February 2010

Thanks, readers, for all the supportive notes on Friday. And for those who asked that I stop blaming everything on the dog, I have a little secret to reveal... http://bit.ly/cPala7

BENTON'S COMMUNICATIONS-RELATED HEADLINES for SUNDAY, FEBRUARY 28, 2010

Headlines will return Tuesday, March 2 in the afternoon.

See this week's agenda http://bit.ly/d9fNyh

THE BROADBAND STIMULUS
   NTIA Awards $7.25 Million BTOP Grant to the California Emerging Technology Fund
   NTIA blocks Reid's plea for broadband stimulus extension
   USDA Broadband Initiatives Program Round 1 Approved Projects as of February 17, 2010

NATIONAL BROADBAND PLAN
   Could Another 9-11 Be Mitigated by a $16 Billion National Public Safety Broadband Network?
   Lower-Income and Less Educated Still Face Broad Digital Divide
   Broadband and New Media Strategies for Minority Radio
   Pokey Mobile Broadband Isn't Cutting It in the New App Era
   'Up to' claims for Internet connection speeds next to worthless

GOOGLE NET
   Google May Spend 'Hundreds of Millions' on Broadband
   Four reasons gigabit 'demo deployments' won't matter
   In the Netherlands, 1 Gbps Broadband Will Soon Be Everywhere

MORE ON BROADBAND
   Independents post progress toward broadband
   IBM survey: land lines to disappear, mobile broadband to explode over next decade
   The Future of Digital Infrastructure for the Creative Economy

NET NEUTRALITY/OPEN INTERNET
   9 Out Of 10 Fake Scientists Agree: Neutrality Means Job Losses
   The Myth of the Benign Monopoly
   Net Neutrality Opponent Tribe joins Justice Department

CYBERSECURITY
   The Connection Between Google's Chinese Cyber Attackers and the US Government
   Cybersecurity bill to give president new emergency powers
   Attacks on Google May Have Hit 100 Companies, ISEC Says
   Microsoft Battles Cyber Criminals

OWNERSHIP
   Sen Kohl asks NBC about Olympic site pay-TV link
   Congress told that Comcast/NBC merger a big crapshoot
   Microsoft says Google acts raise antitrust issues
   The emperor's clothes

TELEVISION
NCTA Backs Must-Carry Challenge | Tsunami warnings show value of TV airwaves, broadcasters say | Cuts at TV-News Divisions Augur Leaner Approach | Who decides what's indecent on cable, late night?

HEALTH IT
Should FDA Regulate Health IT? | Pennsylvania broadband network slated as health data conduit | ONC unveils 'popHealth' for EHR-based quality reporting

STORIES FROM ABROAD
These headlines presented in partnership with:

Italy's Google Miscarriage | On Google, Italy and the Future of Media | Iraqi journalist sees threats to press freedom | NTT DoCoMo announces reduction in interconnection fees | Europe 'will not accept' three strikes in ACTA treaty | Open Wi-Fi 'outlawed' in Digital Economy Bill | Mandelson criticised for backing Google plan | BBC plans widespread cuts to services | Google Street View May Breach EU Law, Officials Say

MORE ONLINE
FTC Journalism Workshop March 9-10 | Common Sense Bestows Genachowski With Minow Award | Obama campaign arm focuses on talk radio | Obama honors leaders in arts and humanities | Big Biz Embracing Twitter | IPad Apps Could Put Apple in Charge of the News | The 2010 Digital Broadband Migration Conference: Examining the Internet's Ecosystem

