May 2007

INTERNET/BROADBAND
Internet tax ban meets resistance in Senate
Senate Bill Refocuses Rural Internet Loans
When They Say You Are a Spammer
E-mail to bypass phone charges

MEDIA OWNERSHIP
Report Argues For Limits On Spectrum Auction Participants
Key senator urges rejection of XM-Sirius deal
Goldman Takes 'Private' Equity To a New Level

JOURNALISM
A Future for Newspapers
Killing the Russian Media

BROADCASTING & CABLE
High-tech TV upgrades will create low-tech trash
Rep. Bono Questions a la Carte Mandates

TELECOM
Legal Sanity 'Discovered'

INTERNET/BROADBAND

INTERNET TAX BAN MEETS RESISTANCE IN SENATE
[SOURCE: InfoWorld, AUTHOR: Grant Gross, IDG News Service]
Several U.S. senators questioned whether to=20
extend a ban on access and other Internet-only=20
taxes, at least in their current form, during a=20
Senate Commerce Committee hearing Wednesday. The=20
current moratorium on Internet taxes expires on=20
Nov. 1. Representatives of Verizon and the=20
National Taxpayer Union Foundation called on=20
Congress to make the tax ban permanent, but=20
several senators said the current ban could allow=20
Internet service providers to package other=20
products with access and exempt them from taxes.=20
The current ban should be extended temporarily,=20
"if at all," said Committee Chairman Daniel=20
Inouye (D-Hawaii). On Tuesday, three groups=20
representing state government officials called=20
for a more limited, temporary ban. Several other=20
senators said they would support a temporary ban=20
on Internet access taxes, but only if language in=20
the moratorium is changed to make clear that=20
states are allowed to tax services packaged with=20
access, including music and movies and television=20
over Internet Protocol, called IPTV. When the=20
moratorium was last debated in Congress in 2004,=20
a group of senators, many of whom are former=20
state government officials, raised concerns that=20
the Internet tax ban could cost states billions of dollars.
http://www.infoworld.com/article/07/05/23/Internet-tax-ban-meets-resista...
-in-Senate_1.html
* Internet Access Tax Moratorium: Revenue Impacts Will Vary by State
[SOURCE: US Government Accountability Office,=20
AUTHOR: James R. White, Director, Strategic Issues]
GAO testimony at the Senate Commerce Committee=20
hearing. The agency made no recommendation in the testimony.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-896T
Highlights - http://www.gao.gov/highlights/d07896thigh.pdf

SENATE BILL REFOCUSES RURAL INTERNET LOANS
[SOURCE: Technology Daily, AUTHOR: David Hatch]
Sens Pat Roberts (R-KS) and Ken Salazar (D-CO)=20
introduced legislation to overhaul a federal loan=20
program designed to spur deployment of high-speed=20
Internet service to rural communities. The=20
initiative, part of the Agriculture Department's=20
Rural Utilities Service, has provided more than=20
70 loans totaling $1.2 billion since its creation=20
five years ago. But critics complain that most of=20
the money goes to places that do not need it.=20
"RUS has used its limited funds in urban areas,=20
suburban developments and towns that already have=20
access to high-speed Internet," Sen Roberts said.=20
He wants to 1) shift the focus back to rural=20
regions that lack broadband service, 2) enhance=20
incentives for investment and increase the=20
feasibility of loans in rural areas, 3) improve=20
the responsiveness of RUS to Loan and Loan=20
Guarantee applicants and 4) create a new grant=20
program to expand opportunities for state-private=20
partnerships to map where broadband is available,=20
and conduct outreach to areas where it is not.
http://www.njtelecomupdate.com/2007/05/senate_bill_aims_to_refocus_ru.html
* Sen Roberts' press release:
http://roberts.senate.gov/public/index.cfm?FuseAction=3DPressRoom.PressR...
ases&ContentRecord_id=3Db3ccc5ae-802a-23ad-4efc-f48f0308584f

