May 2006

Yes, Congress is away, but the policy world isn't=20
completely dead (it is not August after all). A=20
discussion entitled "Tangled Web: Will the=20
Internet be Free for the Press?" takes place=20
tomorrow and the CPB board meeting June 1. For=20
these and other upcoming media policy events, see http://www.benton.org

FCC NEWS
McDowell Confirmed To FCC
FCC Is Set to Take Fresh Look At Media Ownership
Gridlock at the FCC
FCC Indecency Complaints Sextuple in 1Q
Despite Satellite Policy, Ads Fly
Commissioner Tate's Remarks on Public Payphones

TELEVISION
Study says Violence still Abounds in Children's Television
Broadcasters Urged to Beef Up Election Coverage
Stations Oppose HDTV Downconversion
Adelphia Pushes Merger Closure

GOVERNMENT & COMMUNICATION
Bush 'planted fake news stories on American TV'
AT&T leaks sensitive info in NSA suit
Amnesty seeks to end Internet repression

TELECOM
Adios to a Phone Tax
Cell Carriers Seek Growth by Catering to Hispanics
Earn Cellphone Minutes by Watching Ads

QUICKLY -- Middle class goes broadband as price=20
falls; Showtime for the Smithsonian; Technology=20
and Easy Credit Give Identity Thieves an Edge;=20
Net ad spending will overtake national press in UK

FCC NEWS

MCDOWELL CONFIRMED TO FCC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Holy Media Ownership Proceeding, Batman, the FCC=20
is now at full strength! Robert McDowell Friday=20
was confirmed as the fifth FCC commissioner.=20
McDowell, a Republican appointee who has been=20
working as a lobbyist for Comptel, had an easy=20
confirmation hearing, praised by both Republicans=20
and Democrats, but a hold was placed on his=20
nomination, widely believed by Senator Jay=20
Rockefeller over issues having to do with funding=20
for telecommunications services for schools and=20
libraries. Friday's confirmation proves that you=20
should never leave you post until the last Member=20
of Congress has boarded the last plane out of=20
town. Commissioner McDowell received praise from=20
Senate Commerce Committee Chairman Ted Stevens=20
(R-Alaska) -- he picked the nominee, after all --=20
FCC Chairman Kevin Martin, and now-fellow=20
Commissioners Michael Copps and Jonathan Adelstein (see below).
http://www.broadcastingcable.com/article/CA6338736?display=3DBreaking+News
http://www.senate.gov/pagelayout/legislative/one_item_and_teasers/nom_co...
.htm
* Sen Stevens' statement:
http://commerce.senate.gov/public/index.cfm?FuseAction=3DPressReleases.D...
il&PressRelease_id=3D248617&Month=3D5&Year=3D2006
* Martin statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265592A1.doc
* Copps Statement
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265590A1.doc
* Adelstein statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265591A1.doc
* And Suddenly, the Universe Changed
http://www.wetmachine.com/totsf/

FCC IS SET TO TAKE FRESH LOOK AT MEDIA OWNERSHIP
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz( at )wsj.com]
With Republicans in the majority at the Federal=20
Communications Commission for the first time in=20
14 months, the agency is poised to begin tackling=20
a host of contentious issues, including changes=20
to media ownership limits. Even before=20
Commissioner McDowell was confirmed, FCC Chairman=20
Kevin Martin had begun circulating proposals=20
among the other commissioners to reopen two=20
issues: media ownership limits and a requirement=20
that cable operators carry multiple channels from=20
local broadcasters after the transition to=20
digital television instead of just one. A vote to=20
reopen the debate of media ownership limits may=20
occur at the FCC's regularly scheduled meeting=20
next month, agency officials said. The FCC will=20
take a comprehensive look at what changes should=20
be made, but the review isn't expected to be=20
completed this year. Even the whiff of possible=20
FCC action has been enough to prompt a stir.=20
Senators Trent Lott (R-MS) and Byron Dorgan=20
(D-ND) last week sent a letter asking Chairman=20
Martin to have the commission address the issue=20
of local broadcast content before acting on new=20
media ownership rules. An FCC task force was=20
created in 2004 to study the issue, but no report=20
has been issued. Meanwhile, the cable industry is=20
gearing up to oppose Martin's must-carry=20
proposal, which has been on broadcasters' wish-list for several years.
http://online.wsj.com/article/SB114894537770865776.html?mod=3Dtodays_us_...
e_one
(requires subscription)

