May 2004

For upcoming media policy events, see http://www.benton.org/calendar.htm

SPECTRUM
Nextel Ready to Kill Spectrum Agreement

TELECOM
News from ALTS Conference
2004 Biennial Review of Telecommunications Regulations

BROADBAND
$190 Million To Support Rural Broadband Access
NCTA: Steady as Broadband Goes

COPYRIGHT
Strengthen Digital Copyright Protections
Entitled to Entertainment?

QUICKLY
Lie, and the Voters Will Believe
PBS Wins More Webby Awards
Chief of FTC to Resign; Bush Selects a Successor
For Valenti, an Impressive Cast
Judge Ties Antispammer's Hands

SPECTRUM

NEXTEL READY TO KILL SPECTRUM AGREEMENT
Nextel may walk away from the "Consensus Plan" to solve its interference=20
problems with public safety officials. The problem is that the FCC seems to=
=20
be favoring giving Nextel spectrum at 2.1 GHz instead of the 1.9 GHz it=20
asked for. =93My responsibility to Nextel=92s shareholders requires that=
Nextel=20
obtain comparable value in any returning
transaction: 2.1 GHz does not meet that test,=94 Nextel President Timothy=20
Donahue wrote FCC Chairman Powell. =93Nextel cannot and will not accept that=
=20
result.=94 Mr. Donahue accused proponents of the 2.1 GHz plan, led by the=20
Cellular Telecommunications & Internet Association, of trying to gain a=20
competitive advantage at Nextel=92s expense: =93The sole goal of the 2.1 GHz=
=20
advocates is to decrease competition and inflict damage on Nextel by=20
manipulating the proceeding to force Nextel to accept
=97 at great cost =97 inferior replacement spectrum.=94 Public safety=
officials=20
are fearful a solution will be reached if Nextel walks away from the deal.=
=20
Nextel contends that at higher frequencies, signals don't travel as far,=20
and existing cellular equipment cannot be used.
[SOURCE: Communications Daily, AUTHOR: Howard Buskirk]
(Not available online)
WP: http://www.washingtonpost.com/wp-dyn/articles/A19027-2004May11.html

TELECOM

NEWS FROM ALTS CONFERENCE
The Association for Local Telecommunications Services is holding a=20
conference this week. FCC Commissioner Michael Copps told the audience=20
that the FCC should have four telecom priorities the next few months: 1)=20
appealing the U.S. Appeals Court ruling on the Triennial Review Order, 2)=20
continuing to urge negotiations that preserve competition, 3) resolving=20
intercarrier compensation and 4) stopping the =93mindless=94 process of=20
broadband reclassification. Although the next likely Chairman of the Senate=
=20
Commerce Committee, Sen Ted Stevens (R-Alaska), prefers fewer hearings and=
=20
more industry meetings to developing telecom reform, an aide to Senate=20
Communications Subcommittee ranking Democrat Daniel Inouye (Hawaii) favors=
=20
a more open process soon after the next Congress convenes.
[SOURCE: Communications Daily, AUTHOR: Edie Herman, Terry Lane, Susan=20
Polyakova]
(Not available online)

2004 BIENNIAL REVIEW OF TELECOMMUNICATIONS REGULATIONS
Everyone loves a quick review of FCC rules, so let's start another round.=20
The FCC is in the process of conducting its comprehensive 2004 biennial=20
review of telecommunications regulations to "determine whether any such=20
regulation is no longer necessary in the public interest as the result of=20
meaningful economic competition between the providers of such=20
service." The Commission is directed by law to repeal or modify any such=20
regulations that it finds are no longer in the public interest. The=20
Commission is seeking suggestions from the public as to what rules should=20
be modified or repealed as part of the 2004 biennial review. [All those in=
=20
favor of current regulations move to the back of the bus.] Comments are due=
=20
July 12; reply comments due August 11. For more information, see the URL=20
below and/or contact:
Consumer & Governmental Affairs Bureau: Jeffrey Tignor, (202) 418-0774,=20
Jeffrey.Tignor( at )fcc.gov=09
Enforcement Bureau: Suzanne Tetreault, (202) 418-7450,=20
Suzanne.Tetreault( at )fcc.gov
International Bureau: David Krech, (202) 418-7443, David.Krech( at )fcc.gov=09
Office of Engineering & Technology: Karen Rackley, (202)=20
418-2431, Karen.Rackley( at )fcc.gov
Wireless Telecommunications Bureau: Harry Wingo, (202) 418-1783,=20
Harry.Wingo( at )fcc.gov
Wireline Competition Bureau: Vickie Robinson, (202) 418-2732,=20
Vickie.Robinson( at )fcc.gov
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-105A1.doc

BROADBAND

$190 MILLION TO SUPPORT RURAL BROADBAND ACCESS
Agriculture Secretary Ann M. Veneman last week announced, as part of the=20
Bush Administration=92s effort to expand the availability of broadband=20
technology in rural areas, the approval of 20 rural broadband and=20
telecommunication loans totaling $190 million to expand access to advanced=
=20
technology in 19 states. Sec Veneman announced in January 2003 that USDA=20
would expand efforts to bring farmers, rural residents and businesses=20
greater access to improved telecommunication technology through loans and=20
loan guarantees to rural telecommunications providers. Funds for the=20
program were authorized through the 2002 Farm Bill. To date, over $206=20
million in broadband loans have been approved in this program. The rural=20
broadband access program provides loans and loan guarantees for the=20
construction, improvement, and acquisition of facilities and equipment for=
=20
broadband service in eligible rural communities. Priority is given to=20
applications that are proposing to serve areas where no residential=20
broadband service currently exists. Of the $190 million announced today,=20
$150 million resulted from funding available through the 2002 Farm Bill.=20
The remaining $40 million in loans announced came from Rural Development=92s=
=20
traditional telecommunications program. Borrowers are required under the=20
traditional telecommunication loan program to ensure that all=20
infrastructure built include broadband capability. Since the beginning of=20
the Bush Administration, the traditional program has provided $2.0 billion=
=20
in funding, providing over 771,000 rural homes and businesses with access=20
to high speed broadband connections.
A list of loan recipients is available at=20
http://www.rurdev.usda.gov/rd/newsroom/2004/BBLoanRecipients.html
[SOURCE: Department of Agriculture Press Release]
http://www.usda.gov/Newsroom/0180.04.html

