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October 2008

Understanding the Personal and Social Benefits of the IT Revolution

In the new global economy information technology (IT) is the major driver of both economic growth and improved quality of life. However, IT is also at the core of dramatic improvements in the quality of life for individuals around the world. In our new report, we show how IT is the key enabler of many, if not most, of today's key innovations and improvements in our lives and society -- from better education and health care, to a cleaner and more energy-efficient environment, to safer and more secure communities and nations.

Royalty rate doesn't change for Apple, music retailers

The Copyright Royalty Board on Thursday froze the rate that digital-music stores, such as iTunes and RealNetworks' Rhapsody, must pay music publishers. The three-member board that sets statutory copyright licenses e-mailed the Digital Media Association (DiMA), the National Music Publishers' Association, Apple, and other download stores with its decision to keep the royalty rate 9.1 cents. The board also set the same rate for CDs and mandated established a 24-cents rate for ringtones. The decision is the first time the Board has established mechanical royalty rates for digital downloads.

Senate Confirms CPB Nominees

On Thursday, the Senate confirmed President Bush's nominees for the Board of Directors of the Corporation for Public Broadcasting. They are: David Pryor, Bruce Ramer, Elizabeth Sembler, and Loretta Cheryl Sutliff.

What if Google's mission extended to public records?

[Commentary] What if Google's mission extended beyond indexing the World Wide Web, and organizing private and commercial information such as medical records and books? What if Google also decided to start organizing and indexing public records that are now largely stored in paper form? What would it mean for people, communities, government entities, and other companies and organizations that drive the Internet economy?

Headline Highlights -- Media and Telecom Policy Developments September 2008

Sure, we get it -- September is hurricane season. But did anyone predict the storms we've seen in the past month? Hurricane Hanna got every one's attention, especially federal regulators overseeing Wilmington, North Carolina's transition to (almost) all digital television broadcasting. No one saw the technical problems on the DTV radar, however. In was late August when Sen John McCain picked Alaska Governor Sarah Palin to be his Vice President. The selection led to what some called "Hurricane Palin," a storm that forever changed the dynamics of the 2008 election. These stories nearly drowned out some carry-over issues from August like the FCC's first major Network Neutrality decision. The biggest tempest, however, is a financial crisis is interrupting the 2008 campaign.

I. Wilmington Survives Hanna and DTV Transition -- Will the US?

In late August and early September the National Weather Service and others had a close eye on Hurricane Hanna, a powerful storm which moved up the East Coast of the U.S. The storm was, perhaps, watched most closely for its effects on Wilmington, North Carolina, where five commercial television broadcast stations were scheduled on September 8 to become the nation's first to permanently switch to all-digital signals, serving as a test of the transition that other stations across the country will make in February. Thankfully, Wilmington survived both storms.

The results of the Wilmington experiment have created a new disturbance in Washington. Observers found that the message about the early transition in Wilmington made it to residents there and many made the effort to adjust how they receive their TV signals. But despite the many efforts of the FCC, the commercial broadcasters, and local officials (including firemen), there were technical issue -- not for TV stations, but for consumers. People calling broadcasters and the FCC after the transition needed help programming the digital-to-analog converter boxes used to allow old television sets to continue to work. Researchers also found that viewers did not have antennas or, if they did, they weren't powerful enough, placed high enough or pointed in the correct direction. Additionally, some people who were used to receiving signals from some stations suddenly found themselves outside the stations viewing area. The FCC is now estimating that the smaller digital footprint of TV broadcasters may affect as many as 15 percent of television markets in the US. The FCC is still calculating what impact that may have nationwide. It's not certain what -- if anything -- the FCC or broadcasters can do for affected viewers, short of recommending that they buy a bigger antenna.

Even though calls generated by the Wilmington transition only amounted to approximately half of 1% of the area's residents, that could mean trouble in February 2009 when the rest of the nation goes through the transition. Then the transition could generate over half a million calls by people with problems receiving broadcast signals. And, if a large proportion of those callers need antenna installations or adjustments, it could be a cold, potentially dangerous fix in areas with below-freezing temperatures.

Further complicating transition plans are a revelation by the National Telecommunications and Information Administration that the agency would run out of funds for its digital-to-analog converter box coupon program in January 2009, a time when consumers may be most aware of the transition and most interested in taking action to preserve their TV signals. (DTV Coupon Funds Running Out; Congress Wants to Know Why ). The late request for additional funding, made with just days left before Congress was to adjourn, infuriated lawmakers. As lawmakers stretch in Washington moved into October, Congress was working on giving the NTIA additional funding to ensure the coupon program remained intact -- and more money for the FCC to raise awareness of the transition.

On September 12, FCC Commissioner Michael Copps (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-285373A1.doc), the driving force behind the Wilmington test, wrote FCC Chairman Kevin Martin with recommendations on how to address the Wilmington lessons. He suggested the following steps:

  1. Conduct additional field testing
  2. Dedicate a special FCC Team to the needs of at-risk communities
  3. Ramp up the FCC Call Center
  4. Prepare comprehensive DTV contingency plans
  5. Create an online DTV Consumer Forum
  6. Educate consumers on DTV trouble-shooting, including antenna issues and the need to "re-scan" converter boxes and sets
  7. Ensure that broadcasters meet their construction deadlines
  8. Encourage the rapid deployment of small, battery-powered DTV sets
  9. Find a way to broadcast an analog message to consumers following the transition

Later in September, House Democrats told Chairman Martin and the FCC to:

  1. Establish a public/private/nonprofit-sector information campaign that focuses on the need for new antennas or adjustments to existing antennas to receive digital-TV broadcast signals;
  2. Encourage Americans to act now to buy and install a DTV converter box, test the reception and then take action to resolve any problems as soon as possible;
  3. Update information on the FCC's Web site and other related government DTV Web sites to include in an obvious, accessible location a clear explanation of antenna matters; and
  4. Expand the FCC's call center, especially in the weeks immediately preceding the transition, to address questions concerning antenna matters.

