June 2006

** Two events on the agenda this week: 1) on Tuesday, the telecom
reform debate returns to the Senate (see
http://www.benton.org/index.php?q=node/2405) and 2) on Wednesday a
discussion on investment in advanced technology tools for learning.
For these and other upcoming media policy events, see http://www.benton.org **

GOVERNMENT & COMMUNICATIONS
Court backs Government Broadband Wiretap Access
Judge may decide if Eavesdropping is Legal
NSA Train Wreck
Finding Fault With Logic of Congress's E-Mail Plan

NEWS FROM CONGRESS
Stevens Modifies Telecom Bill
Control over cable TV shifting
Ominous Neutrality
The Internet's Future
Web Titans' D.C. Blues
Telecom Coverage Blackout
Fines' Fate Up to Bush

BROADCASTING/CABLE
Local Stations Struggle to Adapt As Web Grabs Viewers, Revenue
Coming Soon (Maybe): Even More TV Channels
No Analog Viewer Left Behind?
The Quiet $10.3 Billion
Media Activists Fight Clear Channel's 'Hate Radio'
FCC Still Sitting on Adelphia Deal
Murdoch's talks with Malone at crucial stage
Groups Raise Concern About Broadcast Treaty Negotiations

QUICKLY -- Source Diversity at the Free Press; The Future of Cable
News Channels; An E-Mail Tax for Europe?; ISPs evolving; Kids pick PC
over TV, study says; 30 Countries Past 100% Mobile Phone Penetration;
Product Placement Deals in Books

GOVERNMENT & COMMUNICATIONS

COURT BACKS GOVERNMENT BROADBAND WIRETAP ACCESS
[SOURCE: Reuters, AUTHOR: Peter Kaplan]
The U.S. Court of Appeals for the District of Columbia Circuit on
Friday upheld the government's authority to force high-speed Internet
service providers to give law enforcement authorities access for
surveillance purposes. The court rejected a petition aimed at
overturning a decision by regulators requiring facilities-based
broadband providers and those that offer Internet telephone service
to comply with U.S. wiretap laws. In a split decision, two of three
judges on the panel concluded that the 2005 Federal Communications
Commission requirement was a "reasonable policy choice" even though
information services are exempted from the government's wiretapping
authority. The FCC has set a May 14, 2007, deadline for compliance,
and the ruling drew praise from the FCC and the Justice Department,
which sought the access. "Today's decision will ensure that
technology does not impede the capabilities of law enforcement to
provide for the safety and security of our nation," the department
said in a statement. But the chief author of the 1994 wiretapping
law, Sen. Patrick Leahy (D-VT), criticized the court's decision,
saying Congress had deliberately excluded the Internet when it wrote
the wiretap law. "The court's expansion of (the wiretapping law) to
cover the Internet is troubling, and it is not what Congress
intended," Sen Leahy said in a statement.
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID...
* FCC Chairman Martin's statement:
Enabling law enforcement to ensure our safety and security is of
paramount importance. Today, the United States Court of Appeals for
the District of Columbia Circuit affirmed the Commission's decision
concluding that VoIP and facilities- based broadband Internet access
providers have CALEA obligations similar to those of telephone
companies. I am pleased that the Court agreed with the Commission's
finding, which will ensure that law enforcement agencies' ability to
conduct lawful court-ordered electronic surveillance will keep pace
with new communication technologies.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265879A1.doc
* Appeals court upholds Net-wiretapping rules
http://news.com.com/Appeals+court+upholds+Net-wiretapping+rules/2100-102...
* Court Ruling Threatens Civil Liberties, Technology Innovation
[SOURCE: Center for Democracy and Technology]
A federal appeals court today ruled 2-1 that telephone regulators and
the FBI can control the design of Internet services in order to make
government wiretapping easier. The decision, which is damaging both
to civil liberties and technology innovation, came in a case in which
CDT joined with a coalition of universities, libraries, public
interest groups and Internet companies, to oppose an August 2005
ruling by the Federal Communications Commission. In that ruling, the
FCC expanded the reach of the 1994 Communications Assistance for Law
Enforcement Act (CALEA) -- a law intended to apply only to the
telephone network -- to the Internet.
CALEA Ruling: http://www.cdt.org/wiretap/20060609calea.pdf
More on CALEA: http://www.cdt.org/wiretap/calea/

JUDGE MAY DECIDE IF EAVESDROPPING IS LEGAL
[SOURCE: Reuters, AUTHOR: Daniel Trotta]
The National Security Agency's domestic spying program faces its
first legal challenge in a case that could decide if the White House
is allowed to order eavesdropping without a court order. Oral
arguments are set for today at U.S. District Court in Detroit at
which the American Civil Liberties Union will ask Judge Anna Diggs
Taylor to declare the spying unconstitutional and order it halted.
The case goes to the heart of the larger national debate about
whether President Bush has assumed too much power in his declared war
on terrorism. President Bush said he authorized NSA intercepts soon
after the September 11 attacks, allowing the NSA to monitor the
international phone calls and e-mails of U.S. citizens without first
obtaining warrants if in pursuit of al Qaeda suspects. The ACLU sued
the NSA on behalf of scholars, journalists and attorneys, claiming
that warrantless wiretaps violate the U.S. Constitution and the
Foreign Intelligence Surveillance Act of 1978, or FISA.
http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID...

