May 2007

INTERNET/BROADBAND
USDA Announces New Proposed Rules for Broadband in Rural Communities
Internet's value tied to keeping it neutral
Let the experts run citywide WiFi
DirecTV may try broadband on power lines

TELECOM
More Americans go for cell phones, drop landlines
FCC Seeks Comment on Recommendation to Cap High-Cost Fund
CLECs alarmed by threat of ILEC copper retirement

BROADCASTING/CABLE
Martin: FCC May Need To Regulate Food Ads
The Stable Of Cable As A Poster Child
NAB Concerned About DTV-Box Shortage
Selling Spanish TV to ad buyers

MEDIA OWNERSHIP
News Corp. to offer board seat to Bancrofts

TEN YEARS AGO...
So Far, Murdoch's Bid To Enter Satellite TV In U.S. Goes Nowhere

QUICKLY -- Pentagon Blocks 13 Web Sites From=20
Military Computers; Campaigns Embrace Use of Text=20
Messages; Laptops in the classroom: Mend it,=20
don't end it; Study sees no future in selling=20
video downloads; Viacom sees more strength in Web advertising

INTERNET/BROADBAND

USDA ANNOUNCES NEW PROPOSED RULES FOR BROADBAND IN RURAL COMMUNITIES
[SOURCE: US Department of Agriculture]
On Friday, Agriculture Under Secretary for Rural=20
Development Thomas C. Dorr announced the=20
publication of new proposed rules designed to=20
facilitate the further deployment of broadband=20
services to rural communities nationwide. Key=20
elements include: 1) Promoting deployment to=20
rural areas with little or no service; 2)=20
Ensuring that residents in funded areas get=20
broadband access more quickly; 3) Limiting=20
funding in urban areas and areas where a=20
significant share of the market is served by=20
incumbent providers; 4) Clarifying and=20
streamlining equity and marketing survey=20
requirements; 5) Increasing the transparency of=20
the application process, including legal notice=20
requirements, to make more informed=20
lending/borrowing decisions; 6) Promoting a=20
better understanding of all application=20
requirements, including market survey,=20
competitive analysis, business plan, and system=20
design requirements; and 7) ensuring that=20
projects funding are keeping pace with increasing demand for bandwidth.
http://www.dailywireless.org/2007/05/14/rural-broadband-gets-a-plan/

INTERNET'S VALUE TIED TO KEEPING IT NEUTRAL
[SOURCE: Portland Press Herald, AUTHOR: Editorial staff]
[Commentary] Successful economic eras can usually=20
be traced back to a technology breakthrough and=20
the public policy decisions made to support it.=20
In the years leading up to and during the early=20
21st century, the Internet has emerged as a=20
technological development on par with the=20
creation of the railroad or telephone. And like=20
those inventions, the impact of the Internet on=20
our economy -- and, in this case, on our ability=20
to exercise our free-speech rights -- has been=20
aided by sensible public policy choices. Setting=20
the Internet up as a resource available to all on=20
the same, low-cost terms has made it an=20
unprecedented innovation tool. It has also=20
allowed the Internet to become the place where=20
just about anybody can start a business or make=20
their voice and views available to the world.=20
Now, however, there are forces working to undo=20
the sensible and essential rules that govern the=20
use of the Internet. Some -- though not all --=20
Internet service providers want the ability to=20
create two standards for Internet transmission.=20
Even if it's true that getting rid of net=20
neutrality would bring consumers cheaper Internet=20
service, the cost to the overall economy in lost=20
innovation would hardly make the change=20
worthwhile. Besides, the surest way to give=20
consumers the best price is to make it possible=20
for multiple players to package and offer local=20
and national television content, high-speed=20
Internet, phone and cell-phone services. As we=20
move in that direction, we'll also need a system=20
for raising money to provide incentives to=20
providers to serve rural areas. All that can be=20
accomplished without undermining the principle=20
that the Internet should serve all comers on an equal basis.
http://pressherald.mainetoday.com/viewpoints/editorials/070512netneutral...
ml