NCTA: STEADY AS BROADBAND GOES
The National Cable & Telecommunications Association told the FCC that its=20
deployment of broadband services, driven by the deregulation of the=20
Telecommunications Act of 1996, has continued at a "reasonable and timely"=
=20
pace. NCTA argued for a continued light regulatory touch which means rules=
=20
mandating nondiscriminatory access to unaffiliated Internet service=20
providers. By the end of the year, cable modem service will be available to=
=20
91% of all homes passed by cable (cable passes 95% of US homes). But only=20
50% of homes pay for Internet service and just one-third of those homes=20
subscribe to broadband services, so adoption is seriously trailing=20
deployment. NCTA characterizes the rollout as "one of the greatest success=
=20
stories" of the 1996 Act. Not so, argues Mark Cooper, of the Consumer=20
Federation of America: "If it's a success, there is no reason to forbear=20
regulation of nondiscrimination of interconnection," he says. "It's a=20
success compared to what? There are lots of people concerned about the=20
higher levels of penetration in Japan, Korea and Canada." While asking for=
=20
a continued light hand in most regulatory departments, NCTA did ask the=20
commission to wield a big stick to keep utility companies from engaging in=
=20
anticompetitive practices when it comes to their control of the "poles,=20
ducts and conduits" that are the broadband rights-of way.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton ]
http://www.broadcastingcable.com/article/CA416776?display=3DBreaking+News
(requires subscription)
See Also:
NCTA WARNS ABOUT POLE-ACCESS FIGHTS
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA416668?display=3DBreaking+News
(requires subscription)

COPYRIGHT

STRENGTHEN DIGITAL COPYRIGHT PROTECTIONS
Congress should act to restore the rights of consumers to use digital=20
materials, such as DVDs and CDs in ways protected by traditional copyright=
=20
law, three major consumer groups will say today. In joint testimony to the=
=20
House Commerce, Trade and Consumer Protection Subcommittee the groups,=20
Public Knowledge, Consumers Union and the Consumer Federation of America=20
will endorse legislation (H.R. 107) sponsored by Reps. Rick Boucher (D-VA)=
=20
, John Doolittle (R-CA) and House Commerce Committee Chairman Joe Barton=20
(R-TX), that would correct some parts of the 1998 Digital Millennium=20
Copyright Act. Gigi B. Sohn, president and co-founder of Public Knowledge,=
=20
and Chris Murray, legislative counsel for Consumers Union, will testify at=
=20
the hearing. The legislation, the =93Digital Media Consumers=92 Rights Act=
of=20
2003,=94 would require CD makers to label their products to let consumers=20
know of any technical restrictions or limitations on their use. The bill=20
would also make clear some of the fair use exemptions that would allow=20
consumers to circumvent copy protections if no copyright violations were=20
involved. Murray will say that =93copyright law is being abused to shut out=
=20
competition in everything from garage door openers to printer=20
cartridges. The law is broken, and this bill is a significant first step=20
towards putting it back on track.=94 Mark Cooper, research director of the=
=20
Consumer Federation of America, will add, =93The American consumer is=
driving=20
the digital transition. Consumers' rights that the Boucher bill would=20
restore are essential to this transition both as a matter of principal and=
=20
as a matter of encouraging a market climate that supports technological=20
innovation and economic vibrancy.=94
=93No consumer should purchase a CD only to be surprised that it does not=20
play on his or her computer or CD player. The DMCRA will create an=20
informed marketplace where competition among new CD formats can prosper=20
without consumer confusion,=94 the groups said.
[SOURCE: Public Knowledge Press Release]
http://www.publicknowledge.org/

ENTITLED TO ENTERTAINMENT?
The House Subcommittee on Commerce, Trade, and Consumer Protection tomorrow=
=20
is expected to hear testimony on the Digital Media Consumers' Rights Act=20
(DMCRA), a bill intended to amend the Digital Millennium Copyright Act=20
(DMCA). In "Entitled to Entertainment? The Digital Media Consumers' Rights=
=20
Act," former Cato scholar Clyde Wayne Crews Jr. and Adam Thierer, Cato=20
director of telecommunications studies, wrote in January 2003: "The extent=
=20
to which government stands in the way of private efforts to protect content=
=20
via copy protection controls or licensing schemes is a violation of=20
creator's rights, not a violation of free speech for someone who intends to=
=20
make a duplicate. Government ought not interfere with such experimentation=
=20
by discouraging copy-protection schemes (or by mandating them, as Hollywood=
=20
and the record companies would prefer)."
[SOURCE: Cato Institute, AUTHOR: ]
http://www.cato.org/tech/tk/030113-tk.html

QUICKLY

LIE, AND VOTERS WILL BELIEVE
University of Pennsylvania's National Annenberg Election Survey shows that=
=20
people believe the claims made in political advertising while they remain=20
unaware of candidates' true positions on issues. The campaigns may get=20
around to advertising what they really stand for "but only if they run out=
=20
of fantasies about what the other guy stands for," Clymer concludes.
[SOURCE: New York Times, AUTHOR: Adam Clymer, the political director of the=
=20
National Annenberg Election Survey]
http://www.nytimes.com/2004/05/12/opinion/12CLYM.html
(requires registration)
See more about the importance of political advertising.
THE SHRUM FACTOR
[SOURCE: MediaChannel, AUTHOR: Rory O'Connor]
http://www.mediachannel.org/views/dissector/affalert193.shtml
THE SUBSIDIZED SOAPBOX
"Sen. John McCain (R-AZ.) would like nothing better than to load fall TV=20
schedules with election-year obligations, including quotas for political=20
coverage and free ad time for federal candidates," according to a recent=20
Broadcasting & Cable article. In "The Subsidized Soapbox: Senator McCain's=
=20
Free Airtime for Politicians Bill," Cato scholars John Samples and Adam D.=
=20
Thierer wrote in August of last year: "Sen. McCain wants to control the=20
editorial discretion of broadcasters to solve problems that do not exist.=20
His free airtime proposal has no place in a market-driven digital media age=
=20
wherein broadcasters give consumers the programs they want and plenty of=20
news alternatives exist for citizens who desire more political information.=
=20
Why does Sen. McCain have the right to force Americans to watch what he=20
deems good for us?"
[SOURCE: Cato Institute, AUTHOR: John Samples and Adam D. Thierer]
http://www.cato.org/tech/tk/030818-tk.html

