December 2006

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INTERNET/BROADBAND
The Internet accelerates while U.S. Trails Behind

TELECOM
Stalemate Keeps AT& T-BellSouth Merger Off of FCC's Agenda
Merger Hold Up
Feds Defend approval of Telecom Megamergers
US Telecom's McCormick: Three Steps to a Wonderful Life

JOURNALISM
US News Media Ownership Consolidated in Recent Decades
C-Span Wants More Access From Congress

TELEVISION
Martin Calls for Rate Transparency
Americans will devote half their lives to forms of media next year
Political, Telco Dollars Drive Local TV Revs
PTC: Less Religion on TV This Year
Vivendi holds on to its 20% stake in NBC
2 Equity Firms Paying $7.6 Billion for Largest German TV Broadcast=
er

FROM THE BLOG-O-SPHERE -- Kevin Martin, North=20
Carolina's Next Governor?; What Should McDowell Do?;

QUICKLY -- Media Movers Mold Memphis Meeting; FCC=20
Details Second 2007 'Modest' Spectrum Auction; GA=20
Board: Harry Potter Books Can Stay

INTERNET/BROADBAND

THE INTERNET ACCELERATES WHILE US TRAILS BEHIND
[SOURCE: San Francisco Chronicle 12/14, AUTHOR: Charles Giancarlo, Cisco]
[Commentary] The second wave of the Internet=20
Revolution is upon us, but is America ready?=20
Based on the current growth and availability of=20
household bandwidth speeds and quality, the=20
answer is clearly no. The United States has been=20
a technology leader for the past decade, but=20
recent statistics show that the country is in=20
danger of losing its premier position. According=20
to the Organization for Economic Co-operation and=20
Development (OECD), the United States is no=20
better than middle-of-the-pack regarding the=20
availability of broadband network access.=20
"Broadband" is loosely defined as any high-speed=20
network connection typically faster than 1.5=20
megabits per second, although the U.S. definition=20
is 200 kilobits per second -- roughly six times=20
slower than universal standards. The United=20
States now ranks 12th in the world in the total=20
percentage of citizens that subscribe to=20
broadband access, lagging behind such countries=20
as Iceland, Korea, Sweden, Belgium and Canada.=20
The trend line is even worse. The United States=20
ranks 17th for the growth of these high-speed=20
connections, outpaced by nearly all of our=20
economic peers. Our broadband speeds don't=20
measure up either. Korea's citizens, for example,=20
have access to 50 megabits per second=20
connections, making Internet services at typical=20
U.S. speeds "broadband lite," at best. Though=20
once considered a luxury, broadband access is=20
quickly becoming basic infrastructure for any=20
country wishing to benefit from the development=20
of modern digital communications and Internet=20
technologies. This is arguably America's most=20
important infrastructure issue for global=20
competitiveness. The time for a national=20
broadband plan is now. We need to set national=20
goals and hold our service providers, regulators=20
and legislators accountable for meeting these=20
goals. A few things that I think will help=20
immediately; 1) The government hurts innovation=20
when yesterday's rules are used for today's=20
technology, including Internet phone service; 2)=20
With regular phone service penetration nearly=20
universal, develop federal policies to make=20
broadband as accessible as telephones; 3) Press=20
firmly ahead with the 2009 digital television=20
transition, while continuing to clear a path for=20
the coming explosion in wireless broadband services and technologies.
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2006...
/14/EDGOULJ5TB1.DTL

TELECOM

STALEMATE KEEPS AT&T-BELLSOUTH MERGER OFF OF FCC'S AGENDA
[SOURCE: Washington Post, AUTHOR: Alan Sipress]
Federal Communications Commission Chairman Kevin=20
J. Martin said yesterday he did not know how soon=20
it would consider AT&T's proposed $86 billion=20
acquisition of BellSouth after the deal was left=20
off the agenda for Wednesday's meeting because of=20
a continuing stalemate between the commission's=20
Republican and Democratic members. Chairman=20
Martin, an advocate of the merger, told reporters=20
he was "anxious" to set a date for the vote,=20
which would create the country's largest provider=20
of telephone, wireless and broadband services.=20
AT&T and BellSouth have waited more than seven=20
months for the commission to act despite Martin's=20
efforts earlier this year to win quick approval=20
of the transaction without conditions. The=20
proposed acquisition has dramatically increased=20
in value since it was presented to the FCC=20
because of rising stock prices. If approved, the=20
merger would reunite much of the AT&T=20
telecommunications empire broken apart by the=20
federal government 22 years ago because of concerns over competition.
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/14/AR200612...
1682.html
(requires registration)