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THE BROADBAND STIMULUS

NTIA AWARDS $7.25 MILLION BTOP GRANT TO CA EMERGING TECH FUND
[SOURCE: National Telecommunications and Information Administration]
The Department of Commerce's National Telecommunications and Information Administration (NTIA) today announced a $7.25 million Recovery Act investment to bridge the technological divide and increase economic opportunities in vulnerable and low-income communities in Los Angeles, the Central Valley, Orange County, San Diego, and the Inland Empire in California. The grant will fund digital literacy training for more than 675,000 individuals, enabling them to make use of key educational, employment, and health resources online. With this investment, the California Emerging Technology Fund will coordinate a multifaceted outreach campaign using local partner organizations, trusted ambassadors, and grassroots mobilization, to disseminate information about broadband training and services to 5 million California residents. Among other benefits, this investment will upgrade California's One-e-App one-stop online screening and enrollment system that helps families apply for a range of health care and social service programs. The project expects to increase adoption of broadband Internet service among key vulnerable populations by more than 130,000 households.
benton.org/node/32629 | National Telecommunications and Information Administration
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NTIA WILL NOT EXTEND BTOP DEADLINE
[SOURCE: The Hill, AUTHOR: Kim Hart]
The National Telecommunications and Information Administration (NTIA) has rejected a plea from Senate Majority Leader Harry Reid (D-NV) to extend a deadline for broadband stimulus applications. The NTIA said late Thursday that its March 15 deadline for second-round applications stands firm. By law, the administration must award all of the money by Sept. 30 and cannot risk more delays, NTIA said. Earlier this week, Sen Reid joined public interest groups and other lawmakers in asking NTIA to extend its deadline. In a letter, Sen Reid said he was "concerned that the application deadline for the second and final round of rural broadband funding ... does not provide applicants sufficient time to improve their applications for resubmission." "Many applicants have only recently received feedback on their first-round application, and many more are still awaiting notification," he said. "The result is a narrow window for reapplication that can be difficult to accommodate." An extension of the deadline, Reid said, "will help ensure all second-round applicants have a reasonable time to prepare the best application for a competitive program." Potential applicants have also expressed frustration with the short time frame.
benton.org/node/32626 | Hill, The
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RUS BIP PROJECTS TO DATE
[SOURCE: Rural Utilities Service, AUTHOR: ]
The Department of Agriculture's Rural Utilities Service has released a list of 33 broadband stimulus projects funded by the American Recovery and Reinvestment Act. The Broadband Initiatives Program projects include short summaries and loan and grant amounts.
benton.org/node/32644 | Rural Utilities Service
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NATIONAL BROADBAND PLAN

