February 2009

Sharpton, City Council Members Petition for FCC to Pull News Corp.'s Waiver

The Rev. Al Sharpton and several New York city council members want the Federal Communications Commission to pull News Corp's waiver that allows it to own two TV stations-WNEW and WWOR-serving the New York market. Sharpton's National Action Network is collecting signatures on an online petition in an effort to get the FCC to review the waiver, arguing it gives the company too much control of the media market. News Corp. also owns the New York Post and The Wall Street Journal. The petition drive was prompted in part by a New York Post cartoon.

Facebook Averts FTC Privacy Complaint

An about-face by social networking site Facebook last week regarding its terms of service headed off a complaint to federal regulators prepared by the Electronic Privacy Information Center. The Wednesday decision to restore Facebook's original policy and its commitment to a more transparent, participatory process regarding future changes to its operating procedure came hours before the watchdog group planned to file a complaint with the Federal Trade Commission. The EPIC filing was supported by more than a dozen consumer and privacy organizations, officials said.

It's Not Newspapers in Peril; It's Their Owners

For all the apocalyptic news about newspapers, there's a distinction worth making: Newspaper owners are far more endangered than the medium itself. Even as they take blow after blow from recession and digital media, newspapers themselves still earn decent profits. They do even better outside big cities, which tend to get all the attention. Not a lot of papers are operating at a loss," said John Morton, the veteran industry analyst. "There are roughly 1,400 daily newspapers. We only hear about the top markets. That leaves at least 1,300 papers out there." Publicly owned newspapers averaged an operating profit of 10.8% in the first three quarters of last year, Mr. Morton said. That's not the margin enjoyed by newspapers when they were monopolies, but it's not nothing either. The owners, on the other hand, are variously posting huge losses, at least on paper. Some owners even borrowed that money to double down on newspapers, which aren't engines of growth even when their balance sheets are healthy.

Wanted: Online Payment Plan for Print

Every publication now must compete with every other around the globe, many of which are willing to offer their content for free. They also face competition from thousands of aggregators, who take journalists' content, monetize it for their own profit, and, in many cases, give little or nothing back to its originators. That's been true for years now, but the election is over, and we're still staring into an economic abyss that offers little hope that publications -- not to mention TV and radio -- will have time to manage decline while they figure out what's next. What to do? The media grandees weighing in had plenty of solutions (micropayments! Pay walls! ISP taxes! Nonprofit status!), but they can be distilled into two distinct camps: those who believe that consumers can be made to pay -- even a penny -- for content and those who don't.

Publisher speculates about Amazon/Google e-book "duopoly"

Richard Sarnoff, chairman of the Association of American Publishers, speculated last week that the landmark Google Book Search settlement could create a duopoly in the electronic books market. Speaking at Princeton University's Center for Information Technology Policy, Sarnoff noted that Amazon currently dominates the market for downloadable e-books. He said that the settlement "forces Google to become a provider of electronic books with a different business model" in direct competition with Amazon. And he said that some aspects of the massive settlement would be "difficult to replicate" for Google's competitors. Sarnoff said the publishers he represents didn't set out to create a monopoly in the markets for book search engines or online book sales. But he didn't deny that the settlement could have that effect. After all, he noted, "copyright itself is a monopoly."

Watchdog groups press Obama DOJ on Bush e-mails

The National Security Archive and the watchdog group Citizens for Responsibility and Ethics in Washington were disappointed when, just a day after the inauguration, the government moved for dismissal of long-running litigation over millions of lost Bush-era e-mails. In a response brief filed Friday, the Archive blasted White House claims that recovery was under control as based on "untested scraps of evidence," and urged a federal court to compel archivists to request the intervention of the Attorney General under the Federal Records Act. The watchdog groups filed suit under the FRA after learning that problems with the White House e-mail journaling system had led to the loss of some 5 million messages between 2003 and 2005. The law makes the preservation of all such official communications mandatory. In January, the government argued that suit had been rendered moot thanks to the preservation of backup tapes that will permit the eventual restoration of almost all the lost data. Not good enough, say lawyers for the watchdog groups, because the restoration process is still ungoing, and the risk of the loss of records remains. The law, their brief argues, is clear about the required remedy: the White House and National Archives must call on the Attorney General to step in to ensure compliance with the statute. Moreover, they claim that the evidence provided to establish that the danger of deletion has passed is inadequate—and that the attempt to establish mootness at this late date amounts to little more than a bit of legal slight of hand, because it asks the court to preemptively resolve the very question that would be at issue in any decision on the merits of the case.

