January 2010

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, JANUARY 11, 2010

A busy telecom policy week begins with the HIT Policy Committee's Privacy & Security Policy Workgroup http://bit.ly/7Xigf2

NATIONAL BROADBAND PLAN
   How the National Broadband Plan Can Help States Achieve their Broadband Goals
   The National Broadband Plan and Tribal Lands
   Spectrum Debate Hits CES
   FCC's Genachowski at CES
   Is the Federal Government's Defined Speed for Broadband Too Slow?
   Administration Backs Spectrum Search

NETWORK NEUTRALITY
   Skeptical judges ask FCC if Comcast P2P smackdown was legal
   Free to Invest: The Economic Benefits of Preserving Network Neutrality
   Why the White House is backing away from Network Neutrality?
   Music Industry Group Creates Net Neutrality Website

WIRELESS
   The end of all-you-can-eat pricing
   The Nexus One and Google's Mobile Strategy
   Mobile Search: Google's Loss Leader or Savvy Investment?
   Google Smartphone Components Cost About $174, ISuppli Estimates

BROADCASTING/CABLE
   FCC Grants Waiver on Encryption Rule for Cablevision
   Retrans Gets 2010 Off To A Good Start for Broadcasters
   Will Time Warner/Fox Deal Bring New Network Priorities For Cable Systems?
   TV Still Leads A Changing Viewing World

TELECOM
   Lawmakers Aim to Stop Verizon Sale to Frontier

PRIVACY
   Firm Drops Controversial Tactic

JOURNALISM
   How to Save Journalism
   A flaw in the proposed federal shield law for journalism?
   Study: Papers Still Lead In Local News

ELECTIONS AND MEDIA
   Courts Roll Back Limits on Election Spending
   Local TV Stations Are Projected Winners in Midterm Elections
   Roger Ailes, A Fox Chief at the Pinnacle of Media and Politics

GOVERNMENT & COMMUNICATIONS
   China's Web Crackdown Continues
   New European crackdown on illegal Internet downloads

MEDIA OWNERSHIP
   How the AOL-Time Warner Merger Went So Wrong
   In Leno Fiasco, a Window to the Midlife Crisis of NBC

HEALTH IT
   Health IT Incentives Out Of Reach?
   Are Doctors Ready for Virtual Visits?

POLICYMAKERS
   Rep Walden Takes Aim at FCC's Distinguished Scholar
   Journalist to Join Google's DC Team

