May 2006

The CPB Board of Directors meets today as does the Smithsonian
Regents (see story below). On Friday, the FCC's Panel on Katrina
meets as does a discussion entitled "Beyond Broadcast: Reinventing
Public Media in a Participatory Culture."
For these and other upcoming media policy events, see http://www.benton.org

TELECOM LEGISLATION UPDATE
12 in Congress Likely to Forge Telecom Bill in Secret
Hurdles Multiply for Telecom Reform
House Judiciary Chairman Demands Review Of Telecom Bill
House Telecom Bill to Exceed Unfunded Mandates Threshold

INTERNET
No free lunches on the Net
Court Skeptical of FCC on Broadband Wiretap Access
Barton Endorses Data Retention
Broadband Deployment Is Extensive, but Gaps in Rural Areas
Worldwide Survey Estimates 694 Million Adult Web Users
The Next Tech Battle: Internet Searches on Cellphones

BROADCASTING
Martin Wants Affils to Retreat on Indecency
FCC 'Whitewashing' Blues, Says Scorsese
Warner Bros. to Let Local TV Put Sitcom on Web
Uncertainty Sparks Predictions of Flat TV Market
Someone Has to Pay for TV. But Who? And How?

QUICKLY -- Smithsonian Regents To Discuss VOD Deal Today; The
politics of tech's tax breaks; Scholarly Journals Dislike Bill to
Require Online Access

TELECOM LEGISLATION UPDATE

12 IN CONGRESS LIKELY TO FORGE TELECOM BILL IN SECRET
[SOURCE: The Atlanta Journal-Constitution, AUTHOR: Marilyn Geewax]
The House and Senate are preparing to vote on telecommunications
legislation that could affect every American who surfs the Internet,
watches cable TV or uses a phone. But consumers shouldn't waste much
time watching the floor debates on C-SPAN. The lawmakers admit their
goal is not to pass definitive legislation in public in the coming
weeks. Instead, they want the House and Senate to pass separate
bills, regardless of how different they may be. The final version
would be negotiated, largely in private, by about a dozen senators
and representatives on a conference committee. The Senate just needs
to pass "anything to get us into conference," where the real
decisions will be made, House telecommunications subcommittee
Chairman Fred Upton (R-MI) said Tuesday at a telecom forum hosted by
National Journal's Technology Daily. "It's not supposed to work like
this," said Celia Wexler, vice president for advocacy for Common
Cause, a government watchdog group. "It's appalling that you can hear
a member (of Congress) say that in public." Watchdog groups say that
while most conference negotiations are closed to public view,
lobbyists continue to influence the members and their staffers,
sometimes even supplying language that ends up as the law of the land.
http://www.ajc.com/services/content/business/stories/0507biztelecom.html...

HURDLES MULTIPLY FOR TELECOM REFORM
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Senate rolled out its version of a telecommunications-reform bill
last week amid confident talk of passage that echoed similar boasts
on the House side. But whether either has the momentum to make it to
the president's desk is still up in the air. The omnibus legislation
promises to dramatically alter the regulatory landscape for media
companies, spurring cable competition and giving clearer guidelines
for the digital-TV transition. A much narrower House bill passed the
Commerce Committee last week. Before telecom reform can become law,
the House must decide if the Judiciary Committee shares
jurisdiction. If it does, expect more hearings and committee votes
before a full floor vote. The Senate version is only a draft and must
still go through two hearings in late May and a markup in early June.
If both bills are passed by the chambers, then differences must be
hashed out in conference committee. Some Wall Street analysts see the
bill's prospects dimming, and one former high-ranking
telecommunications regulator says he doesn't see how the bills could
be reconciled in the time remaining.
http://www.broadcastingcable.com/article/CA6332379?display=News
See also --
* CDD's guide to the Communications, Consumer's Choice, and Broadband
Deployment Act of 2006
http://www.democraticmedia.org/news/washingtonwatch/StevensBill.html