GRIDLOCK AT THE FCC
[SOURCE: Broadcasting&Cable, AUTHOR: Elizabeth Jensen and John Eggerton]
Thanks to partisan deadlock in a divided=20
commission, the growing volume of=20
broadcast-indecency complaints, and a protocol=20
that allows only the chairman to set agendas, the=20
FCC is contending with significant gridlock on a=20
number of issues. =93Increasingly, you hear it,=94=20
says Gloria Tristani, a former FCC commissioner=20
and president of the Benton Foundation. =93Many=20
proceedings are stalled, from all over the=20
spectrum of things that the FCC regulates.=94 The=20
delays have left major media companies and small=20
broadcasters alike unable to plan long-term as=20
long as ownership rules are unsettled or license=20
renewals are snagged by indecency complaints. But=20
with the Senate threatening to pass a massive=20
telecom bill on a host of issues -- from cable=20
franchising to Internet commerce -- that will=20
require FCC action, the backup could become far=20
worse. For its part, the FCC denies that there is=20
any logjam, noting that media issues are only=20
part of its purview and pointing to several=20
telephony-oversight actions that have been=20
taken. Former-Commissioner Tristani concedes=20
that occasional backlogs are =93a fact of life at=20
the FCC=94 when the commission is focused on a=20
single issue, like indecency or phone company=20
slamming, which preoccupied the commission during=20
her tenure, from 1997 to 2001. But she calls it=20
=93a disgrace=94 that the commission is six months=20
past due in responding to recommendations=20
submitted by the FCC's Consumer Advisory=20
Committee (CAC). On May 18, 14 of the committee's=20
55 members (including Tristani's Benton=20
Foundation) complained in a letter to Chairman=20
Martin that the CAC had yet to receive an=20
acknowledgement of the recommendations it had=20
made in November regarding public-interest=20
obligations of digital broadcasters. =93What is the=20
point of having a federal advisory committee if=20
you are going to ignore them?=94 Tristani asks,=20
adding that it is =93very lamentable that=20
legitimate consumer concerns are not being=20
addressed.=94 The FCC declined to comment on why it=20
has failed to respond to the CAC, but=20
Commissioner Michael Copps agrees that action is=20
needed. =93When we ask people to devote their=20
energies and talents to an advisory committee,=94=20
he says, =93the least the commission can do is pay=20
heed to the recommendations they develop.=94
http://www.broadcastingcable.com/article/CA6338738?display=3DFeature
* See CAC letter at http://www.benton.org/index.php?q=3Dnode/2436

FCC SMUT COMPLAINS SEXTUPLE IN 1Q
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The number of TV and radio broadcast indecency=20
and profanity complaints filed with the FCC=20
jumped to 275,131 in the first quarter of 2006.=20
That was up more than six times the 44,109 filed=20
in fourth quarter 2005, and over 10 times the=20
number filed in the third quarter (26,185). There=20
were only 1,798 complaints in January, but that=20
exploded to 138,527 in February and 134,865 in=20
March. B&C had predicted a big boost back in=20
February after a FOIA request turned up at least=20
134,000 complaints between the beginning of the=20
year and the end of February, driven by a=20
campaign against NBC drama Las Vegas. The FCC=20
said at the time those were all it had logged,=20
not necessarily all it had received. American=20
Family Association had told B&C it filed over=20
170,000 complaints about a Las Vegas scene in a strip club.
http://www.broadcastingcable.com/article/CA6338759?display=3DBreaking+News
* FCC Report on Consumer Complaints
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265565A1.doc
* Test Your Indecency IQ
First Amendment attorney John Crigler knows=20
indecency. Or at least he thinks he knows what=20
the FCC thinks is indecent. So Crigler, of=20
Washington law firm Garvey Schubert Barer, penned=20
a quiz to see if broadcasters can read the minds of the FCC.
http://www.broadcastingcable.com/article/CA6338764?display=3DNews
* Tell the People
[Commentary] "It is likely that, within the next=20
two weeks, Congress is going pass a Senate bill=20
that will raise the FCC's indecency fines to a=20
maximum of $325,000 a pop. That is a staggering=20
figure, especially because we're sure most of the=20
nation is not aware of the bill's ramifications.=20
It means, for example, that the next time the=20
storyline for Without a Trace acknowledges that=20
young people have sex lives, the fine could be=20
$30 million-plus. That would make the already=20
onerous $3 million FCC-proposed fine seem paltry by comparison."
http://www.broadcastingcable.com/article/CA6338767?display=3DOpinion

