October 2010

Televisa to Take Stake in Univision

Apparently, Mexican media giant Grupo Televisa SAB will pay $1.2 billion to help recapitalize Univision Communications, Inc. and gain a minority stake in return, ending years of acrimony between the world's two biggest Spanish-language broadcasters.

Televisa will pay $130 million for a 5% stake. The rest would be convertible debt equivalent to 30% of Univision shares, with a 15-year maturity. Televisa would also have the right to buy an additional 5% of Univision at market prices in five years time. All told, the Mexican broadcaster would have the rights to buy up to 40% of Los Angeles-based Univision, if all its debentures are converted. US law, however, currently prohibits a foreign broadcaster from owning more than 25% of U.S. broadcasters.

Emerging Telecoms in $6.5 Billion Deal

Russian wireless operator VimpelCom Ltd. agreed to buy the telecommunication assets of Egyptian billionaire Naguib Sawiris in a $6.5 billion stock-and-cash deal, transforming two emerging-markets companies into a global giant.

VimpelCom is buying Mr. Sawiris's 52% stake in Orascom Telecom Holding SAE, a major wireless provider in the Arab world, and Italian carrier Wind Telecomunicazioni SpA. For VimpelCom, the deal doubles its number of subscribers to about 175 million, making it the world's fifth-largest mobile operator by that measure. One major roadblock is Orascom's Algerian unit, Djezzy, which the Algerian government has prevented from being sold in the past. Russian President Dmitry Medvedev and VimpelCom executives are flying to Algeria this week as part of an investment conference, and the company is expected to reiterate that foreign direct investment is in the interest of Algerian officials. The risks of problems in Algeria are already reflected in the stock price, and international treaties would prevent the state from nationalizing Orascom's assets there without paying a fair price, VimpelCom executives said.

New kids' TV channel raises product-placement concerns

Hub, a channel aimed at kids that launches Sunday, is co-owned by cable giant Discovery Communications Inc. and Hasbro Inc., the nation's No. 2 toy maker.

The Hub is already in the crosshairs of media watchdogs who fear the network's programming, with shows based on toy lines G.I. Joe, Transformers, My Little Pony and Pound Puppies, amounts to little more than plugs for Hasbro products. "The notion of a toy company owning a television channel for the sole purpose of promoting their toys is egregious practice," said Susan Linn, director of the Campaign for a Commercial-Free Childhood, which has emerged as one of the Hub's harshest critics. Linn acknowledged that she had yet to see any of the network's new shows. Whether the network's ties to Hasbro will lead to greater scrutiny from lawmakers and regulators remains to be seen. The Federal Communications Commission limits the number of commercials aired during shows aimed at children ages 12 and younger. And during shows based on a toy or game, the FCC bars advertisements for that toy or game. Looking to ease an outcry, the Hub plans to carry six minutes of commercials per hour in shows aimed at preschoolers, well below the FCC's limit of 12 minutes on weekdays and 10.5 minutes on weekends.

Telecom firms' donations to minority groups criticized as FCC considers network neutrality rules

Some leading minority advocacy groups long have supported AT&T Inc., Comcast Corp. and other major telecommunications firms in the industry's efforts to win approvals for mergers, get rid of old regulations and avoid new government rules. And the telecom firms, in turn, have poured millions of dollars of donations and in-kind services, including volunteer help from the carriers' executive suites, into charitable groups in the communities they serve.

Consumer and public advocates used to whisper about the possibility of conflicts of interest, but now they are openly critical as the battle heats up over proposed federal regulations over net neutrality, the principle that Internet service providers should not restrict content, programs and other uses on their networks. Key minority groups are backing the carriers' efforts to thwart the net neutrality proposals, which would, for instance, prohibit carriers from charging more to give some residential and corporate customers priority in delivering online content.

"When you give national civil rights groups millions of private dollars, there's no firewall strong enough to keep that money out of their policy," said Malkia Cyril, executive director of the Center for Media Justice. Cyril and other consumer and public advocates have been buoyed by comments from Federal Communications Commission member Mignon L. Clyburn, a prominent African American and daughter of Rep. James E. Clyburn (D-SC). She said in a speech in January that she was surprised that most statements and filings by "some of the leading groups representing people of color have been silent on this make-or-break issue" of net neutrality.

An undeclared war in cyberspace

[Commentary] For advanced industrial nations, cyber-warfare is simultaneously a huge opportunity and a huge threat. Targeted cyber-attacks, such as those aimed at Iran, offer the chance to disrupt an enemy's industrial and military capacities. But western officials are also having nightmares about the vulnerabilities of their own societies.

Senior western officials claim they've had success disrupting the Iranian nuclear program -- could it have been a state-sponsored cyberattack? The Iranian government complains that it has been hit by "electronic warfare" in the form of the Stuxnet virus that has infected more than 30,000 computers in their country. But computer experts seem pretty sure that something as complex as Stuxnet could only have been designed by a state. Early speculation centered around Israel. But, in truth, there are several intelligence agencies that have the capacity and motive to make life difficult for Iran's nuclear scientists. This year, the US set up a Cyber Command to defend its networks and to plan attacks.

