May 2006

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LEGISLATION UPDATE
House Schedule Excludes Barton Bill
Stevens Sells Communications Reform Bill as=20
Measure to Speed Broadband Deployment

TELECOM
Bell Broadband Plans
Court To Hear From Bell Rivals

NET NEUTRALITY
Commisso Takes Aim at Net Neutrality
Tax Foes Attack Net Neutrality

MEDIA OWNERSHIP
A Comedian's Riff on Bush Prompts an E-Spat
Bay Area Democrats want closer look at MediaNews Deal
CW Affil Worth $217 Million In Orlando

INDECENCY
CBS blasts FCC Fines
'Sopranos' Undergoes Cosmetic Surgery for Basic Cable

QUICKLY -- Smithsonian Deal Was Not Made in=20
Secret, Small Says; Newspaper circulation falls,=20
Web readership gains; Connecticut May Not Require=20
IPTV Franchises; No Vote on Florida=20
Statewide-Franchise Bill; Warner Brothers to Sell=20
Movies and TV Shows on Internet; Contest held for peaceful video games

LEGISLATION UPDATE

HOUSE SCHEDULE EXCLUDES BARTON BILL
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The House floor schedule this week excludes a=20
telecommunications bill that would overhaul=20
cable-franchising rules to allow new providers to=20
initiate service within 30 days under a national=20
authorization scheme. Key sponsors of the bill=20
were hoping that the House would debate the bill=20
Wednesday or Thursday, but the floor schedule=20
released by Majority Whip Roy Blunt (R-Mo.)=20
listed 11 bills, not including H.R. 5252, the=20
Communications Opportunity, Promotion and=20
Enhancement Act (COPE Act), sponsored by Energy=20
and Commerce Committee chairman Joe Barton=20
(R-Texas). The House schedule could change if=20
House Speaker J. Dennis Hastert (R-IL) refuses to=20
refer the COPE Act to the Judiciary Committee,=20
deciding a power struggle in Barton=92s favor over=20
Judiciary chairman James Sensenbrenner (R-WI).
http://www.multichannel.com/article/CA6332676.html?display=3DBreaking+News

COMMUNICATIONS REFORM BILL AS MEASURE TO SPEED BROADBAND DEPLOYMENT
[SOURCE: US Senate Commerce Committee press release]
Senate Commerce Committee Chairman Ted Stevens=20
(R-Alaska) on Friday received the Government=20
Accountability Office (GAO)=92s report detailing=20
certain shortcomings in broadband deployment and=20
penetration in the United States. In response,=20
Chairman Stevens urged his colleagues to support=20
S. 2686, the Communications, Consumers=92 Choice=20
and Broadband Deployment Act of 2006, which, he=20
argues, responds to many of the GAO report=92s=20
findings. The GAO report found that only 28=20
percent of American households subscribe to=20
broadband Internet service, another 30 percent=20
subscribe only to dial-up service, and 41 percent=20
of American households are not connected to the=20
Internet at all. The GAO report also found that=20
rural Americans are much less likely to subscribe=20
to broadband than those living in cities. In all,=20
only 17 percent of rural households have to=20
broadband service. =93The disparity of broadband=20
deployment between rural and urban America cited=20
in the GAO report raises serious concerns,=94 said=20
Chairman Stevens. =93High-speed Internet access is=20
absolutely essential to all Americans, whether=20
you live in Manhattan or a remote village in=20
Alaska. Numerous provisions in the=20
Communications, Consumers=92 Choice, and Broadband=20
Deployment Act of 2006 focus on addressing this broadband deployment proble=
m.=94
http://commerce.senate.gov/newsroom/printable.cfm?id=3D255239

