July 2006

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TELECOM LEGISLATION
Stevens 'Very Close' To Votes Needed For Senate Telecom Bill

INTERNET
Comcast reaps as price war fails to materialize
A New Model For Getting Rich Online

CONTENT
House Passes Broad Mandatory Filtering Bill
Senate Commerce Chairs Cheer Content Campaign
Bill Would Give FCC Cable Content Control

MEDIA OWNERSHIP
Advocates want Public to Weigh in on the Future of the Media
Media Mogul Summons the Powerful to Expound
Judge: I'm Not Inclined To Block McClatchy's Bay Area Deal

GOVERNMENT & COMMUNICATIONS
House Democrats oppose Bush's spy law changes
Judges weigh combining US telecom spying suits
GAO Report: Government Slow to Fill FOIA Requests
China's Tightened Web Rules May Vex Foreign Operators

QUICKLY -- FCC Open Meeting Agenda; Kneuer=20
Nomination Hearing Delayed; NPR's Klose Receives=20
Murrow Award; DVR Owners Watch Less TV; High-tech=20
Windfall awaits California Schools; Signing Off

TELECOM LEGISLATION

STEVENS 'VERY CLOSE' TO VOTES NEEDED FOR SENATE TELECOM BILL
[SOURCE: Technology Daily, AUTHOR: David Hatch]
Senate Commerce Chairman Ted Stevens (R-Alaska)=20
expressed confidence that he would reach the=20
60-vote threshold of support necessary to stave=20
off delaying tactics and move his sweeping=20
telecommunications overhaul measure to the Senate=20
floor. But while Sen Stevens said he is close to=20
the 60-vote mark, he acknowledged during an=20
impromptu interview that he has not reached it.=20
"We're very close to that right now," he said,=20
adding, "I'm going to visit with a series of=20
senators to make sure they will be with us."=20
While Sen Stevens previously had indicated the=20
telecom bill would reach the floor when the=20
Senate reconvenes in September following the=20
summer recess, he acknowledged Thursday for the=20
first time that floor action could be delayed=20
until an anticipated lameduck session following=20
the November election. "I would prefer to do it=20
before the elections," Sen Stevens said -- while=20
conceding that, given other pending legislative=20
priorities, it would be difficult to get the=20
floor time he needs prior to November. Sen=20
Stevens said his broad telecom measure might be=20
slimmed down, but only during House-Senate=20
conference negotiations on the legislation -- and=20
not on the Senate floor. Stevens did express=20
confidence that amendments requiring the addition=20
of so-called network neutrality provisions -- the=20
most controversial issue in this year's telecom=20
overhaul debate -- would be defeated on the=20
Senate floor. Such provisions would bar cable and=20
phone broadband providers from blocking or=20
degrading competing Internet content.
http://www.njtelecomupdate.com/lenya/telco/live/tb-UMUA1154027364690.html
* Franchise Bill May Have Its 60 Votes
http://www.broadcastingcable.com/article/CA6357121.html?display=3DBreaki...
News

INTERNET

COMCAST REAPS AS PRICE WAR FAILS TO MATERIALIZE
[SOURCE: Financial Times, AUTHOR: Aline van Duyn]
Comcast, the largest cable operator in the US, on=20
Thursday offered further evidence that strong=20
competition among cable and telecom providers of=20
high-speed Internet connections is not yet=20
pushing prices down. Comcast said that in its=20
second quarter the average revenue made from each=20
broadband customer rose to $43.78 from $43.35 a=20
year ago. =93Broadband bears have been predicting a=20
price war in broadband for more than two years,=20
and the =91just wait=92 arguments are wearing thin,=94=20
said Craig Moffett, analyst at Sanford Bernstein.=20
=93Consistent with comments from=20
[telecommunications companies] AT&T and BellSouth=20
this week, both of whom saw strength in=20
higher-speed Internet tiers, the action in=20
broadband seems to be at the high end, not the=20
low end, of the market,=94 he said.
http://www.ft.com/cms/s/7ff11a12-1d90-11db-bf06-0000779e2340.html
(requires subscription)

