November 2007

OK, so we're no Harry Reid, but here's the big=20
news from Washington as we all turned our attention to Thanksgiving...

UNIVERSAL SERVICE/BROADBAND
Universal Service Reform Recommendations
Coverage
Statements from Board Members
Taxpayers Not Keen To Fund Broadband Subsidies
U.S. in the broadband slow lane

FCC AGENDA
FCC 11/27 Open Meeting Agenda
Programmers Get More Time to Fight FCC's A la Carte Proposal
Bland Menu if Cable Goes =E0 la Carte
FCC Considering Digital Public Interest Obligations Over 12 Years,
Benton and CLC Remind McDowell

MEDIA & ELECTIONS
FEC Allows Corporate-, Union-Funded Campaign Ads
Rupert Murdoch Discusses His Political Control of U.K. Papers
Thompson charges Fox News is biased against his campaign

LOBBYING
Constituents' E-Mail on XM Deal Not Well Received
Tech trade groups combining for greater clout

UNIVERSAL SERVICE/BROADBAND

UNIVERSAL SERVICE REFORM RECOMMENDATIONS
[SOURCE: Federal Communications Commission]
The Federal-State Joint Board on Universal=20
Service (Joint Board) issued its Recommended=20
Decision on High-Cost Universal Service=20
Support. The Joint Board recommended: A) The=20
creation of three separate =93funds=94 with distinct=20
budgets and purposes: 1) The Broadband Fund to=20
disseminate broadband Internet services to=20
unserved areas; 2) The Mobility Fund to=20
disseminate wireless services to unserved areas;=20
and 3) A Provider of Last Resort (POLR) Fund to=20
support wireline carriers that perform that=20
function. B) An overall cap on the total amount=20
of high-cost funding at $4.5 billion. C)=20
Elimination of the identical support rule. D)=20
Expansion of the definition of supported services=20
to include broadband and mobility. E) A=20
transition period, during which, each of the five=20
current mechanisms are separately capped at 2007=20
levels. F) Exploration of the most appropriate=20
reverse auction mechanisms. (WC Docket Nos. 05-337 and 96-45, FCC07J-4)
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A1.doc
** Coverage **
* US panel urges FCC to cap rural phone subsidies
http://www.reuters.com/article/governmentFilingsNews/idUSN2118298620071122
http://www.reuters.com/article/governmentFilingsNews/idUSN2118298620071121
* Panel recommends capping subsidies for rural=20
phone, Net service (Associated Press)
http://www.mercurynews.com/business/ci_7526479?nclick_check=3D1
* Martin Seeks Supports On Universal Service
[SOURCE: Technology Daily 11/16, AUTHOR: David Hatch]
FCC Chairman Kevin Martin is seeking a third vote=20
on the five-member commission to impose a=20
temporary cap on the multibillion-dollar=20
universal service fund that subsidizes Internet=20
connections in rural and low-income areas.
http://www.njtelecomupdate.com/2007/11/martin_seeks_supports_on_unive.html
** Statements from Joint Board members **
* FCC Chairman Martin: "Today, the Federal-State=20
Joint Board on Universal Service recommends to=20
the Commission a number of important proposals to=20
address the structure of the high-cost universal=20
service program. I want to thank my colleagues=20
on the Federal-State Joint Board for their=20
contributions and efforts to improve the=20
universal service fund. It is essential that we=20
take actions that preserve and advance the=20
benefits of the universal service program."...=20
"The broadband program recommended by the Joint=20
Board is tasked primarily with disseminating=20
broadband Internet access services to unserved=20
areas. This is a laudable goal as we work to=20
make broadband services available to all=20
Americans across the nation. As proposed, the=20
program would have limited resources. Additional=20
support for this broadband program could be made=20
available by requiring competitive ETCs to=20
demonstrate their own costs and meet the support=20
threshold in the same manner as rural providers."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A2.doc
* FCC Commissioner Copps: "Five years ago I=20
dissented to a recommendation by a different=20
Federal-State Joint Board on Universal Service=20
that concluded advanced services should not be=20
eligible for Universal Service support and that=20
broadband, specifically, should not be included=20
in the definition of Universal Service. Today,=20
the Joint-Board happily reverses course and finds=20
that broadband does indeed meet the statutory=20
criteria of section 254 for inclusion as a=20
supported service and that it is in the public=20
interest to do so. I am enormously pleased to=20
approve of this historic finding by the Joint=20
Board because it establishes for the first time=20
the right mission for Universal Service in the=20
21st century. This may well be the most important=20
single action a Joint Board has ever taken."..."I=20
must express disappointment, however, that once=20
the initial decision to include broadband was=20
made, councils of caution found their way to the=20
fore. Instead of bold recommendations to=20
implement our historic decision, the Joint Board=20
only suggests that $300 million of federal=20
dollars be dedicated to this challenge. And none=20
of this would be new money, but rather a mere=20
reshuffling of dollars among different pots.=20
That's like fighting a bear with a fly swatter."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A4.doc