TELECOM

BELL BROADBAND PLANS
[SOURCE: Reuters]
Below find links to three articles about the=20
plans of telecom giants AT&T, Verizon and Qwest.=20
1) AT&T said on Monday it would a) offer new=20
satellite-based Internet services in U.S. rural=20
markets where DSL service is not available and b)=20
expand its investment in emerging WiMax wireless=20
connections. 2) Verizon Communications warned the=20
financial services industry may not get the=20
secure networks it needs if Congress adopts laws=20
governing high-speed Internet broadband networks.=20
Verizon's chief congressional lobbyist Peter=20
Davidson warned that the financial services=20
industry "better not start moaning in the future=20
about a lack of sophisticated data links they=20
need" if Net neutrality laws were passed because=20
the communications industry may not invest in new=20
networks. 3) Qwest Communications International,=20
the fourth largest but financially weakest U.S.=20
local telephone company, said on Monday that it=20
would expand high-speed network capacity as much=20
as customers want, but not too much more. Qwest's=20
Chief Executive Richard Notebaert said that he=20
aimed for "just in time" bandwidth expansion,=20
referring to a popular inventory strategy to=20
optimize the return on investment. 4) Is it me,=20
or do these articles really say C) DSL service=20
will never be available in many rural areas, Y)=20
"Shut up and eat your bandwidth and A) we'll=20
cling to any successful buzzword we can to make us look good.
1) AT&T plans fast Web alternatives in rural areas
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-05-08T202508Z_01_N08191775_RTRUKOC_0_US-TELECOMS-ATT-INTERNET.xml
(See AT&T press release:=20
http://www.sbc.com/gen/press-room?pid=3D5097&cdvn=3Dnews&newsarticleid=3...
272)
2) Verizon warns financial sector on Internet fight
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-05-08T190029Z_01_N08181116_RTRUKOC_0_US-FINANCIAL-BANKING-TELECOMS=
.xml&archived=3DFalse
3) Qwest to expand bandwidth "just in time"
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-05-08T224541Z_01_N08216350_RTRUKOC_0_US-TELECOMS-QWEST.xml

COURT TO HEAR FROM BELL RIVALS
[SOURCE: Technology Daily, AUTHOR: David Hatch]
A U.S. District Court judge in Washington will=20
hear oral arguments Wednesday on whether Comptel,=20
a telecommunications industry association, should=20
be granted intervener status in a judicial review=20
of two recent telecom mega-mergers. A favorable=20
ruling for Comptel would be significant, because=20
the association represents many competitors of=20
the former regional Bell operating companies who=20
are critical of the recent combinations of AT&T=20
with SBC Communications and MCI with Verizon Communications.
http://www.njtelecomupdate.com/lenya/telco/live/tb-ZPWH1147115045123.html

NET NEUTRALITY

COMMISSO TAKES AIM AT NET NEUTRALITY
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
In a stark departure from the cable industry's=20
public position, Mediacom Communications Corp.=20
CEO Rocco Commisso decried proposed=20
"net-neutrality" rules Monday by saying that they=20
keep cable operators from deciding how to "rent"=20
their networks to Web-content providers. "The=20
government is coming and telling us how we can=20
rent our infrastructure," Commisso told around=20
200 cable executives at the annual meeting of the=20
American Cable Association, a lobbying group for=20
small cable operators, in Washington, D.C. The=20
comments are very close to the controversial=20
position of AT&T chairman Ed Whitacre, who has=20
alarmed Web companies and consumer advocates by=20
openly declaring that he wants to charge the=20
likes of Google and Yahoo! for access to AT&T's=20
customers. Cable operators and telcos currently=20
charge consumers extra for higher capacity=20
service. But Commisso added another reason, one=20
that Web companies and consumer advocates fear:=20
the ability to make financial arrangements with=20
content providers, including charging for access=20
to Web surfers through cable's high-speed data=20
networks. Citing networks that sell episodes=20
of hit TV shows online, Rocco says "they're=20
making money through our pipe" but then "turn=20
around and `say don't let Rocco charge anybody=20
for this usage.'" He also criticized Google which=20
is lobbying for net neutrality rules. Noting that=20
the company has a greater stock market valuation=20
than the entire cable industry. "They need=20
special favors in Washington, so make sure they=20
can use our pipe and they make their money and we=20
can't make any?" Interviewed afterward, Commisso=20
says that arrangements with content providers=20
could come in the form of advertising=20
availabilities for cable operators. "We should=20
have the flexibility at some point in time -- not=20
today -- to have different business models that=20
ensure our return on investment."
http://www.broadcastingcable.com/article/CA6332793?display=3DBreaking+News
* Smaller cable firms take aim at Net neutrality fans
http://news.com.com/Smaller+cable+firms+take+aim+at+Net+neutrality+fans/...
0-1028_3-6069873.html?tag=3Dhtml.alert
* Commisso Open to Charging Web Fees
http://www.multichannel.com/article/CA6332865.html?display=3DBreaking+News
More Net Neutrality Commentary --
* Save the net from what?
http://www.affbrainwash.com/archives/021047.php
* Net Diversity Threatened by Neutrality Advocates
http://www.linuxinsider.com/story/features/50350.html
* Let's Get Neutral
[SOURCE: AlterNet, AUTHOR: Annalee Newitz]
[Commentary] If the big corporations win their=20
push to charge Internet users different rates for=20
the same product, the Web as we know it will=20
wither on the vine. If the deregulationists=20
succeed, power over the Internet will be=20
centralized among the companies that own the=20
wires, and everyone but the big corporations will=20
lose. We may be about to witness the end of the ends.
http://www.alternet.org/columnists/story/36002/

