August 2011

FCC Releases Cable Carriage Order

The Federal Communications Commission released a revision of its cable program carriage rules adopted on July 29. The order provides for standstills during program carriage disputes or price and "true ups" for winners of complaints over price or discrimination. It also seeks comments on other proposed changes, including being able to collect damages in program carriage cases, defining retaliation as a form of discrimination, and codifying who bears the burden of proof. FCC commissioners found that "the record reflects that, absent a standstill, an MVPD will have the ability to retaliate against a programming vendor that files a legitimate complaint by ceasing carriage of the programming vendor's video programming, thereby harming the programming vendor as well as viewers who have come to expect to be able to view that video programming." To remedy that, the FCC says programmers can file a request for standstill that needs to demonstrate that "the complainant is likely to prevail on the merits of its complaint; (ii) the complainant will suffer irreparable harm absent a stay; (iii) grant of a stay will not substantially harm other interested parties; and (iv) the public interest favors grant of a stay."

FCC Commissioner Robert McDowell dissented in part from the provisions requiring standstills during program carriage complaints, agreeing with cable operators that the FCC did not provide sufficient opportunity for comment per the Administrative Procedures Act. The FCC defended the constitutionality and procedural soundness of its order, specifically dismissing in its order cable arguments that the program carriage rules are constitutionally suspect and that the FCC's mode of changing them violated proper administrative procedures.

Public Knowledge Legal Director Harold Feld said, "Consumers could be stuck in the middle when the cable and satellite operators reach an impasse with program providers over carriage issues. Under the rules the FCC issued, programming will continue to be available while disputes are resolved."

Rep. Eshoo: Rule to stop loud TV ads should apply to every provider

Rep. Anna Eshoo (D-CA), sponsor of the Commercial Advertisement Loudness Mitigation (CALM) Act, wrote to the Federal Communications Commission saying the new law should apply to all pay-TV providers.

The law limits the volume of advertisements to the same levels as the programs they interrupt. "The law's intent is simple — to make the volume of commercials and programming uniform so that spikes in volume do not affect the consumer's ability to control sound," Rep Eshoo said. "I recognize that implementation takes time, which is why the legislation includes a grace period that is fair to stakeholders and allows programming distributors ample time to install the engineering fix necessary to ensure that sound is modulated."

The American Cable Association, which represents small and medium-size cable providers, has argued the law's penalties shouldn't apply to programming they simply retransmit from broadcasters — only to commercials the firms insert themselves.

WWOR License Challengers Take Renewed Aim

A group challenging the Federal Communications Commission license of News Corp.'s WWOR-TV (Secaucus, NJ) have sent a letter to FCC Media Bureau Chief Bill Lake continuing to challenge staff estimates for the station and News Corp's veracity in claims to the FCC responding to their challenge.

The FCC's Media Bureau said in February it was looking into allegations that Fox Television Stations misrepresented the station and lacked candor in its responses. Fox has said that the FCC will ultimately conclude the challenge is unwarranted and without merit. Various groups challenging Fox's license for the station had complained back in December 2010, following up on complaints earlier in the year. Those groups argue that Fox did not inform the FCC of various material changes to the stations, as required, including that after "most" of WWOR-TV's operations were relocated to New York City in 2008 and 2009, its staff, news and public affairs programming were all cut, including one of those public affairs shows and the move of its 10 p.m. news to 11 p.m. and cutting it to a half-hour. In the letter dated Aug. 1, Voice for New Jersey (VNJ) responded to representations to the committee April 4 by a Fox lawyer. The group said the letter was not only "lacking in candor" itself, but also essentially made VNJ's case for it about past misrepresentations. VNJ points to the April 4 letter, which contains figures for staff and hours of news at WWOR that are different and lower than ones provided in an Aug. 26, 2009 letter, it says.

Big media rings up sales as advertisers keep coming

US media giants are set to report quarterly revenue gains on the back of a booming advertising market that shows little sign of retreating. Thanks largely to the strongest advertising spending in years, investors have flocked to media stocks, which have far outperformed the Standard & Poor's 500 this year.

Among the big gainers, CBS Corp is up 44 percent, Viacom Inc is up 22 percent and Time Warner Inc has climbed 9 percent. Industry analysts and investors see more healthy quarters ahead despite questions surrounding the overall U.S. economy. Advertising typically accounts for 30 to 70 percent of sales for major players such as Walt Disney Co, CBS and Time Warner -- companies that report quarterly results over the next two weeks. Projected revenue increases vary by company, with CBS set to gain 7 percent, Time Warner 7 percent and Disney 4.5 percent, according to Thomson Reuters I/B/E/S.

Public Computer Centers Helping Los Angeles Job Seekers

Last week I visited a new WorkSource Center Satellite in South Los Angeles, where a Recovery Act investment by NTIA has funded 25 new computer stations that community members seeking jobs can use. Coupled with hands-on assistance and career counseling from trained personnel, this investment is creating economic opportunities in a neighborhood where poverty and unemployment rates are unacceptably high. All told, NTIA’s $7.5 million grant to the City of Los Angeles for its Computer Access Network (LA CAN) project–part of a $4 billion Recovery Act investment to expand broadband access and adoption in communities nationwide–will upgrade more than 180 public computer centers in some of the city’s neediest neighborhoods.

