Benton's Communications-related Headlines For Thursday August 11, 2005
For upcoming media policy events, see http://www.benton.org/calendar.htm
ON CAPITOL HILL
Rural Senators Aim To Expand USF
Don't Change Auction Process, FCC Tells Congress
Capitol Hill Telecom Tidbits
BROADBAND
Activists Attack Rosy Broadband Report
Texas OKs Statewide Telco Franchises
OWNERSHIP
Former FCC Chief to Join Providence Equity
A Buoyed Murdoch Blocks a Major Investor
Hollywood, Radio Finally Part Waves
Sprint, Nextel Employees Compete to Keep Their Jobs
Salt Lake City Getting First Duopoly
TEENS & MEDIA
The Movies Are Rated R, but Not on the Billboards
Text Messages Sent by Cellphone Finally Catch On in U.S.
QUICKLY -- NAB Wants Sooner DTV-Tuner Mandate; Cracking Down on 'Mobile
Viewing'; NCAA Wants Media To Drop Indian Names; Challenge to FBI Records
Demands; NSF Funds VoIP Tapping Research; Web Increasingly Cluttered By
Sites Full of Paid Links; Fall Media Reading List
ON CAPITOL HILL
RURAL SENATORS AIM TO EXPAND USF
Three senators representing largely rural states plan to draft legislation
that would strengthen and expand the fund subsidizing telephone service to
rural and impoverished areas. Republicans Conrad Burns of Montana and
Olympia Snowe of Maine, along with Democrat John (Jay) Rockefeller of West
Virginia, plan to draft universal service legislation in consultation with
Senate Commerce Chairman Ted Stevens, R-Alaska. Preserving the $6.5 billion
universal service fund is a top priority of the lawmakers. The legislation
would help build the foundation of Sen Stevens' efforts to revamp universal
service. "We are aware that Senator Burns is working on a USF bill," a
Stevens spokeswoman wrote in an e-mail, noting that Stevens and Burns have
worked together on that and other issues. "We look forward to reviewing his
bill, along with any others introduced by committee members." Sources
speculated that Sen Burns and company would seek to expand the base of
contributors to the fund and revise a Byzantine system of intercarrier
payments.
[SOURCE: Technology Daily, AUTHOR: David Hatch]
http://www.njtelecomupdate.com/lenya/telco/live/tb-WZDU1123706481876.html
DON'T CHANGE AUCTION PROCESS, FCC TELLS CONGRESS
The auction process is a "speedy, efficient mechanism for deploying
spectrum" that has brought the government $26.8 billion while promoting the
broadest possible participation, according to a letter the FCC wrote in
July to House Telecom Subcommittee Chairman Fred Upton (R-MI). The FCC was
responding to 20 questions on spectrum auctions submitted by Rep. Bobby
Rush (D-II) arising from a May 26 hearing on the draft House DTV bill. He
wanted in-depth information on FCC management of the auction process to
determine how quickly the government can log revenue and see if changes
were needed to widen participation by minorities and small businesses in
the bidding process.
[SOURCE: Communications Daily, AUTHOR: Anne Veigle]
(Not available online)
CAPITOL HILL TELECOM TIDBITS (see bottom of page)
1) The Senate and House Commerce Committees must have digital television
legislation ready by Sept. 16 for inclusion by the budget committees in a
reconciliation package. Both measures would establish a firm transition
date from analog to digital. 2) The House Commerce Committee is making
progress on drafting a telecom bill that will address regulation of
Internet-based phone and video services. Industry sources expect the draft
in September or October. 3) This fall, House Commerce Committee plans to
publish the findings of its investigation into fraud and abuse associated
with the e-rate. 4) The Senate Commerce Committee will reschedule a hearing
on proposed telecom mergers.
