May 2008

Scrap looms over radio waves

Europe’s leading mobile phone operators on Monday set themselves on a collision course with television broadcasters by making a pitch to secure a big chunk of the “digital dividend” radio ­spectrum. A report commissioned by Vodafone, Telefonica and Orange calls for the mobile operators to be allocated 25 per cent of the spectrum, or radio waves, made available by the switchover from analog to digital television. The report, written by Spectrum Value Partners, a consulting firm, claims that giving mobile operators access to the digital dividend spectrum could be worth up to €165bn ($255bn, £129bn) to consumers and companies. Auctions of the ultra high frequency spectrum previously used for analog television could also raise billions of euros for European governments.
http://www.ft.com/cms/s/7086cb96-19f4-11dd-ba02-0000779fd2ac.html
(requires subscription)

On the brink

America's Audit Bureau of Circulations reported that for the 530 biggest dailies, average circulation in the past six months was 3.6% lower than in the same period a year earlier; for Sunday papers, it was 4.6% lower. Ad revenues are plunging across the board: by 22.3% at Media General, for example. In 2007 total newspaper revenues fell to $42.2 billion, not to be sniffed at, certainly, but a lot less than the peak of $48.7 billion in 2000. Much of this decline is being blamed on the rise of the Internet, which offers free, round-the-clock coverage, and which has provided a new, better home for classified advertising, once the bedrock of most newspapers' revenue. But some of the fall in revenues is actually due to the economic slowdown in America, and especially in the housing market, which contributes a large slice of classified advertising. The credit crunch has also come at a bad time for a group of new newspaper owners, who used loans that were readily available until last summer to buy their way into the business, but must now be having second thoughts.
http://www.economist.com/business/displaystory.cfm?story_id=11294258

Benton's Communications-related Headlines For Monday May 5, 2008 (feliz Cinco De Mayo!)

To view Benton's Headlines feed in your RSS=20
Aggregator, paste=20
http://www.benton.org/index.php?q=3Dtaxonomy/term/6/all/feed into your read=
er.

GOVERNMENT & COMMUNICATIONS
Congressmen Urge Probe of Defense Dept.=92s Influence on Military Analysts

ELECTIONS AND MEDIA
Obama's Chilly Spring
Obama Takes Star Turn in Republican Ads

UNIVERSAL SERVICE
Interim Cap Clears Path for Comprehensive Universal Service Fund Reform
Fewer phones, more broadband: FCC struggling to fix USF

INTERNET/BROADBAND
House Hearing Set on Internet Freedom Preservation Act
Why The 'Right' Gets Net Neutrality Wrong
Internet Says: 'Me Want Cookie'

MEDIA OWNERSHIP
All eyes on Yahoo for alternate deal to Microsoft
Murdoch won't raise bid for Newsday

BROADCASTING/CABLE
Localism Divides Religious Groups
Making Localism Illogical
This Is Only a Test: Vegas Station Simulates Analog Shutoff
ACA Keeps Pressure on FCC Regarding News Corp. Conditions
Cable Operators Seek To Broaden Martin Plan
Sezmi may be on to something, sez me

QUICKLY -- FCC's McDowell is Kevin Martin's Loyal=20
Opponent; On the brink; Amazon.com sues N.Y. over=20
new online sales tax; Scrap looms over radio waves

GOVERNMENT & COMMUNICATIONS

CONGRESSMEN URGE PROBE OF DEFENSE DEPT'S INFLUENCE ON MILITARY ANALYSTS
[SOURCE: TVWeek, AUTHOR: Ira Teinowitz]
Rep Rosa Delauro (D-CT) and 40 other Members of=20
Congress are calling on the Pentagon=92s Inspector=20
General to probe whether the Department of=20
Defense went too far in trying to sway the=20
opinions of military analysts on network and=20
cable TV shows in behalf of the Iraq war in ways=20
that may have been illegal. They called the=20
Pentagon effort an =93unethical, and potentially=20
illegal, propaganda campaign aimed at=20
deliberately misleading the American public.=94
http://www.tvweek.com/news/2008/05/congressmen_urge_probe_of_defe.php
(requires free registration)
* Pentagon Used Military Analysts to Deliver Message
http://www.npr.org/templates/story/story.php?storyId=3D90111757

