July 2006

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For upcoming media policy events, see http://www.benton.org

GOVERNMENT & COMMUNICATIONS
Critics blast bill proposing NSA spy changes

TELECOM LEGISLATION/NET NEUTRALITY
Impact Of Senate Telecom Bill On States, Consumers Debated
Wyden Warns Of Market Domination Without 'Net Neutrality' Provisions
Technologists square off on Net neutrality
Net ignorance of the Christian Coalition

IN THE COURTS
Antitrust Group Offers Experts To Court In Review Of Mergers
Arrest Made in Crackdown on Internet Betting

MEDIA OWNERSHIP
Will 2008 election spur media deals?
Will DIRECTV & EchoStar Merge?
Cable, DBS Ante for AWS Spectrum
CW: Diversity Is Key To Finding Audience

AT THE FCC
FCC Keeps Status Quo on Regulatory Fees

QUICKLY -- Ford Foundation grant to reform media=20
landscape; A teenage problem of too much=20
information; YouTube serves 100 million videos/day

GOVERNMENT & COMMUNICATIONS

CRITICS BLAST BILL PROPOSING NSA SPYING CHANGES
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Criticism is growing of a proposed law touted by=20
Senate Judiciary Committee Chairman Arlen Specter=20
(R-PA) and the White House as a compromise=20
solution to the ongoing controversy over the=20
National Security Agency's electronic=20
surveillance program. Sen Specter hailed the=20
agreement, reached after weeks of negotiations=20
with Vice President Dick Cheney and=20
administration lawyers, as recognition that the=20
President does not have a "blank check." But=20
civil liberties advocates and major newspaper=20
editorial boards with knowledge of the draft=20
proposal have charged in recent days that the=20
real picture is vastly different. Some say that=20
Specter's intended bill is a "sham" that would=20
not, in fact, bind the Administration to=20
submitting existing or future surveillance=20
programs for scrutiny -- and could erode checks=20
on the chief executive's power and constitutional=20
safeguards against unreasonable searches. "The=20
reality is, Specter is filling in the exact=20
amount--it's not a blank check; it's whatever you=20
want," Lisa Graves, the American Civil Liberties=20
Union's national security lobbyist, said in a=20
telephone interview. She added that the proposal=20
is "far worse than the Patriot Act." Electronic=20
Frontier Foundation staff attorney Kevin Bankston=20
deemed Specter's draft measure "a rubber stamp=20
for any future spying program dreamed up by the=20
executive," saying it "threatens to make court=20
oversight of electronic surveillance voluntary=20
rather than mandatory." Scathing editorials in=20
The Washington Post, the Los Angeles Times, and=20
The New York Times this weekend took a similar tack.
http://news.com.com/Critics+blast+bill+proposing+NSA+spy+changes/2100-10...
3-6095136.html?tag=3Dhtml.alert

TELECOM LEGISLATION/NET NEUTRALITY

IMPACT OF SENATE TELECOM BILL ON STATES, CONSUMERS DEBATED
[SOURCE: Technology Daily 7/14, AUTHOR: Michael Davis]
Telecom experts debated this week whether=20
consumer protections and other issues often=20
tackled by states would be adequately preserved=20
under a telecom overhaul bill being pushed by=20
Senate Commerce Chairman Ted Stevens (R-Alaska).=20
K. Dane Snowden, a vice president of the wireless=20
group CTIA, answered the question in the=20
affirmative: The wireless industry largely=20
supports the bill and recently launched a major=20
ad campaign pushing for its passage. But Dan=20
Phythyon, public policy director at the Alliance=20
for Public Technology, said consumer protection=20
and states' rights issues emerged from debate=20
surrounding the bill "reasonably late," and=20
expressed concern about whether consumers really=20
would benefit. The measure authored by Sen=20
Stevens -- which his committee approved in late=20
June -- would require that the FCC examine=20
consumer complaints and other wireless issues,=20
cutting out state involvement in such matters.=20
But Snowden said CTIA "agrees there is a need to=20
make sure customers are taken care of." He=20
pointed to a 1993 law balancing the nation's=20
budget, which effectively spurred current growth=20
in the wireless industry by empowering the FCC to=20
auction space on the radio spectrum. "It has=20
worked, there's no doubt about that," he=20
declared. However, Brian Adkins, executive=20
director of the National Association of=20
Regulatory Commissioners, said state pre-emption=20
"is an issue that will grow," while contending=20
adding that there is no need to change=20
regulations in a $118 billion industry. "An=20
industry can't grow this fast, sell contracts and=20
reply to complaints with dogma about industry competition," he declared.
http://www.njtelecomupdate.com/lenya/telco/live/tb-JNHC1153165072833.html