HOUSE JUDICIARY CHAIRMAN DEMANDS REVIEW OF TELECOM BILL
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
House Judiciary Chairman James Sensenbrenner (R-WI) is vehement that
his panel be able to review a telecommunications bill passed late
last month in the House Commerce Committee. In a letter to Speaker
Dennis Hastert (R-IL), Chairman Sensenbrenner said that if his
request is declined, Rep Hastert should refrain from scheduling floor
action on the bill until the Judiciary panel can consider telecom
legislation of its own. House Commerce Chairman Joe Barton (R-Texas)
does not want the Judiciary Committee to consider his bill, and
sought to craft the legislation in such a way as to keep it out of
the Judiciary panel's jurisdiction. The measure, H.R. 5252, would
permit the former regional Bell operating companies to quickly enter
the video marketplace. It has been publicly supported by Speaker
Hastert, who played a significant role in crafting the 1996
Telecommunications Act as a member of the Commerce Committee before
he assumed the House speakership in 1998. Chairman Sensenbrenner's
letter details many reasons why he believes the Judiciary panel
should have jurisdiction over the bill. He cited issues such as
antitrust law, the province of Judiciary committees, pre-emption of
consumer protection laws, administrative procedures, taxes on
interstate commerce, rights to private property, child pornography,
and civil rights. Industry sources differ on whether the Judiciary
Committee will be granted a referral. If the Judiciary panel receives
a referral, House action on the Barton bill could be delayed until
June. Otherwise, a floor vote could occur in the next couple of
weeks. The Judiciary Committee was not granted a referral over the
1984 or 1992 cable acts, which would be most affected by Barton's
bill. The Judiciary panel had a referral over the 1996 Telecom Act
and a portion of a Commerce Committee 2001 measure to liberalize
broadband regulation. Besides a referral or a vote delay, Hastert
could promise Sensenbrenner an amendment or action on an unrelated priority
http://www.njtelecomupdate.com/lenya/telco/live/tb-XPJI1146860374640.html

COPE (HR 5252) TO EXCEED UNFUNDED MANDATES THRESHOLD
[SOURCE: Congressional Budget Office, AUTHOR: Melissa Petersen, Sarah
Puro, Philip Webre and Fatimot Ladipo]
H.R. 5252 would allow providers of cable service to apply to the FCC
for a national franchise. National franchises would be substitutes
for separate, negotiated agreements with states and localities
regarding the provision of cable service to a local area. H.R. 5252
contains several intergovernmental mandates, as defined in the
Unfunded Mandates Reform Act (UMRA). In particular, it would prohibit
intergovernmental entities -- primarily municipal governments -- from
charging certain fees to providers of cable service. The bill also
would impose a variety of requirements and limitations on public
safety access points (PSAPs). Further, the bill would preempt state
laws that prohibit municipal governments from providing Internet
access services and, if area cable providers receive a national
franchise, would preempt state and local laws that address consumer
protection, cable franchises, and the use of municipal rights-of-way.
CBO estimates that the net direct costs of these mandates on state
and local governments would grow over time, and would likely fall
between $100 million and $350 million by 2011. Such losses would
exceed the threshold established in UMRA in at least one of the first
five years the mandates are in effect (the threshold is $64 million
in 2006 and is adjusted annually for inflation).
http://www.cbo.gov/ftpdocs/71xx/doc7182/hr5252.pdf

INTERNET

NO FREE LUNCHES ON THE NET
[SOURCE: C-Net|News.com, AUTHOR: Gerald Wesel]
[Commentary] The network neutrality debate has generated plenty of
emotion and rhetoric. One side argues that the creation of "fast
lanes" of Internet traffic constitutes "informational apartheid,"
while the other calls such views nuts. The answer lies beyond the
rhetoric, requiring an understanding of technology and the networks
themselves. This is the approach that should inform Congressional
decisions. Networks need traffic management. We need a solution that
reflects experience and facts, not rhetoric. The result will be
better and faster Internet service for everyone.
http://news.com.com/No+free+lunches+on+the+Net/2010-1034_3-6068868.html?...
More commentary
* Net neutrality and politics
[Commentary] "The Internet is not threatened by access tiers. In
fact, it can be enhanced by making new bandwidth-heavy services more
economical and reliable in ways that would be impossible given a
naive enforcement of "net neutrality" rules."
http://blogs.zdnet.com/carroll/?p=1563

COURT SKEPTICAL OF FCC ON BROADBAND WIRETAP ACCESS
[SOURCE: Reuters, AUTHOR: Peter Kaplan]
On Friday the Federal Communications Commission faced tough
questioning from a federal appeals court about whether the government
can force broadband Internet service providers to give law
enforcement authorities access for surveillance purposes. One of the
three judges hearing the case called the government's rationale for
the surveillance requirement "gobbledygook," and another also
expressed reservations. "This is totally ridiculous. I can't believe
you're making this argument," Judge Harry Edwards told a FCC lawyer.
The issue before the U.S. Court of Appeals for the District of
Columbia is a decision by the FCC in August requiring
facilities-based broadband providers and those that offer Internet
telephone service to comply with U.S. wiretap laws. The FCC has set a
May 14, 2007 deadline for compliance.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...
* Appeals court takes dim view of Net-tapping rules
http://news.com.com/Appeals+court+takes+dim+view+of+Net-tapping+rules/21...

