October 2005

The House Commerce Committee will begin a discussion on its version of a
digital television transition bill beginning this afternoon and continuing
tomorrow morning. See article below for more information on the bill. For
these and other upcoming media policy events, see http://www.benton.org

AGENDA
House DTV Draft: Subsidy, No Must-Carry
FCC Open Meeting Friday
Telecom Mergers Make Progress
Nextel Partners Is a Phone Company Without a Brand

INTERNET
A Cisco System to Make Radios Work Together
More Lawmakers Back US Control of Internet
Should you Have a Right to Broadband?
Why You Should Pay to Read This
To Go Global, Do You Ignore Censorship?

JOURNALISM
In Defense of a Press Shield Law
The Village Voice's No-Alternative News: Corporate Takeover

QUICKLY -- Texas PUC OKs Verizon Franchise; Google & Publishers; Webisodes
return, now as advertising; Brand Blogs Capture the Attention of Some
Companies; Poor Nations Are Littered With Old PC's, Report Says

AGENDA

HOUSE DTV DRAFT: SUBSIDY, NO MUST CARRY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The House Commerce Committee has circulated a new draft of its DTV
transition bill that sets a hard date of December 31, 2008, only three
months and one week sooner than that passed Thursday by the Senate Commerce
Committee (April 7, 2009 see http://www.benton.org/index.php?q=node/442).
The House bill also contains a converter-box subsidy that was not in the
draft issued earlier in the year. As expected, it does not require cable to
carry broadcaster's multiple digital signals. The House bill allows cable
operators to convert broadcaster's signals from digital to analog, at the
headend or the set, so long as it does not "materially degrade" the signal,
though it also lays out a bunch of conversion scenarios and says, by
definition, they don't qualify as degrading the signal. Specifically, it
requires cable systems (with capacity of more than 550 MHz) to transmit
both a standard definition version of a must-carry broadcast signal (so no
HDTV pass-though requirement) and an analog version for the first five
years, after which they must deliver a digital version of a station's
signal. The bill also requires broadcasters to air two, 60-second PSAs per
day, one in prime time, throughout all of 2008 informing viewers that their
analog-only sets won't work after Dec. 31, 2008, without a converter. Cable
and satellite providers, and other multichannel video distributors, would
have to include bill-stuffer announcements. The bill would provide only
$830 million (after administrative costs) for subsidies for DTV-to-analog
converter boxes for every household. The subsidy would be in the form of a
redeemable coupon worth $40. That would suggest the boxes will cost at
least that, and more like $50 or $60. The Senate bill also sets the value
of its subsidy at $40 per set-top converter, but does not spell out how the
program would be administered. The House bill requires viewers to obtain a
coupon request form from government buildings, and likely online, then
actively apply for the subsidy. In essence the subsidy is meant to target
those who really need it by creating a three-step process: get the
application; get the coupon, then get the box at a retailer. It is also not
open-ended, lasting about one year. The auction of analog TV spectrum would
begin in January 2008.
http://www.broadcastingcable.com/article/CA6276788?display=Breaking+News...
(free access for Benton's Headlines subscribers)
* Text of bill:
http://energycommerce.house.gov/108/Markups/10252005/Title_I.PDF
** Follow the bill's progress at:
http://www.benton.org/index.php?q=node/446
*** Engel Wants DTV Waiver For NY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Not that Congress has actually passed any legislation setting a hard date
to the end of analog TV, but just in case it does, Rep Eliot Engel (D-NY)
wants New York City broadcasters to first in line for a waiver. "It seems
that Congress has forgotten its pledge to help New York recover from the
Sept. 11th terrorist attacks on the World Trade Center. If this waiver is
denied," Rep Engel said, "hundreds of thousands of people could be without
free, over-the air television signals."
http://www.broadcastingcable.com/article/CA6276892?display=Breaking+News...
(free access for Benton's Headlines subscribers)

FCC OPEN MEETING FRIDAY
[SOURCE: Federal Communications Commission]
The Federal Communications Commission will hold an Open Meeting on the
subjects listed below on Friday, October 28, 2005, which is scheduled to
commence at 10:00 a.m. in Room TW-C305, at 445 12th Street, S.W.,
Washington, D.C. The Commission will consider: 1) a First Report and Order
and Further Notice of Proposed Rulemaking concerning the Emergency Alert
System rules, 2) a Report and Order to adopt rules for satellite carriage
of "significantly viewed" television stations pursuant to the Satellite
Home Viewer Extension and Reauthorization Act (SHVERA), 3) the AT&T-SBC
merger and 4) the Verizon-MCI merger. (RE: items #3&4, see story below.)
Cupcakes and lemonade will NOT be provided, but you can watch online at
www.fcc.gov/realaudio.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-261760A1.doc