* FCC Commissioner Tate (Joint Board Federal=20
Chair): "While I support some of the=20
recommendations, others raise questions that need=20
to be addressed in more depth. For instance, is=20
it prudent to create three new government=20
administered funds instead of reforming the=20
existing high cost fund?"..."I also believe that=20
many questions remain with respect to two of the=20
new funds: the Broadband Fund and the Mobility=20
Fund. Should these new funds be more targeted,=20
limited to unserved areas or used to enhance=20
substandard service and/or to provide continued=20
operating subsidies? What is the source of=20
funding for the proposed $300 million and when=20
will it accrue? What will the transition plan=20
and period be? How should the proposed Broadband=20
Fund relate to other current existing government=20
programs such as those administered by the=20
federal Department of Agriculture, the (14)=20
fourteen broadband bills that are currently=20
pending in Congress, and the hundreds of state=20
and local projects that have been undertaken with=20
state and local taxpayer dollars? While we all=20
support the expansion and deployment of broadband=20
to every corner of this Nation, we must do so in=20
a way that is efficient, targeted and fiscally responsible."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A3.doc
* OR PUC Commissioner Ray Baum: "The new=20
Broadband Fund will greatly accelerate broadband=20
access in rural areas served by the non-rural=20
incumbent local exchange carriers (non-rural=20
ILECs). The new fund will also assist rural=20
ILECs (RLECs) who are caught in the "parent trap"=20
when purchasing service areas from non-rural=20
ILECs. The idea is to direct funds to those=20
portions of the country where broadband=20
deployment is lagging, and where Rural Utility=20
Service (RUS) loans and other types of support=20
are not available. The RD points out that=20
current High Cost support mechanisms have allowed=20
RLECs to more effectively deploy broadband to=20
their consumers. RLEC access to low-interest RUS=20
loans helps to fill any gaps."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A5.doc
FL PSC Chairman Lisa Polak Edgar: "I have=20
lingering concerns that we have not accomplished=20
all that can and should be done. As a Joint=20
Board member from a net contributor state, I have=20
concerns that expanding the scope of the fund to=20
include broadband and mobility could=20
inadvertently increase the overall fund=20
size. While I recognize the importance of=20
broadband Internet access and the importance of=20
deploying it to unserved areas, I am wary of what=20
lies beyond that initial objective and what=20
financial impacts such deployment may have on=20
consumers. I view these funding mechanisms as=20
intended to facilitate service to unserved areas=20
and not as long-term entitlements. Broadband=20
technology as a consumer product has been growing=20
steadily. Actions should not be taken that would=20
interfere with market forces already at work or=20
discourage current state efforts which are=20
helping to bring broadband to unserved=20
areas. Equally important, we must be mindful to=20
not unduly burden consumers in states that have=20
already made concerted efforts to foster=20
deployment of these new technologies. As=20
deployment becomes more widespread and as=20
advances in technology lower service costs, a=20
reduction in the universal fund size should occur."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A6.doc
* IN URC Commissioner Larry S. Landis: "I concur=20
in the view of my colleagues who support=20
redefinition of supported services to include=20
broadband, employing a mechanism such as that=20
outlined in this recommendation. It is beyond=20
debate that there are those areas in which=20
buildout is sufficiently costly that no business=20
case can be made for buildout, regardless of the=20
technology under consideration, and it is to=20
those areas I would expect the broadband dollars would be primarily directe=
d."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A7.doc
* VT Commissioner John D. Burke: "The most=20
dramatic change we recommend is to support=20
broadband deployment. Finding adequate funding=20
for that program was our most difficult=20
challenge. Since wireline and wireless voice=20
services already receive support, one might=20
anticipate that adding broadband would increase=20
high-cost support by as much as one-half. I am=20
pleased that we could find a way to offer=20
substantial new funding for broadband deployment=20
while still limiting the increase in fund size to about seven percent."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A8.doc
* WA Assistant Attorney General Public Counsel=20
Simon ffitch: "A key aspect of this Recommended=20
Decision is that it proposes a reasonable and=20
practical way to reform existing support=20
mechanisms and to redirect support to broadband=20
and mobility needs, while at the same time=20
keeping control on the overall size of the=20
fund. In this way, the plan proposed in this=20
Recommended Decision keeps the focus where it=20
should be in this process -- on the interests of=20
America's telecommunications consumers."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A9.doc