NATIONAL PUBLIC SAFETY BROADBAND NETWORK
[SOURCE: Fast Company, AUTHOR: Kit Eaton]
Although broadband infrastructure companies are building out a national network of high-capacity fiber optics for broadband, the needs of emergency service "interoperable public safety" communications aren't being met by these private plans. So the Federal Communications Commission is recommending that Congress allocate $6 billion in Federal cash to build a nation-wide, fiber network and lay out a further $6 billion to $10 billion to fund its ongoing operations over the next 10 years. The network will be supported by a wireless system too, which could be created by forcing networks that recently bought frequencies in the 700MHz band to devote a small segment of priority airspace to the public safety grid. FCC Chairman Julius Genachowski is strongly arguing that it's the "best and shortest path" to building a national public safety grid, and he's irritated that through political wranglings "we have gone too long with little progress to show for it." What would the grid be used for? Its inception lay in analysis of how the emergency services around the U.S. responded to the events of 9/11. Airwaves were clogged with radio pager and cellphone calls, from emergency services and members of the public, and there was no way to absolutely guarantee the emergency responders or government officials would get priority on the airwaves, or even digital Net-based communications. A reserved broadband network, with prioritized radio bandwidth for mobile communications would've helped matters incredibly, and that's exactly what the FCC is aiming at.
benton.org/node/32647 | Fast Company | PCWorld
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LOWER-INCOME AND LESS EDUCATED STILL FACE BROAD DIGITAL DIVIDE
[SOURCE: Joint Center for Political and Economic Studies, AUTHOR: Jon Gant, Nicol Turner-Lee, Ying Li, Joseph Miller]
More than 75% of Americans, across racial and ethnic groups, now use the Internet on a regular basis. Seventy-nine percent of Whites, 69% of African Americans, 59% of Hispanics, and more than 83% of other racial and ethnic minorities, including Asian and Pacific Islander Americans, Native Americans, and multiracial Americans are now online. Between December 2009 and January 2010, the Joint Center for Political and Economic Studies conducted a study of 2,741 respondents, oversampling African Americans and Hispanics, to understand national minority broadband adoption trends, and examine broadband adoption and use between and within minority groups. This report addresses the experiences of minority consumers of wireline and mobile broadband services and provides insights into some of the factors affecting the decisions of minorities who have adopted broadband. [much more at the URL below]
benton.org/node/32646 | Joint Center for Political and Economic Studies
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BROADBAND AND MINORITY RADIO
[SOURCE: Federal Communications Commission, AUTHOR: Carolyn Williams]
On January 26, 2010, the Office of Communications Business Opportunities (OCBO) hosted a roundtable on Broadband and New Media Strategies for Minority Radio. The list of the roundtable participants and other details can be found here. The roundtable boasted an aggressive agenda which included topics ranging from the current state of radio and its many challenges to possible collaboration with other media and what the future may hold in a technological environment that is ever-changing. The participants discussed the shift in advertising revenue from traditional radio to the Internet citing statistics which indicated that, in 2007, for the first time in history, Internet ad revenue surpassed radio ad revenue and that that trend continues. The point was made that the slow economy is something that cannot be overlooked as a challenge to all as ad spending is down across the board. All of this impacts the ability of small businesses to gain access to capital. However, even with the challenges faced by radio, weekly radio listenership still dominates across all forms of media. This led to an exploration of the unique value that radio offers to the public. It is positioned to best serve local markets as well as national interests, e.g., Census 2010 and voter education. In that vein, the roundtable participants turned to a lively exploration of creative strategies and innovative business models that could take advantage of the new technologies. There was a demonstration of some of the capabilities and applications that currently exist today, such as online radio, and discussion of some of the collaborations that may result in a happy marriage between the traditional broadcast of radio and broadband. The goal for all of us is to ensure that minority radio adapts new methods of delivering content, expands across a multimedia platform, and thrives in this digital age of communications.
benton.org/node/32645 | Federal Communications Commission
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MOBILE BROADBAND NOT CUTTING IT
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
As more people pick up smartphones and shell out for mobile data plans, carriers, application developers and phone manufactures need to keep one thing in mind: Speed matters. Even if it's mobile, a connection to the web still needs to feel like broadband. Otherwise, people aren't going to use their phones as often, or for as long. But speed is a double-edged sword because as newer, faster networks are deployed, the data tsunami already swamping carriers grows taller. Data from AdMob shows that folks using an iPod touch and Wi-Fi to connect to the web spend 100 minutes a day on their devices using apps, while those using 3G on the iPhone spend just 79 minutes. For other 3G handsets, that number rises to 80 minutes for Android phone users and 87 minutes for those on Palm devices. Message: if it ain't fast, then users go home.
benton.org/node/32654 | GigaOm
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'UP TO' INTERNET CLAIMS ARE WORTHLESS
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
When it comes to high-speed Internet access, are you getting what you pay for? Although Internet service providers market "up to" speeds, consumers may rightfully ask "What's the usual speed?" Apparently that's not a question Verizon is comfortable answering. And neither are most other Internet service providers, which routinely promise speeds "up to" certain cyber-velocities but have a hard time specifying what most customers can really expect. "Truth in broadband advertising is a giant problem in the United States," said Joel Kelsey, a telecom policy analyst for Consumers Union. "These 'up to' speeds are not what the typical customer experiences." A more straightforward sales pitch would feature the average speed that Internet customers experience in a certain area, he said. Many business customers are provided such information by telecom companies, Kelsey said, and some are even guaranteed minimum access speeds.
benton.org/node/32620 | Los Angeles Times
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GOOGLE NET

