May 2007

For upcoming media policy events, see http://www.benton.org

GOVERNMENT & COMMUNICATIONS
Justice Dept. Search for Rove E-Mails Yields Little
Unfriendly Views on U.S.-Backed Arabic TV
Wiretap Tales
Controversial CEO to Leave Smithsonian Business Ventures

INTERNET/BROADBAND
Hearing Today on Broadband Mapping Bill
FCC Chief Pledges Loyalty To USF, Reforms
It's Silicon Valley vs. Telcos in Battle for Wireless Spectrum

CONTENT
Protecting kids from online food ads
The Sound of Copy Restrictions Crashing
Media Companies Fire Back At Violence Studies
How to End the Reign of Shock Jocks
FCC Fines More Stations For Kids TV Violations
Court Backs Comcast In Dispute With NFL

OWNERSHIP
Clear Channel Sale Is Gaining Momentum
Beware of the promises of Murdoch
Parties Split Over Public Inequities of Private Equity

QUICKLY -- Univision Eyes Retransmission-Consent=20
Fees; Consumers Less Satisfied With TV Service;=20
New Demographic Racial Gap Emerges

GOVERNMENT & COMMUNICATIONS

JUSTICE DEPT SEARCH FOR ROVE E-MAILS YIELDS LITTLE
[SOURCE: Washington Post, AUTHOR: Paul Kane]
The Justice Department told Congress yesterday=20
that a search of e-mails sent over 2 1/2 years=20
turned up a single message in which the=20
department's senior officials communicated with=20
White House adviser Karl Rove about the=20
dismissals of nine U.S. attorneys last year. In a=20
letter to Senate Judiciary Committee Chairman=20
Patrick J. Leahy (D-VT), a senior Justice=20
official said the department scoured its=20
computers in response to a subpoena and found=20
just the single e-mail chain written earlier this=20
year. It already had been released publicly. The=20
possibility that Rove had a role in the removal=20
of the U.S. attorneys has become a central issue in Congress's investigatio=
n.
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/16/AR200705...
2443.html
(requires registration)
* Senators get 2 e-mails on U.S. attorneys
http://www.usatoday.com/printedition/news/20070517/a_capcol17.art.htm

UNFRIENDLY VIEWS O US-BACKED ARABIC TV
[SOURCE: New York Times, AUTHOR: Helene Cooper]
In recent weeks both conservative Republicans and=20
liberal Democrats have attacked Al Hurra --=20
United States-financed Middle East television=20
channel -- for, in the words of The Wall Street=20
Journal=92s editorial page last week, providing=20
=93friendly coverage of camera-ready extremists=20
from Al Qaeda, Hamas and other terrorist groups.=94=20
But blaming the network might be a little like=20
shooting the messenger. The State Department has=20
devoted many resources lately to public=20
diplomacy, including taking Muslim students to=20
the World Cup games in Germany, serving as host=20
for Arab journalists at training seminars in=20
Washington, and dispatching the under secretary=20
of state for public diplomacy, Karen Hughes, to=20
talk to Muslim women around the world. But those=20
efforts do little to counter the rising anger=20
among Arabs over the American role in Iraq and=20
the Bush administration=92s refusal to shut down=20
the military prison at Guant=E1namo Bay in Cuba.
http://www.nytimes.com/2007/05/17/washington/17hurra.html
(requires registration)

WIRETAP TALES
[SOURCE: Wall Street Journal, AUTHOR: Editorial staff]
[Commentary] Former Deputy Attorney General James=20
Comey's Senate testimony earlier this week=20
revealed that nothing illegal was done, he was=20
never threatened by White House officials, and=20
the President told him to do what he felt was=20
right. The Gonzales-Card hospital intrusion was=20
unusual, and politically unwise, but their motive=20
at the time was to gain approval for a program=20
the President thought vital to national security=20
and was about to expire. What's really going on=20
here is a different form of political theater:=20
Democrats are trying to whip up an aura of=20
"illegality" to create the political leverage to=20
strip a Republican President of his surveillance=20
authority in wartime. They've tried to do this=20
since the program was revealed, and back in 2006=20
Russ Feingold compared it to Watergate. But=20
unfortunately for the Democrats, wiretapping=20
aimed at America's terrorist enemies is=20
politically popular. So, rather than arguing the=20
legal merits, Democrats are spinning a yarn about=20
shady deeds perpetrated in a hospital room at=20
night. They are using half-truths to achieve a=20
partisan goal that is dangerous policy, and they shouldn't get away with it.
http://online.wsj.com/article/SB117936562630505722.html?mod=3Dtodays_us_...
nion
(requires subscription)
* The Gonzales Coverup
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/16/AR200705...
2489.html

