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March 5-11: Gearing Up for the National Broadband Plan's Anniversary

A number -- OK, let's give it a number: 1, 2, 3, 4, 5 -- of DC policy events this month are examining what has been accomplished in the first year since the Federal Communications Commission sent the National Broadband Plan to Congress. At the Benton Foundation, we've had our eyes on the Plan all year and have been tracking the progress in implementing it . So we're not above jumping on the bandwagon -- if for no other reason than we think it very important that the public hold the FCC and other governmental bodies accountable for delivering on the promise of the broadband plan.

It is not without irony that this week's Headlines were dominated again with updates on network neutrality. The House Commerce Committee, it appears, bent on celebrating the broadband plan anniversary by voting to rescind the FCC's open Internet/network neutrality rules adopted last December. On March 9, the Committee's Communications Subcommittee held a back-to-back hearing and vote on a resolution of disapproval that -- if passed by the House and Senate and signed by President Barack Obama -- would disallow the FCC's rules. The full House Commerce Committee is expected to vote on and approve the resolution March 15. Of course, although a companion resolution had been introduced in the Senate, its prospects are dim and President Barack Obama -- a strong network neutrality advocate and supporter of the FCC's rules -- seems completely unlikely to sign the resolution if it ever made it to his desk. So the entire exercise, as commentators like Public Knowledge's Art Brodsky point out, proves the new House majority has a laser-like focus on fixing the economy, encouraging innovation, and getting people back to work.

Lost in the news of March 9, perhaps then, was the FCC's announcement that it will provide E-Rate funding for 20 “Learning On-The-Go” wireless pilot projects . The National Broadband Plan includes a recommendation that the FCC support off-campus mobile Internet connections for students. According to a survey approximately 50 percent of the schools and libraries plan to implement or expand the use of digital textbooks and other wireless devices for digital learning. The FCC aims to increase the percentage of schools and libraries across the country using mobile broadband. As Rep Jesse Jackson Jr (D-IL) said this week on the House floor while holding an iPad and a Kindle, "These devices are revolutionizing our country — and they will fundamentally alter how we will educate our children." Rep Jackson is promoting an idea to amend the Constitution so that it guarantees every American the right to an equal education. An education facilitated by technology, Rep Jackson says, could help further inalienable rights both in and out of the Constitution.

On Benton's National Broadband Plan Tracker you can follow the developments of each recommendation including the related dockets the FCC launches and public comments it receives, legislation introduced in Congress, and changes in Administration policy. The Tracker is powered by our Communications-related Headlines service -- a daily update on the world of telecommunications policy. The Tracker captures the links between today's Headlines and events, bills moving through Congress, dockets at the FCC, and the week's key events.

Next week's agenda includes three National Broadband Plan review events, so expect to hear lots more about how the FCC and other government bodies are doing implementing plan. But there will also be news about the Freedom of Information Act in the Digital Age, online consumer privacy, and more.


Broadband Breakfast Club
Tuesday, March 15th, 2011
8am
http://broadbandbreakfast.com/2011/03/broadbandbreakfast-com-again-on-le...

This event will focus on the National broadband Plan’s three parts: (1) promoting investment and innovation, (2) including all Americans in the digital economy through availability and adoption, and (3) promoting “national purposes.”

Panelists:

  • Robert D. Atkinson, President, The Information Technology and Innovation Foundation
  • Daniel Berninger, Independent Communication Architect and Analyst
  • John Erik Garr, Principal, Diamond Advisory Services
  • Keith Montgomery, Senior Program Director, Broadband, ICF International


March 11, 2011 (Tracking the National Broadband Plan)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, MARCH 11, 2011

A Friday, yes, but still lots of fun to be had in wonkland http://benton.org/calendar/2011-03-11/


INTERNET/BROADBAND
   Tracking the National Broadband Plan -- Universal Service
   The incredible shrinking US broadband plan
   The Hill's 'Wonderland' Assault On Network Neutrality
   Rep Walden worried FCC will reclassify broadband if network neutrality struck down in court
   Sens Franken, Wyden to SEC: Allow AT&T, Verizon, Comcast shareholders to vote on network neutrality
   Admit it, data hogs: you know you should pay more
   New Broadband Program at USDA
   Southwest Virginia Losing US Funds for Broadband
   China's cyber abilities worry US

FCC NEWS
   Reps Introduce Federal Communications Commission Collaboration Act
   Top Aide: Genachowski Intends To Stay Put

TAXES
   Newly Introduced Bill Puts Halt on Wireless Taxes
   Gov Quinn signs 'Amazon tax' bill -- to loud boos and cheers
   Amazon Takes Action in Illinois as War on Sales Taxes Continues
   Nevada considers Internet poker bill, but casinos balk

PUBLIC BROADCASTING
   Second Secretly Recorded Tape Emerges In NPR Sting
   Public broadcasting's top GOP backer switches sides
   NPR needs to stay neutral
   Public broadcasting: Luxury or staple?
   In NPR scandal, small radio stations stand to be biggest losers
   Post-Vivian Schiller, big stakes in NPR's next moves

TELEVISION/RADIO
   Cumulus to buy Citadel Broadcasting
   Nielsen: Dramatic Rise In Time-Shifted Viewing
   Hearst TV: Government Should Not Scrap Local Broadcasting In Favor Of National Service
   Coming to America
   Creditors begin sparring over when Tribune became insolvent
   Freedom Communications seeks to sell some or all of its media properties

WIRELESS/SPECTRUM
   Three Incentive Auction Bills Introduced In Congress
   Wireless Carriers Call On FCC To Act On Data Roaming Mandate
   FCC calls WCAI suggestion 'absurd'
   NTT Docomo, Japan Phone Operators Report Poor Services After Earthquake
   Smartphone wake-up call for Japan

PRIVACY
   EU, US Officials Say They're Getting Closer On Privacy
   Senate Democrats Push Facebook on Privacy
   HP Exec Says International Organizations Needed For Long-term Privacy Fix

AGENDA
   Sen Kohl Vows Google Probe
   Sen Rockefeller lobbies for public safety bill
   ITIF Calls For More Government Investment

DIGITAL CONTENT
   Google Lets Users Hide Sites to Find More of What They Want
   E-Book Lending Takes Off

UNIVERSAL SERVICE/TELECOM
   USF/ICC Reform ex parte Meetings
   Proposed Second Quarter 2011 Universal Service Contribution Factor 14.9%
   FCC Proposes Caller ID Rules