LET THE EXPERTS RUN CITYWIDE WIFI
[SOURCE: San Francisco Chronicle, AUTHOR: Steve=20
Falk, San Francisco Chamber of Commerce]
[Commentary] San Francisco has an unprecedented=20
opportunity to build a new model for Internet=20
access across the country and demonstrate our=20
unique capacity to provide this dynamic and=20
essential technology to all who live here. It is=20
well understood that the Internet will continue=20
to grow as a primary means of communications,=20
education and commerce. Expanding its use will=20
certainly fuel our continued economic=20
competitiveness. San Francisco's controller has=20
confirmed the WiFi proposal will favorably impact=20
the local economy and save consumers between $9=20
million and $18 million annually. It's time for=20
San Franciscans to make their voices heard in the=20
corridors of City Hall. Today's hearing will be=20
the first of a series of public hearings on the=20
WiFi proposal. Let the Board of Supervisors know=20
you support free WiFi for all San Franciscans and=20
the negotiated agreement to get the project going=20
today. Stop the politics -- San Franciscans expect and deserve more.
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2007...
/14/EDGGTP3D0F1.DTL

DIRECTV MAY TRY BROADBAND ON POWER LINES
[SOURCE: Reuters, AUTHOR: Yinka Adegoke and Robert MacMillan]
Satellite television provider DirecTV Group Inc.=20
may test delivering high-speed Internet service=20
through power lines in a major U.S. city in the=20
next year, its chief executive said on Monday.=20
DirecTV and others are talking to companies that=20
specialize in providing broadband through the=20
electrical grid. DirecTV would like to test=20
delivering Internet access on power lines in a=20
"top 50 city where you're covering at least half=20
the city." While DirecTV and fellow satellite TV=20
operator EchoStar Communications Corp. have=20
managed to keep increasing their subscriber base=20
in the face of stiff competition from cable=20
operators, Wall Street analysts have long=20
questioned what broadband strategy the satellite=20
operators will employ to counter competitive pressures.
http://www.reuters.com/article/technologyNews/idUSN1433448320070514

TELECOM

MORE AMERICANS GO FOR CELL PHONES, DROP LANDLINES
[SOURCE: San Francisco Chronicle, AUTHOR: Ryan Kim]
Not so many years ago, the cell phone was=20
considered a luxury item while the landline was=20
standard in every household. My, how times have=20
changed. Today, the cell phone is regarded as a=20
necessity by a growing number of Americans --=20
especially the young and the poor -- while the=20
residential phone is becoming optional. The=20
trend, according to a new survey by the Centers=20
for Disease Control and Prevention, is not=20
limited to just one or two demographic groups but=20
is slowly expanding to include all age and income=20
groups. According to the survey of 13,056=20
households across the nation, 29.1 percent of=20
people ages 25 to 29 and 25.2 percent of the=20
respondents ages 18 to 24 have abandoned=20
residential phones and rely solely on cell=20
phones. Among poor households, more than 1 in 5=20
(22.4 percent) have cut the cord, about twice the=20
rate of other respondents. The survey says 12.8=20
percent of households rely solely on cell phones=20
for communication, up from 3.2 percent in the=20
beginning of 2003, when the semi-annual survey began.
http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2007/05/15/PHONES.TMP
* Disaster alert? Check your cellphone.
California weighs using text messages to warn residents during emergencies.
http://www.csmonitor.com/2007/0515/p02s01-ussc.html

FCC SEEKS COMMENT ON RECOMMENDATION TO CAP HIGH-COST FUND
[SOURCE: Federal Communications Commission]
The Federal Communications Commission is seeking=20
prompt comment on a recommendation by the=20
Federal-State Joint Board on Universal=20
Service that the Commission take immediate=20
action to rein in the explosive growth in=20
high-cost universal service support=20
disbursements. Comments and replies on the=20
Notice of Proposed Rulemaking (NPRM) released=20
Monday May 14 will be due 14 and 21 days after=20
publication of the NPRM in the Federal Register.=20
High-cost support helps make phone service=20
affordable for consumers in rural and other high-cost areas.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-273027A1.doc
NPRM: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-88A1.doc