MERGER HOLD UP
[SOURCE: Wall Street Journal, AUTHOR: Editorial Staff]
[Commentary] The merger of AT&T and BellSouth=20
has the support of Big Labor, was approved by the=20
Justice Department without conditions in October,=20
and would help consumers by bringing more=20
competition to telecom amid enormous=20
technological change and business ferment. But=20
the merger has been held up for months at the=20
Federal Communications Commission, thanks to the=20
political maneuvering of Commissioners Michael=20
Copps and Jonathan Adelstein. They want the=20
combined company to accede to "Net neutrality"=20
commitments that go well beyond the FCC's own=20
policy paper on the matter. The Republican=20
majority of the Commission cannot approve the=20
merger because one commissioner, Robert McDowell,=20
agreed during his confirmation not to vote on any=20
matter to which his former employer, the telecom=20
industry group Comptel, is a party. Now, even=20
though the FCC General Counsel has approved a=20
McDowell vote, the WSJ says he "could incur the=20
trumped-up "ethics" wrath of the new Democratic=20
committee chairmen who are allied with the FCC=20
Democrats." In short, the Democrats on the FCC=20
and in Congress are engaged in a kind of bad=20
cop-worse cop routine with Mr. McDowell: Either=20
he must stay recused on the merger so they can=20
extort more concessions from the new AT&T, or he=20
can vote for the merger and risk spending the=20
rest of his days answering subpoenas. Never mind=20
that if Mr. McDowell does stay recused, the two=20
companies might very well let the merger die=20
rather than submit to regulation that would=20
hamper their ability to recoup their investment=20
in laying broadband pipe. The real conflict of=20
interest, the WSJ concludes, is the Democrats'=20
willingness to carry water for Google and=20
MoveOn.org in the Net neutrality debate.
http://online.wsj.com/article/SB116615333373851152.html?mod=3Dtodays_us_...
nion
(requires subscription)

FEDS DEFEND APPROVAL OF TELECOM MEGAMERGERS
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
The U.S. Justice Department on Thursday denied=20
allegations that it fudged the analysis that=20
prompted it to approve two telecommunications=20
megamergers now under scrutiny by U.S. District=20
Judge Emmet Sullivan. In a filing Justice lawyers=20
took issue with accusations of wrongdoing lodged=20
by opponents of the twin deals -- between AT&T=20
and SBC Communications, and Verizon and MCI -- at=20
a November 30 court hearing. When approving the=20
mergers, the Justice Department concluded that it=20
needed to place limited conditions--namely,=20
requirements aimed at ensuring that the=20
companies' competitors could gain access to fiber=20
optic connections in certain commercial buildings=20
where Verizon and MCI or AT&T and SBC had been=20
the only two companies supplying some types of connections.
http://news.com.com/Feds+defend+approval+of+telecom+megamergers/2100-103...
-6143925.html?tag=3Dhtml.alert

US TELECOM'S MCCORMICK: THREE STEPS TO A WONDERFUL LIFE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
USTelecom President Walter McCormick outlined to=20
a Practicing Law Institute crowd in Washington=20
what was being billed as the path to "a wonderful=20
life." That life, said McCormick, was highlighted=20
by "a panoply of new services that are innovative=20
and attractively priced," awaiting widespread=20
video-franchise reform to make that dream a=20
reality. McCormick's is the same path recently=20
outlined and advocated by FCC Chairman Kevin=20
Martin in a speech several weeks ago. Chairman=20
Martin said that the FCC should take three major=20
steps to insure that local franchising=20
authorities are not impeding the rollout of=20
broadband and video price and service competition=20
to cable: 1) Put a 90-day shot clock on local=20
franchising authorities to rule on franchise=20
requests; 2) clamp down on unreasonable and=20
unrelated franchise conditions; and 3) limit build-outs for new service.
http://www.broadcastingcable.com/article/CA6400225.html?display=3DBreaki...
News