EDUCATION
   President Obama highlights $90 million education technology agency
   Rep Jackson stands by his proposal: An iPad for every student

CHILDREN & MEDIA
   President and First Lady Call For a United Effort to Address Bullying
   Apple changes purchases policy to protect kids on iPad, iPhone games
   PTC targets ABC's 'Good Christian Bitches'

OPEN GOVERNMENT
   Expert says data on federal transparency site is wrong

MORE ONLINE
   Bloggers Discuss the Role and Size of Government
   Amazon At Nearly 50% of e-Reader Market

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INTERNET/BROADBAND

TRACKING THE NATIONAL BROADBAND PLAN
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
March 16 marks the one year anniversary of the release of the National Broadband Plan, a multi-year strategy for increasing broadband deployment, adoption and meaningful use throughout the country. Over the last year, the Benton Foundation has been tracking the implementation of the plan and its over 200 recommendations. At Benton, we believe the heart of the National Broadband Plan are the recommendations targeted at modernizing and streamlining the federal Universal Service Fund. Thirty-five recommendations -- approximately 16% of the plan's suggestions -- address this issue. Five of these recommendations (14%) have been completed in the past year. In September, the Federal Communications Commission's E-rate Order addressed upgrading broadband connectivity to schools and libraries. The bulk of the recommendations (22 or 63%) are in full swing at the FCC. Most notably, the FCC has recently launched proceedings to modernize and streamline its universal service and intercarrier compensation policies and modernize and drive tougher accountability measures into the Lifeline/Link Up program. On Benton's National Broadband Plan Tracker you can follow the developments of each recommendation including the related dockets the FCC launches and public comments it receives, legislation introduced in Congress, and changes in Administration policy. The Tracker is powered by our Communications-related Headlines service -- a daily update on the world of telecommunications policy. The Tracker captures the links between today's Headlines and events, bills moving through Congress, dockets at the FCC, and the week's key events. On this, day 361 of the National Broadband Plan, Benton invites you to take a look at how much work has gone into making the plan a reality. You can even grade the performance of the government bodies the Plan's recommendations were targeted to. Sure, the FCC has completed work on over 10% of the recommendations it made to itself, but how is Congress doing? (Hint: not nearly so well)
http://benton.org/node/52560
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THE NATIONAL BROADBAND PLAN
[SOURCE: Financial Times, AUTHOR: Eli Noam]
[Commentary] A year into the National Broadband Plan and two years into the Obama Administration, it is worth looking at the progress in promoting an infrastructure that candidate Obama had declared essential. The idea is to liberate 500 megahertz of spectrum, to auction it off to providers of 4G, presumably mobile telecom companies, thus more than doubling their spectrum, and to use the proceeds to create broadband connectivity for unserved areas and people. In the end, it is likely that much less spectrum will be available for auctioning than envisioned, and hence less money would be generated. In other words, a major struggle with broadcasters in the name of broadband Internet will result in $19.6bn for non-broadband purposes, and in only $8.2bn towards infrastructure, all of it for 4G wireless. Why then not move the national effort to fibre, which by general agreement, is the road to the future? The problem is that the Federal budget deficit does not permit the funding of a national fiber initiative. This leaves the government with the fallback to use an off-budget currency – spectrum allocations— to advance its goals, and it shapes its preference to the wireless platform. But if fiber upgrades are to be pursued, too, how would those investments then be generated? The approach here needs to generate creatively off-budget strategies. It would have four elements:
Tax incentives, through investment credits for incremental high-speed network upgrades in low-density areas, and for certain hardware upgrades by low-income end-users.
Regulatory incentives, such as encouragement for cable, telecoms, and other infrastructure providers to share the fiber in low-density areas and thus lower their cost, subject to openness requirements and consumer protections.
Creation of a Federal off-tax funding mechanism. This already exists through the universal service fund for rural telecom and is being transformed into a wider mechanism for broadband. It is, in effect, an internal taxing mechanism for telecom and soon for broadband, paid through a levy on communications bills. However, the amounts raised today for high-cost areas is about $4.5bn, of which maybe a third would go to fiber, and are not enough to fund fiber nationally. Expanding this mechanism would be the most realistic source of funding, and it might find the approval even of anti-tax Republicans because it is pro-rural and not formally a tax.
Local cost sharing. There should be a much stronger role and responsibility for states and municipalities to support the infrastructure in their states following their own priorities. They could work with private companies, and use tax-free municipal bonds to support these projects. This should be promoted by Federal matching contributions, using the broadband fund mentioned above.
To conclude: the vision of a nation-wide fiber infrastructure should not be replaced by merely facilitating the new generation of mobile communications, and then relabeling it high-speed broadband. If the US is losing its technology lead it is not because of a lack of private sector initiatives, but because its government is losing the ability to do or enable big things.
benton.org/node/52563 | Financial Times
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WONDERLAND ASSAULT
[SOURCE: Public Knowledge, AUTHOR: Art Brodsky]
In approving the resolution to nullify the Federal Communications Commission’s (FCC) open Internet rules, the Republican members of the House Communications Subcommittee (no Democrats voted to block the FCC) said they didn't care if big companies imposed unfavorable conditions on start-ups and didn't care if there was nowhere small companies could go if they felt disadvantaged. In today’s Wonderland that is the House, real-world experience means nothing.The conclusions have been drawn. Off with the head of the FCC! The traditional arguments and politics that usually govern House Republican votes mean nothing. At the Subcommittee hearing held just prior to the vote, A leading small businesswoman says openness is needed for the Internet. Never mind. Even big business, which usually has the Republicans at its beck and call, is largely going along with the FCC rules. No matter. Instead, there is the power-centric view favoring telecom carriers. One witness who runs a wireless ISP said it was OK to block Netflix from going to his customers. Another, a former Wall Street analyst who fears for the financial safety of the Big Telecom companies, asked what would happen if Google decided to “withhold its services from Verizon in Boston but continue to provide them to Comcast,” which would be a problem for Verizon retaining customers. Wonderland, indeed. Instead, there are bizarre interpretations in which FCC rules which an open Internet rule is seen as a hindrance to small business, rather than an arbiter to which small companies could turn if they thought they were being taken advantage of by super carriers. And so the circus will reconvene on the 15th, when the full House Commerce Committee will vote to repeal the FCC rule, and the later in the week the full House will do so as well. It will all be cloaked in the sanctimony of curbing government and helping small business, but nothing will be further from the truth. All it will do is put entrepreneurs further behind when the big carriers decide the time is right to put the pressure on and they start charging for preferential “fast lanes” that start-ups can't afford, or requirements they can't meet.
benton.org/node/52588 | Public Knowledge
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WALDEN WORRIES ABOUT RECLASSIFICATION
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Rep. Greg Walden (R-OR) is concerned that the Federal Communications Commission (FCC) will regulate broadband under Title II of the Communications Act if the courts strike down its network neutrality rules. The agency had previously considered the more stringent Title II approach last year before ultimately deciding to write net neutrality regulations using Title I. The House Communications Subcommittee chairman said on an episode of C-Span's "The Communicators" series, released March 10: "The FCC still keeps open this Title II proceeding so if they lose the court case, there's this GPS locator that says, 'go over here and regulate the Internet as a common carrier using Title II. We've already got the proceeding open to go down that path. Otherwise, why wouldn't they close that proceeding?"
benton.org/node/52522 | Hill, The
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LETTER TO SEC
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Sens. Al Franken (D-MN) and Ron Wyden (D-OR) wrote to the Securities and Exchange Commission to say network neutrality is a significant public policy issue, despite a recent SEC finding to the contrary. The SEC decided that network neutrality is not a "significant" policy issue for the purposes of a rule that permits shareholders to force a vote on an issue at annual shareholder meetings. The rule is often invoked by social activists. This SEC's ruling pertained to shareholder meetings for AT&T, Comcast and Verizon. The SEC had decided that net neutrality was not a "significant topic of widespread public debate such that it would be a significant policy issue." On the contrary, said Sens Wyden and Franken in a letter to SEC Chairwoman Mary Schapiro. "No other telecommunications issue has generated the same amount of public debate, legislative ad regulatory action, and media attention as net neutrality, especially if you look at the last six months," they said. The senators described the history of the net-neutrality debate over the last year, including President Obama's statement of support for the FCC's decision to pass regulations as well as the GOP effort to repeal the rules.
benton.org/node/52528 | Hill, The
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NW USDA BROADBAND PROGRAM
[SOURCE: Department of Agriculture, AUTHOR: Press release]
Agriculture Secretary Tom Vilsack announced that USDA issued a Notice of Solicitations of Applications and regulations implementing the 2008 Farm Bill for the broadband loan program. Building out broadband infrastructure remains an important Obama Administration priority to help lay a new foundation for economic opportunity to help rural America win the future. The interim regulation for the Broadband Program requires that certain definitions affecting eligibility be revised and published annually by the agency in the Federal Register. For the purpose of this interim regulation, the agency has amended two definitions: Broadband Service and Broadband Lending Speed and Incumbent Service Provider. USDA's Farm Bill broadband loan program has invested over $1 billion over the past decade in more than 100 projects nationwide. This loan program is fundamental to increasing access to broadband, which will enable rural communities to expand markets, compete in the global economy, and create high-paying jobs. RUS is planning to schedule training opportunities to educate applicants on new program requirements, and how to submit complete and competitive applications. Dates for the training will be published on the USDA website shortly. The notice is being issued prior to passage of the final appropriations act to allow potential applicants time to submit proposals and give the agency time to process applications within the current fiscal year. Upon completion of a 2011 Appropriations Act, RUS will publish a subsequent notice identifying the amount of funding available for broadband loans. Expenses incurred in developing applications will be at the applicant's own risk.
benton.org/node/52514 | Department of Agriculture | National Journal | Farm Bill Broadband Program
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FCC NEWS

