September 2006

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TELECOM REFORM
Telecom Tax Restrictions seen Hurting Local Governments
'Net Neutrality' Gets A Summer Sales Pitch
Don't Connect Government to 'Network Neutrality' Fight
Politics Squeezes effort on Broadband

GOVERNMENT & COMMUNICATIONS
Congress Takes Up Surveillance Bills
Clinton Administration Urges Disney to Cancel or Revise 9/11 Mini-Series

POLICYMAKERS
Is FCC's Martin on the Senate Agenda?
Pru analyst sees Dems taking control of House
Campaign Contributors Revealed

QUICKLY -- Just About Anyone Can Get Phone Records; Time Warner
Agrees To Governance Changes; Rivals May Challenge
Vivendi-Bertelsmann Deal; Facebook hit by privacy protests; NCTA:
Cable VoIP Saves Billions; Ross Offers Policy Principles for Media
Regulation; Virginia Court Upholds Antispam Law; Time Warner Uses Common Sense

TELECOM REFORM

TELECOM TAX RESTRICTIONS SEEN HURTING LOCAL GOVERNMENTS
[SOURCE: Reuters]
U.S. state and local governments could lose $8 billion a year in
revenue if Congress further restricts their ability to tax
telecommunications services, the National League of Cities said on
Wednesday. Alex Ponder, a lobbyist with the National League of
Cities, said the organization opposes two tax restrictions included
in the Senate telecommunications reform bill. The bill proposes a
three-year moratorium on new state and local cell-phone taxes. It
also bans state and local governments from charging Internet access
taxes and eliminates the existing exemption for municipalities that
currently collect this tax. The National League of Cities in a
statement expressed concern that these provisions "could represent
the first step toward eliminating all telecom-specific state and
local taxes" and lead to lost revenues. Together with other local
government organizations, the group conducted a study that showed
that 81 percent of all cities with populations over 50,000 would see
their tax revenues decline if they cannot tax telecoms. This drop in
revenue would lead to a reduction in services to local residents with
potentially more than 150,000 public sector jobs on the line as well
as higher taxes on other taxpayers, the organization said. The study
argues that the telecom industry pays essentially the same level of
property taxes as, and in some cases lower corporate taxes than,
other businesses.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...
* The Truth About Telecom Taxes and Reform: The Real Effect on Local Government
http://www.nlc.org/Newsroom/Press_Room/11721.cfm
** For more on the Senate bill see
http://www.benton.org/index.php?q=node/2173

'NET NEUTRALITY' GETS A SUMMER SALES PITCH
[SOURCE: Technology Daily, AUTHOR: Heather Greenfield]
People who are still neutral on network neutrality probably have not
heard of it yet. Over the August congressional recess, opponents and
proponents of legislation that would prohibit high-speed Internet
providers from potentially slowing competitors' content worked to
change that. Both sides took their battle from Capitol Hill to
lawmakers' communities and Americans' homes. Opponents of net
neutrality used cable television, and supporters of the concept used
the Internet itself to make their case, with thousands of petitions
delivered to Senate offices in 25 cities. The National Cable and
Telecommunications Association began airing advertisements in some
cable markets in August and took the campaign nationwide Sept. 1.
Brian Dietz, a spokesman for NCTA, said the ads could reach tens of
millions of viewers and will run through the fall, "especially as
this issue is being discussed." He declined to identify where the ads
will run or what they will cost. So far, the group has collected 1.1
million signatures from people concerned about the FCC dissolving net
neutrality protections last summer and what will result if Congress
waits for bad conduct before reinstating ground rules against content
discrimination. The group's Web site says that 26 senators strongly
favor net neutrality legislation and that 14 oppose it. The opponent
list reads much like the Republican roster on the Senate Commerce
Committee, with the exception of Maine's Olympia Snowe, who sponsored
a net neutrality amendment to a pending telecom bill. Leslie Harris,
executive director of the Center for Democracy and Technology, said
that despite a big grassroots effort, net neutrality is not
necessarily an issue senators will have to take a position on in time
for the November election.
http://www.njtelecomupdate.com/lenya/telco/live/tb-EFSJ1157568115993.html