DESPITE SATELLITE POLICY, ADS FLY
[SOURCE: Los Angeles Times, AUTHOR: Sallie Hofmeister]
Under an 8-year-old rule that Congress designed=20
to increase educational fare on satellite,=20
DirecTV and rival Dish Network, owned by EchoStar=20
Communications Corp., must set aside 4% of their=20
channel capacity for nonprofit programmers that=20
serve the common good with ad-free content. But=20
critics say ambiguities in the guidelines and=20
weak enforcement have resulted in rampant abuses.=20
Several nonprofit channels ignore the rules and=20
air advertisements, according to consumer=20
advocates and industry insiders. Some also sell=20
airtime to programming suppliers, a practice that=20
is not explicitly forbidden but critics say=20
raises questions about whether some channels are=20
wrongly profiting. In comments this month filed=20
with the Federal Communications Commission in=20
support of a complaint last year, Farm Journal=20
Inc., a for-profit media company, alleged that=20
RFD-TV, a public interest channel about rural=20
living, has aired commercials for bluejeans, lawn=20
mowers, horse saddles and quilting books. "Such=20
conduct mocks the congressional and FCC=20
requirements," the filing stated. Andrew=20
Schwartzman, president of the Media Access=20
Project, a Washington-based public policy law=20
firm, called the airing of product advertisements=20
"blatantly illegal. The FCC is asleep at the=20
switch when it comes to the commercialization,"=20
said Schwartzman, adding that in general, the=20
set-aside program's "implementation is not=20
consistent with the intent of the law."
http://www.latimes.com/business/la-fi-nonprofit28may28,1,5305101.story
(requires registration)

COMMISSIONER TATE'S REMARKS AT THE AMERICAN PUBLIC COMMUNICATIONS COUNCIL
[SOURCE: Federal Communications Commission]
In a world where it seems like almost everyone=20
has a cellphone - and indeed, where 6% of=20
households ONLY use cellphones - it's easy to=20
forget that payphones are still an important part=20
of many people's lives. 8.7 million American=20
households still have no phone service at all. A=20
payphone may be some peoples' only lifeline to=20
communicate with others. In particular, payphones=20
are a critical part of homeland security. They=20
are there for those times that we can't=20
anticipate, when our landlines and our cellphones=20
aren't available, and so as we plan for the=20
possibility of another disaster -- whether a=20
terrorist attack, a hurricane, or pandemic flu --=20
we should not forget to consider payphones as part of our response.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265545A1.doc

TELEVISION

STUDY SAYS VIOLENCE STILL ABOUNDS IN CHILDREN'S TELEVISION
[SOURCE: Kansas City Star, AUTHOR: Aaron Barnhart]
Thirty years after researchers found that=20
Saturday morning cartoons were more violent than=20
prime-time TV shows, a study released Thursday=20
argued that little had changed. The report from=20
the Parents Television Council, called ''Wolves=20
in Sheep's Clothing,'' found that children's=20
shows were still more violent than adult shows =97=20
even when ''cartoony'' depictions of violence=20
were factored out. With Sen. Sam Brownback (R-KS)=20
sitting beside him, Parents Television Council=20
executive director L. Brent Bozell said, "This=20
disturbing trend signifies that parents can no=20
longer be confident that their children will not=20
have access to dark violence, sexual innuendo or=20
offensive language on entertainment programming=20
targeted toward children." David Kleeman,=20
executive director of the American Center for=20
Children and Media, said the council's=20
researchers did not watch public TV =97 which is=20
known for its children's programming =97 and did=20
not take into account whether people on the shows=20
were punished or learned lessons from their bad=20
behaviors. "They looked at all of these behaviors=20
in isolation," Kleeman said. "That kind of=20
analysis eliminates any opportunity to do comedy, or drama, or even learnin=
g."
http://www.mcall.com/entertainment/tv/all-tvviolencekids0529may29,0,4302...
.story?coll=3Dall-enttv-hed

