August 2006

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LEGISLATION
Pay-TV Bill OKd by California State Senate

GOVERNMENT & COMMUNICATIONS
Positive Press on Iraq Is Aim of U.S. Contract
Senate panel won't confirm Tomlinson

INTERNET/BROADBAND
Verizon drops DSL Fee after FCC Pressure
The Lion Lies Down With the Lamb
NYT move to Block Web to Britons raises Questions

CONTENT
FCC wants to Reconsider Indecency Ruling
New Film attacks Hollywood's "Censorship" System
Creative Commons -- an Answer to the Copyright Debate?

ADVERTISING
FEC Passes On Ad Exemption
Study: Product Placement to Surge 25% in '06
In Japan, Broadcasters Pitch Commercials With Commercials

QUICKLY -- Man From Google Joins Apple's Board; Dateline: Newsrooms;
Subject: Reporting; News Corp. Will Launch MyNetworkTV; Discarded
Cellphones Retain Sensitive Data

LEGISLATION

PAY-TV BILL OK'd BY CALIFORNIA STATE SENATE
[SOURCE: Los Angeles Times, AUTHOR: James S. Granelli]
Shrugging off objections from cities and counties, the California
state Senate late Wednesday voted 33 to 4 to approve a measure that
takes oversight of pay television away from local governments and
consolidates control with state regulators. The bill, which Gov.
Arnold Schwarzenegger is expected to sign as early as today, is
intended to make it easier for big phone companies to compete against
big cable companies to provide TV services. The bill is supported by
phone and cable companies that have had to secure approval from each
municipality in which they offer programming. They complain that
local officials make unreasonable demands and take too long to
approve agreements. If more than 300 changes to the bill pass muster
with the Assembly, the legislation would make California the eighth
state to streamline its franchising rules. "This is a very
complicated bill, and it's outrageous that all these amendments were
made in the last days and we never were allowed to see them," said
Megan Taylor, spokeswoman for the League of California Cities. The
carriers controlled the process so thoroughly, Taylor said, that "on
amendments we would send over to the Legislature, we'd hear back,
'Sorry, but AT&T said no.' " California would invest the Public
Utilities Commission with the authority to grant pay-TV franchises
statewide, beginning no later than April 1. Cities and counties would
retain the power to enforce service agreements and would continue to
get a 5% cut of cable revenue. Some local workers could lose their
jobs as franchising authority moves to the state. The utilities
commission, meanwhile, probably would hire as many as 200 new
employees at a cost of as much as $3 million a year, paid by the
companies regulated. The bill would keep intact a 5% fee that
municipalities get from cable TV revenue for using public rights of
way. But local officials worry that it would allow the state in a
financial crisis to take away that revenue, estimated at $300 million
statewide.
http://www.latimes.com/business/printedition/la-fi-cable31aug31,1,552947...
(requires registration)

GOVERNMENT & COMMUNICATIONS

POSITIVE PRESS ON IRAQ IS AIM OF US CONTRACT
[SOURCE: Washington Post, AUTHOR: Walter Pincus]
U.S. military leaders in Baghdad have put out for bid a two-year, $20
million public relations contract that calls for extensive monitoring
of U.S. and Middle Eastern media in an effort to promote more
positive coverage of news from Iraq. The contract calls for
assembling a database of selected news stories and assessing their
tone as part of a program to provide "public relations products" that
would improve coverage of the military command's performance. The
request for bids comes at a time when Bush administration officials
are publicly criticizing media coverage of the war in Iraq. The
proposal, which calls in part for extensive monitoring and analysis
of Iraqi, Middle Eastern and American media, is designed to help the
coalition forces understand "the communications environment." Its
goal is to "develop communication strategies and tactics, identify
opportunities, and execute events . . . to effectively communicate
Iraqi government and coalition's goals, and build support among our
strategic audiences in achieving these goals," according to the
statement of work that is publicly available through the Web site
http://www.fbodaily.com
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/30/AR200608...

