May 2007

NEWS FROM THE FCC
Is the FCC DOA?
Testimony of Jonathan Adelstein on Rural Broadband
Frontline Wireless Wins Over FCC Chairman In Run-Up To 700-MHz Auc=
tion
Verizon warns against unnecessary U.S. auction rules
Informal Consumer Inquiries and Complaints

CONTENT
For teens, too much TV can impair learning later, study says
Time to tame TV violence
Media execs blast further U.S. TV regulation
Univision Gives Citizenship Drive An Unusual Lift
HBO's Zitter Says DRM Is Misnomer

MEDIA OWNERSHIP
Private Equity: So Who Are These Guys?
Eight More Reasons To Distrust Murdoch
CBS-Fox Duopoly Takes Shape in Traverse City
Zell firm's point man is believer in paper profits

JOURNALISM
Locked Out: The Lack of Gender and=20
Ethnic Diversity on Cable News Continues
Where's the paper?
AFTRA Sees Red Over L.A. Police 'Brutality'

QUICKLY -- Where have the TV viewers gone?; Qwest=20
renews bid for franchise deals; Guess It Depends=20
on What the Definition of "Consumer" Is; MySpace=20
to host online town halls for users to question candidates

NEWS FROM THE FCC

IS THE FCC DOA?
[SOURCE: Los Angeles Times, AUTHOR: Glenn Harlan Reynolds]
[Commentary] Is there are role for the FCC in the=20
21st century? No. OK -- maybe setting technical=20
standards and assigning spectrum=97though that=20
could probably be undertaken just as well by=20
private bodies and auctions. In the 21st Century,=20
the twin arguments for an FCC role, limited=20
broadcast spectrum and public ownership of the=20
airwaves, have become obsolete. Broadcast=20
spectrum isn't limited=97most towns have room for=20
more TV and radio broadcasters than they can=20
economically support anyway. (Your real=20
information-industry monopolist in most towns is=20
the local newspaper, which the FCC won't touch.)=20
And the public "ownership" of the airwaves=97why?=20
The public didn't discover them. Neither did the government.
http://www.latimes.com/news/opinion/la-op-dustup10may10,0,3652860.story?...
l=3Dla-opinion-center
(requires registration)

TESTIMONY OF JONATHAN ADELSTEIN
[SOURCE: Federal Communications Commission]
On May 9, FCC Commissioner Jonathan Adelstein=20
testified before the House Subcommittee on Rural=20
and Urban Entrepreneurship. The subject was=20
ensuring the ubiquitous deployment of affordable,=20
high speed broadband infrastructure to every=20
corner of this country. He recommended 1)=20
setting ambitious goals and shoot for real=20
high-bandwidth broadband deployment; 2) updating=20
our current anemic definition of high-speed of=20
just 200 kbps in one direction to something more=20
akin to what consumers receive in countries with=20
which we compete; 3) compiling more reliable,=20
more specific data so we can better ascertain our=20
current problems and develop responsive=20
solutions; 4) redoubling our efforts to encourage=20
broadband development by increasing incentives=20
for investment; 5) providing adequate funding for=20
Rural Utilities Service broadband loans and=20
grants; 6) ensuring RUS properly targets those=20
funds; 7) providing tax incentives for companies=20
that invest in broadband to underserved areas; 8)=20
devising better depreciation rules for capital=20
investments in targeted telecommunications=20
services; 9) investing in basic science research=20
and development to spur further innovation in=20
telecommunications technology; 10) improving math=20
and science education so that we have the human=20
resources to fuel continued growth, innovation=20
and usage of advanced telecommunications=20
services; and 11) properly channeling universal=20
service and promoting spectrum-based services for Rural America.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-272954A1.doc

