February 2006

The Senate Commerce Committee hosts a hearing on=20
municipal networks today at 10am. See=20
http://commerce.senate.gov/hearings/witnesslist.cfm?id=3D1706.=20
For this and other upcoming media policy events, see http://www.benton.org

TELEVISION
Stevens: Joint Board on Franchising
Free Press Franchising E-Mails Flood FCC
FCC's Texas Visit Sparks Debate Over Video Market
Cable TV Model Broken
Why a la carte cable TV is a nutty idea
As an Alternative to a Trip to a Video Store, Movies Through a Set-Top Box

GOVERNMENT & COMMUNICATIONS
Study Details $1.6B in Govt. Ad/PR Spending
Voice of America to Concentrate on Mideast
Congress's dilemma: When Yahoo in China's not Yahoo
U.S. Lobbying Tab Hits a Record

QUICKLY -- More Net Neutrality Commentary;=20
'Midwest heroes,' my ass; No Love Lost Between=20
CWA, Comcast; Russian Telecom Merger; Content Pirates Take $30-$35 Billion

TELEVISION

STEVENS: JOINT BOARD ON FRANCHISING
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Senate Commerce Committee leaders are developing=20
a plan that would empower a federal-state panel=20
to propose changes to cable-franchising laws in=20
an effort to bring uniformity and predictability=20
to the process. The federal-state joint board=20
would be created by a new law this year, and its=20
recommendations would be codified in another law=20
next year, Senate Commerce Committee chairman Ted=20
Stevens said Monday. =93The idea would be that some=20
of the FCC [Federal Communications Commission]=20
and some of the state [public-utility regulatory]=20
people would come up with some recommendations=20
and we next year could enact a solution that=20
would deal with that problem of franchising,=94=20
Stevens told reporters after an address to state=20
regulators in which he said demands by local=20
governments on new cable entrants =93border on=20
extortion and ought not to be permitted=94 in the franchising process.
http://www.multichannel.com/article/CA6307434.html?display=3DBreaking+News
(requires subscription)
* Stevens' comments to National Association of Regulatory Utility Commissio=
ners
http://commerce.senate.gov/newsroom/printable.cfm?id=3D251507

FREE PRESS FRANCHISING E-MAILS FLOOD FCC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Hundreds of e-mailed comments flooded the FCC=20
over the weekend in advance of the deadline for=20
comments in its proposal to modify video=20
franchising rules to encourage competition. Many=20
appeared to be e-mails of the same message from=20
media reform group Free Press. FCC Chairman Kevin=20
Martin has made it clear he thinks that, to=20
advance the compelling government interest of=20
speeding the roll-out of broadband and video=20
competition to cable and satellite, new=20
multichannel video providers need some government=20
help bypassing the time-consuming local=20
franchising process. Free Press, which wants to=20
make sure that community input is not also=20
bypassed, set up an online complaint filing form=20
under the heading "Defend local needs from=20
corporate greed," with a message promoting=20
continued local input into the franchise process.
http://www.broadcastingcable.com/article/CA6307348?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

FCC'S TEXAS VISIT SPARKS DEBATE OVER VIDEO MARKET
[SOURCE: Technology Daily, AUTHOR: Kimberly Reeves]
Texas made major strides in deregulating video=20
competition last year, but a panel of local=20
stakeholders in the communications market warned=20
the FCC that deregulation must include=20
safeguards. The FCC held an unusual two-day field=20
trip to Keller (TX) last week in order to view=20
the fruits of the Texas Legislature's=20
deregulation of the telecommunications industry=20
last year. North Texas is a test market for=20
high-speed Internet service offered over power=20
lines, as well as fiber-optic and Internet television service.
http://www.njtelecomupdate.com/lenya/telco/live/tb-SAEV1139841389949.html
See also --
* Coalition pushes FCC franchise process
[SOURCE: Telephony Online, AUTHOR: Vince Vittore]
A day after the Federal Communications Commission=20
issued its annual report on video competition,=20
Bell-supported "Consumers for Cable Choice" filed=20
a request asking the FCC to update its cable=20
franchising process. In an 8-page submission,=20
motivated by the FCC=92s Notice of Proposed=20
Rulemaking on video franchising, Robert Johnson,=20
C4CC president, asked the commission to expedite=20
the local franchising process and to establish=20
federal rules for what constitutes unreasonable=20
franchise terms. Both actions would increase=20
choice for consumers and bring about numerous other benefits, he said.
http://telephonyonline.com/regulatory/news/FCC_cable_franchise_021306/

