April 1, 2013 (No Fooling)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, APRIL 1, 2013
This week’s agenda http://benton.org/calendar/2013-03-31--P1W/
POLICYMAKERS/AGENDA
President Obama walking into political minefield as he taps new FCC chairman - analysis
Looming departures, changes at FCC - analysis
Departing FCC chairman could have done more for consumers - analysis
Groups offer their two cents on who should be next FCC chair
Senate Democrats back Rosenworcel for FCC chief
Rep Markey: Backing network neutrality is prerequisite for FCC chief
Fifth FTC commissioner could face tough confirmation slog
FCC Announces Tentative Agenda For April Open Meeting - press release
Columbia Looks Ahead in an Age of Disruption [links to web]
WIRELESS/SPECTRUM
Senate rejects bid to end cellphone subsidy
It’s Big TV vs. Big Telecom Over Broadcast Spectrum
US May Sell Airwaves That Help Broadway Sing
Can T-Mobile’s gamble pay off?
T-Mobile’s MetroPCS Merger Opponents Gaining Traction
Sprint agrees to shun Huawei equipment
INTERNET/BROADBAND
Senate overwhelmingly endorses states' collection of online sales taxes
Amazon’s Tax Dispute May Be Destined for the Supreme Court
A Chance to Comment on Commerce’s Report on Cybersecurity Incentives - press release
Law Firms Tout Cybersecurity Cred [links to web]
PRIVACY
Letting Down Our Guard With Web Privacy [links to web]
CHILDREN AND MEDIA
The Child, the Tablet and the Developing Mind [links to web]
New Disney Characters Make It Big in TV’s Preschool Playground [links to web]
OWNERSHIP
Amazon Purchase of Goodreads Book-Review Site Irks Authors Group [links to web]
CONTENT
Papers Worldwide Embrace Web Subscriptions [links to web]
TELEVISION
TV Service Providers Held Talks With Aereo
STORIES FROM ABROAD
Russians Selectively Blocking Internet
Saudis Seeking to Regulate Skype, Other Web Services
Talk Talk seeks BT network regulation [links to web]
Privately run press returns to Myanmar [links to web]
…AND DID YOU HEAR?
Fearing Chinese Censors, Paramount Changes ‘World War Z’ [links to web]
Introducing Google Fiber Poles - press release
Owners of Competing Hollywood Publications Settle Copyright Lawsuit
POLICYMAKERS/AGENDA
POLITICAL MINEFIELD OVER FCC POST
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
President Barack Obama is walking into a political minefield as he decides whom to nominate for chairman of the Federal Communications Commission. Industry groups, consumer advocates and Democrats are splintering over the contenders, putting President Obama in a bind as he narrows his short list for the powerful post. "You're going to offend a whole lot of people no matter which way you go," one communications industry source said. It’s an important choice for President Obama, as the next chairman will face difficult decisions over how to provide enough airwaves for mobile devices, preserve the openness of the Internet and promote competition. Tom Wheeler, a venture capitalist and fundraiser for Obama, was considered the clear favorite for the job just last week. But then a coalition of public interest groups sent a letter to the president bashing him, and 37 senators signed a letter supporting an alternative pick: FCC Commissioner Jessica Rosenworcel. "Wheeler is still the front runner, but it isn't as secure as it was a week or two ago," another industry watcher said.
