June 2006

TELECOM REFORM LEGISLATION
Senate Judiciary takes Interest in Telecom Bill
Cable Competitiveness and Broadband Deployment spur Economic Development
Consumer choice in video is within reach in 2006
USF can provide Cost-Effective Broadband Access to Every State
Wireless lobbies for Preemption as Senate Wrangles with Telecom Reform

NET NEUTRALITY
SavetheInternet.com Claims Million Pro-Net Neutrality E-Mails
The Internet must remain Open for Innovation
Congress must be Pressured to Preserve Internet Neutrality
An Internet Test
Rockers Push Policy, Not Product
The Tiered Internet and =93Virtual Redlining=94
Inside The Beltway Newspapers Lying About Net Neutrality? What A Surprise

AT THE FCC
FCC Meeting Agenda
FCC must hear Public=92s Concerns before voting on Media Consolidation Rul=
es
AT&T backs TV Multicasts, ahead of likely FCC move
Wireless and Internet Phone Bills seen Rising
The Internet Tax May Be Creeping Up on Us

OWNERSHIP
Feds ask More Time to Look at Sale of Four KR Papers
Chandlers Call for Breakup of Tribune
Tribune's Assets Seen as Big Lures for Bidders

CABLE
Cable Operators Blast Handling Of Rural Broadband Initiative
Cable Spending on Triple Play Dwarfs U.S. Telco Investments

GOVERNMENT & COMMUNICATIONS
Government Increasingly Turning to Data Mining
Congress keeps itself, public in the dark on surveillance
Warrantless tapping of Americans=92 telephone calls is unacceptable
Russia's Lid On the Media

QUICKLY -- Nielsen to gauge TV viewing on Web,=20
mobile devices; U.S. Joins Industry in Piracy=20
War; Too many kids can still buy violent video games: FTC

TELECOM REFORM LEGISLATION

SENATE JUDICIARY TAKES INTEREST IN TELECOM BILL
[SOURCE: Reuters]
Senate Judiciary Committee Chairman Arlen Specter=20
(R-PA) said on Wednesday his panel should be=20
involved in crafting telecommunications reform=20
legislation because of antitrust issues. Much of=20
the controversy surrounding the legislation is=20
whether safeguards are needed to ensure consumers=20
can surf wherever they choose on the Internet and=20
if high-speed broadband Internet providers should=20
be banned from charging content companies to=20
ensure access and service quality. Senators at=20
Wednesday's Judiciary Committee hearing were=20
divided on whether adopting tough Internet=20
regulations would hamper innovation or if the=20
protection is needed to ensure consumers do not=20
face limits on access to content or higher prices=20
for it. Republicans urged restraint against=20
imposing regulations, while Democrats said=20
protections would ensure equal access by all.=20
Judiciary Committee Co-chairman Patrick Leahy, a=20
Vermont Democrat, said he would like to see a=20
"strong bill" akin to a proposal offered by=20
Republican Jim Sensenbrenner and Democrat John=20
Conyers on the House side. Known as the "Internet=20
Freedom and Nondiscrimination Act of 2006," that=20
bill proposed, among other things, making it=20
illegal under federal antitrust law for network=20
operators to impose priority-access fees on=20
content providers or to fail to provide service=20
on "reasonable and nondiscriminatory terms." If=20
the Judiciary Committee asserts jurisdiction over=20
the legislation, that could take more time and=20
make it more difficult to pass a bill this year.=20
Congress has a shorter work schedule this year=20
because of the November congressional elections.=20
"I want to talk to Senator Stevens about it to=20
decide what to do," Sen Specter said. "Whatever=20
we do will be collaborative, try to work it out together."
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-06-14T194845Z_01_N14224151_RTRUKOC_0_US-TELECOMS-CONGRESS.xml
* FTC Testifies on Broadband Internet Access Services
The Federal Trade Commission today told the=20
Senate Judiciary Committee that as the Committee=20
considers legislation to amend the Communications=20
Act, it should preserve the FTC=92s existing=20
authority to protect consumers and maintain=20
competition in the broadband services industry.=20
Delivering the FTC testimony, Commissioner=20
William E. Kovacic said the agency believes it=20
has jurisdiction over most broadband Internet access services.
http://www.ftc.gov/opa/2006/06/broadband.htm
* Cohen: Net Neutrality About Neutering Cable
Comcast Corp. executive vice president David=20
Cohen said in Senate testimony Wednesday that=20
Google Inc., Microsoft Corp. and others that=20
advocate =93net-neutrality=94 laws were actually=20
seeking to transform cable networks into =93dump=20
pipes=94 denied the right to innovate.
http://www.multichannel.com/article/CA6344006.html?display=3DBreaking+News
* Senate ponders policing of Net neutrality offenses
http://news.com.com/Senate+ponders+policing+of+Net+neutrality+offenses/2...
-1028_3-6083733.html?tag=3Dnefd.top
* Senate Judiciary Weighs In On Net Neutrality
http://www.broadcastingcable.com/article/CA6343617?display=3DBreaking+News
* Google Queried on Net Neutrality Ads
Vinton Cerf, Google's chief Internet evangelist,=20
told a Senate Judiciary Committee hearing=20
Wednesday that the company's advertisements along=20
the side of the search engine are according to an open auction.
http://www.broadcastingcable.com/article/CA6343698?display=3DBreaking+News
* Google E-Mail Highlights Division Over 'Network Neutrality' Issue
http://www.njtelecomupdate.com/lenya/telco/live/tb-NFOZ1150312166968.html