GOOGLE MAY SPEND 'HUNDREDS OF MILLIONS' ON BROADBAND
[SOURCE: Bloomberg, AUTHOR: Brian Womack]
Google said it may spend as much as "hundreds of millions" of dollars on an experimental broadband service that offers Internet speeds 100 times faster than current networks. The cost of the test project, announced this month, isn't known and will depend on demographics, the lay of the land and the number of households that use it, said Richard Whitt, Google's Washington counsel on telecommunications and media issues. The company hasn't determined the location or size of the network, which could serve 50,000 to 500,000 customers. Google, after urging the Federal Communications Commission to expand broadband access, is developing the network to show the potential of high-speed Internet service. It also wants to ensure that networks are open to different software and technologies, rather than the ones picked by service providers. "This is not a small thing," Whitt said in an interview. "We're trying to advance the ball on open networks. We're hopeful this is one way to do that."
benton.org/node/32652 | Bloomberg
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DEMO DEPLOYMENTS DON'T MATTER
[SOURCE: Connected Planet, AUTHOR: Rich Karpinski]
[Commentary] It's difficult to criticize any effort to boost the capacity of broadband networks here in the U.S. But forgive us for feeling that high-profile demo deployments, attention-grabbing announcements and even over-arching national plans are unlikely to truly drive broadband deployments. Here's why: 1) Test networks aren't exactly a new idea. 2) Scale matters. 3) You can't fake capital expenditures spending. 4) It goes against the principles that drove the Internet and the Web. [more at the URL below]
benton.org/node/32651 | Connected Planet
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1 GBPS BROADBAND IN NETHERLANDS
[SOURCE: GigaOm, AUTHOR: Om Malik]
ReggeFiber, in partnership with Dutch incumbent KPN, will make 1 Gbps the standard connection speed for all fiber to the home customers. The company currently has more than 300,000 customers and is on target to grow to a million subscribers. Zeewolde is the first city that will get the service.
benton.org/node/32650 | GigaOm
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MORE ON BROADBAND

INDEPENDENT CARRIERS ROLL OUT BROADBAND
[SOURCE: Connected Planet, AUTHOR: Joan Engebretson]
Fourth quarter earnings reports from four different Independent telcos reveal a mixed bag this week as the companies seek new revenue sources to compensate for continued line loss in their traditional voice business. Many industry observers view bundled broadband services as the best focus for small and large telcos moving forward -- and SureWest Communications seems to be having significant success with that approach. The company saw consolidated revenues increase 2% year-over-year, driven by 13% broadband revenue growth, which offset telecom revenue declines of 15%. The broadband gains did not happen without investment, however. The company, which operates fiber and hybrid fiber coax networks, passed 8800 additional advanced fiber homes in 2009. Also noteworthy was the company's average $8 increase in average revenue per user for triple-play marketable homes. "This was due to a fourth quarter 2009 video and data price increase that reinforced the company's ability to maintain growth while targeting customers who value superior service offerings," the company wrote. Increased demand for higher data speeds, high-definition TV and digital video recorders also helped generate ARPU growth, the company said.
benton.org/node/32649 | Connected Planet
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IBM SURVEY
[SOURCE: The Hill, AUTHOR: Kim Hart]
IBM surveyed 8,000 consumers and 60 telecom company executives to get a sense of Internet-related trends over the next decade, showing that broadband will continue to evolve and expand while traditional communications infrastructure -- those copper lines we've used to make phone calls for decades -- will rapidly disappear. IBM predicts that the use of land lines will decrease by 95 percent in the next five to 10 years. Conversely, usage of mobile and wireless broadband will increase by 98 percent during the same period. The company also found that consumers will demand open platforms, where they can access content on all types of devices. In fact, 70 percent of those surveyed said they want to access content on any device-- a computer, TV, phone or netbook--from any provider. Interestingly, IBM found that 65 percent of consumers expect their telecom provider to maintain their role as simply providing Internet and wireless services. Only one in five consumers expect telecom providers to have a role in the retail and delivery of online content services.
benton.org/node/32648 | Hill, The
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DIGITAL INFRASTRUCTURE AND THE CREATIVE ECONOMY
[SOURCE: Future of Music Coalition, AUTHOR: Casey Rae-Hunter]
Every member of the arts community has been impacted by the unprecedented challenges and opportunities proffered by technology. The last decade has observed our field coming to terms with this disruptive force in inspiring and innovative ways. Equally exhilarating and demanding, these transformations challenged many previous assumptions about the role of the arts and culture sector. This paper briefly examines some of the challenges and opportunities presented by the digital era, and also suggests how the development and maintenance of certain digital infrastructure is critical to a successful and resilient 21st century arts and cultural sector.
[Authored and submitted by Future of Music Coalition, Fractured Atlas and the National Alliance for Media Arts and Culture.]
benton.org/node/32642 | Future of Music Coalition
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NET NEUTRALITY/OPEN INTERNET