By the end of the month, the NTIA adopted a new pitch to television viewers, encouraging them to "apply, buy, try" new converter boxes to ensure they are ready for the February transition.

II. McCain, Palin and the Rift with His "Base"

Sen. John McCain's pick of relatively unheard of Gov. Sarah Palin as his running mate caught many by surprise. The move set off what Slate's Jack Shafer called, "Hurricane Palin," a media frenzy to fill the vacuum of what was unknown about the candidate as the GOP convention opened. Feeling the McCain campaign did little to feel the void, the press hotly pursued on Gov. Palin's earmark flip-flops, her political inexperience, her Alaska Independence Party connection, her views on teaching "creationism," her book-banning phase, plus the "troopergate" scandal, her husband's ancient DUI, and her pregnant teenage daughter. The McCain campaign was soon on the defensive, accusing media outlets, liberal bloggers and the Obama campaign of sexism.

In St. Paul, McCain's campaign made its anti-news-media message central to the convention program. Some journalists were shocked -- was Sen. McCain really dissing his base to appease his party's base? Then Jim Rutenberg wrote in the New York Times about how in 2004, when Republicans gathered at Madison Square Garden to celebrate President Bush's second nomination, Sen. John McCain gathered at a restaurant with some of the biggest stars in journalism to celebrate his birthday. Among those mingling over cocktails and fine French food with McCain and his wife, Cindy, were Tom Brokaw, Peter Jennings, Bob Schieffer, Maureen Dowd, Tim Russert — "our people," as an old campaign hand reminisced on during this year's convention. Those there that night in 2004, Rutenberg wrote, were now in St. Paul feeling as if they are living in some sort of alternate reality. The convention included some of the most intense attacks against journalists by a campaign in memory. For conservative talk radio, it was a different story. From the titans of talk -- Rush Limbaugh, Sean Hannity, Laura Ingraham -- to conservative hosts who loom large in their local markets, the cheering for Palin was nearly unanimous.

In the days after the GOP convention, the McCain campaign let journalists know that media access to Sarah Palin would be tightly controlled, restricted to those with "some level of respect and deference." The move was playing a dual -- or, perhaps more accurately, duelling -- purpose: 1) for the first time in the three months since the general election campaign began, Sen. John McCain generated more coverage than Sen. Barack Obama (although Gov Palin got even more coverage than Sen. McCain) and 2) the campaign had cast the media as the enemy (-- with the media hitting back. See, too Don't be swept away by hype in the Palin campaign] -- ironically, as Adam Reilly pointed out, the same media that had made McCain a political superstar in the first place.

[Note: The McCain campaign reserved special disdain for the New York Times (McCain camp attacks New York Times McCain-Palin Love-Hate Media McCain Camp Aims Again at The Times When all truth is relative)

Gov. Palin did appear before cheering crowds, using the "greatest hits" of her convention speech, but fact-checkers soon derided parts of her rhetoric -- and McCain ads -- that weren't true. So the anti-media campaign spread to include even fact-checkers even as one journalist declared that fact-checking should become the #1 priority for anyone covering the campaign. (How Fact-Checking Took Center Stage in 2008 Campaign). McCain himself derided "Gotcha journalism" as the press quoted Gov. Palin.

With all the McCain complaints, the media may have already been easier on him than on Sen. Obama. In a review of the media's coverage of two stories negatively affecting or reflecting on Sen. Barack Obama and two stories negatively affecting or reflecting on Sen. John McCain -- specifically Obama's ties to Bill Ayers and Antoin Rezko, and McCain's dealings with donors whom he reportedly benefited and his association with G. Gordon Liddy -- Media Matters found that the five major newspapers and the three evening network news broadcasts have frequently mentioned Obama's ties to Ayers and Rezko, but have rarely mentioned McCain's dealings with donors and have ignored his association with Liddy.

All this led the San Francisco Chronicle's Joe Garofoli to conclude, "The McCain campaign is attempting to do something unheard of in the modern political era. It is not just running against the mainstream media, it is running around it."

III. FCC's Comcast/Net Neutrality Decision Plays Out

October 1 marked the beginning of Comcast's new broadband traffic management plan, a result of the FCC's August ruling finding that the cable TV giant had impropoerly blocked Internet traffic. Comcast appealed the ruling in early September, triggering a legal battle that could determine the extent of the government's authority to regulate the Internet. Comcast is arguing the FCC's findings in the matter did not justify its decision. But the company wasn't the only litigant: the Media Access Project, representing Consumers Union PennPIRG and Vuze Inc, filed appeals in New York, Philadelphia and San Francisco asking the courts to eliminate the FCC's Dec 31 deadline and make Comcast comply with the agency's order immediately. The combined cases will be heard by the US Court of Appeals DC Circuit.

Comcast's new plan, rather than targeting specific types of bandwidth-intensive applications like peer-to-peer file sharing, will slow Internet speeds for its heaviest users at peak times when its network is congested. Comcast will do this by creating a second stream of traffic for recent heavy users that will have a lower priority when compared to its other customers. The so-called protocol-agnostic approach is intended to comply with the FCC's Network Neutrality principles, which restrict Internet service providers like cable and phone companies from degrading traffic from particular companies.

IV. Financial Meltdown

What this past Spring was referred to as the housing crisis became, in September, a crisis of the financial sector which the Bush Administration said need a $700 billion life preserver. By mid-month, the meltdown on Wall Street re-oriented the campaign and re-wrote the storyline. The crisis was not only the media's top story -- marking only the second time this year that an event other than the campaign emerged as the No. 1 topic of the week. It also raised the possibility that a major policy issue, the economy, might emerge as the decisive factor of the campaign.

Coverage of the issue spanned far from the political to raise concerns about jobs, the newspaper industry, telecommunications, and television.

