For upcoming media policy events, see http://www.benton.org/calendar.htm
Of special note this week are the following Congressional hearings: 1)=20
Telecommunications Policy Review: Lessons Learned from the Telecom Act of=20
1996, 2) Telecommunications Policy: A Look Ahead, 3) Satellite Home Viewer=
=20
Improvement Act reauthorization and 4) Spyware: What You Don't Know Can=20
Hurt You.
POLITICS
Bush to Roll Out His Tech Vision Ahead of Kerry's
Vote on Internet Tax Moratorium Today
Trouble in NAB Paradise?
CABLE
In Embracing Digital Recorders, Cable Companies Take Big Risk
Under Assault/Bleepinator Anyone?
Ferree Plan No Picnic for Cable, Either
Jeff Chester Gets On Cable=92s Case
INTERNET
The Latest High-Tech Legal Issue: Rooting Out the Spy in Your Computer
14% of Internet Users Say They No Longer Download Music Files
TELECOM
Why Cingular Won't Ditch This Deal
The real fight begins for AT&T, Baby Bells
VoIP: Challenging Regulations and Rates in States
QUICKLY
Technology and Show Business Kiss and Make Up
TV and Toddlers
No Wires, No Rules
POLITICS
BUSH TO ROLL OUT HIS VISION AHEAD OF KERRY'S
Expect announcements early this week from President George Bush of=20
proposals aimed at boosting technological innovation. Proposals will=20
include: $100 million annual grants that support development of electronic=
=20
medical records systems, asking Congress to pass legislation making=20
permanent existing tax breaks on broadband services and new steps to make=20
available more spectrum for broadband services. President Bush's proposals=
=20
are already facing criticism. Morley Winograd, executive director of the=20
Center for Telecom Management at the University of Southern California and=
=20
former adviser to Vice President Al Gore, said, "There's only one big thing=
=20
you can do to promote universal broadband, which is subsidize the price."=20
That notion was absent from the White House plan. Mr. Winograd said=20
President Bush's proposal on taxes ratify the status quo and embrace a=20
widely accepted bipartisan goal. He added that the plan on wireless=20
spectrum was up to the FCC, an independent agency, and the proposals for=20
expanding broadband over power lines was rarely discussed and that current=
=20
limits had less to do with government policies than consumer acceptance of=
=20
the idea.
[SOURCE: Wall Street Journal, AUTHOR: Greg Hitt greg.hitt( at )wsj.com and Jacob=
=20
M. Schlesinger jacob.schlesinger( at )wsj.com ]
http://online.wsj.com/article/0,,SB108294725270693283,00.html?mod=3Dtoda...
s_page_one
(requires subscription)
VOTE ON INTERNET TAX MORATORIUM TODAY
The Senate is expected to vote today to open a 30hr debate on a bill making=
=20
permanent the moratorium on Internet access taxes (S-150). A second vote=20
--on Tuesday or Wednesday -- would be needed to move to a more formal=20
debate and vote on the bill. Opponents to the bill, especially proponents=20
of a competing bill, S-2084, may prevent cloture. Democrats may also try to=
=20
offer non-germane amendments to S-150, including amendments related to=20
minimum wage law. Apart from all that, senators may have a tough choice=20
between the bills. S-150 may hurt states, preventing them to tax Internet=20
connections, and S-2084 could be seen as a vote for higher taxes. What's a=
=20
states' rights fiscal conservative to do?
[SOURCE: Communications Daily, AUTHOR: Patrick Ross]
(Not available online)
Reuters:=20
http://www.reuters.com/newsArticle.jhtml?type=3DinternetNews&storyID=3D4...
32§ion=3Dnews
LATimes:=20
http://www.latimes.com/business/printedition/la-fi-preview26.1apr26,1,70...
1.story?coll=3Dla-headlines-pe-business
TROUBLE IN NAB PARADISE?
Conflicting reports out of the National Association of Broadcasters=20
convention last week suggest that there could be a power struggle going on=
=20
within the lobbying group. Some have suggested that the organization's=20
Joint Board Chairman Phillip Lombardo, CEO of Citadel Communications, has=20
organized a coup to oust NAB President Eddie Fritts and install himself as=
=20
president. Mr. Lombardo is vehemently denying this. Nevertheless, there=20
appears to be friction between the TV and radio members of the organization=
=20
and Mr. Lombardo seems to have rubbed some people the wrong way. Radio=20
members feel Lombardo sides with TV in his decisions while Mr. Fritts has=20
been criticized for not moving enough on TV broadcasting issues. =93There=92=
s a=20
cadre on the TV board that have it in for Mr. Fritts,=94 said William=20
Stakelin, COO of Regent Communications and a former NAB board chairman.