WYDEN WARNS OF MARKET DOMINATION WITHOUT 'NET NEUTRALITY' PROVISIONS
[SOURCE: Technology Daily, AUTHOR: David Hatch]
Sen. Ron Wyden (D-OR) painted a grim portrait of=20
an Internet dominated by telecom and cable giants=20
if legislation approved late last month by the=20
Senate Commerce Committee legislation is enacted=20
into law. "Unless there is a clear policy=20
preserving the neutrality of the Internet, and=20
without tough sanctions against those who would=20
discriminate online, in my view the Internet=20
would be changed forever -- for the worst," he=20
warned during a Senate floor speech. Sen Wyden=20
and other critics worry that the measure's=20
so-called network neutrality provisions are too=20
weak to prevent broadband operators from=20
controlling the content transmitted over their=20
high-speed wires. Those provisions are intended=20
to prevent operators from potentially acting as=20
Internet gatekeepers. Sen Wyden detailed=20
scenarios under which rank-and-file citizens and=20
small businesses would be saddled with hefty fees=20
imposed by Internet providers if the Commerce=20
Committee bill becomes law. Corporations opposed=20
to net neutrality are spending millions of=20
dollars on lobbying and advertising to secure the=20
bill's passage so they can make "billions" from a=20
two-tiered Internet, he contended. Sen Wyden --=20
who does not sit on the Commerce Committee, but=20
who has been active on a series of=20
Internet-related issues in recent years -- has=20
introduced his own net neutrality measure.=20
"Verizon and Google can take of themselves.=20
They've got deep pockets. They've got lots of=20
clout," said Sen Wyden who emphasized that he is=20
concerned instead about the "future Googles."
http://www.njtelecomupdate.com/lenya/telco/live/tb-JCUM1153164778611.html

TECHNOLOGISTS SQUARE OFF ON NET NEUTRALITY
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Two Internet pioneers dueled on Monday over=20
whether proposed Net neutrality regulations=20
supported by companies like Google and Amazon.com=20
are the best way to prevent "abusive" behavior by=20
broadband providers. A debate here hosted by the=20
Center for American Progress, a nonpartisan=20
research institute that brags of challenging=20
"conservative thinking," pitted Google Chief=20
Internet Evangelist Vint Cerf, who co-developed=20
the Internet's backbone protocols and has emerged=20
as a leading proponent of congressional=20
antidiscrimination mandates for network=20
operators, against Dave Farber, a Carnegie Mellon=20
University computer scientist widely considered=20
to be a "grandfather" of the Internet. The pair=20
of technologists appeared to agree on at least=20
one thing: Network operators, in general,=20
shouldn't be allowed to interfere with Net users'=20
activities. Where they disagreed was on the role=20
that Congress and federal regulators should play=20
in the ongoing debate over so-called Net=20
neutrality, the idea that network operators must=20
generally give equal treatment to all content=20
that travels over their pipes. Without=20
legislation that expressly bars network operators=20
from engaging in such prioritization, start-up=20
Web innovators will suffer and consumers may have=20
to pay higher prices to reach the content they=20
want, Cerf warned. "I am very concerned that we=20
do not have adequate competition today to act as=20
a restraint on abusive practices on some of the=20
broadband carriers," Cerf said, "and until we=20
have that kind of competition, we still need=20
oversight and some kind of constraints."
http://news.com.com/Technologists+square+off+on+Net+neutrality/2100-1028...
6094954.html?tag=3Dhtml.alert
* Technologists Tackle Net Neutrality
http://www.broadcastingcable.com/article/CA6353867.html?display=3DBreaki...
News