CABLE COMPETITIVENESS AND BROADBAND DEPLOYMENT SPUR ECONOMIC DEVELOPMENT
[SOURCE: The Hill, AUTHOR: Rep. Fred Upton (R-MI)]
[Commentary] Last week, the House overwhelmingly=20
-- by a supermajority vote of 321-101 -- approved=20
HR 5252, the Communications Opportunity,=20
Promotion and Enforcement Act of 2006. In=20
approving this legislation, the House=20
emphatically and unhesitatingly rejected the=20
status quo in the cable-television marketplace,=20
in which most consumers have access to only one=20
cable provider and prices steadily climb, and=20
embraced choice and competition =97 and the lower=20
prices and innovative services this will bring.=20
The status quo is that only 2 percent of the=20
cable marketplace is being served by more than=20
one provider, so the vast majority of consumers=20
have no choice, notwithstanding the fact that=20
there are cable overbuilders and, thanks to new=20
technology and investment, phone companies (both=20
big and small, rural ones) that seek to compete=20
in the cable marketplace. But with approximately=20
33,000 local franchise authorities nationwide,=20
the locality-by-locality-by-locality=20
franchise-negotiation process is standing in the=20
way their competitive entry and progress. H.R.=20
5252 will help drive investment in broadband=20
deployment and bring multiple providers of=20
bundled voice, video and broadband data services=20
than ever before. And this competition will bring=20
prices down as a result, which will be great news=20
to family budgets across the nation.
http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_upton...
ml

CONSUMER CHOICE IN VIDEO IS WITHIN REACH IN 2006
[SOURCE: The Hill, AUTHOR: Sen. John Ensign (R-NV)]
[Commentary] Congress needs to act now to=20
modernize our communications laws. With each=20
passing day, our lack of action to ensure our=20
laws keep up with the rapid march of technology=20
relegates the United States to a position further=20
and further back in the pack of technology=20
leading countries. The Internet has been=20
incredible in its resilience and success despite=20
rapidly changing technology, mostly because the=20
government has stayed out of the business of=20
regulating the Internet. Today, the Internet=20
operates based on private contractual=20
arrangements, free from the greedy paws of=20
government regulators and tax collectors. We=20
should not impose on the Internet a slow-moving,=20
stodgy government regulation that will do real=20
harm to innovation. If we are going to legislate=20
in this area, as some have called for, I believe=20
the key to reaching consensus is keeping a=20
consumer-focused approach in whatever legislative=20
steps we take. The key components of a=20
consumer-centric approach to network neutrality=20
are saying in no uncertain terms what consumers=20
should be able to expect from their online=20
experience, including the freedom to get to any=20
legal website, the use of any application of the=20
customer=92s choosing and the freedom to choose a=20
voice over Internet protocol (VoIP) service from=20
any competitor without having that service blocked or intentionally degrade=
d.
http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_ensig...
tml

USF CAN PROVIDE COST-EFFECTIVE BROADBAND ACCESS TO EVERY STATE
[SOURCE: The Hill, AUTHOR: Sen. Ted Stevens (R-Alaska)]
[Commentary] A recent Government Accountability=20
Office report found that two-thirds of Americans=20
do not have access to broadband service. Several=20
factors have prevented Americans from accessing=20
broadband service; chief among these is cost.=20
Broadband is too expensive for some families, and=20
others cannot even afford to purchase home=20
computers. We must address this issue now because=20
the delay in deploying affordable high-speed=20
Internet service is stifling innovation and=20
limiting our ability to compete in the global=20
marketplace. Later this month, the Senate=20
Commerce Committee will consider S. 2686, the=20
Communications, Consumer=92s Choice and Broadband=20
Deployment Act of 2006. The centerpiece of S.=20
2686 is a program called Universal Service, which=20
helps provide affordable communications services=20
in every state. This bill updates the program for=20
the digital age by using Universal Service Fund=20
money to establish a $500 million account that=20
will finance broadband deployment to unserved areas.
http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_steve...
html

WIRELESS LOBBIES FOR PREEMPTION AS SENATE WRANGLES WITH TELECOM REFORM
[SOURCE: RCRWireless News, AUTHOR: Heather Forsgren Weaver]
CTIA President Steve Largent appeared at=20
Tuesday=92s hearing to plead again for the wireless=20
industry=92s top telecom-reform priority as the=20
latest Senate draft bill did not include=20
preemption of state regulation. The House of=20
Representatives passed its version of=20
telecommunications reform last Thursday without a=20
preemption provision. State regulators are=20
pushing back hard. =93We are concerned and raise=20
the issue today because the wireless industry has=20
launched an aggressive lobbying effort to create=20
a technology-specific preemption standard for=20
their telecommunications services. From our point=20
of view, it makes little sense to eliminate=20
scores of consumer protections at the state level=20
solely on the basis of the particular technology=20
used. In the case of wireless, it makes even less=20
sense because the industry has prospered so well=20
under the division of authority that now exists,=94=20
said Philip Jones, commissioner with the=20
Washington Utilities & Transportation Commission=20
and chairman of the federal legislative=20
subcommittee of the National Association of Regulatory Utility Commissioner=
s.
http://www.rcrnews.com/news.cms?newsId=3D26598

NET NEUTRALITY

SAVE THE INTERNET.COM CLAIMS MILLION PRO-NET NEUTRALITY E-MAILS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The flood of network neutrality-related activity=20
in Washington continued apace Wednesday. In=20
addition to a Senate Judiciary Committee on the=20
issue, there was the 1 million e-mails=20
SavetheInternet.com said it delivered to Congress=20
in support of strong network neutrality language=20
in a proposed telcom reform bill. Sens Byron=20
Dorgan (D-ND) and Olympia Snowe (R-Maine) were on=20
hand for the announcement, according to the=20
group, to lend their support. The two had=20
co-sponsored a bill with strong network=20
neutrality protection provisions that they hope=20
to amend to the Senate version of telecom reform,=20
which is being amended in the Senate Commerce Committee June 22.
http://www.broadcastingcable.com/article/CA6343957?display=3DBreaking+News
* One Million Americans Urge Senate to Save the Internet
http://www.freepress.net/press/release.php?id=3D155

