June 2006

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NEWS FROM CONGRESS
Telecom Measure Passes in House
Revised Senate Draft Awaits House Bill
Upton Wants Indecency-Clarification Summit With FCC

DIGITAL TV & CABLE
Multicast Position Misconstrued, Says Stevens
NCTA To FCC: Reject Multicast Must-Carry
Affiliates Say FCC Has Multicast Muscle

MORE FCC NEWS
Rethink by FCC sparks Prospect of Deals
FCC Chief faces hard Fight on Media Mergers
FCC hit with Lawsuit over August AWS Spectrum Auction

GOVERNMENT & COMMUNICATIONS
Senate Committee Approves Bill to Authorize NSA Snooping
Cheney defends against Specter eavesdropping rebuke

QUICKLY -- FCC Continues EEO Audits; CPB Board Amends By-Laws
Requiring More Board Oversight; House panel OKs digital licensing
bill; Televisa eyes Univision 'plan B'; Lightspeed Isn't Cable, Says
Connecticut

NEWS FROM CONGRESS

TELECOM MEASURE PASSES IN HOUSE
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz( at )wsj.com]
House lawmakers took a step toward the first major rewrite of the
nation's telecommunications laws in a decade, approving a bill that
makes it easier for phone companies to get into the cable-television
business. The measure, which passed on a 321-101 vote, establishes a
national video franchise that would allow phone companies including
AT&T and Verizon Communications to bypass local governments when
seeking to offer pay TV service. It extends similar rights to cable
companies. It also authorizes the Federal Communications Commission
to enforce "net neutrality" principles, which require Internet
providers to allow consumers to use the Internet as they choose. The
vote represents a positive step for the Bells, which have spent
millions of dollars lobbying Congress to pass a bill, but there is
still a significant climb ahead. The legislative calendar is shorter
than normal this election year and the Senate committee in charge of
the telecom rewrite hasn't settled on a draft bill yet. The measure's
video-competition provisions have bipartisan support, but Republicans
and Democrats remain deeply divided about regulations concerning the
Internet. The White House expressed support for the bill last night.
But even if the Senate passes a telecom bill this year, a conference
with House members to resolve differences in the bills could hit a
snag on the issue of the Universal Service Fund, which subsidizes
phone service for rural or low-income consumers. Democrats argued the
bill didn't go far enough to protect the Internet, a position
advocated by high-tech companies including Microsoft and Google,
which are concerned about the potential of Internet providers
establishing a two-tier Internet and requiring corporations to pay
more for service. "The bill fails the Internet. It fails the
nondiscriminatory history of the Internet," said Rep. Edward Markey
of Massachusetts. An amendment to strengthen Internet protections
failed mostly along party lines, although a related measure, which
preserved antitrust authority in net-neutrality disputes, was
approved. Opponents of the bill complained it would allow cable and
phone companies to "cherry-pick" upper-income neighborhoods and
encourage red-lining. State lawmakers also raised concerns that the
bill will prevent states that have passed statewide video franchises
at the request of the Bells from opting out of the federal franchising program.
http://online.wsj.com/article/SB114981968918275815.html?mod=todays_us_pa...
(requires subscription)
** There's lots of coverage of the debate and passage of COPE, see
links to all at: http://www.benton.org/index.php?q=node/2619 **

REVISED SENATE DRAFT AWAITS HOUSE BILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Senate Commerce Committee Chairman Senator Ted Stevens (R-Alaska)
said Thursday that a revised draft of his committee's version of a
communications reform/video franchise reform bill will not be
released this week. He will wait to see if the House passes the
Communications Opportunity, Promotion and Enhancement (COPE) Act (HR
5252) and what provisions it includes if amended.
http://www.broadcastingcable.com/article/CA6342142?display=Breaking+News