CABLE TV MODEL BROKEN
[SOURCE: Red Herring]
Jonathan Hurd, an analyst with a Boston-based=20
consulting firm, believes the =E0 la carte war=20
between the cable industry and the FCC will=20
affect what TV viewers see in the short term.=20
Ultimately the cable industry will be forced to=20
make even more dramatic changes in how it=20
programs TV content for its subscribers. =93The=20
whole notion of channels, bundles of channels,=20
and programming being available only at a fixed=20
time and only in a fixed place is evolving,=94 said=20
Mr. Hurd. =93With TiVo, PVR technology, and=20
SlingBox, people are going to be able to consume=20
video where they want and when they want. The=20
trend is toward flexibility.=94 Mr. Hurd believes=20
the whole concept of programming channels should=20
be reviewed. A subscriber may like baseball, but=20
not football or basketball, so he or she would be=20
forced to subscribe to ESPN. Mr. Hurd believes=20
the cable channels should offer that subscriber=20
baseball only and perhaps access to music and=20
movies they like based on collaborative filtering.
http://www.redherring.com/Article.aspx?a=3D15696&hed=3DCable+TV+Model+Br...
n&sector=3DIndustries&subsector=3DEntertainmentAndMedia

WHY A LA CARTE IS A NUTTY IDEA
[SOURCE: CNN|Money, AUTHOR: Marc Gunther, Fortune]
[Commentary] It never occurred to me -- until now=20
-- to call up the people at The Times to tell=20
them that I would like to buy only certain=20
sections of the newspaper and not others. And if=20
The Times were to tell me the paper is an=20
all-or-nothing deal, well, maybe I should ask my=20
Congressman to require The New York Times Co. to=20
sell its newspapers a la carte. This is, in=20
effect, what some politicians in Washington --=20
led by Kevin Martin, the chairman of the Federal=20
Communications Commission and Sen. John McCain --=20
are pushing the cable TV industry to do. They=20
would like to require cable operators to=20
"unbundle" their packages of channels, so that=20
consumers can save money by buying only the=20
channels they want and no more. The thing is, 72=20
million people subscribe to cable. If they don't=20
think they are getting good value, they can=20
switch to satellite TV providers like DirecTV and=20
Echostar or wait for the phone companies like=20
Verizon or SBC Communications to offer video, as=20
they have begun to do. They could also watch=20
over-the-air television or -- please make sure=20
you are sitting before reading on -- they could=20
watch no television at all. If cable TV were a=20
necessity, like phone service or electricity,=20
there might be reason for regulators to decide=20
how it should be sold. But it's not. We need food=20
and oxygen. We don't need The Food Network and=20
Oxygen. One thing unbundling would do: It would=20
drive a bunch of cable channels out of business.=20
They'd lose subscriber fees and ad revenues. Most=20
people would not miss G4 or Sprout or the Golf=20
Channel or the Independent Film Channel or BET=20
but the reason pay television has become so=20
pervasive -- about 85 percent of American homes=20
subscribe to either cable or satellite -- is that=20
it serves a variety of niche audiences.
http://money.cnn.com/2006/02/13/magazines/fortune/pluggedin_fortune/inde...
tm?section=3Dmoney_latest

AS AN ALTERNATIVE TO A TRIP TO A VIDEO STORE, MOVIES THROUGH A SET-TOP BOX
[SOURCE: New York Times, AUTHOR: Saul Hansell]
Will people pay $230 and hook a new gizmo up to=20
their television sets so they do not have to=20
drive to the video rental store? That is the=20
question to be answered by MovieBeam, a service=20
being introduced in 29 major markets today. The=20
service was originally developed and tested in=20
three cities in 2004 by the Walt Disney Company.=20
Disney has brought in new investors and=20
streamlined the service's pricing to offer it on=20
a broader scale. MovieBeam is built around a=20
technology that broadcasts movies slowly over=20
unused portions of the television signals to=20
set-top boxes that store them on a hard disk.=20
Users will have a choice of 100 movies =97 mainly=20
those that have been recently released on DVD's =97=20
with 10 new titles replacing old ones each week.=20
Consumers will buy the MovieBeam box for $250=20
from electronics stores. They can send for a $50=20
rebate, but must also pay a $30 activation fee,=20
making the effective upfront cost $230. The=20
service does not charge a monthly fee, but movies=20
cost $3.99 each for current titles and $1.99 for=20
older ones. (The company will also offer some=20
movies in a high-definition format for an=20
additional $1.) The customers will be able to=20
watch the movie for a 24-hour period.
http://www.nytimes.com/2006/02/14/business/media/14movie.html?pagewanted...
all
(requires registration)
* MovieBeam to Show Disney Films On Demand on DVD Release Day
http://online.wsj.com/article/SB113988720711773208.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

