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July 2008

Broadband war gets bloodier

[Commentary] Judging from the earnings announcements from Comcast, Verizon and AT&T, adding new broadband customers is getting more tough as many people already subscribe to either cable or DSL. As a result, cable operators and phone companies are battling each other head to head to steal customers from one another. With the economy in trouble and 90 percent of active Internet users connecting via broadband, these companies are going to rely more heavily on promotional pricing to entice customers to switch. Media Metrics analyst Laura Martin says the fairly miserable subscriber numbers from AT&T and Verizon suggest that cable is stealing a share of the broadband market from DSL. The upshot, she thinks, is that DSL will become the equivalent of a narrowband service over the next five years -- that is, it will become obsolete.

When "free" is no longer free

With its pending decision to censure Comcast over its network-management practices, the Federal Communications Commission could be planting the seed for an interesting natural experiment on the economics of "piracy". On Comcast's earnings call COO Steven Burke said the company "disagrees" with the apparent decision but added, "we're going to adjust our network management techniques to go to a bit more of a consumption-based model." In other words, charging by the bit, as Time Warner Cable is now testing in a few markets. While Time Warner launched its tiered-pricing test on its own initiative, heightened scrutiny of ISPs' network-management practices by the FCC could turn the Time Warner test into a trend, as Burke's comment suggests. One effect of that trend would be to pass some of the bandwidth costs associated with P2P file-sharing on to those who are actually engaging in it, whether legally or illegally. The upshot could be the "free" is no longer so free. "Piracy" would start to have a price (of sorts).

FCC Hearing Overcoming Financing Barriers to Media Ownership

On July 29, the Federal Communications Commission held an en banc hearing and conference on overcoming barriers to communications financing.

Commissioner Michael Copps identified a starting point: "We agree on the overarching goal of supporting more minority and female ownership among the communications industries we regulate-media, of course, and telecommunications more generally. So the question is not whether to encourage more ownership-at least I hope that's never the question!-but how to encourage it and by using what combination of private and public resources. Second, I think we all recognize that access to capital is a huge barrier to entry and that we need to find ways to bring aspiring entrepreneurs together with meaningful capital. So I'm looking forward to learning a lot more today about why those barriers exist and what options might be available to tear them down." But he also identified a "San Andreas Fault" -- on one side those who have identified increased media ownership concentration as a barrier to diversity in media ownership; on the other side, the FCC's proposed policies have favored increasing media ownership concentration. He said, "It is absolutely essential that we work toward race-conscious remedies if we are serious about reversing the sad state of minority ownership."

Commissioner Jonathan Adelstein said the FCC has a responsibility to take affirmative steps to prevent discrimination on the basis of race, gender, religion, and nationality. The FCC's founding charter, he said, "requires us to take affirmative steps to promote diversity of ownership, because, in America, ownership is the key to having your voice heard."

Commissioner Deborah Taylor Tate said she would continue to press on ten fronts including 1) tracking investments and the performance of investments by gender, race, and ethnicity; 2) encouraging investors to make diversity a priority in their overall portfolios; 3) creating programs to educate and prepare women to lead fast-growth businesses; 4) researching investors treatment of women and minority-led ventures; and 5) establishing internships for women and minorities.

Commissioner Robert McDowell raised concerns that FCC regulation could harm the business of broadcasting. "In particular, the localism proposals we are currently considering, if enacted, would, ironically, result in less of the local programming and service at which minority and women-owned stations excel."

Private equity firms complete Clear Channel buyout

Private equity firms Thomas H. Lee Partners and Bain Capital Partners said on Wednesday they completed the $17.9 billion purchase of radio-station and billboard company Clear Channel Communications. The deal, which had been slowed by legal battles in two states and negotiations to lower the purchase price, closed almost two years after Clear Channel began exploring strategic options in October 2006.

