August 2011

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, JULY 8, 2011

A look at upcoming events http://benton.org/calendar

WIRELESS
   IDT Opposes AT&T/T-Mobile Deal
   Mobile phones shifting from fun to fundamental
   Free cellphone program for the poor draws critics
   Public safety network unlikely by Sept. 11
   Delay on Spectrum Models Raises Suspicion - editorial [links to web]
   In spectrum battles, Mom & Pop TV loses [links to web]
   Smartphones Are 'A Tool For Modern Families' [links to web]
   Mobile computing giants in patent free-for-all

INTERNET/BROADBAND
   FCC Launches Inquiry on Broadband Deployment - public notice
   Universal Service Reform and Broadband Caps - analysis
   Pentagon cyber program to fund hacker innovation [links to web]

BROADCASTING
   Coalition Urges to FCC To Bring Broadcast Data Collection Into the 21st Century - press release
   NBCU Targets End Of August To Pick Online Content Partners
   TV's Next M&A Wave Won't Be Like last One
   Ad Money Reliably Goes to Television
   US media groups buy back shares

LABOR
   Verizon Unions Strike as Contract Negotiations Break Down

CONTENT
   Judge says domain name loss is not a "substantial hardship"
   Nielsen to launch online campaign rating tool

POLICYMAKERS
   Power to become White House telecom aide
   New White House CIO Was Obama Campaign Donor
   News Corp.’s Soft Power in the US - analysis
   News Corp. Director Leading Phone-Hacking Probe Has Ties to Murdoch Family [links to web]

STORIES FROM ABROAD
   Beijing's Crash Course in News Censorship - editorial [links to web]
   Tribunal rules BT can raise mobile rates [links to web]

