August 2007

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BROADBAND/INTERNET
US Jumps to 24th in Worldwide Broadband Penetration

BROADCASTING/CABLE/SATELLITE
Is Herbert Hoover managing the DTV transition?
NAB Proposes Vague DTV Education Plan
Noncommercial TV Not So Different
Iowa, N.H., S.C. Markets Win Big in Primary Race
Station's Cable Debut Delayed in 2 Counties
Farmer Group Backs XM-Sirius Merger
DVRs Nested In One-in-Five Homes

JOURNALISM
Tribune shareholders OK $8.2-bil. buyout
Newsrooms becoming whiter
Journal's Pains Reflect Media's Malaise

ADVERTISING
Translating a Ruling Into New Limits for Issue Ads
TV Drug Ads Set for Image Study

TELECOM
Customers can sue AT&T, after all
Vonage sues to nullify patents
Verizon wants off the hook for state controls on its network
Missouri Case Could Ring Up Cellphone Taxes
Sylvia Siegel, Activist on Utility Rates

QUICKLY -- The Warrantless Debate Over=20
Wiretapping; Google 'probably' to bid for 700MHz=20
spectrum; Tots getting Internet identity at birth

BROADBAND/INTERNET

US JUMPS TO 24TH IN WORLDWIDE BROADBAND PENETRATION
[SOURCE: Website Optimization]
"We're 24! We're 24!" Yes, the Bush=20
Administration has much to be proud of with the=20
release of new broadband penetration numbers...=20
Reversing a previous trend, the US moved up from=20
25th to 24th in broadband penetration worldwide=20
in the first quarter of 2007. At current growth=20
rates however, Hong Kong should pass South Korea=20
in the summer of 2007 to become the leading=20
nation in broadband penetration. Meanwhile,=20
broadband penetration among active Internet users=20
grew to 83.43% in US homes in June, up 0.2=20
percentage points from 83.23% in June 2007. This=20
increase of 0.2 points is below the average=20
increase in broadband of 0.8 points per month=20
over the last six months. US broadband=20
penetration uptake appears to be slowing down over the past few months.
http://www.websiteoptimization.com/bw/0708/

BROADCASTING/CABLE/SATELLITE

IS HERBERT HOOVER MANAGING THE DTV TRANSITION?
[SOURCE: Lasar's Letter on the FCC, AUTHOR: Matthew Lasar]
[Commentary] The Bush administration's=20
"deregulatory phase" approach to what one=20
National Association of Broadcasters official has=20
called "our Y2K" -- the impending shutdown of all=20
analog TV signals after February 17, 2009 --=20
doesn't fly with some members of the FCC's=20
Consumer Advisory Committee. That move, if it=20
took place today, would turn an estimated 21=20
million "rabbit ears only" TV sets into useless=20
pieces of furniture (about 17 percent of TV=20
households), many of them belonging to people who=20
do not own digital TV receivers, do not buy=20
digital cable or satellite service, live on fixed=20
incomes, have hearing or visual disabilities, are=20
quite elderly, live in remote rural areas, or=20
deal with more than one of these conditions.=20
Moreover Catherine Seidel, Chief of the FCC's=20
Consumer and Governmental Affairs Bureau=20
disclosed that 32 million Americans subscribe to=20
analog, rather than digital cable. These=20
consumers could lose their signal as well,=20
"unless the Commission acts," Seidel said. To=20
alert the public to this impending challenge, the=20
government has budgeted a paltry five million=20
dollars to the National Telecommunications=20
Information Administration (NTIA), whose job will=20
be to offer two 40 dollar coupons to every=20
American, each good towards a converter set top=20
box that will turn any old rabbit ears machine=20
into a digital ready receiver. In contrast,=20
Britain has penciled in about 400 million for=20
this educational task. But not to worry. The=20
U.S., in the grand tradition of Herbert Hoover=20
style industry voluntarism, plans to rely on the=20
private sector to get the word out.
http://www.lasarletter.net/drupal/node/449