FCC COLLABORATION ACT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Reps Anna Eshoo (D-CA), John Shimkus (R-II) and Mike Doyle (D-PA) have introduced a bill, the Federal Communications Commission Collaboration Act, that would allow more than two commissioners to meet privately outside of public meetings. The bill would allow three or more commissioners to meet for "collaborative discussions," so long as no agency actions were taken at the meetings and so long as a member of each political party was a party to the discussions, which, in this case, would mean no meeting among the three Democrats making up the majority. The FCC's sunshine rules currently prevent that, so negotiations on items and issues are often through staffers and e-mails. FCC Commissioner Michael Copps has been a long and strong voice for allowing commissioners to reason together outside of public meetings. "I am thrilled that Congresswoman Anna Eshoo, Congressman John Shimkus, and Congressman Mike Doyle have introduced the Federal Communications Commission Collaboration Act," said Commissioner Copps. "If there is only one action we could take this year to reform the FCC, this should be it." "The FCC has the responsibility to tackle the nation's most pressing communications issues, from spectrum reform to universal service and public safety," said Rep Eshoo. "But the Closed Meeting Rule prevents simple collaboration or discussion of these issues, outside of a formal setting. I'm pleased to introduce legislation to modify this restrictive rule to promote greater discussion among the five FCC Commissioners so they can benefit from each other's expertise and experience."
benton.org/node/52550 | Broadcasting&Cable | Rep Eshoo | Commissioner Copps
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TAXES

WIRELESS TAX FAIRNESS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Legislators in the House and Senate have introduced a bill, the Wireless Tax Fairness Act, which would impose a five-year moratorium on taxes on wireless service, a tax rate the legislators say now averages about 16.3%, or more than double that on other goods and services. Reining-in taxes plays to the Republican side of the aisle, while boosting the attractiveness of wireless helps out with the Obama Administration's push for wireless as a driver of broadband adoption. The bill was introduced in the House by Reps. Reps. Zoe Lofgren (D-CA) and Trent Franks (R-AZ) and in the Senate by Ron Wyden (D-OR) and Olympia Snowe (R-Maine).
benton.org/node/52548 | Broadcasting&Cable
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PUBLIC BROADCASTING