SENATE PANEL WON'T CONFIRM BUSH BROADCAST CHIEF
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
A White House nominee may lose his job overseeing U.S.-backed
international TV and radio services after a Senate committee said on
Wednesday it would not vote this year on another term for Kenneth
Tomlinson, following a government report that said he used the office
for personal gain. President George W. Bush in 2005 nominated
Tomlinson to a second term as chairman of the Broadcasting Board of
Governors, which oversees government international programming like
Voice of America as well as Radio and TV Marti, which air
Spanish-language broadcasts to Cuba. However, the
Republican-controlled Senate Foreign Relations Committee will not
take up his nomination this year, panel spokesman Andy Fisher told
Reuters. Democrats in Congress have demanded President Bush fire
Tomlinson. "We're not going to schedule it for the remainder of the
year, and at that point it (the nomination) expires," he said. His
term expired in 2004, but he is able to remain in office until
Congress adjourns sometime later this year. President Bush could
bypass Congress and install Tomlinson to another term using a
so-called recess appointment. A White House spokeswoman and State
Department spokeswoman declined to comment on the committee's plans.
http://www.political-news.org/breaking/28170/senate-panel-wont-confirm-b...

INTERNET/BROADBAND

VERIZON DROPS DSL FEE AFTER FCC PRESSURE
[SOURCE: Reuters]
The Federal Communications Commission sent Verizon a letter last week
questioning a new fee on digital subscriber line (DSL) services which
the company introduced in place of a fee the federal government ended
earlier this month. On Wednesday, Verizon announced it was dropping
the surcharge. "We have listened to our customers... and are
eliminating this charge in response to their concerns," Verizon's
chief marketing officer Bob Ingalls said in a statement on Wednesday.
A small number of customers who have already been billed for the
surcharge will receive a credit, the company said. FCC Chairman Kevin
Martin said in a statement on Wednesday that he was happy with
Verizon's decision.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...
* Chairman Martin's statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-267159A1.doc
* Commissioner Tate's statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-267166A1.doc
* Verizon drops plans for new surcharge on DSL bills
http://www.usatoday.com/printedition/money/20060831/1b_surcharge31.art.htm
* Verizon Drops DSL Fee
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/30/AR200608...
* Verizon Drops DSL Fee Plan
http://www.latimes.com/business/printedition/la-fi-verizon31aug31,1,5423...

THE LION LIES DOWN WITH THE LAMB
[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] Increasingly, incumbent telephone companies have
realized that fighting municipal broadband networks is a losing issue
for them and have decided to figure out how to make money out of it.
I have said for awhile that corporations confronted by a serious
challenge to their business model undergo their own version of the
famous five stages of grief. Denial ("There's no way this can
seriously challenge us!"), anger ("How dare they challenge us like
this! To the regulators to squash this at once!"), bargaining ("O.K.,
instead of banning it, lets regulate it to create a 'level playing
field'"), acceptance ("We are no longer going to lobby on this"), and
profit seeking ("Hey, if we think about it for a minute, we can
figure out how to make money on this!") The pro-muni broadband
provision in the otherwise pro-Telco Barton Bill and the revision of
the anti-muni broadband provision in the Stevens Bill to a pro-muni
broadband version indicates that Congress has no intention of
squashing muni broadband at this point. But Feld offers four
cautions: 1) Incumbents providing muni broadband means less chance
for competition. 2) In dealing with incumbents, local governments
need to take every effort to make sure they insulate themselves from
this kind of "capture." 3) Once the incumbent gets around to building
its competing private system in the area, local governments will need
to be alert for any sign that the incumbent is using its control of
the muni network to try to shift customers to the private network. 4)
Finally, it is important to recognize the difference between
municipal networks of whatever flavor and non-commercial
community-based networks.
http://www.wetmachine.com/totsf/item/579

NYT MOVE TO BLOCK WEB TO BRITONS RAISES QUESTIONS
[SOURCE: Reuters, AUTHOR: Daniel Trotta]
A New York Times decision to block British online readers from seeing
a story about London terrorism suspects raises new questions on
restricting the flow of information in the Internet age, legal and
media experts say. While restricting what British media can report
has been effective in the past, the Internet has made it far harder
to stop information published by foreign outlets, which may breach
Britain's laws, from being seen by UK readers. Because British courts
may impose heavy fines and jail editors, foreign newspapers sometimes
hold potentially sensitive stories out of their British print
editions. Media lawyer Mark Stephens said he could not see anything
wrong with the blocked New York Times article and the decision by
British papers to print similar details showed the contempt of court
law may be the problem. This was the first time the New York Times
had targeted a readership and blocked it from seeing a story on the
Web, as far as a spokeswoman and a lawyer from the paper could recall.
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID...