TAXPAYERS NO KEEN TO FUND BROADBAND SUBSIDIES
[SOURCE: internetnews.com 11/20, AUTHOR: Sean Gallagher]
A poll of American taxpayers found little support=20
for expanding telephone Universal Service=20
subsidies to include Internet broadband. The=20
research, sponsored by a Web-based "grass-roots"=20
organization pushing for reform of the Universal=20
Service Fund, reports that 62 percent of those=20
polled oppose a broadband build-out push funded=20
by the USF. The key focus of the organization,=20
the Cap The Fund Campaign, is placing a limit on=20
the subsidies to rural wireless telecommunication=20
providers under the "high cost" portion of the=20
USF. In 2006, the "high cost" portion of the USF=20
tax brought in $4 billion, up from $2.2 billion in 1998.
http://www.internetnews.com/infra/article.php/3712131
* Universal Services Fund fraud, present and future
[SOURCE: NetworkWorld, AUTHOR: Johna Till Johnson]
[Commentary] The last time the FCC tried to=20
implement a universal services initiative, the=20
result was so bad that they had to spend the=20
decade fixing things =97 and they=92re not finished=20
yet. So what=92s up next? Launching yet another=20
universal services initiative =97 this one focusing=20
on broadband. Hello! That=92s like saying if you=20
don't have the engineering skills to build a=20
garden shed, your next project should be erecting a 50-story skyscraper.
http://www.networkworld.com/columnists/2007/090507johnson.html

US IN THE BROADBAND SLOW LANE
[SOURCE: San Jose Mercury News 11/22, AUTHOR: Mark Boslet and John Boudreau]
The United States invented the Internet. But it's=20
falling behind in the global broadband race. In=20
2001, it was fourth in the number of broadband=20
subscribers per capita. Now it's 15th. What's=20
more, high-speed Internet service in countries=20
like Japan, France and South Korea is many times=20
faster than in the United States and noticeably=20
cheaper. In Japan, the average connection speed=20
is 93.7 megabits per second, or more than 10=20
times faster than the average speed in the United=20
States, according to a recent study. Yet average=20
monthly prices are lower: $34.21 compared with=20
$53.06 here. Subscribers in Sweden pay an average=20
of $34 a month and get speeds that are more than=20
twice as fast. The widening broadband gap could=20
have broad ramifications. Some say it threatens=20
to turn the tide on Internet innovation in the=20
United States, where a Net-savvy population=20
traditionally has favored domestic entrepreneurs,=20
who have come up with breakthrough companies such=20
as Google, eBay and Facebook. Lower penetration=20
also could slow job growth and business development.
http://www.siliconvalley.com/news/ci_7531570

