July 2007

INTERNET/BROADBAND
Study: Broadband Growth Slowing in U.S.
True or False: U.S.'s Broadband Penetration Is Lower Than Even Estonia's
A Report on Internet Speeds in All 50 States
The Effects of Broadband Deployment on Output and Employment
FTC Issues Staff Report on Broadband Connectivity Competition Policy
Proposal by Qwest would help spread of high-speed Internet

CABLE
Illinois Gov. Signs Franchise Law
Verizon Gave FCC Last-Minute Digital-Video Pledge

CHILDREN & MEDIA
Obesity Task Force Pushes Report To September
FCC Gives CBS More Time To Respond to "Without a Trace" Question

BROADCASTING
Traditional Radio to Pay for Play?
Answers Sought to Lowest Unit Rate Question

SPECTRUM POLICY
Feds snub open source for 'smart' radios
House Lawmakers Critical of Frontline Wireless Plan

INTERNATIONAL
Awaiting Internet Access, Remote Brazilian Tribes Debate Its Promise, Peril
China city tightens Internet control after protest

QUICKLY -- AT&T Imposes Inexplicable Early=20
Termination Penalty on iPhone Users; Cool Reception for Conservative Radio

INTERNET/BROADBAND

STUDY: BROADBAND GROWTH SLOWING IN US
[SOURCE: Associated Press, AUTHOR: Anick Jesdanun]
The rate of broadband adoption is slowing in the=20
United States, partly because service providers=20
already have grabbed the easiest converts, a=20
study has found. Price reductions and other=20
factors led to 40 percent growth in adoption from=20
March 2005 to March 2006. Over the following=20
year, growth was a more modest 12 percent, the=20
Pew Internet and American Life Project said in a=20
report Tuesday. "The low-hanging fruit was picked=20
... so you saw a slowdown understandably going to=20
2007," said John Horrigan, Pew's associate=20
director for research. "You're left with people=20
who are less-intense Internet users. They are=20
likely to be users who aren't processing a lot of=20
bits per month. They don't have the demand for=20
high speed." Horrigan, however, said many of the=20
Internet users on dial-up simply can't get=20
high-speed service, particularly in rural areas.=20
About 31 percent of rural Americans have=20
broadband at home, compared with 47 percent for the general population.
http://www.poststar.com/articles/2007/07/05/ap/hitech/d8q5as3g0.txt
* Home Broadband Adoption 2007
http://www.pewinternet.org/pdfs/PIP_Broadband%202007.pdf
* High-speed Internet hits home
http://www.chicagotribune.com/business/chi-fri_broadbandjul06,0,6476765....
ry?track=3Drss

TRUE OR FALSE: US's BROADBAND PENETRATION IS LOWER THAN ESTONIA'S
[SOURCE: Newsweek, AUTHOR: Steven Levy]
Maybe our proud nation is going through some=20
rough spots, but at least we have one shining and=20
perpetual triumph: the Internet. People may refer=20
to it as the World Wide Web, but its capital is=20
Silicon Valley and the United States is the big=20
dog tapping the global keyboard. At least that's=20
what we thought, until the news broke in April of=20
a report by the international Organization for=20
Economic Cooperation and Development that ranked=20
the high-speed broadband adoption of 30 countries=20
in the developed world. The United States was not=20
first. Or second, or third. It ranked 15th.=20
Although President George W. Bush promised during=20
his re-election campaign that all Americans would=20
have access to affordable broadband by 2007, many=20
rural Americans have no way to connect. It's=20
impossible to tell how many, in part because of=20
the bizarre way the FCC measures the issue. Many=20
rural homes can theoretically get broadband by=20
satellite dish, but the cost is high and the=20
service not as fast as other alternatives.=20
Another problem is that, compared with broadband=20
in some other nations, our connections are anything but "high speed."
http://www.msnbc.msn.com/id/19389299/site/newsweek/