A NEW MODEL FOR GETTING RICH ONLINE
[SOURCE: Washington Post, AUTHOR: Yuki Noguchi]
A decade ago, the Internet dream was to score=20
through venture-capital financing and by raising=20
cash in public stock offerings. Now, people with=20
creative ideas can get rich relatively quickly by=20
permitting advertisers to piggyback on any Web=20
site that attracts a lot of viewers. Technology=20
can direct ads to more and more specific=20
audiences, rewarding entrepreneurship on the=20
smallest scale -- even Web pages filled with=20
obscure and homemade content. Companies like=20
Google, in turn, also find profit in such sites.=20
In the second quarter, Google got $997 million,=20
or 41 percent of its revenue, through the network=20
of Web sites that host ads through the AdSense=20
system. Its software, like Yahoo's, prices ads=20
based on popularity. When users click the ads,=20
the software keeps detailed records, including=20
the number of page views and the amount of=20
commission the site's host earns from the ad --=20
all of which Web site owners can keep track of by=20
logging on to their accounts. Every month, Google=20
pays publishers by check or direct deposit. Ad=20
publishers must be approved through Google, to=20
ensure that the ads don't subsidize pornography=20
or gambling, or contain material that is racist,=20
violent or related to illegal drugs. Among other=20
things, Google says it watches to make sure=20
people don't inflate their revenues by clicking=20
on their own ads -- a practice known as "click=20
fraud" that has plagued online marketing. The=20
popularity of making money this way also has led=20
to creation of "made-for-AdSense" Web pages that=20
contain little content and lots of ads, which=20
critics say clutter the Internet and divert online searches.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/27/AR200607...
1622.html
(requires registration)

CONTENT

HOUSE PASSES BROAD MANDATORY FILTERING BILL
[SOURCE: Center for Democracy & Technology]
The House of Representatives has passed a bill=20
that would force schools and libraries to block=20
chat and social networking sites as a condition=20
of receiving federal E-rate funding. This bill=20
goes far beyond the already broad mandate that=20
requires schools and libraries to filter out=20
obscenity and "harmful-to-minors" content and=20
would block access to many legal and valuable web=20
sites and Internet tools. Because chat and=20
social networking are woven into the fabric of=20
Internet communication, a huge range of sites may=20
be declared off limits in libraries and schools.=20
The bill appoints the Federal Communications=20
Commission as the arbiter of what can and cannot=20
be accessed in libraries around the country,=20
meaning that for the first time, the federal=20
government would be getting the business of=20
evaluating and screening wholly lawful Internet content.
H.R. 5319: http://www.cdt.org/legislation/#H.R.5319
http://www.cdt.org/headlines/920

SENATE COMMERCE CHAIRS CHEER CONTENT CAMPAIGN
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The heads of the major industry associations=20
appeared together before the Senate Commerce=20
Committee Thursday to pitch their new=20
content-control PSA campaign in cooperation with=20
The Ad Council and received a benediction and a=20
"go forth" from Chairman Ted Stevens (R-Alaska)=20
and co-chairman Daniel Inouye (D-Hawaii). The=20
campaign is intended to let parents know they=20
already have the tools to block unwanted=20
programming, as well as to encourage them to do=20
so. It is also intended to head off further=20
government content control regulation being=20
threatened by legislators concerned about TV=20
content. The Parents Television Council suggested=20
it is much of the same which is more talk and=20
still no action. PTC, having helped boost=20
indecency fines on broadcasters and pushed=20
tougher profanity enforcement policies at the=20
FCC, wants cable to offer a la carte programming=20
as the other "must-have" element of parental=20
choice. "They still don't get it," said PTC's Dan Isett of the campaign.
http://www.broadcastingcable.com/article/CA6356834.html
* V-Chip Campaign Gets Warm Reception on Hill
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=3D100...
3733
* Parents group derides V-Chip ads
http://news.com.com/Parents+group+derides+V-Chip+ads/2100-1028_3-6099408...
ml?tag=3Dnefd.top

