April 2008

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FCC REFORM
Dingell Probe Of FCC Could Yield June Hearing

ELECTIONS AND MEDIA
Media Matters

BROADCASTING
Public Interest Groups Weigh In On Localism

MEDIA OWNERSHIP
Committee Criticizes Move at Journal
The Newsday Chase
Time Warner plans cable services spin-off
XM, Sirius delay shareholders pending FCC ruling
Google may end up as winner if Microsoft buys Yahoo

UNIVERSAL SERVICE
Barton Releases Discussion Draft on Universal Service Fund Reform
Texas PUC Approves Universal Service Fund Cut

INTERNET/BROADBAND
AT&T to Vuze: your TCP reset test proves nothing

LABOR
Screen Actors Guild, Hollywood studios still far from a contract

QUICKLY -- Stung by Complaints, Telecoms Stress Customer Service

FCC REFORM

DINGELL PROBE OF FCC COULD YIELD JUNE HEARING
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Staff members on the House Commerce Committee are recommending public
hearings in June on the management practices of Federal
Communications Commission Chairman Kevin Martin. The staff
recommendation came in an April 28 memo to Commerce Committee
Chairman John Dingell (D-MI) and Rep. Bart Stupak (D-MI), who is
chairman of the panel's subcommittee on Oversight and Investigations.
Dingell's staff said in the memo that the investigation is "ongoing"
and the recommendation to hold a hearing was based on "more than 30
interviews with current and former [FCC] employees as well as
industry representatives and private citizens."
http://www.multichannel.com/article/CA6555778.html?nid=4262
* As Congress Examines FCC, Chairman May Be Asked to Defend His Leadership
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/29/AR200804...

ELECTIONS AND MEDIA

MEDIA MATTERS
[SOURCE: Huffington Post, AUTHOR: Lucy Carrigan]
[Commentary] Carrigan wishes the media was capable of covering
election stories with some element of intelligent and reasonable
analysis and discourse. We are, as a nation, worse-off because it
can't seem to. Watching cable news channels, she's appalled by the
extraordinary misinterpretations, and deliberate falsehoods, that are
allowed to fill the airwaves night after night after night. Whether
it's "bittergate," (last week she watched as Chris Matthews described
Barack Obama as "making fun" of blue collar workers) or Jeremiah
Wright (Chris Matthews, (again) last night, describing Wright as
Obama's "surrogate," and going on to describe Obama and Wright as the
Dr. Jekyll and Mr. Hyde of the same person, "birds of a feather," he
continued). C'mon now? Seriously?! There are very few journalists on
cable news anymore. Instead there are a lot of pundits putting
forward disingenuous arguments -- i.e. arguments they know to be
false, in an effort to support their candidate. It is like what Jon
Stewart said, oh so long ago now, on Crossfire, it's all about
political hackery, with partisan pundits believing that the end
justifies the means ... and any means will do. Jon Stewart said it
back then, and it is still true today, "It's not so much that it's
bad, as it's hurting America."
http://www.huffingtonpost.com/lucy-carrigan/media-matters_b_99130.html

BROADCASTING

PUBLIC INTEREST GROUPS WEIGH IN ON LOCALISM
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Public Interest Public Airwaves Coalition, Center for Creative
Voices in Media, Free Press, and National Hispanic Media Coalition
filed comments Monday on the Federal Communications Commission's
proposed rules to promote localism in broadcasting. The groups want
the FCC to require broadcasters that want expedited license renewals
to set aside 1% of their airtime for unpaid public service
announcements, have no more than 30% of their airtime be infomercials
or home shopping, and air a "reasonable amount" of independently
produced programming (at least 25% of a network affiliates' primetime
devoted to programming in which the network owns more than a
one-third interest in the show or controls the copyright). The groups
want the Commission to require more programming about local elections
and civic affairs and come up with "clear definitions" of what
qualifies. And they want the FCC to reduce license terms to three
years from eight and commit to acting on petitions to deny license
renewals within 180 days. They are not saying that broadcasters who
don't comply should be denied license renewals, just that those who
do comply get expedited renewals.
* Creative Voices Seeks FCC Carve-Out for Indie Productions
http://www.broadcastingcable.com/article/CA6555809.html?rssid=193