PBS WINS MORE WEBBY AWARDS
For the fourth time, pbs.org has earn Webby Award as the best TV site on=20
the Web. With this win, pbs.org has won more TV category Webby prizes than=
=20
any other broadcast or cable network. In addition, the PBS Web site P.O.V.:=
=20
Borders won a Webby in the competition=92s Broadband category and PBS KIDS=
=20
Online won a Webby People=92s Voice Award, which is voted on by the public.=
=20
Hailed as =93the online Oscars=94 by Time Magazine, The Webby Award is the=
=20
leading international honor for Web sites. [SOURCE: PBS Press Release]

CHIEF OF FTC TO RESIGN; BUSH SELECTS A SUCCESSOR
Timothy J. Muris said on Tuesday that he had decided to step down this=20
summer as chairman of the Federal Trade Commission. Chairman Muris led the=
=20
agency in its popular crusade against telemarketers, creating a "do not=20
call" registry and then successfully defending it from court challenges=20
brought by the industry. The registry enables consumers to block=20
solicitations by registering their phone numbers."He came with a strong=20
ideological conservative bent and surprised everyone by steering a course=20
that reflected the bipartisan tradition of the Federal Trade Commission,"=20
said Gene Kimmelman, a senior director at Consumers Union. "He avoided=20
partisan rancor. While he wasn't particularly aggressive in antitrust=20
enforcement, he responded to public concern on the 'do not call' list. And=
=20
he preserved the consumer protection function of the agency." President=20
Bush had selected Deborah P. Majoras, a former top antitrust official at=20
the Justice Department, to succeed Chairman Muris. Ms. Majoras was the #2=20
official in the antitrust diving of the Dept of Justice and was=20
instrumental in negotiating the government's settlement with Microsoft=20
which has faced some criticism. She was also involved in a proposal to give=
=20
up the FTC's antitrust authority over mergers of media companies to the=20
Justice Dept. After some controversy, that proposal was scuttled.
[SOURCE: New York Times, AUTHOR: Stephen Labaton]
http://www.nytimes.com/2004/05/12/business/12ftc.html
(requires registration)
WSJ:=20
http://online.wsj.com/article/0,,SB108431384156908563,00.html?mod=3Dtoda...
s_page_one
WP: http://www.washingtonpost.com/wp-dyn/articles/A18959-2004May11.html
LATimes:=20
http://www.latimes.com/business/printedition/la-fi-muris12may12,1,537546...
ory?coll=3Dla-headlines-pe-business

FOR VALENTI, AN IMPRESSIVE CAST
A glimpse at the influence long-time Motion Picture Association of America=
=20
head Jack Valenti wields was on display last night at the first of many=20
retirement parties for the 82 year-old lobbyist.
[SOURCE: Washington Post, AUTHOR: Ann Gerhart]
http://www.washingtonpost.com/wp-dyn/articles/A19686-2004May12.html
(requires registration)

JUDGE TIES ANTISPAMMER'S HANDS
Scott Richter, the self-professed "Spam King" and president of e-mail=20
marketing company OptIn has won a temporary restraining order to prevent=20
SpamCop, an antispam operation, from interfering with messages sent by=20
OptIn. SpamCop has been collecting complaints from Internet users about=20
unwanted e-mail and uses that information to list the offending Internet=20
Protocol addresses used to send the messages. OptIn claims that SpamCop is=
=20
interfering with his business [isn't that the point?] and causing his=20
Internet service providers to block his company's e-mail. OpIn also charges=
=20
SpamCop with not disclosing the identity of people who complain about its=20
e-mail, thereby aiding potential violations of the Can-Spam Act, which=20
requires the removal of people from future mailings if they so choose. The=
=20
case is in a Northern California District Court which will reconvene later=
=20
this month.
"More troubling is what this means for the individuals who submit=20
complaints to SpamCop with the expectation that SpamCop will not reveal=20
their e-mail addresses to the people they are accusing of spamming," said=20
Anne Mitchell, CEO of the think tank Institute for Spam and Internet Public=
=20
Policy. "This is, after all, a private enterprise, not a branch of the=20
government and certainly not a court of law, and there is no right to=20
confront your accuser in this arena."
[SOURCE: C-Net|News.com, AUTHOR: Stefanie Olsen]
http://news.com.com/2100-1024_3-5210518.html?tag=3Dnefd.top
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. Headlines are compiled by=20
Kevin Taglang (headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

For upcoming media policy events, see http://www.benton.org/calendar.htm

Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. Headlines are compiled by=20
Kevin Taglang (headlines( at )benton.org) -- we welcome your comments.

BROADCASTING
Self-Censorship In Broadcasting Seen as Rising
Web TV Is Changing The Way Programming Is Watched and Sold

CABLE
Against =E0 la Carte
Some in Cable Scorn Gore Plan

ACCESSIBILITY
VoIP Disability Access Issues
Frustrating Signs at the FCC

QUICKLY
Costly Growth for the Bells
The 'Dot Kids' Internet Domain: Protecting Children Online
Stall on Gallagher Nomination Hurting Effectiveness Abroad

