April 2012

What the DOJ e-book lawsuit means for readers now

What does the Department of Justice suit against Apple and five book publishers for allegedly colluding to set e-book prices mean for readers today and in coming weeks?

Readers are likely to see lower prices on e-books from HarperCollins, Hachette and Simon & Schuster — at least at Amazon, which expressed its glee over the settlement. But you won’t see those lower e-book prices until at least June — remember there’s that 60-day waiting period, and then publishers and retailers have to enter into new contracts. It’s in Amazon’s best interest to enact the new contracts as soon as possible so that it can start discounting the settling publishers’ e-books. Other e-book retailers, like Barnes & Noble and Kobo, are likely to want to enter into new contracts quickly as well so that they are on a more even playing field with Amazon. They may not be able to afford to discount a wide range of e-books as deeply as Amazon can, but could deeply discount select titles. As soon as the new contracts are in place, let the discounting begin. Forrester analyst James McQuivey told Digital Book World last week that he expects Amazon to discount e-books slowly and strategically, starting with bestsellers. Publishing industry consultant Mike Shatzkin, on the other hand, believes Amazon “will do the splashiest discounting they possibly can, making the point as loudly as possible that they deliver the lowest prices to the consumer and daring their competition to match them.”

US and China engage in cyber war games

The US and China have been discreetly engaging in "war games" amid rising anger in Washington over the scale and audacity of Beijing-coordinated cyber attacks on western governments and big business, the Guardian has learned.

State department and Pentagon officials, along with their Chinese counterparts, were involved in two war games last year that were designed to help prevent a sudden military escalation between the sides if either felt they were being targeted. Another session is planned for May. Though the exercises have given the US a chance to vent its frustration at what appears to be state-sponsored espionage and theft on an industrial scale, China has been belligerent. "China has come to the conclusion that the power relationship has changed, and it has changed in a way that favors them," said Jim Lewis, a senior fellow and director at the Centre for Strategic and International Studies (CSIS) think tank in Washington.

Behind Closed Doors, Broadcasters Battle Online Disclosure of Political Ad Buys

The Federal Communications Commission is scheduled to vote April 27 on whether to require TV stations to post online public information about political ad buys. Some form of the rule seems likely to pass, but the industry and others are lobbying the FCC to alter the nature of the final rule.

The FCC won’t release the exact text of the rule until after the panel votes to finalize it later this month. Meanwhile, the wording is subject to change based on input from interested parties. That’s why the National Association of Broadcasters has been paying visits to key FCC officials this month. A group of influential Republican senators has also told the FCC they oppose the proposed rule. On April 3 and 10, National Association of Broadcasters President Gordon Smith met officials, including all three FCC commissioners, to make his case against required online disclosure of the public political ad information.

Comcast Heads to Trial in Case Alleging Monopolization

A 2003 consumers’ $875 million antitrust lawsuit against cable-service operator Comcast is headed for trial after a federal judge in Philadelphia upheld some of the claims. U.S. District Judge John Padova said allegations that Comcast targeted discounts for potential new customers may go to trial, while claims including blocking access to some contractors won’t.

“Because it possessed market power, its decision to target promotional discounts to deter a new entrant may be deemed predatory and an exercise of market power to maintain its monopoly,” Judge Padova wrote of Comcast in his pre-trial opinion. The judge also found “that Comcast has stated a legitimate procompetitive justification for its conduct with regard to cable infrastructure installation contractors.” The lawsuit was filed by customers who contended the Philadelphia-based company wrongly “entered into agreements with its competitors to allocate the nation’s regional cable markets amongst themselves” and “used its monopoly power to raise cable prices to artificially high, supra-competitive levels,” according to Judge Padova’s ruling.

Supreme Court Mum on Media Ownership Case Review

The Supreme Court took no action April 16 on broadcasters' appeal of the Third Circuit Court of Appeals ruling last July upholding the Federal Communications Commission's 2008 decision not to loosen the television duopoly, radio ownership or TV/radio cross-ownership rules, but vacating the FCC's loosening of the broadcast/newspaper cross-ownership rule for failure to meet notice and comment requirements.

The Supremes had a conference April 13 where they were expected to consider three appeals of the Third Circuit Court of Appeals ruling. The National Association of Broadcasters sought appeal on the grounds that there was a split in the circuits, while Tribune (joined by Fox, Sinclair, Clear Channel, Bonneville, and the Newspaper Association of America) and Media General challenged on constitutional grounds in separate petitions. Court watchers predicted that if the court took no action, it was likely because it was waiting until it had ruled on the government's challenge to FCC indecency enforcement before it decides, since that also implicates the scarcity rationale for broadcast regulation (Red Lion Broadcasting Co. v. FCC) that Tribune et al. and Media General are challenging in their appeals to the Supremes.