NAB PROPOSES VAGUE DTV EDUCATION PLAN
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
In a letter Tuesday to FCC Chairman Kevin Martin,=20
Jack Sander, Chairman of the National Association=20
of Broadcasters's Joint Board, described the=20
steps the lobbying group is taking to heighten=20
consumer awareness about the DTV transition.=20
According to NAB, 60% of Americans =AD 180 million=20
people =AD are =93completely unaware=94 of the move to=20
all-digital broadcasting. Among other things,=20
Sander=92s letter said one =93fully produced=94=20
60-second and four to six 30-second PSA spots=20
would sent to local TV stations by the end of the=20
year. But Sander did not describe whether NAB=20
members stations had committed to run the PSAs in=20
front of large prime time audiences in lieu of=20
lucrative advertisements. Sander=92s letter also=20
didn't describe the content of the PSAs,=20
including whether or not they would inform=20
broadcast-only homes that they could turn to=20
their local cable company for local TV signals.=20
Broadcasters have been reluctant to discuss their timetable for PSAs.
http://www.multichannel.com/article/CA6470799.html
* NAB Issues DTV-Education Tool Kit to Congress
http://www.broadcastingcable.com/article/CA6470795.html?rssid=3D193
* NAB letter
http://www.nab.org/xert/corpcomm/pressrel/releases/082107_Sander_FCC_DTV...

NONCOMMERCIAL TV NOT SO DIFFERENT
[SOURCE: tvnewsday]
John Lawson is president of the Association of=20
Public Television Stations, a Washington trade=20
group that represents 361 noncommercial TV=20
stations. He says his members are coping with=20
many of the same issues for-profit TV stations=20
are -- must carry, the DTV transition and more.=20
They also share commercial broadcasters'=20
enthusiasm for the medium. =93We do have the=20
opportunity to bring back over the air,=94 he says.=20
=93It=92s perceived as a dinosaur right now, but it=20
doesn't have to be. DTV is a once-in-a-lifetime=20
opportunity for the broadcasting industry to reinvent itself."
http://www.tvnewsday.com/articles/2007/08/21/daily.1/

IOWA, NH, SC MARKETS WIN BIG IN PRIMARY RACE
[SOURCE: AdAge, AUTHOR: Ira Teinowitz]
Despite the mad rush of states pushing up their=20
primary dates, so far the bulk of the advertising=20
money is being dumped into the old reliables:=20
Iowa, New Hampshire and South Carolina. Total=20
spending, $7.9 million through Aug. 6, is well=20
ahead of four years ago. Of course, last time=20
around, only the Democrats were conducting a=20
heated primary; they had spent $2.8 million going=20
into August. Now, large fields of candidates are=20
duking it out in both parties. Spending in Iowa=20
this year is $3.1 million, New Hampshire is $1.9=20
million and South Carolina is $200,000. National=20
cable has drawn $1.8 million (compared with=20
$7,000 four years ago), mainly from the Romney campaign.
http://adage.com/article?article_id=3D119952

STATION'S CABLE DEBUT DELAYED IN 2 COUNTIES
[SOURCE: Washington Post 8/21, AUTHOR: John Wagner]
With great fanfare, Maryland Public Television=20
yesterday launched the state's first public=20
all-Spanish-language channel, featuring an array=20
of educational and entertainment programming. But=20
it could be a while before most Comcast=20
subscribers in Montgomery and Prince George's=20
counties are able to tune in. As the digital=20
station made its debut in the Baltimore region,=20
officials from Comcast, the Washington area's=20
dominant cable provider, hadn't committed to a=20
starting date in the two Maryland jurisdictions=20
with by far the largest Hispanic populations.
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/20/AR200708...
1700.html
(requires registration)
* Public TV Airs a New Spanish Voice
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/21/AR200708...
2018.html

FARMER GROUP BACKS XM-SIRIUS MERGER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In a letter to the Federal Communications=20
Commission, the Federation of Southern=20
Cooperatives/Land Assistance Fund said rural=20
communities are "underserved" by terrestrial=20
radio and argued that the merger of satellite=20
radio operators XM and Sirius will provide "lower=20
prices and increased programming choice" to its=20
20,000 member families in 12 states.
http://www.broadcastingcable.com/article/CA6470731.html?rssid=3D193
* Federation of Southern Cooperatives Land Assistance Fund
http://www.federationsoutherncoop.com/

