August 2007

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GOVERNMENT & COMMUNICATIONS
Lawsuits May Illuminate Methods of Spy Program

SPECTRUM
FCC Rules Allow One Bidder To Buy More Than Half Of Spectrum
NAB Issues Preemptive Strike Against Microsoft In White Spaces Battle

INTERNET/BROADBAND
Video Surge Divides Web Watchers
One fifth of Americans never use the Internet?
Rural Broadband Providers Look Skyward
Dr. Google and Dr. Microsoft

CONTENT
Discovery Kids Joins Movement Against Junk Food Targeting Children
Half of Web time spent viewing content
Paid Content on the Net? Not if the Content's News
Content Issues for New and Old Media

QUICKLY -- Karmazin Swings Back at NAB; Ford Foundation Selects Its New Lea=
der

GOVERNMENT & COMMUNICATIONS

LAWSUITS MAY ILLUMINATE METHODS OF SPY PROGRAM
[SOURCE: Washington Post, AUTHOR: Dan Eggen]
Tomorrow, a three-judge panel will hear arguments=20
on whether the Terrorist Surveillance=20
Program/National Security Agency spying case,=20
which may provide the clearest indication yet of=20
how the spying program has worked, can go=20
forward. So far, evidence in the case suggests a=20
massive effort by the NSA to tap into the=20
backbone of the Internet to retrieve millions of=20
e-mails and other communications, which the=20
government could sift and analyze for suspicious=20
patterns or other signs of terrorist activity,=20
according to court records, plaintiffs' attorneys=20
and technology experts. In the first of two=20
lawsuits before the court, the Electronic=20
Frontier Foundation, a privacy group, alleges in=20
a class action that AT&T collaborated with the=20
NSA to operate a "dragnet" that illegally tracked=20
the domestic and foreign communications of=20
millions of Americans. The second case centers on=20
the disbanded al-Haramain charity and two of its=20
attorneys, who say they were given -- and then=20
forced to return -- a Treasury Department=20
document showing that they had been the focus of=20
NSA surveillance. The Justice Department is=20
arguing that the cases should be dismissed=20
because their subject matter is a state secret.=20
The communications company, meanwhile, says it is=20
prevented from properly defending itself because=20
of national security reasons and dismisses the=20
employee who briefly saw the room and worked on=20
supporting equipment as a "line technician who .=20
. . never had access to the 'secret room' he purports to describe."
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/13/AR200708...
1113.html
(requires registration)
* NSA wiretapping trial begins
http://www.csmonitor.com/2007/0814/p01s02-usju.html

SPECTRUM

FCC RULES ALLOW ONE BIDDER TO BUY MORE THAN HALF OF SPECTRUM
[SOURCE: DowJones; AUTHOR: Corey Boles corey.boles( at )dowjones.com]
A single company could bid for more than half the=20
lucrative spectrum to be auctioned off by the=20
Federal Communications Commission after the final=20
rules for the sale failed to include a provision=20
prohibiting this from occurring. There had been=20
pressure on FCC policymakers to include such a=20
rule to ensure that an incumbent wireless carrier=20
such as Verizon Wireless or AT&T wouldn't be able=20
to take the lion's share of the spectrum being=20
sold. Potential new entrants to the market, such=20
as Google, as well as a handful of public=20
interest groups had been pushing the FCC to=20
include the rule. Two sections make up 32=20
megahertz of the 62 megahertz of prized airwaves=20
being sold off. They include one 22-megahertz=20
swath with so-called open-access requirements=20
attached -- which is actually six separate pieces=20
that can be added together, and another=20
10-megahertz chunk that will be used to provide=20
wireless broadband service to the emergency=20
services community, with any spare capacity able=20
to be used for commercial purposes. The remaining=20
30 megahertz has been broken up into several=20
hundred licenses. They are likely to be bought by=20
smaller or rural wireless carriers that couldn't=20
afford to bid for the larger sections.=20
Ultimately, the FCC decided not to include such a=20
rule after public safety representatives voiced=20
concern that such a rule might limit interest in=20
the 10 megahertz of airwaves that affects them.=20
Public safety said they feared that if large=20
bidders were forced to choose between the=20
22-megahertz chunk and the 10-megahertz one, they=20
would choose the former. The absence of a rule=20
prohibiting a major swoop by a bidder doesn't=20
mean such a move is likely. It would cost upward=20
of $7.5 billion if the forecast price for the=20
entire 62 megahertz of airwaves is correct.
http://money.cnn.com//news/newsfeeds/articles/djf500/200708131702DOWJONE...
ONLINE000417_FORTUNE5.htm