CONTROVERSIAL CEO TO LEAVE SMITHSONIAN BUSINESS VENTURES
[SOURCE: Washington Post, AUTHOR: James V. Grimaldi and Jacqueline Trescott]
Gary M. Beer, the founding chief executive of the=20
Smithsonian's business unit and architect of a=20
controversial deal with Showtime Networks Inc.,=20
has announced plans to leave amid internal and=20
congressional inquiries into his management,=20
expense account and promotions of a female subordinate.
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/16/AR200705...
1964.html
(requires registration)

INTERNET/BROADBAND

HEARING TODAY ON BROADBAND MAPPING BILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The House Telecom & Internet Subcommittee will=20
hold a hearing on a draft bill that would=20
establish in law that "high-speed" Internet=20
access means "transmission at speeds allowing the=20
user to download not less than 2 megabits per=20
second and upload not less than 1 megabit per=20
second." Moreover, the legislation would require=20
the National Telecommunications & Information=20
Administration and the Federal Communications=20
Commission to collect more, and more precise,=20
data on the rollout of broadband service in the=20
US. The FCC would collect the data, and NTIA=20
would be charged with coming up with a map=20
showing exactly where, and what kind of, broadband service was available.
http://www.broadcastingcable.com/article/CA6442596.html?rssid=3D193
* For more on the hearing see=20
http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.051707.Witness.list...

FCC CHIEF PLEDGES LOYALTY TO USF, REFORMS
[SOURCE: Technology Daily 5/15, AUTHOR: David Hatch]
FCC Chairman Kevin Martin has responded to a=20
detailed query from Rep. Edward Markey (D-MA)=20
regarding the regulator's positions on the=20
multibillion-dollar universal service program=20
that subsidizes telecommunications and Internet=20
connections in rural and impoverished areas.=20
Chairman Martin's response to Rep Markey's April=20
inquiry surfaced publicly Monday. In his letter,=20
Chairman Martin said preserving the stability of=20
the fund "is one of the commission's most=20
important responsibilities." He added that "the=20
system requires fundamental reform, and I support=20
modifying the current contribution system and=20
moving to a more competitively and=20
technology-neutral system." He also told Rep=20
Markey he wants the FCC to explore "how and to=20
what extent" the fund could assist with the=20
deployment of high-speed Internet service in=20
rural and low-income areas, or at least remove=20
barriers to deployment. The chairman reiterated=20
his support for so-called "reverse auctions,"=20
which would award subsidies to carriers agreeing=20
to receive the lowest subsidies. He also=20
expressed hesitancy toward subsidizing multiple=20
carriers in high-cost rural areas because that=20
could "lead to inefficient and/or stranded=20
investment and a ballooning universal service fund."
http://www.njtelecomupdate.com/2007/05/fcc_chief_pledges_loyalty_to_u.html

IT'S SILICON VALLEY VS TELCOS IN BATTLE FOR WIRELESS SPECTRUM
[SOURCE: Wired, AUTHOR: Frank Rose]
Apple's iPhone may be the most eagerly awaited=20
gadget of the year, but when it finally goes on=20
sale some time next month, only 30 percent of US=20
mobile phone customers -- those who subscribe to=20
AT&T's wireless service -- will be able to use=20
it. Verizon subscribers might have had a shot,=20
but executives at that carrier nixed the idea of=20
letting an Apple device onto their network years=20
ago. It's as if Mac owners had to connect to the=20
Internet through AT&T because their machines=20
wouldn't work on Verizon, Comcast or Time Warner=20
Cable. The wire-line Internet doesn't work that=20
way, and wireless doesn't have to either. By the=20
end of this year, the FCC is expected to start=20
auctioning a frequency band that could be used=20
for a wireless network that any device -- be it a=20
cell phone, laptop, desktop, TV or toaster --=20
would be able to connect to. A proposal to build=20
such a network has been presented by Frontline=20
Wireless, a startup backed by three of Silicon=20
Valley's biggest players: Venture capitalist John=20
Doerr, Google angel investor Ram Sriram and=20
one-time Netscape CEO James Barksdale. But=20
Frontline will be bidding against behemoths like=20
Cingular and Verizon, and whether it has a chance=20
will be determined within the next few weeks,=20
when the FCC sets the rules for the auction.
http://www.wired.com/techbiz/media/news/2007/05/uhf_spectrum