BILL WOULD GIVE FCC CABLE CONTENT CONTROL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
As promised, Republican Reps Tom Osborne (R-Neb)=20
and Dan Lipinski (D-II) Thursday introduced bill=20
that would give cable a "column A,B,C," choice of=20
content regulation. The bill is billed as the=20
Family Choice act, the preferred term for a la=20
carte cable with groups like Parents Television=20
Council, which backs the legislation and touted=20
it to the press on Wednesday. Asserting that=20
"indecent programming on channels carried on=20
extended basic cable service is pervasive, " and=20
that the V-chip does not "effectively protect=20
children from indecent programming--it cites a TV=20
Fax article on second and third sets without=20
chips, by the way--the bill's authors would=20
essentially give the FCC the power to regulate=20
cable content in one of several=20
ways. Multichannel video providers -- cable,=20
satellite, telcos -- would be required to abide=20
by FCC indecency standards that currently don't=20
apply to them, or they would have to scramble any=20
channel, without charge, a subscriber doesn't=20
want, except channels that have to be on, like=20
public access and TV station's local signals; or=20
they have to offer cable a la carte--pay per=20
channel, essentially; or provide a family tier,=20
which must include all basic channels except ones=20
with TV-14 or TV MA content between 6 a.m. and 10=20
p.m., unless they are news or live sporting events.
http://www.broadcastingcable.com/article/CA6357159.html?display=3DBreaki...
News
See also --
* Consumers Union Supports Greater Choice in Cable
[SOURCE: Consumers Union press release]
Consumers Union praised the introduction today of=20
bipartisan legislation that could offer consumers=20
greater choice over the cable television channels=20
they buy and reduce the prices consumers pay for=20
service. =93Consumers are sick and tired of paying=20
bloated prices for a giant package of 100=20
channels when they only watch a handful of them,=94=20
said Jeannine Kenney, senior policy analyst with=20
Consumers Union, the non-profit publisher of=20
Consumer Reports=AE, =93and many are offended that=20
they must pay for channels they find=20
objectionable. This legislation offers consumers=20
the promise of more choice of what channels come=20
into their homes and greater control over their cable bills.=94
http://www.consumersunion.org/pub/core_telecom_and_utilities/003631.html

MEDIA OWNERSHIP

ADVOCATES WANT PUBLIC TO WEIGH IN ON THE FUTURE OF MEDIA
[SOURCE: Honolulu Star-Bulletin, AUTHOR: Erika Engle]
Honolulu media watchdogs are hoping consumers who=20
read newspapers and get local news from=20
television and radio will participate in the=20
FCC's new proceeding on media ownership. "It is a=20
rare opportunity for the public to weigh in on a=20
critical policy issue," said Sean McLaughlin,=20
founder of Hawaii Consumers LLC, a research and=20
advocacy organization. Having fewer media owners=20
limits the number of voices in a community, he=20
said. Media consolidation is a huge reason for=20
the explosion of Internet communities, message=20
boards and blogs, he said. Since the FCC last=20
voted on similar issues three years ago, more=20
than 3,300 television and radio station licenses=20
have changed hands, "so even under the old rules,=20
consolidation grows, localism suffers and=20
diversity dwindles," FCC Commissioner Michael=20
Copps said in a statement. He sees that it may be=20
tempting for the public to "see this debate as=20
important only to giant media moguls," but the=20
discussion really "means that this commission has=20
begun to decide, on behalf of the American=20
people, the future of our media. "It means=20
deciding whether or not to accelerate media=20
concentration, step up the loss of local news and=20
change forever the critical role independent=20
newspapers perform for our country," he said. The=20
debate will have "far reaching implications for=20
the credibility of information Americans get from=20
the media -- for the vitality of the civic=20
dialogue that determines the direction of our=20
democracy -- and for whether TV and radio offer=20
entertainment that is creative, uplifting and=20
local or degrading, banal and homogenized." The=20
Hawaii Congressional delegation sponsored a=20
Senate resolution encouraging the FCC to have a=20
Hawaii hearing on the localism issue.
http://starbulletin.com/2006/07/27/business/engle.html

