March 2006

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INTERNET/BROADBAND/TELECOM
Verizon Gets Break On Business Broadband
Stevens Weighs FCC enforcing Net Neutrality
Customer is king in new telecom era
Helping Bridge the Digital Divide
US cities warned on long-term costs of free wireless

TELEVISION
Benton Answers Adelstein's Call to Action
Public Failing Public TV
Verizon, CBS Sign Retrans Deal
Franchising Letter From Hispanic Groups Questioned
Charter Chief Sees =C0 La Carte Looming
Advertisers Sit Out Cable A La Carte Distribution Battle
A fine mess at the FCC
Experts Rip 'Sesame' TV Aimed at Tiniest Tots

OWNERSHIP
The Turbulent World of News

QUICKLY -- MAP Queries FCC On Possible Rule=20
Violation; Chinese Regulators Caution TV Talent=20
Shows; CDT Report Identifies Large Corporate Adware Funders

INTERNET/BROADBAND/TELECOM

VERIZON GETS BREAK ON BUSINESS BROADBAND
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Despite the opposition of two of the four sitting=20
FCC commissioners, the FCC Monday granted Verizon=20
relief from regulations on the provision of=20
high-speed broadband service to large business=20
customers. Verizon filed the so-called=20
"forbearance" petition in December 2004 per the=20
1996 Telecommunications act, which allows the FCC=20
to exempt companies from regulations under=20
certain circumstances. (If the Commission does=20
not deny the petition in a year for failure to=20
meet the criteria for forbearance, it is granted=20
by default.) Verizon promised to continue to pay=20
into the Universal Service Fund for the business=20
services. That fund helps pay for broadband=20
roll-out to poorer or hard-to-reach areas.=20
Verizon also said it would continue to make the=20
services available was "wholesale common carrier=20
services." The supporting commissioners were=20
deregulatory Republicans FCC Chairman Kevin=20
Martin and Commissioner Deborah Taylor Tate, who=20
praised the outcome, saying: "Promoting broadband=20
deployment is one of the highest priorities of=20
the FCC. To accomplish this goal, the Commission=20
seeks to establish a policy environment that=20
facilitates and encourages broadband investment,=20
allowing market forces to deliver the benefits of=20
broadband to consumers. Today, we take another=20
step in establishing a regulatory environment=20
that encourages such investments and innovation."=20
Commissioners Michael Copps and Jonathan=20
Adelstein were not pleased with either the=20
outcome or the process that produced. Copps put=20
his problems with the latter this way: "As a=20
legal matter this approach is suspect. There is=20
no appealable Order. There is no document, no=20
stitch of analysis, no trace of discussion,=20
nothing that a court can use to gauge where the=20
Commission is coming from. And by failing to act=20
through a normal proceeding, the Commission=20
jeopardizes many Congressional policies that are=20
at the core of its statutory duties. I find no=20
basis to support an approach that puts so much at risk."
http://www.broadcastingcable.com/article/CA6317345?display=3DBreaking+News
* FCC Press Release
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264436A1.doc
* Joint Statement Martin & Tate:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264436A2.doc
* Copps Statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264436A3.doc
* Adelstein Statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264436A4.doc
Additional coverage --
* FCC Deregulates Verizon's Big-Business Market
http://online.wsj.com/article/SB114289216601003318.html?mod=3Dtodays_us_...
e_one
* Verizon High-Speed Services Deregulated
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/AR200603...
1527.html

SENATOR WEIGHS FCC ENFORCING NET NEUTRALITY
[SOURCE: Reuters]
Senate Commerce Committee Chairman Ted Stevens on=20
Monday said he is considering a mechanism in=20
which the Federal Communications Commission would=20
be charged with ensuring that consumers can go=20
wherever they choose on the Internet or run any=20
Internet-based application. The Alaska Republican=20
said at a conference sponsored by communications=20
companies that the issue, dubbed network=20
neutrality, is one of the most difficult for=20
lawmakers to reach a consensus on as they craft=20
legislation aimed at overhauling U.S.=20
communications laws. "Net neutrality is one of=20
the most difficult issues our committee faces in=20
this process," he told the conference sponsored=20
by trade association Comptel, which represents=20
communications service providers and suppliers.=20
"I think there are more differences on our=20
committee on this one issue than any other issue."
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-03-21T015208Z_01_N20276235_RTRUKOC_0_US-TELECOMS-INTERNET-NEUTRALIT=
Y.xml