The WorkSource Center Satellite is located with the Chicana Service Action Center, whose CEO, Sophia Esparza, told me how the project is preparing job seekers, not for yesterday’s jobs, but for the “green jobs” of the future. Customers, including returning veterans and Temporary Assistance for Needy Families (TANF) recipients, are benefiting from strong partnerships between the city and local employers to place solar installers, energy auditors, lead green technicians and electrical auto technicians into well-paying jobs. The center expects to serve about 150,000 jobseekers annually.

The project team illustrated for me how the Center is helping unemployed residents transition to the workplace. In recent months, for instance, a 51-year-old man who was receiving food stamps came to the Center in desperate need of a job. After attending workshops on basic computer literacy, resume writing and interview skills, he is now working as a sales representative and looking forward to his first pay raise. Another example: a 25-year-old single mother of two, who never held a permanent job and relied solely on government assistance, attended workshops and received one-on-one support from the Center. She is now employed as a data entry clerk. For many adults, free computer training can be a life-changing experience.

Government IT may fare well under debt ceiling deal

The deal struck between the Obama White House and congressional leaders to immediately raise the limit on federal borrowing in exchange for $2.5 trillion in spending cuts over 10 years is unlikely to mean a major scaling down of federal information technology initiatives, expert say. That's because there's a generally strong consensus in Congress and the Administration that increased efficiencies from new technology offer the government's only hope of slashing such a huge portion of federal spending without drastically reducing services, said Alan Balutis, a former chief information officer at the Commerce Department and now a director at Cisco's Internet Business Solutions Group.

Some Lee Papers Adopt Metered Model, Even For Print Subscribers

For about the cost of “a trip to Starbucks,” six Lee Enterprises newspapers in Montana and Wyoming are adopting a metered pay model on their websites.

Starting August 1, even print subscribers will have to pay a small charge to read above a certain number of articles online -- but they do get a discount. The participating Lee newspapers are the Missoulian, Ravalli Republic, Billings Gazette, Helena Independent Record, Montana Standard and Casper Star Tribune. The paywalls are run by RR Donnelly’s Press+ service. Press+ comes from Journalism Online, the company founded by Steve Brill, Gordon Crovitz and Leo Hindery, Jr. was acquired by Donnelly earlier this year.

NCTA Wants To Cap USF/Intercarrier Comp Reform Fund At $4.5 Billion

In the wake of the telecom industry's compromise proposal, the National Cable & Telecommunications Association has filed some additional cable industry thoughts on Universal Service Fund and intercarrier compensation reform, pointing out what it likes about that plan and what additional issues the Federal Communications Commission should keep in mind given that cable operators provide broadband "to the vast majority of the nation." That includes not letting telcos hang on to legacy payments any longer than is necessary.

NCTA says three elements of the telco's proposals are "critical" to effective reform and delivering broadband to areas that do not currently get it:

capping the current fund at $4.5 billion;
subsidizing service only where there is no unsubsidized provider offering service and
there should be a specific and "symmetrical" transition for reforming intercarrier compensation rates--the rates networks charge each other for exchanging traffic.

But NCTA has additional reform thoughts:

Any subsidies to mobile should be included in the $4.5 billion cap, not in addition to it.
Carriers should have an opportunity to show where National Broadband Map has gotten it wrong.
Support from the fund should be technology-neutral, going to the most efficient provider and no right of first refusal for incumbent telcos.
Legacy telco support should be phased out as quickly as possible after the migration to broadband funding mechanism is established.

What we'd really lose in an AT&T-T-Mobile merger

[Commentary] If the AT&T/T-Mobile merger goes through, I fear that T-Mobile's gutsy approach to expanding its smartphone lineup will be killed by AT&T's stodgier culture. Indeed, over the last year, T-Mobile has greatly outshone its potential partner in both the range and quality of such handsets. AT&T produced slightly more smartphones during that period (21 versus 19), but T-Mobile has taken more risks and its lineup has earned a higher average score from CNET editors (7.7 versus 7.2).

Google's PAC posts big uptick

Google is ramping up its campaign machine ahead of the 2012 election, raking in $570,000 for its political action committee in the first six months of the year — the most it has raised in a single cycle since its PAC opened shop.

The search giant’s midyear report, filed July 29, shows Google has already brought in more in the first half of 2011 than over the course of the entire 2010 cycle. The amount dwarfs what the company raised during the 2006 and 2008 cycles combined. So far, Google has donated only $60,000 from its expanded campaign war chest. That may be a meager sum compared to its tech and telecom competitors, but it is still early in the 2012 election cycle. And all signs point to Google continuing to refine its campaign operations as the election season accelerates.

Benton

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