NAB ISSUES PREEMPTIVE STRIKE AGAINST MICROSOFT IN WHITE SPACES BATTLE
[SOURCE: Broadcasting&Cable, AUTHOR: Glen Dickson]
The National Association of Broadcasters (NAB) is=20
looking to stay one step ahead of the computer=20
industry in the lobbying battle over what type of=20
wireless devices will be allowed to operate in=20
unused portions of the broadcast spectrum. The=20
trade association released a statement early=20
Monday afternoon aimed at Microsoft and other=20
computer firms that have been pushing for the FCC=20
to allow various types of unlicensed wireless=20
devices to operate in the so-called "white=20
spaces" within the broadcast spectrum. "The FCC=20
performed rigorous tests on the Microsoft=20
devices, and we are confident that its finding=20
that these devices cause interference to=20
television reception is accurate," said NAB=20
spokesman Dennis Wharton in a statement. "Nearly=20
a decade ago, broadcasters and government=20
launched the historic public-private partnership=20
that is bringing the next generation of=20
television to American consumers. Now that the=20
DTV transition is near completion, up steps=20
Microsoft and its allies to jeopardize all that=20
has been accomplished. By continuing to press its=20
self-serving agenda, Microsoft is playing Russian=20
Roulette with America's access to interference free TV reception."
http://www.broadcastingcable.com/article/CA6468401.html?rssid=3D193
* NAB statement
http://www.nab.org/AM/Template.cfm?Section=3DHome&template=3D/CM/Content...
play.cfm&section=3DPress_Releases1&ContentID=3D10102
* Microsoft says test shows vacant airwaves usable
Microsoft Corp told the U.S. Federal=20
Communications Commission on Monday it was=20
confident that vacant television airwaves can be=20
used for wireless services without interfering with broadcast signals.
http://www.reuters.com/article/technologyNews/idUSN1329621220070813
* Microsoft Screws Up the White Spaces; or, Why=20
Citizens Movements Are Citizen Driven =97 the Latest Example
http://www.wetmachine.com//item/868

INTERNET/BROADBAND

VIDEO SURGE DIVIDES WEB WATCHERS
[SOURCE: Wall Street Journal, AUTHOR: Kevin J.=20
Delaney kevin.delaney( at )wsj.com and Bobby White]
Researchers have long warned that rapid increases=20
in Internet usage could strain the capacity of=20
the data lines and gear that make up the network,=20
severely slowing traffic and even knocking out=20
service. For years, they've been wrong as=20
Internet-access providers and telecom carriers=20
have added routers and other hardware to keep=20
ahead of demand, and the data-carrying capacity=20
of the Internet pipes has greatly expanded thanks=20
to technical advances. But could the doomsayers=20
be right this time? It depends on whom you ask.=20
Prompting the latest concerns is the rapid growth=20
of bandwidth-hungry applications like online=20
video, file-sharing programs and Internet=20
telephone service. Transmitting a minute of video=20
can require 10 times the bandwidth of audio -- or=20
more, depending on the quality. Already,=20
peer-to-peer video swapping -- most of it illegal=20
-- is estimated to represent in the range of more=20
than one-third of all Internet traffic this year.=20
U.S. Internet video sites alone transmit more=20
data per month than was carried over the entire=20
U.S. Internet backbone monthly in 2000. "One of=20
the key possibilities for 2007 is that the=20
Internet could be approaching its capacity,"=20
analysts at Deloitte Touche Tohmatsu wrote in a=20
January report. "Our belief is we'll start to see=20
some brownouts or service slowdowns or service=20
issues," says Phil Asmundson, the national=20
managing partner leading Deloitte & Touche USA's=20
Telecommunications practice. But some analysts=20
and Internet companies such as Google Inc. play=20
down the idea that there's an impending crunch,=20
pointing to the forecasters' poor track record of=20
predicting such problems. There are also=20
political implications to the debate. As part of=20
the "network neutrality" scuffle in Washington,=20
telecommunications companies say Internet=20
companies should help foot the bill for more data=20
lines and equipment if they're sending lots of=20
video traffic at high speed to consumers. One=20
issue causing alarm is that access providers=20
often don't have the gear in place to provide the=20
bandwidth they promise to DSL or cable Internet=20
customers. They practice oversubscription in the=20
way airlines overbook planes with the expectation=20
some people will fail to show up. Cable companies=20
are particularly susceptible because their=20
network design shares bandwidth among neighbors,=20
allowing a few Internet users to degrade service=20
by using more than their fair share. Some warn=20
that new applications from start-ups and media=20
companies using peer-to-peer technology to=20
transmit TV shows online could increase any=20
strain if they prove popular. Telephone companies=20
face another challenge. Many own networks that=20
are a hodgepodge of older equipment, much of=20
which is inefficient at handling new forms of traffic like video.
http://online.wsj.com/article/SB118705221439696600.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