DVRs NESTED IN ONE-TO-FIVE HOMES
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
Leichtman Research Group estimates that more than=20
one in every five U.S. households now have a=20
digital video recorder, up from about one in=20
every 13 households just two years ago. 53% of=20
DVR owners say that they have an HDTV set. While=20
84% of DVR owners rate the ability to skip=20
commercials as very important, just 8% of DVR=20
owners say it is the greatest benefit of having a=20
DVR. The research and consulting group estimates=20
that 95% of all TV viewing is still of live TV, despite the uptick in DVRs.
http://www.multichannel.com/article/CA6470434.html?rssid=3D196

JOURNALISM

TRIBUNE SHAREHOLDERS OK $8.2 BILLION BUYOUT
[SOURCE: Crain=92s Chicago Business, AUTHOR: Gregory Meyer]
As expected, Tribune's shareholders on=20
overwhelmingly approved taking the company=20
private later this year. At the meeting in=20
Tribune Tower CEO Dennis FitzSimons announced=20
that 97% of shares voted were in favor of the=20
move. In a statement from Tribune Co., Mr. Zell=20
said, "I believe Tribune Co. is reasserting=20
itself as a national leader in news generation=20
and distribution. Despite the recent upheaval in=20
the credit markets, my view of the company as an investment has not changed=
."
http://chicagobusiness.com/cgi-bin/news.pl?id=3D26080
* Rosenthal: Vote a sure thing; future not as certain
http://www.chicagotribune.com/business/chi-tue_phil_0821aug21,0,3835597....
umn?track=3Drss
* Tribune Shareholders Back Zell=92s Takeover
http://www.nytimes.com/2007/08/22/business/media/22tribune.html?ref=3Dto...
spaper
* Tribune Co. Buyout Advances
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/21/AR200708...
0662.html
* Tribune shareholders overwhelmingly approve billionaire's buyout deal
http://www.usatoday.com/printedition/money/20070822/tribune22.art.htm
* Tribune sale clears hurdle
http://www.latimes.com/business/printedition/la-fi-tribune22aug22,1,1823...
.story?coll=3Dla-headlines-pe-business
* Tribune-Deal Worries Remain Despite Approval
http://online.wsj.com/article/SB118770757441704048.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

NEWSROOMS BECOMING WHITER
[SOURCE: The Newspaper Guild-CWA 8/17]
According to the American Society of Newspaper=20
Editors' annual survey, the percentage of=20
minority journalists working in daily newsrooms=20
slipped this year for only the second time since=20
1978, to 13.62%. ASNE=92s goal has been to increase=20
minority representation until it mirrors society=20
at large -- which is now 33% non-white. Other=20
indicators in the ASNE survey also are slipping=20
into reverse. Minorities account for only 10.9%=20
of all newsroom supervisors, reverting to a level=20
reached two years ago. Meanwhile, the number of=20
newspapers with no minorities at all on their=20
newsroom staffs increased to 392, from 377 last year.
http://www.newsguild.org/gr/index.php?ID=3D4332

JOURNAL'S PAINS REFLECT MEDIA'S MALAISE
[SOURCE: Washington Post, AUTHOR: Howard Kurtz]
American Journalism Review, the influential but=20
financially troubled media journal, could face a=20
shutdown by year's end. Tom Kunkel, the review's=20
president, said it is "more likely" that the=20
magazine will be able to continue publishing next=20
year, but that he must close a deficit of roughly=20
$200,000 -- about one-quarter of its annual=20
budget. The bimonthly, launched in 1977 as=20
Washington Journalism Review, has been cutting=20
costs as the economic downturn in print=20
journalism has eroded its advertising base.=20
Longtime editor Rem Rieder essentially became the=20
only editorial employee after the managing=20
editor, Rachel Smolkin, left and was not=20
replaced. Even the design and artwork of the=20
magazine are contracted out. There was a time=20
when AJR, along with Columbia Journalism Review,=20
operated by Columbia University, provided much of=20
the critical examination of an industry not known=20
for self-reflection. But the rise of Web sites=20
and blogs dedicated to critiquing, and in some=20
cases bashing, the media has increasingly=20
overshadowed magazines that publish six times a=20
year, although their carefully reported=20
examinations of media mistakes and trends remain important.
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/21/AR200708...
1898.html
(requires registration)

