September 2007

For upcoming media policy events, see http://www.benton.org

NEWS AT FCC
FCC Leaves Public in the Dark
Peer Review Supports Pro-a-la-Carte FCC Study
FCC rejects free Wi-Fi start-up's spectrum plans
FCC: No Need to Keep Long-Distance Apart
FCC Media Ownership Hearing Sept 20 in Chicago
FCC Sept 11 Open Meeting Agenda
FCC Denies Comcast Set-Top Waiver ... Again
FCC equal-time rule could sideline announcer-candidate

INTERNET/BROADBAND
Don't hit Wi-Fi delete key
Internet Displaces Radio As Fourth Biggest Ad Medium

BROADCAST/CABLE
DTV Transition: The Sky is Not Falling
Old Court Defeat Could Help Cable Now
TV industry waits, frustrated, for next push
NBC in Deal With Amazon to Sell Shows on the Web

QUICKLY -- Judge's order forces FBI to divulge=20
details of modern surveillance tools; Kids TV Ad=20
Diet High In Sweets, Fats & Salt; MetroPCS/Leap=20
Deal Could Create Huge Prepaid Player; In Remote=20
Canyon, Calif., a Pay Phone Is Celebrated

NEWS AT FCC

FCC LEAVES PUBLIC IN DARK
[SOURCE: Associated Press, AUTHOR: John Dunbar]
It's odd for an agency that has the word=20
"communications" as its middle name, but the=20
Federal Communications Commission routinely=20
leaves the public in the dark about how it makes=20
critical policy decisions. That secrecy was on=20
display during the recent debate over how the=20
government should auction off the rights to=20
billions of dollars worth of publicly owned=20
airwaves. For three weeks, potential bidders such=20
as AT&T Inc. and Google Inc. and a coalition of=20
public interest groups waged a war through the=20
media over proposed rules, prepared under FCC=20
Chairman Kevin Martin, that would guide the=20
auction. The debate advanced largely on rumor and=20
speculation, because Martin's draft, as required=20
by agency rules, was never made public. In fact,=20
even when commissioners approved the auction=20
rules at an open meeting on July 31, the rules=20
still hadn't been made public. The auction rules=20
experience is not unique. It is how the agency=20
has conducted the public's business for at least a decade, some observers s=
ay.
http://biz.yahoo.com/ap/070904/fcc_secrecy.html?.v=3D5
* Groups Raise Concerns About 700MHz Auction
A $1.3 billion reserve price for a piece of=20
wireless spectrum to be auctioned by the FCC in=20
January is too high, according to Frontline Wireless.
http://www.pcworld.com/article/id,136763-pg,1/article.html

PEER REVIEW SUPPORTS PRO A LA CARTE FCC STUDY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission Tuesday=20
released the peer reviews of its 10=20
media-ownership-related studies, plus two others,=20
and the results are a mixed bag. Among the two=20
others was an FCC staff analysis commissioned by=20
FCC Chairman Kevin Martin that generally made a=20
case for an a-la-carte cable business model.=20
According to the reviews, released Tuesday, it=20
was found to be sound. The Martin-commissioned=20
study had criticized an earlier study conducted=20
under former FCC Chairman Michael Powell that=20
concluded just the opposite. On the other side, a=20
study that concluded that franchise-build-out=20
requirements would not benefit consumers was=20
found wanting. A Pew Research Center review of a=20
Nielsen Media Research study on where and how=20
people get their information was labeled a=20
credible effort, but was cited for a low response=20
rate (2.2%) and the citing of online media brands=20
but not others in the questions. The 10 ownership=20
studies were generally found to be solid, but=20
with suggested improvements and questions and=20
caveats about some of the findings.
http://www.broadcastingcable.com/article/CA6475146.html?rssid=3D193
* See peer review documents:
http://www.fcc.gov/mb/peer_review/peerreview.html