MEDIA OWNERSHIP

COMMITTEE CRITICIZES MOVE AT JOURNAL
[SOURCE: New York Times, AUTHOR: Richard Perez-Pena]
That didn't take long. A special oversight committee created to
protect the editorial integrity of The Wall Street Journal has
decided the ouster of paper's top editor last week did not live up to
conditions that the News Corporation had agreed to when it bought Dow
Jones & Company in December. The committee has the power to block the
firing or hiring of the newspaper's managing editor. But the editor,
Marcus W. Brauchli, was not fired; he resigned on April 22, albeit
under pressure, and accepted a role as a consultant to the News
Corporation. The committee members were informed the day before that
the company and Brauchli had agreed that he would leave. "Although
our charter does not directly envision a process for dealing with a
resignation, Committee members expressed the view that learning of
the Brauchli matter after the fact failed to meet the letter and the
spirit of the agreement," the panel's chairman, Thomas J. Bray, said
in a statement. "Under the agreement, the committee has the duty and
responsibility to approve or disapprove such actions." The committee
"decided that there was no practical way to 'unresign' Brauchli and
start the process over," Mr. Bray said. But he said the panel
"intends to exercise fully its role in the approval of a successor
managing editor and to take the steps necessary to prevent a repeat
of the process it has just been through."
http://www.nytimes.com/2008/04/30/business/media/30journal.html?ref=toda...
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THE NEWSDAY CHASE
[SOURCE: Fortune, AUTHOR: Devin Leonard]
Mort Zuckerman, owner of the New York Daily News, isn't going to let
his archrival, News Corp.'s Rupert Murdoch snatch away Newsday
without a fight. He's matched News Corp.'s offer to pay $580 million
for Tribune Co.'s Long Island paper. The Zuckerman camp is also
warning that Murdoch's pending deal with Tribune may not withstand
regulatory scrutiny. But Tribune Co. CEO Sam Zell is unlikely to
jettison Murdoch for the Daily News owner. That's because Zuckerman's
bid may have its own regulatory challenges. The proposed deal between
News Corp. and Tribune must clear two governmental hurdles. First,
Murdoch must persuade the Federal Communications Commission to allow
his company to acquire the Long Island paper when it already owns the
New York Post and two television stations in the region. (News Corp's
also owns the Wall Street Journal.) Former FCC chief of staff Blair
Levin, now a media analyst at Stifel Nicholaus, writes that while the
agency has "relaxed" its cross-ownership rules, News Corp's bid for
Newsday "would appear to push the envelope." News Corp. must also get
the deal through the Justice Department's antitrust division. This
may be where the acquisitive media company CEO trumps his tabloid
competitor. News Corp.'s isn't seeking to buy Newsday in outright
sale. It wants to create a joint venture between The Post and the
Tribune's Long Island paper. Murdoch surely likes the idea because he
may finally be able to staunch the tabloid's estimated $50 million in
losses. Zell's company would save as much as $245 million in taxes on
the transaction. Predictably, Zuckerman has proposed a similar
combination involving the Daily News. But the Justice Department is
likely to look more favorably on the marriage of News Corporation's
tabloid and the Tribune's suburban paper. Sure, Zuckerman can argue
that he needs a joint venture to strengthen the News at a moment when
advertisers are abandoning newspapers for the Internet. But Murdoch
can make the same case with more vigor. By all accounts, Zuckerman's
Daily News turns a profit. The Post loses an estimated $50 million a year.
http://money.cnn.com/2008/04/29/news/companies/leonard_news.fortune/inde...
* Cablevision may make joint bid for Newsday
http://www.reuters.com/article/industryNews/idUSN2929900020080429