A REPORT ON INTERNET SPEEDS IN ALL 50 STATES
[SOURCE: Communications Workers of America]
Between September 2006 and May 2007, nearly=20
80,000 people in all 50 states and the District=20
of Columbia =97 nearly all of them with broadband=20
connections =97 have gone to the Speedmatters.org=20
site to take an Internet speed test and measure=20
how fast their computers can upload and download=20
data. This is the first national survey of actual=20
Internet speeds, and the results show just how=20
the U.S. continues to lag behind other countries.=20
The median download speed for the 50 states and=20
the District of Columbia was 1.9 megabits per=20
second (mbps). In Japan, the median download=20
speed is 61 mbps, or 30 times faster than the=20
U.S. The U.S. also trails South Korea at 45 mbps,=20
Finland at 21 mbps, Sweden at 18 mbps, and Canada=20
at 7.6 mbps. The median upload speed from the=20
Speedmatters.org test was just 371 kilobits per=20
second (kbps), far too slow for patient=20
monitoring or too transmit large files such as=20
medical records. Why does speed matter? Speed=20
defines what is possible on the Internet. It=20
determines whether we will have the 21st century=20
networks we need to grow jobs and our economy,=20
and whether we will be able to support=20
innovations in telemedicine, education, public=20
safety, and public services to improve our lives=20
and communities. Most U.S. Internet connections=20
today are not fast enough to permit interactive=20
home-based medical monitoring, multi-media=20
distance learning, or to send and receive data to run a home-based business.
http://www.speedmatters.org/document-library/sourcematerials/sm_report.pdf
* U.S. Net access not all that speedy
http://www.usatoday.com/tech/news/techpolicy/2007-06-25-net-speeds_N.htm

THE EFFECTS OF BROADBAND DEPLOYMENT ON OUTPUT AND EMPLOYMENT
[SOURCE: Brookings Institute, AUTHOR: Robert=20
Crandall, William Lehr and Robert Litan]
This study provides new estimates of the effects=20
of broadband penetration on both output and=20
employment, in the aggregate and by sector, using=20
state level data. The study finds that nonfarm=20
private employment and employment in several=20
industries, is positively associated with=20
broadband use. More specifically, for every one=20
percentage point increase in broadband=20
penetration in a state, employment is projected=20
to increase by 0.2 to 0.3 percent per year. For=20
the entire U.S. private non-farm economy, this=20
suggests an increase of about 300,000 jobs,=20
assuming the economy is not already at =93full=20
employment.=94 At a more disaggregated level, the=20
authors find that employment in both=20
manufacturing and services industries (especially=20
finance, education and health care) is positively=20
related to broadband penetration. They also find=20
that state output of goods and services is=20
positively associated with broadband use,=20
although probably because of noise in the=20
underlying data, our estimates are not statistically significant.
http://www3.brookings.edu/views/papers/crandall/200706litan.pdf