NET NEUTRALITY AND FAKE SCIENCE
[SOURCE: dslreports.com, AUTHOR: Karl Bode]
[Commentary] The network neutrality debate has seen no limit of dumb arguments from both sides of the aisle. Since the argument really heated up in 2005 with AT&T CEO Ed Whitacre first clumsily explaining his dream of double dipping, it has been so warped by fuzzy logic, bad science, and spin that the "debate" today is little more than an ugly mess, dominated by professional distortionists and people in strange outfits. The tone and pace of the conversation is now largely dictated by lobbyists and think tankers for hire, who use a wide variety of incredibly sleazy tactics to try and win what now passes for honest debate on the subject of open networks and consumer rights. One of the biggest contributors to the ever-devolving quality of the discussion has been Bret Swanson, recently employed by a PR firm named the Discovery Institute. The Discovery Institute is responsible for such ideas as "intelligent design" (created by evangelical partisans to help sell creationism in the classroom) and the Exaflood (created by ISPs to try and convince the world the Internet will collapse if ISPs aren't allowed to cap, throttle, and overcharge consumers). Swanson is essentially a fake objective analyst for hire, who now does heavy lifting for major telecom carriers under the actually rather ironic name of Entropy Economics. Through bunk science and massaged statistics, Swanson gets quoted as an objective analyst in media outlets, informing the world that there really aren't any broadband problems. Swanson's latest masterpiece appeared this week over at the Huffington Post, where Swanson informs his readers that the FCC's effort to craft more tangible network neutrality guidelines for carriers will result in huge job losses.
benton.org/node/32643 | dslreports.com
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THE MYTH OF THE BENIGN MONOPOLY
[SOURCE: GigaOm, AUTHOR: Sebastian Rupley]
[Commentary] It's worth noting that big commercial technology companies throw their weight around the world in increasingly anti-open, and dangerous, ways. As OStatic notes today, the powerful International Intellectual Property Alliance (IIPA) has just produced a 498-page report for the office of the U.S. Trade Representative arguing that government mandates to use open-source software must be "carefully monitored." The IIPA report recommends that numerous entire countries be placed on international watchlists because their governments favor such software, which it characterizes as a threat to innovation. A closer look at the report, though, shows that its recommendations are made in conjunction with the Business Software Alliance, which counts among its members Microsoft, Adobe, Symantec, IBM and many other large commercial software providers. Innovation all around the world depends on countries, governments, companies and users finding harmonious ways to work together. Just ask the Chinese science community, which has made clear that without Google's technology, its research efforts will suffer enormously. Now, more than ever, there needs to be a healthy and open global ecosystem for technology innovation, and the most dominant technology companies bear great responsibility for protecting it.
benton.org/node/32653 | GigaOm
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TRIBE TO DEPT OF JUSTICE
[SOURCE: Washington Post, AUTHOR: Carrie Johnson]
Harvard law professor Laurence Tribe will join the Justice Department next week to lead an effort focused on increasing legal access for the poor. He will serve as a senior counselor for access to justice. In recent weeks, speculation within legal circles about Tribe's move to Washington had focused on a troubleshooting role that the law professor might play in hot-button areas, such as national security and international issues. But department officials Thursday said his portfolio would involve domestic affairs, and that he would report to Tom Perrelli, the associate attorney general. The National Cable & Telecommunications Association's Brian Dietz points out that Tribe opposes Network Neutrality mandates. In a 2009 paper authored with Thomas Goldstein, tribe wrote: "Net neutrality regulation, if not carefully crafted, could squelch the ability of [broadband service providers] to continue to innovate and provide consumers with the products and services they desire." they cautions that net neutrality threatens the First Amendment because "it interjects the government into private decisions about speech."
benton.org/node/32611 | Washington Post | Read the paper
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CYBERSECURITY

