November 2005

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

BROADCASTING
House Passes DTV Bill
Advisory Panel Proposes Public-Interest TV Programming
Kids Cases Consolidated in 6th Circuit
Feingold Intros Payola Bill
CPB IG To Investigate Station Lobbying
Unused Digital TV Channels Could Increase U.S. Wireless Access
Big Three in Trouble
Networks Make Nice, Not War
Deep Value On The TV Dial

POLICYMAKERS
Broadcast ex-chief sent =91bragging=92 e-mail to Rove
CPB needs a critic, not a censor
Public TV Overseer Faces New Questions
Commissioner Kathleen Abernathy Leaving FCC December 9
Senate Schedules Dec. 13 For FCC Nominees
Senate Commerce OK's FTC Commissioners

TELECOM
Universal Service Reform Act of 2005
Study: FCC Fees could hit the Old, Poor the Hardest
State Regulators Disconnect Ma Bell
In Risky Move, a New AT&T Bets on Internet Technology
Stance on competition is in what SBC does, not says

INTERNET
The Internet at Risk
Digital divide a focus at close of Net summit
Search Engine Use Up

QUICKLY -- How to Tame an Inflated Entertainment Budget; FCC Fines Cable=20
One; Journalist, Cover Thyself; TV Ad Rules Are Challenged By 'Pod' Busters

BROADCASTING

HOUSE PASSES DTV BILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The full House passed the budget reconciliation bill 217-215 in the wee=20
hours of Friday morning. House Commerce Committee Chairman Joe Barton=20
(R-Tex.) cast the last vote after former Majority Leader Tom "The Hammer"=
=20
Delay pinned Barton's right arm behind his back and waltzed him down the=20
aisle. Passing intact as part of that legislation was the Commerce=20
Committee's DTV transition bill. That bill sets a hard date of Dec. 31,=20
2008, for the cut-off of analog TV service and the return of spectrum for=
=20
auction, bringing billions to the treasury -- some say as much as $30=20
billion. But before Uncle Sam gets his hands on that money, $990 million=20
will be set aside for a converter box subsidy to let analog-only sets=20
receive a DTV signal after analog is cut-off on that date. The bill also=20
contains a number of other DTV-related items, including money for first=20
responders, a consumer education campaign and TV set labeling, and=20
provisions for allowing cable to convert an HDTV signal to standard DTV,=20
and DTV to analog. Now comes the hard work of reconciling that bill in=20
conference with the already-passed Senate version, which sets aside $3=20
billion for a subsidy; establishes an April 7, 2009 hard date; and gives=20
twice as much money to first responders (over a billion versus $500=20
million). But that is about all it does because Senate rules prevent=20
legislating on appropriations bills.
http://www.broadcastingcable.com/article/CA6285138?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
* NAB Asks Broadcasters to Weigh In Against House DTV Bill
[SOURCE: National Association of Broadcasters advisoy]
"Between now and when conference work begins, broadcasters should convey to=
=20
Members of Congress the importance of removing the House down conversion=20
language from the final budget package. The down conversion language is=20
anti-consumer. Consumers who have spent thousands of dollars on=20
high-definition DTV sets should not be deprived the benefits of their=20
investment. Under the down conversion language, cable subscribers with=20
high-definition sets will receive lesser quality standard definition signal=
s."
http://www.nab.org/xert/corpcomm/newsletters/TVtoday/2005/112105/page3.asp
* Legislation headed to a House-Senate conference committee would pave the=
=20
way for completing the digital television transition in 2008.
[SOURCE: Rep Joe Barton press release]
http://energycommerce.house.gov/108/News/11182005_1725.htm

