February 2008

Three telecom events in the coming days: 1) today's House hearing on
wireless consumer protection (see story below), 2) a FCC DTV
transition workshop focusing on issues for people with disabilities,
and 3) the Texas Community Media Summit. For these and other upcoming
media policy events see http://www.benton.org/event/2008/02/27/month/all/all

MEDIA OWNERSHIP
Prometheus Asks Court to Vacate Ownership-Rule Change
Justice Clears Liberty-DirecTV
Sirius Says It Could Do Without XM

WIRELESS/SPECTRUM
Markey bill could force Apple, AT&T to unlock iPhone
Pryor: FCC 'Fouled Up' Spectrum Auction

INTERNET/BROADBAND
Comcast Paid People to Pack FCC Hearing
Comcast Faces Another Peer-To-Peer Lawsuit

BROADCASTING/CABLE
"60 Minutes" glitch sparks conspiracy theories
DTV Transition Top of Mind for House, Senate
Court Reverses Field on NFL, Comcast Ruling

GOVERNMENT & COMMUNICATIONS
In Wiretap Law's Stead, Uncertainty
Liberal Dems seek secret FISA session
GOP Halts Effort to Retrieve White House E-Mails
Crippling Open Government

ELECTIONS & MEDIA
In New-Media World, Everyone Is Sounding Like a Beltway Insider
Sam's Club: Zell Says Economics Woes Caused By....Obama and Clinton

QUICKLY -- EU fines Microsoft record $1.35 billion; Slower Sales Are
Expected For TV Sets; Apple's iTunes grows to No. 2 U.S. music retailer

MEDIA OWNERSHIP

PROMETHEUS ASKS COURT TO VACATE OWNERSHIP-RULE CHANGE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
On Tuesday, the Media Access Project filed a petition with the U.S.
Court of Appeals for the Third Circuit on behalf of Prometheus Radio
Project and in opposition to loosening the newspaper-broadcast
cross-ownership rules, which the Federal Communications Commission
did Dec. 18. MAP was instrumental in getting the FCC's 2003
ownership-rule rewrite remanded to that court in the first place when
it represented Prometheus in a filing to block that deregualtory
effort. The result of that, after years of legal maneuvers and rule
reviews, was eventually that December 2007 decision to loosen, but
not lift, the newspaper-broadcast cross-ownership rules. But there is
more for MAP to like in the rule rewrite this time around. The group
supported the FCC majority's decision not to loosen the local TV or
radio ownership caps. "We are going to be very supportive of some of
the things the commission did," MAP president Andrew J. Schwartzman
said. But loosening newspaper-broadcast cross-ownership was not one
of them and it made that clear in no uncertain terms. In its
petition, the group called the decision "contrary to law" and
"otherwise arbitrary and capricious, an abuse of discretion and in
excess of statutory authority." MAP asked the court to "vacate,
enjoin and set aside the report and order and order such other relief
as may be just and proper." MAP expects broadcasters to take the
decision to court, too. They will likely argue that the FCC was wrong
in not deregulating the TV and radio ownership caps while it was at it.
http://www.broadcastingcable.com/article/CA6535600.html?rssid=193

JUSTICE CLEARS LIBERTY-DIRECTV
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
A day after the deal won the Federal Communications Commission's
blessing, the Justice Department said Tuesday it would not try to
block Liberty Media's plan to take effective control of DirecTV, the
satellite TV provider with 16.8 million subscribers run by News Corp.
since late 2003. The DOJ's antitrust division clashed with
Malone's lawyers over the deal impact on pay-TV competition in
Puerto Rico, dragging out the merger review for many months. The
dispute centered on Malone's joint interest in a small Puerto Rico
cable system that competes with a DirecTV affiliate. The FCC gave
Liberty one-year to divest one of the properties or to ensure that
Malone does not have an attributable ownership stake in both the
cable and satellite TV entities. The FCC's condition evidently
resolved Liberty's dispute with Justice's competition lawyers.
http://www.multichannel.com/article/CA6535638.html?nid=4262

SIRIUS SAYS IT COULD DO WITHOUT XM
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Sirius Satellite Radio said yesterday that it gained subscribers in
the fourth quarter and lost less money, signs that its business is
improving even as the company's merger with XM Satellite Radio
Holdings remains stuck in a regulatory limbo more than a year after
it was proposed. Though Sirius remains hopeful that the merger will
be approved by the Justice Department and the Federal Communications
Commission, chief executive Mel Karmazin said yesterday that the
company could survive without it. "In the unlikely scenario of a
merger not being approved, we believe we are fully funded. We believe
we are going to become a profitable company on a stand-alone basis,"
Karmazin said during a conference call with analysts.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR200802...
(requires registration)

