February 2006

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

NEWS FROM THE FCC
Today's FCC Meeting
Consumers Benefit from A La Carte
Reaction to FCC A La Carte Report
Booz Allen Defends Study

NEWS FROM CONGRESS
Lawmakers Abandon Talks On Universal Service Bill
Broadband: A link to the outside world
Prospects Dim for Franchise Bill This Session
Saving the Internet
Fresh US outrage ahead of China Internet hearings
Feingold Requests Payola Hearing

MEDIA OWNERSHIP
NAB's Rehr Spells Out Ownership Priorities
ABC Swaps A Famous Sportscaster For a Coveted Cartoon
A Telecom Monopoly Cripples Mexico

INTERNET/BROADBAND
Seidenberg: It=92s About Cost, Not Blocking
Charge E-Mailers, but Keep Pipeline Open

SATELLITE SERVICES
The Strange Case of Satellite Radio
NAB Cites Victories in 'White Area' Report

PUBLIC BROADCASTING
Official Resigns Public TV Post

QUICKLY -- Groups map media's influence on=20
elections; Happy 10th and bon voyage, Telecom=20
Act; Family Association Head Urges Complaints=20
Against 'Las Vegas'; A Journalism Manifesto;=20
Bid-Rigging Costs Firm in E-Rate Fraud; Apple=20
Goes to University; Advertisers may face public=20
humiliation over adware; Probe of Web Sites=20
Offering Large Returns for Looking at Ads; Picking Music Hits

NEWS FROM THE FCC

TODAY'S FCC MEETING
[SOURCE: Federal Communications Commission]
And now, your FCC meeting participants... The=20
participants for the Federal Communications=20
Commission's Open Meeting today in Keller, Texas=20
at The Keller Pointe Community Center, 405 Rufe=20
Snow Drive, Keller, TX 76248 are as follows:=20
Commissioner Barry Smitherman, Public Utility=20
Commission of Texas; Michael "Sid" Moncrief,=20
Mayor of the City of Fort Worth; Lori=20
Panzino-Tillery, Division Chief, Franchise=20
Programs, San Bernardino County; National=20
Association of Telecommunications Officers and=20
Advisors; Sharon King, President and CEO, Dallas=20
Community Television; Alliance for Community=20
Media; Marilyn O'Connell, Senior Vice President,=20
Video Solutions, Verizon; Vernon Drewa, Keller=20
FIOS Internet and TV subscriber; Lea Ann=20
Champion, Senior Executive Vice President, IP=20
Operations, AT&T; Daniel Brenner, Senior Vice=20
President for Law and Regulatory Policy, National=20
Cable & Telecommunications Association; and Joi=20
Philpott, Corporate Vice President of Government=20
Affairs and Franchising Relations, Charter=20
Communications. Can't get to TX today? Live audio=20
coverage of the meeting will be broadcast over=20
the Internet from the FCC's Audio Events web page=20
with open captioning at www.fcc.gov/realaudio.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263742A1.doc
See also --
* Federal regulators hold Texas hearing on video competition
http://www.statesman.com/news/content/gen/ap/TX%5fFCC%5fCable.html