ADVISORY PANEL PROPOSES PUBLIC-INTEREST TV PROGRAMMING
[SOURCE: National Journal, AUTHOR: Drew Clark]
On Friday, the FCC's Consumer Advisory Committee recommended that the=20
agency act within six months to require broadcasters to satisfy specific=20
public-interest obligations for digital television. The recommendation asks=
=20
the Commission to complete open dockets on public interest and disclosure=
=20
dockets open since 1999 and 2000 respectfully. Before the Committee's vote,=
=20
James Goodmon, the CEO of Capitol Broadcasting in Raleigh (NC) spoke to the=
=20
group about why defining public interest obligations are crucial for=20
broadcasters. Goodmon, a member of the National Association of Broadcasters=
=20
(NAB), has endorsed public-interest requirements for digital broadcasters=
=20
since at least 1998. Only one member of the Committee opposed the=20
recommendation: Ann Bobeck, an attorney representing the NAB.
http://nationaljournal.com/pubs/techdaily/pmedition/tp051118.htm
(requires subscription)
* FCC Committee Recommends DTV Obligations
http://www.broadcastingcable.com/article/CA6285441?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
* FCC Consumer Group Weighs DTV Obligations
Looking for a strong yes vote, Rep Diane Watson (D-CA) has written the=20
chair of the CAC expressing her support for the recommendations. Rep Watson=
=20
is a founding member of the Future of America Media Caucus, formed last=20
April by House Democrats "concerned about "the damaging effects of media=20
consolidation." "While the FCC has opened a series of proceedings since=20
1999 on issues related to the public interest obligations of digital=20
television broadcasters," wrote Rep Watson, "it has not yet issued any=20
decision from those proceedings. I strongly believe that consumers have the=
=20
right to know how the analog-to-digital transition will serve their interes=
ts."
http://www.broadcastingcable.com/article/CA6284889?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
** For more info on CAC, see:=20
http://www.benton.org/index.php?q=3Dinitiatives/proceedings

KID CASES CONSOLIDATED IN 6TH CIRCUIT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The D.C. Appeals Court has decided to transfer Viacom and Disney's=20
challenges to the FCC's children's television rules to the Sixth Circuit in=
=20
Cincinnati, according to Media Access Project's Andy Schwartzman. He is=20
co-counsel for the Children Now coalition and the United Church of Christ,=
=20
which filed their own challenge to the rules in the Sixth Circuit saying=20
they were not tough enough. Although Disney or Viacom are free to ask for=
=20
the case to be moved back to Washington, the decision established initial=
=20
jurisdiction and means that, presumptively, the various cases will be heard=
=20
in the Sixth Circuit, said Schwartzman. He is pleased with the decision,=20
calling the D.C. challenges "a needless and wasteful diversion of=20
attention." ABC Spokeswoman Julie Hoover responded: "The decision by the=20
D.C. court transferring the case to the Sixth Circuit has nothing to do=20
with the merits of our challenge to these harmful and unnecessary new=20
rules. We are confident that whichever court considers the case on the=20
merits will rule in our favor."
http://www.broadcastingcable.com/article/CA6284782?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
* ANA, Disney Suffer Setback in Fight Against Children's' AD Restrictions
http://adage.com/news.cms?newsId=3D46822

FEINGOLD INTROS PAYOLA BILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
On Friday, Senator Russ Feingold (D-WI) introduced legislation that would=
=20
increase the penalties for payola, the practice of paying to influence the=
=20
playing of certain songs, including putting a radio station's license at=20
risk for violating FCC rules prohibiting the practice. The bill would=20
require "arm's-length transactions between radio stations and record=20
companies that might want to influence playlists, and would require the=20
station's to keep records of those transactions handy for FCC inspection.=
=20
The bill broadens the definition of payola beyond the "direct bribing of=20
DJs and stations" to relationships with independent music promoters. "No=20
matter what tortured path money or other consideration travels," Sen=20
Feingold said, "if it is for airplay and not disclosed, it is payola." And=
=20
in a direct shot at Clear Channel, the bill would put restrictions on the=
=20
cross-ownership of radio stations and concert venues. Clear Channel is a=20
dominant player in both. The bill would require stations to disclose all=20
payments or considerations and their sources, along with a monthly=20
playlist, including label and artist. "While corporations may not fear the=
=20
current hard-to-prove $10,000 fines," he said, "they do understand public=
=20
relations. The potential for consumers and the media to use these records=
=20
to connect the dots should have a chilling effect on the practice and may=
=20
mean that the FCC Enforcement Bureau will rarely even need to be involved."
http://www.broadcastingcable.com/article/CA6285543?display=3DBreaking+News=
=20
&referral=3DSUPP
(free access for Benton's Headlines subscribers)
* Sen Russ Feingold's statement
http://feingold.senate.gov/~feingold/statements/05/11/20051118.html
* AFTRA Applauds Introduction of New Payola Bill
http://www.aftra.org/press_copy/pr_2005_11_18_payola.html