BROADCASTING

SELF-CENSORSHIP IN BROADCASTING SEEN AS RISING
In the wake of FCC rulings and legislation making its way through Congress,=
=20
broadcasters are self-censoring their content. "If you're asking if there=20
has been overcaution on the part of broadcasters today, I think the answer=
=20
is yes," said Jeff Smulyan, the chairman and chief executive of Emmis=20
Communications, which owns 16 television stations and 27 radio stations in=
=20
Chicago, Los Angeles, New York and other cities. "Everyone is going to err=
=20
on the side of caution. There is too much at stake. People are just not=20
sure what the standards really are." If the bills moving through Congress=20
become law, at stake are both much higher fines for broadcasters, but also=
=20
their licenses. FCC Commissioner Michael J. Copps, who has been one of the=
=20
strongest critics of media companies, acknowledged that some broadcasters=20
appeared to be overreacting. But, he said, "I applaud the effort at self=20
policing." He also disputed the notion that the FCC's standards on=20
indecency were too vague. "I think most of the things we're dealing with=20
right now are pretty clear, from the standpoint of being indecent," he=20
said. "There's enough stuff out there that shouldn't be on."
[SOURCE: New York Times, AUTHOR: Jacques Steinberg]
http://www.nytimes.com/2004/05/10/business/media/10FCC.html?hp
(requires registration)

WEB TV IS CHANGING THE WAY PROGRAMMING IS WATCHED AND SOLD
The movie and TV industries are starting to see the Internet as a new way=20
to sell programming that has already aired on TV. The quality of video on=20
people's PCs is not great yet, but as networks grow faster and easy-to-use=
=20
Internet-aware devices are sold for the living room, the role of the=20
Internet in TV will only grow. Think about getting "West Wing" without=20
having to deal with Comcast -- or even NBC. "It would be the video analog=20
of getting your music directly from the artist. You wouldn't even need a=20
TiVo, because the whole world would be your TiVo," Gomes writes. Policy=20
decisions will help shape this future. Cable companies sell us both=20
Internet signals and TV programming. Maybe, says Timothy Wu, a University=20
of Virginia law professor who has studied the issue, we should insist they=
=20
not downgrade their Internet signal as a way of protecting their cash-cow=20
TV business.
[SOURCE: Wall Street Journal, AUTHOR: Lee Gomes]
http://online.wsj.com/article/0,,SB108414174945606228,00.html?mod=3Dtoda...
s_marketplace
(requires subscription)

CABLE

AGAINST A LA CARTE
Cable lobbyists have a special mission this week -- kill a la carte pricing=
=20
mandates. Rep. Nathan Deal (R-GA) has an amendment to legislation renewing=
=20
satellite companies' right to carry broadcast channels that the Commerce=20
Committee is expected to pass along this week. The amendment would give=20
satellite companies EchoStar and DirecTV permission to sell individual=20
basic pay-TV channels, a practice no programmer allows today, instead=20
requiring carriage of a full complement of basic networks. Although the=20
amendment does not have much chance of passing, the cable lobby is applying=
=20
a full-court press to make sure it does not happen -- so that, down the=20
line, a similar measure is not passed applying to cable. EchoStar has=20
endorsed the measure, insisting the strategy would give it a competitive=20
edge. DirecTV, whose parent News Corp owns cable networks, is opposed.=20
Republican leaders are lobbying against the amendment.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell ]
http://www.broadcastingcable.com/article/CA416235?display=3DTop+of+the+Week
(requires subscription)
Also, worrying that "pure" a la carte could threaten public, educational=20
and government channels, the Alliance for Community Media will be talking=20
to lawmakers to include =93protective language=94 for noncommercial PEG=20
channels. =93In their efforts to find ways to protect consumers, Congress=
can=20
not leave community media out in the cold. PEG access is a vital=20
resource... that must be protected when the laws change,=94 says ACM's=
Bunnie=20
Riedel.
[SOURCE: Communications Daily, AUTHOR: Brigitte Greenberg]
(Not available online)

SOME IN CABLE SCORN GORE PLAN
There's not a lotta love between former Vice President Al Gore and the=20
cable industry. As a senator, Mr. Gore attacked cable TV distributors as=20
gougers and monopolists, coined the phrase "Cable Cosa Nostra" and compared=
=20
then-industry leader John Malone to Darth Vader. So it is no surprise to=20
read quotes like this: "It's very ironic that the same guy who tried to=20
blow-torch the industry now wants our help," said one executive for a=20
leading cable operator. "He won't get any help from me." But others are=20
seeing Mr. Gore's attempts to launch a new cable channel as an opportunity=
=20
for the industry: Mr. Gore has an armada of political connections in=20
Washington that no other cable newcomer could match and some cable=20
operators are agreeing to continue to carry Mr. Gore's network in exchange=
=20
for his political support. The commitments for carriage that Mr. Gore has=20
won have translated into financial backing from Wall Street.
[SOURCE: Los Angeles Times, AUTHOR:Sallie Hofmeister]
http://www.latimes.com/business/printedition/la-fi-gore10may10,1,6752823...
ry?coll=3Dla-headlines-pe-business

ACCESSIBILITY

VoIP DISABILITY ACCESS ISSUES
FCC Chairman Michael Powell is urging the disabled community to get=20
involved now with Internet telephony (VoIP) to ensure that solutions for=20
the disabled are not just "bolted on at the end," but considered from the=20
beginning. Speaking at the Commission's Solutions Summit last Friday, FCC=20
Commissioner Michael Copps said, "Making sure that IP services are=20
accessible to everyone=94 is a =93chief=94 challenge to be addressed by the=
FCC.=20
"It=92s the right thing to do. But that=92s not just my interpretation. It=
=92s=20
the law. So, let=92s put that front-and-center. Let's be certain we do=20
everything we can to ensure that we live up to the mandate of functional=20
equivalency as IP services flood the communications landscape."
[SOURCE: Communications Daily, AUTHOR: Susan Polyakova]
(Not available online)

FRUSTRATING SIGNS AT THE FCC
A look at the FCC's regulation of video-relay service (VRS). This free,=20
public, on-demand telecommunication service allows two-way live=20
videoconferencing with a sign interpreter, who then contacts the hearing=20
party via a standard phone line. The interpreter relays the conversation to=
=20
a deaf caller in sign language. The system is much more effective for deaf=
=20
callers than typing conversations into a text-based telephone (TTY). Title=
=20
IV of the Americans with Disabilities Act (ADA) requires equal telecom=20
access for the deaf, everywhere, including the workplace. But according to=
=20
the FCC, VRS can be used only for phone calls between parties in two=20
different locations -- so coworkers under the same roof cannot use the=20
system. The FCC says the deaf should schedule an interpreter to come to=20
their offices instead. That is a costly and inconvenient solution.
[SOURCE: BusinessWeek, AUTHOR: Suzanne Robitaille]
http://www.businessweek.com/technology/content/may2004/tc2004057_8783_tc...
htm