CONSUMERS BENEFIT FROM A LA CARTE
[SOURCE: Federal Communications Commission]
On Thursday, the FCC's Media Bureau released a=20
report that concluded, "Whoops, we goofed." The=20
report finds consumers could be better off under=20
a la carte and explores several a la carte=20
options that could provide substantial benefits=20
to subscribers by increasing their choices in=20
purchasing programming. But not long ago the FCC=20
released a report saying a la carte is no good=20
for consumers. Check the date is this 1984?=20
Thursday's release describes a number of errors=20
in the Booz Allen Hamilton ("Booz Allen") Study=20
that the Media Bureau relied upon to support the=20
conclusion of the earlier report that a la carte=20
is not economical. The report finds that the=20
2004 report also relied upon unrealistic=20
assumptions and presented biased analysis in=20
concluding that a la carte "would not produce the=20
desired result of lower rates for most=20
pay-television households." The new report=20
identifies mistaken calculations in the Booz=20
Allen Study, which was originally submitted by=20
the cable industry for Commission consideration.=20
Booz Allen itself acknowledges the errors, which=20
other economists also have confirmed. The new=20
report explains that the Booz Allen Study failed=20
to net out the cost of broadcast stations when=20
calculating the average cost per cable channel=20
under a la carte. As a result, the Booz Allen=20
Study overstated the average price per cable=20
channel by more than 50 percent. The Booz Allen=20
Study significantly underestimated the number of=20
programming channels that a subscriber could=20
enjoy under a la carte while still achieving=20
savings compared to the subscriber's current=20
multichannel video programming distributor=20
("MVPD") fees. Indeed, correcting for this=20
mathematical error, consumers' bills decreased by=20
anywhere from 3 to 13% in three out of the four=20
scenarios considered in the Booz Allen Study.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263741A1.doc
* Statement from FCC Chairman Kevin Martin:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263746A1.doc
* Links to new report:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.pdf
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.txt
** Regulators making mistakes? A regulatory fix=20
to help consumers save money? We smell a story=20
here and we have the links to prove it --
* FCC Releases 'A La Carte' Report
http://www.njtelecomupdate.com/lenya/telco/live/tb-RWQD1139519069159.html
* FCC Report Supports A La Carte
http://www.broadcastingcable.com/article/CA6305927?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
* FCC Study Boosts a la Carte Pricing
http://www.multichannel.com/article/CA6305989.html?display=3DBreaking+News
(requires subscription)
* FCC: Cable 'a la Carte' Would Save Money
http://news.yahoo.com/s/ap/20060210/ap_en_tv/cable_tv_pricing_4;_ylt=3DA...
9JQazHvG_KujTWwBZBpsaMYA;_ylu=3DX3oDMTA5bGVna3NhBHNlYwNzc3JlbA--
* FCC Says a la Carte Cable Channels Could Cut Prices
http://www.bloomberg.com/apps/news?pid=3D10000087&sid=3DadFW8TZ0V1c0&refer=
=3Dtop_world_news
* =C0 la Carte Pricing May Cut Bills For Cable Customers, FCC Says
http://online.wsj.com/article/SB113949907169169617.html?mod=3Dtodays_us_...
ketplace
(requires subscription)
* FCC Sees Cable Savings in =E0 la Carte
http://www.nytimes.com/2006/02/10/business/media/10cable.html
(requires registration)
* Cable by Channel Could Be Cheaper
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/09/AR200602...
2055.html
(requires registration)
* Study: A la carte cable would be cheaper
http://www.usatoday.com/printedition/money/20060210/1b_alacarte10.art.htm
* Study Finds Savings in Cable Choice
http://www.latimes.com/business/printedition/la-fi-cable10feb10,1,352113...
ory?coll=3Dla-headlines-pe-business
(requires registration)

REACTION TO FCC A LA CARTE REPORT
* Senate Commerce Committee Chairman Ted Stevens=20
(R-Alaska): "If a la carte is not more expensive=20
for consumers, I will support an effort to take=20
such an approach, subject to discussions with=20
providers on the downside of such a process."
http://commerce.senate.gov/newsroom/printable.cfm?id=3D251382
* Kyle McSlarrow, NCTA: "Most studies conclude=20
that a mandated a la carte regime would be more=20
expensive for consumers and result in less=20
diversity in programming. It is disappointing=20
that the updated Media Bureau report relies on=20
assumptions that are not in line with the reality=20
of the marketplace. Over the last 25 years, the=20
American free enterprise system created the most=20
diverse video programming on Earth with the best=20
value for the customer. The marketplace in which=20
cable, satellite, broadcasters and others=20
vigorously compete for customers should decide=20
video offerings, not mandates and price controls=20
imposed by Washington, D.C. The notion that the=20
government knows better how to improve on a=20
competitive marketplace is not supported by the evidence."
http://www.ncta.com/press/press.cfm?PRid=3D668&showArticles=3Dok
* Consumers Union: Senator McCain pledged he will=20
quickly introduce cable choice legislation.=20
"Consumers should praise FCC Chairman Kevin=20
Martin and Senator John McCain for striking at=20
the heart of the cable industry's flawed pricing=20
scheme which forces consumers to buy packages of=20
television channels they don't want and shouldn't=20
have to pay for," said Jeannine Kenney, Senior=20
Policy Analyst for Consumers Union. "Today's=20
action kick starts the national effort to give=20
consumers' wallets a break and allow them more=20
control over their television programming choices=20
and cable bills," added Kenney. Cable companies=20
and broadcasters have fought "a la carte" pricing=20
for years, hiding behind the fallacious argument=20
that channels had to be bundled together to keep=20
all programming afloat. As a result, consumers=20
have been paying for dozens of channels that they=20
never watch. The average household watches only=20
17 channels on cable systems. "In 2004, the FCC=20
issued a staff report based on erroneous=20
assumptions that kept this costly bundling=20
charade going," said Kenney. For example, the old=20
report assumed consumers would watch nearly 25%=20
less television per day if they were allowed to=20
buy only the channels they want to watch.=20
"Today=92s FCC report shreds the foundation of this industry-sponsored dece=
it."
http://www.consumersunion.org/pub/core_telecom_and_utilities/003152.html...
re
http://www.hearusnow.org/other/newsroom/tvradiocable/fccalacartereportsa...
onsumerscablebillscouldbecutby13mccainpledgeslegislationinsupport/
* Center for Creative Voices in Media: "Today=92s=20
bundling system gives Big Media -- the broadcast=20
networks and Big Cable -- a chokehold over=20
America=92s television programming, restricting=20
consumer choice largely to networks owned by=20
broadcast network owners or large cable=20
operators. As the FCC recognizes, an a la carte=20
option would enable consumers to access a wider=20
diversity of programming from additional sources,=20
full of diverse and competing voices and=20
viewpoints =AD and at a lower cost. It will also=20
give consumers the ability to choose to not=20
subscribe to networks on cable and satellite that=20
offend them, eliminating any need for extending=20
broadcast indecency regulations to cable. This=20
will be good not only for creative media artists, but for all Americans. "
http://www.creativevoices.us/php-bin/news/showArticle.php?id=3D150
* Progress & Freedom Foundation:
http://blog.pff.org/archives/2006/02/initial_thought.html
* FCC: Give cable customers choices (from Chicago Tribune)
http://newsblogs.chicagotribune.com/news_theswamp/2006/02/fcc_give_cable...
tml