CPB IG TO INVESTIGATE STATION LOBBYING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Kenneth Konz, the Inspector General of the Corporation for Public=20
Broadcasting, has agreed to investigate whether noncom stations illegally=
=20
lobbied Congress. The investigation comes in response to an Aug. 4 letter=
=20
from Republican House member Ginny Brown-Waite (R-Fla). and a group of 17=
=20
other Republican house members who have requested that Konz investigate=20
whether public TV stations violated the law by asking their viewers to=20
weigh in on public broadcasting budget cuts that were threatened, and=20
eventually restored, earlier this year. Konz says the investigation will=20
hinge not on the lobbying activities, but whose dollars funded them.
http://www.broadcastingcable.com/article/CA6285299?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

UNUSED DIGITAL TV CHANNELS COULD INCREASE US WIRELESS ACCESS
[SOURCE: Washington Post 11/19, AUTHOR: Eric S. Crouch, Medill News Service]
increased access to wireless networks may be just around the corner. Before=
=20
the end of the year, the House is expected to consider a provision proposed=
=20
by Representative Jay Inslee (D-WA) that would force the Federal=20
Communications Commission to decide whether "white spaces" -- empty=20
broadcast-TV channels -- should be made available for use by unlicensed=20
wireless networks. With both the House and the Senate having recently=20
passed bills requiring television broadcasts to switch from analog to=20
digital sometime in early 2009, the 700-MHz band (channels 52 to 69) will=
=20
be cleared of programming and moved to lower frequencies (channels 2 to=20
51). The 700-MHz band will be set aside for public-safety emergency=20
transponders and for bidding by wireless networks. According to the New=20
America Foundation , the average TV market in the United States uses=20
approximately 7 high-power channels of the 67 that it is allocated. This=20
leaves an abundance of free channels that could be used for wireless access.
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/18/AR200511...
0083.html
(requires registration)

BIG THREE IN TROUBLE
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
Although you may be reading about the 22% drop in revenues for the "Big=20
Three" broadcast TV networks, remember that the 2004 numbers were inflated=
=20
by Olympics coverage. Adjusting for that, the largest broadcast networks'=
=20
revenues increased 3% during the quarter. Summer and early-fall prime time=
=20
increased 8% to $1.3 billion, but that was chipped away by declines in late=
=20
night and news.
http://www.broadcastingcable.com/article/CA6285533?display=3DNews&referral=
=3DSUPP
(free access for Benton's Headlines subscribers)

NETWORKS MAKE NICE, NOT WAR
[SOURCE: Broadcasting&Cable, AUTHOR: J. Max Robins]
[Commentary] With everything from the cable box to the Xbox attacking their=
=20
business, broadcast networks have had a sort of revelation: They're more=20
interested in selling their collective product than in kicking the=20
daylights out of each other.
http://www.broadcastingcable.com/article/CA6285481?display=3DNews&referral=
=3DSUPP
(free access for Benton's Headlines subscribers)

DEEP VALUE ON THE TV DIAL
[SOURCE: Forbes, AUTHOR: George Putnam, Turnaround Letter]
For years, owning a broadcast (i.e. old-fashioned, pre-cable) television=20
station was the modern equivalent of owning a gold mine. You controlled one=
=20
of a limited number of information pipelines into the home, and advertisers=
=20
were willing to pay dearly to get their messages into that pipeline. Today,=
=20
with the advent of cable television and the Internet, things are less=20
golden for the broadcast TV industry. Not only is competition greater, but=
=20
advertising spending in all media is in a multiyear slump. As a result, the=
=20
broadcast TV stocks have been beaten down. But it has become difficult to=
=20
even find pure broadcast television stocks. The major television networks=
=20
are all buried within much larger conglomerates -- ABC is part of Disney;=
=20
CBS belongs to Viacom; NBC is a division of General Electric; and Fox is a=
=20
part of News Corp. And many of the television stations themselves have been=
=20
bought up by newspaper or other multifaceted media companies.
http://www.forbes.com/investmentnewsletters/2005/11/17/broadcast-televis...
-putnam-in_gp-1117soapbox_inl.html

