July 30, 2013 (How We Watch TV)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, JULY 30, 2013
Standard Essential Patent Disputes and Antitrust Law; Senate Commerce Committee markup; and FCC Consolidated Reporting Act http://benton.org/calendar/2013-07-30/
AGENDA
Senate panel to vote on Wheeler's nomination for FCC chief
FCC Announces Updated Tentative Agenda for August Open Meeting - press release
FCC moves to cut prison phone rates
EDUCATION
Our schools need better Internet access, capacity - op-ed
This Is What It Looks Like When A School Becomes A Community Hub [links to web]
INTERNET/BROADBAND
Time Warner Cable raises Internet modem fees for customers [links to web]
TELECOM
The State of Wireline is changing, but our values remain the same
FCC Aims to Reduce USF Cap Uncertainty – At Least for a While
OWNERSHIP
Sinclair Agrees to Buy Allbritton for $985 Million
Free Press Takes Aim at Sinclair/Allbritton Deal
FTC OK With Tribune/Local TV Holdings Deal
Publicis-Omnicom Merger May Raise Antitrust Concerns
Mad Men Need Friends in Digital Age
MORE ABOUT TELEVISION
Rethinking How We Watch TV
CBS Experiments With Streaming Deals
Time Warner Temporarily Removes CBS in Major Cities
PBS: Acting Like a Network and a Service
Why Aereo’s Free Ride Will Ultimately Crash - analysis
TiVo Research Shows Netflix Not Eating Into Linear TV [links to web]
TV Repacking: What the Latest TVStudy Materials Mean - analysis [links to web]
WIRELESS/SPECTRUM
Apps That Know What You Want, Before You Do
Toss Your Old Phone? Think Again
AT&T To Buy Rural Carrier’s Wireless Business [links to web]
Smartphones Mean You Will No Longer Have to Memorize Facts - op-ed [links to web]
TV Repacking: What the Latest TVStudy Materials Mean - analysis [links to web]
JOURNALISM
Little change for women, minorities in TV/radio - research
PRIVACY
Is online privacy a right? - op-ed
Privacy as the next green movement? Study says companies will compete on data practices [links to web]
GOVERNMENT & COMMUNICATIONS
The Surveillance State Strikes Back - analysis
ELECTIONS AND MEDIA
How the Obama campaign won the race for voter data [links to web]
Why Democrats Laugh at the Republican Digital Strategy – and Why They Shouldn’t [links to web]
COMPANY NEWS
Amazon quietly slashes book prices to new lows [links to web]
Poll: Most in US favor new limits on surveillance [links to web]
With NSA revelations, Sen. Ron Wyden’s vague warnings about privacy finally become clear [links to web]
AGENDA
VOTE ON WHEELER NOMINATION
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The Senate Commerce Committee is scheduled to vote on Tom Wheeler's nomination to lead the Federal Communications Commission on July 30. The committee also announced votes on 21 other bills and nominations, including a cybersecurity bill and a measure to fund research into violence in the media.
benton.org/node/156757 | Hill, The
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FCC ANNOUNCES UPDATED TENTATIVE AGENDA FOR AUGUST OPEN MEETING
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Federal Communications Commission Chairwoman Mignon Clyburn announced that the following items will be on the tentative agenda for the next open meeting scheduled for Friday, August 9, 2013:
Comprehensive Review of Licensing and Operating Rules for Satellite Services: The FCC will consider a Report and Order that streamlines Part 25 of the Commission’s rules to facilitate greater investment and innovation in the satellite industry and promote more rapid deployment of new satellite services to the public.
Revision of Part 15 of the Commission’s Rules Regarding Operation in the 57-64 GHz Band: The FCC will consider a Report and Order addressing technical requirements applicable to unlicensed services in the 57-64 GHz frequency band to provide additional competition in the broadband market, improve efficient delivery of broadband services in residences and businesses, and facilitate backhaul transport to support the deployment of 4th Generation (4G) and other wireless services.
Reforming Rates for Interstate Inmate Calling Services: The FCC will consider a Report and Order and Further Notice of Proposed Rulemaking to reform interstate inmate calling services rates and practices.
