January 2007

Two items on the telecom policy agenda this week: 1) Local Media
Diversity Matters to All Americans hosted by the Center for American
Progress today and 2) a Senate Commerce Committee oversight hearing
on the FCC on Thursday.
For upcoming media policy events, see http://www.benton.org

INTERNET/BROADBAND
Web War: Nothing Neutral About It
Beyond Network Neutrality Lies Internet Freedom
Internet TV Is Finally a Reality Show
An alternative to San Francisco's Wi-Fi deal
FBI turns to broad new wiretap method
Broadband Speed

MEDIA OWNERSHIP
News Corp. and Liberty Ask FCC To OK DirecTV Deal
Australia Media Open for Business
Air America Finds Buyer in SLG Radio

MEDIA & ELECTIONS
TV Stations Prepare for $1 Billion Presidential Ad Onslaught
Liberate Political Speech

QUICKLY -- Bush Directive Increases Sway on Regulation; Fiber-Optic
Focus, Asset Sales Trim Verizon's Profit

INTERNET/BROADBAND

WEB WAR: NOTHING NEUTRAL ABOUT IT
[SOURCE: BusinessWeek, AUTHOR: Catherine Holahan]
There's a high-stakes battle raging in Washington over who picks up
the tab for the rising rivers of Internet data and the newly upgraded
networks that deliver it. On one side are a host of tech companies --
from Google to Yahoo! to Intel to Microsoft -- that specialize in
Web-related content and technology, pushing for rules that they say
would keep the Internet free from discriminatory pricing. On the
other are the phone and cable companies that run the networks
shuttling that information from place to place. They oppose
regulation of the Internet. Last year, the skirmish ended in
stalemate. The battle will rage on again in 2007, with the Google
camp likely to gain the upper hand. Both sides of the issue spent the
better part of 2006 trying in vain to win over the
then-Republican-controlled Congress to its vision of the Internet's
future. A bill that favored telecom companies such as AT&T and cable
operators such as Comcast was passed in June by the House of
Representatives, but it went on to die in the Senate. Similarly, an
amendment to that bill viewed as favorable to the opposite camp was
also rejected, largely by Republicans. This year, the Democrats are
in control, and they're seen as more sympathetic to laws favoring
so-called network neutrality, which would bar phone and cable
companies from erecting tiered pricing that favors some Web traffic
or sites over others.
http://www.businessweek.com/technology/content/jan2007/tc20070129_444703...

BEYOND NET NEUTRALITY LIES INTERNET FREEDOM
[SOURCE: TomPaine.com, AUTHOR: Ben Scott, Free Press]
[Commentary] Once Network Neutrality is back on the books, we can set
our sights higher than protecting the free and open network we've
always had. We can start pushing for the big goal: universal access
to a world-class broadband network at affordable prices. We need a
national broadband policy, not a series of laws designed to prop up
the business models of incumbent telephone and cable companies. We
want to make the information superhighway a public good, to bring the
transformative spirit of free speech and free markets to every
community. The organizers of the SavetheInternet.com Coalition
recently unveiled the "Internet Freedom Declaration" to pursue these
goals. This is an uphill fight, but the new Congress has leaders in
key positions that favor an expansive, public interest broadband
policy. Throughout the early months of 2007, we should expect House
and Senate Commerce Committees to conduct a series of hearings to
determine the best paths for bringing a bigger, better, more
affordable Internet to the American public. For once, the lawyers of
the largest corporations won't be the only voices at the table. We'll
see scholars, consumer representatives, unions and entrepreneurs who
can give testimony about why we need a universal broadband to
super-charge our economy and enhance social opportunity.
http://www.tompaine.com/articles/2007/01/25/beyond_net_neutrality_lies_i...