ONE FIFTH OF AMERICANS NEVER USE THE INTERNET?
[SOURCE: Lasar's Letter on the FCC, AUTHOR: Matthew Lasar]
Over 20 percent of subjects in a major survey=20
told Nielsen Media Research that they have no=20
access to the Internet. The findings come from a=20
recent study Nielsen completed for the Federal=20
Communications Commission, one of ten sponsored=20
on behalf of the agency's media ownership=20
proceeding. 20.3 percent of respondents told=20
Nielsen that they never log in, either at home or=20
at their job. Of those with access, 75.1 percent=20
said they reach the Internet at home. 31 percent=20
said they get entry to the Web and other Internet=20
services at work. The average respondent spent=20
about 12.8 hours a week on line, according to the report.
http://www.lasarletter.net/drupal/node/447

RURAL BROADBAND PROVIDERS LOOK SKYWARD
[SOURCE: BusinessWeek, AUTHOR: Tim Catts]
Just after nightfall on Aug. 14, a new=20
state-of-the-art satellite owned by Hughes=20
Communications will blast off from Kourou, French=20
Guiana, into an orbit more than 22,000 miles=20
above earth. The satellite, Spaceway 3, is part=20
of the company's bid to reach a bigger slice of a=20
sizable but untapped U.S. broadband market that=20
remains beyond the reach of cable or DSL Internet=20
service providers. For years, as major telecom=20
and cable operators such as Comcast, AT&T,=20
Verizon Communications, and Time Warner have=20
rolled out a bevy of new bundled telephone and=20
Internet packages for urban centers, many rural=20
regions languished with dial-up access as just=20
about the only option for Internet access. For=20
the most part, investments in the hinterlands=20
bear considerable risks: Absent the economies of=20
scale that come with densely packed customers,=20
providers are forced to hope that their services=20
are widely adopted. If not, such investments may=20
never pay off. That leaves a potentially huge=20
market without high-speed Internet access.
http://www.businessweek.com/technology/content/aug2007/tc20070813_731298...
m?campaign_id=3Drss_tech

DR GOOGLE AND DR MICROSOFT
[SOURCE: New York Times, AUTHOR: Steve Lohr]
In politics, every serious candidate for the=20
White House has a health care plan. So too in=20
business, where the two leading candidates for=20
Web supremacy, Google and Microsoft, are working=20
up their plans to improve the nation=92s health=20
care. By combining better Internet search tools,=20
the vast resources of the Web and online personal=20
health records, both companies are betting they=20
can enable people to make smarter choices about=20
their health habits and medical care. =93What=92s=20
behind this is the mass consumerization of health=20
information,=94 said Dr. David J. Brailer, the=20
former health information technology coordinator=20
in the Bush administration, who now heads a firm=20
that invests in health ventures. It is too soon=20
to know whether either Google or Microsoft will=20
make real headway. Health care, experts note, is=20
a field where policy, regulation and entrenched=20
interests tend to slow the pace of change, and=20
technology companies have a history of losing patience.
http://www.nytimes.com/2007/08/14/technology/14healthnet.html
(requires registration)