2ND NPR VIDEO
[SOURCE: National Public Radio, AUTHOR: Mark Memmott]
In "Part II" of his secretly recorded conversations with National Public Radio fundraisers, conservative political activist James O'Keefe's accomplice presses for assurance that a $5 million gift to NPR from the fake group could be kept anonymous. In the 44-minute recording, NPR Senior Director of Institutional Giving Betsy Liley speaks with a man posing as "Ibrahim Kasaam" of the fictitious Muslim Education Action Center Trust. They talk at length about the donation process. "Kasaam" presses the question of whether NPR could shield the group's donation from the government. Liley, who earlier this week was placed on administrative leave, says she thinks so but will have to check with NPR's legal counsel. That's among several mistakes she made during the call.
The Corporation for Public Broadcasting released this statement:
"For nearly fifty years, the federal investment in public broadcasting has helped to strengthen our society. Public broadcasting educates our children, increases our sense of community as Americans, and provides a respectful non-commercial alternative on a hyper-commercial media landscape. The Corporation for Public Broadcasting is responsible for the health and vitality of public broadcasting in the United States and the investment of taxpayer dollars in locally owned and controlled public broadcasting stations and national producers and distributors of content such as PBS and NPR. Recent events involving NPR officials have not reflected the values and aspirations of public broadcasting. The Corporation for Public Broadcasting is committed to fair, balanced, objective, and transparent journalism that reflects a variety of viewpoints. The Corporation is committed to editorial standards that clearly separate decisions about content from financial or political considerations. We demand respect for all Americans whatever their racial or ethnic background, political belief, educational level, or occupation. The Corporation condemns the unprofessional conduct and offensive statements by Mr. Schiller and Ms. Liley that are inconsistent with these values. We will continue to work with our local station and national network partners to achieve these values and we will support NPR in its search for a Chief Executive who can strengthen NPR and fulfill them."
benton.org/node/52545 | National Public Radio | CPB
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NPR NEEDS TO STAY NEUTRAL
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] National Public Radio long has attracted complaints from conservatives that it has a liberal tilt. By seeming to confirm that view, a senior NPR fundraising official has provided the network's critics with undreamed-of ammunition. More than ever, NPR needs to remember its obligation as a recipient of government funds to be balanced and nonpartisan. NPR is a national asset, providing diverse and absorbing programming, much of which isn't duplicated by commercial radio. But its role as a recipient of government funds imposes an obligation to avoid partisanship in its news programming and in the statements of its managers. All things considered, that's the best way to counter critics' charges of bias.
benton.org/node/52586 | Los Angeles Times
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LUXURY OR STAPLE?
[SOURCE: USAToday, AUTHOR: David Lieberman]
Public broadcasting fans have a lot more to worry about than the embarrassing tape, released this week, of a National Public Radio executive criticizing Tea Party activists, evangelical Christians and Republicans. Critics of the federal government's $460 million a year outlay to the Corporation for Public Broadcasting (CPB) — which contributes to NPR and PBS — call the expenditure an unneeded luxury at a time when most households are awash in media. NPR CEO Vivian Schiller resigned Wednesday amid the political fallout surrounding the tape. But supporters of public media say it's important to have programming that isn't beholden to advertising. No audio service "comes close to NPR news," says Patricia Aufderheide, director of American University's Center for Social Media. PBS treats kids "not as little consumers but as responsible members of the community." The effort to defund CPB "is in defiance of public opinion, not in support of it," says Alex Jones, director of Harvard University's Joan Shorenstein Center on the Press, Politics and Public Policy. Some critics say the programming frequently found on PBS and NPR stations is more expensive than, but not much different from, options on C-SPAN, CNN, A&E, HBO and webcasts. Former CPB president W. Kenneth Ferree says a docudrama on the History Channel costs about a fifth as much to produce as one on PBS station WGBH. "But is the one on WGBH five times better? Probably not." Mark Meckler, national coordinator of the Tea Party Patriots, says the purpose of funding public media once "was to provide another voice. But there's a cacophony of voices on the radio and on the Internet today.''
benton.org/node/52585 | USAToday
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SMALL RADIO STATIONS HAVE MOST TO LOSE
[SOURCE: The Christian Science Monitor, AUTHOR: Gloria Goodale]
If National Public Radio loses it federal funding, many of its smaller stations will "go dark." In a scandal that is, for the most part, political theater, small public radio stations clearly have the most to lose. Now, with that threat looming, many of these small radios stations are asking how they might save themselves if the worst happens – and, in some cases, they are looking at their big-city brothers for inspiration. To some, larger public-radio stations offer lessons in efficiency and ingenuity that can be adopted by stations of any size. To others, their huge and diverse donor bases can't be duplicated. But the search for solutions is intensifying as NPR's federal backing appears to be facing its greatest challenge in a generation.
benton.org/node/52583 | Christian Science Monitor, The
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POST-SCHILLER NPR
[SOURCE: The Christian Science Monitor, AUTHOR: Patrik Jonsson]
The short, tumultuous leadership of Vivian Schiller is over at National Public Radio, leaving public radio employees shellshocked, wounded, and peering into an uncertain future. Her departure is the third top-level exit in recent months. The exodus has left NPR shaken and buried in controversy. Its 17-member board of directors, which includes 10 heads of member public radio stations, says it is putting together a search committee to find NPR's next leader. But whoever gets the job will take the helm of an organization whose journalistic reputation has been tarnished, that seems conflicted about the need for continued federal funding for public broadcasting, and that has big unresolved points of tension between itself and local public radio stations across the US. At stake is not only the future of NPR, but also perhaps American journalism itself.
benton.org/node/52582 | Christian Science Monitor, The
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TELEVISION/RADIO

CUMULUS TO BUY CITADEL
[SOURCE: Los Angeles Times, AUTHOR:]
Cumulus Media is buying Citadel Broadcasting in a $1.7 billion deal that would unite two of the country's largest radio station owners. Cumulus would own 572 radio stations across about 120 U.S. markets once the deal closes. It will remain the No. 2 radio station owner in the U.S. behind Clear Channel, which owns more than 800 stations. The deal represents a bet that the radio advertising market will continue rebounding. Like other media, radio broadcasters were hard hit in 2008 and 2009 as the recession curtailed the ad spending that generates most of their revenue. An advertising shift to the Internet also siphoned money away from radio stations. But the outlook has been improving modestly as the recovering economy has encouraged advertisers to increase their marketing budgets.
benton.org/node/52530 | Los Angeles Times
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LOCAL BROADCASTING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Broadcast executives made a pitch in Washington for the value of local broadcasting in the face of government calls for them to give up spectrum for wireless broadband. "The work that local stations do in this country is extraordinary and should not be taken for granted," said David Barrett, president of Hearst TV, which owns 29 TV stations. Barrett was accepting the First Amendment Leadership Award from the Radio-Television News Directors Foundation at a dinner in Washington. And while he talked eloquently about the need to preserve that freedom, he first talked about the need to preserve the spectrum that allows broadcasters to provide local service. "We are, indeed, at a threshold of decision with respect to spectrum in this country and how it is used," he said. Barret hearkened back to the Communications Act of 1934 and its emphasis on localism. He said it was enlightened legislation because it rooted broadcast policy firmly in localism across over 200 markets. He said the country had been "extraordinarily well served by that spirit of localism." Barret pointed out that the country could have built "supertransmitters" that broadcast regionally, but instead built a system that serves local communities. "Yes, the country needs to solve spectrum challenges" and needs to be "adaptive to what goes forward here with new forms of media, wireless media and the like," he said. But "shame on us if we let policy determinations throw out the existing system that serves Americans so well in favor of a new system that would emphasize national more than local service." He told his audience they needed to press their case with legislators.
benton.org/node/52580 | Broadcasting&Cable
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WIRELESS/SPECTRUM

