September 2010

Bernstein Research says the cable and satellite industries face a "new normal" of years, perhaps decades, of reduced discretionary consumer spending -- at least compared to the boom times that preceded the economic meltdown. That could make price increases for cable and satellite service problematic. In a weekend report, senior analyst Craig Moffett pointed to the recent finding that pay subs had declined for the first time in recorded history and said that it was likely more than just the downturn in new housing. "Perhaps the most consistent theme in our research over the past two years has been the widening disconnect between flat-to-declining consumer disposable income, particularly in the bottom two quintiles of household income, and the rising price of media and telecommunications services," he wrote. Moffett indicated that the price of programming and retransmission-consent have helped boost the cost of expanded basic to $60 "at a time when the average family in the bottom quintile spends just $50 per month on all media."

Top U.S. officials, including Federal Communications Commission Chairman Julius Genachowski and Ambassador Philip Verveer, U.S. coordinator for communications and information policy, met with a Chinese delegation in Washington on Sept 7 for the fourth round of the US-China Information and Communication Technology Consultations to discuss network neutrality, the Internet Corporation for Assigned Names and Numbers (ICANN), and the affirmation of commitments.

Chairman Genachowski spoke extensively about the National Broadband Plan and the core principles of an open Internet. "The Chinese agree with us on some of the cyber security issues," Ambassador Verveer said, citing one of the positive outcomes of the meeting. Cybersecurity is one of the issues that will be addressed in the next International Telecommunication Union's (ITU) Plenipotentiary Conference, which will be held in Mexico this October. The conference is the top policy-making body of the ITU.

During the past decade, the Internet has become an important news source for the majority of Americans. According to a study conducted by the Pew Internet and American Life Project, as of January 2010, nearly 61% of Americans got at least some of their news online in a typical day. This increased reliance on the Internet as a source of news has coincided with declining profits in the traditional media and the shuttering of newsrooms in communities across the country.

Some commentators look at this confluence of events and assert that, in this case, correlation equals causation - the Internet is harming the news business. One explanation for the decline of the traditional media that some, including News Corporation owner Rupert Murdoch and Associated Press Chairman Dean Singleton, have seized upon is the rise of the news aggregator. According to this theory, news aggregators from Google News to The Huffington Post are free-riding, reselling and profiting from the factual information gathered by traditional media organizations at great cost. Murdoch has gone so far as to call Google's aggregation and display of newspaper headlines and ledes "theft." As the traditional media are quick to point out, the legality of a business model built around the monetization of third-party content isn't merely an academic question - it's big business. Revenues generated from online advertising totaled $23.4 billion in 2008 alone.

But for all of the heated rhetoric blaming news aggregators for the decline of journalism, many are still left asking the question: are news aggregators violating current law? This white paper attempts to answer that question by examining the hot news misappropriation and copyright infringement claims that are often asserted against aggregators, and to provide news aggregators with some "best practices" for making use of third-party content.

Until recently, Internet providers like Myakka Technologies were the low men on the totem pole. Based in the unincorporated eastern Manatee County community of Myakka City, which has no stoplight to its name, this little company has only been able to exist because the big players -- Verizon, Comcast and Bright House -- had no interest in providing high-speed Internet service to the low-density rural byway. But something big just happened for Myakka Technologies, the same thing that happened to tiny Indiantown Telephone Co. in Martin County, on Florida's east coast. The federal government came to the rescue with dollars from the economic stimulus designed to pay for beefing up country folks' ability to access broadband. Indiantown, with the federal financing, is already going all-fiber in western Martin. Following closely on its heels, Myakka Technologies is now completing the paperwork on an $8 million government award and loan that will give this rural area -- it is roughly equidistant from Bradenton and Sarasota -- one of the speediest Internet networks in the nation.