September 2013

Google’s chief economist understands media better than some industry executives do

Hal Varian, the chief economist at Google and a former MIT professor, isn’t a practicing journalist and has never run a media company (unless you see his current employer as one, which many people increasingly do). But he knows a lot about information theory and network effects, and he made it clear during a recent presentation in Italy — where he received a journalism award — that he has a better grasp of what those two factors are doing to the media industry than many of those who run media companies.

Long Before Navy Yard Shooting, Military First Responders Complained of Bum radios

Radio failures reported by Navy emergency personnel responding to the Sept. 16 shootings at the Washington Navy Yard underscored problems Navy firefighters have documented since 2009, union officials said.

The transmission range was so poor, firefighters working in an incident command post within a building at the Navy Yard had to send a runner with a radio to a door in order to communicate, said Greg Russell, president of the local that represents firefighters in the Naval District of Washington. Russell also said that batteries in the radios used by firefighters, who also serve as emergency medical technicians, lost their charge within two to three hours, despite requirements that they be able to sustain a charge for eight hours.

FCC Upholds Bloomberg News Neighborhooding Complaint Against Comcast

The Federal Communications Commission upheld its Media Bureau's decision for Bloomberg in its news neighborhooding complaint against Comcast and will require Comcast to neighborhood standard definition as well as high definition channels. The FCC upheld the bureau definition of a neighborhood, and rejected Comcast's First Amendment challenge.

New legislation would kill CableCard, potentially spell trouble for third-party cable boxes

Reps Bob Latta (R-OH) and Gene Green (D-TX) introduced a bill that would end the ban on integrated security, removing the need for CableCards but also potentially muscling out third-party operators like TiVo. It's a rehash of an earlier bill from August, which aimed to limit the Federal Communications Commission's authority over cable programming boxes, but sank before reaching the president. This new bill was revised to end the requirement while preserving the FCC's authority to regulate the market, which will hopefully give it a better chance as it approaches a vote.

Vodafone deal poised to drive shake-up of European telecoms

The British government is not alone in hoping that Vodafone shares the proceeds of the $124 billion raised through the sale of its stake in Verizon Wireless by embarking on acquisitions of its own. Many bankers believe that the European telecoms sector will be shaken up by the deal, the third biggest in corporate history ($130 billion including the value of Verizon’s stake in Vodafone Italy given to Vodafone as part of the disposal), not least given the heightened expectation of interest from AT&T in a more European-focused Vodafone. Such expectations have been fanned by comments by AT&T chief executive Randall Stephenson that the company remained interested in European telecoms deals. This year has been dominated by dealmaking by the technology, media and telecommunications (TMT) sector, a key driver of the upward trend in global M&A. It is a development many bankers say is set to persist. The $438 billion of deals done in the sector is at a six-year high – about 38 percent higher than the total deals announced in 2012, according to Mergermarket. The sector accounted for nearly a third of all deals globally in the year to date. Verizon’s acquisition added a third to TMT M&A. Seven of the top deals this year so far have featured TMT companies. Even without Verizon’s acquisition – the biggest for a decade – TMT would still have accounted for the sector with the largest increase at 52.3 percent year on year.

EU’s broadband challenge, part 2: Kroes calls for a digital single market

Asserting that telecommunications networks are the foundation of the wider digital economy and that every sector depends on connectivity, the European Commission plan calls for a number of provisions. To start, there should be simplification and reduction of regulation for telecommunication companies. While falling short of a pan-European license, carriers can at least have a single EU authorization which is accepted by all national regulatory authorizes. Next is coordination of spectrum allocation, which seems to be a no-brainer given the small size of many European countries. The EU report chastises national governments and regulators for “short-term interest in maximizing revenue from spectrum auctions (that) sapped large sums from many telecoms companies, eating away at investments in network build-out.” Allowing broadband providers to operate across borders, rather than having to create distinct and increasingly obsolete national operating entities, would go a long way to improve the efficiency and scale of broadband deployment. Additionally removing restrictions on consolidation among providers would allow providers to get a business case for infrastructure investment and improve their terms for raising capital.

EC Vice President Neelie Kroes and the Digital Single Market Committee deserve credit for taking on a project that is long overdue. However it appears that it may be too little, too late. Without giving reforms the necessary teeth, such as allowing consolidation, the plan may just be kicking the can down the road. The next blog will analyze the barriers to reform to realize the digital single market.

Reporting Iran’s News, but Speaking for One Side

In Iran’s news media landscape, which is divided into two camps, the hard-liners and reformists, Fars has emerged in recent years as the most influential conservative voice.

It is directly linked to the Revolutionary Guards, the country’s elite military unit. Its editor for years was Hamid Reza Moghadam Far, now a deputy commander in the Revolutionary Guards. Along with the conservative daily newspaper Keyhan, Fars is widely considered a mouthpiece for the governing establishment of hard-line clerics and commanders. When its relations soured with Mr. Ahmadinejad two years ago, for example, Fars began attacking him mercilessly. Mindful of those connections, journalists working for reformist outlets avoided reporters from Fars, who could safely criticize their opponents, knowing they were untouchable. Along with Keyhan, Fars would lead campaigns against people and institutions deemed to be out of line with the conservative governing establishment.