INCENTIVE AUCTION BILLS
[SOURCE: CommLawBlog, AUTHOR: Lee Petro]
It’s no secret that: (a) the Federal Communications Commission would like to re-purpose already-occupied broadcast TV spectrum for broadband use; (b) many (if not most) of the folks who currently occupy that spectrum are not particularly keen on the idea; and (c) the FCC figures that any broadcaster resistance to spectrum re-purposing might be softened by the siren song of a big payday, with the cash coming out of the proceeds of an auction of the re-purposed spectrum. The FCC’s problem (also not a secret) is that it doesn't have the statutory authority to promise any auction proceeds to licensees who relinquish their spectrum. It’s obviously time (with apologies to Stephen Sondheim) to . . . send in the legislators! Already, three bills have been introduced this year that would allow the Commission to spread the spectrum wealth around; reports of still more bills in the works continue to surface. (This is in addition to several bills introduced last year.)
First into the mix this year was S.415 (a/k/a the Spectrum Optimization Act). A short and sweet four-page bill from Sen. Mark Warner (D-VA), it would give the FCC the authority to conduct auctions of spectrum that is “voluntarily relinquished by a licensee”, with “a portion” of the proceeds being shared with relinquishing licensees.
On the House side, we have H.R.911 (dubbed the Spectrum Inventory and Auction Act of 2011) introduced by Rep. John Barrow (D-GA). This, too, would give the FCC the authority to conduct incentive auctions. But before such auctions could be conducted, the FCC and the NTIA would first have to complete an exhaustive broadband spectrum inventory report which would have to be made public and updated semi-annually. The report would be no walk in the park: it would have to detail federal and non-federal uses of the spectrum and describe (among other things) the types of receivers in use, the geographic distribution of the various uses, and the frequency of use.
Back on the Senate side, we have S.455, the Reforming Airwaves by Developing Incentives and Opportunistic Sharing Act ­ or “RADIOS Act” ­ co-sponsored by Sens. John Kerry (D-MA) and Olympia Snowe (R-ME). This bad boy weighs in at a much heftier 51 pages. It follows up on a similar bill these two senators co-sponsored last year. According to Kerry’s website, this year’s edition is “comprehensive spectrum reform legislation to modernize our nation’s radio spectrum planning, management, and coordination activities.”
benton.org/node/52534 | CommLawBlog
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CALL FOR DATA ROAMING MANDATE
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
Smaller wireless companies called on the Federal Communications Commission to hurry up and update the nation's wireless roaming rules to include data services to reflect the growing use of mobile phones for far more than just voice communications. They want the FCC to act on a rule that would ensure their customers can access data networks operated by other providers when outside their own network area at fair rates and terms. Companies such as Cricket Communications, Sprint and T-Mobile held a news conference to call on the FCC to include a proposed rule mandating data roaming on its April agenda. "Regarding data roaming, there is no question that there is a severe market failure," Rural Telecommunications Group General Counsel Carri Bennet, whose group represents small wireless operators, said in a statement. She said the rule is needed to help meet the Obama administration's goal of ensuring 98 percent of Americans have access to wireless broadband in five years. "RTG's members are willing to move forward with such deployments, provided they can assure their rural consumers that their devices will be able to access data networks outside of their rural areas on fair and equitable terms, Bennet said. "Without these data roaming agreements or assurances that these data roaming agreements will be forthcoming, President Obama's vision will not be realized." The firms argue that AT&T and Verizon Wireless, the nation's biggest wireless providers, currently have a duopoly in providing nationwide service and that the FCC needs to step in with rules to help ensure that as they migrate to new technologies, customers of other providers can access those networks when needed. Tom Sugrue with T-Mobile argued that his firm and others "are asking for the FCC to help when we can't reach agreements on roaming."
benton.org/node/52512 | National Journal
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CELLPHONE SERVICE IN JAPAN
[SOURCE: Bloomberg, AUTHOR: Mariko Yasu, Maki Shiraki]
NTT DoCoMo, KDDI and Softbank, the three largest mobile-phone operators in Japan, said their services were disrupted across many regions after an earthquake shook buildings across the nation. Wireless connections are poor across the country, Atsuko Suzuki, a spokeswoman for NTT DoCoMo said by phone. Phone services across Tohoku, Kanto and Tokai regions were bad, Softbank spokeswoman Makiko Ariyama said separately. Softbank is checking for possible damages to its telecommunications facilities, she said. An 8.8-magnitude earthquake struck off the coast of northern Japan, shaking buildings violently in Tokyo, according to the U.S. Geological Service. A tsunami of more than 10 meters was reported in northern Japan.
benton.org/node/52565 | Bloomberg
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PRIVACY

EU-US GETTING CLOSER ON PRIVACY
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
Top privacy regulators agreed that the United States and the European Union are moving closer in their approaches to protecting consumer privacy. But they still remain at odds over whether a U.S. national law is needed to ensure companies follow widely agreed upon privacy principles. During a discussion on the US and European approaches to privacy protection at the International Association of Privacy Professionals conference, EU Data Protection Supervisor Peter Hustinx agreed with Federal Trade Commission Chairman Jon Leibowitz that the two sides are moving closer but noted one key difference remains: the Unites States still lacks a broad privacy protection law. "I see more convergence than divergence," Chairman Leibowitz said. The European Commission is currently in the process of reviewing its broad privacy framework, which includes the EU's 1998 data protection law. Hustinx said among the issues it plans to address include trying to reduce the "diversity" in how the law is applied among the EU's 27 member countries and ways to make the privacy law more effective.
benton.org/node/52540 | National Journal
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AGENDA