ELECTIONS AND MEDIA

OBAMA'S CHILLY SPRING
[SOURCE: Washington Post, AUTHOR: Howard Kurtz]
The man who tried to soar above politics has been=20
brought back to earth by the same media=20
organizations that helped fuel his spectacular=20
rise. After more than a year of mostly glowing=20
coverage, Barack Obama is having to defend his=20
relationship with the Rev. Jeremiah Wright, his=20
temerity in not sporting a flag pin, even his=20
arugula-loving, bad-bowling, let-me-eat-my-waffle=20
persona that fostered what Newsweek has branded=20
"the Bubba Gap." "The media have decided to get=20
tougher on Obama," says St. Petersburg Times=20
media critic Eric Deggans. "There was so much=20
talk about him getting such an easy ride that=20
some journalists got tired of it." When the=20
Illinois senator denounced his former pastor last=20
week, it followed days of saturation coverage of=20
Wright's inflammatory, sometimes eccentric=20
remarks. The press, which was slow to recognize=20
the importance of the Wright controversy --=20
videotapes of his sermons could have been=20
purchased months earlier -- was no longer willing=20
to dismiss the reverend as a sideshow. Still,=20
says David Greenberg, a Rutgers University=20
professor of journalism and history, the coverage=20
could be far worse. For journalists, he says,=20
"there has been a real infatuation with Obama=20
that has served as almost an unconscious=20
restraint" as many became "taken with the idea of=20
demonstrating their tolerance and America's=20
tolerance by electing a black candidate."
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/04/AR200805...
1899.html
(requires registration)

OBAMA TAKES STAR TURN IN REPUBLICAN ADS
[SOURCE: AdAge, AUTHOR: Evan Tracey]
[Commentary] Barack Obama's campaign has spent=20
more than $70 million to air more than 121,000=20
campaign ads. But the ads starring Obama that his=20
campaign is not paying for are attracting the=20
most attention. Recently, we have seen=20
candidates, interest groups and a state political=20
party all using Obama's quotes, pastor and=20
likeness in an attempt to attack their opponents.=20
This is nothing new. As long as there have been=20
politicians, they've tried to link their=20
opponents, in a game of guilt by association, to=20
identifiable and polarizing political figures.=20
What this trend shows is that the "movement"=20
atmosphere that once surrounded Obama and made=20
him appear untouchable has now seemingly=20
disappeared, at least in some parts of the=20
country. Conservative candidates, the Republican=20
party and right-wing interest groups are not=20
going to hesitate to use Obama's likeness as a=20
way to denounce and triangulate Democratic=20
opponents. This may be something Democratic super=20
delegates consider when deciding which candidate=20
to support. Of course, the bad news for John=20
McCain and the Republicans is that Democrats will=20
still have Bush and Cheney to counter with in ads this Fall.
http://adage.com/campaigntrail/post?article_id=3D126802

UNIVERSAL SERVICE

INTERIM CAP CLEARS PATH FOR COMPREHENSIVE UNIVERSAL SERVICE FUND REFORM
[SOURCE: Federal Communications Commission]
In the wake of adopting an interim cap on=20
payments to competitive eligible=20
telecommunications carriers (ETCs) under the=20
Universal Service Fund (Fund), the Federal=20
Communications Commission says it has taken a=20
crucial first step toward comprehensive reform of=20
Universal Service and intercarrier compensation,=20
two carrier compensation regimes that are=20
directly interrelated. Such comprehensive reform=20
is critical to ensuring the continued provision=20
of affordable telecommunications for all=20
Americans. The Commission's action to cap=20
competitive ETC support, as proposed by Chairman=20
Martin six months ago, will stabilize the Fund,=20
enabling the Commission to now move forward=20
expeditiously on comprehensive reform of both the=20
universal service program and intercarrier compensation.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-281939A1.doc

FEWER PHONES, MORE BROADBAND: FCC STRUGGLING TO FIX USF
[SOURCE: ars technica, AUTHOR: Matthew Lasar]
A divided Federal Communications Commission has=20
put a cap on Universal Service Fund (USF)=20
payouts, but even the agency's majority calls it=20
a stop-gap measure for a program in serious=20
trouble. The cap on USF subsidies will exempt=20
telecommunications providers operating on tribal=20
lands in the contiguous United States and in=20
Alaska Native regions. The FCC says that the=20
ceiling will remain in place only until the=20
agency enacts far reaching reforms on the USF=20
program. But it is unclear when that will happen,=20
given the chaotic nature of the Commission's=20
decision making process on this issue. Most=20
analysts agree that the USF has to move from=20
subsidizing conventional telephone service to=20
helping extend broadband use to the nation's=20
low-income and rural consumers. The Benton=20
Foundation, among other groups, has been pushing=20
this issue for some time. The nonprofit argues=20
that a general transition to VoIP telephony would=20
save consumers billions of dollars in the long=20
and even short run. Benton calls for the FCC to=20
establish a five-year timetable from analog to=20
digital telephony=97"with a hard analog shut off=20
date." This would be similar to the impending DTV=20
transition deadline of February 17, 2009.
http://arstechnica.com/news.ars/post/20080504-fewer-phones-more-broadban...
cc-struggling-to-fix-usf.html