CLECs ALARMED BY THREAT OF ILEC COPPER RETIREMENT
[SOURCE: CedMagazine.com, AUTHOR: Brian Santo]
Don't be scared off by this article's alphabet=20
soup... The Office of Advocacy of the U.S. Small=20
Business Administration has asked the FCC to open=20
a rulemaking on the way incumbent local exchange=20
carriers (ILECs -- think AT&T, Verizon, etc)=20
retire their copper infrastructure. The move may=20
help competitive carriers (CLECs -- think XO=20
Communications) who lease those lines. The Office=20
of Advocacy has sent a letter with that request=20
to FCC Chairman Kevin Martin. In it, the Office=20
asserts that CLECs are developing competitive new=20
services that ultimately benefit consumers. A=20
rulemaking, the Office said, will give these=20
companies a formal venue for discussing the=20
issue. ILECs don't rip out their copper when they=20
install fiber. The procedure, as they install=20
more and more fiber, is to send a copper=20
retirement petition to the FCC. These are granted=20
in as few as seven business days. Once approved,=20
the ILECs no longer have to support those lines,=20
although apparently, they typically still do.=20
CLECs who may be using those lines (or who had=20
planned to) remain concerned, however, that the=20
ILECs could entirely shut down their retired=20
copper loops. Recall, too, that the FCC has=20
determined that ILECs do not have to lease fiber=20
loops to CLECs. In essence, the CLECs see a=20
threat that as ILECs are increasing their=20
potential fiber markets, they could=20
simultaneously shrink the CLECs=92 potential=20
markets. Meanwhile, the pace at which the ILECs=20
file petitions for copper retirement is=20
accelerating as the pace of their fiber installations increases.
http://www.cedmagazine.com/article.aspx?id=3D147700

BROADCASTING/CABLE

MARTIN: FCC MAY NEED TO REGULATE FOOD ADS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In a letter to House Telecommunications And=20
Internet Subcommittee Chairman Ed Markey (D-MA),=20
Federal Communications Commission Chairman Kevin=20
Martin and Commissioner Deborah Tate say the FCC=20
may have to take steps to put additional=20
restrictions on TV food advertising to kids.=20
These restrictions could include limiting or=20
eliminating the advertisements if the=20
government/industry task force does not come up=20
with sufficient self-regulation. They also said=20
that any such regulation should target cable,=20
where they argue the marketing of snack foods=20
that "exacerbates the problems of childhood=20
obesity and poor nutrition." They added that any=20
proposed solution that does not include cable=20
regulations "would be inappropriate and=20
ineffective." They also said that the FCC would=20
consider Chairman Markey's proposal to disqualify=20
shows that air "junk food" ads from meeting the=20
FCC's three-hour weekly educational programming=20
minimum if the Task Force on Media and Childhood=20
Obesity -- of which Martin and Tate are members=20
-- did not come up with sufficient self-regulation.
http://www.broadcastingcable.com/article/CA6442041.html?rssid=3D193
* See Chairman Markey's letter and responses from=20
Martin/Tate and fellow FCC Commissioner Michael Copps
http://markey.house.gov/index.php?option=3Dcom_content&task=3Dview&id=3D...
1&Itemid=3D141
* Martin: Cable Part of Junk-Food Problem
http://www.multichannel.com/article/CA6442081.html?rssid=3D196