FTC ISSUES STAFF REPORT ON BROADBAND CONNECTIVITY COMPETITION POLICY
[SOURCE: Federal Trade Commission 6/27]
The Federal Trade Commission=92s Internet Access=20
Task Force issued a report, =93Broadband=20
Connectivity Competition Policy,=94 which=20
summarizes the Task Force=92s findings in the area=20
of broadband Internet connectivity and, in=20
particular, so-called network neutrality=20
regulation. Based on these findings, and FTC=20
staff=92s experience with the operation of myriad=20
markets throughout the economy, the report=20
identifies guiding principles that policy makers=20
should consider in evaluating proposed=20
regulations or legislation relating to broadband=20
Internet access and network neutrality. According=20
to Chairman Deborah Platt Majoras, =93This report=20
recommends that policy makers proceed with=20
caution in the evolving, dynamic industry of=20
broadband Internet access, which generally is=20
moving toward more =96 not less =96 competition. In=20
the absence of significant market failure or=20
demonstrated consumer harm, policy makers should=20
be particularly hesitant to enact new regulation in this area.=94
http://www.ftc.gov/opa/2007/06/broadband.shtm
* F.T.C. Urges Caution on Net Neutrality
[SOURCE: New York Times 6/27]
http://select.nytimes.com/mem/tnt.html?emc=3Dtnt&tntget=3D2007/06/28/tec...
logy/28net.html&tntemail0=3Dy
(requires registration)
* FTC is neutral on net neutrality
[SOURCE: Washington Post 6/27]
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR200706...
3002.html
(requires registration)
* FTC Stance Against Rules Cheers Broadband Firms
http://online.wsj.com/article/SB118297442020150521.html?mod=3Dgooglenews...
(requires subscription)
* How the FTC Mangled Net Neutrality
[Commentary] Every once in a while, it's a useful=20
exercise to look under the hood and to see how=20
those facile conclusions in the headlines about=20
the FTC urging caution on Net Neutrality were=20
derived. Just a warning -- it's not pretty.
http://www.tpmcafe.com/blog/coffeehouse/2007/jun/28/how_the_ftc_mangled_...
_neutrality
* FTC Report on Broadband Resurrects Freedom of Service Information
http://www.drewclark.com/2007/07/ftc-report-on-broadband-resurrects.shtml
* Center for Public Integrity Spearheads Efforts to Disclose Broadband Data
The Center for Public Integrity's efforts to shed=20
light on local Internet availability are having=20
an impact in the legislative and regulatory=20
debate over broadband. For example, Senate=20
Commerce Committee Chairman Daniel Inouye,=20
D-Hawaii, last month introduced S. 1492, the=20
Broadband Data Improvement Act. The bill would=20
require the FCC to supplement the information it=20
currently collects about broadband deployment=20
with more localized data, including ZIP code plus=20
four digits. It calls for the creation of online=20
maps showing the availability of high-speed=20
Internet services at the census-block level. The=20
chairman of the House Energy and Commerce=20
Subcommittee on Telecommunications and the=20
Internet, Rep. Ed Markey, D-Mass., released=20
similar draft legislation in May. It would=20
require the Commerce Department's National=20
Telecommunications and Information Administration=20
to create and publicize a nationwide map in which=20
a broadband provider's service locations could be=20
searched in detail. The debate around this topic=20
has led other government, non-profit and=20
business-led efforts to take notice. The FCC is=20
currently reconsidering its data-collection=20
policies for broadband. Agencies including the=20
NTIA and the Federal Trade Commission are also considering getting involved.
http://www.publicintegrity.org/telecom/report.aspx?aid=3D886
* The Battle To Map American Broadband
http://www.dslreports.com/shownews/The-Battle-To-Map-American-Broadband-...
93

PROPOSAL BY QWEST WOULD HELP SPREAD OF HIGH-SPEED INTERNET
[SOURCE: Associated Press 6/30, AUTHOR:Catherine Tsai]
Qwest Communications International Inc. is=20
proposing changing a subsidy that helps=20
underserved customers get affordable phone=20
service so they also can get high-speed Internet=20
access. The proposal also would shrink the amount=20
of money wireless competitors would get from the=20
federal program. The Universal Service Fund, or=20
USF, is paid for with a nearly 12 percent=20
surcharge on phone bills. It subsidizes phone=20
service in rural areas, mountain communities and=20
other places where installing equipment and=20
making a profit would be difficult. Qwest is the=20
primary telephone-service provider in Arizona and=20
13 other states, mainly in the West. Denver-based=20
Qwest and others say the fund, which has grown to=20
about $4 billion, hasn't kept up with the times=20
and is subsidizing phone service to areas that no=20
longer are unserved or unprofitable to serve.=20
Qwest proposes changing the formula for doling=20
out USF subsidies to wireless companies so it is=20
distributed on a per-household basis, rather than=20
per phone. Currently, a wireless company serving=20
a home where all four family members have mobile=20
phones can get subsidies for four customers, even=20
though it is serving one home. Qwest estimates=20
the change could trim subsidies paid to wireless=20
companies from $1 billion to $500 million=20
annually, leaving $500 million to subsidize rural broadband services.
http://www.azstarnet.com/business/189817
* Qwest presents plan to FCC
http://www.neca.org/wawatch/wwpdf/062807_2.pdf
* Qwest Wants Rural Subsidies To Carriers Slashed
http://www.informationweek.com/news/showArticle.jhtml?articleID=3D200900292