INTERNET/BROADBAND

HOUSE HEARING SET ON INTERNET FREEDOM PRESERVATION ACT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
On Tuesday, the House Telecommunications &=20
Internet Subcommittee will hold a hearing on the=20
Internet Freedom Preservation Act (HR 5353),=20
which could put some more teeth in the Federal=20
Communications Commission's guidelines on network=20
nondiscrimination, the issue that prompted the=20
Network Neutrality and, more recently,=20
network-management debates. Witnesses will=20
include National Cable & Telecommunications=20
Association president Kyle McSlarrow, Free Press=20
policy director Ben Scott, USTelecom president=20
Walter McCormick and Mitch Bainwol, chairman of=20
the Recording Industry Association of America The=20
bill was introduced by Subcommittee Chairman Ed=20
Markey (D-MA) in February in the wake of various=20
complaints against cable operators and telephone=20
companies for their network-management practices.=20
The result has been more hearings, on the Hill=20
and at the FCC, on an issue that dominated=20
telecommunications debate in the last Congress.=20
The Markey bill would essentially enshrine the=20
FCC's four network-nondiscrimination principles=20
into law, although in language general enough to=20
be open to regulatory discretion. It would also=20
direct the FCC to assess the state of access to=20
broadband services, including via a series of=20
summits with plenty of prior public notice.
http://www.broadcastingcable.com/article/CA6557066.html?rssid=3D193
* For more on the hearing see http://www.benton.org/node/10734
* For more on HR 5353 see http://www.benton.org/node/9186

WHY THE 'RIGHT' GETS NET NEUTRALITY WRONG
[SOURCE: Public Knowledge, AUTHOR: Art Brodsky]
[Commentary] What do conservatives have against=20
Network Neutrality? Most congressional=20
Republicans oppose the idea of giving consumers=20
freedom on the Internet. They take shelter in=20
their anti-government, anti-regulation rhetoric,=20
preferring to allow Internet freedom to apply to=20
the corporations which own the networks=20
connecting the Internet to consumers, rather than=20
to consumers themselves. There could, of course,=20
be a larger discussion about the meaning of=20
=93conservative=94 and Republican, and whether the=20
two are synonymous. At the heart of the=20
opposition is the =93mythology of the market,=94 that=20
once government =93got out of the way,=94 new=20
technologies emerged. The argument against Net=20
Neutrality really goes off-track when it gets=20
into the nature of private property, the state of=20
competition, and the effect of regulation. That=92s=20
more than one track to be thrown off of, so it=92s=20
quite the disaster scene. We may need CSI: Telecom to sort it all out.
http://www.publicknowledge.org/node/1545
http://www.publicknowledge.org/node/1544

INTERNET SAYS: 'ME WANT COOKIE'
[SOURCE: Wall Street Journal, AUTHOR: L. Gordon Crovitz]
[Commentary] Today's controversial cookies are=20
the small text files that track where people go=20
online. Web sites do a poor job of explaining how=20
and why this information is used, even as details=20
about our lives are increasingly knowable online.=20
Risks to privacy make this a race between smarter=20
self-regulation on the Web and threatened new=20
regulation by the Federal Trade Commission.=20
People involved in building the Web are rightly=20
proud of the openness of the digital culture.=20
Most consider that cookies cause no harm and are=20
key to the growth of the Internet, but many Web=20
users feel left in the dark about how information=20
about them is used and not used. Unless people=20
can be reassured, there is a real risk that some=20
day soon we'll find the untested hands of regulators in the cookie jar.
http://online.wsj.com/article/SB120994540824466285.html?mod=3Dtodays_us_...
nion
(requires subscription)