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NATIONAL BROADBAND PLAN

HOW THE NATIONAL BROADBAND PLAN CAN HELP STATES ACHIEVE THEIR BROADBAND GOALS
[SOURCE: Massachusetts Broadband Institute, AUTHOR: Judith Dumont]
How can the Federal Communications Commission help state organizations achieve their broadband goals through measures that do not require additional federal funding or legislation? 1) Provide for Easier Permitting, Licensing and Right-of-Way Access. 2) Promote Project Collaboration and Sharing of Rights-of-Way (including a) Encourage Joint Trenching Opportunities, b) Require Conduit Construction as part of DOT Projects, c) Facilitate Tower Access, d) Leverage Smart Grid Projects, and e) Leverage E-Health Projects). 3) Facilitate Easier Access to Existing Infrastructure ­ Pole Attachments. 4) Pursue Reform of Universal Service ­ Including Overall Fund Reform and Inclusion of Broadband Access. 5) Require More Efficient Use of Spectrum. 6) Prioritize Public Safety Uses. 7) Compile and Share Best Practices and Other Educational Materials. 8) Create a Forum to Facilitate Collaboration Among States. 9) Provide Technical Advice
benton.org/node/31110 | Massachusetts Broadband Institute
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THE NATIONAL BROADBAND PLAN AND TRIBAL LANDS
[SOURCE: California Association of Tribal Governments, AUTHOR: ]
The California Association of Tribal Governments urges the Federal Communications Commission to include a Tribal Broadband Plan into the National Broadband Plan as broadband is the best hope for tribal governments to develop economic development opportunities that support all of the underlying building blocks of economic opportunity that are: education, health care, public safety and governance. A key goal of the National Broadband Plan must be that all tribal governments, anchor tribal institutions, and tribal citizens, like other Americans, have the opportunity to reap the full benefits of broadband services. Recommendations include: 1) Increasing coordination—among federal agencies; Tribal, state, and local governments; and community groups and individuals—is a critical preliminary step towards ensuring that the federal trustee accomplish its tribal broadband goals and objectives in an efficient and effective way. 2) Congress should direct the NTIA, with FCC Tribal Affairs Bureau support, "to address both short- and long-term needs assessments" for tribal broadband. 3) Tribal recommendations for universal service reform, eligible telecommunications carrier designation process reform, network openness, spectrum access, middle mile/special access reform, inter-carrier compensation, access to poles and rights of way, tower siting, national historical preservation act (NHPA) processes, national environmental policy act (NEPA) processes, and video programming proceedings. 4) To help inform Congress of any needed changes to the recommendations in these challenges to the implementation of the Tribal Broadband Plan, including the completion of the National Broadband Plan, the Federal Communications Commission Chairman should complete a status report on the Tribal Broadband Plan by February 17th every year beginning in 2011.
benton.org/node/31109 | California Association of Tribal Governments
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SPECTRUM DEBATE AT CES
[SOURCE: Broadcasting&Cable, AUTHOR: Glen Dickson]
The debate over whether the federal government should reclaim part, or all, of broadcasters' spectrum and reallocate it for wireless broadband applications continued at the Consumer Electronics Show in Las Vegas Thursday (Jan. 7), as representatives of broadcasters, telcos, policy groups and Wall Street argued over how the spectrum can most efficiently be used. During the panel discussion "The Spectrum Grab and Innovation," moderated by Washington Post technology columnist Rob Pegoraro, Association for Maximum Service Television (MSTV) President David Donovan staunchly defended broadcasters' use of the spectrum to provide free over-the-air television and new mobile DTV services against assertions by Qualcomm and AT&T executives that parts of the broadcast spectrum would be put to better use for mobile broadband. "One of the clear focuses of this convention is the use of broadcast spectrum for mobile DTV purposes," said Donovan, who added that mobile DTV should be considered as part of the country's overall broadband plan that is currently being formulated by the Federal Communications Commission. He noted that the most bandwidth-intensive application being cited for wireless broadband is the delivery of wireless video, and that broadcaster's point-to-multipoint system with mobile DTV would be the most efficient way to deliver video, particularly live video. "This spectrum is being used extremely efficiently, and the new services out there now are consistent with that," said Donovan.
benton.org/node/31108 | Broadcasting&Cable | The Hill
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GENACHOWSKI AT CES
[SOURCE: Broadcasting&Cable, AUTHOR: Glen Dickson]
In a wide-ranging one-on-one keynote interview with Consumer Electronics Association chief Gary Shapiro at the Consumer Electronics Show in Las Vegas Jan. 8, Federal Communications Commission Chairman Julius Genachowski described broadband as an "engine for economic growth" and emphasized that providing wireless broadband access will be an important component of the national broadband plan the Commission is currently formulating. While the FCC will explore using the spectrum more efficiently, such as through secondary licensing, he said it is clear the FCC needs to find more spectrum to achieve its goal of universal broadband access. The two most likely sources are broadcasters and government users of spectrum. But Chairman Genachowski did acknowledge the importance of stations' existing DTV broadcasts.
benton.org/node/31107 | Broadcasting&Cable | C-Net|News.com
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IS THE GOVERNMENT'S DEFINITION OF BROADBAND TOO SLOW?
[SOURCE: Government Technology, AUTHOR: Andy Opsahl]
The federal government set 768 kilobits per second (Kbps) for downloading and 200 Kbps for uploading as minimum acceptable speeds to qualify for broadband stimulus grants. But critics say those speeds hardly equate to true broadband. "It's almost impossible to participate in a real-time video conference [at that speed]. It's almost impossible to share video files, music files, pictures -- any large quantity of data with a time-sensitive nature to it. It's almost impossible to do that because it's barely four times the speed of dial-up," said S. Derek Turner, research director of Free Press, a consumer group advocating for higher speeds within the National Broadband Plan, which the FCC plans to release March. "Certainly on the downstream side, you might be able to stream YouTube videos, but you're going to have a lot of stuttering and buffering," Turner added. "On the upstream side, it's barely enough to engage in a two-way voice over Internet phone call." Some critics say the federal government's standard, as written, would cement America's low ranking among national average broadband speeds. Turner contends that this would stunt the nation's economy, which increasingly depends on fast Internet connections. The U.S. ranked 19th in average advertised broadband speeds compared to other countries in a 2008 study conducted by the Organization for Economic Co-operation and Development (OECD), a group headquartered in France that helps governments tackle economic, social and governance challenges of a global economy. If the national plan holds to the minimum speeds required by the stimulus, old-style copper lines will likely be used to provide DSL connections in regions that are now classified as unserved, said Alan Shark, executive director of the Public Technology Institute. He wants subsidies to fund more advanced technology. "We're preserving the current infrastructure," Shark said. "What new is going to be built, other than taking copper lines and putting in a few little switches?"
benton.org/node/31105 | Government Technology
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ADMINISTRATIONS BACKS SPECTRUM SEARCH
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
It is looking more and more likely that the National Broadband Plan will include directions to the nearest available spectrum. Federal Communications Commission Chairman Julius Genachowski and his broadband team have made it clear that while there is no immediate spectrum crisis, they foresee one by mid-decade, and planning for it needs to start now. Broadband advisor Blair Levin recently said that the FCC's plans don't threaten the future of broadcasting, but he added that said future did not necessarily justify using all of that spectrum all the time. Last week, the sense of urgency got the backing of the Obama administration with a one-two punch that could be aimed at incumbent spectrum users, including broadcasters. In filings to the FCC on the upcoming broadband plan, both the Justice Department and the Obama administration—via its chief telecom advisor, the National Telecommunications & Information Administration—said the FCC needed to get its hands on a lot more spectrum. Both agencies framed the push as critical to broadband competition and deployment. While neither singled out broadcasting, the Justice Department in particular was clear that the FCC's first job was to find spectrum being underutilized in terms of its current value versus prospective value to wireless uses.
benton.org/node/31111 | Broadcasting&Cable
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NETWORK NEUTRALITY