ADVERTISING

TRANSLATING A RULING INTO NEW LAWS FOR ISSUE ADS
[SOURCE: Washington Post, AUTHOR: Matthew Mosk]
In June, Chief Justice John G. Roberts Jr. and a=20
bare majority of his colleagues blew up a key=20
provision of the campaign finance overhaul that=20
Congress passed in 2002. Now the Federal Election=20
Commission has begun to piece together the=20
fragments that remain to answer this question:=20
What can issue-oriented political ads that are=20
paid for with corporate or union cash say before=20
they become a clear appeal to vote for or against=20
a presidential or congressional candidate? FEC=20
Chairman Robert D. Lenhard said the commission=20
feels compelled to resolve that question before=20
mid-December, when a barrage of ads is likely to=20
start filling up airtime. One thing is expected,=20
campaign finance analysts said: Organizations=20
will continue to push the limits of any new=20
regulations, and more court battles will follow.
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/21/AR200708...
1675.html
(requires registration)

TV DRUG ADS SET FOR IMAGE STUDY
[SOURCE: Associated Press]
Federal regulators plan to study whether=20
relaxing, upbeat images featured in TV drug ads=20
distract consumers from warnings about the drugs'=20
risks. The announcement, posted on the Food and=20
Drug Administration Web site, comes a week after=20
a study published in the New England Journal of=20
Medicine suggested the agency's drug-ad=20
enforcement has steadily declined. The FDA says=20
it plans to study how 2,000 people react to=20
television drug ads to determine whether they=20
have an overwhelmingly positive impression of=20
products despite audio warnings about potential side effects.
http://online.wsj.com/article/SB118774315856404781.html?mod=3Dtodays_us_...
sonal_journal
(requires subscription)

TELECOM

CUSTOMERS CAN SUE AT&T, AFTER ALL
[SOURCE: The Register, AUTHOR: Cade Metz]
A federal court in San Francisco has decided that=20
AT&T's wireless contract is "unconscionable." On=20
Friday, the US Court of Appeals for the Ninth=20
Circuit came out against AT&T's "arbitration=20
clause," which forbids wireless customers from=20
bringing class-action suits against the company.=20
Arbitration clauses are quite common in the US,=20
as companies do their darndest to bury expensive=20
consumer suits before they even get started, and=20
the new ruling could go a long way towards curbing the practice.
http://www.theregister.co.uk/2007/08/20/court_slames_att_wireless_contra...
clause/

VONAGE SUES TO NULLIFY PATENTS
[SOURCE: Bloomberg 8/21]
Internet phone company Vonage sued a U.S. unit of=20
Canadian telecommunications equipment maker=20
Nortel Networks, seeking to invalidate three=20
patents for managing telephone data. Nortel is=20
attempting to sue Vonage in Texas for infringing=20
the patents. Vonage contends that those patents are not valid.
http://www.latimes.com/business/la-fi-vonage21aug21,1,4323034.story?coll...
la-headlines-business

VERIZON WANTS OFF THE HOOK FOR STATE CONTROLS OF ITS NETWORK
[SOURCE: The Virginian-Pilot, AUTHOR: Carolyn Shapiro]
Federal regulators are considering whether=20
Hampton Roads consumers have enough competitive=20
choices in telephone services. This region is one=20
of six on the East Coast where Verizon=20
Communications Inc. hopes to release itself from=20
certain regulations. It has filed a "forbearance"=20
petition with the Federal Communications=20
Commission, claiming that some regulations are no=20
longer necessary in markets with healthy=20
competition. The telecommunications giant is=20
hoping to shake off the rules governing the=20
wholesale rates that the company charges=20
competitors for access to its network. Competing=20
companies that lack their own connections to=20
homes and businesses depend on Verizon's network=20
to deliver service and must pay for use of that network.
http://content.hamptonroads.com/story.cfm?story=3D130712&ran=3D218932