INTERNET TV IS FINALLY A REALITY SHOW
[SOURCE: BusinessWeek, AUTHOR: Cliff Edwards]
After years of build-up, it looks as if content, computers, and
consumer electronics are all finally converging. So far there's been
scant consumer interest in Internet TV. Indeed, two-thirds of U.S.
homes that have gone to the trouble of setting up wireless networks
and Ethernet routers still only use them to share Internet access and
have no other devices connected -- not even printers or other PC
peripherals, according to researcher In-Stat. Even though prices for
such products are low, most consumers still consider it too
complicated to network all their electronic gear. To make the
technology as simple as possible, Sony, HP, and other vendors are
finally creating software that can be used across all their devices
-- be it PCs, TVs, or set-top boxes. Consumers for the first time
won't have to learn new tricks for using different products from the
same company. And third-party software vendors will have a common set
of development tools for a particular company's products, helping
speed time to market. The battle for dominance is expected to be
bruising. Traditional cable and satellite companies will fight it out
with Web portals like Yahoo! and Google, as well as their own content
partners. "The fight to capture the expanding base of IPTV
subscribers will put telecom operators on a collision course with
existing pay-TV market competitors and with a new class of broadband
video portals as they roll out progressively more sophisticated
offerings," says Mark Kirstein, iSuppli vice-president for multimedia
content and services.
http://www.businessweek.com/technology/content/jan2007/tc20070129_246549...

AN ALTERNATIVE TO SAN FRANCISCO'S WI-FI DEAL
[SOURCE: San Francisco Chronicle 1/29, AUTHOR: Becca Vargo Daggett,
Institute for Local Self-Reliance]
[Commentary] San Francisco Supervisors who would reject the
Earthlink-Google deal now have an alternative. The central conclusion
of a recent report from the San Francisco budget analyst is that a
municipally owned wireless network is fiscally feasible. But equally
important for the upcoming Board of Supervisors' vote is the report's
conclusion: that the process leading to the Earthlink-Google deal was
profoundly flawed. The result of this flawed process is the
inadequate Earthlink-Google deal, which accomplishes little more than
the most basic goal of free Internet access. The free service is
decidedly slow: half the speed of the DSL access AT&T is now required
to sell for $10 per month, under terms imposed on its acquisition of
BellSouth, and one-third the speed available for free in neighboring
communities. The need for a wireless bridge device, to bring the
outdoor wireless signal indoors, forces low-income households either
to buy such a device for $80 to $200, or subscribe to the paid
service at $22 per month. Both these options limit the number of
low-income individuals who will use the network. The network also
limits potential competition.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2007/0...
* See "Localizing the Internet: Five Ways Public Ownership Solves the
U.S. Broadband Problem"
http://www.ilsr.org/pubs/pubsrecent.html

FBI TURNS TO BROAD NEW WIRETAP METHOD
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
The FBI appears to have adopted an invasive Internet surveillance
technique that collects far more data on innocent Americans than
previously has been disclosed. Instead of recording only what a
particular suspect is doing, agents conducting investigations appear
to be assembling the activities of thousands of Internet users at a
time into massive databases, according to current and former
officials. That database can subsequently be queried for names,
e-mail addresses or keywords. Call it the vacuum-cleaner approach.
It's employed when police have obtained a court order and an Internet
service provider can't "isolate the particular person or IP address"
because of technical constraints.
http://news.com.com/FBI+turns+to+broad+new+wiretap+method/2100-7348_3-61...

BROADBAND SPEED
[SOURCE: Wall Street Journal, AUTHOR: Nate Herpich]
How fast is your Internet connection? It's also worth checking to see
if you are getting the full speed that you are paying for with your
cable or phone company. Speakeasy's test is at
www.speakeasy.net/speedtest/; Bandwidth is at
www.bandwidthplace.com/speedtest/ and Windows Users Group Network for
PC users is at www.wugnet.com/myspeed/speedtest.asp and click on
"Click to Start My Speed."
http://online.wsj.com/article/SB117012963161092095.html?mod=todays_us_pe...
(requires subscription)