REPUBLICAN POLITICO ENDORSES DATA RETENTION
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
House Commerce Committee Chairman Joe Barton (R-Texas) plans to find
a way to force Internet providers to keep records of their customers'
activities. "We have made a commitment with the congresswoman to
address that issue," David Cavicke, general counsel to the House
Committee on Energy and Commerce, said at the Computers, Freedom &
Privacy conference here. Cavicke was referring to Rep. Diana DeGette,
a Colorado Democrat, who has drafted legislation making it unlawful
for an Internet provider to delete certain types of customer
information. Cavicke said he didn't know what form the legislation
will take -- whether, that is, it'll be a standalone bill or an
amendment to a much broader proposal to rewrite telecommunications
laws. It involves figuring out "how to protect consumers' personal
information and protect American citizens from scourges like child
pornography," Cavicke said.
http://news.com.com/Republican+politico+endorses+data+retention/2100-102...

BROADBAND DEPLOYMENT IS EXTENSIVE, BUT GAPS IN RURAL AREAS
[SOURCE: Government Accountability Office]
About 30 million American households have adopted broadband service,
but the Federal Communications Commission's data indicating the
availability of broadband networks has some weaknesses. FCC conducts
an extensive data collection effort using its Form 477 to assess the
status of advanced telecommunications service in the United States.
For its zip-code level data, FCC collects data based on where
subscribers are served, not where providers have deployed broadband
infrastructure. Although it is clear that the deployment of broadband
networks is extensive, the data may not provide a highly accurate
depiction of local deployment of broadband infrastructures for
residential service, especially in rural areas. GAO recommends that
FCC develop information regarding the cost and burden that would be
associated with various options for improving the information
available on broadband deployment and report this information to the
relevant Senate and House committees to help them determine what
actions, if any, are necessary. FCC provided technical comments on
this report, but did not comment on this recommendation. (GAO-06-426)
http://www.gao.gov/cgi-bin/getrpt?GAO-06-426
Highlights - http://www.gao.gov/highlights/d06426high.pdf

WORLDWIDE SURVEY ESTIMATES 694 MILLION ADULT WEB USERS
[SOURCE: Reuters, AUTHOR: Eric Auchard]
Seeking to standardize global online measurements, comScore
Networks introduced on Friday a new global survey with an estimate
that 694 million people, age 15 or higher, used the Internet during
March, or around 14 percent of adults. The survey, called the
comScore World Metrix, estimates there are 168.1 million users across
four Asian countries -- China, Japan, India and Korea -- or nearly 25
percent of the total online population. By contrast, the United
States is home to 152 million users, or 22 percent of the world's Web users.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

THE NEXT TECH BATTLE: INTERNET SEARCHES ON CELLPHONES
[SOURCE: Wall Street Journal, AUTHOR: Cassell Bryan-Low
cassell.bryan-low( at )wsj.com and Kevin J. Delaney]
The push by the world's biggest Internet search firms to dominate
what customers see when they turn on their cellphones has accelerated
in recent months with Google, Yahoo and Microsoft Corp. all striking
deals with service providers and others in the cellphone industry.
The tech giants want their search engines and logos to pop up on
cellphone screens, enabling people to also use their phones for other
services the companies provide, such as downloading maps, or sending
email and instant messaging, just as they do on their computers. The
companies contend that even though only a small number of people
currently use their phones to search for information online, there is
a huge potential market with twice as many cellphones in use globally
as PCs. And, as search engines become better at tailoring results to
a user's location, mobile searching will become more attractive, they
say. "The leading edge battleground between us and Google in local
search really will come on the phone," predicts Microsoft Chief
Executive Steve Ballmer. Internet searching in general is a huge
market, with U.S. search-related advertising spending totaling $5.1
billion last year, according to research firm eMarketer Inc. But
advertising on cellphones is still in its infancy, generating just
about $100 million last year, analysts say. And, mobile searching
generates little if any revenue.
http://online.wsj.com/article/SB114704408802546163.html?mod=todays_us_ma...
(requires subscription)