CONNECTING CYBERATTACK WITH US POLICY
[SOURCE: Fast Company, AUTHOR: Kit Eaton]
[Commentary] The Chinese cyberattack late in 2009, targeting Google and other big names, was enabled by U.S. warrantless search legislation. This is a classic case of wrong-headed government thinking, designed to supposedly boost public safety, resulting in genuine disaster: The crack through which Chinese cyberattacks broke into Google last year, causing no end of ongoing trouble, was actually put into the security system on purpose to comply with legislation. Think about that for a moment. The U.S. government, hell-bent at trampling over citizen's rights in order to protect those self-same rights, required Google to install back doors in its security system so that it could, at will, snoop on the online goings-on of suspect Gmail users. And then clever Chinese hackers, hell-bent on discovering intelligence on Gmail users who are suspected to be anti-establishment, used that same back door system to neatly dodge past the complex, expensive security systems Google has in place to protect its own data, and the petabytes of deeply personal information it stores about its billions of users. Oh the irony. It's made worse by the fact that the ongoing saga about Google and China hasn't concluded yet--the search engine giant is still in talks with China's government, even while Chinese scientists lament Google's potential departure, and the affair may have actually damaged human rights hopes inside China. Security researchers are still trying to pin-point the source of the hacks, and believe they may have found some key players and institutions that may be responsible, some with government links. The Chinese government is responding by saying this is preposterous.
benton.org/node/32658 | Fast Company | CNN
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CYBERSECURITY BILL
[SOURCE: The Hill, AUTHOR: Tony Romm]
Sens Jay Rockefeller (D-WV) and Olympia Snowe (R-Maine) continue to draft cybersecurity legislation. Apparently the bill includes: 1) a mandate for federal agencies to prepare emergency response plans in the event of a massive, nationwide cyberattack, 2) provisions giving the President the ability to initiate those network contingency plans to ensure key federal or private services did not go offline during a cyberattack of unprecedented scope, 3) promotion of public awareness of Internet security issues, and 4) key protections of Americans' civil liberties on the Web. It is unclear when Rockefeller and Snowe will finish their legislation. And the ongoing debate over healthcare reform, financial regulatory reform, jobs bills and education fixes could postpone action on the floor for many months.
benton.org/node/32657 | Hill, The
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CYBER ATTACKS MAY HAVE HIT 100 COMPANIES
[SOURCE: Bloomberg, AUTHOR: Brian Womack, Katrina Nicholas]
The Chinese cyber attacks that Google Inc. reported last month may have targeted more than 100 companies, a larger number than previously thought, according to security research firm ISEC Partners Inc. ISEC said it discovered the additional targets while working with victims of the attack, which originated in China. Google initially alerted 30 companies to the problem, San Francisco-based ISEC said. "Although none of the attacks or technique used in this series of attacks are particularly novel, the skill set, patience and tenacity of the attackers is much greater than most enterprises are equipped to deal with," ISEC said in its report.
benton.org/node/32656 | Bloomberg
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MICROSOFT BATTLES CYBER CRIMINALS
[SOURCE: Wall Street Journal, AUTHOR: Ben Worthen]
Microsoft launched a novel legal assault to take down a global network of PCs suspected of spreading spam and harmful computer code, adding what the company believes could become a potent weapon in the battle against cyber criminals. But security experts say it isn't yet clear how effective Microsoft's approach will be, while online rights groups warn that the activities of innocent computer users could be inadvertently disrupted. On Monday, a federal judge in Alexandria (VA) granted Microsoft's request for an order to deactivate hundreds of Internet addresses that the company linked to an army of tens of thousands of PCs around the globe, infected with computer code that allows them to be harnessed to spread spam, malicious virus programs and mount mass attacks to disable Web sites. The court order was issued under seal—a rare move in civil cases of this nature—to allow the company to secretly sever communications channels among the computers before the network's operators could re-establish contact with the machines.
benton.org/node/32625 | Wall Street Journal
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OWNERSHIP

