July 2006

GOVERNMENT & COMMUNICATIONS
Intelligence Chiefs Urge Easing of spy Rules
U.S. voices openness to private Net control

EMERGENCY COMMUNICATIONS
Cellular Firms Want To Avoid Emergency Alert Mandate
Request for Comment on Katrina Report

INTERNET/BROADBAND
Broadband subscribers soar: FCC
The Buck Stops Here, Mr. Chairman
Cities Awaiting Edison Signal on Wireless Networks
'Net Neutrality' Fight Moves to States
Microsoft opposes Net Neutrality Plan on its Proxy

TELECOM
FCC Report on Local Telephone Competition
Cellular Carriers Work To Outdo Google, Yahoo
Tech's Cutting Edge? Try a Tiny Town

IN THE COURTS
Judge Rebuffs Interveners In Review of Mega Mergers
Court Upholds FCC DBS Local-Signal Test

CONTENT
PBS To Revisit Stricter Profanity Policy
Multiple-Choice Cable Content Bill Planned

MEDIA OWNERSHIP
Newspapers seek to rebut lawsuit over sale of Mercury News
EMI Won't Pursue Its $4.6 Billion Bid For Warner Music
Kazaa to pay music industry $100 mln

QUICKLY -- Specter proposes challenge of Bush's power on laws

GOVERNMENT & COMMUNICATIONS

INTELLIGENCE CHIEFS URGE EASING OF SPY RULES
[SOURCE: Reuters, AUTHOR: David Morgan]
Three administration officials, including CIA=20
Director Michael Hayden, appeared before the=20
Senate Judiciary Committee to press lawmakers to=20
ease warrant requirements for the surveillance of=20
al Qaeda suspects. "Why should our laws make it=20
more difficult to target al Qaeda communications=20
that are most important to us -- those entering=20
or leaving this country," Hayden said. The=20
four-star Air Force general set up President=20
George W. Bush's warrantless surveillance program=20
in the aftermath of the September 11 attacks=20
while he was director of the National Security=20
Agency. The program allows the government to=20
eavesdrop on the international phone calls and=20
e-mails of U.S. citizens without obtaining a=20
warrant, if in pursuit of al Qaeda. Hayden said=20
most of the phone calls involve al Qaeda suspects=20
overseas calling people inside the United States.=20
Members of Congress say the program could=20
overstep President Bush's authority as commander=20
in chief and appears to violate the 1978 Foreign=20
Intelligence Surveillance Act, or FISA. FISA=20
requires warrants for individual eavesdropping=20
suspects inside the United States.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-07-26T182456Z_01_N26291904_RTRUKOC_0_US-SECURITY-EAVESDROPPING.xml&=
archived=3DFalse
* Spy agencies call for broader surveillance laws
http://news.com.com/Spy+agencies+call+for+broader+surveillance+laws/2100...
28_3-6098735.html?tag=3Dnefd.lede
* Administration and Critics, in Senate=20
Testimony, Clash Over Eavesdropping Compromise
http://www.nytimes.com/2006/07/27/washington/27fisa.html?ref=3Dtodayspaper
* Law on Domestic Spying Urged
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/25/AR200607...
0992.html
* Spy agency chiefs call for broader rules
http://www.usatoday.com/printedition/news/20060727/a_capcol27.art.htm

US VOICES OPENNESS TO PRIVATE NET CONTROL
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
The United States may be willing to cede at least=20
some of its historic control of the Internet=20
domain name system after all, a U.S. Commerce=20
Department official said Wednesday. Despite bold=20
statements last year that seemed to indicate=20
otherwise and ignited a worldwide debate, John=20
Kneuer, the director of the National=20
Telecommunications and Information=20
Administration, said the government "remains=20
committed" to private management of the DNS.=20
Kneuer and the NTIA are contemplating weather to=20
renew a memorandum of understanding, dating back=20
to 1998, between the U.S. government and the=20
Internet Corporation for Assigned Names and=20
Numbers, or ICANN, the nonprofit organization=20
responsible for coordinating the allocation of=20
domain names and Internet Protocol addresses. The=20
agreement, which establishes guiding principles=20
for management of the DNS, is set to expire on=20
Sept. 30, but could be renewed, as has occurred=20
in the past. Kneuer said the government's=20
continuing interest in privatization doesn't=20
clash with a list of four principles issued last=20
summer by the Commerce Department. That brief=20
policy statement riled up some in the=20
international community because it asserted the=20
U.S. government's intention to retain control=20
over the Internet's "root," the master file that=20
lists which top-level domains are authorized. It=20
also indicated plans to maintain its oversight over ICANN.
http://news.com.com/U.S.+voices+openness+to+private+Net+control/2100-102...
-6098893.html?tag=3Dhtml.alert

