November 2005

Three events today: 1) a CPB board meeting, 2) a discussion on whether=20
vacant TV channels be opened for wireless broadband, and 3) a talk about=20
telecom's brave new world. For these and other upcoming media policy=20
events, see http://www.benton.org

CHILDREN & MEDIA
What Does Mom Like?
Little Viewers, Big Squabble

INTERNET
Other Nations Hope to Loosen U.S. Grip on Internet
Election Day Results for Muni Broadband
Internet Phone Subscriptions Up by a Third in 3 Months
Google is Watching You
Mini-Porn Could Be Mega-Business

COMPETITION
Comcast Gains Dallas Deregulation
Telecom Mergers Need Global Context
Franchising Issue Leads To Accusations of 'Front Groups'

QUICKLY -- A Map of the International Digital Divide; Dems develop tech=20
agenda; At PBS, Education Extends Beyond TV; The Messenger Changes Tactics;=
=20
AFA Ramps Up Indecency Efforts; Fixing A Hole; Multimedia Killed the TV=20
Star; Shareholder Pressure Leads Knight Ridder to Announce Sale; Battle for=
=20
free speech is not yet won; 25% Increase in Residential Local Phone Service=
=20
Over the Past 10 Years

CHILDREN & MEDIA

WHAT DOES MOM LIKE?
[SOURCE: Broadcasting&Cable, AUTHOR: Paige Albiniak]
=93Television is a shockingly powerful medium for children,=94 says Brigid=
=20
Sullivan, VP for children=92s educational and interactive programming at WG=
BH=20
Boston, which produces PBS=92 Arthur and Postcards From Buster and Discover=
y=20
Kids=92 Peep and the Big Wide World. =93There=92s almost nothing a 3-year-o=
ld=20
would rather do than watch television. It=92s frightening.=94 So how do you=
=20
harness that power? =93The quickest way to get [a series on-air] is not to=
=20
spend years and years researching and getting educational consultants and=
=20
constantly testing the shows,=94 says Linda Simensky, senior director of=20
children=92s programming at PBS. But because that=92s the drill for educati=
onal=20
shows, it often takes an extra year to get the program in shape. All that=
=20
extra time and expense for a dwindling return on advertising is one reason=
=20
the broadcast networks have ceded their Saturday-morning kids blocks to=20
cable partners and another reason kids cable networks program pepper their=
=20
after-school blocks with older-kids fare that seems heavy on fun but light=
=20
on learning. =93Nick=92s attitude is that kids get education at school. Wha=
t=20
Nick wants to be for kids is a safe haven where they can find their=20
favorite characters and play great games,=94 says Brown Johnson, executive=
=20
creative director for Nick Preschool Television. =93They have enough pressu=
re=20
from going to school, and then they have homework. Nick, and I think=20
rightly so, doesn't think it needs to be more school for kids.=94
http://www.broadcastingcable.com/article/CA6283292?display=3DSpecial+Rep...
&referral=3DSUPP
(free access for Benton's Headlines subscribers)

LITTLE VIEWERS, BIG SQUABBLE
[SOURCE: Broadcasting&Cable, AUTHOR: Paige Albiniak]
Kids have become a key constituency in media policy in Washington.=20
Advertising to kids is trickier than ever. Most urgently, the FCC=92s new=
=20
kids-TV rules are coming online Jan. 1. Media companies say the new=20
regulations threaten the fundamentals of an already challenging business.=
=20
If the courts don't force the FCC to stay the rules, media companies will=
=20
have to drastically change the way they market, advertise and promote=20
during kids shows. Washington=92s involvement in all things kids is enough =
to=20
make programmers want to back off completely. Developing and producing=20
educational shows is expensive and time-consuming. Programmers have to keep=
=20
ads during kids shows to 10=BD minutes on weekends and 12 minutes on=20
weekdays, according to the Children=92s Television Act of 1990. That alread=
y=20
limits programmers=92 revenue, but the new rules would force them to count=
=20
network promotions toward those limits as well, giving them even less time=
=20
to sell. That will drive up the cost of each commercial, while driving down=
=20
total revenue, hurting both advertisers and producers, they say. The=20
Internet is a new arena for activists. According to such groups as the=20
Children=92s Media Policy Coalition (CMPC), directing kids from TV shows to=
=20
branded Web sites is a version of =93host-selling=94: when a popular charac=
ter=20
hawks certain products. For example, The Disney Channel would not be=20
allowed to mention or display disney.go.com during a show if there were=20
direct links anywhere on the site allowing kids to buy Disney-related=20
merchandise. =93We=92re fighting here about the relationship between what=
=92s on=20
television and what=92s on the Internet,=94 says Andrew Jay Schwartzman,=20
president/CEO of public-interest law firm Media Access Project, =93and that=
=92s=20
new and important for everyone.=94
http://www.broadcastingcable.com/article/CA6283290?display=3DSpecial+Rep...
&referral=3DSUPP
(free access for Benton's Headlines subscribers)