NET IGNORANCE OF THE CHRISTIAN COALITION
[SOURCE: C-Net|News.com, AUTHOR: Former-House majority leader Dick Armey]
[Commentary] Beltway Fever has infected the=20
national leaders of the Christian Coalition, and=20
the latest bout of illness has them standing with=20
the ACLU, MoveOn.org, U.S. PIRG, SEIU and the=20
Progressive Democrats of America in support of=20
Net neutrality regulation. The national Christian=20
Coalition's logic on this issue is puzzling.=20
While the organization strongly supports imposing=20
federal indecency rules on speech on cable and=20
satellite networks, they now claim a "free=20
speech" rationale for supporting government=20
control over the Internet. Assuming that free=20
speech is in fact what they are interested in,=20
they should oppose Net neutrality. Secure=20
private-property rights and consumer choice will=20
guarantee continued free speech on the Internet,=20
not increasing the power of federal regulators=20
and Washington lobbyists, as Net neutrality=20
regulations would. Net neutrality mandates=20
threaten the very diversity of Internet options=20
and the innovation Christian Coalition members=20
rely upon. Indeed, why is the Christian Coalition=20
supporting a federal law that would force=20
Internet service providers (ISPs) to treat=20
pornography the same as family-friendly content?=20
Increasing federal regulation of the Internet=20
will reduce choice, growth and innovation.
http://news.com.com/2010-1028_3-6094235.html?part=3Drss&tag=3D6094235&subj=
=3Dnews

IN THE COURTS

ANTITRUST GROUP OFFERS EXPERTS TO COURT IN REVIEW OF MERGERS
[SOURCE: Technology Daily, AUTHOR: Sarah Lai Stirland]
A public advocacy group offered access to two=20
experts with the potential to significantly alter=20
a judge's actions as he considers the merits of=20
two telecommunications mega-mergers. The American=20
Antitrust Institute told Judge Emmet Sullivan of=20
the U.S. District Court in Washington, D.C. that=20
a former Clinton administration antitrust expert=20
and a legal scholar critical of the Justice=20
Department's antitrust settlement with Microsoft=20
would be available for questioning for a day as=20
Sullivan determines whether the telecom mergers=20
-- SBC-AT&T and Verizon-MCI -- are in the public=20
interest. The experts are Darren Bush, an=20
antitrust economist and a law professor at the=20
University of Houston, and Joseph Farrell, now a=20
University of California professor. Farrell was=20
previously the FCC's chief economist and deputy=20
assistant attorney general and chief economist in=20
Justice's antitrust division. Bush co-authored a=20
paper that criticized a federal appeals court's=20
interpretation of the so-called Tunney Act in the=20
court's 2004 approval of the Microsoft deal.=20
Several Senate Judiciary Committee members cited=20
that paper as they moved later that year to amend=20
the Tunney Act -- in an effort to make clear that=20
courts should not treat reviews of antitrust=20
settlements as merely a procedural nicety.
http://www.njtelecomupdate.com/lenya/telco/live/tb-LUWN1153165808441.html

