May 2008

The Sad State of U.S. Broadband

For the second year running, the U.S. ranked 15th among the 30 members of the Organization for Economic Cooperation & Development in terms of broadband availability. Denmark ranked first again in the annual OECD survey, followed by a host of European and Asian nations. Indeed, while the number of Americans with access to broadband service rose 20% last year, to nearly 70 million people, the most in the OECD, that amounted to just 23 of every 100 residents. By contrast, the top five countries in the OECD ranking all sport per-capita penetration rates of better than 30%. Why isn't the U.S. up to speed online? The Federal Communications Commission is quick to point out differences in population and geography that have made it more difficult for the nation to catch up with smaller countries. But challenges of wiring remote communities don't tell the whole story. The OECD also found that U.S. broadband providers charge more than those in many developed nations. Broken down by megabit per second of download speed, U.S. rates ranged from $2.83 to $38.41 in late 2007. Consumer advocacy groups blame what they see as a market with little competition. They say the ability of major telephone and cable operators, such as Verizon Communications, AT&T, Time Warner Cable, and Comcast, to dominate their markets without sharing their lines with rivals has kept out new competition, enabling the companies to keep prices high and investments in faster technologies low.
http://www.businessweek.com/technology/content/may2008/tc20080522_340989...

Sens. to GAO: Study Access to Independent Programming

Sens Byron Dorgan (D-ND), Patrick Leahy (D-VT) and Herb Kohl (D-WI) have asked the Government Accountability Office to investigate the state of independent programming, prompted by their concerns that media consolidation has squeezed out independent programmers. The Senators in their letter cited figures showing that while 50% of primetime programming was independently produced in 1989, only 18% of such programming is independently produced today. They argued in the letter that subscription video has not "come to fruition" as a competitive alternative for independents. Among the questions they want the study to address are: The sources of programming on television; Factors contributing to the current distribution of programming; The impact of consolidation, on independent programming and diversity; The degree to which the Internet has become an outlet for such programming and how much the major media companies "dominate" the most widely viewed sites; and What changes may need to be made to programming carriage laws and regulations.
http://www.broadcastingcable.com/article/CA6563030.html?rssid=193

Plan to trim cell phone cancellation fees draws criticism

A wireless industry proposal under consideration by the government that would make it easier for cell phone customers to break up with their service providers was met with withering criticism by consumer advocates on Wednesday. The plan would give consumers a break on fees charged when they quit their service early, but would also let cell phone companies off the hook in state courts where they are being sued for hundreds of millions of dollars by angry customers. "If this plan goes through, the nation's largest cell phone carriers get a get-out-of-court-free card," said Chris Murray, senior counsel for Consumers Union. "We have long opposed limiting consumers' rights to sue, and that seems to be what we're doing here." Patrick Pearlman, a lawyer with the consumer advocate division of West Virginia's Public Service Commission, said, "The consumer protections are an inadequate fig leaf to justify federal pre-emption." The nation's No. 2 wireless company, Verizon Wireless, offered the proposal to the FCC for its review after high-level meetings with senior FCC officials. It did so in consultation with other leading wireless companies, whose executives indicated they would not oppose its provisions.
http://www.iht.com/articles/ap/2008/05/21/america/Cell-Phone-Fees.php

Bell Canada Takeover Is Blocked

An appeals court quashed approval for the $51.8 billion leveraged buyout of Bell Canada on Wednesday after siding with angry bondholders in a ruling. While the unanticipated decision may not be the final ruling on the buyout, the largest leveraged deal in history, it puts its future in legal jeopardy. A five-judge panel of the Quebec Court of Appeal found that Canada’s largest telecommunications company “never attempted to justify the fairness and reasonableness of an arrangement that results in a significant adverse economic impact on the debenture holders while at the same time it accords a substantial premium to the shareholders.” Because the buyout is structured under Canadian law as a “plan of arrangement” it requires court as well as shareholder approval. The new ruling sets aside court approval that was granted in early March.
http://www.nytimes.com/2008/05/22/business/worldbusiness/22bce.html?ref=...
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FTC Wants to Know What Big Brother Knows About You