EMERGENCY COMMUNICATIONS

CELLULAR FIRMS WANT TO AVOID EMERGENCY ALERT MANDATE
[SOURCE: Technology Daily 7/21, AUTHOR: Drew Clark]
Fearful that the FCC will extend an emergency=20
alert system to cellular carriers, the industry=20
has been pushing for legislation and executive=20
action to make compliance voluntary. Further, the=20
legislation supported by the industry would shift=20
the authority to run the system from the FCC to=20
the Homeland Security Department or another=20
department, like Commerce. Legislation to create=20
a voluntary system is gaining steam because of=20
concern that the FCC will impose strict rules,=20
industry and government sources said. The=20
cellular industry has been pitching the voluntary=20
approach, and officials were heartened by a June=20
26 executive order calling for Homeland Security=20
to take the lead in a new alert system. They also=20
cite what they regard as the success of the=20
Wireless Priority Service put in place at=20
Homeland Security since terrorist attacks of=20
September 2001. Cingular Wireless and T-Mobile=20
grant legislators and other public officials=20
priority access to spectrum during emergencies or=20
natural disasters. Cellular and traditional=20
telephones are frequently overwhelmed during such=20
occasions -- but legislators availing themselves=20
of the voluntary service are granted a special=20
phone number designed to avoid all the busy circuits.
http://www.njtelecomupdate.com/lenya/telco/live/tb-KTLE1153939641615.html

REQUEST FOR COMMENT ON KATRINA REPORT
[SOURCE: Federal Communications Commission]
The FCC is asking for public comment on the=20
recommendations of the Independent Panel=20
Reviewing the Impact of Hurricane Katrina on=20
Communications Networks. Specifically, the=20
Commission is asking parties to address the=20
applicability of the Panel's recommendations to=20
all types of natural disasters (e.g.,=20
earthquakes, tornados, hurricanes, forest fires)=20
as well as other types of incidents (e.g.,=20
terrorist attacks, flu pandemic, industrial=20
accidents, etc). Parties should also discuss=20
whether the Panel's recommendations are broad=20
enough to take into account the diverse=20
topography of the nation, the susceptibility of a=20
region to a particular type of disaster, and the=20
multitude of communications capabilities a region=20
may possess. Comments in this proceeding are due=20
on or before August 7, 2006 and reply comments=20
are due on or before August 21, 2006. For more=20
info contact Lisa M. Fowlkes (202) 418-7452 or lisa.fowlkes( at )fcc.gov
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-1524A1.doc

INTERNET/BROADBAND

BROADBAND SUBSCRIBERS SOAR: FCC
[SOURCE: Reuters]
U.S. high-speed Internet subscriptions soared 33=20
percent last year to 50.2 million lines,=20
according to the latest data released by the=20
Federal Communications Commission on Wednesday.=20
More consumers signed up for digital subscriber=20
line (DSL) service from telephone companies like=20
AT&T and Verizon than cable modem service from=20
companies like Comcast and Time Warner. DSL=20
subscriptions jumped 5.7 million lines versus=20
cable companies adding 4.2 million subscribers in=20
2005, according to the FCC. The cable industry's=20
market share dropped 3.5 percentage points to=20
57.5 percent while DSL gained 3.3 percentage=20
points to reach 40.5, the agency said. DSL is=20
typically less expensive than cable Internet=20
service but offers slower download speeds.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-07-26T180126Z_01_N26316850_RTRUKOC_0_US-BROADBAND.xml
* FCC press release:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266593A1.doc
* High-Speed Services for Internet Access: Status as of December 31, 2005
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266596A1.pdf
* Telcos Top New Broadband Sign-ups
http://www.broadcastingcable.com/article/CA6356578.html?display=3DBreaki...
News