MEDIA OWNERSHIP

ALL EYES ON YAHOO FOR ALTERNATE DEAL ON MICROSOFT
[SOURCE: Reuters, AUTHOR: Michele Gershberg]
Yahoo faced growing pressure on Sunday to find an=20
alternative strategy to a $47.5 billion takeover=20
offer from Microsoft after the software maker=20
walked away over a major disagreement on price.=20
Yahoo was likely to push for an advertising=20
partnership with Web search leader Google that=20
should help boost its operating performance in=20
the near term, sources familiar with the matter=20
said. It is also still pursuing a deal with=20
another Internet media and advertising major,=20
such as Time Warner Inc's AOL. The expectation=20
that Yahoo Chief Executive Jerry Yang has another=20
strategy up his sleeve could help mitigate a=20
steep descent for the company's shares on Monday,=20
but he will face angry questions from shareholders if nothing materializes.
http://www.reuters.com/article/internetNews/idUSN0228397020080504
* Microsoft Drops Bid for Yahoo
http://www.businessweek.com/technology/content/may2008/tc2008053_759938....
?campaign_id=3Drss_tech
* Microsoft=92s Failed Yahoo Bid Risks Online Growth
http://www.nytimes.com/2008/05/05/technology/05soft.html?ref=3Dtodayspaper
* After Deal Dies, Yahoo Weighs Its Next Move
http://www.nytimes.com/2008/05/05/technology/05yahoo.web.html?ref=3Dtoda...
aper
* Giving Up on Yahoo, Microsoft Rethinks Its Internet Options
http://online.wsj.com/article/SB120990343342465453.html?mod=3Dtodays_us_...
e_one
* Throughout Microsoft Talks, Yahoo Appeared Unwilling to Sell
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/04/AR200805...
1731.html
* Microsoft drops Yahoo, looks ahead
http://www.usatoday.com/printedition/money/20080505/1b_yahoo05.art.htm
* How the 'no deal' went down for Microsoft-Yahoo
http://www.usatoday.com/printedition/money/20080505/3b_msoft-yahoo-side....
.htm
* Yahoo may not have heard the last of Microsoft
http://www.latimes.com/business/printedition/la-fi-microsoft5-2008may05,...
08313.story
* Yahoo under pressure after deal collapse
http://www.ft.com/cms/s/fccd005a-1a05-11dd-ba02-0000779fd2ac.html
* Google's shadow hung over Microsoft-Yahoo deal
http://www.infoworld.com/article/08/05/05/Google-shadow-hung-over-Micros...
-Yahoo-deal_1.html

MURDOCH WON'T RAISE BID FOR NEWSDAY
[SOURCE: Associated Press, AUTHOR: Seth Sutel]
Rupert Murdoch's News Corp., which had appeared=20
close to a deal to buy Newsday, doesn't plan to=20
raise its bid for the Long Island newspaper=20
despite a higher offer from Cablevision Systems.=20
Cablevision's offer of $650 million bested=20
Murdoch's $580 million price, as well as an offer=20
of equal value from New York Daily News owner=20
Mortimer Zuckerman. It wasn't clear whether=20
Zuckerman would respond to Cablevision's higher=20
offer. The competitive bidding for Newsday is=20
good news for its owner Tribune Co., which took=20
on an additional $8.2 billion in debt in December=20
when it became a privately held company.=20
Tribune's new CEO Sam Zell had initially said he=20
wanted to keep the company largely intact, but=20
later decided to entertain offers for Newsday=20
following a steep drop-off in advertising=20
revenues at the company. Like Newsday,=20
Cablevision is also based on Long Island and has=20
about 3 million cable TV customers in the New=20
York region. It also has a local cable news=20
channel, Madison Square Garden, and several cable=20
networks including AMC and IFC.
http://biz.yahoo.com/ap/080502/newsday_sale.html?.v=3D2

BROADCASTING/CABLE

LOCALISM DIVIDES RELIGIOUS GROUPS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission's proposals=20
for increasing public interest reporting=20
requirements and other steps to promote broadcast=20
localism have drawn a flood of comments from=20
understandably worried broadcasters. But they=20
have also revealed a potential new battleground=20
in this issue: a schism between religious groups.=20
On one side of the faith divide over the=20
proposals are the Conference of Catholic Bishops=20
and the United Church of Christ, which support=20
some form of new licensing guidelines tied to a=20
fast-tracked renewal process. On the other is the=20
National Religious Broadcasters, which represents=20
some 1,400 members, primarily radio and TV=20
stations. Evangelical in nature but=20
nondenominational in makeup, the NRB argues the=20
proposals could =93strangle=94 Christian media and=20
create an =93official orthodoxy=94 on what is acceptable local programming.
http://www.broadcastingcable.com/article/CA6557189.html

MAKING LOCALISM ILLOGICAL
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Pelkey, Daniel J. Margolis]
[Commentary] Two attorneys for broadcaster=20
Broadcast Co. of America (BCA) argue again the=20
Federal Communications Commission's proposed=20
rules to promote localism. The most eye-catching=20
proposal made by the FCC in the Localism Notice=20
for Proposed Rulemaking is the proposal to=20
require each broadcaster to construct and operate=20
a main studio in each of its communities of=20
license. So if, for example, the broadcaster were=20
licensee of five stations in a market and each of=20
those stations had a different community of=20
license, it would be required to construct and=20
operate five separate main studios. Coupled with=20
the FCC's policy requiring each studio to be=20
staffed by two full-time employees, the=20
broadcaster could be required to expend more than=20
a million dollars per year in operating expenses,=20
plus the costs of construction. Given the current=20
state of the broadcast industry and the economy,=20
such a result would be catastrophic.
http://www.broadcastingcable.com/article/CA6557193.html