FCC REJECTS FREE WI-FI START-UP'S SPECTRUM PLANS
[SOURCE: C-Net|News.com 9/1, AUTHOR: Anne Broache]
A Silicon Valley start-up that sought permission=20
to build a "free, family-friendly" wireless=20
Internet service on a stretch of unused radio=20
spectrum has been shot down by federal=20
regulators. Late Friday, the Federal=20
Communications Commission rejected a nearly=20
16-month-old petition by Menlo Park, Calif.-based=20
M2Z Networks to receive an exclusive, 15-year=20
license to build and operate such a network in=20
the 2155MHz-to-2175MHz band, in return for=20
depositing a portion of its revenues into the=20
U.S. Treasury. In the same order, the FCC also=20
rejected a similar proposal from a company called=20
NetFreeUS. The FCC said it wasn't persuaded that=20
allowing a single company to control the slice of=20
spectrum without first seeking broader comment on=20
how the band should be used would serve the=20
public interest. The regulators concluded that=20
it's preferable to conduct their usual=20
rule-making process to set parameters for the=20
spectrum's use -- a move that would begin "shortly."
http://news.com.com/8301-10784_3-9770197-7.html
* FCC Press Release
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-161A1.doc
* Chairman Martin:
"As several commenters have urged in recent days,=20
the public interest is best served by considering=20
fully the best use of this spectrum in a Notice=20
of Proposed Rulemaking, rather than through=20
forbearance petitions seeking exclusive use for a=20
single entity filed by M2Z and NetfreeUS."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-161A2.doc
* Commissioner Copps:
"I believe that the proper way to allocate this=20
spectrum-in the manner that best serves the=20
public interest-is to conduct a general=20
rulemaking, which the Commission will initiate=20
shortly. Such a rulemaking should consider the=20
following options: (1) opening this band to=20
unlicensed use, as has proved so productive in=20
other bands; (2) designating it for an open=20
access model that would combine wholesale=20
broadband access and a Carterfone mandate; (3)=20
using it to provide free, advertiser-supported=20
broadband service (as initially proposed by M2Z=20
and one other applicant) as well as a fee-based=20
premium broadband service; or (4) allocating it=20
through a traditional, largely unconditioned auction."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-161A3.doc
* Commissioner Adelstein:
"So I'm disappointed that despite the aggressive=20
interest in and availability of this spectrum,=20
the Commission is only now expressing its intent=20
to seek comment on service rules for this=20
band. I am also concerned that we have not=20
considered more seriously M2Z's proposal as=20
offering a new technology or service under=20
Section 7 of the Communications Act."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-161A4.doc
* Do you M2Z?
[SOURCE: Lasar's Letter on the FCC, AUTHOR: Matthew Lasar]
http://www.lasarletter.net/drupal/node/454

FCC: NO NEED TO KEEP LONG-DISTANCE APART
[SOURCE: Associated Press]
The Federal Communications Commission Friday told=20
the three remaining Baby Bell companies that they=20
can bring their long-distance arms in-house,=20
ending a requirement to operate these units as=20
separate businesses. The agency said the new=20
rules would allow the three dominant wired phone=20
companies -- AT&T Inc., Qwest Communications=20
International Inc. and Verizon Communications=20
Inc. -- to merge their long-distance businesses=20
with their main operations. Companies were=20
required to either operate the long-distance=20
units as separate legal companies, or subject=20
themselves to price regulation. All three opted=20
for the former choice. The move will allow the=20
companies to merge their long-distance=20
businesses, thereby cutting down on duplication=20
of marketing, customer service and other=20
operating costs. All three companies had been=20
pushing the FCC to cut the red tape in this area.
http://www.forbes.com/feeds/ap/2007/08/31/ap4073973.html
* FCC press release:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-276371A1.doc
* FCC Order:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-159A1.doc
* Commissioners Copps & Adelstein:
We cannot fully join this decision because we are=20
concerned that the Order does not fully take into=20
account the significant consolidation that has=20
taken place in the marketplace and what this=20
means for consumers. Nor does the Order put in=20
place a comprehensive mechanism for monitoring=20
changes in the marketplace (e.g., in the=20
long-distance, wireless, and access markets) that=20
would enable the Commission to reliably make decisions.
* Bells get FCC OK to merge units
http://www.fiercetelecom.com/story/bells-get-fcc-ok-merge-units/2007-09-...
utm_medium=3Drss&utm_source=3Drss

FCC MEDIA OWNERSHIP HEARING SEPT 20 IN CHICAGO
[SOURCE: Federal Communications Commission]
The FCC announced the time (4-11pm) and place=20
(Operation PUSH National Headquarters) for its=20
Chicago Media Ownership hearing on September 20.=20
The purpose of the hearing is to fully involve=20
the public in the process of the 2006 Quadrennial=20
Broadcast Media Ownership Review that the=20
Commission is currently conducting. The hearing=20
is open to the public, and seating will be=20
available on a first-come, first-served=20
basis. This hearing is the fifth in a series of=20
six media ownership hearings the Commission=20
intends to hold across the country. There will be=20
a period for public comment following panel=20
discussions. Further details including names of=20
the panelists will be released prior to the=20
hearing. For additional information about the=20
hearing, please visit the FCC's website at=20
http://www.fcc.gov/ownership. Press inquiries=20
should be directed to Mary Diamond, at=20
202-418-2388, or Clyde Ensslin, at 202-418-0506.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-276412A1.doc