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WIRELESS

IDT OPPOSES AT&T/T-MOBILE
[SOURCE: Fierce, AUTHOR: Dan O'Shea]
IDT, a mobile virtual network operator partner of T-Mobile USA, has formally filed comments with the Federal Communications Commission that oppose AT&T's $39 billion pending acquisition of T-Mobile. IDT vice chairman James Courter said in the filing that "the merger would cause excessive consolidation in the mobile services marketplace and make it impossible for smaller, entrepreneurial companies such as IDT to compete." IDT is one of several mobile virtual network operators (MVNOs) that launched during the past decade to target the growing demographic of Hispanic mobile users. It offers pre-paid service under the TuYo brand. Courter said in the filing that AT&T's purchase of T-Mobile could jeopardize IDT's GSM resale deal with T-Mobile because it would "create two super-companies that would dominate the market to the detriment of low-income people who rely upon the availability of low-cost resellers such as TuYo Mobile. AT&T has not committed to making wholesale spectrum available to MVNOs in its application to acquire T-Mobile, and AT&T does not have a favorable track record in providing wholesale access to its spectrum." The filing also noted that the AT&T/T-Mobile merger would take one of only two GSM-based networks in the U.S. out of the wholesale game.
benton.org/node/85602 | Fierce
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MOBILE PHONES FUNDAMENTAL
[SOURCE: GigaOm, AUTHOR: Ryan Kim]
Anyone who’s taken Psych 101 should remember Maslow’s hierarchy of needs, a chart that organizes people’s needs, from basic physiological to safety and ultimately self. So what’s that have to do with mobile technology? It’s a helpful guide in showing where consumers are currently spending their money in mobile and where it’s headed in the future, said analyst Chetan Sharma, in a new white paper called How mobile will change the way we spend. Sharma said Americans overall spend about 15 percent of their income right now on the top of Maslow’s pyramid on self, which includes friendship, esteem, belonging, family and self actualization. Most of the impact of mobile, however, has been on this category but is shifting now to more basic needs, moving down Maslow’s pyramid to things like health care and wellness. Sharma said mobile’s ability to compress time and distance are now having a bigger impact on mobile health care and will help increasingly with remote monitoring, alerts, data collection and management, wellness and information awareness and early detection. Using Maslow’s pyramid is an interesting way of thinking of the shifts in mobile. A lot of the biggest app categories right now are geared toward self-actualization, interpersonal communication and fun. Games, weather and social networking are the top smartphone app categories, according to Nielsen. But health apps, like Azumio’s Instant Heart Rate and RunKeeper, which didn't register as one of the top app categories used in the last 30 days during a survey in June 2010, is now used by 13 percent of respondents in the second quarter of this year.
benton.org/node/85603 | GigaOm
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LIFELINE PROGRAM
[SOURCE: Los Angeles Times, AUTHOR: Deborah Netburn]
Is having a cellphone a basic human right? In more than half the states in America, people who are eligible for Medicaid and food stamps may also be eligible for a free cellphone and 250 free minutes a month. A story in the Pittsburgh Tribune-Review that unearthed this program, which has been around for three years, reported that up to 5.5 million people could qualify for a free cellphone and free service in Pennsylvania alone. The article identified two companies that provide free cellphones and free minutes to people who qualify -- Assurance Wireless, a program of Sprint subsidiary Virgin Mobile, and SafeLink, a program from Tracphone Wireless. Neither service is available in California. These free cellphone and minute plans are paid for by the Universal Service Fund, which telecommunications companies must contribute to by law. According to the Tribune-Review story, every cellphone service carrier passes the charge of its contribution on to its American customers. Cellphone users will see a "universal service" charge added to their contract each month. That money funds free cellphones and minutes to the poor and ensures that schools and libraries have secure phone service.
benton.org/node/85650 | Los Angeles Times | Pittsburgh Tribune-Review
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BILL BY 9/11 UNLIKELY
[SOURCE: Politico, AUTHOR: Tony Romm]
In the wake of Sept. 11, police and firefighters called on Washington to help in preventing the type of communications chaos that occurred with deadly results during the terrorist attacks on the World Trade Center. They even set an informal goal for action: the 10th anniversary of the tragedy. But with that milestone just a month away, the fixes seem out of reach, amid sharp differences among lawmakers and intense lobbying by the broadcasting and wireless industries. It doesn't help that Congress left the matter unresolved as it departed for its annual August recess. “Not only are we going to be disappointed, we’re going to be down in DC, walking the halls of the House and the Senate and letting them know how disappointed we are,” said John Feal, a demolition worker who worked at Ground Zero and started the Fealgood Foundation, which pushed for the 9/11 health bill. He was in Washington last month to urge passage of legislation improving communications for first-responders. “Cops and firefighters are given tools every day to do their jobs. But those tools are no good unless they have the proper communications,” he said.
benton.org/node/85645 | Politico
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MOBILE PATENTS
[SOURCE: San Jose Mercury News, AUTHOR: Brandon Bailey]
The mobile computing boom has turned into a courthouse war of the titans, as big tech companies are increasingly engaged in high-dollar legal disputes over lucrative patents for the software that makes smartphones and tablets so popular around the world. Industry experts say they've never seen so many claims and counterclaims between major tech companies: Google threw a spotlight on the issue last week when it accused Apple, Microsoft and Oracle of using patents as weapons in an organized campaign to "strangle" Google's popular Android software. But other competitors, such as Nokia and Apple, have also feuded over patents in court.
"This is the biggest patent battle in U.S. history," said Joshua Walker of Lex Machina, an online tracking service that has counted a steady increase in disputes involving wireless phones and mobile computing. "There's no precedent for this."
benton.org/node/85666 | San Jose Mercury News
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INTERNET/BROADBAND

BROADBAND DEPLOYMENT PROCEEDING
[SOURCE: Federal Communications Commission, AUTHOR: ]
This Notice of Inquiry (Inquiry) seeks input on the Federal Communications Commission's annual broadband progress report. The Telecommunications Act of 1996 requires the FCC annually to “initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms).” In conducting this Inquiry, the FCC must “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. In the last two broadband progress reports, the FCC found that broadband was not being deployed to all Americans in a reasonable and timely fashion. The FCC encourages individual consumers, consumer advocates, analysts, companies, policy institutes, governmental entities, and others to provide objective, empirical data and evidence to help it complete this task. The FCC seeks comment in particular on the questions set forth below. The FCC also encourages commenters to bring new issues concerning broadband to its attention and recommend new ways to measure and evaluate broadband deployment and availability. The information gathered in this proceeding will help ensure that the FCC’s broadband policies are well informed and data driven as it strives to reach our goal of universal broadband availability.
Comments are due September 6; reply comments are due October 4.
benton.org/node/85651 | Federal Communications Commission | Chairman Genachowski | Commissioner McDowell
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USF REFORM AND BROADBAND CAPS
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
Most of the air in Washington has been devoted of late to the debt ceiling deal and deciphering what it means. But that hasn't stopped major developments in how broadband networks will be deployed and used.
At the heart of the National Broadband Plan are the recommendations targeted at modernizing and streamlining the federal Universal Service Fund (USF). Thirty-five recommendations -- approximately 16% of the plan's suggestions -- address this issue. The USF helps provide communities across the country with affordable telecommunications services. The USF has traditionally been focused on making telephone service more available and affordable, but the National Broadband Plan recommended that the Federal Communications Commission modernize the USF, focusing on broadband deployment and affordability.
AT&T announced this week that, starting October 1, it will curb browsing speeds for its heaviest users on unlimited wireless data plans to cope with surging data traffic. Customers on an unlimited plan whose monthly use puts them into the top 5 percent of data consumption may experience reduced speeds until the end of that billing cycle. Verizon Wireless made a similar announcement in early July. The US already ranks highest in mobile Internet costs per month. US users pay more than $40 a month for 2GB of data (the going threshold for new capped data plans). On the other end of the scale, Japanese mobile phone callers pay just a touch over $10 a month for the same plan.
http://benton.org/node/85592
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BROADCASTING