THE INTERNET MUST REMAIN OPEN FOR INNOVATION
[SOURCE: The Hill, AUTHOR: Rep. John Conyers (D-MI)]
[Commentary] Over the past decade, the Internet=20
has revolutionized the way the world works,=20
including the way we think and the way we shop,=20
learn and communicate. It has created a global=20
marketplace in which a single person running a=20
business from home can access millions of=20
potential customers equally as well as a=20
multinational corporation. This information=20
superhighway allows us to access unprecedented=20
amounts of information and opinions and has=20
become a safe harbor for First Amendment rights=20
in which everyone can discuss whatever is=20
important to them. However, because we have only=20
begun to see the potential of this incredible=20
resource, it is crucial that we protect the=20
Internet and ensure that it remains the platform=20
for innovation that it is today. I believe the=20
way to do that is through network-neutrality=20
legislation. The need for strong, narrowly=20
tailored legislation to ensure network neutrality=20
is widely supported. Time is of the essence. We=20
cannot stand by and let the cable and phone=20
companies re-create the Internet to suit their=20
needs. The possibilities of a future that the=20
Internet can and will bring are infinite and=20
exciting, but we must act now to ensure that the=20
endless possibilities remain just that -- possible.
http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_conye...
html

CONGRESS MUST BE PRESSURED TO PRESERVE INTERNET NEUTRALITY
[SOURCE: San Jose Mercury News, AUTHOR: Editorial Staff]
[Commentary] The proposition that the Internet=20
should remain an open, decentralized network=20
where all users and Web sites are treated equally=20
suffered a blow last week when the House of=20
Representatives defeated an "Internet neutrality"=20
amendment that was part of a larger bill to=20
reform telecommunications laws. And on Tuesday,=20
Senate Commerce Committee chair Ted Stevens,=20
R-Alaska, who is crafting companion legislation,=20
said Internet neutrality isn't likely to be part=20
of his bill, either. But this battle is too=20
important to give up. Without Internet-neutrality=20
rules, the telephone and cable companies that=20
control Internet access are sure to go ahead with=20
a plan to divide the Internet into a two-tiered=20
network. Companies that pay them a toll will see=20
their content and services cruise at high speeds.=20
Everyone else will be stuck in a slow lane.=20
Worse, cable and phone companies would have the=20
freedom to decide who gets quick access and who=20
doesn't. As a result, consumer choice and=20
innovation will suffer. The Merc concludes: "If=20
you want the Internet to remain a force for=20
innovation and free speech, urge our senators not=20
to sell off cyberspace to special interests. You=20
can add your voice to the growing chorus of=20
Internet neutrality supporters at=20
www.savetheinternet.com or www.itsournet.org."
http://www.mercurynews.com/mld/mercurynews/news/opinion/14814372.htm

AN INTERNET TEST
[SOURCE: San Francisco Chronicle, AUTHOR: Editorial Staff]
[Commentary] "Net Neutrality" will never make it=20
on a bumper-sticker or flame-red T-shirt. But the=20
clunky phrase has become a worthy battle cry:=20
Keep the Internet free, level and open to all.=20
It's the Senate's turn to consider the issue. The=20
Senate may want to duck a showdown, believing the=20
Internet is too unpredictable to regulate. Why=20
not let the phone and cable companies have their=20
way and ask the Federal Communications Commission=20
to jump on them later, if abuses surface? If only=20
Washington worked that way. Once the phone and=20
cable industry has its way, it will be hard to=20
rein them in. Net neutrality should remain a=20
basic, not a negotiating point to be weighed and measured later on.
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2006...
/14/EDGDOILMHO1.DTL
* Congress vs. the Internet
[Commentary] There's little question that a=20
united Democratic caucus could combine with=20
principled Republicans in the Senate to defend=20
net neutrality. But if so-called "new Democrats"=20
in the Senate side with the telephone and cable=20
lobbies, the information superhighway will become a toll road.
http://www.madison.com/tct/opinion/index.php?ntid=3D87399&ntpid=3D0

ROCKERS PUSH POLICY, NOT PRODUCT
[SOURCE: BusinessWeek, AUTHOR: Carlos Bergfeld]
As a rule, rock stars have never shied away from=20
taking up a political cause. But the advent of=20
the Digital Age is giving musicians a host of new=20
ways to mix both tech savvy and their rock star=20
status to further an agenda. Coordinators of the=20
SavetheInternet.com coalition back so-called "Net=20
neutrality," or rules that would bar phone and=20
cable companies from creating a multi-tiered fee=20
structure on the Internet. They're hoping that=20
participation of artists like Moby will help them=20
spread the word. At least 10 other musicians and=20
celebrities will soon add their voices to the=20
plea, says Craig Aaron, a spokesman for=20
FreePress.net, which is organizing the coalition.=20
"These are folks that have a loyal fan base that=20
looks to the artist," he says. "It's an=20
opportunity to reach out to a new audience that=20
is not necessarily paying attention to the ins=20
and outs of media policy" at the Federal=20
Communications Commission. So is this marriage of=20
technology and politics on the part of musicians=20
working out? Artists who back the free=20
dissemination of music via the Web remain lone=20
voices in the music industry. Meantime, the=20
Net-neutrality backers have made little headway=20
in Congress. Still, the influence these musicians=20
can have with the public is undeniable. "For=20
better or for worse, the mainstream media loves=20
to write about celebrities," Aaron says. And the=20
technologically advanced ways those celebrities=20
try to bring their messages across.
http://www.businessweek.com/technology/content/jun2006/tc20060614_409987...
m?chan=3Dtechnology_technology+index+page_more+of+today%27s+top+stories