Sam Zell's Deal from Hell

Sam Zell doesn't need Tribune to thrive; merely keeping it alive could earn him an astronomical return when it comes time to sell. That has always been the goal. But amid the credit crunch, the quick asset sales haven't panned out. With the newspaper business deteriorating, his seemingly clever strategy has thrown the whole Tribune enterprise into jeopardy. The question for the company's 18,500 employees is whether Sam Zell is the guy to save it. Many staffers are alarmed by Zell's open disdain for the newspaper business. Adding to the uncertainty, Zell has tapped some quirky characters with no newspaper experience to run key elements of the Tribune empire. With the newspaper industry in free fall, Zell's new survival plan is to build out Tribune's broadcasting and Internet groups, which represent 24% of revenues, and slash costs in the newspaper group. And so the layoffs will keep coming. Tribune has axed 1,100 people thus far, with newspapers bearing the brunt. One wonders what might have happened had someone else bought Tribune. Zell and his team have limited flexibility, but a different buyer might not have taken on so much debt. Zell says the casualties will be "significantly greater" by yearend, and he's unapologetic about that. "I knew that I needed to act as both the grenade thrower and the bomb deflector if we were going to get from here to there," he says. Getting "there," of course, would mean a big payday for Sam Zell.

Sen Kay Bailey Hutchison named Commerce Committee Ranking Member

In the wake of the indictment of now former Senate Commerce Committee Vice Chairman Ted Stevens (R-Alaska), Sen Kay Bailey Hutchison (R-Texas) will assume the role. "I am honored to temporarily step-in for Senator Stevens as Ranking Member of the Senate Commerce, Science, and Transportation Committee while the legal process works itself out," said Senator Hutchison. "Ted served our country heroically in World War II and is a tireless advocate for his state. I have every expectation that Senator Stevens will return to his role as Ranking Member in the future." Sen Hutchison has been a defender of the cable industry from what some perceived as Federal Communications Commission Chairman Kevin Martin's heavy regulatory hand. She pushed for giving the FCC the authority to regulate violence and for allowing TV stations on the border with Mexico to continue broadcasting in analog after February 2009.

Headlines in the Classroom

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July 30, 2008 (Stevens indicted)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY JULY 30, 2008

GOVERNMENT & COMMUNICATIONS
   Internet sites still blocked for Olympic reporters
   When Official Truth Collides With Cheap Digital Technology

MEDIA & ELECTIONS
   With Commercial, McCain Gets Much More Than His Money's Worth
   Obama's ad campaign extends to more states

TELECOM
   Congress may revamp phone fees that subsidize rural service
   Phones Without Homes
   Sprint Early Termination Fees are Unlawful
   Merger and acquisition talk surrounds Embarq

INTERNET/BROADBAND
   OPEC 2.0
   Comcast Illegally Interfered With Web File-Sharing Traffic, FCC Says
   Google Seeks Network Neutrality Clarity From FCC
   FCC.politics.gov
   HP, Intel, Yahoo study ways to make Web a utility
   OECD Broadband Ranking System Needs Restructuring, Says Think Tank
   Public interest groups roast FCC smutless broadband plan
   What DPI can do to you
   The consumer-friendly version of DPI

BROADCASTING/CABLE
   Dingell to NTIA: As Many Coupons as Necessary
   Nielsen: More Households Ready for DTV
   Schools prepare for switch to digital TV
   How CBS Lost the Super Bowl Case
   Appeals Court Stops Leased Access Case
   More People Watching Primetime "TV" Online
   Cablevision completes acquisition of Newsday
   Sirius completes acquisition of XM Satellite Radio

