May 2007

For upcoming media policy events, see http://www.benton.org/?q=3Devent

BROADCASTING
Do Home Shopping stations serve the Public Interest?
Tozzi: Deep-six Localism Study Again

CABLE
The Chairman vs. Cable
FCC Grants Three Set-Top Waivers
Iowa Franchise-Reform Bill to Governor=92s Desk

MEDIA OWNERSHIP
Tensions Build Between Investors and Newspaper-Controlling Families
Once Again, Murdoch=92s Siren Song
Tribune Accepts That Sale of Stamford Paper Violated Union Contract
Clear Channel Is Asked To Reconsider Offer

JOURNALISM
How to Sink a Newspaper
A Boston Newspaper Prints What the Local Bloggers Write
Afghan Media Face Threat of Controls

MEDIA & ELECTIONS
Beyond Books: Oprah Winfrey=92s Seal of Approval Goes Presidential

QUICKLY -- Telecom workers put their bucks behind=20
'08 runners; Web alarms, mobile alerts aim to=20
make you safer; U.S. to keep Internet gambling=20
ban; Indie labels plan to pull out of digital service

BROADCASTING

DO HOME SHOPPING STATIONS SERVE THE PUBLIC INTEREST
[SOURCE: Federal Communications Commission]
In 1993, the FCC ruled that television broadcast=20
stations that are used predominantly for the=20
transmission of sales presentations or program=20
length commercials (such as home shopping=20
stations) serve the public interest and are=20
therefore qualified for mandatory cable carriage.=20
The Center for the Study of Commercialism (CSC)=20
filed a petition for reconsideration of that=20
order. On Friday the Commission released a Public=20
Notice because it would like to update the record=20
for this proceeding before ruling on the=20
petition. The Commission seeks comment on issued=20
raised in CSC's petition. CSC argues that the=20
Commission failed to consider in its public=20
interest analysis the significant amount of=20
commercial programming broadcast by home shopping=20
stations. The Commission is also seeking comment=20
on the specific issues concerning how home=20
shopping stations serve the people in their=20
communities, including the elderly and homebound=20
who may have no way to lose their life savings=20
other than spending it on QVC. CSC asserts that=20
the Commission failed to consider information=20
relevant to the second statutory factor, i.e.,=20
competing demands for the=20
spectrum. Specifically, CSC claims that the=20
Commission failed to consider evidence regarding=20
Congressional intent that the Commission consider=20
non-broadcast uses for the television broadcast=20
spectrum, such as those of police and fire=20
departments. Finally, given the passage of time=20
since the Report and Order was adopted, we seek=20
comment on the current number of broadcast=20
stations that provide home shopping programs for=20
the majority of their broadcast day. How do home=20
shopping stations meet their public interest=20
obligations? In particular, how do they comply=20
with the requirements of the Children's=20
Television Act of 1990 and licensees' obligation=20
to provide coverage of issues facing their communities?
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-07-2005A1.doc

TOZZI: DEEP-SIX LOCALISM STUDY AGAIN
[SOURCE: Lasar's Letter on the FCC, AUTHOR: Matthew Lasar]
Jim Tozzi, a former Nixon and Reagan=20
administration Office of Management and Budget=20
(OMB) official now at the Center for Regulatory=20
Effectiveness, thinks the FCC should ignore the=20
localism study unearthed by Sen Barbara Boxer=20
(D-CA) because it is a "third-party information=20
submission" that doesn't comply with FCC and OMB=20
standards because it uses "arbitrary and=20
non-replicable methodology," "biased protocol,"=20
and fails to reveal its "underlying data." Tozzi=20
believes the FCC should dump the study and all=20
the comments that cite it on the FCC's localism=20
and media-ownership dockets. Tozzi cc'd his list=20
of technical torpedos to the Consumer's Union,=20
the Consumer Federation of America, Free Press,=20
the AFL-CIO, and the Institute for Public=20
Representation, among other parties. Doubtless=20
their replies will appear on the media ownership and localism dockets soon.
http://www.lasarletter.net/drupal/node/396

