December 2006

NEWS FROM FCC MEETING
FCC Adopts Rules for New Video Market Entrants
Coverage
Bell Companies' FCC Victory Might Be Short-Lived
links to additional stories
FCC Finds Cable rates Rose 5.2% in 2004
IP Captioned Telephone Service Eligible for TRS
Comment Sought on Public Safety Network

BROADCASTING/TELEVISION
Appeals court grills FCC on indecency standards
A TV Show=92s Content Calls the Commercial Plays

GOVERNMENT & COMMUNICATIONS
Panel Calls For More Funding On Emergency Preparedness
Bush puts Conservative on Public Broadcast Board

QUICKLY -- S.F. Judge Blocks Hearst/MediaNews=20
Collaboration; The Death of the VCR; Once a=20
novelty, Internet now a big part of life

NEWS FROM FCC MEETING

FCC ADOPTS RULES TO ENSURE REASONABLE FRANCHISING=20
PROCESS FOR NEW VIDEO MARKET ENTRANTS
[SOURCE: Federal Communications Commission]
The Federal Communications Commission adopted a=20
Report and Order and Further Notice of Proposed=20
Rulemaking that establishes rules and provides=20
guidance to implement Section 621(a)(1) of the=20
Communications Act of 1934, which prohibits=20
franchising authorities from unreasonably=20
refusing to award competitive franchises for the=20
provision of cable services. In the Order, the=20
Commission concludes that the current operation=20
of the franchising process constitutes an=20
unreasonable barrier to entry that impedes the=20
achievement of the interrelated federal goals of=20
enhanced cable competition and accelerated=20
broadband deployment. The Order addresses=20
several ways by which local franchising=20
authorities are unreasonably refusing to award=20
competitive franchises. These include drawn-out=20
local negotiations with no time limits;=20
unreasonable build-out requirements; unreasonable=20
requests for "in-kind" payments that attempt to=20
subvert the five percent cap on franchise fees;=20
and unreasonable demands with respect to public,=20
educational and government access (or "PEG"). To=20
eliminate the unreasonable barriers to entry into=20
the cable market, and to encourage investment in=20
broadband facilities, the Commission: 1) Found=20
that franchising negotiations that extend beyond=20
certain time frames amount to an unreasonable=20
refusal to award a competitive franchise within=20
the meaning of Section 621(a)(1); 2) Found that=20
requiring an applicant to agree to unreasonable=20
build-out requirements constitutes an=20
unreasonable refusal to award a competitive=20
franchise; 3) Found that, unless certain=20
specified costs, fees, and other compensation=20
required by local franchising authorities are=20
counted toward the statutory five percent cap on=20
franchise fees, demanding them could result in an=20
unreasonable refusal to award a competitive=20
franchise; 4) Found that it would be an=20
unreasonable refusal to award a competitive=20
franchise if the local franchising authority=20
denied an application based on a new entrant's=20
refusal to undertake certain unreasonable=20
obligations relating to public, educational, and=20
governmental ("PEG") and institutional networks=20
("I-Nets"); and 5) Preempted local laws,=20
regulations, and requirements, including local=20
level-playing-field provisions, to the extent=20
they impose greater restrictions on market entry=20
than the rules adopted herein.
The Commission concluded that although the record=20
allows it to determine generally what constitutes=20
an "unreasonable refusal to award an additional=20
competitive franchise" at the local level, the=20
Commission does not have sufficient information=20
to make such determinations with respect to=20
franchising decisions made at the state level or=20
in compliance with state statutory directives,=20
such as statewide franchising decisions. As a=20
result, the Order addresses only decisions made=20
by county- or municipal-level franchising=20
authorities. The Commission also adopted a=20
Further Notice of Proposed Rulemaking in which it=20
seeks comment on how its findings in the Order=20
should affect existing franchisees, tentatively=20
concludes that the findings should apply to=20
existing franchisees at the time of their next=20
franchise renewal process, and seeks comment on=20
the Commission's statutory authority to take this=20
action. The Commission will conclude this=20
rulemaking and release an order no later than six=20
months after the release of the Order.
News Release:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A1.doc
Martin Statement:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A2.doc
Copps Statement:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A3.doc
Adelstein Statement:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A4.doc
Tate Statement:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A5.doc
McDowell Statement:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269111A6.doc