benton.org/node/148711 | Hill, The
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CHANGES AT FCC
[SOURCE: Politico, AUTHOR: Tony Romm, Brooks Boliek]
After a busy week of announced exits at the Federal Communications Commission, the slow wheels of change are beginning to turn — both at the agency and on Capitol Hill. The pending departures of Democratic Chairman Julius Genachowski and Republican Commissioner Robert McDowell are catalyzing a natural evolution. The FCC’s next most senior Democrat is among those angling for the driver’s seat, even as the White House eyes other candidates, and conversations are just beginning on Capitol Hill about whom the next Republican commissioner should be. But it’s just the beginning of a potentially lengthy process, one in which the FCC’s congressional overseers could clash with the Obama administration over the telecom agency’s work and its future direction. If anything, the past few months of Senate squabbling at multiple hearings featuring the commissioners may only serve as a preview of what’s to come. It’s almost impossible for Genachowski’s replacement to be confirmed in the few weeks before the sitting chairman officially departs. That only raises the likelihood that one of its sitting Democratic commissioners could take the helm in an interim capacity — a role that could fall to Mignon Clyburn, the next-most senior member.
benton.org/node/148710 | Politico
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GENACHOWSKI COULD HAVE DONE MORE
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
[Commentary] Julius Genachowski, who will step down as head of the Federal Communications Commission within the next few weeks, leaves behind a mixed bag of accomplishments and disappointments. He had made expansion of broadband Internet access one of his priorities. We moved forward on that front, but not far enough. He also aimed to expand available wireless spectrum for smartphones and tablets and the like. That hasn't come very far either. As for pushing for cable subscribers to pay only for the channels they want, rather than pay for fat bundles of channels they never watch, Genachowski was largely silent. What the FCC needs is a leader who is unafraid to challenge the established order, much as Elizabeth Warren stood up to banks and other financial powers. Until then, the US will continue making baby steps on the telecom front, instead of displaying the global leadership Genachowski boasted of. And we'll all be the worse for it.
benton.org/node/148708 | Los Angeles Times
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LETTER ON FCC CHAIRMAN
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
Groups are rushing to give President Barack Obama their two cents on who should be the next chair of the Federal Communications Commission following Julius Genachowski’s announcement that he would step down from the post. Over 25 organizations wrote to Obama on March 26, urging him to appoint a strong public interest advocate to lead the agency, criticizing Genachowski’s tenure. The Administration, the groups said, “must recognize the severe mismanagement and lack of progress that occurred” under Genachowski’s leadership and urged the president to consider someone without strong ties to industry lobbying groups. “We expect that the Administration will put the FCC back on course to do its job for this country and choose a nominee who will protect the future of communications for all,” wrote the groups, which include the New America Foundation’s Open Technology Institute, Fight for the Future, Free Press Action Fund and Center for Media Justice. Public interest groups are not the only ones weighing in on who should succeed Genachowski.
benton.org/node/148707 | Washington Post | read the letter
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SENATE DEMS BACK COMMISSIONER ROSENWORCEL
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Dozens of Senate Democrats are urging President Obama to consider choosing Jessica Rosenworcel to be the next chairwoman of the Federal Communications Commission. If selected, current-FCC Commissioner Rosenworcel would be the first woman to lead the FCC. Commissioner Rosenworcel has been an FCC commissioner since last May. Before that, she served as an adviser to Sen. Jay Rockefeller (D-W.Va.), the chairman of the Commerce, Science and Transportation Committee, which has jurisdiction over the FCC. She has also served as an aide at the FCC and worked in private practice. But choosing Commissioner Rosenworcel would skip over fellow FCC Commissioner Mignon Clyburn, the more senior Democratic commissioner and daughter of Rep. James Clyburn (D-SC), and could be seen as a snub of Commissioner Clyburn and anger her supporters. As a sitting commissioner, Rosenworcel would not need Senate confirmation to ascend to the chairmanship. The Democrats argued that by choosing Commissioner Rosenworcel, the Administration could avoid delaying critical FCC rule-makings.
benton.org/node/148705 | Hill, The | read the letter
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FCC CHAIRMAN AND NETWORK NEUTRALITY
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Rep. Edward Markey (D-MA), who is running for the Senate, said that any new chairman of the Federal Communications Commission must support network neutrality regulations. On a conference call with the Progressive Change Campaign Committee, a liberal advocacy group, Rep Markey said that having an "understanding of net neutrality, an understanding of the non-discriminatory principles that are baked into the Internet from its origin," is a prerequisite for becoming FCC chairman.
