September 2006

Hubbard's Secret Satellite Weapon

HUBBARD'S SECRET SATELLITE WEAPON
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]

In a TiVo World, Television Turns Marketing Efforts to New Media

IN A TIVO WORLD, TELEVISION TUNES MARKETING EFFORTS TO NEW MEDIA
[SOURCE: New York Times, AUTHOR: Stuart Elliott]

Sci Fi Creates ‘Webisodes’ to Lure Viewers to TV

SCI FI CREATES 'WEBISODES' TO LURE VIEWERS TO TV
[SOURCE: New York Times, AUTHOR: Jonathan Glater]

Reality show should make us all cringe

A BITTER 'FLAVOR': REALITY SHOW SHOULD MAKE US ALL CRINGE
[SOURCE: USAToday, AUTHOR: DeWayne Wickham]

Exploitative Internet marketing fuels child obesity

EXPLOITATIVE INTERNET MARKETING FUELS CHILD OBESITY
[SOURCE: Reuters, AUTHOR: Michael Perry]

Textbooks Are Free, but They Carry Ads

TEXTBOOKS ARE FREE, BUT THEY CARRY ADS
[SOURCE: Associated Press, AUTHOR: Justin Pope]
Textbook prices are soaring into the hundreds, but in some courses this fall, students won't pay a dime. The catch: Their textbooks will have ads for companies including FedEx Kinko's and Pura Vida Coffee.
http://www.latimes.com/business/printedition/la-fi-textbookads5sep05,1,4...
(requires registration)

NAB Hires Top Hill Staffer for Lobbying

NAB HIRES TOP HILL STAFFER FOR LOBBYING
[SOURCE: TVNewsday, AUTHOR: Kim McAvoy]

Benton's Communications-related Headlines For Tuesday September 5, 2006

To view Benton's Headlines feed in your RSS=20
Aggregator, paste=20
http://www.benton.org/index.php?q=3Dtaxonomy/term/6/all/feed into your read=
er.
For upcoming media policy events, see http://www.benton.org

AGENDA
Congress Set for Combative Pre-Election Push
Elections, Net Neutrality May Disconnect Telecom Bill
Congress Unlikely to Tackle Net Neutrality
Congress should ensure Internet Providers don't Play Favorites
Tiering, It's Not Just For Telcos Anymore

MEDIA OWNERSHIP
Clear Channel Presses FCC To Raise Ownership Caps In Largest Markets
Top 3 Cable firms offer $2.3 billion for Airwaves
Hubbard's Secret Satellite Weapon

BROADCASTING/TELEVISION
Let Broadcasters Be Free
In a TiVo World, Television Turns Marketing Efforts to New Media
Sci Fi Creates =91Webisodes=92 to Lure Viewers to TV
Reality show should make us all cringe

ADVERTISING
Exploitative Internet marketing fuels child obesity
Textbooks Are Free, but They Carry Ads

PEOPLE
NAB Hires Top Hill Staffer for Lobbying
PTC's Bozell to Step Down
Freston Resigns from Viacom

QUICKLY -- "Winning Online" -- A Manifesto ;=20
MySpace: Meet the Band, Buy the Song; One-stop=20
answers; Law =91Carves Out=92 Santa Cruz; New Charity=20
to Start Plan for $50,000 Artists=92 Grants; Brazil=20
judge orders Google to disclose users' data;=20
Online Game Seizes the Globe; Americans not eating enough fruits, veggies

AGENDA

CONGRESS SET FOR COMBATIVE PRE-ELECTION PUSH
[SOURCE: Reuters, AUTHOR: Thomas Ferraro]
U.S. lawmakers return to work today from a=20
month-long recess with time running out for=20
Republicans to pass legislation and impress=20
unhappy voters as they try to retain control of=20
Congress in November 7 elections. Both parties=20
are expected to jockey for political advantage in=20
the coming weeks, particularly over the=20
increasingly unpopular Iraq war and the battle=20
against terrorism. Congress is expected to pass=20
little more than big spending bills for the=20
departments of Defense and Homeland Security.=20
Deadlocks appear certain to remain on legislation=20
such as raising the federal minimum wage,=20
revamping U.S. immigration laws and reducing=20
inheritance taxes. Congress is set to recess on=20
October 6. But with Republicans so concerned=20
about losing power, they may break a week early=20
to give them more time to go home to campaign.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-09-04T170548Z_01_N045159_RTRUKOC_0_US-CONGRESS.xml
* Congress's Fall Agenda Takes Shape
The House has scheduled 11 full days of=20
legislative work this month after Thursday's vote=20
to curb the slaughter of U.S. horses -- a bill=20
that has prompted dark jokes among Republicans=20
about what awaits lawmakers if they don't get=20
back on the campaign trail. To a remarkable=20
degree, the leadership is prepared to risk the=20
label of a "Do-Nothing Congress" if it means=20
getting rank-and-file members on the hustings.
http://online.wsj.com/article/SB115741016450653170.html?mod=3Dtodays_us_...
e_one
(requires subscription)

ELECTIONS, NET NEUTRALITY MAY DISCONNECT TELECOM BILL
[SOURCE: MediaWeek, AUTHOR: Todd Shields]
Lawmakers returning to Washington this week will=20
be greeted by telephone company lobbyists engaged=20
in a final, uphill push for help in emerging as=20
cable=92s competitors. Verizon and AT&T want final=20
passage of a bill that would let federal=20
officials rather than localities set guidelines=20
for offering video services. Telephone executives=20
say kowtowing to thousands of localities is a=20
barrier to rolling out TV services that offer=20
hundreds of channels over high-speed lines.=20
Cities and counties are fighting the measure,=20
saying it saps their power to protect=20
constituents and rights-of-way. The bill has=20
prevailed in several votes and now needs an OK=20
from the full Senate to clear Congress. But=20
opponents have the calendar working for them.=20
Lawmakers return to work Sept. 5 and adjourn by=20
early October for the fall election campaign. The=20
intervening weeks are likely to be jammed with=20
routine appropriations and debate on national security.
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=3D100...
6729
See also --
* Video Franchise Not On Senate Schedule
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Advanced Telecommunications and Opportunities=20
Reform Act of 2006 is not scheduled for this=20
week, and odds lengthen that it will be=20
considered before the post-election lame duck session, if at all.
http://www.broadcastingcable.com/article/CA6368461.html?display=3DBreaki...
News
** For more on the bill see http://www.benton.org/index.php?q=3Dnode/2173

CONGRESS UNLIKELY TO TACKLE NET NEUTRALITY
[SOURCE: InfoWorld, AUTHOR: Grant Gross, IDG News Service]
The U.S. Congress may take another crack at net=20
neutrality and related broadband legislation when=20
it returns from a month-long recess next week,=20
but some observers aren't laying odds on either=20
package passing. The battle lines over net=20
neutrality have, if anything, become more defined=20
since votes earlier this summer on=20
telecommunications reform, and some people=20
involved in the broadband debate say the=20
legislation is unlikely to pass in a highly=20
politicized election year. Neither side has=20
offered a net neutrality compromise during the=20
August congressional recess. The net neutrality=20
debate has turned largely into a partisan issue,=20
at least on Capitol Hill. Many Democrats have=20
sided with consumer groups and many large=20
e-commerce companies backing a strong net=20
neutrality requirement. Many Republicans have=20
backed the large broadband providers and network=20
equipment vendors opposed to a new law.
http://www.infoworld.com/article/06/09/01/HNcongressnetneutrality_1.html