CABLE

THE CHAIRMAN VS CABLE
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
FCC chairman Kevin Martin=92s agenda of cable items=20
for the 20 months remaining in the Bush=20
administration includes: 1) Capping cable=20
ownership. Comcast could not own more than 30% of=20
pay-TV subscribers nationally as its customers.=20
2) A la carte legislation. Encouraging Congress=20
to pass law forcing channels to be sold one at a=20
time, to regulate cable prices and the=20
distribution of violent and indecent content. 3)=20
Dual carriage. Forcing cable operators to carry=20
local TV signals in both analog and digital form,=20
until all cable subscribers have digital=20
reception equipment. 4) Forced Carriage.=20
Requiring cable carriage of programming from=20
FCC-qualified entities that have leased time from=20
local TV stations. 5) Non-exclusivity. Banning=20
cable operators from signing exclusive service=20
contracts with apartment building landlords.
http://www.multichannel.com/article/CA6439442.html
* McSlarrow on Cable and the FCC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
National Cable & Telecommunications Association=20
President Kyle McSlarrow talks with B&C about the=20
FCC's =93fundamental disconnect,=94 retransmission=20
consent, and what he thinks of the government's=20
proposal to make cable operators carry TV=20
stations in both digital and analog: =93Not much.=94=20
Of FCC Chairman Kevin Martin he says, "The=20
leadership of this commission clearly embraces=20
regulation, so that puts us on the opposite side of a lot of issues."
http://www.broadcastingcable.com/article/CA6439377.html

FCC GRANTS THREE SET-TOP WAIVERS
[SOURCE: Multichannel News, AUTHOR: Todd Spangler]
The Federal Communications Commission, on the eve=20
of the cable industry=92s biggest show, granted=20
Charter Communications and two smaller operators=20
temporary waivers of the ban on set-top boxes=20
with integrated security features that takes=20
effect July 1. The FCC=92s Media Bureau granted=20
Charter=92s waiver request for seven set-top-box=20
models until July 1, 2008. The bureau said it=20
=93found that the severe financial difficulties=20
that Charter faces justified waiver.=94 Charter has=20
had five consecutive years of negative free cash=20
flow, and the MSO has more than $20 billion in=20
outstanding debt obligations, according to its=20
waiver request. In addition, the FCC said,=20
Charter may file a request for an extension of=20
the waiver in July 2008 to allow the agency to=20
review the company=92s financial status at that=20
time =93to determine whether further waiver is=20
warranted.=94 The agency also granted conditional=20
waivers of the ban to GCI, a telecommunications=20
and cable provider in Anchorage, Alaska; and=20
OneSource Communications, a telephone and cable=20
company in Keller, Texas. The FCC said those=20
operators=92 =93commitments to migrate their systems=20
to all-digital on or before Feb. 17, 2009,=20
justified grant of the waivers.=94 However, it=20
denied OneSource=92s request for a waiver with=20
respect to Motorola=92s DCT3416 model because it=20
found the operator=92s arguments that the high-end=20
model was critical to its ability to migrate to all-digital =93unconvincing=
.=94
http://www.multichannel.com/article/CA6439324.html?rssid=3D196
* FCC New release
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-272874A1.doc

IOWA FRANCHISE-REFORM BILL TO GOVERNOR'S DESK
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
franchise-reform bill that will let incumbent=20
video providers file for state regulation as soon=20
as a competitor files to serve the local=20
community is awaiting the signature of Iowa Gov.=20
Chet Culver. The bill there would become law on=20
July 1. Following that date, competitive=20
providers can choose either to apply for a local=20
franchise, or for state regulation by the=20
utilities board of the Department of Commerce.=20
The state board will have 15 days to act on=20
applications, and the local incumbent's=20
application will be deemed approved as soon as a competitor is franchised.
http://www.multichannel.com/article/CA6439266.html?rssid=3D196

MEDIA OWNERSHIP

TENSIONS BUILD BETWEEN INVESTORS AND NEWSPAPER-CONTROLLING FAMILIES
[SOURCE: Associated Press]
Family control of newspaper companies has long=20
been seen as a necessary bulwark against=20
shareholder pressure and unwelcome takeover bids,=20
allowing publishers to focus on public service=20
and the long-term health of their companies. Now=20
that structure is under pressure like never=20
before, as media baron Rupert Murdoch sets his=20
sights on taking over Dow Jones & Co., publisher=20
of The Wall Street Journal, and as shareholders=20
raise a storm of protest over how the New York=20
Times Co. is being run. On Friday, that pressure=20
extended beyond newspapers to electronic news=20
publishing as Reuters Group PLC, a major provider=20
of financial information and news, said it had=20
received a takeover approach. All three companies=20
have protections against shareholder activism,=20
but signs of strain are showing. Difficult=20
economic times such as these are exactly what the=20
founders of such companies had in mind when they=20
put in place the two-tier share structures that=20
allow families to retain stewardship over their=20
companies, says Alex S. Jones, author of a book=20
on a newspaper family dynasty and director of the=20
Shorenstein Center on the Press, Politics and=20
Public Policy at Harvard. Those protections may=20
become harder and harder to maintain as Wall=20
Street demands ever more accountability from publicly traded companies.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003581205