benton.org/node/148704 | Hill, The
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FTC NOMINATION
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
It could be a long time before the Federal Trade Commission has all five commissioners again. The FTC is currently made up of two Democrats and two Republicans. President Barack Obama has yet to name his choice for the open fifth seat, but Senate Republicans are unlikely to be in any hurry to give Democrats a majority on the commission, no matter who the nominee is. Republican opposition would likely prevent any nominee from even coming up for a vote. The FTC, which handles competition enforcement, consumer protection and privacy issues, needs a majority vote to take action against a company or to adopt new regulations.
benton.org/node/148702 | Hill, The
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FCC ANNOUNCES TENTATIVE AGENDA FOR APRIL OPEN MEETING
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Federal Communications Commission Chairman Julius Genachowski announced that the following items will be on the tentative agenda for the next open meeting, scheduled for Thursday, April 18, 2013:
Reducing Regulatory Burdens and Facilitating Investment by Streamlining Foreign Ownership Review: The Commission will consider a Second Report and Order to streamline the foreign ownership policies and procedures that apply to common carrier radio licensees and certain aeronautical radio licensees under section 310(b) of the Act, significantly reducing regulatory burdens while ensuring the Commission continues to receive the necessary information to protect the public interest.
Promoting Innovation and Competition by Facilitating Direct Access to Numbers: The Commission will consider a Notice of Proposed Rulemaking and Notice of Inquiry on expanding direct access to telephone numbers to promote competition and innovation by IP-based providers, while protecting consumers and the reliability of phone calls. It will also consider an Order to allow a limited trial of direct access to numbers for VoIP providers.
Presentation on the Status of Alerts to Prevent Bill Shock: Pursuant to CTIA's revision to its Code of Conduct for Wireless Service, April 17, 2013 is the deadline by which the participating CTIA member wireless carriers must provide their subscribers with four specified types of alerts to allow consumers to avoid unexpected charges for wireless usage exceeding their plan limits, and for additional charges for international roaming. The Consumer and Governmental
benton.org/node/148693 | Federal Communications Commission
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WIRELESS/SPECTRUM
LIFELINE PROGRAM SURVIVES IN SENATE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The Senate rejected a proposal to end a federal cellphone subsidy in a mostly party line 46-to-53 vote. The proposal, offered by Sen. David Vitter (R-LA), would have been an amendment to the budget resolution. The proposal was non-binding, but was an important test of support for the cellphone subsidy, which is managed by the Federal Communications Commission. Sen. Claire McCaskill (D-MO) joined the Republicans in supporting the amendment. The program, called Lifeline, has been derisively referred to as the "Obama phone" program, although it began long before Obama took office. Outgoing Federal Communications Commission Chairman Julius Genachowski fired back at the sponsors of the amendment in a statement: “The Lifeline program has helped some of our most vulnerable citizens connect to emergency services, doctors and family in times of crisis," he said. "It has been a literal lifeline for these Americans -- and in today’s era, with a third of Americans having cut the cord to wireline phone service, it’s appropriate that Lifeline supports wireless service." He touted the commission's efforts to curb waste and abuse in the program. FCC Commissioner Mignon Clyburn, the agency's most vocal defender of Lifeline, said the amendment failed to take into account how important Lifeline is to low-income families.