MISSOURI CASE COULD RING UP CELLPHONE TAXES
[SOURCE: Wall Street Journal, AUTHOR: Sara Silver sara.silver( at )wsj.com]
In recent years, state and local governments have=20
been looking to monthly cellphone bills as a new=20
source of tax revenue to make up for the growing=20
number of consumers giving up their traditional=20
telephones for wireless services. Now, a legal=20
battle in Missouri could accelerate that trend,=20
emboldening some state and local governments to=20
increase cellphone taxes -- and cellphone bills=20
-- even more. After a six-year legal struggle, a=20
state court in St. Louis County this week may=20
finally rule on whether a group of municipal=20
telephone license taxes -- worth an estimated=20
$500 million statewide -- apply to services offered by wireless carriers.
http://online.wsj.com/article/SB118774015705004665.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

SYLVIA SIEGEL, ACTIVIST ON UTILITY RATES
[SOURCE: New York Times, AUTHOR: David Cay Johnston]
Sylvia Siegel, who brought a customer=92s=20
perspective to the regulation of California=20
utilities and spent 1.6 years fighting against=20
rates and rules that she maintained were unfair=20
to consumers, died Saturday in Mill Valley,=20
Calif. She was 89. Stephen Brobeck, executive=20
director of the Consumer Federation of America,=20
said that =93in the =9270s and =9280s Sylvia was the=20
most visible and outspoken utility advocate in=20
the country, and to this day the organization she=20
created has been the most effective advocate=94 in=20
the nation for consumers in utility cases. In=20
1973, at her kitchen table, Mrs. Siegel, a mother=20
of two children, started what is now known as the=20
Utility Reform Network to represent consumers=20
before the California Public Utility Commission.=20
She said she believed that the commission, which=20
meets in San Francisco, was more concerned with=20
the welfare of California=92s electric, gas,=20
telephone and water utilities and its in-state=20
airlines, trucking and bus companies, than with the interests of the custom=
ers.
http://www.nytimes.com/2007/08/22/business/22siegel.html?ref=3Dtodayspaper
(requires registration)

QUICKLY

THE WARRANTLESS DEBATE OVER WIRETAPPING
[SOURCE: New York Times, AUTHOR: Philip Bobbitt]
[Commentary] Once linear, analog, point-to-point=20
communication has been replaced by the=20
disaggregated packets of the Internet, two people=20
talking to each other in Europe could find their=20
conversations going through American switches. It=20
also became difficult to determine the true=20
origin of any communication that was routed=20
through the United States. If a terrorism suspect=20
in Pakistan is having conversations with someone=20
on a computer with a New York Internet protocol=20
address via a chat room run by an Internet=20
service provider in London, where exactly is the=20
intelligence being collected? If the answer is=20
the United States simply because the servers are=20
here, of what possible relevance could that be to=20
the protection of the rights of Americans?
http://www.nytimes.com/2007/08/22/opinion/22bobbitt.html?ref=3Dtodayspaper
(requires registration)

GOOGLE 'PROBABLY' TO BID FOR 700 MHZ SPECTRUM
[SOURCE: C-Net|News.com, AUTHOR: Declan McCullagh]
Google is "probably" going to submit a $4.6=20
billion bid for a prime chunk of wireless=20
spectrum, its chief executive said Tuesday=20
evening. Eric Schmidt told a dinner audience at=20
the Progress and Freedom Foundation's Aspen=20
Summit that "it's highly likely that when we get=20
to that point we will see the regulatory=20
framework that is conducive to the bid (we wanted) to make."
http://news.com.com/8301-10784_3-9764120-7.html

TOTS GETTING INTERNET IDENTITY AT BIRTH
[SOURCE: Associated Press, AUTHOR: Anick Jesdanun]
A small but growing number of parents are getting=20
domain names for their young kids, long before=20
they can do more than peck aimlessly at a=20
keyboard. The trend hints at the potential=20
importance of domain names in establishing one's=20
future digital identity. Think of how much a=20
typical teen's online life now revolves around=20
Facebook or News Corp.'s MySpace. Imagine if one=20
day the domain could take you directly to those=20
social-networking profiles, blogs, photo albums and more.
http://news.yahoo.com/s/ap/20070821/ap_on_hi_te/business_of_life
--------------------------------------------------------------
Happy Birthday, Andrea!
--------------------------------------------------------------
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.
--------------------------------------------------------------