[SOURCE: Technology Daily, AUTHOR: David Hatch]
http://www.njtelecomupdate.com/lenya/telco/live/tb-WZDU1123706481876.html
BROADBAND
ACTIVISTS ATTACK ROSY BROADBAND REPORT
Free Press and Consumer's Union say FCC Chairman Kevin Martin was wearing
rose-colored glasses when he touted a July report on the progress of the
country's rollout of broadband service. The two released a report of their
own Wednesday, a "broadband reality check" they said shows the FCC is
"failing to confront the digital divide."
The groups argue that the FCC's definition of 200 Kilobits per second as
high-speed Internet access is barely fast enough for streaming video and
"far below" the high-speed threshold for other countries. It also argues
that the FCC is overstating the penetration rate by using a ZIP code
reached as the measurement, even if only one person in the ZIP code
subscribes and irrespective of price, speed, or general availability.
"Despite FCC claims, the digital divide persists and is growing wider,"
they say. "Broadband adoption is largely dependent on socio-economic
status. In addition, broadband penetration in urban and suburban in areas
is double that of rural areas." The report was a response not only to the
FCC's braodband status report but to the commission's removal--with the
help of the Supreme Court in the Brand X decision--of open access
requirements on cable braodband service and, as of last Friday, on telco
broadband service as well.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA634035?display=Breaking+News&...
(free access for Benton's Headlines subscribers)
* See press release: http://www.freepress.net/press/release.php?id=86
* See "Broadband Reality Check: The FCC ignores America's Digital Divide":
http://www.freepress.net/docs/broadband_report.pdf
TEXAS OKs STATEWIDE TELCO FRANCHISES
Texas legislators have given telephone companies what they wanted, passing
legislation allowing them to launch video services without securing
town-by-town franchises. The bill had been opposed by cable operators, who
have long been forced to secure a franchise for each city or suburb in
which they operate. The state senate approved the bill late Tuesday and the
House signed off Wednesday. The bill has now been sent to Gov. Rick Perry
for his signature. It's unknown whether Gov. Rick Perry will sign the
measure -- or any other bills that pass the legislature -- into law unless
lawmakers conclude their business on education-funding reform, Multichannel
News reports. The legislation paves the way for SBC and Verizon to apply
for statewide franchises to deliver cable-like video franchises. It also
allows power companies to offer broadband over powerlines.
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins & John Eggerton]
http://www.broadcastingcable.com/article/CA633869?display=Breaking+News&...
(free access for Benton's Headlines subscribers)
* Texas Legislature OKs Telco Bill
http://www.multichannel.com/article/CA633979.html?display=Breaking+News
(requires subscription)
* Verizon, SBC Bid to Offer TV Gets a Lift From Texas House
http://online.wsj.com/article/0,,SB112370794488510123,00.html?mod=todays...
* Phone Firms In Texas Near A TV Coup
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR200508...
* Texas Passes Deregulatory Telco Bill
http://www.njtelecomupdate.com/lenya/telco/live/tb-HRJK1123765693585.html
OWNERSHIP
FORMER FCC CHIEF TO JOIN PROVIDENCE EQUITY
Everyone's always asking, "Hey, how is Mike Powell doing these days." Well,
you're kind to ask. He's joining Providence Equity Partners, a private
equity firm that has in recent years built a $9 billion empire of holdings
in media and telecommunications companies. His role will be trying to
generate new ideas for deals and mentoring Providence's roster of
companies. "I didn't want to be a lobbyist," said Mr. Powell. "I didn't
want to be a classic former government official that does nothing but sell
access back to the corridors of DC" Mr. Powell is not worried about now
doing business with some of the same people he once regulated and perhaps
frustrated. "These are folks who play in a business in which things go your
way and don't go your way and I don't think that you personalize or
emotionalize policy," he said, citing what he called "a very strong
relationship" with Mel Karmazin, the former president of Viacom, the owner
of CBS and Infinity Broadcasting, with whom he feuded over everything from
Howard Stern's on-air antics to the Janet Jackson episode.
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
http://www.nytimes.com/2005/08/11/business/media/11deal.html
(requires registration)
A BUOYED MURDOCH BLOCKS A MAJOR INVESTOR
Rupert Murdoch gave the cold shoulder to his largest shareholder, John C.