FCC SEPT 11 MEETING AGENDA
[SOURCE: Federal Communications Commission]
The Federal Communications Commission will hold=20
an Open Meeting on Tuesday, September 11, 2007,=20
which is scheduled to commence at 9:30 a.m. in=20
Room TW-C305, at 445 12th Street, S.W.,=20
Washington, D.C. The Commission will consider:=20
1) Enhanced 911 (E911) location accuracy=20
requirements, 2) implementation of 800 MHz band=20
reconfiguration, 3) local franchising=20
agreements, 4) program access rules, 5) digital=20
television must carry requirements for cable=20
operators, 6) broadband services rules, and 7)=20
cellphone antenna rules. The Commission is=20
waiving the sunshine period prohibition contained=20
in section 1.1203 of the Commission's rules, 47=20
C.F.R. =A7 1.1203, until 5:30 pm, Friday, September 7, 2007.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-276427A1.doc
* Martin Ready To Hit Cable With Dual Carriage Rules
http://www.multichannel.com/article/CA6475157.html
* Ergen: No Bandwidth For Dual Must Carry
http://www.multichannel.com/article/CA6475069.html

FCC DENIES COMCAST SET-TOP WAIVER... AGAIN
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission Tuesday=20
upheld an earlier media bureau decision denying=20
Comcast a waiver of its ban on integrated digital=20
set-top boxes. Comcast said it would see the=20
Commission in court. FCC chairman Kevin Martin=20
and commissioners Deborah Taylor Tate and Michael=20
Copps approved, with commissioners Robert=20
McDowell and Jonathan Adelstein concurring, but=20
with criticisms of what they called the FCC's=20
"inconsistent" application of its waivers,=20
granting some waivers for "exactly the same boxes=20
covered by the Comcast request."
http://www.broadcastingcable.com/article/CA6475151.html?rssid=3D193
* FCC Order:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-127A1.doc
* Comcast Ready To Take FCC To Court
http://www.multichannel.com/article/CA6475156.html

FCC EQUAL-TIME RULE COULD SIDELINE ANNOUNCER-CANDIDATE
[SOURCE: Associated Press, AUTHOR: ]
A high-school football commentator running for=20
school board could be sidelined by an equal-time=20
requirement for political opponents. Doug Steve,=20
a candidate for Indiana Area School Board, is a=20
commentator for WQMU-FM, which carries Indiana=20
University of Pennsylvania games, and WDAD-AM,=20
which carries Indiana High School games. "I'm not=20
saying anything about the campaign, I'm there for=20
Indiana High football," Steve said Friday. "It's=20
unfortunate that after tonight I may have to wait=20
until after the election to broadcast again."=20
Steve is one of five candidates on the ballot for=20
five seats in the Nov. 6 election. Federal=20
Communications Commission rules require that he=20
either be pulled from football broadcasts or that=20
his opponents be given free air time within 60 days of an election.
http://www.phillyburbs.com/pb-dyn/news/103-09022007-1401477.html

INTERNET/BROADBAND

DON'T HIT WI-FI DELETE KEY
[SOURCE: San Francisco Chronicle 9/3, AUTHOR: Editorial staff]
[Commentary] Although San Francisco's=20
Earthlink-Google citywide Wi-fi partnership could=20
have worked, its demise may be a blessing because=20
of Earthlink's shaky finances. Topography, cost,=20
changing technology, and a patchwork of existing=20
Wi-Fi service all make San Francisco a special=20
case. But the goal of providing fast, reliable=20
and low-cost service remains a worthwhile one.
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2007/09/03/EDM5RT7...
DTL
* Being realistic about municipal wi-fi [Commentary]
[SOURCE: MarketWatch, AUTHOR: John C. Dvorak]
http://www.marketwatch.com/news/story/us-cities-woefully-unable-spread/s...
y.aspx?guid=3D6B188161-FD10-4462-B70C-37027810C40C&dist=3DSecMostRead