WHEN THEY SAY YOU ARE A SPAMMER
[SOURCE: New York Times, AUTHOR: Karen Bannan]
Blacklisting is an annoyance for big companies,=20
but one that a dedicated technology staff can=20
eventually remedy. For many smaller businesses=20
(or, a small non-profit with a really good news=20
service delivered via e-mail, say), on the other=20
hand, having messages blocked or shuttled into a=20
spam folder by an Internet service provider or=20
e-mail administrator can mean lost revenue (or,=20
worse, lost readers!). E-mail blacklisting was=20
created as a way to help reduce spam. But=20
innocent companies are finding that even people=20
who follow the rules and do not send unwanted=20
e-mail can find themselves in a jam.
http://www.nytimes.com/2007/05/24/business/smallbusiness/24sbiz.html
(requires registration)

E-MAIL TO BYPASS PHONE CHARGES
[SOURCE: Reuters, AUTHOR: Eric Auchard]
Jangl Inc., one of a new class of Web-telephone=20
calling companies, is introducing a way to call=20
over the Internet that bypasses traditional phone=20
networks and uses e-mail to provide privacy from=20
unknown callers. The service, available on=20
Wednesday, allows users to place calls as well as=20
to send text messages or send or receive=20
voicemail -- all via the Internet, rather than=20
voice networks. It helps consumers place=20
long-distance calls, globally, to anyone with an=20
e-mail address and a phone, for about the cost of a dime.
http://www.reuters.com/article/technologyNews/idUSNAAD230120070523

MEDIA OWNERSHIP

REPORT ARGUES FOR LIMITS ON SPECTRUM AUCTION PARTICIPANTS
[SOURCE: Dow Jones Newswires, AUTHOR: Corey Boles]
Lobbying over how the Federal Communications=20
Commission should frame rules governing the=20
forthcoming auction of radio spectrum has=20
intensified. On Tuesday a report by economists=20
Robert Wilson and Andrzej Skrzypacz of Stanford=20
University Business School that was commissioned=20
by Frontline Wireless, concluded that large=20
incumbent telecom operators such as Verizon=20
Communications and AT&T's wireless units, should=20
be partially restricted from taking part in the=20
auction. The report argues that the same partial=20
ban should be extended to the large cable=20
companies too. Their comments concern the 10=20
megahertz of spectrum that Frontline has been=20
trying to convince the FCC to attach additional=20
guidelines to. It wants these additional rules in=20
place so its proposal for a national wireless=20
broadband network for use by both commercial=20
operators and public safety could get off the=20
ground. The economists said that only wholesale=20
operators should be allowed to bid for the 10=20
megahertz of powerful and lucrative radio spectrum.
http://news.morningstar.com/news/ViewNews.asp?article=3D/DJ/200705230745...
JONESDJONLINE000447_univ.xml&Cat=3DMktDigest

KEY SENATOR URGES REJECTION OF XM-SIRIUS DEAL
[SOURCE: Reuters, AUTHOR: Peter Kaplan]
Sen. Herb Kohl (D-WI), chairman of the Senate=20
antitrust subcommittee, on Wednesday urged=20
regulators to block Sirius Radio's proposed=20
acquisition of XM Satellite Radio Holdings on=20
grounds that it would cause "substantial harm to=20
competition and consumers." "Such a result should=20
be unacceptable under antitrust law and as a=20
matter of communication policy," Kohl wrote to=20
FCC Chairman Kevin Martin and the Justice=20
Department's antitrust chief, Thomas Barnett.=20
Although they can exert political influence over=20
the agencies generally, lawmakers have no direct=20
input into the decisions about individual merger reviews.
http://www.reuters.com/article/technologyNews/idUSN2326781220070523

