation, so be it; that's the price you pay for remonopolization"; 3)
The firms must divest overlapping facilities and customers "to prevent
monopolization in specific locations and to encourage the emergence of
additional end-to-end networks" and 4) The merged firms must offer "naked
DSL" allowing consumers to get Internet access from telecom carriers and
voice from other providers.
[SOURCE: Communications Daily, AUTHOR: Edie Herman]
(Not available online)

UNIVERSAL SERVICE FUND REFORM HIGH ON BUSY FALL TELECOM AGENDA
A "perfect storm" of telecommunications issues is brewing. Congressional
committees that referee the industry's disputes are grappling with the
nation's transition to digital television. They also must tackle broad
telecom reform and an overhaul of the plan to bring affordable telephone
service to all Americans. The House is widely expected to defer to the
Senate. But legislators such as Reps. Lee Terry (R-Neb) and Rick Boucher
(D-VA), say they will press ahead with legislation to reform the Universal
Service Fund, which aims to guarantee all Americans affordable telecom
services.
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
http://www.njtelecomupdate.com/lenya/telco/live/tb-CXLV1128545419860.html

INTERNET/BROADBAND

MUNI BROADBAND SAID TO SELL RISKS SHORT; PRIVATE INCENTIVES BETTER
Telecom consultants Michael Balhoff and Robert "Call me Bob" Rowe released
a lengthy report on municipal broadband's history, economics and policy
issues Wednesday. They suggest that governments can do a "whole variety of
things short of building their own networks" to improve broadband deployment,
adoption and value, without breaking the taxpayer bank. Rowe, a former
Montana Public Service Commission Chairman, said governments "should look
to models that are likely to balance social, policy and financial goals in
any given marketplace." Citing a 2003 paper by MIT Broadband Working Group
Director Sharon Gillett, the report offered 4 ways to improve the climate
for broadband expansion: 1) Using municipal buying power to "evaluate,
plan, stimulate or aggregate demand"; 2) Reforming local rules on
rights-of-way, pole attachments, cable franchise agreements and others; 3)
Subsidizing private networks with grants and tax breaks and 4) Sponsoring
some or all elements of the network provision. Link to full report below.
[SOURCE: Communications Daily, AUTHOR: Greg Piper]
(Not available online)
* Municipal Broadband: Digging Beneath the Surface
http://www.balhoffrowe.com/pdf/Municipal%20Broadband--Digging%20Beneath%...

SMALLER VIDEO PRODUCERS SEEK AUDIENCES ON NET
Video delivered over the Internet, which has been embraced by media and
Internet giants like Viacom and Yahoo, is quickly shaping up as a way for
smaller producers to reach an audience without having to cut deals with
movie studios and the big networks that are the traditional gatekeepers of
television. As interest in video soars (there are more than a million video
clips currently available online), a host of new ventures is starting to
cater to the publishing and advertising needs of smaller video creators.
One new start-up called Brightcove, for example, has developed a system of
online video production tools that makes it easier for small operations to
distribute video programs as well as charge for them.
[SOURCE: New York Times, AUTHOR: Saul Hansell]
http://www.nytimes.com/2005/10/06/technology/06video.html
(requires registration)

QUICKLY

REFORM GROUP PUSHES CAMPAIGN AD VOUCHERS
The Campaign Legal Center is urging Congress to pass a bill that would levy
a fee on broadcasters to help subsidize campaign ads via a voucher system.
The center was looking to capitalize on the recommendations of the
Carter/Baker Commission on Federal Election Reform, which came out with its
report two weeks ago. That commission recommended the bill, and
additionally suggested broadcasters carry five minutes a night of candidate
discourse in the month preceding the elections, the so-called 5/30
standard. The voucher program was proposed in the Our Democracy, Our
Airwaves Act introduced in the last Congress by veteran campaign reformers
John McCain (R-AZ) and Russell Feingold (D-WI).
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA6263890?display=Breaking+News...
(free access for Benton's Headlines subscribers)
For more see:
http://www.campaignlegalcenter.org/FCC-199.html

