February 2007

Lots of telecom fun this week: 1) Today and tomorrow there's the Tech
Policy Summit in the Silicon Valley; 2) tomorrow, break out the party
hats for a celebration of 10 years of the E-rate, 3) the first
Congressional hearing on the XM-Sirius merger happens Wednesday, and
4) the Senate Commerce Committee discusses Universal Service reform
on Thursday. For these and other upcoming media policy events, see
http://www.benton.org

NEWS FROM HARRISBURG
Locals Bring Consolidation Complaints to FCC
Broadcasters Make Their Case To FCC at Media Ownership Forum
FCC's Martin Floats Leased Multicast Must-Carry Proposal
- Additional Statements from Commissioners
Rep Doyle Says Non-Neutral Net Isn't Competing Voice

CHILDREN & MEDIA
Record Fine Expected for Univision
FCC May Try to Scrub Kids' TV
FCC can stop kidding themselves

MORE ON MEDIA OWNERSHIP
Comcast Fights Ownership Limits
XM & Sirius: What a Merger Won't Fix
Old Media, New Media
Tribune Mulls Revamp As Auction Founders
Which Videos Are Protected? Lawmakers Get a Lesson

QUICKLY -- A third of U.S. surfers tried wireless; New Public Safety
and Homeland Security Bureau Chief; Retrans Doesn't Need Fixing;
Andrew Tyndall Offers "NewsTube"

** TEN YEARS AGO... Deal By Murdoch For Satellite TV Startles
Industry ** (see story at end of e-mail)

NEWS FROM HARRISBURG

LOCALS BRING CONSOLIDATION COMPLAINTS TO FCC
[SOURCE: TVWeek, AUTHOR: Ira Teinowitz]
The Federal Communications Commission heard two sides of the media
consolidation debate in its third media ownership hearing in
Harrisburg, Penn., but its hopes for limiting comments to smaller
market issues got sidestepped as residents of Philadelphia,
Pittsburgh and Baltimore drove to the hearing to add their concerns
about bigger market issues. Consumers questioned further
consolidation, said radio consolidation had already gone too far and
suggested the little advanced reporting on the hearing by local media
was indicative of the effects of consolidation. Broadcasting&Cable
reports that the forum was crowded with broadcasters and
representatives from several organizations on both sides of the issue
applauding the industry including the United Way, the YWCA, The York
Jewish Community Center, Salvation Army, the local blood bank, and a
representative of the Amber Alert system. That tone was in marked
contrast to the industry bashing that predominated the FCC's previous
media ownership hearing in Nashville. though ultimately critics
weighed in toward the latter half of the hearing. Among those
weighing in against more consolidation was a representative of a
small newspaper publisher, who argued against lifting the ban on
newspaper/broadcast crossownership--a rule will likely survive the
FCC's review of planned rule changes.
http://www.tvweek.com/news.cms?newsId=11604
(requires free registration)
See also
http://www.broadcastingcable.com/article/CA6418989.html?display=Breaking...
* Free Press Counters NAB's Request for Speaker ID's at FCC Hearing
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Activist group Free Press has taken issue with a National Association
of Broadcasters request that the FCC should require commenters at its
public hearing on Friday, February 23 to identify where they were
lived. In the end, the FCC did not require speakers to identify
themselves geographically.
http://www.broadcastingcable.com/article/CA6419187.html?display=Breaking...