BROADCASTING

MARTIN WANTS AFFILS TO RETREAT ON INDECENCY
[SOURCE: TVNewsday 5/5, AUTHOR: Kim McAvoy]
[Commentary] Is FCC Chairman Kevin Martin trying to recruit
broadcasters for his anti-indecency crusade? It appears so. During a
private get-together with the influential Television Operators Caucus
at the NAB convention last week, sources say, Martin scolded the
network affiliates who compose the TOC for joining the networks in
challenging the FCC's latest round of indecency fines. And, the
sources say, Martin asked that the broadcasters support his
controversial a la carte proposal that would require cable operators
to allow subscribers to pick and choose the channels they want and,
in that way, avoid those channels they feel were indecent or
otherwise unsuitable for viewing in their homes. There is much the
TOC wants from the FCC, and Martin will be able accommodate them,
once Robert McDowell joins the agency and puts Martin at the head of
a three-commissioner Republican majority. Among other things, the
network affiliates would like the FCC to require cable operators to
carry their digital multicast signals and ease the ownership rules
banning duopolies in small markets and newspaper-broadcast
crossownership. The broadcasters would also probably like action on
their long-standing petition affirming the affiliates' right to
preempt network programming. TOC members currently hold eight of the
23 seats on the NAB TV board, which means it has a loud voice in
setting NAB policy.
http://www.tvnewsday.com/articles/2006/05/05/daily.1/

FCC 'WHITEWASHING' BLUES, SAYS SCORSESE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Producer-director Martin Scorsese told the FCC Friday that profanity
was integral to the language of his TV documentary and that to censor
it would "strip the documentary of its essential authenticity and
historical accuracy." Saying it reflected his "deep concern over the
adverse impact" the FCC's fining of his Martin Scorsese Presents the
Blues PBS series would have on "the creative process generally and,
more specifically, on the ability and willingness of filmmakers to
produce authentic documentaries and other valuable programming for
presentation on broadcast television," Scorsese Friday weighed into
the TV indecency fight. It came in the form of a sworn statement,
part of a massive filing to the FCC by the San Mateo Community
College District, licensee of KCSM-TV San Mateo, Calif. (San
Francisco). That was one of the stations fined for profanity in the
FCC's March release of almost a dozen proposed indecency findings
against TV stations for sex and language. The station challenged the
$15,000 fine, saying it was unconstitutional and calling into
question the underpinnings of indecency regulation in general.
Scorsese also objected to relegating the show to the 10 p.m.-6 a.m.
hours during which profanity and adult sexuality are protected from
FCC fines. "Our mutual artistic objective of broadly sharing an
accurate depiction of one of the few uniquely American art forms will
be severely undermined if the Commission limits broadcast of the film
to hours when viewership is lowest," he argued.
http://www.broadcastingcable.com/article/CA6332444?display=Breaking+News
See also --
* Stand Up for Free Speech
http://www.broadcastingcable.com/article/CA6332449?display=Opinion

ON A FIRST, WARNER BROTHERS TO LET LOCAL TV PUT SITCOM ON WEB
[SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes brooks.barnes( at )wsj.com]
In a groundbreaking move for the TV industry, Warner Bros. will allow
local TV stations that buy reruns of the comedy "Two and a Half Men"
to stream the episodes on their Web sites. The initiative is the
first time local TV stations will share in the migration of TV shows
onto the Internet. Warner Bros.' move is a sign that the TV industry
is beginning a broader embrace of digital technologies. Major TV
studios have been reluctant to allow hit shows to be streamed online
for fear it would cannibalize the money they make from sale of reruns
or DVDs. The only exceptions have been in cases where studios and
networks fall under the same corporate umbrella, which was the case
with ABC. Warner Bros., a unit of Time Warner Inc., is the biggest
supplier of primetime shows to the major networks. The move is sure
to have ripple effects. Once "Two and a Half Men" reruns are
available on station Web sites, other shows sold into the rerun
syndication market may follow. Warner Bros. will benefit as well. The
studio will likely be able to charge stations more for the reruns of
"Two and a Half Men" than it might have otherwise. Stations that buy
"Two and a Half Men" will share their online ad revenue with Warner
Bros on a 50-50 basis. Warner Bros. said it will also control how the
episodes are streamed to protect against piracy and to limit viewing
by certain geographical area. Mr. Rosenblum's plans call for stations
to stream five episodes of "Two and a Half Men" on their Web sites at
a time; the episodes will consist of the previous week's five aired
installments. The episodes will be free, available on demand and
supported by advertising. A 15-second video commercial that can't be
skipped will run at the beginning of each episode.
http://online.wsj.com/article/SB114704748966046240.html?mod=todays_us_pa...
(requires subscription)
* Warner Bros. Launches Online Syndication Effort
http://www.broadcastingcable.com/article/CA6332456?display=Breaking+News
* Two and a Half Broadband
http://www.multichannel.com/article/CA6332369.html?display=Breaking+News
* ABC affiliates join online streaming program
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