POLICYMAKERS

BROADCAST EX-CHIEF SENT 'BRAGGING' E-MAIL TO ROVE
[SOURCE: Reuters 11/17, AUTHOR: Deborah Zabarenko]
The Corporation for Public Broadcasting=92s former chairman e-mailed White=
=20
House strategist Karl Rove, =93bragging=94 about a push for conservative=20
programming on U.S. public television, the CPB=92s inspector general said o=
n=20
Thursday. Kenneth Tomlinson told Rove of his work to balance the liberal=20
PBS program =93Now with Bill Moyers,=94 with a conservative show, =93The Jo=
urnal=20
Editorial Report,=94 Inspector General Kenneth Konz said in a telephone=20
interview. =93There=92s a few of them to and from Karl Rove,=94 Konz said o=
f the=20
e-mail traffic. =93They primarily relate to (ex-)Chairman Tomlinson advisin=
g=20
Mr. Rove and his staff regarding his success in getting a program to be put=
=20
on the air to balance the Bill Moyers program. =85 He was bragging on how=
=20
successful he was being. =93In addition, I saw some general comments relati=
ng=20
to how (Tomlinson) was shaking things up here at CPB,=94 Konz said, adding=
=20
Rove responded with =93sort of general congratulations =85 very short, very=
=20
cryptic.=94 The e-mails show no evidence Tomlinson acted with White House=
=20
guidance to push for right-leaning programming, Konz said, but they do show=
=20
Tomlinson failed to keep the CPB board and management informed about what=
=20
he was doing. =93It went against what the law said he had the authority to=
=20
do,=94 Konz said.
http://www.freepress.net/news/12435
* Groups demand release of Rove-Tomlinson e-mails
http://www.freepress.net/press/release.php?id=3D107

CPB NEEDS A CRITIC, NOT A CENSOR
[SOURCE: Toledo Blade 11/18, AUTHOR: Editorial Staff]
[Commentary] Friends of public broadcasting in America have no reason to=20
mourn the departure of Kenneth Y. Tomlinson, chairman of the Corporation=20
for Public Broadcasting, who resigned in the wake of a blistering report on=
=20
his tenure as head of what is supposed to be a political "firewall" for=20
public radio and television. That is not to say that all board members or=
=20
officials in public broadcasting must be cheerleaders for everything said=
=20
and done on the stations that bring alternative programming to the vast but=
=20
hardly varied panoply of commercial broadcasting. Mr. Tomlinson, who was=20
accused of violating the Public Broadcasting Act and the CPB's own=20
regulations, apparently saw his role as one who would "balance" coverage of=
=20
politics on public radio and television by monitoring "liberal" programs on=
=20
his own authority and lobby to put on "conservative" programs, such as the=
=20
Wall Street Journal's editorial board discussions at a reported cost of $5=
=20
million. Mr. Tomlinson's departure will not make the task of public=20
broadcasting any easier. The need for funds to repair the damage caused by=
=20
Hurricane Katrina may lead to efforts to reduce PBS funds. The Corporation=
=20
for Public Broadcasting will have to walk a fine line between censorship=20
and mindless objectivity. Fans of public radio especially want the news=20
broadcast in context, and all 50 states benefit from it, including those=20
that, as Sen. Ted Stevens of Alaska noted, do not have communities large=20
enough and wealthy enough to support major fund-raising. Public=20
broadcasting in the United States provides news and entertainment of a sort=
=20
different from the usual commercial fare. That alone is enough to warrant=
=20
its continuation, free of crude efforts at censorship such as Mr. Tomlinson=
=20
tried to implement. Freedom cannot be sustained without variety in the=20
media from which millions of Americans glean news and opinion so essential=
=20
to maintaining a free society.
http://toledoblade.com/apps/pbcs.dll/article?AID=3D/20051118/OPINION02/5...
80323/-1/OPINION

PUBLIC TV OVERSEER FACES NEW QUESTIONS
[SOURCE: New York Times, AUTHOR: Stephen Labaton]
Senior officials at the Corporation for Public Broadcasting have asked a=20
large accounting firm to rewrite a confidential report, provided to the=20
corporation's board this month, that raised questions about the propriety=
=20
of a number of large contracts. Among the contracts the auditors' report=20
questioned, they said, was a consulting agreement worth almost $500,000=20
with a former president of the corporation, Robert T. Coonrod. The contract=
=20
was approved by the corporation's board while Mr. Coonrod was still=20
president to get around a statutory limit on his salary. Federal tax=20
records show he was paid $174,000 in his final year of service. The report=
=20
by auditors from the accounting firm PriceWaterhouseCoopers is a=20
particularly sensitive political document. It examines procurement=20
practices while Cheryl Halpern, the corporation's newly elected chairwoman,=
=20
led the board's audit committee. Most of the same board members who=20
received the PriceWaterhouseCoopers report this month were on the board=20
during the time under study. The report's conclusions questioning the=20
contracts and spending practices of the corporation could be incendiary on=
=20
Capitol Hill, where conservative lawmakers have often sought to reduce the=
=20
corporation's annual budget.
http://www.nytimes.com/2005/11/21/arts/television/21cpb.html
(requires registration)