BROADCASTERS MAKE THEIR CASE TO FCC AT MEDIA OWNERSHIP FORUM IN HARRISBURG
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Broadcasters made their case for loosening media ownership rules at
the FCC's media ownership hearing in Harrisburg on Friday. The first
speaker was Bill Baldwin, an executive with Hall Communications,
owner of 21 radio stations including in nearby York and Harrisburg
(PA). He said that his stations are run by local managers and that
50% of the employees are women. He said his employees devote 30,000
minutes annually to public service spots, and invest in local news
and public affairs. They also hire local talent and the average
length of service is 20 years. "Turnover is something we don't know
much about," Baldwin said. The stations are also involved with food
banks, hospices, Make a Wish, Habitat for Humanity, rescue missions,
Big Brothers, Big Sisters, United Way, among others. To make
Baldwin's point, the head of the local United Way praised broadcaster
commitment to the organization, including emceeing events and
producing campaign videos at no charge. Also making the broadcasters'
case was Paul Quinn, President/GM of Hearst-Argyle's WGAL-TV, who
said local service is a core mission. Quinn said that his station
does more than 30 hours of local news, 20-plus hours of public
affairs and national news, has a 24-7 local weather channel, raised
more than $10 million for local charities last year, and 16 town
meetings. He also said that during the 2006 election, like all
Hearst-Argyle stations, provided at least 10 minutes per day for
candidate-centered political coverage. Because of its vast resources,
he said, the station "was able to stream this meeting over our
station's Web site." Given unprecedented competition, including
competitors that were not around in 2003 when the FCC first tried to
loosen ownership rules. "We will not be able to serve communities if
the rules are not brought into conformance with today's realities,"
Quinn said. There was even a working broadcaster in attendance with a
six-week-old baby in her arms arguing that "Big Media" had given her
the flexibility to be both broadcaster and mom.
http://www.broadcastingcable.com/article/CA6418989.html?display=Breaking...

FCC'S MARTIN FLOATS LEASED MULTICAST MUST-CARRY PROPOSAL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
FCC Chairman Kevin Martin used the media ownership public hearing in
Harrisburg, Pennsylvania to publicly push a new multicasting approach
he had earlier pitched privately to minority media interests and
broadcast and cable lobbies. In his public statement before the
hearing , he said the commission needs to "find more opportunities
for diverse viewpoints to be heard. "Part of the problem is the
limited number of channels available on broadcast television and
radio and the high start-up cost of building your own station." He
pointed to low-power FM radio as one attempt by the FCC to increase
that number of voices. He also said that it would allow small and
independently owned businesses to lease some of an existing
broadcaster's spectrum to distribute their own programming.
"Conversion to digital operations enables broadcasters to fit a
single channel of analog programming into a smaller amount of
spectrum," he told the crowd. "Often, there is additional spectrum
left over that can be used to air other channels of programming.
Small and independently owned businesses could take advantage of this
capacity and use a portion of the existing broadcasters' digital
spectrum to operate their own broadcast channel. This new programming
station would then obtain all the accompanying rights and obligations
of other broadcast stations, such as public interest obligations and
carriage rights."
http://www.broadcastingcable.com/article/CA6419183.html?display=Breaking...
* Link to martin's Statement:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270765A1.doc
-- More Opening Statements --
* Copps: " Don't believe anyone who tells you that big media's push
for more consolidation has gone away. I've seen their very recent
pleadings at the FCC. They're still marching along behind that same
Pied Piper of Consolidation they've been following for years. They
haven't gone away, and their lawyers and lobbyists haven't gone away
either. They have money and they have power. So if we are going to
succeed in this-and go on from there to a broader national dialogue
on the future of the media in our democracy-a discussion that has
been too long delayed and too long denied-it will be because of
citizen action from millions of Americans and testimony at hearings
like this one."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270758A1.doc
* Adelstein: "The problem can be seen here in Harrisburg because the
statistics speak for themselves. According to Consumer Federation
and Free Press, just four companies control over 79 percent of the
Harrisburg area news market. There are three companies that own 60
percent of the commercial radio stations, with one owning 6 stations,
thus creating a market where non-local entities own nearly 75 percent
of the radio stations. This is especially discouraging when
considering that there are no locally owned commercial news
stations. There are no full-power commercial TV stations owned by a
racial or ethnic minority in the Harrisburg area, and none are owned by women."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270762A1.doc
* Tate: "Given the important role that the broadcast media play in
our democratic society's marketplace of ideas, I am committed to
working with my FCC colleagues to ensure that our actions further the
touchstone goals of competition, localism, and diversity."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270759A1.doc
* McDowell: "In particular I look forward to learning about
competition, diversity and localism in the Harrisburg market from all
of you. We need the first-hand knowledge that only you can provide
about how our ownership rules affect you as businesspeople and as
viewers and listeners so that we can determine whether the times
demand that those rules change."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270763A1.doc