WIRELESS/SPECTRUM

MARKEY BILL COULD FORCE APPLE, AT&T TO UNLOCK PHONE
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
House Telecom and Internet Subcommittee Chairman Ed Markey (D-MA) is
sponsoring a bill, the Wireless Consumer Protection and Community
Broadband Empowerment Act, that would direct the Federal
Communications Commission to establish a number of new rules for
wireless carriers. Among other things, those companies would have to
give abundant disclosure to their customers about their rate plans in
a "clear, plain, and conspicuous manner," breaking out the cost of
everything from early termination fees to state and local taxes for
the customer. Carriers would also be obligated to devise more
detailed maps of their network coverage areas. And they'd have to
permit customers to cancel a contract for any reason without penalty
within the first 30 days and to prorate any fees associated with
leaving a contract early. There will be a hearing on the bill this morning.
http://www.news.com/8301-10784_3-9879554-7.html?tag=nefd.top

PRYOR: FCC 'FOULED UP' SPECTRUM AUCTION
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen Mark Pryor (D-AK), a member of the Senate Commerce Committee,
told broadcasters Tuesday that House and Senate members from both
parties continued to be frustrated by Kevin Martin's chairmanship of
the Federal Communications Commission. In particular, Sen Pryor
called the 700-megahertz spectrum auction a disaster. "History will
show that the way the FCC structured the auction basically helped the
two big wireless companies [Verizon Communications and AT&T] to the
detriment of competition in this country," he said.
http://www.broadcastingcable.com/article/CA6535366.html?rssid=193

INTERNET/BROADBAND

GRASSROOTS SUPPORT? OR ASTROTURF?
[SOURCE: Portfolio.com, AUTHOR: Sam Gustin]
Comcast, the giant of the cable and broadband service industries,
hired people off the street to attend this week's Federal
Communications Commission hearing on Network Neutrality. Comcast
spokeswoman Jennifer Khoury said that the company paid some people to
arrive early and hold places in the queue for local Comcast employees
who wanted to attend the hearing. Some of those placeholders,
however, did more than wait in line: They filled many of the seats at
the meeting, according to eyewitnesses. As a result, scores of
Comcast critics and other members of the public were denied entry
because the room filled up well before the beginning of the hearing.
Craig Aaron, a spokesman for Free Press, one of the groups that filed
the complaint against Comcast, denounced the company's tactics. "The
sad thing about this is that literally hundreds of people who were
not paid to stand in line, or paid by their employer to attend, were
prevented from even entering the building," Aaron said. Such tactics
are not unheard of at congressional hearings in Washington, D.C., but
Comcast's critics said that they were inappropriate for a public
hearing on a college campus.
http://www.portfolio.com/news-markets/top-5/2008/02/26/Comcast-FCC-Heari...

* Free Press Accuses Comcast of Packing FCC Hearing
http://www.broadcastingcable.com/article/CA6535646.html?rssid=193
* Comcast Paid People to Pack FCC Hearing (Associated Press)
http://www.tvnewsday.com/articles/2008/02/27/daily.2/
* Will The FCC Save The Internet?
[SOURCE: Public Knowledge, AUTHOR: Art Brodsky]
[Commentary] At the Federal Communications Commission's extraordinary
hearing Feb. 25, FCC Chairman Kevin Martin said that companies can't
"arbitrarily block access to particular applications and services"
and that any such blockage must be done in a way transparent not only
to consumers but to applications developers. He said the Commission
was "ready, willing and able to step in" if it found such a situation
Comcast's David Cohen maintained that his company never blocked
access to any applications, that the company merely delayed some
traffic in periods of network congestion. In response to Martin's
call for transparency in network management, Cohen cited a new
disclosure policy on his company's Web site. If the Commissioners
were forced to negotiate a compromise on this crucial issue, there
certainly is enough wiggle room there for a mealy mouthed decision
finding that Comcast really didn't "block" any applications while
calling for network operators like Comcast, Verizon or AT&T to be
more vigilant and transparent in managing their networks. Such a
decision would overlook the reality that to delay traffic is a form
of blocking the use of an application or service, as consumers will
go elsewhere.
http://www.publicknowledge.org/node/1409