CONTENT

FCC WANTS TO RECONSIDER INDECENCY RULING
[SOURCE: Associated Press, AUTHOR: Larry Neumeister]
The Federal Communications Commission rushed to judgment in
concluding that "NYPD Blue" and three other television programs
violated rules governing the broadcast of indecent and profane
material, an FCC lawyer said Tuesday. The lawyer, Eric D. Miller,
asked an appeals court to delay hearing a challenge to the FCC's
findings for two months so its board can hear the opinions of the
owners of the programs and reconsider its rulings, which carried no
fines. In court papers, the FCC said it skipped its usual process of
soliciting responses from the broadcasters because it believed the
orders responded to requests from broadcasters for guidance on what
violates the FCC's new indecency and profanity rules. The FCC said it
acted faster than usual and did not propose fines for any of the
programs, concluding only that the programs "apparently" violated the
statutory and regulatory prohibitions on indecency and profanity.
Lawyers for several broadcasting companies told the 2nd U.S. Circuit
Court of Appeals they ultimately want to challenge the rules, which
they say have spoiled their First Amendment rights, exposing them to
hefty fines for accidental broadcasts of isolated and fleeting expletives.
http://seattlepi.nwsource.com/tv/1401AP_FCC_TV_Indecency.html?source=rss

NEW FILM ATTACKS HOLLYWOOD'S "CENSORSHIP" SYSTEM
[SOURCE: Reuters, AUTHOR: Arthur Spiegelman]
Kirby Dick, the director of "This Film is Not Yet Rated," set out to
unmask some of the most powerful people in America -- the Motion
Picture Association of America's ratings board. The group keeps the
names of most of its board members secret from the public, it says,
to protect them from public pressure. Although not a censorship board
in the traditional sense of the term, the board wields enormous power
in Hollywood. Few filmmakers, for example, want their works rated
NC-17, which bars anyone 17-years-old or under from attending,
because newspapers and TV stations often won't accept ads for such
films, and many theaters refuse to show them. Moreover, NC-17 carries
the stigma of an "adult movie," which in many people's minds
translates into "pornography." Many ratings board decisions stem from
the nature of sex scenes in films. The MPAA has said its ratings
board consists mostly of average Americans whose mandate is to
provide guidance for parents on the nature of films' content, such as
the level of violence and sexuality. The board was established in
1968 to replace a more rigid system. Dick said he would like to see
the current ratings system replaced by one that gives more detailed
information about what a film contains so that parents -- and parents
alone -- can determine what their children see.
http://today.reuters.com/news/NewsArticle.aspx?type=filmNews&storyID=200...

CREATIVE COMMONS -- AN ANSWER TO THE COPYRIGHT DEBATE?
[SOURCE: C-Net|News.com, AUTHOR: Eric J. Sinrod, Duane Morris]
[Commentary] Creative Commons consists of a U.S. charitable
corporation and a not-for-profit company in the United Kingdom. It
believes that all-out copyright has failed to help many artists and
entrepreneurs gain the exposure and widespread distribution they
desire. As a result, a significant number of them are increasingly
open to "innovative business models" that ensure a return on their
creative investment. This is where Creative Commons comes into play,
by offering a set of licenses on its Web site, free of charge.
Creative Commons is gaining use and notoriety among prominent
creators. In May of this year, the group announced that Pearl Jam's
new single "Life Wasted" was to be offered to the public under its
Attribution Non-commercial No Derivatives license, enabling people
internationally to copy, distribute and share the clip legally. It
does appear that Creative Commons is offering the flexible copyright
options it envisioned at the outset. As always, time will tell
whether it will inspire a true movement that gains even more momentum.
http://news.com.com/Creative+Commons-an+answer+to+the+copyright+debate/2...