POLICYMAKERS
   7-Count Corruption Indictment for Sen Ted Stevens


GOVERNMENT & COMMUNICATIONS

INTERNET SITES STILL BLOCKED FOR OLYMPIC REPORTERS
[SOURCE: Associated Press, AUTHOR: ]
Olympic organizers are backtracking on another promise about coverage of the Beijing Games, keeping in place blocks on Internet sites in the Main Press Center and venues where reporters will work. The blocked sites will make it difficult for journalists to retrieve information, particularly on political and human rights stories the government dislikes. The censored Internet is the latest broken promise on press freedoms. In bidding for the games seven years ago, Chinese officials said the media would have "complete freedom to report." And in April, Hein Verbruggen and Kevan Gosper — senior IOC members overseeing the games — said they'd received assurances from Chinese officials that Internet censorship would be lifted for journalists during the games. Sen. Sam Brownback (R-Kansas) charged Tuesday THAT China has installed Internet-spying equipment in all the major hotel chains serving the 2008 Summer Olympics.
http://benton.org/node/15661


WHEN OFFICIAL TRUTH COLLIDES WITH CHEAP DIGITAL TECHNOLOGY
[SOURCE: New York Times, AUTHOR: Jim Dwyer]
A look at YouTube's impact on relation between police and the public. A recent incident recorded in New York City may turn out to be yet another head-on collision between false stories told by some police officers in criminal court cases and documentary evidence that directly contradicts them.
http://benton.org/node/15658


MEDIA & ELECTIONS

WITH COMMERCIAL, MCCAIN GETS MUCH MORE THAN HIS MONEY'S WORTH
[SOURCE: New York Times, AUTHOR: Jim Rutenberg]
Sen John McCain's new advertisement attacking Sen Barack Obama for canceling a visit with wounded troops in Germany last week ran as a paid commercial about a dozen times. But it has been shown fully or partly on local, national and cable newscasts hundreds of times. For Sen McCain (R-AZ) this is a public relations coup that allowed him to show his toughest campaign advertisement of the year -- one widely panned as misleading -- to millions of people, largely free, through television news media hungry for political news with arresting visual imagery. Political campaigns have for years sought to broadcast their ads free by making them intriguing enough to draw wide coverage from news outlets. And Sen McCain's campaign has proved particularly adept at getting such free air time in recent weeks, as news stations endlessly repeat the advertisements, which feature provocative visuals that can fill time during a relative lull in the campaign season.
http://benton.org/node/15660
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OBAMA'S AD CAMPAIGN EXTENDS TO MORE STATES
[SOURCE: USAToday, AUTHOR: Martha Moore]
More Americans will see presidential campaign ads before Election Day because of Democrat Barack Obama's deep pockets and his quest to expand the number of competitive states in his race against Republican John McCain. Obama and McCain advertise in about a dozen battleground states such as Ohio and Pennsylvania. Obama's stronger fundraising means he can afford also to run ads in states such as Alaska and Montana that rarely see general-election TV spots — as well as air his commercials nationally during NBC's broadcast of the Olympic Games next month. Obama has spent about $27 million on general-election ads and McCain has spent $25 million, according to Evan Tracey of Campaign Media Analysis Group, which tracks political ads. Political campaigns almost always buy ad time in local markets, city by city, to target their ads more precisely. As a result, many Americans never see a presidential ad — while some see thousands.
http://benton.org/node/15659
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TELECOM

