October 22, 2013 (New Wave of Consolidation Devours Local TV Stations)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, OCTOBER 22, 2013
For updates all day, follow us on Twitter @benton_fdn
INTERNET/BROADBAND
Yes, Netflix on cable would be great for TV. But it’d be horrible for the open Internet. - analysis
See also: Netflix Poised to Pass HBO in Paid US Subscribers [links to web]
States' online 'Amazon tax' fight may land in US Supreme Court: lawyers
Why Illinois court's 'Amazon tax' ruling may not last long - analysis
Wall Street learns from simulated cyberattack [links to web]
Google to launch tools to combat attacks, surveillance [links to web]
AT&T will sell your 300 Mbps broadband for $199 a month. Maybe! Someday! Soon! [links to web]
WIRELESS/SPECTRUM
Google’s iron grip on Android: Controlling open source by any means necessary - analysis
Auction for H Block Licenses in the 1915-1920 MHz and 1995-2000 MHz Bands Rescheduled for January 22, 2014 - public notice [links to web]
Connected TV points the way forward for the Internet of things - op-ed [links to web]
Employees really want to use their personal devices at work [links to web]
OWNERSHIP
FCC Looks the Other Way as a New Wave of Consolidation Devours Local TV Stations - press release
Fox Investors Excluding Murdoch Back Job Split by 3-1 Margin
How long will Google keep burning money on Motorola? - analysis
Tellabs to be acquired by Marlin Equity Partners for $891 million in cash [links to web]
With Project Loon, Google is engineering a mobile network in reverse
A pricey deal for Crown; a mystifying one for AT&T - analysis [links to web]
TELEVISION
In Life And Especially Death, JFK Changed TV
Why Disney Briefly Weighed Selling ABC Stations [links to web]
ABC Leads Broadcast Rivals in DVR Playback Rankings [links to web]
Big Media Companies To See Key Revs Rise Alongside Ad Gains [links to web]
JOURNALISM
Fox News Reportedly Used Fake Commenter Accounts To Rebut Critical Blog Posts
Facebook suggesting stories for news media to post [links to web]
CONTENT
Online Dating and Relationships - research
Demand Media's eHow Learns Hard Lessons [links to web]
The astounding rise of ‘search engines’ and ‘social media,’ in 3 charts [links to web]
Can Artsy make fine art as accessible as luxury fashion? [links to web]
How Al Gore is using social media to try to change the conversation on climate change [links to web]
Why I am unapologetic about paywalls or promotion - editorial [links to web]
Facebook suggesting stories for news media to post [links to web]
PRIVACY
California Paves the Way for Privacy
EDUCATION TECH
Barnes & Noble partners with One Laptop Per Child to preload new kids’ app on XO tablets [links to web]
Google helps you learn about quantum physics with Minecraft [links to web]
EMERGENCY COMMUNICATIONS
Google and San Francisco Launch Real-Time Crisis Map [links to web]
GOVERNMENT PERFORMANCE
President Obama promises to iron out glitches on healthcare website
White House Obamacare team: Best, brightest -- and a mystery [links to web]
HHS brings in Verizon to help HealthCare.gov [links to web]
Here’s why the feds didn’t have more skilled programmers for HealthCare.gov [links to web]
Obamacare website: 6 biggest contractors [links to web]
Contractors Fight Over Delays to NSA Data Center [links to web]
Cyber Civil Servants Knock on Industry’s Door After Shutdown [links to web]
NEWS FROM THE FCC
FCC forced to play catch-up after shutdown
Updated: The Low Power FM Application Window Is Fast Approaching - press release [links to web]
New FCC CIO on the Importance of Communication - press release [links to web]
POLICYMAKERS
Time to move ahead at the FCC - editorial
Chairman Rockefeller Announces Departure of Chief of Staff Kerry Ates; James Reid Will Succeed Ates as Chief of Staff - press release [links to web]
House committee to debate future of FTC [links to web]
New FCC CIO on the Importance of Communication - press release [links to web]
STORIES FROM ABROAD
Rules Shielding Online Data From NSA and Other Prying Eyes Advance in Europe
President Obama speaks with French president after report of NSA spying [links to web]
MORE ONLINE
Mark Zuckerberg Starts Spending His Billion-Dollar Charitable Fund [links to web]
No, technology isn’t going to destroy the middle class [links to web]
Health Groups Target Katy Perry for Marketing Pepsi [links to web]
INTERNET/BROADBAND
YES, NETFLIX ON CABLE WOULD BE GREAT FOR TV. BUT IT’D BE HORRIBLE FOR THE OPEN INTERNET.