MEDIA OWNERSHIP

NEWS CORP AND LIBERTY ASK FCC TO OK DIRECTV DEAL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
News Corp. Monday filed a petition with the FCC for permission to
transfer its interest in DirecTV to Liberty Media. Liberty will also
get three regional sports networks serving Denver, Pittsburgh and
Seattle and $550 million in cash in the deal, which is valued at
about $11 billion. Liberty will also give up its stake in News
Corp. Liberty has agreed to abide by the conditions--including
program access and carriage conditions for the regional sports
networks -- that were imposed on News Corp. by the FCC when it
approved the company's purchase of over a third of the satellite
broadcaster from Hughes Corp. in January 2004. Those include not
Liberty's agreement not to enter into exclusive programming
arrangements with any multichannel video provider, discriminate
against unaffiliated program services, and to submit and regional
sports network carriage impasse to independent arbitration. Liberty
owns QVC and Starz! It spun off its half-interest in Discovery in
2005, although Liberty Chairman John Malone is Chairman, CEO and a
major stockholder in Discovery. Liberty also owns a stake in
satellite broadband company WildBlue, Expedia, GSN and Hallmark,
among others. The WildBlue stake could be of particular interest to
the FCC. Broadband competition and roll-out to underserved areas is a
big priority for FCC Chairman Kevin Martin. In the petition, News
Corp. and Liberty pointed out that the WildBlue interest, as well as
that of Starz! and QVC, would "lead to continued development and
deployment of innovative products that will be available to all U.S.
consumers, including those underserved or unserved by terrestrial
alternatives."
http://www.broadcastingcable.com/article/CA6411134.html?display=Breaking...
http://www.multichannel.com/article/CA6411170.html?display=Breaking+News

AUSTRALIA MEDIA OPEN FOR BUSINESS
[SOURCE: Wall Street Journal, AUTHOR: Lyndal McFarland
lyndal.mcfarland( at )dowjones.com]
Australia's decision to relax media-ownership rules has international
buyout groups and industry chiefs jostling for pieces of the action.
The government won't formalize changes to the country's 20-year-old
media laws until later this year. But billions of dollars in deals
already have been unveiled since lawmakers approved the new rules in
late 2006. Prominent among the deal makers in the sector -- which is
40 billion Australian dollars in size (US$30.93 billion) -- have been
buyout giants Kohlberg Kravis Roberts & Co. and CVC Asia Pacific.
Irish billionaire Tony O'Reilly's Independent News & Media PLC last
week revived a A$2.8 billion plan to buy newspaper-and-radio offshoot
APN News & Media Ltd. with Providence Equity Partners and Carlyle
Group. The new rules relax cross-ownership restrictions and scrap
foreign-ownership limits.
http://online.wsj.com/article/SB117012558938491983.html?mod=todays_us_mo...
(requires subscription)

AIR AMERICA FINDS BUYER IN SLG RADIO
[SOURCE: MediaWeek, AUTHOR: Katy Bachman]
SLG Radio, an entity controlled by Stephen Green, founder and
chairman of SL Green Realty Corp, will buy Air America Radio. Green
said, "We'll do three things. First, we'll stabilize its finances.
Second, we'll build on its line up to assure the best radio talent
possible, since in the long run content is king. And third, we'll
extend this special brand by partnering with other platforms beyond
radio to make sure Air America's content reaches the wide audience it
deserves." With the announced sale, the network also announced that
it would lose its marquee personality Al Franken, whose last day
hosting The Al Franken Show, would be Feb. 14, 2007. Thom Hartmann,
host of The Thom Hartmann Program, will move into Franken's Noon to 3
p.m. weekday time slot. Stephen Green's brother, Mark Green, has been
a frequent guest and host on the network.
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=10035...
* Air America to Be Acquired by New York Investor
http://www.nytimes.com/2007/01/30/business/media/30radio.html

MEDIA & ELECTIONS

TV STATIONS PREPARE FOR $1 BILLION PRESIDENTIAL AD ONSLAUGHT
[SOURCE: AdAge, AUTHOR: Ira Teinowitz]
The 2008 presidential race is shaping up to be an embarrassment of
riches -- and possibly headaches -- for TV markets across the
country. Amid mouthwatering visions of more than $1 billion in
spending on the most wide-open race since the TV era began, stations
will have to devise some way to handle the rush when close to two
dozen candidates come knocking at the same time. And some local TV
stations will look to the web for help. Many managers said stations
will boost their websites, using them to deliver additional news
coverage and more ad availability. Even though it's only January 2007
and basics such as the once-set-in-stone primary and caucus schedule
have yet to be resolved, Evan Tracey, chief operating officer of
TNSMI/Campaign Media, said advertising could well start in force this
summer, with candidates trying to introduce or establish themselves early.
http://adage.com/article?article_id=114554