INTERNET

OTHER NATIONS HOPE TO LOOSEN US GRIP ON INTERNET
[SOURCE: New York Times, AUTHOR: Victoria Shannon]
What if, by historical chance, France or Britain controlled country domain=
=20
names on the Internet? Would the United States settle for asking another=20
government to fix its own addresses? That kind of power to hinder or foster=
=20
freedom of the Internet, centralized in a single government, is the crucial=
=20
issue for many of the 12,000 people expected in Tunis this week for a=20
United Nations summit meeting on the information age.
http://www.nytimes.com/2005/11/15/technology/15net.html?pagewanted=3Dall
(requires registration)
* Clashes precede Net governance showdown
[SOURCE: News.com, AUTHOR: Anne Broache]
Nothing says "global information sharing" like beating the crap out of=20
journalists and activists.
http://news.com.com/Clashes+precede+Net+governance+showdown/2100-1028_3-...
1707.html?tag=3Dnefd.top
* Flagrant violation of human rights this morning alongside UN summit
http://www.apc.org/english/wsis/blog/index.shtml?x=3D2430526
* US Seeking to Scuttle UNESCO Cultural Treaty
http://www.newsdissector.org/blog/
Also see some dueling commentary --
* U.N. control of Internet? An idea for the =91delete' file
http://www.usatoday.com/printedition/news/20051115/edit15.art.htm
* Govern 'Net globally
http://www.usatoday.com/printedition/news/20051115/oppose15.art.htm

ELECTION DAY RESULTS FOR MUNI BROADBAND
[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] As part of the off year elections, 32 communities in Iowa=20
voted on referenda on whether to explore having a muni broadband system. 17=
=20
of the 32 voted to go forward, with 15 voting not to explore the option.=20
Given that Mediacom and Qwest, the incumbent cable and telco companies=20
spent about $1.4 million to defeat the measures, while proponents of the=20
measure spent only a few thousand dollars, that's pretty good. Muni=20
broadband keeps getting attacked using all the usual big business buzzwords=
=20
that voters (especially in =93red states=94) are supposed to be conditioned=
to=20
respond to like Pavlov dogs. They are told allowing local government to=20
provide broadband services is =93socialized Internet=94 and =93wasting tax =
payer=20
money.=94 Government can't do something this complicated, and shouldn't try=
,=20
because it will just get in the way of the uber-efficient private sector=20
which =97 now that the FCC has deregulated broadband =97 should be rarin' t=
o=20
deploy cheap ubiquitous broadband everywhere. But voters ain't buyin'. They=
=20
look around and see that big companies concerned with the bottom line are=
=20
unlikely to want to deploy in their towns and neighborhoods anytime soon.=
=20
When this stuff comes up in the legislature, it generally gets shot down.=
=20
And even where it has passed, legislators may have second thoughts.
http://www.wetmachine.com//item/373

INTERNET PHONE SUBSCRIPTIONS UP BY A THIRD IN 3 MONTHS
[SOURCE: Washington Post, AUTHOR: Arshad Mohammed]
The number of subscribers for Internet phone services surged to about 3.6=
=20
million in the third quarter as providers aggressively signed up customers,=
=20
according to an independent report released yesterday. That was up 33=20
percent from 2.7 million subscribers at the end of June, said the report=20
prepared by TeleGeography, a research firm owned by privately held=20
Primetrica Inc. Revenue from Internet phone services jumped 38 percent, to=
=20
$304 million, during the period, the report said. "The threat to=20
traditional phone companies is substantial," said Stephan A. Beckert,=20
director of research for TeleGeography, saying his firm projects=20
traditional carriers will see local phone revenue shrink by $4.8 billion=20
and long-distance revenue by $1.8 billion by 2010 because of VOIP competiti=
on.
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/14/AR200511...
1428.html
(requires registration)
* For information about VoIP and E-911, see www.voip911.gov