THE STABLE OF CABLE AS A POSTER CHILD
[SOURCE: MediaChannel.org, AUTHOR: Danny Schechter]
The market is our icon and fetish built on the=20
assumption that it acts freely, guided by an=20
=93invisible hand=94 in Adam Smith=92s phrase, and=20
always clear of external pressures except the=20
occasional=ADand I would say systematic=ADacts of=20
corruption. No one talks about what this word=20
market really means or what its impact is. In=20
theory, we have a market system that reflects the=20
democratic impulses of buyers and sellers. In=20
practice, there is nothing free about it. It is=20
dominated and monopolized by a handful of=20
companies who choke off real competition and=20
exclude players who challenge their dominance. A=20
=93deregulated regime=94 guarantees market failure=20
and all the problems that go along with it. Cable=20
execs =93understand=94 the concerns of their viewers=20
and critics but please, they implore, Congress=20
and the FCC don't regulate, don't impose public=20
interest obligations, don't insist on more=20
diversity or kids fare or honest news, don't=20
assure the continuing presence of public access=20
programming, and most of all, don't do anything=20
that will stop the revenues flowing into huge=20
media combines as Americans pay more and more for=20
cable and entertainment and often get less and=20
less. What we need is more regulation in the=20
public interest and rules to insure that the=20
needs of viewers come before the needs of=20
advertisers and highly paid cable executives.
http://www.mediachannel.org/wordpress/2007/05/14/the-stable-of-cable-as-...
oster-child/

NAB CONCERNED ABOUT DTV-BOX SHORTAGE
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The National Association of Broadcasters is=20
concerned that millions of digital converter=20
boxes won't be widely available Jan. 1, 2008, for=20
consumers who want to keep using analog TV sets=20
many years into the future. In a letter to=20
leaders of the Consumer Electronics Association=20
and the Consumer Electronics Retailers Coalition=20
Monday, NAB President David Rehr said, =93It is=20
critical to our collective success that=20
manufacturers build, and retailers have available=20
for sale, digital-to-analog converter boxes by=20
[Jan. 1, 2008]. As I am sure you are aware, if=20
boxes are not produced and on store shelves on=20
Jan. 1, 2008, significant consumer confusion will=20
result and could negatively impact the overall=20
success of the transition.=94 Ironically, the NAB,=20
CEA and National Cable & Telecommunications=20
Association are leading partners in a coalition=20
designed to prepare the public for the government=20
mandated cutoff of analog TV on Feb. 17, 2009.
http://www.multichannel.com/article/CA6442082.html?rssid=3D196
* NAB Warns Of Digital TV Box Shortage
http://www.tvpredictions.com/dtv051507.htm
* Text of letter
http://www.nab.org/xert/corpcomm/pressrel/releases/051407_DKR_to_CEA_CER...
df

SELLING SPANISH TV TO AD BUYERS
[SOURCE: Los Angeles Times, AUTHOR: Lorenza Mu=F1oz]
Considering that Latinos make up the largest=20
ethnic group in the United States and Latino=20
buying power is on an upward march, you'd figure=20
Spanish-language networks would be fighting=20
advertisers off. They aren't. This week in New=20
York, where the bulk of the commercial time for=20
the upcoming television season will be sold at=20
what's called the upfront market, Univision and=20
Telemundo will need to make hard sells.=20
Advertising spending on Spanish-language media=20
has been growing, rising more than 14% last year=20
from 2005, according to Nielsen Co. But only 3.2%=20
of total national television and print=20
advertising is directed at Spanish markets in the=20
Spanish language, TNS Media Intelligence has=20
found. What's more, recent research by the Assn.=20
of Hispanic Advertising Agencies determined that=20
of the country's top 250 advertisers, about 100=20
don't market in Spanish at all, and many of those=20
that do aim less than 1% of their promotional=20
budgets at Latinos. A large group of advertisers=20
=97 mainly in the banking, investment and=20
technology industries =97 question whether they=20
need to reach out to Latinos en espa=F1ol or=20
whether their messages are getting across in English.
http://www.latimes.com/business/printedition/la-fi-spanishads15may15,1,2...
672.story?coll=3Dla-headlines-pe-business
(requires registration)