CONGRESS SHOULD ENSURE INTERNET PROVIDERS DON'T PLAY FAVORITES
[SOURCE: Anchorage Daily News, AUTHOR: Editorial Staff]
[Commentary] Advocates of wide-open access to the=20
nation's information superhighway are at odds=20
with Alaska Sen. Ted Stevens. They're worried=20
that congressional update of the 1996=20
Telecommunications Act will allow companies that=20
control Internet connections to play favorites=20
with the content they deliver. Sen. Stevens=20
chairs the key Senate committee on the issue,=20
Commerce, and he does not share their concern.=20
The advocates point out that Internet providers=20
are free to fast-track content from favored Web=20
sites or companies, while slowing down=20
transmissions from everybody else. To prevent=20
those abuses, the access advocates want the new=20
federal law to ensure "net neutrality." That's=20
shorthand for saying Internet companies can't=20
discriminate in delivering content to your=20
computer. Net neutrality is hardly a=20
heavy-handed government intrusion into the=20
free-wheeling world of the Internet. It is a=20
simple antitrust rule that protects consumers by=20
keeping Internet companies from exploiting their=20
control over connections. Congress should get=20
ahead of the curve and ensure net neutrality=20
before abuses begin to spread. BOTTOM LINE: Net=20
neutrality is a good idea. Sen. Ted Stevens should support it.
http://www.adn.com/opinion/story/8156658p-8049486c.html
* Net Neutrality Wins More Senators
http://www.webpronews.com/topnews/topnews/wpn-60-20060901NetNeutralityWi...
oreSenators.html

TIERING, IT'S NOT JUST TELCO'S ANYMORE
[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] New Internet registry contracts=20
will now allow price-tiering for names. As Milton=20
Mueller at ICANNWatch observes, this raises=20
similar worries as tiered Internet access. This=20
is why Sascha Meinrath's & Victor Pickard's new=20
paper on redefining net neutrality is important.=20
Meinrath and Pickard make the very good point=20
that the openness of the Internet rests on more=20
than just residential access providers. Those=20
concerned with the current fight to maintain net=20
neutrality -- as narrowly defined as preventing=20
the last-mile access provider from defining the=20
Internet experience -- should be aware of the=20
need to protect other potential bottlenecks from=20
emerging. What I love most about reality, is how=20
it will always turn around and bite you in the=20
rear end if you decide to ignore it. Reality=20
soooo does not care that you chose to be ignorant=20
of things like economics and political science,=20
any more than it cares when idiots in poli-sci=20
decide they can dictate technology and try to=20
make idiotic rules about blocking net gambling or=20
blocking indecency or outlawing peer-2-peer. Reality doesn't care. It just =
is.
http://www.wetmachine.com//item/584

MEDIA OWNERSHIP

CLEAR CHANNEL PRESSES FCC TO RAISE OWNERSHIP CAPS IN LARGEST MARKETS
[SOURCE: RadioandRecords, AUTHOR: Jeffrey Yorke and Carol Archer ]
Clear Channel=92s legal eagles landed in two FCC=20
Commissioners=92 offices last week to influence=20
their positions on expanding ownership cap limits=20
in the largest radio markets. For months, Clear=20
Channel lobbyists have been pressing the flesh on=20
Capitol Hill and in the halls of FCC=20
headquarters. On Aug. 29, Clear Channel's=20
executive VP and chief legal officer Andrew=20
Levin, senior VP of government affairs Jessica=20
Marventano, and outside legal advisor John=20
Fiorini III of the influential K Street law firm,=20
Wiley Rein & Fielding, held separate meetings=20
with both Commissioner Deborah Taylor Tate and=20
her legal assistant Chris Robbins, and with=20
Commissioner McDowell and his legal assistant,=20
Cristina Chou Pauze. A Tate staffer said that it=20
was obvious that Clear Channel=92s interest in=20
expanding market presence was due to its concerns=20
about =93audience fractioning=94 caused by growing=20
competition from iPods and satellite radio=20
operators Sirius and XM. The discussions are part=20
of the on-going 120-day comment period initiated=20
by the FCC earlier this summer when it invited=20
public comment its obligatory review of media=20
ownership rules. Current caps on large market=20
ownership limit one group to owning up to eight=20
stations =AD five on one band, three on another =AD=20
in a market the size of New York, Los Angeles,=20
Chicago, Dallas, Washington or even Baltimore.=20
But based on a document obtained by R&R, Clear=20
Channel specifically uses New York City -- with=20
149 stations in the area -- as an example that it=20
says shows that owning eight stations in markets=20
with 45-to-59 stations is just 18% of the market,=20
owning 10 stations in markets with 60-to 74=20
stations would be 17% of the market and owning a=20
dozen stations in markets of 75 or more stations=20
would be 16% or less of the market.
http://www.radioandrecords.com/radiomonitor/news/business/leg_reg/articl...
isplay.jsp?vnu_content_id=3D1003086023

TOP 3 CABLE FIRMS OFFER $2.3 BILLION FOR AIRWAVES
[SOURCE: Bloomberg News, AUTHOR: Molly Patterson & Christopher Stern]
The three largest U.S. cable operators have=20
offered more than $2.3 billion for airwaves in=20
the Federal Communications Commission's current=20
auction, a slice big enough to create a new=20
national wireless network. SpectrumCo LLC, 52=20
percent of which is owned by Comcast Corp., the=20
largest U.S. cable company, has made the top=20
offers for 132 of the licenses being sold by the=20
FCC, including ones in New York, Los Angeles and=20
Chicago. Overall, bids for 1,122 licenses totaled=20
$13.7 billion after Thursday's 70th round. The=20
Comcast-led group is poised to capture airwaves=20
covering about 265 million people, or 89 percent=20
of the U.S. population. Winning the licenses=20
would allow its members, which include Time=20
Warner and Cox Communications, to build their own=20
wireless network. Another member, Sprint Nextel,=20
has a separate agreement to provide wireless=20
services to cable-company customers. The=20
Sprint-cable partnership was third in total=20
bidding in Thursday's most recent round, after=20
T-Mobile USA Inc.'s $4.15 billion and Verizon=20
Wireless's $2.8 billion. With offers for the=20
largest swaths of spectrum unchallenged for a=20
week or more, participants are now battling for airwaves in midsize cities.
http://seattlepi.nwsource.com/business/283420_fccauction01.html

HUBBARD'S SECRET SATELLITE WEAPON
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
Why has Hubbard Broadcasting been an active buyer=20
of video programming lately? The Hubbards have a=20
little-known deal granting them slots for three=20
channels on DirecTV and the potential to reach=20
its 16 million subscribers -- and the deal=20
expires soon. Securities filings show that, when=20
DirecTV bought USSB, the satellite TV service=20
Hubbard controlled, in 1999, the deal included a=20
special agreement to carry the Hubbards=92 All News=20
Channel (which ultimately folded in 2002), as=20
well as two additional channels to be developed=20
later. With the deal expiring this year, the=20
company has had to move quickly. So when=20
Ovation=92s investment banker, Lazard Freres,=20
approached the company about the channel,=20
Hubbard=92s son, Stanley E. Hubbard II, pounced,=20
agreeing to buy in and use the DirecTV rights as leverage to secure carriag=
e.
http://www.broadcastingcable.com/article/CA6368381?display=3DBreaking+News