CUSTOMER IS KING IN NEW TELECOM ERA
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
CEOs kicking off the TelecomNext trade show in=20
Las Vegas on Monday said that the consumer is the=20
most important catalyst in the rapidly changing=20
telecommunications market, but they also=20
cautioned that there are many challenges still=20
ahead. During a two-hour keynote session, CEOs=20
from Verizon Communications, Disney, Time Warner=20
Cable and NTT told a packed audience of=20
conference attendees that the future of telecom=20
lies in the hands of consumers who nowadays have=20
more choices when it comes to the content and=20
services they subscribe to and how they use them.=20
"We're seeing a great shift in how consumers=20
spend money, and our business models need to be=20
flexible," said Robert Iger, CEO of Disney. "It=20
used to be said that content was king, but the consumer is king."
http://news.com.com/Customer+is+king+in+new+telecom+era/2100-1037_3-6051...
.html?tag=3Dnefd.top

HELPING BRIDGE THE DIGITAL DIVIDE
[SOURCE: Wall Street Journal, AUTHOR: Joi Preciphs joi.preciphs( at )dowjones.co=
m]
It is hard to get a decent-paying job if you=20
can't use a computer. But with hectic lives and=20
transportation problems, it is often a struggle=20
for low-wage workers to find time for classroom=20
training or ways to get there. So with a federal=20
grant, New Jersey state officials in 2001 piloted=20
a program that gave low-income mothers who had=20
been working for at least four months laptops,=20
printers and Internet access so they could do=20
computer and job-skills training from home over=20
the Internet. There was a bonus offer -- the=20
computer was theirs to keep if they passed a=20
skills test at the end of a year. The results=20
have been impressive: 92% of the 128 women in the=20
first class finished, and those who finished=20
managed an average 14% pay increase. Fifteen went=20
on to college or community college. The state has=20
since expanded the program to seven of its 29=20
One-Stop Career Centers, and opened it to men as=20
well. Now, a handful of other states are copying the program.
http://online.wsj.com/article/SB114290635409003678.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

US CITIES WARNED ON LONG-TERM COSTS OF FREE WIRELESS
[SOURCE: Financial Times, AUTHOR: Kevin Allison]
Municipal wireless experts are urging cities to=20
think twice before rushing to install free=20
wireless networks paid for by advertising amid=20
concerns that they may not be sustainable in the=20
long term. =93I think it=92s a very dangerous thing=20
for the industry in terms of [cities] jumping on=20
the free bandwagon,=94 said one consultant involved=20
in wireless projects in San Francisco and other=20
big cities. =93These networks need to be=20
financially stable for the long term, and there=20
are still many questions about whether=20
advertising will work.=94 Experts emphasized that=20
free networks could generate unexpected costs,=20
including the cost of dismantling a network if=20
its business model fails. They also warned that=20
economic development could be thwarted if free=20
networks failed to raise the revenue needed for=20
programmes to provide the poor with computers and other essential tools.
http://news.ft.com/cms/s/0336510a-b854-11da-bfc5-0000779e2340.html
(requires subscription)

TELEVISION

BENTON ANSWERS ADELSTEIN'S CALL TO ACTION
[SOURCE: Benton Foundation]
On March 15, FCC Commissioner Jonathan S.=20
Adelstein delivered a Call to Action, asking=20
government and the TV industry to reach out and=20
educate every American about the DTV transition.=20
The goal is to let every American know "what=92s in=20
it for me?" On March 20, Charles Benton wrote,=20
"When educating the public about the DTV=20
transition, there is no need to stop short with a=20
focus on technology, when there is so much more=20
at stake." He suggests any DTV Taskforce also=20
educate the public about their stake and right to=20
participate in proceedings that define how=20
broadcasters must serve local communities in=20
return for valuable spectrum licenses.
http://www.benton.org/benton_files/Adelstein.doc

