January 2006

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

INTERNET/BROADBAND
AT&T chief warns on Internet costs
Verizon Splits With Bell Companies On Need For
'Net Neutrality' Solution
Bold prediction: telcos will become wholesale providers
How politics are preventing public access to the Internet
Arizona Wi-Fi Mesh Net Biggest Yet
MetroFi offers free service in some cities

TELEVISION
Another $100 billion gift to Broadcasters from Uncle Sam
Report: TV Stations Should Pay Ops
DBS Rules Rural America
Cable: No Special Deals for Telcos
USTelecom Statement to the U.S. Conference of Mayors
Liberty Media, EchoStar Invest In Start-Up for New TV Device

QUICKLY -- Communications panel studies lessons=20
of Katrina; Product Placement in Morning Shows;=20
Ads in Video iPods; Where do you want your VOD?;=20
DirecTV, EchoStar Bundle Up; Amusing Ourselves to=20
Death; Road maps for the digital revolution; Solo=20
Video Journalists; Newspapers More Engaging Than=20
TV, Radio, Web; U.K. battles Web TV regulation;=20
Sellout.com; Sex, boys and video games; Fines for AT&T, Alltel

INTERNET/BROADBAND

AT&T CHIEF WARNS ON INTERNET COSTS
[SOURCE: Financial Times, AUTHOR: Paul Taylor]
Ed Whitacre, AT&T=92s chairman and chief executive,=20
warned on Monday that Internet content providers=20
that wanted to use broadband networks to deliver=20
high-quality services such as movie downloads to=20
their customers would have to pay for the service=20
or face the prospect that new investment in high=20
speed networks =93will dry up.=94 =93I think the=20
content providers should be paying for the use of=20
the network =96 obviously not the piece from the=20
customer to the network, which has already been=20
paid for by the customer in Internet access fees=20
=96 but for accessing the so-called Internet=20
cloud,=94 Whitacre said. The major US=20
telecommunications providers, including T&T, have=20
come under pressure from their investors in part=20
because of their hefty investments in new fibre=20
optic-based networks capable of delivering=20
advanced TV and video services to their=20
customers. =93If someone wants to transmit a high=20
quality service with no interruptions and=20
=91guaranteed this, guaranteed that=92, they should=20
be willing to pay for that,=94 the AT&T chief said.=20
=93Now they might pass it on to their customers who=20
are looking at a movie, for example. But that=20
ought to be a cost of doing business for them.=20
They shouldn't get on [the network] and expect a free ride.=94
http://news.ft.com/cms/s/3ced445e-91c5-11da-bab9-0000779e2340.html
(requires subscription)
* Keep network neutrality
http://www.mndaily.com/articles/2006/01/31/66882
* More (Negative) Thoughts on Prioritized Bandwidth
http://www.technologyevangelist.com/2006/01/more_thoughts_on_pri.html

VERIZON SPLITS WITH BELL COMPANIES ON NEED FOR 'NET NEUTRALITY' SOLUTION
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
Verizon Communications opened more distance=20
between itself and two other leading Bell=20
companies when its top public policy official,=20
Tom Tauke, strongly pushed voluntary Internet=20
neutrality principles. But he said Verizon would=20
continue to resist efforts to codify these=20
Internet neutrality principles through=20
legislation. The principles govern the ability=20
for a consumer to access to any Web site, to=20
attach any device to the Internet. They also seek=20
for any consumer to run any application, ask that=20
consumers receive full disclosure of terms and=20
conditions when they purchase Internet access.=20
High tech and consumer groups strongly support=20
this approach. Tauke said there is a "danger of=20
having governments getting involved in the=20
Internet space." He said the FCC already had the=20
authority to act against companies that violated=20
the Internet neutrality principles. He cited the=20
example of Madison River Telecommunications,=20
which the FCC ordered to stop blocking Internet telephone services.
http://www.njtelecomupdate.com/lenya/telco/live/tb-PGMG1138652004049.html