BROADCASTING/TELEVISION

LET BROADCASTERS BE FREE
[SOURCE: Broadcasting&Cable, AUTHOR: Former FCC Commissioner James H. Quell=
o]
[Commentary] Broadcasters need help. The=20
government must assure the future maintenance of=20
television and radio's expensive but vital=20
emergency, local-news and community services.=20
Foremost, the amazing influence of the Internet=20
and its universal omnipresence must be fully=20
considered. Second, the multichannel effect of=20
the digital transition, especially for=20
broadcasting, requires a revised regulatory=20
outlook. Quello concludes: "It may be nearing the=20
time that Congress set a date certain to=20
establish a telecommunications open marketplace=20
and eliminate the barriers between TV, radio,=20
newspaper, cable, satellite, DSL and phone=20
services. Companies should be allowed to enter=20
any field in open competition. Remember, it is=20
entrepreneurial industry, not government=20
regulation, that provides investments, jobs and=20
innovative consumer-serving technical advances.=20
Admittedly, this proposal may be a few years=20
ahead of itself, but the progressive benefits to=20
consumers and industries, plus the need to=20
effectively compete in the challenging,=20
burgeoning, international marketplace, makes it a future imperative.
http://www.broadcastingcable.com/article/CA6368434.html?display=3DOpinion

IN A TIVO WORLD, TELEVISION TUNES MARKETING EFFORTS TO NEW MEDIA
[SOURCE: New York Times, AUTHOR: Stuart Elliott]
Two deals that are scheduled to be announced=20
today are indicative of the ways TV is headed in=20
new directions to meet the new needs of=20
marketers. CBS and TiVo will work together to=20
make it easier for TiVo subscribers to sample=20
four new series on the network's fall schedule.=20
The agreement is the first time that TiVo, which=20
is trying to change its image as being unfriendly=20
to advertisers, and a broadcast network have=20
teamed up for a sneak peak of a new series.=20
Previous preview deals struck by the broadcasters=20
have been off television, offering computer users=20
a chance to watch streaming video on Web sites=20
like msn.com and yahoo.com. The other agreement=20
involves ITN Networks, a media sales company in=20
New York with estimated annual billings of $300=20
million. ITN assembles customized national TV=20
networks for advertisers from the commercial time=20
it buys from local broadcast stations. ITN=20
clients include Burger King, Capital One, Clorox,=20
GlaxoSmithKline, Johnson & Johnson, Pfizer, Sara=20
Lee and Sears. A group of media heavyweights --=20
Sony Pictures Television, Veronis Suhler=20
Stevenson and the Zelnick Media Corporation -- is=20
buying a majority stake in ITN, spending an=20
estimated $200 million initially as part of plans=20
to eventually invest up to $250 million. The=20
group also intends to expand ITN beyond broadcast=20
TV into other realms like cable and satellite TV,=20
the Internet and video games. For all the focus=20
on new media, =93people will not stop watching=20
television anytime soon,=94 said Strauss Zelnick,=20
chief executive at Zelnick Media in New York, who=20
will take the new post of chairman at ITN. The=20
problem with television is that =93for years, it=92s=20
been a one-size-fits-all medium, when advertisers=20
want to reach targeted audiences more=20
effectively,=94 Mr. Zelnick said. =93We=92re trying to=20
look around the corner and benefit from where the=20
media market is going in the future.=94
http://www.nytimes.com/2006/09/05/business/media/05adco.html
(requires registration)

SCI FI CREATES 'WEBISODES' TO LURE VIEWERS TO TV
[SOURCE: New York Times, AUTHOR: Jonathan Glater]
The Sci Fi Channel has created online=20
mini-episodes of the television series=20
=93Battlestar Galactica;=94 the first is scheduled to=20
be posted at midnight. The 10 Web segments, each=20
just a few minutes long and viewable on devices=20
ranging from iPods to laptops to desktops to=20
full-size television sets, feature characters=20
from the television show. And they have the same=20
dark feel of broadcast episodes of =93Galactica,=94 a=20
post-apocalyptic survival tale of humans on the=20
run after their home planets have been destroyed.=20
The mini-episodes will go online, one at a time,=20
on Tuesday and Thursday nights until=20
=93Galactica=92s=94 season premiere on Oct. 6. The=20
=93Galactica=94 segments are part of a broader effort=20
by NBC Universal, which owns Sci Fi, to make new,=20
original video and audio material =97 content =97 available on the Internet.
http://www.nytimes.com/2006/09/05/arts/television/05gala.html
(requires registration)

A BITTER 'FLAVOR': REALITY SHOW SHOULD MAKE US ALL CRINGE
[SOURCE: USAToday, AUTHOR: DeWayne Wickham]
[Commentary] There's more proof that Neil Postman=20
knew what he was talking about. In his 1985 book,=20
Amusing Ourselves to Death: Public Discourse in=20
the Age of Show Business, the media critic and=20
educator suggested that futurist Aldous Huxley,=20
not George Orwell, had a better vision of where=20
life on this planet is headed. =93What Orwell=20
feared were those who would ban books,=94 Postman=20
wrote in the foreword to his book. =93What Huxley=20
feared was that there would be no reason to ban a=20
book, for there would be no one who wanted to=20
read one. =85 Orwell feared that the truth would be=20
concealed from us. Huxley feared that the truth=20
would be drowned in a sea of irrelevance. Orwell=20
feared we would become a captive culture. Huxley=20
feared we would become a trivial culture.=94 The=20
success of Flavor of Love 2, a VH1 reality show=20
whose second-season premiere last month brought=20
the cable network its highest rating for any=20
opening show, is a crass and tasteless descent=20
into the abyss that Huxley saw the world hurtling=20
toward. And it is proof positive that this nation=20
is at risk of amusing ourselves to death.
http://www.usatoday.com/printedition/news/20060905/opcomtues.art.htm

ADVERTISING

EXPLOITIVE INTERNET MARKETING FUELS CHILD OBESITY
[SOURCE: Reuters, AUTHOR: Michael Perry]
Self-regulation in food and beverage marketing is=20
being exploited and is failing to curb childhood=20
obesity, research by a global obesity taskforce=20
presented on Tuesday has found. The International=20
Obesity Taskforce said some Internet sites that=20
attracted children with advertising games were=20
being used to bypass stricter advertising=20
standards in traditional media, the 10th=20
International Congress on Obesity in Sydney=20
heard. The taskforce found that 85 percent of=20
businesses advertising to children on television=20
also had interactive Web sites for them. It said=20
12.2 million children had visited commercial Web=20
sites promoting food and beverages over a=20
three-month monitoring period in 2005. An=20
analysis of this marketing found that food and=20
beverage advertisers paid lip service to=20
advertising codes of conduct. It said some Web=20
sites pressure children to purchase before they played online games.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-09-05T092640Z_01_SYD96605_RTRUKOC_0_US-AUSTRALIA-OBESITY.xml

TEXTBOOKS ARE FREE, BUT THEY CARRY ADS
[SOURCE: Associated Press, AUTHOR: Justin Pope]
Textbook prices are soaring into the hundreds,=20
but in some courses this fall, students won't pay=20
a dime. The catch: Their textbooks will have ads=20
for companies including FedEx Kinko's and Pura Vida Coffee.
http://www.latimes.com/business/printedition/la-fi-textbookads5sep05,1,4...
820.story?coll=3Dla-headlines-pe-business
(requires registration)

