April 2006

BROADCASTING
FCC Launches Payola Probes of 4 Radio Giants
Broadcast TV's bid to be even more Risqu=E9
Digital TV Distributed Transmission System Technologies

MEDIA OWNERSHIP
Mogul Close to Deal for Papers
NBC, Affils Band Together for Broadband

INTERNET
Minorities Don't Lag in Net Usage, Says USIIA
Will Google, Microsoft, Yahoo! and the others Really Fight for Net Neutral=
ity?
Don't Neutralize Video Franchise Reform

GOVERNANCE
CPB Board To Vote on Governance Changes
The Tangled Web of E-Rate

QUICKLY -- Toothpicks, thumb-clamps could force=20
TV viewers to watch ads; More "branded=20
entertainment"; NARC Chief James Guthrie Stepping Down

BROADCASTING

FCC LAUNCHES PAYOLA PROBES OF 4 RADIO GIANTS
[SOURCE: Los Angeles Times, AUTHOR: Charles Duhigg]
The Federal Communications Commission on=20
Wednesday launched formal investigations into=20
pay-for-play practices at four of the nation's=20
largest radio corporations -- Clear Channel=20
Communications, CBS Radio, Entercom=20
Communications and Citadel Broadcasting. The=20
biggest federal inquiry into radio bribery since=20
the congressional payola hearings of 1960 is=20
focused on allegations that radio programmers had=20
received cash, checks, clothing and other gifts=20
in exchange for playing certain songs without=20
revealing the deals to listeners, a violation of=20
federal rules. The four broadcasters have been=20
negotiating with the FCC for weeks to forestall a=20
federal inquiry by offering to discontinue=20
certain practices and pay limited fines. But=20
those talks stalled last month over the issue of=20
how much the broadcasters should pay.
http://www.latimes.com/news/printedition/front/la-fi-fcc20apr20,1,208364...
tory?coll=3Dla-headlines-frontpage
(requires registration)

BROADCAST TV'S BID TO BE EVEN MORE RISQUE
[SOURCE: The Christian Science Monitor, AUTHOR: Editorial Staff]
[Commentary] Broadcast TV has had enough and=20
won't take it anymore. It's lost too many viewers=20
to cable shows like "The Sopranos" and appears=20
eager to air more sex, violence, and obscenities.=20
So last week, ABC, CBS, FOX, and NBC sued the=20
Federal Communications Commission over its curbs=20
on indecency. The suit in essence challenges=20
decades of FCC authority over risqu=E9 content.=20
Broadcasters say parents have the bulk of=20
responsibility to shield children. Many parents=20
say no. Broadcast TV still dominates the market=20
and government must help shield children, even=20
from the secondhand influence of other children=20
allowed to view offensive shows. And, they add,=20
cable TV, even though it is a purchased service=20
not using the government-owned airwaves, should=20
also be FCC regulated. The FCC does need to work=20
with the networks better, speeding up its process=20
and offering more consistent and timely guidance,=20
but without loosening standards. It could become=20
less of a policing agency and more of a=20
bridge-builder between the industry and various=20
consumers of TV. Families with young children can=20
do much to restrict access to coarse and explicit=20
TV. But an FCC that's more sensitive to the=20
industry's need for specific and quick guidance=20
in a new media age can still be an aiding arm for many families.
http://www.csmonitor.com/2006/0420/p08s02-comv.html

DIGITAL TV DISTRIBUTED TRANSMISSION SYSTEM TECHNOLOGIES
[SOURCE: New America Foundation]
On Tuesday, the New America Foundation was joined=20
by a number of groups in an ex parte filing at=20
the FCC. In the filing, the commenters argue that=20
broadcasters seeking expanded coverage via=20
distributed transmission system technologies=20
(DTS) continue to fail to acknowledge the huge=20
opportunity costs associated with the massive=20
expansion in geographic service area rights that=20
they are requesting. Broadcasters also continue=20
to assert that expanded geographic service area rights will
result in large benefits for the public; for=20
example, the expansion of =93free TV=94 service. But=20
nowhere do they quantify those benefits or even credibly commit to continue
providing =93free TV=94 service. Broadcasters also=20
continue to pretend to already have as part of=20
their licenses virtually all the rights they=20
request. But the rights they are in fact=20
requesting represent a huge modification of their=20
licenses. Arguments to the contrary merely amount=20
to clever word games. The FCC should thus=20
allocate these white spaces the way it would=20
allocate any other unused spectrum. That is,=20
consistent with the Communications Act=92s=20
prohibition of unjustified enrichment, it should=20
conduct some type of comparative process to=20
allocate the unused spectrum rather than merely=20
give it to the nearby incumbents who in this case=20
happen to be high power TV broadcasters.
http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=3Dpdf&id_d...
ment=3D6518333904

