June 2010

Tribune bankruptcy judge orders info from JPMorgan

The judge in the Tribune Company's bankruptcy case has ordered JPMorgan Chase to turn over information sought by a group of lenders who oppose the company's reorganization plan. The lenders told the judge Wednesday that JPMorgan should provide the names and addresses of current holders of Tribune's credit agreement debt, and a list of payments Tribune made under the credit agreement before filing for bankruptcy in 2008. The lenders want to use the information in part to try to rally opposition to Tribune's reorganization plan.

Local Broadcasters Bullish at SNL Kagan Conference

Local broadcasters are clearly enjoying station television's economic rebound. SNL Kagan forecasted that 2010 broadcast retransmission consent revenue would be $1.09 billion -- well ahead of 2009's $762 million.

The $1.36 billion forecasted for 2011 had them even more optimistic. Retransmission dominated much of the morning discussions. CBS Executive VP and CFO Joseph Ianniello discussed CBS's increasingly vigorous retransmission gameplan in his opening keynote at the Millennium Hotel, including pushing for half of affiliates' retrans earnings. Asked about bypassing the affiliates altogether and going straight to the cable, satellite and telecom TV operators, he said the network has no interest in cutting out its local partners. "We're not looking to shrink the ad pie," he said. SNL Kagan research showed that CBS will tally around $100 million in retrans in 2010. Its 209% retrans increase from 2008 to 2009 was well above the industry average.

Knight Foundation Announces Winners of 2010 News Challenge

Twelve media innovation projects have been named the 2010 winners of the Knight News Challenge, a contest that funds ideas that use digital technology to inform specific geographic communities. The winners will receive $2.74 million as part of the fourth round of the five-year international contest. Among the winning ideas are two easy-to-use tool sets for journalists and bloggers to illustrate raw data visually - one of the most promising new areas of digital journalism. One project (Tilemapping) was field-tested in Haiti, to map where aid was needed after the earthquake.

US Hampered in Fighting Cyber Attacks, Report Says

The US government's ability to counter cyber attacks against its nonmilitary computer systems is largely ineffective, according to a report from an internal watchdog to be released June 16.

The Homeland Security Department branch that monitors cyber attacks can't force other agencies to protect their systems, is woefully understaffed and its ability to manage responses to cyber attacks has been hindered by constant turnover, said the department's inspector general. The department's U.S. Computer Emergency Readiness Team, known as US-CERT, also withheld data from other federal agencies that could have helped them address security breaches, the report found. The team "is still hindered in its ability to provide an effective analysis and warning program for the federal government in a number of ways," according to congressional testimony outlining the report from Inspector General Richard Skinner.

Cybersecurity legislation looks likely to pass this year

Lawmakers on the Senate Homeland Security and Governmental Affairs Committee appear confident their recently unveiled comprehensive cybersecurity legislation will pass the Senate this year, despite the Administration's refusal to endorse the bill at a hearing on June 15.

At a hearing to discuss the Protecting Cyberspace as a National Asset Act of 2010 on Tuesday experts testified the bill would significantly upgrade the federal government's approach to protecting its networks. Sen. Joe Lieberman (I-CT), who sponsored the bill with Sens. Susan Collins, (R-Maine) and Thomas Carper (D-Delaware) said he has scheduled the bill for a markup next week and he anticipates reporting it to the Senate floor before the July 4 recess. The hearing turned briefly contentious when Sen. John McCain, (R-AZ) questioned Philip Reitinger, deputy undersecretary of the National Protection and Programs Directorate at DHS, on the nature of denial of service attacks launched against the nations of Estonia and Georgia last year. Reitinger refused to attribute the attacks despite widespread media reports that they originated in Russia, causing McCain to shake his head in disbelief. Sen McCain also expressed doubt that DHS is the ideal choice to take the lead on civilian cybersecurity. "After DHS' handling of the Christmas bomber, I am not confident that DHS at this particular time is the proper bureaucracy to work in partnership, particularly with the Department of Defense," Sen McCain said.

House Homeland Security Intelligence Subcommittee Chairwoman Jane Harman (D-CA) and ranking member Peter King (R-NY) said Wednesday they plan to introduce legislation soon that mirrors a sweeping cybersecurity bill recently introduced in the Senate, which would give the government emergency authority to take critical information technology systems offline in dire situations when no other option is available.

Has The Cyberwar Threat Been Exaggerated?

As succeeding presidential administrations and leaders in the Pentagon devote increasing resources to defending U.S. computer networks and planning for potential cyber warfare, some observers are questioning whether the cyber threat has been overstated.

While risks do exist, they say, most of them don't truly rise to the level of war. And framing the debate in war terms could provide justification for the U.S. intelligence community to assert greater authority over what people can do on the Internet, they argue. But those who warn of the country's cyber vulnerabilities argue that criminals, hackers and other nations pose a great threat to disrupt and destroy the data networks the U.S. relies on so heavily — and strong defenses are essential.