For the moment, the western powers probably do still have the upper hand in cyberspace. But one day, the tables may turn. The first we may know of it is when our cashpoints refuse to co-operate, our traffic lights go on the blink and our computers shut down.

Group seeks companies' pledge not to use corporate money for campaigns

Several prominent Democratic politicians announced a new coalition aimed at pressuring major companies not to use corporate money for political campaigns.

The Coalition for Accountability in Political Spending, spearheaded by New York City Public Advocate Bill de Blasio (D), aims to secure promises from major corporations to fully disclose political spending and, ideally, to avoid spending corporate money directly on elections. The effort marks the latest response to the Supreme Court's landmark ruling early this year in Citizens United v. Federal Election Commission, which allows corporations, unions and nonprofit groups to spend unlimited amounts of money on elections. The ruling has helped fuel a record year for spending by outside interest groups, mostly in favor of Republicans, records show. The new coalition springs out of a successful effort by de Blasio, who serves as a trustee for New York City's largest pension fund, to persuade Goldman Sachs, J.P. Morgan Chase and Morgan Stanley to adopt policies that forbid spending money from their general treasuries on campaigns. The firms can still run their political action committees, which are operated independently, officials said.

Midterm campaigns, brought to you by . . . ?

[Commentary] The Republican grab for Congress is being funded by a pack of wolves masquerading as a herd of sheep.

How sweet and innocent they seem, these mysterious organizations with names like Americans for Job Security. Who could argue with that? Who wants job insecurity? It turns out, according to The Post, that an entity called Americans for Job Security has made nearly $7.5 million in "independent" campaign expenditures this year, with 88 percent going to support Republican candidates. Who's putting up all that money? You'll never know, because Americans for Job Security -- which calls itself a "business association" -- doesn't have to disclose the source of its funding. Likewise, the American Future Fund has spent $6.8 million on campaigns this year, with every penny of that money benefiting Republicans. The patriotically named group -- and, really, who doesn't want America to have a future? -- is based in Iowa and has never before been a big player in the Great Game of campaign finance. Now, suddenly, it has a king's ransom to throw around. Whose money is it? The American Future Fund won't tell you.

The Supreme Court made all this possible with its ruling early this year, in Citizens United v. Federal Election Commission, which legalized unlimited campaign spending by corporations, unions, trade associations and other such entities. And the independent-expenditure groups with the patriotic names are often structured as nonprofits, which means they are not required to disclose their donors publicly. The result is a system in which oil companies opposed to an energy bill that would begin to steer the country away from fossil fuels, or Wall Street firms that want to undo financial regulatory reform and return to the days of the Big Casino, or gazillionaires who want to keep George W. Bush's tax breaks, can all spend as much as they like to try to buy Congress for the Republican Party. And they can do it secretly, in the dark, without anyone knowing. It's bad enough that public offices can be purchased. It's unconscionable that we can't even know who the buyers are.

Senate must pass Disclose Act

[Commentary] As voters consider the issues and candidates, they're awash in an unprecedented flood of campaign advertising, much of it funded by people who don't identify themselves -- and don't have to.

So come January, we'll have a crop of ambitious lawmakers beholden to donors the public has no way to identify. How can they be held accountable? We hope that once the election frenzy subsides, a few Republican senators will listen to their consciences. Susan Collins, Olympia Snowe, John McCain, Richard Lugar and Thad Cochran all previously have voted for much more restrictive campaign finance laws. The Disclose Act will be just a start at solving campaign finance problems. For example, Congress and the IRS need to examine whether independent groups are abusing their nonprofit status. But the act will help solve one very real problem, and if the Senate doesn't pass it, we'll have even more evidence that lawmakers are out for themselves and their donors -- not the people.

Campaign 2010

As the president hit the road to shore up the Democrats' faltering fortunes, the midterm elections topped the news agenda for the third week in a row, accounting for 26% of the newshole from Sept. 27-Oct. 3, according to the Pew Research Center's Project for Excellence in Journalism.

Even though the 2010 campaign did not heat up until the primaries began in earnest in the spring, it is now the third-biggest story of the year to date, accounting for 7% of the newshole, according to PEJ's News Coverage Index. The No. 1 story in 2010 thus far has been the economy (12%), followed by the Gulf of Mexico oil spill (9%). On the ideological radio and cable talk shows last week, a full 69% of the airtime studied was devoted the elections—with hosts finding plenty to talk about as President Obama launched a series of campaign-style appearances around the country. The economy, the No. 2 story last week at 9%, was highlighted in stories related to the housing crisis and a suspension of foreclosures by some big lenders accused of improperly processing paperwork.

Tribune Co. Gets New Deadline for Exiting Chapter 11

Tribune Company now has a new deadline for exiting bankruptcy, following a ruling Monday in a Delaware court. U.S. Bankruptcy Court Judge Kevin Carey set an Oct. 15 deadline — the third deadline extension granted to the arbitration proceedings in the bankruptcy case — for the Chicago Tribune's parent to file proposals for dividing up its ownership so it can pay its creditors and emerge from Chapter 11 protection