June 2007

CABLE/BROADCASTING
Cities Seek Stay Of FCC Video Franchise Changes
Massillon Floating Massive Free-Cable Plan
Online Captioning: The Right Thing to Do
Indifference at 11
Buyers dialing up prices for local TV stations
'Mad Men' and Jack Daniel's: Bad mix?
Public Broadcasters Receive Senate Support
DTV Views Of Martin, Lawmakers Clash
Senate Committee Considers Cutting Campaign Ad Prices
Broadcasters Warn Of DTV Signal Corruption
McCain Supports Giving Broadcasters First Responder Status

OWNERSHIP
Dow Jones Board Takes Over Talks On Firm's Future
Web Broadcasters Plan Protests Over Royalties

GOVERNMENT & COMMUNICATIONS
Phone privacy case pits Justice Dept. vs. states
CDT Identifies Most Wanted Warrantless Snooping Documents

INTERNET/BROADBAND
Web spending seen rising by double digits to 2011
Moving Slowly in the Fast Lane
Answering to YouTube

QUICKLY -- Bush renominates Tate to FCC; Don't=20
Blame Me: It's the Phone's Fault!

CABLE/BROADCASTING

CITIES SEEK STAY OF FCC VIDEO FRANCHISE CHANGES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Groups representing local governments and=20
nonprofit organizations have gone to court to try=20
to block changes to the FCC's video franchising=20
rules. In a motion filed with the Sixth Circuit=20
Court of Appeals Wednesday to stay enforcement of=20
the FCC order, the groups said the changes will=20
"severely restrict the ability of local=20
governments to protect their citizens,=20
rights-of-way, community channels, and public=20
safety networks." The plaintiffs include the=20
Alliance for Communications Democracy, the=20
Alliance for Community Media, the National=20
Association of Counties, the National League of=20
Cities, the National Association of=20
Telecommunications Officers and Advisors and the U.S. Conference of Mayors.
http://www.broadcastingcable.com/article/CA6454291.html
* Stay Sought on FCC=92s 90-Day Shot-Clock Order
http://www.multichannel.com/article/CA6454257.html?rssid=3D196

MASSILLON FLOATING MASSIVE FREE-CABLE PLAN
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Millions of American households would receive=20
free cable-television service while all local TV=20
stations would have guaranteed cable distribution=20
rights of their analog- and expanded=20
digital-TV-channel lineups, according to a new,=20
seven-year digital-TV-transition scheme proposed=20
by Ohio-based Massillon Cable TV. The Massillon=20
plan, unveiled last week in private talks with=20
Federal Communications Commission officials, is=20
largely designed to mitigate the impact of the=20
federally mandated shutdown of analog broadcast=20
TV in early 2009 on an estimated 20 million=20
households that rely exclusively on free,=20
over-the-air TV and have yet to acquire the=20
necessary equipment to view digital-TV signals.=20
Key to the Massillon plan=92s success is agreement=20
from local TV stations that in exchange for=20
cable=92s commitments, they would not seek=20
negotiated cable carriage of their content for=20
the first seven years after analog-TV signals go=20
dark Feb. 17, 2009. =93This proposal is designed to=20
benefit consumers -- the public interest.=20
Broadcasters and [pay TV providers] both have=20
benefits and costs, but consumers are the primary=20
beneficiary,=94 Massillon president Bob Gessner=20
said. Under the Massillon plan, a broadcast-only=20
home that obtained a $40 coupon to buy a=20
digital-to-analog converter box under the federal=20
subsidy program would receive free analog-basic=20
cable for seven years on every TV set in the=20
home, with free installation. The customer would=20
need to surrender the coupon to the cable=20
company, which would then return it the federal=20
government for possible recirculation.
http://www.multichannel.com/article/CA6454308.html?rssid=3D196