FRONTLINE WIRELESS WINS OVER FCC CHAIRMAN IN RUN-UP TO 700-MHZ AUCTION
[SOURCE: InformationWeek 5/8, AUTHOR: Richard Martin]
Speaking at a civic group luncheon in Silicon=20
Valley last week, FCC chairman Kevin Martin gave=20
his clearest indication yet of how he thinks the=20
upcoming auction of 700-MHz spectrum for wireless=20
broadband services should be structured. "One of=20
the things that I think we need to do is [to=20
consider] the potential to have some synergies=20
between the two, some public-private partnerships=20
that would allow for cross-utilization of the=20
spectrum," Chairman Martin said. "Public safety=20
[agencies are] coming to us to say they don't=20
have the resources to build out a next-generation=20
[wireless] network. The question is one of how to=20
work with the private sector." He then described=20
an auction in which two-thirds of the 60 MHz of=20
available bandwidth would be reserved for smaller=20
local players, and the remaining 20 MHz would be=20
offered to larger players to create an entity=20
that "can compete effectively with established=20
phone and cable carriers." That sounds an awful=20
lot like the proposal put forth by Frontline=20
Wireless, a startup headed by a trio of veteran=20
telecom executives including Reed Hundt, himself=20
the former FCC chairman. Backed by prominent=20
Silicon Valley investors including Netscape=20
founder Jim Barksdale and John Doerr of venture=20
capital firm Kleiner Perkins Caufield and Byers,=20
Frontline is proposing the building of a=20
nationwide broadband network that would be=20
available for public safety use during=20
emergencies and leased to commercial carriers at=20
other times. To ensure that it can successfully=20
compete against the major wireless carriers AT&T=20
(formerly Cingular) and Verizon Wireless, Hundt's=20
group has asked that a portion of the valuable=20
spectrum be set aside in the auction for smaller players.
http://www.informationweek.com/shared/printableArticle.jhtml?articleID=3...
9400224

VERIZON WARNS AGAINST UNNECESSARY US AUCTION RULES
[SOURCE: Reuters]
Responding to the Federal Communications=20
Commission's request for public comments, Verizon=20
Communications says it opposes a proposal that=20
would require the winner of an coming sale of=20
wireless airwaves to offer "open access" to=20
rivals. "We believe rules should not dictate a=20
business plan. They should give every player a=20
chance to bid on the spectrum," said Thomas=20
Tauke, Verizon's executive vice president of=20
public affairs and communications. Tauke was mum=20
on exactly what kind of auction rules Verizon=20
would prefer, but did take exception to one=20
proposal that asked the FCC to designate half of=20
the available spectrum as "open access." That=20
means any company with a device or phone could=20
pay to use or lease the winning bidder's network.=20
Tauke said open access would diminish the value=20
of the spectrum and likened it to a form of Internet regulation.
http://www.reuters.com/article/governmentFilingsNews/idUSN0736525220070508

INFORMAL CONSUMER INQUIRIES AND COMPLAINTS
[SOURCE: Federal Communications Commission]
The FCC has released its report on the top=20
subject areas for inquiries and complaints=20
processed by the Consumer & Governmental Affairs=20
Bureau (CGB) during the fourth quarter of=20
calendar year 2006. Wireless complaints had a=20
slight rise from 4,149 in the 3rd quarter to=20
4,600 in the 4th quarter. Billing and Rates was=20
the top Wireless category again this quarter.=20
Wireline complaints rose from 12,426 in the 3rd=20
quarter to 13,490 in the 4th quarter. The number=20
of Radio and Television Broadcasting complaints=20
decreased from 163,134 in the 3rd quarter to 33,327 in the 4th quarter.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-272902A1.doc
* FCC indecency complaints dropped by end of 2006
http://www.lasarletter.net/drupal/node/397
* Violence Doesn't Even Make List of Top FCC Complaints
http://www.broadcastingcable.com/article/CA6440902.html

CONTENT

FOR TEENS, TOO MUCH TV CAN IMPAIR LEARNING LATER
[SOURCE: The Christian Science Monitor, AUTHOR: Daniel B. Wood]
If your 14-year-old is sitting in front of the TV=20
for hours a day, your concerns about your=20
teenager's education may be borne out. That's=20
because watching three or more hours of=20
television a day leads to poor homework=20
completion, negative attitudes toward school, bad=20
grades, and poor performance in college,=20
according to a study published this week.
http://www.csmonitor.com/2007/0510/p03s02-ussc.html