COMMISSIONER ABERNATHY LEAVING FCC DECEMBER 9
[SOURCE: Federal Communications Commission]
"Yesterday I sent a letter to President Bush thanking him for the profound=
=20
privilege and honor of serving on the Federal Communications Commission and=
=20
informing him of my intention to leave the Commission on December 9, 2005.=
=20
During my 4 =BD-year tenure the Commission has achieved a great deal. Firs=
t=20
and foremost, our decisions increasingly reflect the wisdom of relying on=
=20
competition, rather than regulation, as the best means of assuring that=20
consumers get the telecommunications services they want at affordable rates=
."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-262254A1.doc
* Reaction from Chairman Martin
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-262265A1.doc
* Reaction from Commissioner Copps:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-262256A1.doc
* Reaction from Commissioner Adelstein:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-262258A1.doc

SENATE SCHEDULES DEC 13 FOR FCC NOMINEES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
How much time does the Senate need to consider a new candidate for a seat=
=20
on the Federal Communications Commission? How's a day? The Senate Commerce=
=20
Committee has scheduled a hearing on the nominations of Tennessee=20
Regulatory Authority Director Deborah Tate and current Commissioner Michael=
=20
Copps on December 13. If the Senate can approve Director Tate on the 14th,=
=20
FCC Chairman will not be in the minority when he oversees a FCC meeting on=
=20
December 15. Tate has been active on the voice over Internet protocol front=
=20
(VOIP), weighing in at the FCC in her capacity as chairman of the National=
=20
Association of Regulatory Utility Commissioners (NARUC) Washington Action=
=20
Committee. Tate's resume includes legal counsel former Tennessee Governor=
=20
Lamar Alexander and assistant to former governor Don Sundquist, who=20
appointed her to the TRA. Clearly, her wheelhouse is telco matters, but she=
=20
is said to be sufficiently free market to get the nod of broadcasters,=20
according to someone who's paid a lot more than me to know.
http://www.broadcastingcable.com/article/CA6285335?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
See a bio for Director Tate at http://www.benton.org/index.php?q=3Dnode/646

SENATE COMMERCE OK's FTC COMMISSIONERS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Senate Commerce Committee by unanimous consent has approved the=20
nominations of two new FTC commissioners, Thomas Rosch and William Kovacic.
http://www.broadcastingcable.com/article/CA6284938?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

TELECOM

UNIVERSAL SERVICE REFORM ACT OF 2005
[SOURCE: Press Release from Reps. Terry and Boucher]
Late last week, House Commerce Committee Members Reps. Lee Terry (R-NE) and=
=20
Rick Boucher (D-VA) released a discussion draft of the Universal Service=20
Reform Act of 2005, announcing that they encourage interested parties to=20
provide comments on the draft by December 23, 2005. The sponsors indicated=
=20
that the bill will not be considered in the Committee before next year.=20
Since enactment of the Telecommunications Act of 1996, a variety of new=20
providers of voice services which are exempt from Universal Service Fund=20
(USF) payments have entered the market, resulting in greater USF funding=20
burdens being placed on traditional service providers. Internet based=20
telephony and flat rate all distance calling plans have rendered obsolete=
=20
the current USF methodology of imposing payment obligations only on=20
interstate and international calls. The Universal Service Reform Act of=20
2005 responds to these developments and would ensure the continued=20
availability of the USF to support the provision of communications services=
=20
in rural and underserved areas. The measure broadens the base of=20
contributions into the fund, controls distributions from the fund and=20
allows use of universal service support for broadband deployment. It also=
=20
makes a number of other much needed changes to improve fund administration.=
=20
The Universal Service Reform Act increases contributions to the USF by=20
assessing them on the intrastate, interstate and international revenues of:=
=20
1) Any entity that pays into the USF under the current system (e.g., long=
=20
distance providers); 2) Any provider of a service that uses telephone=20
numbers, IP addresses or their functional equivalents to provide or enable=
=20
real time voice communications and in which the voice component is the=20
primary function (e.g., cable telephony and VoIP providers); and 3) Any=20
provider that offers a network connection for a fee to the public (e.g.,=20
DSL, cable modem, WiMax and broadband over powerline providers).
The Press Release and draft legislation can be viewed at:
http://www.house.gov/boucher/docs/usfrelease.htm
http://www.house.gov/boucher/docs/usfdiscussion.pdf
* New taxes could run rural broadband
http://news.com.com/New+taxes+could+run+rural+broadband/2100-1034_3-5959...
.html
* House Proposal Would Bring Broadband Into USF Loop
http://www.njtelecomupdate.com/lenya/telco/live/tb-NNDP1132261951605.html

