December 2008

'Network Neutrality'? Never Mind.

[Commentary] We just had a never-mind moment on the most controversial public-policy issue relating to the Web: network neutrality. It's not so funny that it has taken so long to reach this logical conclusion. Regulators treat the Web as if it were a common carrier like a railroad, discouraging efficient network management and pricing. The issue of network neutrality had been so politicized in Washington that it's driven underinvestment. President-elect Obama has said he supports "network neutrality," whatever the phrase now means. Networks such as those provided by telecom and cable companies should be able to deliver Web content as quickly and reliably as competitive markets will bear. When the Web was text-based, these issues were straightforward. Now, bandwidth usage is growing by an estimated 50% a year, especially due to online video and real-time applications, such as games and telephone calls, which require no-jitter connections. These services are great for consumers and the companies that offer them, but regulators have not let network management evolve to serve these new needs. It's time to let the big boys among the content providers and network providers fight it out to see who pays how much for what level of service. Until they work out a new approach, consumers in the U.S., who once had the best Web experience, will fall further down the Internet ranks.

For Conservative Radio, It's a New Dawn, Too

Amid all the pressures on the radio industry, news-talk stations see an opportunity — and his name is Barack Obama. After eight years of playing defense for President Bush, the conservatives who dominate talk radio are back on offense. Radio, at least for now, still acts as a national megaphone for influential voices. This year, news talk ranked as the most popular radio format in the United States, surpassing country music for the first time ever. Forty stations have added news talk in the last year, for a total of 2,064 that use the format, up from about 1,500 a decade ago, according to the trade publication M Street. That means 2,064 stations need 24 hours of programming every day. Stations with tight budgets increasingly rely on programs from Premiere Radio Networks, ABC Radio Networks and other syndication companies. Five of the most popular syndicated names in news-talk radio — Mr. Limbaugh, Mr. Hannity, Glenn Beck, Michael Savage and Laura Ingraham — signed new contracts in the last 12 months, all but guaranteeing that they will be rallying listeners for the duration of Mr. Obama's four-year term. Mr. Limbaugh's landmark contract, announced in July, promised a total of $400 million through 2016.

In Move to Digital TV, Confusion Is in the Air

The Federal Communications Commission sponsored a NASCAR race car as part of its effort to inform Americans that on Feb. 18, television signals transmitted over the air will be transmitted solely in digital format. Old TV sets will no longer work. It paid $350,000 to emblazon "The Digital TV Transition" and other phrases on a Ford driven by David Gilliland. So how's that going? In November, the car crashed during a NASCAR race in Phoenix. It was the second crash in as many months. And how is the digital TV transition going? According to critics, about as well, despite a major marketing campaign that includes nightly ads on TV. According to surveys conducted by the Consumers Union, while 90 percent of the nation is aware of the transition, 25 percent mistakenly believe that one must subscribe to cable or satellite after February, and 41 percent think that every TV in a house must have a new converter box, even those that are already connected to cable or satellite. "This transition is possibly one of the worst understood consumer education programs in modern times," said Richard Doherty, an analyst with the Envisioneering Group. While the government and industry have invested large sums to get the message out, the problem is that the effort is too little and way too late.

Cities' Early Digital Shift May Leave Some TVs Dark

Hundreds of Northern California residents could wake up Monday to discover that their televisions no longer work as well. Three of four network stations in Chico and Redding, Calif., will begin broadcasting only in digital Monday, two months before the rest of the country. The worry is that some of the 20,000 residents who rely on over-the-air TV still aren't ready, despite local broadcasters' airing of thousands of ads and screen crawls to alert viewers. The transition in Northern California could be a harbinger of what happens on Feb. 17, when the whole country is required by Congress to switch to digital-only TV. (The ABC affiliate station for Chico and Redding also plans to go digital on Feb. 17.) Last week, 40 stations in Ohio shut off their analog signals for five minutes to show viewers what their analog TVs would look like without converter boxes: a blank screen. Viewers flooded a broadcasters' hot line with calls to ask how to get the government coupons and how to operate converter boxes, among other questions, said Christine Merritt, executive vice president of the Ohio Association of Broadcasters. She added that the hot line got so many calls -- about 7,500 -- that the phone system overloaded and crashed.