Some looked at how the crisis was affecting coming decisions on support research and auctioning spectrum.

Some articles pointed to technology as a possible new economic driver . But there were also questions about whether journalism was up to the challenge of reporting on the crisis and the decisions about how to address it. Others looked at the parallels between financial deregulation and the Network Neutrality debate. And, if we might circle back to Washington and the presidential race, the LA Times reviewed John McCain's history of pro-deregulation, but reliance on government control during a crisis.

For updates on our coverage of the impact of the financial crisis on communications, technology and journalism, see www.benton.org/taxonomy/term/1427

September's Most-read Headlines

  1. Hurricane Hannah May Impact Wilmington Test
  2. Congress set to weigh in on tech, telecom issues
  3. FCC's First Network Neutrality Ruling taken to Court
  4. GOP Petition Drive Urges Oprah to Reconsider Palin Interview
  5. FCC Report on Wilmington DTV Transition
  6. New election low: distorting the fact-checking
  7. Wilmington North Carolina DTV Transition Set for 12 Noon Monday September 8
  8. Obama vs. McCain on media policy 2008
  9. Digital TV test shows the FCC will need more phones
  10. Broadband access comes under fire

Two Days of Events Celebrating
The Columbia Institute of Tele-Information's
Twenty-fifth Anniversary
October 30 & 31, 2008

Co-sponsored by the International Telecommunications Society
In collaboration with IDATE, France, as part of the Transatlantic Dialog

Gala Dinner

Thursday, October 30, 6 - 9pm
Rotunda, Low Memorial Library, Columbia University Campus

Speakers include:
--Vinton Cerf, "Pioneer of the Internet," and Vice President Google
--Ivan Seidenberg, CEO, Verizon
--Richard Wiley, "Pioneer of Digital TV," and Media Lawyer

The Columbia Institute for Tele-Information (CITI) is a research center at Columbia Business School that has published over 70 books, written more than thousand articles, and hosted over 200 conferences, bringing together illustrious speakers and accomplished alumni to explore the wonderfully dynamic fields of Telecom and Electronic Mass Media.

------------------------------------------------------------

The Next Generation of Communications:
The Dawning of the Ultra-Broadband Era

This conference will explore the next generation of broadband -- personal ultra-broadband (connections above 1Gbps, hundreds of times faster than most of today's broadband) -- and the vast changes in mass media, consumer electronics, and ICT that this technology will drive.

Friday, October 31
Roone Arledge Auditorium, Columbia University, Broadway and 115th St.,
New York

9:00 Introduction: Ultra-Broadband: The Next Era for the Communications
Sector
--Eli Noam, Director, CITI, Professor of Finance and Economics,
Columbia Business School

9:15 The Demand and Need for Ultra-Broadband
--Jonathan Adelstein, Commissioner, FCC
--Leo Hindery, Managing Partner, InterMedia Partners, Former CEO, TCI and of AT&T Broadband
--Robert Pepper, Senior Managing Director of Global Advanced
Technology Policy, CISCO
--Stephane Dufour, Senior VP Strategy, Swisscom
--Heather Hudson, Professor, Telecommunications Management and
Policy Program, University of San Francisco

10: 15 The Gigabit Infrastructure: Continuity, Volatility, Monopoly?
--Jon DeLuca, President, CEO, and Director, Fibernet Telecom Group Inc.
--Marc Fossier, CTO, France Telecom
--Maggie Wilderotter, Chairman and CEO, Citizens Communications
--David Belanger, Chief Scientist, AT&T Labs
Moderator: Robert C. Atkinson, Director of Policy Research, CITI

11:30 Can Wireless Infrastructure Keep Up In UBB: Gigabits vs. Megahertz

--Thomas Hazlett, Professor of Law and Economics, George Mason University
--Ambassador Mathew Kirk, Director of External Relationships, Vodafone
--Lorenzo Pupillo, Executive Director, Public & Economic Affairs, Telecom Italia
--Joe Mallahan, Vice President, Integrated Customer Experience, T-Mobile
Moderator: Raul Katz, Director of Business Strategy, CITI

12:30 Lunch
--Joseph Stiglitz, Nobel Laureate, Professor of Finance and Economics, Columbia Business School

2:00 Gigabits vs. Megabucks : How UBB Will Be Financed
--Mike Balhoff, Managing Partner, Balhoff & Williams, LLC
--Simon Flannery, Managing Director, Morgan Stanley
--John Hodulik, Managing Director, UBS
Moderator: Dan Reingold, Project Director for Telecom Finance, CITI

3:00 Gigabit Networks, Kilobit Government?: A Transatlantic Dialog
(with IDATE, France): Experiences from both sides of the Atlantic
--Ron Binz, Chairman, Colorado Public Utilities Commission
--Kathryn Brown, Senior VP, Public Policy Development and Corporate Responsibility, Verizon, Former Chief of Staff, FCC
--Gabrielle Gauthey, Board Member, ARCEP (French Regulatory Agency)
--Matthias Kurth, President, Bundesnetzagentur (German Regulatory Agency)
--Klaus-Peter Statz, President and CEO, Deutsche Telekom (USA)
Reza Jafari, Chairman, ITU Telecom Board, & Vice Chairman, Eaton Telecom
Moderator: Yves Gassot, CEO, IDATE

4:30 The Gigabit Society and Economy: Impacts and Resolutions
--Nadine Strossen, President, American Civil Liberties Union
--Russ Neuman, Professor, Media Technology Communication Studies, Institute for Social Research, University of Michigan
--Robert D. Atkinson, President, Information Technology and Innovation Foundation
--Charlie Firestone, Executive Director, Communications and Society Program, The Aspen Institute
--Erik Bohlin, Professor, Chalmers University of Technology, Chair, International Telecommunications Society
Moderator: Larry Pressler, U.S. Senator (ret.)