THE TIERED INTERNET AND "VIRTUAL REDLINING"
[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] If Senator Stevens or=20
Representatives Rush and Wynn ever thought about=20
the impact of =93tiered access=94 on rural areas and=20
minority communities, they'd probably switch=20
their votes. Because the flip side of charging=20
for =93premium=94 access is that the third party has=20
to want to pay for it. If you are a big company,=20
will you pay extra to reach =93undesirable=94=20
customers like rural customers or minority=20
communities? Of course not! If you have to=20
negotiate with every ISP for premium access, you=20
are only going to want to pay for the =93good=94=20
customers. And happily, because the ISP is under=20
no requirement to protect customer privacy, the=20
ISP can provide you with precisely the right=20
target demographic. Welcome to the new world of=20
=93Virtual Redlining.=94 Made possible by Senator=20
Stevens, Bobby Rush and Al Wynn. I hope they have=20
fun explaining to their constituents why, even=20
when they buy the =93high speed=94 pipe, their=20
content downloads slower than the exact same=20
content in the nice neighborhoods of NYC and LA.
http://www.wetmachine.com/item/484

INSIDE THE BELTWAY NEWSPAPERS LYING ABOUT NET NEUTRALITY? WHAT A SURPRISE
[SOURCE: Tech Dirt]
[Commentary] Two separate editorials from DC=20
newspapers both oppose net neutrality efforts --=20
and yet, both seem to be filled with outright=20
lies or misleading half-truths. The real issue=20
with net neutrality is that there isn't enough=20
competition in the broadband space. If there were=20
real competition, network neutrality wouldn't=20
even be on the table for discussion. The=20
Washington Post tries to get by this point by=20
claiming that there is real competition in the=20
broadband space, stating that 60% of all zip=20
codes have four or more choices. Of course,=20
reading that language, you can tell immediately=20
that it's coming from the FCC's discredited=20
broadband penetration numbers. The FCC counts on=20
a per zip code basis -- so if a broadband=20
provider offers broadband to a single house in=20
that zip code, the entire zip code is considered=20
covered by that provider. The General Accounting=20
Office's own study found much, much lower=20
broadband penetration than the FCC numbers=20
suggest. Then, the Washington Times chimes in=20
with its own anti-network neutrality screed,=20
saying that we shouldn't worry about network=20
neutrality because there's no problem yet. This,=20
of course, has been the argument that the telcos=20
have raised for many years, just more vocally=20
these days. As we've noted, there is some truth=20
to this -- but that doesn't mean network=20
neutrality issues deserve to be ignored. As some=20
have pointed out there are plenty of=20
"speculative" dangers that the government decides=20
are worth paying attention to, such as potential=20
terrorist attacks or bird flu. And, in the case=20
of network neutrality, the executives of AT&T,=20
Verizon and BellSouth have all stated very=20
publicly that they would like to break the basic=20
concepts of network neutrality, and make Google=20
pay again for the part of the Internet you=20
already pay for. The Washington Times piece also=20
totally mischaracterizes the debate, claiming=20
that network neutrality means the telcos can't=20
charge sites like Google more for the bandwidth=20
they use. This is flat out false. The high=20
bandwidth users online, such as Google, Yahoo,=20
Vonage and others are already paying for their=20
bandwidth. What the telcos are trying to get them=20
to do is pay double for your bandwidth as well.=20
The current network neutrality proposals in=20
Congress are really a side issue that completely=20
ignores the real issue (the lack of competition).=20
It's no secret that some of the proposals in=20
Congress have problems as well, but that doesn't=20
mean the issue of network neutrality should be=20
brushed aside. Of course, instead of getting any=20
serious debate, we're getting soundbites, lies,=20
misleading arguments, propaganda and celebrity=20
endorsements. The whole debate, on both sides, has become a joke.
http://www.techdirt.com/articles/20060612/2346200.shtml

AT THE FCC

FCC MEETING AGENDA
[SOURCE: Federal Communications Commission]
The Federal Communications Commission will hold=20
an Open Meeting on Wednesday, June 21, 2006 at=20
9:30 a.m. in Room TW-C305, at 445 12th Street,=20
S.W., Washington, D.C. The Commission will=20
consider: 1) the mandatory carriage of digital=20
broadcast television signals by cable operators,=20
2) media ownership rules, 3) universal service=20
and 4) service rules for the 17/24 GHz=20
Broadcasting Satellite Service (BSS). Audio/Video=20
coverage of the meeting will be broadcast live=20
with open captioning over the Internet from the=20
FCC's Audio/Video Events web page at www.fcc.gov/realaudio.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265954A1.doc
* FCC To Vote on Multicasting, Ownership Re-Start
http://www.broadcastingcable.com/article/CA6343990?display=3DBreaking+News
* FCC to Impose Multicast Must-Carry
http://www.multichannel.com/article/CA6343988.html?display=3DBreaking+News