ONLINE CAPTIONING: THE RIGHT THING TO DO
[SOURCE: TVWeek, AUTHOR: Editorial staff]
[Commentary] In 1971, Julia Child's great cooking=20
show "The French Chef" became the first TV=20
program accessible to deaf and hard-of-hearing=20
people through closed captioning. Today, more=20
than 35 years later, closed captioning isn't=20
available to those who need it to enjoy new shows=20
such as "Ugly Betty" or "Jericho" by streaming=20
them on the Web or downloading them from iTunes.=20
So even as the television industry embraces the=20
digital age, it's leaving behind some disabled=20
Americans, as well as those who use closed=20
captioning to learn to speak English. That means=20
that more than 23 million viewers in the U.S. are=20
being excluded from the future of television in=20
which viewers can watch whatever they want,=20
wherever and whenever they want. We urge the=20
industry to do what's right and devote whatever=20
resources are necessary to provide closed=20
captioning for all the material they are=20
distributing over developing digital media. Given=20
the low pricetag and the ease with which any=20
technological barriers can be crossed, it's=20
difficult to see why the networks haven't done=20
more to treat hard-of-hearing Americans equally=20
in the digital world. Now that the issue has been=20
illuminated, it's time for them to act.
http://tvweek.com/news/2007/06/online_captioning_the_right_th.php
(requires free registration)

INDIFFERENCE AT 11
[SOURCE: Philadelphia Inquirer, AUTHOR: Gail Shister]
Viewership of local news is down across the=20
country, and for the same reasons network news is=20
hurting: the Internet, changing lifestyles, and a=20
bottomless generation gap. "Increasingly, people=20
find local TV news repetitive and not=20
nutritious," says Tom Rosenstiel, director of the=20
Project for Excellence in Journalism (PEJ). "They=20
say the stories aren't telling them anything they=20
don't already know. They're put off by what=20
strikes them as superficial." PEJ studies Nielsen=20
data from about 600 stations in all 210 U.S.=20
markets. Over the last several years, "we're=20
seeing a gradual and systematic downturn of=20
ratings in local TV news," Rosenstiel said. "The=20
data are clear." First, the obvious suspects. We=20
get our news instantly online, or on other=20
platforms. We're doing other things at 6 and 11.=20
We have longer commutes, so we go to bed and wake=20
up earlier. Content is another factor, says=20
Rosenstiel. According to several recent studies,=20
local stations' heavy emphasis on murder and=20
mayhem - "police scanner journalism" - alienates=20
viewers, he says. Part of the problem, says=20
Temple's Petner, is that local stations produce=20
so much news on a daily basis, they don't have=20
enough staff to generate different stories for every broadcast.
http://www.philly.com/inquirer/columnists/20070621_Indifference_at_11.html

BUYERS DIALING UP PRICES FOR LOCAL TV STATIONS
[SOURCE: Dow Jones Newswires]
Local television has been the darling of the=20
media sector, and an increasing number of=20
companies are hoping to cash in on what could be=20
the peak of the market. Irving, Texas-based=20
Nexstar Broadcasting Group Inc. and Providence,=20
R.I.-based Lin TV Corp. announced last month they=20
are considering potential sales of their=20
companies. Last week, New York-based News Corp.=20
said it plans to sell nine TV stations affiliated=20
with its Fox network. And Philadelphia-based=20
insurer Lincoln National Corp. is considering=20
options for its media assets, which include three=20
TV stations. Some believe the sudden flood of=20
nearly 100 TV stations on the auction block could=20
dampen what have been sizzling sales prices in=20
recent deals. Most industry participants,=20
however, believe sellers will continue to reap=20
windfalls as they rush to take advantage of=20
favorable sentiment for the local television=20
industry. If recent rich sales multiples=20
continue, more sellers could jump in, as=20
cash-fueled private-equity firms prove to be=20
hungry acquirers during the recent local-TV binge.
http://www.chicagotribune.com/business/chi-thu_smart_0621.1jun21,0,34596...
story?track=3Drss