SKEPTICAL JUDGES HAMMER FCC ON BITTORRENT DECISION
[SOURCE: ars technica, AUTHOR: Nate Anderson]
Comcast has had its day in court over the issue of "network management." News accounts suggest that the three-judge panel from the DC Court of Appeals was plenty skeptical that the Federal Communications Commission had the proper authority to sanction Comcast's BitTorrent blocking in 2008. It can be difficult to guess judicial decisions based on the judge's oral questioning of the lawyers, but it's certainly possible to see where judges are having trouble with an argument. In today's case, judges repeatedly went after the FCC's contention that it was acting legally in the Comcast case. Because Comcast's behavior ran afoul of an "Internet Policy Statement" rather than an official rule, the company claims that the FCC had no grounds for action until it made the Policy Statement into actual policy. Judges questioning the FCC's legal team said that the Policy Statement was "aspirational, not operational," that the FCC had not identified a "specific statute" Comcast violated, and that the FCC "can't get an unbridled, roving commission to go about doing good." FCC Chairman Julius Genachowski said, "This case underscores the importance of the FCC's ongoing rulemaking to preserve the free and open Internet. I remain confident the Commission possesses the legal authority it needs and look forward to reviewing the court's decision when it issues."
benton.org/node/31104 | Ars Technica | B&C | MediaPost | TechDailyDose | Bloomberg | Chairman Genachowski
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FREE TO INVEST: THE ECONOMIC BENEFIT OF PRESERVING NET NEUTRALITY
[SOURCE: New York University Law School, AUTHOR: Inimai Chettiar, J Scott Holladay]
The Federal Communications Commission has proposed rules that would keep the doors to the Internet open. The proposed rules would make Network Neutrality the law of the land, ensuring that the Internet remains free and open to content providers. This Report analyzes federal net neutrality policy from an economic perspective in order to understand the fundamental tradeoffs: How do we maximize the value of the Internet? Who wins, and who loses? While there may be other considerations for policymakers, economic criteria can indicate which policy maximizes net benefits for society, and, thus, are clearly important. There are five core findings of this Report that should influence the debate over net neutrality.
1) Internet Market Failure: The Internet -- understood both as the physical infrastructure as well as the content and information moving along that infrastructure -- produces billions of dollars of free value for the American public: Information is shared, reused, and reconfigured without fees or penalties.
2) Smart Policy Can Help: As a result of this dynamic, the Internet is more useful to everyone on it, but Internet Service Providers (ISPs) and content providers are at a disadvantage since they are not compensated for all the information they disseminate. This leads to systematic underinvestment in the Internet.
3) Without net neutrality rules, new technologies could lead to pricing practices that transfer wealth from content providers to ISPs, a form of price discrimination that would reduce the return on investment for Internet content—meaning website owners, bloggers, newspapers, and businesses would have less incentive to expand their sites and applications.
4) Additional investment in broadband infrastructure would also increase the value of the Internet—making it faster and accessible in more places. But charging content providers for access to ISP customers is an extremely inefficient economic tool to do that, primarily because most additional revenue generated for ISPs is likely to be transferred to their shareholders rather than invested in expanding broadband lines.
5) By giving players the best incentives for optimal investment, net neutrality encourages a cycle that breeds more content, which in turn breeds more users. A combination of policies that protect content providers and judiciously deploy government resources to augment private investment in physical infrastructure is the right mix to ensure that the Internet continues to grow and flourish, generating massive benefits for the American public.
benton.org/node/31085 | New York University Law School
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WHY IS THE WHITE HOUSE BACKING AWAY FROM NET NEUTRALITY?
[SOURCE: C-Net|News.com, AUTHOR: Larry Downes]
[Commentary] The Obama Administration and its allies at the Federal Communications Commission are retreating from a militant version of Network Neutrality regulations first outlined by FCC Chairman Julius Genachowski in September. Chairman Genachowski had initially described his vision for the future role of the FCC as a "smart cop on the beat preserving a free and open Internet." Communications companies understood that to mean aggressive and detailed enforcement of rules that would, among other things, prohibit ISPs from offering premium, or "fast lane," services. Downes cites an American Spectator article (see link below) saying that Obama advisor Susan Crawford left the White House in a row over how radical proposed Network Neutrality rules would be. At the Consumer Electronics Show, Crawford and White House deputy CTO Andrew McLaughlin reminded the audience that the FCC had yet to determine whether net neutrality is needed to preserve the open Internet and characterized the proposing of the rules as simply opening a dialogue on the subject to allow the FCC to collect data. Downes writes that the major carriers are making the investments, and have every business reason to make more. But the Net neutrality rules, depending on how the FCC defines key terms, could hamstring their efforts to make their money back. Net neutrality is making Wall Street uncomfortable about financing broadband deployment. That in turn is making the White House nervous. Net neutrality is turning out to be a noisy side show and a growing distraction from the real priority for both the White House and the FCC: getting the country wired for recovery. [Larry Downes is a consultant and author, most recently of "The Laws of Disruption: Harnessing the New Forces that Govern Life and Business in the Digital Age." He is a nonresident fellow at the Stanford Law School Center for Internet & Society.]
benton.org/node/31083 | C-Net|News.com | The American Spectator | HuffingtonPost
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FUTURE OF MUSIC COALITION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Future of Music Coalition is collecting network neutrality shout-outs from musicians, including R.E.M., Pearl Jam, Dead Presidents, and others on a new Web site. In addition to collecting the comments, the site's goal is to pass those along to the FCC as comments filed in that network neutrality proceeding (comments are due Jan. 14 and replies March 5).
benton.org/node/31103 | Broadcasting&Cable
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WIRELESS