GETLER APPOINTED FIRST PBS OMBUDSMAN
Following a nationwide search, PBS has appointed veteran journalist Michael
Getler as Ombudsman, a newly created position. As an independent internal
critic, Mr. Getler will seek to ensure that PBS upholds its own rigorous
standards of journalistic ethics for both online and on-air content. His
reports and commentary will be published on pbs.org, the third most
trafficked dot-org on the Internet. Mr. Getler, who currently serves as The
Washington Post's Ombudsman, will have complete authority to determine what
issues are examined and full independence in assessing them. After his
contract with The Post ends this month, he will join PBS on November 15 and
report directly to PBS President and CEO Pat Mitchell.
[SOURCE: PBS press release]
http://www.pbs.org/aboutpbs/news/20051004_ombudsman.html

FCC PLEASED WITH FIRST ROUND OF CHANNEL ELECTIONS
The FCC is happy with the number of stations getting designated tentative
digital channels in the first round
in the complex channel elections process, officials said Wednesday. On
Tuesday, the FCC said 1,713 TV stations, more than 95% of broadcast
stations nationwide, received tentative digital channels -- leaving just
80-85 station channels to be resolved. The FCC is keeping its 0%
interference policy.
[SOURCE: Communications Daily, AUTHOR: Tania Panczyk-Collins]
(Not available online)

MSTV, NAB ANNOUNCE LOW-COST CONVERTER BOX PROJECT
The Association for Maximum Service Television and the National Association
of Broadcasters announced Wednesday that they have recruited LG Electronics
and Thomson SA to develop low-cost, high-quality prototype
digital-to-analog converter boxes for the industry.
[SOURCE: TVWeek, AUTHOR: Doug Halonen]
http://www.tvweek.com/news.cms?newsId=8677
(requires free registration)

MIERS' PAST SHOWS SIGNS OF SUPPORT FOR PRESS FREEDOM
Supreme Court nominee Harriet Miers' limited history on media issues offers
little indication of how she would approach such cases on the court,
according to a review by the Reporters Committee for Freedom of the Press.
Still, the group says her past work with The Dallas Morning News and as an
editor of the American Bar Association's monthly magazine offers some hope
that she would support press freedoms.
[SOURCE: Editor&Publisher, AUTHOR: Joe Strupp]
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...

NETWORK FEUD LEADS TO NET BLACKOUT
On Wednesday, network company Level 3 Communications cut off its direct
"peering" connections to another big network company called Cogent
Communications. That technical action means that some customers on each
company's network now will find it impossible, or slower, to get to Web
sites on the other company's network. Level 3 contends that its arrangement
with Cogent is no longer financially viable, since it is larger than the
other company. It has asked Cogent to seek other arrangements, possibly
including paying for the traffic exchange, a Level 3 representative said.
Cogent CEO Dave Schaeffer contested that claim, saying that its network is
at least as big as Level 3's, and that it makes no sense to pay for the
connection. Cogent is offering any Level 3 user who can't get to Cogent
sites free Internet service for a year, in an attempt to attract its
rival's customers.
[SOURCE: C-Net|News.com, AUTHOR: John Borland ]
http://news.com.com/Network+feud+leads+to+Net+blackout/2100-1038_3-58895...

FTC BRINGS CHARGES AGAINST COMPANY FLAGGED IN CDT COMPLAINT
The Federal Trade Commission announced Wednesday that it had brought
charges against Odysseus Marketing, publisher of a software product called
ClientMan. The Center for Democracy & Technology had first identified
ClientMan as one of several troubling programs in a spyware complaint it
filed with the FTC in February 2004. The FTC has now filed cases against
three of the companies mentioned in the CDT complaint, plus a fourth the
FTC found through its own investigation.
[SOURCE: Center for Democracy & Technology]
FTC Complaint: http://www.ftc.gov/os/caselist/0423205/050929comp0423205.pdf
Original CDT Complaint (February 10, 2004):
http://www.cdt.org/privacy/20040210cdt.pdf
--------------------------------------------------------------
To everyone who wrote in yesterday, all I can say is "Aw shucks."
--------------------------------------------------------------
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.
--------------------------------------------------------------