Reception

RSVP www.citi.columbia.edu/events/summit2008


Oct 2, 2008 (The economy and the election -- what else is there?)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY OCTOBER 2, 2008

Follow the impact of financial crisis on communications and technology at http://benton.org/taxonomy/term/1427

ECONOMY
   How the Media Sold Their Souls to Wall Street
   McCain opposes regulation -- until he supports it
   Financial Downturn Further Weakens Newspaper Publishers
   Will your IT job survive the financial meltdown?
   Can tech companies withstand hard times?
   Tech Sector Could Star In US Economic Salvation
   "Potential to Deconsolidate" Could save Media During Downturn
   Hollywood could get a cut of the bailout
   AT&T chairman says credit woes crimping operations

ELECTIONS & MEDIA
   Palin says media "censors" her
   Palin Can't Name a Newspaper She's Read Regularly
   Palin questioner rejects 'gotcha journalism' charge
   Obama ramps up search engine marketing efforts
   NBC, Obama Campaign Spar Over YouTube Video

NEWS FROM CONGRESS
   Congress Approves Internet Safety Legislation
   Congress protects Internet radio
   Rep Dingell Seeks Input From Phone Cos On Regulatory Issues
   Senate Analog Nightlight Bill Introduced

NEWS FROM THE FCC
   Martin Gives Old College Try for Localism
   FCC's Quiet Period Review Awaits Martin Vote
   Peha Named FCC's Chief Technologist

GOVERNMENT & COMMUNICATIONS
   Surveillance of Skype Messages Found in China

QUICKLY -- Federal copyright board to set digital music royalties; Consumers Deem TV Most 'Credible' Medium, Online Ranks Third; Studios reach digital cinema upgrade deal; DVR Ownership Increases, But Recordings Not Priority Viewing; CDT Lays Out Rule of Law Agenda for Next President and Congress

