January 2006

The full Senate returns to work next week with Senate Commerce Committee=20
hearings on inappropriate content Jan 19, a FCC meeting on Friday and a=20
possible vote on Judge Alito's nomination. For upcoming media policy=20
events, see http://www.benton.org

AT THE FCC
The Impact of Hurricane Katrina on Communications Networks
Cable, =E0 la Carte?

INTERNET/BROADBAND
What Should the Government Role be in Ensuring an Open Internet?
Clinton, McHugh Call for Overhaul of Broadband Loan Program

QUICKLY -- Rewriting Pay System for Hollywood Talent; Court Dismisses Yahoo=
=20
Free Speech Suit; Rigging the Numbers; Critics Say iTunes Is Snooping; More=
=20
Super Bowl ads in high-def; Dallas Gets News On Demand; Web Site of Agency=
=20
Is Called Insecure; Doubts Cloud Plan for Cellphone Service in NYC Subway=
=20
Stations

AT THE FCC

THE IMPACT OF HURRICANE KATRINA ON COMMUNICATIONS NETWORKS
[SOURCE: Federal Communications Commission]
Five months after Hurricane Katrina ravaged the Gulf Coast, a new FCC=20
Advisory Committee will hold its first meeting in Washington to review the=
=20
impact of the storm on the telecommunications and media infrastructure in=
=20
the affected area. The committee will make recommendations to the=20
Commission regarding ways to improve disaster preparedness, network=20
reliability, and communications among first responders by June 15, 2006.=20
FCC Chairman Kevin Martin named the members of the committee Thursday and=
=20
set the first meeting for Monday, January 30, 2006 from 10:00 a.m. to 5:00=
=20
p.m. at FCC headquarters. At its first meeting, the Panel will discuss a=20
tentative timeline and process for completion of its task by June 15, 2006=
=20
and its committee structure. The Panel will also introduce and receive=20
brief statements from panel members about the impact of Hurricane Katrina=
=20
on their company's or industry sector's communications infrastructure as=20
well as issues on which the panel should focus. The Committee will be=20
chaired by Nancy J. Victory of Wiley Rein & Fielding and Lisa M. Fowlkes=
=20
will serve as the Designated Federal Officer. The groups consists of public=
=20
safety officials and corporations affected by the storms, see a full list=
=20
of participants at the URL below.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-57A1.doc

CABLE, A LA CARTE?
[SOURCE: National Review, AUTHOR: Cesar V. Conda]
[Commentary] Conda, a former assistant for domestic policy to Vice=20
President Dick Cheney, weighs in in favor of FCC Chairman Kevin Martin's=20
approach to cable pricing. "The critics of Martin=92s ideas have resorted t=
o=20
overblown rhetoric about how the government plans to regulate America=92s=
=20
viewing habits, which would result in higher prices and kill off fledgling=
=20
competition to cable television." Don't you worry, fellow conservatives,=20
Chairman Martin is proposing no new regulation, Conda insists.=20
"Conservatives of all stripes should commend FCC Chairman Martin for using=
=20
the enlightening power of the Bully Pulpit, instead of the coercive power=
=20
of government mandates, to produce an outcome that most Americans support:=
=20
protecting our children from indecent programming."
http://www.nationalreview.com/nrof_comment/conda200601120906.asp
See also:
* How About Cable Your Way?
http://www.zwire.com/site/news.cfm?newsid=3D15913555&BRD=3D2259&PAG=3D74...
ept_id=3D226964&

INTERNET/BROADBAND

WHAT SHOULD THE GOVERNMENT ROLE BE IN ENSURING AN OPEN INTERNET?
[SOURCE: The Jeff Pulver Blog]
[Commentary] For the past few years, many of us have been prophesizing the=
=20
emerging battle between Internet Application Providers and Internet Access=
=20
Providers. There is no longer any doubt in my mind that we are witnessing=
=20
the emergence of the new battle for control over the Internet and=20
communications. I have some concerns that we might see the emergence of two=
=20
Internets -- one an ever-evolving and progressing privately-controlled=20
Internet, and the other an increasingly dilapidated publicly-accessible=20
Internet with minimal quality and capacity. Will the emergence of a=20
government supported Internet onramp ensure a quality public Internet or=20
undermine the efforts of private enterprise? Will the public Internet be a=
=20
dirt road (albeit free), while the privately-controlled Internet will be of=
=20
top-quality but will not allow users access to the full-range of content=20
and applications that the Internet could offer? How do we maintain the=20
quality of a public road? Does it simply degenerate into a neglected back=
=20
road traveled by only the disenfranchised members of the community? And=20
does the establishment of the public road undermine private efforts to=20
build the best, next-generation broadband networks? Would we relive the=20
fiascoes experienced by the public projects of failed Communist states, in=
=20
which they built publicly-owned facilities without any financial incentive=
=20
and which ultimately led to their deterioration and an inability to meet=20
the development and progress of an enlightened capitalist economy? It is=20
times like this that I look around for my time machine, my crystal ball, my=
=20
ability to see the alternate futures. I still sense that much good can come=
=20
from publicly-supported broadband networks, particularly where industry has=
=20
not stepped up to the plate. At a minimum, I think we could use some=20
government support to build out private, but open networks. I would like to=
=20
think that the open and public Internet access projects would serve as a=20
check to ensure that the privately-owned Internet access builds will also=
=20
remain open and discourage the Internet Access Providers from building=20
walled-gardens with less user control and access to the broadest array of=
=20
Internet applications and content. But I have heard arguments on both=20
sides. I am however, happy to see that the issues are now front and center=
=20
and we are finally embarking upon an open and public debate over the more=
=20
subtle, nuanced issues involved.
http://pulverblog.pulver.com/archives/003519.html
* Jeff Pulver is the Chairman and Founder of pulver.com, and a pioneer of=
=20
the Internet telephony/VoIP industry