FCC MUST HEAR PUBLIC'S CONCERNS BEFORE VOTING ON MEDIA CONSOLIDATION RULES
[SOURCE: Common Cause press release]
Common Cause is calling on the Federal=20
Communications Commission (FCC) to hear the=20
public=92s concerns and opinions before voting on=20
any proposals to relax media ownership limits.=20
With the appointment of Robert McDowell as the=20
fifth and final FCC Commissioner, it is widely=20
expected that the agency will announce new media=20
consolidation rules at its June 21 meeting. In an=20
open letter to FCC Chairman Kevin Martin, Common=20
Cause noted that the FCC in 2003 voted to relax=20
media consolidation limits without giving the=20
public time to review the rules or seeking the=20
public=92s views on the impact those rules would=20
have on communities. =93When the Court of Appeals=20
in Philadelphia rejected the 2003 rules, the=20
court=92s decision made clear that not only were=20
the rules flawed, so was the process that=20
produced them,=94 Common Cause President Chellie=20
Pingree wrote. =93We urge you not to repeat the=20
mistakes of the past.=94 Chairman Martin has=20
indicated that he would like to eliminate the=20
30-year-old ban prohibiting a company from owning=20
both a television station and a newspaper in the=20
same market, and may also relax rules governing=20
the number of local television and radio stations=20
that can be controlled by a single owner. =93The=20
FCC must actively seek and listen to public=20
opinion on this issue,=94 Pingree said. The group=20
is urging the Commission to disclose any and all=20
proposed rule changes in a comprehensive package=20
before the June 21 meeting, and to schedule a=20
series of hearings in geographically diverse=20
locations to listen to public opinion.
http://www.commoncause.org/site/apps/nl/content2.asp?c=3DdkLNK1MQIwG&b=3...
6043&ct=3D2565115

AT&T BACKS TV MULTICAST, AHEAD OF LIKELY FCC MOVE
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
AT&T, the No. 1 U.S. telephone company which is=20
expanding into video, is willing to carry extra=20
channels television broadcasters plan to offer=20
and is in talks to do so. The Federal=20
Communications Commission could vote next week to=20
require cable companies to carry additional=20
channels that the traditional over-the-air=20
broadcasters are developing as they switch to=20
digital airwaves. The extra channels could=20
include news, sports and home shopping, among=20
other programming. As the broadcasters make the=20
switch to digital, the new technology affords=20
them the ability to offer the additional=20
channels, a practice known as multicasting. So=20
far, the FCC has only allowed a broadcaster to=20
force cable to carry its primary signal, ensuring=20
that subscribers can get the main broadcast=20
stations. AT&T has argued that it is not a cable=20
company and therefore not subject to that=20
regulatory regime, but has also told the FCC that=20
it is willing to accommodate the extra channels=20
that broadcasters are planning and starting to offer.
http://go.reuters.com/newsArticle.jhtml?type=3DbusinessNews&storyID=3D12...
220&src=3Drss/businessNews

WIRELESS AND INTERNET PHONE BILLS SEEN RISING
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
Consumers would likely face higher wireless and=20
Internet telephone bills under a plan that could=20
be approved by the U.S. Federal Communications=20
Commission next week, sources familiar with the=20
matter said on Wednesday. FCC Chairman Kevin=20
Martin has proposed requiring new Internet-based=20
telephone services like Vonage Holdings to=20
contribute a portion of their revenue to the=20
Universal Service Fund, as well as boost=20
contributions from wireless carriers, the sources=20
said. The move comes as the agency is facing in=20
August a shortfall in the $7.3 billion fund.=20
Chairman Martin must find a way to make up for a=20
looming shortfall because the FCC last year=20
exempted companies offering digital subscriber=20
line (DSL) high-speed Internet service from=20
paying to the fund. DSL bills could drop if the=20
savings are passed on to customers. The FCC has=20
been weighing broader reform of USF contributions=20
for some time. Martin has supported a charge=20
based on telephone numbers, but he has decided=20
instead to advance an interim step in light of=20
the shortfall, the sources said. Martin's=20
proposal would subject almost 65 percent of the=20
revenue of Internet telephone service, known as=20
Voice over Internet Protocol, or VOIP, to the=20
10.9 percent contribution factor, the sources=20
said, declining further identification. The=20
current revenue level subject to USF=20
contributions for wireless carriers is 28.5=20
percent but it would go up to about 37 percent=20
under the proposal, the sources said. If the=20
wireless or Internet telephone providers can=20
prove that their long distance and international=20
revenue is less, they would be allowed to use=20
that as the basis for their contribution to the=20
fund. "I think in general the direction they're=20
going will lead to a better distribution of the=20
cost of supporting a nationwide, affordable=20
communications network," said Gene Kimmelman,=20
vice president for federal and international=20
policy at Consumers Union. "It's not clear to me=20
they've got the distribution fully accurate," he cautioned.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-06-15T060433Z_01_N14175719_RTRUKOC_0_US-TELECOMS-CONSUMERS-USF.xml&=
archived=3DFalse

THE INTERNET TAX MAY BE CREEPING UP ON US
[SOURCE: Jeff Pulver]
[Commentary] I have repeatedly called for VoIP=20
providers that offer services intended to be=20
nothing more than a replacement for plain old=20
telephone service to step up to the plate and=20
meet the regulatory obligations of traditional=20
telephony providers. In fact, the Voice on the=20
Net Coalition, the voice for the VoIP industry in=20
the US, has also supported meeting the basic=20
economic and regulatory obligations that ensure a=20
robust and ubiquitous public switched network.=20
For the record, however, I have to reiterate that=20
many, if not all, of the current regulations do=20
not make sense in a world where voice is an=20
application riding on top of broadband=20
transmission services. The current Universal=20
Service Fund ("USF") contribution methodology,=20
which requires service providers to determine=20
whether its revenues are derived from intrastate=20
vs. interstate or international services, telecom=20
services vs. information services, or even=20
customer premises equipment, is one of the many=20
regulatory schemes that no longer work in a=20
geographically irrelevant, converged, IP-enabled=20
world. As the VON Coalition has repeated in many=20
of its filings over the last few days, applying=20
USF assessments on VoIP services that act like=20
replacement phone services is not a matter of if=20
or when, but a question of how. To this end,=20
while I do support the assessment of USF=20
contributions on the companies that the FCC=20
refers to as "interconnected" VoIP providers,=20
first, the FCC must reform the assessment=20
mechanisms so that VoIP consumers are not hit=20
with a discriminatory, inequitable, and arbitrary=20
tax simply because they have chosen to utilize=20
advanced IP technology to make voice calls, as=20
opposed to wireless or circuit switched services.=20
Chairman Martin has called for a new contribution=20
system based on working telephone numbers. This=20
is just one better way of ensuring that the=20
transmission service (or the connection)=20
contributes, rather than the application.
http://pulverblog.pulver.com/archives/004835.html