GOVERNMENT & COMMUNICATIONS

STUDY DETAILS $1.6 BILLION IN GOVERNMENT AD/PR SPENDING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
According to a Government Accountability Office,=20
the Bush Administration has spent $1.6 billion on=20
advertising and public relations since 2003 on=20
everything from video news releases to=20
embroidered bowling bags. The report was called=20
for by Democrats and prompted by revelations=20
about payments to conservative broadcaster=20
Armstrong William to plug the Department of=20
Education's No Child Left Behind policy on-air.=20
Ad agencies got the lion's share of the dollars=20
at $1.4 billion, with PR firms getting $197=20
million and media companies $15 million, and=20
individual members of the media $100,000.=20
Campaigns included pushing the administration=20
view if the war on terror and warning of the=20
dangers of importing prescription drugs from=20
outside the country. The Defense Department spent=20
the most at $1.1 billion. Health and Human=20
Services was next at more than $300 million;=20
followed by Treasury at $152 million; and=20
Homeland Security at $24 million. Another of the=20
key findings, according to the Democrats, was=20
that $50 million (76 contracts) was allocated=20
without competitive bids. Craig Aaron,=20
communications director of media reform group=20
Free Press, reacted to the report: =93We need a=20
full accounting of the Bush administration's=20
spending on advertising, PR and fake news. It's=20
time for Congress to reclaim its constitutional=20
role as a counterweight to the executive branch=20
and permanently cut off funding for covert=20
propaganda. We must ensure that taxpayer money=20
isn't being spent by the White House to secretly=20
manipulate the American public.=94
http://www.broadcastingcable.com/article/CA6307445.html?display=3DBreaki...
News&referral=3DSUPP
(free access for Benton's Headlines subscribers)
* Free Press Calls on Congress to Rein in White House Propaganda
http://www.freepress.net/press/release.php?id=3D115
* Update: Prepackaged News
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/13/AR200602...
1897.html
(requires registration)
See GAO report:
* Media Contracts: Activities and Financial=20
Obligations for Seven Federal Departments. GAO-06-305
http://www.gao.gov/cgi-bin/getrpt?GAO-06-305
Highlights - http://www.gao.gov/highlights/d06305high.pdf

VOICE OF AMERICA TO CONCENTRATE ON MIDEAST
[SOURCE: Washington Post, AUTHOR: Christopher Lee]
The Voice of America plans to silence many of its=20
radio broadcasts in English and several other=20
languages as the agency concentrates more=20
resources on the Middle East and countries=20
central to the U.S. effort against terrorism. The=20
Broadcasting Board of Governors, which oversees=20
the government-owned broadcasting service,=20
announced the moves last week, citing tight=20
budgets and the need to focus on the most=20
pressing national security threats. Its plans=20
arose despite proposed budget increases of 13=20
percent for the U.S.-sponsored Middle East=20
Broadcasting Networks and 5.3 percent for the=20
VOA. The plans angered many employees and VOA=20
advocates, who say the move would eliminate=20
long-standing English-language radio broadcasts=20
everywhere but Africa, abandon other language=20
broadcasts in some unstable parts of the world,=20
and potentially leave many specialized=20
journalists out of work. The changes come as=20
Russia, China and the Qatar-based al-Jazeera=20
network are adding television or Internet=20
programming in English. Most painful, advocates=20
say, is the prospective loss of News Now, the=20
VOA's flagship English-language service. It=20
broadcasts worldwide 14 hours a day and includes=20
hourly news updates, correspondent reports and=20
longer programs on science and other topics. The=20
VOA would continue with English content on the=20
Web and special broadcasts for limited English speakers.
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/13/AR200602...
1896.html
(requires registration)

CONGRESS'S DILEMMA: WHEN YAHOO IN CHINA'S NOT YAHOO
[SOURCE: The Christian Science Monitor, AUTHOR: G. Jeffrey MacDonald]
Wednesday, American companies at the vanguard of=20
the information future are likely to get grilled=20
about practices reminiscent of the 20th century -=20
such as censorship and aiding political=20
repression. A US House of Representatives panel=20
will look into high-profile cases where=20
Microsoft, Google, and Yahoo worked with China to=20
restrict access to material or reveal the=20
identity of users with dissident postings. Cisco=20
is also implicated. But lawmakers eager to end=20
such cooperation may find it hard to do so, at=20
least in Yahoo's case. A deal in October may=20
insulate the Internet giant. Because it gave up a=20
majority stake of its China service to a Chinese=20
company, Yahoo argues that decisions about=20
cooperating with Chinese officials lie with that=20
company, which has obligations to obey Beijing, not Washington.
http://www.csmonitor.com/2006/0214/p01s04-usfp.html