DOYLE SAYS NON-NEUTRAL NET ISN'T COMPETING VOICE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Rep. Mike Doyle (D-PA), vice chairman of the House Telecommunications
Subcommittee, weighed in remotely at the FCC's media ownership public
hearing in Harrisburg, Pa., Friday (Feb. 23) to say the existence of
the Web, particularly without network neutrality guarantees, should
not be used to justify further media ownership consolidation. In a
letter that he asked to be read into the record of the hearing, Rep
Doyle said that "then-Chairman Michael Powell made the mistake of
acting as if the Internet was an independent source of national and
local news -- a mistake repudiated by the 3rd Circuit Court of
Appeals when they remanded the Commission's rules on this very
point," he said. Rep Doyle said that though he believed the 'net "has
the potential to give everyone an equal platform to report about and
opine on the goings-on around them," and that "an open and free
Internet could be considered the first truly accessible tool to make
the spirit of First Amendment come alive for everyone in the
country," he also said that "without an Internet available to all
that guarantees fast speeds to anyone's content, that potential is
just a promise."
http://www.broadcastingcable.com/article/CA6419376.html?display=Breaking...

CHILDREN & MEDIA

RECORD FINE EXPECTED FOR UNIVISION
[SOURCE: New York Times 2/23, AUTHOR: Stephen Labaton]
When Univision began broadcasting a show three years ago about the
misadventures of 11-year-old identical twin girls who swapped
identities after discovering they had been separated at birth, it
characterized the episodes as educational programming for children.
That decision is expected to cost Univision, the nation's largest
Hispanic network, $24 million in what would be the largest fine the
Federal Communications Commission has ever imposed against any
company. The penalty is also expected to send a strong signal to
broadcasters that they will be expected to meet their required quota
of shows that educate and inform children, after years of permissive
oversight in this area. The commission has decided to impose the
heavy fine -- disclosed by FCC Chairman Kevin J. Martin in an
interview -- as a tough rebuke to Univision for claiming to meet its
obligations to broadcast educational children's programs by showing
the Latino soap opera "Complices al Rescate" ("Friends to the
Rescue") and other so-called telenovelas. The penalty represents an
unusually aggressive enforcement of the 1996 regulations that
interpreted the Children's Television Act. Those regulations, adopted
after some broadcasters characterized cartoons like "The Flintstones"
and "The Jetsons" to be educational programs, imposed more
substantive requirements on the networks as they comply with the
mandate to broadcast at least three hours a week of programs of
intellectual value to young people. Although some television critics
say it is common for stations not to comply, only a handful of
complaints have been filed. An even smaller number have resulted in
modest penalties of several thousand dollars for stations found to
have violated the rules.
http://www.nytimes.com/2007/02/24/business/24fcc.html
(requires registration)
* Landmark FCC Ruling Against Univision is Result of United Church of
Christ's Public Advocacy for Children
http://sev.prnewswire.com/entertainment/20070224/NYSA01024022007-1.html

FCC MAY TRY TO SCRUB KIDS' TV
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz( at )wsj.com]
Broadcasters have long considered Republican FCC Chairman Kevin
Martin an ally. Since becoming an FCC commissioner in 2001 he's been
an advocate for some of their biggest priorities, including a
requirement that cable companies carry more local channels once the
U.S. shifts to digital-only broadcasts in 2009. The National
Association of Broadcasters hope he'll torpedo a proposed merger of
terrestrial radio's rivals XM and Sirius. But broadcasters are also
increasingly finding themselves on the wrong side of Mr. Martin's
FCC. Last year, the networks and affiliates took the unusual step of
challenging several proposed indecency fines in federal court. More
recently, the FCC has drafted a report suggesting Congress can expand
the agency's reach to regulate violence on TV. Now, the FCC's
unusually large fine against Univision appears to be part of a larger
effort by the agency to make sure broadcasters are offering
kid-friendly programming. The $24-million fine was negotiated by Mr.
Martin's staff, not the five-member FCC board. Several senior FCC
officials, including at least one FCC commissioner, said they learned
of the fine by reading the New York Times on Saturday. "Across the
board we're trying to protect consumers," said Mr. Martin, who
pointed out the Univision fine follows previous efforts to ensure 911
service is available from all phones and newly proposed rules to
protect the privacy of cellphone users. "I don't think I'm trying to
send any particular message. The commission takes all of its rules
seriously," he said. But the fine also may go a long way toward
placating Latino groups who've complained the FCC has ignored
violations on Spanish-language stations, and some conservative
Christians who've grumbled that Mr. Martin hasn't done enough to
clean up the airwaves.
http://online.wsj.com/article/SB117244863225318833.html?mod=todays_us_pa...
(requires subscription)