QUICKLY

COSTLY GROWTH FOR THE BELLS
Facing an approximate 4% drop in their wireline phone business, the Baby=20
Bells are looking for new revenue streams like high speed Internet access.=
=20
Digital subscriber lines (DSL) service is growing faster than ever and the=
=20
Bells are bundling access with content from Yahoo! and Microsoft. The phone=
=20
companies are also bundling DSL service with local and long distance phone=
=20
service. But these bundles worry analysts who see profit margins being=20
squeezed by consumer discounts.
[SOURCE: BusinessWeek, AUTHOR: Todd Rosenbluth, Standard & Poor's=
Securities]
http://www.businessweek.com/investor/content/may2004/pi2004057_0898_pi04...
m

THE 'DOT KIDS' INTERNET DOMAIN: PROTECTING CHILDREN ONLINE
The House Subcommittee on Telecommunications and the Internet last week=20
held a hearing on establishing the ".kids.us" Internet domain. The Federal=
=20
Bureau of Investigation (FBI) considers online child pornography and child=
=20
sexual exploitation to be the most significant cyber crime problem=20
confronting the FBI that involves crimes against children. The Dot Kids Act=
=20
required the National Telecommunications and Information Administration=20
(NTIA) to amend its contract with NeuStar to establish a child-friendly=20
space. NTIA was also required to oversee the development of kids.us in=20
accordance with specific content, enforcement and registration=20
obligations. The law also directed NTIA to publicize the availability of=20
the new domain and educate parents regarding the use of the kids.us domain=
=20
in combination with blocking and filtering technologies. In the eight=20
months since the creation of the kids.us space, over 1,700 domain names=20
have been registered in kids.us, such as Crayola.kids.us, Hasbro.kids.us,=20
Lego Land.kids.us, CuriousGeorge.kids.us, and=20
Yahooligans.kids.us. Currently, kids.us is home to thirteen active=20
websites. These websites showcase information about arts and=20
entertainment, computers and technology, sports and recreation, science and=
=20
government, and much more.
See the URL below for documents related to this hearing.
[SOURCE: House of Representatives]
http://energycommerce.house.gov/108/Hearings/05062004hearing1262/hearing...

STALL ON GALLAGHER NOMINATION HURTING EFFECTIVENESS ABROAD
Titles matter, *Acting* Assistant Secretary Michael Gallagher said last=20
week and former agency heads agree. The Senate's failure to act on his=20
confirmation as head of the NTIA costs Dir Gallagher diplomatic points with=
=20
officials from other countries. Dir Gallagher said the problem is the=20
biggest he meets with counterparts from other major nations. =93The=20
difficulty comes from the larger, more-established counties, not so much=20
the smaller ones,=94 he said. =93Any audience they get with a senior=
government=20
official, they feel very honored, very privileged... In the countries that=
=20
have a longer relationship with our country, that have a bigger economy,=20
that have more established bureaucracies around the issues we work with --=
=20
those are the ones where it has an impact.=94
[SOURCE: Communications Daily, AUTHOR: Howard Buskirk]
(Not available online)
--------------------------------------------------------------

For upcoming media policy events, see http://www.benton.org/calendar.htm

MEDIA & POLITICS
Disney Takes Heat on Blocking Bush Film

INDECENCY
Some CBS Affiliates Could Drop Live News
Concerned Women Launch Buffet-Cable Push

COMPETITION
SBC Dispute Undermines Move Toward Local Phone Competition

BROADBAND
FCC's Wireless Broadband Access Task Force

MEDIA & POLITICS

DISNEY TAKES HEAT ON BLOCKING BUSH FILM
The Disney-Michael Moore controversy heated up Wednesday as Mr. Moore
appeared on a number of TV shows and Sen Frank Lautenberg (D-NJ) called for
hearings into "the pattern of politically based corporate censorship of the
news media and the entertainment industry." Mr. Moore may be using the
attention the controversy has gained to help find a new distributor for the
film and, ultimately, bigger audiences. Disney executives said it was made
clear to Miramax last May, when it became the principal investor in the
film, that Disney would not let it be the distributor.
[SOURCE: New York Times, AUTHOR: Jim Rutenberg & Laura Holson]
http://www.nytimes.com/2004/05/06/national/06FILM.html
(requires registration)
The NYTimes also is running an editorial on the subject this morning. In
"Disney's Craven Behavior," the paper accuses Disney of cowardice. The
company should be a champion of free expression and "acceptable political
commentary," but its actions "underscore the dangers of allowing huge
conglomerates to gobble up diverse media companies." The editorial
concludes: it is clear that Disney loves its bottom line more than the
freedom of political discourse.
[SOURCE: New York Times, AUTHOR: Editorial Staff]
http://www.nytimes.com/2004/05/06/opinion/06THU4.html
(requires registration)

INDECENCY

SOME CBS AFFILIATES COULD DROP LIVE NEWS
CBS affiliate stations are warning the FCC that the indecency crackdown
will "fundamentally alter the manner in which local broadcasters engage in
newsgathering." The stations are telling the Commission that unless it
changes its ruling about profanities on-air, many will have to stop doing
news outside of the 10 p.m.-6 a.m. safe harbor for indecent speech. "Live
newsgathering outside of the safe harbor will be a risk that many licensees
can't take," the affiliates wrote the FCC. Public television stations have
already begun to self-censor, they wrote in a separate FCC filing. stations
have deleted language from "Prime Suspect" on Masterpiece Theater and even
had to consider whether to edit our a nude lithograph from Antiques
Roadshow, even though the show had aired months before with no complaint.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA415396?display=Breaking+News
(requires subscription)
See Also:
PROFANITY RULES BOTHER NEWS SHOWS
"We'd like the commission to evaluate whether there's a difference in
scripted entertainment programming in which it's possible to know what is
about to happen versus coverage of, let's say, fires in Southern
California," Bob Lee, chairman of the CBS Television Network Affiliates
Assn., said Wednesday. "Do you want to shoot the messenger when news media
might be there as observers and participants in the story?"
[SOURCE: Los Angeles Times, AUTHOR:Lynn Smith]
http://www.latimes.com/business/printedition/la-fi-news6may06,1,4620076....

