September 2008

More than 20 million homes have cut the cord on landline phones

More than 20 million U.S. households -- 17% of all homes with phones -- use only a cellphone, according to Nielsen. That figure has quadrupled since late 2003, when only 4.2% of households were wireless only. "As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue," Alison LeBreton, vice president of client services for Nielsen Mobile, said in a news release. "In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection." Young people are more likely to use only a wireless phone. And the majority of people who have dropped their landline service are in lower income brackets, according to the Nielsen report. Cutting costs appears to be a big reason for cutting the cord. A landline phone costs an average of $40 a month. But going wireless-only doesn't mean you can pocket all those savings. "Wireless substitutors" use their cellphones more, paying an average of $6.69 a month more than people who also have a land line, Nielsen said. Those increased wireless charges are one of the reasons people give for returning to landline service. About 10% of households with a landline phone in the second quarter of this year relied only on a cellphone before.

Fox and CBS say TV advertising holding up

Advertisers are moving forward with deals they signed last spring for billions of dollars in television commercial time, and remain willing to pay top dollar for additional spots, two top media executives said on Wednesday. They were speaking at a closely watched media conference, which comes amid fears that a sharp downturn in local advertising due to cutbacks by auto and financial sectors could quickly spread to the national TV market. Those fears have only been heightened by this week's financial upheaval. CBS president and CEO Leslie Moonves said political spending was heating up at the CBS-owned stations and stressed that it's historically a fourth-quarter event, not a third-quarter one. He predicted a $150 million political windfall at the stations -- particularly those in Pennsylvania, Florida and California, which is not a swing state but has a number of hot-button issues on the ballot. InterActiveCorp. chairman and CEO Barry Diller believes the social networking craze has gone too far, but the Web is only in the early stages of fulfilling its true potential as an advertising medium. Despite a recent deceleration in online display advertising growth momentum, he told an investor conference here Wednesday morning that he expects ad models based on traditional TV to play an increasing role online.

Google rebuts study predicting higher ad costs

Google's chief economist, Hal Varian, said Tuesday that "flawed assumptions" and "questionable methodology" undermine a SearchIgnite study that predicted a 22 percent ad price increase from Yahoo's search-ad deal with Google. Varian took issue with several elements of the study, but led off with this one: "ad prices are not set by Yahoo or Google, but by advertisers themselves," through the search-ad keyword bidding process. Varian also said the study assumed Yahoo will show Google ads for as many searches as possible, which indeed Yahoo has said isn't its intent.

ESPN's ISP discrimination shakes Network Neutrality hornet's nest

[Commentary] ESPN360.com bills itself as the premier destination for streaming access to live sports events. If the sport or team you love isn't important enough to be shown on cable TV, no fear, ESPN will stream it to you online for free. Well, that is if you a subscriber to the right Internet service provider. Customers of AT&T DSL and Verizon's Fios services, along with approximately 20 more ISPs, can have free, 24-hour per day access to ESPN's exclusive sports content. Customers of Comcast, Cox, and hundreds of other ISPs, both big and small, are left out in the cold--forbidden to access content that ESPN has, via exclusive contracts, guaranteed that you cannot obtain via any other means in the US. After telling out-of-luck users that their ISPs haven't coughed up funds for their customers to access ESPN360, the sports network informs them that AT&T customers do have access, and helpfully provides them with a toll-free number that they can call to make the switch to that ISP.

McDowell Pans FCC Proposal for More Detailed Info

Federal Communications Commission member Robert McDowell took the opportunity of a National Religious Broadcasters media summit to try to drive a stake into the FCC's proposal to require broadcasters to provide more detailed information to the commission, including outlining in greater detail what types of programming they air. He said he just visited a small religious station in Alaska (on a digital-TV-education trip) that was operated mostly by volunteers.

NCTA Warns Copyright Office on Distant Signals

The National Cable & Telecommunications Association put the Copyright Office on notice that it could have "a deleterious effect on the continuity of broadcast-signal carriage post-transition" if the office changes the way it determines what qualifies as a distant TV-station signal. Translation: If an in-market station a cable operator has carried free-of-charge is reclassified after the digital-TV transition as a distant signal for which cable operators have to pay for the privilege of carrying, those operators will be less inclined to carry them.

Why Cable Will Survive the Meltdown

Cable looks like a decent place to park your money in the event of a catastrophic market meltdown. The logic is this: People like TV. They don't want to give it up even if the economy is going to hell in a handbasket. Actually, they may be less willing to sacrifice it in a recession, according to some Wall Street analysts. And even if cable operators won't grow gangbusters, they may not bleed subscribers -- unlike other businesses. "Generally speaking, incumbent cable providers are better protected [from the economy] than other businesses for a couple reasons. The only competitive pressures they have are coming from Verizon and AT&T, and they don't have the scale to pose a serious threat yet," says Chris King, an analyst with Stifel Nicolaus. "And as Americans, we would rather cut off our arms than cut off our TV service." In a major market downturn, there aren't many sectors that will escape unscathed. And there's some expectation that if people are forced to trim spending, they will give up premium cable TV services such as HBO. But generally speaking, cable providers have proven more resilient to the market downturn than telecom competitors. (Both AT&T and Verizon posted dismal broadband growth last quarter, before this little financial crisis really took hold of the market.)

Senate Passes E-Government Act Reauthorization

For five years, the E-Government Act has promoted improvements in the federal government's use of information technology, including increased transparency for government information. The Senate is expected to pass the E-Government Reauthorization Act of 2007 by unanimous consent later tonight. CDT believes that the reauthorization includes two key improvements to the E-Government Act in a call for the development of best practices for Privacy Impact Assessments, and to make online government information more accessible to search.

States with Superior use of Technology

The 10 most tech-savvy states in the nation have been announced by e.Republic's Center for Digital Government, a national research and advisory institute focused on information technology (IT) policies, and best practices in state and local government. States with the most advanced use of technology were ranked as a result of the Center's 2008 Digital States Survey, a comprehensive biannual review of digital solutions and best practices among state governments. State chief information officers and senior executives from across the nation participated in the survey which benchmarks progression in digital government. It covered a wide range of areas from infrastructure to online applications and new Web 2.0 technologies provided to citizens. This year's survey also included a first-in-nation measure of sustainability efforts, especially in the area of green IT. Top Ten States: 1st Place Utah; 2nd Place Michigan; 3rd Place Virginia; 4th Place Arizona; 5th Place California; 6th Place Washington; 7th Place Kentucky; 8th Place South Dakota; 9th Place Maryland; 10th Place Tennessee (tie); 10th Place Pennsylvania (tie).

GAO Report on Electronic Waste

Increasingly, US consumers are recycling their old electronics to prevent the environmental harm that can come from disposal. Concerns have grown, however, that some US companies are exporting these items to developing countries, where unsafe recycling practices can cause health and environmental problems. Items with cathode-ray tubes (CRT) are particularly harmful because they can contain 4 pounds of lead, a known toxin. To prevent this practice, since January 2007 EPA began regulating the export of CRTs under its CRT rule, which requires companies to notify EPA before exporting CRTs. In this context, GAO examined 1) the fate of exported used electronics, 2) the effectiveness of regulatory controls over the export of these devices, and 3) options to strengthen federal regulation of exported used electronics. Among other things, GAO reviewed waste management surveys in developing countries, monitored e-commerce Web sites, and posed as foreign buyers of broken CRTs. GAO recommends that EPA (1) develop a systematic plan to enforce the CRT rule and (2) develop options to broaden its regulatory authority to address the export of other potentially harmful used electronics. (GAO-08-1044)

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