NSA TRAIN WRECK
[SOURCE: Washington Post, AUTHOR: Editorial Staff]
[Commentary] Since news first broke of the National Security Agency's
warrantless domestic wiretapping, Senate Judiciary Committee Chairman
Arlen Specter (R-PA) has fought for greater congressional and
judicial oversight of the program. He's to be commended for that. But
the bill he's introduced is not the right remedy. Legislation that
authorizes and limits necessary surveillance is surely the ultimate
goal. But many key lawmakers, including Sen Specter, have not been
briefed fully on what the NSA is doing, so it is way too early to be
legislating -- and all the more dangerous not just to tinker but to
fundamentally alter the rules.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/11/AR200606...
(requires registration)
* Specter seeks results on surveillance rules
http://www.usatoday.com/printedition/news/20060612/a_capcol12.art.htm

FINDING FAULT WITH LOGIC OF CONGRESS'S E-MAIL PLAN
[SOURCE: Washington Post, AUTHOR: Jeffrey H. Birnbaum]
Last month the House quietly began to make it harder for interest
groups to send large numbers of e-mails to lawmakers. At the end of
May, the House started to offer congressmen the chance to add an
extra obstacle -- the completion of a math problem -- to their
already difficult-to-penetrate e-mail systems. The purpose, officials
said, was to cut down on the deluge of messages they receive.Most
offices in the House are pretty impregnable as it is. Generally,
before a person can send an e-mail to a member of the House, he or
she must go to a lawmaker's Web site, click on "Write Your Rep,"
select the congressman's state, type in a Zip code that is in that
state, and then fill out a form that includes name, address, city,
e-mail address and phone number. And all of that must be completed
before an e-mail can either be composed or sent. Even with these many
impediments, lawmakers still bellyache that the torrent of e-mails
they get every day is more than their staffs can handle. According to
a recent study, electronic messages to the House doubled to 99
million from 2000 to 2004. In the Senate, the number of e-mails more
than tripled to 83 million during the same period. So the House's
managers are adding what they call a logic puzzle to the hurdles that
constituents must already scale before writing e-mails to members. In
addition to the Zip code test and others, the system now used by a
growing number of lawmakers also asks would-be e-mailers to solve a
simple numbers problem.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/11/AR200606...
(requires registration)

NEWS FROM CONGRESS

STEVENS MODIFIES TELECOM BILL
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Phone companies could enter cable markets within 90 days under
streamlined franchising rules and cable incumbents could opt in to
the new licensing regime when existing agreements expire or when
phone companies arrive in the market, according to new
telecommunications draft legislation from Senate Commerce Committee
chairman Ted Stevens (R-Alaska). He altered his position some in
response to concerns by local officials. His original bill would have
allowed AT&T and Verizon Communications to begin offering video
service within 30 days. Local governments won another change: Sen
Stevens modified his bill so that a video provider using the new
franchising process would have to pay franchise fees based on a
definition of gross revenue that includes commissions paid by home
shopping channels. Cities argued that the original bill would have
cut franchise fees by up to 20%. While Sen Stevens would not impose
video-buildout requirements on phone companies, he would expose them
to penalties for denial of service based on a group's income, race or
religion. But phone companies could cite commercial infeasibility to
defend against red-lining charges. Under the Stevens bill, local
governments would be required to use a simplified franchising
procedure crafted by the FCC, in a concession to phone-company
concerns that current local franchising system is long, tedious and a
barrier to competition. On network neutrality, the new 151-page bill
is no different from the original (S. 2686) released May 1. It would
require the Federal Communications Commission to study the Internet
market and file annual reports to Congress over a five-year period.
Sen Stevens is holding a hearing Tuesday on his Communications,
Consumer's Choice and Broadband Deployment Act of 2006. He hopes to
vote it out of committee June 20 despite strong opposition by Sen.
Daniel Inouye (Hawaii) -- the panel's top Democrat -- to the
net-neutrality language.
http://www.multichannel.com/article/CA6342816.html?display=Breaking+News
For more on the bill, see: http://www.benton.org/index.php?q=node/2173

