January 2009

Wireless Growth Helps Boost Verizon

Verizon posted a 15% increase in fourth-quarter profit due to strong wireless growth, but a slowdown in spending by businesses took a toll on the company's landline operations. The telecom provider posted net income of $1.24 billion, or 43 cents per share, up from $1.07 billion, or 37 cents a year ago. Revenue rose 3.4% to $24.65 billion. Verizon Wireless reported a revenue increase of 12.3% year-over-year to $12.8 billion, partly because of growth in data services like text messaging, email and Internet access. That helped drive the unit's adjusted operating margin to 47.2%, up from 43.6% a year ago. Verizon added 1.2 million net new wireless customers in the quarter, bringing its total to 72.1 million, not including those it added through the acquisition of Alltel. The tough economic environment impacted the unit that markets phone and broadband services to businesses, which saw sales slide 2.2% from last year to $3.6 billion. The company said businesses are delaying purchasing decisions and require fewer services as they lay off employees. Overall, the landline unit reported a 6% operating margin, down from 9.7% in the year-earlier quarter. A longstanding trend of customers dropping landline phone service to replace it with cable or wireless service continued. Verizon lost 911,000 landline customers in the fourth quarter and 3.7 million lines for the year, a 9.3% decline. Verizon's digital subscriber line, or DSL, broadband service continued to struggle, with a net loss of 68,000 customers in the quarter. Still, that was more than offset by growth in the company's faster FiOS fiber-optic broadband network, which added 282,000 high-speed Internet customers in the quarter. The FiOS TV service added 303,000 customers, bringing the total user base to 1.9 million. The FiOS Web and TV network now reaches 12.7 million premises and users have an average service bill of $133. Capital expenditures for 2008 were $17.2 billion or 17.7% of Verizon's revenue, down from 18.8% in 2007. Chief Financial Officer Doreen Toben said the company is expecting to bring that figure down even further in 2009, part of a cautious approach to spending while the economy is unstable.

Sidman Named President of the Association of Public Television Stations

The Association of Public Television Stations (APTS) has chosen long-time media advocate Lawrence R. Sidman as president and CEO. Sidman served as Chief Counsel and Staff Director of the House Telecommunications Subcommittee in the late 1980s. Currently, he is a partner and chair of the Government Affairs practise group at Paul, Hastings, Janofsky & Walker LLP. As the Obama Administration and the 111th Congress convene, public television faces serious funding challenges because of the broad and deep economic downturn. At the same time, this is a critical opportunity for public television stations to lay the foundation for public service media in the digital age. "Because of the new leadership in Washington and the economic and technological changes affecting all media providers, the 111th Congress is perhaps the most important Congress for us since the Corporation for Public Broadcasting was created," Sidman said.

McDowell On Board with FCC Reforms, Increased Transparency

Federal Communications Commission member Robert McDowell says he is on board with Chairman Michael Copps' plan to start reforming the agency to make it more open and transparent. In a letter to Copps Tuesday, McDowell offered up some of his own suggestions: 1) A thorough operational, financial and ethics audit of the Commission and related entities including USAC and the advisory committees. 2) An update of the FCC's strategic plan. 3) Using the results of items 1 and 2 for a potential restructuring of the Commission. 4) Publish Open Meeting dates for all of 2009. 5) Increase coordination among commissioner offices, commissioner and staff, and between staff. 6) Update FCC IT system and web site. 7) Build better rapport with other parts of the government including consumer protection, homeland security and technology areas.

Comcast's Congestion Catch-22

When Comcast earlier this week received yet another admonition from the FCC about how it was managing traffic on its network, the groans were heard far and wide. Here we go again - the draconian Comcast taking a heavy hand with its users. The FCC's charge, delivered in a letter to Comcast was this: that Comcast was using the latest version of its congestion management system - the one it had just recently altered in response to an earlier FCC inquiry and demand - to improperly (and perhaps illegally) favor its own voice-over-IP (VoIP) service over competitors. Even at first glance, the charges seemed slightly off. Wasn't it common knowledge in the industry that all facilities-based providers did their best to keep their VoIP traffic on their own pipes and away from the public Internet? If Comcast was forced to take a protocol-agnostic route with its management scheme, why would it suddenly be limiting relatively low-bandwidth VoIP packets? At a time when service providers are experimenting heavily with deep packet inspection (DPI)-driven congestion management approaches, could anyone get it right? Deeper examination leads to more questions: Is the use case that the FCC is questioning really as small as it appears? Did they intend their decision to tweak Comcast on what appears to be a technicality to open up a larger Pandora's box of questions? And is there any level of network management that a service provider can enable that won't draw howls of protest - not only from the FCC but from users as well?

