March 2007

INFRASTRUCTURE
U.S. Loses Top Spot in Global Tech Study
AT&T, Qwest, Verizon win U.S. Govt Telecom Contract

SATELLITE
XM-Sirius Merger Constitutes a Monopoly
Sirius to launch TV service in Chrysler 2008 cars

ELECTIONS & MEDIA
Bush/Clinton say media now harsher on politicians
Grass Roots Planted In Cyberspace

OWNERSHIP
Tribune Suitor Zell Is Used to Bucking Trends
Univision's new ownership takes over

QUICKLY -- Senators Push for More Telecommuting;=20
Chessen Joins Copps' Staff; TWC Clarifies=20
Testimony; FreeConference.com Sues AT&T For=20
Blocked Phone Calls; Hispanics and Media

INFRASTRUCTURE

US LOSES TOP SPOT IN GLOBAL TECH STUDY
[SOURCE: Associated Press, AUTHOR: Bradley Klapper]
European countries and Singapore have surpassed=20
the United States in their ability to exploit=20
information and communication technology,=20
according to a new survey. The United States,=20
which topped the World Economic Forum's=20
"networked readiness index" in 2006, slipped to=20
seventh. Denmark edged Sweden for the top spot,=20
while Finland was behind in fourth. The study,=20
out Wednesday, largely blamed increased political=20
and corporate interference in the judicial=20
system. The index, which measures the range of=20
factors that affect a country's ability to=20
harness information technologies for economic=20
competitiveness and development, also cited the=20
United States' low rate of mobile telephone=20
usage, a lack of government leadership in=20
information technology and the low quality of=20
math and science education. But Thierry Geiger,=20
one of the Forum's economists responsible for the=20
report, said the U.S. market environment remains=20
the best in the world in terms of how easy it is=20
to set up a business, get loans and have access to market capital.
http://www.salon.com/wire/ap/archive.html?wire=3DD8O58PMG0.html
* The Global Information Technology Report
http://www.weforum.org/en/initiatives/gcp/Global%20Information%20Technol...
%20Report/index.htm
* Foreign Nations Take Tech Title
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2007/03/29/BUG41OT...
1.DTL&type=3Dtech

AT&T, QWEST, VERIZON WIN US GOVERNMENT TELECOM CONTRACT
[SOURCE: Reuters, AUTHOR: Rachelle Younglai]
The U.S. General Services Administration cast=20
Sprint Nextel aside and picked AT&T, Qwest and=20
Verizon on Thursday for the largest-ever federal=20
telecommunications contract. Government agencies=20
are expected to spend at least $20 billion on the=20
contract over 10 years, the GSA estimates -- a=20
move that will overhaul the government's=20
telecommunications services. Under terms of the=20
GSA contract, called Networx Universal, agency=20
spending could be increased to as much as $48=20
billion. The announcement comes after weeks of=20
anticipation and years of preparation. The four=20
companies have spent millions of dollars=20
preparing bids and called on thousands of their=20
employees to develop proposals and hammer out the=20
details. The failure to include Sprint is seen as=20
a huge upset as it has provided telecommunication=20
services to U.S. government agencies for 18 years.
http://www.reuters.com/article/technologyNews/idUSWAT00723320070329
* Largest Ever Network Services Acquisition Awarded (GSA press release)
http://www.gsa.gov/Portal/gsa/ep/contentView.do?pageTypeId=3D8199&channe...
=3D-13259&P=3D&contentId=3D22827&contentType=3DGSA_BASIC
* Government Telecom Deal Omits Sprint
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/29/AR200703...
1061.html