'MAD MEN' AND JACK DANIEL'S: BAD MIX?
[SOURCE: Los Angeles Times, AUTHOR: Lynn Smith]
A new television series set in a New York=20
advertising agency in 1960 has drawn complaints=20
from a consumer group alleging that the show's=20
sponsor =97 Jack Daniel's whiskey =97 is violating=20
liquor industry standards by mixing sex,=20
irresponsible behavior and alcohol. Trailers from=20
AMC's period drama "Mad Men," scheduled to=20
premiere July 19, appear on its website along=20
with Jack Daniel's promotions. Commercial Alert=20
filed a formal complaint Wednesday with the=20
Distilled Spirits Council of the United States=20
alleging that the sponsorship crosses a line that=20
generally precludes liquor advertising in shows=20
with "depictions of overt sexual activity," lewd=20
images or language, irresponsible drinking and=20
intoxication. The complaint was based on a clip=20
that shows an advertising executive climbing into=20
bed with his girlfriend, as well as reports that=20
Jack Daniel's will be integrated into the show's=20
scenes, said Robert Weissman, managing director=20
of the Washington-based nonprofit organization.
http://www.latimes.com/business/printedition/la-fi-jack21jun21,1,5184550...
ory?coll=3Dla-headlines-pe-business
(requires registration)

PUBLIC BROADCASTERS RECEIVE SENATE SUPPORT
[SOURCE: tvnewsday]
In a markup Tuesday, a Senate appropriations=20
subcommittee provided $420 million in advance=20
funding to the Corporation for Public=20
Broadcasting for FY 2010. Mirroring its House=20
counterpart, this represents the first increase=20
to this line-item in four years. The subcommittee=20
also: 1) provided level funding of $29.7 million=20
for the CPB Digital program to assist stations in=20
making the transition to digital; 2) increased=20
funding by $1 million for Ready To Learn to=20
approximately $25.3 million; and 3) provided=20
$10.9 million in level funding for Ready To=20
Teach, a program that ensures teachers have=20
access to educational services aimed at enhancing=20
teacher performance, in turn raising student=20
achievement. The full Senate Appropriations=20
Committee is scheduled to consider this bill on Thursday, June 21, at 2 p.m.
http://www.tvnewsday.com/articles/2007/06/20/daily.5/
* CPB Statement on the Senate Appropriations=20
Subcommittee's Proposed Funding Levels
http://www.cpb.org/pressroom/release.php?prn=3D606
* CPB Happy With Senate Funding
http://www.broadcastingcable.com/article/CA6454239.html

DTV VIEWS OF MARTIN, LAWMAKERS CLASH
[SOURCE: Technology Daily, AUTHOR: David Hatch]
An exchange of letters between key congressional=20
Democrats and FCC Chairman Kevin Martin, a=20
Republican, has exposed sharp disagreements over=20
which agency should supervise the digital=20
television transition and how much money should=20
be spent on consumer education. At issue is=20
whether the FCC or the National=20
Telecommunications and Information=20
Administration, a division of the Commerce=20
Department, has the primary role and if the FCC=20
has requested enough money for outreach.
http://www.njtelecomupdate.com/2007/06/dtv_views_of_fcc_chairman_lawm.html

SENATE COMMITTEE CONSIDERS CUTTING CAMPAIGN AD PRICES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Broadcasters got an earful on Wednesday at a=20
Senate Rules Committee hearing on a campaign=20
finance reform bill. The Fair Elections Now=20
Act--co-sponsored by Dick Durbin (D-IL) and Arlen=20
Specter (R-PA) and supported by Barack Obama=20
(D-IL) -- is part of a push for publicly-funded=20
elections and would help candidates who agreed to=20
take only small public contributions to afford=20
the TV ads they will need to get elected.=20
Candidates are currently charged the lowest unit=20
rate for TV ads, but the bill would give them a=20
extra 20% discount in the run-up to election day.=20
The bill would also extend the lowest unit rate=20
and discount beyond candidates to ads from=20
political parties. The legislation would also=20
prevent broadcasters from preempting those ads.=20
In addition to providing lower rates to=20
candidates than they do to others, broadcasters=20
would be taxed 2% of their gross=20
advertising revenues to underwrite a political=20
advertising voucher system that would help=20
underwrite ad spending by federal candidates and parties.
http://www.broadcastingcable.com/article/CA6454140.html

BROADCASTERS WARN OF DTV SIGNAL CORRUPTION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The National Association of Broadcasters and=20
Association For Maximum Service Television have=20
sent letters to every member of Congress warning=20
of the "corrupting" consequences of allowing=20
portable unlicensed devices to operate in the broadcast band.
http://www.broadcastingcable.com/article/CA6454274.html