GOLDMAN TAKES 'PRIVATE' EQUITY TO A NEW LEVEL
[SOURCE: Wall Street Journal, AUTHOR: Randall Smith randall.smith( at )wsj.com]
Goldman Sachs Group is creating its own private=20
system to trade the stocks of companies that=20
don't want the scrutiny and regulatory burdens of=20
going public. Nasdaq is also planning its own new=20
market for smaller, unregistered securities.=20
These markets will generally be closed to=20
individual investors. For instance, Goldman's=20
market is open only to large institutional=20
investors with assets of more than $100 million.=20
That is because the stocks traded on it aren't=20
registered with the Securities and Exchange=20
Commission and issuers aren't subject to SEC=20
regulations designed to protect individual=20
investors. It represents the latest step in the=20
creeping exclusion of individual investors from a=20
growing proportion of financial-market activity.=20
For instance, giant private-equity firms are busy=20
buying public companies and delisting them from=20
stock exchanges. The growing importance of hedge=20
funds -- which are generally limited to wealthy=20
investors, institutions and endowments -- also excludes individuals.
http://online.wsj.com/article/SB117996989061312894.html?mod=3Dtodays_us_...
ey_and_investing
(requires subscription)

JOURNALISM

A FUTURE FOR NEWSPAPERS
[SOURCE: Wall Street Journal, AUTHOR: Andy Kessler]
[Commentary] Media, after all, is about owning a=20
pipe -- some conduit between the creation of news=20
or entertainment and the eyeballs that consume=20
it. Media companies sell the owners of those=20
eyeballs lots of things we weren't even sure we=20
needed. The higher the ad rates, the better the=20
business. The pipe reaches the consumer directly,=20
keeping competition at bay. The tighter the pipe,=20
the less the competition. For broadcasters, the=20
pipe is spectrum given or bought from the Federal=20
Communications Commission under the guise that=20
spectrum is scarce. For cable operators, it is=20
often the sole cable franchise in a town. For=20
phone companies, it's those regulated copper=20
wires, some of which are so old they have=20
Alexander Graham Bell's teeth marks in the=20
insulation. And newspapers? Reputation, quality=20
news gathering, trust and credibility maintain=20
the franchise. But they aren't in the printing=20
business, they're in the ad business.
http://online.wsj.com/article/SB117997297020012986.html?mod=3Dtodays_us_...
nion
(requires subscription)

KILLING THE RUSSIAN MEDIA
[SOURCE: New York Times, AUTHOR: Editorial staff]
[Commentary] Journalists from around the world=20
who will gather in Moscow next week are poised to=20
stand up for their colleagues in a country where=20
journalism and journalists are increasingly under=20
attack. The 1,000 media representatives plan to=20
establish a commission to finally investigate the=20
growing number of unsolved murders of journalists=20
in Vladimir Putin=92s Russia. The few remaining=20
critics increasingly write or speak out at their=20
peril, as new laws tighten the government=92s grip.=20
Most recently, the definition of extremism has=20
been expanded to include media criticism of state=20
officials. That can mean jail time for the=20
reporter and the shutting down of the news=20
outlet. In the meantime, polls show President=20
Putin=92s popularity has soared. No wonder. Fewer=20
and fewer Russians can see or hear from anyone=20
who opposes him, his policies or his government.
http://www.nytimes.com/2007/05/24/opinion/24thu3.html
(requires registration)