BROADCAST DISCLOSURE
[SOURCE: Campaign Legal Center, AUTHOR: Press release]
The Public Interest Public Airwaves Coalition wrote to Federal Communications Commission (FCC) Chair Julius Genachowski strongly urging the FCC to take action to implement the modernized disclosure recommendations in its recent comprehensive report, The Information Needs of Communities (“INOC”). This report, issued earlier this summer, compiles the most up-to-date and comprehensive review of one of the core areas under the Commission’s authority—mass communications—and the Commission’s statutory obligations to ensure that the mass media serve the public interest, convenience and necessity. The groups praised the report’s top recommendation, to “emphasize online disclosure as a pillar of FCC media policy.”
In the letter, the Coalition urges the FCC to expedite adoption of streamlined online broadcaster program reporting by eliminating paper forms and instead implementing the online public file requirements proposed in the INOC Report. The Coalition proposes allowing broadcasters, who receive their licenses to use the publicly owned airwaves for free, to vastly reduce the data submitted, but retain its statistically validity by submitting programming data using two “constructed” weeks per quarter selected by the FCC – a method used by academics in their studies -- using a standardized and comparable format in the following programming categories: Local News; Local Civic/Governmental Affairs; Local Electoral Affairs; and Closed Captioning/Emergency Accessibility Complaints. Broadcasters would also have the option of reporting on other types of programming, should they choose to do so, in areas such as emergency programming, religious programming, and national news. In addition, because coverage of local electoral issues is critical to an informed citizenry, broadcasters would be required to disclose all local electoral affairs programming aired during the peak campaign periods when the lowest unit charge laws are in effect (i.e., 45 days before a primary election and 60 days before a general election).
Members of the PIPA Coalition include: Benton Foundation, Campaign Legal Center, Common Cause, Free Press, Media Access Project, New America Foundation, and the Office of Communication, Inc. of the United Church of Christ.
benton.org/node/85598 | Campaign Legal Center | B&C
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NBC'S CONTENT PARTNERS
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
NBCUniversal has told the Federal Communications Commission that it received 32 applications for online news partners by the July 22 deadline, and that it expects to choose the winning RFPs by the end of August, so long as there are enough candidates that fit the bill. That news was delivered in its sixth-month report to the commission on its progress on complying with the Comcast/NBCU deal condition that "at least half of the 10 NBC Owned Television Stations to enter into cooperative arrangements with locally focused non-profit news organizations [online news partners]." NBCU added a caveat that it might have to "revisit" that timeline if those 32 do not eventually yield enough viable candidates, which would be at least one viable candidate in five markets. The remaining candidates, after an initial review by NBCU execs to narrow that field, will be subjected to a second round of vetting including site visits, reference-checking and a background check. The partnerships are based on one between NBC's KNSD in San Diego and nonprofit Voice of San Diego. NBCU will report to the FCC in another six months on the project.
benton.org/node/85646 | Multichannel News
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TELEVISION MERGERS AND ACQUISITIONS
[SOURCE: TVNewsCheck, AUTHOR: Eric Dodson Greenberg]
As Mark Twain might put it, news of the death of broadcast television mergers and acquisitions (M&As) has been greatly exaggerated. In fact, as the end of summer looms, we could be on the cusp of an especially dynamic market for mergers and acquisitions in the television space. Of course, throughout the recent downturn there have been regular declarations that a return of broadcast M&A is just around the corner and the predicted uptick seems as elusive as the ever-receding horizon. But this time there are a number of cross-currents forming that will create a particularly strong climate for deal-making. Those deals and the climate itself will be different from what we saw before the economic downturn. This won't be your father’s M&A market.
benton.org/node/85596 | TVNewsCheck
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TELEVISION ADVERTISING
[SOURCE: New York Times, AUTHOR: Brian Stelter, Tanzina Vega]
The economy is faltering and consumers are scared, but you wouldn't know it by watching television, where advertisers are still pouring in money. Last week, companies like Viacom, CBS and Time Warner reported windfalls in television revenue, much of it from growing ad spending.
Every company was asked the same question by worried investors — will the weakening economy claim television advertising — and every company answered the same way. “We have not seen any deterioration in our current market conditions,” said Brad Singer, the chief financial officer of Discovery Communications. “We don't see any signs of a deceleration right now,” said Stephen B. Burke, the chief executive of NBCUniversal. “We’re not at all afraid, and frankly we’re looking forward to the fall,” said Leslie Moonves, the chief executive of the CBS Corporation, referring to the start of the fall season.
Despite worries of a possible double-dip recession, so far companies are not pulling back from their television ad spending plans, demonstrating the resiliency of the medium even when faced with a downturn and the persistent threat of the Internet to steal viewers.
benton.org/node/85670 | New York Times
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MEDIA BUY BACK
[SOURCE: Financial Times, AUTHOR: David Gelles]
Large cash piles at big US media companies have led to a wave of buy-backs that have returned more than $14 billion to shareholders this year.
Led by television groups including Time Warner, Time Warner Cable and Disney, media companies have executed the third-most buy-backs of the 67 company groups it tracks, according to Birinyi Associates. Overall, US companies are buying back their stock at the fastest pace since 2007. The repurchase programmes come as media companies are flush with cash but reluctant to invest internally after years of capital expenditures and also wary of a weak mergers and acquisitions market.
benton.org/node/85669 | Financial Times
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LABOR

