April 2006

Listen to today's FCC Consumer Advisory Committee=20
meeting online (see http://www.fcc.gov/realaudio/ for details).

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

CONTENT
Adelstein seeks Probe of Video News Releases
Liberal Denomination Fires Salvos at Right
Media Tune in to Ethnic Audiences

TELEVISION
Let Phone and Cable firms Compete for TV Viewers
Franchise-Reform Bill Hits California Assembly
Viacom: Study Advises Against a la Carte
Media General Buys Four NBC Stations

INTERNET
Congress turns a Deaf ear to Need for Internet Neutrality
Google aims to Track Users with Wi-Fi

TELECOM
Gonzales Suggests Legal Basis for Domestic Eavesdropping
AT&T and Whatever Happened to Antitrust?

QUICKLY -- McDowell Nomination Still in Limbo;=20
Podcasting Roils NPR Fund Raising; USAC Annual=20
Report Released; Consumers want more from phones;=20
Anti-ports deal crusader: Lucent-Alcatel merger OK

CONTENT

ADELSTEIN SEEKS PROBE OF VIDEO NEWS RELEASES
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
Federal Communications Commissioner Jonathan=20
Adelstein on Thursday called for an investigation=20
into new accusations that television news=20
broadcasts are not disclosing the source of video=20
news releases they use. Two consumer advocacy=20
groups released a study that found 77 television=20
stations over a 10-month period ending in March=20
failed to clearly tell viewers when they were=20
using video news releases and said that violated=20
FCC rules that require such disclosure. "We=20
should immediately open investigations into these=20
possible violations of our rules and prosecute=20
them to the full extent of the law," Commissioner=20
Adelstein said at a news conference sponsored by=20
the groups, Free Press and the Center for Media=20
Democracy. The FCC a year ago reminded television=20
broadcasters and cable operators to properly=20
identify the source of video news releases after=20
incidents in which prepackaged news from=20
government agencies was used by stations without=20
proper sponsorship identification. Congressional=20
investigators also concluded last year that=20
prepackaged news stories created by the Office of=20
National Drug Control Policy constituted covert propaganda.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-04-06T230606Z_01_N06393884_RTRUKOC_0_US-MEDIA-PROPAGANDA.xml&archiv=
ed=3DFalse
* Text of Commissioner Adelstein's statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264822A1.doc
* RTNDA Tells Stations To ID All VNRs
The Radio-Television News Directors Association=20
wants stations to toughen up their VNR policies,=20
including clearly identifying all outside material used in news programming.
http://www.broadcastingcable.com/article/CA6322868?display=3DBreaking+News

LIBERAL DENOMINATION FIRES SALVOS AT RIGHT
[SOURCE: New York Times, AUTHOR: Neela Banerjee]
The United Church of Christ, in an e-mail=20
campaign, is accusing the ABC News political=20
program "This Week" of booking far more=20
conservative Christian leaders than moderates for=20
the Sunday morning broadcast. The network has=20
called that assertion "unfounded and not based on=20
fact." And after stirring up publicity in late=20
2004 with an advertisement about tolerance, the=20
church is distributing an even more pointed=20
commercial that shows people who might not be=20
considered mainstream, like a single mother and a=20
gay couple, being shot through the roof of a=20
church from an "ejector pew." "God doesn't=20
reject people," the commercial says. "Neither do=20
we." Critics of the United Church of Christ,=20
including the Institute for Religion and=20
Democracy, assert that the church tries to=20
silence those who do not agree with its liberal=20
interpretation of Scripture. The United Church of=20
Christ appears to be battling two trends: the=20
influence of the Institute of Religion and=20
Democracy within mainline denominations and the=20
influence of the religious right, particularly=20
its influence with the news media.
http://www.nytimes.com/2006/04/07/us/07ucc.html
(requires registration)

MEDIA TUNE IN TO ETHNIC AUDIENCES
[SOURCE: USAToday, AUTHOR: David Lieberman]
One of the most intriguing new developments in=20
media is taking place in a part of the industry=20
that many executives used to dismiss as a=20
backwater. Call it the year of ethnic media, the=20
vast collection of mostly tiny broadcasters,=20
cable channels, newspapers and magazines that=20
target Hispanics, Asians and other audience=20
niches. Advertisers who once deemed ethnic=20
audiences too small, too poor or too old to take=20
seriously are looking at them anew as immigration=20
rates soar. With minority markets now accounting=20
for nearly a third of U.S. buying power, pitching=20
to these audiences =93is no longer the nice thing=20
to do, or the social thing to do. It's about=20
business,=94 says Gwen Kelly, senior ad specialist=20
for American Family Insurance. Spanish-language=20
media are getting the most attention. The 2000=20
Census found that 12.5% of the U.S. population of=20
more than 280 million was Hispanic =97 a bigger=20
market than all of Canada =97 and projects the share to be nearly 18% by 20=
20.
http://www.usatoday.com/printedition/money/20060407/ethnicmedia.art.htm