ARREST MADE IN CRACKDOWN ON INTERNET BETTING
[SOURCE: New York Times, AUTHOR: Matt Richtel]
In a sharp escalation of their crackdown on=20
Internet gambling, United States prosecutors said=20
yesterday that they were pressing charges against=20
the chief executive of BetOnSports, a prominent=20
Internet gambling company that is publicly traded=20
in Britain, and against several other current and=20
former company officers. Federal authorities=20
arrested the chief executive, David Carruthers,=20
late Sunday as he was on layover at Dallas-Fort=20
Worth International Airport on his way from=20
Britain to Costa Rica. In a hearing yesterday in=20
Federal District Court in Fort Worth, he was=20
charged with racketeering conspiracy for=20
participating in an illegal gambling enterprise.=20
Also at the hearing, the court granted the=20
government=92s request for a temporary restraining=20
order preventing BetOnSports from accepting=20
wagers from customers in the United States and=20
requiring it to return money held in the accounts=20
of American customers. In addition to Mr.=20
Carruthers, the government filed charges against=20
10 other people involved with BetOnSports and=20
with three Florida marketing companies that=20
prosecutors say were involved in promoting illegal gambling.
http://www.nytimes.com/2006/07/18/technology/18gamble.html
(requires registration)
* BetonSports, 3 Other Companies Are Indicted in U.S.
http://online.wsj.com/article/SB115316139480608868.html?mod=3Dtodays_us_...
sonal_journal
(requires subscription)
* BETonSPORTS faces U.S. charges
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-18T103327Z_01_WLA0652_RTRUKOC_0_US-LEISURE-BETONSPORTS-DETENTION=
.xml
* Britain to allow Web gambling advertising on TV
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-18T080449Z_01_L1895548_RTRUKOC_0_US-MEDIA-BRITAIN-GAMBLING.xml&a=
rchived=3DFalse

MEDIA OWNERSHIP

WILL 2008 ELECTION SPUR MEDIA DEALS?
[SOURCE: Reuters 7/13, AUTHOR: Megan Davies]
Big media deals and strict regulation don't mix=20
well. But will the fear of potential change in=20
control of the White House in 2008 spur mergers=20
and acquisitions before then? That's the question=20
some Washington watchers and bankers are=20
considering as they look beyond this fall's=20
congressional elections to the next presidential=20
contest. "The regulatory environment is probably=20
as favorable for deals as it is ever going to get=20
-- so companies that are considering deals have=20
to be factoring that in right now," said Paul=20
Gallant, media analyst at Stanford Washington=20
Research Group. Gallant expects that any=20
prospective major media deals will be proposed in=20
the next six to eight months in case the White=20
House is won back by the Democrats. The Democrats=20
are seen by some as more unfriendly to=20
consolidation. Republicans, who control Congress=20
as well as the White House under George W. Bush,=20
have historically been viewed as pro-business,=20
creating favorable tax rules and allowing markets=20
rather than regulators to hash out most=20
competitive issues. Consolidation in the media=20
sector provokes particularly contentious debate,=20
as consumer groups worry that allowing companies=20
to concentrate media properties squeezes out=20
independent voices and reduces local control.
http://today.reuters.com/news/newsarticle.aspx?type=3DcomktNews&rpc=3D55...
oryid=3D2006-07-13T220402Z_01_N13220134_RTRIDST_0_COLUMN-MERGERS-SCHEDULED-=
WEEKLY-COLUMN-UPDATE-1.XML

WILL DIRECTV & ECHOSTAR MERGE?
[SOURCE: TVPredictions, AUTHOR: Phillip Swann]
[Commentary] Satellite operators DIRECTV and=20
EchoStar will soon announce a merger. A deal=20
joining the nation's top satellite TV services=20
has been speculated about for months. However,=20
the rumors have suddenly escalated in the last=20
few weeks with reports coming from last week's=20
Allen & Co. media and technology conference in=20
Idaho. "I think if there's any prospect for (a=20
DIRECTV-EchoStar) deal at all ... it almost=20
certainly has to be in a Republican=20
administration," Craig Moffett, a media analyst=20
at Sanford C. Bernstein & Co., told Reuters.
http://www.tvpredictions.com/satmerger071706.htm
* News Corp. Talk Hikes Dish Stock
http://www.multichannel.com/article/CA6354056.html?display=3DBreaking+News