CONTENT

PROTECTING KIDS FROM ONLINE FOOD ADS
[SOURCE: C-Net|News.com, AUTHOR: Stefanie Olsen]
In January, the FCC began enforcing new federal=20
rules that restrict children's TV channels like=20
Nickelodeon from displaying Web site addresses=20
that contain any links to commercial content. But=20
critics argue that those regulations are=20
short-sighted, given that marketers today are=20
targeting children on media beyond the TV.=20
Particularly in the last few years, marketing and=20
digital media have merged to create a powerful=20
force in the lives of younger generations,=20
through devices like mobile phones and within=20
virtual reality sites. Nutrition experts and some=20
members of Congress are already showing support=20
for new regulations surrounding digital food=20
marketing. In comments to the Federal Trade=20
Commission Thursday, The Center for Digital=20
Democracy, Children Now and the Berkeley Media=20
Studies Health group argue that there is a need=20
for government intervention in advertising to=20
make sure that marketers "serve the health of our=20
children rather than undermine it."
http://news.com.com/Protecting+kids+from+online+food+ads/2100-1025_3-618...
9.html?tag=3Dnefd.lede
* FTC Asked to Conduct a Broader Food Marketing Inquiry
http://www.broadcastingcable.com/article/CA6442853.html?rssid=3D193
* Is Online Marketing Making Kids Obese?
http://www.businessweek.com/technology/content/may2007/tc20070517_416894...
m?campaign_id=3Drss_tech

THE SOUND OF COPY RESTRICTIONS CRASHING
[SOURCE: Washington Post, AUTHOR: Rob Pegoraro]
The idea of ditching "digital rights management"=20
for music downloads is rapidly changing from=20
dream to business reality -- and faster than=20
anybody might have hoped. Amazon said yesterday=20
that it would open an online store that stocks=20
only MP3 music files without copying=20
restrictions. That would be huge news, except=20
that Amazon is only catching up with Apple, which=20
announced in early April that it would offer=20
DRM-free downloads by the end of this month. Both=20
stores have the public backing of EMI, one of the=20
four big record labels, which yesterday also said=20
it would sell unrestricted music downloads at=20
some European sites. This should delight=20
customers, who will no longer have to worry about=20
being able to listen to their song files on their=20
next music player or their computer. But it must=20
unsettle many music industry executives.
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/16/AR200705...
2762.html
(requires registration)
* Amazon.com takes digital music sales to the next, unprotected level
http://www.usatoday.com/printedition/money/20070517/amazon17.art.htm
* Will labels sing along with DRM-free music?
http://news.com.com/Apple%2C+Amazon+may+hold+future+of+DRM-free+music/21...
1027_3-6184509.html?tag=3Dnefd.lede

MEDIA COMPANIES FIRE BACK AT VIOLENCE STUDIES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
University of Toronto professor Jonathan Freedman=20
concedes that there is a correlation between=20
violent media and aggression, but says that is=20
not the same as causation. While he FCC's recent=20
report to Congress concludes that research shows=20
TV violence is harmful to kids, Prof Freedman=20
says advocates claiming "overwhelming" evidence=20
for the causal connection are wrong -- and need=20
to be challenged on it. Instead, he said, the FCC=20
did no thorough analysis of the research. "There=20
seems to be mainly an acceptance of that view=20
because more of those they talked with favored it=20
than favored the other view," saying the result=20
"could not hope to produce anything of much use."=20
"The Violence Report was very clear to=20
differentiate between causation and correlation,"=20
countered an FCC official. "It said the data on=20
causation is mixed/inconclusive at this time but=20
that there is strong evidence of correlation and=20
that alone warrants some action to be taken."
http://www.broadcastingcable.com/article/CA6442496.html?rssid=3D193
* Freedman's paper:=20
http://www.mediainstitute.org/issue_papers/policyviews/2007/Freedman-Tel...
sionViolence.pdf
* Media Institute challenge FCC
http://www.variety.com/article/VR1117965058.html?categoryid=3D14&cs=3D1&...
=3D2562