BROADCASTING & CABLE

HIGH-TECH TV UPGRADES WILL CREATE LOW-TECH TRASH
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera]
As new high-definition televisions fly off store=20
shelves, millions of old sets soon could be=20
flying into the trash. A major change to=20
broadcast television in 2009 =97 the conversion=20
from analog signals to all digital =97 is expected=20
to send many Americans to the store for new TV=20
sets. That could mean a flood of outdated TVs,=20
which contain lead-encased picture tubes and=20
other hazardous material, heading into landfills.=20
"There's going to be an e-waste tsunami that hits=20
America," said John S. Shegerian, chief executive=20
of Electronic Recyclers in Fresno, the state's=20
largest electronics recycler. Lawmakers and=20
environmentalists already are concerned about the=20
amount of technology waste =97 old laptops, iPods,=20
printers and other gear =97 in dumps. So far, TVs=20
have been less likely to end up in landfills than=20
other electronics, recycling experts say.=20
Although cellphones, computers and other gadgets=20
generally get thrown out or given away when=20
people upgrade, TVs tend to hang around the house=20
if they're still working. They're used to play=20
video games or to watch DVDs, or they get plugged=20
into the cable system or hooked up to rabbit ears=20
to serve as an extra set. The latest U.S. Census=20
figures indicate that the average household had=20
2.5 television sets in 2004, a 25% increase since=20
1990. In all, there were 268 million TV sets.=20
"There's a lot of different uses," said Parker=20
Brugge, environmental counsel for the Consumer=20
Electronics Assn. "That's why the number of=20
televisions in consumers' households keeps going=20
up." But the calculus that leads Americans to=20
hang on to old TVs could change on Feb. 18, 2009.=20
That's the day a federal law will require all TV=20
stations to turn off their analog signals and=20
start broadcasting only in digital. Tens of=20
millions of old analog TVs will need to be hooked=20
up to a cable or satellite box, or fitted with a=20
special converter, to display the new signals.
http://www.latimes.com/business/printedition/la-fi-tvwaste24may24,1,4894...
.story?coll=3Dla-headlines-pe-business
(requires registration)

REP BONO QUESTIONS A LA CARTE MANDATES
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Rep. Mary Bono (R-Calif.) circulated a letter to=20
all House members Wednesday in which she=20
questioned Federal Communications Commission=20
chairman Kevin Martin=92s campaign to force cable=20
to sell channels one by one. Rep Bono said that=20
as a parent, she had the =93responsibility to=20
evaluate technologies available that allow me to=20
determine what is seen in my home -- not the=20
government=92s.=94 Rep Bono said: =93Recent attempts by=20
the FCC to advance an a la carte agenda in the=20
name of our children need to be met with a high=20
degree of skepticism.=94 She added, =93If the=20
government is so worried about unwanted guests in=20
American homes, my question is, =91Who invited the=20
FCC?=92=94 In 2004, 39 House members, including Bono,=20
signed a letter asking the FCC to study=20
excessively violent television programming and=20
make a number of recommendations, including=20
potential steps by Congress or the FCC.
http://www.multichannel.com/article/CA6446193.html?rssid=3D196
See also --
* Cable Competition: Where Up is Down and More is Less
http://www.consumersunion.org/blogs/hun/2007/05/cable_competition_where_...
is.html

TELECOM

LEGAL SANITY 'DISCOVERED'
[SOURCE: Wall Street Journal, AUTHOR: Richard Epstein]
[Commentary] The WSJ continues the parade of=20
supporters for a Supreme Court decision that=20
ended a telecom antitrust case before it even got=20
started. Today a Hoover Institution fellow and=20
party in the case under discussion celebrates=20
"what might become a welcome revolution in civil=20
litigation." He reviews Twombly v. Bell Atlantic=20
and concludes: "the Supreme Court faced a moment=20
of truth: Did the plaintiff allege enough facts=20
to make it socially wise to go through discovery,=20
the next procedural step. Extensive FCC=20
oversight, a Department of Justice investigation,=20
and the powerful economic reasons for Bell=20
operating companies to deploy capital elsewhere=20
tipped the balance in favor of ending litigation=20
promptly. One looming question is whether=20
Twombly's healthy skepticism carries over, for=20
example, to class-action claims in securities or=20
antidiscrimination cases. It's too early to=20
predict a system-wide transformation in=20
congressional or judicial attitudes. But, given=20
Twombly, both Congress and the courts are far=20
likelier to end in a sensible place, system wide,=20
if they keep asking this question: Has the=20
plaintiff presented enough by way of evidence to=20
justify any huge additional expenditures of=20
public and private resources in pretrial=20
discovery? One place to start is with=20
across-the-board limitations on discovery, which=20
include stronger judicial oversight coupled with=20
requirements that the moving party bear some or=20
all of the cost of document production and party depositions.
http://online.wsj.com/article/SB117997355435413006.html?mod=3Dtodays_us_...
nion
(requires subscription)
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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.
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