August 2011

Media companies are starting to cash in on Internet video. But that new money could be coming at a cost as fewer young people watch traditional television.

That battle between the old and new ways of watching TV is putting networks and studios in a tricky position -- balancing a new, growing online market for shows with a traditional market that is facing new threats and still accounts for the lion's share of revenues. Declines among younger viewers accelerated this TV season -- a shift in an industry that has registered growth for decades. At any given time of day, about 11.5 million people between 18 and 34 years old watched TV on traditional sets between last September and the end of last month, down 2% from a year earlier and 3.4% from two seasons ago, according to Nielsen Co. Networks are able to charge advertisers a premium for viewers in the age group, which also is a barometer for future viewing habits. New digital-streaming deals with companies like Netflix Inc. meanwhile pumped hundreds of millions of dollars into big media companies this spring, and media executives say they are teeing up more such deals.

The changes come as a war brews over which companies will profit by piping video to consumers. Netflix, Amazon and Google and other technology companies are muscling into living rooms with new ways to watch video. Cable operators and other traditional distributors are fighting back, rushing to give their subscribers access to shows on such new devices as tablets and Internet-connected TV sets -- and trying to restrict the amount of free TV available on the Web.

Whether that war is already taking a toll is subject to debate.

Anticipated budget cuts are prompting agencies to cancel or defer planned information technology projects, share and outsource more IT functions, and make more trade-offs in plotting their IT investments. It isn't clear how proposed and future cuts under the debt ceiling plan will affect federal IT. Most of those cuts will come in 2013 and later years, said former Virginia congressman Tom Davis, now director of federal government affairs at Deloitte & Touche LLP. "The good news is that they [agencies] will be able to reinvent themselves," Davis said. But some cuts are under way.

The Bay Area Rapid Transit District's (BART) shut-off of subterranean cell phone service in its downtown San Francisco stations may have prevented a protest August 11, but it sparked accusations the next day that the action stifled free speech and smacked of the kind of government intrusion employed by Middle East dictators.

"All over the world, people are using mobile devices to protest oppressive regimes, and governments are shutting down cell phone towers and the Internet to stop them," said Michael Risher, a staff attorney for the American Civil Liberties Union of Northern California. "It's outrageous that in San Francisco, BART is doing the same thing." BART officials acknowledged that they had switched off the transit system's underground cell phone network, which runs from Balboa Park Station through the Transbay Tube, from 4 to 7 p.m. to prevent protesters from coordinating plans to stop trains. A cluster of groups under the "No Justice, No BART" banner said on websites that they planned to protest the fatal July 3 shooting of a knife-wielding man, Charles Blair Hill, by BART police. Protesters briefly shut down the Civic Center, Powell Street and 16th Street Mission stations July 11. Trains ran through the stations without stopping.

As negotiations over a strike by 45,000 Verizon workers continued to sour, several thousand Washington-area customers experienced service outages caused by what the company called acts of sabotage.

Verizon reported 28 incidents of cut cables and damaged terminals in the District and Maryland since the strike began Sunday, out of more than 100 similar incidents along the East Coast. Most of the vandalism has taken place in New Jersey and New York, Verizon spokesman Harry Mitchell said. Aaron Dom, the area manager for Maryland and the District, said there has been a marked rise in serious vandalism on the company’s systems since the strike began. “Normally, in a year’s time we'd see maybe six acts of sabotage,” he said, adding that of the 28 incidents of damage, 18 took place in the District and 10 in Maryland. Vandals in the region appear to be cutting fiber-optic and copper lines as well as going after the large, square terminals on street corners, in what appear to be attempts to damage more of the system at a time, Dom said. Verizon is offering up to $50,000 to anyone who can identify the vandals. The Communications Workers of America and the International Brotherhood of Electrical Workers, which represent the workers, said they do not condone any illegal or violent actions and are confident that the picketers are respecting and obeying the law.