[SOURCE: Washington Post, AUTHOR: Brian Fung]
[Commentary] Reed Hastings famously said that Netflix's goal "is to become HBO faster than HBO can become us." The CEO was mainly talking about producing compelling television like "House of Cards" and "Orange is the New Black," but take that to its logical endpoint and you wind up at a cold, numerical battle against HBO for the public's eyeballs. Now, Netflix is set to reveal that it's virtually surpassed its rival in terms of paid subscribers, a sign of how quickly the service has matured since its experiment with Qwikster (the ill-fated idea to spin off Netflix's DVD-by-mail feature as a separate company). Netflix's enormous audience is looking increasingly attractive to cable companies, many of whom are reportedly in talks to put Netflix on set-top boxes nationwide. If successful, getting access to Netflix could soon become that much more convenient. But while it might serve consumers in the short run, tying Netflix more closely to the cable industry could pose a threat to the open Internet that helped give rise to the company in the first place. Netflix has been a staunch defender of network neutrality, the idea that Internet providers shouldn't tailor the quality of their service according to the type of information (video, audio, text, etc.) being transmitted. Watching Netflix requires ISPs to move a lot of data, and the company is often invoked as a potential victim of efforts to throttle that traffic. Since that tension is partly what's driven Netflix to challenge cable companies in the past, a deal with said companies might undermine Netflix's rhetorical position on net neutrality. More importantly, though, a content-sharing agreement would also set up an actual economic opportunity for cable companies to establish greater control over the Internet. Once cable companies bring Netflix closer into their orbit, they'll be able to justify upselling customers to more expensive broadband plans or raising the price of cable packages. And, particularly if they concede to Netflix on Open Connect, the network operators could pass the costs of integrating and maintaining the technology onto Netflix, which could mean higher prices for Netflix's own subscribers.
benton.org/node/163469 | Washington Post
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STATES' ONLINE 'AMAZON TAX' FIGHT MAY LAND IN US SUPREME COURT: LAWYERS
[SOURCE: Reuters, AUTHOR: Patrick Temple-West]
Diverging high court rulings in New York and Illinois over 'Amazon taxes' point to a possible US Supreme Court case to settle questions about the legality of states taxing online retail sales, lawyers said. With Congress failing to take action on the issue, courts have been intervening case-by-case in a long-running struggle between state governments and major online retailers, including Amazon, over sales tax. Different decisions in different states improve the odds that the Supreme Court will tackle these issues, said Stephen Kranz, a partner at law firm McDermott Will & Emery. "There will continue to be additional litigation at the state level exacerbating the problem," Kranz said. "That is clear and should be a factor considered by the court in deciding whether to take the New York or Illinois case."
benton.org/node/163467 | Reuters
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ILLINOIS AMAZON TAX
[SOURCE: Crain’s Chicago Business, AUTHOR: Paul Merrion]
By avoiding the fundamental constitutional question, last week's Illinois Supreme Court 6-1 ruling against the state's “Amazon tax” has left the controversial issue of Internet sales taxes up to Congress or the U.S. Supreme Court to sort things out once and for all. In other words: Don't expect those Internet marketers that fled the state when the law was enacted two years ago to be flocking back anytime soon. The state's highest court found Illinois' Internet sales tax void and unenforceable because it conflicts with a federal law that temporarily blocked new state or federal taxes aimed at online retailers or Internet providers, the first court in the country to take that stance. But others say a conflict with federal law merely makes the state tax unenforceable. For unstated reasons, the court did not address a lower court ruling that found the state tax in violation of the Commerce Clause of the U.S. Constitution.