THE BUCK STOPS HERE, MR CHAIRMAN
[SOURCE: Jupitermedia, AUTHOR: Dave Burstein]
[Commentary] FCC Chairman Kevin Martin is=20
responsible for fulfilling President Bush's=20
universal broadband pledge. If he has the=20
backbone, he will demand actual deployment as=20
part of the AT&T-BellSouth merger conditions, and=20
maybe even threaten to enforce the conditions of previous mergers.
http://www.isp-planet.com/cplanet/tech/2006/prime_letter_060724_editoria...
tml

CITIES AWAITING EDISON SIGNAL ON WIRELESS NETWORKS
[SOURCE: Los Angeles Times, AUTHOR: James S. Granelli]
As cities across the nation roll out their own=20
wireless Internet networks, some Southern=20
California communities are hitting an unexpected=20
bottleneck: Southern California Edison. The=20
state's second-largest power utility owns many of=20
the residential street lights that cities need to=20
form the backbone of their networks. But Edison=20
acknowledges that it has yet to act on year-old=20
requests for access to its poles and electricity.=20
That has left cities waiting for a signal. Before=20
they can build, though, Edison wants to=20
"understand the technology better," said Douglas=20
H. Kim, general manager of Edison's carrier=20
solutions division. "We are an electric utility=20
and want to make sure, first and foremost, that=20
we provide reliable service." The company wants=20
to test the wireless transmitters -- which draw=20
about two nightlights' worth of power from the=20
pole -- to make sure they are "safe for workers=20
and don't hinder our expansion plans or hurt our infrastructure," he said.
http://www.latimes.com/business/printedition/la-fi-edison27jul27,1,37497...
story?coll=3Dla-headlines-pe-business
(requires registration)

'NET NEUTRALITY' FIGHT MOVES TO STATES
[SOURCE: Heartland Institute, AUTHOR: Kristina Rasmussen]
The fight over "network neutrality" regulations=20
has mainly been a matter for national=20
legislators, but the debate over how Internet=20
broadband is managed could soon be coming to a=20
state capitol near you. A failed amendment in the=20
U.S. House of Representatives and the wariness of=20
Senate Telecom Committee Chairman Ted Stevens=20
(R-AK) suggest an uncertain prognosis for federal=20
action on net neutrality before the end of the=20
year. As a result, many activists are taking=20
their case to friendly state lawmakers during the=20
2007 legislative cycle, in hopes of finding=20
allies willing to transform the concept into=20
state law. Two influential state officials jumped=20
into the net neutrality fray in late June. New=20
York Attorney General Eliot Spitzer (D) sent a=20
letter to the chairman and ranking member of the=20
U.S. Senate Commerce Committee urging them to=20
adopt net neutrality regulations and enforcement=20
mechanisms, stating, "state Attorneys General and=20
private parties should also be authorized to=20
bring civil actions in any U.S. District Court to=20
enforce these provisions." California Attorney=20
General Bill Lockyer (D) has also expressed=20
support for net neutrality principles.
http://www.heartland.org/Article.cfm?artId=3D19415

MICROSOFT OPPOSES NET NEUTRALITY PLAN ON ITS PROXY
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
The Free Enterprise Action Fund, a mutual fund=20
that says it offers both financial and=20
ideological returns, wants Microsoft shareholders=20
to seek a report -- analyzing the business and=20
economic rationale, regulatory impacts, legal=20
liabilities and any effects on product=20
development and customers -- concerning the=20
company's rationale for backing Net Neutrality,=20
which the group says would result in "expanded=20
government regulation of the Internet." Microsoft=20
wants to block the effort. However, Microsoft=20
asked the Securities and Exchange Commission if=20
it could exclude the proposal from its annual=20
shareholder vote without facing enforcement=20
action by the agency. The company argued that the=20
Net neutrality debate was part of its normal=20
business operations and securities rules=20
permitted Microsoft to exclude such proposals from a shareholder vote.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-07-26T151343Z_01_N25236150_RTRUKOC_0_US-TELECOMS-MICROSOFT-NEUTRAL=
ITY.xml&archived=3DFalse