VERIZON STRIKE
[SOURCE: Bloomberg, AUTHOR: Devin Banerjee]
About 45,000 Verizon Communications Inc. workers began a strike after failing to reach agreement on a new contract with the second-largest U.S. telephone company. The contract expired August 6. “Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle class workers and their families,” the Communications Workers of America said. The strike, which began when the old contract expired August 6, may delay service calls and disrupt installations for telephone and Internet service. The company has trained more than 40,000 managers and contractors to step into the roles of union workers, said Richard Young, a Verizon spokesman. “We are confident that we have the talent and resources in place to meet the needs and demands of our customers,” Mark Reed, Verizon’s executive vice president of human resources, said. Verizon began negotiating with more than 45,000 members of the Communications Workers of America and the International Brotherhood of Electrical Workers in July over terms of a contract to replace one that expired yesterday. A proposal to change health-care benefits is one of the issues to be resolved, with the company and unions remaining sharply divided.
benton.org/node/85653 | Bloomberg | AP
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CONTENT

DOMAIN NAME LOSS
[SOURCE: ars technica, AUTHOR: Timothy Lee]
A federal judge has rejected a petition by the Spanish company Puerto 80 for the return of the domain names Rojadirecta.com and Rojadirecta.org. The US federal government seized the domains earlier this year, arguing that they were primarily used to provide links to infringing sporting content. Puerto 80 says that after weeks of playing phone tag with federal officials, it was told that it could only have the domain names back if it agreed not to "link to any U.S. content anywhere on its sites anywhere in the world." Since this demand clearly exceeded what was required of it under copyright law (and arguably violated the First Amendment), Puerto sued for the return of the domain names. Under federal law, the owner of seized property can seek its return if the government's continuing to hold it would cause a "substantial hardship" to its owner. Puerto 80 pointed not only to the loss of traffic since the seizure, but also to the infringement of its First Amendment rights. It also pointed out that its activities had already been ruled legal by the Spanish courts. But Judge Paul Crotty was unconvinced. He replied that Puerto 80 had registered alternative domains like rojadirecta.me and rojadirecta.es, and that Rojadirecta can use its "large Internet presence" to "simply distribute information about its new domain name to its customers."
benton.org/node/85648 | Ars Technica | Electronic Frontier Foundation
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NIELSEN ONLINE RATING TOOL
[SOURCE: Financial Times, AUTHOR: Andrew Edgecliffe-Johnson]
Nielsen, the audience measurement group, will next week roll out a new approach to measuring online display advertising across the US using Facebook data and TV-style reporting, after a trial that showed many supposedly targeted campaigns are missing their goals. Nielsen Online Campaign Ratings, tested on 80 campaigns on 15 publishers’ sites since March, will be made available to all US media buyers on August 15, giving advertisers daily reports on campaigns running on Facebook and the wider web in one place, using the “gross ratings points” data they use to track TV ads. The early trial results had been “astonishing”, said Steve Hasker, Nielsen’s president of media products and advertiser solutions, showing that just 30 per cent of branded display advertising aimed at specific age- and gender-defined demographic groups was hitting its target. By contrast, mass-market campaigns hit their target three times out of four.
benton.org/node/85667 | Financial Times
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POLICYMAKERS