benton.org/node/163195 | Crain’s Chicago Business
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WIRELESS/SPECTRUM
GOOGLE’S IRON GRIP ON ANDROID: CONTROLLING OPEN SOURCE BY ANY MEANS NECESSARY
[SOURCE: GigaOm, AUTHOR: Lauren Hockenson]
[Commentary] When building software, it’s great to be Open Source until it isn’t. In the early days of a project where time is of the essence, as when Google scrambled to get into mobile to catch up with Apple’s iPhone, opening up makes for better software faster. But, what happens when you win? Ars Technica has a great report about Google’s introduction of proprietary apps that replace Android Open Source Project apps — essentially cutting off company-enacted updates to the Open Source material. It’s an ingenious, if slightly conniving, way to keep competitors from swiping the platform. As we've seen with the struggles of Windows Phone and Blackberry 10, app selection is everything in the mobile market, and Android's massive install base means it has a ton of apps. If a company forks Android, the OS will already be compatible with millions of apps; a company just needs to build its own app store and get everything uploaded. In theory, you'd have a non-Google OS with a ton of apps, virtually overnight. If a company other than Google can come up with a way to make Android better than it is now, it would be able to build a serious competitor and possibly threaten Google's smartphone dominance. This is the biggest danger to Google's current position: a successful, alternative Android distribution.
benton.org/node/163434 | GigaOm | Ars Technica
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OWNERSHIP
TV STATION OWNERSHIP CONSOLIDATION
[SOURCE: Free Press, AUTHOR: Press release]
Free Press released Cease to Resist: How the FCC’s Failure to Enforce Its Policies Created a New Wave of Media Consolidation. The report investigates how companies are using shady tactics to buy up TV stations and build new national media empires. The report comes as Sinclair Broadcast Group spearheads one of the largest waves of TV consolidation in history. The report also looks at tactics used by Gannett, Media General, Nexstar and Tribune. Among the report’s key findings:
In the first eight months of 2013, 211 full-power TV stations changed hands, the highest level in more than a decade, and the fourth-highest year on record in terms of deal value. The latest surge of consolidation is unique from prior waves in that it’s taking place in small and medium-sized markets and involves companies that are not household names.
Sinclair Broadcast Group is leading the current wave of consolidation. In the past two years alone, Sinclair has closed or announced deals that will increase its holdings from 58 to 161 stations nationwide. These deals will more than double the number of markets Sinclair serves from 35 to 78, covering nearly 39 percent of the U.S. population.
The report also details how media companies are using shell companies to evade the Federal Communications Commission’s media ownership rules, making inefficient use of the scarce public airwaves and depriving communities of diverse viewpoints and in-depth news coverage. Sinclair controls or will control 46 stations nominally owned by a third party, with 40 of these stations’ licenses held by shell companies Sinclair created for the express purpose of evading the FCC’s ownership rules. The report also details recommendations to the FCC and incoming Chairman Tom Wheeler. Turner calls on Wheeler to deny the latest transaction deals, which Free Press and other groups have challenged, and to close the numerous loopholes in its ownership rules. The report also describes how the FCC can modernize its ownership rules to better reflect the capabilities of digital broadcasting. These changes would maximize efficient use of the public airwaves and promote greater competition and diversity in the local TV market.