THE END OF ALL-YOU-CAN-EAT PRICING
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Verizon Wireless imagines that its coming LTE mobile broadband network will run all kinds of devices such as tablet computers, home appliances, automobiles, smart phones and televisions that you may not necessarily get from a Verizon store. And because so many devices in one household could be connected to its network, the nation's largest wireless service operator thinks the days of flat-rate plans may be over, according to Verizon chief technology officer Dick Lynch in an interview Thursday at the Consumer Electronics Show. Instead, the company will probably charge a base rate for its users and allow multiple authenticated devices to be attached to its network. Then it will charge by how much bandwidth is used by a provider ­ a business model known as usage-based pricing. So the question now, writes GigaOm's Stacey Higginbotham, is whether the pricing model will resemble that of cable services, with a high base rate and then smaller charges for premium channels, or that of a utility bill, which see users pay a tiny charge each month and then a set rate for each kilowatt consumed. Or will it be closer to that of existing cellular pricing plans, complete with high base rates and punitive overage fees? And how will the subscriber be billed for myriad connected devices?
benton.org/node/31106 | Washington Post | GigaOm
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THE NEXUS ONE AND GOOGLE'S MOBILE STRATEGY
[SOURCE: GigaOm, AUTHOR: Colin Gibbs]
Google's strategy for the Nexus One has reportedly infuriated Motorola and Verizon Wireless, both of which have invested heavily in promoting the Droid devices that came to market two months ago. For Verizon, which had earned a reputation as the nation's most closed network operator, Android is a double-edged sword. The carrier is enjoying brisk Droid sales and will surely see proportionate data consumption, but much of that traffic will come from subscribers using Android apps — not Verizon's offerings. Aware that it must broaden its lackluster lineup of consumer-facing smartphones or lose customers to competing carriers, Verizon has agreed to support a CDMA version of the handset. But Google, not Verizon, will sell the phone. Which means that not only is Google unafraid of angering the nation's largest carrier by competing with it, it is wresting at least a little control from the operator's retail business. The Droid deal may have let Google's fox into Verizon's henhouse. The Nexus One may be a small wedge designed to open a gap between the operators, whose grip on the industry is slowly loosening, and their customers. Google hopes to widen that gap and approach users directly, marginalizing carriers by commoditizing connectivity as it boosts traffic. As Hendrix writes, "By definition, disruptive innovations are usually at odds with incumbents' interests. As a result, the legacy mobile business as it exists today is likely to be transformed significantly."
benton.org/node/31095 | GigaOm
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IS MOBILE SEARCH GOOGLE'S LOSS LEADER?
[SOURCE: ClickZ, AUTHOR: Kevin Lee]
Google's reasons for wanting AdMob are strategic. Google apparently believes that the market for mobile advertising is important enough to acquire rather than deploy its talented engineers to build a platform similar to AdMob's. These reasons include:
1) Growth in mobile display: Clearly, brand advertisers interested in following certain consumer segments to where they spend their time must consider buying at least some mobile advertising (if for no other reason than to not look stupid when the CEO asks if the company is "tapping the mobile opportunity"). Direct response advertisers will be less likely to be drawn to mobile display (with the exception of certain segments like ringtones and other mobile-centric purchases). Most consumers transact less frequently on their mobile devices, even when researching products and services.
2) AdSense for mobile: Contextual links could work on a mobile device. They are low bandwidth and formats could be arrived at that make them consumer-friendly. Consumers may click through on content placements.
3) Loss leader: Maintaining leadership in mobile display could be a sound strategic investment, even if the ROI (define) doesn't show up as direct advertising profits. Google must ensure its ad sales teams are always welcome at agencies and by marketers. The curiosity about mobile advertising will persist for many years, guaranteeing Google many sales visits where up-sell and cross-sell opportunities exist (even if the meeting doesn't end with an IO for mobile display ads). On the consumer side, the acquisition ensures that Google can position itself as "cool and cutting edge." Consumers spending a lot of time online (the important consumers for any search or display publisher) already see "Ads by Google" messages all over the place. These messages provide free advertising for Google in the form of reminders. AdMob has already served 143 billion ad impressions, and the next 200 billion impressions may include "Ads by Google."
benton.org/node/31094 | ClickZ
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GOOGLE PHONE COSTS $174
[SOURCE: Bloomberg, AUTHOR: Lisa Wolfson, Arik Hesseldahl]
Google's Nexus One phone has component costs of about $174, according to an estimate from ISuppli Corp. Qualcomm's Snapdragon chip, which runs the phone's software, probably costs $30.50, making it the most expensive part in the device and accounting for 18 percent of the total. The Nexus One, which uses Google's Android operating system, retails for $179 with a two-year T-Mobile USA contract and $529 without it. Google designed the device with HTC Corp. of Taiwan. It also has a compass, satellite navigation and a one-piece enclosure, known as unibody construction. Components including a unibody and Snapdragon chip have been used in other smartphones "but never before combined into a single design," said Kevin Keller, senior analyst at ISuppli. "This gives the Nexus One the most advanced features of any smartphone" broken down and analyzed by the firm, he said. The phone's 3.7-inch display screen is supplied by Samsung Mobile Display Co. and has an estimated cost of $23.70, ISuppli said. Samsung Semiconductor Inc. provided all the memory in the phone, contributing $20.40, or 11.7 percent, of the total component cost, ISuppli said.
benton.org/node/31093 | Bloomberg
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BROADCASTING/CABLE