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ECONOMY

HOW THE MEDIA SOLD THEIR SOULS TO WALL STREET
[SOURCE: The Huffington Post, AUTHOR: Josh Silver]
[Commentary] A comprehensive report studying 42 banking crises over the past 37 years finds that bailouts often do not work. They often result in more bad practices, and they distort economies by transferring wealth from taxpayers to bankers and their customers. But why aren't these conclusions being shared by the mainstream media? Instead, turn on your television - the place where more than 60% of Americans get their primary news - turn on your radio, or open your local newspaper, and you're not going to see what these top economists are saying. It's a McCain quote, an Obama sound byte, and the same pundits who have proven their incompetence over and over. The result is an American public that is fundamentally uninformed about the issues that matter most - like economics, health care, and war - and over-informed about those that matter least: sports, celebrity, the latest campaign ad, and horserace analysis of elections. We have no reason to believe that the press -- and along with it, most politicians -- will ask the tough questions, expand the range of debate, and bring the facts to the American people. But until they do, our economy - and our democracy -- will continue its race to the bottom.
http://benton.org/node/17512
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MCCAIN OPPOSES REGULATION -- UNTIL HE SUPPORTS IT
[SOURCE: Los Angeles Times, AUTHOR: Noam Levey]
As financial collapse threatened Wall Street and consumed Washington, John McCain appeared to undergo a dramatic transformation. The candidate who would shrink government became the candidate who would bulk it up. The turnabout is a move McCain has perfected in 26 years on Capitol Hill. The Arizona senator embraces his party's popular critique of government, frequently invoking the deregulatory rhetoric that has helped Republicans win five of the last seven presidential elections. But when a crisis or scandal makes headlines and sparks a public outcry, McCain is among the quickest in his party to call for robust government intervention. Over the last decade, he also championed greater government authority over airlines, automobiles, tobacco, television programming, even baseball, which he targeted after reports of steroid use in the sport. Sen McCain wanted to regulate when broadcasters could air violent programming. In one unusual bid to expand government authority, McCain introduced legislation in 2003 to control how broadcasters cover elections. Under McCain's proposal, broadcasters would have been required to air two hours a week of candidate- or issue-centered programming and to offer political candidates the lowest advertising rates.
http://benton.org/node/17511
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FINANCIAL DOWNTURN FURTHER WEAKENS NEWSPAPER PUBLISHERS
[SOURCE: Wall Street Journal, AUTHOR: Shira Ovide]
The credit crunch has further weakened newspaper publishers, which already are reeling from a prolonged drop in advertising revenue. Several major chains, including Tribune Co., MediaNews Group Inc. and McClatchy Co., have significant debt loads. As debt conditions sour, interest rates will go up for many papers, and lenders will impose onerous conditions. Some publishers risk default or even a trip into bankruptcy court. The good news is that banks -- many facing their own troubles -- are expected to cut newspaper companies some slack on debt terms. The alternative may be taking over newspapers, something many banks won't stomach. For one thing, newspapers are a tough sell in current conditions.
http://benton.org/node/17510
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WILL YOUR IT JOB SURVIVE THE FINANCIAL MELTDOWN?
[SOURCE: InfoWorld, AUTHOR: Tom Kaneshige]
Fearful tech workers tiptoeing along the shaky alleys of Wall Street -- and fretting about losing their jobs -- should take a deep breath. Of the more than 100,000 job losses expected as a direct result of the financial crisis, only a tiny slice will likely be from the tech ranks, figures Sean O'Dowd, an analyst at market researcher Financial Insights. As with any market consolidation, finance companies "will look for redundancies and overlap," O'Dowd says. For IT, that means management, not programmers, admins, and other line staff. "I think [layoffs] will come out of the IT management layer such as CIOs, so you're looking at hundreds [of layoffs], not necessarily thousands. Companies will continue to need a lot of the rank-and-file IT folks."
http://benton.org/node/17509
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CAN TECH COMPANIES WITHSTAND HARD TIMES?
[SOURCE: USAToday, AUTHOR:Byron Acohido]
How will Silicon Valley make out if the economy slides into recession? Tech suppliers expect to be hit hard. But big winners could quickly start to emerge from the chaos, say tech industry analysts. With credit scarce and job cuts mounting, consumers and businesses have begun adopting a cautious approach to tech spending. No one will escape the unfolding economic slowdown, Microsoft CEO Steve Ballmer told reporters in Oslo, Norway, this week. "I think one has to anticipate that no company is immune to these issues, " Ballmer said. Yet some tech companies are better equipped than others. Google, for instance, which dominates search advertising, should hold steady so long as Web users continue to shop, socialize and do research online. But Yahoo, the leader in brand advertising, could be vulnerable as advertisers trim budgets for image ads. IBM, Hewlett-Packard and Oracle can hunker down with cash pouring in from a diverse array of corporate and government contracts; they also stand to earn billions helping the credit industry reconstitute itself.
http://benton.org/node/17508
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TECH SECTOR COULD STAR IN US ECONOMIC SALVATION
[SOURCE: InformationWeek, AUTHOR: Thomas Claburn]
As USC professor Jon Taplin sees it, the government needs more than legislation. It needs a national policy designed to allow information technology companies and energy technology companies to power our economic recovery to address the US financial crisis. "Just recapitalizing the banks is not going to revive the economy," said Taplin. "The economy is going to have to be spurred to be a much more production-oriented economy, rather than a consumer-oriented economy. Seventy two percent of our economy is based on people going to the mall. That's not a competitive situation when you have a Chinese economy in which 65% of the economy is based on producing real stuff." As Taplin sees it, the government has to help direct private sector innovation through investment. "The government is going to have to spur extraordinary levels of spending, as they did in the '30s, and the smartest, most efficient ways to do that would be to make sure we have universal broadband, spending on energy technologies, and alternative technologies," he said. "The way out of the crisis will be, I think, a very large investment program built by the government, based on leadership in IT and ET." Taplin expects that the recovery will be traumatic and painful. "There are going to be a lot of empty shopping malls," he said. "But coming out of that on the other side, becoming once again the world leader in technology could be an exciting thing. We did it once before in the '60s and '70s when the IT revolution started, and it was the government, through DARPA, that provided the money to get it going. The Internet wouldn't exist if it wasn't for government spending."
http://benton.org/node/17494
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MEDIA SECTOR HAS HEALTHY LIQUIDITY, FITCH SAYS
[SOURCE: Bloomberg, AUTHOR: Andy Fixmer]
US media and entertainment companies have ``generally healthy'' liquidity and will be supported by predictable revenue and high profit margins in the current credit crunch, Fitch Ratings said in a report. Diversified companies including Walt Disney Co., News Corp., Time Warner Inc. and Viacom Inc. are best positioned to weather market conditions, Fitch analysts Jamie Rizzo and Mike Simonton said. The companies have "no significant exposure" to Lehman Brothers, which filed for bankruptcy, and the mergers of Citigroup with Wachovia and Bank of America with Merrill Lynch & Co. are unlikely to affect their credit lines, Fitch said. The industry's cash on hand and free cash flow exceed debt coming due over the next three years. "These factors make media companies attractive borrowers for banks and bondholders, even under more selective market conditions,'' the analysts wrote. "The potential to deconsolidate media portfolios to pay down debt could further support creditors in a downturn,'' Fitch said.
http://benton.org/node/17493
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HOLLYWOOD COULD GET A CUT OF THE BAILOUT
[SOURCE: Los Angeles Times, AUTHOR: Richard Verrier]
Hollywood would get a little unexpected boost from the proposed $700-billion bailout of the nation's financial system. The bill wending its way through Congress would provide tax breaks worth more than $470 million over the next decade for movie and TV producers that shoot in the US. That's not a lot of money, given that the average studio movie costs $106.6 million to make and market, but it could keep some low-budget productions -- and jobs -- from going offshore. Hollywood has long sought measures to curb so-called runaway production, which it blames for causing thousands of job losses in Southern California as filmmakers have fled to Canada and other foreign countries that offer cost savings through tax breaks and other incentives. One provision would provide film and TV producers with the same tax deductions that American manufacturers such as General Motors Corp., Boeing Co. and Xerox Corp. receive for making their products in the US. Specifically, the legislation would allow filmmakers who shoot in the U.S. to qualify for a tax deduction granted in 2004 to domestic manufacturers that capped the top tax rate at 32% instead of 35%. Additionally, the tax package lifts the budget cap on the existing tax deduction, which was limited to movies that cost less than $15 million to make -- in effect excluding most studio films, which cost a lot more.
http://benton.org/node/17507
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AT&T CHAIRMAN SAYS CREDIT WOES CRIMPING OPERATIONS
[SOURCE: Associated Press, AUTHOR: Emery Dalesio]
The tightening of the global credit markets is crimping the world's largest telecommunications company. AT&T Chairman and CEO Randall Stephenson said Tuesday that his company was unable to sell any commercial paper last week for terms longer than overnight. Commercial paper, which helps lubricate the flow of business operations, is a short-term IOU available to corporations that banks usually know are good for the money.
http://benton.org/node/17492
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ELECTIONS & MEDIA