TAX FOES ATTACK NET NEUTRALITY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Calling itself a conservative response to=20
moveon.org's pro-"network neutrality" regulation=20
lobby, the Internet Freedom Coalition has formed=20
to "fight regulation of the Internet." The new=20
coalition, including limited-government groups=20
like Americans for Tax Reform, the Center for=20
Individual Freedom, and Tennessee Center for=20
Policy Research, argue that tough network=20
neutrality language in the bill would be "the=20
first major attempt by Washington to regulate the=20
Internet." They will fight moveon.org's Internet=20
fire with fire, promising to launch a massive=20
e-mail campaign, take out Internet banner ads to=20
fight what is says will be a tax on the Internet.=20
Why is network neutrality regulation a tax? If=20
networks aren't allowed to recoup their build-out=20
costs by charging more for bandwidth, security or=20
other services, the argument goes, they will have=20
to pass them along to customers.
http://www.broadcastingcable.com/article/CA6332711?display=3DBreaking+News

MEDIA OWNERSHIP

A COMEDIAN'S RIFF ON BUSH PROMPTS AN E-SPAT
[SOURCE: New York Times 5/8, AUTHOR: Noam Cohen]
Stephen Colbert's performance at the White House=20
Correspondents Dinner nine days ago has already=20
created a debate over politics, the press and=20
humor. Now, a commercial rivalry has broken out=20
over its rebroadcast. On Wednesday, C-Span, the=20
nonprofit network that first showed Mr. Colbert's=20
speech, wrote letters to the video sites=20
YouTube.com and ifilm.com, demanding that the=20
clips of the speech be taken off their Web sites.=20
The action was a first for C-Span. "We have had=20
other hot -- I hate to use that word -- videos=20
that generated a lot of buzz," said Rob Kennedy,=20
executive vice president of C-Span, which was=20
founded in 1979. "But this is the first time it=20
has occurred since the advent of the video=20
clipping sites." After the clips of Mr.=20
Colbert's performance were ordered taken down at=20
YouTube -- where 41 clips of the speech had been=20
viewed a total of 2.7 million times in less than=20
48 hours, according to the site -- there were=20
rumblings on left-wing sites that someone was=20
trying to silence a man who dared to speak truth=20
to power. But as became clear later in the week,=20
this was a business decision, not a political=20
one. Not only is the entire event available to be=20
streamed at C-Span's Web site, c-span.org, but=20
the network is selling DVD's of the event for=20
$24.95, including speeches and a comedy routine=20
by President Bush with a President Bush imitator.=20
And C-Span gave permission to Google Videos to=20
carry the Colbert speech beginning Friday. The=20
arrangement, which came with the stipulation that=20
Google Videos provide the entire event and a clip=20
of Mr. Bush's entire routine as well, is a one-time deal.
http://www.nytimes.com/2006/05/08/technology/08colbert.html
(requires registration)

BAY AREA DEMOCRATS WANT CLOSER LOOK AT MEDIANEWS DEAL
[SOURCE: San Francisco Chronicle 5/6, AUTHOR: Carolyn Said]
Six Bay Area members of Congress wrote to the=20
Justice Department on Friday, asking it to=20
carefully consider the antitrust implications of=20
McClatchy Co.'s proposed acquisition of Knight=20
Ridder. Specifically, the representatives=20
questioned the impact on Bay Area readers and=20
advertisers of a key related transaction -- the=20
transfer of three Northern California Knight=20
Ridder newspapers to Denver's MediaNews Group and=20
the involvement of New York's Hearst Corp. in=20
that complex arrangement. Those papers are the=20
San Jose Mercury News, Contra Costa Times and=20
Monterey County Herald. The letter was signed by=20
Reps. Zoe Lofgren, George Miller, Anna Eshoo,=20
Ellen Tauscher, Barbara Lee and Mike Honda, all=20
Democrats. MediaNews, which already has a string=20
of Bay Area dailies and nondailies, would have 43=20
papers extending across the Bay Area with the=20
addition of the Knight Ridder dailies and=20
associated weeklies, the letter said.
http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2006/05/06/BUGUCIMG7A...
TL

