June 2006

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NET NEUTRALITY
Sen. Stevens offers Deal on Net Neutrality
Three Drafts of Senate Commerce Committee Communications Bill
Speed Bumps on the Information Highway

NEWS AT THE FCC
FCC puts off Vote on TV Multicasting on Cable
Nelson To FCC's Martin: Diversity Now
Consumer Panel Meeting Agenda (July 21)
Court Backs FCC on Unbundling

OWNERSHIP
FCC Rules on Ownership Loom in Duel for Univision
Fitfully Blending Papers and TV

QUICKLY -- Justice sues Jersey to keep telcos quiet;
Broadcast-Decency Bill: Pro or Con?; Telecom Giants in Europe Plan
$30 Billion Deal

NET NEUTRALITY

SEN STEVENS OFFERS DEAL ON NET NEUTRALITY
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
Senate Commerce Committee Chairman Ted Stevens has offered a
compromise in the fierce fight over legislation on Internet network
neutrality, but stopped short of demands sought by content companies
like Google. Sen Stevens has added a new section to his bill aimed at
preserving consumers' ability to surf anywhere on the public Internet
and use any Web-based application. However, the new draft does not
include a ban on pricing content companies have demanded. Sen
Stevens' compromise would also create a complaint process through the
FCC if consumers believe their access rights were violated and the
agency would be authorized to adjudicate complaints with penalties,
according to the draft. However, the FCC would be barred from issuing
any regulations under the new law that would add to the obligations
on Internet service providers. The compromise is somewhat similar to
legislation that passed the House of Representatives. However, there
are other differences between the House and Senate that would have to
be resolved. Earlier versions of the Stevens bill only called for the
Federal Communications Commission to report on Internet access,
prompting Hawaii Sen. Daniel Inouye, the top Democrat on the
committee, and some others to call for more protections. Striking a
compromise would likely make it easier for the bill to pass this
year. The Senate committee is scheduled to consider amendments and
vote on the measure at a meeting on Thursday.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...
* Stevens Floats New Net Neutrality Compromise
http://www.multichannel.com/article/CA6344840.html?display=Breaking+News
** For more on the bill see http://www.benton.org/index.php?q=node/2173

THREE DRAFTS OF SENATE COMMERCE COMMITTEE COMMUNICATIONS BILL
[SOURCE: Drew Clark]
A copy of Senate Commerce Committee Chairman Ted Steven's new telecom
legislation is available -- and it keeps growing. What started out as
135 pages on May 1 grew to 151 pages in the June 9 draft that was
released on June 12. This third draft -- dated June 16 and expected
to be officially unveiled in a 10 a.m. briefing on Capitol Hill --
tops off at 151 pages. Most significantly, this new draft makes good
on the pledge Stevens made, 11 days ago, to significantly modify the
Net Neutrality provisions of the legislation. Indeed, an entire new
section is present -- "Internet Consumer Bill of Rights Act" -- goes
so far as to "apply" the First Amendment to Bell companies that would
attempt to "limit, restrict, ban, prohibit or otherwise regulate
content on the Internet because of the religious views, political
views, or any other views expressed in such content unless
specifically authorized by law." All of the Bell and cable companies
have already said that they wouldn't block or impede the ability of
consumers to access such sites. Advocates of strict net neutrality
note that this new consumer bill of rights says nothing about
discrimination or non-discrimination. And that is certain to set up a
conflict over whether Stevens' new approach does more, less or about
the same as the House-passed version's limited approach to net neutrality.
http://www.drewclark.com/2006/06/three-drafts-of-stevens-bill.shtml