MCCAIN SUPPORTS GIVING BROADCASTERS FIRST RESPONDER STATUS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen John McCain (R-AR) has signed on as=20
co-sponsor of a bill, first offered by Sen Mary=20
Landrieu (D-LA), that would give broadcasters=20
first responder status and access to disaster=20
areas and fuel, food and water in times of=20
emergency. With Appropriations Committee markups=20
aplenty to occupy Sen Landrieu's time, don't look=20
for a big push on the bill until after the July=20
recess, when more co-sponsors and a mark-up date=20
will be sought. A similar bill has been introduced in the House.
http://www.broadcastingcable.com/article/CA6454171.html

OWNERSHIP

DOW JONES BOARD TAKES OVER TALKS ON FIRM'S FUTURE
[SOURCE: Wall Street Journal, AUTHOR: Sarah=20
Ellison at sarah.ellison( at )wsj.com, Susan Pulliam & Dennis K. Berman]
Dow Jones & Co.'s board, frustrated with the pace=20
of the Bancroft family's negotiations with News=20
Corp., said it would take over talks on the=20
future of the company. The move, coming after=20
more than two weeks of little progress between=20
the parties, increases the likelihood of a deal=20
to enable Rupert Murdoch's media giant to buy Dow=20
Jones, the owner of The Wall Street Journal.=20
Yesterday, the Bancrofts' four board=20
representatives finished revising a proposal to=20
safeguard the editorial independence of Dow Jones=20
but decided to ask the board to review it before=20
forwarding the document to News Corp. The family=20
had previously insisted that it alone negotiate=20
with Mr. Murdoch about editorial independence. If=20
the sides reached an agreement, the family would=20
have then empowered the board to begin buyout=20
talks. Some independent directors were opposed to=20
this strategy because they felt negotiating=20
editorial independence separately gave the board=20
less leverage on price. Now, both those=20
components have been ceded to the board. Despite=20
backing off of direct talks, however, the=20
Bancrofts still hold enough voting power to veto=20
any deal. The Bancrofts' editorial proposal calls=20
for the establishment of a special committee to=20
enforce a set of editorial principles News Corp.=20
would be expected to adhere to, according to a=20
family spokesman. It also includes protections=20
for top editors and provisions to enforce the=20
agreement. These elements were included in=20
earlier drafts as well, and it wasn't immediately=20
clear how the version submitted to the Dow Jones board had been revised.
http://online.wsj.com/article/SB118236943974642345.html?mod=3Dtodays_us_...
e_one
(requires subscription)
* Dow Jones Board Takes Over Negotiations With News Corp.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR200706...
2197.html
* Murdoch bid is alive as board holds sway
http://www.latimes.com/business/printedition/la-fi-dowjones21jun21,1,116...
7.story?coll=3Dla-headlines-pe-business
* Few Choices for Workers at Dow Jones
Looking at the potential bidders for Dow Jones &=20
Company =97 Rupert Murdoch=92s News Corporation and a=20
joint effort by General Electric and Pearson =97=20
some reporters and editors at The Wall Street=20
Journal are calling the decision a choice between=20
=93trash or slash.=94 And they are wondering which might be worse.
http://www.nytimes.com/2007/06/21/business/media/21dow.html

WEB BROADCASTERS PLAN PROTESTS OVER ROYALTIES
[SOURCE: Wall Street Journal, AUTHOR: Sarah McBride sarah.mcbride( at )wsj.com]
Music fans tuning into their favorite Internet=20
radio stations next Tuesday might hear nothing=20
but silence. Web broadcasters are planning to=20
turn off their music for the day to protest=20
higher statutory royalty rates payable to=20
artists. Some of the largest services, including=20
Live 365 Inc., Pandora Media Inc. and Yahoo=20
Inc.'s Yahoo Music, are participating in the=20
blackout, which organizer Kurt Hanson of=20
online-radio service AccuRadio has dubbed "Day of=20
Silence." Many online broadcasters say the new=20
rate structure -- which will cost some of them=20
several times their current total revenue -- will=20
put them out of business. The new rates,=20
announced in March, start at 0.08 cent per song,=20
per play, per listener, retroactively starting in=20
2006, and rise to 0.19 cent by 2010. The fees start coming due July 15.
http://online.wsj.com/article/SB118237834051942601.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