_Coverage_

BELL COMPANIES' FCC VICTORY MIGHT BE SHORT-LIVED
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz( at )wsj.com]
Phone companies scored a win at the Federal=20
Communications Commission when the agency agreed=20
to change rules to let them enter the=20
cable-television business faster, but the victory=20
may be short-lived, as congressional Democrats=20
complained and opponents threatened legal action.=20
The FCC, in a 3-2 party-line vote, passed rules=20
that give state and local authorities a 90-day=20
deadline to grant video-franchising agreements to=20
new competitors. The commission also struck down=20
rules requiring that the Bells do more to provide=20
service to all residents in an area than current=20
providers. The FCC action raises potentially=20
significant issues for the Bells, which have=20
persuaded eight states -- including California,=20
New Jersey and Texas -- to change laws to=20
accelerate entry to the video business. State and=20
local officials say the FCC is trying to usurp=20
their authority, and cable companies say the=20
Bells are getting preferential treatment. The=20
matter looks to be heading for court. Yesterday's=20
decision may make it more difficult for the Bells=20
to persuade other states to change some rules=20
that are made somewhat moot by the FCC action.
http://online.wsj.com/article/SB116664369395955925.html?mod=3Dtodays_us_...
e_one
(requires subscription)
* Phone Carriers Win a Skirmish in Cable Wars
http://www.nytimes.com/2006/12/21/business/21cable.html?ref=3Dtodayspaper
(requires registration)
* FCC Vote A Victory For Phone Companies
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/20/AR200612...
0779.html
* Telecoms groups gain TV boost
http://www.ft.com/cms/s/e936c23c-9082-11db-a4b9-0000779e2340.html
(requires subscription)
* Phone giants are closer to TV service
http://www.usatoday.com/printedition/money/20061221/1b_franchise21.art.htm
* FCC backs telephone companies in TV fight
http://www.latimes.com/business/printedition/la-fi-fcc21dec21,1,5635193....
ry?coll=3Dla-headlines-pe-business
* FCC Gives Telcos Big Video Victory
http://www.broadcastingcable.com/article/CA6401769.html?display=3DBreaki...
News
* FCC: 90-Day Franchise Shot Clock
http://www.multichannel.com/article/CA6401838.html?display=3DBreaking+News
* FCC Votes to Ease Hurdles to Cable Competition
http://www.tvweek.com/news.cms?newsId=3D11265
* NCTA Could Sue FCC Over Franchise Item
http://www.broadcastingcable.com/article/CA6401834.html?display=3DBreaki...
News
* Dingell questions FCC authority on cable
http://news.yahoo.com/s/ap/20061220/ap_en_tv/cable_competition
* Markey Says He Will Review FCC Decision
http://www.broadcastingcable.com/article/CA6401858.html?display=3DBreaki...
News
* FCC adopts relief for telecom companies planning TV offerings
http://news.com.com/FCC+adopts+relief+for+telecom+companies+planning+TV+...
erings/2100-1036_3-6145184.html?tag=3Dnefd.lede