UPTON WANTS INDECENCY-CLARIFICATION SUMMIT WITH FCC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Now that Congress has raised the broadcast fines on indecency and
profanity tenfold, it will start to work on coming up with a better
definition of what that offensive content is, which may mean more
indecency hearings. At a signing ceremony for the Broadcast Decency
Enforcement Act, Rep. Fred Upton (R-MI), co-sponsor of the original
indecency bill in the House, said that he was "likely to have a
working meeting with the FCC and a number of [his] colleagues who
would like to see that pursued so that broadcasters know where the
line is." He said it may be a public hearing and added, "I think
you'll see a letter from me [to the FCC] in the next week or two,
asking for, in essence, a summit, now that all five commissioners are
in place, where we can sit down and actually work this thing out."
http://www.broadcastingcable.com/article/CA6342111?display=Breaking+News
* Congress To Media: Stop Pushing the Envelope
http://www.broadcastingcable.com/article/CA6342140?display=Breaking+News
* Rep. Gary Ackerman (D-NY) goofed and voted for the Broadcast
Decency Enforcement Act after speaking out against the bill.
http://www.broadcastingcable.com/article/CA6342251?display=Breaking+News
* President to Declare "Mission Accomplished" on Indecency?
http://www.huffingtonpost.com/jonathan-rintels/president-to-declare-mis_...

DIGITAL TV & CABLE

MULTICAST POSITION MISCONSTRUED, SAYS STEVENS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Senate Commerce Committee Chairman Ted Stevens (R-Alaska) said
Thursday he is not opposed to the FCC deciding to reverse its policy
and require cable to carry all of a broadcast TV station's digital
multicast signals. "It's their duty and I am happy to see them do
it," he said. In a letter to FCC Chairman Kevin Martin, Sen Stevens
said that the press misinterpreted his remarks. On Wednesday Sen
Stevens had said, in response to a question about Chairman Martin's
pushing for the reversal: "We're hoping that, if it's going to be
done, it's going to be done by Congress and not by the FCC. It's too
easy to change at the FCC." Sen Stevens said Thursday that what he
meant by that comment was that "eventually, we will try to put it
into the law." "People should realize that it is a regulation that is
subject to consideration by us when we get to consideration of the
whole digital transition, and that has got to be one of the things
that is put to rest, and it can only be put to rest by having a law
that cannot be changed by other administrative decisions."
http://www.broadcastingcable.com/article/CA6342153?display=Breaking+News
* Stevens OK with FCC Must-Carry Rules
http://www.multichannel.com/article/CA6342231.html?display=Breaking+News
* Stevens now open to FCC acting on TV multicasts
http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&st...
* Stevens Has Change of Heart on Must-Carry
http://www.tvweek.com/news.cms?newsId=10153
(requires free registration)

NCTA TO FCC: REJECT MULTICAST MUST-CARRY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Kyle McSlarrow, president of the National Cable & Telecommunications
Association, has written FCC Chairman Kevin Martin to say that the
Commission got the digital TV, multicast must-carry vote right the
first and second time -- so there's no need to vote again. "[T]wo
bites of the apple is enough," he wrote.
http://www.broadcastingcable.com/article/CA6342277?display=Breaking+News

AFFILIATES SAY FCC HAS MULTICAST MUSCLE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
CBS, NBC and ABC affiliate TV associations have filed comments with
the FCC arguing the Commission should rule that cable operators that
do not carry all of a broadcasters' free digital channels is
illegally "degrading" the broadcast signal in violation of the 1992
must-carry law because it is "stripping of broadcasters free
multicast signals." The groups sent a letter to key House and Senate
leaders Thursday informing them of the filing and insisting that
"there can be no question that it is within the FCC's authority to
implement the congressionally-established non-degradation principle."
http://www.broadcastingcable.com/article/CA6342255?display=Breaking+News