CONTROL OVER CABLE TV SHIFTING
[SOURCE: Associated Press, AUTHOR: Deborah Yao]
Phone companies are leading efforts to rewrite rules giving local
governments control over cable TV in their areas. Under bills passed
or pending in at least 14 states and Congress, pay-TV control would
shift to state or federal regulators. That would mean phone and cable
companies no longer would have to make individual local franchise
deals. Supporters tout the bills as pro-consumer, saying video
competition from Verizon Communications and AT&T will lower prices.
Others, including municipalities, argue that the bills cede too many
consumer protections to two companies that are almost monopolies.
Texas, Indiana, Kansas and South Carolina signed into law a
state-approval process. Virginia passed a variation speeding the
local approval process. Similar bills are pending in Pennsylvania,
California, Iowa, Michigan, Minnesota, New Jersey, Tennessee, North
Carolina and Louisiana. Connecticut ruled that AT&T doesn't need
franchises. Meanwhile, the U.S. House last week passed a bill calling
for a national franchise process. A similar Senate bill is pending,
though passage is complicated by debate over other issues addressed
in the bill. Critics are upset the legislation lets new video
providers choose the communities they want to serve. Currently, cable
companies generally must serve all neighborhoods in any city they
enter. "We're afraid that either state or federal bills will allow
the phone companies to redline some neighborhoods, to price gouge
others, to eliminate benefits to the local community and allow the
existing cable company to backslide," said Ed Mierzwinski of the U.S.
Public Interest Research Group. Phone companies say they are spending
billions on networks for TV and high-speed Internet, so it's logical
to offer the services first in areas most likely to buy.
http://www.usatoday.com/printedition/money/20060612/2b_story12.art.htm

OMINOUS NEUTRALITY
[SOURCE: Wall Street Journal, AUTHOR: Steve Forbes]
[Commentary] The Net Neutrality lobbyists want Congress to pass
innovation-stifling restrictions on what companies like Verizon and
AT&T can do with the new high-speed broadband networks that these
companies haven't even finished building yet. These networks are the
superhighways for transporting Internet content and services. They
will also permit Verizon and AT&T to offer Internet-based cable TV
programming in competition with the cable companies, which are
already competing in telecom services. Slapping these networks with
premature, unnecessary regulations would be an inexcusable barrier to
the tradition of innovation at the heart of the Internet. Phone
companies are investing billions of dollars in network innovation.
They need to earn a return on their investment. One logical way is to
use a tiered pricing system that charges a premium price for premium
services -- which means super-high-speed services that gobble extra
bandwidth on the network. Those who are happy with standard broadband
speeds would continue to pay the same prices they pay now. Passing
Network Neutrality legislation would be a re-run of the disastrous
Telecom Act of 1996 which forced telecom companies to provide network
access to competitors at below market prices. That certainly put a
chill on network innovation. After years of wasteful lawsuits and
regulatory infighting, the network access monster has gone away. But
it was a big factor in letting America slip into the high-tech Stone
Age, with consumer broadband services lagging far behind what's
available in countries like Japan or South Korea. Members of Congress
are on the verge of updating the Telecom Act to bring it into sync
with a communications industry that's been transformed by Internet
technology. As they do that, we can only hope they don't compromise
the future of this vital industry by falling for the rhetoric of Net
Neutrality. After all, what network operator would be silly enough to
keep investing billions in network innovations if the fruits of its
innovation had to be given away at below cost?
http://online.wsj.com/article/SB115007182366177436.html?mod=todays_us_op...
(requires subscription)

THE INTERNET'S FUTURE
[SOURCE: Washington Post, AUTHOR: Editorial Staff]
[Commentary] The Senate will hold hearings tomorrow on "net
neutrality," the idea that the pipes and wires that form the Internet
should treat all content equally. An alliance whose membership ranges
from the Christian Coalition to MoveOn.org is demanding that Congress
write this neutrality into law; the groups fear that the pipe owners
-- cable companies, phone companies and so on -- might otherwise
deliver corporate content at high speed for high fees, while
consigning political Web sites and hobbyists to a slow information
byway. These arguments are amplified by the big Internet firms --
Google, Microsoft, eBay -- that want their services delivered fast
but don't want the pipe owners to extract fees from them. Although
this coalition lost a House vote last week, its prospects are
stronger in the Senate. The weakest aspect of the neutrality case is
that the dangers it alleges are speculative. It seems unlikely that
broadband providers will degrade Web services that people want and
far more likely that they will use non-neutrality to charge for
upgrading services that depend on fast and reliable delivery, such as
streaming high-definition video or relaying data from heart monitors.
If this proves wrong, the government should step in. But it should
not burden the Internet with preemptive regulation. (The Washington
Post Co. owns broadband networks that might charge Web sites for fast
delivery. It also produces Web content that might be subject to such
fees, so it claims it has interests on both sides of this issue.)
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/11/AR200606...
(requires registration)