JOURNALISM

US NEWS MEDIA OWNERSHIP CONSOLIDATION IN RECENT DECADES
[SOURCE: Voice of America, AUTHOR: Michael Bowman]
With the exception of one domestic broadcasting=20
network, the U.S. news media are privately owned=20
and operated, and always have been. Yet the=20
nature of media ownership has been transformed in=20
recent decades, with more and more media outlets=20
coming under the control of a handful of large=20
mass-media corporations, some of which have=20
merged to form even-larger entities. A look at=20
America's media ownership, and what effect it has on the news.
http://www.voanews.com/english/2006-12-14-voa23.cfm?rss=3Dunited%20states

C-SPAN WANTS MORE ACCESS FROM CONGRESS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In a letter to incoming Speaker of the House=20
Nancy Pelosi (D-CA), C-SPAN Chairman Brian Lamb=20
asks the new Congress to let the cable network=20
run its own House floor coverage and to release=20
House vote tallies more quickly after the voting=20
has closed. C-SPAN was not able to convince the=20
Republican-controlled Congress to grant either=20
request. The House Speaker controls the camera --=20
a rule that is part of the nearly 30-year-old=20
deal that convinced the long-resistant=20
legislature to allow the cameras in the first=20
place. Lamb argues that the Speaker's control has=20
become an anachronism that "does a disservice to=20
the institution and to the public."
http://www.broadcastingcable.com/article/CA6400074.html?display=3DBreaki...
News
* C-SPAN presses Pelosi on transparency
http://thehill.com/thehill/export/TheHill/News/Frontpage/121306/cspan.html

TELEVISION

MARTIN CALLS FOR RATE TRANSPARENCY
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Federal Communications Commission Chairman Kevin=20
Martin said Thursday that consumers should know=20
the wholesale price of cable networks and should=20
be allowed to piece together their channel=20
lineups to better budget their cable spending.=20
=93I've been saying for over a year that there is a=20
significant problem in the video area,=94 Chairman=20
Martin said at a telecommunications conference.=20
=93I think that at the very least, we should be=20
able to have a transparency and how much each of=20
those channels is costing, so we are able to see=20
what those costs are.=94 Since taking office in=20
March 2005, Chairman Martin has stumped for cable=20
a la carte -- a system that would allow consumers=20
to pay for channels one-by-one as an alternative=20
to the purchase of large programming tiers. =93I=20
think we should go even further and I think not=20
only should it be transparent to the consumer how=20
much you have to pay for each channel, but I=20
think consumers should be able to say, =91I don't=20
want that channel and I don't want to have to pay for it.=92=94 he added.
http://www.multichannel.com/article/CA6400246.html?display=3DBreaking+News

AMERICANS WILL DEVOTE HALF THEIR LIVES TO FORMS OF MEDIA NEXT YEAR
[SOURCE: USAToday, AUTHOR: Janet Kornblum]
Americans love their media -- so much that next=20
year they'll spend nearly half their lives=20
watching TV, going online, listening to the radio=20
(or music) and reading. That's what the U.S.=20
Census Bureau is predicting in its "Statistical=20
Abstract of the United States: 2007," out today.=20
The annual report uses data from several sources,=20
including private industry and non-profits. It=20
has statistics on everything from elections to=20
transportation to finances. In 2000, Americans=20
each spent an average of 3,333 hours consuming=20
media -- and most of that time (1,467 hours) was=20
spent in front of the TV, according to Veronis=20
Suhler Stevenson, a media-oriented money=20
management company that supplied much of the=20
media data used in the report. Next year,=20
Americans will spend 3,518 hours with their=20
beloved media, including 1,555 in front of the=20
TV, says Veronis Suhler Stevenson. That means the=20
average American will spend roughly 146 days, or five months, consuming med=
ia.
http://www.usatoday.com/printedition/news/20061215/a_censusstats15.art.htm
* Americans increasingly prefer electronic connections
http://sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2006/12/15/CENSUS.TMP
* Study of Americans' Media Use Finds Web Finally Passing Newspapers
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003522187