BOOZ ALLEN DEFENDS STUDY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Consultant Booz Allen Hamilton said it was right=20
the first time when it told the FCC a la carte=20
cable pricing would result in higher prices to=20
consumers and reduce diversity of programming.=20
"In November 2004, the FCC independently=20
corroborated the methodology and conclusions of a=20
report prepared for the FCC's a la carte=20
inquiry," said Booz Allen in a statement. "At=20
that time, other independent economists also=20
corroborated our conclusions. In December 2005,=20
in a letter to the FCC's Chief Economist, we=20
acknowledged -- and corrected -- a mistake in one=20
of our calculations. We shared with the FCC our=20
findings that, after making the appropriate=20
adjustments, our conclusions remain unchanged."
http://www.broadcastingcable.com/article/CA6306307?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

NEWS FROM CONGRESS

LAWMAKERS ABANDON TALKS ON UNIVERSAL SERVICE BILL
[SOURCE: Technology Daily, AUTHOR: David Hatch]
Negotiations between Sens. Conrad Burns (R-MT)and=20
John (Jay) Rockefeller (D-WV) over reforming the=20
Universal Service Fund have collapsed. The two=20
powerful lawmakers had been collaborating for six=20
months to draft a USF bill that might form the=20
foundation of legislation envisioned by Senate=20
Commerce Chairman Ted Stevens. But the bipartisan=20
alliance dissolved early this week. Sen Burns=20
introduced the bill without any co-sponsors. The=20
impasse involving two of the program's strongest=20
advocates highlights the complexities of reaching=20
consensus on revamping the $7.1 billion federal=20
program for subsidizing communications services=20
in rural and low-income areas. Until now,=20
industry observers thought USF legislation would=20
face challenges only in the lower chamber, where=20
House Commerce Chairman Joe Barton often=20
criticizes the fund. Sources said the senators=20
failed to agree on several matters pertaining to=20
carrier contributions and distributions. "We're=20
not able to bridge the goals of the respective=20
constituencies," said a spokesman to Rockefeller.=20
Sen Burns is actively seeking co-sponsors and is=20
open to further discussions with Sen Rockefeller, a source said.
http://www.njtelecomupdate.com/lenya/telco/live/tb-DYXQ1139516193803.html
* Burns launches USF initiative
http://telephonyonline.com/regulatory/news/burns_usf_initiative_020906/
* USTelecom Encouraged by New Proposal to Reform Universal Service
http://www.ustelecom.org/news_releases.php?urh=3Dhome.news.nr2006_0209

BROADBAND: A LINK TO THE OUTSIDE WORLD
[SOURCE: The Hill, AUTHOR: Sen Conrad Burns]
[Comentary] While the Telecom Act promised=20
industry and technology convergence, only=20
recently is it materializing =97 with telephone,=20
cable and wireless companies invading one=20
another=92s turf. Cable companies are offering=20
phone service over the Internet. Telephone=20
companies are offering video service. New=20
technologies and competition have brought=20
consumers a variety of choices for local,=20
long-distance, video, wireless and Internet=20
services, and many companies are offering bundled=20
services. The radical transformation of the=20
industry has led some to call for a rewrite of=20
the Telecom Act. Central issues in the debate=20
today are the reform of the Universal Service=20
Fund (USF), reform of intercarrier compensation,=20
franchising issues for video providers and net=20
neutrality. As Congress begins working to rewrite=20
telecom laws, my focus will be encouraging=20
broadband deployment in every corner of the=20
United States and preserving and improving USF.=20
In revising USF to adapt to the changing=20
technology landscape, it=92s essential to maintain=20
commitment levels to USF programs to foster the=20
continued availability of telecom and advanced=20
services in rural communities and to strengthen and improve the overall fun=
d.
http://www.hillnews.com/thehill/export/TheHill/News/Frontpage/020906/ss_...
ns.html

PROSPECTS DIM FOR FRANCHISE BILL THIS SESSION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Prospects may be dimming for federal legislation=20
creating a national video franchising scheme. In=20
a policymaker interview scheduled to air on=20
C-SPAN's Communicator series Saturday (6:30=20
p.m.), Verizon executive Tom Tauke, himself a=20
former Member of Congress, said that while he=20
believes there is "very strong" support for=20
national legislation, there may not be enough=20
days left in the legislative session.
http://www.broadcastingcable.com/article/CA6306356?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