FCC GRANTS CABLEVISION WAIVER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has granted Cablevision a waiver of its encryption rule prohibiting cable operators from scrambling their basic tiers for the cable operator's New York franchise--Bronx and the majority of Brooklyn--which it is converting to all-digital. The encryption rule was adopted to insure that viewers with cable-ready sets would not have to buy/rent set-tops to get their programming. But the FCC left room for waivers in some circumstances, and said Jan. 8 that Cablevision had made a strong case for the waiver. Cablevision said the waiver would allow it to connect and disconnect remotely, though that means its subs would have to have either a set-top or a TV set with the CableCARD security hardware. That strong case included that the move would "reduce costs, improve customer service, reduce fuel consumption and CO2 emissions, alleviate traffic [Cablevision says it made a million service calls last year], and have virtually no negative impact on customers." To make that last point, Cablevision pointed out that 99% of the subs in the New York system had either set-tops or CableCARDS, so the disruption would be minimal. The FCC said that Cablevision had "cogent reasons" and cited "concrete benefits." It called "compelling" the 99% figure, saying that meant incompatibility between consumer equipment and the cable service would not be widespread. The FCC said it was convinced Cablevision would take the necessary steps to mitigate harm to customers, and also said it would be a good test bed for the FCC to "assess the utility of the encryption rule." Public Knowledge Legal Director Harold Feld said, "The unique facts presented in this case by Cablevision justified granting a waiver for encryption of basic cable service. We are also pleased that the Media Bureau will monitor Cablevision's commitment to provide free set-top boxes. At the same time, we are still concerned that the Commission is proceeding on a case-by-case basis on a variety of set top box issues. Cablevision's conversion to all-digital service is part of a broader cable digital transition that has been recognized as part of the Commission's National Broadband Plan. It would be much better for the Commission to take a comprehensive look at all set-top box issues as part of one rulemaking, as we have suggested."
benton.org/node/31101 | Broadcasting&Cable | Public Knowledge
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RETRANS GETS 2010 OFF TO GOOD START
[SOURCE: TVNewsCheck, AUTHOR: Harry Jessell]
[Commentary] Fox and Sinclair seem to have gotten the best of cable in their retransmission showdowns. Fox fell short of its goal — a buck a sub a month — in its negotiation with Time Warner Cable, but may have gotten more than the 50 cents that CBS has been getting. That sets a new benchmark that all broadcasters can aim for in upcoming negotiations. Of course, I think Fox should have asked for $2 and settled for $1.50. That's the kind of retrans dough that the all broadcasters are eventually going to need if they want to maintain their programming lead over basic cable deep into the new decade.
benton.org/node/31100 | TVNewsCheck
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WILL TWC/FOX DEAL BRING NEW PRIORITIES?
[SOURCE: MediaPost, AUTHOR: Wayne Friedman]
[Commentary] Do broadcast networks have the advantage over cable networks when it comes to cable system carriage negotiations? If you are a cable network not connected to a big media company that owns a network, you might find this true. Future contract talks between cable networks and cable systems might get testier now that broadcast networks want to cut ahead of the negotiating line. Look at what Tennis Channel is going through with Comcast; Versus with DirecTV; HGTV and Food Network with Cablevision Systems. One wonders if cable systems aren't really looking to prioritize their efforts when it comes to viewers' interests -- especially since they quickly tackled the bigger programmers' issues, such as what Time Warner and Fox resolved.
benton.org/node/31099 | MediaPost
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THE STILL LEADS A CHANGING WORLD
[SOURCE: TVNewsCheck, AUTHOR: Kathy Haley]
In a world in which TV everywhere is increasingly the goal, linear TV remains king, generating by far the biggest audiences and the greatest wealth for program creators. But as opportunities to organize and interact with TV programming proliferate, both online and on mobile devices, TV executives and content creators must be aware of how their medium is changing, and plan how to maximize future revenue streams. Live, linear TV viewing is up 23% from third-quarter 2008, and at least some of that increase may have been spurred by all the exposure TV shows are getting on the Internet. "People with Internet access watch more TV than they did five years ago," said Scott Brown, SVP of strategy and digital platforms at Nielsen, who noted that the trend is apparent even among viewers under 18. Despite the growth in watching in front of a TV set, time-shifted viewing is up 22.5%, Brown said, while online video consumption is up 35%, with 42% of online video consumption occurring during the day, when most people are at work.
benton.org/node/31098 | TVNewsCheck
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TELECOM