INTERNET DISPLACES RADIO AS FOURTH BIGGEST AD MEDIUM
[SOURCE: MediaDailyNews, AUTHOR: Erik Sass]
Internet ad revenues are set to pass radio's for=20
the first time, according to eMarketer, a firm=20
that tracks and analyzes spending trends across=20
various media. EMarketer is pegging Internet ad=20
spending at $21.7 billion, compared to $20.4=20
billion for radio. eMarketer's report comes as=20
the Internet already has surpassed outdoor ad=20
spending, and as a recent report from equity firm=20
Veronis Suhler Stevenson predicts that the=20
Internet will displace television as the No. 1 ad=20
medium by 2011. While this news is unlikely to=20
cheer radio advertisers, it's more a testament to=20
the feverish rate of Net growth than any secular downturn in radio.
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
6671&Nid=3D33821&p=3D368626

BROADCAST/CABLE

DTV TRANSITION: THE SKY IS NOT FALLING
[SOURCE: tvnewsday, AUTHOR: ]
A Q&A with Consumer Electronic Association head=20
Gary Shapiro. While broadcasters wring their=20
hands about the DTV transition, Shapiro appears=20
supremely confident that the country will get=20
past the February 2009 analog cut-off with little=20
disruption or complaint. But he says that CEA's=20
cooperative spirit with broadcasters on the=20
transition does not extend to white spaces.
http://www.tvnewsday.com/articles/2007/09/04/daily.4/

OLD COURT DEFEAT COULD HELP CABLE NOW
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
With the Federal Communications Commission under=20
Chairman Kevin Martin considering new=20
cable-carriage handouts for local TV stations,=20
the cable industry is warning the FCC that it=20
will challenge the rules on both First and Fifth=20
Amendment grounds. Under a plan proposed by FCC=20
Chairman Martin, TV stations that demand cable=20
carriage after the digital television transition=20
could get cable operators to deliver the signals=20
in analog and digital to all cable homes. The few=20
cable systems that are all-digital -- presumably=20
meaning all customers have digital reception on=20
all TV sets -- would be exempt from the dual=20
carriage mandate. The FCC=92s Fifth Amendment=20
problem with regard to dual carriage is that=20
federal law bans cable operators from receiving=20
payment from must-carry stations. =93A=20
dual-carriage rule would, absent the payment of=20
just compensation to the cable companies, violate=20
the Takings Clause of the Fifth Amendment,=94 says=20
law firm Cooper & Kirk. A Fifth Amendment victory=20
for cable could prove expensive for the federal government.
http://www.multichannel.com/article/CA6474371.html

TV INDUSTRY WAITS, FRUSTRATED, FOR NEXT PUSH
[SOURCE: Reuters, AUTHOR: Georgina Prodhan]
In Europe, the television industry is ready to=20
deliver a host of new ways to experience video=20
from high-definition (HD) TV to Internet and=20
mobile TV but manufacturers are frustrated at a=20
lack of political impetus. HDTV will not become=20
mainstream for public broadcasts in most European=20
countries until 2010 or 2011, which means=20
consumers have little incentive to buy an HD set=20
before then, when they will probably cost less=20
than half of what they do now. For now the only=20
ways most Europeans have of experiencing HD is=20
either by buying a disc player at the risk of=20
choosing the losing format, by shooting their own=20
video on an HD camcorder and playing it at home,=20
or by playing HD games and video on a games console.
http://www.reuters.com/article/internetNews/idUSL0377524320070903

NBC IN DEAL WITH AMAZON TO SELL SHOWS ON THE WEB
[SOURCE: New York Times, AUTHOR: Brooks Barnes]
NBC Universal significantly deepened its=20
relationship with Amazon=92s digital video download=20
service after a dispute with Apple over the=20
pricing of television shows on iTunes. The media=20
conglomerate, part of General Electric, said=20
yesterday that Amazon had agreed to give it=20
something that Apple would not: greater=20
flexibility in the pricing and packaging of video=20
downloads. As a result, NBC Universal said it had=20
agreed to sell a wide variety of television=20
programming on Amazon=92s fledgling Unbox download=20
service, including the drama =93Heroes=94 and the=20
comedies =93The Office=94 and =9330 Rock.=94 Episodes=20
will be available on Unbox the day after they are=20
shown. While Amazon is still working to determine=20
pricing, Unbox typically charges more for newer=20
releases than for older ones. Unbox also gives=20
consumers more options, including whether to rent=20
a movie for $3.99 or buy a download for $14.99.=20
Amazon agreed to offer promotions, including a 30=20
percent discount when buying full seasons of=20
television shows. Apple sells episodes of=20
television shows for a flat $1.99, with movies priced at $9.99.
http://www.nytimes.com/2007/09/05/business/media/05nbc.html?ref=3Dtodays...
er
(requires registration)
* Amazon's Unbox to Sell NBC Shows
http://online.wsj.com/article/SB118896012521517848.html?mod=3Dtodays_us_...
ketplace

