October 2007

Two music-related events today: 1) a Senate hearing on the future of
radio (see "Web Radio Seeks Resolution" below) and 2) a discussion
titled "Who should get to decide what you put on your iPod? You or
the MPAA?" For these and other upcoming media policy events, see
http://www.benton.org/?q=event

OWNERSHIP
Guilds seek primetime quota for indies
Tribune shares rise as stock upgraded
AT&T revenue up on BellSouth acquisition
The Dish on AT&T's Satellite Plans

SPECTRUM POLICY
Verizon Wireless Drops Challenge to FCC
Microsoft plans to pass wireless auction
More Reps Protest 'White Spaces' Devices

INTERNET/BROADBAND
The Broadband Divide: Rural Access Lags Far Behind Cities
Broadband-over-power-lines battle goes to court
Cities themselves may be muni Wi-Fi's savior
Web Radio Seeks Resolution

GOVERNMENT & COMMUNICATIONS
House Committee endorses bill to stop online repression
FISA Commentary

EMERGENCY COMMUNICATIONS
Fires take toll on cellphone service

QUICKLY -- Don't Tread on Us, States Tell FCC's Martin; In Foray Into
TV, Google Is to Track Ad Audiences; Verizon Wireless settles N.Y.
probe into marketing

OWNERSHIP

GUILDS SEEK PRIMETIME QUOTA FOR INDIES
[SOURCE: Hollywood Reporter, AUTHOR: Brooks Boliek]
The entertainment guilds are urging the FCC to require the major
networks to set aside a quarter of their primetime schedule for
independent programming in order to offset growing consolidation of
the programming marketplace. In a joint filing late Monday, SAG, DGA,
Producers Guild of America, AFTRA, WGA West and East and the Caucus
for Television Producers, Writers and Directors argued that one of
the FCC's own studies showed that the consolidated media landscape
was diminishing the number of independent programs on network TV.
That study, "Vertical Integration and the Market for Broadcast and
Cable Television Programming" by University of Chicago professor
Austan Goolsbee, found that of the network shows in primetime only
18% were from independents and that the networks discriminate against
independent programming by favoring their own shows over independent
programming, even when the indies had higher ratings, the guilds said.
http://www.hollywoodreporter.com/hr/content_display/television/news/e3i5...

TRIBUNE SHARES RISE AS STOCK UPGRADED
[SOURCE: Associated Press]
Shares of Tribune Co. rose Tuesday as a Barrington Research
Associates analyst upgraded the media company, citing its attractive
share price as a chance to capitalize on Tribune's proposed buyout.
The company, which agreed to an $8.2-billion buyout offer from real
estate mogul Sam Zell earlier this year, has faced increased
speculation that the deal may fall through. However, analyst James
Goss said Tribune's current trading price of significantly discounts
risk of the proposed transaction collapsing. "As we draw closer to
the prospective targeted year-end closing date, the potential upside
over the short time frame becomes magnified," he wrote in a client
note, upgrading Tribune to "Market Perform" from "Underperform." Goss
expressed confidence in Zell's ability to access capital for the
buyout, as well as his ability to handle cross-ownership hurdles that
may arise if the Federal Communications Commission fails to grant
Tribune waivers from rules banning same-market ownership of
television and newspapers.
http://chicagobusiness.com/cgi-bin/news.pl?id=26858

AT&T REVENUE UP ON BELLSOUTH ACQUISITION
[SOURCE: InfoWorld, AUTHOR: Grant Gross]
AT&T reported net income of $3.1 billion for the third quarter of
2007, up from $2.2 billion a year earlier, largely due to its
acquisition of BellSouth. AT&T nearly doubled its revenue from a year
ago, going from $15.6 billion to $30.1 billion, but those 2006
numbers don't factor in the BellSouth acquisition and revenue from
Cingular Wireless, which AT&T and BellSouth co-owned. The BellSouth
deal closed Dec. 29, 2006. AT&T's renamed wireless division saw an
increase in 2 million customers in the quarter, the company said. The
company's wireless division now has 65.7 million subscribers. AT&T's
partnership with Apple on the new iPhone drove much of the wireless
growth, said Rick Lindner, AT&T's senior executive vice president and
chief financial officer. Since the iPhone launched in late June, AT&T
has signed up 1.1 million iPhone subscribers, with 40 percent of them
new AT&T wireless customers, he said. Independent telecom analyst
Jeff Kagan called AT&T's five-year exclusive iPhone contract with
Apple "a big win for the company."
http://www.infoworld.com/article/07/10/23/AT&T-revenue-up-on-BellSouth-b...