TELECOM

FCC REPORT ON LOCAL TELEPHONE COMPETITION
[SOURCE: Federal Communications Commission]
The Federal Communications Commission released=20
new data on local telephone service competition=20
in the United States. Twice a year, all=20
incumbent local exchange carriers (incumbent=20
LECs) and competitive local exchange carriers=20
(CLECs) are required to report basic information=20
about their local telephone service, and all=20
facilities-based mobile telephony providers are=20
required to provide information about their=20
subscribers, pursuant to the FCC's local=20
telephone competition and broadband data=20
gathering program (FCC Form 477). The statistics=20
in this report reflect data as of December 31,=20
2005. Some highlights: 1) End-user customers=20
obtained local telephone service by utilizing=20
approximately 143.8 million incumbent LEC=20
switched access lines, 31.6 million CLEC switched=20
access lines, and 203.7 million mobile telephony=20
service subscriptions at the end of 2005. 2) Of=20
the 31.6 million CLEC end-user switched access=20
lines, 5.1 million lines were provided over=20
coaxial cable connections. The 5.1 million lines=20
represent about 50% of the 10.1 million end-user=20
switched access lines that CLECs reported=20
providing over their own local loop=20
facilities. 3) Mobile telephony service=20
providers reported 203.7 million subscribers at=20
the end of 2005, which is 22.6 million, or 12%,=20
more than a year earlier. 4) At least one CLEC=20
was serving customers in 82% of the nation's Zip=20
Codes at the end of 2005. For more information,=20
contact James Eisner or Ellen Burton at (202) 418-0940, TTY (202) 418-0484.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266592A1.doc
* FCC report:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266595A1.pdf

CELLULAR CARRIERS WORK TO OUTDO GOOGLE, YAHOO
[SOURCE: Wall Street Journal, AUTHOR: Amol Sharma amol.sharma( at )wsj.com]
Envisioning a lucrative wireless search and=20
advertising market, U.S. cellphone companies are=20
shying away from deals with Internet giants such=20
as Google and Yahoo in favor of partnerships with=20
small start-ups they can more easily control.=20
Google, Yahoo and other Internet companies are=20
targeting wireless search as a major new growth=20
area as cellphone use proliferates globally. They=20
see billions of dollars in potential revenue from=20
selling advertising that is linked to searches=20
for ringtones, games, local listings and mobile=20
Web content. The search giants have had some=20
success overseas, but they have still had=20
difficulty penetrating the large U.S. carriers,=20
which ultimately control access to the nation's=20
nearly 217 million cellular subscribers. Large=20
phone companies, including Verizon Communications=20
and AT&T, never really profited from the=20
explosion of search and advertising on the=20
Internet. Now wireless operators like Verizon=20
Wireless and Cingular Wireless, which are partly=20
owned by those same phone giants, don't want to make the same mistake.
http://online.wsj.com/article/SB115396112635018586.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

TECH'S CUTTING EDGE? TRY A TINY TOWN
[SOURCE: Wall Street Journal, AUTHOR: Bobby White bobby.white( at )wsj.com]
In the Internet age, big cities such as New York=20
and Dallas are often seen as the earliest=20
adopters of the latest technology. But the rapid=20
pace of Internet technology has created some=20
ironies where rural centers have moved more=20
quickly than urban areas to embrace new tech=20
services. Residents of tiny towns such as Sallon,=20
Nev., Greybull, Wyo., and Kingfisher, Okla., can=20
now all boast that they get IPTV, while city=20
dwellers in Portland and San Francisco won't get=20
the service for at least another 12 months. The=20
rural areas have surpassed the cities largely=20
because of nimbler local telecom companies that=20
have taken matters into their own hands. While=20
behemoths such as AT&T and Verizon are hamstrung=20
by the daunting red tape and logistics of=20
rollouts to millions of consumers, many smaller=20
companies have charged ahead by exploiting some=20
weapons only available to firms of their size.=20
For one, the rural telecoms can receive aid from=20
the Rural Utilities Service, a division of the=20
Agriculture Department. To prevent rural phone=20
companies from falling behind, the division loans=20
small telecoms enough money to pay for 80% of a=20
network upgrade. Since 2002, when this broadband=20
program was enacted, 57 loans totaling more than=20
$800 million have been dished out, says an agency spokesman.
http://online.wsj.com/article/SB115396323507218646.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