benton.org/node/163207 | Free Press
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FOX INVESTORS EXCLUDING MURDOCH BACK JOB SPLIT BY 3-1 MARGIN
[SOURCE: Bloomberg, AUTHOR: Andy Fixmer]
21st Century Fox investors not affiliated with Rupert Murdoch and his family supported a proposal to create an independent chairman of the film and television company by about a 2-1 margin. Shareholders representing almost 147 million Class B voting shares backed the plan, according to a filing by New York-based Fox after the company’s annual meeting in Los Angeles. Votes opposing totaled 361.7 million, including about 280 million cast by Murdoch, 82, and his family trust. “The level of family control -- Murdoch owns 40 percent of voting shares -- and the dual-class share structure which denies voting rights to Class A shareholders, were engineered to keep power in the hands of Murdoch,” said Julie Tanner of Christian Brothers Investment Services. “While it is virtually impossible for a shareholder resolution to ‘pass,’ a high vote result should send a clear signal to the board that change is needed.”
benton.org/node/163440 | Bloomberg
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HOW LONG WILL GOOGLE KEEP BURNING MONEY ON MOTOROLA?
[SOURCE: The Verge, AUTHOR: Ben Popper]
Recently, losses at Google's Motorola Mobility have accelerated despite three rounds of layoffs that slashed around 6,000 workers. The division is now on pace to bleed $1 billion a year out of Google’s bank account. The question is, does a money pit like Motorola have a major impact on Google’s bottom line? In a lot of ways, the answer right now is no. Despite the losses, Google is profitable overall, and its cash on hand has grown steadily. But if Motorola continues to slide, Google may eventually be forced to write down the cost of the $12.5 billion acquisition -- and its investors could clamor for the company to scuttle what has so far been a painful experiment into the world of mobile hardware. Unless Google's overall performance shows a serious slump, it may not be forced to make hard decisions about Motorola any time soon. But from the perspective of return on investment, Motorola’s a long way off from showing signs of life. "The new products haven’t been a flop, it’s far too early to call them a failure," says Avi Greengart, the research director for consumer devices at Current Analysis. "Financially speaking, however, Motorola hasn’t been a flop. It’s been a disaster."
benton.org/node/163414 | Verge, The
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PROJECT LOON UPDATE
[SOURCE: GigaOm, AUTHOR: Kevin Fitchard]
Building a balloon-based broadband network is nothing like designing a satellite constellation, Google explains. You can think of Loon as a cellular network where the towers are moving instead of the subscribers. My bet is Google won’t get too complex in its designs for reasons of both maintenance and cost. These balloons will be floating in the stratosphere where they won’t be very easy to fix if they malfunction, and if Loon really does take off, Google will launch tens — if not hundreds — of thousands of them into the heavens. At that kind of scale, cheap hardy equipment will be a big priority.
benton.org/node/163495 | GigaOm
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TELEVISION
IN LIFE AND ESPECIALLY DEATH, JFK CHANGED TV
[SOURCE: Associated Press, AUTHOR: Frazier Moore]
It's a measure of how long ago President John F. Kennedy died that, at the time, television was described as a young medium. With the shooting in Dallas, TV grew up. Coverage that November weekend 50 years ago signaled, at last, that television could fulfill its grand promise. It could be "more than wires and lights in a box," in the words of newsman Edward R. Murrow, and not just the "vast wasteland" that Federal Communications Commission Chairman Newton Minow had branded it just two years before. Rising to an unprecedented challenge, television could perform an incalculable public service. It could hold the country together: Americans convened in a video vigil, gathering before an electronic hearth. Nonstop broadcasts by America's three networks provided a sense of unity, a chance to grieve together, a startling closeness to distant events. And television, exhaustively chronicling the murder, memorial and burial, gave viewers the final scenes of a political career ushered in almost in tandem with the video age. In life and especially in death, John F. Kennedy changed television forever.
benton.org/node/163452 | Associated Press
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JOURNALISM
FOX NEWS REPORTEDLY USED FAKE COMMENTER ACCOUNTS TO REBUT CRITICAL BLOG POSTS
[SOURCE: Media Matters for America, AUTHOR: Ben Dimiero]
NPR media reporter David Folkenflik writes in his forthcoming book “Murdoch's World” that Fox News' public relations staffers used an elaborate series of dummy accounts to fill the comments sections of critical blog posts with pro-Fox arguments. In a chapter focusing on how Fox utilized its notoriously ruthless public relations department in the mid-to-late 00's, Folkenflik reports that Fox's PR staffers would "post pro-Fox rants" in the comments sections of "negative and even neutral" blog posts written about the network. According to Folkenflik, the staffers used various tactics to cover their tracks, including setting up wireless broadband connections that "could not be traced back" to the network. A former staffer told Folkenflik that they had personally used "one hundred" fake accounts to plant Fox-friendly commentary.