ONCE AGAIN, MURDOCH'S SIREN SONG
[SOURCE: New York Times, AUTHOR: David Carr]
Now that some of the commotion has eased, it=20
might be worth a few minutes to examine the Dow=20
Jones proposal bearing in mind Rupert Murdoch=92s=20
unique business DNA. 1) First, the deal will be=20
made at some point, regardless of what the=20
Bancroft family said last week. Brute-force=20
capital, like flood waters, always finds a way to=20
break through. 2) Despite his allaying words to=20
the contrary, Mr. Murdoch would operate The=20
Journal, including its editorial operations, as=20
he sees fit. As Mr. Murdoch himself has said=20
throughout his relentlessly acquisitive career,=20
he buys things to run things. 3) There is=20
business synergy in the deal =97 between the News=20
Corporation=92s proposed Fox Business cable TV=20
channel and The Journal, for example. But far=20
more important is Mr. Murdoch=92s own version of=20
synergy, which puts business, media and=20
government all in a single vertical. Owning The=20
Journal would give him a powerful leverage in all=20
three. 4) The price that Mr. Murdoch is offering=20
=97 $60 a share =97 is a multiple of ego, not=20
earnings. He may have some other super-secret=20
plan to squeeze more value out of the company,=20
but the deal would give him something that, for=20
all of his stellar business achievements, he=92s=20
never achieved in this country: a seat at the gentlemen=92s table.
http://www.nytimes.com/2007/05/07/business/media/07carr.html
* Ottaways Deplore Bid by Murdoch
Two members of the Ottaway family, a minority=20
partner in Dow Jones & Company, released scathing=20
statements yesterday saying that a takeover by=20
Rupert Murdoch=92s News Corporation would ruin Dow=20
Jones and its crown jewel, The Wall Street Journal.
http://www.nytimes.com/2007/05/07/business/media/07ottaway.html
(requires registration)
* Statement: 'The media equivalent of a trophy wife'
http://online.wsj.com/article/0,,SB117847597734093670,00.html?mod=3Dtoda...
us_marketplace
* The Wrong Man for Dow Jones (by Jim Ottaway Jr)
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/06/AR200705...
0915.html
* A London read on Murdoch's plan
The Dow Jones suitor's British properties show a 'populist' approach.
http://www.latimes.com/business/printedition/la-fi-rupertstimes7may07,1,...
1652.story?coll=3Dla-headlines-pe-business

TRIBUNE ACCEPTS THAT OF STAMFORD PAPER VIOLATED UNION CONTRACT
[SOURCE: Associated Press]
Tribune Co. has accepted an arbitrator's ruling=20
that its sale of The Advocate of Stamford to=20
Gannett Co. violated a provision of the union's=20
contract that requires the newspaper's new owner=20
to honor a labor contract with newsroom=20
employees. It was not clear Friday whether the=20
sale would go forward. "Gannett has told us=20
directly they are not going to go through with=20
this deal if it means taking the union contract,"=20
said Maida Rosenstein, president of Local 2110 of=20
the United Automobile, Aerospace and Agricultural=20
Implement Workers of America. But Gannett=20
spokeswoman Tara Connell said Friday the two=20
companies are still in discussions about the sale.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003581263

CLEAR CHANNEL IS ASKED TO RECONSIDER OFFER
[SOURCE: Wall Street Journal, AUTHOR: Sarah=20
McBride sarah.mcbride( at )wsj.com and Dennis K. Berman dennis.berman( at )wsj.com]
Shareholders lobbied Clear Channel Communications=20
Inc. over the weekend hoping to persuade its=20
board to reconsider a sweetened, $19.35 billion=20
privatization proposal it turned down Thursday.=20
Led by Boston-based Highfields Capital=20
Management, the investment group that spearheaded=20
the new offer along with private-equity companies=20
Bain Capital Partners LLC and Thomas H. Lee=20
Partners LP, some shareholders contacted the=20
company to ask them to put the proposal before=20
shareholders for a vote, or at least take more=20
time to consider it, according to investors.
http://online.wsj.com/article/SB117850348001594096.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