BROADCASTERS URGED TO BEEF UP ELECTION COVERAGE
[SOURCE: Campaign Legal Center]
In a letter mailed today to every television=20
station general manager in the nation, the=20
Campaign Legal Center, Common Cause and the=20
Benton Foundation called on broadcasters to=20
provide their viewers with substantive coverage=20
of this year=92s elections. General managers=20
nationwide were urged to encourage their news=20
staffs to tackle significant election issues in=20
order to engage and educate viewers. The=20
organizations reminded broadcasters of their=20
responsibilities as the primary source of=20
election information for voters. A list of=20
resources was also compiled by the organizations=20
designed to help broadcasters improve their=20
election coverage, meet their public interest=20
obligations and understand the legal requirements=20
related to political broadcasting.
http://www.campaignlegalcenter.org/press-2053.html

STATIONS OPPOSE HDTV DOWNCONVERSION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In a letter to Senate Commerce Committee Chairman=20
Ted Stevens (R-Alaska) Friday, affiliate=20
television stations of ABC, CBS, FOX and NBC=20
called for changes to a Stevens bill that would=20
allow cable systems, through 2014, to convert=20
digital TV signals to analog for their analog=20
customers and high definition signals (HDTV) to=20
standard definition signals (DTV) for their=20
digital subscribers. Stations are fine with the=20
first part of that equation because, they say, it=20
"protects against the disenfranchisement of=20
viewers with analog receivers." Downconverting HD=20
to DTV is, by contrast, consumer unfriendly, they=20
argue, because "it condones viewer=20
disenfranchisement from HDTV services." Allowing=20
cable to "degrade" HDTV, they argue, would=20
disenfranchise viewers who have bought HDTV sets=20
to be able to watch the Super Bowl, Nascar or=20
other programs in high-definition. Besides, they=20
say, cable would have the incentive to favor its=20
own HDTV programming, which it could supply=20
without degradation while converting the services=20
of the networks or stations. The affiliate groups=20
want the chairman to either drop both conversion=20
provisions and deal with the issue in a bill next=20
session, or drop the HDTV conversion provision=20
only. They said their focus on conversion should=20
not indicate they don't have other issues with=20
the bill. They do, including its permitting=20
unlicensed wireless devices to operate in=20
broadcast spectrum and "broad" exceptions to the=20
broadcast flag content protection technology that the bill would also appro=
ve.
http://www.broadcastingcable.com/article/CA6338597?display=3DBreaking+News
* Affiliates Protest DTV Terms In Stevens Bill
http://www.multichannel.com/article/CA6338775.html?display=3DBreaking+News
* NAB Opposes HDTV Downconversion
http://www.broadcastingcable.com/article/CA6338779?display=3DBreaking+News

ADELPHIA PUSHES MERGER CLOSURE
[SOURCE: Multichannel News, AUTHOR: Mike Farrell]
Frustrated with the failure of its major=20
bondholders to reach an agreement, Adelphia=20
Communications Corp. tried to take matters into=20
its own hands Friday, asking a U.S. Bankruptcy=20
Court judge to allow its sale to Comcast and Time=20
Warner to go through without a final bankruptcy=20
agreement. =93Despite our best efforts, the=20
creditors=92 disputes remain unresolved,=94 said=20
William Schleyer, chairman and CEO of Adelphia,=20
in a statement. =93Removing the requirement for a=20
confirmed Plan of Reorganization for Adelphia=20
greatly increases the odds of Adelphia's sale=20
closing in a timely manner. We believe these=20
modifications accommodate the desires of=20
creditors to lock in maximum value for the estate=20
while enabling them to continue settlement=20
discussions and litigation without the pressure=20
of a looming deadline.=94 Time Warner and Comcast=20
have apparently signed off on the modified deal.=20
According to a statement, =93Time Warner Cable and=20
Comcast are working closely with Adelphia to find=20
the swiftest path to accomplish the sale.=94 Time=20
Warner and Comcast agreed to jointly purchase=20
Adelphia in April 2005, but the $17 billion deal=20
is predicated on the bankruptcy being completed.=20
Both Time Warner and Comcast have set a July 31=20
drop-dead date when the two can walk away from the deal without penalty.
http://www.multichannel.com/article/CA6338713.html?display=3DBreaking+News