THIS IS ONLY A TEST: VEGAS STATION SIMULATES ANALOG SHUTOFF
[SOURCE: Broadcasting&Cable, AUTHOR: P.J. Bednarski, Glen Dickson]
KVBC Las Vegas conducted a simulation of what=20
will happen at the stroke of midnight on Feb. 17,=20
2009, when full-power stations across the U.S.=20
cease broadcasting in analog. During each of the=20
station's seven daily newscasts on May 2, the=20
station stopped feeding its normal programming=20
into its studio-to-transmitter link and instead=20
ran a brief clip of simulated static. Overlaid on=20
the fuzzy screen was a graphic instructing=20
befuddled viewers to call 888-DTV-2009 or=20
DTVanswers.com, the industry's official sources=20
for information on the transition. The simulated=20
blackouts, which included footage of an actual=20
cable being pulled, began with Friday's 5 a.m.=20
newscast. KVBC anchors explained to viewers that=20
those who could still see them after they "pulled=20
the plug" have nothing to worry about come=20
February 2009 -- those who got only white snow,=20
however, need to act now to make their sets DTV-ready.
http://www.broadcastingcable.com/article/CA6557252.html?rssid=3D193

ACA KEEPS PRESSURE ON FCC REGARDING NEWS CORP CONDITIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The American Cable Association, the lobbying=20
organization for small and mid-sized cable=20
operators, again asked the Federal Communications=20
Commission to deny News Corp.'s effort to get out=20
from under conditions the FCC put on the company=20
when it bought DirecTV. This time, the ACA argued=20
that the company "manipulated Commission=20
processes to suppress scrutiny of a key issue in=20
the Liberty [Media]/DirecTV transaction." The FCC=20
Feb. 25 approved the sale of DirecTV to Liberty.=20
News Corp. petitioned the FCC March 11 to lift=20
the conditions. The company said its sale of=20
DirecTV to Liberty justified lifting the=20
conditions that required it to submit to=20
commercial arbitration in cable-operator=20
program-access complaints about negotiations for=20
regional sports networks or retransmission-consent talks.
http://www.broadcastingcable.com/article/CA6556914.html?rssid=3D193

CABLE OPERATORS SEEK TO BROADEN MARTIN PLAN
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Charter Communications, Mediacom Communications,=20
and Cequel Communications want Federal=20
Communications Commission Chairman Kevin Martin=20
to broaden his proposal designed to give small=20
cable operators relief from rules mandating the=20
duplicative carriage of some local TV signals.=20
Martin=92s plan, announced in early April at the=20
American Cable Association=92s annual DC summit,=20
included relief for cable systems with 552 MHz of=20
capacity or less. Last week, the three cable=20
companies said relief should also include systems=20
with up to 5,000 subscribers or =93some other=20
threshold deemed suitable.=94 The scope of Martin=92s=20
proposal should expand, the MSOs said, because=20
they and other cable operators have systems with=20
750 MHz of capacity that have not been upgraded=20
to digital and do not have the subscriber base to justify doing so.
http://www.multichannel.com/article/CA6556996.html?nid=3D4262

SEZMI MAY BE ON TO SOMETHING, SEZ ME
[SOURCE: tvnewsday, AUTHOR: Harry A. Jessell]
[Commentary] Sezmi, the latest wireless cable=20
scheme involving broadcast spectrum, cable=20
networks, Internet access and a big, honkin' DVR=20
could just work if stations don't decide to keep=20
all their digital space for diginets or mobile.=20
Backed with $17.5 million in venture capital, the=20
company is now trying to put together the pieces=20
that it needs to begin trials in three markets=20
later this year. It needs spectrum from=20
broadcasting, distribution deals from cable=20
networks and marketing help from ISPs. That=20
represents a lot of work. But the proposed Sezmi=20
service possesses a few elements that its=20
ill-fated predecessors did not and they could=20
make all the difference. First, the Sezmi box not=20
only connects to a smart antenna to receive the=20
local TV stations and cable networks off air, but=20
also to the Internet so that subscribers can tap=20
into the VOD movies and TV shows that the studios=20
and networks are making available as well as the=20
blizzard of videos on YouTube and elsewhere.=20
Second, the Sezmi box will contain a super DVR=20
with one terabyte of storage. That means that it=20
can record much of what it receives off the air=20
or finds on the Web and have it ready when you=20
are. Finally, Sezmi is promising a smart=20
interface that will help subscribers sort through=20
it all and organize it so they will always have=20
their favorites right at their fingertips.
http://www.tvnewsday.com/articles/2008/05/02/daily.6/