FCC CAN STOP KIDDING THEMSELVES
[SOURCE: Variety, AUTHOR: Brian Lowry]
[Commentary] Having spent years failing to craft a coherent policy
regarding televised indecency, Democratic legislators and the Federal
Communications Commission are groping to add violence to their
regulatory comedy act. Yet if they're truly committed to helping
parents navigate a confounding TV dial -- as opposed to just flapping
their gums with grasping-for-moral-high-ground rhetoric -- there is a
potential solution, one that could assist parents without reducing
television to pabulum for the vast majority of adults who don't live
with someone under the age of 16. After years of expecting parents to
master the V-chip, TV content ratings and everything short of the
Dewey-decimal system, TiVo or its digital-video recorder equivalent
could be the answer. Indeed, it's an approach upon which many
tech-fluent parents have already stumbled, confining children's
viewing to programs allowed through TiVo's filter along with whatever
DVDs they purchase. In this way, they eliminate channel-surfing or
any other happenstance way kids might encounter inappropriate
content. The result, parents will tell you, is tots who don't know
much about TV networks or schedules, only how to punch up their
specific programs.
http://www.variety.com/article/VR1117960062.html?categoryid=1682&cs=1&ni...

MORE ON MEDIA OWNERSHIP

COMCAST FIGHTS OWNERSHIP LIMITS
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
With phone companies entering cable markets and consumers surfeited
with video from iPods and Internet sites like YouTube, Comcast is
advocating that federal cable-ownership limits are both unnecessary
and judicially unsustainable. As the largest U.S. cable company,
Comcast is the only cable operator that has to worry that a
transaction involving a few million cable subscribers could bump into
cable ownership caps enforced by the Federal Communications
Commission. On an informal basis, the FCC won't allow a cable company
to serve more than 30% of pay TV subscribers. With 26.2 million
subscribers, Comcast has 27% of the 96.8 million subscribers to pay
television, the multiple-system operator said last Thursday, citing
Kagan Research data. Implementing a 1992 law, the FCC has designed
cable-ownership rules based on concerns that a few giant cable
companies would hold too much power over programmers seeking
distribution. But in a Feb. 14 filing, Comcast insisted that because
of "revolutionary changes in the marketplace," market forces rather
than anticompetitive motives dictate the programming decisions of
cable operators. "It is clear that no cable operator has either the
incentive or the ability to effectuate the harm at which the statute
was aimed: obstructing the flow of video programming to the
consumer," Comcast explained to the FCC in a filing prepared by
lawyers expert in regulatory and constitutional law.
http://www.multichannel.com/article/CA6419399.html?display=Policy