CONTENT

DISCOVERY KIDS JOINS MOVEMENT AGAINST JUNK FOOD TARGETING CHILDREN
[SOURCE: Rep Ed Markey (D-MA)]
Discovery Kids, a branch of the Discovery=20
Communications family of cable networks, has=20
decided to stop licensing its name and characters=20
for use in connection with unhealthy food and=20
beverage products. Rep. Markey said, =93I commend=20
Discovery Kids for taking this step to help=20
protect children from unhealthy junk food ads and=20
look forward to reviewing the details of their=20
proposal. By helping kids discover the world=20
beyond junk food, Discovery Kids is making an=20
important statement about the responsibility that=20
media companies have to join the fight against=20
childhood obesity. Two years ago the Institute of=20
Medicine linked the current unhealthy trend=20
toward poor nutrition and childhood obesity to=20
the prevalence of television advertisements for=20
fast food, junk food, sugared cereals, and other=20
foods wholly lacking in nutritional value.=20
Ideally, children's television can be an=20
electronic oasis of educational and informational=20
fare for kids in the otherwise vast wasteland of=20
commercial television. While some food marketers=20
have started to set standards for junk food ads,=20
media companies like Nickelodeon and the Cartoon=20
Network should follow the lead of Disney and=20
Discovery Kids and take similar steps to assist=20
in combating this public health problem.=94
http://markey.house.gov/index.php?option=3Dcom_content&task=3Dview&id=3D...
3&Itemid=3D141
* FCC Chairman Martin
"I want to join Senators Sam Brownback (R-KS) and=20
Tom Harkin (D-IA) and FCC Commissioners Michael=20
Copps and Deborah Taylor Tate in congratulating=20
Discovery Communications on their decision to=20
license the Discovery Kids name and characters=20
for use only in connection with healthy food and=20
beverage products. I appreciate Discovery's=20
commitment to children's health evident in their=20
participation in the Task Force on Media=20
and Childhood Obesity. I also appreciate=20
Discovery's example of voluntary commitment, high=20
standards and good corporate citizenship."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-275942A1.doc
* Commissioner Copps
"It's good news that the Discovery Kids brand=20
will be used to promote only nutritious,=20
wholesome foods. This is the kind of commitment=20
we hope more media companies will soon make. It=20
will take tough and concerted action by both food=20
and media businesses if we are really serious=20
about putting an end to junk food ads aimed at our kids."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-275940A1.doc
* Commissioner Tate
"Almost daily, another company does the right=20
thing and pledges to America's families that=20
their brand and characters will only be used for=20
healthier foods and more active lifestyles," said=20
Commissioner Tate. "Today I want to applaud=20
Discovery Kids for being at the forefront of this=20
effort. Like the Good Housekeeping Seal of=20
Approval, parents can trust brands such as=20
Discovery Kids, which have made a commitment to=20
promoting healthy, nutritious foods."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-275926A1.doc

HALF OF WEB TIME SPENT VIEWING CONTENT
[SOURCE: Reuters]
Content online is king. Internet users spend=20
nearly half their time online viewing news or=20
entertainment content, surpassing activities such=20
as sending e-mails, shopping or searching for=20
information, according to a study released by the=20
Online Publishers Association on Monday. The=20
four-year study, conducted by Nielsen/NetRatings,=20
tracked a 37 percent increase in amount of time=20
spent viewing content such as online videos or=20
news, surpassing a 35 percent rise in using=20
search engines like Google. The abundance of=20
content and faster online speeds accounted for=20
the spike, the study said. A proliferation of=20
social networks such as News Corps' MySpace and=20
Facebook have helped boost content viewing as=20
well. Overall, viewing content accounts for 47=20
percent of time spent online in 2007, up from 34=20
percent in 2003. Web search accounted for 5=20
percent of time spent online in 2007 from 3 percent in 2003.
http://www.reuters.com/article/technologyNews/idUSN1335166120070813
* People Devote More Time Online to Content Than E-mail
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003625111