FCC FINDS CABLE RATES ROSE 5.2% IN 2004
[SOURCE: tvnewsday]
The FCC released its annual report on cable=20
industry prices on Wednesday. The report shows=20
that average monthly rates for cable=20
service=97including basic and expanded basic cable=20
programming services=97increased by 5.2% over the=20
12-month period ending Jan. 1, 2005, from $40.91=20
to $43.04, and by 93% since the period=20
immediately prior to Congress=92s enactment of the=20
Telecommunications Act of 1996. Specifically, the=20
average monthly charge for basic service=20
increased by 3.3%, rising from $13.84 on Jan. 1,=20
2004 to $14.30 on Jan. 1, 2005. Over the same=20
period, the average charge for expanded basic=20
service rose from $27.07 to $28.74, an increase=20
of 6.2%=97more than 84% of cable consumers=20
subscribe to the expanded basic service. The=20
report finds that for the 12-month period ending=20
Jan. 1, 2005, the average monthly rate for basic=20
and expanded basic cable programming services=20
increased by 4.9% for the group of cable=20
operators in communities relieved from basic tier=20
rate regulation (the =93effective competition=20
group=94) and by 5.2% for the group of cable=20
operators without a finding of effective=20
competition (the =93noncompetitive group=94). As of=20
Jan. 1, 2005, cable operators without a finding=20
of effective competition charged an average of=20
$43.33 per month for basic and expanded basic=20
programming, which was 7.9% more than the $40.15=20
charged by the group of operators with a finding=20
of effective competition. The degree of=20
difference, however, varied by subgroup, with the=20
highest percentage differential associated with=20
the subgroup of cable operators for which relief=20
from rate regulation was based on a second cable operator.
http://www.tvnewsday.com/articles/2006/12/20/daily.11/
* FCC Releases Report on 2005 Cable Industry Prices
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269116A1.doc
* Cable Rep Rips Into FCC Price Report
[SOURCE: MediaWeek, AUTHOR: Brooks Boliek, The Hollywood Reporter]
Kyle McSlarrow, president and CEO of the National=20
Cable and Telecommunications Assn, said measuring=20
cable prices simply by looking at the cost to=20
consumers of analog video "is a fundamental=20
misunderstanding of what our business is doing.=20
It's like we've been put in a time warp."=20
McSlarrow contends that the report fails to take=20
in cable's entire service, from broadband Internet access to telephone serv=
ice.
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=3D100...
3795

IP CAPTIONED TELEPHONE SERVICE ELIGIBLE FOR COMPENSATION FROM TRS FUND
[SOURCE: Federal Communications Commission]
The FCC adopted a ruling that Internet Protocol=20
(IP) captioned telephone service (IP CTS) is a=20
type of telecommunications relay service (TRS)=20
eligible for compensation from the Interstate TRS=20
Fund (Fund). The Commission acted in response to=20
a petition by Ultratec, Inc., that was widely=20
supported by the disability community. An IP=20
captioned telephone call can be set up similar to=20
a two-line captioned telephone call, except that=20
the line from the user to the provider would be=20
via the Internet, not a second PSTN line. The=20
consumer would make a voice to voice call to the=20
other party on a standard telephone and the PSTN;=20
at the same time, the voice of the called party=20
is directed from the consumer's telephone to a=20
personal computer (or similar device) that routes=20
it to the provider via the Internet. The=20
provider, in turn, sends back to the consumer the=20
text of what was spoken. As a result, the=20
consumer can both hear (to the extent possible)=20
what the called party is saying over the standard=20
voice telephone headset, and read the text of=20
what the called party said on the computer or similar device.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269113A6.doc

COMMENT SOUGHT ON PUBLIC SAFETY NETWORK
[SOURCE: Federal Communications Commission]
On Wednesday, the FCC adopted a Ninth Notice of=20
Proposed Rulemaking that proposes a national,=20
centralized approach to maximize public safety=20
access to interoperable, broadband spectrum in=20
the 700 MHz band. In addition, the initiative=20
seeks to promote the deployment of advanced=20
broadband applications, related radio=20
technologies, and modern, IP-based system=20
architecture. The proposals contained in this=20
item are designed to meet the following public=20
safety objectives: (1) opportunities for=20
broadband, national, interoperable use of 700 MHz=20
spectrum; (2) new sources of funding for the=20
build-out and operation of the national public=20
safety network; (3) economies of scale and scope=20
in production and competition in supply to=20
maximize cost effectiveness; (4) efficient=20
spectrum use; (5) network robustness and=20
survivability; and (6) flexible, modern IP-based=20
wireless system architecture.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269117A1.doc
See NPRM: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-181A1.doc