MEDIA OWNERSHIP

MOGUL CLOSE TO DEAL FOR PAPERS
[SOURCE: Los Angeles Times, AUTHOR: Joseph Menn and James Rainey]
Media mogul William Dean Singleton has made=20
himself the clear favorite to acquire three=20
Northern California newspapers being sold by=20
McClatchy Co. with his offer to buy those papers=20
and one in Minnesota for as much as $1 billion.=20
Completing a deal with McClatchy would give him a=20
controlling interest in the San Jose Mercury=20
News, the Contra Costa Times and the Monterey=20
County Herald, as well as the St. Paul Pioneer=20
Press in Minnesota. Singleton's Denver-based=20
MediaNews Group already sells more newspapers=20
each day than any other company in California and=20
is a major player in the suburban markets around=20
Los Angeles and San Francisco. Buying the Mercury=20
News and the Contra Costa Times would allow=20
Singleton to link their newsrooms, advertising=20
and production operations to nine other papers=20
his company owns in the Bay Area, strengthening=20
what is already a formidable challenge to the San=20
Francisco Chronicle. "He has most of the dailies=20
that now surround San Francisco proper and this=20
only enlarges his presence in the area," said=20
veteran newspaper analyst John Morton. "With the=20
California properties, Singleton has more of a=20
motive than other folks to pay a higher price=20
because it would enhance what he already owns."=20
The boost to MediaNews' Bay Area position would=20
reduce the number of media voices in the region=20
and raise antitrust questions, industry analysts=20
said. "Right now, there are multiple reporters=20
covering important issues. You might have one=20
from the Contra Costa Times, one from the Mercury=20
News, one from the Chronicle" and one=20
representing Singleton's Bay Area papers, said=20
John McManus, director of a San Jose State=20
University project evaluating local journalism.=20
"If MediaNews takes over all of those but the=20
Chronicle, there will be two reporters. It would=20
be one thing if one single company owned the=20
grocery stores or the car dealerships or the=20
computer outlets, but none of those have the=20
power to define reality, and that is the power that journalism has."
http://www.latimes.com/business/printedition/la-fi-mcclatchy20apr20,1,62...
90.story?coll=3Dla-headlines-pe-business
(requires registration)

NBC, AFFILS BAND TOGETHER FOR BROADBAND
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano]
NBC and its affiliates plan to launch a new=20
broadband venture later this year stocked with=20
video from the local stations, NBC Universal=92s=20
library and user-contributed content. But=20
executives stressed the portal will be different=20
from video-sharing sites like YouTube.com and=20
that it goes beyond streaming NBC shows online.=20
The venture, dubbed The National Broadband=20
Company, will sell video and make some content,=20
such as local news stories and behind-the-scenes=20
clips from NBC U-produced shows, available to=20
users. NBBC, the working title, could be a way=20
for local stations to monetize their video and=20
NBC U to earn more money from of its library.=20
Like digital weather channel NBC WeatherPlus,=20
launched in December 2004, the new broadband=20
channel will be co-owned by NBC and its affiliates and managed by the netwo=
rk.
http://www.broadcastingcable.com/article/CA6326565?display=3DBreaking+News