THE DISH ON AT&T'S SATELLITE PLANS
[SOURCE: Wall Street Journal, AUTHOR: Dionne Searcey
dionne.searcey( at )wsj.com and Dana Cimilluca]
AT&T has been circling the satellite-television sector for several
years, contemplating a bid for one of the two major players. Now,
with consolidation in the telephone industry mostly done, AT&T
appears to be getting ready to swoop in. The company has been
consulting lawyers in Washington about how long it would take to get
government approval to purchase either EchoStar or DirecTV. If it
does make a bid for one of the satellite providers, AT&T could unveil
the offer before year's end in hopes of getting federal antitrust
officials to approve the combination before a new administration
takes over. A deal could cost $30-40 billion.
http://online.wsj.com/article/SB119314123850168314.html?mod=todays_us_mo...
(requires subscription)

SPECTRUM POLICY

VERIZON WIRELESS DROPS CHALLENGE TO FCC
[SOURCE: Associated Press]
Verizon Wireless abandoned its legal challenge Tuesday of the Federal
Communications Commission's rules for its upcoming auction of radio
spectrum, removing a potential obstacle to the much-anticipated sale.
The U.S. Court of Appeals for the District of Columbia earlier
rejected an attempt by Verizon Wireless to have its appeal considered
on an expedited schedule so it could conclude before the auction
begins in January. Verizon's filing to the court Tuesday cited this
as the reason for its decision to drop the challenge. Legal experts
had said that the company's challenge was unlikely to succeed because
the courts generally defer to the FCC in rule-making procedures.
http://biz.yahoo.com/ap/071023/verizon_wireless_fcc.html?.v=1

MICROSOFT PLANS TO PASS WIRELESS AUCTION
[SOURCE: Reuters]
Microsoft said on Tuesday it will not participate in an upcoming U.S.
mobile phone airwave auction despite speculation that Web rival
Google will bid at least $4.6 billion on the wireless spectrum.
Microsoft Chief Executive Steve Ballmer said the company was not
interested in the auction for the 700-megahertz spectrum band because
it would not advance the company's strategy to sell mobile phone
software to handset makers. "What would it buy us to buy a piece of
spectrum, one piece of spectrum in one country," said Ballmer at the
CTIA wireless conference in San Francisco seen over the Internet. "It
would do a lot to alienate the telecom industry." Ballmer would not
address Google directly, but said Microsoft's expertise is not in
setting up wireless networks.
http://www.reuters.com/article/technologyNews/idUSN2331009420071023

MORE REPS PROTEST 'WHITE SPACES' DEVICES
[SOURCE: tvnewsday]
Twelve Representatives from Texas and Ohio recently sent letters to
FCC Chairman Kevin Martin voicing concern over the use of unlicensed
personal-portable devices that have been shown to cause interference
to television reception. Texas Reps. Gene Green (D-29th), Ralph Hall
(D-4th), Charles Gonzalez (D-20th), Sam Johnson (R-3rd), Nick Lampson
(D-22nd), John Carter (R-31st), and Al Green (D-9th), sent a letter
arguing that the transition to digital television is a major
undertaking that should not be complicated by allowing
interference-causing devices to operate on broadcast frequencies.
Ohio Reps. Steve Chabot (R-1st), Dave Hobson (R-7th), Jim Jordan
(R-4th), Patrick Tiberi (R-12th), and Steven C. LaTourette (R-14th),
sent a letter expressing concern that allowing unlicensed personal
and portable devices to operate in the broadcast spectrum would
negatively impact the digital transition.
http://www.tvnewsday.com/articles/2007/10/23/daily.8/

INTERNET/BROADBAND

THE BROADBAND DIVIDE: RURAL ACCESS LAGS FAR BEHIND CITIES
[SOURCE: Center for American Progress, AUTHOR: Mark Lloyd]
In testimony before the House Agriculture Subcommittee on
Appropriations, contrasted the rosy dream of the Digital Age --
bringing the advantages of the city to the country -- to the ugly
nightmare -- new information technologies increasing the advantages
of urban and suburban America and deepen the disadvantages of small
towns and rural America. Whether we realize the dream or the
nightmare will not be because of computer engineers or the free
market. Public policy makers will choose either the promise or the
nightmare. Public policy makers will choose between a widening
digital divide or an investment in our small towns and country lanes.
Connecting all Americans to the most advanced communications service
is important for business, health care, education, our public safety,
and especially for civic participation. We should be concerned about
connecting rural Americans not because of some soft idealized dream
of country life and not because rural Americans represent a need. Our
federal policies should recognize the very real contributions rural
Americans make to our nation, and the fact that we must find a way to
continue to tap into this vital resource for our own collective good.
And just as extended mail service, the highways, and electric service
paid off for America, we must extend high-speed telecommunications
service so that the world has an opportunity to see and hear and
benefit from rural America.
http://www.americanprogress.org/issues/2007/10/lloyd_testimony.html