JOURNALISM

HOW TO SINK A NEWSPAPER
[SOURCE: Wall Street Journal, AUTHOR: Walter=20
Hussman, Arkansas Democrat-Gazette]
[Commentary] Are the newspaper industry's=20
problems self-inflicted? Take free news. News has=20
become ubiquitous, free, and as a result, a=20
commodity. Anytime you are trying to sell=20
something that becomes a commodity, you have lost=20
much of the value in providing that product or=20
service. Not many years ago if someone wanted to=20
find out what was in the newspaper they had to=20
buy one. But not anymore. Now you can just go to=20
the newspaper's Web site and get that same=20
information for free. The newspaper industry=20
wonders why it is losing young readers. Those=20
readers might be young, but many of them are=20
smart, not to mention computer-savvy. Why would=20
they buy a newspaper when they can get the same=20
information online for free? Exacerbating the=20
problem with free news was the decision by the=20
newspaper industry, which owns the Associated=20
Press, to sell AP copy to news aggregators like=20
Yahoo, Google and MSN. With local radio and=20
television stations also creating Web sites and=20
posting their news for free, newspapers soon=20
realized that much of the news on the broadcast=20
Web sites had been created by the local=20
newspaper. So, whereas before the newspapers were=20
selling print ads while radio and TV were selling=20
air time, now they were all selling the same=20
medium: their Web sites. Since newspapers share=20
their content with the Associated Press so other=20
members can use it, radio and TV members are=20
using much of that content to compete against the=20
newspapers that created it. It is time for=20
newspapers to reconsider the ultimate costs and consequences of free news.
http://online.wsj.com/article/SB117849835415093994.html?mod=3Dtodays_us_...
nion
(requires subscription)

A BOSTON NEWSPAPER PRINTS WHAT THE LOCAL BLOGGERS WRITE
[SOURCE: New York Times, AUTHOR: Jerod Kummer]
While most newspapers are trying to stake bigger=20
claims online, one new publication is pulling=20
material off the Internet to be printed in ink.=20
John Wilpers, editor in chief of BostonNow, a=20
free weekday daily introduced last month, said he=20
wanted to fill the paper with items that local=20
bloggers submitted to the BostonNow Web site.
http://www.nytimes.com/2007/05/07/business/media/07boston.html
(requires registration)

AFGHAN MEDIA FACE THREAT OF CONTROLS
[SOURCE: New York Times, AUTHOR: Carlotta Gall]
Afghanistan=92s government, competing with the=20
Taliban for public support and trying to fend off=20
accusations that it is corrupt and ineffective,=20
is moving to curb one of its own most impressive=20
achievements: the country=92s flourishing=20
independent news media. Under President Hamid=20
Karzai, a 1960s media law was updated and has=20
been considered the most liberal in the region.=20
Six independent television channels have begun=20
broadcasting, and dozens of radio stations and=20
newspapers are now operating. All news media=20
outlets were under government control under the=20
Taliban government, which was ousted in late=20
2001. Yet for the past year, as the government=20
has sought to counter growing public=20
dissatisfaction, it has tried to impose more=20
controls over the news media, journalists and=20
human rights officials said. Parliament is now=20
considering amendments that the critics warn=20
could undo many of the gains made since the fall of the Taliban.
http://www.nytimes.com/2007/05/07/world/asia/07afghanmedia.html
(requires registration)
* Afghan News Media Find Foes on All Sides
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/06/AR200705...
1160.html
(requires registration)