COMCAST FACES ANOTHER PEER-TO-PEER LAWSUIT
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
Comcast is the subject of another lawsuit, this time in Washington
D.C., alleging the operator falsely advertises that consumers will
get "unfettered access" to all Internet content. The potential
class-action suit, filed in Superior Court for the District of
Columbia, was filed for Dr. Sanford Sidner on behalf of himself and
other Comcast's D.C. Internet subscribers. The legal action is
similar to one filed last November in Alameda County, Calif, Superior
Court by a San Francisco Bay Comcast subscriber, Jon Hart. That suit
also seeks class-action status. Sidner, according to his attorneys,
Gilbert Randolph LLP, claims that his service frequently stops or
slows to a crawl when he uses file-sharing applications.
http://www.multichannel.com/article/CA6535644.html?nid=4262

BROADCASTING/CABLE

"60 MINUTES" GLITCH SPARKS CONSPIRACY THEORIES
[SOURCE: Reuters, AUTHOR: Paul J. Gough]
WHNT-TV, an Alabama TV station's outage during a "60 Minutes" segment
about the state's former governor has stirred speculation that the
blackout may have been politically motivated. The station's technical
troubles began at 6 p.m. CST, when "60 Minutes" began, and lasted for
12 minutes. The 13-minute report in question began about 6:05 p.m.
The outage raised eyebrows in Alabama and elsewhere, with some
bloggers claiming it was a deliberate attempt to keep the segment off
the air. CBS seemed satisfied that there was no hanky-panky. Another
CBS affiliate in Alabama, WAKA-TV in Montgomery, Ala., didn't report
any problems. Nor has CBS heard of any other stations with problems
during the broadcast.
http://www.reuters.com/article/televisionNews/idUSN2528426120080226
-- See also --
* Times Co. Agrees to Sell TV Stations to Equity Firm (01.05.07)
In January 2007, the New York Times Company agreed to sell WHNT-TV to
Oak Hill Capital Partners, a private equity firm.
http://www.nytimes.com/2007/01/05/business/media/05times.html
* New Station Super Group Reaches Half of U.S. (01.01.08)
In January 2008, in the wake of Sam Zell's purchase of the Tribune
Company, Tribune combined its own 23 television stations with the
nine stations owned by Oak Hill Capital Partners. And Tribune hired
Randy Michaels, a veteran Clear Channel executive, to run the new company.
http://www.tvnewsday.com/articles/2008/01/01/daily.2/
* Clear Channel veteran expected to play a big role at Tribune (12.20.07)
Most recently, Michaels has been chief executive of Local TV, a chain
of nine mid-size Midwestern television stations acquired in May with
the backing of Oak Hill Capital, a private equity firm run by Fort
Worth investor Robert Bass. Under Michaels, the chain has emphasized
live local newscasts as audience builders. Michaels, 55, last worked
for Zell at Jacor Communications Inc., a radio chain Zell bought in
1993 and sold at a huge profit in 1998 to Clear Channel
Communications Inc. He helped build Clear Channel into a network of
1,200 stations coast to coast. But he had also alienated record
companies by exploiting the company's market strength to build its
concert business, forcing the industry to do business with both
units. Critics also blamed him for homogenizing local radio, a
reference to Clear Channel's use of disc jockeys operating out of a
centralized location but projecting the impression that they were
locally based. Although Michaels helped implement the policy at Clear
Channel, it is not certain he originated it.
http://www.latimes.com/business/printedition/la-fi-michaels20dec20,1,524...
(requires registration)

DTV TRANSITION TOP OF MIND FOR HOUSE, SENATE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Oversight of the digital-TV transition will dominate the broadcast
legislative agenda in both the House and Senate, according to key
staffers from both houses and both sides of the aisle. Jessica
Rosenworcel, senior counsel on the Senate Commerce Committee, noted
concern that a Consumer Reports survey found that 74% of the people
who know anything about the transition have the information wrong.
She suggested making sure the message was right and that viewers got
the information would be the focus of a lot of legislative energy.
Rosenworcel also said the Senate will look at the issue of localism.
The FCC adopted a number of proposals, including creating community
advisory boards and reporting requirements. Rosenworcel praised those
efforts and said localism is what made broadcasting special and added
that congressional oversight would not necessarily translate to
"onerous new burdens."
http://www.broadcastingcable.com/article/CA6535502.html?rssid=193

COURT REVERSES FIELD ON NFL, COMCAST RULING
[SOURCE: MediaWeek, AUTHOR: Anthony Crupi]
NFL Network on Tuesday scored a win over Comcast, as a New York State
appellate court reversed an earlier ruling allowing the cable
operator to shift the channel to a premium sports tier. The appeals
court overturned the May 2007 ruling by a state Supreme Court
justice, concluding that the original carriage agreements between
Comcast and the NFL "are ambiguous with respect to the scope of the
tiering provision," adding that "neither party has established that
its interpretation of the relevant contracts is correct as a matter
of law." In a 14-page judgment, the appellate court panel remanded
the matter to the lower court, arguing that certain ambiguities in
the language of the carriage agreements will have to be untangled
before a final ruling can be handed down.
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=10037...