HOW TO END THE REIGN OF SHOCK JOCKS
[SOURCE: Media is a Plural, AUTHOR: Rory Connor]
[Commentary] Other than the desire to shock=20
listeners -- and thereby create controversy, grow=20
audiences and sell advertising -- the current=20
spate of repulsive shock-jock gibberish all share=20
something else: a salary from CBS. Once=20
peacock-proud of their self-styled =93Tiffany=94=20
network -- so-called for its supposed devotion to=20
quality -- the corporate heirs of William Paley=20
traded public service for private profit long=20
ago. But now no amount of filthy lucre can=20
perfume away the stench wafting from the current=20
trench of programming sewage being shoveled our=20
way of late by such CBS on-air alleged =91talent=92=20
as Opie & Anthony, JV and Elvis, and Don =93I-Man=94 Imus.
http://www.roryoconnor.org/blog/2007/05/15/the-imus-effect-cbs-shock-joc...
strike-again/
* Listeners shocked by XM hosts' suspension
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera and Amy Kaufman]
Satellite radio bills itself as the Wild West of=20
the airwaves, an uncensored outpost beyond the=20
reach of federal regulators where expletives fly=20
with impunity and the banter can get as raunchy=20
as at a strip club. But the decision this week by=20
XM Satellite Radio to suspend shock jocks Opie=20
and Anthony for 30 days for crude sexual comments=20
about First Lady Laura Bush, Secretary of State=20
Condoleezza Rice and Queen Elizabeth II has=20
listeners wondering whether there's a new sheriff=20
in town. Some XM listeners were outraged =97 not at=20
the comments but at XM's reaction.
http://www.latimes.com/business/printedition/la-fi-shockradio17may17,1,5...
854.story?coll=3Dla-headlines-pe-business
(requires registration)

FCC FINES MORE STATIONS FOR KIDS TV VIOLATIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The FCC has proposed another $36,000 in fines=20
against TV stations for violations of kids TV=20
rules. The biggest fine is $20,000 against Media=20
General's WRBL(TV) Columbus, Ga., for willful and=20
repeated violations of rules requiring it to file=20
reports on compliance with kids TV ad limits, for=20
its failure to publicize the existence of its=20
kids TV programming reports, and for not=20
reporting its FCC-friendly kids programming to program guide publishers.
http://www.broadcastingcable.com/article/CA6442615.html?rssid=3D193

COURT BACKS COMCAST IN DISPUTE WITH NFL
[SOURCE: Technology Daily 5/14, AUTHOR: Michael Martinez]
The television network owned by the National=20
Football League is moving to challenge a recent=20
court ruling in New York that lets Comcast carry=20
it on a special tier for sports programming. In a=20
decision made public late last week, the New York=20
Supreme Court found that Comcast, the nation's=20
largest cable provider, should be allowed to=20
offer the NFL Network in a niche package with=20
fewer subscribers, potentially cutting off the=20
NFL from millions in revenue. Comcast pays the=20
league a fee for each subscriber with access to the channel.
http://www.njtelecomupdate.com/2007/05/court_backs_comcast_in_dispute.html

OWNERSHIP

CLEAR CHANNEL SALE IS GAINING MOMENTUM
[SOURCE: Wall Street Journal, AUTHOR: Dennis K.=20
Berman dennis.berman( at )wsj.com and Sarah McBride sarah.mcbride( at )wsj.com]
Strong momentum was building last night for a=20
final plan to clinch the $19.4 billion sale of=20
Clear Channel Communications Inc. to a duo of=20
private-equity firms. Major shareholders=20
Highfields Capital Management and Fidelity=20
Investments were expected to be on board with a=20
new buyout proposal brought forward last week.=20
This proposal would sweeten the offer for the San=20
Antonio media-and-entertainment company by 20=20
cents a share, to $39.20. The deal also offers=20
current shareholders a chance to own as much as=20
30% of the newly constituted Clear Channel, which=20
would be majority-owned by Bain Capital and=20
Thomas H. Lee Partners. The shareholders' support=20
for the plan clears the way for a deal that has=20
endured months of contention among shareholders,=20
the company's management and the private-equity=20
firms, which had originally hoped to strike a=20
deal at $37.60 per share late last year.
http://online.wsj.com/article/SB117937277807805941.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