UNCERTAINTY SPARKS PREDICTIONS OF FLAT TV MARKET
[SOURCE: AdAge, AUTHOR: Claire Atkinson]
With so much uncertainty surrounding this year's TV upfront market as
everyone sorts through digital offerings, DVR ratings and one less
broadcast network, it's hard to predict where the dollars will fall.
So conventional wisdom is the market will be flat, and if that's the
case the broadcast networks will be scrambling for their share of the
$9.1 billion spent last year. Buyers are predicting a positive
upfront for ABC and Fox, think CBS will fall in the middle and NBC
will be flat or forced to cut rates for the second straight year.
http://www.adage.com/mediaworks/article?article_id=109006

SOMEONE HAS TO PAY FOR TV. BUT WHO? AND HOW?
[SOURCE: New York Times, AUTHOR: Randall Stross]
[Commentary] The digital video recorder is slowly, but surely,
tunneling through the television industry's foundation. Ten million
homes had DVR's in 2005, according to Forrester Research; the number
is expected to jump to 15 million this year, 30 million next year and
42 million in 2010. Scientific-Atlanta, which supplies set-top boxes
to all the major cable companies, reports that fully half its boxes
going out today are equipped with DVR's. What this means for
traditional advertising can be divined in data collected by TiVo,
which has 4.4 million subscribers. Davina Kent, a TiVo vice
president, said that when its customers watch recorded programs, they
skip 70 percent of the commercials. This has not escaped the notice
of advertisers. Josh Bernoff, a principal analyst at Forrester,
predicted that "next year, you'll see significant decline in TV ad
spending as a result of digital video recorders." The television
industry has not figured out how best to respond.
http://www.nytimes.com/2006/05/07/business/yourmoney/07digi.html
(requires free registration)

QUICKLY

SMITHSONIAN REGENTS TO DISCUSS VOD DEAL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Smithsonian Board of Regents is meeting Monday, May 8. On the
agenda is a discussion of the its increasingly controversial video on
demand deal with Showtime.
http://www.broadcastingcable.com/article/CA6332396?display=Breaking+News

THE POLITICS OF TECH'S TAX BREAKS
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache and Declan McCullagh]
Every individual and business, of course, tries to pay the minimum
amount of taxes legally required. But technology companies that try
to minimize their tax burden sometimes draw accusations of hypocrisy
from liberal advocacy groups and academics--mostly because the same
companies want more government spending on education and research.
http://news.com.com/The+politics+of+techs+tax+breaks/2100-1028_3-6066641...

SOME PUBLISHERS OF SCHOLARLY JOURNALS DISLIKE BILL TO REQUIRE ONLINE
ACCESS TO ARTICLES
[SOURCE: New York Times, AUTHOR: Sara Ivry]
Scholarly publishing has never been a big business. But it could take
a financial hit if a proposed federal law is enacted, opening
taxpayer-financed research to the public, according to some critics
in academic institutions. The Federal Research Public Access Act of
2006, proposed last week by Senators Joseph I. Lieberman (D-CT) and
John Cornyn (R-TX) would require 11 government agencies to publish
online any articles that contained research financed with federal
grants. If enacted, the measure would require that the articles be
accessible online without charge within six months of their initial
publication in a scholarly journal.
http://www.nytimes.com/2006/05/08/business/media/08journal.html
(requires registration)
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