QUICKLY

FCC'S MCDOWELL IS KEVIN MARTIN'S LOYAL OPPONENT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
A Q&A with Republican Federal Communications=20
Commission Commissioner Robert McDowell. He=20
concedes he has differed from FCC Chairman Kevin=20
Martin on a number of issues lately, but his=20
divergent points of view on some issues don't=20
indicate a larger rift between the two. The=20
independent-minded commissioner cautions against=20
a heavy regulatory hand on the Internet, and=20
takes issue with new broadcast localism proposals=20
that have broadcasters worried. He believes the=20
FCC already has the authority to keep the=20
Internet open, and says broadcasters are already=20
programming to their communities and don't need=20
the government to exhume old rules. Commissioner=20
McDowell, who says he thinks DTV transition is on=20
track for a smooth switchover, talks about the=20
analog shut-off and other issues including Network Neutrality.
http://www.broadcastingcable.com/article/CA6557245.html?rssid=3D193

ON THE BRINK
[SOURCE: The Economist, AUTHOR: ]
America's Audit Bureau of Circulations reported=20
that for the 530 biggest dailies, average=20
circulation in the past six months was 3.6% lower=20
than in the same period a year earlier; for=20
Sunday papers, it was 4.6% lower. Ad revenues are=20
plunging across the board: by 22.3% at Media=20
General, for example. In 2007 total newspaper=20
revenues fell to $42.2 billion, not to be sniffed=20
at, certainly, but a lot less than the peak of=20
$48.7 billion in 2000. Much of this decline is=20
being blamed on the rise of the Internet, which=20
offers free, round-the-clock coverage, and which=20
has provided a new, better home for classified=20
advertising, once the bedrock of most newspapers'=20
revenue. But some of the fall in revenues is=20
actually due to the economic slowdown in America,=20
and especially in the housing market, which=20
contributes a large slice of classified=20
advertising. The credit crunch has also come at a=20
bad time for a group of new newspaper owners, who=20
used loans that were readily available until last=20
summer to buy their way into the business, but=20
must now be having second thoughts.
http://www.economist.com/business/displaystory.cfm?story_id=3D11294258

AMAZON.COM SUES NY OVER NEW ONLINE SALES TAX
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
As expected, Amazon.com is hitting back at New=20
York over a new law requiring online retailers to=20
collect sales taxes from customers residing in=20
that state. In a complaint filed on April 25,=20
Amazon asked the New York State Supreme Court to=20
declare the recently passed law "invalid, illegal, and unconstitutional."
http://www.news.com/8301-10784_3-9934188-7.html?part=3Drss&subj=3Dnews&tag=
=3D2547-1_3-0-5

SCRAP LOOMS OVER RADIO WAVES
[SOURCE: Financial Times, AUTHOR: Andrew Parker, Sarah Laitner]
Europe=92s leading mobile phone operators on Monday=20
set themselves on a collision course with=20
television broadcasters by making a pitch to=20
secure a big chunk of the =93digital dividend=94=20
radio =ADspectrum. A report commissioned by=20
Vodafone, Telefonica and Orange calls for the=20
mobile operators to be allocated 25 per cent of=20
the spectrum, or radio waves, made available by=20
the switchover from analogue to digital=20
television. The report, written by Spectrum Value=20
Partners, a consulting firm, claims that giving=20
mobile operators access to the digital dividend=20
spectrum could be worth up to =80165bn ($255bn,=20
=A3129bn) to consumers and companies. Auctions of=20
the ultra high frequency spectrum previously used=20
for analogue television could also raise billions=20
of euros for European governments.
http://www.ft.com/cms/s/7086cb96-19f4-11dd-ba02-0000779fd2ac.html
(requires subscription)
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Next Week's Agenda

This weekend there's Fordham University's Information and the Information Economy conference and next week there's a hearing on The Internet Freedom Preservation Act (HR 5353). For these and other upcoming media policy events, see http://www.benton.org/calendar/2008/5