DON'T CONNECT GOVERNMENT TO 'NETWORK NEUTRALITY' FIGHT
[SOURCE: Chicago Sun Times 9/6, AUTHOR: Editorial Staff]
[Commentary] What should Congress do, if anything, to regulate the
Internet? The argument is between those who favor mandating "network
neutrality" and those who don't. Put simply, neutrality is the idea
that Internet providers should not be able to discriminate against
any Web site -- be it Google or Amazon or an individual blogger --
but should treat them so that they all load on your computer at the
same speed. The Internet has evolved and flourished precisely because
it is free, competitive and open. Any changes that threaten that
success should be taken seriously. But so should government
regulation. We don't take lightly the fears of net neutrality
proponents, but we don't think the government should get involved
until there is clear evidence that involvement is needed.
http://www.suntimes.com/output/commentary/cst-edt-edits06a.html

POLITICS SQUEEZES EFFORT ON BROADBAND
[SOURCE: Chicago Tribune, AUTHOR: Jon Van]
The competition to offer consumers the next generation of broadband
Internet service in several Chicago suburbs has gotten caught up in
local and national politics, resulting in what telephone companies
say is a lack of options resulting in needlessly higher prices. The
problem, which experts say has broken out in pockets across the U.S.,
is one of applying old ways of doing business to new technology,
according to the phone companies. The municipalities insist on
negotiating individual franchise agreements with AT&T Inc. for new
broadband service the same way they have struck exclusive deals to
accept cable TV service. Phone companies, led by AT&T, say that times
have changed because there is competition in providing service. As a
result, they are pushing for state or national franchising laws to do
away with all the paperwork and delays, while municipalities,
including Naperville and others, say they have a legal obligation to
maintain control. On Wednesday AT&T and other Illinois phone
companies told an Illinois legislative subcommittee that they will
probably seek statewide video franchising here, similar to laws
passed in Texas, California, New Jersey, Indiana and other states.
"The phone companies don't have to have national franchising," said
Steven Titch, a telecom analyst with the Chicago-based Heartland
Institute, a free market advocacy group. "They can solve their
problems at the state level, and the longer the deadlock lasts in
Washington, the more likely that's the route they'll take."
http://www.chicagotribune.com/business/chi-0609070191sep07,1,2749913.sto...

GOVERNMENT & COMMUNICATIONS

CONGRESS TAKES UP SURVEILLANCE BILLS
[SOURCE: Associated Press, AUTHOR: Jim Abrams]
The Bush Administration gave guarded support to several terrorist
surveillance bills Wednesday as Congress took up the sensitive issue
of how to give legal backing to the President's warrantless
wiretapping. The acting assistant attorney general told a House
Judiciary subcommittee that legislation backed by the House GOP
leadership showed promise and that the President had expressed
support for a measure from Senate Judiciary Committee chairman Arlen
Specter (R-PA). But Steven Bradbury and the National Security
Agency's general counsel, Robert Deitz, also said the NSA's
wiretapping program was proper and necessary, and that tampering with
it could jeopardize national security.
http://hosted.ap.org/dynamic/stories/C/CONGRESS_EAVESDROPPING?SITE=RIWOO...
See also --
* CDT Testifies Against Dangerous "Update" of Surveillance Law
An effort gathering momentum in Congress to "update" the major law
governing domestic surveillance could radically undermine the privacy
of innocent Americans -- not just by legitimizing the
administration's warrantless surveillance programs -- but by granting
this and future administrations unfettered authority to spy on
Americans in the United States. Testifying today before the House
Judiciary Committee's Subcommittee on Crime, Terrorism and Homeland
Security, CDT Policy Director Jim Dempsey again urged lawmakers to
seek a better understanding of the administration's shadowy
surveillance programs before drastically rewriting the laws intended
to govern them. CDT has argued that it would be better to do nothing
than to rush out an ill-considered bill. Last month, a judge ordered
the Administration to halt its surveillance programs, finding that
they violated the First and Fourth Amendments of the Constitution and
the Foreign Intelligence Surveillance Act (FISA) -- the law that some
in Congress are attempting to "update." September 06, 2006
Dempsey Testimony [PDF], September 06, 2006:
http://www.cdt.org/testimony/20060906dempsey.pdf