TIME WARNER PLANS CABLE SERVICES SPIN-OFF
[SOURCE: Reuters, AUTHOR: Kenneth Li]
Time Warner Inc said on Wednesday that it planned to spin off its
cable services division completely, as the one-time world's biggest
media company moves to restructure itself. Chief Executive Jeffrey
Bewkes has already taken steps to restructure the company, which also
owns Time Inc and the Warner Bros movie studios, to help lift its
sluggish stock price. Sources have said Time Warner had held
discussions to merge its AOL online unit with Yahoo Inc. "We've
decided that a complete structural separation of Time Warner Cable,
under the right circumstances is in the best interest of both
companies' shareholders," Bewkes said in a statement.
http://www.reuters.com/article/industryNews/idUSWNAS061520080430
* Time Warner earnings to clarify cable plans (Financial Times)
http://www.ft.com/cms/s/4817b0c6-1639-11dd-880a-0000779fd2ac.html

XM, SIRIUS DELAY SHAREHOLDERS PENDING FCC RULING
[SOURCE: Associated Press, AUTHOR: ]
XM Satellite Radio and Sirius Satellite Radio on Tuesday postponed
their annual shareholder meetings, pending further information about
the timing of the planned combination of the two companies. The XM
stockholders' meeting was scheduled for Friday. Sirius' meeting was
slated for May 20. The Federal Communications Commission, which
prohibited a merger when it granted satellite radio operating
licenses in 1997, has yet to rule on the plan.
http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20080429/FREE/47...
* Sirius and XM Delay Meetings To Wait for Merger Ruling
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/29/AR200804...

GOOGLE MAY END UP AS WINNER IF MICROSOFT BUYS YAHOO
[SOURCE: San Jose Mercury News, AUTHOR: John Boudreau]
One of the biggest players behind Microsoft's drive to buy Yahoo has
never been at the bargaining table - Google.
That company's dominance in search advertising prompted Microsoft CEO
Steve Ballmer to go shopping and seek a tie-up with Yahoo so he could
bolster his efforts against what has turned out to be one of
Microsoft's toughest competitors. If the deal happens, Google could
face a stronger challenge in the $41 billion online advertising
market. But a protracted antitrust review by U.S. and European
officials, or difficult corporate integration, could actually help
the Mountain View search giant. And if the deal does not occur?
Google still wins. Most analysts believe the Mountain View juggernaut
will continue gaining market share. More than half of Web advertising
revenue comes from online queries. In March, Google garnered 59.8
percent of the U.S. search market, while Yahoo had 21.3 percent and
Microsoft, 9.4 percent, according to ComScore. Microsoft, which has
sputtered online, decided that hooking up with Yahoo of Sunnyvale in
a $44.6 billion deal is the best way to gain traction against its
rival. But don't expect quick results.
http://www.mercurynews.com/ci_9098620

UNIVERSAL SERVICE

BARTON RELEASES DISCUSSION DRAFT ON UNIVERSAL SERVICE FUND REFORM
[SOURCE: House Commerce Committee, AUTHOR: Rep. Joe Barton (R-TX)]
Rep. Joe Barton (R-TX), ranking member of the House Commerce
Committee, released a discussion draft of a bill to reform the
Universal Service Fund. The Universal Service Reform, Accountability,
and Efficiency Act of 2008 would rewrite the universal service
provisions of the Telecommunications Act of 1996, limiting USF
support to voice services and establishing a reverse auction to
distribute USF support. The bill would add three economists to the
Federal-State Joint Board on Universal Service, reconstitute the
Board of Directors of the Universal Service Company with professional
public administrators, and require the Federal Communications
Commission to set performance measures to determine whether universal
service goals are being achieved in an economically efficient way.
http://republicans.energycommerce.house.gov/News/PRArticle.aspx?NewsID=6722

TEXAS PUC APPROVES UNIVERSAL SERVICE FUND CUT
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
The Texas Public Utility Commission has unanimously approved a rules
change that will reduce the state's Universal Service fund by $144
million over the next four years. The cut represents a 36.5%
reduction in the funds, collected from consumers and distributed to
large operators such as Verizon, AT&T and Embarq. The funds help
those operators with the expense of delivering phone services to
rural users. But the amount of the fund was challenged by the USF
Reform Coalition, the members of which include Time Warner telecom
divisions in the state and Sprint Nextel. Funds collected by those
companies from consumers helped constitute the pool that was
redistributed to the larger operators for the rural subsidy. The
competitors argued that the USF, currently at 4.4%, had not been
recalculated in several years and that the amount given to the large
operators doesn't reflect the current cost of delivering rural
service. They also complained that they collected the tax, but were
not eligible to receive funds from it.
http://www.multichannel.com/article/CA6555807.html?nid=4262