benton.org/node/148701 | Hill, The
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BIG TV VS BIG TELECOM
[SOURCE: Variety, AUTHOR: Ted Johnson]
The government’s plan to auction off broadcast spectrum to expand wireless services has pitted Big TV against Big Telecom at the Federal Communications Commission and in the halls of Congress. Some say the nation is facing an apocalyptic capacity crunch due to the proliferation of mobile devices, while others insist those fears are overblown. The chaos has opened the door for profiteering by TV station owners who suddenly find themselves sitting on valuable real estate. There’s a buying spree going on in the upper reaches of the TV dial, the largely forgotten universe of UHF stations made up of many mom-and-pop owners who long ago gave up ambition in favor of a mix of home-shopping and reruns like Matlock. The stations are being scooped up by private equity and investment firms that are widely believed to have designs not on their assets but their airspace. They are speculators in spectrum — the slice of the nation’s airwaves allocated by the federal government to individual broadcast entities in order to avoid massive signal interference for TV and radio stations, as well as emergency communications services. The sales bounty is coming as the government embarks on an ambitious but untested plan to entice flailing stations to call it quits, put their spectrum up for auction and share in the proceeds from the sale to wireless firms; stations also have the option to share spectrum or move to another part of the band.
benton.org/node/148689 | Variety
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BROADWAY VS SPECTRUM AUCTION
[SOURCE: New York Times, AUTHOR: Edward Wyatt]
Broadway producers are alarmed that a carefully balanced system is about to crumble. The Federal Communications Commission is considering plans to force the users of cordless microphones — not only Broadway producers but also megachurches and the National Football League — to move to a less desirable spot on the nation’s airwaves. The FCC, backed by Congress, hopes to auction most of those prime airwaves now used by singers, preachers and coaches to data-gobbling smartphone companies, potentially for billions of dollars. The FCC says that the airwaves are public property and that theater owners have long gotten preferential access to the frequencies. The commission also points out that the first $7 billion raised by the auction is to build a nationwide public safety communications network, and that many members of Congress have urged the commission to sell everything it can to raise money to reduce the nation’s deficit. Still, Broadway producers say that moving to a new spot on the airwaves, or spectrum, will compromise the sound quality of shows making the melodies less full and rich. They say a failure of a wireless intercom could endanger a performer or crew member and that they will be forced to buy expensive new equipment or risk having their transmissions overwhelmed by smartphones that use the same airwaves.
benton.org/node/148687 | New York Times
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T-MOBILE’S GAMBLE
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
T-Mobile changed its pricing game plan, announcing that it will charge users for their devices separately from their talk, text and data plans. Nor will T-Mobile require customers to sign on for two-year service plans, or wait for the end of their contract to upgrade to the latest smartphone. The company touted it as a break from contracts and a new approach to an industry that is “broken.” It says that its approach is more transparent about letting users know what they’re paying for when they turn in their monthly bill. Those are bold claims, but a fresh approach to the market may be exactly what T-Mobile, the nation’s fourth-place carrier, needs to gain subscribers back, said Yankee Group senior analyst Rich Karpinski.
benton.org/node/148685 | Washington Post
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T-MOBILE/METROPCS
[SOURCE: Bloomberg, AUTHOR: Scott Moritz, Olga Kharif]
Opposition to T-Mobile’s merger with MetroPCS Communications is gaining momentum leading up to a vote after two of three shareholder advisory firms recommended blocking the deal. P. Schoenfeld Asset Management LP, a MetroPCS investor that has led a challenge to the deal, scheduled a webcast for April 4 to explain its position to other shareholders in the wireless carrier. Institutional Shareholder Services and Glass, Lewis & Co. came out against the transaction last week, while Egan-Jones Proxy Services was in favor. The decisions put more pressure on T-Mobile parent Deutsche Telekom AG to offer better terms than the current proposal. MetroPCS shareholders are being asked to approve a reverse merger creating a publicly traded company 74 percent owned by the German phone carrier.