INTERNET

MINORITIES DON'T LAG IN NET USAGE, SAYS USIIA
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Appearing to back up assertions by Illinois=20
Democratic Rep. Bobby Rush, the U.S. Internet=20
Industry Association (USIIA) is circulating a=20
White Paper by its president suggesting the=20
minority community is not lagging the rest of the=20
nation in Internet usage. The "digital divide"=20
theory has informed much of the debate over=20
legislation to revise telecommunications policy=20
to speed the universal roll-out to high-speed=20
Internet service, with some legislators pushing=20
for so-called anti-redlining provisions and=20
build-out requirements. USIIA counters that=20
"English-speaking minority groups [are] leading=20
the nation in the adoption of modern=20
communications technology." At a House=20
Telecommunications Subcommittee hearing on a=20
telecommunications reform bill earlier this=20
month, Rep Rush, who co-sponsored the bill,=20
suggested that his constituents, many of them=20
African-American, didn't need to be taken care of=20
through build-out provisions but instead needed=20
the lower prices for cable service that the bill=20
would produce by creating national video=20
franchises and spurring competition to cable from telcos and others.
http://www.broadcastingcable.com/article/CA6326353?display=3DBreaking+News
* See "Keeping cable TV diverse and affordable" for more from Rep rush
http://newsblogs.chicagotribune.com/news_opinion_letters/2006/04/keeping...
ble_t.html
* See USIIA's White Paper "Proposed Legislation=20
and Its Impact On Consumer's Use Of Broadband and IP Services"
An examination of the needs and expectations for=20
broadband content and applications by U.S.=20
Seniors, Asian-Americans, African-Americans, Hispanic-Americans and others
http://www.usiia.org/pubs/segmentation.doc

WILL GOOGLE, MICROSOFT, YAHOO AND THE OTHERS REALLY FIGHT FOR NET NEUTRALIT=
Y?
[SOURCE: Digital Destiny, AUTHOR: Jeff Chester]
[Comentary] Word from sources in Congress say=20
that the major companies arguing for network=20
neutrality have failed so far to demonstrate they=20
are seriously committed to seeing legislation=20
passed. While the CEO=92s from the Bell companies,=20
we were told, glad-handed members of Congress,=20
leading online companies have been largely=20
MIA. Imagine if on its home pages Google,=20
Yahoo!, and Microsoft=92s MSN urged users to take=20
action and asked them to save the Internet.=20
Congress would be overwhelmed with angry emails=20
and letters. The Bell/cable industry =93grass-tops=94=20
faux campaign would be seen as a very minor,=20
paid-for, outcry. But we wonder whether Google,=20
Microsoft and Yahoo! really want to see network=20
neutrality legislation? They must have serious=20
misgivings, since they have done such an=20
incompetent and half-hearted lobbying effort so=20
far. Certainly they are thinking about the=20
downsides of legislation. For today=92s call for=20
network neutrality could (and should) lead to=20
other legislative safeguards, such as protecting=20
privacy online. Microsoft, Google, and Yahoo!=20
fear that such privacy safeguards would threaten=20
their interactive advertising/data collection digital golden gooses.
http://www.democraticmedia.org/jcblog/?p=3D29

DON'T NEUTRALIZE VIDEO FRANCHISE REFORM
[SOURCE: National Review, AUTHOR: Phil Kerpen, Free Enterprise Fund]
[Commentary] As Congress moves rapidly to address=20
video franchising and broader telecom=20
deregulation, they must keep the proper objective=20
in mind, which is to encourage infrastructure=20
investment and greater consumer choice. Americans=20
will not enjoy the full benefits of video=20
franchising reform if onerous net-neutrality requirements come along with i=
t.
http://www.nationalreview.com/nrof_comment/kerpen200604190818.asp

GOVERNANCE

CPB BOARD TO VOTE ON GOVERNANCE CHANGES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Corporation For Public Broadcasting (CPB)=20
board is scheduled May 1 to vote on a boatload of=20
measures to update and strengthen its governance=20
and external controls. Following an April 26=20
meeting of one of three committees created by the=20
board in November to oversee the expansive=20
review, the full board will meet to vote on a set=20
of new or amended policies relating to: its code=20
of ethics; conflicts of interest; open meeting=20
procedures--i.e. when the board can or can't hold=20
open meetings; procedures preventing political=20
tests in employment actions; whistle-blower=20
nonretaliation policies; and the handling of investigation-related records.
http://www.broadcastingcable.com/article/CA6326557?display=3DBreaking+News
* CPB Committee To Mull Politics-Proofing
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
A committee comprising three board members of the=20
Corporation for Public Broadcasting will meet=20
April 26 to go over procedures for preventing=20
political tests in hirings at CPB.
http://www.broadcastingcable.com/article/CA6326348?display=3DBreaking+News
* See the CPB press release at:=20
http://www.cpb.org/pressroom/release.php?prn=3D534