CABLE

ILLINOIS GOV SIGNS FRANCHISE LAW
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
Illinois Gov. Rod Blagojevich signed a law which=20
assigns franchising authority to the state=92s=20
Commerce Commission. The governor said the bill,=20
SB678, will provide consumers with more providers=20
while requiring incumbent operators to provide=20
more reliable, on-time service. In addition to=20
shifting franchising authority to state=20
officials, the bill introduces a number of new=20
customer service rules, such as the=20
implementation of standards for installation,=20
repair, telephone response time, billing,=20
collections and services for the disabled. While=20
the transfer of state authority took effect when=20
the governor signed the bill July 3,=20
implementation of service quality standards for=20
incumbents will not begin until Jan. 1, 2008.=20
Illinois is the 21st state to approve statewide=20
regulation of cable franchising.
http://www.multichannel.com/article/CA6457513.html

VERIZON GAVE FCC LAST MINUTE DIGITAL-VIDEO PLEDGE
[SOURCE: Multichannel News, AUTHOR: Todd Spangler]
Verizon Communications on June 29 informed the=20
Federal Communications Commission that it would=20
eventually move to all-digital video=20
distribution, hours before the agency issued an=20
order exempting the phone company from the=20
integrated set-top ban based on that commitment.=20
Late last Friday, the FCC=92s Media Bureau granted=20
waivers of the July 1 ban to Verizon and about=20
120 other video providers that currently have=20
all-digital networks or have promised to convert=20
to all-digital transmission by Feb. 17, 2009.=20
Meanwhile, the agency denied requests by the=20
National Cable & Telecommunications Association=20
and 10 cable operators. The FCC said all-digital=20
video providers will support the agency=92s mandate=20
requiring TV broadcasters to provide digital-only=20
transmission by February 2009. All-digital cable=20
and telco TV networks also will =93enable expanded=20
service offerings, promote efficient use of the=20
spectrum, deliver broadband services, spur=20
competitive entry and expand universal service,=94 the FCC said.
http://www.multichannel.com/article/CA6457745.html
* AT&T: No Need For FCC Set-Top Waiver
http://www.multichannel.com/article/CA6457755.html

CHILDREN & MEDIA

OBESITY TASK FORCE PUSHES REPORT TO SEPTEMBER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Task Force on Media & Childhood Obesity has=20
asked for and received a delay in the deadline=20
for getting a report to Congress. The July 11=20
target date has now been pushed to September.=20
Apparently, Sens Tom Harkin (D-Iowa) and Sam=20
Brownback (R-Kansas), who spearheaded the task=20
force's creation, along with FCC Chairman Kevin=20
Martin and Commissioners Deborah Taylor Tate and=20
Michael Copps have agreed to extend the task=20
force's work. The report is to identify steps to=20
rein in marketing of snack foods to kids and=20
promoting healthier diets and exercise. TVWeek=20
reports that the extension indicates that the=20
nation=92s biggest food and beverage marketers are=20
preparing to unveil major new concessions in how=20
they market food to kids on TV on July 18 at a=20
Federal Trade Commission/Department of Health & Human Services workshop.
http://www.broadcastingcable.com/article/CA6457602.html
* FCC press release
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-274907A1.doc
* Obesity Report Delayed as Advertisers Prepare Their Plan
http://tvweek.com/news/2007/07/obesity_report_delayed_as_adve.php

FCC GIVES CBS MORE TIME TO RESPOND TO "WITHOUT A TRACE" QUESTION
[SOURCE: Broadcasting&Cable 7/5, AUTHOR: John Eggerton]
FCC has given CBS until August 10 to respond to a=20
letter from the Commission (it was released June=20
27) looking for some answers related to CBS=92=20
airing of a "Without a Trace" episode back in=20
2004 that drew a proposed multimillion-dollar=20
indecency fine. The Parents Television Council=20
challenged the license of CBS=92 KUTV Salt Lake=20
City claiming CBS did not honor the terms of a=20
consent decree following the FCC=92s issuance of a=20
proposed fine against the show. The FCC wants CBS=20
to document its compliance with the decree. CBS=20
says it didn't violate the terms of the November=20
2004 agreement and will make that clear in its=20
response. The consent decree cleared the FCC=92s=20
books of all indecency complaints and findings=20
except the Janet Jackson Super Bowl reveal.
http://www.broadcastingcable.com/article/CA6457447.html