ADVERTISING

FEC PASSES ON AD EXEMPTION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
On Tuesday the Federal Election Commission voted not to change the
definition of "electioneering communications" to permit a
"grassroots lobbying" exemption that would allow unions and
corporations to run TV and radio issue ads that mention incumbent
legislators and air in the 60 days before an election without the
reporting requirements and spending caps that currently apply.
Unions, led by the AFL-CIO had asked for the exemption, saying that
the prohibition limited speech about issues at a crucial time -- when
those issues were before the legislature. The exemption would have
been limited to ads featuring incumbents who would be voting on those
issues. The FEC only received a handful of comments on the proposal,
most supporting the exemption, arguing that the current
electioneering communications rules limit ads that are not meant to
back any candidate, but to support or kill legislation at the most
critical time, i.e. when the legislation is before Congress,
regardless of the election cycle. The commission voted not to
initiate a rulemaking citing "other administrative priorities"
including two outstanding court challenges to its electioneering
communications rules that could effect how it interprets them, but
said it is not precluded from doing so in the future.
http://www.broadcastingcable.com/article/CA6367267?display=Breaking+News
* For more info see http://www.fec.gov/agenda/2006/mtgdoc06-53.pdf

STUDY: PRODUCT PLACEMENT TO SURGE 25% IN '06
[SOURCE: AdAge, AUTHOR: Marc Graser and T.L. Stanley]
The global product-placement market will soar 25% to $7.5 billion
this year and hit $14 billion by 2010, a study finds. But the
explosion is causing product-placement agencies to rethink their
business models and leading some to wonder how effective placement
can be amid all the noise. "Product placement has evolved from a
novel marketing tactic to a key marketing strategy on a global scale,
as brand marketers seek more effective methods to make important
emotional connections with consumers," said Patrick Quinn, president
of PQ Media, which conducted the study. "Fear of ad-skipping
technology, doubts about traditional advertising's effectiveness and
declining government media subsidies have fueled a dramatic increase
in the value of seamless brand integration."
http://adage.com/article?article_id=111526

IN JAPAN, BROADCASTERS PITCH COMMERCIALS WITH COMMERCIALS
[SOURCE: Wall Street Journal, AUTHOR: Amy Chozick amy.chozick( at )wsj.com ]
Facing a slowdown in ad revenue, Japan's television networks are
running commercials ... for commercials. The country's 133 commercial
stations this week kicked off a month-long ad campaign to remind
viewers of the contributions made by TV commercials to popular
culture. The first day, Monday, was dubbed "Commercial Day" and
featured a barrage of commercials starring some of Japan's biggest TV
personalities. One of the most popular, Mino Monta, appears in an ad
that will run throughout the month. "Do you know how many TV
commercials are made in a year?" he asks. "Twenty-thousand!" The
tactic highlights how Japanese broadcasters, like those in the U.S.,
have become desperate to retain eyeballs and ad revenue. At $17.5
billion a year, Japan's TV-advertising market is the world's
second-largest, after the U.S. But it has been hit recently by
changes in the way people consume media. Despite strong growth in
overall ad revenue, TV has seen its share of ad spending in Japan
stagnate as marketers pour money into cellphone, Internet and other
nontraditional outlets. Part of the problem is that viewers have
grown so used to seeing commercials, "they don't catch people's
attention that much anymore," says Hiroyuki Yabuuchi, a producer for
Mainichi Broadcasting System in Osaka. What's more, Japan is among
the fastest markets in the world to embrace digital video recorders,
devices that make it easy for people to zip past the ad breaks in
shows recorded earlier. According to Tokyo-based Nomura Research
Institute, the number of Japanese households with DVRs is expected to
rise to 44% by 2009 from 15% in 2005.
http://online.wsj.com/article/SB115697852940249935.html?mod=todays_us_ma...
(requires subscription)

QUICKLY

MAN FROM GOOGLE JOINS APPLE'S BOARD
[SOURCE: New York Times, AUTHOR: John Markoff]
When Eric E. Schmidt, Google's chief executive, was named to Apple
Computer's board this week, it did more than signal a potential
alliance between powerful companies. It touched off a wave of
speculation about the motives of the man behind the move: Apple's
co-founder, Steven P. Jobs. "The old social networks in Silicon
Valley run very deep," noted AnnaLee Saxenian, a leading scholar of
the industry and dean of the School of Information at the University
of California, Berkeley. "And this reminds us that Silicon Valley has
a common enemy to the north." She did not even need to name the enemy
she had in mind: Microsoft, the leading rival to both Mr. Jobs and
Mr. Schmidt through most of their careers. Now, with the Internet era
remaking the competitive landscape, their prospects for outdueling
Microsoft's Windows empire may be better than ever.
http://www.nytimes.com/2006/08/31/technology/31valley.html?hp&ex=1157083...
(requires registration)