PEOPLE

NAB HIRES TOP HILL STAFFER FOR LOBBYING
[SOURCE: TVNewsday, AUTHOR: Kim McAvoy]
The National Association of Broadcasters its=20
government relations department by bringing in=20
Mildred Webber, deputy chief of staff for House=20
Majority Whip Rep. Roy Blunt (MO), the=20
third-ranking Republican leader in the House.=20
Webber will join NAB as senior vice president of=20
government affairs on Sept. 29. She will report=20
to the department=92s executive vice president,=20
Doug Wiley, who assumed his post in May.=20
According to a June 2003 story in The National=20
Journal, Webber aided Rep Blunt in his duties as=20
Whip, always trying to make sure that 218 votes=20
-- a House majority -- were aligned with the=20
wishes of the Republican leadership. The article=20
also said that Webber tended to =93member services,=20
or taking care of Republican lawmakers' unique=20
problems, whether they involve policy, politics=20
or personal matters.=94 Webber's rise to prominence=20
on the Hill -- Roll Call, a Capitol Hill=20
newspaper, recognized her in 2004 as one of=20
Capitol Hill=92s 50 most powerful staffers -- may=20
have more to do with her association with Rep Tom=20
DeLay, the once powerful House Majority Leader=20
who decided not to seek reelection earlier this=20
year after being indicted for campaign financing=20
violations. Webber once served as Rep DeLay=92s=20
director of coalitions, responsible for rallying=20
outside support for the Republicans political=20
agenda among lobbyists and businesses. And Webber=20
is credited with helping Rep DeLay land the job=20
of House Majority Whip in 1994 in an upset over=20
more established rivals. The National Journal=20
reported in April 2005 that Webber contributed=20
$500 to Rep DeLay=92s legal defense fund. Prior to=20
her work for Reps Delay and Blunt, Webber was=20
staff director for the House Subcommittee on=20
National Economic Growth, Natural Resources and=20
Regulatory Affairs. Webber, who has a B.A. from=20
the University of North Carolina at Chapel Hill,=20
also knows her way around the executive branch,=20
having worked for both the Reagan and the first Bush administrations.
http://www.tvnewsday.com/articles/2006/09/01/daily.4/

PTC's BOZELL TO STEP DOWN
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Brent Bozell, president of the Parents Television=20
Council, said Friday he will step down on Jan.1.=20
He will be replaced by the current executive=20
director Tim Winter. Winter is a former executive=20
with NBC in Burbank and London, and with the MGM=20
film studio. PTC has been one of the principle=20
forces behind the push for stronger FCC=20
enforcement of indecency regulations. Bozell will=20
continue to serve as an advisor and on the board. He founded the group in 1=
995.
http://www.broadcastingcable.com/article/CA6368240?display=3DBreaking+News

FRESTON RESIGNS FROM VIACOM
[SOURCE: Multichannel News]
Viacom said Tuesday morning that CEO Tom Freston=20
had resigned. The media giant named Philippe=20
Dauman president and CEO in the surprise=20
announcement. Viacom also promoted Thomas Dooley=20
to the newly created position of senior executive=20
vice president and chief administrative officer.=20
Freston, 60, became CEO of Viacom in January,=20
after the company split with its CBS Corp. unit.=20
Freston had worked as CEO of MTV Networks before taking the helm at Viacom.
http://www.multichannel.com/article/CA6368477.html?display=3DBreaking+News

QUICKLY

'WINNING ONLINE' -- A MANIFESTO
[SOURCE: Editor&Publisher, AUTHOR: Tom Mohr]
Newspapers must win online, or face a future of=20
painful contraction. To win, industry leaders=20
must adopt a Marshall Plan embodying two key=20
objectives: the migration to common platforms,=20
and the acquisition of the ability to sell=20
top-quality online product to our advertisers. To=20
fulfill these objectives, the independent=20
companies of a proud industry must aggregate into=20
an industry-wide network. In this network, each=20
company must cede some control over its digital=20
future into a =93Switzerland=94 organization that=20
manages the network. This will require a degree=20
of cooperation and trust rarely seen before in=20
the newspaper business, and therefore will only=20
be achieved through the active, visionary=20
leadership of the industry=92s captains. But, if=20
they pursue this path and plug into the power of=20
network economics, they will tap into $4 billion=20
of revenue upside for the industry by 2010.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003086961

MYSPACE: MEET THE BAND, BUY THE SONG
[SOURCE: Washington Post, AUTHOR: Yuki Noguchi]
Technology is taking the middleman out of the=20
music business, giving artists a bigger array of=20
tools to get their songs in the MP3 players of=20
potential fans around the world. That trend is=20
hurting the classic record store chains, such as=20
Tower Records, and thousands of independent=20
stores, but it's also opening doors to digital=20
music sales direct from the artist to the fan.=20
The latest development in that direction comes=20
from MySpace, a social networking site that has=20
brought new audiences to many bands. Now MySpace=20
is adding a music-store feature that will allow=20
artists, labels and the site itself to cash in on=20
the popularity of those songs. The new feature,=20
expected to be announced today, will allow=20
musicians -- whether they are backed by a record=20
label or not -- to sell songs directly from their=20
MySpace profile pages. Assuming that the songs=20
for sale do not violate a copyright, the artist=20
or label can set a price and allow Web users to=20
buy songs the way they might with services such=20
as iTunes and Yahoo Music. The service is in=20
trial and will be available broadly by the end of the year.
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/04/AR200609...
0806.html
(requires registration)

ONE-STOP ANSWERS
[SOURCE: Sacramento Bee, AUTHOR: Editorial Staff]
[Commentary] Six years ago, the Federal=20
Communications Commission designated 2-1-1 as the=20
abbreviated dialing code for access to community=20
services. Operators for 2-1-1 direct callers to=20
welfare and mental health services, homeless=20
shelters, food pantries, financial assistance=20
agencies and more. The code 2-1-1 became the=20
central information resource for people displaced=20
by Hurricane Katrina. Worried about ongoing=20
costs, county budget advisers have recommended it=20
not be funded. That's a mistake. The code can=20
save money by diverting callers from the=20
overloaded 9-1-1 system. When it comes up for a=20
vote this week, 2-1-1 deserves Sacramento supervisors' strong support.
http://www.sacbee.com/content/opinion/editorials/story/14317407p-1523497...
html

LAW 'CARVES OUT' SANTA CRUZ
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
While the new legislation in California will=20
allow incumbent cable operators to seek state=20
operating authority, one system won't be filing=20
anytime this decade. That would be Charter=20
Communications=92 Santa Cruz County system. Though=20
not named in the newly passed legislation,=20
specific terms in the bill target the system and=20
prevent it from taking advantage of the new=20
policy until July 2014. The language says no=20
system operating under a consent decree from=20
federal court can expand its system boundaries,=20
and it can't apply for state authorization until=20
that date. A 2004 consent decree governs=20
Charter=92s operations including keeping rates=20
about $18 lower than expanded basic rates charged=20
in the region by Comcast. Supporting the original=20
county suit was the Santa Cruz City Council. One=20
of the council=92s members was John Laird. Laird is=20
now the democratic assemblyman for Santa Cruz and=20
Monterey counties, and he got the amendment=20
inserted into the state franchising bill preserving the local agreement.
http://www.multichannel.com/article/CA6368151.html?display=3DBreaking+News