BROADCASTING

TRADITIONAL RADIO TO PAY FOR PLAY?
[SOURCE: BusinessWeek, AUTHOR: Olga Kharif]
First it was online music swapping, then Web=20
radio. Now, the music industry is taking aim at=20
something really big: traditional radio, a $20=20
billion industry that has, in its 80-plus years=20
of existence, played songs without paying music=20
labels and singers a dime. Aside from the=20
occasional royalty scuffle across those decades,=20
the music industry has always been happy to let=20
radio stations play songs for free, treating it=20
as a necessary marketing expense for the songs=20
and albums they wanted listeners to buy. In fact,=20
in the past, some deejays had been accused of=20
illegally accepting payments from record labels=20
for spinning certain songs. But with more music=20
lovers consuming their passion over the Internet=20
and through satellite broadcasters XM Satellite=20
Radio (XMSR) and Sirius Satellite Radio (SIRI),=20
the free exposure offered by FM and AM radio is=20
no longer quite so valuable. And with online file=20
swapping eating away at revenue despite the legal=20
victories in that arena, the music industry wants=20
all broadcasters to pay for its product.
http://www.businessweek.com/technology/content/jul2007/tc2007073_639316....
?campaign_id=3Drss_tech
* Congress urges peace talks in Net radio conflict
http://news.com.com/Congress+urges+peace+talks+in+Net+radio+conflict/210...
028_3-6193933.html?tag=3Dhtml.alert.hed
* Analysis: A Reprieve for Internet Radio?
http://www.pcmag.com/article2/0,1895,2154524,00.asp

ANSWERS SOUGHT TO LOWEST UNIT RATE QUESTION
[SOURCE: tvnewsday]
The FCC on Thursday announced that it is=20
soliciting comments on a June 19 request by state=20
broadcasting associations. The groups want the=20
FCC to rule on =93whether a broadcast station=20
participating in any of [three specific Internet=20
sales programs] must take into consideration the=20
=91sale price=92 of the airtime sold to advertisers=20
under these programs when computing the station=92s=20
lowest unit rate=94 as it applies to political=20
advertising. Comments on the matter (Docket MB=20
07-137) are due Aug. 6, with reply comments due by Aug.21.
http://www.tvnewsday.com/articles/2007/07/05/daily.8/

SPECTRUM POLICY

FEDS SNUB OPEN SOURCE FOR 'SMART' RADIOS
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Mobile-gadget makers are starting to take=20
advantage of software-defined radio, a new=20
technology allowing a single device to receive=20
signals from multiple sources, including=20
television stations and cell phone networks. But=20
a new federal rule set to take effect Friday=20
could mean that radios built on "open-source=20
elements" may encounter a more sluggish path to=20
market--or, in the worst case scenario, be shut=20
out altogether. U.S. regulators, it seems,=20
believe the inherently public nature of=20
open-source code makes it more vulnerable to=20
hackers, leaving "a high burden to demonstrate=20
that it is sufficiently secure." If the decision=20
stands, it may take longer for consumers to get=20
their hands on these all-in-one devices. The=20
nascent industry is reluctant to rush to market=20
with products whose security hasn't been=20
thoroughly vetted, and it fears the Federal=20
Communications Commission's preference for=20
keeping code secret could allow flaws to go=20
unexposed, potentially killing confidence in their products.
http://news.com.com/Feds+snub+open+source+for+smart+radios/2100-1041_3-6...
102.html?tag=3Dnefd.lede