THREE FROM CLINTON ADMINISTRATION URGE DISNEY TO CANCEL OR REVISE
9/11 MINI-SERIES
[SOURCE: New York Times, AUTHOR: Jesse McKinley]
Three members of the Clinton administration -- former Secretary of
State Madeleine K. Albright, former national security adviser Samuel
R. Berger, and former White House aide Bruce R. Lindsey -- have
written the chief executive of the Walt Disney Company, ABC's parent,
to complain that the network's coming two-part miniseries "The Path
to 9/11" is fraught with factual errors and fabrications. The letters
ask that the five-hour movie, scheduled for broadcast Sunday and
Monday, be either edited for accuracy or canceled, and ABC gave a
small indication yesterday that some changes might be made. ABC,
meanwhile, continued to explain that the mini-series, though largely
drawn from the report of the Sept. 11 commission, was a
dramatization, not a documentary. But the network appeared to be
leaving the door open to last-minute changes in the film. The series,
which cost almost $40 million, is to be broadcast without
commercials, but a network spokesperson said this had been planned,
as a public service, and had nothing to do with any pressure that
might have been brought on prospective advertisers.
http://www.nytimes.com/2006/09/07/washington/07path.html
(requires registration)
* Clinton Administration Officials Assail ABC's 'The Path to 9/11'
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/06/AR200609...
* ABC 9/11 Movie Slams 'Wash Post' for 'Wash Times' Report
One of the most blatant factual errors in the ABC's miniseries next
week on the 9/11 attacks is a claim that The Washington Post ruined a
valuable form of surveillance of Osama bin Laden by disclosing that
the U.S. was monitoring his cell phone calls. Indeed, that charge has
been made -- but the alleged wrongdoer was a different paper, The
Washington Times.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...

POLICYMAKERS

IS FCC'S MARTIN ON THE SENATE AGENDA?
[SOURCE: TVNewsday 9/1, AUTHOR: Kim McAvoy]
FCC Chairman Kevin Martin's term expired June 30. President Bush duly
re-nominated Martin for another five-year term last April, but before
he can be officially reappointed, he must win Senate approval. That,
in all likelihood, means a confirmation hearing before the Commerce
Committee this month. The word from the Hill is that the committee is
trying to schedule a hearing before the Senate's targeted adjournment
on Oct. 6. Failing that, it could hold a hearing during a possible
lame-duck session after the elections. Even if the Senators failed to
squeeze Chairman Martin onto the calendar this year, he may serve
until the end of 2007. But if the November elections go badly for the
Republicans and the Democrats take charge of the Senate, Chairman
Martin may have a much rougher time at his confirmation hearing. Some
Democrats are openly hostile to his policies, particularly his drive
to loosen media ownership restrictions. Chairman Martin has remained
fairly silent on that issue and may keep it on the back burner until
after the election.
http://www.tvnewsday.com/articles/2006/09/01/daily.1/

PRU ANALYST SEES DEMS TAKING CONTROL OF HOUSE
[SOURCE: Reuters, AUTHOR: Cal Mankowski]
Prudential Equity Group's political analyst Charles Gabriel has
concluded that Democrats are likely to win control of the U.S. House
of Representatives in the November 7 election. Stock sectors that
could become what Gabriel calls "Dem shocks" include regional
telephone companies, health plans, pharmacy benefit managers, defense
contractors, college loan and educational services companies, and
retailer Wal-Mart Stores. The analyst rates the chances of the
Democrats winning control of the Senate at one in three. He puts the
odds of a shift in both houses at 30 percent.
http://today.reuters.com/news/articlenews.aspx?type=politicsNews&storyID...