OWNERSHIP

FEDS ASK MORE TIME TO LOOK AT SALE OF FOUR KR PAPERS
[SOURCE: San Jose Mercury News, AUTHOR: Pete Carey and Chris O'Brien]
Federal regulators reviewing the purchase of=20
Knight Ridder by McClatchy need more time to=20
examine McClatchy's proposed sale of four Knight=20
Ridder newspapers, including the Mercury News and=20
two other Northern California papers, to=20
Denver-based MediaNews Group. The request from=20
the Department of Justice came Monday, the final=20
day of an initial 30-day period regulators have=20
to review major mergers and acquisitions under=20
guidelines set down by the Hart-Scott-Rodino=20
Antitrust Act. McClatchy received a request for=20
more information on its purchase of Knight Ridder=20
on April 26. That review is ongoing, said people=20
familiar with the process. The latest request=20
from regulators focuses on McClatchy's sale of=20
four Knight Ridder papers, including three in the=20
Bay Area. MediaNews is also buying the St. Paul=20
Pioneer Press. While experts believe the sales=20
won't be blocked, an obvious area of antitrust=20
concern is the purchase of the Mercury News,=20
Contra Costa Times and Monterey County Herald by=20
MediaNews Group. MediaNews already owns seven=20
papers in the region, which overlap in some areas=20
with those it is acquiring. The timing may=20
jeopardize McClatchy's plan to close the deal to=20
buy Knight Ridder and simultaneously sell the=20
four papers. The sale of Knight Ridder to=20
McClatchy is slated for 4 p.m. June 27. It's=20
possible the Justice Department could approve=20
that sale before then but take more time on the=20
MediaNews deal, forcing McClatchy to take over=20
the papers for a short time, something it was anxious to avoid.
http://www.mercurynews.com/mld/mercurynews/business/14814416.htm

CHANDLERS CALL FOR BREAKUP OF TRIBUNE
[SOURCE: Editor&Publisher and the Associated Press]
The second-largest shareholder of Tribune Co. on=20
Wednesday called for a breakup of the=20
Chicago-based media company, saying its strategy=20
of combining broadcasting and newspaper=20
properties in large cities has failed. The=20
Chandler family, which owns 12 percent of=20
Tribune's shares, also said in a regulatory=20
filing that they would not tender their shares as=20
part of a major buyback the company is=20
undertaking. In a stinging letter to Tribune=92s=20
board of directors included in the filing,=20
William Stinehart Jr., trustee of the Chandler=20
Trust, wrote: =93Over the past two years, Tribune=20
has significantly underperformed industry=20
averages and there is scant evidence to suggest=20
the next two years will be any different.=20
Clearly, it is time for prompt, comprehensive action.=94
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1002688142
* At Tribune, a Call for a Split
http://www.nytimes.com/2006/06/15/business/media/15tribune.html
* Chandlers Threaten Proxy Fight Over 'Disastrous' Tribune Strategy
http://online.wsj.com/article/SB115030372387580193.html?mod=3Dtodays_us_...
e_one
* Chandlers Demand Breakup of Tribune
http://www.latimes.com/news/printedition/front/la-fi-tribune15jun15,1,32...
35.story?coll=3Dla-headlines-frontpage

TRIBUNE'S ASSETS SEEN AS BIG LURES FOR BIDDERS
[SOURCE: Los Angeles Times, AUTHOR: Jerry Hirsch and James Rainey]
The prospect of a breakup of Chicago-based=20
Tribune Co. and its 11 daily newspapers and 26=20
television stations would draw intense interest=20
from potential buyers despite skepticism among=20
many investors about the value of traditional=20
media. Several media analysts said that if the=20
Chandler family succeeded in forcing a Tribune=20
breakup, it was far more likely the company would=20
be sold off piecemeal rather than to one or two=20
buyers. That's because the larger individual=20
assets -- including the Chicago Cubs baseball=20
team -- are likely to draw interest from local=20
and regional buyers who view them as trophy=20
properties. The allure of Tribune's publishing=20
and broadcast arms is likely to vary by market.=20
Big city television operations generally would be=20
more attractive, whereas newspapers in those=20
markets face growth challenges and competition=20
from mostly free online classified advertising=20
services such as Craig's List. Tribune's=20
major-market TV stations -- WPIX Channel 11 in=20
New York; KTLA in Los Angeles and WGN Channel 9=20
in Chicago -- probably would be most attractive=20
to private equity funds -- pools of investment=20
money that finance acquisitions -- that have=20
subscribed to the idea of "brand name" value and=20
already are players in several recent media purchases.
http://www.latimes.com/news/printedition/asection/la-fi-buyers15jun15,1,...
9331.story?coll=3Dla-news-a_section
(requires registration)