FCC AGENDA

FCC 11/27 OPEN MEETING AGENDA
[SOURCE: Federal Communications Commission]
11/20/2007 - The FCC will hold an open meeting on=20
Tuesday, November 27, 2007, at 9:30 a.m. in Room=20
TW-C305, at 445 12th Street, S.W., Washington,=20
D.C. On the agenda, the Commission will consider:=20
1) a Notice of Proposed Rulemaking concerning=20
extension of the current 5-year registration=20
period for the Do-Not-Call Registry; 2) a Notice=20
of Proposed Rulemaking to evaluate the need for=20
rules to govern petitions for forbearance; 3) a=20
Report and Order and Third Further Notice of=20
Proposed Rulemaking concerning initiatives=20
designed to increase participation in the=20
broadcasting industry by new entrants and small=20
businesses, including minority- and women-owned=20
businesses; 4) a Third Report and Order=20
concerning the promotion and expansion of low=20
power FM (LPFM) service; 5) a Report and Order=20
concerning standardizing and enhancing=20
information provided to the public on how=20
broadcast television stations serve the public=20
interest; 6) the Thirteenth Annual Report and a=20
Notice of Inquiry seeking comment and information=20
for its Fourteenth Annual Report to Congress on=20
the status of competition in the market for the=20
delivery of video programming; and 7) a Report=20
and Order concerning modifications to its=20
commercial leased access and program carriage rules.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278312A1.doc
* FCC Sets Media-Heavy Nov. 27 Public Meeting
http://www.broadcastingcable.com/article/CA6504467.html?rssid=3D193
* Martin Ready To Hammer Cable
http://www.multichannel.com/article/CA6504587.html?rssid=3D196

PROGRAMMERS GET MORE TIME TO FIGHT FCC'S A LA CARTE PROPOSAL
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Major cable programming suppliers on Wednesday=20
received additional time to prepare their attack=20
on a Federal Communications Commission proposal=20
to permit cable and satellite distributors to=20
purchase channels on an a la carte basis from=20
programming vendors. Responding to requests for=20
more time from Disney, Viacom Fox, and NBC=20
Universal, the FCC=92s Media Bureau agreed to move=20
the due date for initial comments from Nov. 30 to=20
Jan. 4, 2008 and reply comments from Dec. 17 to=20
Jan. 22, 2008. In general, the Big Four sought=20
more time because they said the issues were=20
complex; their experts needed to prepare studies;=20
FCC issues overlapped with issue presented in a=20
class action law suit on retail a la carte; and=20
the holiday season caused scheduling problems.
http://www.multichannel.com/article/CA6504695.html?rssid=3D196
* Studio chiefs claim no need for cable regulations
In a letter dated Tuesday , News Corp. president=20
and COO Peter Chernin, Disney president and CEO=20
Robert Iger, Viacom CEO Philippe Dauman, and NBC=20
Universal president and CEO Jeff Zucker urged FCC=20
Chairman Kevin Martin to back off his attempts to restore cable regulation.
http://www.news.com/Studio-chiefs-claim-no-need-for-cable-regulations/21...
1036_3-6219723.html?tag=3Dhtml.alert.hed