POLITICAL, TELCO DOLLARS DRIVE LOCAL TV REVS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Local broadcast TV revenues were up 10.4% in the=20
third quarter over the same quarter last year,=20
helped by political dollars and=20
telecommunications spending from companies=20
seeking franchise reform from Washington as well=20
as new customers for their service. By contrast,=20
network TV revenues were down .6% and syndicated=20
revenues down 1.4%, for a total 3.8% increase in=20
broadcast TV revenues over third quarter 2005.=20
Political dollars helped drive much of that=20
increase -- up by 182.1% to $207.3 million out of=20
a total $442.5 million revenue increase of all local broadcast TV.
http://www.broadcastingcable.com/article/CA6399947.html?title=3DArticle&...
cedesc=3Dnews

PTC: LESS RELIGION ON TV THIS YEAR
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Parents Television Council says that there=20
were only about half as many treatments of=20
religious topics in broadcast primetime TV in=20
2005-2006 as there was depicted the year before.=20
But of the ones that were on TV, more (35%)=20
treated religion negatively than positively=20
(34%), according to the PTC staff=20
of reviewers. Reality shows actually had more=20
positive portrayals (60%) than negative, which=20
PTC President Brent Bozell attributed to real=20
people speaking their real minds. In scripted=20
shows, by contrast, 96% of the treatments were=20
negative, PTC said. Bozell said that was the key=20
finding, demonstrating that "when Hollywood [TV=20
writers] write scripts, they attack that which=20
84% of Americans support." That was a reference=20
to the 84% of adults -- according to a Zogby poll=20
-- who said they were not offended by references=20
to God or the Bible. The NAB was quick to respond=20
that the majority of the year's religious-themed=20
programming is yet to air: Santa Claus is Coming=20
to Town; It's a Wonderful Life; Rudolph the Red-Nosed Reindeer...
http://www.broadcastingcable.com/article/CA6400054.html?display=3DBreaki...
News
* Report says TV losing its religion
http://www.latimes.com/business/printedition/la-fi-tvreligion15dec15,1,7...
657.story?coll=3Dla-headlines-pe-business

VIVENDI HOLDS ON TO ITS 20% STAKE IN NBC
[SOURCE: Bloomberg News]
For those of you scoring "Who Owns the Media" at=20
home, Vivendi decided to keep its 20% stake in=20
entertainment company NBC Universal and agreed=20
with partner General Electric Co. to extend their=20
shareholder agreement. The companies formed NBC=20
Universal in 2004, when Vivendi sold its U.S.=20
cable channels, Universal Pictures film studio=20
and theme parks to General Electric's NBC unit.=20
General Electric holds the remaining 80% of the=20
venture, which also owns the NBC broadcast=20
network, the third-ranked U.S. channel.
http://www.latimes.com/business/printedition/la-fi-nbc15dec15,1,3533453....
ry?coll=3Dla-headlines-pe-business
(requires registration)

2 EQUITY FIRMS PAYING $7.6 BILLION FOR LARGEST GERMAN TV BROADCASTER
[SOURCE: New York Times, AUTHOR: Kevin O'Brien]
Two private equity firms, Kohlberg Kravis Roberts=20
and Permira, agreed on Thursday to buy the=20
largest private German TV broadcaster,=20
ProSiebenSat.1, in a transaction worth about $7.6=20
billion. The purchase of ProSiebenSat.1, which=20
operates five TV channels that draw 42 percent of=20
all German TV advertising revenue, will bolster=20
plans by Kohlberg Kravis and Permira to create a=20
competitor to RTL, the Luxembourg-based=20
broadcaster that is the largest in Europe in=20
terms of sales. The new owners are likely to=20
combine the ProSiebenSat.1, which is based in=20
Unterf=F6hring, a suburb of Munich, with their SBS=20
Broadcasting, a group of 16 radio stations, 19=20
free TV channels and 20 pay TV channels, with a=20
combined 100 million viewers in nine countries.
http://www.nytimes.com/2006/12/15/business/worldbusiness/15tele.html
(requires registration)

