March 2010

FCC Commissioner Clyburn's Statement Regarding Broadband Affordability and Competition

Federal Communications Commission member Mignon Clyburn issued a statement March 10:

"The same day [the FCC] announced ... important recommendations designed to usher more Americans into the digital age, ... I learned that another major broadband provider is raising its rates for its lowest tiers of broadband service. This news came on the heels of plans unveiled by other major providers throughout the country to increase prices as well. So, just as we are in the process of proposing steps to ensure that more people are comfortable signing up for broadband service, providers of that very service are raising prices. If we are serious as a nation -- both public and private sectors -- about connecting America; about leading the world technologically and economically; about ensuring that all Americans have meaningful access to on-line education, healthcare, and information essential to citizenry, then we should be very concerned about these ominous signs. For if our push to increase broadband adoption -- including through Lifeline subsidies -- merely results in higher prices for the lowest-income consumers, programs like the National Digital Literacy Corps will be for naught. This is an issue we must examine closely going forward. Thirty-six percent of non-adopters cite a cost-related reason as their main barrier to adoption, with 15 percent pointing to the monthly cost of service, and 9 percent saying they do not want a long-term service contract or find the installation fee too high. Across-the-board price increases, especially on those who can least afford it, should raise a red flag for the Commission."

Sunstein touts White House record on transparency, accountability

Cass Sunstein, the chief of the White House's Office of Information and Regulatory Affairs (OIRA), stressed the Obama administration takes public comments submitted on its transparency websites "extremely seriously."

In a speech at the Brookings Institution, Sunstein said it was not the case that federal officials ignore criticism of the rules they are required by federal mandate to post for comment on Web sites like RegInfo.gov, OIRA's main hub. Rather, Sunstein said, "If you look what's come out of the administration, in final form, public comments are playing a significant role..." Sunstein later added that the White House's push for transparency, especially on the federal government's Data.gov and IT dashboard websites, has allowed rule making to become more of a "collaborative process."

FTC Said to Ask Google Rivals About AdMob Purchase

The Federal Trade Commission is seeking sworn declarations from Google competitors and advertisers as part of their probe of the Internet company's bid to buy AdMob Inc., indicating the government may challenge the deal, said people with direct knowledge of the matter.

The FTC is investigating whether Google's proposed purchase of AdMob would reduce competition in the market for Internet advertising on mobile phones. At least two companies are being asked to sign statements, said the people, who declined to be identified because the probe isn't being conducted in public. The declarations put on paper information that Google rivals gave the FTC in its investigation of the $750 million purchase of AdMob, announced in November. AdMob sells ads that appear on Web pages and applications on mobile phones. The agency is assessing whether the purchase would let Google parlay its dominance in Internet searches on computers to phones. Agency officials typically collect declarations "when they think there is some significant chance" the agency will ask a court to block a merger, or seek to modify a deal, said Stephen Calkins, a former general counsel at the FTC who is now a professor of law at Wayne State University's law school in Detroit. Even so, it's not uncommon for the agency to collect affidavits and then not litigate, he said.

CNN's Klein Says He Fears Social Networks, Not TV

CNN President Jonathan Klein said he worries more about competition from social- networking sites such as Facebook than from other cable news networks.

"The competition I'm really afraid of are social- networking sites," Klein said today at a media conference in New York. "That threatens to pull people away from us. The people you're friends with on Facebook or the people you follow on Twitter are trusted sources of information. Well, we want to be the most trusted name in news." CNN, owned by Time Warner Inc., has lost ground in television ratings. News Corp.'s Fox News has retained the top spot with 2.3 million primetime viewers this year, and NBC Universal's MSNBC is second with 800,000, according to data from Nielsen Co. CNN, once the most-watched cable news network, has averaged 687,000 primetime viewers this year. Klein said ratings are only one way of measuring the audience and that growth will come from the Internet and mobile phones, pitting CNN more against social networks.

Advertisers, TV Affiliates Will Pay More for CBS

CBS chief executive Leslie Moonves has put advertisers and local affiliates on notice: both will soon be paying more.

Advertisers will face higher prices for commercials running on the network. And CBS TV affiliates will pay more in the form of substantial portions of the retransmission consent fees they receive from cable operators -- or risk losing their network affiliations. The CBS chief turned up the volume on pre-upfront posturing, insisting that the scatter market was commanding greater than 30 percent increases over last year's upfront marketplace. And it's not just CBS, Moonves said, asserting that Fox and NBC are also commanding such increases.

