October 2009

Free Press Files in Support of FCC Comcast Order

In a legal brief filed Monday with the U.S. Court of Appeals for the DC Circuit, Free Press and five other organizations backed the Federal Communications Commission's authority to protect Internet users' right to an open Internet. The brief defends the FCC's decision in 2008 to act on a complaint, also filed by Free Press and its allies, asking the FCC to stop Comcast's illegal Internet blocking. Comcast appealed the order, challenging the FCC's jurisdiction and procedures. The appeal is currently in the D.C. Circuit Court and no argument date has yet been scheduled.

NTIA Announces First State Broadband Mapping Grants

The Department of Commerce's National Telecommunications and Information Administration (NTIA) today announced that it has awarded the first four grants under NTIA's State Broadband Data and Development Grant Program to fund activities in California, Indiana, North Carolina, and Vermont. The program, funded by the American Recovery and Reinvestment Act, will increase broadband access and adoption through better data collection and broadband planning. The data will be displayed in NTIA's national broadband map, a tool that will inform policymakers' efforts and provide consumers with improved information on the broadband Internet services available to them. The California Public Utilities Commission (CPUC) is awarded approximately $1.8 million; the Indiana Office of Technology (IOT) is awarded approximately $1.3 million; the Rural Economic Development Center (e-NC Authority) is awarded approximately $1.6 million; and the Vermont Center for Geographic Information (VCGI) is awarded approximately $1.2 million to collect and verify the availability, speed, and location of broadband across the states of California, Indiana, North Carolina, and Vermont, respectively. This activity is to be conducted on a semi-annual basis between 2009 and 2011, with initial data coming available in November 2009 to inform broadband policy efforts. Awardees are to present the data in a clear and accessible format to the public, government, and the research community. The CPUC is also awarded $500,000 for the cost of broadband planning activities in California over four years, bringing its grant award total to approximately $2.3 million. In addition, the e-NC Authority is awarded approximately $435,000 for the cost of broadband planning activities in North Carolina over five years, bringing its grant award total to over $2 million.

Broadband Stimulus: Cha- Cha- Cha Changes in NOFA Rule

[Commentary] Some time this month, the National Telecommunications and Information Administration and the Rural Utilities Service intend to issue a Request for Information" (RFI) to gather input on rule changes, additions, deletions, and so on for the next broadband stimulus Notice of Funding Availability (NOFA). This is likely your last best opportunity to impact the stimulus funding process. There's a strong sentiment at the agencies to combine the last two funding rounds. Expect serious jockeying for attention by incumbents who've decided they want to play in the sandbox after all, but not by rules that the first round's 2,200 applicants did. One new rule Settles believes should insist on is that the protections for applicants from incumbent challenges be written, not just verbal as they are currently. Furthermore, insist that applicants have a clearly written defense process to counter challenges, AND be able to see the "evidence" that incumbents submit for their challenges. Currently incumbents can hide evidence behind NDAs, making it harder for communities to defend against challenges.

More, Better, Faster

After digesting 26 workshops, testimony from 230 witnesses and nearly 41,000 pages of written comments, the Federal Communications Commission clearly sees a need for speed. That was one remedy that emerged at a public meeting last week as the agency tries to craft a strategy for "delivery of universal, affordable, widely adopted broadband to serve vital national purposes" as part of the American Recovery and Reinvestment Act of 2009. The national broadband plan is due to Congress by Feb. 17, 2010. At the FCC meeting, chairman Julius Genachowski offered a state-of-the-industry update, rather than strong recommendations. Still, the need for faster Internet lines complicates another key agency mission: service to the about 3 million to 6 million people are who are unserved by basic broadband, defined as a speed of 768 Kilobits per second or less. As the FCC increases the minimum broadband speed in its definition, the number of "unserved" subscribers also goes up. And that, of course, means more money must be spent. By the government's own estimates, the total investment required could go as high as "$350 billion for 100 [Megabits per second] or faster."

Clyburn, Copps to Discuss Telemedicine Services

On October 6, FCC Commissioners Mignon Clyburn and Michael Copps will discuss how broadband has enabled the Medical University of South Carolina to serve rural areas through telemedicine. MUSC officials will describe the research institution's support for advanced stroke treatment services, prenatal care and other health care services for women via broadband networks. MUSC is part of the Palmetto State Providers Network, which connects four rural and underserved regions to a fiber optic backbone being developed in the state and Internet2. The network is a participant in the FCC's Rural Health Care Pilot Program.

FTC Rules on Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act. The notice incorporates several changes to the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980. Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides - which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as "results not typical" - the revised Guides no longer contain this safe harbor. The revised Guides also add new examples to illustrate the long standing principle that "material connections" (sometimes payments or free products) between advertisers and endorsers - connections that consumers would not expect - must be disclosed.