SATELLITE

XM-SIRIUS MERGER CONSTITUTES A MONOPOLY
[SOURCE: Consumer Coalition for Competition in Satellite Radio press releas=
e]
Gregory Sidak of Criterion Economics has=20
concluded a study which demonstrates that the=20
proposed merger between XM and Sirius would=20
create a monopoly, constituting a likely=20
violation of the antitrust laws. Sidak, a former=20
Deputy General Counsel for the FCC, was asked by=20
the Consumer Coalition for Competition in=20
Satellite Radio to determine whether=20
subscription-based satellite digital audio radio=20
services ("SDARS") are a relevant product market=20
for antitrust purposes, and to assess the=20
unilateral pricing effects of the proposed merger=20
in the relevant product market. Sidak finds that=20
1) SDARS are a distinct antitrust product market;=20
2) The proposed merge would be anti-competitive=20
as (i) it constitutes a monopoly under the most=20
reasonable market definition and (ii) even under=20
a more expansive market definition the proposed=20
merger would increase seller concentration ratios=20
to unacceptably high levels; 3) The majority of=20
efficiencies identified by XM and Sirius would=20
not benefit consumers; and 4) The conditions=20
offered by XM and Sirius would not preserve consumer welfare.
http://www.contentagenda.com/articleXml/LN591301420.html?nid=3D3039
* Consumer Coalition for Competition in Satellite Radio
http://www.c3sr.org/index.asp

SIRIUS TO LAUNCH TV SERVICE IN CHRYSLER 2008 CARS
[SOURCE: Reuters]
Sirius Satellite Radio will launch its backseat=20
television service exclusively in several=20
DaimlerChrysler cars and minivans later this=20
year. Sirius said three live child-themed TV=20
channels would be available in 2008 model year=20
cars in the Chrysler, Jeep and Dodge lines. Sales=20
of those cars will start later this year. The=20
satellite radio provider has been promising such=20
a service since 2004, but at that time it said=20
deals with manufacturers and content providers=20
needed to be hammered out. Last November, Chief=20
Executive Mel Karmazin said the service would=20
launch in 2007. The system will cost about $470,=20
which includes the first year of service, when=20
packaged with Chrysler's rear seat entertainment=20
system in new cars. Customers must subscribe to=20
Sirius Satellite Radio. Channels on the service=20
include Viacom's Nickelodeon, Walt Disney's=20
Disney Channel and Time Warner's Cartoon Network.=20
Asked about some of the evening shows broadcast=20
on Cartoon Network that are aimed at adults, a=20
Sirius spokesman said that the 24-hour=20
programming in the car will always be suitable for children.
http://www.reuters.com/article/technologyNews/idUSN2919036120070329
* Chrysler, Sirius to beam kids' TV into '08 models
http://www.usatoday.com/printedition/money/20070330/1b_tvincars30.art.htm

ELECTIONS & MEDIA

PRESIDENTS SAY MEDIA NOW HARSHER ON POLITICIANS
[SOURCE: Reuters, AUTHOR: Sinead Carew]
Former Presidents George H.W. Bush and Bill=20
Clinton said on Thursday media coverage of=20
politicians had grown harsher and warned that=20
this could have a detrimental effect on future=20
leaders as the 2008 election draws near. Bush,=20
the 41st U.S. president and father of the current=20
president, described what he called an=20
increasingly adversarial relationship between the=20
press and politicians that is "even tougher,=20
uglier" than he remembered. "I'm afraid it will=20
turn off a lot of good people from politics," he=20
said. Clinton said he and Bush had received their=20
share of tough questions when they were in=20
office, but cited a blurring of the lines between=20
sensationalism and mainstream journalism. Clinton=20
said a more even discussion of politics could=20
come from Internet sites and Web blogs. He cited=20
the tendency of blogs to scrutinize one or two=20
subjects rather than a full plate of issues.=20
"They can do research and get the facts and don't=20
have to bad-mouth people. Sometimes they do, but=20
they don't have to," Clinton said. "I think all=20
these blog sites are creating a whole new=20
opportunity for public debate that may revitalize=20
our politics in an old fashioned way." Clinton=20
said that sensational news coverage could=20
interfere with the ability of politicians to make=20
good decisions. Clinton and Bush lauded the role=20
telecommunications and technology can play in=20
improving healthcare, spreading individual=20
freedoms and eradicating poverty. And as for=20
personal technology, the former presidents said=20
they were dedicated to using cell phones or=20
wireless devices. "The hour I'm here is about the=20
longest I can be away from my Blackberry," Bush said.
http://www.reuters.com/article/domesticNews/idUSN2919944120070329