XM & SIRIUS: WHAT A MERGER WON'T FIX
[SOURCE: BusinessWeek, AUTHOR: Tom Lowry and Paula Lehman]
[Commentary] Even if regulators finally bless the proposed merger of
XM and Sirius, there's no guarantee that the combined company will
survive in a very competitive environment. Perhaps XM and Sirius
should just take the satellite out of satellite radio. Both services
have great content and where better to sell that programming than on
cell phones or Web sites? Distributing more programming through third
parties would require moving beyond the current $12.95-per-month
subscription model. That could include sharing ad revenues or
subscription fees with wireless carriers or Web sites. XM's deal with
Cingular may provide a model: Subscribers pay an extra $9 a month to
get the XM channels, a fee that is divvied up between both companies.
XM and Sirius have built surprisingly robust brands in six years,
thanks in part to pushes in such retail outlets as Best Buy. For
media outfits trying to reach ears and eyeballs in multiple ways --
including, if it survives, via satellite -- a strong brand and
content may well be the killer apps.
http://www.businessweek.com/magazine/content/07_10/b4024055.htm?chan=tec...
* Can Video Help Save the Satellite Radio Business?
http://www.nytimes.com/2007/02/26/technology/26satellite.html
* XM and Sirius: Happy Together
http://www.multichannel.com/article/CA6419390.html?display=Top+Stories
* Stick to the Rule, Satellite Radio
http://www.multichannel.com/article/CA6419267.html?display=Opinion

OLD MEDIA, NEW MEDIA
[SOURCE: Broadcasting&Cable, AUTHOR: Anne Becker]
Last year, almost 18,000 media employees lost their jobs -- the
biggest group of layoffs since the dotcom bubble burst in 2001. Some
of the world's biggest "old-media" companies -- including MTV
Networks, NBC Universal, Disney and Discovery Communications -- are
axing staffers in handfuls and hundreds. In one of the biggest
reductions, Time Warner's AOL began cutting 5,000 employees in
December, about 26% of its workforce. U.S. media companies announced
they were slashing a total of 17,809 jobs in 2006, 88% more than in
the year before, according to Challenger, Gray & Christmas, a New
York-based global outplacement firm that tracks layoffs. The cuts
reflect a grim reality for these media giants: Staying ahead often
means cutting heads. As viewers shift their media-consumption habits,
TV operations are forced to take a hard look at how they have been
run and staffed for years. And in many cases, they've realized, they
just don't need the same people they used to.
http://www.broadcastingcable.com/article/CA6419245.html?display=Feature

TRIBUNE MULLS REVAMP AS AUCTION FOUNDERS
[SOURCE: Wall Street Journal, AUTHOR: Sarah Ellison sarah.ellison( at )wsj.com]
Despite considering a late-breaking bid from Chicago real-estate
magnate Sam Zell, Tribune Co.'s board is inching closer to a
"self-help" restructuring deal it will implement on its own, say
people familiar with the situation. The board met with its advisers
Saturday for an update on the five-month-old auction. Unlike the past
couple of board meetings, it issued no statement afterward. Tribune
-- which owns the Los Angeles Times, the Chicago Tribune and 23
television stations -- has promised shareholders a resolution of the
auction by March 31. Mr. Zell's offer to take the company private
emerged after the deadline for offers last month. People familiar
with the situation noted that his proposal is structured in a way
that would take time to implement, a strike against it for executives.
http://online.wsj.com/article/SB117244644179218760.html?mod=todays_us_pa...
(requires subscription)
See also --
* Tribune to evaluate offers on Saturday
[SOURCE: Reuters, AUTHOR: Megan Davies and Robert MacMillan]
Media group Tribune Co.'s special committee will meet again on
Saturday to evaluate alternatives that could split up the company or
take it private.
http://today.reuters.com/news/newsArticle.aspx?type=industryNews&storyID...

WHICH VIDEOS ARE PROTECTED? LAWMAKERS GET A LESSON
[SOURCE: New York Times, AUTHOR: Noam Cohen]
As the new Congress experiments with the wide world of blogging and
video clips, members are learning the complexities of copyright law,
much the way the casual YouTube user has learned that there are
corporations out there that own "Lost" and can stop you from posting
a favorite episode.
http://www.nytimes.com/2007/02/26/technology/26cspan.html
(requires registration)

QUICKLY

A THIRD OF US SURFERS TRIED WIRELESS
[SOURCE: Reuters]
One-third of U.S. Internet users have connected to the Web using a
wireless network to send e-mails, check the latest news or read other
things, according to a survey released on Sunday by the Pew Internet
Project. The survey also found that 20 percent of Internet users now
have wireless networks available at home, double the number recorded
in January 2005. "We know that 'always on' broadband connections
really deepen people's relationship to the Internet; adding 'on the
go' to the mix takes this a step further," said John Horrigan,
associate research director at the Pew Internet Project. "The
convenience of wireless access gives people the chance to fire off a
quick e-mail to someone while waiting in a doctor's office or check
the news headlines on the way to work."
http://www.reuters.com/article/internetNews/idUSN2518346420070225
* Wireless Internet Access
http://www.pewinternet.org/PPF/r/203/report_display.asp
* Wireless Internet Access Becoming More Common
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=56...