MORE FCC NEWS

RETHINK BY FCC SPARKS PROSPECT OF DEALS
[SOURCE: Financial Times, AUTHOR: Stephanie Kirchgaessner and James Politi]
A wave of media deals could be on the horizon following a highly
anticipated move by the Federal Communications Commission to revisit
the rules that govern media ownership limits later this month.
Tribune, publisher of the Los Angeles Times and Chicago Tribune, and
Gannett, owner of USA Today, will benefit most from a relaxation of
the media rules, according to Wall Street analysts, who say the
companies will be free to buy local television and radio broadcasters
in their markets if the rules are changed. The companies, along with
Rupert Murdoch's News Corporation and General Electric's NBC have
lobbied hard in Washington for an overhaul of the current limits,
which they say do not reflect the rapidly changing media environment.
Debra Schwartz, an analyst at Credit Suisse, says that despite tepid
growth in the market for local television, big companies such as
Gannett do want to expand. A "significant" number of privately held
companies are also waiting for ownership rules to change to sell
assets, she said.
http://news.ft.com/cms/s/1cb89332-f719-11da-a566-0000779e2340,_i_rssPage...
(requires subscription)

FCC CHIEF FACES HARD FIGHT ON MEDIA MERGERS
[SOURCE: Financial Times, AUTHOR: Stephanie Kirchgaessner]
[Commentary] In an unusually polarized era for American politics, few
have framed positions on issues as adeptly as FCC Chairman Kevin
Martin. But his political talents are about to be tested as never
before. In less than two weeks he is expected to revive a debate over
media ownership rules that has dogged the agency for nearly a decade.
At stake is whether the rules that curb the ambitions of groups such
as Rupert Murdoch's News Corporation should be loosened to allow
unfettered expansion of the biggest media companies in the US.
Millions of dollars worth of potential takeovers of local television
stations by newspaper groups such as Gannett and Tribune rest on the
outcome. But the proposal has prompted a backlash from consumers who
fear that, in place of local coverage, they will be served up a
homogenized diet of national news. Unlike obscure telecoms
regulations, the media ownership debate will reverberate far beyond
Washington's Beltway, arousing opposition from communities across the
country who fear their access to local news could be diluted if big
newspaper groups are allowed to take over small TV stations. "There
is a firestorm that is about to confront Mr Martin and I don't think
he's aware of it," says Jeffrey Chester, executive director at the
Center for Digital Democracy. "I think there is growing unease by the
public about the media in general. There is no way he is going to
emerge from the media ownership issue without a black eye." Another
critic of deregulation, Gene Kimmelman at the Consumers Union, says
he is fighting to ensure that "what consumers read in the morning
isn't verbatim what they see on the six o'clock news". But Chairman
Martin says newspaper companies are struggling for survival, amid
falling circulation and stock prices. Allowing companies to
consolidate with broadcasters in the same market would allow
companies to cut costs. Wall Street analysts agree that a relaxation
of the rules would generally benefit media companies, particularly
Gannett and Tribune. The problem, as Chairman Martin accepts, is that
the public "has not been convinced of the need for change". In fact,
according to Mr Chester, the public outcry against changes to media
rules will be even more intense than the last time the FCC tried to
overhaul the limits, because campaigning groups such as Moveon.org
are better organized.
http://news.ft.com/cms/s/34f406fa-f71b-11da-a566-0000779e2340.html
(requires subscription)