STUDY: FCC FEES COULD HIT THE OLD, POOR THE HARDEST
[SOURCE: Cox News Service, AUTHOR: Mike Saccone]
The Keep Universal Service Fund Fair Coalition released a report last week=
=20
saying proposed changes to federal telephone taxes -- a shift from the=20
current 'pay-for-what-you-use' system to a monthly flat-fee of $1 or $2, or=
=20
more, per phone line -- could impose a steep financial burden on millions=
=20
of seniors and low-income phone users. The report also shows FCC Chairman=
=20
Kevin Martin's proposed flat fee could also cost the 43 million Americans=
=20
who spend less than 10 minutes a month dialing long-distance up to $707=20
million annually -- roughly $16 per person.
http://www.miami.com/mld/miamiherald/business/13197642.htm
(free registration required)
* Wireless-Backed Group Decries FCC Chairman Over USF Plan
http://www.njtelecomupdate.com/lenya/telco/live/tb-HVJR1132343275089.html

STATE REGULATORS DISCONNECT MA BELL
[SOURCE: Associated Press 11/19]
On Friday, the California Public Utilities Commission approved the SBC=20
takeover of AT&T and Verizon's purchase of MCI. The PUC extracted=20
concessions similar to those imposed on the companies by the U.S. Justice=
=20
Department and the Federal Communications Commission to make sure the deals=
=20
don't hurt market competition. The various regulatory agencies have won=20
agreements from SBC and Verizon to stop requiring customers who want=20
high-speed DSL Internet access to buy local phone service as well. Before=
=20
granting its approval, the FCC required that SBC and Verizon freeze for 30=
=20
months the wholesale prices they charge competitors to lease certain=20
high-capacity business lines. The companies also have promised not to=20
hinder Internet access to customers or the free flow of Internet traffic on=
=20
their networks, a topic that Congress is debating as part of a new bill=20
governing the telecommunications industry.
http://www.latimes.com/business/printedition/la-fi-sbc19nov19,1,2279119....
ry?coll=3Dla-headlines-pe-business
(requires registration)
* SBC closes AT&T acquisition
http://news.com.com/SBC+closes+AT38T+acquisition/2100-1036_3-5961206.htm...
ag=3Dnefd.top

IN RISKY MOVE, A NEW AT&T BETS ON INTERNET TECHNOLOGY
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant( at )wsj.com and=
=20
Almar Latour almar.latour( at )wsj.com]
Don't call it SBC anymore; the new AT&T is placing a risky bet that its=20
future will depend on delivering content to television, wireless phones and=
=20
computers on a network using Internet technology. In doing so, the merged=
=20
company hopes to play a central role in the seismic changes under way in=20
the media and telecom businesses. Only 23% of AT&T's revenue will come from=
=20
the residential landline phone business that for decades was the main=20
engine driving the venerable company founded in 1885. That business, along=
=20
with most other wired voice services, has been suffering anemic or negative=
=20
growth for years because of new technology and new competitors. A key to=20
AT&T's new growth strategy is to deliver video, data, wireless calls and=20
phone traffic over a single network to consumers and large corporate=20
customers. AT&T executives say the technology will let it offer a new form=
=20
of television with 1,000 or more channels available to consumers within the=
=20
next 18 months. The company also plans to beam TV content to cellphones;=20
offer targeted advertising on TV, much like Google offers on the Internet;=
=20
and eventually provide thousands of programs and movies on demand. Yahoo,=
=20
which has been working on ventures with SBC since 2001, will work closely=
=20
with AT&T in this effort and will help develop search technology and=20
advertising.
http://online.wsj.com/article/SB113254097669902775.html?mod=3Dtodays_us_...
e_one
(requires subscription)
* Cingular will be sold under name of AT&T
http://www.usatoday.com/printedition/money/20051121/att21.art.htm