BROADBAND-OVER-POWER-LINES BATTLE GOES TO COURT
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
A dispute that could affect the roll-out of broadband over power
lines, which some hope will one day compete with cable and DSL
services, went before a federal appeals court on Tuesday, but no
immediate resolution occurred. The U.S. Court of Appeals for the
District of Columbia heard arguments from attorneys for the Federal
Communications Commission and the American Radio Relay League, which
represents amateur radio operators, about FCC rules aimed at allowing
BPL services to flourish. Therein lies the dispute: The FCC says its
rules, which date back to 2004, have struck the right balance between
encouraging unlicensed BPL deployment and protecting existing
licensed devices -- including those run by public safety workers, TV
broadcasters and amateur radio operators -- from harmful interference
on those airwaves. The ARRL, however, contends the FCC's rules are
inconsistent with federal law and aren't strict enough to prevent BPL
signals from disrupting its members' communications.
http://www.news.com/8301-10784_3-9802730-7.html

CITIES THEMSELVES MAY BE MUNI WI-FI'S SAVIOR
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
Cities that commit to using new Wi-Fi networks for their own use
could help rescue the ailing citywide Wi-Fi movement. Like many new
technology initiatives, citywide Wi-Fi has been over-hyped. In less
than two years, the technology--which provides inexpensive Internet
access by using unlicensed wireless spectrum and cheap, industry
standard equipment--has gone from savior to sunken ship. But the
truth is that blanketing cities with Wi-Fi signals is not inherently
a bad idea. Even though some projects have stalled or failed
outright, there have also been several success stories. Cities such
as Minneapolis, Minn.; Houston, Texas; Burbank, Calif.; and Tucson,
Ariz., are moving forward and seeing early signs of success. One of
the common threads weaved through each of these deployments is that
all of these cities have committed to using the Wi-Fi networks for
their own purposes whether it be to provide remote access for mobile
city workers, automate meter reading, control traffic congestion or
enhance public safety.
http://www.news.com/Cities-themselves-may-be-muni-Wi-Fis-savior/2100-735...

WEB RADIO SEEKS RESOLUTION
[SOURCE: Washington Post, AUTHOR: Catherine Rampell]
Internet radio webcasters are hoping a Senate hearing today will
renew legislators' interest in their negotiations with the recording
industry over royalty fees. The hearing, held by the Senate Commerce
Committee, will focus on the future of radio, the number of women and
minorities who own radio stations, expansion and protection of
community radio, and other aspects of a medium that is rapidly
changing through technological advances and the recording industry's
crumbling business model. The most contentious of these issues,
though, involves what online radio stations will pay in order to
sustain both innovations in radio and the artists whose music they
feature. Webcasters have argued that a royalty fee schedule set by
the Copyright Royalty Board last spring would put online radio
stations, and the independent musicians whose work they often play,
out of business. This spring, legislators from the House and Senate
proposed legislation to set Internet radio royalty rates at the lower
levels used for satellite radio and jukeboxes, but then asked
webcasters and copyright holders to try to negotiate a compromise.
Webcasters have been negotiating since July with SoundExchange, the
organization that collects royalties on behalf of music copyright
owners, over a new fee schedule. Webcasters say they are growing
impatient with delays in the discussions.
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/23/AR200710...
(requires registration)

GOVERNMENT & COMMUNICATIONS

HOUSE COMMITTEE ENDORSES BILL TO STOP ONLINE REPRESSION
[SOURCE: Reuters, AUTHOR: Peter Kaplan]
The House Foreign Relations Committee endorsed legislation on Tuesday
that would bar U.S. Internet companies from cooperating with
authorities in China and other repressive regimes. It voted in favor
of legislation designed to stop companies such as Yahoo Inc from
turning over personal information to governments that use it to
suppress dissent. "Dictatorships need two pillars to survive --
propaganda and secret police. The Internet -- if misused -- gives
them both in spades," Rep. Chris Smith (R-NJ), the author of the
bill, said. The bill would give individuals the right to sue
companies in federal court if their information was improperly
disclosed. It also requires Internet service providers to disclose to
the U.S. government the terms and phrases they filter and the
restrictions imposed on them in "Internet-restricting" countries. The
bill needs approval from the House Commerce Committee before it can
reach the House floor. A companion bill has not yet been introduced
in the Senate.
http://www.reuters.com/article/politicsNews/idUSN2335605620071023