LAWMAKERS AIM TO STOP VERIZON
[SOURCE: IDG News Service, AUTHOR: Grant Gross]
Verizon Communication's proposed sell-off of 4.8 million rural phone lines in 14 states to Frontier Communications will saddle the smaller telecom firm with a huge amount of debt and should be rejected by the government, two U.S. lawmakers said Thursday. The US$8.6 billion deal, announced last May, would leave Frontier with $3.3 billion in debt while allowing Verizon to avoid paying about $600 million in taxes, U.S. Representative Paul Hodes, a New Hampshire Democrat, said during a press conference. Hodes plans to introduce legislation to close the tax "loophole" under a so-called Reverse Morris Trust transaction, in which a larger company sells off assets to a smaller company. The deal is a "tax scam, at its base," added Ben Scott, policy director of Free Press, a media reform group. In a Reverse Morris Trust deal, the selling company can avoid paying taxes on its sold assets as long as its shareholders end up with more than 50 percent of stock of the buying company.
benton.org/node/31092 | IDG News Service
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PRIVACY

FIRM DROPS CONTROVERSIAL TACTIC
[SOURCE: CongressDaily, AUTHOR: Juliana Gruenwald]
Senate Commerce Committee Chairman John (Jay) Rockefeller (D-WV) Friday praised the marketing firm Affinion Group for dropping a controversial tactic known as online datapass marketing. Rockefeller's committee has been investigating Affinion and two other firms, Vertrue and Webloyalty, that partner with trusted online retail sites to get consumers to sign up for discount club memberships as part of a misleading step connected to the online checkout process with the retail sites. As part of the process, consumer credit and debit card information is passed on to the marketing firms usually without consumers' knowledge.
benton.org/node/31096 | CongressDaily
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JOURNALISM