BOLD PREDICTION: TELECOS WILL BECOME WHOLESALE PROVIDERS
[SOURCE: MuniWireless.com, AUTHOR: Esme Vos]
[Commentary] The telcos' desire to eat out of two=20
pots - charging customers for access to the=20
network and content providers for access to those=20
customers - is nothing more than fantasy=20
perpetuated by nervous managers to calm down=20
nervous investors, who suspect that, indeed, the=20
Age of Big Telecom has faded into history like=20
bowler hats and crinolines. There are several=20
reasons why telcos cannot eat out of two pots and=20
why they will end up as wholesale providers: 1)=20
there is now a business model that allows=20
companies such as Google and the people who=20
partner with them (municipalities, ISPs, content=20
providers) to offer free Internet access, free=20
voice calls and even free entertainment programs;=20
2) (the open network model has been proven in=20
Europe and Asia to lead to higher rates of=20
broadband penetration, lower prices and more=20
bandwidth; 3) high tech companies such as Intel,=20
Microsoft, Google, Yahoo and Apple simply won't=20
let them, and 4) the telecos underestimate just how much the public hates t=
hem.
http://www.tropos.com/newsletters/2006-01-27_guestcommentary.html

HOW POLITICS ARE PREVENTING PUBLIC ACCESS TO THE INTERNET
[SOURCE: Utne Reader, AUTHOR: Bennett Gordon]
If it's the government's duty to maintain roads=20
and provide gas and electricity, then why not the=20
Internet? Robert McChesney and John Podesta,=20
writing in Washington Monthly, suggest that the=20
problem isn't economic, it's not even=20
technological. The problem is political. The=20
United States is falling behind the technological=20
curve as countries like Japan actively pursue=20
municipally owned Internet systems. The "digital=20
divide" is allowing populations with Internet=20
access to surge ahead in innovation and=20
education, leaving those without it in the dust.=20
The United States is putting itself on the wrong=20
side of this divide by passing laws discouraging=20
Internet access. There are legitimate debates=20
going on right now about Wi-Fi access. But the=20
question shouldn't be whether or not it should be=20
set up. The question should be "how."
http://www.utne.com/webwatch/2006_233/news/11961-1.html
See also:
* Cities' wireless plans hit snags
[SOURCE: eSchool News, AUTHOR: Robert Brumfield]
Across the nation, municipalities looking to=20
provide wireless Internet access citywide are=20
meeting with resistance from local cable and=20
telecommunications companies that fear such=20
projects will cut into their business. How these=20
skirmishes play out will have important=20
implications for school leaders and their efforts=20
to provide anytime, anywhere learning opportunities for students.
http://www.eschoolnews.com/news/showStoryts.cfm?ArticleID=3D6073

ARIZONA WI-FI MESH NET BIGGEST YET
[SOURCE: Multichannel News, AUTHOR: Karen Brown]
Chandler (AZ) is striking a deal to create a=20
citywide wireless mesh network offer Wi-Fi access=20
to its 240,000 residents, as well as its 19,000=20
businesses within its 72-square-mile city limits.=20
A second, parallel connection will be provided=20
for municipal communications. Chandler=92s service=20
will include access to multiple Internet-service=20
providers, and it can also support=20
voice-over-Internet-protocol service. A hot zone=20
in Chandler=92s downtown business district will=20
also offer visitors two hours of free Internet=20
access daily, and that deal also will extend to=20
Chandler=92s library and three of its largest=20
parks. The network will also extend to connect=20
with a mesh-network system have installed for=20
nearby Tempe covering 40 square miles, making the=20
combined grid the largest continuous mesh network in the nation to date.
http://www.multichannel.com/article/CA6303230.html?display=3DBreaking+News
(requires subscription)

METROFI OFFERS FREE SERVICE IN SOME CITIES
[SOURCE: San Jose Mercury News, AUTHOR: Jessie Seyfer]
MetroFi announced Monday it was abandoning fees=20
for its wireless Internet service, giving=20
residents in several Silicon Valley (CA) cities WiFi for free.
The catch? A half-inch-deep strip of local=20
advertising will be at the top of a person's=20
browser window at all times. Customers who don't=20
want the banner, however, can continue paying the=20
going rate of $19.95 a month to get online.=20
MetroFi currently offers wireless Internet, or=20
WiFi, services to residents across 25 square=20
miles of Santa Clara, Cupertino and parts of=20
Sunnyvale. Both the free and paid services offer=20
data-transfer speeds of 1 megabit per second for=20
downloads and 256 kilobits per second for uploads, comparable to DSL speeds
http://www.mercurynews.com/mld/mercurynews/business/technology/13753805.htm