IN THE COURTS

JUDGE REBUFFS INTERVENERS IN REVIEW OF MEGA MERGERS
[SOURCE: Technology Daily 7/25, AUTHOR: Sarah Lai Stirland]
Federal Judge Emmet Sullivan of the District of=20
Columbia temporarily rebuffed several parties=20
that sought to derail the Bush administration's=20
antitrust settlement with two sets of local=20
telecommunications companies in their mergers=20
with long-distance providers. The American=20
Antitrust Institute, the National Association of=20
State Utility Consumer Advocates, the New Jersey=20
Division of Rate Council, New York Attorney=20
General Eliot Spitzer and Sprint Nextel all had=20
sought to intervene in the judicial review of the=20
mergers. The Justice Department settled the=20
antitrust complaint it had filed against AT&T and=20
MCI in their mergers with SBC Communications and=20
Verizon Communications, respectively. The groups=20
had offered input from expert witnesses after the=20
judge in a July 12 hearing asked where the=20
public-interest groups were and why he had not=20
been offered any independent experts to confirm=20
Justice's findings in the settlement. The groups=20
oppose the settlement in its current form, which=20
requires the new AT&T and Verizon to provide=20
competitive access to certain buildings in=20
several markets and to divest of certain assets.=20
Judge Sullivan asked the utilities' group,=20
Spitzer and Sprint Nextel to file=20
friend-of-the-court briefs. He said he would take=20
the rest of the requests "under advisement" and=20
would "disfavor" any additional requests because of time constraints.
http://www.njtelecomupdate.com/lenya/telco/live/tb-AWJF1153939195365.html

COURT UPHOLDS FCC DBS LOCAL-SIGNAL TEST
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
A court has upheld the FCC's method of=20
determining which households receive a local=20
signal and thus are not eligible to receive an=20
imported distant TV station signal from a=20
satellite provider. The U.S. court of Appeals for=20
the District of Columbia Tuesday denied an=20
EchoStar appeal of the FCC's=20
congressionally-mandated model for determining=20
signal strength. EchoStar is already facing the=20
prospect of pulling all its distant signals after=20
an Atlanta Federal Appeals Court in May, in a=20
harshly-worded opinion, declared: "We have found=20
no indication that EchoStar was ever interested=20
in complying with" laws regulating how satellite=20
TV companies deliver broadcast stations to their=20
customers. EchoStar is permitted to deliver=20
so-called "distant" signals only to homes that=20
receive no other stations over the air. But=20
EchoStar=92s method of determining which customers=20
were eligible for the distant signals has been a=20
bone of contention, and litigation, for years.=20
Broadcasters complain that the company abuses the=20
rules and violates the Satellite Home Viewer Act=20
by regularly delivering the wrong market=92s stations to its subscribers.
http://www.broadcastingcable.com/article/CA6356370?display=3DBreaking+News
* EchoStar Looks to Supreme Court for Relief
http://www.multichannel.com/article/CA6356776.html?display=3DBreaking+News