NEW CHARITY TO START PLAN FOR $50,000 ARTISTS' GRANTS
[SOURCE: New York Times, AUTHOR: ]
A new charity, United States Artists, will=20
announce today an ambitious plan to provide=20
support to working artists, starting with a grant=20
program that will be one of the most generous in=20
existence. Fifty artists working in a wide=20
variety of disciplines and at various career=20
stages will receive $50,000 each, no strings=20
attached. The first recipients will be announced on Dec. 4.
http://www.nytimes.com/2006/09/05/arts/design/05unit.html
(requires registration)

BRAZIL JUDGE ORDERS GOOGLE TO DISCLOSE USERS' DATA
[SOURCE: Reuters]
A Brazilian judge has ordered the local office of=20
Web search company Google to disclose the data of=20
users of Google's social networking site Orkut=20
accused of crimes like racism or child=20
pornography. Federal judge Jose Lunardelli ruled=20
late on Thursday that Google be given 15 days to=20
disclose the information, including the Internet=20
Protocol addresses that can uniquely identify a=20
specific computer on a network. The judge set a=20
daily fine of 50,000 reais ($23,255) for each=20
individual case if Google refuses to reveal the=20
data. Brazilians account for 65 percent of=20
Orkut's nearly 27 million users and public=20
prosecutors have recently been investigating=20
Orkut communities set up by Brazilians and=20
dedicated to such subjects as racism, homophobia=20
and pedophilia. Google officials in Brazil have=20
said all clients' data is stored on a server in=20
the United States and is subject to U.S. laws,=20
which makes it impossible for them to reveal the=20
data in Brazil. They also said the local=20
affiliate only deals in marketing and sales and has nothing to do with Orku=
t.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-09-01T154938Z_01_N01443799_RTRUKOC_0_US-BRAZIL-GOOGLE.xml&archived=
=3DFalse

ONLINE GAME, MADE IN US, SEIZES THE GLOBE
[SOURCE: New York Times, AUTHOR: Seth Schiesel]
Less than two years after its introduction, World=20
of Warcraft, made by Blizzard Entertainment,=20
based in Irvine, Calif., is on pace to generate=20
more than $1 billion in revenue this year with=20
almost seven million paying subscribers, who can=20
log into the game and interact with other=20
players. That makes it one of the most lucrative=20
entertainment media properties of any kind.=20
Almost every other subscription online game,=20
including EverQuest II and Star Wars: Galaxies,=20
measures its customers in hundreds of thousands=20
or even just tens of thousands. And while games=20
stamped =93Made in the U.S.A.=94 have often struggled=20
abroad, especially in Asia, World of Warcraft has=20
become the first truly global video-game hit since Pac-Man in the early 198=
0=92s.
http://www.nytimes.com/2006/09/05/technology/05wow.html?hp&ex=3D11575152...
en=3D9d3b5750e6f5e8bc&ei=3D5094&partner=3Dhomepage
(requires registration)

AMERICANS NOT EATING ENOUGH FRUITS, VEGGIES
[SOURCE: Reuters]
Get that donut out of your mouth and grab some kale!
http://today.reuters.com/news/articlenews.aspx?type=3DdomesticNews&storyID=
=3D2006-09-04T165038Z_01_SIB460618_RTRUKOC_0_US-AMERICANS-EATING.xml&archiv=
ed=3DFalse
--------------------------------------------------------------
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.
--------------------------------------------------------------

The Advanced Telecommunications and Opportunities Reform Act of 2006 (S. 2686/HR 5252)

The Advanced Telecommunications and Opportunities Reform Act of 2006 (S. 2686/HR 5252)

For a Microsoft Word version of this document see http://www.benton.org/benton_files/ATORA0904.doc

On June 28, 2006, by a 15-7 vote, the Senate Commerce Committee approved the Advanced Telecommunications and Opportunities Reform Act.

It took until August 4 for the Committee to release the final text of bill as amended at the June mark-up. In a year when key Republican lawmakers are promising sweeping telecommunication reform legislation, eyes are watching this bill as Senate Commerce Committee Chairman Ted Stevens (R-Alaska) tries to round up 60 votes needed to move the legislation to the Senate floor. If Sen Stevens can gain passage for the bill during the Senate’s brief return in September, it would be met in conference by the House-passed Communications Opportunity, Promotion, and Enhancement Act of 2006 (H.R. 5252 – See http://www.benton.org/index.php?q=node/1882 for more on the House bill).

The Senate bill would: 1) streamline video franchising for telephone companies and others; 2) spell out broadband Internet consumer rights, but without nondiscrimination language urged by Net Neutrality advocates; 3) firm up and expand the universal service fund (USF); 4) clarify Internet telephone service (Voice Over Internet Protocol or “VoIP”) interconnection rights, duties, and jurisdiction; 5) authorize municipal broadband systems, subject to nondiscrimination safeguards; 6) impose a permanent moratorium on state and local Internet-access taxation, a three-year moratorium on state and local wireless taxation, and further preemption of state and local regulation of wireless services; and 7) institute various mandates targeting broadcasters and other media players, among numerous other measures. Below find a summary of the major provisions in the bill.


I. Streamlining the Video Franchising Process

II. TV and Internet Content

III. Internet Neutrality
IV. Universal Service Reform

V. Municipal Broadband
VI. Wireless Innovation Networks
VII. Digital Television
VIII. Low Power Radio
IX. The Federal Communications Commission

X. Internet & Wireless Telephone Service Taxes
XI. Research
XII. Conclusion
Endnotes


I. Streamlining the Video Franchising Process

A main driver for this year’s legislative push to update telecommunications law is the desire of telephone companies to offer cable TV-like video services. Nervous about possible delays in reaching local franchise agreements with tens of thousands of communities around the country, telephone companies have asked both federal and state lawmakers to streamline the process by creating national or state-wide video franchises.

The Advanced Telecommunications and Opportunities Reform Act of 2006 updates current cable law by changing the term “cable operator” in the Communications Act to “video service provider” – in essence, making incumbent cable operators and new competitors equals in the regulatory field. The FCC is given 4 months to update its rules and establish a comprehensive, Federal legal framework for the franchising of video services that use public rights-of-way.

Local franchise authorities

  • Streamlines video franchising, giving localities 90 days to grant video applications using FCC form, subject to appeals. Cable can apply in market upon approval of new entrant. IP video covered, but FCC can’t regulate it.
  • Local franchise authorities would be prevented from awarding exclusive franchises and the term of franchises could be no shorter than 5 years and no longer than 15 years.
  • Local governments would retain their authority to regulate the use of public rights of way in a way that is reasonable, competitively neutral, and non-discriminatory. Permit fees are limited to the direct costs incurred issuing the permit.


New Entrants

  • To gain the right to provide video services in a community, a company would have to simply apply to a local franchising authority. The FCC is given 30 days from enactment to promulgate this form. The local authority is given 15 days to publish a public notice of the application if this is required by state or local law. The local authority is also required to quickly share with the applicant its franchise fee and public, educational and governmental use channel (PEG) requirements. If the company accepts these terms, it may begin offering service 15 days after completing its application. If the local franchise authority fails to respond the company within 90 days, the franchise is awarded on the 91st day for a term of 15 years with franchise fees and PEG requirements equal to that of the current, local cable operator.