Malone, yesterday by extending a poison pill that blocks Mr. Malone's
Liberty Media Corporation from buying more shares of Mr. Murdoch's News
Corporation. The shareholder rights plan, or poison pill, was put in place
for a period of one year last November, but was extended by the News
Corporation's board for two more years. Mr. Murdoch indicated talks with
Mr. Malone about swapping assets for the shares or entering into some kind
of standstill arrangement had stalled. Mr. Malone built an 18 percent
voting stake in the News Corporation last year, to Mr. Murdoch's surprise,
while professing friendly intentions to Mr. Murdoch, a sometime business
partner. In a conference call last week, Mr. Malone said he did not expect
to sell the shares any time soon and hoped the company's strategy would be
focused "a little more on shareholder returns and less on empire building."
Mr. Murdoch controls 29.5 percent of the company's voting stock. The
analyst Richard Greenfield of Fulcrum Global Partners applauded Mr.
Murdoch's tactics. "You've seen today where the leverage rests - with
Murdoch, not with Malone," Mr. Greenfield said. "You own this stock for
Rupert's vision. Any threats to that vision should be protected by the
company." In the conference call, Mr. Murdoch emphasized the company was
serious about competing on the Internet. After spending $580 million to
acquire Intermix Media and its popular social networking site Myspace.com,
Mr. Murdoch said the company could spend double that and possibly up to $2
billion to buy Internet assets to complement what the company would build
internally. The company also last week acquired the sports Web business
Scout Media for $60 million, and Mr. Murdoch said the company is "in very
advanced negotiations to buy a controlling interest in what we think is a
wonderful search engine."
[SOURCE: New York Times, AUTHOR: Richard Siklos]
http://www.nytimes.com/2005/08/11/business/media/11news.html
(requires registration)
* News Corp. Extends Its Poison Pill
http://online.wsj.com/article/0,,SB112368437408109776,00.html?mod=todays...
* News Corp's Murdoch: No Bigger Priority Than Internet
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20050810-000911-1846
HOLLYWOOD, RADIO FINALLY PART WAVES
For some, Friday will mark a dark day in Hollywood -- and a reminder of how
much the radio business has changed. Microphones at the last radio station
in Hollywood will go dead as announcers and newscasters complete their
final on-air shift at the historic Columbia Square broadcast center. The
relocation of Los Angeles' first radio station, KNX-AM (1070), to new
studios in Wilshire Boulevard's Miracle Mile area will end an 85-year
tradition of radio broadcasting in the place that bills itself as the
world's center of entertainment. Over the years, Hollywood has been home to
68 radio stations and nine television stations. In the last few years, five
television stations have left. And when Columbia Square is shut down next
year, two more -- KCBS-TV Channel 2 and KCAL-TV Channel 9 -- will move to
new headquarters being built in Studio City. That will leave just two
television stations, KTLA-TV Channel 5 and KCET-TV Channel 28, in
Tinseltown. "I never thought I'd see the day when there are no radio
broadcasts out of Hollywood," said KNX assistant news director Ronnie
Bradford, who joined the station in 1968. "This is a company town --
movies, television and radio." Many believe that the loss of radio has to
do with corporate economics. The dozens of radio and TV stations, once
independently owned, are now part of big corporate chains. These companies,
like Infinity and Clear Channel, save money by consolidating engineering
and administrative jobs under one roof. The radio and TV buildings in
Hollywood are old, making it hard to conform with the latest technology.
Infinity owns seven radio stations, including KROQ-FM (106.7) and KRTH-FM
(101), while Clear Channel owns 10, such as KIIS-FM (102.7) and KFI-AM (640).
[SOURCE: Los Angeles Times, AUTHOR: Bob Pool]
http://www.latimes.com/news/printedition/front/la-me-hollywood11aug11,1,...