LIBERATE POLITICAL SPEECH
[SOURCE: Los Angeles Times, AUTHOR: Editorial Staff]
[Commentary] The Supreme Court may be having second thoughts about
upholding provisions of the McCain-Feingold campaign finance law
which ban "electioneering communications" paid for out of the
treasuries of independent organizations. As defined by the law,
electioneering communications are advertisements that mention a
candidate for federal office and are broadcast within 30 days of a
primary election or within 60 days of a general election. They need
not (and usually do not) tell viewers to vote for or against a
candidate. Last month, a three-judge federal court in Washington
ruled that the "issue ad" provision deprives free-speech rights. If
the Supreme Court agrees, political speech will be given more
breathing room. And such a ruling needn't derail the soft-money
provisions of the McCain-Feingold legislation. But if the court isn't
willing to go back to the drawing board, Congress should. An
advertisement praising or criticizing a politician -- even one
seeking reelection -- has more in common with the endorsement
editorials that appear on this page than it does with the campaign
contributions (in hard or soft dollars) that have received only
minimal 1st Amendment protection from the courts. The "bright line"
that needs to be drawn is the one between financing someone else's
message and articulating your own.
http://www.latimes.com/news/printedition/opinion/la-ed-campaign30jan30,1...
(requires registration)

QUICKLY

BUSH DIRECTIVE INCREASES SWAY ON REGULATION
[SOURCE: New York Times, AUTHOR: Robert Pear]
President Bush has signed a directive that gives the White House much
greater control over the rules and policy statements that the
government develops to protect public health, safety, the
environment, civil rights and privacy. In an executive order
published last week in the Federal Register, Mr. Bush said that each
agency must have a regulatory policy office run by a political
appointee, to supervise the development of rules and documents
providing guidance to regulated industries. The White House will thus
have a gatekeeper in each agency to analyze the costs and the
benefits of new rules and to make sure the agencies carry out the
president's priorities. This strengthens the hand of the White House
in shaping rules that have, in the past, often been generated by
civil servants and scientific experts. It suggests that the
administration still has ways to exert its power after the takeover
of Congress by the Democrats. Consumer, labor and environmental
groups denounced the executive order, saying it gave too much control
to the White House and would hinder agencies' efforts to protect the public.
http://www.nytimes.com/2007/01/30/washington/30rules.html?ref=todayspaper
(requires registration)
* Bush Order Limits Agencies' 'Guidance'
http://www.washingtonpost.com/wp-dyn/content/article/2007/01/29/AR200701...

FIBER-OPTIC FOCUS, ASSET SALES TRIM VERIZON'S PROFIT
[SOURCE: Washington Post, AUTHOR: Crayton Harrison]
Verizon, the second-largest U.S. telephone company, said
fourth-quarter profit declined 38 percent because of costs to build a
fiber-optic network and shed assets. Profit fell to $1.03 billion
from $1.66 billion during the same period a year ago. Chief executive
Ivan Seidenberg sacrificed profit from the wireless unit to expand
Verizon's faster network for Internet and TV service. The $23 billion
investment is designed to compete with cable companies such as
Comcast, which have attracted more subscribers by offering phone
service. The company's mobile phone unit gained 2.3 million wireless
subscribers, helping to offset the loss of revenue from the 366,000
customers who shut off their home phones in the quarter.
http://www.washingtonpost.com/wp-dyn/content/article/2007/01/29/AR200701...
(requires registration)
--------------------------------------------------------------
Communications-related Headlines is a free online news summary
service provided by the Benton Foundation (www.benton.org). Posted
Monday through Friday, this service provides updates on important
industry developments, policy issues, and other related news events.
While the summaries are factually accurate, their often informal tone
does not always represent the tone of the original articles.
Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
--------------------------------------------------------------