TIME TO TAME TV VIOLENCE
[SOURCE: The Christian Science Monitor, AUTHOR: Editorial staff]
[Commentary] The television industry is not=20
correcting itself to the satisfaction of parents=20
=96 whose children watch an average of two to four=20
hours of TV a day. Eighty-two percent of parents=20
with young children say violence in children's=20
programming is a major concern. Nine in 10 say it=20
has a serious negative impact on their kids.=20
Government regulation is tricky here because the=20
courts have protected violent speech and=20
depictions under the First Amendment. But doing=20
nothing would leave children at greater risk to=20
models of violence. And it would leave society at=20
greater risk of aggression committed by people=20
who were influenced by violent media, as many=20
studies show. Congress may resist a foray into=20
these other media areas. But unless it acts now=20
to claim a right to regulate in them, society=20
might as well give up trying to have any=20
collective controls other than consumer boycotts=20
to curb the corrosive effects of violent media.
http://www.csmonitor.com/2007/0510/p08s01-comv.html

MEDIA EXECS BLAST FURTHER US TV REGULATION
[SOURCE: Reuters, AUTHOR: Yinka Adegoke]
Media executives on Tuesday criticized potential=20
further U.S government involvement in regulating=20
what Americans watch on television and called on=20
industry lobbyists to prepare for a battle in Washington.
http://www.reuters.com/article/industryNews/idUSN0848966520070509
* Media execs fear government, not Google
http://telephonyonline.com/home/news/ncta_google_government_050807/

UNIVISION GIVES CITIZENSHIP DRIVE AN UNUSUAL LIFT
[SOURCE: Wall Street Journal, AUTHOR: Miriam Jordan miriam.jordan( at )wsj.com]
Backed by the largest Spanish-language broadcast=20
network in the U.S., a massive campaign by Latino=20
media and grass-roots groups to spur millions of=20
eligible Hispanic residents to become U.S.=20
citizens is showing results that could influence=20
the agenda and outcome of the 2008 election. More=20
than eight million green-card holders -- that is,=20
legal permanent residents -- are eligible to=20
become U.S. citizens, and the majority are=20
immigrants of Latin American origin, according to=20
U.S. government data. Now, Univision=20
Communications Inc. is using its considerable=20
clout with the Spanish-speaking community in the=20
U.S. to turn this latent voting bloc into an=20
active and potentially potent force. The=20
citizenship drive, which is about to go national,=20
could help turn Latinos into a key electoral=20
constituency in several states. A larger bloc of=20
new Latino voters would likely influence the=20
immigration debate that has been dividing the=20
country. In part because of this, Hispanic voters=20
in recent elections have tended to cast ballots mostly for Democrats.
http://online.wsj.com/article/SB117876675523098194.html?mod=3Dtodays_us_...
e_one
(requires subscription)

HBO'S ZITTER SAYS DRM IS MISNOMER
[SOURCE: Broadcasting&Cable, AUTHOR: Glen Dickson]
Digital rights management (DRM) is the wrong term=20
for technology that secures programmers' content=20
as it moves to new digital platforms says HBO=20
Chief Technology Officer Bob Zitter, since it=20
emphasized restrictions instead of opportunities.=20
Speaking at a panel session at the NCTA show in=20
Las Vegas Tuesday, Zitter suggested that "DCE,"=20
or Digital Consumer Enablement, would more=20
accurately describe technology that allows=20
consumers "to use content in ways they haven't=20
before," such as enjoying TV shows and movies on=20
portable video players like iPods.
http://www.broadcastingcable.com/article/CA6440876.html