FISA COMMENTARY
[Commentary] In the Wall Street Journal, Robert Turner, a former
senior White House lawyer under President Reagan charged with
overseeing the implementation of FISA and other intelligence laws,
argues that a President's highest duty is to the Constitution when
there is a conflict between it and an inconsistent statute. In
confirmation hearings, Judge Michael Mukasey rightly promised to
resign rather than violate his oath of office if the "president
proposed to undertake a course of conduct that was in violation of
the Constitution" and could not be dissuaded. For precisely the same
reason, he was also right to refuse to be bound by unconstitutional
acts of Congress like FISA that usurp presidential power. Any senator
who elects to vote against him because of this issue has a duty to
explain to the American people by what theory an unconstitutional
statute has suddenly taken on a superior position to the Constitution
itself. Meanwhile, a San Francisco Chronicle editorial says that the
reauthorization of the Foreign Intelligence Surveillance Act is
supposed to be about protecting the American people from terrorists.
However, the version that came out of the Senate Intelligence
Committee last week also serves to protect the White House and
telecom carriers from scrutiny over their past participation in
warrantless wiretapping.
* The Surveillance Law That Matters
[SOURCE: Wall Street Journal, AUTHOR: Robert Turner]
http://online.wsj.com/article/SB119318480328969186.html?mod=todays_us_op...
(requires subscription)
* Congress should not follow on FISA
[SOURCE: San Francisco Chronicle, AUTHOR: Editorial staff]
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/23/ED5LSU7G5...

EMERGENCY COMMUNICATIONS

FIRES TAKE TOLL ON CELLPHONE SERVICE
[SOURCE: Los Angeles Times, AUTHOR: Joseph Menn]
The Southern California fires wreaked havoc on cellphone service,
destroying dozens of antenna towers, causing power outages in other
areas and leaving many residents with no other means of
communication. Even where coverage was available, the surging call
volume as tens of thousands of evacuees went wireless overwhelmed
circuits and blocked calls from getting through. Meanwhile, USA Today
reports that technology is proving crucial as Southern California
residents fight raging wildfires. They're using text messages, video,
blogs, Google maps and databases to describe the chaos, find missing
people and share strategies. Despite fears of an overload, AT&T,
Sprint and Verizon said their cellphone networks were working fairly
well. Some cell towers were affected by fire or power outages. But
cell companies have learned to reroute network resources during such
a crisis, Sprint spokeswoman Kathleen Dunleavy said.
http://www.latimes.com/business/printedition/la-fi-cell24oct24,1,68147.s...
(requires registration)
* Technology's pipeline is lifeline
http://www.usatoday.com/printedition/news/20071024/a_tech_wildfires24.ar...

QUICKLY

DON'T TREAD ON US, STATES TELL FCC'S MARTIN
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The National Conference of State Legislators agrees with top cable
company Comcast that the Federal Communications Commission should
leave exclusive contracts for cable service in apartments and condos
to the marketplace, saying that to ban them from Washington would
impinge on the state sovereignty.
http://www.broadcastingcable.com/article/CA6493683.html?rssid=193

IN FORAY INTO TV, GOOGLE IS TO TRACK AD AUDIENCES
[SOURCE: New York Times, AUTHOR: Brian Stelter]
Google, which dominates the market for advertising on the Internet,
seems to be hoping to do the same thing on television. The company is
set to announce a partnership today with the Nielsen Company, the
voice of authority in measuring television audiences, that will give
advertisers a more vivid and accurate snapshot than ever before of
how many people are viewing commercials on a second-by-second basis,
and who those people are. At a time when digital video recorders are
proliferating, advertisers are thirsty for any data they can get
about who is watching their ads, who is fast-forwarding past them and
where it makes the most sense to invest.
http://www.nytimes.com/2007/10/24/business/media/24adco.html?ref=todaysp...
(requires registration)
* Google to Work With Nielsen on TV Data
http://online.wsj.com/article/SB119319202593769420.html?mod=todays_us_ma...

VERIZON WIRELESS SETTLES NY PROBE INTO MARKETING
[SOURCE: Reuters, AUTHOR: Paritosh Bansal]
Verizon Wireless has agreed to settle a probe into the marketing of
its Internet usage plans and reimburse $1 million to customers for
wrongful account termination. The company agreed to pay $150,000 in
penalties and costs to New York state and revise marketing of its
wireless Internet access plans, Attorney General Andrew Cuomo's
office said in a statement. The state probe found that Verizon
Wireless had marketed its NationalAccess and BroadbandAccess plans as
"unlimited," without disclosing that actions such as downloading
movies or playing games online were prohibited. The company also cut
off heavy Internet users for exceeding an undisclosed cap of usage per month.
http://www.reuters.com/article/internetNews/idUSN2330204120071023
--------------------------------------------------------------
Communications-related Headlines is a free online news summary
service provided by the Benton Foundation (www.benton.org). Posted
Monday through Friday, this service provides updates on important
industry developments, policy issues, and other related news events.
While the summaries are factually accurate, their often informal tone
does not always represent the tone of the original articles.
Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
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