PAID CONTENT ON THE NET? NOT IF THE CONTENT'S NEWS
[SOURCE: AdAge, AUTHOR: Nat Ives and Abbey Klaassen]
Slate, The Economist, CNN and, maybe soon, the=20
New York Times and the Wall Street Journal. Paid=20
content on the Web doesn't seem to work. Even=20
those that still plan to charge for content=20
recognize that the free model has its benefits.=20
This March, Slate rival Salon hiked prices on=20
both its paid-subscription plans, but not because=20
it saw paid content as the way forward. It raised=20
rates the most for its ad-free subscription and=20
raised them less for a subscription tier that=20
includes some ads. The appeal of charging for=20
online content is understandable -- doing so=20
helps fight cannibalization of print editions and=20
supplements online-ad sales that can't match the=20
rates achieved in print. It's also nice for=20
advertisers to know that a consumer loves a=20
publisher's site enough to pay for it. None of=20
that is compelling enough to support paid content=20
in most situations, said Jeff Marshall, senior=20
VP-digital managing director at Starcom/Pixel.=20
"From a marketer perspective, the big reason for=20
moving something like TimesSelect or Dow Jones is=20
you potentially create greater scale for=20
advertisers, and they want as much scale as=20
possible," he said. "Fortune 1000 companies want=20
to move a lot of products, and the more people=20
you can reach in desirable audiences, the better."
http://adage.com/mediaworks/article?article_id=3D119836
* Fee content vs. free content
http://www.csmonitor.com/2007/0814/p09s01-coop.html

CONTENT ISSUES FOR NEW AND OLD MEDIA
[SOURCE: DrewClark.com]
Tracy Weston, founder and CEO for the Center for=20
Governmental Studies, outlined some pointers on=20
thinking about the regulation (or lack of=20
regulation) of media content. He suggested=20
breaking the field up into offensive content,=20
harmful content, and missing content. Offensive=20
content is that sort of material that can be=20
avoided through filtering and other blocking=20
systems. Harmful content may be that which may=20
represent a clear and present danger. Missing=20
content is that which isn't, for whatever reason,=20
produced by the marketplace. He concluded with=20
these principles: 1) Whatever you know now will=20
change because of new technologies. 2) We should=20
try to avoid censorship. 3) In the Western word,=20
there is a presumption of a lack of harm from=20
speech. Other societies place a much higher value=20
on security. We need to have a neutral and=20
respectful dialogue about free speech versus=20
security. 4) The line between offensive speech,=20
in which filtering will work on, and dangerous=20
speech, dangerous people would be drawn to, is=20
porous. 5) The new models of the Internet disrupt=20
social constraints. On social networking =AD do we=20
put constraints more like it is as it were a=20
television, or as though it was a telephone. 6)=20
Globalization is making all of this more=20
difficult, harder, or more interesting. 7)=20
Preserving free speech is a process; censorship will never be overcome.
http://www.drewclark.com/2007/08/content-issues-for-new-and-old-media.shtml

QUICKLY

KARMAZIN SWINGS BACK AT NAB
[SOURCE: Broadcasting&Cable, AUTHOR: Mark Robichaux]
Last week, the National Association of=20
Broadcasters reignited its attack on the Sirius=20
XM a la carte proposal, saying it would certainly=20
lead to higher prices and =93up-sells.=94 NAB says=20
the government would be bailing out the business=20
for overpaying for programming. On Monday Sirius=20
and XM fired back, claiming broadcasters were=20
trying once again to protect their turf from=20
competition. See this Q&A with Mel Karmazin.
http://www.broadcastingcable.com/article/CA6468221.html?rssid=3D193

FORD FOUNDATION SELECTS ITS NEW LEADER FROM OUTSIDE THE PHILANTHROPIC WORLD
[SOURCE: New York Times, AUTHOR: Stephanie Strom]
Luis A. Ubi=F1as, who has worked for McKinsey &=20
Company, the consulting firm, for 18 years, will=20
lead the Ford Foundation, the nation=92s=20
second-largest foundation, with $11 billion in=20
assets. Increasingly, high-profile nonprofit jobs=20
are going to people who have done well in the=20
business world or in politics, a reflection on=20
the pressure on charities and foundations to become more accountable.
http://www.nytimes.com/2007/08/14/us/14foundation.html
(requires registration)
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Communications-related Headlines is a free online=20
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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
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