Franchise Fees

  • Local franchise authorities may still collect franchise fees from video service providers, but the fees may not exceed 5 percent of the provider’s gross revenue.(1)


PEG Channels

  • New video service providers receiving franchises are required to provide as many public, educational and governmental (PEG) channels as the provider in that local area that provides the most PEG channels.
  • For new providers in areas where there is no current service, the FCC shall determine the number of PEG channels – up to 3. Support for PEG channels and institutional networks would be capped at 1% of a provider’s gross revenues.
  • The cost of operating institutional networks could be deducted from the 1%.
  • Only every 15 years, beginning in 2021, could a local franchise authority request that a provider increase the capacity of the video service network reserved for PEG channels; the increase may not exceed one PEG channel or 10% of the channel capacity currently used for PEG.
  • A video service provider would not have any editorial control over PEG content; the production of that content would be the responsibility of the franchising authority. The video provider would simply be responsible for ensuring that all subscribers receive all PEG programming and that information about the programming is available in navigational guides.


Consumer Protection and Service

  • Within 4 months on enactment of the bill, the FCC would be required to issue new customer service and consumer protection rules for video service. These rules would go into effect 2 months after being adopted by the FCC.
  • Local franchising authorities would have the authority to enforce these rules. Complaints could also be referred by franchising authorities to a state attorney general or state consumer protection agency on a case-by-case basis.


Redlining

  • According to the bill, a video service provider could not deny access to its service to any group of potential residential subscribers because of income, race or religion. State attorney generals, through a consumer complaint-initiated process, would enforce this.
  • If a court found against the provider was in violation of law, the court could 1) ensure that the provider remedy the violation and 2) assess a civil penalty. Unlike in previous drafts of the bill, there is no provision here to revoke the provider’s local franchise.
  • Beginning 3 years after enactment, all local franchising authorities are directed to report to the FCC on video service provider deployment. The FCC, in turn, is to submit a report to Congress. The bill, however, does not include a specific build out requirement to reach all areas of a community. Currently, cable operators are required to serve their entire community as a condition of a franchise.


IP-Enabled Video Service

  • Video services provides over the Internet are termed “IP-enabled video service.”
  • The bill states that these services are subject to only Federal regulation, but prohibits the FCC from regulating these services.

The National League of Cities, the National Governors Association, the National Conference of State Legislatures, the Council of State Governments, the National Association of Counties, the U.S. Conference of Mayors, and the International City/County Management Association have raised concerns about the bill cautioning that it would:

  • permit local telephone companies to pick and choose the neighborhoods in which they want to provide video and broadband services, while allowing them to bypass other neighborhoods completely.
  • replace strong state and local consumer protection and customer service standards with federal standards drafted by federal bureaucrats not accountable to state and local communities and consumers.
  • unilaterally preempt other carefully crafted state and local laws that encourage competition and protect the public interest.

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II. TV and Internet Content

The bill directs pay TV service providers to submit an annual report to the FCC on family tiers, a description of the channels the company includes in those tiers, the retail price, marketing efforts, and the subscribership for those tiers. The FCC is directed to aggregate the data in these reports each year and submit it to Congress.

The bill also gives the FCC 6 months after enactment to complete an open proceeding and issue findings on violent television programming and its impact on children.(2)

Satellite TV Service

  • The bill directs the FCC to require that satellite licensees offer the same services offered to contiguous states to noncontiguous states to the degree it is technically feasible to do so. This provision is designed to fix a problem whereby Alaska and Hawaii residents are not afforded the same satellite TV service as other states because they are beyond the reach of certain satellites. NOTE: The Chairman and ranking member on the committee are from Alaska and Hawaii respectively.


Digital Content Protection

  • The bill gives the FCC the authority to impose the “broadcast flag” (3)requirements the Commission adopted in 2004 for TV, but that the courts struck down. The bill also requires the Commission to impose similar controls on digital radio.
  • The bill requires the FCC exempt from these rules digital signals sent around a home network. Broadcasters are prohibited from using protections that would limit the redistribution of news and public affairs programming.
  • The FCC is required to set up an advisory committee, the “Digital Audio Review Board,” with representatives nominated from the information technology industry, the software industry, the consumer electronics industry, the broadcast radio industry, satellite radio industry, cable industry, audio recording industry, music publishing industry, performing rights societies (American Society of Composers, Authors and Publishers; Broadcast Music Inc; and SESAC), public interest organizations, representatives of recording artists, performers and musicians and any other group the FCC determines will be affected by adoption of the broadcast flag regulations.
  • Within 1 year of enactment, the Board is to propose a broadcast flag regulation that represents a consensus of its members and is consistent with fair use principles.
  • The FCC is given 7 months to adopt a rule based on this recommendation.
  • If the Board does not offer a consensus recommendation, the FCC is instructed to adopt new rules as long as they do not impede the rollout of digit radio.

The current draft of the bill deletes provisions concerning sports programming on pay TV services. Many video service providers complain that it is difficult to compete with local cable operators because their affiliated cable channels buy the rights to sports programming and will not sell access to these channels on competing systems. Earlier drafts of the bill asked the FCC to adopt new rules that would increase competition in the sports programming market by prohibiting exclusive contracts for sporting events. A previous draft also ensured that local broadcasters could preempt, at their own discretion, children’s educational programming in order to air news or sports events.

Protecting Children

  • The FCC is directed to adopt new rules to prevent the offering of child pornography by video service providers.
  • Website operators would be required to provide warnings of sexually explicit material on their sites.
  • The legislation would also make it unlawful to knowingly deceive another person into viewing obscene material or Internet content that is harmful to minors.
  • The bill would make it the responsibility of video providers (broadcasters, cable operators, etc) to prevent interactivity with commercial matter during any children’s programming.
  • The FCC is to conduct a study on providing radio and TV programming on school buses and submit a report to Congress.

The bill would also exempt independent broadcast TV network affiliates from indecency fines if the stations air indecent programming but were not given reasonable opportunity to preview the material or if the network has not alerted stations that the program includes content that could be considered indecent.

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III. Internet Neutrality
In August 2005, the FCC adopted a policy statement on the regulation of broadband networks. The statement includes four principles. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet consumers are entitled to:

  • Access the lawful Internet content of their choice.
  • Run applications and use services of their choice, subject to the needs of law enforcement.
  • Connect their choice of legal devices that do not harm the network.
  • Competition among network providers, application and service providers, and content providers.

Collectively these four principles have come to be known as “network neutrality.” When adopting the principles, the FCC explicitly indicated that they are not enforceable principles. Net neutrality advocates argue that the FCC should be given new authority to enforce these principles and to preserve the fundamental openness that has been the hallmark of the Internet – largely based on these principles. They also argue for a fifth principle ensuring nondiscrimination. Broadband providers argue that there isn’t a problem that needs fixing, that the FCC already has sufficient authority, and that any new statutory language would amount to regulating the Internet.

The Advanced Telecommunications and Opportunities Reform Act of 2006 includes a Consumer Internet Bill of Rights which directs Internet service providers to allow subscribers to: access and post lawful content, access the web pages of the consumers’ choosing, run any applications of the consumers’ choosing, connect any legal devise to the network and receive “clear and conspicuous” information about connection speeds, capabilities and pricing. Broadband providers are also directed to offer high-speed Internet services without requiring consumers to also subscribe to additional telecommunications services.