WEB TITANS' DC BLUES
[SOURCE: BusinessWeek, AUTHOR: Burt Helm]
An impressive array of tech titans has joined the It's Our Net
coalition. Among them: Google, Yahoo, Microsoft, eBay, Amazon, and
IAC/Interactive. They're banding together to fight for rules aimed at
preventing what they say would be discrimination by telephone and
cable companies in directing Web traffic. The group has enlisted a
diverse cadre of supporters, from the conservative Christian
Coalition, to the liberal MoveOn.org, to consumer-minded groups like
the Consumer Union. But for all that seemingly formidable firepower,
the coalition has had a tough time finding support in Washington. In
particular, it's struggled to enlist the aid of the many lobbyists
who can make all the difference in getting a message to the right
legislator at the right time. Why? Established telecom and cable
companies, well-versed in the ways of Washington, are sitting on the
opposite side of the policy issue. And they have succeeded in locking
up some of the lobbyists most qualified to tackle telecom issues on
the Hill. It's difficult to find a top-notch telecom expert without a
conflict of interest. "Even if they aren't working this issue for a
cable [or telecom] company, they'll say they can't do it," says Maura
Corbett, a partner with Qorvis Communications who is in charge of
coordinating the tech companies' fight. At stake are rules that would
prohibit phone companies and cable-TV operators, which oversee the
vast networks that send information around the Internet, from
favoring some types of Web traffic over others. Google, Yahoo, and
friends are pressing for what they call "Net neutrality" rules that
would bar operators from charging different fees for varying levels
of service. Phone companies like Verizon (VZ) and AT&T (T) and cable
operators such as Comcast (CMCSA) oppose government restrictions on
how they run their networks.
http://www.businessweek.com/technology/index.html/content/jun2006/tc2006...
See also --
* Net neutrality: Meet the winner
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
An interview with Verizon's Thomas Tauke -- one of the most ecstatic
lobbyists in Washington right about now.
http://news.com.com/Net+neutrality+Meet+the+winner/2008-1028_3-6082444.h...

TELECOM COVERAGE BLACKOUT
[SOURCE: Drew Clark 6/9]
The House passed the COPE Act just after 10pm Thursday June 8. Among
Republicans, 215 supported it, with only 8 opposed. A majority of
Democrats, 108 versus 92, voted for passage. The one independent
voted no. Earlier in the evening, an amendment seeking to strengthen
the bill's "network neutrality" provisions failed 269-152. The
amendment had been offered by Rep. Ed Markey (D-MA). Normally when
major legislation is being passed by Congress, even late in the
evening or early in the morning, there is a crowd of reporters
following the event. Not so June 8. Shortly after the members left
the floor for the evening, Drew Clark caught up with House Commerce
Committee Chairman Barton (R-TX) in the speakers' gallery. Rep Barton
was ready for a crowd, but instead gave Clark an exclusive interview.
The "absolutely ecstatic" Barton addresses network neutrality,
universal service, passage of telecom legislation in the Senate and
FCC Chairman Martin.
http://www.drewclark.com/2006/06/joe-barton-fred-upton-ed-markey-and-me....
See also --
* No More Stinkin Moral Compasses!
"[Rep Bobby] Rush wouldn't know the definition of honesty if it
crawled up his slimy backside."
http://www.riedelcommunications.blogspot.com/

FINES FATE UP TO BUSH
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Fueled by public outrage over Janet Jackson's Super Bowl halftime
breast flash on live national television in 2004, the House passed
and sent President Bush a bill last Wednesday that would raise
maximum radio- and TV-indecency fines tenfold, from $32,500 to
$325,000 per offense under a $3 million cap for any single act. The
House voted 379-35 to approve a bill (S. 173) that originated in the
Senate and passed that body May 18 by unanimous consent. "This is a
victory for children and families," Sen. Sam Brownback (R-KS),
sponsor of the Senate bill, said after the House vote. "Raising the
fines for abusing the public airwaves will hold broadcasters
accountable for the content and consequences of their media." Federal
Communications Commission Chairman Kevin Martin welcomed the bill as
a way to clean up the airwaves, but he repeated his interest in
seeing that consumers gain access to programming from cable and
satellite companies on an a la carte basis. "I believe concerns
regarding content should be addressed in a comprehensive fashion by
empowering parents to choose the programming that comes into their
homes," Chairman Martin said. The White House -- which typically
enunciates its position on legislation through the Office of
Management and Budget -- did not issue a statement of administration
policy regarding the Brownback bill.
http://www.multichannel.com/article/CA6342685.html?display=Policy