Federal Communications Commission Caps Cell Phone Company USF Payments

"Any day now" became Thursday night for the Federal Communications Commission which agreed to temporarily cap the Universal Service Fund, a growing subsidy program that paid nearly $1.2 billion last year to cell phone companies that do business in rural areas. The cap will remain in place until the commission passes a comprehensive reform package, which is in the works. The move is bad news for rural cellular carriers who rely on such payments for a substantial part of their revenue, but it benefits big telephone companies like Verizon and AT&T, whose customers are the largest contributors to the fund. AT&T is also a major recipient of such wireless subsidies, but agreed to a cap as a condition of its acquisition of Dobson Communications Corp. last year. The top recipient of such subsidies, Alltel Corp., had also agreed to a cap as part of its buyout by a private investment group. Regulators hope the decision will slow the increase in fund charges on telephone bills and keep the program sustainable. FCC Commissioners Michael Copps and Jonathan Adelstein voted against the cap. They said the agency should have taken the opportunity to make more dramatic changes, including using the fund to promote broadband service. "As technology and the marketplace rapidly reshape the communications landscape, we face difficult questions about how our universal service policies should keep pace," commissioner Jonathan Adelstein said in a statement. FCC Chairman Kevin Martin said, "Today's decision is not an end in itself, but a step on the path towards comprehensive reform. I continue to believe the long-term answer for comprehensive reform of high-cost universal service support is to move to a reverse auction methodology and to require that high-cost support be based on a carrier's own costs. I'm supportive of these measures to contain the growth of universal service in order to preserve and advance the benefits of the Fund and protect the ability of people in rural areas to continue to be connected. "
http://www.newsobserver.com/1595/story/1057405.html

FCC votes to cap fund for rural phone subsidies
http://www.reuters.com/article/marketsNews/idUSN0148058020080501?feedTyp...

FCC Takes Action to Cap High Cost Support Under the Universal Service Fund (FCC)
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-281921A1.doc

FCC Order:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A1.doc

FCC Chairman Martin Statement
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A2.doc

FCC Commissioner Copps Statement: "I dissent from today's decision... because it falls woefully short of the fundamental, comprehensive reforms needed to meet the overarching telecommunications challenge of the Twenty-first century. That challenge, both by statute and by necessity, is to encourage the deployment of basic and advanced telecommunications to all of our citizens and to ensure that the Universal Service system, which accomplished so much in the 20th Century, can do so again now."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A3.doc

FCC Commissioner Adelstein Statement
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A4.doc

FCC Commissioner Tate Statement
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A5.doc

FCC Commissioner McDowell Statement
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-122A6.doc

Media Passes on Times Pentagon Piece

On April 20, The New York Times published an 8,000-word, front-page article that seemed certain to generate attention. The story, written after the paper sued to gain access to Pentagon records, detailed the close relationship between the Defense Department and some military analysts commenting on the Iraq war for television networks. According to the story, these analysts were granted access to classified information, had briefings with senior leaders including Donald Rumsfeld, were taken on tours of war zones, and in some cases, had defense-related business interests. In return, they consistently reinforced the administration’s talking points and provided a more favorable view of the war -- despite some acknowledging their doubts about the information they were giving to the public. Despite these revelations, there was virtually no mainstream media follow up to The Times’ expose, according to PEJ’s News Coverage Index, which monitors approximately 1,300 stories a week from 48 different outlets. Although there was some discussion of The Times scoop in the blogosphere, the Index found only two related stories in the week of April 21-27, both of them in the April 24 PBS NewsHour broadcast. In the cable news universe, where many of these analysts worked, silence greeted the story. By way of comparison, the Texas polygamy case garnered 50 stories and General Petraeus’ promotion to head of Central Command captured 16. Even Rupert Murdoch’s latest newspaper maneuvering received twice as much attention (4 stories).
http://www.journalism.org/node/10849
* Shameful Days: Why Won't The Media Pursue the Pentagon Propaganda Scandal?
http://www.huffingtonpost.com/arianna-huffington/shameful-days-why-wont-...
* Why Big Media is Mum about Its Propaganda Habit
http://www.huffingtonpost.com/timothy-karr/why-big-media-is-mum-abou_b_9...