SAVING THE INTERNET
[SOURCE: The Hill, AUTHOR: Rep. Rick Boucher (D-VA)]
[Commentary] Not all broadband providers are=20
building out fiber to the home or fiber to the=20
neighborhood with reprovisioned terminals, and=20
until such connections are available everywhere=20
an interim solution is needed. A simple rule=20
would assure that broadband providers do not=20
disadvantage unaffiliated content while also=20
giving them the program quality assurances they=20
need to launch their services. This result is=20
achieved through clear prohibitions on broadband=20
providers: (1) blocking, interfering with or=20
impairing the ability of their customers to=20
access lawful content, applications and services=20
on the Internet or attaching their choice of=20
devices to the network and (2) favoring=20
themselves or their affiliates in the allocation,=20
use or quality of Internet-access service. A=20
broadband provider could prioritize a category of=20
its own bits, such as video, if it also=20
prioritized all video bits traveling over its=20
pipe at no cost to other service providers so=20
that consumers have a true choice between the=20
broadband provider=92s video service and competing=20
video services. Broadband providers could take=20
reasonable and nondiscriminatory steps to manage=20
the network for technical efficiency, protect=20
network security and prevent illegal activity.=20
This simple, straightforward approach would=20
preserve consumer choice and the openness that is=20
the hallmark of the Internet by preventing=20
broadband providers from erecting tollbooths on=20
the network, while assuring that they can offer a=20
robust, reliable and competitive video=20
programming service. These guarantees would=20
facilitate innovative new Internet-based products=20
and services by both broadband providers and=20
providers at the edge of the network without creating a multi-track Interne=
t.
http://www.hillnews.com/thehill/export/TheHill/News/Frontpage/020906/ss_...
cher.html

FRESH US OUTRAGE AHEAD OF CHINA INTERNET HEARINGS
[SOURCE: Reuters, AUTHOR: Joel Rothstein and Eric Auchard]
U.S. Internet companies faced bipartisan=20
criticism in the Congress on Thursday amid a=20
rising controversy over Yahoo Inc.'s alleged role=20
in the Chinese government's imprisonment of a=20
second dissident. "I don't like any American=20
company ratting out a citizen for speaking out=20
against their government," Rep. Tim Ryan, an Ohio=20
Democrat and member of the House Human Rights=20
Subcommittee, told Reuters. "This is the tip of=20
the iceberg of a very oppressive regime that we=20
have almost become accustomed to in America,"=20
said Rep. Chris Smith, a Republican and chairman=20
of the House Human Rights Subcommittee. The storm=20
over Western media companies' compliance with=20
Chinese policies comes before a hearing next week=20
by Smith's committee. Lawmakers from both parties=20
are expected to grill representatives from Yahoo, Google, Microsoft and Cis=
co.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-02-10T075233Z_01_N0917515_RTRUKOC_0_US-CHINA-INTERNET.xml

FEINGOLD REQUESTS PAYOLA HEARING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen Russ Feingold (D-WI) has asked the ranking=20
members of the Senate Commerce Committee to both=20
raise the payola issue at a planned FCC oversight=20
hearing, and to hold a separate hearing devoted=20
to it. The request follows reports that New York=20
State Attorney General Elliot Spitzer has=20
subpoenaed a number of top radio groups in his=20
ongoing investigation of pay-for-play policies in=20
the music industry. both BMG and Warner Music=20
have settled payola complaints with Spitzer, and=20
he has sent the evidence in those cases to the=20
FCC, which is conducting its own investigation.=20
Sen Feingold has more than a passing interest in=20
the subject. Sen Feingold wants to give the FCC=20
more clout in dealing with any violations it may=20
find, as well as build disincentives into the regulatory framework.
http://www.broadcastingcable.com/article/CA6306388?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
See also --
* Free Press Calls For Get-Tough Payola Policy
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Media reform group Free Press wants the FCC to=20
take a stronger stance against payola after=20
hearing news of New York State Attorney General=20
Elliot Spitzer subpoenaing of nine radio groups=20
in his ongoing investigation of payola in the=20
music industry. "The FCC needs to take a stronger=20
stance against payola abuses. It has been 40=20
years since enactment of the payola statutes,"=20
said the group in a statement. "It=92s time the FCC=20
and Congress determined whether the existing=20
rules adequately stop payola in the age of big radio."
http://www.broadcastingcable.com/article/CA6306377?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
* 100s of Radio Stations in Payola Probe
http://www.abcnews.go.com/Business/story?id=3D1600966&page=3D1&ad=3Dtrue

