July 2007

OWNERSHIP
Tribune faces key tests to seal deal
Consumers May Get Caught in Piracy War
=09
BROADCASTING
Can media fairness be mandated?
IPTV Deserves Compulsory License
As TV shows go online, networks try to adapt ads

CABLE
Cable box prices to increase

INTERNATIONAL
Media Mogul Learns to Live With Ch=E1vez
Battle of the Soaps: Brazilian Minister Takes On TV Giant

QUICKLY -- Fox deal for Photobucket gets U.S.=20
antitrust OK; In India, Protecting a Whistle-Blower

OWNERSHIP

TRIBUNE FACES KEY TESTS TO SEAL DEAL
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera]
Tribune Co.'s shareholders are set to vote in=20
late August on an $8.2-billion proposal to go=20
private, but the Chicago-based media company has=20
other hurdles to clear before the deal can be=20
completed. Washington regulators must agree to=20
transfer the licenses of Tribune's 23 TV stations=20
and one radio station to the new company, led by=20
real estate mogul Sam Zell, and to issue waivers=20
allowing it to hold on to TV stations in Los=20
Angeles and four other cities where Tribune also=20
owns newspapers, including The Times. In=20
addition, borrowing terms have grown more onerous=20
since Zell made the proposal in April, making it=20
costlier to finance the transaction. The company=20
is expected to be saddled with about $10 billion=20
in debt even after an expected sale of the=20
Chicago Cubs baseball team. Wall Street has=20
signaled its skittishness, sending Tribune shares=20
down to $29.25 late last month after they had hit=20
a high in late May of $33.20. The Zell deal is=20
worth $34 a share if it is completed. Zell wants=20
to close the deal by December and to keep the=20
deal from collapsing needs FCC waivers to hold on=20
to KTLA-TV Channel 5 and TV stations in New York,=20
Chicago, Fort Lauderdale, Fla., and Hartford,=20
Conn. Federal regulations prohibit the ownership=20
of a newspaper and a TV station in the same=20
city. The waivers normally would be routine=20
because business-friendly Republicans control the=20
FCC. But in a stroke of bad timing for Tribune,=20
Democrats took control of Congress in January and=20
immediately toughened oversight of the agency.=20
Further complicating matters, the FCC is in the=20
middle of hearings about relaxing its media=20
ownership rules. Eliminating the ban on=20
cross-ownership of newspapers and TV stations in=20
the same market is one possible outcome. Many=20
Democrats and liberal activist groups adamantly=20
oppose changing the rule because they say media=20
consolidation leads to less diversity of=20
viewpoints. Several of those groups, including=20
Consumer Reports publisher Consumers Union,=20
Consumer Federation of America and the United=20
Church of Christ, have formally opposed Tribune's waiver requests.
http://www.latimes.com/business/printedition/la-fi-tribune5jul05,1,21539...
story?coll=3Dla-headlines-pe-business
(requires registration)

CONSUMERS MAY GET CAUGHT IN PIRACY WAR
[SOURCE: Wall Street Journal, AUTHOR: Keith Winstein]
Movie studios and other companies that control=20
the latest technology for playing home videos=20
have come up with a new strategy for thwarting=20
unauthorized copying -- one that can slow down=20
hackers but has the potential for frustrating=20
consumers innocent of any piracy. The industry's=20
new strategy has so far eschewed lawsuits aimed=20
at the hacker community -- which proved largely=20
ineffective in stopping widespread copying of=20
first-generation DVDs -- in favor of a hard-ball=20
technological approach called "key revocation"=20
that aims to protect newer, high-definition DVDs=20
from piracy. The new strategy has unfolded over=20
recent months as hackers have attacked the=20
protections used in personal computers and=20
laptops that play high-definition discs. The=20
anticopying protection for high-resolution DVDs=20
relies on secret, 128-digit passwords embedded in=20
the hardware or software used to play DVDs. Under=20
its new " key-revocation strategy, Hollywood and=20
its allies in the high-technology industry start=20
with the assumption that enterprising hackers=20
will eventually decipher the passwords, which can=20
then be used to make copies. But once a password=20
is compromised and posted on the Web, the=20
industry answers by changing the way in which its=20
new DVD titles are made. Anyone who pops one of=20
the new discs into their personal computer=20
without installing a software upgrade will find=20
that it destroys the computer's ability to play=20
any high-definition DVD at all. To restore the=20
computer's ability to play them again, the owner=20
is forced to download new software from the Web=20
-- software with a new password that hackers=20
haven't yet discovered. The old password, or key, has been revoked.
http://online.wsj.com/article/SB118357696486657400.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

