February 2010

Televisa, Nextel Mexico in Deal

Mexican media giant Grupo Televisa has acquired a 30% stake in Nextel Mexico for $1.44 billion, a move that allows Televisa to partner with a wireless carrier to bid for new wireless spectrum up for auction later this year.

Under terms of the all-cash deal, which has been discussed in the Mexican media for weeks, Televisa will be granted an option to acquire another 7.5% of Nextel Mexico in the third or fourth year after this deal closes. Televisa is the largest media company in the Spanish-speaking world. It is dominant in Mexico in areas such as cable, satellite and television, but has little to no wireless-phone presence. Nextel Mexico is a subsidiary of NII Holdings, the international arm spun out from Nextel before its Sprint merger. NII is based in Virginia and has wireless operations in Mexico, Brazil, Argentina and Peru. Competition in Mexico's telecom industry, dominated by tycoon Carlos Slim's America Movil, is heating up as the government auctions wireless spectrum after years of delays. Movil controls about 70% of the country's wireless market.

Court Orders Spanish Broadcasting System to Restore Arbitron Encoding

A court has ordered Spanish Broadcasting System to reinstate, at least temporarily, the coding of its radio broadcasts for measurement by Arbitron.

The Supreme Court of New York has issued a temporary restraining order (TRO) against the Spanish Broadcasting System and scheduled a hearing Feb. 16 to determine whether to make it permanent. That came in response to Arbitron's request that the court force SBS to start encoding its radio broadcasts under a June 2007 agreement. The encoding allows Arbitron's Portable People Meters (PPMs) to record audience information, a system that relies on encoding. According to Arbitron, it sought the TRO after SBS stopped encoding the broadcasts at stations in New York, Miami, Chicago, L.A. and San Francisco on Feb. 4.

Media conglomerates seeing revenue boosts

Media conglomerates hadn't seen revenue growth for at least a year, relying on cost cuts to boost their bottom lines. But the current quarterly earnings season has brought a return to at least slight growth at several sector biggies.

NBC Universal and Viacom are the exceptions so far with 4% and 3% revenue declines, respectively, and Disney already had returned to revenue growth in the third calendar quarter of 2009 and eked out another slight uptick in the fourth. Most have cited better ad momentum in fourth-quarter 2009 as a key reason for the revenue gains, and Time Warner even predicted it would record revenue gains for full-year 2010.

But News Corp. chairman and CEO Rupert Murdoch was the most vocal about touting his conglomerate's quarterly revenue boost that at 10% outperformed the gains of its peers.

Student Suspended for Facebook Page Can Sue

A South Florida teenager who sued her former principal after she was suspended for creating a Facebook page criticizing a teacher can proceed with her lawsuit, a federal judge has ruled. The student, Katherine Evans, is seeking to have her suspension expunged from her disciplinary record. School officials suspended her for three days, saying she had been "cyberbullying" the teacher, Sarah Phelps. Evans is also seeking a "nominal fee" for what she argues was a violation of her First Amendment rights, her lawyers said, and payment of her legal fees. The former principal, Peter Bayer, who worked at the Pembroke Pines Charter High School, had asked that the case be dismissed. But Magistrate Judge Barry L. Garber denied Bayer's petition and rejected his claims of qualified immunity.

White House revamps communications strategy

White House officials are retooling the administration's communications strategy to produce faster responses to political adversaries, a more disciplined focus on President Obama's call for "change" in Washington and an increasingly selective use of the president's time.

The messaging adjustments are the result of an end-of-the-year analysis in which White House advisers said the president's communications team had not taken the initiative often enough and had allowed drawn-out debates in Congress, and relentless criticism by Republicans, to drown out his message. "It was clear that too often we didn't have the ball -- Congress had the ball in terms of driving the message," communications director Dan Pfeiffer said. "In 2010, the president will constantly be doing high-profile things to be the person driving the narrative." Senior White House aides described the changes as an aggressive response, aimed at producing fresh momentum for the president's faltering agenda and regaining the advantage ahead of the congressional midterm elections in November.

China leads the world in hacked computers, McAfee study says

More private computers were commandeered by hackers for malicious purposes in China in the last quarter of 2009 than in any other country, including the United States, according to a new study by an Internet security company.

These "zombie" computers are often grouped into "botnets," or armies of infected computers that can be used to send spam e-mail or attack Web sites, according to McAfee, a Silicon Valley security firm. The company, which said it collects information about Internet-based threats that target more than 100 million computers in 120 countries, said that in the last three months of 2009, about 1,095,000 computers in China and 1,057,000 in the United States were infected. Those numbers are in addition to 10 million or so previously infected computers in each country, McAfee said. The prevalence of botnets is a sign of how vulnerable computer networks are to infiltration, a subject of increasing international debate as companies and governments seek to defend their computer systems from intruders.