benton.org/node/148740 | Bloomberg
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SPRINT AND HUAWEI
[SOURCE: Financial Times, AUTHOR: Geoff Dyer, Stephanie Kirchgaessner]
Sprint Nextel, the US telephone carrier, and its Japanese suitor SoftBank have both agreed not to use equipment made by China’s Huawei , the chairman of the House intelligence committee said on March 28. Rep Mike Rogers (R-MI) said that the two companies had given assurances that they would not use Huawei equipment in Sprint’s cellphone network. They had also agreed to replace products made by the Chinese company in the network of Clearwire, a data network operator that Sprint is acquiring. Rep Rogers also said the companies would make the same assurances to the Committee on Foreign Investments in the United States, which monitors national security concerns in business deals. In October, Sprint agreed to sell a 70 per cent stake to Japan’s SoftBank for $20.1 billion.
benton.org/node/148730 | Financial Times
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INTERNET/BROADBAND
ONLINE SALES TAX BILL GETS SUPPORT IN SENATE
[SOURCE: The Hill, AUTHOR: Ramsey Cox]
The Senate overwhelmingly approved an amendment empowering states to collect taxes for online sales, delivering a huge victory to lawmakers and stakeholders who have devoted more than two years to the effort. Sens. Mike Enzi (R-WY) and Dick Durbin (D-II) watched their amendment sail through the upper chamber on a 75-24 vote, confirming their hunch that their legislation has the support needed to pass outside the budget process. The lawmakers have been seeking a vote on their Marketplace Fairness legislation since last summer and finally got their answer — that there is plenty support for the change in law that will allow states to collect sales tax on purchases made online by consumers in their states. The legislation would exempt small businesses that earn less than $1 million annually from out-of-state sales.
benton.org/node/148699 | Hill, The
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ONLINE SALES TAX HEADED TO SCOTUS?
[SOURCE: Wall Street Journal, AUTHOR: Jacob Gershman]
One of the less-remembered legacies of Eliot Spitzer’s governorship was the “Amazon tax.” It was his administration that came up with a plan to get Amazon and other out-of-state online retailers to start collecting state and local sales taxes from New York customers. Six years (and two governors) later, New York’s battle with Amazon came to a head on March 28 after the state’s highest court upheld the constitutionality of the tax in a 4-1 ruling. Writing for the majority, Chief Judge Jonathan Lippman concluded: “The bottom line is that if a vendor is paying New York residents to actively solicit business in this State, there is no reason why that vendor should not shoulder the appropriate tax burden.”
benton.org/node/148697 | Wall Street Journal
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CYBERSECURITY NOI
[SOURCE: Department of Commerce, AUTHOR: Press release]
As part of the Executive Order signed by President Obama directing agencies to use their existing authorities and work with the private sector to better protect our nation’s power, water, and other critical systems, the Commerce Department is preparing a report on ways to incentivize companies and organizations to improve their cybersecurity. To better understand what stakeholders – such as companies, trade associations, academics and others – believe would best serve as incentives, the Department has released a series of questions to gather public comments in a Notice of Inquiry. The Notice will remain open for public comment until April 27, 2013. All comments will be posted on the Department’s Internet Policy Task Force web site. The Department will submit its recommendations to the President no later than June 12, 2013. The Executive Order also directs the Secretaries of the Treasury and Homeland Security to recommend incentives to participate in the Program. The Secretary of Defense and the Administrator of General Services are tasked with reporting on government procurement-related issues.
benton.org/node/148691 | Department of Commerce | read the Notice of Inquiry
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TELEVISION
AEREO EXPANSION
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran]
Aereo, the Web television startup backed by media mogul Barry Diller, has discussed partnerships with major pay-TV distributors and Internet service providers, including AT&T and Dish Network, as it looks to roll out its fledgling service to more markets, people familiar with the matter say. Aereo, which streams local TV broadcast signals over the Web for a fee, is now available only in the New York City region. It could expand its reach significantly if it joins forces with cable, satellite or phone concerns. Talks between Aereo and telecom operators haven't yet yielded any agreements. One big issue is the legal uncertainty surrounding the startup. Aereo is battling a suit by broadcasters, which say it is violating copyright law, in part because it reformats and retransmits their signals without permission—and then charges a fee to its subscribers. For the distributors, a tie-up with Aereo would offer a way to reach a generation of viewers who may be content with a slimmed-down channel package streamed over the Web instead of a traditional cable-TV bundle with hundreds of channels.