SPEED BUMPS ON THE INFORMATION HIGHWAY
[SOURCE: San Francisco Chronicle, AUTHOR: Tom Abate]
In this age of information, wealth and ideas flow through wires and
cables just as wheat, iron and other goods once traveled over
railroads and highways. Who controls today's digital thoroughfares,
and whether they get to charge extra for safe and speedy passage, has
emerged as a potentially defining debate for the Internet. This issue
is commonly referred to as "network neutrality," a slogan that leans
heavily to one side of the argument. The debate, which the Senate is
poised to consider as soon as this week, centers on whether all
Internet traffic should be given the same delivery treatment at the
same price, as it has since the start of the Internet, or whether the
companies that deliver the traffic to consumer's homes can charge
heavy users more. A major reason for the debate is the Internet's
stunning growth -- and the new uses to which companies and their
customers are putting it. A system once used almost exclusively for
e-mail is now eyed by businesses that want to send huge video files
as large as 75,000 e-mails. The result is a growing traffic jam that
threatens everyone's deliveries.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/06/18/NET.TMP
* Analysis: Courts May Have To Decide Rules Of The Internet Road
[SOURCE: InfoWeek, AUTHOR: K.C. Jones]
http://www.informationweek.com/internet/showArticle.jhtml;jsessionid=RI0...
* Tangled web of fear, greed and Internet's fate
http://www.philly.com/mld/inquirer/business/14850257.htm
* Small companies want to maintain Net's neutrality
http://www.usatoday.com/printedition/money/20060619/1b_smallbiznet19.art...

NEWS AT THE FCC

FCC PUTS OFF VOTE ON TV MULTICASTING ON CABLE
[SOURCE: Reuters]
Federal Communications Commission Chairman Kevin Martin has withdrawn
plans for the agency to vote this week on a proposal requiring U.S.
cable operators to carry extra digital channels that television
broadcasters plan to air, an agency official said on Sunday. Chairman
Martin had proposed cable operators be required to carry all the
digital TV channels aired by TV broadcasters and he had scheduled a
vote for Wednesday at the FCC's monthly open meeting. It appeared he
was unable to win at this time the vote of the third Republican
commissioner, Robert McDowell, on the five-member FCC. McDowell was
recently sworn in, giving Martin the first working Republican
majority in over a year. The two Democrats on the FCC, Jonathan
Adelstein and Michael Copps, have previously demanded the agency
first consider the public interest obligations of broadcasters with
these new channels.
http://today.reuters.com/news/newsArticle.aspx?type=industryNews&storyID...
* FCC Drops Planned Vote On Multicasts
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/18/AR200606...
* Martin Bails on Must-Carry Vote
http://www.multichannel.com/article/CA6344841.html?display=Breaking+News

NELSON TO FCC'S MARTIN: DIVERSITY NOW
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Senator Bill Nelson (D-FL) recently wrote to FCC Chairman Kevin
Martin recently asking the Chairman not to begin rewriting media
ownership rules until the FCC first takes a look at minority, women
and small-business-ownership issues. Sen Nelson was responding, in
part, to another letter sent to Chairman Martin by Julie Johnson,
chairperson of the FCC's Advisory Committee on Diversity in the
Digital Age. She provided a copy of a number of recommendations
already submitted by the committee on topics including diversity
credits, ownership incentives, and transparency in transactions.
http://www.broadcastingcable.com/article/CA6344704?display=Breaking+News

CAC MEETING AGENDA
[SOURCE: Federal Communications Commission]
The next meeting of the FCC's Consumer Advisory Committee will take
place on Friday, July 21, 2006, 9:00 A.M. to 4:00 P.M., at the
Commission's Headquarters Building, Room TW-C305, 445 12th Street,
S.W., Washington, DC 20554. At its July 21, 2006 meeting, the
Committee will receive (1) a briefing by FCC staff regarding Agency
activities; (2) recommendations from its TRS Working Group regarding
captioned telephony, the existence and role of the Interstate TRS
advisory Council, and the definition of "effective communication" for
TRS purposes; (3) a revised recommendation from its Media Working
Group regarding media ownership rules; (4) a recommendation from its
Consumer Affairs Working Group regarding the Commission's consumer
publications and outreach programs; and (5) a report of activities by
its Rural and Underserved Populations Working Group. The full
Committee may take action on any or all of these agenda items. The
meeting site is fully accessible to people using wheelchairs or other
mobility aids. Meeting agendas and handouts will be provided in
accessible formats; sign language interpreters, open captioning, and
assistive listening devices will be provided on site. The meeting
will be webcast with open captioning at
http://www.fcc.gov/cgb/cac. Request other reasonable accommodations
for people with disabilities as early as possible; please allow at
least five (5) days advance notice. Include a description of the
accommodation you will need including as much detail as you
can. Also include a way we can contact you if we need more
information. Send an e-mail to: fcc504( at )fcc.gov or call the Consumer
& Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432
(tty). For further information contact: Scott Marshall, Consumer &
Governmental Affairs Bureau, Federal Communications Commission,
202-418-2809 (voice) or 202-418-0179 (TTY), scott.marshall( at )fcc.gov (e-mail).
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-1284A1.doc