CONTENT

PBS TO REVISIT STRICTER PROFANITY POLICY
[SOURCE: Broadcasting&Cable, AUTHOR: Jim Benson]
New PBS President-CEO Paula Kerger, grilled about=20
the indecency issue during most of her first=20
session Wednesday at the Television Critics Assn.=20
press tour, said that she and Senior Programming=20
VP John Wilson will revisit their recently=20
announced new programmer guidelines for editing=20
out profanity. On May 31, PBS informed public=20
stations that rather than just bleeping offensive=20
words in shows airing prior to 10 p.m., producers=20
would now be required to digitally obscure foul=20
language when it is clear to viewers what the=20
person is saying. In addition, they would also=20
have to bleep compound phrases containing certain=20
words in their entirety rather than just the=20
offending word, as in the past. The FCC has said=20
that bleeping is not necessarily a defense from=20
indecency fines if the lips can be read and the=20
word is obvious. But Kerger and Wilson,=20
referring to the FCC's assertion that it is still=20
taking context into account, are now indicating=20
that they may seek to revise the strict=20
guidelines that producers have roundly=20
criticized. Kerger complained that she had come=20
away from recent meetings with four of the five=20
FCC commissioners with =93no clear guidance=94 on how=20
to proceed, a sentiment shared by many=20
broadcasters, commercial and noncommercial alike.
http://www.broadcastingcable.com/article/CA6356639.html?display=3DBreaki...
News
* New PBS Chief Concerned About FCC Fines
http://www.tvweek.com/news.cms?newsId=3D10433
(requires free registration)
* PBS's Lip-Reading Effort
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/26/AR200607...
2003.html
See also --
* PBS' Kerger Wary of Showtime, Smithsonian Deal
[SOURCE: Broadcasting&Cable, AUTHOR: Jim Benson]
New PBS President-CEO Paula Kerger expressed=20
concern Wednesday over a joint venture between=20
Showtime Networks and the Smithsonian Institute=20
to form Smithsonian Networks, which will develop=20
museum-based TV series for multiple platforms.=20
Kerger says the Smithsonian =93is an archive for=20
the American public=94 and she wants to ensure the=20
material remains available to everyone, =93not just Showtime.=94
http://www.broadcastingcable.com/article/CA6356513.html?display=3DBreaki...
News

MULTIPLE-CHOICE CABLE CONTENT BILL PLANNED
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Rep. Dan Lipinski (D-Ill.) and Tom Osborne=20
(R-Neb.) are introducing a bill that would try to=20
control cable content by giving the industry a=20
choice among three regulatory approaches. The=20
Family Choice Act of 2006 would require=20
multichannel video providers to choose one of=20
three options: 1) apply FCC broadcast indecency=20
standards to their own programming; 2) offer an=20
opt-out form of "a la carte" so subscribers could=20
choose not to take certain channels; or 3) offer=20
a family-friendly tier of programming. They will=20
introduce the bill today -- the same day that the=20
Senate is being briefed on a new $300 million=20
content-control campaign from the TV industry, an=20
effort meant, in part, to head off calls for=20
mandated =E0 la carte cable, but representatives=20
for both legislators say the timing was=20
coincidence. Parents Television Council=20
President, Brent Bozell, a fan of a la carte,=20
will join the legislators for the announcement.
http://www.broadcastingcable.com/article/CA6356426.html?display=3DBreaki...
News
* Bill Would Impose Program Mandates
http://www.multichannel.com/article/CA6356772.html?display=3DBreaking+News