DATELINE: NEWSROOMS; SUBJECT: REPORTING
[SOURCE: New York Times, AUTHOR: Elizabeth Jensen]
Investigative reporters toil in hidden corners, digging through court
records, meeting anonymous whistle blowers in nondescript cafes. It
is not uncommon for them to spend a year on a report that makes the
front page for only a day or two. They can effect profound policy
change, but their jobs usually don't bring much personal glory. Now
some investigative teams will get their "All the President's Men"
moment in the spotlight with "AIR: America's Investigative Reports,"
a weekly half-hour program on PBS, beginning tomorrow. Produced by
WNET, the New York public television station, in association with the
Center for Investigative Reporting in Berkeley, Calif., "AIR" will
review one or two recent journalistic projects each week, most taken
from regional newspapers. The episodes will summarize the reporting
on the articles as well as how the reporters got their scoops.
http://www.nytimes.com/2006/08/31/arts/television/31air.html
(requires registration)

WITH SEXY STORY LINES, LOW BUDGETS, NEWS CORP WILL LAUNCH MYNETWORKTV
[SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes brooks.barnes( at )wsj.com]
Every time News Corp. launches a new television business, it turns to
programming that entrenched players decry as schlocky and culturally
debasing. Then, in many cases, the company starts printing money. On
Tuesday, Roger Ailes, chairman of News Corp.'s Fox Television
Stations, will flip the switch on MyNetworkTV, a new broadcast
network that will feature a novel format for mainstream U.S.
television: Super-sexy -- and super-cheap -- prime-time soap operas
that air six nights a week for limited runs. It's an over-the-top
format borrowed from Spanish-language broadcasters. While story lines
on American soaps can drag on for years, Spanish soaps, or
telenovelas, deliver immediate gratification. They wrap everything up
after 13 weeks, offer a cliffhanger in each episode and culminate
with shocking finales that can rack up Super Bowl-size ratings --
just the formula that MyNetwork hopes to duplicate. U.S. viewers may
be jolted by the style and content of the two shows MyNetwork is
rolling out next week -- "Desire" and "Fashion House." But "Fox has a
way of turning unsophisticated, simplistic programming into a
success," says Laura Caraccioli-Davis, an executive vice president at
ad-buying firm Starcom Entertainment. She adds: "And this is
definitely unsophisticated." The hour-long episodes on MyNetwork are
taped on a shoestring budget of $200,000 to $500,000 each, and it
shows. While far from bare-bones, the sets aren't as lavishly
decorated as those seen in traditional network dramas, which cost $2
million to $3 million an episode. Advertisers have seen it, and if
they're impressed, it isn't yet showing in MyNetwork's advance ad
sales. Media-buying firms estimate that the network has secured under
$50 million in advertising commitments for the fall season. In
comparison, My Network's closest competitor, the new CW network,
lined up about $640 million in advance ad business.
http://online.wsj.com/article/SB115698811194650185.html?mod=todays_us_ma...
(requires subscription)
* A Network's Drama
http://www.latimes.com/business/printedition/la-fi-mynetwork31aug31,1,77...

EXPERIMENT EXPOSES SENSITIVE DATA ON DISCARDED CELLPHONES
[SOURCE: Associated Press, AUTHOR: Ted Bridis]
Selling your old phone once you upgrade to a fancier model can be
like handing over your diaries. All sorts of sensitive information
piles up inside our cellphones, and deleting it may be more difficult
than you think. A popular practice among sellers, resetting the
phone, often means sensitive information appears to have been erased.
But it can be resurrected using specialized yet inexpensive software
found on the Internet.
http://www.usatoday.com/printedition/money/20060831/b_cellphones.art.htm
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While the summaries are factually accurate, their often informal tone
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