GRASS ROOTS PLANTED IN CYBERSPACE
[SOURCE: Washington Post, AUTHOR: Jose Antonio Vargas]
If there's a social networking site that John=20
Edwards is not a part of, we'd like to know what=20
it is, pronto. No one's sure exactly what role=20
these sites -- a.k.a. socnets -- will play in the=20
upcoming election. But whatever it is, Edwards=20
isn't taking any chances. The man's flooding the=20
zone. He's on the big ones: Flickr, YouTube,=20
Facebook, et al., but he's also on some of the=20
most obscure sites -- Blip.tv, 43Things.com. In=20
fact, the former senator is signed up in at least=20
23 socnets -- more than any other presidential=20
candidate. And that's not counting John Edwards=20
One Corps, his own networking site that campaign=20
officials say has 20,000 members and 1,200=20
chapters across the country. All the presidential=20
hopefuls are online. Everyone's got a Web site. A=20
few hired full-time bloggers and videographers.=20
Most have MySpace profiles, just a click away=20
from "friending" a supporter. Yet Edwards has=20
taken his Internet presence a step further, fully=20
exploiting the unknown possibilities (and known=20
pitfalls) of the social Web, online strategists=20
say. Sen. Barack Obama (D-Ill.), judging by the=20
number of friends on MySpace or number of views=20
of his YouTube videos, may be the most popular=20
online candidate, Republican or Democrat. But=20
Edwards arguably has the most dynamic Web=20
presence -- he's everywhere, doing everything.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/29/AR200703...
2382.html
(requires registration)

OWNERSHIP

TRIBUNE SUITOR IS USED TO BUCKING TRENDS
[SOURCE: Wall Street Journal, AUTHOR: Sarah=20
Ellison sarah.ellison( at )wsj.com and Dennis K. Berman]
Like other real-estate swashbucklers, Sam Zell is=20
proud to be a contrarian. It's just as well. To=20
complete his come-from-behind effort to buy=20
Tribune Co., he'll have to be. As Tribune's=20
special committee gathers today for a lengthy=20
meeting that could decide the future of the=20
company, the leading proposal is an aggressively=20
leveraged offer from Mr. Zell, who proposes=20
buying the company and transferring control to an=20
employee stock ownership plan, an approach rife=20
with tax benefits. Like a lot of other=20
real-estate investors, he's comfortable buying=20
distressed, unfashionable properties, often by=20
taking on a substantial debt load and providing=20
relatively little equity compared with other=20
businesses. Then he spruces up the properties and=20
waits for the market to cycle back. But the=20
newspaper industry, pounded by Internet=20
competition for readers and advertisers, has been=20
riven by doubts about whether its problems are=20
not cyclical but permanent. In this case, Mr.=20
Zell is expected to put in less than $300 million=20
of equity, a fraction of the company's total=20
value of about $7.9 billion, not counting=20
Tribune's existing $4.5 billion of debt. While=20
details of his offer remain subject to=20
negotiation, the structure would involve a few=20
steps. In the first step, Mr. Zell would invest=20
his equity and receive convertible preferred=20
stock in Tribune. Then Tribune, using borrowed=20
funds, would pay out about $17.50 a share to=20
shareholders. In the next step, Tribune would=20
create an employee share ownership plan.=20
Tribune's ESOP could then roll future company=20
contributions to employee 401(k) funds into the=20
ESOP, effectively providing capital for the=20
buyout without increasing Tribune's debt. (At the=20
end of 2005, Tribune's retirement-savings plans=20
included at least $2.3 billion, of which $610=20
million, or 26%, was already invested in company=20
stock.) Mr. Zell's strategy for Tribune isn't=20
known, although he has said he doesn't plan to=20
break up the company, whose assets include a=20
string of TV stations and the Chicago Cubs=20
baseball team as well as the newspapers. What's=20
clear, say real-estate experts, is that he isn't=20
making a play for the real-estate assets held by=20
Tribune, including the buildings that house the=20
Tribune and Los Angeles Times newsrooms. The=20
value of Tribune's properties -- estimated at=20
less than $700 million -- simply isn't big enough=20
to justify being the driver of the deal.
http://online.wsj.com/article/SB117521471477853968.html?mod=3Dtodays_us_...
ketplace
(requires subscription)
* Broad, Burkle Up Offer for Tribune Co.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/29/AR200703...
2644.html
* L.A. duo reenters Tribune auction
http://www.latimes.com/business/printedition/la-fi-tribune30mar30,1,2348...
.story?coll=3Dla-headlines-pe-business
* Will Tribune extend deadline again?
[SOURCE: Associated Press]
As Saturday's self-imposed deadline looms for=20
Tribune Co. to announce how it plans to increase=20
shareholder value, speculation continued Thursday=20
that the company might postpone announcing a=20
possible sale, spinoff or reorganization.
http://chicagobusiness.com/cgi-bin/news.pl?id=3D24416