CONGRESS MAY REVAMP PHONE FEES THAT SUBSIDIZE RURAL SERVICE
[SOURCE: Dallas Morning News, AUTHOR: Dave Michaels]
Congress is building toward major reform of a program that subsidizes rural phone service with billions of dollars in fees charged to all land-line and wireless customers. Reform of the Universal Service Fund ­ which also subsidizes phone and Internet service for schools, libraries and rural health care providers ­ is one of the biggest issues facing telecommunications companies. Although there is widespread agreement that some reform is necessary, big changes would be likely to trigger a lobbying battle involving rural legislators ­ who largely favor the current system ­ and may hinge on the outcome of the presidential election. The issue has gotten an added push from Sen Barack Obama, the presumed Democratic nominee for president, who argues that universal service fees should support broadband in underserved areas because rural customers already have quality voice service.
http://benton.org/node/15647
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PHONES WITHOUT HOMES
[SOURCE: Slate, AUTHOR: Daniel Gross]
The rise of the Internet and the telecommunications revolution of the 1990s was a boon to the wired-phone industry. Since 2000, however, it's been a different story. Wireless has continued to boom, but the number of land lines has fallen somewhere between 4 and 6 percent in every year since 2000. The result: The number of incumbent local exchange carriers' access lines in 2006 was back down to 140 million, about the same level as in 1991 and off about one-quarter from the 2000 peak. If it comes down to one or the other, the mobile or the home-based land line, it's clear which is a necessity and which is an option. One lets you make telephone calls only from your house. The other lets you make telephone calls from anywhere, send e-mails, surf the Internet, play music, and take photographs. At this rate of decline, within a few years the push-button wired telephone with service provided by a Bell company could be as rare and obsolete as a rotary phone is today.
http://benton.org/node/15636
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SPRINT EARLY TERMINATION FEES ARE UNLAWFUL
[SOURCE: Dow Jones, AUTHOR: Roger Cheng]
Sprint Nextel was dealt a major blow in its early-termination-fee case when a California judge ruled it would have to pay $ 73 million. The decision could bode poorly for the various trials that are taking place throughout the country, as well as the Federal Communications Commission's attempts to make wireless carriers exempt from these state court cases. This ruling sounds the death knell for the industry's petition seeking a preemption ruling from the FCC - a ruling the industry has never been able to win in court," said Scott Bursor, an attorney representing the plaintiffs. Early termination fees are incurred when a customer breaks their wireless contract before it ends, and is an issue debated in state courts and with the FCC. Consumer advocacy groups argue that it unfairly restricts consumers from switching service. Carriers argue that the fees are a necessary because they subsidize a part of the cellphone and need to recoup those expenses. But most carriers have already changed their early termination fees to be more flexible.
http://benton.org/node/15635


MERGER AND ACQUISITION TALK SURROUNDS EMBARQ
[SOURCE: Kansas City Star, AUTHOR: Jason Gertzen]
Embarq, the former Sprint unit that sells local phone service and high-speed Internet connections in parts of 18 states, is cutting costs and focusing on rapidly growing niches while confronting continued deterioration in its home phone business. Wall Street analysts such as Jonathan Levine at Jefferies & Co. think the Kansas company isn't getting all the credit it deserves for executing a strategy that's likely to continue boosting adjusted earnings in the near term. That being said, Levine wrote in a new investor report Friday that he would be on the watch soon for possible merger and acquisition deals involving companies such as Embarq and Windstream, a local phone company out of Little Rock (AR) that spun off Alltel.
http://benton.org/node/15644


INTERNET/BROADBAND

OPEC 2.0
[SOURCE: New York Times, AUTHOR: Tim Wu]
[Commentary] Americans are as addicted to bandwidth as they are to oil. The first step is facing the problem. Americans today spend almost as much on bandwidth — the capacity to move information — as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on gas and heating oil. Just as the industrial revolution depended on oil and other energy sources, the information revolution is fueled by bandwidth. In an information economy, the supply and price of bandwidth matters, in the way that oil prices matter: not just for gas stations, but for the whole economy. If we aren't careful, we're going to repeat the history of the oil industry by creating a bandwidth cartel. That's why, as with energy, we need to develop alternative sources of bandwidth. The solution is to relax the overregulation of the airwaves and allow use of the wasted spaces.
http://benton.org/node/15657
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COMCAST ILLEGALLY INTERFERED WITH WEB FILE-SHARING TRAFFIC, FCC SAYS
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
A majority of the Federal Communications Commission has concluded that cable operator Comcast unlawfully disrupted the transfer of certain digital video files, affirming the government's right to regulate how Internet companies manage Web traffic. Three commissioners on the five-member FCC have signed off on an order that finds Comcast violated federal rules by purposely slowing the transmission of video files shared among users of the application BitTorrent. As of Friday, FCC Chairman Kevin J. Martin and Commissioners Michael J. Copps and Jonathan S. Adelstein had affirmed the complaint. Commissioner Robert M. McDowell is preparing to vote against the complaint and Commissioner Deborah Taylor Tate has not indicated how she will rule. The full board is scheduled to formally vote on the matter Friday. The ruling could set a precedent, analysts said, in that it would send a message to other carriers that they must fully disclose how they manage the flow of traffic over their networks and not single out any specific applications for more scrutiny.
http://benton.org/node/15656