CABLE

CABLE OPERATORS BLAST HANDLING OF RURAL BROADBAND INITIATIVE
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant( at )wsj.com]
A federal program designed to speed the expansion=20
of high-speed Internet services to rural areas is=20
coming under increasing criticism from cable=20
operators that say the aid is unfairly=20
subsidizing competitors. The Broadband Access=20
Program, administered by the Agriculture=20
Department, has provided more than $871 million=20
in loans since 2003 to broadband companies=20
serving communities with populations of less than=20
20,000. The department says those funds will=20
provide high-speed Internet access to 380,000=20
homes and businesses. But cable operators contend=20
that they already have spent tens of millions of=20
dollars to offer service in many of those areas=20
and that the federal program is putting those=20
investments at risk by enabling competitors to=20
offer rival services at lower costs. "It's poor=20
administration and misuse of the taxpayers'=20
money," says Matt Polka, president of the=20
American Cable Association. In the latest=20
escalation of the fight, late last month the Iowa=20
Cable and Telecommunications Association joined=20
with Mediacom Communications Corp., a midsize=20
cable operator, in filing a lawsuit against the=20
Agriculture Department alleging the program is=20
violating the intent of Congress. The lawsuit=20
says that the cable companies receiving loans are=20
using the money to provide customers with TV=20
service as well as broadband services. The=20
Agriculture Department has been attacked by both=20
sides of this debate. While cable companies have=20
criticized the government for making too much=20
money available, other critics have attacked the=20
agency for not spending it fast enough. At a=20
recent congressional hearing, for example, Sen.=20
Tom Harkin (D., Iowa) warned that hundreds of=20
millions of dollars of loan capacity may have to=20
be returned to the Treasury if it isn't spent by=20
September. "Time really is of the essence here,"=20
he said. Cable and phone companies haven't=20
extended broadband service to many rural areas=20
because they are too sparsely populated to make=20
it worthwhile. Only 19% of households in rural=20
areas have broadband, compared with 28% in=20
suburban areas and 29% in cities, according to=20
the Government Accountability Office.
http://online.wsj.com/article/SB115032596559080552.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

CABLE SPENDING ON TRIPLE PLAY DWARFS US TELECO INVESTMENTS
[SOURCE: Telecommunications Online, AUTHOR: Bob Wallace]
Developing a full-service video offer is one of=20
the most important facets of the "triple play" --=20
providing voice, video and Internet service --=20
battle now forming between local telephone=20
companies and cable operators. A new report from=20
Detecon finds that the $90 billion investment=20
made in the triple play by cable operators since=20
the 1996 Telecom Act dwarfs Baby Bell spending in the same area.
http://telecommagazine.com/newsglobe/article.asp?HH_ID=3DAR_2150

GOVERNMENT & COMMUNICATIONS

GOVERNMENT INCREASINGLY TURNING TO DATA MINING
[SOURCE: Washington Post, AUTHOR: Arshad Mohammed and Sara Kehaulani Goo]
Industry executives, analysts and watchdog groups=20
say the federal government has significantly=20
increased what it spends to buy personal data=20
from the private sector, along with the software=20
to make sense of it, since the Sept. 11, 2001,=20
attacks. They expect the sums to keep rising far=20
into the future. Privacy advocates say the=20
practice exposes ordinary people to ever more=20
scrutiny by authorities while skirting legal=20
protections designed to limit the government's=20
collection and use of personal data. Critics=20
acknowledge that such data can be vital to law=20
enforcement or intelligence investigations of=20
specific targets but question the usefulness of=20
"data-mining" software that combs huge amounts of=20
information in the hopes of finding links and=20
patterns that might pick someone out as suspicious.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/14/AR200606...
2063.html
(requires registration)

CONGRESS KEEPS ITSELF, PUBLIC IN DARK ON SURVEILLANCE
[SOURCE: USAToday, AUTHOR: Editorial Staff]
[Commentary] With its wiretapping of=20
international phone calls and collecting a=20
database of domestic phone records, the Bush=20
administration is busy watching for evildoers.=20
Unfortunately, spying on those who pose a threat=20
is not easily separated from spying on everyone=20
else, and no one is watching the Bush=20
administration with equal attentiveness. Despite=20
lots of rhetoric, Congress has offered little to=20
fulfill its duty to act as a check on the=20
executive branch. Today, six months after The New=20
York Times disclosed that the National Security=20
Agency has been wiretapping international phone=20
calls of U.S. residents without court orders, and=20
one month after USA TODAY revealed that the NSA=20
has been compiling a huge database of domestic=20
phone records, Congress is poised for its first=20
action. The Senate Judiciary Committee is set to=20
consider a bill by its chairman, Arlen Specter,=20
R-Pa., that would consolidate a gaggle of=20
lawsuits challenging the constitutionality of the=20
warrantless wiretapping program. It would send=20
the issue to a special court created by the=20
Foreign Intelligence Surveillance Act(FISA),=20
which approves =97 or in some rare instances denies=20
=97 wiretap requests. Sen Specter's goals are=20
admirable. He wants to ensure that challenges to=20
these programs get their day in court and are not=20
dismissed on technical grounds. But his measure=20
would do more harm than good. It appears to=20
embrace the president's dubious claim that he has=20
the constitutional authority to order wiretaps=20
without the FISA court's approval. By explicitly=20
stating that the president might have such=20
authority, Congress not only would fail to guard=20
its constituents' privacy, it would also deepen=20
the risk. Its actions could influence the court's=20
thinking on the legality of the wiretaps.
http://www.usatoday.com/printedition/news/20060615/edit15.art.htm
* My bill would light the way
Commentary from Sen Arlen Specter
http://www.usatoday.com/printedition/news/20060615/oppose15.art.htm