GOVERNMENT & COMMUNICATION

BUSH 'PLANTED FAKE NEWS STORIES ON AMERICAN TV'
[SOURCE: The Independent, AUTHOR: Andrew Buncombe]
The Federal Communications Commission is actively=20
investigating dozens of American television=20
stations for broadcasting items produced by the=20
Bush administration and major corporations, and=20
passing them off as normal news. Some of the fake=20
news segments talked up success in the war in=20
Iraq, or promoted the companies' products. Among=20
items provided by the Bush administration to news=20
stations was one in which an Iraqi-American in=20
Kansas City was seen saying "Thank you Bush.=20
Thank you USA" in response to the 2003 fall of=20
Baghdad. The footage was actually produced by the=20
State Department, one of 20 federal agencies that=20
have produced and distributed such items. The=20
controversy over the use of VNRs by television=20
stations first erupted last spring. At the time=20
the FCC issued a public notice warning=20
broadcasters that they were obliged to inform=20
viewers if items were sponsored. The maximum fine=20
for each violation is $32,500.
http://news.independent.co.uk/world/americas/article621189.ece

AT&T LEAKS SENSITIVE INFO IN NSA SUIT
[SOURCE: C-Net|News.com 5/26, AUTHOR: Declan McCullagh]
Lawyers for AT&T accidentally released sensitive=20
information while defending a lawsuit that=20
accuses the company of facilitating a government=20
wiretapping program. AT&T's attorneys this week=20
filed a 25-page legal brief striped with thick=20
black lines that were intended to obscure=20
portions of three pages and render them=20
unreadable. But the obscured text nevertheless=20
can be copied and pasted inside some PDF readers.=20
The deleted portions of the legal brief seek to=20
offer benign reasons why AT&T would allegedly=20
have a secret room at its downtown San Francisco=20
switching center that would be designed to=20
monitor Internet and telephone traffic. The=20
Electronic Frontier Foundation, which filed the=20
class-action lawsuit in January, alleges that the=20
room is used by an unlawful National Security=20
Agency surveillance program. "AT&T notes that the=20
facts recited by plaintiffs are entirely=20
consistent with any number of legitimate Internet=20
monitoring systems, such as those used to detect=20
viruses and stop hackers," the redacted pages=20
say. Another section says: "Although the=20
plaintiffs ominously refer to the equipment as=20
the 'Surveillance Configuration,' the same=20
physical equipment could be utilized exclusively=20
for other surveillance in full compliance with"=20
the Foreign Intelligence Surveillance Act. The=20
redacted portions of AT&T's court filing are not=20
classified, and no information relating to actual=20
operations of an NSA surveillance program was=20
disclosed [so it is unlikely you will be=20
prosecuted for reading this]. Also, AT&T's=20
attorneys at the law firms of Pillsbury Winthrop=20
Shaw Pittman and Sidley Austin were careful not=20
to explicitly acknowledge that such a secret room actually exists.
http://news.com.com/AT38T+leaks+sensitive+info+in+NSA+suit/2100-1028_3-6...
353.html?tag=3Dhtml.alert

AMNESTY SEEKS TO END INTERNET REPRESSION
[SOURCE: Reuters, AUTHOR: Paul Majendie]
Amnesty International marked its 45th anniversary=20
on Sunday by launching a global campaign to stamp=20
out state censorship of the Internet. The human=20
rights pressure group called on Web users to sign=20
a pledge calling on governments to stop censoring=20
sites and urging technology corporations not to=20
collude with them. Arguing that online censorship=20
is a new threat to freedom, Amnesty claimed to=20
have uncovered Internet repression in areas=20
around the world from China and Tunisia to=20
Vietnam, Iran, Israel and the Maldives.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-05-28T084742Z_01_L28419901_RTRUKOC_0_US-RIGHTS-AMNESTY.xml