MEDIA OWNERSHIP

NAB'S REHR SPELLS OUT OWNERSHIP PRIORITIES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
National Association of Broadcasters President=20
David Rehr has sent a letter to the FCC outlining=20
the association's wish list for reforms to rules=20
he says "impair broadcasters' ability to compete=20
in a digital multi-channel marketplace." Topping=20
the list, and reiterating NAB's long-held=20
position, is "reforming" the broadcast/newspaper=20
crossownership ban -- which currently does not=20
allow even one station to be co-owned with a=20
newspaper in the same market, save for some 70 or=20
80 grandfathered combos--and allowing duopolies=20
(ownership of two stations by one entity) in=20
medium and smaller markets. They are already=20
allowed in large markets. NAB argues that the=20
expense of the DTV transition (which the NAB has=20
advocated for for many, many years), reductions=20
in network compensation to stations, and=20
increased competition from cable and satellite=20
have created financial pressures on smaller=20
stations that could be ameliorated if they were=20
allowed to combine resources with other media outlets.
http://www.broadcastingcable.com/article/CA6306059?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)
See NAB letter:=20
http://www.nab.org/newsroom/pressrel/Filings/MartinLetterOwnership2-8-06...

ABC SWAPS A FAMOUS SPORTSCASTER FOR A COVETED CARTOON
[SOURCE: Wall Street Journal, AUTHOR: Joe Flint=20
joe.flint( at )wsj.com and Merissa Marr]
In perhaps the first deal of its kind, ABC/Disney=20
has traded a sportscaster, Al Michaels, to NBC=20
for veteran cartoon Oswald the Lucky Rabbit, two=20
minor leaguers and a buck of balls. Disney=20
executives have released Michaels from his=20
contract, but they also extracted a series of=20
business concessions from their rival, General=20
Electric Co. One was the return of Oswald the=20
Lucky Rabbit, a cartoon character created by Walt=20
Disney in 1927 that was a precursor to Mickey=20
Mouse. The rights to Oswald belonged to Universal=20
Studios and Disney had always coveted this piece=20
of its history. NBC acquired Universal two years=20
ago. Disney got more than just a rabbit in the=20
deal. NBC agreed to promote ESPN's "Monday Night=20
Football" during its own Sunday night game,=20
putting the network in the uncomfortable position=20
of hyping a rival network. NBC agreed to sell=20
ESPN the Friday rights, and rebroadcast rights,=20
to golf's biennial Ryder Cup through 2014. NBC=20
keeps the live weekend coverage. ESPN is paying=20
NBC about $12 million for those rights. NBC also=20
loosened its tight hold on highlight footage from=20
the Olympics, which begin tonight. In the past,=20
NBC would allow ESPN and ESPN2 to use only six=20
minutes of footage a day combined and had a=20
window of only 24 hours to show it. Now they will=20
get six minutes on each of their news shows, and a 48-hour window.
http://online.wsj.com/article/SB113954127077170398.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

A TELECOM MONOPOLY CRIPPLES MEXICO
[SOURCE: Wall Street Journal, AUTHOR: Mary Anastasia O'Grady]
A decade after supposed deregulation, Mexico's=20
Telmex has 95% of the country's fixed-line=20
market, resulting in relatively high telephony=20
prices and a sub-optimal ratio of telephones to=20
Mexican homes, particularly in rural areas.=20
Telmex controls almost all data traffic and=20
consumer choice in broadband, Internet and voice=20
over Internet services is practically=20
non-existent. It's still not clear whether the=20
wireless market can develop competitively.=20
National Action Party presidential candidate=20
Felipe Calderon is promising that he will tackle=20
the monopoly problem but some doubt whether he=20
will be able to summon up the political muscle=20
even if elected. Telmex has been masterful in=20
protecting its turf. In crushing competition, the=20
company has had help from the government of PAN=20
President Vicente Fox and from the Institutional=20
Revolutionary Party (PRI) President Ernesto Zedillo before him.
http://online.wsj.com/article/SB113954042025370380.html?mod=3Dtodays_us_...
nion
(requires subscription)

INTERNET/BROADBAND

SEIDENBERG: IT'S ABOUT COST, NOT BLOCKING
[SOURCE: Multichannel News, AUTHOR: Mike Farrell]
Network Neutrality, Verizon CEO Ivan Seidenberg=20
said Thursday, is more of a cost issue than of=20
the potential blocking of certain Web sites on=20
the Internet. Seidenberg said that in the=20
broadband world, as users =93camp out=94 on the=20
Internet more, Verizon needs backbone facilities=20
to carry the traffic across the country. =93If you=20
buy your DSL [digital subscriber line] from FiOS,=20
you'll never have any problem with the bandwidth=20
from your house to the first point in the=20
network,=94 Seidenberg said. =93But the issue is that=20
the backbone needs to be built. Who is going to=20
build it?=94 Seidenberg added that the options are=20
either that the Internet-applications companies=20
like Google foot the bill, or that it falls on=20
Verizon with no regard to how the company will=20
recoup that cost. =93I think where we are now is=20
one big ruse to shifting costs and hiding behind=20
the notion that a company like Verizon will block=20
traffic so therefore you better make sure that=20
these guys can't block traffic and give everybody=20
in the world free access to broadband services,=94=20
Seidenberg said. =93I think we have to be real=20
careful. We won't be quiet on this point.=94
http://www.multichannel.com/article/CA6306370.html?display=3DBreaking+News
(requires subscription)