Additional links:
Soon, Bloggers Must Give Full Disclosure (NYTimes)
http://www.nytimes.com/2009/10/06/business/media/06adco.html?ref=todaysp...

U.S. Seeks to Restrict Gift Giving to Bloggers (WSJ)
http://online.wsj.com/article/SB125475547130664753.html#mod=todays_us_pa...

FTC Sets Endorsement Rules for Blogs (WashPost)
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/05/AR200910...

Bloggers face disclosure rules (LATimes)
http://www.latimes.com/business/la-fi-bloggers6-2009oct06,0,4733519.story

FTC approves crackdown on blogger payola (AP)
http://www.usatoday.com/printedition/money/20091006/blogger06_st.art.htm

Celebrities face endorsement crackdown (FT)
http://www.ft.com/cms/s/0/4c854634-b1db-11de-a271-00144feab49a.html

US Media Revenue Set for Historic 2009 Decline

Just how tough has the media space become? The nation's top 100 media companies eked out 0.8% revenue growth in 2008 -- and the reported revenue for top media firms in the first half of this year fell 4.3% from a year ago, according to Ad Age's analysis. So not only was last year's Media 100 revenue growth the lowest since 1991, this year it's on track to show the first decline since Ad Age began ranking top media firms in 1981. Remarkably, 11 of last year's Media 100 firms have plunged into bankruptcy reorganization, overwhelmed in most cases by shrinking revenue and debt loads taken on during the blind optimism of the boom. Print media dominate the bankruptcy list: six newspaper companies, two magazine publishers and two yellow-pages publishers. That points to the momentum going toward digital-media firms, right? Not so fast. Interactive is a mixed bag of hype and hope, with media revenue surging in 2008 at Google (up 23.2%) and flagging at Microsoft Corp. And when it comes to revenue, Facebook and Twitter aren't worth Twittering about at this stage.

Verizon merges two landline units

Verizon is reorganizing its two landline telecom business -- Verizon Telecom, which serves consumers, and Verizon Business, which targets corporate clients -- into one group, as consumers continue to disconnect home phones in favor of cellphones or rivals. Verizon named Fran Shammo, president of Verizon Business, as president of the realigned wireline operations and said Shammo would report directly to Verizon Chief Executive Ivan Seidenberg. Verizon made no mention of job cuts but spokesman Peter Thonis noted that Verizon had been reducing headcount in its traditional phone business for up to six years in order to reflect the decline in home phone lines.

An upfront deal with MediaVest gives Hulu a piece of broadcast's dollars

Hulu is drawing nearer to its goal of getting a big chunk of broadcast TV dollars thanks to an upfront commitment from MediaVest. The Publicis Groupe agency is committing several million dollars of ad spending to Hulu over the next year as part of an upfront deal targeted to demographic clusters. The agreement includes at least six MediaVest clients, with potentially more to join. That it was crafted on audience demos aligns Hulu's ad sales more closely with how broadcast deals are cut. Hulu determines demographics for its content based on a combination of data from Nielsen, comScore and its own user registration lists. For Hulu, the deal represents an important step in building its ad business to match its buzz factor. Since its public debut in March 2008, the site has steadily built its audience. According to comScore, Hulu is now the No. 2 video site, serving 393 million streams in August, more than triple a year earlier. The video hub has the largest cache of high-quality content online, with TV programming from NBC Universal, News Corp. and some Disney properties. CBS remains a holdout, with CBS Interactive head Quincy Smith recently saying Hulu is driving down the TV ratings for some programs.

The Real Cyber Czar

Lt. Gen. Keith B. Alexander is the director of the National Security Agency, the largest intelligence agency in the government, and with little public fanfare he has been setting up the central nervous system in the government's new campaign to defend cyberspace. The agency historically has not been a front-line guardian of civilian government networks, much less the systems that run privately owned electrical plants, dams and financial systems. But that is changing. Recently, Homeland Security Secretary Janet Napolitano said NSA will provide DHS with "technical assistance" as it carries out its statutory mission to defend civilian networks and coordinate private sector protection. Homeland Security, with its much smaller and less experienced cyber staff, will depend on Alexander and his crew for the tools, expertise and resources to do the job. For his part, Alexander has kept a modest public profile and downplayed talk of bureaucratic turf wars with Homeland Security. He and Napolitano are on the same page, even if that can't be said for her staff. In his speeches and statements, Alexander displays the ease of a man who's been given a mission and who knows what it is. Whoever becomes czar will have to hope Alexander maintains this collaborative spirit - and that he returns phone calls.

Benton

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