TELECOM MERGERS MAKE PROGRESS
[SOURCE: USAToday, AUTHOR: Paul Davidson and Leslie Cauley]
The mergers of telecommunications giants SBC and AT&T along with Verizon
and MCI could win approval from the Department of Justice and Federal
Communications Commission by the end of the week. Apparently, SBC and
Verizon have agreed to lease to rivals, on a long-term basis, their spare,
or "dark," fiber that runs to several hundred of the buildings as a
condition to the merger approvals. Not all of the buildings would be
affected, because SBC and Verizon argued that many are already served, or
easily could be, by competitors with existing lines in the neighborhood.
Justice and the companies are still haggling over how many buildings to
include in the pacts, say the people with knowledge of the situation. At
least one competitor has little interest in acquiring those lines, because
SBC and Verizon would not be forced to also transfer the customers. "All
I've got is an expense and no revenue," says Heather Gold of XO
Communications. The FCC will consider the mergers at its open meeting on
Friday.
http://www.usatoday.com/printedition/money/20051024/1b_merger24.art.htm

NEXTEL PARTNERS IS A PHONE COMPANY WITHOUT A BRAND
[SOURCE: Washington Post, AUTHOR: Jerry Knight]
It's been only two months since Sprint and Nextel completed their merger,
and already the new company is embroiled in two lawsuits with Nextel
Partners Inc., a firm that provides Nextel phone service in dozens of
smaller markets. The lawsuits are preliminary skirmishes for a
billion-dollar battle that begins today, when Nextel Partners stockholders
are expected to vote to demand that Sprint Nextel buy the 69 percent of the
company that it doesn't already own. A corporate agreement that was written
when Nextel created Nextel Partners in 1998 gives Partners the right to
force a buyout under certain circumstances -- including the sale of Nextel.
Once Nextel Partners shareholders invoke the mandatory buyout requirement,
the question becomes, "For how much?" Wall Street is betting that Sprint
Nextel will have to pay top dollar for Partners. Its stock has gained more
than 30 percent this year and closed at $25.51 a share on Friday. At that
price, Sprint Nextel would have to spend close to $5 billion to acquire
Partners. The feuding began when Sprint and Nextel announced plans to phase
out the Nextel label and use the Sprint brand. That left Nextel Partners
without a brand name. Partners can't switch to the Sprint label because
Sprint already does business in its territory. Orphaning the Nextel brand
created bad blood at Nextel Partners, and it left the company with little
choice but to exercise its option to sell itself to Sprint Nextel.
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/23/AR200510...
(requires registration)

INTERNET

A CISCO SYSTEM TO MAKE RADIOS WORK TOGETHER
[SOURCE: New York Times, AUTHOR: John Markoff]
Cisco Systems plans to announce today a new method -- based on a widely
used Internet telephone standard -- for marrying the frequently
incompatible radio gear used by emergency services agencies and businesses.
The approach is aimed at connecting the diverse array of push-to-talk radio
systems with other voice and data systems without the expense of replacing
the existing systems. Cisco executives said the method, based on existing
network routers, could be used in the transportation, finance and retail
industries as well as at public safety agencies. The system, a set of
software programs and hardware interfaces that connect with existing radio
networks, will likely prove most immediately useful in emergencies. The new
approach is known as Internet Protocol Interoperability and Collaboration
Systems, or Ipics, and it essentially converts voice traffic on radios and
cellphones into data traffic over existing networks.
http://www.nytimes.com/2005/10/24/technology/24cisco.html?pagewanted=all
(requires registration)

MORE LAWMAKERS BACK US CONTROL OF INTERNET
[SOURCE: Reuters, AUTHOR: Andy Sullivan]
Reps John Doolittle (R-CA), Bob Goodlatte (R-VA) and Rick Boucher (D-VA)
called on Friday for the Internet's core infrastructure to remain under
U.S. control, echoing similar language introduced in the Senate earlier
last week. The resolution aims to line up Congress firmly behind the Bush
administration as it heads for a showdown with much of the rest of the
world over control of the global computer network. Countries including
Brazil and Iran want an international body to oversee the addressing system
that guides traffic across the Internet, which is currently overseen by a
California nonprofit body that answers to the U.S. Department of Commerce.
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID...