BROADCASTING/CABLE

LOCAL STATIONS STRUGGLE TO ADAPT AS WEB GRABS VIEWERS, REVENUES
[SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes brooks.barnes( at )wsj.com]
The 1,300 other commercial television stations in the U.S., much like
newspapers and magazines, are under attack as new technologies roil
the industry. The Internet, in particular, is sucking away both
viewers and advertisers. The shift is sending ripples through the
broader media industry. For decades, TV stations have been a fount of
cash for some of the industry's biggest players such as Viacom, News
Corp. and General Electric's NBC. Newspaper publishers such as
Tribune Co. and Gannett Co., also diversified into television. For
many of these companies, steady profits from their stations funded
expansion into other businesses. At News Corp., which at one time
derived about one-third of profits from its station group, proceeds
helped the company to become a global powerhouse. Tribune's station
profits funded its efforts to become a newspaper giant with the 2000
acquisition of Times-Mirror Co. The picture has changed. Total local
broadcast revenue fell 9% in 2005 to $16.8 billion, according to the
Television Bureau of Advertising. The chief culprit: Big advertisers
cutting back budgets or moving to the Web. Among auto marketers,
which have long accounted for about a third of station revenue,
DaimlerChrysler AG cut spending on local TV by 13% in 2005. Ford
Motor Co. slashed its local TV budget by 15%. "Stations are getting
beaten up," says Brad Adgate, senior vice president at media
consultancy Horizon Media in New York. "They have to dramatically
reinvent themselves and many don't know how." The slump in TV-station
revenue and profits is causing some companies to consider drastic
action. Tribune has spent months contemplating a spinoff of its
TV-station group. Such a move could undermine the rationale for the
Times-Mirror purchase, which was aimed at pairing Times-Mirror's
collection of big-city papers like the Los Angeles Times with
Tribune's TV stations in the same markets. Tribune's deliberations
come six months after Viacom broke into two, separating its
broadcast-TV operations from its cable channels. NBC Universal just
sold four stations in smaller markets. News Corp., whose station
group has been stung by operating-income declines for more than a
year, is also considering selling some smaller stations. Local
stations are suffering a full-fledged identity crisis. Networks used
to need them to broadcast shows. But 85% of U.S. households now
receive TV via cable or satellite, and the Internet is a
fast-emerging competitor. As TV companies allow people to watch shows
whenever they want -- on iPods, on-demand cable services and network
Web sites -- local stations are apt to endure even more losses.
http://online.wsj.com/article/SB115007459811277478.html?mod=todays_us_pa...
(requires subscription)

COMING SOON (MAYBE): EVEN MORE TV CHANNELS
[SOURCE: New York Times 6/11, AUTHOR: Richard Silkos]
As America careers toward its much-touted conversion to the
all-digital transmission of television signals -- the digital
switchover is now set in stone for February 2009 -- the debate over
multicasting is looking like another shining example of the law of
unintended consequences when technology comes into play.
Multicasting, by the way, is the entertainment industry term for
broadcasting several television channels in the space, or bandwidth,
of a current analog broadcast signal. There are technical issues
related to this, but the upshot is that with new digital frequencies
and equipment, a local station can now beam roughly four digital
channels on its signal where a single analog channel once existed. Or
it can broadcast the current signal and sublet the extra spectrum, or
space, for other purposes, like Internet access, infomercials or
pay-TV services. Now, the first question one might rightly ask is
this: Who cares about multicasting when there are already hundreds of
cable channels available in millions of households, and a bewildering
array of new download services and Webby ways of getting video
material? Where television programming is concerned, there is no
reason to believe that more is more. But there is a compelling
argument to be made that multicasting is a public good because it
uses a national resource -- the airwaves -- to deliver more and
better free television into people's homes. While only 15 percent of
America's households currently receive their television over the
airwaves, rather than through cable or satellite, some cool new
channels may help to quell a potential uproar over the fact that old
analog televisions will not work with new digital signals. Bruce
Leichtman of the Leichtman Research Group in Durham, N.H., estimates
that when the digital switch is thrown in 2009, there will be about
75 million analog TV's nationwide that get their signals only from
rabbit ears. Their owners will need to buy $50 converter boxes to
tune in after that. Unfortunately for broadcasters -- and, arguably,
for viewers -- that 15 percent of households is not a big-enough
market to make these new niche channels economically viable. For the
model to work, broadcasters also need to make the new channels
available to people with cable and satellite services -- and they
want the channels to be distributed free, in the way federal law
currently obligates cable companies to carry their primary local
channels. The law is known as the must-carry rule, and several
groups, led by the National Association of Broadcasters, are lobbying
for what they call the digital must-carry rule: that all their
broadcast signals, including whatever new digital multicast channels
they cook up, should be included, free, on the basic cable lineup.
There are several arguments for this. One of the most sensible is
that local broadcasters have had to invest small fortunes in
equipment to convert to digital broadcasting at Washington's behest,
and that this is a way for them to recoup their costs.
http://www.nytimes.com/2006/06/11/business/yourmoney/11frenzy.html?_r=1&...
(requires registration)