MEDIA OWNERSHIP

PRIVATE EQUITY: SO WHO ARE THESE GUYS?
[SOURCE: tvnewsday, AUTHOR: Price Colman]
As private equity funds increase their=20
investments in broadcast, the ownership landscape=20
is changing. Get past the network O&Os and the=20
stations owned by old-line newspaper publishers=20
like Scripps, Hearst, Gannett and the Washington=20
Post and it seems the industry is being taken=20
over by the big-money private equity firms. Among=20
the TV groups in their thrall (or soon to be) are=20
Barrington, Nexstar, the New York Times stations,=20
BlueStone, Montecito, Freedom, Ion Media, Clear=20
Channel Television, Tribune, LIN TV and=20
Univision. The names of the private equity owners=20
behind those companies are not so familiar: ABRY,=20
Blackstone, Cerberus, Diamond Castle, HM Capital,=20
Oak Hill, Pilot Group and Providence Equity. And,=20
for the most part, the people who run the funds=20
and ultimately control the stations are unknown=20
in traditional broadcasting circles and to the=20
men and women who actually run the stations. They=20
aren't active in the trade associations, they=20
don't give speeches or sit on panels at TV=20
conventions and they may never have stepped=20
inside of a TV station. Yet, so far, their=20
growing presence in broadcasting has not tripped=20
any alarms, or caused any upheavals in the way=20
business is being done, although a private equity=20
takeover almost invariably means the imposition=20
of great efficiencies=97that is, fewer jobs.
http://www.tvnewsday.com/articles/2007/05/09/daily.2/

EIGHT MORE REASONS TO DISTRUST MURDOCH
[SOURCE: Slate, AUTHOR: Jack Shafer]
[Commentary] The Wall Street Journal may not be a=20
perfect newspaper, but its news pages=20
consistently run counter to its economic=20
interests=97that is, if the paper can bruise or=20
bloody a misbehaving or corrupt business with a=20
well-reported story, it does. The same goes for=20
advertisers. The same can't be said for Rupert=20
Murdoch, whose $5 billion offer for Dow Jones,=20
which owns the Journal, seems unstoppable.
http://www.slate.com/id/2165839/
* The O'Murdoch factor
Rupert Murdoch's bid to take over the Wall Street=20
Journal is a dramatic illustration of why public=20
ownership is a disaster for newspapers.
http://www.salon.com/opinion/feature/2007/05/09/murdoch/
* Betting Against Murdoch
http://www.nysun.com/article/54080
* The Umpteenth Epistle to the Bancrofts
http://www.observer.com/2007/umpteenth-epistle-bancrofts
* For Clues to a Murdoch-Owned Journal, Look to London
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/09/AR200705...
2394.html

CBS-FOX DUOPOLY TAKES SHAPE IN TRAVERSE CITY
[SOURCE: tvnewsday]
Cadillac Telecasting Co. is buying WFQX, the Fox=20
affiliate serving Traverse City-Cadillac, Mich.,=20
with the intention of entering into a =93shared=20
services agreement=94 with Heritage Broadcasting=20
Co., under which Heritage will operate the=20
station in tandem with its CBS affiliate in the=20
market, WWTV/WWUP. Since FCC rules prohibit=20
ownership of two stations in small markets like=20
Traverse City, many small-market broadcasters=20
operate so-called duopolies through shared=20
services agreements and other contractual arrangements.
http://www.tvnewsday.com/articles/2007/05/09/daily.9/

ZELL FIRM'S POINT MAN IS BELIEVER IN PAPER PRODUCTS
[SOURCE: Los Angeles Times, AUTHOR: James Rainey]
A look at Bill Pate, a key player as the Chicago=20
firm led by billionaire Sam Zell planned to take=20
Tribune Co. private in an $8.2-billion deal. On=20
Wednesday, Zell joined the board of Tribune,=20
owner of the Los Angeles Times and the=20
third-biggest U.S. newspaper chain by=20
circulation. Pate is expected to join later this=20
year. Pate, Zell and their colleagues at Equity=20
Group Investments have been surprised by the=20
attention the planned transaction has generated,=20
considering that Equity Group has completed deals=20
worth a whole lot more. On the other hand, none=20
of those involved marquee holdings like The=20
Times, the Chicago Tribune and the Chicago Cubs.
http://www.latimes.com/business/printedition/la-fi-madill10may10,1,57249...
story?coll=3Dla-headlines-pe-business
(requires registration)
* Tribune CEO peppered with questions on Zell deal
http://chicagobusiness.com/cgi-bin/news.pl?id=3D24934