Status of the Broadcast Incentive Auction: The FCC’s Incentive Auction Task Force will present the latest update on progress towards the Commission’s 2014 television broadcast incentive auction.
benton.org/node/156779 | Federal Communications Commission
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PRISON PHONE RATES
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The Federal Communications Commission will vote August 9 on an order to cut the rates that prisoners pay for interstate phone calls. The agency will also seek public comments on whether to limit rates for calls within states. “For too long, the high cost of long-distance calls from prisoners to their loved ones across state lines has chronically impacted parents and children, especially among low-income families," Acting FCC Chairwoman Mignon Clyburn said. " Multiple studies have shown that meaningful contact beyond prison walls can make a real difference in maintaining community ties, promoting rehabilitation, and reducing recidivism."
benton.org/node/156777 | Hill, The | Chairwoman Clyburn
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EDUCATION
BETTER INTERNET ACCESS FOR SCHOOLS
[SOURCE: San Francisco Chronicle, AUTHOR: Evan Marwell]
[Commentary] Only 23 percent of America's schools have the bandwidth they need for the 21st century classroom. That's 40 million kids, the next generation of talent we need across every segment of society, being left behind. The most common problems: slow connections to schools, outdated content filters that create network bottlenecks and spotty Wi-Fi. Even in Silicon Valley, only 39 percent of schools have the Internet infrastructure they need. So why do we have this problem? In part, it's because computers are moving from the principal's office and computer lab to the student's desk - increasing the demand for bandwidth by more than 10-fold. It's also partly a lack of resources: Few school districts have the capital to connect their schools to fiber and upgrade their Wi-Fi networks. Even fewer can afford the specialized networking and purchasing expertise needed to design, implement, monitor and manage a network. Addressing these issues will be the equivalent of upgrading our schools from dial-up to broadband. The Federal Communications Commission action to modernize its subsidy program provides an opportunity to address this. Digital learning can transform education, but first, Congress and the FCC must have the vision to ensure that our schools have world-class Internet infrastructure. We need to convince Washington that upgrading our schools must be a national priority.
[Evan Marwell is the CEO of EducationSuperHighway, a nonprofit with the mission of upgrading the Internet infrastructure in America's K-12 schools for digital learning.]
benton.org/node/156783 | San Francisco Chronicle
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TELECOM
STATE OF WIRELINE HEARING
[SOURCE: Public Knowledge, AUTHOR: Girard Kelly]
The public telephone network remains the backbone of our nation’s telecommunications infrastructure, but any changes in technology need to reflect a bedrock principle— we must make sure the transition results in an actual upgrade in technology without a downgrade in the services upon which Americans depend. Leaders from telecom, rural broadband, and Internet industry joined PK's President Gigi Sohn to discuss the challenges of the IP transition at the Senate Commerce Committee hearing on the “State of Wireline Communications.” There were a number of issues raised at the hearing that will require policymakers to act as more and more consumers cut the cord and move to mobile wireless and VoIP services. The Federal Communications Commission has been tasked with providing guidance with national policy, but changes are already happening at the state level.
benton.org/node/156743 | Public Knowledge
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USF CAP
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
Rate of return carriers face less uncertainty with regard to universal service fund (USF) high-cost loop support as the result of an order adopted by the Federal Communications Commission– in the short term, at least. In the order the FCC said that for 2014 it would maintain the approach to USF benchmarking used in 2013 – summing the capital and operating expense caps. “We do this to provide sufficient time, after reconciliation of recently filed study area boundary data, for public input on the development of a single cap, as required by the commission,” said the chief of the FCC Wireline Competition Bureau in the order. In addition, the order delays the phase-in of high-cost loop support reductions by one year rather than making them fully effective in 2014.
benton.org/node/156741 | telecompetitor
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OWNERSHIP
SINCLAIR-ALLBRITTON
[SOURCE: Broadcasting&Cable, AUTHOR: Michael Malone]
Sinclair Broadcast Group has agreed to buy Allbritton TV stations for $985 million. The stations consist of seven ABC Network affiliates, covering 4.9% of the U.S. TV households, and NewsChannel 8, a 24-hour cable news network covering the Washington metropolitan area that Sinclair may expand to other markets. Lucrative, and influential, WJLA Washington is also in the group. The deal is subject to regulatory approval and is expected to close in the fourth quarter. To comply with Federal Communications Commission ownership rules, Sinclair expects to sell the license and certain related assets of its stations in Birmingham, Harrisburg-Lancaster-Lebanon-York, and Charleston, and to provide services to each of these stations. Sinclair continues to acquire at an impressive rate, with Allbritton easily being the largest of its string of acquisitions.