TELEVISION

ANOTHER $100 BILLION GIFT TO BROADCASTERS FROM UNCLE SAM
[SOURCE: Truth, Justice, and Telecom Policy, AUTHOR: J.H. Snider]
[Commentary] Today, it's practically impossible=20
to find a serious telecom analyst who believes=20
that a generation from now conventional=20
over-the-air broadcasting-digital or not-will be=20
a significant media business in the United=20
States. The expectation is that consumers will=20
want significantly more choice in terms of=20
programming options and convenience-something=20
which only the Internet can efficiently=20
deliver. Broadcast industry leaders, of course,=20
beg to differ. With a level playing field and=20
"minor" enhancements to their licenses, they=20
claim that the ad-supported, terrestrial,=20
over-the-air broadcasting industry will continue=20
to thrive-perhaps for eternity. But do their=20
actions match their rhetoric? No where do we get=20
a better sense of the discrepancy than in the=20
current FCC Digital Television Distributed=20
Transmission System (DTS) rulemaking, with=20
comments due on February 6, 2006. In this=20
rulemaking, derived from another rulemaking about=20
two years ago, we see a brilliant continuation of=20
the broadcast industry's below-the-public radar,=20
one-step-at-a-time strategy of quietly exiting=20
the broadcasting business in the name of=20
preserving it while walking off with a windfall=20
of tens of billions of dollars worth of new spectrum rights.
http://www.jhsnider.net/telecompolicy/

REPORT: TV STATIONS SHOULD PAY OPS
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
TV stations, which generate substantial ad=20
revenue through their carriage in cable homes,=20
should be paying cable operators $4.16 per month,=20
per subscriber in license fees for that extra=20
reach, according to a report commissioned by the=20
American Cable Association. The suggested license=20
fee was part of a 27-page report, researched and=20
written by Arlen Communications, on the economic=20
impact of retransmission consent on small-town=20
and rural cable systems. The report argued that=20
in a true free market, cable operators wouldn't=20
be paying broadcasters cash to carry their TV=20
stations, as now permitted by federal=20
regulations, and cable systems wouldn't be put in=20
a position where they are forced to carry media=20
conglomerates=92 cable networks in exchange for=20
carrying their broadcast stations.
http://www.multichannel.com/article/CA6302636.html?display=3DBreaking+News
(requires subscription)
* American Cable Association press release
http://releases.usnewswire.com/GetRelease.asp?id=3D60054

DBS RULES RURAL AMERICA
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
Direct-broadcast satellite is now the dominant=20
provider of video services in rural America. Of=20
those who subscribe to cable or DBS in rural=20
areas, 42% of those customers now take satellite,=20
versus 37% buying cable, according to data from=20
Leichtman Research Group. 2% have both cable and=20
DBS. EchoStar=92s Dish Network has greater=20
penetration in rural markets than DirecTV, which=20
has been targeting urban and suburban customers.=20
For example, about 55% of EchoStar subscribers=20
say they live in rural areas, compared with about 45% of DirecTV subscribers
http://www.multichannel.com/article/CA6303308.html?display=3DBreaking+News
(requires subscription)

CABLE: NO SPECIAL DEALS FOR TELECOS
[SOURCE: MediaWeek, AUTHOR: Todd Shields]
National Cable & Telecommunications Association=20
President Kyle McSlarrow said Monday that cable=20
operators should be granted whatever regulatory=20
breaks Washington and local governments give to=20
telephone companies that want to begin video=20
service. He proposed that new entrants such as=20
AT&T and Verizon should be given 30 days to=20
negotiate deals to provide TV service. If no=20
agreement were reached, the new entrants would=20
get the same deal cable has; if the new entrant=20
reached a deal, cable would get the same=20
treatment. Such proposals are likely to be=20
discussed Tuesday as the Senate Commerce=20
Committee holds a hearing into video franchising.
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=3D100...
0833

USTELECOM STATEMENT TO THE US CONFERENCE OF MAYORS
[SOURCE: USTelecom press release]
=93We are encouraged to note that your agenda=20
addresses the vital efforts underway today in the=20
United States Congress to update the nation=92s=20
communications laws. As you know, our member=20
companies are investing billions of dollars in=20
communities across the country to enhance the=20
nation=92s broadband infrastructure and to deliver=20
new communications and entertainment choices to=20
consumers. In doing so, we are seeking=20
assurances that franchising requirements=20
established years ago to protect consumers from=20
cable monopolies are not misused today to protect=20
cable providers from much-needed competition and=20
to deny consumers the many benefits of enhanced video choice."
http://www.ustelecom.org/news_releases.php?urh=3Dhome.news.nr2006_0125