CLINTON, MCHUGH CALL FOR OVERHAUL OF RURAL UTILITIES SERVICE BROADBAND LOAN=
=20
PROGRAM
[SOURCE: Sen Clinton press release]
Senator Hillary Clinton (D-NY) and Representative John McHugh (R-NY) are=20
urging the head of the Rural Utilities Service (RUS) to address problems=20
with administration of the Broadband Loan Program that are preventing it=20
from achieving its potential. In a letter sent to RUS Administrator James=
=20
Andrew, Clinton and McHugh emphasized the pivotal role the program plays in=
=20
encouraging broadband deployment in rural and underserved areas, one of the=
=20
most critical elements in promoting economic development. The two also=20
underscored the factors -- such as long processing time, the cost and=20
complexity of the application process, and the fact that more loan=20
applications are being rejected or returned than funded -- that show the=20
program is not adequately serving those it was intended to benefit. The=20
lawmakers urge Andrew to consider implementing a two-step process -- adding=
=20
a pre-application, which could consist of financial disclosures and a=20
business plan outline. This step would provide applicants with more=20
certainty and confidence that if specific conditions are met, then a loan=
=20
would be made and, in turn, giving them the assurances needed to raise=20
additional capital to leverage a broadband loan.
http://clinton.senate.gov/news/statements/details.cfm?id=3D250346&&

QUICKLY

HOLLYWOOD STUDIOS REWRITING PAY SYSTEM FOR THEIR TALENT
[SOURCE: Los Angeles Times, AUTHOR: John Horn]
With moviegoing declining and production costs skyrocketing, studio=20
executives are taking a harder look at the industry's most cherished and=20
costliest perk: first-dollar gross profit. The practice of giving A-listers=
=20
first dibs on a studio's box-office take has long allowed the industry's=20
top actors, writers and producers to grab the bulk of a movie's total=20
receipts well before a studio has earned back its investment. But what's=20
been good for the likes of Tom Cruise and Steven Spielberg has become=20
increasingly problematic for studio executives. In a move that some leading=
=20
talent agents say would have been unthinkable just a few years back,=20
studios are now placing a hard cap -- usually about 25% -- on how much of a=
=20
film's revenue will be split with the talent. A growing number of studio=20
deal makers also are eliminating the old pay system on a broad spectrum of=
=20
projects, suggesting instead that actors, directors and producers=20
essentially become financial partners in a movie's making. The upshot of=20
these new deals, which are called cash break-even, is simple: If the film=
=20
is a hit, the directors, lead actors, writers and others will enjoy an even=
=20
richer payday, but only after the studio has recouped its investment. If=20
it's a bomb, the studio will be spared the ignoble task of cutting bonus=20
checks on a money-losing dog.
http://www.latimes.com/business/printedition/la-fi-gross13jan13,1,773935...
tory?coll=3Dla-headlines-pe-business
(requires registration)

COURT DISMISSES YAHOO FREE SPEECH SUIT
[SOURCE: Associated Press]
A federal appeals court on Thursday skirted answering whether Yahoo Inc.=20
must pay a fine of about $15 million to a Paris court for displaying Nazi=
=20
memorabilia for sale in violation of French law. The 9th U.S. Circuit Court=
=20
of Appeals dismissed a federal lawsuit brought by Yahoo in California=20
challenging the fine levied five years ago for running an auction site in=
=20
which French users could buy and sell the memorabilia banned in France.=20
Yahoo asked the U.S. court to rule that the judgment could not be collected=
=20
in the United States because it violated the company's free speech rights.=
=20
In a 99-page decision, the court left open the central question of whether=
=20
U.S.-based Internet service providers are liable for damages in foreign=20
courts for displaying content that is unlawful overseas but protected in=20
the United States. The court said it was unlikely the French would ever=20
enforce the judgment and doubted Yahoo's free speech rights under U.S. law=
=20
were violated.
http://www.washingtonpost.com/wp-dyn/content/article/2006/01/12/AR200601...
1229.html?nav=3Dprintbox
(requires registration)