TELECOM

ADIOS TO A PHONE TAX
[SOURCE: Wall Street Journal, AUTHOR: Editorial Staff]
[Commentary] Treasury Secretary John Snow said=20
the Internal Revenue Service will no longer=20
collect the 3% federal excise tax on=20
long-distance phone calls and will offer refunds=20
for the past three years. The WSJ would like to=20
think the Administration was acting out of=20
principle. But the reality is that the courts --=20
most recently the Second Circuit Court of Appeals=20
in a decision last month -- have forced its hand=20
with repeated rulings that the tax on=20
long-distance is illegal in a telecom world in=20
which calls are no longer priced based on=20
distance. The IRS will continue to collect the=20
tax on local calls, but Sec Snow to his credit=20
did express support for the idea of Congress=20
passing legislation to repeal the tax entirely.=20
That would be the best outcome, and not just=20
because a future administration might opt to=20
begin collecting the tax again and restart the=20
court battles. Another argument for full repeal=20
is that so long as the tax exists, so will the=20
political temptation to expand its scope and turn=20
it into yet another revenue stream for the=20
federal till. A Joint Tax Committee report issued=20
last year suggested extending the excise tax to=20
"all data communication services," including=20
cable modems, cellular and DSL Internet=20
connections. Like the alternative minimum tax,=20
the federal excise tax was intended to target=20
"the rich," who at the time were the only ones=20
who could afford a telephone. Yet our tax code=20
still considers phones "luxury" items today. The=20
last time Congress came close to ending this=20
charade was 2000, when majorities in both the=20
House and the Senate voted for repeal, which=20
President Clinton vetoed. The Republican=20
Congress, which may not be Republican much=20
longer, might consider giving it another shot before November.
http://online.wsj.com/article/SB114894015305465661.html?mod=3Dtodays_us_...
nion
(requires subscription)

CELL CARRIERS SEEK GROWTH BY CATERING TO HISPANICS
[SOURCE: New York Times, AUTHOR: Matt Richtel & Ken Belson]
Now that nearly three out of four people in this=20
country have mobile phone service, cellphone=20
companies are chasing new customers by marketing=20
to ever more specific slices of the population.=20
But one group is getting extra attention:=20
Hispanics. The industry is spending tens of=20
millions of dollars on marketing campaigns to=20
court Hispanic customers. This summer, Verizon is=20
sponsoring the concert tour of the Colombian-born=20
pop singer Shakira, while Sprint is promoting=20
advanced phones that let subscribers watch=20
television and download songs in Spanish. And=20
there is ample reason for the carriers'=20
attention. One of the country's fastest growing=20
demographic groups, Hispanics often have large=20
families that span international borders, making=20
for larger phone bills. They are also younger as=20
a group, so they are less likely to have an=20
old-fashioned landline phone and more likely to=20
use pricey data services on their cellphones. In=20
other words, they are ideal customers.
http://www.nytimes.com/2006/05/30/business/media/30cell.html
(requires registration)

EARN CELLPHONE MINUTES BY WATCHING ADS
[SOURCE: New York Times, AUTHOR: Matt Richtel]
With the cost of mobile phone calls already=20
dropping sharply, Virgin Mobile USA plans to=20
announce a way that people can talk for no money=20
at all. They will, however, have to pay with a=20
chunk of their attention. The program, called=20
SugarMama, lets people earn one minute of talking=20
time by watching 30-second commercials on a=20
computer or receiving text messages on their=20
phones, then answering questions to prove they=20
were, in fact, paying attention. Virgin Mobile,=20
a relatively small cellphone carrier with four=20
million mostly young customers, is aiming the=20
program at teenagers, who can earn up to 75=20
minutes of free talk time a month. Howard=20
Handler, chief marketing officer for Virgin=20
Mobile USA, described SugarMama as "someone who=20
shows up and gives you some extra gratification=20
and gets you over the hump" when you are running=20
low on talk time. The company says that the=20
program, scheduled to be available on June 14, is=20
the first ad-supported cellphone service in the=20
United States. Several companies are taking a=20
similar approach to wireless Internet access,=20
with proposals or plans for free services backed=20
by advertising. Virgin has signed up three=20
advertisers: Pepsi, Microsoft's Xbox game console=20
and a youth antismoking campaign called Truth.=20
Telecommunications industry analysts said=20
SugarMama might not hit a sweet spot with=20
consumers or advertisers. Roger Entner, an=20
analyst with Ovum Research, a market research=20
firm, said the kinds of consumers willing to swap=20
their time for airtime were not likely to be big spenders.
http://www.nytimes.com/2006/05/30/business/media/30virgin.html
(requires registration)
* Virgin Mobile introduces ad-subsidized calls
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-05-30T094953Z_01_N28255458_RTRUKOC_0_US-TELECOMS-VIRGIN-ADVERTISIN=
G.xml