UNIVISION'S NEW OWNERSHIP TAKES OVER
[SOURCE: Los Angeles Times, AUTHOR: Meg James]
Los Angeles billionaire A. Jerrold Perenchio on=20
Thursday waved adios to the business he has spent=20
nearly 15 years building into the nation's=20
foremost Spanish-language media company,=20
Univision Communications. As expected, the sale=20
of the Century City-based company for $12.3=20
billion closed Thursday, two days after winning=20
the blessing of the Federal Communications=20
Commission. The new owners, a consortium of=20
investors including another Los Angeles=20
billionaire, Haim Saban, paid $36.25 a share to=20
buy out Univision stockholders, taking the=20
company private. The 76-year-old Perenchio =97 a=20
former talent agent, boxing promoter, and music,=20
TV and movie producer =97 collected $1.3 billion=20
for his 11.5% stake. That's a hefty return on the=20
$33 million that Perenchio paid when he joined=20
two Latin American media moguls to buy Univision=20
from Hallmark Cards Inc. in 1992 for $550=20
million. Since then, the Latino population has=20
grown to more than 42 million in the U.S. today.=20
The company's flagship, Univision, has become the=20
nation's fifth-largest television network, behind=20
CBS, Fox Broadcasting, ABC and NBC.
http://www.latimes.com/business/printedition/la-fi-univision30mar30,1,79...
64.story?coll=3Dla-headlines-pe-business
(requires registration)

QUICKLY

SENATORS PUSH FOR MORE TELECOMMUTING
[SOURCE: Washington Post, AUTHOR: Stephen Barr]
Sens Ted Stevens (R-Alaska) and Mary Landrieu=20
(D-La.) have introduced a bill that would make=20
nearly all government employees eligible to=20
telecommute. The bill covers employees in the=20
executive, legislative and judicial branches.=20
Under current practice, employees are assumed to=20
be ineligible for telecommuting unless their=20
agencies select them for work-at-home programs.=20
The Stevens Landrieu bill, the sponsors say,=20
would reduce fuel consumption, ease traffic=20
congestion and help government workers better=20
balance career and family obligations. The most=20
recent federal personnel data showed that 41=20
percent of civil service employees had been=20
deemed eligible to telecommute, but that only 19=20
percent were working from home or from a nearby=20
telework center at least one day a week.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/29/AR200703...
2043.html
(requires registration)