[SOURCE: Communications Daily, AUTHOR: Tania Panczyk-Collins]
(Not available online)
CABLE
IN EMBRACING DIGITAL RECORDERS, CABLE COMPANIES TAKE BIG RISK
The cable industry is rushing to install as many digital video recorders in=
=20
subscribers' homes as they can -- and charge an extra $10/month for their=20
use. But if those subscribers us the machines to tune ads out, it could=20
undermine the basic economics of the television business. Advertisers spent=
=20
$54.5 billion on U.S. television advertising in 2003, more than any other=20
medium. Many of the companies that sell monthly cable-TV service also own=20
cable channels that rely on advertising revenue. "This is something=20
consumers really want and ultimately that's what's going to drive everybody=
=20
in a competitive business," says Comcast's Brian Roberts. The long-term=20
affect for consumers could be higher cable and satellite bills as=20
advertising revenues dwindle. Consumers might be given a choice: They could=
=20
pay extra to get ad-free TV, or choose a cheaper plan that forces them to=20
watch ads. In a 2002 speech to television critics, Jamie Kellner, then Time=
=20
Warner's top TV programming executive, said users of digital recorders=20
might have to pay an extra $250 a year for commercial-free TV to replace=20
the revenue lost from advertising. "Don't think for a moment that there's=20
free lunch involved in this," he said.
[SOURCE: Wall Street Journal, AUTHOR: Julia Angwin julia.angwin( at )wsj.com,=20
Peter Grant peter.grant( at )wsj.com and Nick Wingfield nick.wingfield( at )wsj.com ]
http://online.wsj.com/article/0,,SB108292985324892853,00.html?mod=3Dtoda...
s_page_one
(requires subscription)
UNDER ASSAULT
The world is changing fast, maybe too fast, for the cable industry. Perhaps=
=20
just six months ago, no one in the industry would have been giving a second=
=20
thought about in/decent programming. Now indecency critics -- including FCC=
=20
Chairman Michael Powell, House Commerce Committee Chairman Rep. Joe Barton=
=20
(R-TX) and groups like the Parents Television Council -- having seemingly=20
won the battle to reign in broadcast programming are turning their=20
attention to cable TV. Programmers are pushing edgier fare to later start=20
times and slowing production -- until after this election cycle -- of=20
potentially controversial shows. Even though most major cable networks are=
=20
owned by broadcasters, the rules for cable are different. In the past, the=
=20
courts have blocked Congress and the FCC from imposing broadcast-style=20
indecency restrictions on cable for two reasons. First, subscribers=20
"invite" cable into their homes and voluntarily pay for it. Second, the=20
government must limit free-speech restrictions to the lightest remedy=20
possible, and subscribers can already call their cable operator and order a=
=20
block on any channel. Perhaps a more Constitution-friendly, but potentially=
=20
economically damaging alternative is mandated a la carte options for=20
consumers so they do not have to pay for channels they don't want.
[SOURCE: Broadcasting&Cable, AUTHOR: John Higgins]
http://www.broadcastingcable.com/article/CA412802?display=3DTop+of+the+Week
(requires subscription)
Also see this related story:
BLEEPINATOR ANYONE?
Television stations are being advised by attorneys to delay and sometimes=20
alter local news broadcasts because of changes in FCC decency enforcement.=
=20
Alluding to the NBC-Bono decision, communications attorney Kathleen Kirby=20
notes that "some words are inherently indecent and profane." Context, she=20
said, has been completely removed from the debate. At the NAB convention,=20
FCC Commissioner Kathleen Abernathy said that lots of stations do good news=
=20
work in the community, but, "if you cross the line, we're still going to=20
nail you for it." Under the strictest interpretation of the FCC's=20
broadcast-indecency rules, for example, during a live shot for the 6 p.m.=20
news, a streaker could run behind a reporter and yell, "F*** you!" and the=
=20
station might face a $1 million fine=97$500,000 for the profane utterance=
and=20
another $500,000 for the nudity. The enforcement changes mean increased=20
sales for a small group of equipment companies that sell signal-delay=20
systems. Leitch, Prime Image, and Encore drew hundreds of visitors on the=20
exhibit floor at NAB last week, selling devices that range from $8,000 to=20
$30,000 each.