QUICKLY

MIDDLE CLASS GOES BROADBAND AS PRICE FALLS
[SOURCE: Associated Press, AUTHOR:Peter Svensson]
Middle- and working-class Americans signed up for=20
high-speed Internet access in record numbers in=20
the past year, apparently lured by a price war=20
among phone companies. Broadband adoption=20
increased 59 percent from March last year to=20
March 2006 among U.S. households with incomes=20
between $30,000 and $50,000, according to a=20
survey to be released Monday by the Pew Internet=20
and American Life Project. It increased 40=20
percent in households making less than $30,000 a=20
year. Among blacks, it increased 121 percent,=20
according to the study. Middle- and lower-income=20
households still lag higher-income households=20
when it comes to broadband adoption. Among the=20
$30,000-$50,000 households, 43 percent now have=20
broadband, compared to 68 percent for those=20
making more than $75,000. Overall, 42 percent of=20
adult Americans, or 84 million people, have=20
broadband, compared to 30 percent a year ago.
http://www.mercurynews.com/mld/mercurynews/business/technology/14691662.htm
* Home Broadband Adoption 2006
http://www.pewinternet.org/PPF/r/184/report_display.asp

SHOWTIME FOR THE SMITHSONIAN
[SOURCE: Los Angeles Times, AUTHOR: Editorial Staff]
[Commentary] The Smithsonian has joined forces=20
with the Showtime cable TV network to create a TV=20
programming service called Smithsonian on Demand.=20
The aim is to showcase the Smithsonian's vast=20
resources on cable TV. It's hard to quibble with=20
the goal of Smithsonian on Demand. There's always=20
room for TV programming that relies on artifacts=20
instead of artifice. Nor can the institution,=20
which relies on the kindness of lawmakers for=20
most of its funding, be blamed for turning to the=20
private sector to finance its entry into TV. The=20
question, however, is whether the deal would have=20
the perverse effect of hindering filmmakers from=20
using the Smithsonian's collections and=20
expertise. In exchange for having Showtime foot=20
the bill for the new channel, the Smithsonian=20
agreed to limit its cooperation with filmmakers=20
who might compete with the new channel.=20
Commercial films that would make significant use=20
of the Smithsonian's collections or experts would=20
either have to be sold to Smithsonian on Demand=20
or receive a waiver, which the Smithsonian could=20
grant no more than six times per year. Officials=20
say the deal won't affect the vast majority of=20
films that use the Smithsonian's resources -- and=20
that Showtime's money will help filmmakers whose=20
documentaries highlight the Smithsonian's assets.=20
They may be right. But a better approach would be=20
to focus on producing the best possible works for=20
the new channel, rather than deterring other=20
outlets from showing off the treasures in America's attic.
http://www.latimes.com/news/printedition/opinion/la-ed-showtime30may30,1...
1300.story?coll=3Dla-news-comment
(requires registration)

TECHNOLOGY AND EASY CREDIT GIVE IDENTITY THIEVES AN EDGE
[SOURCE: New York Times, AUTHOR: John Leland & Tom Zeller]
In an economy that runs increasingly on the=20
instantaneous flow of information and credit --=20
aggressively promoted by banks and credit card=20
companies despite the risks -- Phoenix and its=20
surrounding area provide a window on one of the=20
system's unintended consequences. According to a=20
Federal Trade Commission survey in 2003, about 10=20
million Americans -- 1 in 30 -- had their=20
identities stolen in the previous year, with=20
losses to the economy of $48 billion. Subsequent=20
surveys, by Javelin Strategy and Research, a=20
private research company, found that the number=20
of victims had declined to nine million last year=20
but that the losses had risen to $56.6 billion.=20
In Arizona, one in six adults had their=20
identities stolen in the last five years, about=20
twice the national rate, according to the Javelin survey.
http://www.nytimes.com/2006/05/30/us/30identity.html
(requires registration)

NET AD SPEND POISED TO OVERTAKE NATIONAL PRESS
[SOURCE: Financial Times, AUTHOR: Carlos Grande]
In the UK, the Internet will this year overtake=20
national newspapers to become the third biggest=20
advertising medium. By the end of 2007, Internet=20
advertising will close the gap on regional=20
newspapers, the number two medium, but will still=20
be well short of television, the biggest outlet=20
in the =A312bn-a-year media advertising market.
http://news.ft.com/cms/s/fa2642b6-ef33-11da-b435-0000779e2340.html
(requires subscription)
--------------------------------------------------------------
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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