benton.org/node/156765 | Broadcasting&Cable | TVNewsCheck | NYTimes
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FREE PRESS STATEMENT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In response to word that Sinclair will buy Allbritton's television stations and its DC regional cable news network, Free Press President Craig Aaron said, “The rapid and massive expansion of Sinclair Broadcast Group is unwelcome news for local TV viewers. The company's cookie-cutter approach to local news and repeated use of the airwaves to push a partisan agenda are well known. But the idea that one company should be allowed to control so many stations in so many markets is simply outrageous. What will it take for the FCC to wake up? The FCC needs to scrutinize these proposed deals and stop allowing covert consolidation through shared services agreements. In particular, it should require stations Sinclair has indicated it will put up for sale as part of this deal to be sold to independent competitors, not Sinclair front groups."
benton.org/node/156763 | Broadcasting&Cable
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TRIBUNE-LOCAL TV HOLDINGS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Trade Commission has given a clean bill of antitrust health to Tribune's planned purchase of Local TV Holdings. The FTC released the list of merger's whose antitrust reviews had been terminated early and Tribune's $2.725 billion deal to buy Local's 19 TV stations was on it. That means neither the FTC, nor Justice, which divvy up the antitrust review, planned to take any action to block or condition the deal. An antitrust review by either the FTC or Justice--in this case most likely Justice--is triggered by mergers valued at least $70.9 million. If there are no antitrust issues, an early termination of the review is granted.
benton.org/node/156761 | Broadcasting&Cable
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PUBLICIS-OMNICOM ANTITRUST CONCERNS
[SOURCE: AdWeek, AUTHOR: Katy Bachman]
The merger of Publicis and Omnicom to form the world's largest ad conglomerate is bound to raise more than a few eyebrows in Washington where regulators could add conditions to or even block the proposed $35 billion deal. Though the holding companies' respective CEOs have said they don't expect regulatory hurdles, the numbers suggest otherwise—the combined companies would control 40 percent of U.S. media spending and 20 percent of the global market. "If it creates too much buying power, it can be anti-competitive," said Bert Foer, president of the American Antitrust Institute. Large, advertising-dependent media companies have the most to lose in the deal, facing a behemoth of a media-buying concern with enormous clout when it comes to setting advertising rates. They could even be motivated to try to block the deal. "Media owners and national TV programmers in particular would face an industry where the combined entity plus WPP would account for more than two-thirds of their revenues," Brian Wieser, an analyst with Pivotal Research Group, pointed out in a report. Not all observers think the newly formed entity's buying power will be an issue with regulators, however.
benton.org/node/156753 | AdWeek
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ADVERTISING AND DIGITAL
[SOURCE: Wall Street Journal, AUTHOR: John Jannarone]
Madison Avenue is famous for setting trends. Now, two of its biggest players are scrambling to catch up with the times. Advertising giants Omnicom Group and Publicis Groupe surprised the media world over the weekend with an agreement to enter a merger of equals. A key motivation for the deal: create a larger company with more knowledge and power to purchase digital media controlled by Silicon Valley hotshots like Google and Facebook. The deal, which doesn't involve either company paying a premium, is easily worth the effort. The companies expect annual savings of $500 million, thanks to overlap in areas from research to information- technology platforms. The main risk: The merged company winds up losing clients because of a perceived conflict of interest. Omnicom, for instance, represents PepsiCo while Publicis has Coca Cola as a prized client. But as media holding companies comprised of several agencies each, Omnicom and Publicis are accustomed to managing competing clients. Barclays estimates that the merged company would need to lose 19% of its client revenue to wipe out all of the cost savings from the deal. That looks unlikely.
benton.org/node/156789 | Wall Street Journal | USAToday
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MORE ABOUT TELEVISION
HOW WE WATCH TV
[SOURCE: Wall Street Journal, AUTHOR: Don Clark, Ian Sher]
Intel, Apple, Microsoft, Sony and Google are all pushing TV advances. Computer industry players have been pushing new TV visions for 20 years, with decidedly mixed results. Cable and satellite TV providers have strong positions, with big players like Comcast preparing major technology upgrades of their own. Negotiations with media companies for content rights could delay new services and limit some features, though Intel vows to enter some markets by the end of the year. Yet there is a growing consensus that underlying technologies are evolving to the point that major changes in the TV experience are all but inevitable, whether delivered by new entrants or incumbents.