STANCE ON COMPETITION IS IN WHAT SBC DOES, NOT SAYS
[SOURCE: Houston Chronicle, AUTHOR: Loren Steffy]
[Editorial] If deregulation has taught us anything, it's to be suspicious=
=20
when former monopolists start talking about competition. So if erstwhile=20
monopolist SBC thinks Houston Mayor Bill White's plan for a citywide=20
wireless broadband network is bad, then it's probably good for consumers.=
=20
Phone companies like SBC received $5 billion in federal subsidies last=20
year, according to a Wall Street Journal report this summer. When you=20
consider how much government coin is filling their pockets, it's no wonder=
=20
the phone companies want to block municipal WiFi. They don't want to share=
=20
the gravy train. Having a chokehold on the market appeals to the company's=
=20
monopolist roots. If you want DSL service in the Houston area, for example,=
=20
in most cases you have to have SBC phone service, regardless of your=20
Internet provider. SBC can do that because it controls the plumbing. It=20
did, of course, build its telephone network, but it didn't do it alone. It=
=20
relied on agreements with cities similar to the WiFi plan that White now=20
envisions. That's not to say the mayor's plan will succeed. There's a host=
=20
of technical and financial problems to overcome, and there's the risk that=
=20
by the time a widespread WiFi network is built, the technology will have=20
been surpassed by new innovations.
http://www.chron.com/cs/CDA/ssistory.mpl/business/3469077

INTERNET

THE INTERNET AT RISK
[SOURCE: Washington Post, AUTHOR: Editorial Staff]
[Commentary] The job of assigning domain names offers huge opportunities=20
for abuse. Whoever controls this function can decide to keep certain types=
=20
of individuals or organizations offline (dissidents or opposition political=
=20
groups, for example). Or it can allow them on in exchange for large fees.=
=20
The striking feature of U.S. oversight of the Internet is that such abuses=
=20
have not occurred. Any organization that wants to register a domain name=20
can do so, provided that the name hasn't already been claimed.=20
Opportunistic cyber-squatting has been brought under control. The cost of=
=20
registering a Web address has fallen. It's possible that a multilateral=20
overseer of the Internet might be just as efficient. But the ponderous=20
International Telecommunication Union, the U.N. body that would be a=20
leading candidate to take over the domain registry, has a record of=20
resisting innovation -- including the advent of the Internet. Moreover, a=
=20
multilateral domain-registering body would be caught between the different=
=20
visions of its members: on the one side, autocratic regimes such as Saudi=
=20
Arabia and China that want to restrict access to the Internet; on the other=
=20
side, open societies that want low barriers to entry. These clashes of=20
vision would probably make multilateral regulation inefficiently political.=
=20
You may say that this is a fair price to pay to uphold the principle of=20
sovereignty. If a country wants to keep certain users from registering=20
domain names (Nazi groups, child pornographers, criminals), then perhaps it=
=20
has a right to do so. But the clinching argument is that countries can=20
exercise that sovereignty to a reasonable degree without controlling domain=
=20
names. They can order Internet users in their territory to take offensive=
=20
material down. They can order their banks or credit card companies to=20
refuse to process payments to unsavory Web sites based abroad. Indeed,=20
governments' ample ability to regulate the Internet has already been=20
demonstrated by some of the countries pushing for reform, such as=20
authoritarian China. The sovereign nations of the world have no need to=20
wrest control of the Internet from the United States, because they already=
=20
have it.
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/20/AR200511...
0858.html
(requires registration)

DIGITAL DIVIDE A FOCUS AT CLOSE OF NET SUMMIT
[SOURCE: Reuters, AUTHOR: Andy Sullivan]
The United Nations-organized World Summit on the Information Society, which=
=20
ended on Friday, made progress in narrowing the technology gap between rich=
=20
and poor countries, participants said, despite rich nations' reluctance to=
=20
contribute to a development fund pushed by African states. The summit also=
=20
saw clashes over human rights and control of the Internet's technical=20
functions. At least 200 deals were struck to bring technology to the=20
developing world during the three-day meeting, organizers said, from=20
multi-million dollar commitments by firms like Microsoft to alliances not=
=20
easily measured in monetary terms. Summit headlines were grabbed by a spat=
=20
over control of the Internet's addressing system, currently managed by a=20
California-based non-profit group called the Internet Corporation for=20
Assigned Names and Numbers (ICANN) that answers to the United States. A=20
last-minute agreement reached hours before the conference kept the current=
=20
"domain name" system intact, but also set up a forum where dissenting=20
countries like Iran and Brazil will be able to keep "Internet governance"=
=20
on the front burner.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2005-11-18T185631Z_01_HO866799_RTRUKOC_0_US-TUNIS.xml&archived=3DFalse
* "Digital divide" not so easy to close, Kenyans find
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2005-11-18T160233Z_01_RID830559_RTRUKOC_0_US-TUNIS-DIVIDE.xml&archived=
=3DFalse