Politicians as News Analysts Raise Questions on Their Goal

Sarah Palin. Mike Huckabee. Newt Gingrich. Today, that is a list of paid Fox News political analysts. Two years from now, it could be a list of Republican presidential candidates.

A former Fox analyst, Angela McGlowan, entered a House race in Mississippi last week. Over at MSNBC, Harold E. Ford Jr. was on the payroll until a few weeks ago, when he told his boss that he was seriously contemplating a run for the Senate from New York. TV names are also constantly being run through the candidate rumor mill. There is a "Draft Larry Kudlow" movement. There is also talk of a political bid by Lou Dobbs, who left CNN last fall.

"It does seem amazing how many are being either discussed as candidates, rumored as candidates, or are actually doing it," said Phil Griffin, the president of MSNBC.

Television and politics have always been intertwined, but never to this degree, TV executives and journalism professionals say. It would seem that the so-called revolving door for political operatives has been extended to the politicians themselves, at a time when cable news is more politically charged than ever. To viewers, it seems to be an endless televised political campaign, with former, and possibly future, politicians biding their time giving sound-bite versions of stump speeches. (Mr. Huckabee's recap of President Obama's State of the Union: "rudderless confusion." Ms. Palin's perception of Mr. Obama's counterterrorism strategy: "lackadaisical.")

The benefit for the part-time, but highly paid, pundits is clear: it increases their visibility. "It makes sense for candidates to seek out positions in niche cable, because it is a direct pipeline to voters," said Jonathan Wald, a former senior vice president at CNBC and an adjunct professor at Columbia's journalism school. "It's an automatic affinity group." The benefit to the viewers is less clear. Some experts say the arrangements can cloud the objectivity of the news organizations.

New FEC rules could impact effect of Court's campaign-finance decision

A long-awaited Federal Election Commission ruling could dramatically impact how the Supreme Court's Citizens United decision affects the power of candidates to control campaign messages. The FEC will set new rules this year to govern the coordination of communication between outside entities and candidates and parties. The proposed rulemaking was already in the works before the Citizens United decision, but this week the agency set a public hearing for March 2 and 3 and extended its public comment period on the issue to elicit comments addressing the impact of the high court's decision.

A New Civil Rights Mandate: Champion Open Networks to Close the Digital Divide

[Commentary] As the Federal Communications Commission moves to quickly finalize a National Broadband Plan that many hope will ensure Internet access for all and create opportunity for innovation and economic security, community groups from around the country are hosting delegation visits, direct actions, and community events to ask the same question I am. Namely, why are Telecom companies and their beltway allies asking poor communities and communities of color to choose between fair representation and access to high speed Internet networks? Why can't we have both?

Unfortunately, if the FCC and Congress don't act decisively to protect broadband networks with strong Open Internet rules, the National Broadband Plan may be insufficient to secure the connection, communication, and cultural representation that is the Internet's greatest potential. Let's face it, a broadband plan without open Internet protections is like the constitution without the bill of rights- it's insufficient. It's time for a new generation of civil right leaders to be heard on this issue. We know that digital inclusion and closing the digital divide is only possible with affordable, accessible, and open high speed networks. True representation of people of color and the poor demands that the civil rights community fight for this as vigorously as we fight for equal access in our schools, services, and in the broader society.

Google's broadband venture

[Commentary] Google's plan to build an ultra-fast broadband service is so appealing, it defies credulity.

The speed -- 1 gigabit per second -- is about 200 times faster than the fastest connections available in the U.S. today. Alas, for the vast majority of Internet users, Google's gambit is too good to be true. The new fiber-optic lines will be deployed in only a handful of communities, reaching no more than half a million people. But the point for Google isn't to go head to head with the broadband services already offered by AT&T, Comcast and other phone and cable TV companies. It's to apply not-so-subtle pressure on them to do more. It's no accident that Google unveiled its fiber-optic vision while the Federal Communications Commission is developing a National Broadband Plan, which will set goals for Internet access services in the United States -- including the amount of bandwidth they should provide.

A major impediment to improving this country's comparatively pokey broadband networks is the cost of deploying more fiber optics, but Google's engineers evidently believe they can build a network at significantly less expense than the current state of the art. If so, the Google demonstration project would provide a blueprint for Internet providers to follow. Google's gigabit test bed enables innovators to show the public what the next leap in bandwidth could bring to education, medicine and who knows what other segments of the economy. Internet providers often grumble about Google freeloading on the investments they've made -- its YouTube subsidiary and its Web-based mail and productivity services all reach their customers through other companies' broadband pipes. So Google's latest project is by no means altruistic. On the other hand, if Google sparks a race to the top among broadband providers, it will hardly be the only one to benefit.