[SOURCE: Broadcasting&Cable, AUTHOR: Steve McClellan]
http://www.broadcastingcable.com/article/CA412624?display=3DTop+of+the+Week
(requires subscription)
FERREE PLAN NO PICNIC FOR CABLE, EITHER
The cable industry has so far been supportive of FCC Media Bureau Chief Ken=
=20
Ferree as he tries to craft a plan to quicken the nation's transition to=20
digital-only broadcasting, returning valuable spectrum for auction. But=20
does cable really like the Ferree proposal? Maybe not, thinks at least one=
=20
FCC official. Under the plan, TV stations may demand mandatory cable=20
carriage of their digital signals, effective Jan. 1, 2009. Some stations=20
would elect for digital carriage, knowing that the cable operator might=20
have to voluntarily carry the signal in analog to keep analog=20
equipment-only viewers happy. =93If you choose digital carriage and you have=
=20
a [The] WB [station] or something, the cable system will find it very tough=
=20
to drop your analog,=94 suggests the FCC's Rick Chessen. =93Cable has very=
=20
mixed feelings about this type of plan, where broadcasters get to choose=20
whether they want digital, because they recognize that the marketplace in=20
many, many instances is going to force them to carry both,=94 Mr. Chessen=
said.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA412781?display=3DTop+Stories
(requires subscription)
JEFF CHESTER GETS ON CABLE'S CASE
Soft-spoken, understated, demur -- these are the words cable and broadcast=
=20
executives use all the time to describe Jeff Chester. But, as Mr. Chester=20
will quickly tell you, they lie -- they lie all the time. Outspoken, brash,=
=20
relentless public interest advocate Jeff Chester is interviewed here by=20
Multichannel News. Here's Mr. Chester describing his work in his own words:
"Television is under the control of just the tiny few, giant companies,=20
whose principal focus is advertising and marketing and the entertainment=20
that promotes it. What motivates me is to have a system that can be more a=
=20
thriving, vibrant media marketplace of ideas. Imagine more serious news,=20
long-form documentaries, and the best of local and national arts. That=92s=
=20
missing today on television, including cable."
"Brian Lamb can deny it, [but] C-SPAN is designed to aid cable=92s lobbying=
=20
strategy. It=92s a not-so-silent campaign contribution on both parties, who=
=20
appreciate being invited in here. Also, C-SPAN has never really cast a=20
negative eye for any kind of sustained basis on its own industry. It=92s a=
=20
political operation for the cable industry."
"We were one of the biggest critics of Bill Kennard, as we are of the=20
critics of Michael Powell."
"I think it=92s a tragedy about what has happened with this decency debate.=
=20
Look, the Congress and the FCC have gone too far. What is being proposed,=20
ultimately, is censorious. What kids and adults, frankly, need, are more=20
options."
There's much more at the URL below.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA412556?display=3DTop+Stories
(requires subscription)
INTERNET
THE LATEST HIGH-TECH LEGAL ISSUE: ROOTING OUT THE SPY IN YOUR COMPUTER
What is spyware? It is what opponents call software that is unknowingly=20
downloaded onto an Internet user's computer delivering pop-up ads and=20
sometimes performing other actions (monitoring Internet use or recording=20
keystrokes) without the owner understanding what is going on or how to stop=
=20
it. Proponents call this adware. This creates inconveniences for users, but=
=20
may have a new cost: spyware is now the No. 1 reason that consumers call=20
Dell for technical support, damaging the Dell brand, the company argues.=20
Utah has passed the first anti-spyware law and California, Iowa and=20
Virginia are considering legislation. Federal legislation has been proposed=
=20
too. Sen. Burn (R-MT), Wyden (D-OR) and Boxer (D-CA) have introduced a bill=
=20
that would require notice and consent before software could be added to a=20
computer.
More at the URL below and see http://www.benton.org/calendar.htm for=20
information on an upcoming Congressional hearing on the topic.
[SOURCE: New York Times, AUTHOR: John Schwartz & Saul Hansell]
http://www.nytimes.com/2004/04/26/technology/26spyware.html
(requires registration)
14% OF INTERNET USERS SAY THEY NO LONGER DOWNLOAD MUSIC FILES
The recording industry campaign against those who download and swap music=20
online has made an impact on several major fronts, but the number of=20
Americans downloading music and sharing files online has increased,=20
according to the most recent survey of the Pew Internet & American Life=20
Project. The Project's national phone survey shows that 14% of online=20
Americans say that at one time in their online lives they downloaded music=
=20
files, but now they no longer do any downloading. That represents more than=
=20
17 million people. However, the number of people who say they download=20
music files increased from an estimated 18 million to 23 million since the=
=20
Project's November-December 2003 survey. This increase is likely due to the=
=20
combined effects of many people adopting new, paid download services and,=20
in some cases, switching to lower-profile peer-to-peer file sharing=20
applications. For more information, see Web site:=
http://www.pewinternet.org/.
