December 2010

Copps' Media Call to Action draws fire from Barton

Rep. Joe Barton (R-TX) is pushing back against a contention by Federal Communications Commission member Michael Copps that the government should create new regulations to promote diversity in news programming.

Rep Barton was reacting to a proposal made last week by Commissioner Copps, who in a speech suggested that broadcasters be subject to a new "public values test" every four years. "I hope … that you do not mean to suggest that it is the job of the federal government, through the [FCC], to determine the content that is available for Americans to consume,” Barton wrote in a letter to Copps. Rep Barton questioned whether Commissioner Copps believes the government should reinstate the defunct Fairness Doctrine, a controversial standard that required broadcast licensees to offer "balanced" coverage. Critics saw it as an affront to free speech. Rep Barton also asked whether "five commissioners can do a better job of ensuring that Americans have access to a wide diversity of content and viewpoints than Americans can themselves by expressing their preferences ... in the vigorously competitive marketplace."

No Longer Tiny, Netflix Gets Respect -- and Creates Fear

After years as a bit player in entertainment, Netflix Inc. is being eyed for a new role by Hollywood: industry hulk.

The Silicon Valley company has successfully expanded its mail-order DVD rental service to delivering video online. Meantime, the rise of Internet-connected TVs and disc players means that Netflix's electronically streamed movies and TV shows are reaching living rooms, not just computers. All that poses a potential threat to the traditional way consumers watch movies and TV: cable, phone and satellite systems. Netflix had 16.9 million subscribers at the end of September, up 52% from a year earlier. Meantime, over the past two quarters, the number of U.S. households that subscribe to cable and other paid TV services fell for the first time since the dawn of cable -- by about 335,000 households out of about 100 million, according to data provider SNL Kagan. Netflix's growth surge -- at a time of weak DVD sales and increasingly fragmented TV audiences -- prompts concern among movie and TV studios as well as other technology companies. One big worry is that the company could end up dominating the electronic distribution of movies and TV the way Apple's iTunes Store dominates music. To prevent that, entertainment and technology companies are exploring plans to outflank Netflix with their own offerings.

Clearwire eyes selling up to $2 billion spectrum

Clearwire expects to snag another round of funding late this year or early 2011 and may raise as much as $2 billion from selling wireless spectrum, according to its finance chief Erik Prusch.

Clearwire, which is 54 percent owned by Sprint Nextel, needs billions of dollars more funding to complete construction of its high-speed wireless network even after a $1.3 billion debt offering last week. It is considering an equity investment from a strategic partner like Sprint and a sale of wireless airwaves that it does not need for its service. Prusch said the company is half-way though a spectrum auction and has had interest from several partners who are doing due diligence. "We would be looking to find up to $2 billion from a sale," Prusch told reporters after his presentation at a UBS investor conference, adding that it was still not clear if Clearwire would look for both equity funding and a spectrum sale. "The question is whether we close either or both," Prusch said.

Crash hurts Russia satellite challenge to U.S. GPS

Analysts believe the botched launch of three of its satellites will delay Russia's bid to challenge US dominance of the market for satellite navigation technology by at least six months.

The loss of the three satellites, which crashed into the Pacific Ocean about 1,500 km (900 miles) north-west of Hawaii on Sunday, scuppers the Kremlin's much-touted plans to complete the GLONASS system this year. The state has spent over $2 billion in the last decade on achieving what Russian Prime Minister Vladimir Putin has called "satellite navigation sovereignty" and has high hopes it will lead a domestic revolution in consumer devices like smartphones and vehicle sat-navs. But experts estimated the crash cost 5 billion roubles ($160 million) and set Russia back six months in realizing the navigation system, which has its roots in the Cold War technology that was used to guide strategic missiles.

Commerce's Inspector General Shares Concerns with Congress

The Department of Commerce's Office of Inspector General has presented its Semiannual Report to Congress for the 6 months ending September 30, 2010. One of eight management challenges identified in the report is Enhancing Accountability and Transparency of the American Recovery and Reinvestment Act Program’s Key Technology and Construction Programs.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) is an unprecedented effort to promote economic activity, invest in long-term growth, and implement a level of transparency and accountability that will allow the public to see how their tax dollars are being spent. The Department of Commerce received $7.9 billion in Recovery Act funds. Of that amount, approximately $6 billion were obligated in the form of grants or contracts for key technology and construction programs in four of the Department’s operating units: Economic Development Administration (EDA), National Institute of Standards and Technology (NIST), NOAA, and National Telecommunications and Information Administration (NTIA). As of September 30, 2010, the Department has spent $1.7 billion (or 24 percent of the obligated funds), leaving significant spending yet to be completed. Of the riskier programs, the largest is NTIA’s Broadband Technology Opportunities Program (BTOP), which awarded 233 grants totaling $3.9 billion for broadband Internet access across the nation. There is considerable uncertainty about how NTIA will administer or monitor these grants because the agency has not received any funding to manage the program beyond September 30, 2010. Additionally NOAA, NIST, and EDA are overseeing a number of development and construction activities. Effective management by the agencies is critical to completing these projects on schedule and within budget, and to making certain the public receives the intended benefits from the Recovery Act.