SHOULD YOU HAVE A RIGHT TO BROADBAND
[SOURCE: C-Net|News.com, AUTHOR: Charles Cooper]
[Commentary] The big change on the horizon is the move to enshrine access
to a broadband connection as a basic right of citizenship. The slogan is
being picked up here and abroad by a collection of interest groups and
policymakers who view broadband as just too important to leave anymore to
the vagaries of the private sector. The question boils down to whether you
believe that broadband is so important that it should get treated like a
public utility, in the much the same way as water or power. There's no
consensus about that, and it's doubtful that the issue will be put on the
national agenda before the next presidential election. Prepare yourself for
a lot of sturm und drang before this issue gets sorted out. But sorted out
it will be. The political momentum is only going to gain strength in the
months ahead.
http://news.com.com/Should+you+have+a+right+to+broadband/2010-1071_3-590...

WHY YOU SHOULD PAY TO READ THIS
[SOURCE: New York Times, AUTHOR: David Carr]
[Commentary] Only suckers pay for content. Sure, laugh, but many of the
country's biggest media companies, including its newspapers, subscribe to
the corollary: only losers charge for content. Free has worked handily
before - radio and television have the billions to show for it. But in
giving away content to match the Web's unrecompensed goodies, traditional
print media is eating its own lunch. We have been through this before, back
in 1999, with everyone rushing to harvest eyeballs and then worrying about
making them cash-flow later. But this time around, at least on the Web,
there is a business model that involves search, targeted advertising and
the ability to scale. Free on the Web is one thing -- Flickr for pictures,
Slate for news analysis, Craigslist for classifieds -- but taking free into
the offline world of paper, delivery and vendors means scale, the grail of
the race for eyeballs, and that adds to expense. If a Web site achieves a
growing audience, it simply beefs up servers and serves up more ads. If a
free print product catches on, its publisher has to deal with beefy union
delivery drivers and serving up more expensively milled dead trees. And it
has to deal with something else: consumers who value its publication at
exactly zero dollars and zero cents. During the dot-com delirium, many
people fondly quoted Stewart Brand, the founder of The Well and The Whole
Earth Catalogue, saying "Information wants to be free." But don't forget
that the full quote is: "Information wants to be free because it has become
so cheap to distribute, copy and recombine -- too cheap to meter. It wants
to be expensive because it can be immeasurably valuable to the recipient.
That tension will not go away."
http://www.nytimes.com/2005/10/24/business/24carr.html
(requires registration)

TO GO GLOBAL, DO YOU IGNORE CENSORSHIP?
[SOURCE: New York Times, AUTHOR: Tom Zeller Jr.]
Companies seeking to cash in on the Chinese Internet boom -- its online
population of 100 million is now second to that of the United States --
might want to keep an ear to the regulatory ground. And shareholders may
rise up and force change where regulation fails to do so. The Paris-based
group Reporters Without Borders is preparing a joint statement, with nearly
two dozen asset management signatories, calling on Internet businesses to
ensure that their products "are not being used to commit human rights
violations." Both the American public and policymakers appear to be
frustrated with companies that do business in China and elsewhere -- and
are complicit in cracking down on dissenters. "I've always taken the
attitude that you're better off playing by the government's rules and
getting there," Yahoo's chairman, Terry S. Semel, told attendees of the Web
2.0 conference in San Francisco earlier this month. "Part of our role in
any form of media is to get whatever we can into those countries and to
show and to enable people, slowly, to see the Western way and what our
culture is like, and to learn." The argument, of course, is that in
resisting the demands of the police in China and risking censure, or in
wholly divesting from the country on principle, companies would deny
whatever fresh air the Internet -- filtered and censored as it is --
provides there. But it is also possible that cooperating simply delays an
inevitability. "Who needs who more?" Max Boot of the Council on Foreign
Relations asked. "Do the Chinese need Yahoo and Cisco more than Yahoo and
Cisco need China?" If the answer is the former - as most analysts suspect -
and if regulatory oversight and shareholder indignation continue to loom,
then a little bit of civil resistance in China might be better for the
bottom line than companies currently think.
http://www.nytimes.com/2005/10/24/technology/24link.html?pagewanted=all
(requires registration)