KOHL'S PRIORITIES
[SOURCE: Politico, AUTHOR: Mike Zapler]
Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights Chairman Herb Kohl (D-WI) outlined his priorities for this Congress: media ownership consolidation network neutrality, and Google's dominance in Internet search. He specifically called out Google as a potential cause for concern: "In recent years, the dominance over Internet search of the world’s largest search engine, Google, has increased and Google has increasingly sought to acquire e-commerce sites in myriad businesses. In this regard, we will closely examine allegations raised by e-commerce websites that compete with Google that they are being treated unfairly in search ranking, and in their ability to purchase search advertising,” Kohl continued. “We also will continue to closely examine the impact of further acquisitions in this sector." Additional areas of concern are: online video, the Comcast-NBC merger, and competition in the broadband market.
benton.org/node/52535 | Politico | The Hill
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ITIF CALLS FOR INVESTMENT
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
The US government is leaving American companies out in the cold, undermining their ability to compete in a global marketplace, Information Technology and Innovation Foundation President Robert Atkinson said. Atkinson said as opposed to many other countries, the US government does not support its businesses enough. For American companies to compete in the world, the US government needs to take a more active role, Atkinson asserted. Atkinson said lawmakers need to overcome partisanship and unite behind American businesses. Speaking at the ITIF's Competitiveness Conference, Atkinson painted a bleak picture of America's place in the world. He cited a 2009 study that showed the U.S. was now sixth in the world for innovation according to a number of indicators. For the first time, research and development spending has declined in the U.S., as have college attainment levels and the number of scientists and researchers, Atkinson said. And in the rate of improvement in such innovation indicators, the U.S. ranks dead last out of the 40 countries surveyed. "In short, the U.S. is falling behind in the race for global innovation advantage," Atkinson said. Atkinson called for more government investment in R&D and education; less regulation; a tax overhaul to lower taxes and create permanent R&D tax incentives; increased high-skill immigration; full funding for federal regulatory agencies; and tougher enforcement of trade agreements.
benton.org/node/52510 | National Journal
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DIGITAL CONTENT

GOOGLE LETS USERS BLOCK SITES
[SOURCE: Google, AUTHOR: Amay Champaneria, Beverly Yang]
Now there’s yet another way to find more of what you want on Google by blocking the sites you don't want to see. You've probably had the experience where you've clicked a result and it wasn't quite what you were looking for. Many times you'll head right back to Google. Perhaps the result just wasn't quite right, but sometimes you may dislike the site in general, whether it’s offensive, pornographic or of generally low quality. For times like these, you'll start seeing a new option to block particular domains from your future search results. Now when you click a result and then return to Google, you'll find a new link next to “Cached” that reads “Block all example.com results.” Once you click the link to “Block all example.com results” you'll get a confirmation message, as well as the option to undo your choice. You'll see the link whether or not you’re signed in, but the domains you block are connected with your Google Account, so you'll need to sign in before you can confirm a block. You can see a list of your blocked sites in a new settings page, which you can access by visiting your Search Settings or clicking on the “Manage blocked sites” link that appears when you block a domain. On the settings page you can find details about the sites you've blocked, block new sites, or unblock sites if you've changed your mind.
benton.org/node/52520 | Google
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UNIVERSAL SERVICE/TELECOM

SCHEDULE ESTABLISHED FOR EX PARTE MEETINGS REGARDING USF/ICC REFORM
[SOURCE: Federal Communications Commission, AUTHOR: ]
On February 9, 2011, the Federal Communications Commission released a Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking seeking comment on proposals to fundamentally modernize the Commission's universal service fund and intercarrier compensation system. Comments on Section XV of the USF/ICC Transformation NPRM are due on April 1, 2011, and reply comments are due on April 18, 2011. Comments on the remaining sections are due on April 18, 2011, and reply comments are due on May 23, 2011. Comments are due for the State Members of the Joint Board on Universal Service on May 2, 2011. Specific filing instructions are detailed in the USF/ICC Transformation NPRM.
As described in the USF/ICC Transformation NPRM, this matter shall be treated as a "permit-but-disclose" proceeding in accordance with the Commission's ex parte rules. Staff from the Wireline Competition Bureau's (WCB) Front Office, Telecommunications Access Policy Division, and Pricing Policy Division, as well as staff from the Wireless Telecommunications Bureau (WTB), including the Auctions and Spectrum Analysis Division will be available for meetings regarding parties' comments March 21, 2011 through April 1, 2011. These meetings will be scheduled for thirty minutes each. Parties seeking a meeting should identify with specificity the issues they plan to address and indicate if they would also like to include staff from any Bureau in addition to WCB or WTB.
To schedule meetings pursuant to this Notice, please submit your request at http://www.fcc.gov/wcb/tapd/universal_service/reform_exparte-meeting-req.... For any questions or additional assistance regarding a meeting request, please contact Tiffany Jamison, Wireline Competition Bureau, at wcbchief@fcc.gov or (202) 418-1581.
For further information regarding universal service issues, please contact Patrick Halley, Wireline Competition Bureau, at (202) 418-7550, and for further information regarding intercarrier compensation issues, please contact Jennifer Prime, Wireline Competition Bureau, at (202) 418-2403.
benton.org/node/52518 | Federal Communications Commission
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EDUCATION

PRESIDENT STUMPS FOR ED TECH AGENCY
[SOURCE: eSchool News, AUTHOR: ]
Educational technology advocates applauded President Barack Obama’s focus on college and career readiness and his call for a new federal agency devoted to education technology innovations, which he expanded on in a March 8 speech in Boston. “I want everyone to pay attention. Even as we find ways to cut spending, we cannot cut back on job-creating investments like education,” he told a crowd at TechBoston Academy in Boston’s Dorchester neighborhood on March 8. “There’s nothing responsible about cutting back on our investment in these young people.” President Obama was joined by philanthropist Melinda Gates in the latest stop on his month-long push for an education agenda aimed at garnering bipartisan support for more flexibility and accountability for teachers, an increased emphasis on educational technology, and more innovative standards for students. The school visit also was designed to draw attention to Obama’s call for the creation of a federal agency designed to pursue breakthroughs in educational technology. Obama requested $90 million for the agency’s first year in the budget blueprint he sent to Congress last month. The proposal would create an Advanced Research Projects Agency ­ Education (ARPA-ED), with the goal of transforming educational technology just as the Defense Advanced Research Projects Agency (DARPA) has transformed military technology. ARPA-ED would further catalyze the ed-tech industry by sponsoring the synthesis and vetting of public and private research and development efforts; identifying breakthrough development opportunities, shaping the next wave of research and development; investing in the development of new educational technology, learning systems, and digital learning materials; and identifying and transitioning the best and most relevant research and development from other federal agencies.
benton.org/node/52508 | eSchool News | Federal Computer Week
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CHILDREN & MEDIA