PUBLIC FAILING PUBLIC TV
[SOURCE: Pittsburgh Post-Gazette, AUTHOR: Mark Roth]
One in every 10 people who watch Pittsburgh's=20
WQED is a contributing member. If 2 in 10=20
contributed, the station's financial woes would=20
disappear. But that's unlikely to happen. The=20
number of public TV subscribers in America has=20
fallen from 7.2 million in 2000 to 6.5 million in=20
2004, the most recent statistics available,=20
according to the Corporation for Public=20
Broadcasting. With all the pressures facing=20
stations, it's easy to understand why public=20
broadcasting advocates have hoped for years that=20
Congress would set up a trust fund to provide=20
them with secure, stable funding that would be=20
immune from political pressures and ideological=20
debates. But Dennis Haarsager, general manager of=20
the public TV stations owned by Washington State=20
University, said he's not sure many members of=20
Congress support the trust fund idea. "In=20
general," he said drily, "legislators like to=20
have control over the money they appropriate."=20
Under the annual appropriations process, the=20
Corporation for Public Broadcasting now provides=20
about $266 million, or only about 13 percent of=20
public TV's total budget. "I think people=20
sometimes think that once they sign their tax=20
returns, we're taken care of," said Deborah=20
Acklin, WQED Multimedia's general manager. "But=20
we don't get most of our money from the government."
http://www.post-gazette.com/pg/06079/673306.stm
See also --
* NPR is Commercial Radio
http://www.audioactivism.org/2006/03/20/npr-is-commercial-radio/

VERIZON, CBS SIGN RETRANS DEAL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Verizon and CBS have struck a=20
retransmission-consent deal that includes analog=20
TV-station carriage, digital multicast channels,=20
HDTV, and video on demand (VOD) --both network=20
and local VOD content, primarily news. Getting=20
VOD play on the telco's FiOS video system will be=20
CSI, Survivor and NCIS, among other shows. The=20
VOD will be available for no extra cost above=20
FiOS service. Verizon had already been carrying=20
the CBS stations per a "special" agreement. When=20
Verizon launched its video service, it made a=20
deal with CBS to carry its stations in the=20
markets where it was launching. Leslie Moonves,=20
President and CEO, CBS, had told analysts in late=20
February to look for a big retransmission-consent=20
deal in the near future. This appears to have been it.
http://www.broadcastingcable.com/article/CA6317143?display=3DBreaking+News
* Verizon Will Pay to Run CBS Shows on New Service
http://online.wsj.com/article/SB114290242967603589.html?mod=3Dtodays_us_...
ketplace

FRANCHISING LETTER FROM HISPANIC GROUPS QUESTIONED
[SOURCE: Technology Daily, AUTHOR: David Hatch]
Latino groups sent a letter to top Senate=20
Commerce Committee lawmakers urging=20
video-franchising relief for the Bell=20
telecommunications firms, the appeal appeared to=20
be on behalf of Hispanic Americans. The groups=20
are part of the National Latino Media Council.=20
But critics said the letter also was on behalf of=20
the Bell firms AT&T and Verizon Communications,=20
which have financial and business ties to many of=20
the signatories. Among the signers was the=20
National Hispanic Media Coalition, which became a=20
client of the Washington-based lobbying firm=20
Mickey Ibarra and Associates on Feb. 23. Ibarra=20
is a registered lobbyist for Verizon and=20
Consumers for Cable Choice, which is funded partly by Bell companies.
http://www.njtelecomupdate.com/lenya/telco/live/tb-SJVD1142887133785.html

CHARTER CHIEF SEES A LA CARTE LOOMING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Charter Communications President Neil Smit says=20
he believes some form of =E0 la carte service is=20
coming, so he advises the industry, rather than=20
Washington, to come up with a plan. "Something=20
will happen," he told an audience of cable=20
marketers at a Cable Television Public Affairs=20
Association convention panel session in=20
Washington Monday. He didn't know whether it=20
would come from Washington or the industry, but=20
said he preferred the latter. He pointed to the=20
fact that the industry was getting it from the=20
right and left on the issue of unbundling its=20
service and selling individual channels to=20
consumers, with indecency driving calls from=20
conservatives for more content control, and from=20
liberals calling for more value and choice.
http://www.broadcastingcable.com/article/CA6317167?display=3DBreaking+News

ADVERTISERS SIT OUT CABLE A LA CARTE DISTRIBUTION BATTLE
[SOURCE: AdAge, AUTHOR: Abbey Klaassen]
The cable industry is charging back against the=20
Federal Communication Commission=92s endorsement of=20
a la carte cable pricing, which would let=20
consumers buy only the channels they choose to=20
receive, rather than bundled packages. But=20
advertisers, who would see yet another mass-reach=20
vehicle upended if a la carte becomes the norm,=20
have been strangely silent so far. For=20
advertisers, a la carte would likely mean fewer=20
ratings points since incidental viewing would=20
drop. That reduced supply would likely drive=20
prices higher. On the flip side, advertisers=20
would know that the viewers watching a particular=20
channel were attached enough to purposefully pay=20
for it -- a sign they=92re more engaged with it.
http://adage.com/news.cms?newsId=3D48328