WARRANTLESS TAPPING OF AMERICANS' TELEPHONE CALLS IS UNACCEPTABLE
[SOURCE: The Hill, AUTHOR: Rep. Bennie G. Thompson (D-Miss)]
[Commentary] Sept. 11, 2001, was the most tragic=20
and horrific event to take place in modern=20
American history. However, it should not serve as=20
the administration=92s free pass to trample upon=20
the rights and liberties of American citizens,=20
under the guise of =93national security.=94 When we=20
implement polices and procedures that are not in=20
line with our constitutional values, we must then=20
ask the question if we are truly winning the war=20
on terrorism. We say that we are a country that=20
believes privacy is important and that we won't=20
trample on the rights of our citizens unless we=20
have legal authorization to do so; yet policies=20
like the NSA surveillance program undermine these=20
beliefs. If we allow the threat of terrorism and=20
the presence of those who wish to do us harm to=20
cause us to place the constitutional privacy of=20
our own citizens at risk, they win and we lose.
http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_thomp...
.html

RUSSIA'S LID ON MEDIA
[SOURCE: Washington Post, AUTHOR: Masha Lipman, Carnegie Moscow Center]
[Commentary] Earlier this month Moscow hosted a=20
congress of the World Association of Newspapers.=20
The organization's president, Gavin O'Reilly,=20
deplored the Russian government's encroachments=20
on media freedom. Then President Vladimir Putin=20
took the podium to respond. The media's situation=20
has grown better, not worse. In its hypocrisy,=20
its utter lack of credibility, Putin's statement=20
was reminiscent of the most blatant Soviet=20
propaganda. In fact, it's not just foreign=20
observers but also Russian media professionals=20
who are deeply concerned about state control of=20
the media. In the autumn of 2004 a number of=20
members of the Russian Television Academy signed=20
a letter that stated that "Russian television=20
today is not free." They said they were being=20
forced to broadcast official reports "instead of=20
objective information. Propaganda instead of free=20
discussions. Censorship has been basically=20
established on television." And other=20
restrictions, the letter emphasized, had led to=20
self-censorship. There are still other, smaller=20
outlets besides Kommersant that have preserved=20
independent editorial stances. But these can=20
barely break the basic media monopoly of Putin's=20
Kremlin. The state television news channels reach=20
100 percent of the Russian audience, while=20
alternative sources of information have limited=20
circulation. Moreover, the Kremlin has ensured=20
that national television is separated from=20
independent-minded media: Television does not=20
pick up their stories or invite their reporters=20
to appear on the air. Today's Kremlin is wholly=20
unconstrained. There is nothing, inside or=20
outside the country, to stop Putin and his regime=20
from doing anything they wish on the domestic=20
scene -- political, media or otherwise.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/14/AR200606...
2006.html
(requires registration)

QUICKLY

NIELSEN TO GAUGE TV VIEWING ON WEB, MOBILE DEVICES
[SOURCE: Reuters, AUTHOR: Paul J. Gough]
In a move with far-reaching implications for=20
commercial television, Nielsen Media Research=20
said Wednesday it plans to integrate TV with=20
Internet ratings and to measure viewership for=20
such portable devices as cell phones and iPods.=20
Nielsen also set a firm date of 2011 for the end=20
of paper diaries still used for collecting local=20
ratings data in the smallest markets during=20
"sweeps." The scope of Wednesday's announcement=20
stunned many in the media industry, who had for=20
years told Nielsen that it moved too slowly in=20
reacting to changes in the TV business. It also=20
came months after Nielsen opted not to go ahead=20
with a joint venture involving radio ratings=20
service Arbitron and its Portable People Meter technology.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-06-15T104144Z_01_N14251279_RTRUKOC_0_US-MEDIA-NIELSEN.xml&archived=
=3DFalse

US JOINS INDUSTRY IN PIRACY WAR
[SOURCE: Washington Post, AUTHOR: Frank Ahrens]
The U.S. government has joined forces with the=20
entertainment industry to stop the freewheeling=20
global bazaar in pirated movies and music,=20
pressuring foreign governments to crack down or=20
risk incurring trade barriers. Copyright exports=20
-- worth about $626 billion annually, or 6=20
percent of the U.S. gross domestic product -- are=20
as important to today's American economy as=20
autos, steel and coal were to yesterday's.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/14/AR200606...
2071.html
(requires registration)

TOO MANY KIDS CAN STILL BUY VIOLENT VIDEO GAMES: FTC
[SOURCE: Reuters, AUTHOR: Peter Kaplan]
The Federal Trade Commission on Wednesday told=20
lawmakers it supports the video game industry's=20
self-regulation of violent content but said too=20
many U.S. children are still able to buy=20
Mature-rated games in stores. An FTC study found=20
42 percent of its undercover shoppers, children=20
between the ages of 13 and 16, were able to buy=20
an M-rated game last year. That is down from 69 percent in 2003.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-06-14T200916Z_01_N14250641_RTRUKOC_0_US-CONGRESS-VIDEOGAMES.xml
* Politicians lash out at video game industry
http://news.com.com/Politicians+lash+out+at+video+game+industry/2100-102...
-6083943.html?tag=3Dnefd.top
* Upton Preps Bill Boosting FTC Fine Authority
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
House Telecommunications Subcommittee Chairman=20
Fred Upton (R-MI) is preparing a bill to give the=20
Federal Trade Commission greater authority to fine video game manufacturers.
http://www.broadcastingcable.com/article/CA6344002?display=3DBreaking+News
--------------------------------------------------------------
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.
--------------------------------------------------------------