PALIN SAYS MEDIA "CENSORS" HER
[SOURCE: The Hill, AUTHOR: Michael O'Brien]
Calling into conservative talk radio host Sean Hannity's show late Wednesday, Gov Sarah Palin (R-Alaska) said the media sometimes "censors" what she says. The Republican vice presidential nominee also said debate moderator Gwen Ifill is "not a concern." The PBS host became a target for conservatives Wednesday after online reports revealed Ifill plans to release a book on the historic nature of Barack Obama's candidacy. Conservatives charged that it damages Ifill's objectivity. "It's motivating even to me to hear Gwen's comments because, again, it's going to motivate me to work that much harder," Palin told Hannity. Republican presidential nominee John McCain also defended Ifill's journalistic credentials.
http://benton.org/node/17514
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PALIN CAN'T NAME A NEWSPAPER SHE'S READ REGULARLY
[SOURCE: Associated Press, AUTHOR: ]
Vice presidential candidate Gov Sarah Palin (R-Alaska) repeatedly failed to cite a newspaper or magazine when asked what she had read regularly before John McCain picked her as his running mate, saying only that she had read "most of them." Gov Palin also said that she doesn't believe that the media's coverage of her has been sexist. "It would be sexist if the media were to hold back and not ask me about my experience, my vision, my principles, my values," said Gov Palin. Asked Tuesday by radio host Hugh Hewitt if she agreed that interviews with ABC's Charles Gibson and CBS' Couric were designed to embarrass her, Palin replied: "Well, I have a degree in journalism also, so it surprises me that so much has changed since I received my education in journalistic ethics all those years ago." She continued: "But I'm not going to pick a fight with those who buy ink by the barrelful. I'm going to take those shots and those pop quizzes and just say that's OK, those are good testing grounds. And they can continue on in that mode. That's good. That makes somebody work even harder. It makes somebody be even clearer and more articulate in their positions. So really I don't fight it. I invite it."
http://benton.org/node/17491
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PALIN QUESTIONER REJECTS 'GOTCHA JOURNALISM' CHARGE
[SOURCE: The Hill, AUTHOR: Chris Good]
The Philadelphia man who asked Alaska Gov. Sarah Palin about Pakistan on Saturday has told The Hill that GOP presidential nominee John McCain and Palin mischaracterized the exchange in a primetime interview. A clip of Philadelphia resident Michael Rovito's encounter with Palin quickly caused a stir. It showed Palin saying the U.S. should "absolutely" strike terrorist targets in Pakistan, a stance publicly shared by Democratic presidential nominee Sen. Barack Obama (IL) and criticized by Sen. McCain (AZ). The media also seized on the clip because it was a rare unscripted moment for Palin, who has been shielded from taking questions from reporters since being picked as McCain's running mate. Seeking to quell any notions of being at odds with the Arizona senator, Palin on Monday implied in an interview with CBS's Katie Couric that she could not hear Rovito's question completely and that criticism over the comment resulted from "gotcha journalism." However, Rovito, who supports Obama in the presidential election, told The Hill that the Alaska governor could hear him just fine, and that the label of "gotcha journalism" doesn't fit.
http://benton.org/node/17490
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CANDIDATES FLIP FLOP (SEARCH STRATEGIES, THAT IS)
[SOURCE: MediaPost, AUTHOR: Mark Walsh]
When it comes to online search strategy, the presidential candidates have lately changed positions, according to a new study. Leading up to their Sept. 26 debate, Democratic nominee Barack Obama ramped up search engine marketing efforts while Republican rival John McCain scaled back, marking a shift for both. Search marketing firm SendTec found the Obama campaign capitalized on the Mississippi showdown with McCain by bidding on debate and issue-related keywords including "debate winner," "presidential debate," and "economic crisis." And ads and landing pages were designed to direct viewers to watch the debate. McCain, by contrast, didn't try to build a similar search campaign around the debate. Most polls immediately following the debate gave the win to Obama while many commentators declared it a wash.
http://benton.org/node/17488
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NBC, OBAMA CAMPAIGN SPAR OVER YOUTUBE VIDEO
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
NBC executives and lawyers sent a cease-and-desist letter to the Obama campaign, whose VoteForChange.com posted a web video featuring NBC News anchors -- Tom Brokaw, Keith Olbermann -- appearing to pronounce Sen. John McCain (R-AZ) the Nov. 4 election-night winner.
http://benton.org/node/17489
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NEWS FROM CONGRESS

CONGRESS APPROVES INTERNET SAFETY LEGISLATION
[SOURCE: US Senate Commerce Committee]
The Senate approved the Protecting Children in the 21st Century Act as part of the Broadband Data Improvement Act. The measure will bring parents, industry, and teachers together to address comprehensive education for children online. The Protecting Children in the 21st Century Act: requires schools receiving E-Rate funds to offer education regarding online behavior, including social networking, chat rooms and cyberbullying awareness and response; creates an interagency working group to identify and encourage technologies and initiatives to help parents protect their children from unwanted content; and requires a national public awareness campaign to be conducted by the Federal Trade Commission.
http://benton.org/node/17487
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CONGRESS PROTECTS INTERNET RADIO
[SOURCE: Variety, AUTHOR: William Triplett]
Internet radio operators expressed cautious optimism regarding congressional approval of a deal designed to help them survive a recent steep hike in royalty rates.
"This legislation is not the final answer, but it is an essential step toward a lasting and much-needed solution," said SaveNetRadio spokesman Jake Ward in a statement Wednesday, referring to Senate approval of the Webcaster Settlement Act of 2008. Webcasters and SoundExchange, a nonprofit that collects royalty payments from digital radio companies, have been trying to negotiate an agreement since the Copyright Royalty Board in early 2007 increased rates for digital radio by at least 300%. According to SaveNetRadio, numerous Webcasters have felt an "immediate and devastating effect," with three of the most popular operators -- AOL Radio, Yahoo! Radio and Pandora - having already limited listener access, shut down or announced a likely shut down if the rates aren't dramatically lowered. But since Webcasting requires a government license - and with Congress about to recess with no rate agreement reached yet -- the Senate approved legislation that would confer congressional acceptance of any agreement Webcasters and SoundExchange might hammer out before recess ends.
http://benton.org/node/17486
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REP DINGELL SEEKS INPUT FROM PHONE COS ON REGULATORY ISSUES
[SOURCE: Dow Jones, AUTHOR: Fawn Johnson]
Just days before lawmakers leave town, perhaps for the rest of the year, House Commerce Committee Chairman John Dingell (D-MI) wants AT&T, Verizon Communications, and Qwest Communications to state their positions on several telecommunications issues that Congress could consider next year. Among other things, he wants executives at the three largest phone companies in the country to explain why firms' requests for regulatory relief should be granted automatically if the Federal Communications Commission's votes are tied. In a letter sent to the companies Tuesday, Chairman Dingell noted that the five-member FCC could be forced to operate with just four commissioners -- two Republicans and two Democrats -- as early as November, and they could split votes on controversial decisions. Chairman Dingell asked the three companies whether they have waiver requests pending at the FCC that could come due between November 2008 and early 2009. He also asked the three companies if the FCC should shorten the transfer interval for telephone customers who opt to keep their phone numbers when switching services. Transferring phone numbers generally takes a couple of hours for wireless switches, but the industry standard for landline changes is four days.
http://benton.org/node/17506
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SENATE ANALOG NIGHTLIGHT BILL INTRODUCED
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
A bill was introduced in the Senate that would allow broadcasters to continue broadcasting in analog for 30 days after the Feb. 17, 2009, date for TV stations to transition to full-power digital TV. Broadcasters would still transition their primary channel feeds to digital Feb. 17, but they could continue to broadcast DTV-education information and emergency information for that 30-day period. The analog cutoff is currently set, by statute, for Feb. 17. The Senate bill was introduced by Sen John Rockefeller (D-WV). Rep. Lois Capps (D-CA) introduced a similar bill in the House last week.
http://benton.org/node/17505
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NEWS FROM THE FCC