NEW PUBLIC SAFETY AND HOMELAND SECURITY BUREAU CHIEF
[SOURCE: Federal Communications Commission]
On Friday, FCC Chairman Kevin J. Martin announced his intention to
appoint Derek Poarch, a North Carolina police chief, as the FCC's
Public Safety and Homeland Security Bureau Chief. Chief Poarch, a
native of Lenoir, N.C., is presently the Director of Public Safety
and Chief of Police at the University of North Carolina at Chapel
Hill. In his new role, Chief Poarch will oversee the bureau
responsible for FCC activities pertaining to public safety, homeland
security, emergency management and disaster preparedness. Chief
Poarch assumed the position of Director of Public Safety at
UNC-Chapel Hill on September 14, 1998. In this position, Chief
Poarch commands a department of approximately 300 full and part-time
employees providing police, security, emergency communications,
parking and transportation services to a university community of
45,000 persons that has more than a million visitors each year.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270761A1.doc

RETRANS DOESN'T NEED FIXING
[SOURCE: Multichannel News, AUTHOR: Barry M. Faber, Sinclair Broadcast Group]
[Commentary] When the U.S. Congress established the retransmission
consent process, it did so with the express intention of enabling
broadcasters to be paid by cable operators that carry broadcast stations.
http://www.multichannel.com/article/CA6419273.html?display=Opinion

ANDREW TYNDALL OFFERS "NEWSTUBE"
[SOURCE: Broadcasting&Cable]
Despite having been written off as obsolete amid years of ratings
declines, the evening newscasts remain a vital cultural force. And
Andrew Tyndall is still watching. As editor of the Tyndall Report,
Tyndall has monitored and analyzed the way the newscasts cover
various topics since 1987. Now he is inviting viewers to join him.
His Website tyndallreport.com recently began offering an extensive
searchable database of news stories complete with links to video
clips of the segments. Each day, Tyndall posts a grid of the previous
evening's newscasts -- organized by network, topic, reporter,
dateline and the "angle" of the coverage. Visitors can click on
thumbnail links to watch clips of the segments on the networks'
Websites. Although the database goes back to only mid November 2006,
it already comprises more than 1,300 links to clips.
http://www.broadcastingcable.com/article/CA6419196.html?display=Breaking...

TEN YEARS AGO...

Deal By Murdoch For Satellite TV Startles Industry
[SOURCE: New York Times 2/26/1997, AUTHOR: Mark Landler]
Ten years ago cable television and satellite companies around the
country were roiled [we used words like "roiled" back in the 90s] by
the news that Rupert Murdoch had agreed to invest $1 billion in a new
satellite service that could be the first full-fledged competitor to
cable in its three-decade history. News Corporation and Echostar were
to fold their respective direct broadcast satellite services into a
single venture. The service would combine Murdoch's internationally
known Sky satellite-television brand name with Echostar's 430,000
United States subscribers. Experts said it could be far more than the
sum of these parts. Because the combined company could have
eventually had seven satellites floating above the earth, the service
would have been able to beam 500 channels of programming to its
subscribers. The companies planed to use this vast channel capacity
to include local broadcast stations -- which were not available on
any other satellite service, and which analysts said could enable Sky
to offer consumers the first genuine alternative to their local cable
operator. Satellite enthusiasts said that consumer benefits could
include a clearer picture, better service and a broader menu of
programming. The deal would hit a snag in April 1997 and implode by May.
http://select.nytimes.com/search/restricted/article?res=F20613FD3C550C75...
(requires TimesSelect subscription)
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While the summaries are factually accurate, their often informal tone
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