GOOGLE IS WATCHING YOU
[SOURCE: San Jose Mercury News, AUTHOR: John Battelle]
[Commentary] while search is an extraordinary service, we're almost=20
laughably early in its development -- and even earlier in understanding the=
=20
many ways that search is changing our lives. Using the Web opens worlds of=
=20
information to us, and in many ways makes it easier to make decisions,=20
forge contacts and transact business. But as more and more information=20
about us moves into the digital realm, we might want to ask whether there=
=20
are downsides riding along with all those conveniences. Turn search inside=
=20
out and you'll get a taste of some far-reaching implications. Search=20
companies are increasingly capable of tracking our every move online, in=20
effect monitoring our "clickstream.'' Because we are increasingly moving=20
our digital lives from the constraints of the PC to the relatively=20
boundless Web, we also are creating virtual profiles of ourselves. Hundreds=
=20
of millions of us store our e-mail, photographs, social networks, contact=
=20
databases and personal journals on the Web, and we are adding to that pile=
=20
at an extraordinary rate. Put together the bread crumbs we leave as we=20
navigate the Web with the mountain of personal information we've posted=20
there, and add to that the e-mails we send and receive, and you have an=20
enormous storehouse of data available to the search companies. All this=20
raises some rather interesting privacy questions, ones our society has yet=
=20
to fully address. What protects our privacy is trust. We have decided that=
=20
we can trust our government with the information we give it -- there are=20
checks and balances in place, at least, and we know that the government can=
=20
be held accountable in the end. At least we think that's the case. But what=
=20
of our relationship with corporations? Like it or not, most of us are now=
=20
in a relationship of trust with our Internet service provider, our search=
=20
engine and our e-mail provider.
http://www.mercurynews.com/mld/mercurynews/business/technology/13164748.htm

MINI-PORN COULD BE MEGA-BUSINESS
[SOURCE: Washington Post, AUTHOR: Mike Musgrove]
Pornography is spreading from the computer desktop to the small screen, to=
=20
pocket-sized devices such as cell phones, digital music players and=20
portable game players. Almost as quickly, a trade group for wireless=20
carriers has responded with a plan for a rating system, such as that used=
=20
in the movie industry, to help prevent children from seeing inappropriate=
=20
content on mobile phones. The Cellular Telecommunications & Internet=20
Association last week announced that member companies agreeing to the=20
voluntary proposal will not offer adult-oriented images or programming=20
until such a system is in place, though they cannot prevent users from=20
getting material on the Internet. The sale of adult entertainment for=20
downloading to cell phones is a multimillion-dollar business in Europe=20
already. In Japan, adult film companies released movies to watch on Sony's=
=20
PlayStation Portable within weeks of the gadget's debut this spring. Though=
=20
still in its infancy in the United States, the portable porn market could=
=20
grow to nearly $200 million a year here by 2009, according to Boston-based=
=20
research firm Yankee Group.
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/14/AR200511...
1456.html
(requires registration)

COMPETITION

COMCAST GAINS DALLAS DEREGULATION
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The FCC's Media Bureau Monday barred the city of Dallas from regulating=20
basic-cable rates charged by Comcast, settling a bitter dispute between=20
city regulators and the largest U.S. cable company. In a short ruling that=
=20
took one year to decide and release, the FCC determined that Comcast met=20
its legal burden of proving that more than 15% of Dallas households=20
subscribe to a major satellite service. When the 15% test is met, local=20
regulators may not set basic rates, and the cable operator is no longer=20
required to provide a uniform rate structure or to give basic subscribers=
=20
the option of buying a premium service like Home Box Office without having=
=20
to buy a higher tier of service. While Comcast argued that direct-broadcast=
=20
satellite penetration was 17%, Dallas regulators complained that Comcast=20
had inflated DBS penetration and relied on outdated U.S. Census data. The=
=20
FCC said the city's arguments "lack merit." Dallas may appeal the decision=
=20
to FCC Commissioners.
http://www.multichannel.com/article/CA6283729.html?display=3DBreaking+News
(requires subscription)