CHESSEN JOINS COPPS' STAFF
[SOURCE: Federal Communications Commission]
Commissioner Michael J. Copps announced that FCC=20
veteran Rick Chessen would be joining his staff=20
as Senior Legal Adviser effective April=20
5. Chessen is presently serving as Associate=20
Chief of the Media Bureau. In addition to his=20
senior legal adviser responsibilities, Chessen=20
will be the staff lead in handling media issues,=20
although Copps emphasizes that in such an=20
important area as media, each member of his team=20
is involved in an "all-hands on-deck" approach.=20
Chessen, who holds a BA from the University of=20
Wisconsin and a JD from Harvard Law School, first=20
joined the FCC in 1994. Among the positions he=20
has held, Chessen served as Senior Legal Adviser=20
to Commissioner Gloria Tristani from 1997 until=20
March 2000. From 2001 until 2005, he chaired the=20
Commission's Digital Television Task Force which=20
focused on the myriad regulatory and technical=20
issues relating to the DTV transition. His=20
important DTV work was recognized in 2006 when=20
the Academy of Digital Television Pioneers=20
presented him its President's Award. In his=20
current capacity as Associate Bureau Chief,=20
Chessen has been responsible for overseeing the=20
Video Services and Engineering Divisions and=20
managing numerous media-related proceedings.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-271911A1.doc

TIME WARNER CABLE CLARIFIES TESTIMONY
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
A Time Warner Cable official said Thursday that=20
subscribers who buy just the basic tier and lease=20
an HD set-top box have free access to local TV=20
signals in HD, clarifying CEO Glenn Britt=92s=20
testimony before a House subcommittee the=20
previous day. =93As an operational point-of-fact,=20
Time Warner Cable offers basic-only customers the=20
opportunity to receive an HD-capable set-top box=20
without any requirement to step up to the digital=20
tier of services,=94 said Mark Harrad, senior vice=20
president of corporate communications at Time=20
Warner Cable. =93With such a box, customers can get=20
the HD signals of all channels they would=20
otherwise get in standard-definition, including broadcast networks.=94
http://www.multichannel.com/article/CA6429385.html?rssid=3D108

FREECONFERENCE.COM SUES AT&T FOR BLOCKED PHONE CALLS
[SOURCE: TechDirt.com]
[Commentary] Earlier this month, we were=20
surprised to hear that various mobile operators=20
were blocking phone calls to services like=20
FreeConference.com. When you get phone service,=20
you expect that the phone service will work to=20
any phone number, not the ones that your phone=20
provider decides are okay. Oddly, given the=20
attention the story received, the FCC has=20
remained quiet about it. Apparently, the folks at=20
FreeConference.com got tired of sitting around=20
and waiting and have decided to sue AT&T, asking=20
for an injunction against the company to get it=20
to stop blocking calls to the FreeConference.com=20
service. It's no secret that services like=20
FreeConference.com are costing AT&T money, mainly=20
through ridiculous termination fees set up by=20
regulators protecting rural telcos. However, AT&T=20
should take that up with the regulators, rather=20
than simply blocking access to the service.=20
Either way, it seems likely that both the FCC and=20
the courts will soon be deeply involved in this issue.
http://www.techdirt.com/articles/20070327/154203.shtml

HISPANICS AND MEDIA
[SOURCE: Media Daily News/Online Media Daily]
Two articles based on new data from a Telemundo=20
and Experian Simmons Research survey. 1) Online=20
Hispanics consume media and technology at a=20
higher rate than the general U.S. population.=20
Some 80% of Hispanics with Internet access=20
connect using broadband, and combining content=20
from TV and the Internet is a key factor to=20
enriching their media experience. 2) Hispanics=20
are avid consumers of all media--more so, in=20
fact, than the general U.S. population. And they=20
expect TV and Internet content to be delivered in tandem.
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
7853&Nid=3D28779&p=3D368626
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
7857&Nid=3D28776&p=3D368626
--------------------------------------------------------------
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.
--------------------------------------------------------------