MEDIA MOGUL SUMMONS THE POWERFUL TO EXPOUND
[SOURCE: Los Angeles Times, AUTHOR: Sallie Hofmeister]
When 250 News Corp. executives gather this=20
weekend for a management retreat at a posh=20
California seaside resort, they'll skip the=20
typical team-building exercises that such confabs=20
are known for. Why role-play when you can pick=20
the brains of actual world leaders and rock=20
stars? Speakers at the Pebble Beach event will=20
include such political powers as British Prime=20
Minister Tony Blair, former President Clinton and=20
Israeli Vice Premier Shimon Peres. Los Angeles=20
Police Chief William J. Bratton will opine on=20
remaking complex organizations, former Vice=20
President Al Gore will riff on climate change,=20
and U2's Bono will deliver a keynote address=20
titled "The Power of One." If there's one man=20
with the power to summon the powerful, mogul=20
watchers agree, it's Murdoch. "It's his unique=20
persona and his global reach that puts him in a=20
special category," said Jeffrey Sonnenfeld of the=20
Yale School of Management. "He is the=20
fulfillment, although not ideologically, of what=20
Ted Turner aspired to be, in terms of having=20
influence not only culturally but socially.=20
Unlike [Viacom Inc. Chairman] Sumner Redstone,=20
Murdoch is interested in influence as much as affluence."
http://www.latimes.com/news/printedition/front/la-fi-fox28jul28,1,292186...
tory?coll=3Dla-headlines-frontpage
(requires registration)

JUDGE: I'M NOT INCLINED TO BLOCK MCCLATCHY'S BAY AREA DEAL
[SOURCE: Editor&Publisher]
While making no ruling on an emergency request to=20
block the sale of three McClatchy Co. San=20
Francisco Bay Area dailies, a federal judge=20
suggested at a Thursday hearing that she's likely=20
to deny Clint Reilly's request for a temporary=20
injunction against it. "I don't see that there is=20
imminent irreparable harm," U.S. District Court=20
Judge Susan Illston said. In court filings=20
opposing the injunction, McClatchy noted that it=20
had borrowed more than $3 billion to acquire=20
Knight Ridder and needed to sell off some of the=20
papers to draw down debt. The $1 billion the=20
chain will get from the sale of the Bay Area=20
papers is 'important to the company's financial=20
health," McClatchy said in a filing.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1002914230

GOVERNMENT & COMMUNICATIONS

HOUSE DEMOCRATS OPPOSE BUSH'S SPY LAW CHANGES
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Republican-backed legislation designed to broaden=20
a 1978 eavesdropping law came under renewed=20
attack on Thursday by Democrats who have been=20
briefed about the details of the Bush=20
administration's warrantless telephone and=20
Internet monitoring program. Meanwhile, the=20
handful of Republicans present at a U.S. House of=20
Representatives Intelligence Committee hearing=20
here, including Chairman Peter Hoekstra of=20
Michigan, touted a new proposal called the=20
Electronic Surveillance Modernization Act.=20
Supporters say its provisions would speed=20
initiation of terrorist investigations and=20
account for use of communications technologies=20
unforeseen by the 28-year-old Foreign=20
Intelligence Surveillance Act. FISA requires=20
investigators to obtain a warrant from a secret=20
court before conducting wiretapping on=20
international communications when at least one=20
end is located in the United States.
http://news.com.com/House+Democrats+oppose+Bushs+spy+law+changes/2100-10...
3-6099403.html?tag=3Dhtml.alert