MEDIA OWNERSHIP

NEWS CORP TO OFFER BOARD SEAT TO BANCROFTS
[SOURCE: Reuters]
Media conglomerate News Corp. said on Monday it=20
will offer members of Dow Jones & Co. Inc.'s=20
controlling family, the Bancrofts, a seat on News=20
Corp.'s board if they approve a $5 billion buyout=20
offer. In a letter sent to members of the family=20
on Friday, News Corp. Chief Executive Rupert=20
Murdoch promised to preserve the journalistic=20
integrity of Dow Jones' flagship newspaper, The=20
Wall Street Journal, and said he would establish=20
an editorial board to oversee the news pages.=20
Murdoch also said he would retain current management.
http://today.reuters.com/news/newsArticle.aspx?type=3DindustryNews&storyID=
=3D2007-05-14T213553Z_01_WEN8081_RTRIDST_0_INDUSTRY-NEWSCORP-DOWJONES-DC.XML
* 'WSJ' Report: Murdoch Offers Board Seat to Bancrofts in Bid for Dow Jones
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003584924
* In Letter, Murdoch Offers a Seat On Board to Dow Jones Owners
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/14/AR200705...
0801.html
* Murdoch: 'Journal' would be untouched
http://www.usatoday.com/printedition/money/20070515/2b_dowjones15.art.htm
* Dow Jones bid is defended by Murdoch
http://www.latimes.com/business/printedition/la-fi-dowjones15may15,1,310...
.story?coll=3Dla-headlines-pe-business
* Wall Street Journal's Pulitzer Prize-Winning=20
China Reporters Write Letter Blasting Murdoch Takeover Bid
The paper's China-based reporters -- whose=20
coverage won a Pulitzer this year -- have now=20
sent a powerful letter to three key members of=20
the Bancroft family, the Dow Jones Company's=20
controlling shareholder. The letter -- to family=20
members Leslie Hill, Elizabeth Steele and=20
Christopher Bancroft, and to trustee Michael=20
Elefante, all of whom are on Dow Jones' board --=20
warns that Murdoch could use the Journal as a=20
tool to advance his business interests in China.
http://www.talkingpointsmemo.com/horsesmouth/2007/05/wall_street_jou.php

TEN YEARS AGO...

SO FAR, MURDOCH'S BID TO ENTER SATELLITE TV IN U.S. GOES NOWHERE
[SOURCE: Wall Street Journal 5/15/1997, AUTHOR:=20
John Lippman, Mark Robichaux, and Bryan Gruley]
Ten years ago, Rupert Murdoch had cornered the=20
satellite TV market in Asia and Europe and had=20
start up companies in Latin America. But the US=20
market was not falling into his lap. Murdoch=20
made a too-hasty deal with EchoStar, which then=20
fell apart and EchoStar then sued News Corp. for=20
$5 billion. Also Murdoch's plans were a threat=20
to the cable industry and Murdoch couldn't anger=20
cable too much because he needed cable systems to=20
carry News Corp's F/X entertainment and Fox News Network.
http://online.wsj.com/PA2VJBNA4R/snippet/SB863654164502561500-search.html
(requires $2.95 fee)

QUICKLY

PENTAGON BLOCKS 13 WEB SITES FROM MILITARY COMPUTERS
[SOURCE: New York Times, AUTHOR: Dan Frosch]
Members of the military will not be allowed to=20
use military computers to communicate through Web=20
sites like YouTube and MySpace under restrictions=20
that the Pentagon imposed yesterday. The rule=20
bans 13 sites, many of them networking, music or=20
photo-sharing sites, because they have slowed the=20
Internet network of the Defense Department,=20
military officials said. Critics said the policy=20
represented the latest effort to control the=20
deluge of information flowing from soldiers on the battlefield.
http://www.nytimes.com/2007/05/15/washington/15block.html
(requires registration)
* A Casualty Of War: MySpace
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/14/AR200705...
0112.html