In the year ahead, we will focus on how the four agencies manage the contracts and grants awarded to ensure that the technology and construction programs are managed effectively. We are particularly interested in how the agencies monitor recipients’ adherence to grant or contract terms, proper payments or drawdowns of funds, required matching shares for grant programs, and adherence to Recovery Act requirements such as the Buy America Act.

MPAA to universities: curb piracy or lose federal funding

The Motion Picture Association of America (MPAA) has decided to mimic the efforts of its music industry counterpart and put pressure on universities to curb student piracy. The organization notified its partners this week that it would begin sending out letters to college and university presidents in the US "calling their attention" to the anti-infringement provisions of the Higher Education Opportunity Act of 2008 (HEOA). The letter—copied to the campus CIOs—asks universities to cut off infringing students or face potentially crippling consequences. What are those consequences? The HEOA now requires universities to take steps to stop copyright infringement on campus in order to receive state funding and student aid.

Of course, the MPAA isn't capable of pulling university funding over some shared movies, but the organization is capable of spending millions of dollars to lobby state and federal officials to enforce those parts of the HEOA. The MPAA's letter also pulls on the heartstrings of universities that are trying to keep almost-graduating students optimistic during a poor job market. "[M]ore than 2.4 million workers in all 50 states depend on the entertainment industry for their jobs," reads the letter. "[O]nline theft is a job-killer than also reduces the number of opportunities for graduates of your institution to make a living in the creative sectors."

Apple ups ante on Motorola patent infringement suit

Apple has upped the ante in its patent fight with Motorola over smartphone patents, snaring Moto's set-top boxes in the process. In new court filings analyzed by FOSS Patents, Apple is now asserting a total of 24 patents against Motorola versus the 18 Motorola is accusing Apple of violating. Though sheer number doesn't guarantee an Apple win, the maneuver definitely puts Apple at an advantage, especially if the dispute is settled out of court.

Comcast/NBCU OK with Quarterly Public Interest Reporting Requirements

At a Dec. 2 meeting between NBCU Executive VP/General Counsel Rick Cotton, Comcast VP of Regulatory and State Legislative Affairs Kathy Zachem with top Federal Communications Commission staffers, the companies said they are not opposed to reporting back to the government quarterly on the host of public interest commitments they have made to help secure government approval of their proposed joint venture.

Google Widens Its Lead In Mobile Ads; Bulk Of Money Is Online, Not In Apps

New figures from IDC really bring home just how far ahead Google is from the rest of the pack when it comes to mobile advertising: Google accounts for 59 percent of all mobile advertising revenue in the US, with the next-closest competitor, Apple, coming in with just an 8.4 percent share of the market, worth $877 million overall.

What’s notable about the figures is that although a lot of talk about mobile media today is focused around apps, this is not where the majority of money is coming from in mobile advertising. IDC estimates that of Google’s $1 billion in mobile ad revenues, only about $150 million is coming from apps, another portion from licensing fees, and the “bulk” coming from mobile web, in the form of display and search ads. Google’s share represents a jump of 10 percent on last year’s 48.6 percent - a result of the growing use of smartphones (and hence mobile web), the growth of the Google-backed Android platform, and the $750-million acquisition of AdMob in November 2009.

White Space Rules Go Into Effect Jan. 5, 2011

The rules governing the use of unlicensed devices in TV white spaces will officially go into effect Jan. 5, 2011.

The rules, adopted by the Federal Communications Commission in September, have been published in the Federal Register, the final step of codification. The FCC first issued an unlicensed devices order in 2008 and received 17 petitions of reconsideration. The September order was modified in response to those petitions. Issues addressed included protection for TV signals, reservation of two channels for wireless microphones and technical rules for the devices, e.g., power levels and the method for identifying unoccupied spectrum. Said method involves having the devices communicate their coordinates to a database tracking open and unoccupied TV channels. The September order did not name a database manager. As of September, nine companies submitted proposals to manage the database for unlicensed devices. At the time, the FCC had not yet decided if it would choose one or multiple managers.

The nine in the running include Google, Comsearch, Neustar, Key Bridge Global, KB Enterprises with LS Telcom, Frequency Finder with RadioSoft, WSdB LLC, Spectrum Bridge and Telcordia Technologies.

Benton

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