SEARCH ENGINE USE UP
[SOURCE: Pew Internet & American Life Project]
Search engines have become an increasingly important part of the online=20
experience of American Internet users. The most recent findings from Pew=20
Internet & American Life tracking surveys and consumer behavior trends from=
=20
the comScore Media Metrix consumer panel show that about 60 million=20
American adults are using search engines on a typical day. These results=20
from September 2005 represent a sharp increase from mid-2004. Pew Internet=
=20
Project data from June 2004 show that use of search engines on a typical=20
day has risen from 30% to 41% of the Internet-using population, which=20
itself has grown in the past year. This means that the number of those=20
using search engines on an average day jumped from roughly 38 million in=20
June 2004 to about 59 million in September 2005 =AD an increase of about 55=
%.=20
This means that the use of search engines is edging up on email as a=20
primary Internet activity on any given day. The Pew Internet Project data=
=20
show that on a typical day, email use is still the top Internet activity.=
=20
On any given day, about 52% of American Internet users are sending and=20
receiving email, up from 45% in June of 2004. (A day without sending or=20
receiving e-mail -- are you mad, man?)
http://www.pewinternet.org/PPF/r/167/report_display.asp

QUICKLY

HOW TO TAME AN INFLATED ENTERTAINMENT BUDGET
[SOURCE: New York Times 11/19, AUTHOR: Damon Darlin]
For all the talk of the Information Age, we are really in the Entertainment=
=20
Age, where our lives are centered on the pursuit of happiness. The average=
=20
American spends more on entertainment than on gasoline, household=20
furnishings and clothing and nearly the same amount as spent on dining out,=
=20
according to the Bureau of Labor Statistics. Among the affluent, the 20=20
percent of households with more than $77,000 a year in pretax income, more=
=20
money is spent on entertainment - $4,516 a year - than on health care,=20
utilities, clothing or food eaten at home. The average income of households=
=20
in that quintile is a little more than $127,000. Because they account for a=
=20
disproportionate share of spending in the economy, they are the group that=
=20
trend watchers and marketers focus on.
http://www.nytimes.com/2005/11/19/business/19money.html
(requires registration)

FCC FINES CABLE ONE
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
The Federal Communications Commission Friday fined Cable One Inc. $20,000=
=20
for unlawfully bringing a Tulsa, Okla., TV station into a market where the=
=20
cable operator is engaged in a 10-month-old retransmission-consent dispute.
http://www.multichannel.com/article/CA6285434.html?display=3DBreaking+News
(requires subscription)

JOURNALIST, COVER THYSELF
[SOURCE: New York Times, AUTHOR: Katharine Seelye]
A look at the double-life of Washington Post columnist and CNN host Howard=
=20
Kurtz.
http://www.nytimes.com/2005/11/21/business/media/21kurtz.html
(requires registration)

TV AD RULES ARE CHALLENGED BY 'POD' BUSTERS
[SOURCE: Wall Street Journal, AUTHOR: Brian Steinberg=20
brian.steinberg( at )wsj.com ]
Marketers are worried about new technology that allows viewers to zap=20
through commercials. So they are pushing reluctant networks to rethink the=
=20
age-old format of the ad-break -- known on Madison Avenue as a "pod." Among=
=20
the options: special "pod-puncher" ads -- blips as short as five seconds --=
=20
strategically positioned at the end of a commercial break to get more=20
attention from viewers. At the other extreme, marketers are working on ads=
=20
lasting several minutes, as well as groups of ads that mirror a program's=
=20
theme.
http://online.wsj.com/article/SB113253439898002670.html?mod=3Dtodays_us_...
ketplace
(requires subscription)
--------------------------------------------------------------
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.
--------------------------------------------------------------