(requires registration)
SPRINT, NEXTEL EMPLOYEES COMPETE TO KEEP JOBS
A huge benefit of the $35 billion merger between Sprint and Nextel is that
current employees of both companies get to work on their interviewing
skills. They are also sharpening their elbows as they compete for jobs they
already hold. Executives decided the most egalitarian way to staff the new
company would be to put all of the positions up for grabs and let workers
from both firms duke it out. Not surprisingly, that has people from both
Sprint and Nextel completely on edge.
[SOURCE: Washington Post, AUTHOR: Ellen McCarthy]
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR200508...
(requires registration)
SALT LAKE CITY GETTING FIRST DUOPOLY
Clear Channel is buying WB affiliate KUWB Salt Lake City from ACME
Communications for $18.5 million. The deal, subject to FCC approval, would
give Clear Channel, owner of ABC affiliate KTVX, a duopoly in the 36th
largest TV market.
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano]
http://www.broadcastingcable.com/article/CA633804?display=Breaking+News&...
(free access for Benton's Headlines subscribers)
TEENS & MEDIA
THE MOVIES ARE RATED R, BUT NOT ON THE BILLBOARDS
In a season when raunchy sex comedies were supposed to defy conventional
Hollywood marketing wisdom by wearing their R-ratings proudly, they instead
appear to be test cases as studios exploit a loophole in the movie
industry's self-regulating ratings system, which is intended to give
parents the information they need to make decisions about what their
children see. (The ratings system has been refined in recent years amid
pressure from Congress and parents' groups, but they were focused on
violence, not sex.) Outdoor advertisements for many movies now include fine
print saying that the movie has yet to be rated. Nell Minow (daughter of
the famous former FCC chairman Newt), who writes parent-oriented film
reviews for Yahoo! as the Movie Mom, said she believed the studios were
"intentionally and maliciously exploiting a loophole" in the ratings
system. "They would get it in on time if they wanted to," she said. "The
sweet spot for an R-rated comedy is the 15-to-17-year-old range," she said.
"Not having a rating means that a 15-year-old is getting more interested in
the movie than if it already said, 'This is not permissible for you.' It's
that most vulnerable audience that's most intrigued. I don't think it's
parents being fooled, I think it's the under-age audience that's being
titillated by the prospect of seeing the movie."
[SOURCE: New York Times, AUTHOR: David Halbfinger]
http://www.nytimes.com/2005/08/11/movies/11raun.html
(requires registration)
TEXT MESSAGES SENT BY CELLPHONE FINALLY CATCH ON IN US
Some 55 million cellphone users in the U.S. use text messaging for
everything from chatting and dating to business and spiritual counseling.
Once mostly a fad among teens in the U.S., text messaging is growing in
popularity among American adults. They are finding it to be less intrusive
than voice calling, especially in public spaces. It also can be more
private than email, since an office colleague or family member can more
readily see a message typed on a computer screen. Some 4.7 billion text
messages were sent in the U.S. last December, the latest figures available,
compared with 2.1 billion a year earlier and 253 million in December 2001,
according to CTIA-The Wireless Association. Revenue from text messaging is
projected to grow to $4.3 billion in 2006 from $2.5 billion in 2004, says
Forrester Research. Still, the U.S. remains a laggard in "texting" compared
with many other regions of the world. CTIA estimates that in 2004, U.S.
cellphone users sent 203 text messages on average, or 37 billion in total,
while in China, cellphone users exchanged 651 per user, or 218 billion in
total, according to the Chinese information industry ministry. About 71% of
European cellphone users send text messages, more than twice the percentage
in the U.S., says Charles Golvin, an analyst at Forrester. A survey earlier
this year by technology consulting firm Yankee Group of 5,200 adults found
that 33% of Americans between 25 and 34 text-message regularly, up from 24%
in 2004. The rate of text messaging by people between 35 and 44 remained
about 25% in both years, while usage by 18- to 24-year-olds grew to 62%
from 52%. As more older consumers join in, text messaging will be a major
driver of overall data revenue for cellphone carriers over the next five
years, says Linda Barrabee, a Yankee Group analyst.