JOURNALISM

LOCKED OUT: THE LACK OF GENDER AND ETHNIC DIVERSITY ON CABLE NEWS CONTINUES
[SOURCE: Media Matters for America 5/7]
During the recent controversy over former radio=20
and television host Don Imus' remarks about the=20
Rutgers women's basketball team, some cable-news=20
viewers may have noticed something unusual: the=20
presence of significantly more African-Americans.=20
The nature of the controversy led the cable=20
networks to seek comment from a far more diverse=20
group of people than they ordinarily do, which=20
begs the question: To the extent these cable=20
programs included a more diverse guest lineup=20
during the Imus controversy, why do they provide=20
such diversity only when issues of race are in=20
the news cycle? Do cable-news producers view the=20
guests added to the lineup during the Imus=20
controversy as qualified to talk only about=20
issues of race, and not other issues of national=20
and political significance? And did these guests=20
have any lasting effect on the networks' booking=20
practices, or did they return to their old ways=20
as soon as the Imus issue disappeared? To begin=20
to answer these questions, Media Matters for=20
America analyzed the race/ethnicity and gender of=20
the hosts and guests on the major prime-time=20
cable-news programs. This study looks at the=20
guests who appeared on CNN, Fox News, and MSNBC=20
during the weeknights before the Imus controversy=20
(Monday, April 2, through Friday, April 6), the=20
weeknights of the Imus controversy (Monday, April=20
9, through Friday, April 13), and the weeknights=20
following the Imus controversy (Monday, April 23,=20
through Friday, April 27). In total, there are 35=20
hosts and co-hosts of cable-news programs during=20
these hours. All 35 are white, and 29 of the 35=20
are male. Whites dominated the guest lists on all=20
three networks in the weeks we examined. All=20
three brought on substantially more=20
African-American guests during the week of the=20
Imus controversy, but largely went back to their=20
white-dominated guest lists following the controversy.
http://mediamatters.org/items/200705070003?f=3Dh_top

WHERE'S THE PAPER?
[SOURCE: Los Angeles Times, AUTHOR: Robert W. McChesney]
[Commentary] The legendary journalist Ben=20
Badgikian has argued for 25 years that the=20
smartest newspaper publishers would upgrade their=20
commitment to local journalism, downgrade the=20
silly stuff the marketing people promoted, and=20
suffer smaller profits in the near-term to=20
guarantee a growing market down the road. Recent=20
research at the University of Missouri provides=20
supporting evidence for this analysis. Instead,=20
many papers go the opposite route -- gut serious=20
journalism because that costs money (and can=20
antagonize powerful people in their community)=20
and their marketing people tell them the=20
desirable youth demographics (and major=20
advertisers) want sports and entertainment and=20
business and lifestyle news, which is far less=20
expensive to produce. In the near term that=20
equals higher profits. Younger readers over time=20
find they can get this type of information faster=20
and better on line and stop reading daily=20
newspapers. By this time they have less of an=20
understanding of what good local journalism is=20
because they have not been exposed to it. So=20
newspapers find themselves painted into a corner,=20
producing less of the product that makes them=20
distinct and not having nurtured a market for=20
quality local news. But it will be a huge loss if=20
American cities in the digital era do not have=20
multiple newsrooms of well paid journalists=20
competing to cover their communities. It is=20
imperative that we develop policies to make=20
certain we end up there, regardless of what=20
happens to newspapers per se. In the near-term,=20
policies to preserve and promote local (and=20
possibly worker or community) ownership of daily=20
newspapers would be a good start, and then these=20
institutions could be our bridge to the paperless=20
digital newsroom of the future. If we allow our=20
newspapers to continue their downward spiral, and=20
have nothing there to replace them, it will be a tragedy of epic proportion=
s.
http://www.latimes.com/news/opinion/la-op-dustup9may09,0,7652881.story?c...
=3Dla-opinion-center
(requires registration)
* Can't anyone here play this game?
Glenn Harlan Reynolds responds to McChesney.