GOOGLE SEEKS NETWORK NEUTRALITY CLARITY FROM FCC
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Google is asking the Federal Communications Commission for clear guidance on acceptable ways of managing Internet traffic.Such guidance would "help ensure that broadband networks remain open platforms to the Internet," Google said in a letter to the FCC. Google is asking for "useful clarity on the types of protocol-agnostic network management practices that are acceptable under the [FCC's] Internet policy statement."
http://benton.org/node/15655
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FCC.POLITICS.GOV
[SOURCE: Wall Street Journal, AUTHOR: Editorial staff]
[Commentary] FCC Chairman Kevin Martin wants to make an example of Comcast in order to advance a "network neutrality" industrial policy. Those who would use Comcast's actions to argue for more Internet regulation have misidentified the Big Brother problem. It's not the private sector they should be worried about. There's no evidence that Comcast was trying to suppress a political view or favor one of its own services. By all appearances, the company's policies were motivated by nothing more than making sure a tiny percentage of bandwidth hogs didn't slow down Internet traffic for everyone else on the network. Giving the government more say in network management, by contrast, introduces all kinds of potential for political mischief. Regulators would do better to focus on keeping the overall telecom marketplace competitive. If Comcast customers don't like the company's network management policies, they're free to take their business to Verizon, or AT&T, or some other Internet service provider. A World Wide Web run by Kevin Martin and his political friends will leave us with poorer quality and fewer options all around.
http://benton.org/node/15654
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HP, INTEL, YAHOO STUDY WAYS TO MAKE WEB A UTILITY
[SOURCE: Reuters, AUTHOR: Eric Auchard]
Hewlett-Packard, Intel and Yahoo are teaming up on a research project to help turn Web services into reliable, everyday utilities. The companies are joining forces with academic researchers in Asia, Europe and the United States to create an experimental network that lets researchers test "cloud-computing" projects -- Web-wide services that can reach billions of users at once. Their goal is to promote open collaboration among industry, academic and government researchers by removing financial and logistical barriers to working on hugely computer-intensive, Internet-wide projects. Founding members of the consortium said they aim to create a level playing field for individual researchers and organizations of all sizes to conduct research on software, network management and the hardware needed to deliver Web-wide services as billions of computer and phone users come online.
http://benton.org/node/15653
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OECD BROADBAND RANKING SYSTEM NEEDS RESTRUCTURING, SAYS THINK TANK
[SOURCE: BroadbandCensus.com, AUTHOR: William Korver]
Basing telecommunications policy around the faulty ranking system of the Organization for Economic Cooperation and Development would lead to an "ill-defined national broadband strategy," officials from the Phoenix Center think tank said. Decrying the widespread assumption that America has fallen behind the rest of the world in broadband penetration, George Ford and Lawrence Spiwak criticized the OECD's ranking system at a luncheon in the Rayburn House Office Building. The current OECD system ranks measures broadband penetration on a per capita, and not a per household basis, which has led to countries with smaller household sizes moving up in the chart since 2001. People do not buy broadband connections, Ford said; rather, households and businesses buy broadband connections. Moreover, said Ford and Spiwak, countries that have risen in recent rankings ­ Denmark, Sweden, Switzerland, and the Netherlands ­ are small and do not have large rural areas where broadband deployment remains a challenge. Additionally, many countries that were near the top in broadband rankings in 2001 have since fallen, said Ford. "Miracle" Japan has dropped in the OECD ratings, for example. In spite of having 100 Megabit per second-capable broadband networks, Japan ranked behind the U.S. in the December 2007 OECD ratings.
http://benton.org/node/15643
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PUBLIC INTEREST GROUPS ROAST FCC SMUTLESS BROADBAND PLAN
[SOURCE: ars technica, AUTHOR: Matthew Lasar]
Nearly half a dozen advocacy groups from liberal to libertarian concur: they hate Federal Communications Commission Chairman Kevin Martin's proposal for a national broadband service with the porn filtered out. "Unconstitutional and unwise," their Friday filing calls the plan, which they charge amounts to a "government mandated 'blacklist' of websites." The filtering component would limit the system "so dramatically that the usefulness of the service would be radically reduced." Plus, if the agency actually approved the scheme, it would face a tsunami of lawsuits. So contend the Center for Democracy and Technology (CDT), People for the American Way, Adam Thierer of the Progress and Freedom Foundation, the Public Interest Spectrum Coalition, the American Booksellers Association, the Von Coalition, the Electronic Frontier Foundation, and fifteen other groups. It was inevitable that this shoe would drop on a scheme that is already taking heavy incoming fire from the wireless industry for its alleged technical shortcomings.
http://benton.org/node/15642
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WHAT DPI CAN DO TO YOU
[SOURCE: TelephonyOnline, AUTHOR: Carol Wilson]
(7/25) Despite the very public black eye given to deep packet inspection (DPI) technology following its use to block peer-to-peer traffic and to target ads to unsuspecting Web surfers based on their browsing habits, a growing number of technology companies are incorporating DPI or similar technology into their products. While this may seem like contrary behavior to those outside the telecom industry, the truth is that DPI is simply too valuable a technology to be set aside. Instead, telecom companies are pursuing ways to make it more palatable. "This is another situation where the technology is advancing faster than the understanding of how to apply it," said Mike Coward, chief technology officer of Continuous Computing, which provides components to DPI vendors. "All the things we can do with the technology would scare the average consumer. The dance at this point is to figure out exactly the right set of controls and constraints to put on the network that consumers will accept."
http://benton.org/node/15646
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THE CONSUMER-FRIENDLY VERSION OF DPI
[SOURCE: TelephonyOnline, AUTHOR: Carol Wilson]
Deep packet inspection has come under fire from consumer groups, Net Neutrality proponents and even members of the U.S. Congress. But one UK ISP is using DPI in a way intended to improve customer service ­ with its customers' permission. PlusNet is a BT-owned ISP with about 120,000 that began using Ellacoya's IP Service Control System ­ now part of Arbor Networks since its acquisition of Ellacoya ­ in 2006 to launch a Subscriber Service Portal that allows its customers to monitor their own usage, among other things. After first using DPI as a way to inspect and prioritize traffic to protect services such as VoIP and gaming from latency caused by network congestion, PlusNet took things to a new level. The company decided to offer four different classes of service for residential and business customers ­ or eight classes total ­ and to further allow customers to customize their particular service when they signed up.
http://benton.org/node/15645
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BROADCASTING/CABLE