BLAND MENU IF CABLE GOES A LA CARTE
[SOURCE: New York Times 11/24, AUTHOR: Joe Nocera]
[Commentary] Why should cable subscribers have to=20
pay for any stations they don't want? Why does=20
the cable industry force us to absorb the cost of=20
the 75 or 100 stations that make up =93extended=20
basic=94 or =93extended digital=94=97 which most cable=20
customers subscribe to =97 in order to see the much=20
smaller universe of stations we truly want to=20
watch? =C0 la carte. It sounds so appealing,=20
doesn't it? Instead of having to accept =97 and pay=20
for =97 all the channels bundled by your cable=20
company, you could pick from a menu and pay for=20
only the ones you watch. As Andrew Zimbalist, an=20
economics professor at Smith College, nicely put=20
it in a paper he wrote on the subject: =93Imagine=20
walking into a department store to buy a pair of=20
slacks and being told by the salesman that in=20
order to buy the pair you like, you would also=20
have to buy a particular shirt, a particular tie=20
and two pairs of socks. Department stores do not=20
attempt such bundling, because the consumer would=20
not stand for it.=94 Yet that=92s what the cable=20
industry does. =C0 la carte is an idea that has=20
been floating around Washington for years. One of=20
its biggest champions is Gene Kimmelman, an=20
executive at Consumers Union; he sees it as both=20
a way =93to create marketplace pressure to reduce=20
prices=94 and to goose competition. Yet as=20
appealing as the idea might seem at first glance,=20
there is a reason that Congress has not taken the=20
bait and passed an =E0 la carte law. =C0 la carte=20
would be a consumer disaster. For those of you=20
who yearn for it, this is a classic case of =93be careful what you wish for=
.=94
http://www.nytimes.com/2007/11/24/business/media/24nocera.html
(requires registration)

FCC CONSIDERING DIGITAL PUBLIC INTEREST=20
OBLIGATIONS OVER 12 YEARS, BENTON AND CLC REMIND MCDOWELL
[SOURCE: Benton Foundation and Campaign Legal Center]
Last week, FCC Commissioner Robert M. McDowell=20
asked, "If anyone knows of an FCC proceeding=20
where there has been more opportunity for debate=20
over an 11-year period, please let me know." The=20
Benton Foundation and the Campaign Legal Center have an answer.
http://www.benton.org/node/8146

MEDIA & ELECTIONS

NEW FEC RULE RECEIVES MIXED WATCHDOG REVIEW
[SOURCE: The Hill, AUTHOR: Susan Crabtree]
The Federal Election Commission (FEC) on Tuesday=20
voted to approve a modified rule governing=20
corporate and union-funded political ads that=20
will be tested throughout the presidential=20
election. As of Monday evening, election reform=20
groups were raising fears that the new FEC rule=20
would carve a large loophole in the restrictions=20
governing political advertisements established by=20
the Bipartisan Campaign Reform Act (BCRA) of 2002=20
and lead to an onslaught of negative attack ads=20
on the eve of the presidential primary. After the=20
decision, reform advocates appeared somewhat=20
mollified. One vocal critic, the Campaign Legal=20
Center=92s Paul Ryan, said the FEC improved the=20
rule somewhat by accepting an amendment by FEC=20
Commissioner Ellen Weintraub at the last minute.=20
But Ryan remained concerned about what the=20
overall impact would be of the rulemaking coupled=20
with the Supreme Court decision rendered earlier=20
this year in FEC v. Wisconsin Right to Life=20
(WRTL), which caused the FEC to act. Richard=20
Hasen, a professor at Loyola Law School,=20
continued to predict that =93corporate-funded sham=20
issue advocacy will soon hit election 2008=94 on=20
his election law blog after the vote, but he=20
appeared to place the blame on the Supreme Court decision rather than the F=
EC.
http://thehill.com/index.php?option=3Dcom_content&task=3Dview&id=3D69932...
emid=3D70
* The Federal Elections Commission voted on=20
November 20 to approve final rules implementing=20
the Supreme Court's ruling in FEC v. Wisconsin=20
Right to Life. Read the new rule at=20
http://www.fec.gov/pdf/nprm/electioneering_comm/2007/provisions_approved...
v-20-2007.pdf
* FEC Allows Corporate-, Union-Funded Campaign Ads
http://www.broadcastingcable.com/article/CA6504570.html?rssid=3D193

RUPERT MURDOCH DISCUSSES HIS POLITICAL CONTROL OF UK PAPERS
[SOURCE: Editor&Publisher, AUTHOR: ]
News Corp. Chairman Rupert Murdoch said he=20
maintains editorial control over which political=20
party his U.K. newspapers The Sun and News of the=20
World support in U.K. general elections. But=20
Murdoch said he takes a different approach with=20
his other national newspapers in the U.K.: The=20
Times and Sunday Times. While he often asks what=20
these papers are doing, he said he never=20
instructs them or interferes. Murdoch's comments=20
came in an interview with the U.K.'s House of=20
Lords Communications Committee, which traveled to=20
New York on Sept. 17 as part of its inquiry into=20
media ownership and the news. In addition to=20
Murdoch, the committee met privately with=20
officials from U.S. papers such as The New York=20
Times and TV stations such as Fox News, CNN, ABC,=20
NBC and CBS. On Friday, the committee issued=20
minutes of its discussions in New York.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...
t_id=3D1003677268