GOVERNMENT & COMMUNICATIONS

IN WIRETAP LAW'S STEAD, UNCERTAINTY
[SOURCE: New York Times, AUTHOR: Eric Lichtblau]
All last week, intelligence officials fielded calls from nervous
lawyers for the country's phone companies. With a wiretapping law
allowed to lapse in Congress, they were no longer certain what they
were supposed to do when the government came to them with a
wiretapping order, administration officials said. "They're raising
questions, and they're saying, 'Look, we've got an expired piece of
legislation,' " recounted a senior administration official who was
involved in the conversations. "It's not crystal clear." President
Bush and his senior aides have been warning for the last 10 days that
the country was left more vulnerable by the expiration of the
surveillance law on Feb. 16, and said last week that the government
had already lost valuable counterterrorism intelligence because of
Congressional inaction. But as a practical matter, the issue is less
about harm that has actually been done than about the prospect that
such harm will be done because of uncertainty in the government and
the telecommunications industry over what is now allowed, officials
involved in the discussions say. Even with the law lapsed,
intelligence officials continue to be able to put wiretaps on
terrorism and espionage suspects under directives that were approved
before the expiration of the six-month law, the Protect America Act,
which gave the government a freer hand in deciding whom to wiretap
without court approval.
http://www.nytimes.com/2008/02/27/us/27fisa.html?ref=todayspaper
(requires registration)

LIBERAL DEMS SEEK SECRET FISA SESSION
[SOURCE: The Hill, AUTHOR: Mike Soraghan]
Liberal House Democrats are pushing for a closed session to discuss
the legal underpinnings of President Bush's intelligence surveillance
program. They believe that the more members know about it, the less
likely they will be to support Bush's wish to make it permanent. "I
haven't heard anything in closed session that makes me think we need
the Protect America Act," said Rep. Rush Holt (D-N.J.), an
Intelligence Committee member, referring to a White House-backed
interim wiretapping bill that lapsed this month. "Or that FISA [the
Foreign Intelligence Surveillance Act], with modest modifications,
isn't the way to go into the future." The request for the closed
session came in a letter coauthored by Holt and Reps. John Tierney
(D-MA) and Jan Schakowsky (D-IL) to Speaker Nancy Pelosi (D-CA).
http://thehill.com/leading-the-news/liberal-dems-seek-secret-fisa-sessio...

GOP HALTS EFFORT TO RETRIEVE WHITE HOUSE E-MAILS
[SOURCE: Washington Post, AUTHOR: Dan Eggen]
After promising last year to search its computers for tens of
thousands of e-mails sent by White House officials, the Republican
National Committee has informed a House committee that it no longer
plans to retrieve the communications by restoring computer backup
tapes. The move increases the likelihood that an untold number of RNC
e-mails dealing with official White House business during the first
term of the Bush administration -- including many sent or received by
former presidential adviser Karl Rove -- will never be recovered.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR200802...
(requires registration)
* Politicos squabble over 'missing' White House e-mails
[SOURCE: C-Net|News.com, AUTHOR: ]
http://www.news.com/8301-10784_3-9879344-7.html?part=rss&subj=news&tag=2...

CRIPPLING OPEN GOVERNMENT
[SOURCE: Washington Post, AUTHOR: Editorial staff]
[Commentary] Practically every state in the nation has a law that
eases access to public records and documents, a godsend for
researchers, public advocacy groups and ordinary citizens, not to
mention lawyers and journalists. Those laws, modeled on the federal
Freedom of Information Act, have been mainstays of open and
transparent government for several decades. That's why legislation
pending in Maryland to cripple the state's Public Information Act is
so singularly dimwitted.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR200802...
(requires registration)