CABLE, DBS ANTE FOR AWS SPECTRUM
[SOURCE: Multichannel News]
The list of potential bidders for the upcoming=20
advanced-wireless-services auction is out, and it=20
appears that cable and satellite players are=20
mulling whether to vie for any of the 1,222=20
licenses up for grabs. As reported, the cable=20
operators aligned with Sprint Nextel -- Time=20
Warner Cable, Comcast, Cox Communications and=20
Bright House Networks -- filed to potentially=20
take part in the Federal Communications=20
Commission auction, although it remains to be=20
seen whether they will do so. The group=92s=20
application under the name =93SpectrumCo LLC=94 is=20
included on a list of 171 incomplete applications=20
filed with the FCC. Applicants on that list can=20
become qualified bidders if they submit upfront=20
payments by 6 p.m. (EST) Monday and resubmit=20
their applications by 6 p.m. Tuesday with any=20
omissions corrected, according to FCC rules. Also=20
on the incomplete list is Wireless DBS LLC, which=20
represents EchoStar Communications and DirecTV.=20
It also includes cable operators Bend Cable=20
Communications and Cable One, as well as Cingular=20
Wireless. The list of approved bidders,=20
meanwhile, includes Dolan Family Holdings LLC and=20
cellular provider T-Mobile USA.
http://www.multichannel.com/article/CA6353902.html?display=3DBreaking+News

CW: DIVERSITY IS KEY TO FINDING AUDIENCE
[SOURCE: Broadcasting&Cable, AUTHOR: Ben Grossman]
CW President Dawn Ostroff says that the new=20
network will rely on its commitment to diversity=20
to help it find its audience when it launches in=20
the fall. Speaking Monday at the Television=20
Critics Association press tour in Pasadena,=20
Ostroff said she has met with the producers of=20
every one of her shows to outline her desire for=20
a diverse look. For the CW, that diversity also=20
encompasses the youthful audience the network=20
hopes it can steal from the other four broadcast=20
networks and the former UPN and WB. =93There is a=20
great white space, there is no one targeting the=20
18-34 demo right now,=94 she said. Ostroff notes=20
that the Generation X and Generation Y groups=20
make up about 120 million Americans, and the=20
18-34 segment that her network wants to target=20
includes about 42 million, second only to the Baby Boomers.
http://www.broadcastingcable.com/article/CA6353877.html?display=3DBreaki...
News

AT THE FCC

FCC KEEPS STATUS QUO ON REGULATORY FEES
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The Federal Communications Commission Monday=20
saved the satellite-TV industry millions of=20
dollars by rejecting a cable-industry plan that=20
called for hiking federal regulatory fees on=20
their chief video competitors. The cable plan,=20
sponsored by the industry=92s two leading trade=20
organizations, called for trimming the $50=20
million cable operators owe the U.S. Treasury in=20
fiscal-year 2006 and recovering the deficit from=20
DirecTV and EchoStar Communications, both of=20
which opposed the idea in a joint campaign. In an=20
order establishing the fee regime for the current=20
year, the FCC said the National Cable &=20
Telecommunications Association and the American=20
Cable Association failed to meet the legal test=20
established by Congress to justify changing the=20
manner in which the agency collects regulatory=20
fees. The FCC is required by law to fund nearly=20
100% of its budget by collecting fees from=20
regulated entities. The Commission's budget is=20
about $300 million. Without reference to any=20
specific dispute, FCC Democrats Michael Copps and=20
Jonathan Adelstein, alone in commenting on the=20
agency=92s decision, called for change. =93In a=20
rapidly evolving communications marketplace, we=20
need to look for ways to ensure that our=20
regulatory fee methodologies continue to reflect=20
the industries we regulate,=94 Copps said in a one-paragraph statement.
http://www.multichannel.com/article/CA6353900.html?display=3DBreaking+News
* FCC Order
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-102A1.doc
* Commissioner Copps:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-102A2.doc
* Commissioner Adelstein
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-102A3.doc