Nielsen: Americans still love their TV, embracing DVRs

Americans watched an all-time high of 151 hours of TV per month last quarter, according to a new Nielsen study. Our TV habits are on the rise across the "three screens"—TV, Internet, and mobile devices—but the most growth is coming from DVRs, Internet video, and mobile phones. In the fourth quarter of 2008, 285 million Americans watched TV in their living rooms each month, which was up 1.1 percent from the previous quarter. Internet video users were up just 2.3 percent in the same period to 123 million per month, though, while DVRs (8.5 percent) and mobile phones (8.4 percent) took the lion's share of user growth, respectively rising to 74 million and 11 million users per month. Unsurprisingly, Nielsen's study found that the majority of DVR usage comes from a slightly older audience in the 25-64 year-old range, while 12-17 year-olds are watching the most video on mobile phones. Internet video is most popular among 25-54 year-olds. Growth is quite different, however, in terms of the amount of time that users watch video on each of these devices.

Why Is the Media Lying About Digital TV?

[Commentary] After roughly 36 percent of local TV stations switched early to all-Digital TV signals last week, the FCC received more than 70,000 complaints in the first two days. 70,000 complaints in just two days. Based on these developments, you would think that the early DTV switch was a major disaster. Despite local stations' insistence on switching early to save money, it would appear that their viewers were not ready, as many people warned. But good luck in finding that story in many of your nation's top trade and consumer publications, particularly if they are owned by companies that also own local TV stations which desperately want the switch to occur now. There were several examples of newspapers owned by companies that own local TV stations printing digital TV stories that seemed more appropriate for a collection of short novellas. But it wasn't just the consumer press that seemed to go into the tank on this story. If you read the nation's leading TV trade publications, you would think the early switch went as smooth as silk. So, what's happening here? Why are so many publications seemingly so eager to portray the early Digital TV switch as a huge success? It's quite simple. In the case of newspapers with ownership connections to local TV stations, many are following orders. Their corporate parents have a vested interest in creating the perception that the switch is a success, so by God, their newspapers will toe the line or else. Don't kid yourselves, folks. Newsrooms do not make decisions based solely on journalistic reasons. And in the case of the trade publications, they have an historic closeness to the National Association of Broadcasters and other industry heavyweights who want the DTV switch to be portrayed as a success.

Consumer groups tell FCC exclusive handset deals limit competition

Late last week, a group of public-interest groups reiterated how they believe the Federal Communications Commission should address handset exclusivity arrangements. "Handset exclusivity arrangements are harmful to consumers," the Ad Hoc Public Interest Spectrum Coalition told the agency. "These anticompetitive practices limit consumer choice, raise consumer prices and limit innovation in the device market. The arrangements tie together the markets for devices and services, allowing the market power of wireless carriers to invade a competitive market for devices and to use successful devices as hooks to reduce competition in the wireless services market — they function as artificial restrictions on competition in both wireless service and wireless devices markets." As such, the Consumer Federation of America, Consumers Union, Free Press, Media Access Project, New America Foundation, Public Knowledge and U.S. PIRG urged the FCC to initiate a rulemaking with an eye to prohibiting such handset exclusivity arrangements. Last year, the Rural Cellular Association petitioned the FCC to investigate exclusive contracts between top wireless providers and handset manufacturers.

Subscription rates increasing all over

There's been a notable surge in reports of communications service providers raising rates and fees. Companies who have implemented or announced hikes in the past few days include Comcast, Verizon, Time Warner Cable and Rogers Cable. Earlier this month, DirecTV announced it would raise rates effective in March.