FCC HIT WITH LAWSUIT OVER AUGUST AWS SPECTRUM AUCTION
[SOURCE: RCRWireless News, AUTHOR: Jeffrey Silva]
Three groups sued the Federal Communications Commission over changes
to small-business bidding rules, asking a federal appeals court in
Philadelphia to immediately stay enforcement of new guidelines and
delay the scheduled Aug. 9 start of the advanced wireless services
auction pending juridical review of the legal challenge.
In its emergency motion filed at the 3rd U.S. Circuit Court of
Appeals last night, Council Tree Communications Inc., Bethel Native
Corp. and the Minority Media and Telecommunications Council requested
the stay be issued by June 19 -- the filing deadline for short-form
AWS applications. "On the doorstep of Auction 66, the FCC has gone a
long way toward ensuring that this auction -- the largest spectrum
auction in United States history and one that holds promise of
bringing high-speed digital communications to even the most remote
parts of this country -- will be dominated by the largest of this
country's incumbent wireless telecommunications carriers, to the
immediate detriment of small businesses, businesses owned by members
of minority groups and women and rural telephone companies," the
organizations stated. Council Tree, Bethel Native and MMTC challenged
the notion that last Friday's FCC ruling -- which largely upheld
April 25 rules extending license sale restrictions from five to 10
years and denying bidding incentives to DEs that resell or lease more
than 50 percent of their spectrum to others -- were a logical
outgrowth of the original agency proposal. To curb sham DE bidding,
the FCC initially proposed banning large in-regional mobile phone
carriers from partnering with small-business applicants. The mobile
phone industry opposed that proposal. "Council Tree and Bethel Native
would need the powers of the Oracle of Delphi to anticipate that a
proceeding Council Tree itself had recommended to address the
discrete problem of large, deep-pocketed incumbents' potential abuse
of bidding credits would first earn the FCC's tentative endorsement
but then, in a startling, phantom reversal, result in the demise of
their own ability to participate in Auction 66, to the very direct
and tangible benefit of the same large incumbents who were the
ostensible targets" of the commission's plan to reform the DE
program, the parties told the court.
http://www.rcrnews.com/news.cms?newsId=26549

GOVERNMENT & COMMUNICATIONS

SENATE COMMITTEE APPROVES BILL TO AUTHORIZE NSA SNOOPING
[SOURCE: Center for Democracy & Technology]
In a grave threat to civil liberties, the Senate Judiciary Committee
today approved legislation that would gut the historic Foreign
Intelligence Surveillance Act, allowing the President to carry out
wiretaps and other forms of electronic surveillance inside the United
States without a court order. The bill -- sponsored by Chairman Arlen
Specter (R-Pa.), but radically altered by his Republican colleagues
-- would make judicial review for electronic surveillance optional.
CDT Analysis of Specter Proposal:
http://www.cdt.org/security/nsa/20060515cdt-nssa.pdf
* Specter Offers Compromise on NSA Surveillance
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR200606...

CHENEY DEFENDS AGAINST SPECTER EAVESDROPPING REBUKE
[SOURCE: Reuters, AUTHOR: Caren Bohan]
Vice President Dick Cheney on Thursday defended himself against
accusations by Senate Judiciary Committee Chairman Arlen Specter that
he worked to thwart Senate plans to make telephone executives testify
at a hearing about a U.S. domestic spying program. VP Cheney
acknowledged that he had spoken to Senate leaders and members of
Specter's committee. He said in a letter to Sen Specter that he acted
when the administration became concerned about a "compulsory process
to force testimony" in a matter that could involve classified information.
http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID...
* Cheney Plays Down Dispute With Specter
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR200606...
* Cheney Vows Cooperation With Congress
http://www.latimes.com/news/printedition/asection/la-na-cheney9jun09,1,6...

QUICKLY

FCC CONTINUES EEO AUDITS
[SOURCE: Federal Communications Commission]
On June 7, 2006, the Federal Communications Commission mailed the
second of its Equal Employment Opportunity audit letters for 2006 to
randomly selected radio and television stations. The FCC is auditing
the EEO programs of randomly selected broadcast licensees and
multi-channel video programming distributors (MVPDs). Each year,
approximately five percent of all stations and MVPDs are selected for
random EEO audits.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-1138A1.doc