BROADCASTING/TELEVISION

APPEALS COURT GRILLS FCC ON INDECENCY STANDARDS
[SOURCE: Reuters, AUTHOR: Paul Thomasch and Martha Graybow]
A U.S. appeals court on Wednesday sharply=20
questioned the Federal Communications Commission=20
about how it decides what constitutes indecency,=20
in the first major courtroom showdown in years=20
over broadcasting standards. The FCC ruled in=20
March that News Corp.'s Fox television network=20
had violated decency regulations when singer Cher=20
and actress Nicole Richie uttered expletives=20
during the 2002 and 2003 Billboard Music Awards'=20
shows. Fox challenged the ruling, arguing the=20
government's standard was unclear and that the=20
decisions contradicted findings in past cases. In=20
a hearing before the U.S. Court of Appeals for=20
the Second Circuit in New York on Wednesday, a=20
panel of judges pressed the government on why=20
certain words should be considered indecent in an=20
awards show broadcast, but not in other=20
circumstances, such as news programs. Judge Peter=20
Hall noted the appeals hearing -- which featured=20
the expletives uttered aloud by the Fox lawyer=20
and the judges themselves -- was being filmed and=20
could be replayed on the nightly news. "Is that=20
going to be subject to FCC hand slapping?" he=20
asked Eric Miller, the FCC's deputy general=20
counsel. Miller responded that context must be=20
taken into account to decide indecency. In the=20
case of a news segment on the hearing, he argued,=20
the questionable words would not be used to=20
"pander, titillate, or for shock value."
http://today.reuters.com/news/newsArticle.aspx?type=3DindustryNews&storyID=
=3D2006-12-21T022809Z_01_N20408561_RTRIDST_0_INDUSTRY-MEDIA-SMUT-DC.XML
* FCC and Fox Square Off on Profanity
http://www.broadcastingcable.com/article/CA6401750.html
* Fox Lays Out First Amendment Arguments Against FCC
http://www.tvnewsday.com/link/?id=3D9024
(requires free registration)

A TV SHOW'S CONTENT CALLS THE COMMERCIAL PLAYS
[SOURCE: New York Times, AUTHOR: Louise Story]
Sports commentators will not be the only ones=20
remarking on Sunday=92s National Football League=20
games. Animated raccoons will also give instant=20
feedback in advertisements for Wendy=92s=20
International that will be shown at the start of=20
commercial breaks. With three sections of the=20
commercial inserted on the fly, viewers could see=20
up to 11 versions of the ad. All will include a=20
voice-over saying, =93Why eat junk at night when=20
you can go to Wendy=92s?=94 The Wendy=92s commercials,=20
to be broadcast nationally on Fox Sports this=20
weekend, are one of the earliest national=20
examples of an emerging TV technology that allows=20
advertisers to vary their message at the last=20
minute. The Wendy=92s ads will reflect events in=20
the football games, creating what ad executives=20
call a reverse product placement of sorts.=20
Instead of putting Frostys or Wendy=92s fries into=20
a TV program, the company will incorporate a show=92s content in its commer=
cials.
http://www.nytimes.com/2006/12/21/business/media/21adco.html
(requires registration)

GOVERNMENT & COMMUNICATIONS

PANEL CALLS FOR MORE FUNDING ON EMERGENCY PREPAREDNESS
[SOURCE: Technology Daily 12/19, AUTHOR: Jonathan Marino]
A White House-appointed advisory group=20
representing the telecommunications industry told=20
executive branch officials that more funding is=20
needed to improve disaster response. The National=20
Security Telecommunications Advisory Committee=20
approved a report calling on the federal=20
government to increase spending for analysis,=20
research and development of enhancements to=20
existing electric grids to help handle long-term=20
power outages. A separate draft report -- which=20
the advisory committee will discuss further and=20
consider for approval next month -- stated that=20
federal, state and local agencies and industry=20
should join together to improve communications=20
systems for first responders in the event of a major disaster.
http://www.njtelecomupdate.com/lenya/telco/live/tb-ZLRX1166643808552.html