MARTIN GIVES OLD COLLEGE TRY FOR LOCALISM
[SOURCE: tvnewsday, AUTHOR: Kim McAvoy, Harry Jessell]
As a way for TV broadcasters to meet their localism obligations, Federal Communications Commission Chairman Kevin Martin is proposing that they fund residency programs for recent journalism graduates that would cover state government news and produce investigative reports for them. Bypassing the National Association of Broadcasters, Martin has floated the proposal to the boards of the Texas Association of Broadcasters and the North Carolina Association of Broadcasters. Martin's staff also solicited the support of the California Broadcasters Association in a call to officials there early last week.
http://benton.org/node/17485
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FCC'S QUIET PERIOD REVIEW AWAITS MARTIN VOTE
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Apparently, every member of the Federal Communications Commission except Chairman Kevin Martin has voted to seek public comment on the cable industry's retransmission consent quiet period. A Notice for Proposed Rulemaking will be released once Chairman Martin casts his vote. In Oct 15 House testimony, Chairman Martin supported a quiet period in concept and mentioned one close to the date of the DTV transition.
http://benton.org/node/17504
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PEHA NAMED FCC's CHIEF TECHNOLOGIST
[SOURCE: Federal Communications Commission]
Jon M. Peha, Ph.D., has been named Chief Technologist of the Federal Communications Commission. Dr. Peha will serve as a senior advisor on communications technology in the FCC's Office of Strategic Planning and Policy Analysis. Currently, Dr. Peha is a Professor in the Departments of Engineering and Public Policy, and Electrical & Computer Engineering at Carnegie Mellon University (CMU). He also serves as the Associate Director of the Center for Wireless and Broadband Networking at CMU. Prior to joining CMU's Department of Engineering and Public Policy, Dr. Peha served as the Chief Technical Officer of three high-tech start-ups and as a member of the technical staff at SRI International, AT&T Bell Laboratories and Microsoft. Dr. Peha's research interests include technical and policy issues related to computer and telecommunications networks. He has written extensively on these subjects and is the co-author of Science Technology Advice for Congress. He has also authored several articles in the following publications: IEEE Personal Communications; Telecommunications Policy; the International Journal of Communication; and Wireless Technology. Dr. Peha received his Ph.D. in electrical engineering from Stanford University and his undergraduate degree from Brown University. He is a Congressional Fellow of the IEEE and a Diplomacy Fellow of the American Association for the Advancement of Science.
http://benton.org/node/17484
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GOVERNMENT & COMMUNICATIONS

SURVEILLANCE OF SKYPE MESSAGES FOUND IN CHINA
[SOURCE: New York Times, AUTHOR: John Markoff]
A group of Canadian human-rights activists and computer security researchers has discovered a huge surveillance system in China that monitors and archives certain Internet text conversations that include politically charged words. The system tracks text messages sent by customers of Tom-Skype, a joint venture between a Chinese wireless operator and eBay, the Web auctioneer that owns Skype, an online phone and text messaging service. The discovery draws more attention to the Chinese government's Internet monitoring and filtering efforts, which created controversy this summer during the Beijing Olympics. Researchers in China have estimated that 30,000 or more "Internet police" monitor online traffic, Web sites and blogs for political and other offending content in what is called the Golden Shield Project or the Great Firewall of China. The activists, who are based at Citizen Lab, a research group that focuses on politics and the Internet at the University of Toronto, discovered the surveillance operation last month. They said a cluster of eight message-logging computers in China contained more than a million censored messages. They examined the text messages and reconstructed a list of restricted words. The list includes words related to the religious group Falun Gong, Taiwan independence and the Chinese Communist Party, according to the researchers. It includes not only words like democracy, but also earthquake and milk powder.
http://benton.org/node/17513
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QUICKLY