With Stevens's Fall, Pipeline for Lobbyists Shuts Off

Until recently, there were few better ways to start a lobbying career than by leaving the office of Senator Ted Stevens of Alaska. With 40 years of seniority on important Senate committees, Mr. Stevens, a Republican, wielded unrivaled power over industries like fishing, forestry, communications, aviation and the military, steering billions each year to pet Alaskan projects. His power made his good will a valuable commodity on K Street, where many lobbying firms are located. During the past five years, just nine lobbyists and firms known primarily for their ties to Mr. Stevens reported over $60 million in lobbyist fees, not including other income for less direct "consulting." The most recent person to leave his staff to become a lobbyist reported fees of more than $800,000 in just the last 18 months. So when Alaskan voters narrowly rejected Mr. Stevens's bid for re-election last month, just days after a jury convicted him of federal ethics violations, it was in some ways like the closing of the plant in a company town. Stevens's former aides are hardly the only Washington lobbyists to rise and fall with a single Congressional patron. Representative John D. Dingell, the powerful Michigan Democrat first elected in 1955, long sustained a coterie of lobbyists sometimes known as the Dingell Bar. They, too, are feeling the pinch at the moment from his recent loss to Representative Henry A. Waxman, Democrat of California, of the gavel as chairman of the House Commerce Committee. But Mr. Stevens — Alaska's "Uncle Ted" — is in a class by himself.

Newspaper Shuns Web, and Thrives

With 2008 drawing to a brutal close on the media beat -- bankruptcies, daily newspapers that are no longer daily, magazines that are downsizing into brochures -- a little ray of light appeared. It was from a newspaper owner. Into the teeth of a historic recession, the newspaper had just published the biggest issue in its history. The product is double-digit profitable, and it has been growing at a clip of about 10 percent a year since it was founded in 1999, right about the time the Web was beginning to put its hands around print's neck. Finally, a story about a print organization that has found a way to tame the Web and come up with a digital business approach that could serve as a model? No, the TriCityNews of Monmouth County (NJ) is prospering precisely because it aggressively ignores the Web. Its Web site has a little boilerplate about the product and lists ad rates, but nothing more.

Limbaugh Is Right on the Fairness Doctrine

[Commentary] The founding president of Air America Radio agrees with conservative talk radio hosts: The Fairness Doctrine is an anachronistic policy that, with the abundance of choices on radio today, is entirely unnecessary. When conservative talking heads wave a red flag about the possible revival of the Fairness Doctrine, they know it's a great way to play the victim and rally supporters. But Sinton'll let Rush Limbaugh continue with his self-righteous indignation -- and he'll tune into Rachel Maddow, or one of the thousands of other voices that populate radio today.

Undersea cable breaks cut Internet in Mideast, Asia

Breaks in three submarine cables under the Mediterranean, possibly caused by a ship's anchor, have disrupted Internet and international telephone services in parts of the Middle East and South Asia. A ship carrying a submarine repair robot was on its way to the site between Sicily and Tunisia on Saturday, with work expected to take until the end of the year.

The top ten media blunders of 2008

The media took its share of lumps this year, with persistent claims of bias and complaints about often wrong-headed speculation from a seemingly endless parade of talking heads. Of course, there was great reporting, with journalists breaking news and penning terrific profiles of the candidates and the campaigns. TV ratings and Web traffic were through the roof, evidence of huge voter interest. But there were plenty of missteps on the way, and Politico's compiled a list of 2008's greatest blunders (along with a look at how the media responded to each). See #2 -- The New York Times' McCain-Iseman story: There was so much hype leading up to The Times front-page investigation of John McCain's relationship with lobbyists—dating back at least to a Drudge leak two months earlier—that without something concrete, the story was doomed to fail. Executive editor Bill Keller said there's more to the piece than the strongly suggested, never outright stated, romantic relationship between the senator with lobbyist Vikki Iseman, but that's what the public seized upon. The Times put it out there, but couldn't prove it, leading both the right and left to slam the piece. Response: The campaign sparred publicly with the Gray Lady throughout the campaign, using the liberal media as a whipping boy when needing to rally the base, and the paper often appeared to return the favor, most notably in an hostile October profile of wife Cindy McCain.

Telecom lobbyists line up for piece of Obama stimulus

President-elect Barack Obama's frequent use of the words "broadband" and "stimulus" in the same sentence has lobbyists lining up to get a piece of the expected largess in an economic stimulus plan. Telecommunications companies are hoping to benefit from a variety of incentives under consideration, including a tax credit to target rural America, as lawmakers draft an economic recovery plan that could run about $600 billion. The key to any proposal is to prove it will create jobs. "They (lawmakers) are looking at them through the lens of how many jobs will be created," said Jeff Campbell, senior director of technology and trade policy at Cisco Systems Inc., which makes network equipment. Every one percentage point boost in broadband penetration per year is projected to increase jobs by 300,000, assuming the economy is not at full employment, according to a 2007 report by the Brookings Institution, a Washington think tank. "The goal is to revitalize rural America by bringing high-tech jobs to replace those lost in manufacturing," said Derek Turner, research director at Free Press, a reform group that introduced its own $44 billion investment plan this week. The Free Press proposal includes a $15 billion broadband infrastructure fund overseen by the Federal Communications Commission and run by the states, and a $10 billion program to issue corporate bonds for broadband-related investment. Consumers Union and the Consumer Federation of America want Congress to give direct grants to consumers to buy computers and Internet services, rather than "to corporations with a hope and a prayer that stimulus will trickle down to citizens."