ONLINE BULLYING
[SOURCE: The White House]
President Barack Obama and First Lady Michelle Obama called for a united effort to address bullying at the White House Conference on Bullying Prevention. Approximately 150 students, parents, teachers, non-profit leaders, advocates, and policymakers came together to discuss how they can work together to make our schools and communities safe for all students.
Public-Private Partnerships, Commitments and Activities include:
Formspring and Massachusetts Institute of Technology: Formspring is a social network with over 22 million members, and is working with The MIT Media Lab, to develop new approaches to detect online bullying, and designing interfaces which help prevent it or mitigate it when it does occur. This approach uses a collection of common sense knowledge and reasoning techniques from artificial intelligence to understand online bullying at a deeper level than just words. MIT Media Lab and Formspring hope to build self-reflective interfaces that encourage social network participants to think sensibly about their behavior and suggest alternatives and coping strategies. Unlike spam filters, which work by collecting statistics on occurrences of particular words, the new MIT Media Lab and Formspring approach seeks to understand the intent behind the words. In addition, Formspring will discuss their corporate commitment to discovering & supporting the most advanced and meaningful technological innovations that can identify and curb online bullying and harassment.
MTV Networks: “A THIN LINE”: As part of MTV’s multi-year, award-winning A THIN LINE campaign, the network will launch a new anti-digital discrimination coalition, which will work with MTV to fight bullying and intolerance online (in partnership with the National Council of La Raza, Anti-Defamation League, Council on American-Islamic Relations, and GLAAD). MTV will also announce the forthcoming premiere of a poignant new feature film inspired by the true, tragic tale of Abraham Biggs ­ a 19-year-old who battled bipolar disorder and ultimately webcast his suicide after being egged on by a digital mob. The film will illustrate what can happen when we forget there’s a person on the other side of the screen, and serve as a powerful call to action to fight the spread of digital abuse. The network plans six new cyberbullying and digital discrimination public service announcements, encouraging bullying bystanders to support their friends, connect victims of digital abuse to resources, and drive home the serious impact typewritten words can have.
Facebook: Facebook will unveil two new safety features in the coming weeks: a revamped multimedia Safety Center to incorporate multimedia, external resources from renowned experts, and downloadable information for teens. Additionally, they will create a new “Social Reporting” system to enable people to report content that violates Facebook policies so that it can be removed as soon as possible, while notifying parents or teachers of the content so that the reasons for its posting can be addressed.
SurveyMonkey: www.surveymonkey.com/bullying SurveyMonkey—a “do-it-yourself” survey tool—allows anyone to survey people quickly and easily. More than 100 million people are interviewed in the education space each. The familiarity with the application, combined with its ease of use, create an opportunity to help students and administrators alike to use SurveyMonkey to collect information about the prevalence of bullying in schools. To facilitate data collection, SurveyMonkey has created a dedicated page for bullying detection which includes a 10 question survey that students can adopt in order to distribute and disseminate via email, on fliers, through Facebook, and elsewhere. The application is free to use.
The Federal Partners in Bullying Prevention include:
StopBullying.gov: This website will launch at today’s Conference to provide information from various government agencies on how children, teens, young adults, parents, educators and others in the community can prevent or stop bullying. The website will provide information on what bullying is, its risk factors, its warning signs and its effects. It will also provide details on how to get help for those that have been victimized by bullying.
benton.org/node/52503 | White House, The | National Journal | President and Mrs Obama | WH Backgrounder
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APPLE CHANGES PURCHASE POLICY
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Apple changed its policy for how purchases can be made within applications on the iPhone and iPad, an attempt to protect users, particularly children, from accidentally racking up iTunes charges. The move affects users of its most recent operating system and comes amid growing concern by federal and state enforcement agencies that consumers, including children, were not adequately informed or aware that they were incurring charges on iTunes accounts because of a 15-minute period that allowed for purchases without a password. Apple said its new device software, iOS 4.3, made available March 9, will come with a feature that requires a password when purchases are made within an application after it is downloaded. Parents had complained to the The Post that in the 15-minute period after an app was downloaded, children were buying sometimes hundreds of dollars of purchases on games such as Smurfs’ Village and Tap Zoo — popular iTunes games that are also among the highest-grossing programs for in-app purchases.
benton.org/node/52531 | Washington Post
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Author: 
Coverage Type: 

In approving the resolution to nullify the Federal Communications Commission’s (FCC) open Internet rules, the Republican members of the House Communications Subcommittee (no Democrats voted to block the FCC) said they didn't care if big companies imposed unfavorable conditions on start-ups and didn't care if there was nowhere small companies could go if they felt disadvantaged.

In today’s Wonderland that is the House, real-world experience means nothing.The conclusions have been drawn. Off with the head of the FCC! The traditional arguments and politics that usually govern House Republican votes mean nothing. At the Subcommittee hearing held just prior to the vote, A leading small businesswoman says openness is needed for the Internet. Never mind. Even big business, which usually has the Republicans at its beck and call, is largely going along with the FCC rules. No matter. Instead, there is the power-centric view favoring telecom carriers. One witness who runs a wireless ISP said it was OK to block Netflix from going to his customers. Another, a former Wall Street analyst who fears for the financial safety of the Big Telecom companies, asked what would happen if Google decided to “withhold its services from Verizon in Boston but continue to provide them to Comcast,” which would be a problem for Verizon retaining customers.

Wonderland, indeed.

Instead, there are bizarre interpretations in which FCC rules which an open Internet rule is seen as a hindrance to small business, rather than an arbiter to which small companies could turn if they thought they were being taken advantage of by super carriers. And so the circus will reconvene on the 15th, when the full House Commerce Committee will vote to repeal the FCC rule, and the later in the week the full House will do so as well. It will all be cloaked in the sanctimony of curbing government and helping small business, but nothing will be further from the truth. All it will do is put entrepreneurs further behind when the big carriers decide the time is right to put the pressure on and they start charging for preferential “fast lanes” that start-ups can't afford, or requirements they can't meet.