BROADCASTING

CAN MEDIA FAIRNESS BE MANDATED?
[SOURCE: The Christian Science Monitor, AUTHOR: Dante Chinni]
[Commentary] This August will mark the 20th=20
anniversary of the end of the Fairness Doctrine.=20
It was dismantled and eventually dumped during=20
the Reagan Administration in part due to the rise=20
of cable TV =96 which didn't use the airwaves and=20
offered audiences more programming options.=20
Twenty years is a long time in the fast-changing=20
media world. And there is suddenly talk of=20
reviving the Fairness Doctrine. Is there an=20
argument for reinstating the Fairness Doctrine?=20
if there was a legitimate argument in 1987 that=20
cable had significantly broadened the spectrum of=20
opinions available to audiences, that argument=20
must be even truer today -- to the point where=20
bringing "fairness" back to broadcast would=20
certainly have less impact than it had 20 years=20
ago. After all, couldn't Limbaugh, Hannity, and=20
other conservatives simply switch to satellite=20
radio or webcasting or podcasting to make their=20
points free of interference? If members of=20
Congress think bringing back the Fairness=20
Doctrine in radio and TV will stop calls from=20
coming in, they may soon find that different=20
platforms would create the same kinds of=20
pressures. And placing rules on those outlets may=20
well run into a bigger obstacle =96 the First Amendment.
http://www.csmonitor.com/2007/0705/p09s01-coop.html
* Republican sideshow? The Fairness Doctrine and the politics of panic
http://www.lasarletter.net/drupal/node/427
* McCain, Pence will support bills to stop the Fairness Doctrine yet again
http://www.lasarletter.net/drupal/node/426
* Patrick to Revisit Fairness Doctrine Decision
http://www.tvnewsday.com/articles/2007/07/03/daily.8/

CAPITOL IDEA: IPTV DESERVES COMPULSORY LICENSE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Capitol Broadcasting has asked the Copyright=20
Office to allow cable systems to be able stream=20
TV station signals so long as they comply with=20
all existing program exclusivity rules. The=20
broadcaster wants the Copyright Office's=20
compulsory license covering over-the-air=20
broadcasts to be extended to in-market Internet=20
retransmission as well. It points out that the=20
office has traditionally not included Internet in=20
the license, but that the policy stems from a=20
time when it was hard to limit the geography of=20
that streaming. Capitol says it now has a system=20
for insuring that Internet streaming of local=20
stations is confined to the market where that=20
station is licensed, paving the way to extend the=20
compulsory license and the Internet reach of=20
local TV stations without threatening the=20
"linchpin" of the TV channel allocation system,=20
which is local program exclusivity. Capitol=20
President Jim Goodmon plans to testify in a July=20
23 hearing at the office about the proposal. The=20
office is seeking comment on whether the license=20
should be expanded to IP-delivered TV.
http://www.broadcastingcable.com/article/CA6456948.html

AS TV SHOWS GO ONLINE, NETWORKS TRY TO ADAPT ADS
[SOURCE: Los Angeles Times, AUTHOR: Alana Semuels]
With the personal computer replacing the=20
television set for a growing number of Americans,=20
the 30-second spot, along with most conventional=20
TV advertising, is under pressure. For years,=20
people have been able to circumvent TV ads with=20
digital video recorders, but that requires some=20
effort. There are much easier opportunities for=20
ad-avoiding multitasking at the click of a mouse,=20
which is why the networks are experimenting with=20
a mix of alternative formats for online=20
promotional breaks =97 including having none at=20
all. Advertisers are filling online ad time in=20
ways they can't on TV, with interactive videos=20
and competitions. For a campaign for Florida=20
Citrus, the Dallas-based agency Richards Group=20
created a "flu or false" health quiz and a game=20
set in a maze whose walls were contaminated with=20
germs. The games had several levels, the idea=20
being that once viewers started playing they'd be=20
hooked and would stay with it for a lot longer=20
than 30 seconds, going back to the TV show later.=20
Agency research showed that in many cases, people=20
did just that, underscoring a point often made by=20
Joseph Jaffe, author of "Life After the 30-Second=20
Spot." "At the end of the day, why would anybody=20
of sane mind and body sit through a commercial?"=20
said Jaffe, whose book was published in 2005.=20
Online advertisers stand a chance of keeping an=20
audience's attention, he said, by making=20
commercials that don't appear to be commercials.
http://www.latimes.com/business/printedition/la-fi-webspots5jul05,1,2935...
story?coll=3Dla-headlines-pe-business
(requires registration)

CABLE

CABLE BOX PRICES TO INCREASE
[SOURCE: Associated Press, AUTHOR: Deborah Yao]
Cable companies are planning to charge more for=20
set-top boxes. The Federal Communications=20
Commission is trying to spur competition for the=20
boxes so subscribers can actually buy their own,=20
then use a cable-company-provided card to decode=20
their programming. Cable operators won't yet say=20
exactly how much more consumers will pay to rent=20
set-top boxes. It's also unclear whether the fee=20
increases will apply to cable cards. Cable trade=20
groups say monthly rental rates for the new boxes=20
could jump $2 to $3, but that doesn't take into=20
account spreading the cost out to all box=20
renters. The industry is upset that the FCC on=20
Friday denied its petition for a blanket=20
exemption to the cable card mandate, yet granted=20
a temporary one to Verizon Communications, which=20
is rolling out its fiber-optic television, phone=20
and Internet service. The FCC said Verizon=20
provides needed competition against cable.
http://www.usatoday.com/printedition/money/20070705/4b_chrysler05.art.htm
* FCC press release:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-274776A1.doc
* Telco, Cable Weigh In On FCC Waiver Calls
http://www.broadcastingcable.com/article/CA6456934.html