CAMPAIGN CONTRIBUTIONS REVEALED
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
According to the Center for Responsive Politics, big media companies
vary widely as to political preference when it comes to contributions
from PACs (political action committees) and individuals. National
Cable & Telecommunications Association is the top campaign
contributor in the TV/Movie/Music category in the 2006 election cycle
at $1,366,694 through the beginning of August, with the majority of
that, 58%, going to Republicans. Second on the list is Time Warner at
$1,202,502, but with the large majority of that, 71%, going to
Democrats. Rounding out the top five are Comcast at $1,116,292 (52%
to Democrats), followed by Clear Channel at $599,179 (62% to
Republicans), and the National Association of Broadcasters $589,420
(68% going to Republicans). Who gets this cash? The top three pols
are Hillary Clinton at $530,738 (D-NY), Sen Ted Kennedy at $206,950
(D-MA), and Sen Bill Nelson (D-FL) at $197,369
http://www.broadcastingcable.com/article/CA6368976?display=Breaking+News

QUICKLY

WITH A LITTLE STEALTH, JUST ABOUT ANYONE CAN GET PHONE RECORDS
[SOURCE: New York Times, AUTHOR: Matt Richtel]
The protection of phone records falls into a legal gray area, privacy
experts say. Legislators, regulators and the phone industry are all
considering ways to clamp down on unauthorized releases. Legislation
that is pending in the Senate and House would criminalize what is
known as pretexting -- seeking to obtain a customer's phone records
under false pretext, typically by pretending to be the customer.
Separately, the Federal Communications Commission is considering new
rules that would force phone companies to guard customer records more
carefully. It is not clear how widespread pretexting is, but its
perpetrators appear to be mostly private investigators, seeking
information for clients involved in divorces or other civil disputes.
http://www.nytimes.com/2006/09/07/technology/07phone.html
(requires registration)

TIME WARNER AGREES TO GOVERNANCE CHANGES
[SOURCE: Bloomberg news, AUTHOR: David Glovin]
Time Warner Inc., the world's largest media company, won approval
yesterday of a settlement of an investor lawsuit that a judge says
will require the company to make changes in how it governs itself.
U.S. District Judge Shirley Wohl Kram gave final approval to the
settlement that requires Time warner to designate an independent
director as chair of its nominating and governance committee. Within
three years, two-thirds of the company's directors will be
independent, the settlement says. These and other changes "may
enhance investor confidence by ensuring that the company maintains a
healthy governance structure," Judge Kram said in a ruling.
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/06/AR200609...
(requires registration)

RIVALS MAY CHALLENGE PROPOSED VIVENDI-BERTELSMANN DEAL
[SOURCE: New York Times, AUTHOR: Doreen Carvajal]
The German media company Bertelsmann agreed on Wednesday to sell its
music publishing business to a French rival, Vivendi, for $2.1
billion, but an association of independent competitors immediately
promised to challenge the deal. An umbrella organization of music
companies, Impala, signaled on Wednesday that it would raise
objections to the deal. The group, which represents 2,500 independent
labels, persuaded a European Union appeals court in July to annul the
European Commission's approval of the two-year-old merger that
created Sony BMG, a joint-venture music company of Bertelsmann and Sony.
http://www.nytimes.com/2006/09/07/business/media/07music.html
(requires registration)

IN ONLINE SOCIAL CLUB, SHARING IS THE POINT UNTIL IT GOES TOO FAR
[SOURCE: Washington Post, AUTHOR: Susan Kinzie and Yuki Noguchi]
Denizens of one of the Web's most popular student hangouts are in an
uproar over changes to the site that they say make their online
musings much too public, turning their personal lives into a flashing
billboard. Facebook.com, a site used by more than 9 million students
and some professionals, is an Internet lounge where people share
photos, read one another's postings and make connections -- a kind of
digital yearbook through which people find out about goings-on with
their friends and on campus. But this week the site's immense
popularity backfired after it started a feature that culls fresh
information users post about themselves and delivers it in
headline-news format to their network of buddies. Facebook, of Palo
Alto, Calif., unveiled the feature at midnight Monday, saying it
would make new information easier to find. Within hours, online
protest groups were formed and thousands of people had joined.
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/06/AR200609...
(requires registration)
* Web social site Facebook hit by privacy protests
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