FROM THE BLOG-O-SPHERE

KEVIN MARTIN, NORTH CAROLINA'S NEXT GOVERNOR?
[SOURCE: BlueNC, AUTHOR: George Pence]
[Commentary] According to John Nichols, writing=20
in=20
http://www.madison.com/tct/opinion/column/index.php?ntid=3D111066&ntpid=3D=
0The=20
Capitol Times, Kevin Martin is eager to insure=20
the support of the telecommunications industry as=20
he prepares to run for governor of North=20
Carolina. In order to fill his campaign coffers=20
he has engaged in an ethically dubious maneuver=20
to line up the necessary votes to approve a=20
controversial merger between AT&T and BellSouth.=20
In a past episode of South Park Satan killed=20
Kevin Martin and left him to lie dead for several=20
frames. Evidently that was not enough. Now the=20
Republican Party is ready to resurrect him and=20
send him down to North Carolina. The next NC governor will be elected in 20=
08.
http://www.bluenc.com/kevin-martin-our-next-governor

WHAT SHOULD MCDOWELL DO?
[SOURCE: Technology Liberation Front, AUTHOR: Hance Haney]
[Commentary] "[E]ven if [FCC Commissioner Robert]=20
McDowell doesn't have to participate [in the vote=20
on the AT&T-BellSouth merger], he clearly should.=20
Not only will this merger promote investment in=20
broadband in the BellSouth region, but there are=20
other urgent priorities before the FCC (like=20
Universal Service) which could suffer from continued deadlock on this matte=
r.
http://www.techliberation.com/archives/041462.php

QUICKLY

MEDIA REFORMERS MOLD MEMPHIS MEETING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Jimmy Buffett sings "Meet Me in Memphis" and you=20
might consider doing the same as hundreds of=20
Americans visit the eastern bank of the=20
Mississippi River next month for a media reform=20
conference. Headliners include Bill Moyers, Jane=20
Fonda, Phil Donahue, Jessie Jackson, Geena Davis,=20
and Helen Thomas. See a preliminary agenda at=20
http://www.freepress.net/conference
http://www.broadcastingcable.com/article/CA6399984.html?display=3DBreaki...
News

FCC DETAILS SECOND 2007 "MODEST" SPECTRUM AUCTION
[SOURCE: TelecomWeb]
The Federal Communications Commission (FCC)=20
unveiled the particulars of its 2007 auction of=20
some 94 RF licenses in the 220 MHz-222 MHz band=20
range, its second very- modest-dollar-volume=20
bidding contest. Auction 72, targeted to start=20
June 20, 2007, will permit a variety of fixed,=20
mobile and paging services to be offered in 52=20
markets. The FCC's Wireless Telecommunications=20
Bureau is seeking public comment on the proposed=20
auction on or before Jan 8, 2007.
http://www.telecomdirectnews.com/do.php/100/21648?199

GA BOARD: HARRY POTTER BOOKS CAN STAY
[SOURCE: Associated Press, AUTHOR: Greg Bluestein]
The Georgia Board of Education voted Thursday to=20
uphold a local school board's decision to leave=20
Harry Potter books on library shelves despite a=20
mother's objections. The board members voted=20
without discussion to back the Gwinnett County=20
school board's decision to deny Laura Mallory's=20
request to remove the best-selling books.=20
Mallory, who has three children in elementary=20
school, has worked for more than a year to ban=20
the books from Gwinnett schools, claiming the=20
popular fiction series is an attempt to=20
indoctrinate children in witchcraft. "It's=20
mainstreaming witchcraft in a subtle and=20
deceptive manner, in a children-friendly format,"=20
said Mallory, who is considering a legal=20
challenge of the board's ruling. "The kind of=20
stuff in these books - murder and greed and=20
violence. Why do they have to read them in school?"
http://hosted.ap.org/dynamic/stories/P/POTTER_PROTEST?SITE=3DPASUN&SECTION=
=3DHOME&TEMPLATE=3DDEFAULT
--------------------------------------------------------------
...and we're outta here. Have a great weekend.=20
Thanks for your patience this week.
--------------------------------------------------------------
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.
--------------------------------------------------------------