The legislation also states that no government may limit, restrict, ban, prohibit, or otherwise regulate content on the Internet because of the religious views, political views, or any other views expressed in such content unless specifically authorized by law; and no Internet service provider engaged in interstate commerce may limit, restrict, ban, prohibit, or otherwise regulate content on the Internet because of the religious views, political views, or any other views expressed in such content unless specifically authorized by law.

Subscribers may file complaints at the FCC if they feel their provider is violating the Consumer Internet Bill of Rights. The FCC may fine providers up to $500,000 for each violation.

The FCC, however, may not adopt new rules to implement this part of the bill. The bill, directs the FCC to study the situation. The Commission is to provide an annual report to Congress on developments in Internet traffic processing, routing, peering, transport and interconnection and how these developments impact the free flow of information over the Internet. The report is to include information about the business relationships between broadband service providers and online user services, and the development of services available over the Internet. And, if the FCC identifies significant problems, it can make recommendations to ensure that consumers can access lawful content and run Internet applications and services. But the Commission may not include a recommendation that it be given additional rulemaking authority.

This provision has been roundly criticized by the Internet and public interest community alike for lacking an enforceable network neutrality provision. A net neutrality amendment failed in committee along largely party lines, and is expected to be the predominant issue should the bill reach the Senate floor.

The bill also directs the FCC to revise biennially its definition of broadband to reflect a data rate greater than 200 kilobits per second and is consistent with what is generally available to the public.

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IV. Universal Service Reform

Contributions to Universal Service

Representing a state with a large number of rural communities, Sen Stevens has always had a particular interest in the web of subsidies that makes basic telephone service more affordable in rural communities and for low-income households, and advanced services – like Internet connections – for schools, libraries and rural health care sites. Of late, consumers have been adopting cell phones, Internet phone services and all-distance packages in lieu of traditional long-distance phone service thus using fewer long distance minutes and paying less for their service upon which contributions are based. At the same time, the fund has grown dramatically in recent years as wireless carriers have been allowed to access universal service funding. These divergent trends have strained the current contribution mechanisms for the Universal Service Fund (USF).

The Stevens bill addresses these trends by requiring the Federal Communications Commission (FCC), within 6 months of enactment of the legislation, to:

  • Require every provider of a telecommunications service, broadband service or, IP-enabled voice service (VoIP) to contribute to the Universal Service Fund whether or not they are eligible to receive USF support.
  • Develop a contribution mechanism that is competitively and technologically neutral and is specific, predictable and sufficient. Contributions could be assesses on any combination of:
    • intrastate, interstate or international revenue (the current system is based only on interstate revenue),
    • working phone numbers, or
    • network capacity including broadband connections.
  • Prevent the double collection of funds for the same service.
  • Provide a USF discount for group plans where a family may have multiple phones under one account.

In addition, the bill:

  • Preserves state universal state programs.
  • Permanently exempts the USF from the Anti-Deficiency Act – a rule that if applied to the E-rate program or other USF programs, would delay critical funding to needy schools, high-cost rural phone services, and lifeline phone users. The bill requires that USF be accounted for consistent with government Generally Accepted Accounting Practices’ standards, that the E-Rate program not commit more funds in a year than its program cap, and that excess funds be deposited in the US Treasury.
  • Permits Native American libraries and consortia to receive E-Rate funding
  • Directs the census bureau to collect broadband deployment data.
  • Defines broadband service as “a transmission speed of at least 200 kilobits per second in at least one direction.”
  • Concerning VoIP providers, the bill: 1) prohibits telephone companies from refusing to carry VoIP traffic; 2) mandates accessibility for the disabled; and 3) requires extra measures to make VoIP phones useful during emergencies.


Distributions from the Universal Service Fund
The bill also addresses how USF monies are distributed by:

  • Requiring telephone carriers that receive USF support to offer broadband(4) service within five years of enactment of the act.(5)
  • Creating a new broadband deployment fund within the USF that would make available up $500 million per year to provide broadband service(6)to unserved areas.(7)
  • Tightening the requirements telephone companies must meet in order to receive universal service funds including remaining functional in an emergency and providing consumer protection and service quality standards. Carriers would also have to present a 5-yr plan demonstrating how universal service funds would be used to improve coverage, service quality, or capacity in every wire center that would receive support.
  • Ensuring universal service support to multiple connections or lines.
  • Establishing waste, fraud, and abuse review and requiring state commissions to conduct random audits. For example, the FCC would create performance goals and measures for the E-rate program to determine how well it meets the telecommunications needs of schools and libraries.
  • Includes a “phantom” provision requiring voice providers to label traffic with “sufficient information to allow for traffic identification” by other communication networks “that transport, transit, or terminate such traffic” .. “including information on the identity of the originating provider, the calling and called parties.”

The $500 million broadband fund could help achieve the national goal of making high-speed Internet service available throughout the country. The FCC is given 6 months to create the program. But critics may suggest that the new fund may not be big enough to accomplish this goal: it is about one fifth the size of the E-rate fund(8) that has been used to wire the nation's schools and libraries to the Internet, one-fourth the size of US Department of Agriculture's Development Broadband Loan and Loan Guarantee Program(9) (which has not been very successful in increasing rural broadband deployment), and about one-twentieth the size of what many economists have said that "universal" broadband would take.(10) The FCC is required, however, to make recommendations to Congress annually on whether the fund needs to be increased or decreased.

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V. Municipal Broadband

In June 2005, Sens Frank Lautenberg (D-NJ) and John McCain (R-AZ) introduced the “Community Broadband Act.” That bill has two main clauses:

  • No State may prohibit any public provider from providing advanced telecommunications service (including Internet service).
  • To the extent any public provider regulates competing private providers of advanced telecommunications services, it shall apply its rules without discrimination in favor of itself.

The Stevens’ bill borrows the Lautenberg/McCain bill’s name and prevents states from barring municipalities from considering broadband options and choices. In allowing municipal broadband, the bill rolls back exiting state broadband barriers, seeks to encourage public-private partnerships, and includes compromise language requiring modest notice duties and other procedural requirements. The bill also includes language barring local governments from adopting regulations that would favor public over private networks. The compromise has been embraced by pro-municipal broadband groups.

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VI. Wireless Innovation Networks

In February 2006, Sens George Allen (R-VA), John Kerry (D-MA), John Sununu (R-NH), and Barbara Boxer (D-CA) introduced the Wireless Innovation Act of 2006 or the ‘WIN Act.’ The legislation focused on freeing up valuable spectrum for wireless broadband which is currently being underutilized by broadcasters. The bill’s aim was to require the FCC, within 6 months, to take action in its ongoing proceeding regarding the unlicensed use of unused radio spectrum currently reserved for broadcasting, commonly referred to as "white space."(11) The bill also directed the FCC to 1) permit unlicensed, non-exclusive use of unassigned, non-licensed television broadcast channels, 2) establish technical guidelines and requirements for the offering of unlicensed service in such band to protect incumbent licensed services and licensees from harmful interference; and 3) require unlicensed devices operating in such band to comply with existing certification processes.