AFTRA SEES RED OVER LA POLICE 'BRUTALITY'
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The American Federation of Radio and Television=20
Artists, the union representing media workers,=20
has issued a list of questions it wants answered=20
and actions taken in the wake of the L.A.=20
police's attacks on media workers during the=20
MacArthur Park May 1 demonstration on=20
immigration. Those include a public=20
acknowledgment of wrongdoing by the mayor and=20
police, ongoing training for police, and money.=20
The police have conceded it was an overreaction=20
and have reportedly taken some disciplinary steps.
http://www.broadcastingcable.com/article/CA6440890.html
* See press release: http://www.aftra.org/press/pr_2007_05_08_lamediamelee.=
html

QUICKLY

WHERE HAVE THE TV VIEWERS GONE?
[SOURCE: Associated Press, AUTHOR: David Bauder]
ABC, CBS, NBC and Fox have 2.5 million less=20
people watching this Spring then the same time=20
last year. Everyone has a theory to explain the=20
plummeting ratings: early Daylight Savings Time,=20
more reruns, bad shows, more shows being recorded=20
or downloaded or streamed. Scariest of all for=20
the networks, however, is the idea that many=20
people are now making their own television=20
schedules. The industry isn't fully equipped to=20
keep track of them, and as a result the networks=20
are scrambling to hold on to the nearly $8.8=20
billion they collected during last spring's=20
ad-buying season. The viewer plunge couldn't have=20
come at a worse time for the networks =97 next week=20
they will showcase their fall schedules to=20
advertisers in the annual "up front"=20
presentations. The networks argue that viewership=20
is changing, not necessarily declining. Some=20
advertisers respond that they are no longer=20
willing to pay full price up front to reach viewers that may not tune in la=
ter.
http://news.yahoo.com/s/ap/20070508/ap_en_bu/tv_missing_viewers

QWEST RENEWS BID FOR FRANCHISE DEALS
[SOURCE: Denver Post 5/3, AUTHOR: Kimberly S. Johnson and Steve McMillan]
Qwest plans to relaunch its efforts to reach=20
video-franchise agreements with a dozen Colorado=20
cities in the next couple of months. Most of the=20
cities will be in the Denver metro area, but=20
Colorado Springs also will likely be part of=20
Qwest's renewed effort to provide television=20
services. The move comes on the heels of a new=20
Federal Communications Commission order that goes=20
into effect in July and gives companies such as=20
Qwest the right to force cities to make a=20
decision on a video-franchise proposal within 90=20
days. Comcast, the state's largest cable=20
provider, said it would not try to stop Qwest=20
from gaining local franchise agreements, but=20
continued to stress the importance of offering=20
services to all parts of a local community. Qwest=20
has said it doesn't want to be forced into a=20
video buildout schedule by cities.
http://test.denverpost.com/business/ci_5804655

GUESS IT DEPENDS ON WHAT THE DEFINITION OF "CONSUMER" IS
[SOURCE: hearusnow.org, AUTHOR: Bob Williams]
The American Consumer Institute claims that=20
Network Neutrality would cost consumer $69=20
billion over the next ten years. But who is the=20
American Consumer Institute. The contact name for=20
the organization is former Bell Atlantic Chief=20
Economist Stephen Pociask. His bio on the ACI=20
website is quite impressive, but surprisingly=20
there is no mention of his work as chief=20
economist for Bell Atlantic. Go figure.
http://www.consumersunion.org/blogs/hun/2007/05/guess_it_depends_on_what...
e_d.html
* Consumer=92 Group Hides Verizon Link, Fails Smell Test
http://www.savetheinternet.com/blog/2007/05/09/consumer-group-hides-veri...
-link-fails-smell-test/

MYSPACE TO HOST ONLINE TOWN HALL FOR USERS TO QUESTION CANDIDATES
[SOURCE: USAToday, AUTHOR: Jill Lawrence]
A dozen presidential candidates will take part in=20
interactive online town halls with members of the=20
massive social network MySpace, the latest sign=20
of the Internet's growing importance in U.S.=20
political campaigns. MySpace.com, visited by 65=20
million Americans a month, plans to start the=20
hour-long sessions with individual candidates=20
after Labor Day. They will be physically present=20
at a college campus along with about 200 MySpace=20
members; other members can watch a webcast and submit questions.
http://www.usatoday.com/printedition/news/20070510/a_myspace10.art.htm
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Communications-related Headlines is a free online=20
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through Friday, this service provides updates on=20
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and other related news events. While the=20
summaries are factually accurate, their often=20
informal tone does not always represent the tone=20
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