COURT BACKS FCC ON UNBUNDLING
[SOURCE: Wall Street Journal]
The U.S. Court of Appeals for the District of Columbia upheld the
Federal Communications Commission's latest attempt to implement rules
requiring regional phone companies to lease parts of their networks
to competitors. It marked a victory for federal regulators, whose
three previous attempts to implement the unbundling requirements of
the 1996 Telecommunications Act had been struck down by courts. The
1996 law forced the regional phone companies to unbundle their local
phone networks and lease them to rivals at wholesale prices. The
companies complained that the FCC's latest rules went too far,
requiring them to share parts of their network at steep discounts.
Smaller rivals complained that the rules didn't go far enough. With
the court's ruling, companies such as Covad will now be able to
continue providing high-capacity telecommunications service over
existing phone lines without the risk that the rules will change.
http://online.wsj.com/article/SB115048051542282567.html?mod=todays_us_ma...
(requires subscription)
* Appeals court backs FCC on telephone network unbundling
http://news.com.com/Appeals+court+backs+FCC+on+telephone+network+unbundl...

OWNERSHIP

FCC RULES ON OWNERSHIP LOOM IN DUEL FOR UNIVISION
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
The auction for Univision, which is expected to conclude tomorrow
when final bids are due, has become focused in recent days on the
potential regulatory hurdles that the two suitors who are dueling for
control of the company may face, according to people involved in the
process. At issue is whether the two groups -- one led by Grupo
Televisa, Mexico's biggest media company, and another led by a group
of private equity firms that control many media properties -- could,
should they win the auction, face a challenge by the Federal
Communications Commission over foreign ownership restrictions and
concentration concerns, these people said. The Televisa consortium,
which is being backed by the Venezuelan media investor Gustavos
Cisneros, Bain Capital, Blackstone Group, Carlyle Group, Cascade
Investment and Kohlberg Kravis Roberts, is expected to face the most
scrutiny because federal regulations prevent foreign entities from
owning more than 25 percent of an American broadcaster. While the
group's offer is specifically being structured so that Televisa would
own no more than 25 percent of Univision should it win, some
Univision executives and advisers are concerned that the F.C.C. could
determine that it is still acting as a controlling shareholder
because of its influence over the bidding group. It is possible that
the F.C.C. could force the winning group to divest overlapping assets
like radio stations in certain areas and broadcast licenses in cities
where it owns newspapers. Interestingly, stakes in Freedom
Communications and Cumulus are also owned by the Blackstone Group,
which is part of the rival bidding group for Univision. The
possibility that the F.C.C. could block a deal and how long it may
take the agency to approve a deal is expected to weigh on Univision's
decision.
http://www.nytimes.com/2006/06/19/business/worldbusiness/19univision.html
(requires registration)