THOMPSON CHARGES FOX NEWS IS BIASED AGAINST HIS CAMPAIGN
[SOURCE: The Hill, AUTHOR: Bob Cusack]
Former Sen. Fred Thompson (R-TN) suggested on=20
Sunday that Fox News is biased against his=20
campaign, charging that the network highlights=20
commentators who have been critical of his run=20
for the presidency. In an interview on "Fox News=20
Sunday," host Chris Wallace pressed Thompson on=20
how some conservatives have lambasted Thompson's=20
campaign and showed clips of Fox conservative=20
commentators Charles Krauthammer and Fred Barnes=20
criticizing the former senator. Thompson said,=20
"This has been a constant mantra of Fox, to tell=20
you the truth." He noted that other conservatives=20
have praised his bid for the GOP nomination and=20
took issue with a Fox promo that focused on=20
polling in New Hampshire, where Thompson is=20
registering in the single digits. Thompson, in a=20
firm, but measured tone, scolded Wallace: "...for=20
you to highlight nothing but the negatives in=20
terms of the polls and then put on your own guys=20
who have been predicting for four months, really,=20
that I couldn't do it, kind of skew things a=20
little bit. There's a lot of other opinion out there."
http://thehill.com/index.php?option=3Dcom_content&task=3Dview&id=3D69942...
emid=3D70

LOBBYING

CONSTITUENTS' E-MAIL ON XM DEAL NOT WELL RECEIVED
[SOURCE: Washington Post 11/22, AUTHOR: Jeffrey H. Birnbaum and Kim Hart]
A check by The Washington Post of 60 people whose=20
names were attached to identical, anti-XM/Sirius=20
merger e-mails instigated by the National=20
Association of Broadcasters, a major opponent of=20
the merger, produced mostly unanswered phone=20
calls and recordings saying the phones were=20
disconnected. Of the 10 people reached, nine said=20
they never sent anything to the FCC, and only one=20
said she remembered filling out something about=20
Sirius but did not recall taking a position on a=20
merger. The responses raise questions debated a=20
lot in Congress and at federal agencies lately:=20
Are the hundreds of millions of narrow-interest=20
e-mails that deluge official Washington each year=20
a useful measure of public sentiment? Are they even being sent by real peop=
le?
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/21/AR200711...
2149.html
(requires registration)

TECH TRADE GROUPS COMBINING FOR GREATER CLOUT
[SOURCE: Associated Press 11/23, AUTHOR: Dibya Sarkar]
Relative newcomers to Capitol Hill lobbying,=20
technology giants with sometimes differing=20
agendas are figuring out what oil and=20
pharmaceutical companies have known for years:=20
There's strength in numbers. The Information=20
Technology Association of America and the=20
Government Electronics and Information Technology=20
Association are combining. The industry's=20
presence in Washington has long suffered, critics=20
say, from lacking a unified force voice to lobby=20
on fundamental issues, such as taxes, patent=20
reform, immigration and trade, that affect tech companies of all stripes.
http://www.siliconvalley.com/latestheadlines/ci_7538070
--------------------------------------------------------------
Communications-related Headlines is a free online=20
news summary service provided by the Benton=20
Foundation (www.benton.org). Posted Monday=20
through Friday, this service provides updates on=20
important industry developments, policy issues,=20
and other related news events. While the=20
summaries are factually accurate, their often=20
informal tone does not always represent the tone=20
of the original articles. Headlines are compiled=20
by Kevin Taglang headlines( at )benton.org -- we welcome your comments.
--------------------------------------------------------------