Just Between Us

The Bush administration is refusing to disclose internal e-mails, letters and notes showing contacts with major telecommunications companies over how to persuade Congress to back a controversial surveillance bill, according to recently disclosed court documents. The existence of these documents surfaced only in recent days as a result of a Freedom of Information Act lawsuit filed by a privacy group called the Electronic Frontier Foundation. The foundation is seeking information about communications among administration officials, Congress and a battery of politically well-connected lawyers and lobbyists hired by such big telecom carriers as AT&T and Verizon. Court papers recently filed by government lawyers in the case confirm for the first time that since last fall unnamed representatives of the telecoms phoned and e-mailed administration officials to talk about ways to block more than 40 civil suits accusing the companies of privacy violations because of their participation in a secret post-9/11 surveillance program ordered by the White House. At the time, the White House was proposing a surveillance bill -- strongly backed by the telecoms -- that included a sweeping provision that would grant them retroactive immunity from any lawsuits accusing the companies of wrongdoing related to the surveillance program.
http://www.newsweek.com/id/134930

Democrats and Fox News

Does one appearance a warm relationship make? The New York Times and LA Times think so. All of a sudden, the once-frosty relationship between Fox News and the Democratic candidates seems to have grown warmer. Sens Hillary Clinton (D-NY) and Barack Obama (D-IL), who steadfastly refused to attend Fox-sponsored debates last year, are now giving plenty of interviews as they court Fox’s viewers, who are largely white, conservative and undecided. “It’s probably true that we appeal to white working-class voters,” said Brit Hume, the network’s Washington managing editor and the host of “Special Report.” “The candidates are going where the voters are.” Conversely, Fox seems to have softened its stance toward the Democrats, mindful of the intense viewer interest in the prolonged primary season. Although Fox News remains firmly in first place among news channels, CNN has crept up in the ratings on primary nights. So Fox wants to appeal to people who might otherwise flip the channel in search of more time with the Democrats. In short, Fox News and the Democrats abruptly find each other useful.
http://www.nytimes.com/2008/05/02/business/media/02fox-1.html?ref=todays...
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Barack Obama, Hillary Clinton embrace Fox News
http://www.latimes.com/news/printedition/front/la-et-foxnews2-2008may02,...

U.S. needs stronger broadband policy

Government policy plays a less important role in broadband adoption than environmental factors such as population density and price, but the U.S. government should take some new steps to help the country catch up to many other industrialized nations, according to a report released by the Information Technology and Innovation Foundation (ITIF), a Washington (DC) think tank. According to ITIF, the government could 1) adopt more favorable tax policies, allowing broadband network operators to depreciate their investments in next-generation networks faster, 2) make more wireless spectrum available, 3) expand and reform Universal Service Fund programs aimed at delivering telecom services to rural areas, 3) fund state programs already working to expand broadband deployment, 4) fund a grant program focused on digital literacy and access to computers, and 5) focus on demand for broadband. The ITIF report compared the U.S. broadband environment to eight other countries, most with higher speeds and lower prices. In several cases, the countries launched extensive broadband programs in the last decade, with government working closely with broadband providers to expand coverage and roll out next-generation broadband. "The overall message is, leadership matters," said ITIF president Robert Atkinson. "At the end the day, top-level leadership from the highest ranks of government does seem to make a difference."
http://www.infoworld.com/article/08/05/01/US-needs-stronger-broadband-po...

Report Explains Broadband Leadership, Need for Strategy
http://www.govtech.com/dc/articles/306670

As Broadband Growth Slows, Expect Speed Boosts

[Commentary] The demand for broadband in the U.S., after growing at an explosive rate for almost two years, has started to slow, largely due to high market penetration rates and a struggling economy. UBS Research forecasts that the number of U.S. broadband connections will grow 11 percent in 2008, down from growth of 16 percent in 2007. The carriers -- the cable operators and phone companies -- are beginning to feel the impact, and are subsequently looking for ways to squeeze more dollars out of the broadband business. Verizon, for example, is pushing people to sign up for its more expensive FiOS service. Others are looking to use “speed boosts” as a way to lift their ARPU. It should come as no surprise that the carriers have let go of incremental speed upgrades and have gone ahead and doubled or tripled the speeds of their offerings. Why? Because bumping speed to 2 Mbps from 1 Mbps doesn't really feel like a big boost. A 6X speed bump, on the other hand, makes the Internet much faster -- and worth paying for. Suddenly, Hulu and YouTube become much more fun to watch. If a subscriber believes that he or she can download music, stream videos and connect to their favorite social networks faster, they will pay a premium price for that speed. Never mind the fact that how fast content gets delivered to our computers is mandated by not just access speeds but several factors, such as congestion on the backbone networks and servers’ ability to dish out data. As our accompanying chart shows, the downstream speeds might be going up, but the carriers are stifling innovation by controlling the upstream speeds. Broadband 2.0 is all about collaboration and sharing, and that requires just as much upstream bandwidth as it does downstream speeds. Regardless, this coming year is going to be fun as the cable companies and phone operators will do unnatural things to entice new subscribers, starting with offering faster connections at lower prices.
http://gigaom.com/2008/04/29/as-broadband-growth-slows-expect-speed-boosts/