U.S. LOBBYING TAB HITS A RECORD
[SOURCE: Wall Street Journal, AUTHOR: Brody Mullins brody.mullins( at )wsj.com]
U.S. corporations and interest groups spent a=20
total of $1.16 billion to lobby Washington in the=20
first half of 2005, setting a record. According=20
to PoliticalMoneyLine, a nonpartisan organization=20
that tracks such expenditures, spending on=20
lobbying rose $85 million, or 8%, between January=20
and June 30, 2005, compared with the previous=20
six-month period. Corporations, trade=20
associations, lawyers and unions spent about $6.5=20
million a day to lobby Congress and the Bush=20
administration during the latest period.=20
PoliticalMoneyLine relied on semiannual reports=20
lobbying firms and organizations that hire=20
lobbyists are required by Congress to file. The=20
reports, which detail how much money is spent=20
lobbying Congress and the executive branch, are=20
an incomplete snapshot of how much organizations=20
spend to influence public policy in Washington=20
because Congress doesn't require disclosure of=20
expenditures on public relations, television=20
advertisements, polling and grass-roots=20
campaigns. The local telephone industry's trade=20
group, the United States Telecom=20
Association, spent $11.4 million during the=20
period studied, making it one of the top lobby=20
organizations. In second place in sector=20
spending, the Communication & Technology sector=20
spent $152.2 million (up from $144.1 million in=20
the last six months of 2004), with telephone=20
companies leading the way with expenditures of $28.4 million.
http://online.wsj.com/article/SB113988289379073090.html?mod=3Dtodays_us_...
e_one
(requires subscription)
See "Record First Half 2005 Lobbying Outlays"
http://www.fecinfo.com/

QUICKLY

MORE NET NEUTRALITY COMMENTARY
* Network Neutrality Is a Terrible Idea
[Commentary] "Enforced network neutrality will=20
lock us into a mediocre Internet, and is more=20
likely to slow broadband adoption than speed it.=20
On the other hand, allowing carriers the right to=20
create quality tiers will make the Internet=20
better for everyone. If some applications=20
providers have the choice to pay a little more to=20
give customers a better experience, broadband=20
services as a whole will have that much more of a lure."
http://www.reason.org/commentaries/titch%5f20060213.shtml
* An Appeal For 'Network Neutrality'
http://beltwayblogroll.nationaljournal.com/archives/2006/02/an_appeal_fo...
.php

'MIDWEST HEROES,' MY ASS
[SOURCE: AlterNet, AUTHOR: Laura Barcella]
[Commentary] A conservative group's TV ad claims=20
'we're making real progress in Iraq, defending=20
our country from radical Al-Qaeda terrorists.=20
"The media only reports the bad news," an actor=20
says. "But we're making real progress in Iraq,=20
defending our country from radical Al-Qaeda=20
terrorists who want to destroy America, beginning=20
in Iraq=85You'd never know it by the news reports,=20
but our enemy in Iraq is Al-Qaeda, the same=20
terrorists who killed 3000 people on 9/11, the=20
same terrorists from the USS Cole, Madrid,=20
London, and many more=85" The ad comes from the=20
Progress for America Voter Fund, a conservative=20
advocacy group that wants to "reduce the lopsided=20
advertising advantage that liberal 527s have on the campaign trail today."
http://www.alternet.org/blogs/themix/32081/

NO LOVE LOST BETWEEN CWA, COMCAST
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
Members of the Communications Workers of America=20
are trying to marshal support for a Valentine's=20
Day picket against Comcast. The two-hour=20
informational action is aimed at drawing=20
attention to the union's contention that Comcast=20
is an "abusive employer," said Lisa Morowitz,=20
cable field coordinator with the CWA.
http://www.multichannel.com/article/CA6307419.html?display=3DBreaking+News
(requires subscription)

RUSSIAN CELLPHONE OPERATOR OFFERS $5 BILLION FOR TOP TELECOM IN UKRAINE
[SOURCE: New York Times, AUTHOR: Andrew Kramer]
Vimpel-Communications, a Russian mobile phone=20
operator on an aggressive expansion drive in the=20
former Soviet Union, made a $5 billion stock and=20
debt offer on Monday for Kyivstar, the largest=20
telecommunications operator in Ukraine. But the=20
bid was also widely seen as another move in an=20
intricate duel over control involving partners on both sides of the deal.
http://www.nytimes.com/2006/02/14/business/worldbusiness/14vimpel.html?p...
wanted=3Dall
(requires registration)

CONTENT PIRATES TAKE $30-$35 BILLION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Global content piracy cost businesses $30=20
billion-$35 billion worldwide according to a new=20
report from the International Intellectual=20
Property Alliance (IIPA). And that is without=20
Internet piracy, for which the group says it=20
cannot yet get "meaningful" figures.
http://www.broadcastingcable.com/article/CA6307069?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
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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.
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