DINGELL TO NTIA: AS MANY COUPONS AS NECESSARY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
House Commerce Committee Chairman John Dingell (D-MI) says the National Telecommunications and Information Administration's "recent decision to allow additional households to apply for 6 million expired and unredeemed coupons may not be enough to meet demand." He is concerned that the NTIA will not have enough administrative funds to reprocess all of the coupons that go unredeemed. The current redemption rate is under 50%, which means that either a lot of people applied who don't need them, or there will be a bunch of people who will have to pay for the boxes themselves. The NTIA recently said it will send out as many coupons as possible. "As many coupons as possible" will need to be "as many coupons as necessary," Chairman Dingell suggested. "I expect the NTIA to fully comply with the requirements set forth by Congress and to recycle as many coupons as are needed to meet consumers' needs. The committee will exercise vigorous oversight to ensure that the NTIA performs its task efficiently, effectively and, most of all, in a manner that does not leave consumers behind."
http://benton.org/node/15641
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NIELSEN: MORE HOUSEHOLDS READY FOR DTV
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
According to Nielsen, TV households are more prepared for the digital-TV transition than they were seven months ago. According to its latest survey of metered households, 9.3% have no digital, or digital-ready, TV set, compared with 10.5% in January. In January, 23% of households had at least one set that would not receive DTV signals after the transition to DTV. That figure for July is 20.9%.
http://benton.org/node/15651