INTERNET/BROADBAND

AT&T TO VUZE: YOUR TCP RESET TEST PROVES NOTHING
[SOURCE: ars technica, AUTHOR: Matthew Lasar]
AT&T has sent a cool response to the Vuze Corporation's "Plug-In"
survey of ISPs, ranked by their median rate of TCP reset activity:
"Given that Vuze itself has recognized these problems with the
measurements generated by its Plug-In, we believe that Vuze should
not have published these misleading measurements, nor filed them with
the [Federal Communications Commission]." So AT&T Vice President
Charles Kalmanek Jr. wrote to Vuze CEO Gilles BianRosa, following the
P2P content provider's FCC filing last week. And AT&T insists that it
does not insert false reset signals into P2P packets. AT&T's April
24th response categorically denies that any negative significance can
be traced from Vuze's experiment. "AT&T does not use 'false reset
messages' to manage its network," the telco giant says. "We agree
with Vuze that the use of the Vuze Plug-In to measure network traffic
has numerous limitations and deficiencies, and does not demonstrate
whether any particular network providers or their customers are using
TCP Reset messages for network management purposes." And in its
response, AT&T forwarded Vuze and the FCC an academic paper from
Canada's University of Calgary, which argues that resets often occur
due to "network outages, attacks, or reconfigurations." The authors
based their conclusions, published in 2004, on a one year study of
the Calgary campus network, which found that 15 to 25 percent of TCP
connections had at least one reset.
http://arstechnica.com/news.ars/post/20080428-att-to-vuze-your-tcp-reset...

LABOR

SCREEN ACTORS GUILD, HOLLYWOOD STUDIOS STILL FAR FROM CONTRACT
[SOURCE: Los Angeles Times, AUTHOR: Richard Verrier Claudia Eller]
After more than two weeks of negotiations, studios and the Screen
Actors Guild appear to have made little headway toward a new
contract. Despite mounting pressure on both sides to avert another
costly walkout after the 100-day writers strike, the talks have
bogged down over how much actors should be paid across both new- and
old-media platforms, said people close to the negotiations who asked
not to be identified because they were not authorized to discuss them
publicly. Guild negotiators are pushing for significant improvements
in the proposed three-year contract above what writers and directors
negotiated in their recent deals. Among other things, actors are
seeking to double what they earn from the sale of DVDs, on grounds
that the formula has remained unchanged since 1986. Studios, however,
have refused to budge, saying DVD revenue is needed to offset rising
production and marketing costs. The sluggish pace of the talks
suggests the parties could fail to hammer out a contract by Friday,
barring a last-minute breakthrough. That's the end of the three-week
period that studios and actors had set aside to reach a new
agreement. Although the actors contract doesn't expire until June 30,
negotiations are expected to go down to the wire, creating more
uncertainty about a potential work stoppage that would shut down most
film and TV production.
http://www.latimes.com/business/printedition/la-fi-sag30apr30,1,4053165....
(requires registration)

QUICKLY

STUNG BY COMPLAINTS, TELECOMS STRESS CUSTOMER SERVICE
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Customer service problems in the telecommunications industry have
been nearing legendary proportions. It's a challenge that
telecommunications and cable companies are struggling to overcome as
they compete for new subscribers paying $150 to $200 a month on
average for phone, Internet and television services. AT&T, Verizon,
and Comcast are working to keep subscribers and lure new ones into
subscriptions that bundle those services. All the while, consumers
have become ever more savvy and vocal about airing complaints,
holding companies accountable through lawsuits and blogs such as
Consumerist.com, which describes its mission as "consumers bite
back." They have found powerful tools that resonate widely, such as
the YouTube video hit of a Comcast technician asleep on a subscriber's couch.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/29/AR200804...
(requires registration)
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While the summaries are factually accurate, their often informal tone
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