MySpace Extends Conversations 365 Days Per Year

The days of sending holiday letters to update receivers about the year's events has transformed into portals in social media platforms. Social media also gives brands the opportunity to continue the conversation with consumers every day during the year, according to MySpace executive Angela Courtin. Keeping the conversation active is one of several discoveries that MySpace has perfected during the past five years since the company was founded. Consumers want self-expression, positive change and fun, said Courtin, MySpace SVP of marketing, entertainment and content. As use shifts to social media, it's no longer a race to build a destination--but rather constellations that connect, she said.

Is There Life After Newspapers?

Thousands upon thousands of newspaper journalists have lost their jobs in recent years in endless rounds of layoffs and buyouts. Where do they end up? Just under 36 percent said they found a new job in less than three months. Add those who say they freelance full time, and the total jumps to 53 percent. Less than 10 percent say it took them longer than a year. Only a handful - 6 percent - found other newspaper jobs. The rest are doing everything from public relations to teaching to driving a bus and clerking in a liquor store.

Maverick CMOs Try Going Without TV

As the upfronts loom, many big brands are slashing their spending on television advertising out of necessity. But another factor to consider is the maverick CMO who is willing to spend a lot less on TV advertising or cut it out entirely.

Can't Trust "Trust Me"

In one of the sleazier ideas in the world of product placement, TNT has come up with a series about a fictional advertising agency in which actual sponsors of the series, like Dove, are clients. The series is called, ironically enough, "Trust Me." If that's the question, the answer is an unequivocal, "No." That trick is about as trustworthy as a reality show where the contestants are actually supposed to get married.

The Federal Communications Commission will hold an Open Meeting on Thursday, March 5, 2009, which is scheduled to commence at 9:30 a.m. in Room TW-C305, at 445 12th Street, S.W., Washington, D.C.

  • The meeting will include presentations and discussion by senior agency officials as well as industry, consumer groups and others involved in the Digital Television Transition. A list of presenters will be released prior to the meeting.
  • Congress has set June 12, 2009 as the final deadline for terminating full-power analog broadcasts. The purpose of the meeting is to educate and inform the Commission and the public about the digital television transition, including the partial transition on February 17, 2009, when some full-power broadcast television stations stopped broadcasting in analog and began broadcasting in digital only.

The meeting site is fully accessible to people using wheelchairs or other mobility aids. Sign language interpreters, open captioning, and assistive listening devices will be provided on site. Other reasonable accommodations for people with disabilities are available upon request. Include a description of the accommodation you will need. Also include a way we can contact you if we need more information. Last minute requests will be accepted, but may be impossible to fill. Send an e-mail to: fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

Additional information concerning this meeting may be obtained from Audrey Spivack or David Fiske, Office of Media Relations, (202) 418-0500; TTY 1-888-835-5322. Audio/Video coverage of the meeting will be broadcast live with open captioning over the Internet from the FCC's Audio/Video Events web page at www.fcc.gov/realaudio.

For a fee this meeting can be viewed live over George Mason University's Capitol Connection. The Capitol Connection also will carry the meeting live via the Internet. To purchase these services call (703) 993-3100 or go to www.capitolconnection.gmu.edu.



The FCC will hold an open full Commission meeting on Thursday February 5 at 2:00 pm.

The meeting will include presentations and discussion by senior agency officials as well as industry, consumer groups and others involved in the Digital Television Transition.

The purpose of the meeting is to educate and inform the Commission and the public about the status and issues involved with the upcoming Digital Television Transition.

Agenda and list of witnesses follows:

2:00pm Opening Statements by Chairman and Commissioners

2:15pm Panel 1: DTV Consumer Outreach

Cathy Seidel, Chief of the Consumer and Governmental Affairs Bureau, FCC

Tony Wilhelm, Consumer Education Director, National Telecommunications and Information Administration

Mark Lloyd, Vice President for Strategic Initiatives, Leadership Conference on Civil Rights and Leadership Conference on Civil Rights Education Fund

Sandy Markwood, Chief Executive Officer, National Association of Area Agencies on Aging

3:00pm Panel 2: DTV Call Centers

Andrew Martin, Chief Information Officer, Federal Communications Commission

Sam Howe, Executive Vice President, Time Warner Cable

David Rehr, President and CEO, National Association of Broadcasters

Dennis Lyle, President, National Alliance of State Broadcasters Associations

3:45pm Panel 3: Reception Issues and Analog Nightlight

Julius Knapp, Chief of Office of Engineering and Technology, FCC

David Donovan, President, MSTV

Joel Kelsey, Policy Analyst, Consumers Union

Michael Petricone, Senior Vice President Government Affairs, Consumer Electronics Association

4:30pm Closing Statements/Adjournment