SCHOOLS PREPARE FOR SWITCH TO DIGITAL TV
[SOURCE: eSchool News, AUTHOR: Laura Devaney]
As consumers and cable companies prepare for the February 17, 2009, switch from analog to digital television broadcasting, some educators are wondering how their schools' televisions will be affected. As long as older analog TV sets are connected to a cable service, they will continue to display local broadcast stations after the transition, according to a digital TV transition guide from Cable in the Classroom (CIC). If a school receives television service through a cable company or other multi-channel provider, its technology staff might not have to do anything to prepare for the transition, because most cable companies already have technology in place to handle the new digital formats of local TV stations. For the most part, as long as the TV sets in a school building are connected to cable TV service, they will display local stations. But schools might need to examine their internal networks and distribution systems to see if their broadcasting might be affected. A school or district technology coordinator should have information on that.
http://benton.org/node/15639


HOW CBS LOST THE SUPER BOWL CASE
[SOURCE: New York Sun, AUTHOR: Harold Furchtgott-Roth]
[Commentary] While the outcome of CBS v. FCC seems like a win for free speech, it is really the opposite. In last week's decision, the court never tells the FCC that it may not regulate broadcast programming content. Indeed, it said that FCC regulation of broadcast speech is permissible, only the process was flawed. Essentially, CBS won on a procedural technicality, not on the broader issue of whether the government may regulate speech. Investors and all Americans will cheer when the Supreme Court ultimately stops broadcast content regulation. Broadcasting will not turn into a cesspool of indecent material any more than book publishing or newspapers are today. Instead, unshackled from excessive regulation, broadcasters will be able to compete more effectively, to the benefit of all consumers.
http://benton.org/node/15650
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APPEALS COURT STOPS LEASED ACCESS CASE
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The US Court of Appeals for the 6th Circuit in Cincinnati has stopped the cable industry's legal attack on new leased access rules to accommodate the Federal Communications Commission in the agency's ongoing dispute with the Bush administration's Office of Management and Budget. Last Friday, the court agreed to hold the case "in abeyance." It also ordered the FCC to update the court every 60 days on the status of its problems with OMB. The cable industry is appealing FCC rules to regulate the rates that third-party commercial programmers pay to access cable systems. Large cable operators have to set aside 15 percent or channels for leased access programmers. The National Cable & Telecommunications Association claims on behalf of cable operators that the FCC had imposed a rate structure that produced an illegally low amount of revenue. A few weeks ago, OMB refused to approve the FCC implementing regulations, saying the information collection burdens placed on cable operators violated the Paperwork Reduction Act.
http://benton.org/node/15638


MORE PEOPLE WATCHING PRIMETIME "TV" ONLINE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton ]
According to a new study by Integrated Media Measurement, the appetite for primetime network TV online is growing, with 20% of respondents saying they watch some primetime TV programming online. Of those 20%, about one-half watch shows they missed or have already seen, while the other half are watching shows as they become available and "appear to be beginning to use the computer as a substitute for the television set."
http://benton.org/node/15640