A governmentwide cybersecurity purchasing contract gains converts

Security experts inside and outside government are becoming more convinced that the federal government must develop contracting programs that provide agencies with the ability to buy cybersecurity tools and services quickly to fend off ever-evolving and sophisticated threats.

There is no department that better illustrates the problem than the Defense Department. Currently, Defense takes an average of 81 months -- nearly seven years -- to develop an IT program from its initial funding to when it becomes operational, making systems four to five generations old by the time they are turned on, said Deputy Secretary William Lynn during a military symposium on cyberspace in May. At the meeting, he announced the formation of a task force that will look into speeding the IT acquisition process. But such a long development and purchasing cycle makes it difficult to secure computer systems against cyberattacks that can develop almost instantaneously. "The challenge we have in the cyber world is that adversaries are acting on a faster time frame -- days or hours, not months or years," said Don Proctor, a senior vice president at Cisco and leader of its cybersecurity task force in the Office of the Chief Executive Officer.

Consumer advocates urge FCC to investigate wireless Lifeline benefits

Low-income wireless telephone customers receiving benefits through the federal Universal Service Fund (USF) may not be saving enough. In a resolution adopted this week by the National Association of State Utility Consumer Advocates (NASUCA), the Federal Communications Commission was asked to consider establishing a minimum standard to ensure adequate value is provided to recipients of wireless Lifeline benefits.

Lifeline is a federal program designed to make local telephone service more affordable and accessible to residential consumers. The FCC and state regulators have permitted an increasing number of wireless companies to tap into the USF to offer Lifeline benefits. While federal rules define specific levels of landline discounts for eligible low-income customers, there are not required benefit levels for wireless programs. A minimum number of monthly minutes and a maximum price of additional minutes available for purchase are samples of benefits that could be provided. "Wireless companies should be required to show that those paying into the fund - including residential ratepayers - are getting their money's worth," said Mary Healey, president of NASUCA and consumer counsel for the state of Connecticut. "Federal and state regulators should ensure benefits offered to low-income wireless customers are at least equal to the level of funding paid by all customers into the Universal Service Fund." "With millions of dollars of ratepayer money at stake, it is in consumers' best interests that minimum guidelines be enacted to ensure wireless benefits are adequate and only eligible customers are receiving free handsets and monthly allotments of minutes," said David Bergmann, chairman of the NASUCA telecommunications committee. "As described in the resolution, other aspects of these so-called 'Lifeline-only' carriers also deserve explanation." Bergmann is also an assistant consumers' counsel with the Office of the Ohio Consumers' Counsel.

AT&T Rethinks U-Verse Spending After FCC Move

AT&T could cut back spending on its U-Verse home television and Internet service if the Federal Communications Commission goes forward with its plan to tighten regulation on broadband Internet providers.

AT&T says that investment could be cut short due to fears the new regulation could change the economics of the industry. "If this Title 2 regulation looks imminent, we have to re-evaluate whether we put shovels in the ground," AT&T Chief Executive Randall Stephenson said. AT&T isn't threatening to roll back capital spending on its wireless network, the core of its business. U-Verse, AT&T's answer to the cable industry's TV, Internet and phone packages, had 2.3 million subscribers at the end of March, up 231,000 from a year earlier. The carrier doesn't break out how much capital it spends on U-Verse in particular, but Stephenson says it is a "couple billion" dollars a year. AT&T has said that it plans roughly $19 billion in capital expenditure this year on its wireless and wireline networks combined. The FCC recently said that it is planning to bring broadband providers under Title 2 regulation, which comes with a stronger set of rules than what Internet providers have to abide by now.

Derek Turner, Free Press research director, said, "AT&T has no credibility on investment, and this latest threat is further evidence of that. The company continues to cry wolf about investment to pressure the FCC into doing its bidding, while it fails to deliver on key promises. In 2002, the company (operating as SBC) promised the Commission that it would invest billions to deploy fiber-to-the-home technology if the FCC gave it specific deregulatory favors. AT&T got exactly what it wanted, but the company has yet to deliver on its investment promise. This latest threat is just more of the same."

West Virginia to Build State Wide Fiber Network

In March, West Virginia was awarded $126 million from the Broadband Technologies Opportunities Program.

The federal money was granted to create a statewide high-speed broadband network of 45mbps down, for all public schools, libraries, health-care facilities and fire and police departments. West Virginia's Commerce Secretary Kelly Goes said "After we get the system working smoothly in that first county, we're going to wire everything that needs it in every county, statewide." Governor Joe Manchin said in 2007 that the state would be wired, and thus this process began long before there was even a thought of a federal grant. The state was the only grantee to be given funds to create a state wide network while most others have local or county networks. "If we can use the broadband stimulus dollars to overbuild fiber optic capacity in the communities, then that extra capacity can be expanded to the community in the future," Kyle Schafer, chief technical officer for the project said, "That's the intent. It will be a real selling point for new businesses and new residents who want to work from home." $40 million of the stimulus money will be used to build 12 broadband towers to the state's existing 83 towers; $40 million will pay Verizon Business Services to lay fiber optic cable to 1,064 public facilities and provide access to global networks.

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