GOVERNMENT & COMMUNICATIONS
Phone privacy case pits Justice Dept. vs. states
PHONE PRIVACY CASE PITS JUSTICE DEPT VS STATES
[SOURCE: Los Angeles Times, AUTHOR: Henry Weinstein]
Can the federal government stop states from=20
investigating whether telephone companies=20
illegally provided customer information to the=20
National Security Agency? A federal judge in San=20
Francisco will take up that issue today as the=20
Justice Department and the phone companies=20
attempt to block state investigations into the=20
Bush administration's Terrorist Surveillance=20
Program. After published reports last year=20
alleging that AT&T and Verizon cooperated with=20
the government on the surveillance program,=20
customers and the American Civil Liberties Union=20
urged state officials to probe whether the firms=20
had illegally shared call records with the=20
government. Verizon said it had not worked with=20
the NSA. AT&T said it had always followed the law=20
but would not comment on any dealings with the=20
government. After the companies declined to=20
answer formal questions, officials from New=20
Jersey, Missouri, Connecticut, Maine, and Vermont launched investigations.
http://www.latimes.com/news/printedition/asection/la-na-tap21jun21,1,789...
2.story?coll=3Dla-news-a_section
(requires registration)

CDT IDENTIFIES MOST WANTED WARRANTLESS SNOOPING DOCUMENTS
[SOURCE: Center for Democracy & Technology]
As lawmakers move closer to subpoenaing documents=20
related to the administration's warrantless=20
wiretapping activities, several critical=20
questions about the domestic snooping program=20
remain unanswered. CDT today issued its "Most=20
Wanted Documents" related to the so-called=20
"Terrorist Surveillance Program" as well as its=20
"Most Wanted Answers" about the program. By=20
getting answers to the right questions and=20
obtaining the documents that formed the legal=20
basis for the shadowy surveillance program,=20
Congress can gain a fuller understanding of the=20
extent to which the program impacted Americans' privacy rights.
Most Wanted Documents: http://www.cdt.org/security/20070620wanteddocs.pdf
Most Wanted Answers: http://www.cdt.org/security/20060620wantedanswers.pdf

INTERNET/BROADBAND

WEB SPENDING SEEN RISING BY DOUBLE DIGITS TO 2011
[SOURCE: Reuters, AUTHOR: Gina Keating]
Internet advertising and access spending by U.S.=20
consumers will rise each year by double digits on=20
average through 2011, fuelled by high-speed=20
connections and social networking and=20
entertainment sites, according to a forecast=20
released on Thursday. PricewaterhouseCoopers'=20
Global Entertainment and Media Outlook expects=20
combined spending on Web advertising and fees=20
paid by U.S. consumers to Internet providers to=20
reach $78.4 billion by 2011, up from $47.2=20
billion in 2006, a 10.7 percent average annual=20
growth rate. The United States has the world's=20
largest online ad market, projected to grow to=20
$35.4 billion by 2011. But China will overtake=20
the United States to become the world's largest=20
Internet territory in terms of users by 2009, the=20
report said. The report cited "triple-play=20
packages" for combined Internet, telephone and=20
television service as a driver for broadband=20
growth in each global region, including the=20
United States, over the next five years.=20
Telephone company investments in infrastructure=20
will also contribute to broadband growth, as=20
consumers migrate from dial-up services, causing=20
spending on dial-up access to drop by an average=20
of 25.5 percent annually, the report said. By=20
2011, the number of broadband subscribers will=20
grow to 89 million, an average annual increase of=20
12.2 percent, the report showed.
http://www.reuters.com/article/technologyNews/idUSN2029583020070621
* Tech execs see convergence lifting broadband demand
[SOURCE: Reuters, AUTHOR: Ritsuko Ando]
Top telecommunications executives attending an=20
industry conference this week forecast wireless,=20
video and Internet services would increasingly=20
converge, bolstering demand for Internet network capacity.
http://www.reuters.com/article/technologyNews/idUSN1846685020070621