In fact, he said, the market is so strong that CBS is handing off additional time to its sales department normally reserved to promote the network's own programming. Moonves insisted that the network would command "strong double-digit" price increases in the upfront, which will begin in May after the new fall schedules are unveiled. By comparison, advertisers paid reduced rates in 2009 when the recession was in full swing.

As for local CBS affiliates, when asked if he would yank affiliations of stations that balk at paying the network substantial portions of their cable retransmission fees, Moonves replied bluntly: "Yes." Affiliates, he said, "are sharing in the success" of high ratings and advertisers' demand for programming that the network spends roughly $6 billion annually to develop. "I need something back for that," he said. Increasingly, local broadcast stations are demanding and receiving so-called retransmission fees from cable operators in return for permission to carry the broadcast signals on cable systems. In fact, Moonves said CBS' owned TV stations would collect about $250 million annually in such fees by 2012.

Broadcasters Counter Cable With Retransmission Letter

Broadcasters have countered the cable and satellite operators' letter to House and Senate Commerce Committees with one of their own.

While Time Warner, Cablevision and others asked Congress to review what they called a broken retransmission consent system, National Association of Broadcasters Chairman Paul Karpowicz said in a letter that Congress and the FCC have already reviewed the process and concluded that the playing field was level, that government should not dictate outcomes in free market negotiations, and that if there are problems, the FCC has the authority to address them via complaint of not bargaining in good faith. Karpowicz points out that no broadcaster has ever been found guilty of bad-faith bargaining. "The retransmission consent rules do not guarantee any compensation," he wrote. "Rather, the rules only provide an opportunity for the broadcaster to negotiate for
compensation for the use of its signal."

Senate Passes STELA; Measure Moves to House

The Senate Wednesday passed STELA, the five-year re-authorization of the satellite blanket distant signal license. It still has to be passed in the House, but the Senate action is a major step given the trouble the bill has had in gaining passage.

The Dec. 31 expiration had to be extended twice after if failed to pass, and there was a brief period when the license had actually expired. The just-passed bill contains a provision making it retroactive to cover that base. Satellite operators and content owners complied with Congress' urgings to maintain the status quo between the license's expiration on Feb. 28 and the March 2 stopgap renewal until March 28.

Senate Holds Hearing on Supreme Court's Citizen's United Ruling

Saying the Supreme Court's decision "turns the idea of government of, by and for the people on its head," Senate Judiciary Committee Chairman Patrick Leahy (D-VT) held a hearing Wednesday (March 10) on the Supreme Court's decision last September in the Citizen's United case to allow direct funding of TV and radio campaign ads by corporations and unions.

While legislative fixes are being considered, the hearing was not on any specific bill, but an effort by Leahy and company to get a handle on "how the court came to its conclusion and the impact this case will have on our democracy." With a tellingly-placed question mark, the title of the hearing gave a clear indication of where the Democratic majority stood on that decision: "We the People? Corporate Spending in American Elections after Citizens United."

Google China Censorship Talks to Yield Results 'Soon'

Google, in talks with China after threatening to stop censoring Internet search results there, said the discussions will yield results soon.

"We decided not to publicize our dealings with China," Chief Executive Officer Eric Schmidt said at a media conference in Abu Dhabi. "We're in active talks with the Chinese government and we have no specific timetable, but something will happen soon." Schmidt declined to elaborate further on the talks or the source of the cyber attack. The Chinese government, which requires search engines to censor results, has denied any involvement in the incident. Google said on March 2 it hasn't set a deadline for ending the censorship.

Expert says Chinese government likely behind massive cyberattacks

The Chinese government is likely behind recent cyberattacks on U.S. government Web sites and on U.S. companies in an apparent effort to quash criticism of the government there, an expert on U.S. and Chinese relations said.

There's no conclusive proof that recent attacks on Google and dozens of other U.S. companies are directed by the Chinese government, but logic would point to official Chinese involvement, said Larry Wortzel, a member of the U.S.-China Economic and Security Review Commission and a former U.S. Army counterintelligence officer. Google complained in January that it and several other U.S. companies were victims of recent cyberattacks coming from inside China. It is "not clear" who ordered the attacks, but it appears the Chinese government was involved, said Wortzel, who has served in the U.S. embassy in China. There is a group of skilled hackers in China that routinely attacks systems to spy on political dissidents, said Wortzel, speaking during a U.S. House of Representatives Foreign Affairs Committee hearing. Chinese government agencies and Communist Party organizations would be the likely recipients of information obtained by hackers, he said.

Benton

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