The Stevens bill borrows the Allen bill’s name and also aims at making unused broadcast spectrum available for unlicensed devises. However, the bill follows more closely with the American Broadband for Communities Act introduced by Sen Stevens the same day as the Allen bill. In its current form, the Stevens provisions would:

  • Allow certified unlicensed devices to use eligible broadcast television frequencies starting 9 months after enactment.
  • Give the FCC 9 months to adopt minimal technical rules to facilitate this use and 1) protect licensed spectrum users from harmful interference, 2) require FCC certification of unlicensed devises, and 3) require manufacturers to include a way to disable or modify devices that cause interference.

The provision has been largely supported by the high-tech and public interest communities, but opposed by broadcasters.

In addition, the legislation also includes the Rural Wireless and Broadband Service Act of 2006 which would encourage wireless deployment in rural and underserved areas. The legislation calls for the FCC to report to Congress every two years on spectrum leasing and the development of secondary spectrum markets and the deployment of spectrum-based services especially in rural areas. The FCC and NTIA are called to create a publicly assessable database that identifies spectrum licensees. The agencies are also asked to conduct a band-by-band analysis of spectrum management every 5 years and identify for Congress bands that are “not being utilized in an effective of efficient manner.”

Finally, the Commission is asked to initiate a rulemaking to reconfigure spectrum band plans so as to designate up to 6 megaHertz of spectrum for small geographic license areas taking into account the desire to promote wireless service in rural and insular areas.

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VII. Digital Television
Although Congress passed legislation to speed the digital television transition earlier this year,(12) a number of issues were not addressed.(13) This part of the Stevens bill aims to ease the Nation’s transition to digital-only television broadcasting by February 2009. Specifically the bill:

Missing from the DTV transition language are provisions long sought by the public interest community to ensure that legally mandated broadcaster public interest obligations are being met.

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VIII. Low Power Radio
The bill includes the Local Community Radio Act of 2006. These provisions would remove some restrictions that have hampered the growth of low power FM radio stations, especially in urban markets.

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IX. The Federal Communications Commission

The bill includes both structural and procedural changes for the FCC.

First the bill creates an Office of Indian Affairs to 1) work with tribes to ensure they have adequate access to communications services, 2) consult with tribes before enacting rules that could have a special impact of the tribes, 3) advise the FCC on tribal law and sovereignty, 4) conduct outreach to tribes, and 5) assist tribes with complying with Federal law.

The bill also creates an Office of Consumer Advocate at the FCC. The office is to be headed by a director appointed by the FCC Commissioners and would serve a 4 year term. The Director would serve as an attorney for and represent all residential consumers generally in matters before the FCC. An Advisory Committee would be appointed to aid the Director. Four members of the Committee would be chosen by the FCC Chairman and 3 members would be chosen by the National Association of State Utility Consumer Advocates (NASUCA).

The bill directs the FCC to conduct, every year, an inquiry regarding the extent to which communications service providers have deployed their own facilities. The Commission is to share its findings with Congress.

In this section of the bill, the legislation also further federalizes wireless by preempting state/local regulation of wireless “terms and conditions.” The FCC is mandated to write, within one year, consumer-protection and customer-service rules, including on truth in billing.

Concerning the Commission’s media ownership rules, the bill directs the FCC to 1) share with the public specific changes to rules before ruling on them, 2) nullify the changes the Commission sought to cross-ownership rules in 2003 and 3) complete a proceeding on enhance minority media ownership.

The FCC is also directed to revise broadband service providers reporting requirements so that information includes zip code plus four digit locations of where service is available; percentage of households and businesses in those areas that are offered and subscribe to services; the average price per megabyte for the service; and the providers actual average throughput in those areas. The FCC is to use US census Bureau data to provide Congress with a report on areas not served by broadband service providers.

The bill also directs the FCC and the NTIA to develop a plan to increase sharing of spectrum between Federal and non-Federal government users within the next year. The agencies are also asked to establish a pilot program for implementation of the plan.

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X. Internet & Wireless Telephone Service Taxes

The bill makes permanent the moratorium on Internet-access taxes and multiple/discriminatory online taxes. Creates a three-year tax moratorium on new wireless-specific taxes (E911, USF fees are exempted).

These provisions has concerned municipalities because it fails to keep local governments financially whole, striping state and local governments of tax authority over broadband and wireless telecommunications services.

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XI. Research

The bill directs the National Science Foundation to establish a program of basic research in advanced information and communications technologies focused on enhancing the availability and affordability of these services to all Americans.

The NSF is to create a Federal Advanced Information and Communications Technology Board composed of individuals with expertise in this area including representatives from the NTIA, the FCC, the National Institute of Standards and technology and the Department of Defense.

The NSF, in consultation with the Board, would make research grants covering many topics including affordable broadband access, network security, interoperability, privacy and low-power communications. The grants would go to universities, non-profit research institutions and/or consortia of research institutions. Grants could total $190 million between fiscal year 2007 and 2011.

XII. Conclusion
Media reports have Sen Stevens working to gain 60 votes for the bill to ensure a vote in September 2006. However, many senators in tight elections seem hesitant to vote on the bill and on Network Neutrality before November. Sen Stevens has not ruled out a vote on the bill in a lame duck session after the election as well.

In the House, Commerce Committee Chairman Joe Barton’s Communications Opportunity, Promotion, and Enhancement Act of 2006 (H.R. 5252) waits for this bill to conference. Track the progress of both bills at http://www.benton.org/index.php?q=tracking_legislation

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Endnotes:
1. Franchise fees may be reduced, if the franchise authority and provider agree, in exchange for service to government buildings.
2. See FCC Notice of Inquiry In the Matter of Violent Television Programming and Its Impact on Children (MB Docket No. 01-261).
3. The “broadcast flag” is a technology designed to allow a copyright holder to dictate the terms under which digital content gets used.
4. Here defined as at least 3 megabits per second in at least 1 direction, regardless of the technology used.
5. A carrier could apply for and receive a waiver, however, if the cost of deployment of broadband technology is too high, it is not technically feasible, or would materially impair the carrier’s ability to continue providing telephone service throughout its service area.
6. Here defined as a transmission speed of at least 100 kilobits per second in at least one direction. This definition is to be reviewed and revised by the FCC each year.
7. Satellite carriers are eligible to receive those funds.
8. The $2.25 billion a year E-rate program is nearly 5 times larger than the $500 million a year broadband program in the bill.
9. The Rural Utilities Service (RUS), an agency under the U.S. Department of Agriculture runs the Rural Broadband Access Loan and Loan Guarantee program which for FY 2005 made available $2.157 billion in loans – more than 4 times more than the $500 million a year broadband program in this bill.
10. For example Rob Rich, executive vice president of communications infrastructure technologies at research firm the Yankee Group estimates it costs $20 billion for universal broadband access -- about $10 billion for all the un-wired suburban and urban homes left in densest parts of the United States, and another $10 billion to DSL-enable much of rural America. See:
http://www.msnbc.msn.com/id/4626449/
11. See in the matter of Unlicensed Operation in the TV Broadcast Bands, ET Docket No. 04-186
12. See "Getting to February 2009: Implementing the Digital TV Transition" (http://www.benton.org/index.php?q=node/1257)
13. See "Getting to February 2009: Outstanding DTV Transition Issues" (http://www.benton.org/index.php?q=node/1258)

For a Microsoft Word version of this document see http://www.benton.org/benton_files/ATORA0904.doc

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Headlines will return Tuesday Sept 5

** Headlines, like you, plans to enjoy the long weekend. See you again TUESDAY SEPTEMBER 5, 2006 **