POWER TO OSTP
[SOURCE: Politico, AUTHOR: Tony Romm]
Tom Power, current chief of staff for the National Telecommunications and Information Administration, will join the White House as its new deputy chief technology officer for telecommunications. Power will fill the position vacated by Scott Deutchman, who left earlier this year to join Neustar, according to sources familiar with Power’s plans. Filling Power’s position at NTIA while he is on detail with the White House will be Angela Simpson, who has served as a senior NTIA adviser on broadband issues. Power is a notable addition to the White House tech and telecom team, which is housed under the administration’s Office of Science and Technology Policy. He joined NTIA as chief of staff in 2009, and served at a time when the agency was doing considerable work to dole out and monitor billions in new stimulus grants meant to grow broadband availability nationwide. Prior to arriving at the Commerce Department agency, Power worked for years as a top lawyer for Fiberlink Communications. Before that, he served as a senior legal adviser for former FCC Chairman William Kennard.
benton.org/node/85640 | Politico
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VANROEKEL'S CAMPAIGN CONTRIBUTIONS
[SOURCE: National Journal, AUTHOR: Josh Smith]
Steven VanRoekel's years of experience at Microsoft and the Federal Communications Commission make him well suited for his new job as White House chief information officer. But VanRoekel was making friends with the Obama Administration even before Obama took the White House. In 2009 VanRoekel contributed $50,000 to Obama's Inauguration celebration. (Obama capped donations at $50,000.) VanRoekel gave Obama's campaign $4,600 in 2008, when he was an executive at Microsoft. In 2009 and 2010 he contributed $7,300 to the Democratic National Committee while working at the FCC, according to Federal Elections Commission disclosures. And in 2006 Washington Women for Choice received $1,000 from VanRoekel. In congressional races, VanRoekel donated $1,000 to Rep. Michele Bachman's opponent Tarryl Clark last year. He also contributed $1,750 to Rob Miller, who launched a failed challenge to South Carolina GOP Rep. Joe Wilson, in 2010.
benton.org/node/85638 | National Journal
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NEWS CORP'S SOFT POWER
[SOURCE: New York Times, AUTHOR: David Carr]
A News Corporation division has twice come under significant civil and criminal investigations in the United States, but neither inquiry went anywhere. Given what has happened in Britain with the growing phone-hacking scandal, it is worth wondering why.
Both cases involve News America Marketing, an obscure but lucrative division of the News Corporation that is a big player in the business of retail marketing, including newspaper coupon inserts and in-store promotions. The company has come under scrutiny for a pattern of conduct that includes below-cost pricing, paying customers not to do business with competitors and accusations of computer hacking. News America Marketing came to control 90 percent of the in-store advertising business, according to Fortune, aided in part by a particularly quick and favorable antitrust decision made by the Justice Department in 1997. That year, the News Corporation announced it wanted to buy Heritage Media, a big competitor, for about $754 million in stock plus $600 million in assumed debt. The News Corporation said it would sell the broadcast properties and hang onto the marketing division, which serviced 40,000 groceries and other retailers. The deal would make News America Marketing the dominant player in the business and, for that reason, the San Francisco field office of the Justice Department recommended to Washington that the News Corporation’s takeover bid be challenged on antitrust grounds. Typically, such a request from a field office would carry great weight in Washington and, at a minimum, delay the deal for months. But the Justice Department brass overrode San Francisco’s objections and gave its blessing in just two weeks. So who ran the antitrust division at the Justice Department at the time? Joel Klein, who this year became an executive vice president at the News Corporation, head of its education division and a close adviser to Rupert Murdoch on the phone-hacking scandal in Britain.
benton.org/node/85664 | New York Times
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