JUDGES WEIGH COMBINING US TELECOM SPYING SUITS
[SOURCE: Reuters, AUTHOR: Andrew Stern]
Both sides in lawsuits alleging that telephone=20
companies unlawfully cooperated in a secret U.S.=20
government spying program argued on Thursday that=20
a federal court panel should give the cases to a=20
single judge. U.S. Deputy Assistant Attorney=20
General Carl Nichols urged the panel to transfer=20
the roughly two-dozen cases filed around the=20
United States to the federal court in Washington,=20
D.C., while a plaintiff's attorney asked to have=20
a San Francisco judge handle the class-action cases.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-07-27T203447Z_01_N27469452_RTRUKOC_0_US-SECURITY-TELECOMS.xml&archi=
ved=3DFalse

GAO REPORT: GOVERNMENT SLOW TO FILL FOIA REQUESTS
[SOURCE: Associated Press]
Federal agencies are taking longer to answer=20
requests for records but provide fully responsive=20
documents nearly nine out of 10 times, a=20
congressional study says. The number of Freedom=20
of Information Act requests carried over from=20
year to year has risen 43 percent since 2002, the=20
Government Accountability Office reported to a=20
House subcommittee Wednesday. And the problem=20
appears to be worsening. The increase in holdover=20
requests was 24 percent from 2004 to 2005,=20
compared with 11 percent from 2003 to 2004. The=20
GAO found the median -- or midpoint -- time for=20
processing requests varied greatly among=20
agencies: from less than 10 days to more than 100 days.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1002913243

CHINA'S TIGHTENED WEB RULES MAY VEX FOREIGN OPERATORS
[SOURCE: Wall Street Journal, AUTHOR: Jason Dean jason.dean( at )wsj.com]
New rules issued by China's telecommunications=20
regulator could create significant complications=20
for foreign Internet companies operating in China=20
as well as for Chinese Internet companies listed=20
overseas, lawyers and analysts said. Just how=20
much the measures, unveiled this week by the=20
Ministry of Information Industry, will affect=20
Internet companies in China could depend largely=20
on the level of enforcement, experts said. The=20
rules appear to target a complicated legal=20
structure that has been widely used for years to=20
enable foreign investment in the Chinese Internet=20
industry. The measures are aimed at strengthening=20
control over foreign investment in "value added=20
telecom services," a category that includes=20
search engines and other Web sites. The rules=20
require that local providers of such services own=20
the domain names and trademarks that they use in=20
China -- key pieces of intellectual property that=20
are often controlled by foreign affiliates or investors.
http://online.wsj.com/article/SB115402455406219387.html?mod=3Dtodays_us_...
e_one
(requires subscription)

QUICKLY

FCC OPEN MEETING AGENDA
[SOURCE: Federal Communications Commission]
The Federal Communications Commission will hold=20
an Open Meeting on Thursday, August 3, 2006 at=20
9:30 a.m. in Room TW-C305, at 445 12th Street,=20
S.W., Washington, D.C. The agenda includes two=20
items concerning the provision of broadband=20
Internet service over power lines and a new=20
proceeding regarding possible changes to the=20
rules governing wireless licenses in the 698-746,=20
747-762, and 777-792 MHz Bands. Chips and dip=20
will not be served, but you can stay home and=20
watch in your pajamas -- all those Hollywood=20
folks do -- if you visit http://www.fcc.gov/realaudiowww.fcc.gov/realaudi=
o.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266651A1.doc

DEMOCRATS DELAY NOMINATION HEARING ON NTIA'S KNEUER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Senate Commerce Committee Thursday held=20
confirmation hearings on the nominations of some=20
Coast Guard Admirals and Amtrak board members,=20
but still no hearing for acting National=20
Telecommunications & Information Administration=20
head John Kneuer. It has been over two and a half=20
months since the White House indicated he was the=20
president's choice to head the NTIA, the=20
administration's chief telecommunications policy=20
adviser. Democrats balked at adding Kneuer's=20
nomination to the agenda at the 11th hour. Kneuer=20
could be confirmed as early as next week or, more likely, in September.
http://www.broadcastingcable.com/article/CA6357126.html?display=3DBreaki...
News