CABLEVISION COMPLETES ACQUISITION OF NEWSDAY
[SOURCE: Newsday, AUTHOR: Mark Harrington]
On Tuesday, Cablevision completed its $650 million acquisition of Newsday in a deal that creates a new, big regional player in online and print news and advertising. Cablevision acquired 97 percent of Newsday Media Group through the formation of a new partnership with Tribune Co., first announced in May. Cablevision said the deal "adds a complementary print and online media group with diverse, quality local content in the New York area." Newsday Publisher Tim Knight will continue to oversee Newsday and will report to Cablevision chief operating officer Thomas Rutledge. Cablevision and Newsday will begin exploring ways to grow their advertising-based and subscription-based businesses. Cablevision is expected to begin using its cable systems across the New York area to run Newsday advertisements that highlight the strength of the paper's news, content and advertising. The deal puts Cablevision in control of the largest block of advertising and news resources in the region. Its digital cable empire reaches more than 3 million households in the tri-state area, and it owns News 12 Networks operating a 24-hour news programming through the region. Newsday's paid weekday circulation is just under 380,000 copies.
http://benton.org/node/15637
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SIRIUS COMPLETES ACQUISITION OF XM SATELLITE RADIO
[SOURCE: Reuters, AUTHOR: ]
Sirius Satellite Radio said on Tuesday it completed the purchase of rival XM Satellite Radio. The new company will be named Sirius XM Radio and will have more than 18.5 million subscribers, making it the second-largest radio business in the United States.
http://benton.org/node/15652


POLICYMAKERS

7-COUNT CORRUPTION INDICTMENT FOR SEN TED STEVENS
[SOURCE: Anchorage Daily News, AUTHOR: Lisa Demer, Richard Maur]
Sen Ted Stevens (R-Alaska), the Vice Chairman of the Senate Commerce Committee, was indicted Tuesday by a federal grand jury in Washington (DC) on seven counts of filing false financial disclosures. Embattled Sen Ted Stevens (R-Alaska), former chairman of the Senate Commerce Committee, relinquished that vice chairman's post for now in accordance with Senate Republican Conference rules. The Senate Commerce Committee has postponed hearings on its agenda this week. Sen Stevens became an Internet celebrity a couple of summers ago after an audio of his "The Internet is a series of tubes" speech to the Senate Commerce Committee wended its way round the Web. He made the comment during a debate on Net neutrality when he was still the chairman of the Senate Commerce committee. Stevens had been a critic of extensive Net neutrality mandates. At the time, he accused proponents of a Congressional bill of "imposing a heavy-handed regulation before there's a demonstrated need."
http://benton.org/node/15634
Stevens Relinquishes Vice Chairmanship of Commerce (Broadcasting&Cable)
http://benton.org/node/15649
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Internet sites still blocked for Olympic reporters

Olympic organizers are backtracking on another promise about coverage of the Beijing Games, keeping in place blocks on Internet sites in the Main Press Center and venues where reporters will work. The blocked sites will make it difficult for journalists to retrieve information, particularly on political and human rights stories the government dislikes. On Tuesday, sites such as Amnesty International or any search for a site with Tibet in the address could not be opened at the Main Press Center, which will house about 5,000 print journalists when the games open Aug. 8. "This type of censorship would have been unthinkable in Athens, but China seems to have more formalities," said Mihai Mironica, a journalist with ProTV in Romania. "If journalists cannot fully access the Internet here, it will definitely be a problem." The censored Internet is the latest broken promise on press freedoms. In bidding for the games seven years ago, Chinese officials said the media would have "complete freedom to report." And in April, Hein Verbruggen and Kevan Gosper — senior IOC members overseeing the games — said they'd received assurances from Chinese officials that Internet censorship would be lifted for journalists during the games. Sen. Sam Brownback (R-Kansas) charged Tuesday THAT China has installed Internet-spying equipment in all the major hotel chains serving the 2008 Summer Olympics.

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