CPB BOARD AMENDS BY-LAWS REQUIRING MORE BOARD OVERSIGHT
[SOURCE: Corporation for Public Broadcasting]
On Thursday, June 1, the CPB Board of Directors unanimously voted to
amend its by-laws to specify that the delegation of additional duties
and authority not conferred under the by-laws to the Chairman, Vice
Chairman, President and other officers of the Corporation must be
done by resolution of the Board, set forth in the minutes of the
meeting at which it was adopted. The amendment, as adopted, also
includes language that allows for board action by unanimous written
consent in lieu of holding a board meeting, provided that such action
is reported and reflected in the minutes of the Board's next regular
meeting. The Board's action was taken pursuant to a recommendation in
the Inspector General's Report of Review that the Board establish
procedures for the assignment of additional duties to the Chairman or
other Board members. The Inspector General's report concerned the
actions of former CPB Chairman Ken Tomlinson.
http://www.cpb.org/pressroom/release.php?prn=552

HOUSE PANEL OKs DIGITAL LICENSING BILL
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
A U.S. House of Representatives panel on Thursday approved a digital
copyright bill that critics say could imperil home-use copying of
music and video recording devices like TiVo. The Section 115 Reform
Act, or SIRA, introduced by Texas Republican Lamar Smith, attempts to
overhaul a piece of copyright law that established a complex system
of "mechanical royalties" for record companies, recording artists,
songwriters and publishers in exchange for the right to reproduce and
distribute their music. There's a general consensus among
politicians, the U.S. Copyright Office and the music industry that
the law, first written in the era of piano music rolls, is in need of
updates for a digital era. Right now, companies wishing to sell music
have to negotiate separate licenses for each song's recording. SIRA
proposes establishing a "blanket licensing" system in which those
entities would apply for and receive licenses through a one-stop
shop. Established by the Copyright Office, that body would act as a
representative for music publishing companies with the greatest share
of the market. In a three-page letter this week to the bill's
authors, a coalition of 19 consumer-oriented advocacy groups and
companies--including the American Association of Law Libraries,
BellSouth, the Consumer Electronics Association, Public Knowledge,
RadioShack, and Sirius and XM satellite radio--claimed the proposal
poses a threat to fair use.
http://news.com.com/House+panel+OKs+digital+licensing+bill/2100-1028_3-6...

TELEVISA EYES UNIVISION 'PLAN B'
[SOURCE: Financial Times, AUTHOR: James Politi]
Televisa, the Mexican media group, is considering establishing its
own US broadcasting network if it fails to acquire Univision
Communications, the largest US Spanish-language television and radio
group, which is being auctioned for more than $12 billion. Televisa's
plans include an alliance with NBC's Telemundo unit, Paxson
Communications, or McGraw Hill. Each would offer the Mexican group a
platform for entry into the fast-growing Hispanic-American media
market, which serves more than 10 million households. Televisa's
first choice when it comes to moving into the US remains the
acquisition of Univision, which it is pursuing in a consortium. Its
main rival in the auction is a second consortium including
billionaire Haim Saban, Providence Equity Partners, Thomas H Lee
Partners, and others. However, according to one person familiar with
Televisa's thinking, there has been a growing realization within the
Mexican company of the need to develop a "plan B" in case the price
needed to clinch Univision becomes too high.
http://news.ft.com/cms/s/a9ac4236-f726-11da-a566-0000779e2340.html
(requires subscription)

LIGHSPEED ISN'T CABLE, SAYS CONNECTICUT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
AT&T's Lightspeed Internet video service is not a cable service, at
least according to the Connecticut Department of Public Utility
Control. In a 3-2 vote along party lines Wednesday, the department
basically ruled that "a byte is a byte is a byte," as Chairman Jack
Goldberg sad, whether it is video or data. That means that AT&T, says
Connecticut, is "merely another form of data stream," and therefore
not subject to cable franchising requirements.
http://www.broadcastingcable.com/article/CA6342315?display=Breaking+News
* DPUC rules AT&T's service not subject to cable regs
http://www.connpost.com/business/ci_3912639
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Thanks for reading and have a great weekend. Go Cubs!
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Communications-related Headlines is a free online news summary
service provided by the Benton Foundation (www.benton.org). Posted
Monday through Friday, this service provides updates on important
industry developments, policy issues, and other related news events.
While the summaries are factually accurate, their often informal tone
does not always represent the tone of the original articles.
Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
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