A FINE MESS AT THE FCC
[SOURCE: Los Angeles Times, AUTHOR: Joel Stein]
[Commentary] Even though Stein agrees that an=20
episode of "Without a Trace" was in awful,=20
soft-kiddie porn taste, the FCC should still=20
abandon its fining campaign, he writes. It's a=20
losing battle that will do nothing but exacerbate=20
the end of the broadcast networks by making them=20
safer, more nervous and lamer than cable. And by=20
chasing everyone to cable and satellite radio,=20
the FCC will cease to have any reason for being.=20
The best thing the FCC can do is let the networks=20
air their ridiculously unrealistic plots designed=20
to scare suburban parents and get back to its=20
main business, which Stein believe is=20
continuously breaking up AT&T, then putting it=20
back together again. The FCC's fight to protect=20
kids from sex is useless because, as=20
inappropriate as that teen sex orgy was, it's a=20
whole lot tamer than what teens see online.
http://www.latimes.com/news/printedition/opinion/la-oe-stein21mar21,1,40...
2.column?coll=3Dla-news-comment
(requires registration)

EXPERTS RIP 'SESAME' TV AIMED AT TINIEST TOTS
[SOURCE: Washington Post, AUTHOR: Don Oldenburg]
How young is too young to park a baby in front of=20
the TV set? The American Academy of Pediatrics's=20
rule has been steadfast: No television under age=20
2. Now the venerable educational organization=20
that pioneered "Sesame Street" is lowering that=20
age limit with a new DVD series, "Sesame=20
Beginnings," which targets babies and toddlers=20
from 6 months to 2 years. Due in stores April 4,=20
the videos feature baby versions of "Sesame=20
Street's" most beloved characters -- Elmo, Big=20
Bird, Cookie Monster and Prairie Dawn -- dancing=20
and singing with their Muppet parents and other=20
relatives. The product's launch has frayed some=20
friendships and professional alliances among=20
experts who monitor the impact of media on young=20
minds. "Essentially it is a betrayal of babies=20
and families," says Harvard Medical School=20
psychologist Susan Linn, founder of the Campaign=20
for a Commercial-Free Childhood. "There is no=20
evidence that media is beneficial for babies, and=20
they are starting to find evidence that it may be=20
harmful. Until we know for sure, we shouldn't=20
risk putting them in front of the television."=20
Research suggests that television viewing by=20
babies could harm language development and sleep=20
patterns. And there's the "instead-of" caveat --=20
babies and toddlers glued to the tube aren't=20
doing other healthy activities such as creative=20
play and interacting with parents.
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/AR200603...
1801.html
(requires registration)

OWNERSHIP

THE TURBULENT WORLD ON NEWS
[SOURCE: Economic Principals, AUTHOR: David Warsh]
[Commentary] This argument that newspapers are on=20
the ropes misses two key points: the scarcity=20
value of print, and the importance of management.=20
Old advantages die hard. For many of the same=20
reasons that historic cities remain in places for=20
thousands of years -- Paris, London, Rome,=20
Jerusalem and New York are still where they=20
started -- newspapers are likely to remain at the=20
top of the chain that creates and distributes=20
provisional truth and sets the agenda. Because=20
paper and ink are tangible and endure, newspapers=20
are archived, in libraries, on microfilm and in=20
servers; they cannot be changed with a few=20
keystrokes. Because the eye assimilates=20
information much more rapidly than does the ear,=20
newspapers contain much more information than do=20
broadcasts. They hire better people, give them=20
more time to work, offer their readers more=20
durable and satisfying explanations of events=20
than do their electronic brethren. Just as=20
newspapers met the challenges of radio and=20
television, they'll accommodate to the Internet,=20
too, and so remain our most powerful engines of=20
consensus. They'll be smaller, in the future,=20
fewer in number, nimbler, quicker than they were=20
before. Instead of the jumbo jet beloved of city=20
room metaphor, they'll be more like the 737s,=20
767s and 777s (and, soon enough, the 787s) jets=20
that have replaced the lumbering old behemoths on=20
the forward edge. They'll be more expensive, too,=20
and read by fewer people -- a badge of honor (or=20
an article of conspicuous consumption), a status=20
good, a sign that the reader matters. They'll=20
also be more locally owned, at least in the=20
nation's most vital cities. The problem today is=20
the way the industry has been organized=20
historically, not with newspapers themselves. In=20
their heyday, newspapers were relatively easy to=20
operate. Chains could buy out tired owners of=20
local papers and expect to carry on pretty much=20
as before. Not any more. The selectivity of the=20
McClatchy Company in deciding what to keep and=20
what to sell is a sign of things to come. It=20
seems to me highly unlikely that cities such as=20
Philadelphia and San Jose, or, for that matter,=20
Boston and Los Angeles, are going to remain for=20
long without vigorous independent and locally=20
owned newspapers to cover them. Continuing to=20
wilt under inept management is the alternative.=20
It simply defies the logic of cities that the=20
Chicago Tribune should own the Los Angeles Times,=20
or The New York Times should own The Boston=20
Globe. Newspapers in powerful cities should be=20
locally owned by persons, typically families,=20
involved in their hometown's affairs. Otherwise, they wilt.
http://www.economicprincipals.com/issues/06.03.19.html