[SOURCE: Wall Street Journal, AUTHOR: Li Yuan li.yuan( at )wsj.com]
http://online.wsj.com/article/0,,SB112372600885810565,00.html?mod=todays...
(requires subscription)
QUICKLY
NAB WANTS SOONER DTV-TUNER MANDATE
The National Association of Broadcasters is urging the Federal
Communications Commission to accelerate mandates for inclusion of
over-the-air digital tuners in new TV sets. Current FCC rules require DTV
in all but the smallest sets by July 2007. In comments filed Wednesday, NAB
asked the FCC to move it back to "late 2006." NAB also asked the FCC to
end the tuner mandate exemption for sets with screens under 13 inches.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA634076.html?display=Breaking+News
(requires subscription)
CRACKING DOWN ON 'MOBILE VIEWING'
DVDs and driving increasingly don't mix. While many states have long banned
drivers from watching television in their cars, a growing number are
expanding such laws to prohibit drivers from viewing DVD players, laptop
screens and other video entertainment. Meanwhile, a number of states that
never had driving-and-viewing laws are working on adding them.
[SOURCE: Wall Street Journal, AUTHOR: Jennifer Saranow
jennifer.saranow( at )wsj.com]
http://online.wsj.com/article/0,,SB112372578791610559,00.html?mod=todays...
(requires subscription)
NCAA WANTS MEDIA TO DROP INDIAN NAMES
National Collegiate Athletic Association spokesman Bob Williams confirmed
Wednesday that the NCAA will encourage broadcast and cable outlets that
carry its college sports championships not to use Indian-related team
names, including Braves, Indians, Savages, which the NCAA has concluded are
"hostile and abusive."
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA634090?display=Breaking+News&...
(free access for Benton's Headlines subscribers)
CDT SUPPORTS CHALLENGES TO FBI RECORDS DEMANDS
CDT and other privacy groups joined a brief written by the Electronic
Frontier Foundation, supporting on appeal the decision of a lower federal
court that National Security Letters (NSLs) are unconstitutional. NSLs are
secret demands for Internet and telephone communications logs that are
issued by the FBI without prior judicial approval.
Brief on National Security Letters:
http://www.cdt.org/security/20050805nslbrief.pdf
NSF FUNDS VOIP TAPPING RESEARCH
The National Science Foundation has given Xinyuan Wang, an assistant
professor of software engineering at George Mason University, a $307,436
grant to support a project designed to let police identify whether suspects
under surveillance have been communicating through voice over Internet
Protocol (VoIP)--information that would be unavailable today if people
choose to communicate surreptitiously.
[SOURCE: CNet|News.com, AUTHOR: Declan McCullagh ]
http://news.com.com/Feds+fund+VoIP+tapping+research/2100-7348_3-5825932....
WEB INCREASINGLY CLUTTERED BY SITES FULL OF PAID LINKS
[Commentary] Search-related advertising is fueling a new wave of Web sites
that seem to have as much appeal as a cheesy Hollywood set. That's because
many are created to look good to search engines, much as fake scenery fools
TV cameras. Everywhere I turn online these days I stumble over junky sites
that do little more than clutter up the search results at Google and Yahoo.
The search engine ad industry appears to have touched off a moneymaking
frenzy only slightly less intense than the original dot-com boom. But I
can't help but think that this new wave is generating too many useless link
directories designed to provide no value to site visitors, while making
money the same way Google and Yahoo do, by showing links to sites that pay
each time someone clicks on them. Many redistribute text ads sold by Google
and Yahoo, which makes the Web feel like a hall of mirrors.
[SOURCE: Washington Post, AUTHOR: Leslie Walker walkerl( at )washpost.com]
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR200508...
(requires registration)
FALL MEDIA READING LIST
What's the most useful book on media you've read and why? See answers from
real live media people (if there is such a thing) at the URL below.
[SOURCE: MediaBistro, AUTHOR: David Hirschman ]
http://www.mediabistro.com/articles/cache/a5011.asp
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. While the summaries are
factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.
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