TELECOM MERGERS NEED GLOBAL CONTEXT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Senate Commerce Committee questioned William Kovacic and J. Thomas=20
Rosch, two nominees for seats on the Federal Trade Commission. Kovacic said=
=20
that the FTC needed to look at the global market when gauging the=20
competition for merging companies. In evaluating U.S. firms or transactions=
=20
involving them, he said, the arena is global. He said he thought there was=
=20
already a trend in agency staffers asking what the correct context for a=20
merger should be, and that he saw that trend continuing. Rosch said his=20
"unifying principle" of regulating would be "visibility." He said he=20
admires the highway patrol model. "When they are on my tail, I am more=20
cautious," he said. Rosch said the commission needs to staff up, and to=20
build better bench strength when it goes to trial against some of the best=
=20
lawyers in the country. Both men are former FTC staffers back for more fun;=
=20
Senate approval seems likely.
http://www.broadcastingcable.com/article/CA6283704?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

FRANCHISING ISSUE LEADS TO ACCUSATIONS OF 'FRONT GROUPS'
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
The lobbying battle between the cable and telecommunications sectors over=
=20
video franchises is stoking allegations of a campaign funded by Bell=20
companies. The Bells have donated to organizations that support their=20
policy objectives, and many of the groups do not publicly identify their=20
contributions from Bell companies. The cable industry and cable-funded=20
groups are alleging an "astroturf" campaign of phony grassroots support --=
=20
although the cable industry appears to be emulating its rivals' tactics.
http://www.njtelecomupdate.com/lenya/telco/live/tb-KHUU1132002307865.html
* Minority Groups Split Over Video Franchising By Bells
http://www.njtelecomupdate.com/lenya/telco/live/tb-SCLL1132002816771.html

QUICKLY

A Map of the International Digital Divide
http://maps.maplecroft.com/loadmap?template=3Dmap&issueID=3D17

DEMS DEVELOP TECH AGENDA
[SOURCE: The Hill, AUTHOR: Josephine Hearn]
Under the banner of an =93Innovation Agenda,=94 House Democrats today will=
=20
unveil a series of proposals aimed at strengthening the high-tech industry.=
=20
The plan is expected to focus on five areas: providing a more skilled and=
=20
educated high-tech work force, encouraging greater investment in research=
=20
and development, promoting affordable access to high-speed Internet=20
services, ensuring energy independence in ten years, and making small=20
businesses more competitive.
http://thehill.com/thehill/export/TheHill/News/Frontpage/111505/dems.html

AT PBS, EDUCATION EXTENDS BEYOND TV
http://www.broadcastingcable.com/article/CA6283293?display=3DSpecial+Rep...
&referral=3DSUPP
(free access for Benton's Headlines subscribers)

THE MESSENGER CHANGES TACTICS
[SOURCE: Broadcasting&Cable, AUTHOR: Kevin Downey]
Some marketers, under fire, begin to pull back on advertising to children.
http://www.broadcastingcable.com/article/CA6283289?display=3DSpecial+Rep...
&referral=3DSUPP
(free access for Benton's Headlines subscribers)

AFA RAMPS UP INDECENCY EFFORTS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The American Family Association is making it easier for visitors to its=20
website to file indecency complaints at the FCC. AFA is also reaching out=
=20
to churches asking for bulletins to include encouragement to visit the=20
organization's site.
http://www.broadcastingcable.com/article/CA6283445?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

FIXING A HOLE
[SOURCE: Wired in Washington, AUTHOR: Drew Clark]
[Commentary] A look at the "analog hole." Radio is the last form of mass=20
media to make the switch to digital. Boosted by big broadcasters such as=20
Clear Channel, and by electronics companies hungry for a new market, a new=
=20
digital audio radio service has arrived. Besides the higher quality and=20
greater flexibility that digital media bring, creative types like the fact=
=20
that it can be protected with digital locks and keys. But that's only if it=
=20
stays in digital form. Once converted to analog, all these fancy content=20
protections are lost: The content can then be re-digitized and pirated. So=
=20
Hollywood is asking Congress for help. Specifically, it wants lawmakers to=
=20
require all video jacks on computers and televisions to use a=20
government-approved protection technology.
http://www.njtelecomupdate.com/lenya/telco/live/tb-XMFW1113937467518.html