LIBERTY MEDIA, ECHOSTAR INVEST IN START-UP TV DEVICE
[SOURCE: Wall Street Journal, AUTHOR: Rebecca=20
Buckman rebecca.buckman( at )wsj.com]
Major media companies that make TV shows, music=20
and movies can't ignore the fact that consumers=20
increasingly want to access that content on the=20
go. So media giants Liberty Media Corp. and=20
EchoStar Communications Corp. are joining Hearst=20
and other investors in Sling Media, a small=20
Silicon Valley company that lets people watch TV=20
on their computers away from home. Liberty and=20
EchoStar are part of a new, $46.6 million round=20
of funding, which Sling Media will use for=20
product development and international expansion.=20
Venture capitalists, who buy equity stakes in=20
small, private companies with the hope of big=20
payouts later, have traditionally viewed gadgets=20
as risky investments. Gadget companies often=20
incur high start-up costs and can cost investors=20
money if they build up big inventories of unsold=20
products. The proliferation of high-speed=20
Internet links in homes, however, has changed=20
that. Now, many consumers have stores of digital=20
music, videos and photos they want to move around and view on various devic=
es.
http://online.wsj.com/article/SB113867327176760550.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

QUICKLY

COMMUNICATIONS PANEL STUDIES LESSONS OF KATRINA
[SOURCE: InfoWorld, AUTHOR: Stephen Lawson]
An independent panel to study the effects of=20
Hurricane Katrina on communications networks,=20
convened by the U.S. Federal Communications=20
Commission (FCC), met for the first time Monday=20
to discuss committee structure and a tentative=20
timeline for producing its recommendations.
http://www.infoworld.com/article/06/01/30/74904_HNkatrinapanel_1.html?so...
e=3Drss&url=3Dhttp://www.infoworld.com/article/06/01/30/74904_HNkatrinapane=
l_1.html
* Citing Katrina Experience, New Orleans Health=20
Officials Plead for Better Communications Capabilities
http://energycommerce.house.gov/108/News/01272006_1761.htm
* Opening Remarks of Chairman Martin
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263513A1.doc
* Remarks of Commissioner Copps
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263514A1.doc
* Remarks of Commissioner Adelstein
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263520A1.doc

PRODUCT PLACEMENT BROKERS SUCCEED IN MORNING SHOWS
[SOURCE: AdAge, AUTHOR: Marc Graser]
Local TV news operations hungry for free content=20
have intersected with brand brokers looking for=20
product placement opportunities in a way that is=20
now generating growing revenues for both. With=20
product placements and integrations proliferating=20
on prime-time television, daytime talk shows,=20
soap operas and national morning news shows --=20
and the costs to appear in them rising -- some=20
marketers are finding it tough to find available=20
space to promote their brands. However, one=20
remaining outlet has proved to be morning shows=20
produced by local television stations. These=20
midmorning magazine-style shows replace local=20
news, talk programs or syndicated fare.
http://www.adage.com/news.cms?newsId=3D47653

MARKETERS AIM NEW AIDS AT VIDEO IPOD USERS
[SOURCE: Wall Street Journal, AUTHOR: Suzanne=20
Vranica suzanne.vranica( at )wsj.com ]
Since Apple Computer Inc.'s video iPod made its=20
debut less than four months ago, users have been=20
able to download their favorite TV shows free=20
from ads. Now, advertisers are scrambling for a=20
way to subvert the sleek device for their own=20
purposes. Some companies are attaching recycled=20
TV spots to the beginning of video files, or=20
podcasts, that can be downloaded from popular Web=20
sites. Others are creating new, subtler pitches=20
to bracket shows attractive to their target=20
audiences. And still others are creating their=20
own podcasts that blur the line between=20
entertainment and advertisement in hopes of=20
enticing people to watch the commercials for their own sake.
http://online.wsj.com/article/SB113867199829460498.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

WANT YOUR VOD TO GO TO YOUR IPOD, LAPTOP OR TV?
[SOURCE: AdAge, AUTHOR: Kris Oser]
Video on demand may be hot, but there=92s no=20
clear-cut model for it at the moment. Consumers=20
have been bombarded with myriad options to access=20
VOD -- some models are free, others paid either=20
by subscription or a la carte, and you can=20
download content to your iPod, laptop or TV.
http://adage.com/news.cms?newsId=3D47662

DIRECTV, ECHOSTAR BUNDLE UP
[SOURCE: TheStreet, AUTHOR: Sandy Brown]
Rupert Murdoch's DirecTV is linking up with rival=20
EchoStar Communications to launch a nationwide wireless broadband network.
http://www.thestreet.com/tech/internet/10265051.html

AMUSING OURSELVES TO DEATH
[SOURCE: PressThink, AUTHOR: Andrew Postman]
[Commentary] Is "Amusing Ourselves to Death,"=20
Neil Postman's social commentary, is nearing its=20
20th anniversary. Is it still relevant? "Oh,=20
yes," answers Andrew Postman, the author's son.
http://journalism.nyu.edu/pubzone/weblogs/pressthink/