RIGGING THE NUMBERS
[SOURCE: Center for American Progress, AUTHOR: Eric Alterman]
[Commentary] A critique of =93A Measure of Media Bias=94 by UCLA Professor=
=20
Timothy J. Groseclose and Jeffrey D. Milyo of the University of=20
Missouri-Columbia which purports to demonstrate that the mainstream media=
=20
lean leftward.
http://www.americanprogress.org/site/pp.asp?c=3DbiJRJ8OVF&b=3D1347483

CRITICS SAY ITUNES IS SNOOPING
[SOURCE: Los Angeles Times, AUTHOR: Dawn C. Chmielewski]
The latest version of Apple Computer Inc.'s popular iTunes software scans a=
=20
computer's digital music collection and recommends new songs to buy =97 a=
=20
feature blasted by privacy advocates as electronic snooping.
http://www.latimes.com/business/printedition/la-fi-privacy13jan13,1,2413...
.story?coll=3Dla-headlines-pe-business
(requires registration)

MORE SUPER BOWL MARKETERS SHOOT HIGH-DEF ADS
[SOURCE: USAToday, AUTHOR: Laura Petrecca]
Super Bowl viewers with high-definition digital TVs (HDTV) this year will=
=20
see every bead of sweat on Bud Light bottles as clearly as those on the=20
players. The game has aired in ultrasharp HD since 2000, but Super Bowl XL=
=20
(that's 40, not eXtra Large) on ABC will be the first in which the number=
=20
of HD ads crosses the 50-yard line. As more consumers snap up HDTV sets,=20
advertisers are adopting often more costly and complex HD. At the end of=20
2005, about 16 million U.S. households had at least one HD-capable TV. Many=
=20
more are being sold this month.
http://www.usatoday.com/printedition/money/20060113/1b_superhd13.art.htm

DALLAS GETS NEWS ON DEMAND
[SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano]
Following the lead of several CBS owned-and-operated stations, KTVT=20
Dallas-Fort Worth and its sister UPN station, KTXA, are making local news=
=20
and programming available on Comcast=92s video on demand service. KTVT will=
=20
offer all of its local newscasts to VOD customers 30 minutes after the live=
=20
airing and make it available until the next program.
http://www.broadcastingcable.com/article/CA6299077?display=3DBreaking+Ne...
referral=3DSUPP
(free access for Benton's Headlines subscribers)

WEB SITE OF AGENCY IS CALLED INSECURE
[SOURCE: New York Times, AUTHOR: John Markoff]
The General Services Administration has shut a Web site for government=20
contractors after a computer industry consultant reported that he was able=
=20
to view and modify corporate and financial information submitted by=20
vendors. The security flaw, which could have permitted contractor fraud,=20
was reported to the agency's inspector general on Dec. 22, but almost three=
=20
weeks passed before the system was taken offline Wednesday afternoon. The=
=20
General Services Administration is the federal agency responsible for=20
procuring equipment and services, including computer security technology,=
=20
making the lapse all the more striking.
http://www.nytimes.com/2006/01/13/technology/13secure.html
(requires registration)

DOUBTS CLOUD PLAN FOR CELLPHONE SERVICE IN NYC SUBWAY STATIONS
[SOURCE: New York Times, AUTHOR: Sewell Chan]
Cingular Wireless, Verizon Wireless, T-Mobile and Sprint Nextel are=20
considering forming an unusual alliance to compete for the job of creating=
=20
a wireless network for all 277 underground stations in the New York subway=
=20
system. However, they warn that it will be hard to recoup their investment=
=20
unless tunnels, not only stations, are included in the contract. An=20
official at one carrier noted that most customers buy large packages of=20
minutes that are paid for in advance, so carriers would make additional=20
money only if customers went over their allotments. Talking in subway=20
stations may promote more cellphone use, but not necessarily enough to push=
=20
customers over their limits. Because subway platforms and trains are noisy,=
=20
talking may not seem attractive. The Metropolitan Transportation Authority=
=20
has vowed to spend no money on the project. It wants the winning bidder not=
=20
only to design, build, operate and maintain a network, known as a=20
distributed-antenna system, but also to pay monthly access fees,=20
essentially rent, for the privilege of having coverage in the stations. The=
=20
winner will get an exclusive 10-year license, but must allow other carriers=
=20
to rent access. For now, the MTA insists that wiring nearly 700 miles of=20
tunnels would be impossible because it would require access to the tracks=
=20
and interrupt train service for unacceptable stretches of time.
http://www.nytimes.com/2006/01/13/nyregion/13cell.html
(requires registration)
--------------------------------------------------------------
Bear down, Chicago Bears!
--------------------------------------------------------------
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.
--------------------------------------------------------------