MULTIMEDIA KILLED THE TV STAR: AD FIRMS REVISE THEIR APPROACHES
[SOURCE: Wall Street Journal, AUTHOR: Suzanne Vranica=20
suzanne.vranica( at )wsj.com]
The makers of television commercials have long called the shots at most=20
Madison Avenue ad agencies, reflecting the central role historically played=
=20
by TV in advertising. But as advertisers put more emphasis on direct=20
marketing and other techniques, the center of gravity within agencies is=20
shifting. Rising in prominence are executives who can devise ad campaigns=
=20
that integrate all types of media, including less-glamorous "marketing=20
services," such as direct marketing, public relations and "in-store"=20
advertising. The shift on Madison Avenue comes as new technologies, such as=
=20
digital video recorders, are making it easier for viewers to avoid TV ads.=
=20
Advertisers increasingly see TV ads as one part of a broader campaign that=
=20
might also include online ads, public relations and direct marketing. To=20
devise such campaigns, agencies have to get their different units to work=
=20
together.
http://online.wsj.com/article/SB113201674217597057.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

SHAREHOLDER PRESSURE LEADS KNIGHT RIDDER TO ANNOUNCE SALE
[SOURCE: Washington Post, AUTHOR: David A. Vise]
Knight Ridder, based in San Jose, publishes 32 daily newspapers, with a=20
readership of 8.5 million daily and 11 million Sundays. In addition, the=20
company has a Washington bureau with about 40 reporters and operates=20
Realcities.com, which it describes as the leading national network of city=
=20
and regional Web sites. In addition to owning dozens of weekly newspapers,=
=20
Knight Ridder -- whose long history includes 84 Pulitzer Prizes -- also=20
publishes the Philadelphia Inquirer, Miami Herald, San Jose Mercury News,=
=20
Kansas City Star, Fort Worth Star-Telegram, Charlotte Observer and St. Paul=
=20
Pioneer Press. The company put itself up for sale yesterday under continued=
=20
pressure from outside shareholders to boost its stock price. The company=20
was put into play early this month after Private Capital=20
Management disclosed that it purchased a 19 percent stake in Knight=20
Ridder, criticized its management and pressured the board of directors to=
=20
put the giant publisher on the auction block.
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/14/AR200511...
1363.html
(requires registration)

BATTLE FOR FREE SPEECH NOT YET WON
[SOURCE: Financial Times, AUTHOR: Victor Mallet]
[Commentary] Asian authoritarians are repeating their mistake of a decade=
=20
ago, seeing the free flow of information as a preventable evil promoted by=
=20
misguided western liberals. In fact, it is an inevitable adjunct of global=
=20
modernization.
http://news.ft.com/cms/s/54b5449a-5540-11da-8a74-00000e25118c.html
(requires subscription)

25% INCREASE IN RESIDENTIAL LOCAL PHONE SERVICE OVER THE PAST 10 YEARS
[SOURCE: saschameinrath.com]
[Commentary] Reading through the recently released Statistics of=20
Communications Common Carriers, Sascha Meinrath noticed an interesting=20
trend in the average rates charged for residential phone service. They keep=
=20
going up -- from $19.81 in 1994 to $24.31 in 2004. I find this particularly=
=20
fascinating because the rates for businesses aren't increasing at even=20
close to this rate (having grown from $41.64 to $43.75 over the same time=
=20
frame). You can see this for yourself on tables 5.11 and 5.12 on pages=20
145-6 of the FCC report. Thus, while business rates only went up a few=20
percent (and most of that over the last year when it jumped from the $41.96=
=20
in 2003 to $43.75 in 2004), residential rates increased by a whopping 25%.=
=20
The question is, why have residential phone service rates been steadily=20
increasing for the past half-decade while business rates haven't?
http://www.saschameinrath.com/2005nov0925_increase_in_residential_local_...
ne_service_over_the_past_10_years
--------------------------------------------------------------
Thanks for reading; see you tomorrow.
--------------------------------------------------------------
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. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
headlines( at )benton.org -- we welcome your comments.
--------------------------------------------------------------