benton.org/node/163419 | Media Matters for America
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CONTENT
ONLINE DATING AND RELATIONSHIPS
[SOURCE: Pew Internet and American Life Project, AUTHOR: Aaron Smith, Maeve Duggan]
One in ten Americans have used an online dating site or mobile dating app; 66% of these online daters have gone on a date with someone they met through a dating site or app, and 23% have met a spouse or long term partner through these sites. Public attitudes toward online dating have become more positive in recent years, but many users also report negative experiences. Social networking sites have emerged as a venue for navigating the world of dating and relationships. These are among the results of a national survey of dating and relationships in the digital era, the first dedicated study of this subject by the Pew Research Center’s Internet Project since 2005. Key findings include:
11% of Internet users (representing 9% of all American adults) say that they have personally used an online dating site. As recently as 2008, just 3% of American adults had used online dating sites.
7% of cell phone apps users (representing 3% of all American adults) say that they have used a dating app on their cell phone.
Taken together, 11% of all American adults are “online daters”—meaning they have used a dating site or mobile dating app. Online dating is especially common among the college-educated and those in their mid-20’s through mid-40’s, and 38% of Americans who are currently single and actively looking for a partner have used online dating at one point or another.
benton.org/node/163411 | Pew Internet and American Life Project
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CALIFORNIA AND PRIVACY
[SOURCE: AdWeek, AUTHOR: Katy Bachman]
If not for California, consumer privacy law would be at a complete standstill. Privacy legislation in Washington isn’t moving. The White House has been talking about working on consumer privacy law for more than a year, and Sen. Jay Rockefeller’s (D-WV) Do Not Track bill has only one co-sponsor. But in California, Gov. Jerry Brown (D) signed two bills that solidified the state’s lead position on consumer privacy, all but dictating privacy policy for the nation. “Once a state starts enacting privacy legislation, it becomes the de facto national standard,” said Lisa Sotto of law firm Hunton & Williams. It could compel other states to follow suit, even Congress. The first law, known as the eraser button law, gives minors the right to erase information they posted. It also prohibits sites targeting minors from carrying ads for products like alcohol, tobacco, dietary supplements and other adult products. The second law requires online publishers and services that use behavioral advertising to be transparent on how they respond to Do Not Track. For the most part, the laws codify what members of the Digital Advertising Alliance already do, but the eraser button may pose some problems.
benton.org/node/163503 | AdWeek
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GOVERNMENT PERFORMANCE
PRESIDENT OBAMA PRMISES TO IRON OUT GLITCHES
[SOURCE: Los Angeles Times, AUTHOR: Christi Parsons, Noam Levey, Chad Terhune]
President Barack Obama conceded that technical "kinks" had bedeviled the rollout of the federal healthcare website, but said the administration had launched a "tech surge" to fix it and emphasized that the law would give uninsured Americans access to reasonably priced, quality insurance. "Nobody is madder than me about the fact that the website isn't working as well as it should, which means it's going to get fixed," President Obama told supporters in the Rose Garden. But he insisted: "The product, the health insurance, is good. The prices are good. It is a good deal. People don't just want it; they're showing up to buy it." The President relaunched his campaign to sell the law as Republicans announced plans for hearings on the balky website. A Gallup poll last week found that 7 out of 10 uninsured Americans were "not too familiar" or "not familiar at all" with the online marketplaces. Administration officials initially claimed the problems were caused by the unexpectedly high volume of visitors to the federal portal, which serves consumers in 36 states. President Obama acknowledged that the website needed to work "better, faster, sooner," but did not explain what went wrong or when it would work properly. He said "some of the best IT talent in the entire country" was part of a "tech surge" to fix it.