NCTA: CABLE VOIP SAVES BILLIONS
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The National Cable & Telecommunications Association claims that,
according to its analysis of a JD Power & Associates survey, American
consumers could save $60 billion if they switched from traditional
telephone service to voice-over-Internet-protocol (VoIP) calling
services. (That's collectively, of course -- saving $60 billion each
would be some sort of record.) In a July survey, JD Power found that
cable VoIP customers were paying $42.40 per month, while traditional
phone customers were paying $53.59 for local and long-distance
service. NCTA's consumer savings assumed that cable VoIP pricing
would continue to undercut the competition and cable VoIP's market
share would reach 85% (which is sorta a pipe-in-the-mouth projection).
http://www.multichannel.com/article/CA6369482.html?display=Breaking+News
* NCTA release:
http://www.ncta.com/ContentView.aspx?hidenavlink=true&type=reltyp1&conte...

ROSS OFFERS POLICY PRINCIPLES FOR MEDIA REGULATION
[SOURCE: Progress and Freedom Foundation]
Policymakers should consider regulation's effect on consumers,
innovation and free expression when proposing restrictions and
regulations on media platforms, states Patrick Ross in "Do's and
Don'ts for Global Media Regulation: Empowering Expression, Consumers
and Innovation," a Progress on Point released Wednesday by The
Progress & Freedom Foundation. With debate over the "Television
without Frontiers Directive" continuing this fall in the European
Union, the author hopes to guide regulators in their policymaking for
new media platforms by offering simple principles. "Under these
rules," writes Ross, "all new technologies and services could enter
the market and compete for customers, and freedom of expression would
be ensured." This paper is being published as part of PFF's Center
for Digital Media Freedom, directed by Senior Fellow Adam Thierer.
The Progress & Freedom Foundation is a market-oriented think tank
that studies the digital revolution and its implications for public policy.
http://www.pff.org/news/news/2006/090606_principmediareg.html

VIRGINIA COURT UPHOLDS ANTISPAM LAW
[SOURCE: C-Net|News.com, AUTHOR: Candace Lombardi]
The Virginia Court of Appeals upheld a state antispam law on Tuesday
by affirming the conviction of the first person in the United States
to face prison time for spamming. Jeremy Jaynes was convicted in
November 2004 of sending out bulk e-mails with disguised origins and
being in possession of a stolen database of more than 84 million AOL
subscribers addresses. He was sentenced to nine years in prison.
Judge James W. Haley Jr. released an opinion on behalf of a
three-judge panel that struck down all of Jaynes' appeal arguments.
http://news.com.com/Virginia+court+upholds+antispam+law/2100-7350_3-6112...

TIME WARNER USES COMMON SENSE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Time Warner says it will start putting TV reviews and ratings
information from family programming watchdog Common Sense Media on
its cable systems and Web site starting next week. The group rates
the age-appropriateness of TV programs (as well as video games,
movies, music and books) for sex, violence, and language--among other
things-- proclaiming shows on balance "good stuff" (green light)
"pause"--for proceed with caution (yellow light), or "not of the
right age" (red light). The announcement of the new ratings came the
same day that Common Sense Media will give out its annual awards for
"improving the media landscape for children." This year's Lifetime
Achievement winner is former FCC Chairman Newton Minow, who will
receive his award from current FCC Chairman Kevin Martin who has
pushed the media to give parents more content control tools, while
Minow is famous for once calling TV a 'vast wasteland,' compared to
its potential to educate, entertain and enlighten. Other award
winners include Senator Joe Lieberman (I-CT), longtime critic of
media violence, particularly video games, and Gary Knell of Sesame Workshop.
http://www.broadcastingcable.com/article/CA6369461.html?display=Breaking...
* Common Sense Comes to Time Warner Cable
http://www.multichannel.com/article/CA6369167.html?display=Breaking+News
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