SEN KOHL ASKS NBC ABOUT OLYMPIC PAY-TV LINK
[SOURCE: Reuters, AUTHOR: Diane Bartz]
Senator Herb Kohl (D-WI), chairman of the Senate antitrust subcommittee, has written to NBC to express concern that some of its Internet coverage of the Winter Olympics is limited to pay television subscribers. The letter says sports fans who want to see some of the Olympic coverage on the site NBCOlympics.com must first register with the site after validating a subscription with "your cable, satellite or IPTV provider." "I fear that this practice of locking up certain content only for pay-TV subscribers may be a preview of what is to come with respect to TV programing shown on the Internet, particularly in the context of the proposed Comcast/NBC Universal merger," Chairman Kohl wrote in a letter to NBC President Jeff Zucker. NBC Universal responded it was spending nearly a billion dollars to bring the Vancouver Olympics to U.S. fans in on broadcast television, cable and the Internet. "This three-part offering has been structured to provide the financial support to help justify that investment, and bring U.S. fans the high-quality, professionally produced content they demand," the company said.
benton.org/node/32661 | Reuters | MediaWeek | Bloomberg
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CONGRESS TOLD COMCAST-NBC IS CRAPSHOOT
[SOURCE: ars technica, AUTHOR: Matthew Lasar]
Congress held another hearing on Comcast's proposed buyout of NBC Universal on Thursday, and as at earlier gatherings, the critics came out swinging. Perhaps the most intriguing testimony came from economist Thomas Hazlett, who was circumspect about prospects for the proposed deal. "Some financial analysts have praised Comcast for its bold new enterprise; many have condemned it," Hazlett, former chief economist for the FCC, told the Committee. "'Didn't they learn anything from the failed AOL/Time Warner merger?' is a fairly popular reaction." A new Congressional Research Service paper on the merger offers a similar impression. "The recent history of failed megamergers in the communications sector suggests," CRS observed, "that the vertically integrated postmerger entity may have so many pieces with conflicting market incentives that it proves impossible for executives to craft an internally consistent profit-maximizing business strategy, much less exploit market power to undermine competition." It's worth briefly recalling what some critics think went wrong with the AOL/Time Warner venture. "The vision," market analyst Bill Whyman explained in 2002, was "AOL anywhere—that consumers would go home, see AOL on their TV with Time Warner content, they would go to the supermarket and get messages on a cell phone with AOL content in it... And this was sold to consumers globally, that this would change the nature of technology, of content, of cable. They really promised the moon." But once it became clear to investors that the merger wasn't really that lunar in scale -- that the complex entity's growth would not come to anything close to the promised 30 percent a year, disillusionment set in. "When you miss a target by that much, Wall Street is absolutely unforgiving," he observed.
benton.org/node/32660 | Ars Technica
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MICROSOFT SAYS GOOGLE ACTS RAISE ANTITRUST ISSUES
[SOURCE: Reuters, AUTHOR: Bill Rigby]
Microsoft made its most vehement and public attack on Google on Friday, calling its rival's actions potentially anti-competitive, and urging victims to file complaints to regulators. The broadside comes days after a Microsoft-owned business, along with two other small online companies, complained to European Union regulators about Google's operations there. Microsoft is also fighting a plan by Google to digitize millions of books, currently under scrutiny by the Department of Justice. "Our concerns relate only to Google practices that tend to lock in business partners and content -- like Google Books -- and exclude competitors, thereby undermining competition more broadly," wrote Dave Heiner, Microsoft's deputy general counsel, in a blog published on the company's website on Friday. "Ultimately the competition law agencies will have to decide whether or not Google's practices should be seen as illegal," he wrote.
benton.org/node/32659 | Reuters
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THE EMPEROR'S CLOTHES
[SOURCE: The Economist, AUTHOR: ]
[Commentary] The obstacles in the way of media moguls are especially big. Advertising is swiftly migrating online, and moving away from media companies as it does so. The Internet retains the power to disintermediate (that is, bypass media firms by bringing products straight to consumers) and de-aggregate (turning albums into tracks and newspapers into articles). Few have worked out a way of making money from putting content online. Nor is it clear that a willingness to spend on media-playing devices is a wholly good sign. Consumers bought lots of iPods in the past few years. But they did not spend much money on music. And there is always the threat that media moguls will go on another buying spree. The industry has a history of splashy mergers and acquisitions, particularly involving technology outfits, which end up destroying value. So let the content cocks crow. But if they start talking about synergies, run for the hills.
benton.org/node/32612 | Economist, The
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