The growing practice of "behavioral targeting," or sending ads to online users based on their Internet habits, is now under scrutiny by the Federal Trade Commission, whose review could shape not only Web advertising rules but the character of the Web itself. For while public interest groups argue that compiling profiles of largely unsuspecting Internet users ought to be illegal, online advertisers and publishers respond that their ad targeting tactics protect privacy and may be essential to support the free content on the Web. Behavioral targeting allows many Web sites to raise ad prices, because advertisers will pay more when they can isolate a particular audience. Limiting behavioral targeting could "jeopardize the consumer's ability to get free content on the Internet," said Paul Boyle of the Newspaper Association of America, a trade group that represents the business interests of most U.S. dailies, including The Washington Post. The FTC is considering guidelines, for now voluntary, that would make it harder to target behavior. The principles were issued in December after town hall meetings, and the public comment period ended last month. As the commission's deliberations begin, some federal and state lawmakers are weighing measures that would be mandatory. New York lawmakers, for example, are considering a law similar to the FTC guidelines.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/21/AR200805...
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Lawmaker questions Google over privacy practices

Rep Joe Barton (R-TX), the top Republican on the House of Representatives Commerce Committee, asked Google chief executive Eric Schmidt on Wednesday to detail the search engine's privacy practices since it acquired rival DoubleClick. "It is critical that Google's and DoubleClick's policies and procedures for handling this information be transparent, and that every effort is made to protect consumers' data," Rep Barton wrote in a letter to the company dated May 21. In the letter, Rep Barton asked if and how data collected by Google and DoubleClick about computer users would be merged and how the data would be used, and if Google planned to continue allowing users to opt out of ad-serving cookies. Privacy advocates have expressed concern that a wave of consolidation in online advertising would lead to a concentration of personal information in the hands of a few powerful companies.
http://www.reuters.com/article/internetNews/idUSN2142539620080521

What Microsoft's block of 'American Gladiators' teaches us

Users of Windows Media Centers who were blocked from recording two NBC shows last week are eager to learn why Microsoft is taking marching orders from broadcasters. Microsoft is soon expected to explain why it inserted technology into Vista that blocked digital TV viewers from recording their favorite shows. Their current excuse--that Microsoft adheres to regulations proposed by the Federal Communications Commission--makes little sense, as the only rules on controlling recording from broadcast TV were struck down by the courts in 2005.
http://news.cnet.com/8301-10784_3-9950082-7.html?tag=nefd.lede

Interior Allowed To Reconnect To Internet

In December 2001, U.S. District Court Judge Royce Lamberth ordered the Interior Department to disconnect from the Internet all information technology systems that had access to Indian trust data managed by Interior's Bureau of Indian Affairs. The ruling was part of a class action lawsuit accusing the government of mismanaging thousands of Indian trust accounts. But now U.S. District Judge James Robertson granted on motions filed by Interior requesting that the Bureau of Indian Affairs, the Office of Hearings and Appeals, the Office of the Special Trustee, and the Office of Historical Trust Accounting be allowed to reconnect their networks to the Internet.
http://techdailydose.nationaljournal.com/2008/05/interior_allowed_to_rec...

Mobile subscribers really do want more choice

Consumers want more choice when it comes to mobile phone service. At least that's the big conclusion from a consumer survey published Wednesday by IBM's Institute for Business Value. According to the report, 80 percent of consumers said they'd prefer a service provider that gave them more choice in the applications and services available on their mobile device. The results of this survey shouldn't come as a shock to anyone in the industry. As more people use the mobile Internet, they expect to have the same freedom to access applications that they can get on their PCs at home. Imagine the outrage if Internet service providers like AT&T or Comcast told a broadband customer that they couldn't access Facebook or download a Skype client? They'd be outraged.
http://news.cnet.com/8301-10784_3-9950016-7.html?part=rss&subj=news&tag=...

Leased Access: How Much?

The head of the Leased Access Programmers Association, Charlie Stogner, has been trying to find out how much he should be paying to lease space from cable operators, so far to no avail, he said. The Federal Communications Commission earlier this year voted to lower the rate cable operators can charge, arguing that it would spur competition and diversity in multichannel-video programming. The rules were set to kick in May 28, but the Office of Management and Budget reviews drafts of many new regulations -- including the leased-access order -- per the 1980 Paperwork Reduction Act to make sure they don't unnecessarily lead to more paperwork. The Bush administration has been trying to better enforce the 90-day limit on that OMB review, so Stogner wants to find out when the draft was submitted so he can try to figure out when cable operators will be required to quote him a new rate. "The delays in new rules, especially the rates, becoming effective are really hurting those of us that struggle to have cable cooperate," he said in an e-mail to FCC deputy general counsel Joseph Palmore.
http://www.broadcastingcable.com/article/CA6562924.html?rssid=193