May 2010

Genachowski: FCC Should Not Dictate Programming

The Federal Communications Commission will be an "active partner" in supporting public media as one response to a crisis in journalism, says FCC Chairman Julius Genachowski, but he also said that "this agency cannot and should not dictate programming."

Saying that whatever the FCC does, it must be "in the full spirit of the First Amendment," the chairman added that "nothing should ever be done to hobble the independence of the press." That came in opening remarks from the chairman at a daylong workshop on the future of "Public and Other Noncommercial Media in the Digital Era," the commission's second workshop in its ongoing review of the future of media. Chairman Genachowski said several seismic shifts were occurring simultaneously, prompting profound change in both noncommercial and commercial media. He said those changes have disrupted models of journalism and threatened to create a crisis for democracy. He also said it was not about preserving the journalistic industry or journalist's paychecks, but about the citizen's access to local news and information. Commissioner Michael Copps called it a great day, with as impressive a group as had ever been assembled at the FCC--it included the heads of CBP and PBS. Commissioner Copps said there were two problems: the "very immediate" challenge facing traditional media "on life support, where there is still life." The second, he said, was the future of online media. But he said they were actually one challenge: "Making sure that we have the information infrastructure that provides citizens what they need to know so they can make intelligent decisions about their future." He called public media the jewel of American broadcasting, and said it was amazing what they did with the "poverty" of funding for the system.

The Fourth Challenge

On April 30, the Federal Communications Commission's Blair Levin spoke at a forum at the Stanford Institute for Economic Policy Research at Stanford University about how to realize the transformative power of broadband.

He noted that, in preparing the National broadband Plan, his team at the FCC learned that certain sectors face significant obstacles in reengineering processes to fully realize the benefits of broadband. It could be that time will solve that problem, and it may, but we need to recognize the enormous potential cost. Competitive markets, he said, will play the primary role in driving enterprises, both public and private, to take advantage of the opportunities broadband creates. So the FCC targeted areas where it thought government could effectively act to improve the competitiveness of a market. "If we are to change the way America does business," Levin said, "we need to realign our processes for the possibilities of broadband." In many cases, outdated, misguided regulations are hindering the development of broadband applications for our most critical national priorities. Benefits aren't online; government data is rarely online; few policy processes engage the public the way ours did; our public safety networks still don't utilize broadband capability. Changing outdated rules is part of what we need to do to address this fourth challenge. But the bigger part of that challenge is refocusing our public dialogue on how to seize the future.

AT&T channels -- the devil? -- in explaining why net neutrality debate is over the top

AT&T thinks supporters of net neutrality are crying wolf -- or Satanic light bulbs. It's pointing to extreme "what ifs" that could occur if the Federal Communications Commission doesn't create rules that would require companies like it to treat all traffic equally on the Web. But it says there aren't enough examples of wrongdoing to justify those fears. And the company wonders whether rules would justify what they describe to this point as mostly fears. Companies such as Google and public interest groups disagree. They point to a handful of examples of discrimination by broadband service providers that advantage their businesses unfairly. And they say rules today would protect the growth of Internet applications. Google said in a recent filing to the FCC that AT&T blocked Slingplayer on its network even after the mobile video provider configured its application so that it wouldn't eat up too much bandwidth. Back to Satan. In a blog post today, AT&T's vice president of federal regulatory affairs, Hank Hultquist, compared those fears to a fear-mongering tactic decades ago used to drum up support for a weak cause.

Net neutrality: would it have killed the iPhone?

Now here's an interesting claim: had network neutrality been the law of the land several years back, we might not have the iPhone. It's an idea buried in Bret "Exacloud" Swanson's recent comments to the Federal Communications Commission on net neutrality.

"The Apple iPhone may never have emerged if we had blocked or discouraged the type of 'exclusive,' 'discriminatory' deals like the one Apple (a new entrant to the mobile market) struck with AT&T," writes Swanson. "Apple's entry was a move fraught with uncertainty, and the partnership with AT&T allowed both sides to make the investments of time and money necessary to execute a monumental project. The iPhone unleashed wave after wave of innovation in the mobile arena -- like 'app stores' -- thus pushing all competitors at many layers of the wireless value chain towards more dynamism and openness than ever before." What does this mean? We're not sure, Swanson doesn't spell out his concern. It might be about the third plank of the Internet Policy Statement, which says that "consumers are entitled to connect their choice of legal devices that do not harm the network." Under the new FCC rulemaking, this principle could be extended to wireless networks.

After reporter's subpoena, critics call Obama's leak-plugging efforts Bush-like

The Justice Department's decision to subpoena a New York Times reporter this week has convinced some press advocates that President Obama's team is pursuing leaks with the same fervor as the Bush administration.

James Risen, who shared a Pulitzer Prize for disclosing President George W. Bush's domestic surveillance program, has refused to testify about the confidential sources he used for his 2006 book "State of War: The Secret History of the C.I.A. and the Bush Administration." "The message they are sending to everyone is, 'You leak to the media, we will get you,' " said Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press. In the wake of the Bush administration's aggressive stance toward the press, she said, "as far as I can tell there is absolutely no difference, and the Obama administration seems to be paying more attention to it. This is going to get nasty." Kurt Wimmer, a Washington lawyer who helped win White House approval for a proposed federal shield law, called the move against Risen "disappointing" after "we had positive discussions with the Obama administration" on the need to give journalists a legal foundation for protecting their sources in most cases.