CHARGE E-MAILERS, BUT KEEP PIPELINE OPEN
[SOURCE: Washington Post, AUTHOR: Rob Pegoraro]
[Commentary] Another take on the Net Neutrality=20
debate -- It comes down to notions of ownership=20
and boundaries: A company has every right to=20
treat its mail server as its own territory, to=20
bar some from accessing it or to charge others=20
for that access. But the same principle doesn't=20
quite apply to the issue of accessing a larger=20
piece of the company's total Internet pipeline.=20
That's because in only the first case do you have=20
a problem of trespassing that requires putting up=20
gates or levying tolls. E-mail is unique among=20
the Internet's core applications in that it comes=20
unsolicited. You don't get to choose whose mail=20
will land in your inbox. As a result, it's the=20
most abused Internet utility. Companies such as=20
AOL, AT&T, Comcast, Google, Verizon and Yahoo=20
spend vast sums of money to receive and sort out=20
messages that, in most cases, their subscribers=20
never asked for and never wanted. The cost of=20
inaction isn't just a glut of ads for drugs, porn=20
and get-rich-quick cons, but the real risk of=20
losing the ability to employ e-mail for any=20
productive or worthwhile use. Internet service=20
providers have taken a variety of measures to try=20
to deal with that, such as automated filtering of=20
incoming mail, combined with an outright refusal=20
to accept mail from sites on blacklists of known=20
or suspected spammers. But when some of the=20
largest, most deeply entrenched Internet service=20
providers in the United States alternate between=20
griping about how other firms sponge off their=20
bandwidth and suggesting that they'd merely give=20
Web sites the chance to buy higher-priority=20
access, we have a different situation. The first=20
idea, as articulated by Verizon's deputy general=20
counsel, John Thorne, this week -- that a company=20
like Google has been "enjoying a free lunch" by=20
not paying any share of Verizon's costs -- is=20
transparently ridiculous. Google and all the=20
other high-traffic sites aren't getting anything=20
free. They pay -- heavily -- for bandwidth at=20
their end. Second, these mainstream Internet=20
service providers should think about what,=20
exactly, their customers are going online for in=20
the first place. To use the great search engine=20
Verizon's developed? To get directions and=20
satellite photos using AT&T's brilliant mapping=20
site? To buy songs at BellSouth's wildly popular=20
music-download store? Oh, wait: None of those things exist!
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/09/AR200602...
2141.html
(requires registration)
See Also --
* Quality of Service: A Quality Argument?
http://www.freedom-to-tinker.com/?p=3D973

SATELLITE SERVICES

THE STRANGE CASE OF SATELLITE RADIO
[SOURCE:Center for American Progress, AUTHOR: Mark Lloyd]
[Commentary] So just what is satellite radio? Why=20
can it air Opie and Stern without risk of being=20
fined by the FCC? First, for many Americans=20
satellite radio is not delivered to them directly=20
via satellite. It is true that signals are=20
bounced off satellites , but =93satellite=94 radio is=20
made possible by local broadcast transmitters,=20
what the FCC calls =93repeaters.=94 In other words,=20
this is a national system that combines satellite=20
and earth-based transmitters=97a system not=20
entirely different than what Infinity or Clear=20
Channel used to broadcast The Howard Stern Show=20
from New York City to Johnnie=92s disgruntled=20
parents home in Houston, Texas. But the FCC does=20
not consider Satellite Digital Audio Radio=20
Service (SDARS) a broadcast service, and so SDARS=20
operators are not subject to broadcast=20
regulations, such as the prohibitions against=20
indecent speech. Although SDARS systems do=20
utilize localized terrestrial transmitters to=20
amplify their signal and fill gaps in satellite=20
coverage, the authority for use of these=20
terrestrial repeater networks is temporary, and=20
SDARS operators are prohibited from originating=20
programming at their terrestrial repeaters. The=20
FCC does not mean by this that broadcast licenses=20
are, by contrast, permanent. Nor does the FCC=20
mean that the local XM and SIRIUS transmitters=20
are prohibited from carrying local programming.=20
Indeed, XM and SIRIUS carry local weather and=20
traffic reports in major markets. It=92s just that=20
those reports must be made available nationally.=20
So while SIRIUS can boast offering =93original=20
programming =97 not recycled radio,=94 the FCC rules=20
are designed to discourage SDARS operators from=20
offering local communities local programming,=20
such as an original report on a local town=20
meeting. So while it is true that Stern can utter=20
obscenities on XM, it is not true that the FCC=20
does not regulate speech on satellite radio. The=20
rationale behind the FCC=92s strangely=20
anti-democratic disincentive against local speech=20
is to protect the core revenue base of broadcast=20
radio =96 local advertising. And local advertising=20
is sold because local broadcast stations target=20
local audiences. But the combination of radio=20
consolidation and competition for local viewers=20
from national services like satellite radio=20
create disincentives for local radio stations to=20
produce local programming to attract local=20
advertisers. Well-produced national=20
satellite-syndicated news, weather and=20
entertainment programs are much cheaper to=20
broadcast than original local programs, such as a=20
local town meeting. And, despite what the=20
broadcast industry calls onerous public interest=20
obligations, the increasing syndication of=20
national programming such as Rush Limbaugh or Air=20
America on local broadcast radio is also fine with the FCC.
http://www.americanprogress.org/site/pp.asp?c=3DbiJRJ8OVF&b=3D1416697