FITFULLY BLENDING PAPERS AND TV
[SOURCE: New York Times, AUTHOR: Richard Silkos & Katharine Seelye]
Where's the synergy? In hometown Chicago, the Tribune owns the
Chicago Tribune, WGN radio, WGN TV, CLTV (a regional cable news
channel) and our beloved Cubs. Reporters for The Trib share their
work with their broadcast siblings appearing on screen or being heard
over the air. When it works well, information from each outlet flows
in a coordinated way among all the outlets and onto their Web sites.
When the Tribune Company brought the Times Mirror company for $8.3
billion in 2000, the promise was that this approach could be
successfully transplanted to the nation's most cutthroat media
markets, on the East and West Coasts. With its combined properties --
The Los Angeles Times and KTLA in Los Angeles, and Newsday and WPIX
in New York -- Tribune would have a stake in the three biggest
markets in the country and could reach 80 percent of all Americans.
Not only would the properties in each city cross-promote and
cross-pollinate their editorial content, but advertisers could make
sweeping national buys across the media and across the country. John
W. Madigan, then Tribune's chief executive, called the merger with
Times Mirror "the multimedia company of the future." But the strategy
has failed. While the entire media landscape is in turmoil, the
Tribune properties in Los Angeles and New York have fared
particularly poorly. Circulation is down, below the industry
standards at both The Los Angeles Times and Newsday; at KTLA and
WPIX, viewers have declined and audience share has plummeted. Nor has
a synergistic bump in ad revenue materialized.
http://www.nytimes.com/2006/06/19/business/media/19tribune.html
(requires registration)

QUICKLY

JUSTICE SUES JERSEY TO KEEP TELCOS QUIET
[SOURCE: Reuters]
The Department of Justice has sued the New Jersey Attorney General's
office on grounds of security concerns to prevent it from asking
telephone companies if they gave customer call records to the
National Security Agency. DoJ wants to stop the disclosure of
confidential and sensitive information, according to the lawsuit
filed on Wednesday, a day before phone companies were due to reply to
subpoenas issued by the New Jersey attorney general.
http://news.com.com/Justice+sues+Jersey+to+keep+telcos+quiet/2100-1028_3...

BROADCAST DECENCY BILL PRO OR CON?
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano]
An interview with House Telecommunications Chairman Fred Upton
(R-MI), a strong proponent of new legislation that has upped the
maximum fines for broadcasting indecent programming. He says
broadcasters brought the law and its tenfold increases in fines upon
themselves. He points out it was former FCC chief Michael Powell who
launched the Congressional push for boosting indecency fines, aided
by Janet Jackson's Super Bowl number and FCC complaints that simply
disgusted him. He says, "From the day that we introduced the bill and
the hearings and the likelihood that this was going to move along to
become law, the industry has changed its MO. They are much more
cognizant of the rules and potential penalties, and they have made
necessary adjustments to being flagged in the future. That means
different contracts with personnel, delays on live events and a
greater awareness of their responsibility, particularly for the few
who are racing to the bottom." See more at the URL below.
http://www.broadcastingcable.com/article/CA6344827?display=News
See also --
* The Big Chill Becomes Law
[Commentary] "This law is so unnecessary. Even Rep Upton, who started
this indecency crusade even before the 2004 Super Bowl, pointed out
last week that just the threat of this and worse had already made
broadcasters change their ways."
http://www.broadcastingcable.com/article/CA6344831?display=Opinion

TELECOM GIANTS IN EUROPE PLAN $30 BILLION DEAL
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
Nokia of Finland and Siemens of Germany are expected to announce
today that they will merge their telecommunication network equipment
businesses in a deal valued at more than $30 billion, people involved
in the transaction said last night. The merger is likely to set off a
new global wave of consolidation and a round of price wars as the
telecommunication industry continues to remake itself after last
decade's boom-and-bust cycle. The cross-border deal, which was
approved by the boards of both companies, would create the world's
third-largest network equipment concern behind Ericsson and a
combined Lucent and Alcatel, which announced plans to merge three
months ago. The transaction is also likely to put considerable
pressure on Motorola, which will fall to the No. 4 position among
network equipment makers in the world, just as its business is
turning around as a result of its hot-selling Razr cellphones.
http://www.nytimes.com/2006/06/19/business/worldbusiness/19merger.html
(requires registration)
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Communications-related Headlines is a free online news summary
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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
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Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
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