benton.org/node/156791 | Wall Street Journal
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CBS STREAMING
[SOURCE: Wall Street Journal, AUTHOR: Amol Sharma]
CBS Chief Executive Leslie Moonves said the broadcaster is experimenting with new business models for serialized dramas like apocalyptic summer hit "Under the Dome" and the coming thriller "Hostages," banking on deals with streaming-video sites like Netflix and Amazon to help make them profitable. Moonves said the company has renewed "Under the Dome," a show about a small town trapped inside an invisible bubble, for a second 13-episode season. Amazon acquired rights to stream the show four days after episodes air on the CBS network. The June 24 premiere of the series on CBS was watched by 13.53 million viewers—a big number for summer, which was long seen as a time for lower budget shows, reality series and reruns. (Including seven days of DVR, on-demand and online viewing, viewership was 20 million.) Moonves acknowledged that increasingly ambitious cable network programming and digital TV options are affecting the broadcast model, but struck a note of optimism about the broadcast-TV industry's future. "The model has never been dead," he said. "It's just evolving."
benton.org/node/156792 | Wall Street Journal
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RETRANSMISSION NEGOTIATION
[SOURCE: New York Times, AUTHOR: Bill Carter]
CBS stations were temporarily removed from cable systems in millions of homes in major cities — including New York and Los Angeles — about midnight on July 29, after protracted negotiations between CBS and Time Warner Cable over fees collapsed. But after an exchange of recrimination-filled statements, and less than a half-hour of cable interruption, the cable company announced that it had halted the blackout of the stations at CBS’s request. The mercurial series of events followed a daylong negotiation, which was full of fits and starts. The two sides negotiated all day and night, after weeks of public posturing over which side was being more unreasonable in its demands over what are known as retransmission fees. Throughout the night, a series of one-hour extensions in the talks seemed to portend that an agreement was near.
benton.org/node/156795 | New York Times
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PBS
[SOURCE: Associated Press, AUTHOR: David Bauder]
When Discovery, The Learning Channel, History, Bravo, A&E and similar networks emerged, there was a real fear it could lead to the death of PBS. Each specialized network would pick off a portion of PBS' audience for programs on science, nature, history and the arts. Founded as an alternative to commercial TV, PBS was losing what made it unique. Yet in the past few years, these cable networks discovered that it was much more profitable to create reality TV stars. PBS' path was cleared, and it is making the most of its new chance. "It is now once again something that the viewer can't get anywhere else," said Beth Hoppe, PBS' programming chief. Hoppe is trying to infuse PBS with new energy, make its projects more timely and get her colleagues to treat it as a television network instead of just a public service.
benton.org/node/156755 | Associated Press
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AEREO’S FREE RIDE
[SOURCE: Variety, AUTHOR: Todd Spangler]
One way or another, the road for Aereo will come to an end, at least with respect to getting its hands on valuable television programming without paying for it. By any common-sense standard, Aereo is retransmitting local TV signals to devices over the Internet, reselling them to subscribers for a monthly fee. In that sense, it’s identical to cable or satellite TV operators, which under federal law must pay a fee to the broadcaster (unless the latter opts for “must-carry” designation). Even if Aereo were to win in the Supreme Court, broadcasters won’t give up the fight. Broadcasters could try to modify the law to explicitly cover services like Aereo’s (which could take years). They also have threatened to shift their most popular TV shows and sports programming to pay TV, or even convert broadcast stations to cable channels. Those are moves rife with political risk, given that the basic bargain of the government’s spectrum licenses to broadcasters is that they make TV free over the air. But if push comes to shove and Aereo and others are permitted to redistribute “free TV” at no cost, CBS or Fox would certainly put NFL games or popular primetime dramas on cable nets instead.
benton.org/node/156732 | Variety
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WIRELESS/SPECTRUM
PREDICTIVE APPS
[SOURCE: New York Times, AUTHOR: Claire Cain Miller]
A range of start-ups and big companies like Google are working on what is known as predictive search — new tools that act as robotic personal assistants, anticipating what you need before you ask for it. Glance at your phone in the morning, for instance, and see an alert that you need to leave early for your next meeting because of traffic, even though you never told your phone you had a meeting, or where it was. How does the phone know? Because an application has read your e-mail, scanned your calendar, tracked your location, parsed traffic patterns and figured out you need an extra half-hour to drive to the meeting. The technology is the latest development in Web search, and one of the first that is tailored to mobile devices. It does not even require people to enter a search query. Your context — location, time of day and digital activity — is the query, say the engineers who build these services. Many technologists agree that these services will probably become mainstream, eventually incorporated in alarm clocks, refrigerators and bathroom mirrors. Already, an app called Google Now is an important part of Google’s Internet-connected glasses.