NO ANALOG VIEWER LEFT BEHIND?
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The Federal Communications Commission is planning to examine the
obligations of cable operators to ensure that consumers with
analog-TV sets can view digital signals of local TV stations, an
agency source said last Monday. FCC Chairman Kevin Martin is trying
to round up support to launch a rulemaking that would establish
federal policy well before TV stations must cease analog transmission
on Feb. 17, 2009, the source said. Chairman Martin is hoping to
launch the rulemaking at the FCC's June 21 public meeting -- and at
the same the commission adopts rules that would allow digital-TV
stations to demand cable carriage of every free programming service
they transmit. FCC rules currently require carriage of just one
signal per TV station.
http://www.multichannel.com/article/CA6342684.html?display=Policy

THE QUIET $10.3 BILLION
[SOURCE: Broadcasting&Cable, AUTHOR: Editorial Staff]
[Commentary] On June 12, at the National Association of Broadcasters'
Service to America day in Washington, the group will announce that,
by its calculation, broadcasters last year contributed $10.3 billion
worth of public service to the communities they serve, in the form of
advertising time, promotion, and informational campaigns. That's up
from $9.6 billion two years ago, the last time the NAB checked. The
NAB survey counts only PSAs and fundraisers. The number is spongy,
we'll admit. When the term public interest has not been defined, it
is hard to quantify what constitutes "public service." But we know
that, even in a cynical age, broadcasters chip in to help their
communities, keep them informed, and keep them healthy, vibrant and
alive. It is easy to point to the terrific work by stations in New
Orleans and Mississippi that tried to get listeners and viewers to
leave before Katrina and then provided vital information and service
to aid the recovery. But every year, there are mini-crises all over
the country where stations also serve as a crucial part of the
solution. We dare say many broadcasters do more for their communities
than some politicians do. Broadcasters don't deserve the public
flogging they've received, and soon, many of them won't be able to
afford onerous fines for what some bluenose finds indecent. That bill
flies in the face of common sense, fairness and the First Amendment.
They are solid citizens. Service to America? Broadcasters are there;
always have been and, we hope, always will be. They have much to be
proud of, and official Washington has a lot to learn from them.
Broadcasters do good. That's a four-letter word the FCC can't censor.
http://www.broadcastingcable.com/article/CA6342753?display=Opinion
* Broadcasting, With a $10.3B
http://www.broadcastingcable.com/article/CA6342754.html?display=Breaking...
* Two cheers for public service announcements
http://www.latimes.com/news/printedition/opinion/la-oe-seipp12jun12,1,73...
(requires registration)

MEDIA ACTIVISTS FIGHT CLEAR CHANNEL'S 'HATE RADIO'
[SOURCE: The NewStandard, AUTHOR: Catherine Komp]
A broadcasting giant that swallowed up more than 1,200 radio stations
across the country after Congress relaxed ownership rules a decade
ago is once again at the center of controversy over offensive
programming. But this time, Clear Channel's ongoing tolerance of
"shock-jock" programmers resulted in on-air threats of death and
references to sexually assaulting a 4-year-old girl on one of the New
York City's highest-rated urban stations. New York City police last
month arrested Troi Torain, also known as DJ Star of the
nationally-syndicated "Star & Buc Wild Morning Show." They charged
him with harassment and endangerment of a child. Torain's tirade
about a rival DJ's family also included racial and sexual slurs
against the deejay's wife. Clear Channel then fired the top-rated
personality, who has a reputation for hateful, racist programming,
but only after city leaders held a press conference denouncing his
behavior. The company issued a statement apologizing "to those who
may have been offended by his remarks." Long-time critics of Clear
Channel, including media diversity activists and community
organizations, are using the event to reignite a national movement
against the company and remind people about the responsibility of
broadcasters to serve the public interest in exchange for their free
use of the public airwaves. Activists say that despite millions of
dollars in federal fines and settlements, and promises to adopt a
zero-tolerance approach to "indecency," Clear Channel continues to
use "hate radio" as a business model, supporting derogatory
programming because it attracts advertisers. Last month, media
reform, training and access groups launched the "No Hate Radio"
campaign. Groups, including New York-based Radio Rootz, San
Francisco's Youth Media Council and the national organizing groups
Prometheus Radio Project and Free Press, are urging people to file
complaints with the Federal Communications Commission (FCC) about
Clear Channel's broadcasts through the nohateradio.org website. They
are also asking the agency to consider the need for more diverse,
local voices on radio stations.
http://newstandardnews.net/content/index.cfm/items/3266