CW AFFILIATE WORTH $217 MILLION IN ORLANDO
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano & John Eggerton]
Hearst-Argyle is buying WKCF-TV Orlando, the 20th=20
largest TV market in the US, from Emmis for $217=20
million. Hearst-Argyle already own WESH-TV there,=20
so it will now have a duopoly in the market. WKCF=20
is a WB and soon-to-be CW affiliate. The company=20
now has duopolies in five of its seven biggest=20
markets, four TV duopolies and one radio-TV.=20
Opportunities for duopolies in top markets like=20
Orlando don't come up often under today's FCC=20
rules, said H-A spokesman Tom Campo. For its=20
part, Emmis is divesting its TV properties to=20
concentrate in radio. Also Monday, Emmis unveiled=20
a stock buyback proposal that would give founder=20
and Chairman Jeff Smulyan full control of the=20
company. Under the proposal, Smulyan=92s=20
corporation, ECC Acquisition, would buy back=20
outstanding shares at $15.25 per share, a 13.6%=20
premium over the stock=92s closing price last Friday.
http://www.broadcastingcable.com/article/CA6332568?display=3DBreaking+News

INDECENCY

CBS BLASTS FCC FINES
[SOURCE: Variety 5/7, AUTHOR: William Triplett]
CBS has accused the Federal Communications=20
Commission's indecency cops of making an=20
unprecedented and unjustified power grab in=20
levying record fines for an episode of "Without a=20
Trace." Left unchallenged, the recent "Without a=20
Trace""Without A Trace" ruling could establish=20
the FCC as essentially a governmental story=20
editor, CBS implied. On the same day last month=20
when the four major nets jointly took the FCC to=20
court over three other indecency rulings, CBS=20
separately filed an opposition with the agency=20
over its "Without a Trace" decision, which=20
slapped more than 100 stations with a total $3.35=20
million fine. The episode included two brief=20
scenes suggesting a teen sex party, which the=20
Commission said was "unnecessary" to the story.=20
CBS argued that this is a new assertion of=20
authority that constitutes a "deep intrusion into=20
the editorial process," according to the filing.=20
For the FCC to decide what is or isn't necessary=20
to a storyline "places the government at the=20
heart of the editorial process, a role the=20
Commission previously avoided. This is a sharp=20
break from the past," filing said. The papers=20
then quote a 1970 FCC ruling that "there can be=20
no governmental arbiter of taste in the broadcast=20
field." Subsequent FCC actions hewed to that line.
http://www.variety.com/article/VR1117942721?categoryid=3D1622&cs=3D1&s=3...
p=3D0

'SOPRANOS' UNDERGOES COSMETIC SURGERY FOR BASIC CABLE
[SOURCE: New York Times, AUTHOR: Jacques Steinberg]
As "The Sopranos" moves to the A&E Network,=20
hundreds of scenes from the first five seasons of=20
shows are being sanitized. Though A&E, like HBO,=20
is exempt from the Federal Communications=20
Commission guidelines on nudity, violence and=20
coarse language that apply to the broadcast=20
networks, it differs from HBO in two critical=20
respects: it is advertiser-supported, and,=20
because subscribers do not pay a premium to=20
receive it, it is available in three times as=20
many homes as HBO. And so, just as TBS did when=20
it began showing syndicated episodes of "Sex and=20
the City," with ads, in 2004, A&E has been=20
pruning "The Sopranos" of material that it fears=20
may be too risqu=E9 or vulgar or grotesque =97 not=20
only for basic-cable viewers but also for the=20
luxury car companies, soft drink manufacturers=20
and other advertisers that may eventually choose=20
the series as an opportunity to reach consumers.=20
A&E, which is available in about 90 million=20
homes, will begin selling those ads next month.=20
In choosing to strike a balance between censoring=20
itself, and not diluting a series that relies=20
heavily on its grittiness, Bob DeBitetto,=20
executive vice president and general manager of=20
A&E Network, said that he and his colleagues are=20
relying as much on gut feeling as anything else.=20
Among the test questions they have asked=20
themselves about potentially problematic moments=20
are: "What's the use of it in the context of the shot? Is it gratuitous?"
http://www.nytimes.com/2006/05/09/arts/television/09sopr.html
(requires registration)

QUICKLY

SMITHSONIAN DEAL WAS NOT MADE IN SECRET, SMALL SAYS
[SOURCE: Washington Post, AUTHOR: Jacqueline Trescott]
Smithsonian Institution Secretary Lawrence M.=20
Small defended the Smithsonian's television=20
development deal with CBS/Showtime Networks=20
yesterday, saying the agreement was not reached=20
in secret and that restrictions in the contract=20
would affect only a very small number of=20
filmmakers. But the Smithsonian will not release=20
the contract; it will not even say how long it=20
runs. Small said it is up to the Smithsonian to=20
decide on what films might come under the=20
restrictions. Small spoke to journalists after a=20
closed-door meeting of the Board of Regents, the=20
institution's 17-member governing body headed by=20
John Roberts, chief justice of the Supreme Court.=20
In a letter to the Smithsonian last week, two=20
influential congressmen asked the regents to=20
review the Showtime deal at their meeting. Small=20
said the regents' response was being drafted and=20
would be sent to Capitol Hill "in the next couple=20
of days." He declined to discuss the regents'=20
reply to Rep. Charles Taylor (R-NC), the chairman=20
of the House appropriations subcommittee that=20
oversees the Smithsonian's federal money, and=20
Rep. Norman D. Dicks (D-Wash), the ranking minority member.
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/08/AR200605...
1689.html
(requires registration)