benton.org/node/156787 | New York Times
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USED PHONES
[SOURCE: Wall Street Journal, AUTHOR: Thomas Gryta]
US wireless carriers have found a new appreciation for used smartphones. Carriers were long happy to let customers drop their old phones in desk drawers or pass them down to their kids. But the market for previously owned iPhones and Androids is booming, producing high and predictable resale values that carriers are starting to exploit. That shift underlies a spate of recently announced plans from T-Mobile US, AT&T and Verizon Wireless that offer users more frequent upgrades. Instead of insisting subscribers pay off their phones in full before becoming eligible for newer models, carriers are now confident they can milk enough value from trade-ins to let upgrades happen more frequently. What this might mean for consumers and device makers isn't yet clear. The new trade-in plans from AT&T and Verizon Wireless have been panned by some smartphone market observers as too costly. And the strong demand for used phones is a sign that many consumers are finding older devices are good enough as the pace of innovation from device makers like Apple Inc. and Samsung Electronics Co. slows. Still, the emergence of new efforts to capture the value of used phones ultimately could leave the smartphone market more like the auto business, where trade-ins fuel sales of newer models.
benton.org/node/156785 | Wall Street Journal
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JOURNALISM
NEWSROOM DIVERSITY
[SOURCE: Radio Television Digital News Association, AUTHOR: Bob Papper]
The latest RTDNA/Hofstra University Annual Survey finds virtually no change in the percentage of minorities in TV news from a year ago; radio numbers are down overall. The percentage of minority news directors went up in radio but down a bit in TV. The percentage of minority news directors at non-Hispanic TV stations fell back from last year's record high -- but it's still the second highest level ever. Women overall in TV news rose back over the 40% mark, but women TV news directors pulled back from last year's record high. In radio, women and women news directors edged up slightly. As far as minorities are concerned, the bigger picture remains unchanged. In the last 23 years, the minority population in the U.S. has risen 10.7 points; but the minority workforce in TV news is up 3.6, and the minority workforce in radio is up 0.1.
benton.org/node/156775 | Radio Television Digital News Association
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PRIVACY
IS ONLINE PRIVACY A RIGHT?
[SOURCE: Salon, AUTHOR: David Sirota]
[Commentary] Using encryption is clearly a smart move in this Orwellian era. After all, even with the NSA’s impressive codebreaking abilities, secure encryption still works. In fact, when done properly, it works so well to preserve privacy and lock data away from snoops that the government has now kicked off an aggressive campaign to turn the concept of “secure encryption” into an oxymoron. Specifically, the Obama Administration has launched an initiative to force tech companies to give the NSA a set of Internet-wide skeleton keys. The radical move, which would let law enforcement agencies access vast troves of encrypted information, adds significant questions to the ongoing debate over privacy. It begs us to ask not only whether the government has a right to vacuum up millions of Americans’ private data, but also to ask whether the security-conscious among us should even be allowed to retain the right to make data truly secure?
benton.org/node/156773 | Salon
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GOVERNMENT & COMMUNICATIONS
SURVEILLANCE STATE STRIKES BACK
[SOURCE: Foreign Policy, AUTHOR: Shane Harris]
[Commentary] When former National Security Agency contractor Ed Snowden exposed the inner workings of the country's biggest intelligence organization, he said he did so to roll back a spying apparatus that put the United States on the path to "turnkey tyranny." According to experts who are advising U.S. email, cloud data storage, and social media companies, executives are concerned that foreign governments -- particularly ones with fewer protections for personal privacy and free speech -- are already beginning to demand that U.S. tech companies relocate their servers and databases within their borders. Under normal circumstances, companies would rarely comply with those migration demands, especially if those countries have reputations for heavy-handed internal policing. But now that the United States is being seen as a global spying power, they may have little choice. Other governments can make their relocation demands in the name of protecting citizens from the intrusive powers of the NSA. Then those regimes can use U.S. tech to make their own law enforcement and intelligence agencies more NSA-like.
benton.org/node/156735 | Foreign Policy
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