JOURNALISM

IN DEFENSE OF A PRESS SHIELD LAW
[SOURCE: Wall Street Journal, AUTHOR: Stuart Karle, The Wall Street
Journal's general counsel]
[Commentary] Congress is considering a federal shield law that would
protect journalists from being compelled to testify in courts about
confidential sources. Shield laws are intended to assure sources who risk
their livelihoods -- or even their lives -- that their identities can be
kept secret when they speak with the press, even as their information is
published. It is an exaggeration to say that confidential sources are the
lifeblood of journalism: Most stories are published without them, though
some important stories cannot be reported without confidential sources.
Putting aside the benefits shield laws give the public -- to wit, stories
that otherwise could not be published -- they're great cost-savers.
Compelling reporters to testify saps a lot of time from prosecutors,
parties and reporters themselves, is enormously expensive, and rarely
generates sufficient probative evidence to justify the delay and expense.
Prosecutors know this. For decades, without any federal shield law, the
Department of Justice has followed guidelines that limit prosecutors'
ability to subpoena reporters. The guidelines require the U.S. attorney
general to authorize any subpoena directed at a journalist. They have
limited to a dozen or so the subpoenas to journalists for confidential
source information over the past 14 years. Analogous guidelines should be
adopted by every other investigatory arm of the government. The threat to
the willingness of confidential sources to provide important news to the
public justifies the passage of a shield law, as well as the adoption of
the Justice Department guidelines throughout the government.
http://online.wsj.com/article/SB113011643074377214.html?mod=todays_us_op...
(requires subscription)

THE VILLAGE VOICE'S NO-ALTERNATIVE NEWS: CORPORATE TAKEOVER
[SOURCE: Washington Post, AUTHOR: Howard Kurtz]
The nation's two largest alternative newspaper chains plan to announce a
merger today, a long-rumored combination that champions of quirky,
iconoclastic, locally controlled papers have been sniping at for months.
New Times, the Phoenix-based publisher with 11 newspapers from Miami to San
Francisco, is acquiring the Village Voice, the storied New York weekly
co-founded by Norman Mailer, and five other papers owned by the Voice.
Reaction is likely to be chilly among many staffers at the notoriously
fractious Voice, where columnist Cynthia Cotts described a 2000 acquisition
attempt by New Times as a "hostile takeover" by a company whose media
purchases produced a "signature bloodbath." But David Schneiderman, chief
executive of Village Voice Media, says the merger will give his papers a
"national platform," particularly on the Web, an operation that he will
oversee. While his staff will go through "a period of trepidation,"
Schneiderman says, "the resources of the combined company will strengthen
us editorially." New Times executives, he says, "invest in editorial. This
is what they're about. It's quite refreshing." As for the notion that the
fabled counterculture papers of yore are becoming more corporate,
Schneiderman says: "The issue is, what's in the newspaper? I would
challenge anyone who's critical of this to point to anything in our papers
or the New Times papers that's establishment. It's flat-out not true." The
planned acquisition will require Justice Department approval on antitrust
grounds, since the combined company would control about 14 percent of the
circulation of the major alternative weeklies nationwide. The department
has clashed with both companies before. In 2002, New Times agreed to close
its Los Angeles paper, which competed with Village Voice Media's L.A.
Weekly, in exchange for the Voice shutting down its Cleveland paper, which
did battle with New Times's Cleveland Scene. To skeptics, a large company
that serves both the 1.1 million readers of New Times and the 800,000 of
Village Voice Media -- which also has papers in Seattle, Minneapolis,
Orange County and Nashville -- is a giant step toward the corporatization
of the alternative news world. But Michael Lacey, New Times's executive
editor, argues that "media concentration at our end of the business is a
good thing because it allows us to compete effectively," and says he hopes
to restore the Voice "to its glory days."
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/23/AR200510...
(requires registration)
* The Village Voice, Pushing 50, Prepares to Be Sold to a Chain of Weeklies
http://www.nytimes.com/2005/10/24/business/24voice.html
(requires registration)