CONCERNED WOMEN LAUNCH BUFFET-CABLE PUSH
Concerned Women For America (CWA) kicked off its pro-a la carte pricing
campaign with release of a survey finding that 80% of respondents are in
favor of paying for only the cable and network channels they want.
Representatives from CWA were joined at a press conference by Sen John
McCain (R-AZ) and Rep Nathan Deal (R-GA).
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA415486?display=Breaking+News
(requires subscription)
The National Cable & Telecommunications Association responded to recent
pressure for a la carte pricing with a white paper -- The Pitfalls of A La
Carte: Fewer Choices, Less Diversity, Higher Prices -- which claims a la
carte would harm consumers by reducing choice and driving up prices.
http://www.ncta.com/press/press.cfm?PRid=495&showArticles=ok
Also an a la carte amendment to the Satellite Home Viewer Improvement Act
proposed by Rep Deal could be blocked by House rules. Rep Deal will have
to demonstrate that cable a la carte provisions could be attached to
satellite legislation without running afoul of germaneness requirements.
http://www.multichannel.com/article/CA415474?display=Breaking+News

COMPETITION

SBC DISPUTE UNDERMINES MOVE TOWARD LOCAL PHONE COMPETITION
In negotiations to lease parts of its local network to a competitor, phone
giant SBC proposed that Talk America, a small company that sells bundled
local and long-distance services, send 90% or more of its phone traffic to
SBC's network instead of using its own equipment and not enter similar
agreements with rival phone networks. Jim Ellis, SBC general counsel,
defended SBC's strong demands from those seeking access. "If you want the
best price, then that involves duration and volume commitments," he said.
Although Talk American has a nondisclosure agreement with SBC, the company
appears to have shared documents with FCC Commissioner Kevin Martin.
[SOURCE: Wall Street Journal, AUTHOR: Anne Marie
Squeo annemarie.squeo( at )wsj.com]
http://online.wsj.com/article/0,,SB108379454957103153,00.html?mod=todays...
(requires subscription)

BROADBAND

FCC'S WIRELESS BROADBAND ACCESS TASK FORCE
Wireless broadband platforms are an increasingly popular alternative for
business and residential consumers. In light of the continuing development
of the market for wireless broadband services, FCC Chairman Michael Powell
has formed a Wireless Broadband Access Task Force, whose objective is to
review applicable spectrum management policies and regulations. The Task
Force will reach out to all relevant stakeholders and develop
recommendations that will further the deployment of wireless Internet
service providers (WISPs). This Task Force will review current policies to
identify whether any changes can further facilitate WISP growth. To assist
with its review, the Task Force will also actively solicit public input in
numerous ways, including seeking comment on the questions posed in the
Public Notice linked below and conducting various outreach activities. The
Task Force is asking for comment on 12 questions related to broadband
services. Comments are due June 3, reply comments July 1. The Task Force
will also conduct and participate in multiple outreach activities to obtain
input regarding current wireless broadband policies from May 2004 to August
2004. A Wireless Broadband Forum is scheduled for May 19, 2004.
The Task Force homepage is http://www.fcc.gov/wbatf/
[SOURCE: FCC]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-1266A1.doc
Statement by Chairman Powell
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-246852A1.doc
--------------------------------------------------------------
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. Headlines are compiled by
Kevin Taglang (headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

For upcoming media policy events, see http://www.benton.org/calendar.htm

Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=20
Friday, this service provides updates on important industry developments,=20
policy issues, and other related news events. Headlines are compiled by=20
Kevin Taglang (headlines( at )benton.org) -- we welcome your comments.

BROADBAND BACKLASH
No Net Taxes? Why Not?
There's No Need For U.S. to Subsidize Broadband Access
Florida Paves Way for VoIP Taxation

TELECOM
Hearing Generates Ideas for Telecom Act Rewrite
Telecom's Potential
Baby Bell, Union Far Apart Amid Strike Talk

NEWS FROM THE BIG EASY
Sachs Tells Cable to Improve Pitch
Cable Lawyer: A la Carte Would Face Court Buzz Saw
Cable CEOs Downplay Reg Risk

SATELLITE
Update: Satellite Home Viewer Improvement Act
Nextel Would Pay $500M ENG Bill

QUICKLY
Republicans Lure the Arts to Politics and Protests
Newspaper Circulation Continues Overall Decline
Wireless Living

BROADBAND BACKLASH

NO NET TAXES? WHY NOT?
By March, 2004, 41.5% of U.S. households with Internet access already had=20
broadband and that share is growing by about 1% a month. So why does=20
broadband need subsidies and tax breaks, asks Gleckman. What problems are=20
lawmakers trying to solve. Local and state telecom taxes average about 6.5%=
=20
-- that means ~60 cents/month on dial-up accounts and maybe $2.60/month for=
=20
broadband connections. Are those figures scaring away any potential=20
Internet subscribers? The why did the Baby ells just increase the cost of=20
DSL by $2 to $3 a month? Gleckman concludes: High-speed Internet access is=
=20
a marvelous economic success story. In a few years, it will be a=20
near-universal means of communications in the U.S. And it's hard to imagine=
=20
how imposing a modest sales tax on the service will slow that trend or why=
=20
costly new government subsidies are needed to accelerate it.
[SOURCE: BusinessWeek, AUTHOR:Howard Gleckman]
http://www.businessweek.com/technology/content/may2004/tc2004053_0658_tc...
htm