benton.org/node/148732 | Wall Street Journal
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STORIES FROM ABROAD
RUSSIANS BLOCKING INTERNET
[SOURCE: New York Times, AUTHOR: Andrew Kramer]
The Russian government in recent weeks has been making use of a new law that gives it the power to block Internet content that it deems illegal or harmful to children. The country’s communications regulators have required Facebook, Twitter and YouTube to remove material that the officials determined was objectionable, with only YouTube, owned by Google, resisting. The video-sharing site complied with a Russian agency’s order to block a video that officials said promoted suicide. But YouTube filed a lawsuit in Russian court in February saying the video, showing how to make a fake wound with makeup materials and a razor blade, was intended for entertainment and should not be restricted. Supporters of the law, which took effect in November, say it is a narrowly focused way of controlling child pornography and content that promotes drug use and suicide. But opposition leaders have railed against the law as a crack in the doorway to broader Internet censorship. They say they worry that social networks, which have been used to arrange protests against President Vladimir V. Putin, will be stifled.
benton.org/node/148728 | New York Times
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SAUDIS TO REGULATE SKYPE?
[SOURCE: Wall Street Journal, AUTHOR: Ellen Knickmeyer]
The government of Saudi Arabia confirmed that it is seeking to regulate local use of Internet-based messaging services such as Skype and Whatsapp, and threatened "suitable measures" if the providers of those services failed to comply with its demands. The announcement by the Saudi Communications and Information Technology Commission followed local news reports, citing unidentified Saudi authorities, that the kingdom was threatening to block Skype and similar services unless the kingdom was allowed to monitor some users' conversations. The move appears to reflect the government's unease over the embrace of social media and the Internet by the Saudi populace as new avenues of communication and expression. Saudis are some of the world's most-avid users of Twitter and YouTube, in particular, according to those companies and to companies that track online users.
benton.org/node/148726 | Wall Street Journal
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…AND DID YOU HEAR?
FIBER POLES
[SOURCE: Google, AUTHOR: Michael Plump]
We’ve heard this feedback a few times from our customers in Kansas City; it seems that some folks have become hesitant to leave their home connections. They want to be able to have access to Fiber even when they’re out and about in KC, not just within the confines of their own home. So my team of engineers started thinking about possible solutions. How do you get a Gigabit everywhere in the community? We realized that the answer was all around us — utility poles. Poles already have our Fiber strung to them; all we had to do was come up with a way to make that Fiber accessible. That’s what we’ve done today. I’m happy to announce our newest project: Google Fiber Poles.
benton.org/node/148721 | Google
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HOLLYWOOD PUBLICATIONS
[SOURCE: Wall Street Journal, AUTHOR: Ben Fritz]
In the fiercely competitive world of Hollywood trade publications, nobody likes to say they're sorry. But the parent company of the Hollywood Reporter has agreed to do so in order to settle a lawsuit filed against it by the owner of two of its competitors: Variety and Deadline.com. Penske Media Corp., the Santa Monica (CA) company run by Jay Penske, sued the Hollywood Reporter's parent, Prometheus Global Media, in September of 2011, alleging copyright infringement. The complaint alleged that the Hollywood Reporter's website stole code from TVline.com, a television-news website owned by Penske Media. The suit, filed in U.S. District Court in Los Angeles, asked for more than $5 million in damages. According to recently filed court documents, Prometheus agreed to pay Penske $162,500 in order to settle the case. In addition, the two sides agreed on a statement reading in part: "Prometheus admits that the Hollywood Reporter copied source code from Penske Media Corporation's website www.tvline.com; Prometheus and the Hollywood Reporter have apologized to Penske Media."
benton.org/node/148719 | Wall Street Journal
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