FCC STILL SITTING ON ADELPHIA DEAL
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Cable-industry insiders said they don't know what it's going to take
to prod the Federal Communications Commission to act on the Adelphia
Communications Corp. sale to Time Warner and Comcast. Cable-industry
officials who asked not to be identified don't think FCC chairman
Kevin Martin is holding up the merger in an effort to impose a la
carte conditions on Time Warner and Comcast. Chairman Martin's
strategy could be that instead of the FCC adopting a la carte
conditions, the agency is waiting for Comcast and Time Warner to
volunteer a la carte proposals acceptable to Martin. The merger is
supposed to close by July 31. Time Warner and Comcast have agreed to
pay $16.9 billion for bankrupt Adelphia's 5 million subscribers. The
Federal Trade Commission approved the deal without conditions Jan.
31, but the FCC has had it under review for 370 days (as of June 9),
making it one of the longest-reviewed cable deals in recent FCC
history. One source indicated that Martin's goal was to force Time
Warner and Comcast to beef up their family tiers by adding ESPN in
response to concerns that cable subscribers won't buy a family tier
without that popular sports network in the package.
http://www.multichannel.com/article/CA6342787.html?display=Breaking+News
http://www.multichannel.com/article/CA6342796.html?display=Top+Stories

MURDOCH'S TALKS WITH MALONE AT CRUCIAL STAGE
[SOURCE: Financial Times, AUTHOR: Aline van Duyn]
The Federal Communications Commission is expected to approve in the
coming weeks News Corp's request to take control of 35 US television
stations currently licensed to Rupert Murdoch. That move could have
great impact on Murdoch's negotiations with John Malone over buying
back an 18 percent voting stake in News Corporation. The television
stations were licensed to Mr Murdoch personally because he has US
citizenship. When the stations were acquired, News Corp was an
Australian entity. Now that News Corp is domiciled in the US -- a
switch that allowed Mr Malone to buy the voting shares after
Australian investors reduced their stake in the group -- it can own
the licences directly. The FCC has had a request for transfer of
control pending from News Corp, and its appointment last month of a
fifth commissioner is expected to mean this will be approved within
the next few weeks. Mr Murdoch, whose family controls just over 30
per cent of News Corp's voting shares, has wanted to buy out Mr
Malone since his long-time sparring partner accumulated the shares
without Mr Murdoch's knowledge in November 2004. Although Mr Malone
has expressed his support for Mr Murdoch and his News Corp strategy,
Mr Murdoch is believed to be worried that having one shareholder with
such a large voting stake could threaten his family's future control
of the media empire, which includes newspapers such as The Times,
20th Century Fox studios, Fox television and cable businesses, and MySpace.com.
http://news.ft.com/cms/s/b9891928-f973-11da-8ced-0000779e2340.html
(requires subscription)

GROUPS RAISE CONCERN ABOUT BROADCAST TREATY NEGOTIATIONS
[SOURCE: Center for Democracy and Technology]
CDT this week joined a group of public interest organizations calling
on Congress to examine ongoing efforts at the World Intellectual
Property Organization (WIPO) to create a treaty that would grant
broad new intellectual-property-like rights to broadcasters,
"cablecasters," and possibly webcasters. In a letter to members of
the House and Senate Judiciary Committees, the groups expressed
concern that proposed treaty could have a number of negative side
effects, noting that there has been virtually no public debate so far
about the need for such a treaty, its likely impact, or the changes
it would require to established U.S. law. A group of corporations and
trade associations sent a separate letter also expressing concern.
Group Letter:
http://www.publicknowledge.org/pdf/wipo-nonprofit-letter-20060607.pdf
Company Letter:
http://www.publicknowledge.org/pdf/wipo-industry-letter-20060607.pdf