HOW TO SAVE JOURNALISM
[SOURCE: The Nation, AUTHOR: John Nichols, Robert McChensney]
Everyone agrees that a free society requires a free press. But a free press without the resources to compensate those who gather and analyze information, and to distribute that information widely and in an easily accessible form, is like a seed without water or sunlight. It was with this understanding that Washington, Jefferson, Hamilton and their contemporaries instituted elaborate systems of postal and printing subsidies to assure that freedom of the press would never be an empty promise; to that end they guaranteed what Madison described as "a circulation of newspapers through the entire body of the people...[that] is favorable to liberty." Two centuries after Madison wrote those words, American news media are being steered off the cliff by investors and corporate managers who soured on their "properties" when the economic downturn dried up what was left of their advertising bonanza. They are taking journalism with them. If our policy-makers do nothing, if "business as usual" prevails, we face a future where there will be relatively few paid journalists working in competing newsrooms with editors, fact-checkers, travel budgets and institutional support.
benton.org/node/31091 | Nation, The
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A FLAW IN THE PROPOSED FEDERAL SHIELD LAW?
[SOURCE: Online Journalism Review, AUTHOR: Gerry Storch]
[Commentary] The media shield bill that frequently seems poised to whisk through Congress, but has incurred several discomfiting delays, is a bad idea unless it gets one big change. If the story goes to trial, the judge should have the discretion to disallow the confidentiality protection of the sources if the reporter has made any significant errors or if the sources' information is wrong or unfair. If the reporter has screwed up or been dishonest or been suckered, why should he/she be protected? Without this change, the law is a bad idea for the public because the rights of the subjects of the stories and possibly others affected are totally ignored. And it might be a bad idea for the press itself because one can easily foresee it backfiring during a libel trial that centers on wrong and harmful information.
benton.org/node/31090 | Online Journalism Review
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PAPERS STILL LEAD IN LOCAL NEWS
[SOURCE: Associated Press, AUTHOR: Michael Liedtke]
Most local news still flows from newspapers even as an Internet-driven upheaval diminishes the depth of their coverage, according to a study to be released Monday. The findings are based on an analysis of how local news stories evolved in Baltimore during one week last summer. The review by Pew Research Center's Project for Excellence in Journalism monitored 53 media outlets - newspapers, television and radio stations and Web-only operations. Newspapers and their Web sites provided 61 percent of the original reporting or fresh information on six major news stories that unfolded during the week of July 19-25, the study found. Local television stations and their Web sites accounted for 28 percent of the new information, followed by radio stations and their sites at 7 percent and Internet-only "new media" at 4 percent. The conclusions bolster the arguments of newspaper publishers and editors who trumpet their publications as indispensable sources of information about their communities.
benton.org/node/31116 | Associated Press | Pew study
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ELECTIONS AND MEDIA

COURTS ROLL BACK LIMITS ON ELECTION SPENDING
[SOURCE: New York Times, AUTHOR: David Kirkpatrick]
Even before a landmark Supreme Court ruling on campaign finance law expected within days, a series of other court decisions is reshaping the political battlefield by freeing corporations, unions and other interest groups from many of the restrictions on their advertising about issues and candidates. Many legal experts say they expect the court to use its imminent ruling, in the case of Citizens United v. Federal Election Commission, to eliminate the remaining restrictions on advertisements for or against candidates paid for by corporations, unions and advocacy organizations. (The case centers on whether spending restrictions apply to a conservative group's documentary, "Hillary: The Movie.")
benton.org/node/31119 | New York Times
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LOCAL TV STATIONS ARE PROJECTED WINNERS IN MIDTERM ELECTIONS
[SOURCE: AdAge, AUTHOR: Evan Tracey]
The 2010 elections will be viewed by pundits as a test of the Obama administration's popularity, but to media companies -- particularly local TV stations -- it will be viewed as a welcome stimulus package. Between increasingly unhappy (and active) voters, close congressional races and wide open gubernatorial contests, this year could eclipse 2006's record-breaking midterm spending of $2.6 billion. The economy, of course, might drag down fundraising efforts, but that could be offset by a Supreme Court ruling on campaign funding as well as the fundraising lessons learned from the Obama campaign's use of new-media tools. More than $20 million has already been spent on 2010 TV ads in 2009, so the ad wars are well underway. And with 26 states holding primaries before July, it is unlikely that we'll see any lulls in ad spending. Further, the nation is layered with competitive races ranging from the U.S. House, where there could be as many as 70 competitive races, to the one-third of the U.S. Senate up for election. Better yet for those selling ad space, the majority of the 37 governors' races are currently without incumbents running for reelection. Ad spending on the state level will be driven in large part by those governors' races. The U.S. House and Senate races in 2010 will be the political equivalent of the national stress test for the health of the Obama presidency going into 2012.
benton.org/node/31118 | AdAge
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ROGER AILES, A FOX CHIEF AT THE PINNACLE OF MEDIA AND POLITICS
[SOURCE: New York Times, AUTHOR: David Carr, Tim Arango]
Roger Ailes is making money. At a time when the broadcast networks are struggling with diminishing audiences and profits in news, he has built Fox News into the profit engine of the News Corporation. Fox News is believed to make more money than CNN, MSNBC and the evening newscasts of NBC, ABC and CBS combined. The division is on track to achieve $700 million in operating profit this year. This outsize success has placed Mr. Ailes, an aggressive former Republican political strategist, at the pinnacle of power in three corridors of American life: business, media and politics. In addition to being the best-paid person in the News Corporation last year, he is the most successful news executive of the last 10 years, and his network exerts a strong influence on the fractured conservative movement.
benton.org/node/31117 | New York Times
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GOVERNMENT & COMMUNICATIONS