ELECTIONS & MEDIA

IN NEW-MEDIA WORLD, EVERYONE IS SOUNDING LIKE A BELTWAY INSIDER
[SOURCE: Wall Street Journal, AUTHOR: Lee Gomes]
This election year, anyone can be a campaign expert. As it does with
so much else, the Web is democratizing the knowledge that in an
earlier era had been possessed by a small group of political
professionals. Riding around in a rowdy bus; knocking back bourbon in
smoke-filled rooms. All that is so 1972. This year, anyone with the
right browser bookmarks can be a political insider. While all good
reporters have their own sources, they also share the same daily
reading list. Most start with the big national papers, though you can
skip those and head right for a site like "the Note" at ABCNews.com
and "First Read," via MSNBC. NationalJournal.com is an obligatory
stop by news junkies, and newsflashes are available at CNN's
Political Ticker. RealClearPolitics.com shows a list of what its
editors consider to be the leading stories. You can also link there
to the latest polls, or flip to similar information at pollster.com.
Another aggregator of political news, memeorandum.com, uses a
Google-style algorithm to determine the big political story of the hour.
http://online.wsj.com/article/SB120407122909394981.html?mod=todays_us_ma...
(requires subscription)

SAM'S CLUB: ZELL SAYS ECONOMICS WOES CAUSED BY...OBAMA AND CLINTON
[SOURCE: Editor&Publisher]
Speaking on CNBC's "Squawk Box" on Tuesday, new Tribune Co. owner Sam
Zell attributed much of the current economic woes to fear-mongering
by Democratic foes Hillary Clinton and Barack Obama. "Obviously what
we have going on is an attempt to create a self-fulfilling prophecy,"
said Zell. "We have two Democratic candidates who are vying with each
other to describe the economic situation worse."
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...

QUICKLY

EU FINES MICROSOFT RECORD $1.35 BILLION
[SOURCE: Reuters, AUTHOR: David Lawsky]
The European Commission fined Microsoft a record 899 million euros
($1.35 billion) on Wednesday for defying sanctions imposed on the
software giant for antitrust violations, far exceeding the original
penalty. The Commission, executive arm of the European Union, has now
fined Microsoft 1.68 billion euros for its original violation and for
failing to comply with sanctions, more than any other firm. It said
no other company had ever ignored sanctions.
http://www.reuters.com/article/technologyNews/idUSL2775856920080227

SLOWER SALES ARE EXPECTED FOR TV SETS
[SOURCE: Wall Street Journal, AUTHOR: Mary Ellen Lloyd
maryellen.lloyd( at )dowjones.com]
TV sales are expected to decelerate this year, even though millions
of households haven't yet switched from bulky, cathode-ray-tube TVs
to sets with improved picture technology and, typically, thinner
profiles. Much of the expected slowdown is a hangover from 2006, when
excess supply heading into the holidays triggered sharp price cuts in
digital TVs that were too good to pass up for many Americans, pulling
sales forward. But demand in 2007 and this year also weakened amid
consumer fears over a possible U.S. recession and tightening credit,
according to several industry research firms and brokerages that
recently finished crunching sales data from last year.
http://online.wsj.com/article/SB120408289376595901.html?mod=todays_us_pe...
(requires subscription)

APPLE'S iTUNES GROWS TO NO. 2 US MUSIC RETAILER
[SOURCE: Reuters, AUTHOR: Michele Gershberg and Kenneth Li]
Apple Inc's iTunes digital media store edged out Best Buy Co and
Target Corp to become the second-largest U.S. music retailer, behind
Wal-Mart Stores, according to data released on Tuesday from tracking
firm NPD Group. Based on 2007 sales, legal music downloads now
account for 10 percent of music acquired in the United States, but
the increase failed to offset a decline in physical CD sales, NPD
said. The iTunes store now has more than 50 million customers and has
sold more than 4 billion songs.
http://www.reuters.com/article/internetNews/idUSWNAS243320080226
* More teenagers ignoring CDs, report says
[SOURCE: Los Angeles Times, AUTHOR: Michelle Quinn and Andrea Chang]
48% of teenagers bought no CDs at all in 2007, up from 38% in 2006.
Music downloads continue to grow, though, with iTunes leading the way.
http://www.latimes.com/business/printedition/la-fi-music27feb27,1,275859...
(requires registration)
--------------------------------------------------------------
Communications-related Headlines is a free online news summary
service provided by the Benton Foundation (www.benton.org). Posted
Monday through Friday, this service provides updates on important
industry developments, policy issues, and other related news events.
While the summaries are factually accurate, their often informal tone
does not always represent the tone of the original articles.
Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
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