QUICKLY

A GANNETT PAPER SEEKS A NEW KIND OF EXPERTISE
[SOURCE: New York Times, AUTHOR: Katharine Seelye]
Gannett, the biggest newspaper company in the country, with 90
dailies, has one of the strongest records in the industry on hiring
and promoting minority employees. And it has long encouraged -- and
monitored -- the use of minority voices in the content of
articles. Still, it came as something of a surprise last week to
some at The Detroit Free Press, which was acquired last year by
Gannett, when they were told to contribute the names of minority
sources to a collective list. Many newspapers keep such lists to help
reporters who are assigned to an unfamiliar story, but they identify
sources by their expertise. The Free Press list is meant to flag
their racial, ethnic or religious backgrounds as well. Some in the
newsroom objected, saying sources should be quoted because they were
the most credible on a topic or the most articulate, not because they
fit an ethnic profile. They said they feared the day they might have
to delete an insightful quote from a majority source in favor of a
less useful quote from someone who would help the newspaper meet
corporate goals. Paul Anger, editor and vice president of the Free
Press said Gannett had not asked the paper to create such a list, but
that the paper's managers understood that the representation of
minority voices was a Gannett priority, that the company periodically
measured such representation and that other papers in the chain used
such lists as one way to get more voices into print.
http://www.nytimes.com/2006/06/12/business/media/12gannett.html
(requires registration)

NEWS NETWORKS' TOP STORY: FACING THE FUTURE
[SOURCE: Multichannel News, AUTHOR: George Winslow]
CNN turns 25 this years while Fox News and MSNBC turn 10. How are the
facing the future?
http://www.multichannel.com/article/CA6342689.html
* Moving Beyond Local News
A look at regional cable news channels.
http://www.multichannel.com/article/CA6342688.html?display=Special+Report

IDEAS FOR ELECTRONIC MESSAGE TAX PROMPTS SWIFT OUTCRY FROM EUROPE
[SOURCE: New York Times, AUTHOR: Thomas Crampton]
A French member of the European Parliament, Alain Lamassoure,
recently uttered the dreaded T-word -- taxes -- in connection with
e-mail and mobile phone text messages, and in so doing earned the
wrath of the Internet generation. No matter how remote the
possibility may be -- or how useful such taxes might be in financing
the European Union budget -- the mere mention of taxing messages was
enough to ignite the blogosphere and industry lobbying groups.
http://www.nytimes.com/2006/06/12/technology/12email.html
(requires registration)

INTERNET SERVICE PROVIDERS EVOLVE, DIVERSIFY IN FACE OF GROWING
BROADBAND ADOPTION
[SOURCE: Associated Press, AUTHOR: Anick Jesdanun]
"The state of the independent ISPs today is a sad one," said Dane
Jasper, president of the California ISP Association. "What we are
selling today is by and large a commodity. Fast Internet is fast
Internet." See how traditional Internet Service Providers are
evolving into "broadband communications companies" as the era of
dial-up access ends.
http://wire.jacksonville.com/pstories/technology/20060609/4001176.shtml

THOSE KIDS TODAY: PC OVER TV, STUDY SAYS
[SOURCE: Reuters, AUTHOR: Chris Marlowe]
In households with children, the screen being watched is more likely
to be a PC than a television. A recent study by the NPD Group found
that 94% of households with children ages 4-14 had a computer. That
edges out TVs, which the consulting firm's report, "Kids and Consumer
Electronics," found are in slightly less than 90% of households with
that group represented. Kids own their own electronic products as
well, most often a video game system of some kind (slightly more than
40%), a CD player or a television (31%).
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

30 COUNTRIES PAST 100% MOBILE PHONE PENETRATION
[SOURCE: Telecommunications Online 6/9, AUTHOR: Bob Wallace]
Athletes often talk about giving 110%, but how does a country exceed
100% in mobile phone penetration? From Aruba to Italy, the Czech
Republic, Hong Kong and Kuwait, the list of countries where the
number of mobile phone subscriptions exceeds the size of the
population continues to grow. Thirty countries had exceeded 100% cell
phone penetration by the end of the first quarter of this year,
according to a report released today by Informa Telecoms and Media.
The group predicts that country count will reach 40 by year-end,
noting that some countries, such as the UK, Sweden and Italy have
already exceeded 110%. "While the proportion of the population using
mobile phones has stabilized in most developed-world markets at
around 80-85%, the trend among many users for buying second or even
third subscriptions shows no sign of slowing," comments Devine
Kofiloto, Principal Analyst at Informa Telecoms and Media.
http://telecommagazine.com/newsglobe/article.asp?HH_ID=AR_2148

PRODUCT PLACEMENT DEALS MAKE LEAP FROM FILM TO BOOKS
[SOURCE: New York Times, AUTHOR: Motoko Rich]
By now, television and movie viewers have become used to product
placements: when they see sneakers or cars on a show or in a film,
they generally assume that these appearances have been paid for by
the companies that make the brands. But product placement in books is
still relatively rare. The use of even the subtlest of sales pitches,
particularly in a book aimed at adolescents, could raise questions
about the vulnerability of the readers.
http://www.nytimes.com/2006/06/12/business/media/12book.html
(requires registration)
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