INTERNATIONAL

MEDIA MOGUL LEARNS TO LIVE WITH CH=C1VEZ
[SOURCE: New York Times, AUTHOR: Simon Romero]
Gustavo A. Cisneros was a leader of Venezuela=92s=20
opposition to President Hugo Ch=E1vez. Now he and=20
his television network, Venevisi=F3n, has become a=20
target of the same opposition he once championed.=20
Venevisi=F3n, critics say, is now positioned to=20
benefit from President Ch=E1vez=92s recent decision=20
to push the station=92s main rival, RCTV, off the=20
public airwaves. Mr. Cisneros, 62, in a rare=20
interview here, bridled at such charges. =93If you=20
go off the air, then democracy loses,=94 he said,=20
defending his reconciliation with Mr. Ch=E1vez and=20
pointing to fears that Venevisi=F3n could yet=20
suffer the same fate as RCTV, which was forced to=20
stop broadcasting in late May. =93We decided that=20
we needed to pull through,=94 said Mr. Cisneros,=20
citing advice on the matter from Carlos Fuentes,=20
the Mexican writer, who is an outspoken critic of=20
Mr. Ch=E1vez. =93And the way to pull through was to=20
say, =91Enough, we can't be part of the story or=20
play a role in politics but we have to report the=20
story every day.=92 =94 Gone, Mr. Cisneros said, was=20
Venevisi=F3n=92s =93Fox News approach.=94 Executives=20
replaced morning talk shows with astrology=20
programs and gave priority to nightly soap operas=20
over critical news programs. By the time of the=20
presidential election last December, the shift=20
was an about-face from Venevisi=F3n=92s previous=20
coverage. Venevisi=F3n devoted 84 percent of its=20
political coverage to Mr. Ch=E1vez=92s positions and=20
only 16 percent to the opposition, according to a=20
European Union report on the elections.
http://www.nytimes.com/2007/07/05/world/americas/05venez.html?_r=3D1&oref=
=3Dslogin
(requires registration)

BATTLE OF THE SOAPS: BRAZILIAN MINISTER TAKES ON TV GIANT
[SOURCE: Wall Street Journal, AUTHOR: Matt Moffett]
Edir Macedo, the leader of a huge evangelical=20
Protestant church, knows firsthand the impact of=20
the melodramas produced by TV Globo, South=20
America's dominant broadcaster. After all, Globo=20
once ran a scathing miniseries called=20
"Decad=EAncia," about an unscrupulous minister who=20
was a barely fictionalized version of Mr. Macedo=20
himself. Now, in a strange plot twist, Mr. Macedo=20
is having his revenge against Globo and in the=20
process turning what had been one of the world's=20
least competitive TV markets on its ear. Mr.=20
Macedo has invested tens of millions of dollars=20
in an effort to transform a tiny=20
religious-oriented network he owns, Rede Record,=20
into a frank imitator of Globo. Over the past=20
three years, Record has bought and expanded an=20
old studio on 18 acres of land just a few miles=20
from Globo's massive production complex. Offering=20
salaries far above the going rate, Record has=20
hired hundreds of actors, technicians and=20
journalists -- most of whom had cut their teeth=20
at Globo. Globo's face-off with its look-alike=20
competitor represents an entertainment earthquake=20
in Brazil, where Globo customarily pulls in more=20
than half of prime-time viewers and about=20
three-quarters of ad spending. Now, Record's=20
emergence is bringing down the curtain on a=20
tropical version of the old Hollywood studio=20
system, in which Globo dominated all aspects of=20
the entertainment scene and dictated its will to=20
artists. "For the first time, actors have real=20
negotiating power and real options," says Lav=EDnia=20
Vlasak, a former Globo supporting actress who=20
moved to Record for her first starring telenovela role.
http://online.wsj.com/article/SB118359608584057572.html?mod=3Dtodays_us_...
e_one
(requires subscription)

QUICKLY

FOX DEAL FOR PHOTOBUCKET GETS US ANTITRUST OK
[SOURCE: Reuters]
The Federal Trade Commission has approved plans=20
by MySpace-owner Fox Interactive Media, a unit of=20
News Corp., to buy photo-sharing site Photobucket.
http://www.reuters.com/article/internetNews/idUSN0317813220070704

IN INDIA, PROTECTING A WHISTLER-BLOWER
[SOURCE: New York Times, AUTHOR: Anand Giridharadas]
In the YouTube era, it is harder to kill a man=20
who has a bit of Internet renown.
http://www.nytimes.com/2007/07/05/technology/05whistle.html
(requires registration)
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Communications-related Headlines is a free online=20
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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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