Online advertisers scale back targeted ads amid privacy complaints, study finds

Online advertisements that target users' browsing histories may be more effective, but many companies are now scaling back those ad campaigns to avoid public backlash, according to a new study.

A report by the Ponemon Institute, released this week, finds that most companies agree online behavior-based advertisements are 50 percent more effective than standard, run-of-the-mill ad campaigns. However, these advertisers are using these behavior-based ads 75 percent less than they would prefer, the study notes. Those fears seem to stem in part from the growing number of interest groups pushing lawmakers and federal officials to regulate targeted ads. Three in particular -- the U.S. PIRG, Center for Digital Democracy and the World Privacy Forum -- even urged the Federal Trade Commission in early April to probe whether Google, Yahoo and others are wrongly tracking or profiting from users' online behavior.

Google's AdMob Purchase Said to Be Opposed by U.S. FTC Staff

Apparently, Federal Trade Commission staff are urging the filing of an antitrust suit challenging Google's $750 million acquisition of AdMob.

It will be up to the five-member commission to decide whether to follow the staff's advice or approve the deal. The FTC staff signaled last month it was leaning toward urging a court challenge when it was disclosed the agency was seeking sworn declarations from Google's competitors and advertisers. The concern is that Google, owner of the world's most popular web search engine, would reduce competition in the market for advertising on mobile phones. AdMob sells ads that appear on web pages and applications on mobile phones. Google's purchase of AdMob would form the largest mobile- advertising company. The companies combined had 21 percent of the U.S. market in 2009, according to Karsten Weide, an analyst with researcher IDC in San Mateo. The market has been doubling or more in size annually, Weide said.

Lawmakers ask FTC for briefing, inquiry on Google-AdMob deal

Lawmakers on the House Commerce Committee are prepared to wade into federal regulators' ongoing review of Google's proposed purchase of AdMob, a mobile advertising firm. As the Federal Trade Commission reportedly readies a legal team to challenge that deal, five committee Democrats and Republicans asked the panel on Friday to brief them soon on Google's attempted $750-million buy, which critics say could threaten competition in the neophyte mobile ad industry. The letter heavily references criticism levied by Sen. Herbert Kohl (D-WI), the chairman of the Senate subcommittee that chiefly handles anti-trust issues, who wrote the FTC in April to point out potential, "important competition issues." Kohl, however, stressed at the time he had not yet formed a final opinion on the deal. Lawmakers' latest letter, dated Friday, specifically questions whether the "combined company" could eventually come to control "a substantially greater share of such advertising than its closest competitor." They also asked the FTC to note whether the transaction would further boost Google's dominance in the online advertising world, and whether that could result in higher prices for advertisers or lower revenue for Google's chief competitors, especially in the mobile ad world.

Comcast-NBCU Paranoia Pervades Affiliates

[Commentary] Television station owners affiliated with NBC are nervous about the proposed merger with Comcast. They believe that a Comcast-controlled NBC is more likely to go direct to cable, cutting them out of distribution chain. Imagine how impotent an NBC affiliate would be in retransmission negotiation with Comcast if it knows that the cable operator could steal its affiliation.

The NBC affiliates fears pale against those of the ABC, CBS and Fox affiliates. For the past few months, they have been sitting around compiling lists of all the terrible things that could happen if they end up having to compete against an NBC O&O or affiliate working in cahoots with the local Comcast cable system.

Like what? Well, the system and NBC station could join together in selling local spots, even going so far as to merge sales forces.

Or, they could cross-promote. Comcast could use its bottomless well of local avails to promote the NBC station's programming -- local, syndicated and network.

Or, the Comcast system could enable the NBC station to offer zone advertising so it could target different ads to different neighborhoods.

Or, the Comcast system could enable the NBC station to offer interactive advertising by giving the station a return path through the set-top box.

Or, the Comcast system could give the NBC station exclusive access to set-top box viewing data for use in sales.

Or, the Comcast system could give the NBC station prime channel positions for its multicast channels, putting them adjacent to the other broadcast channels rather than, say, the World Fishing Network on Ch. 317. Or, the Comcast system could insure that the NBC station had the prettiest picture in town by not compressing its signal. It could also carry multicast channels in HD, even if they are not broadcast in HD.

Or, the Comcast system could cut a sweetheart retrans deal with its NBC station partner in which it would get carriage for next to nothing. Such a deal would put downward pressure on retrans fees throughout the market.

Qwest Sued Over $10 Billion CenturyTel Takeover

Qwest was sued by shareholders seeking more money in a planned $10 billion stock-swap acquisition by CenturyTel. Qwest investors Lorrieann Martin and Mark Respler asked a judge to halt the takeover and award damages in a complaint filed in Delaware Chancery Court in Wilmington. Given Qwest's financial prospects, selling the company at a "relatively low current trading price in a recession-depressed market raises serious red flags" about whether directors are maximizing shareholder value, according to the complaint.

Benton

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