QUICKLY

TEXAS PUC OKs VERIZON FRANCHISE
[SOURCE: Multichannel News, AUTHOR: David Cohen]
As expected, the Texas Public Utility Commission Friday approved Verizon's
application for a franchise to serve 21 communities in the Dallas/Fort
Worth Metroplex with its Verizon FiOS TV service. The regional Bell
operating company formally filed for the state franchise Oct. 3, and the
PUC said then that it would review the application and issue a franchise
within 17 business days. Fellow RBOC SBC Communications filed for a state
franchise Oct. 11 to become a video-service provider, designating 21
communities in and around San Antonio. And cable overbuilder Grande
Communications Networks made a similar move Oct. 5, taking 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.
http://www.multichannel.com/article/CA6276997.html?display=Breaking+News
(requires subscription)

GOOGLE ME!
[SOURCE: Wall Street Journal, AUTHOR: Cameron Stracher, publisher of the
New York Law School Law Review]
[Commentary] The lawsuit filed by publishers against Google over its plans
to scan millions of books is both shortsighted and legally flawed. The suit
emulates one by the Authors' Guild, claiming copyright infringement.
Despite the plaintiffs' claims, one must note what Google's plan is not:
Google doesn't propose to scan books and then make them available for free.
It intends to scan them in order to make them searchable over the Internet
and available for purchase -- after paying a royalty to copyright holders.
It's hard to see how authors or publishers can lose. Millions of obscure(d)
books get a second life, while publishers retain the ability to make money.
http://online.wsj.com/article/SB113011505053877186.html?mod=todays_us_op...
(requires subscription)

PUBLISHERS TO BUILD OWN ONLINE BOOK NETWORK
[SOURCE: Reuters, AUTHOR: Georgina Prodhan]
German publishers, keen to defend their copyrights as Internet search
engines seek to put the world's literature online, aim to set up their own
web-based database allowing readers to browse, borrow or buy books. In the
longer term, the German association wants to build its own search engine to
offer services which could rival those offered by Google, Yahoo or Lycos.
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID...

WEBISODES RETURN, NOW AS ADVERTISING
[SOURCE: USAToday, AUTHOR: Jefferson Graham]
Remember webisodes? Original minishows for the Internet were all the rage
online before the Internet bubble burst in 2001. Now they're back, this
time as advertising vehicles, courtesy of a robust online ad market and
growing broadband audience.
http://www.usatoday.com/printedition/money/20051024/webisodes.art.htm

BRAND BLOGS CAPTURE THE ATTENTION OF SOME COMPANIES
[SOURCE: New York Times, AUTHOR: Tania Ralli]
As the number of blogs has grown, more consumers are keeping Web diaries
dedicated exclusively to their favorite brands. Most of them are written
without the consent of the companies that own the brands. But some
companies are starting to pay attention to blogs, using them as a kind of
informal network of consumer opinion. For these bloggers, intertwining
their personal stories and commentaries gives them a stake in defining the
brand's image while linking them with fans of similar mind across the
country. For readers, these blogs help them make decisions about what to
buy. And according to a survey released this spring by Yankelovich, a
marketing firm, a third of all consumers would prefer to receive product
information from friends and specialists rather than from advertising. The
brand blogs also give consumers information that companies do not
necessarily publicize on their Web sites.
http://www.nytimes.com/2005/10/24/technology/24blog.html?pagewanted=all
(requires registration)
See also --
* WHAT BLOGS COST AMERICAN BUSINESS
U.S. workers in 2005 will spend the equivalent of 551,000 years reading blogs.
http://adage.com/news.cms?newsId=46494

POOR NATIONS ARE LITTERED WITH OLD PCs, REPORT SAYS
[SOURCE: New York Times, AUTHOR: Laurie Flynn]
"The Digital Dump: Exporting Reuse and Abuse to Africa," a new report to be
released today by the Basel Action Network, finds that unusable computer
equipment is being donated or sold to developing nations by recycling
businesses in the United States as a way to dodge the expense of having to
recycle it properly. According to the National Safety Council, more than 63
million computers in the United States will become obsolete in 2005. An
average computer monitor can contain as much as eight pounds of lead, along
with plastics laden with flame retardants and cadmium, all of which can be
harmful to the environment and to humans.
http://www.nytimes.com/2005/10/24/technology/24junk.html?pagewanted=all
(requires registration)
For more info on the report, go to the source:
http://www.ban.org/BANreports/10-24-05/index.htm
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Was that the best World Series game ever or what?
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Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. 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.
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