NEWSPAPER CIRCULATION FALLS, WEB READERSHIP GAINS
[SOURCE: Reuters, AUTHOR: Robert MacMillan]
U.S. newspaper circulation slid 2.5 percent as of=20
the end of March as readers defect to the=20
Internet and other media outlets, though=20
publishers were able to lure more viewers online,=20
according to industry data released on Monday. A=20
Newspaper Association of America analysis of=20
semiannual data from the Audit Bureau of=20
Circulations found that average daily circulation=20
of 770 daily newspapers fell to about 45.4=20
million readers, compared with about 46.6 million=20
in the same six-month period a year ago.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-05-08T195958Z_01_N083887_RTRUKOC_0_US-DJCMEDIA-NEWSPAPERS-CIRCULAT=
ION.xml&archived=3DFalse
* Precipitous Circ Drop Defies Geography, But Not All News is Bad
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1002464330
* Circulation Falls, but Investors Read Ahead
http://www.latimes.com/business/printedition/la-fi-newspapers9may09,1,58...
80.story?coll=3Dla-headlines-pe-business

CONNECTICUT MAY NOT REQUIRE IPTV FRANCHISES
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
Internet-protocol television is "merely another=20
form of data stream" and not subject to=20
cable-franchising requirements, according to a=20
tentative decision by the Connecticut Department=20
of Public Utility Control. If the decision=20
receives final approval June 7, the regulator's=20
action would allow the rollout of IPTV by AT&T's=20
state division, Southern New England Telephone=20
Co., without oversight by the commission.
http://www.multichannel.com/article/CA6332673.html?display=3DBreaking+News

NO VOTE ON FLORIDA STATEWIDE-FRANCHISE BILL
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
The state Senate in Florida ended its session for=20
the year Friday without ever calling for a vote=20
on the bill that would have enabled statewide=20
franchising for telephone competitors. The bill,=20
HB1199, was resoundingly approved by the state=20
House, but supporters could not muster enough=20
support for even a vote in the Senate.
http://www.multichannel.com/article/CA6332671.html?display=3DBreaking+News

WARNER BROTHERS TO SELL MOVIES AND TV SHOWS ON INTERNET
[SOURCE: New York Times, AUTHOR: Julie Bosman & Tom Zeller]
Warner Brothers plans to announce today that it=20
will make hundreds of movies and television shows=20
available for purchase over the Internet using=20
BitTorrent software, which is widely used to=20
download movies and other copyrighted material=20
illegally. The agreement between Warner Brothers=20
and BitTorrent is an unusual deal between a major=20
Hollywood studio and a company whose file-sharing=20
technology has raised the ire of the movie=20
industry. For its part, Warner Brothers says it=20
is trying to stem the piracy of movies on the=20
Internet by offering consumers an easy and fast=20
way to download movies legally.
http://www.nytimes.com/2006/05/09/business/media/09movie.html
(requires registration)
* Studio Sees Profit in What Was Piracy
http://www.latimes.com/news/printedition/front/la-fi-torrent9may09,1,163...
9.story?coll=3Dla-headlines-frontpage

CONTEST HELD FOR PEACEFUL VIDEO GAMES
[SOURCE: Reuters]
As the Electronic Entertainment Expo, the world's=20
biggest electronic gaming event of the year, gets=20
under way this week in Los Angeles, alternative=20
developers are in the minority in an industry=20
with nearly $30 billion in annual revenue. Most=20
video games focus on shooting, battling aliens,=20
racing, sports, or playing roles in fantasy=20
lands. But a contest organized by the University=20
of Southern California's Center on Public=20
Diplomacy challenged designers to modify popular=20
games or create one of their own to include=20
messages of global peace and friendship.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-05-09T014405Z_01_N08199379_RTRUKOC_0_US-EXPO-PEACE.xml
--------------------------------------------------------------
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=20
welcome your comments. For upcoming media policy=20
events, see http://www.benton.org
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