THERE'S NO NEED FOR U.S. TO SUBSIDIZE BROADBAND ACCESS
Broadband services may be useful, but not useful enough to merit government=
=20
subsidies, Murray argues in his column. Governments normally step in when=20
markets fail, but the marketplace for broadband is working just fine. Rural=
=20
access is growing just fine, too, Murray argues. "Rural users may have to=20
pay more, but so what? The government doesn't intervene to ensure I can buy=
=20
a house in Washington, D.C., at Montana prices. Why would it intervene to=20
ensure Montanans can buy broadband at Washington, D.C., prices?" Instead of=
=20
tax breaks and subsidies, Congress should concentrate on creating=20
regulatory parity, privacy and security laws. "But the government doesn't=20
need to be setting prices, defining the products or subsidizing services.=20
The industrial policy debate ended more than a decade ago, when the=20
Japanese economy tanked and U.S. technology businesses soared. No reason to=
=20
revive it now."
[SOURCE: Wall Street Journal, AUTHOR: Alan Murray at Alan.Murray( at )wsj.com]
http://online.wsj.com/article/0,,SB108362192708100709,00.html?mod=3Dtoda...
s_page_one
(requires subscription)

FLORIDA PAVES WAY FOR VoIP TAXATION
Last week, the Florida House of Representatives failed to pass a bill that=
=20
would have postponed the enforcement of a tax levied on businesses and=20
individuals using substitute communications such as VoIP. The statute was=20
originally meant to tax businesses that bypassed the local telephone=20
network by establishing their own communications network. While it was=20
originally written with technologies such as satellite and microwave in=20
mind, it could be applied to businesses carrying voice traffic over their=20
IP data networks as well as individuals using VoIP services from companies=
=20
like Vonage. The Department of Revenue will now establish rules for the=20
enforcement of the tax. These rules must be approved by the governor and=20
his cabinet before the tax can be enforced.
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
http://news.com.com/2100-7352_3-5204656.html?tag=3Dnefd.top

TELECOM

HEARING GENERATES IDEAS FOR TELECOM ACT REWRITE
Jackson's commentary highlights six interesting ideas presented at the=20
Senate Commerce Committee's hearing on telecom policy last week. 1)=20
Simpler, less vague legislation would help keep telecom policy out of the=20
courts. 2) Legislation should not delegate major decisions to the FCC. 3)=20
The telecom industry spends more on litigation and regulation than on=20
research and development; this may be evidence that a regulatory revamp=20
which streamlines the process is long overdue. 4) Regulatory parity is=20
needed between technologies. 5) Set universal service goals and decide how=
=20
to fund them. 6) Every man, woman and child with either a telephone or a=20
television should receive Benton's Headlines -- so start sharing with your=
=20
friends. Jackson ends: It will be interesting to see how many of these=20
ideas become part of the next telecom legislation package, if one ever gets=
=20
passed in the next couple of years. Many of these notions sound good in a=20
hearing, but may not play as well in the harsh arena of political reality.
[SOURCE: Telephony's Regulatory Insider, AUTHOR: Donny Jackson]
djackson( at )primediabusiness.com

TELECOM'S POTENTIAL
A new report from the American Council for Capital Formation to be released=
=20
today will suggest that if telecom deregulation was done right capital=20
spending on communications equipment alone could increase by an average of=
=20
$2.8 billion a year over the next five years and create jobs. Regulatory=20
uncertainty is one of the reasons both market capitalization and capital=20
investment in the industry is down. Under-investment in infrastructure is=20
credited to price controls and an industrial policy that ignores property=20
rights in this editorial. It concludes: "[President] Bush rightly says 'a=20
proper role for the government is to clear regulatory hurdles so those who=
=20
are going to make investments do so.' Let's hope Washington's gridlocked=20
regulators finally get the message."
[SOURCE: Wall Street Journal Editorial Staff]
http://online.wsj.com/article/0,,SB108362611545400865,00.html?mod=3Dtoda...
s_opinion
(requires subscription)

BABY BELL, UNION FAR APART AMID STRIKE TALK
The Communications Workers of America and Baby Bell SBC may be headed to a=
=20
work stoppage as the two sides try to negotiate a new contract. Sticking=20
points in the talks include the company's insistence that union members=20
start shouldering more of their healthcare costs and the union's insistence=
=20
that SBC curtail the number of jobs it shifts to outside companies, many of=
=20
them overseas. In the last three years, 20,000 of SBC's union jobs were=20
eliminated, most of them in the local wireline business that has seen=20
demand plummet. Meantime, the company has been moving high-speed Internet=20
and other high-tech customer support jobs to overseas companies. CWA=20
represents 100,000 workers employed by SBC. More information is available=20
at www.cwa-union.org/sbc
[SOURCE: Los Angeles Times, AUTHOR:James S. Granelli]
http://www.latimes.com/business/printedition/la-fi-sbclabor4may04,1,7066...
story?coll=3Dla-headlines-pe-business

NEWS FROM THE BIG EASY

SACHS TELLS CABLE TO IMPROVE PITCH
National Cable & Telecommunications Association president Robert Sachs told=
=20
cable executives they need to do a better job of making the case to=20
Washington and consumers that they are getting additional value and=20
programming for their dollar. But a la carte pricing is not a solution Mr.=
=20
Sachs told the audience in New Orleans, "A la carte pricing would have a=20
devastating impact on ad-supported program networks that depend upon wide=20
distribution." As to indecent content, Mr. Sachs said, "I am proud our=20
industry responded swiftly by offering free channel blocking equipment to=20
consumers and informing them about tools to protect children from=20
inappropriate programming. Our follow-through will be just as critical."
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA414692?display=3DBreaking+News
(requires subscription)
SACHS: CABLE SHOULD EMBRACE VOIP SOCIAL POLICIES
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA414707?display=3DBreaking+News
(requires subscription)

CABLE LAWYER: A LA CARTE WOULD FACE COURT BUZZ SAW
Comcast's top lawyer said a la carte legislation will be tough for Congress=
=20
to pass because many lawmakers know the courts would probably strike it=20
down under the First Amendment. "Lawmakers who have talked about and=20
offered to introduce legislation acknowledge that there are serious=20
constitutional infirmities in going this route," said Terry Bienstock,=20
executive vice president and general counsel of Comcast Cable. "So,=20
ultimately, I don't think it will get done, but we're taking it seriously =
=85=20
and doing what we can to make sure it doesn't get any legs," he added.=20
Charter Communications executive VP and general counsel Curtis Shaw said a=
=20
la carte would include lots of hidden costs like developing a "specialty=20
billing" system. Lost ad revenue would be made up by higher retail prices=20
-- exactly what people don't want.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA414670?display=3DBreaking+News
(requires subscription)