BUSH PUTS CONSERVATIVE ON PUBLIC BROADCAST BOARD
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
President George W. Bush on Wednesday installed=20
self-described conservative writer and producer=20
Warren Bell on the board of the Corporation for=20
Public Broadcasting, which supports U.S. public=20
television and radio. The Senate Commerce=20
Committee had been scheduled to hold a=20
confirmation hearing for him in September but he=20
was dropped from the agenda because of concerns=20
by both Republicans and Democrats. President=20
Bush's recess appointment allows Bell to hold the=20
board position until Congress adjourns next year.=20
The President has also recess appointed Mark=20
McKinnon, of Texas, to be a Member of the=20
Broadcasting Board of Governors. Mr McKinnon=20
oversaw the advertising campaign for President Bush's 2004 re-election.
http://today.reuters.com/News/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-12-21T112156Z_01_N20441912_RTRUKOC_0_US-BUSH-PUBLICBROADCASTING.xml=
&WTmodLoc=3DPolNewsHome_C1_%5bFeed%5d-8
* See White House release:=20
http://www.whitehouse.gov/news/releases/2006/12/20061220-4.html

QUICKLY

SF JUDGE BLOCKS HEARST/MEDIANEWS COLLABORATION
[SOURCE: Editor&Publisher, AUTHOR: Mark Fitzgerald]
In a victory for a local businessman seeking to=20
overturn a complex San Francisco Bay Area=20
newspaper deal between Hearst Corp. and MediaNews=20
Group Inc., a federal judge Tuesday issued a=20
preliminary injunction blocking the chains from=20
collaborating on joint distribution or=20
advertising sales of their papers. U.S. District=20
Judge Susan Illston noted in her ruling that both=20
companies have said they have never had any talks=20
about collaboration between the Bay Area papers.=20
The issue arose when lawyers for San Francisco=20
developer Clint Reilly, who brought the case,=20
discovered an April 26 letter from Hearst to=20
MediaNews outlining an agreement to explore joint=20
national and Internet advertising sales for the=20
newspapers, as well as joining the online=20
classified sites CareerBuilder and Classified=20
Ventures on equal financial terms.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003523796

THE DEATH OF THE VCR
[SOURCE: RedHerring, AUTHOR: Ryan Olson]
DVDs now officially reign supreme in homes in the=20
United States. According to data released this=20
week by Nielsen Media Research, for the first=20
time in history more Americans own DVD players=20
than VCRs. DVD player penetration is now more=20
than 81 percent, a huge jump from the 6.7 percent=20
adoption rate Nielsen found when it started=20
tracking figures in 1999. VCR ownership during=20
that time period, meanwhile, dropped below 80=20
percent from 88.6 percent. But there=92s more here=20
than simply one standard replacing another. With=20
the proliferation of iPods and broadband=20
Internet, consumers are facing an ever-increasing=20
collection of options when it comes to experiencing multimedia at home.
http://www.redherring.com/Article.aspx?a=3D20366&hed=3DThe+Death+of+the+VCR

ONCE A NOVELTY, INTERNET NOW A BIG PART OF LIFE, POLL SHOWS
[SOURCE: San Jose Mercury News, AUTHOR:]
A nationwide poll by Zogby International for a=20
Washington firm, 463 Communications finds: by a=20
2-1 ratio, Americans say they would rather watch=20
an old-fashioned TV evening news report's=20
coverage of an event than the sort of "citizen=20
video" that has become increasingly popular; 83=20
percent believe a typical 12-year-old knows more=20
about the Internet than the average member of=20
Congress; and most respondents were optimistic=20
about the reach of the Internet, with a majority=20
saying that within 10 years every place in the=20
world will have online access, but they were=20
somewhat pessimistic on whether the United States=20
will be in the forefront of business dominance.=20
The poll also found that Internet access has=20
become a necessity for many, but a car that works=20
is still more important -- 78 to 10 percent --=20
according to the poll. For those making more than=20
$100,000 a year, 31 percent said loss of Internet=20
and e-mail access would make it harder to get=20
work done than the loss of a car. The perception=20
of the Internet's impact is undeniable.=20
Two-thirds of those polled said the printing=20
press was a more important invention, but 32=20
percent chose the Internet over Gutenberg -- as=20
did 51 percent of Hispanics and 85 percent of Asian-Americans.
http://www.mercurynews.com/mld/mercurynews/news/16280614.htm
--------------------------------------------------------------
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.
--------------------------------------------------------------