benton.org/node/163514 | Los Angeles Times
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NEWS FROM THE FCC
FCC FORCED TO PLAY CATCH-UP
[SOURCE: Politico, AUTHOR: Brooks Boleik]
The Federal Communications Commission is delaying high-profile actions, including a key spectrum auction, as it plays catch-up after the government shutdown. Acting Chairwoman Mignon Clyburn had originally scheduled an auction for the so-called H-Block for Jan. 14. The auction, which will be the first major airwaves sale since 2008, is now slated to start on Jan. 22. That could push it into next year’s fiscal battles. The bill that just passed Congress funds the government through Jan. 15 and raises the debt ceiling through Feb. 7. The shutdown delays add new pressure to the FCC, which is in the midst of major policy initiatives and stuck at three commissioners with two nominees stalled in Congress. The H-Block is the first of a string of planned auctions designed to get more airwaves into the marketplace to feed data-hungry smartphones and power high-speed communications systems. The commission lost critical planning time with most of its nearly 2,000 staffers furloughed for 16 days.
benton.org/node/163501 | Politico
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POLICYMAKERS
TIME TO MOVE AHEAD AT THE FCC
[SOURCE: American Enterprise Institute, AUTHOR: Jeffrey Eisenach, James Glassman]
[Commentary] Sen. Ted Cruz (R-TX) placed a hold on the Senate vote to confirm Tom Wheeler as chairman of the Federal Communications Commission. A vote on Wheeler, a venture capitalist and former trade association executive, has strong bipartisan support and a list of opponents that would make any advocate of free markets proud. So why has Sen Cruz put it on hold? “The Senator,” said an aide, “is holding the nominee until he gets answers to his questions regarding Wheeler’s views on whether the FCC has the authority or intent to implement the failed DISCLOSE Act.” It would be completely inappropriate for an independent regulatory agency like the FCC to even attempt unilateral action, especially in the face of strong opposition, on requiring disclosure of financial contributors of television and radio advertisements. It is perfectly understandable and appropriate for Sen. Cruz to raise these questions. On the other hand, DISCLOSE is no reason to hold up the confirmation of Tom Wheeler, who upon confirmation will surely rank near the top of all Administration officials in terms of private-sector experience. The Hill recently reported that “Wheeler’s candidacy for the job has divided liberals. Groups including the New America Foundation, Free Press and Demand Progress have warned that Chairman Wheeler would be too close to the industries he would be in charge of regulating.” We may not agree with Chairman Wheeler on every aspect of every issue, but we seriously doubt that unilateral implementation of the DISCLOSE Act is at the top of his FCC to-do list. On a variety of other fronts, the FCC has decisions to make that -- even if not made exactly to our liking -- have the potential to reduce costs for consumers, spawn faster innovation, and incentivize more capital investment. Let’s get on with it.
benton.org/node/163410 | American Enterprise Institute
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STORIES FROM ABROAD
EUROPE ADVANCES DATA PROTECTION RULES
[SOURCE: New York Times, AUTHOR: James Kanter]
A panel of European Union lawmakers backed a measure that could require American companies like Google and Yahoo to seek clearance from European officials before complying with United States warrants seeking private data. The vote, by an influential committee at the European Parliament, is part of efforts in Europe to shield citizens from online surveillance in the wake of revelations about a far-reaching spying program by the National Security Agency of the United States. The legislation has been under consideration for two years. The panel, meeting in Strasbourg, France, also endorsed ways of tightening other privacy rules, including fines that could run to billions of euros on the biggest technology companies if they fail to adhere to rules like limiting the sharing of personal data. The measure, if accepted by Europe, is expected to face fierce lobbying from American officials and technology companies. The legislation would still require the approval of governments and the full European Parliament.
benton.org/node/163519 | New York Times | The Hill
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