Rep Eshoo Wants FCC to Extend Political File Reporting to Cable/Satellite

Rep. Anna Eshoo (D-CA) has written Federal Communications Commission Chairman Julius Genachowski to argue for online reporting of television station political files, including individual terms and conditions, and for expanding that requirement to cable & satellite television operators.

Political files are the files, currently residing in paper form at local stations and MVPDs, that chronicle political ad time buys per requirements to provide equal access and lowest-unit-rate charges. Broadcasters have complained that real-time filing for that information will be a burden, especially on smaller stations, and require people hours and resources that will be taken away from local news and other important public service functions. In a letter dated April 16, Rep Eshoo wrote that she had "no doubt" the FCC could craft rules that would ease the process for smaller stations and minimize staff time that would have to be devoted to the task. She said not putting the information on the Internet was "inexcusable" given that the technology was available to bring disclosure "into the 21st Century." Rep Eshoo said creating an FCC-hosted website is an "encouraging start." She also said she supported "future action" to bring the public files of cable and satellite providers online." The FCC has not proposed extending the requirement of online filing to cable and satellite operators.

Mitt Romney: Fox News Has Been Good To Me

During a private campaign event on April 15 in Palm Beach (FL), GOP candidate Mitt Romney had some rather favorable words to say about Fox News.

Speaking of the media coverage his campaign has received, Romney singled out CNN host Wolf Blitzer as being a good interviewer and said, according to the Wall Street Journal, that Fox News has been good to him. He called Fox News viewers "true believers," but said that he needed to broaden his reach to independent and female voters. According to NBC News, Romney also said, "We are behind when it comes to commentators on TV. They tend to be liberal. Where we are ahead or even is on Twitter and on the Internet."

A kids’ reading app that reports back to parents

Children’s e-book reading is still in very early stages — but with parents increasingly handing iPads down to their kids, publishers see room for fast growth. Scholastic launched a children’s e-reading app, Storia, last month. Launching now is Ruckus Media Group’s new iPad app, Ruckus Reader. It offers books for 3- to 8-year-olds from brands like My Little Pony, Curious George and the Transformers, and reports back to parents on their kids’ reading skills.

Ruckus Reader titles can be downloaded individually, or parents can buy access to the whole library for $24.99 for six months. The first title in a series is free; after that, titles are $3.99 each or 2 for $5.99. For now, Ruckus Reader offers 25 titles — a mixture of interactive “iReaders” (enhanced e-books with video and games), straight e-books and “vidReaders” (video books narrated by celebrities like Meryl Streep and Robin Williams). Ruckus CEO Rick Richter, formerly president of the children’s division at Simon & Schuster, told me the company expects to include around 500 titles by the end of the year. In addition to the brand-related content it developed itself, Ruckus is partnering with other book publishers to deliver e-books as well. The first partnership is with Houghton Mifflin Harcourt, which is providing Curious George titles. Richter said other “major publishers” are “lined up.”

Foes say Google got slap on the wrist in Wi-Spy

Google earned about $38 billion in revenue last year, but the only penalty it's faced in the United States in connection with its Wi-Spy scandal is a mere $25,000 fine. Some say the penalty, issued for obstructing the investigation and not for violating the law, is a slap on the wrist — too small of a price to pay for collecting troves of personal information from citizens' home networks.

"The federal government ought to be asking more questions and seeking more answers," said Sen. Richard Blumenthal (D-Conn.), who served as Connecticut's attorney general when his state and others began investigating the incident in 2010. The senator said that there "needs to be some oversight" — not just over how and why Google collected the data, but why federal regulators didn't pursue the matter more aggressively.

Commissioner Copps Takes a Bow

In what was billed as the largest-ever collection of current and former FCC Commissioners, the National Cable & Telecommunications Association hosted a Minority Media & Telecommunications Council salute to retired Commissioner Michael Copps, who exited the FCC at the end of December.

NCTA headquarters was an appropriate venue, since the association is headed by one of Copps’ former chairman, Michael Powell, and now employs one of his former top aides, Rick Chessen. There was no lack of quorum at this meeting of FCC minds, with 14 former commissioners and a video from former chairman Bill Kennard. Actually, there technically was, since only two of the three current commissioners were there. FCC Chairman Genachowski had a conflict, but sent Chief of Staff Zac Katz to speak for him. The afternoon event was filled with lots of hugs and a few tears as former colleagues–his policy foes remain friends and fans, something of an anomaly in Washington–stepped up to the mic, and the Mike, to wax eloquent. Commissioner Copps said he would continue working on the issues he remains passionate about. Almost on cue as this item was being written, an e-mail came from the Benton Foundation with this blog item from Copps on one of the hot topics of the day, broadcast disclosure.

Benton

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