The Hill's 'Wonderland' Assault On Network Neutrality
Coverage Type: 

[Commentary] National Public Radio long has attracted complaints from conservatives that it has a liberal tilt. By seeming to confirm that view, a senior NPR fundraising official has provided the network's critics with undreamed-of ammunition. More than ever, NPR needs to remember its obligation as a recipient of government funds to be balanced and nonpartisan. NPR is a national asset, providing diverse and absorbing programming, much of which isn't duplicated by commercial radio. But its role as a recipient of government funds imposes an obligation to avoid partisanship in its news programming and in the statements of its managers. All things considered, that's the best way to counter critics' charges of bias.


NPR needs to stay neutral
Source: 
Coverage Type: 

Public broadcasting fans have a lot more to worry about than the embarrassing tape, released this week, of a National Public Radio executive criticizing Tea Party activists, evangelical Christians and Republicans.

Critics of the federal government's $460 million a year outlay to the Corporation for Public Broadcasting (CPB) — which contributes to NPR and PBS — call the expenditure an unneeded luxury at a time when most households are awash in media. NPR CEO Vivian Schiller resigned Wednesday amid the political fallout surrounding the tape. But supporters of public media say it's important to have programming that isn't beholden to advertising. No audio service "comes close to NPR news," says Patricia Aufderheide, director of American University's Center for Social Media. PBS treats kids "not as little consumers but as responsible members of the community." The effort to defund CPB "is in defiance of public opinion, not in support of it," says Alex Jones, director of Harvard University's Joan Shorenstein Center on the Press, Politics and Public Policy. Some critics say the programming frequently found on PBS and NPR stations is more expensive than, but not much different from, options on C-SPAN, CNN, A&E, HBO and webcasts. Former CPB president W. Kenneth Ferree says a docudrama on the History Channel costs about a fifth as much to produce as one on PBS station WGBH. "But is the one on WGBH five times better? Probably not." Mark Meckler, national coordinator of the Tea Party Patriots, says the purpose of funding public media once "was to provide another voice. But there's a cacophony of voices on the radio and on the Internet today.''


Public broadcasting: Luxury or staple?
Coverage Type: 

If National Public Radio loses it federal funding, many of its smaller stations will "go dark."

In a scandal that is, for the most part, political theater, small public radio stations clearly have the most to lose. Now, with that threat looming, many of these small radios stations are asking how they might save themselves if the worst happens – and, in some cases, they are looking at their big-city brothers for inspiration. To some, larger public-radio stations offer lessons in efficiency and ingenuity that can be adopted by stations of any size. To others, their huge and diverse donor bases can't be duplicated. But the search for solutions is intensifying as NPR's federal backing appears to be facing its greatest challenge in a generation.


In NPR scandal, small radio stations stand to be biggest losers
Coverage Type: 

The short, tumultuous leadership of Vivian Schiller is over at National Public Radio, leaving public radio employees shellshocked, wounded, and peering into an uncertain future.

Her departure is the third top-level exit in recent months. The exodus has left NPR shaken and buried in controversy. Its 17-member board of directors, which includes 10 heads of member public radio stations, says it is putting together a search committee to find NPR's next leader. But whoever gets the job will take the helm of an organization whose journalistic reputation has been tarnished, that seems conflicted about the need for continued federal funding for public broadcasting, and that has big unresolved points of tension between itself and local public radio stations across the US. At stake is not only the future of NPR, but also perhaps American journalism itself.


Post-Vivian Schiller, big stakes in NPR's next moves
Author: 
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Broadcast executives made a pitch in Washington for the value of local broadcasting in the face of government calls for them to give up spectrum for wireless broadband.

"The work that local stations do in this country is extraordinary and should not be taken for granted," said David Barrett, president of Hearst TV, which owns 29 TV stations. Barrett was accepting the First Amendment Leadership Award from the Radio-Television News Directors Foundation at a dinner in Washington. And while he talked eloquently about the need to preserve that freedom, he first talked about the need to preserve the spectrum that allows broadcasters to provide local service. "We are, indeed, at a threshold of decision with respect to spectrum in this country and how it is used," he said. Barret hearkened back to the Communications Act of 1934 and its emphasis on localism. He said it was enlightened legislation because it rooted broadcast policy firmly in localism across over 200 markets. He said the country had been "extraordinarily well served by that spirit of localism." Barret pointed out that the country could have built "supertransmitters" that broadcast regionally, but instead built a system that serves local communities. "Yes, the country needs to solve spectrum challenges" and needs to be "adaptive to what goes forward here with new forms of media, wireless media and the like," he said. But "shame on us if we let policy determinations throw out the existing system that serves Americans so well in favor of a new system that would emphasize national more than local service." He told his audience they needed to press their case with legislators.


Hearst TV: Government Should Not Scrap Local Broadcasting In Favor Of National Service
Author: 
Coverage Type: 

Amazon's battle with state governments over sales taxes is escalating.

The online retailer on Thursday took action in Illinois, as it had threatened to do, to counter a new law aimed at forcing online retailers to collect sales taxes in the state. Hawaii, North Carolina and Rhode Island have enacted similar laws, and California is weighing action. Amazon is also in a court battle with New York over such legislation. The Illinois law, signed by Gov. Pat Quinn March 9, requires online retailers that work with affiliates in the state to collect sales taxes on purchases made by Illinois residents and businesses. Amazon responded to the measure by cutting ties to its Illinois-based affiliates, which are blogs and other websites that refer traffic to Amazon's website and get paid commissions if customers make purchases there. Amazon, which is based in Seattle, has fiercely opposed all efforts to force it to collect sales taxes. "We had opposed this new tax law because it is unconstitutional and counterproductive," Amazon said in its letter to Illinois affiliates. "We deeply regret that its enactment forces this action." The Amazon action has little impact on Illinois consumers. They can continue to buy directly from the company as well as pass through affiliate websites to reach its website, without Amazon collecting sales tax. But Amazon's payments to those websites will be halted.

Illinois has about 9,000 affiliates, said Rebecca Madigan, director of an affiliate trade group called the Performance Marketing Association. She said the Illinois affiliates generated $611 million in advertising revenue in 2009 and tax revenue of $18 million. She estimates that the state will lose 25% to 30% of that tax revenue because the affiliates will lose business, cut jobs or move out of the state.


Amazon Takes Action in Illinois as War on Sales Taxes Continues