QUICKLY

MAP QUERIES FCC ON POSSIBLE RULE VIOLATION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Media Access Project (MAP) has written the FCC to=20
ask its General Counsel whether the commission=20
has violated ex parte rules in its consideration=20
of the Adelphia acquisition by Time Warner and=20
Comcast. The letter stems from a press conference=20
Friday in which FCC Chairman Kevin Martin talked=20
to reporters about a variety of subjects. MAP=20
says a number of press accounts, including B&C's,=20
reported that Martin "implied that he had been=20
asked to defer action on the Adelphia matter at=20
the request of certain parties. MAP says that any=20
communications relating to merger timing are=20
"presentations" and should show up on a list of=20
disclosed communications about the transaction.=20
If such exist, MAP can't find them and wants=20
access to them "in sufficient time for other=20
parties to have a meaningful opportunity to=20
comment on any previously undisclosed=20
communications." Such communications are allowed=20
in so-called "permit-but-disclose" proceedings,=20
including the Adelphia deal, but the "disclose"=20
part requires a summary of those communications=20
be placed in the public record. MAP represents=20
several groups with concerns about the merger.
http://www.broadcastingcable.com/article/CA6317284?display=3DBreaking+News

CHINESE REGULATORS CAUTION TV TALENT SHOWS
[SOURCE: New York Times, AUTHOR: David Barboza]
One of China's most popular television programs=20
last year, an "American Idol" knockoff called=20
"The Mongolian Cow Sour Yogurt Supergirl=20
Contest," is apparently about to be reined in by=20
government regulators. The state administration=20
of radio, film and television issued a notice=20
last week that seemed directly aimed at altering=20
the show's format, and possibly keeping it off=20
the air. The slightly rebellious nature of the=20
show, which showed participants in baggy jeans=20
singing with unusual emotion, crying on stage and=20
punching their fists in the air, may have gone too far.
http://www.nytimes.com/2006/03/21/business/media/21hunan.html
(requires registration)

CDT REPORT IDENTIFIES LARGE CORPORATE ADWARE FUNDERS
[SOURCE: Center for Democracy & Technology]
Large well-respected companies are helping to=20
fund the virulent spread of unwanted and=20
potentially harmful "adware" by paying for=20
advertisements generated by those programs, a new=20
report by CDT finds. In "Following the Money: How=20
Advertising Dollars Encourage Nuisance and=20
Harmful Adware and What Can be Done to Reverse=20
the Trend," CDT details how -- through a=20
complicated network of intermediaries -- major=20
advertisers pay to have their products and=20
services advertised though pop-ups and other ads=20
generated by unwanted advertising software or=20
"adware." The report dissects the financial=20
relationships behind those arrangements and=20
identifies a number of mainstream companies that=20
advertise through one particularly unscrupulous adware distributor.
CDT Adware Report: http://www.cdt.org/privacy/20060320adware.pdf
Press Release: http://www.cdt.org/press/20060320adwarerelease.pdf
* Advocacy group shames adware advertisers
http://news.com.com/Advocacy+group+shames+adware+advertisers/2100-1024_3...
51749.html?tag=3Dnefd.top
* Report: Firms Fail to Police Adware
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/AR200603...
1657.html
--------------------------------------------------------------
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.
--------------------------------------------------------------