TELEVISION

LET PHONE AND CABLE FIRMS COMPETE FOR TV VIEWERS
[SOURCE: San Jose Mercury News, AUTHOR: Editorial Staff]
[Commentary] When telephone companies upgrade=20
their aging networks so they can deliver=20
super-fast Internet access and television-quality=20
video, consumers stand to benefit. So it makes=20
sense for state and federal lawmakers to want to=20
help more consumers enjoy this kind of=20
competition. Two bills -- one introduced by=20
Assembly Speaker Fabian N=FA=F1ez on Thursday and=20
another approved by a key committee in the U.S.=20
House of Representatives Wednesday -- take steps=20
in that direction. Both would allow phone=20
companies such as AT&T and Verizon to get into=20
the television business without having to go city=20
by city to secure local franchises. This is a=20
good idea in principle. Local franchising can be=20
slow and litigious. Unfortunately, both bills=20
would allow phone companies to deploy their=20
services only in affluent cities and=20
neighborhoods. Instead of everyone benefiting=20
from lower prices and better service, it's=20
possible that only a few would -- and they'd be=20
the ones least in need of lower prices. The gap=20
between digital haves and have-nots would grow=20
wider. And cable firms, which are under stricter=20
requirements to serve entire communities, would=20
be at an unfair disadvantage. Both the state and=20
federal bills should be amended to make sure the=20
benefits of this promising new form of=20
competition are spread equitably across California and the United States.
http://www.mercurynews.com/mld/mercurynews/news/opinion/14286347.htm

FRANCHISE-REFORM BILL HITS CALIFORNIA ASSEMBLY
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
A cable-franchising-reform bill, in the works=20
since last May, was introduced in California. The=20
bill would allow new providers into the market 30=20
days after applying to the state Department of=20
Corporations. Incumbent cable operators will=20
oppose the bill unless amended, California Cable=20
& Telecommunications Association president Dennis=20
Mangers said. The bill was co-authored by=20
Assembly Speaker Fabian Nunez (D-Los Angeles) and=20
Assemblyman Lloyd Levine (D-Van Nuys), chairman=20
of the Assembly Utilities and Commerce Committee.=20
At a Sacramento press conference Thursday=20
morning, both stressed their belief that the bill=20
will prompt broadband investment, create jobs and=20
level the competitive playing field.
http://www.multichannel.com/article/CA6322864.html?display=3DBreaking+News
* Pay-TV Rules Change Sought
http://www.latimes.com/business/printedition/la-fi-video7apr07,1,3523221...
ory?coll=3Dla-headlines-pe-business
(requires registration)

VIACOM: STUDY ADVISES AGAINST A LA CARTE
[SOURCE: Multichannel News]
Viacom announced the results of a new study that=20
challenges the recent findings by the Federal=20
Communications Commission on offering cable=20
networks a la carte. The study was conducted by=20
Dr. Bruce Owen of Stanford University, a=20
consultant to economic-consulting firm Economists=20
Inc. and former chief economist of the Antitrust=20
Division of the Department of Justice and the=20
White House Office of Telecommunications Policy.=20
Speaking about the FCC=92s =93Further Report=94 --=20
which found that the average household would pay=20
14%-30% more to receive the same channels under=20
an a la carte system -- Owen said, =93It would be a=20
mistake for regulators to use that document to guide policy.=94
http://www.multichannel.com/article/CA6322908.html?display=3DBreaking+News

MEDIA GENERAL BUYS FOUR NBC STATIONS
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano]
Media General cut a deal Thursday to buy four NBC=20
stations from NBC Universal Television Group for=20
about $600 million. That was the amount NBC had=20
hoped to generate when it put its four smallest=20
market O&Os =AD WJAR Providence; WNCN Raleigh,=20
N.C.; WCMH Columbus, Ohio; and WVTM Birmingham,=20
Ala =AD on the block in January. The transaction=20
represents 14 times cash flow, based on 2004-2005=20
figures. To comply with FCC ownership limits,=20
Media General plans to sell several of its=20
existing stations, including its CBS affiliate in=20
Birmingham, Ala, as well as CBS outlets KWCH=20
Wichita, Kan; KIMT Mason City, Iowa and WDEF=20
Chattanooga, Tenn. The company says it will=20
consider selling the stations separately or as a=20
group by the end of the year. NBC is auctioning=20
the stations to concentrate on more duopolies and=20
growing its Telemundo portfolio.
http://www.broadcastingcable.com/article/CA6322660?display=3DBreaking+News