CHINA'S WEB CRACKDOWN CONTINUES
[SOURCE: Wall Street Journal, AUTHOR: L. Gordon Crovitz]
[Commentary] China is doing its best to remind us that technology can be a tool of suppression, with Beijing recommitting to censoring its large corner of the Internet. China makes no secret of its commitment to censorship. Its minister of public security last month wrote an essay on the importance of control in a Communist Party magazine called Quishi ("Seeking Truth"). Meng Jianzhu said that the country needed to do a better job limiting use of the Web and social media to organize anticorruption and other protests, which now officially number 80,000 a year. "The Internet has become an important means for anti-China forces to engage in infiltration and sabotage," he wrote, urging policies that "give greater prominence to correct guidance of Internet opinion." Censoring the Web is hard for any government. But as China is showing, with enough commitment it can be done.
benton.org/node/31113 | Wall Street Journal
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EUROPEAN CRACKDOWN ON ILLEGAL DOWNLOADS
[SOURCE: Associated Press, AUTHOR: Ciaran Giles]
Spain approved a plan Friday to quickly shut down Web sites offering illegal entertainment downloads, joining Britain and France in moving to implement new crackdowns on Internet piracy. Justice Minister Francisco Caamano said the measure by the Spanish Cabinet would create a panel of experts to hear complaints against suspect sites. The panel can then call on a judge, who will have four days to hear arguments from the parties involved before ruling on whether to shut down a site. The measure, which must be approved by Parliament, is aimed at placating entertainment industry groups that claim they are losing millions of euros (dollars) through Internet piracy of copyright-protected material. The proposals are more moderate than those of other European countries such as France, where Internet access to people who download illegally can be cut. On Friday French Culture Minister Frederic Mitterrand inaugurated the new authority overseeing the protection of rights on the Internet, and said the first written warnings to people suspected of illegal downloading would be sent in spring. Mitterrand's ministry estimates that 1,000 French Internet users a day could be taken offline under the law passed last year. Britain recently announced it planned to follow France's lead to cut off Internet access to people who download illegally.
benton.org/node/31112 | Associated Press
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MEDIA OWNERSHIP

HOW THE AOL-TIME WARNER MERGER WENT SO WRONG
[SOURCE: New York Times, AUTHOR: Tim Arango]
A Q&A with Steve Case and Gerald Levin. A decade ago, America Online merged with Time Warner in a deal valued at a stunning $350 billion. It was then, and is now, the largest merger in American business history. The Internet, it was believed, was soon to vaporize mainstream media business models on the spot. America Online's frothy stock price made it worth twice as much as Time Warner's with less than half the cash flow. When the deal was announced on Jan. 10, 2000, Stephen M. Case, a co-founder of AOL, said, "This is a historic moment in which new media has truly come of age." His counterpart at Time Warner, the philosopher chief executive Gerald M. Levin, who was fond of quoting the Bible and Camus, said the Internet had begun to "create unprecedented and instantaneous access to every form of media and to unleash immense possibilities for economic growth, human understanding and creative expression." The trail of despair in subsequent years included countless job losses, the decimation of retirement accounts, investigations by the Securities and Exchange Commission and the Justice Department, and countless executive upheavals. Today, the combined values of the companies, which have been separated, is about one-seventh of their worth on the day of the merger. To call the transaction the worst in history, as it is now taught in business schools, does not begin to tell the story of how some of the brightest minds in technology and media collaborated to produce a deal now regarded by many as a colossal mistake.
benton.org/node/31115 | New York Times
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LENO FIASCO
[SOURCE: New York Times, AUTHOR: David Carr]
In the old paradigm, networks operated from Olympian heights, but with cable outlets multiplying, a network's size and mass audience are not always an advantage. While cable networks can pick and choose their spots, building discrete successes while living off a combination of fees and advertising, broadcast networks are at the top of a huge ecosystem where their every move lands forcefully on affiliated locals. For big corporations, it is often about defense, so it made some sense to put Jay Leno on a timer in order to hang on to the very talented Conan O'Brien. And when NBC struggled to compete with its network brethren because of bad programming bets, it addressed the decline by changing the game, busting up the prime-time grid and inserting Mr. Leno at 10 p.m. At the time, it was viewed as a way to cut costs and keep a proven talent away from competitors, while making room for the ascendance of Mr. O'Brien to "The Tonight Show." Everybody hugged. It was win-win, right? But the not-so-reinvented, not-so-funny "Jay Leno Show" had the ratings of a night light, setting off a revolt from affiliates that, according to Ad Age, had a terrible year, with a breathtaking 22.4 percent drop in revenue from 2008. And it didn't help that Mr. O'Brien was pummeled on Mr. Leno's old perch. The fiasco suggests that networks mess with the inertia of viewing habits at their extreme peril.
benton.org/node/31114 | New York Times | NYT - NBC Confirms Leno to late night | WSJ | WP | LATimes | LATimes - What for Leno slot? | USAToday
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