FCC to Open LPFM Window on October 15

Soon there will be a multitude of new voices on the air. And these new voices have three weeks to line up for their ticket to the airwaves by applying for licenses operate on air. The Federal Communications Commission (FCC) will open up the next filing window for low-powered FM (LPFM) stations across the country on October 15, 2013. And there is much work to be done to prepare for a possible onslaught of applications, according to FCC Chairwoman Mignon L. Clyburn.

“It ... has been rewarding to work with my colleagues over the past several years in implementing the Local Community Radio Act in a fair, thoughtful, and responsible way,” Chairwoman Clyburn said in a statement. “I extend special thanks to Congressman Michael Doyle (D-PA) and Congressman Lee Terry (R-NE), as well as to Senator Maria Cantwell (D-WA) and Senator John McCain (R-AZ), the sponsors of the Local Community Radio Act (LCRA) of 2010. Without their leadership ... the nearing LPFM window would not be possible.”

In 2000, the FCC first authorized the creation of low power FM stations to provide noncommercial, educational, and local groups with the opportunity to provide a community-based radio service. Following a study which found that the interference of these stations on stronger commercial signals would be negligible, the LCRA was signed into law in 2011, repealing the so-called interference-related separation requirements. Under these conditions, low-powered FM radio stations could only apply for an FCC license under the condition that they were at least two clicks away from full-power radio stations and did not cause any interference with them. The repeal of these interference-related restrictions with the passing of the LCRA has since opened up new avenues for greater low-powered presence in urban areas. “I believe that the sustainability of the LPFM service is directly tied to its ability to attract listeners in our urban centers,” Chairwoman Clyburn said.

As for the overall social value of low-powered radio stations, FCC Commissioner Jessica Rosenworcel cited new opportunities for non-profit organizations, schools, religious organizations, and public safety groups to “gain a footing in the radio business.”

In 2012, Rep Doyle wrote in the Huffington Post about the potential benefits of independent radio stations for towns across the US. “Low-power FM radio stations, like other noncommercial stations, feature a diversity of musical genres, news reporting, and cultural programming that is created and presented by local residents. They will play those catchy mash-ups the neighbor's kid mixed from his parents' old albums… They will cover high school football games and share life-saving emergency response information,” Rep. Doyle wrote.

Chairwoman Clyburn sees LPFM service as a lifeline for farm workers, ethnic and tribal communities, and community service organizations. According to the NAACP, people of color currently make up over 36% of the US population but own just over 7 percent of radio licenses and 3 percent of TV licenses in the United States today. “As a result of media consolidation, 90% of all we see, hear or read comes from a handful of privately owned corporations,” the civil rights organization wrote in a recent press release.

Licensing more low-powered FM stations promises to bring more social and economic diversity to the airwaves. “We can add real diversity to the FM dial. We can make that voice that rises in the air even more local and more interesting,” Commissioner Rosenworcel said.

FCC Commissioner Ajit Pai encouraged community organizations across the country to take advantage of the LPFM window and expressed optimism that the new stations will enhance diversity and localism on the FM band.

The LPFM application window closes at 6:00 pm EDT on October 29, 2013.

Suffocating Echo Chamber

[Commentary] In the 1990s, as conservative talk radio spread across America, liberals felt victimized. But, in retrospect, the rise of talk radio, Fox News Channel and right-wing Web sites may have done greatest harm to conservatives themselves.

The right-wing echo chamber breeds extremism, intimidates Republican moderates and misleads people into thinking that their worldview is broadly shared. That’s the information bubble that tugs the entire Republican Party to the right and that transforms people like Sen Ted Cruz (R-TX) into crusading Don Quixotes. And that’s why Republicans may lead us over a financial cliff, even though polling suggests that voters would blame them.

Free Cable for Building Managers, but With Fine Print

Some cable companies around the country have long offered free or discounted service to superintendents, and if anybody has vociferous objections to the practice in general, they are difficult to find. But in recent years, as Time Warner Cable has increasingly formalized these longstanding deals, concerns have bubbled up that parts of its program deputize the employees of apartment buildings to carry out Time Warner’s business, thus creating a conflict for building superintendents: Ultimately, which master will you serve?

While the Apartment Managers contract has been in existence for years, it seems that in many instances the only thing supers truly needed to get a cable discount was a letter from the building’s management company saying that they were, in fact, supers and that they lived in such-and-such apartment. But over the past two years, Time Warner has been making an effort to comply with new federal tax legislation and it appears that has meant a stepped-up commitment to paperwork. They have pushed harder to get contracts signed, and sent out W-9 tax forms so the discounts supers receive are better accounted for.

Benton

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