FEDERAL COPYRIGHT BOARD TO SET DIGITAL MUSIC ROYALTIES
[SOURCE: Associated Press, AUTHOR: ]
Royalties that digital music companies from Apple Inc. to record labels pay songwriters for selling their music as ringtones, CDs and permanent digital downloads are to be set Thursday by a federal agency. This is the first time in nearly three decades that the industry has been unable to decide the fee for sales of recorded music on its own. Apple has so strongly opposed increasing the rate, now 9.1 cents per song, that it threatened to shut down the iTunes store if the rate goes up — a move experts said was unlikely. More likely is the Copyright Royalty Board hiking the rate incrementally, in line with the fraction of a penny that it has risen every two or three years since 1981, when it was 4 cents per song.
http://benton.org/node/17503
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CONSUMERS DEEM TV MOST 'CREDIBLE' MEDIUM, ONLINE RANKS THIRD
[SOURCE: MediaDailyNews, AUTHOR: Joe Mandese]
Despite the rapid rise of online media, television, followed by newspapers and radio, remain the most credible sources of news and information, according to a nationally representative survey conducted by Opinion Research Corp. for online communications marketing and content distribution firm ARAnet. Consumers also reported getting a greater percentage of their news and information (35%) from television, followed by daily newspapers (23.5%). The respondents reported getting just 1.6% of their news and information from magazines.
http://benton.org/node/17483
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STUDIOS REACH DIGITAL CINEMA UPGRADE DEAL
[SOURCE: Reuters, AUTHOR: Sue Zeidler]
Five Hollywood studios have reached a long-sought financing deal estimated at over $1 billion with a group of theater exhibitors to digitally upgrade 20,000 US and Canadian cinema screens. The upgrades will enable studios to send movies digitally to theaters, saving them billions of dollars in print and delivery costs. Once outfitted with digital projectors, theaters can add 3-D capabilities. Hollywood has a lot riding on the conversion, with studios like DreamWorks Animation SKG Inc and Disney aggressively planning to roll out 3-D films. These studios will need enough 3-D screens to support their slates. Hollywood and theater chains believe 3-D will not only boost attendance, but also command higher ticket prices. About 5,000 of the 37,000 cinema screens in the United States are digitally equipped and the ultimate aim is to transform all 125,000 screens worldwide. Studios involved in the deal include Walt Disney Co, Viacom Inc's Paramount Pictures, News Corp's Twentieth Century Fox, General Electric Co's Universal Pictures and Lions Gate Entertainment Corp.
http://benton.org/node/17482
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DVR OWNERSHIP INCREASES, BUT RECORDINGS NOT PRIORITY VIEWING
[SOURCE: Center for Media Research, AUTHOR: Jack Loechner]
New consumer research, from Leichtman Research Group, reports that 27% of TV households in the United States have at least one Digital Video Recorder (DVR), and 30% of those households have more than one DVR, and that 87% of DVR owners would recommend their DVR service to a friend. 81% rate their DVR 8-10 on a 10 point scale (with 45% rating the service as 10). But recorded viewing is not necessarily the priority in DVR households, says the report, since 68% of DVR owners say that they usually watch recorded DVR programs when there is nothing on regularly scheduled TV that they want to watch. Only 6 percent of TV viewing is now time-shifted, either as a show recorded on a DVR and viewed later or as one seen through a video-on-demand service, says the report.
http://benton.org/node/17481
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CDT LAYS OUT RULE OF LAW AGENDA FOR NEXT PRESIDENT AND CONGRESS
[SOURCE: Center for Democracy & Technology, AUTHOR: Gregory Nojeim]
In testimony submitted to the Senate Constitution Subcommittee today, CDT called for the next President and Congress to impose checks and balances on governmental national security measures. The testimony, submitted in connection with hearings exploring proposals to restore the rule of law, calls for an update of the Electronic Communications Privacy Act and for measures to ensure that intelligence collection complies with FISA and is subject to judicial oversight.
http://benton.org/node/17480
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Palin says media "censors" her

Calling into conservative talk radio host Sean Hannity's show late Wednesday, Gov Sarah Palin (R-Alaska) said the media sometimes "censors" what she says. The Republican vice presidential nominee also said debate moderator Gwen Ifill is "not a concern." The PBS host became a target for conservatives Wednesday after online reports revealed Ifill plans to release a book on the historic nature of Barack Obama's candidacy. Conservatives charged that it damages Ifill's objectivity. "It's motivating even to me to hear Gwen's comments because, again, it's going to motivate me to work that much harder," Palin told Hannity. Republican presidential nominee John McCain also defended Ifill's journalistic credentials.

Surveillance of Skype Messages Found in China

A group of Canadian human-rights activists and computer security researchers has discovered a huge surveillance system in China that monitors and archives certain Internet text conversations that include politically charged words. The system tracks text messages sent by customers of Tom-Skype, a joint venture between a Chinese wireless operator and eBay, the Web auctioneer that owns Skype, an online phone and text messaging service. The discovery draws more attention to the Chinese government's Internet monitoring and filtering efforts, which created controversy this summer during the Beijing Olympics. Researchers in China have estimated that 30,000 or more "Internet police" monitor online traffic, Web sites and blogs for political and other offending content in what is called the Golden Shield Project or the Great Firewall of China. The activists, who are based at Citizen Lab, a research group that focuses on politics and the Internet at the University of Toronto, discovered the surveillance operation last month. They said a cluster of eight message-logging computers in China contained more than a million censored messages. They examined the text messages and reconstructed a list of restricted words. The list includes words related to the religious group Falun Gong, Taiwan independence and the Chinese Communist Party, according to the researchers. It includes not only words like democracy, but also earthquake and milk powder.

How the Media Sold Their Souls to Wall Street

[Commentary] A comprehensive report studying 42 banking crises over the past 37 years finds that bailouts often do not work. They often result in more bad practices, and they distort economies by transferring wealth from taxpayers to bankers and their customers. But why aren't these conclusions being shared by the mainstream media? Instead, turn on your television - the place where more than 60% of Americans get their primary news - turn on your radio, or open your local newspaper, and you're not going to see what these top economists are saying. It's a McCain quote, an Obama sound byte, and the same pundits who have proven their incompetence over and over. The result is an American public that is fundamentally uninformed about the issues that matter most - like economics, health care, and war - and over-informed about those that matter least: sports, celebrity, the latest campaign ad, and horserace analysis of elections. We have no reason to believe that the press -- and along with it, most politicians -- will ask the tough questions, expand the range of debate, and bring the facts to the American people. But until they do, our economy - and our democracy -- will continue its race to the bottom.

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