ROAD MAPS FOR THE DIGITAL REVOLUTION
[SOURCE: International Herald Tribune, AUTHOR: Thomas Crampton]
If you could start a new media empire from scratch, what would it look like?
http://www.iht.com/articles/2006/01/29/yourmoney/mogul30.php

NASHVILLE TV STATION ADOPTS ONE MAN 'VJs'
[SOURCE: Associated Press, AUTHOR: Rose French]
Some small-station TV reporters have always=20
worked solo, but now entire stations are=20
switching to the solo 'Videojournalist' (VJ) model.
http://biz.yahoo.com/ap/060127/videojournalists.html

MEDIA CONSUMPTION STUDY REVEALS NEWSPAPERS MORE ENGAGING THAN TV, RADIO, WEB
[SOURCE: Editor&Publisher, AUTHOR: Miki Johnson]
Although newspapers are read only a few times a=20
day and for brief periods each time, compared to=20
other media, that time is relatively=20
uninterrupted by other activities, a recent study=20
by Ball State University's Middletown Media Studies finds.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1001921052

UK BATTLES WEB TV REGULATION
[SOURCE: C-Net|News.com, AUTHOR: Graeme Wearden]
The U.K. government is fighting an attempt by the=20
European Commission to change the way television=20
is regulated in Europe amid fears that this could=20
lead to the regulation of Internet content.
http://news.com.com/U.K.+battles+Web+TV+regulation/2100-1028_3-6032794.h...
?tag=3Dhtml.alert

SELLOUT.COM
[SOURCE: Wall Street Journal, AUTHOR: Andy Kessler]
[Commentary] A billion soon-to-be-online Chinese=20
will forever associate Google with lame and=20
censored results -- search tools of the state.=20
That's just dumb. And totally uncool.
http://online.wsj.com/article/SB113868050897360760.html?mod=3Dtodays_us_...
nion
(requires subscription)

SEX, BOYS AND VIDEO GAMES
[SOURCE: Los Angeles Times, AUTHOR: Joel Stein]
[Commentary] On Thursday, Los Angeles sued the=20
firm that makes the video game "Grand Theft Auto:=20
San Andreas" over a hidden sex scene that can be=20
unlocked by hacking into the computer coding. The=20
city believes that parents who simply wanted to=20
buy their boys a wholesome cop-shooting,=20
hooker-killing, car-stealing game were unfairly=20
duped. Because if the ratings board had known=20
about the scene, the game probably would have=20
been bumped up to an "Adults Only" rating=20
(restricting it to those 18 and over) instead of=20
"Mature" (which keeps it away from anyone under=20
17). That means that all across Los Angeles,=20
innocent 17-year-old boys with advanced computer=20
skills were being exposed to moderately rendered,=20
computer-animated soft-core pornography. And City=20
Atty. Rocky Delgadillo wants to make sure someone=20
pays for doing this to our kids. Because if these=20
teen computer geniuses are given the opportunity=20
to unlock a video-game sex scene, then they'll be=20
just one step away from breaking the code that=20
allows them to type dirty words into Google.
http://www.latimes.com/news/printedition/opinion/la-oe-stein31jan31,0,10...
89.column?coll=3Dla-news-comment
(requires registration)

FCC proposes fines on AT&T, Alltel over privacy
FCC PROPOSES FINES FOR AT&T, ALLTEL OVER PRIVACY
[SOURCE: Reuters]
The Federal Communications Commission on Monday=20
proposed fining AT&T and Alltel $100,000 each for=20
failing to properly certify that they have=20
safeguarded their customers' personal call information.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-01-31T030512Z_01_N3012073_RTRUKOC_0_US-TELECOMS-PRIVACY-FCC.xml
AT&T case: http://www.fcc.gov/DA-06-221A1.pdf
Alltel case: http://www.fcc.gov/DA-06-220A1.pdf
--------------------------------------------------------------
Communications-related Headlines is a free online=20
news summary service provided by the Benton=20
Foundation (www.benton.org). Posted Monday=20
through Friday, this service provides updates on=20
important industry developments, policy issues,=20
and other related news events. While the=20
summaries are factually accurate, their often=20
informal tone does not always represent the tone=20
of the original articles. Headlines are compiled=20
by Kevin Taglang headlines( at )benton.org -- we welcome your comments.
--------------------------------------------------------------