NAB CITES VICTORIES IN 'WHITE AREA' REPORT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The National Association of Broadcasters loves=20
the conclusions of the Copyright Office that=20
basically concurs with the NAB that 1) the=20
current FCC standard for determining the quality=20
of a signal is best, 2) that no household should=20
get a distant signal if it can already receive an=20
adequate local signal, 3) that no new model to=20
predict digital signal strength should be adopted=20
before more FCC testing, 4) that the money DBS=20
operators pay for the imported signal is not=20
"fair market value," 5) that syndicated=20
exclusivity should apply to all distant signals,=20
6) and that DBS companies should not have to pay=20
separate copyright fees for importing local stations into local markets.
http://www.broadcastingcable.com/article/CA6306366?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

PUBLIC BROADCASTING

OFFICIAL RESIGNS PUBLIC TV POST
[SOURCE: New York Times, AUTHOR: Stephen Labaton & Elizabeth Jensen]
Michael Pack, the top television executive at the=20
Corporation for Public Broadcasting, announced on=20
Thursday that he would be stepping down. This is=20
the latest in a string of departures of officials=20
and consultants who played central roles in an=20
effort by conservatives to bring what they viewed=20
as more balance to public television and radio.=20
He controlled a $70 million production budget and=20
was described by the official who hired him as a=20
conservative Republican. He chose to resign after=20
Patricia S. Harrison, the corporation's new=20
president, forced him to decide between renewing=20
his employment contract and exercising a=20
soon-to-expire option that gives him $500,000 to=20
produce a documentary. Since being named=20
president of the corporation last June, Ms.=20
Harrison, a former co-chairwoman of the=20
Republican National Committee, has attempted to=20
tamp down a debate over balance in programming=20
that has threatened to undermine financial=20
support for public broadcasting from both=20
Congress and private sources. Public broadcasting=20
officials who had been at odds with the=20
corporation said the personnel changes could=20
shore up support among Republican moderates and=20
Democrats, important traditional allies in budget=20
fights. The White House this week proposed a cut=20
of more than $100 million, or more than 25=20
percent, in the corporation's budget.
http://www.nytimes.com/2006/02/10/arts/television/10broa.html?hp&ex=3D11...
34000&en=3Dd4768621da4480be&ei=3D5094&partner=3Dhomepage
(requires registration)
CPB press release:
http://www.cpb.org/pressroom/release.php?prn=3D526

QUICKLY

GROUPS MAP MEDIA'S INFLUENCE ON ELECTIONS
[SOURCE: Associated Press, AUTHOR: Rick Vecchio]
Good-government groups are using the Internet and=20
interactive mapping technology to chart how mass=20
media affect elections - using Peru's rugged,=20
village-dotted countryside as a testing ground.=20
The project - the brainchild of the Carter=20
Center, the Canadian Foundation for the Americas=20
and the University of Calgary - aims to support=20
campaign-finance reform and democracy-building=20
efforts with an interactive Web page. After=20
mapping out last month's parliamentary elections=20
in Canada, the groups unveiled a Peruvian version=20
Thursday at a seminar attended by representatives=20
from government agencies, nonprofit civic=20
organizations and local electoral and media watchdog groups
http://www.mercurynews.com/mld/mercurynews/business/technology/13837816.htm

HAPPY 10TH BIRTHDAY AND BON VOYAGE, TELECOM ACT
[SOURCE: News.com, AUTHOR: Matt Kibble, FreedomWorks]
[Commentary] This week marks the 10-year=20
anniversary of the Telecommunications Act of=20
1996, which sought to create an open and=20
competitive market. That competition is emerging,=20
but not in ways the regulators anticipated. That=20
10-year-old technology regulations are horribly=20
outdated will surprise no one familiar with the=20
pace at which technological change comes at us=20
today. In cybertime, scientists and entrepreneurs=20
are repeatedly proving Moore's law to be true,=20
which predicts that the rate of technological=20
development will double every 18 months, making=20
10 years a technological eternity. However, 10=20
years in regulatory time is a blink of the=20
eye--and that's exactly why the rules are in need of major reform.
http://news.com.com/Happy+10th+and+bon+voyage%2C+Telecom+Act/2010-1028_3...
37069.html?tag=3Dfd_carsl