INTERNET

CONGRESS TURNS A DEAF EAR TO NEED FOR NET NEUTRALITY
[SOURCE: San Jose Mercury News, AUTHOR: Editorial Staff]
[Commentary] Just as lawmakers in Congress are=20
pushing a bill that could increase competition in=20
video and high-speed Internet services, they're=20
willing to allow phone and cable companies to=20
subvert that competition. A key House committee,=20
which approved the bill Wednesday, would allow=20
cable and phone companies to create special=20
Internet toll lanes that would give them a=20
virtual chokehold on the future of the Internet.=20
Web sites and Web services that pay would have=20
their content -- especially video content --=20
delivered faster to customers, while those who=20
don't could be stuck in a lane so slow as to make=20
them unusable. This would turn on its head one of=20
the key principles that made the Internet a=20
powerful engine of innovation and economic=20
growth. Without Net Neutrality principles, the=20
burgeoning but still nascent world of online=20
video may never get off the ground. Instead of=20
inventive start-ups sprouting everywhere to=20
deliver video content in innovative ways to more=20
people and more devices, the cable and phone=20
firms would be in a position to pick winners and=20
losers. And it's a safe bet that they won't give=20
anyone who threatens their own video business a=20
shot a being a winner. There's far too much at=20
stake to leave the Internet's future to the whims=20
of the handful of companies that control online=20
access. Congress must make Internet neutrality the law of the land.
http://www.mercurynews.com/mld/mercurynews/news/opinion/14286344.htm

GOOGLE AIMS TO TRACK USERS WITH WI-FI
[SOURCE: Financial Times, AUTHOR: Chris Nuttall and Kevin Allison]
Google, the leading Internet search company,=20
which depends on advertising for 99 per cent of=20
its revenues, was selected on Wednesday by San=20
Francisco as its preferred bidder to provide a=20
basic free Wi-Fi Internet service covering the=20
entire city. The company aims to be able to=20
track its users to within 100-200 feet of their=20
location through new wireless networks in order=20
to serve them with relevant advertising from=20
local businesses. Google says users linking up=20
with Wi-Fi transmitters placed around cities can=20
be located to within a couple of blocks. This=20
would open up a new level of advertising=20
opportunities for the company, allowing it to=20
serve tightly focused ads on its web pages from=20
small businesses in the immediate area. Analysts=20
have speculated that the San Francisco bid could=20
be a prelude to Google seeking to extend its=20
reach into localities nationwide.
http://news.ft.com/cms/s/ae0398d2-c58c-11da-b675-0000779e2340.html
(requires subscription)

TELECOM

GONZALES SUGGESTS LEGAL BASIS FOR DOMESTIC EAVESDROPPING
[SOURCE: New York Times, AUTHOR: Eric Lichtblau]
Attorney General Alberto R. Gonzales suggested on=20
Thursday for the first time that the president=20
might have the legal authority to order=20
wiretapping without a warrant on communications=20
between Americans that occur exclusively within=20
the United States. "I'm not going to rule it=20
out," Mr. Gonzales said when asked about that=20
possibility at a House Judiciary Committee=20
hearing. The attorney general made his comments,=20
which critics said reflected a broadened view of=20
the president's authority, as President Bush=20
offered another strong defense of his decision to=20
authorize the National Security Agency to=20
eavesdrop without warrants on international calls=20
and e-mail messages to or from the United States.=20
Mr. Bush, in an appearance in North Carolina,=20
told a questioner who attacked the program that=20
he would "absolutely not" apologize for=20
authorizing it. "You can come to whatever=20
conclusion you want" about the merits of the=20
program," Mr. Bush said. "The conclusion is I'm=20
not going to apologize for what I did on the terrorist surveillance program=
."
http://www.nytimes.com/2006/04/07/washington/07nsa.html
(requires registration)
* Warrantless Wiretaps Possible in U.S.
http://www.washingtonpost.com/wp-dyn/content/article/2006/04/06/AR200604...
0764.html
(requires registration)

AT&T AND WHATEVER HAPPENED TO ANTITRUST?
[SOURCE: Center for American Progress, AUTHOR: Mark Lloyd]
[Commentary] The AT&T trust was split up in 1984,=20
but it is recombining, leading the New York Times=20
to ask, =93Is Antitrust No Longer the Issue?=94 The=20
name AT&T was recently taken by one of its former=20
subsidiaries -- SBC -- which purchased the=20
struggling telecommunications company. Now=20
SBC/AT&T has announced the intended purchase of=20
BellSouth. This would make the new AT&T the=20
largest telecommunications corporation in the=20
United States. The proposed merger would=20
recombine four of the old Baby Bells. The new=20
AT&T would provide local and long distance=20
wireline telephone service in 22 states. AT&T=20
would also control the largest wireless telephone=20
service, Cingular. And, as mentioned in a=20
previous column, AT&T seeks to control a sizeable=20
share of our broadband access to the Internet,=20
and to provide television service. In short, AT&T=20
seeks to become a king over the sale of=20
communications services, surely one of the=20
=93necessaries=94 of modern life. Communication=20
services are vital to our safety; indeed they are=20
vital to the flow of information so necessary to=20
the very functioning of our republic. The=20
emergence of a king of communications should send=20
shivers through the spine of the nation.
http://www.americanprogress.org/site/pp.asp?c=3DbiJRJ8OVF&b=3D1530843