HOUSE LAWMAKERS CRITICAL OF FRONTLINE WIRELESS PLAN
[SOURCE: Multichannel News 7/2, AUTHOR: Ted Hearn]
A bipartisan group from the House Energy and=20
Commerce Committee is calling on the Federal=20
Communications Commission to reject a plan that=20
would require a spectrum-auction winner to build=20
a broad public-safety network, offer nothing but=20
wholesale service and guarantee that the network=20
complied with network-neutrality principles.=20
=93Let=92s not mistake this proposal for what it is:=20
yet another attempt to get valuable spectrum on=20
the cheap,=94 the House group said in a June 29=20
letter to FCC Chairman Kevin Martin. The letter=20
was signed by 16 lawmakers -- 12 Republicans and=20
four Democrats. Leading Republicans on the letter=20
were Reps. Joe Barton (Texas) and Fred Upton=20
(Mich.). Prominent Democrats included Reps. Gene=20
Green (Texas) and Charles Gonzalez (Texas).
http://www.multichannel.com/article/CA6456963.html?rssid=3D196

INTERNATIONAL

AWAITING INTERNET ACCESS, REMOTE BRAZILIAN TRIBES DEBATE ITS PROMISE, PERIL
[SOURCE: Washington Post, AUTHOR: Monte Reel]
In the past several months, an information=20
technology boom has started to spread through the=20
Indian villages that dot Brazil's countryside,=20
from the Amazon rain forest to the Pantanal=20
wetlands. The federal government this year=20
announced a new program to provide satellite=20
Internet access to 150 remote communities, in=20
hopes that they will be better equipped to=20
protect themselves against illegal logging and=20
other threats to their culture. Industry giants=20
such as Google and Intel also have recently=20
launched projects to provide high-tech assistance=20
in the area. The race to wire remote communities=20
is resulting in a new category of discussion at=20
tribal meetings. "All of the Xavante villages in=20
this reserve are in the middle of a debate right=20
now to decide whether they think Internet access=20
will be a good thing or a bad thing," said Romulo=20
Tsereruo, 37, who teaches in the school building=20
here. "In this village, we've already decided: We want it."
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/05/AR200707...
1866.html
(requires registration)

CHINA CITY TIGHTENS INTERNET CONTROL AFTER PROTEST
[SOURCE: Reuters]
A Chinese city planned to censor online chatroom=20
exchanges and ban anonymous postings after=20
residents used the Internet to organize a mass=20
protest against a chemical plant, Chinese media=20
reported on Friday. Under a new city regulation,=20
online users would have to use their real names=20
when posting messages on more than 100,000 Web=20
sites registered in Xiamen, a port city in=20
southeastern coastal Fujian province, the Beijing Youth Daily said.
http://www.reuters.com/article/internetNews/idUSPEK4156920070706

QUICKLY

AT&T IMPOSES INEXPLICABLE EARLY TERMINATION PENALTY ON iPHONE USERS
[SOURCE: HearUsNow.org, AUTHOR: Bob Williams]
[Commentary] All those sleek new iPhones that=20
have been flying off the shelves at $600 a pop=20
have a built-in feature that isn't being touted=20
by Apple or network provider AT&T -- an=20
inexplicable early termination penalty of $175.=20
Wireless phone carriers have imposed such=20
penalties for years, arguing that they are=20
necessary to help make up for lost revenues from=20
discounted or free phones they use to coax=20
customers into signing long term contracts. But=20
Apple and AT&T are not offering any sort of=20
discount on the highly-coveted iPhones. Which=20
brings us to the other -- and probably more=20
important -- reason wireless carriers impose=20
early termination penalties on their customers.=20
It's because long term contracts with early=20
termination penalties are devastatingly effective=20
in keeping customers from switching carriers.
http://www.consumersunion.org/blogs/hun/2007/07/post.html

COOL RECEPTION FOR CONSERVATIVE RADIO
[SOURCE: Washington Post, AUTHOR: Paul Farhi]
Conservative talk radio may be "running America,"=20
but it doesn't have a big audience in Washington, DC.
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/05/AR200707...
1912.html
(requires registration)
--------------------------------------------------------------
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.
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