BEWARE OF THE PROMISES OF MURDOCH
[SOURCE: New York Observor, AUTHOR: Joe Conason]
[Commentary] After decades of observing the old=20
buccaneer and his deceptions, we know -- and, of=20
course, he knows we know -- that promises he=20
makes are not the kind that will be honored. They=20
merely serve as a temporary gloss covering the=20
sellout of journalistic ideals to Mammon, the=20
company also known as News Corp. What Mr. Murdoch=20
usually guarantees, as he prepares to sack and=20
burn an institution like Dow Jones, is editorial=20
independence and freedom from political or=20
commercial manipulation by him and his=20
operatives. Such promises are -- as Mr. Murdoch=20
reportedly told an editor at The Times of London,=20
who had listened to similar assurances from him=20
about that august publication -- =93not worth the paper they are printed on=
.=94
http://www.observer.com/2007/beware-promises-murdoch

PARTIES SPLIT OVER PUBLIC INEQUITIES OF PRIVATE EQUITY
[SOURCE: Washington Post, AUTHOR: Dale Russakoff]
As attention intensifies on the growing role of=20
private equity in the U.S. economy, a House=20
committee yesterday raised the question of=20
whether the government should intervene to=20
protect the interests of affected workers and=20
communities. The hearing, "Private Equity's=20
Effects on Workers and Firms," was planned weeks=20
ago, and the discussion of exactly what, if=20
anything, the government should do was=20
tentative. Both critics and supporters of=20
private-equity firms -- which use pools of=20
investment capital to buy and run companies with=20
growth potential and later sell them for a large=20
profit -- acknowledged that there are no reliable=20
data on the industry's overall impact on wages, benefits or jobs.
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/16/AR200705...
2726.html
(requires registration)

QUICKLY

UNIVISION'S UVA EYES $1 RETRANSMISSION-CONSENT FEES
[SOURCE: Multichannel News, AUTHOR: Mike Reynolds]
Univision's upfront presentation to advertisers=20
here Wednesday was themed, "I heart Univision."=20
The theme, executives said, underlined the=20
affinity and strong ties that bond the leading=20
Spanish-language broadcast network with its=20
audience. But cable operators may not share such=20
warm and fuzzy feelings toward the broadcaster=20
following Univision Communications=92 new CEO Joe=20
Uva=92s comments about retransmission consent. At a=20
press conference after the presentation, Uva=20
talked about Univision seeking $1 per subscriber=20
from retransmission consent for its stations.
http://www.multichannel.com/article/CA6442860.html?rssid=3D196

CONSUMERS LESS SATISFIED WITH TV SERVICE
[SOURCE: TVPredictions.com, AUTHOR: Phillip Swann]
Despite the rollout of new High-Definition TV=20
services, viewers are less satisfied with the=20
service of their cable and satellite TV=20
providers. That's according to the new American=20
Customer Satisfaction Index, an annual reading of=20
consumer moods in dozens of categories. The=20
report is published by the University of=20
Michigan=92s National Quality Research Center. The=20
new study found that customer satisfaction with=20
the cable and satellite industries combined fell=20
two percent to 62 percent, the lowest level of=20
customer satisfaction in the entire index. Not=20
one TV provider improved on its rating from last year.
http://www.tvpredictions.com/customers051507.htm

NEW DEMOGRAPHIC RACIAL GAP EMERGES
[SOURCE: New York Times, AUTHOR: Sam Roberts]
The Census Bureau estimated yesterday that from=20
July 1, 2005, to July 1, 2006, the nation=92s=20
minority population grew to 100.7 million from=20
98.3 million; that is about one in three of all=20
Americans. The new figures also suggest that many=20
states are growing more diverse as minorities=20
disperse. More than 20 percent of children in the=20
United States either are foreign-born or have a=20
parent who was born abroad. Nearly half the=20
children under age 5 are Hispanic, black or=20
Asian. With the number of nonwhite Americans=20
above 100 million for the first time,=20
demographers are identifying an emerging racial=20
generation gap. That development may portend a=20
nation split between an older, whiter electorate=20
and a younger overall population that is more=20
Hispanic, black and Asian and that presses=20
sometimes competing agendas and priorities.
http://www.nytimes.com/2007/05/17/us/17census.html
(requires registration)
* Census Bureau press release
http://www.census.gov/Press-Release/www/releases/archives/population/010...
.html
--------------------------------------------------------------
Have a great weekend. See you next 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.
--------------------------------------------------------------