MOVING SLOWLY IN THE FAST LANE
[SOURCE: Susan Crawford, Cardozo Law School]
[Commentary] The Federal Communications=20
Commission is asking the wrong questions and=20
heading in the wrong direction. We need new=20
leadership in this country that has the political=20
muscle to implement radical change. A key=20
national priority, on a par with funding Head=20
Start programs and adequate national healthcare,=20
must be to ensure that access to an unfettered=20
Internet is universal, speedy, and cheap.
http://scrawford.blogware.com/blog/_archives/2007/6/19/3034169.html

ANSWERING TO YOUTUBE
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] In a pair of debates to be held in=20
July and September, the questions will be posed=20
not by a panel of journalists but by YouTube=20
users who record their queries as video clips.=20
It's a gimmick, but one that could yield some=20
potent results. Debates held this early in the=20
campaign season suffer from at least three=20
fundamental weaknesses. They don't draw much of=20
an audience (this year's initial debates have=20
each attracted less than 3 million viewers). The=20
questions tend to reflect what journalists are=20
interested in. And the format encourages=20
candidates to jab and weave rather than engage in=20
real debate. The YouTube input could help on all these fronts.
http://www.latimes.com/news/printedition/opinion/la-ed-youtube21jun21,1,...
4485.story?coll=3Dla-news-comment
(requires registration)

QUICKLY

BUSH RENOMINATES TATE TO FCC
[SOURCE: Gannett, AUTHOR: Bill Theobald]
Deborah Taylor Tate was nominated for a five-year=20
term on the Federal Communications Commission by=20
President Bush. The Nashville attorney has served=20
as a commissioner since being chosen by Bush in=20
2005 for a term that expires June 30. Her=20
nomination must now be confirmed by the U.S.=20
Senate. Last time she cruised through the=20
confirmation process. Her term would last until June 30, 2012.
http://jacksonsun.com/apps/pbcs.dll/article?AID=3D/20070620/NEWS01/70620015
* White House Announcement
http://www.whitehouse.gov/news/releases/2007/06/20070620-10.html
* Martin Applauds Tate Renomination
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-274451A1.doc

DON'T BLAME ME: IT'S THE PHONE'S FAULT!
[SOURCE: Pew Research Center, AUTHOR: John B.=20
Horrigan, Pew Internet & American Life Project]
[Commentary] What does it mean when half of adult=20
Americans have relatively distant relationships=20
to modern information technology such as the=20
Internet and feature-rich cell phones? What are=20
the implications of another 18% of adults having=20
a good deal of information and communication=20
technology at hand, yet expressing varying=20
degrees of dissatisfaction about it? We have=20
encountered these questions, in various forms,=20
since the Pew Internet Project released its=20
typology of users of information and=20
communication technology (ICT). Two themes emerge=20
from the typology that explains why many=20
Americans are not tuned into the information age.=20
1) Usability: many cell phone and Internet users=20
need help when setting up or using new=20
technology. 2) Many technology users simply do=20
not associate ICTs with greater levels of control=20
or productivity in their lives. number of=20
lessons can be drawn from the utility and=20
usability gaps. First, the technology industry=20
could improve how it designs gadgets, especially=20
for older Americans. Second, efforts to convey=20
the social benefits of ICT use to several=20
segments of the population would have substantial=20
payoffs. Third, some people will probably remain=20
technological contrarians. These would be the=20
Lackluster Veterans and Connected but Hassled=20
groups -- the 18% of the adult population who=20
have put money on the table for ICTs, but either=20
dislike the ease with which they can be contacted=20
as a result or find the gadgets hard to use.=20
Finally, it is important to remind ourselves of a=20
truth understood by scholars of technology: It=20
takes a long time for new innovations to diffuse deeply in society.
http://pewresearch.org/pubs/517/dont-blame-me-its-the-phones-fault
http://www.pewinternet.org/PPF/r/213/report_display.asphttp://www.pewinte=
rnet.org/PPF/r/213/report_display.asp
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Communications-related Headlines is a free online=20
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and other related news events. While the=20
summaries are factually accurate, their often=20
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