CAMPAIGNS EMBRACE USE OF TEXT MESSAGES
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz( at )wsj.com]
Text messaging went mainstream as a political=20
tool yesterday as Democratic candidate Sen.=20
Hillary Clinton launched a service asking=20
supporters to sign up for regular text-messaged=20
campaign updates. Sen Clinton isn't the first=20
2008 presidential candidate to embrace text=20
messaging -- rival John Edwards began in December=20
and Illinois Sen. Barack Obama plans to start=20
soon -- but her use of it signals how widespread=20
the technology is becoming for political=20
campaigns. Many presidential campaigns are now=20
experimenting with how to use the service.=20
Political campaigns generally lag in adopting new=20
types of advertising or technology, but with so=20
many candidates vying for the presidency, all of=20
the top-tier aspirants are elbowing each other to=20
get ahead -- or at least not get left behind.=20
They're posting videos on YouTube, creating=20
profiles on social-networking sites like MySpace=20
and Facebook and posting messages on blogs.
http://online.wsj.com/article/SB117918406231802526.html?mod=3Dtodays_us_...
e_one
(requires subscription)

LAPTOPS IN THE CLASSROOM: MEND IT, DON'T END IT
[SOURCE: The Christian Science Monitor, AUTHOR: Justin Reich]
[Commentary] More and more professors are banning=20
laptops from their classrooms. They argue that=20
the computers turn students into stenographers=20
instead of critical thinkers, or, more often,=20
distract them with online shopping or e-mail.=20
These are the same laptops, mind you, that many=20
schools required students to buy in the first=20
place, and they connect wirelessly to a network=20
that universities have spent millions to install.=20
Technology fees and tuition hikes are hard to=20
swallow for students taking notes with a pencil.=20
After a decade of infusing technology into=20
university facilities with gusto, the bandwagon=20
is crashing into the classroom door. Provosts and=20
presidents can rewire facilities and require=20
laptop purchases, but these innovations are for=20
naught if professors use the same old lecture=20
notes. Computers can transform the way students=20
learn only if instructors change the way they teach.
http://www.csmonitor.com/2007/0515/p09s01-coop.html

STUDY SEES NO FUTURE IN SELLING VIDEO DOWNLOADS
[SOURCE: Reuters ]
Sites that sell movies and TV shows such as=20
Apple's iTunes will likely peak this year and=20
then lose popularity as more content becomes=20
available on free outlets supported by ads,=20
according to a new study. Sales of movies and=20
television shows are expected to almost triple to=20
$279 million in 2007 from an estimated $98=20
million last year. But unless the average=20
consumer begins paying for their online video en=20
masse, growth in sales will likely peter out next=20
year, according to Forrester Research. Currently,=20
only about 9 percent of Net-using adults have=20
paid to download a program or a movie, the study=20
said. These people spent an average of $14 each=20
to buy videos last year and will likely spend more this year.
http://news.com.com/Study+sees+no+future+in+selling+video+downloads/2100...
26_3-6183466.html?tag=3Dhtml.alert.hed

VIACOM SEES MORE STRENGTH IN WEB ADVERTISING
[SOURCE: Reuters, AUTHOR: Kenneth Li and Michele Gershberg]
Viacom Inc. is making the majority of its digital=20
revenue from advertising sales and expects=20
branded advertising to continue to be a major=20
driver of growth, Chief Executive Philippe Dauman=20
said on Monday. While the company is pursuing=20
multiple strategies for capitalizing on use of=20
its entertainment over the Web, mobile phones and=20
other platforms, Internet advertising is still=20
the strongest segment compared with subscriptions=20
or download revenue. Viacom has set its sights on=20
doubling its digital revenue in 2007 from a year=20
ago to the $500 million level, helped by Web=20
extensions of its popular Comedy Central,=20
Nickelodeon and MTV shows on cable television.
http://www.reuters.com/article/internetNews/idUSN1431090420070514
--------------------------------------------------------------
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.
--------------------------------------------------------------