QUICKLY

MCDOWELL STILL DOING THE LIMBO
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Senator Mary Landrieu (D-LA), daughter of former=20
New Orleans Mayor Moon Landrieu, says she will=20
continue her hold on all executive nominations --=20
that includes President Bush's nominee for FCC=20
Commissioner Robert McDowell -- until the White=20
House "fulfills its promise." A single Senator=20
can block a vote on nominations, and Landrieu has=20
pledged to do so until the White House agrees to=20
fund a comprehensive rebuilding of the New=20
Orleans levees that failed to such disastrous=20
result due to Hurricane Katrina. A Landrieu=20
staffer said the Senator had sent the President a=20
letter Tuesday outlining her concerns and=20
informing him of the hold, but at press time had=20
yet to get any response. And McDowell is doubly=20
blocked. There is another hold on his nomination=20
that was being attributed to Senator Jay=20
Rockefeller (D-WV), placed over concerns about=20
funding for telecommunications service to schools=20
and libraries. The FCC will likely not start its=20
media ownership rule rewrite until McDowell, the=20
third Republican vote on a five-person=20
commission, is seated. That looks like it could=20
push the rewrite past the two-year mark. A=20
Philadelphia appeals court sent the rules back to=20
the FCC in June 2004 with instructions to better justify its reasoning.
http://www.broadcastingcable.com/article/CA6322738?display=3DBreaking+News

PODCASTING ROILS NPR FUND RAISING
[SOURCE: Wired, AUTHOR: Steve Friess]
Podcasting is expanding NPR's overall audience=20
and boosting some shows previously unavailable in=20
many markets. While most NPR programming has been=20
streamed online for several years, the portable,=20
time-shifted, on-demand nature of podcasting=20
affords a new level of convenience and access.=20
Yet, at the same time, it can turn ears away from=20
local stations -- possibly for good -- which=20
could be a problem for affiliates that rely=20
heavily upon member donations to pay the dues to=20
air some of the same programming listeners can=20
now get free as MP3s. "Unfortunately, in a=20
typical market only 8 percent of the audience=20
become members of their station, so if you erode=20
that even to 7 percent or 6 percent because=20
they're not getting the shows through the=20
terrestrial station, that's not a good business=20
model," says Paul Marszalek, a radio industry=20
expert who consults with dozens of public and=20
private radio stations. "There is not a single=20
person on the local affiliate level who has not=20
expressed some level of trepidation."
http://wired.com/news/culture/media/0,70583-0.html?tw=3Dwn_index_1

USAC ANNUAL REPORT RELEASED
[SOURCE: Universal Service Administration Company]
A look at the management of the four programs=20
that make up US universal service: the high-cost=20
fund, the schools and libraries fund, the low=20
income fund and the rural health care fund.
http://www.universalservice.org/_res/documents/about/pdf/annual-report-2...
.pdf

CONSUMERS WANT MORE FROM PHONES: STUDY
[SOURCE: Reuters, AUTHOR: Chris Marlowe]
Not many people use their cell phone to buy movie=20
tickets, watch videos or play games, but a=20
significant number of Americans are interested in=20
doing just that. A national study by the Pew=20
Research Center's Pew Internet & American Life=20
Project, the Associated Press and AOL supplied=20
statistics to support these beliefs as it examined how people use their pho=
nes.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-04-07T055354Z_01_N06196507_RTRUKOC_0_US-MEDIA-CELLPHONES.xml
* Americans and their cell phones
http://www.pewinternet.org/PPF/r/179/report_display.asp

ANTI-PORTS DEAL CRUSADER: LUCENT-ALCATEL MERGER OK
[SOURCE: Reuters, AUTHOR: Susan Cornwell]
Sen Charles Schumer (D-NY), one of the leading=20
U.S. congressional opponents of Dubai Ports=20
World's recent purchase of American port=20
facilities, said on Thursday he had no objections=20
to France's Alcatel acquiring Lucent Technologies.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-04-06T225527Z_01_N06182555_RTRUKOC_0_US-SECURITY-LUCENT-CONGRESS.xm=
l&archived=3DFalse
--------------------------------------------------------------
...and we're outta here.
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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.
--------------------------------------------------------------