CABLE CEOs DOWNPLAY REG RISK
At the National Cable Show in New Orleans, cable executives downplayed the=
=20
possibility that Congress will enact a la carte or decency mandates on the=
=20
industry any time soon. Comcast CEO Brian Roberts questioned whether the=20
indecency restriction push is =93a legitimate debate or an election-year=20
debate=94. Time Warner CEO Richard Parsons noted that =93The indecency issue=
is=20
as old as our democracy.=94 But =93I don't think it=92s going to be a=
significant=20
issue for our industry.=94 He said that media companies may tone things down=
=20
a little, but ultimately =93you run your business the way your customers=
tell=20
you to run your business.=94 Charter Communications CEO Paul Allen said that=
=20
a la carte pricing would destroy the economics of ad-supported basic cable=
=20
networks. All the nodding heads in the audience sighed and felt a lot=
better.
[SOURCE: Broadcasting&Cable, AUTHOR: John Higgins]
http://www.broadcastingcable.com/article/CA415052?display=3DBreaking+News
(requires subscription)
Also see:
CABLE LEADERS RIP A LA CARTE
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA415046?display=3DBreaking+News
(requires subscription)

SATELLITE

UPDATE: SATELLITE HOME VIEWER IMPROVEMENT ACT
The Senate Commerce Committee will hold a hearing today on reauthorization=
=20
of the Satellite Home Viewer Improvement Act (SHVIA). Public Knowledge=20
President Gigi B. Sohn will tell the Committee that controversial bills=20
that would change copyright law should be left off of legislation. The law,=
=20
which allows satellite TV providers such as Dish Network and DirecTV to=20
carry local and network TV signals, expires later this year. In her written=
=20
testimony, Ms. Sohn wrote =93We are concerned that because SHVIA must pass=
=20
by Sept. 30, 2004, it may become a vehicle for other intellectual=20
property-related legislation, some of which proposes radical changes to=20
copyright law.=94 Ms. Sohn will mention several bills pending in the Senate=
=20
and House to change copyright law that sponsors may wish to attach to=20
SHVIA. Public Knowledge is most concerned about H.R. 4077, a bill which=20
would lower the legal standard for copyright infringement. The Commerce=20
Committee =93should reject any and all attempts to turn SHVIA into a Trojan=
=20
Horse for those who would like to change copyright and trademark law,=94 Ms.=
=20
Sohn plans to say. Also in her testimony, Ms. Sohn will stress that the=20
broadcast industry should be held to a Dec. 31, 2006 deadline for=20
converting to digital transmissions. The spectrum turned back by=20
broadcasters would lead to improvements in wireless services, including=20
broadband offerings, telephony and emergency communications. Ms. Sohn will=
=20
also endorse a proposal to allow satellite providers to carry distant=20
network signals in areas where viewers don't yet have access to locally=20
broadcast digital TV. Such a proposal, she'll say, would =93not only=20
encourage the purchase of digital television sets, but would provide local=
=20
broadcasters an incentive to provide a full-power digital signal."
The hearing will be webcast; see the URL below.
[SOURCE: US Senate]
http://commerce.senate.gov/hearings/witnesslist.cfm?id=3D1174

NEXTEL WOULD PAY $500M ENG BILL
The FCC has ordered broadcasters to relinquish control of spectrum used to=
=20
transmit live news reports and sports coverage back to the studio. Over the=
=20
next decade, broadcasters supposed to give up one-third of these=20
"electronic newsgathering" (ENG) channels to satellite communications=20
companies. The problem is, the move is expected to cost stations hundreds=20
of millions of dollars and, even though the satellite companies are legally=
=20
obligated to pay for the costs of buying or adapting transmission trucks=20
and receive sites, few have raised enough money to build out their=20
communications networks, much less pay broadcasters. Nextel has developed a=
=20
proposal to pay $500 million upfront to help broadcasters make the move. In=
=20
return, Nextel wants FCC assurance that it will get a small sliver of the=20
spectrum now used for ENG channels as well as another chunk of spectrum=20
close by. Besides speeding the ENG takeback, the government would get=20
another benefit from the new plan: Nextel would vacate crowded spectrum at=
=20
800 MHz where phone users routinely interfere with communications of public=
=20
safety departments.
[SOURCE: Broadcasting&Cable, AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/article/CA415063?display=3DBreaking+News
(requires subscription)
Nextel Strikes Deal With TV Broadcasters
[SOURCE: Washington Post, AUTHOR: ]
http://www.washingtonpost.com/wp-dyn/articles/A64125-2004May3.html
(requires registration)

QUICKLY

REPUBLICANS LURE THE ARTS TO POLITICS AND PROTESTS
A look at the political events artists are organizing in New York for the=20
Republican National Convention in August/September.
[SOURCE: New York Times, AUTHOR: Julie Salamon]
http://www.nytimes.com/2004/05/04/arts/04PROT.html
(requires registration)

NEWSPAPER CIRCULATION CONTINUES OVERALL DECLINE
The Audit Bureau of Circulations reported yesterday that the newspaper=20
industry's overall long-term decline is continuing. The New York Post, the=
=20
New York Times, the Daily News, the Wall Street Journal and the USA Today=20
all saw circulation gains in the last six months, but for the majority of=20
papers, subscribership is down. "Their readers are dying off faster than=20
they're being replaced," said John Morton, president of Morton Research, a=
=20
newspaper consulting firm. "The encouraging thing is that nationally, this=
=20
time, it wasn't a very big drop.''
[SOURCE: New York Times, AUTHOR: Jacques Steinberg]
http://www.nytimes.com/2004/05/04/business/media/04circulation.html
(requires registration)

The New York Times has a special section today -- Wireless Living. See=20
articles at http://www.nytimes.com/technology/techspecial/
--------------------------------------------------------------