NPR'S KEVIN KLOSE RECEIVES EDWARD R MURROW AWARD
[SOURCE: Corporation for Public Broadcasting]
Since 1977, CPB has presented the Murrow Award to=20
individuals who foster public radio's quality and=20
service and shape its direction. The award is=20
named for the legendary reporter, producer,=20
executive and government official, who championed=20
responsible, courageous and imaginative uses of=20
the electronic media during his distinguished=20
30-year career. It is the industry's most=20
prestigious honor. This year's profile in courage=20
is Kevin Klose, president and chief executive=20
officer of National Public Radio (NPR), America's=20
largest nonprofit radio outlet for news and=20
cultural programming. Klose, who has led NPR=20
since December 1998, is a former editor, and=20
national and foreign correspondent with The=20
Washington Post, an award-winning author and=20
international broadcasting executive. Prior to=20
joining NPR, Klose served as director of U.S.=20
international broadcasting, overseeing the United=20
States government's global radio and television=20
news service; and President of Radio Free Europe/Radio Liberty.
http://www.cpb.org/pressroom/release.php?prn=3D563

NEW DATA SUGGESTS DVR OWNERS WATCH LESS, NOT MORE
[SOURCE: Media Daily News, AUTHOR: David Goetzl]
New data from Mediamark Research (MRI) shows that=20
adults in DVR homes watch less television than=20
those without the devices. The research shows=20
that they are 23 percent less likely to be heavy=20
television viewers versus the general population.=20
According to the study, one reason that those in=20
DVR homes may be watching less television is that=20
they spend more down time reading and trolling=20
the Internet. MRI found that adults in DVR homes=20
are 43 percent more likely to be heavy magazine=20
readers, 40 percent more likely to be heavy=20
newspaper readers, and 81 percent more likely to=20
be heavy Internet users. Based on MRI's research=20
and the widely held belief that DVR users tend to=20
have higher education and income levels, those=20
findings are not a surprise. Consider MRI's=20
findings: 36.8 percent of adults with DVRs have a=20
college education (compared to 25.2 percent of=20
the general population), and 17.1 percent earn=20
more than $150,000 a year (versus 8 percent of the general pool).
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
6108&Nid=3D22006&p=3D368626

HIGH-TECH WINDFALL AWAITS CALIFORNIA SCHOOLS
[SOURCE: eSchool News]
California schools soon will receive up to $600=20
million in educational technology funding, thanks=20
to an antitrust settlement with software giant=20
Microsoft Corp. State officials announced the=20
expected windfall, which will total at least $400=20
million, on July 26. California is one of 15=20
states that settled class-action lawsuits with=20
Microsoft, all of which stipulate that a portion=20
of unclaimed funds will benefit schools.
http://www.eschoolnews.com/news/showStoryts.cfm?ArticleID=3D6456

SIGNING OFF
[SOURCE: Washington Post, AUTHOR: Editorial Staff]
[Commentary] Ever since the Boston Globe=20
reported this year that the president had used=20
"signing statements" to question the=20
constitutionality of more than 750 provisions of=20
law, critics across the political spectrum have=20
been up in arms. President Bush brought this=20
skirmish on himself. He has used signing=20
statements -- which indicate that he will=20
interpret new laws so as to avoid the=20
constitutional problems he has flagged within=20
them -- far more frequently than other=20
presidents. Still, it is important not to let Mr.=20
Bush's ugly signing statements bring the=20
presidential practice into disrepute. Signing=20
statements are actually a useful device for=20
transparent and open government. Presidents have=20
long used signing statements to identify=20
particular provisions of law as potentially=20
unconstitutional. They have just as long declined=20
to enforce provisions of law they regarded as=20
unconstitutional. While Mr. Bush has been=20
particularly aggressive about issuing signing=20
statements, a great many break no new ground but=20
merely articulate constitutional views that the=20
executive branch has held across many=20
administrations. The problem is not that Mr. Bush=20
reserves the right to state his views; it is the=20
dangerous substance of the views he sometimes states.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/27/AR200607...
1553.html
(requires registration)
--------------------------------------------------------------
...and we're outta here. See you Monday.
--------------------------------------------------------------
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.
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