[SOURCE: Pew Internet & American Life Project Press Release]
http://www.pewinternet.org/
TELECOM
WHY CINGULAR WON'T DITCH THIS DEAL
AT&T Wireless has been reporting an eroding subscriber base and earnings of=
=20
late. Will it kill the merger with Cingular to form the country's #1=20
wireless provider? Probably not. Cingular parent's Bell South and SBC want=
=20
AT&T Wireless for its networks, wireless spectrum, and coverage. With=20
people choosing wireless instead of wireline for their primary or second=20
lines, the Baby Bells need to enhance their dominant telecom services=20
inside and outside their regions. Adding AT&T Wireless' network will=20
enhance Cingular's cheaper than building new and allow customers to send=20
photos from cell phone to cell phone. And there's massive economies of=20
scale to look forward to resulting in more than $1 billion in operating-=20
and capital-spending savings in 2006, and $2 billion in annual savings=20
beginning in 2007.
[SOURCE: BusinessWeek, AUTHOR: Olga Kharif]
http://www.businessweek.com/technology/content/apr2004/tc20040423_4609_t...
.htm
THE FIGHT BEGINS FOR AT&T, BABY BELLS
Several months ago, AT&T stopped paying local phone companies what are=20
known as access charges for completing long-distance calls placed by its=20
customers while the company waited for a ruling from the FCC. Last week,=20
the Commission ruled that AT&T must continue to pay access fees even when=20
using the Internet to transport parts of long distance calls. AT&T now=20
contends it owes local providers just tens of millions in past access fees,=
=20
but local phone companies argue that the number is in the hundreds of=20
millions. This round of the debate will be played out in court and could=20
affect other carriers besides AT&T.
[SOURCE: C-Net|News.com, AUTHOR: Ben Charny]
http://news.com.com/2100-1037-5198645.html?tag=3Dnefd.hed
VOIP:CHALLENGING REGULATIONS AND RATES IN STATES
Progress & Freedom Foundation President Raymond L. Gifford, in a speech to=
=20
the Buckeye Institute's Telecommunications Policy Forum in Columbus, Ohio,=
=20
offered advice to policymakers. =93The legacy system of PUC administrative=
=20
regulation of communications needs to change and be diminished rapidly,=94=
he=20
said. =93Technology and innovation will eclipse the current regulatory=
system=20
no matter what. But states that take proactive steps to create a legal and=
=20
regulatory structure that is attractive will have a comparative advantage=20
over states that do not.=94 =93Beware a vicious cycle, as is now happening=
with=20
federal Universal Service Fund contributions,=94 he told state experts.=
=93VoIP=20
will squeeze the ability to seek cost recovery from access and reciprocal=20
compensation.=94 It will also =93force rebalancing, or better yet,=
deregulation=20
of retail rates=85forc[ing] a different pricing model toward flat, monthly=
=20
charges, or tiers of bandwidth use.=94 Moreover, Gifford said states will=20
=93lose [their] most profitable access-payers first=94 because =93they have=
the=20
most to gain by avoiding usage-based intercarrier compensation.=94
[SOURCE: Progress and Freedom Foundation Press Release]
The Progress & Freedom Foundation is a market-oriented think tank that=20
studies the digital revolution and its implications for public policy. It=20
is a 501(c)(3) research & educational organization.
http://www.pff.org/news/news/2004/042104giffordbuckeye.html
SJMerc:=20
http://www.mercurynews.com/mld/mercurynews/business/technology/8516274.htm
QUICKLY
TECHNOLOGY AND SHOW BUSINESS KISS AND MAKE UP
Executives from the entertainment and technology industries used to be at=20
eachother's throats, screaming accusations at Congressional hearings. But=20
the economic downturn has helped them find true love in eachother's arms.=20
The ability to deliver movies and music over the Internet in a pirate-proof=
=20
format could mean big money for movie and record companies, which have long=
=20
complained about the expenses of manufacturing and distributing their=20
wares. And there are equally fat profits for those who can ease the=20
distribution and consumption of digital entertainment. But "happily ever=20
after" is no guarantee for this new romance, still fueled equally by=20
optimism and results. And the new partners are only beginning to talk=20
money. "This will be a defining issue between the businesses," said Peter=20
Chernin, chief executive of the News Corporation, owner of 20th Century Fox=
=20
Studios and the Fox Television operations. "How does someone get paid for=20
creating software that moves content around?"
[SOURCE: New York Times, AUTHOR: Evelyn Nussenbaum]
http://www.nytimes.com/2004/04/26/business/media/26entertain.html
(requires registration)
TV AND TODDLERS
Have broadband? BusinessWeekTV looks at recent reports linking TV viewing=20
to attention disorders. Find link to video at URL below (unless you are a=20
toddler subscriber, of course, in which case go get your Dad to read=20
something to you).
[SOURCE: BusinessWeek]
http://www.businessweek.com/technology/index.html
NO WIRES, NO RULES
A special BW section on new wireless technologies and how they will soon=20
reconfigure the Web using radio spectrum that doesn't cost a dime.
[SOURCE: BusinessWeek]
http://www.businessweek.com/technology/content/apr2004/tc20040419_7314.htm
--------------------------------------------------------------