THE TANGLED WEB OF E-RATE
[SOURCE: Government Computing News, AUTHOR: Wilson P. Dizard III]
A look at the Universal Service Administrative=20
Company and its murky legal status. The Federal=20
Communications Commission created USAC to receive=20
project applications, rate them and disburses=20
E-rate money. The nonprofit also administers=20
programs to subsidize telecommunications in=20
high-cost and low-income areas, and rural health=20
care facilities. USAC itself is neither fish nor=20
fowl. Under its own bylaws and FCC regulations,=20
it is barred from making policy decisions or=20
interpreting the program=92s law and regulations.=20
The Government Accountability Office cited an=20
analysis by the FCC inspector general in May 2004=20
stating that the foggy distinction between the=20
commission=92s regulations and USAC=92s procedures=20
weakens the program and hinders oversight. For=20
example, the FCC has a policy of allowing USAC to=20
implement procedures, which the Commission later=20
codifies in regulations. That codification policy=20
raises the question of whether the FCC or USAC=20
itself is actually setting program policies, GAO=20
said in a February 2005 report. Only now, 10=20
years after Congress established the E-Rate=20
program and nine years after the FCC created the=20
company, is the commission thoroughly evaluating=20
which federal laws apply to the nonprofit corporation.
http://www.gcn.com/print/25_8/40401-1.html?CMP=3DOTC-RSS

QUICKLY

PHILIPS DEVICE COULD FORCE TV VIEWERS TO WATCH ADS
[SOURCE: C-Net|News.com, AUTHOR: Candace Lombardi ]
An invention from Royal Philips Electronics=20
prevents TV viewers from switching the channel=20
during commercials or fast-forwarding past=20
commercials when watching DVR content. Viewers=20
would be released from the freeze only after=20
paying a fee to the broadcaster. The freeze would=20
be implemented on a program-by-program basis,=20
giving viewers a choice at the start of each one.=20
According to a recently published patent, the=20
apparatus could work inside a set-top box. It=20
would use the standard Multimedia Home Platform=20
to receive a first control signal and then=20
respond by taking control of the TV. The MHP=20
would also be capable of sending the payment=20
information that would lift the freeze, as it=20
does when authorizing pay-per-view content. If=20
implemented, the invention would have a=20
significant impact on television culture.
http://news.com.com/Philips+device+could+force+TV+viewers+to+watch+ads/2...
-1041_3-6062861.html?tag=3Dnefd.top

MORE SPOT BUCKS BOARD BRANDWAGON
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Two thirds of advertisers employ "branded=20
entertainment" -- product placement -- with the=20
vast majority of that (80%) in commercial TV=20
programming. Advertisers are also moving more=20
money out of traditional spot buys into=20
integrated marketing. Those were among the=20
findings of an Association of National=20
Advertisers survey of 117 of its members. The=20
study was released Wednesday at the Forum for=20
Branded Entertainment=85 LIVE! in New York, which=20
is jointly sponsored by ANA and the Association=20
of Independent commercial producers.
http://www.broadcastingcable.com/article/CA6326263?display=3DBreaking+News

NARC CHIEF JAMES GUTHRIE STEPPING DOWN
[SOURCE: AdAge, AUTHOR: Ira Teinowitz]
James R. Guthrie is stepping down after five=20
years as president-CEO of the National=20
Advertising Review Council, the advertising=20
industry's self-regulatory body. NARC, which is=20
part of the Council of Better Business Bureaus,=20
announced Mr. Guthrie would depart in July from a=20
job that has lately been in the midst of=20
controversy over marketing to children and obesity issues.
http://adage.com/article?article_id=3D108699
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Communications-related Headlines is a free online=20
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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
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