MEDIA & ELECTIONS

BEYOND BOOKS: OPRAH WINFREY'S SEAL OF APPROVAL GOES PRESIDENTIAL
[SOURCE: New York Times, AUTHOR: Juston Jones]
It=92s usually pretty easy to quantify what Oprah=20
Winfrey=92s stamp of approval can mean: her book=20
club catapults titles to the top of best-seller=20
lists, and her nods at other products send=20
consumers racing to buy them. But does her magic=20
touch extend to the realm of presidential=20
politics? Last week, for the first time, Ms.=20
Winfrey endorsed a political candidate, Senator=20
Barack Obama, Democrat from Illinois. In an=20
interview on =93Larry King Live=94 on CNN, she said=20
she was backing the senator =93because I know him=20
personally.=94 Ms. Winfrey said that she had not=20
made a financial contribution to Mr. Obama=92s=20
campaign, but acknowledged that her public=20
endorsement was probably far more valuable.=20
Campaign finance laws would prohibit her from=20
donating more than $2,300 in the primary and=20
$2,300 in the general election. Even considering=20
her broad popularity, Ms. Winfrey=92s entry to the=20
political waters does have risks, said Alex S.=20
Jones, the director of the Joan Shorenstein=20
Center on the Press, Politics and Public Policy=20
at Harvard University. =93If you see that she has a=20
lot of fans who are not necessarily going to vote=20
for Barack Obama, you have to calculate that she=20
may take a commercial hit,=94 he said.
http://www.nytimes.com/2007/05/07/business/media/07oprah.html
(requires registration)

QUICKLY

TELECOM WORKERS PUT THEIR BUCKS BEHIND '08 RUNNERS
[SOURCE: Associated Press, AUTHOR: John Dunbar]
Sen Hillary Rodham Clinton's (D-NY) fundraising=20
machine is working its magic among employees of=20
the nation's biggest telecommunications=20
companies, despite her support for Network=20
Neutrality. was the top recipient of funds from=20
employees of AT&T, Verizon, Comcast and Time=20
Warner through the first quarter of 2007. Sen=20
John McCain (R-AZ), who holds a senior position=20
on the Senate Commerce Committee, lagged far=20
behind. Overall, employees of the nation's=20
telecommunications and cable television companies=20
contributed $119,250 to Clinton's campaign.=20
McCain took in $79,300. Early trends show company=20
employees are not afraid to make contributions=20
that may be at odds with their employers'=20
legislative agendas and with the views of top=20
executives. AT&T Chairman and CEO Edward Whitacre=20
Jr., for example, gave $2,300 to McCain's primary=20
campaign. But his employees ponied up $13,950 to=20
Clinton, $9,500 to Sen Barack Obama (D-IL) and only $5,100 to McCain
http://www.sltrib.com/business/ci_5823866

WEB ALARMS, MOBILE ALERTS AIM TO MAKE YOU SAFER
[SOURCE: Reuters, AUTHOR: Michele Gershberg]
From emergency message networks that can reach=20
100,000 people within minutes, to alarm systems=20
that allow you to monitor your home over the Web,=20
new technologies are aiming to make U.S.=20
consumers feel safer. While institutions such as=20
immigration services, banks and credit card=20
companies continue to improve their systems to=20
prevent fraud or theft, in many cases homeowners=20
and their communities haven't kept pace.
http://www.reuters.com/article/technologyNews/idUSN2029563220070504

US TO KEEP INTERNET GAMBLING BAN
[SOURCE: Reuters, AUTHOR: Doug Palmer]
The United States will maintain a ban on Internet=20
gambling services despite an adverse World Trade=20
Organization ruling, the U.S. Trade=20
Representative's office said on Friday. The move=20
opens the door for other WTO members -- ranging=20
from tiny Antigua and Barbuda to the 27-nation=20
European Union -- to seek potential damages at=20
the WTO. However, Deputy U.S. Trade=20
Representative John Veroneau told reporters the=20
United States did not believe there was any basis=20
for other countries to receive compensation.
http://www.reuters.com/article/internetNews/idUSWAT00742720070504

INDIE LABELS PLAN TO PULL OUT OF DIGITAL SERVICE
[SOURCE: Reuters, AUTHOR: Antony Bruno and Todd Martens]
A handful of independent record labels are poised=20
to launch what they are calling a "revolt"=20
against digital subscription service eMusic,=20
citing unhappiness with the company's pricing=20
model as their core concern. Billboard has=20
learned of at least six eMusic partners -- three=20
of whom were listed among eMusic's top 60 labels=20
this week -- that plan either to pull their=20
catalog from the service entirely or to limit=20
content to back-catalog tracks when their current licensing deals expire.
http://www.reuters.com/article/internetNews/idUSN0448718620070505
--------------------------------------------------------------
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.
--------------------------------------------------------------