MEDIA OWNERSHIP

NEWSPAPERS SEEK TO REBUT LAWSUIT OVER SALE OF MERCURY NEWS
[SOURCE: San Jose Mercury News, AUTHOR: Pete Carey]
Three newspaper companies on Tuesday mounted an=20
attack against a San Francisco investor's=20
antitrust lawsuit to block McClatchy from selling=20
four former Knight Ridder newspapers, and=20
MediaNews from acquiring them. The four papers=20
are the Mercury News, the Contra Costa Times, the=20
Monterey County Herald and the St. Paul Pioneer=20
Press, which are being acquired by the Denver=20
newspaper company in a complex $1 billion deal.=20
Clint Reilly, a real estate investor, former=20
campaign consultant and mayoral candidate, is=20
seeking a court order to block the deal,=20
contending that it is structured to give=20
MediaNews, Hearst and MediaNews' California=20
Newspapers Partnership ``market power, if not=20
monopoly power, over the newspaper business in=20
the entire Bay Area'' in violation of federal=20
antitrust statutes. The newspaper companies=20
portrayed the harm to Reilly as a subscriber and=20
advertiser in the Bay Area papers as "trivial"=20
compared with the damage to them if Reilly=20
succeeds in delaying the deal. "Simply put, the=20
newspapers will languish under temporary=20
ownership," the Denver-based newspaper company=20
said. MediaNews said a delay could force it to=20
reprice a $350 million loan commitment at a cost=20
of $12 million, and may even jeopardize the=20
company's ability to complete financing for the=20
acquisition of the four papers. McClatchy said it=20
is paying $163,000 a day on loans it took out to=20
complete its purchase of Knight Ridder, and needs=20
the $1 billion from the sale of the four papers=20
to help pay down $3.08 billion in loans. It also=20
expressed concern over the possibility of having=20
to negotiate labor agreements at the Mercury News=20
on behalf of MediaNews while the deal is in legal limbo.
http://www.mercurynews.com/mld/mercurynews/business/15124840.htm
* McClatchy Facing $163,000 Daily Bill if Newspaper Sale Is Blocked
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1002912624

EMI WON'T PURSUE ITS $4.6 BILLION BID FOR WARNER MUSIC
[SOURCE: Wall Street Journal, AUTHOR: Ethan Smith ethan.smith( at )wsj.com]
EMI is expected to say today that it is no longer=20
pursuing a $4.6 billion proposal to buy Warner=20
Music Group Corp., according to people familiar=20
with the matter, marking the latest failure in a=20
years-long effort to link the two music giants.=20
EMI and Warner, the world's third- and=20
fourth-largest music companies by market share,=20
had been locked in a battle to buy each other=20
since May. Each company has floated two proposals=20
to buy the other, but all four proposals have=20
been rejected. Even after the last rejection by=20
Warner, EMI had continued to insist that its=20
offer was beneficial. The effective withdrawal=20
comes on the heels of a ruling by a European=20
Court that called into question the viability of=20
another big music merger, that of Sony Corp.'s=20
Sony Music and Bertelsmann AG's BMG, which in=20
2004 were joined to create Sony BMG Music Entertainment.
http://online.wsj.com/article/SB115395715020218462.html?mod=3Dtodays_us_...
e_one
(requires subscription)

KAZAA TO PAY MUSIC INDUSTRY $100 MILLION
[SOURCE: Reuters]
The music industry has reached a legal settlement=20
with veteran antagonist Kazaa, one of the world's=20
best known file-sharing networks and a longtime=20
source of illicit music and movie downloads.=20
Under the terms of the deal, Kazaa's owner=20
Sharman Networks will pay the world's four major=20
music companies -- Universal Music, Sony BMG, EMI=20
and Warner Music -- more than $100 million and=20
commit to immediately going legal, said the=20
International Federation of the Phonographic Industry.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-27T120142Z_01_L27523430_RTRUKOC_0_US-MEDIA-MUSIC-KAZAA.xml

QUICKLY

SPECTER PROPOSES CHALLENGE OF BUSH'S POWER ON LAWS
[SOURCE: Reuters, AUTHOR: Thomas Ferraro]
Sen. Arlen Specter (R-PA) introduced legislation=20
on Wednesday to challenge President George W.=20
Bush's assertion that he can bypass sections of=20
bills that he signs into law. Judiciary Committee=20
Chairman Specter's bill would empower Congress=20
bring to federal court lawsuits to test the=20
constitutionality of Bush's signing statements,=20
which the president has appended to several bills=20
he has signed. In the statements, Bush has=20
reserved the right not to enforce certain=20
provisions of laws if he believes they impinge on=20
his authority or interpretation of the=20
Constitution. Under the Constitution, Congress=20
passes bills and the president may either sign or=20
veto them, and give lawmakers an opportunity to override any veto.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-07-26T195519Z_01_N26412181_RTRUKOC_0_US-USA-CONGRESS-BUSH.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.
--------------------------------------------------------------