FAMILY ASSOCIATION HEAD URGES COMPLAINTS AGAINST 'LAS VEGAS'
[SOURCE: TVWeek, AUTHOR: Doug Halonen]
Donald Wildmon, head of the Tupelo, Miss.-based=20
American Family Association, is urging=20
association members to file complaints at the=20
Federal Communications Commission alleging that a=20
Feb. 6 episode of NBC's "Las Vegas" included a=20
scene inside a strip club that violated the agency's indecency prohibitions.
http://www.tvweek.com/news.cms?newsId=3D9375
(requires free registration)
See ARA alert: http://www.afa.net/lasvegas.asp

A JOURNALISM MANIFESTO
[SOURCE: AlterNet, AUTHOR: G. Pascal Zachary, Dvorak Uncensored]
[Commentary] A Time and Wall St. Journal vet says=20
it's time to admit to biases, dump the=20
'objectivity' and start getting it right.
http://www.alternet.org/mediaculture/31775/

BID-RIGGING COSTS FIRM IN E-RATE FRAUD
[SOURCE: Internetnews.com, AUTHOR: Roy Mark]
The federal government's ongoing probe into=20
E-Rate fraud nabbed another conviction Wednesday=20
with the guilty plea of California-based Premio,=20
which agreed to $400,000 in criminal fines and=20
$1.3 million in restitution as part of the civil=20
settlement. Premio, which makes and sells=20
computers, servers, software and other computer=20
equipment, admitted to collusion, bid-rigging and mail fraud.
http://www.internetnews.com/article.php/3584016

APPLE MOVES INTO UNIVERSITY PODCASTS
[SOURCE: Financial Times, AUTHOR: Rebecca Knight]
Apple Computer has introduced a free service that=20
enables colleges and universities to put course=20
lectures online using Apple=92s iTunes software and=20
allows students to skip class. Apple has worked=20
with six US universities on the pilot project for=20
more than a year and has recently invited other=20
universities to participate. ITunes U allows=20
students to download podcasts and =91vodcasts=92=20
(audio and visual files) onto their computers and=20
iPods so they can listen to and watch the=20
recorded lectures anywhere, any time. Many=20
institutions already offer podcasts of lectures=20
through their internal network. Apple=92s new=20
service offers a customized version of the iTunes=20
software that enables administrators to manage=20
students=92 access to the online materials. The new=20
service could make students regular visitors to=20
iTunes, where songs are sold for 99 cents apiece=20
and television shows are sold for $1.99 each.
http://news.ft.com/cms/s/f13f6fc6-99a5-11da-a8c3-0000779e2340.html
(requires subscription)

ADVERTISERS MAY FACE PUBLIC HUMILIATION OVER ADWARE
[SOURCE: C-Net|News.com, AUTHOR: Joris Evers]
Companies could find themselves put up for public=20
humiliation by the Federal Trade Commission if=20
they continue to advertise through insidious=20
ad-serving software. Such a move might help in=20
the battle against adware, FTC Commissioner Jon Leibowitz said Thursday.
http://news.com.com/Advertisers+may+face+public+humiliation+over+adware/...
0-7349_3-6037662.html?tag=3Dnefd.top

FBI, SEC PROBE WEB SITES OFFERING LARGE RETURNS FOR LOOKING AT ADS
[SOURCE: Wall Street Journal, AUTHOR: Mark Maremont mark.maremont( at )wsj.com]
Last spring, a Web site called 12daily-Pro.com=20
began offering viewers an amazing financial deal:=20
a 12% daily return on membership fees. All they=20
needed to do was to view a dozen advertisements a=20
day on the Web site, the company said. The site=20
would then pay returns to visitors based on how=20
much they invested in membership "upgrades." Now=20
federal and state authorities are investigating=20
12dailyPro and sites making similar offers as=20
possible Internet-era variations on a classic=20
Ponzi scheme. Named for Charles Ponzi, an Italian=20
immigrant to the U.S. who gained notoriety early=20
in the 20th century, a Ponzi scheme is a fraud=20
that promises outsize returns to investors but=20
pays them with money from subsequent investors,=20
rather than revenue generated by business.
http://online.wsj.com/article/SB113953819846670333.html?mod=3Dtodays_us_...
e_one
(requires subscription)

LITTLE RHYME OR REASON TO PICKING HIT SONGS: STUDY
[SOURCE: Reuters, AUTHOR: Maggie Fox]
A study shows that people tend to like the music=20
that most people like. Go figure.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-02-09T204201Z_01_N09393364_RTRUKOC_0_US-SCIENCE-HITS.xml
--------------------------------------------------------------
...and we're outta here. Have a great weekend.
--------------------------------------------------------------
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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