QUICKLY

JUDGE'S ORDER FORCES FBI TO DIVULGE DETAILS OF MODERN SURVEILLANCE TOOLS
[SOURCE: Associated Press, AUTHOR: John Dunbar]
The FBI disclosed new details about its secretive=20
technology for tracing telephone calls and=20
recording conversations during criminal, terror=20
and espionage investigations, custom-made tools=20
it has developed without fanfare for a decade.=20
Documents released under the Freedom of=20
Information Act reveal the government has come a=20
long way when it comes to its surveillance=20
techniques since the days of alligator clips and=20
reel-to-reel tape recorders. The FOIA requires=20
government agencies to provide access to any=20
unclassified data on a specific subject. In=20
hundreds of heavily censored pages, the FBI=20
described in unprecedented detail a sophisticated=20
surveillance system known as the Digital=20
Collection System Network. It includes programs=20
to record information about telephone calls, such=20
as the number called and the duration of the=20
call, made by surveillance targets and another=20
program called Digital Storm to record conversations.
http://news.corporate.findlaw.com/ap/o/51/08-31-2007/fcfe0011c9bc5a2c.html

SURVEY SAYS: KIDS TV AD DIET HIGH IN SWEETS, FATS & SALT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Virtually all the TV food ads seen by young kids=20
and almost all of them viewed by teenagers are=20
for foods high in sugar, fat, or sodium. At least=20
that was the case back in 2003-2004, when the ads=20
were surveyed, according to a study being=20
published Tuesday (Sept. 4) in the journal,=20
Pediatrics. The percentage of snack food ads for=20
teens would likely be even higher if fast food=20
ads had been included, says study author Lisa=20
Powell. Fast food was excluded because it was too=20
difficult to assign nutritional values to them,=20
she says. Say an ad that said "go to McDonald's"=20
might be for a Big Mac or a salad, though she=20
said she doubted many teens would be going for=20
salads. But McDonalds and Burger King aren't off=20
the hook. A separate fast food study is being planned.
http://www.broadcastingcable.com/article/CA6473653.html?rssid=3D193

METROPCS/LEAP DEAL COULD CREATE HUGE PREPAID PLAYER
[SOURCE: TelecomWeb]
Discount wireless provider MetroPCS=20
Communications Inc. has offered more than $5=20
billion in stock to buy Leap Wireless=20
International. Leap Wireless specialize in=20
offering prepaid wireless services to customers=20
with lower credit ratings. MetroPCS, which also=20
offers prepaid plans, has networks in large metro=20
areas while Leap offers a wider geographic=20
footprint with wireless services in suburban and=20
rural areas. If the deal is consummated, MetroPCS=20
would own about 65.4 percent of the combined=20
company, and it forecasts cost savings of about=20
$2.5 billion once its rival has been absorbed.
http://www.telecomweb.com/tnd/25121.html
* MetroPCS Makes Offer for Rival in Cell Service
http://www.nytimes.com/2007/09/05/business/05phone.html
* MetroPCS makes offer for Leap Wireless
http://www.latimes.com/business/printedition/la-fi-leap5sep05,1,7185154....
ry?coll=3Dla-headlines-pe-business
* MetroPCS: A Leap Into the Big Time?
http://www.businessweek.com/investor/content/sep2007/pi2007094_951767.ht...
ampaign_id=3Drss_tech

IN REMOTE CANYON, A PAY PHONE CELEBRATION
[SOURCE: New York Times 9/4, AUTHOR: Carol Pogash]
In Canyon (CA), an unincorporated area of Contra=20
Costa County, 220 residents strongly prefer=20
living close to nature, without many of modern=20
civilization=92s creature comforts. Here they=20
recently gathered for the Canyon Payphone=20
Jubilee. =93Can you imagine a phone being such a=20
big deal?=94 the county supervisor, Gayle Uilkema,=20
asked. =93But it really is.=94 With cellphone=20
reception rare, Canyon residents consider their=20
pay phone to be as essential as the one-room post=20
office and the three-room schoolhouse. But last=20
year AT&T decided that the phone, like countless=20
others across the country, was not making enough=20
money, and dispatched a worker to dismantle it.=20
He ran smack into Elena Tyrrell, Canyon=92s=20
second-generation postmistress, who persuaded him=20
to spare his target, at least temporarily.
http://www.nytimes.com/2007/09/04/us/04payphone.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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