QUICKLY

FORD FOUNDATION GRANT CRITICAL TO IMPLEMENTATION=20
OF CAMPAIGN TO REFORM US MEDIA LANDSCAPE
[SOURCE: Common Cause press release]
The Ford Foundation has awarded it a $100,000=20
grant in support of the Media and Democracy=20
Coalition. The Media and Democracy Coalition=20
represents 23 diverse groups that have joined=20
forces to create a collaborative framework to=20
work for reform of the media landscape in=20
America. Funding from the Ford Foundation will be=20
critical to the implementation of this campaign,=20
especially in developing capacity at the state=20
and local levels in educating, engaging, and=20
convening new stakeholders on media reform=20
issues, as well as and involving and connecting=20
them with media policy debates at the federal=20
level. The goals of the Media and Democracy=20
Coalition are to create a shared vision for an=20
open and vibrant media that is accessible and=20
responsive to the needs and interests of all=20
Americans, and to develop and implement=20
strategies for engaging the public in critical=20
media debates and decisions that will shape the=20
future of this essential aspect of our society=20
for decades to come. Members of the Media and=20
Democracy Coalition include: Alliance for=20
Community Media, Benton Foundation, CCTV Center=20
for Media and Democracy, Center for Creative=20
Voices in Media, Center for Digital Democracy,=20
Consumer Federation of America, Common Cause,=20
Consumers Union Free Press, Future of Music=20
Coalition, Institute for Public Representation at=20
Georgetown Law School, Media Access Project,=20
Media Alliance, Media Tank, National Alliance for=20
Media Arts and Culture, National Hispanic Media=20
Coalition, New America Foundation, Newspaper=20
Guild-CWA, Office of Communications of United=20
Church of Christ, Inc., Prometheus Radio Project,=20
Reclaim the Media, US Conference of Catholic=20
Bishops, US Public Interest Research Group and the Youth Media Council.
http://www.commoncause.org/site/pp.asp?c=3DdkLNK1MQIwG&b=3D810373

A TEENAGE PROBLEM OF TOO MUCH INFORMATION
[SOURCE: Financial Times, AUTHOR: Aline van Duyn and Rebecca Knight]
[Commentary] The use of online social networks=20
such as MySpace, Bebo, Friendster and Orkut is=20
changing the way younger people in particular=20
communicate and entertain themselves. =93Children=20
are now producers of content =AD and dealing with=20
that is more difficult than the previous Internet=20
problems, which were about keeping children from=20
accessing content that was inappropriate,=94 says=20
Ann Lee Flynn, director of education technology=20
at the US National School Boards Association.=20
=93Schools are shell-shocked by the explosive=20
growth of this type of technology.=94 MySpace, with=20
nearly 90m registered users worldwide and 250,000=20
signing up every week, allows each to create a=20
profile, a web page accessible to other members=20
and easily customized with photographs, videos,=20
music and graphics. People write about their=20
lives and can link their profiles to others,=20
creating networks of =93friends=94. Along with this=20
popularity come dangers -- not only sexual=20
predators but also teens bullying others by=20
putting up malicious information. Last month, the=20
US National Center for Missing and Exploited=20
Children hosted a day of discussions among law=20
enforcers, parent and teacher organizations,=20
policymakers and social networks to seek ways to=20
make these sites more youth-safe. MySpace is=20
intended for over-14s but has no way of checking=20
users=92 ages. Social networks are facing calls to=20
introduce age-verification technology, but this=20
is difficult in the absence of identity records=20
for those too young to have, say, a driver=92s=20
licence. But attorneys-general may still press=20
for measures, as the issue can resonate with=20
voters. Law-enforcement officials are=20
increasingly working with MySpace and others to=20
track potential predators, for example by getting=20
the sites to retain log-in records for longer.=20
Sites are making it easier for users to report=20
inappropriate content and to keep their own=20
information private, to be revealed only to people they want to see it.
http://www.ft.com/cms/s/a2ec8cfc-15bd-11db-9950-0000779e2340.html
(requires subscription)

YOUTUBE SERVES UP TO 100 MILLION VIDEOS DAILY ONLINE
[SOURCE: Reuters]
YouTube, the leader in Internet video search,=20
said on Sunday viewers have are now watching more=20
than 100 million videos per day on its site.=20
YouTube videos account for 60 percent of all=20
videos watched online, the company said.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-07-17T094643Z_01_N16399348_RTRUKOC_0_US-YOUTUBE.xml
--------------------------------------------------------------
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.
--------------------------------------------------------------