September 2011

How Not To Make Friends In Washington

[Commentary] There were heaps of irony, and not a little schadenfreude, when Google Executive Chairman Eric Schmidt got himself a bi-partisan grilling before the Senate Antitrust Subcommittee, just two days before the Federal Communications Commission formally released its rules governing an Open Internet.

The connection, of course, is that in the summer of 2010, Schmidt and then-Verizon Chairman Ivan Seidenberg came up with a grand compromise for an Open Internet that that just happened to exclude wireless communications. Our feckless FCC then adopted that outline because, after all, Google had been for an Open Internet, Verizon had been opposed to it, and they agreed on this. No matter that the deal gave away the fastest growing means of access and, coincidentally, the first access to the Internet for many people of color. And AT&T piled on, with their chief lobbyist logging lots of time at the FCC as the Open Internet rules were in their final stages. So it was amusing to some to see Schmidt, under attack for his company’s alleged dominance of the search market, take refuge from the slings and arrows aimed at him by saying, “The Open Internet is the ultimate playing field.” It would have been delicious had some staffer slipped his/her senatorial boss a question which read: “Does that apply to wireless also?” and we could have seen where Schmidt would have to say it was OK for Google to dominate search in the wireless environment.

Working Together to Improve the Internet - BITAG Starts to Make Good on Its Promise

[Commentary] This week, the Broadband Internet Technology Advisory Group (BITAG), released a report offering several solutions to speed IPv6 adoption.

The suggestions include limiting the duration of the use of DNS whitelisting, being open and transparent about whitelisting policies, and using primarily quantitative data to determine which sites are whitelisted, to minimize any impression of discrimination in the decision-making process. It sounds unremarkable: A problem was identified, an advisory group formulated suggestions, and a report was released. What is remarkable is that this group exists at all. This isn't just a bunch of armchair observers proposing solutions that make sense from a policy perspective; these are actual engineers from different sectors of the communications industry, from academia and from the advocacy community coming together to determine, from a technical perspective, the best solution to pressing technological problems that affect how the Internet operates and the user experience on the Internet. The Internet and broadband industry has never seen anything like this.

UK Phone Hacking Lawyer Pursues News Corp. Suit in US

Mark Lewis, a UK lawyer who represents the family of hacking victim Milly Dowler, has consulted with U.S. lawyers about bringing a case against the News Corp. board within the next couple weeks.

Lewis told various news outlets that he instructed New York-based lawyer Norman Siegel to get statements from News Corp. Chairman and CEO Rupert Murdoch, his son James, who oversees the company's international subsidiaries, and other members of the board of directors. He advised Siegel to pursue depositions even before filing papers, which should happen next week. Lewis is already in the process of negotiating the biggest settlement in the hacking scandal, on behalf of Dowler's family.

The Fight Over the Future of Digital Books

On September 12, 2011, the Authors Guild sued the University of Michigan, the University of California, the University of Wisconsin, Indiana University, and Cornell University over digital copies of books from their vast libraries. Many of these scanned books are no longer in print and of interest only to scholars, but the lawsuit reflects the growing tension between professional authors and the libraries that hold their work.

Time Warner Cable and DirecTV team up to lobby FCC

Rival distributors Time Warner Cable and satellite broadcaster DirecTV teamed up to make their case to the Federal Communications Commission for an overhaul the agency's retransmission consent rules.

DirecTV Chief Executive Mike White and Time Warner Cable head Glenn Britt met with FCC Commissioners Michael Copps and Robert McDowell to discuss the tensions that have arisen over the last few years between broadcasters and multichannel video program distributor over fees broadcasters want in return for carriage of their programming. "We explained that the retransmission consent fees demanded by broadcast stations continue to skyrocket and that the outdated regulatory regime, which prevents true marketplace negotiations, results in harm to consumers," wrote Cristina Pauze, Time Warner Cable's vice president of regulatory affairs in a disclosure letter. There have been several examples of heated negotiations between broadcasters and cable operators over distribution deals. The FCC has already launched a review of its rules regarding retransmission consent to see if they need updating to limit the possibility of signals going off the air because the two sides are unable to reach an agreement. Time Warner and DirecTV also said they told the commission it should require "the unbundling of broadcast and cable programming channels." That refers to companies that own broadcast and cable networks packaging said channels together rather than selling them on an individual basis. News Corp., parent of the Fox network as well as several cable networks, typically tries to bundle its channels together when negotiating with a cable or satellite operator. The advantage to bundling is that a weaker channel can get distribution it might not otherwise get because it is packaged with a stronger one.

Deterring attackers in cyberspace

[Commentary] Is America at war in cyberspace?

In the face of increasingly brazen cyber attacks against our country, the Obama administration established the first military command devoted to cyberspace, U.S. Cyber Command, in 2010. And the Pentagon has issued a new declaratory policy in which the United States announced that it reserves the right to respond to cyberattacks with conventional weapons. It sounds a lot like war. But is it?

Today, America is most certainly engaged in what amounts to a cyber “cold war.” We face a daily barrage of low-level “tactical” strikes in which foreign adversaries attack our computer networks, often using proxies in cyberspace — much as the United States and the Soviet Union engaged in low-level combat using proxies in Africa and Latin America during the Cold War of the 20th century. In some cases, these attacks escalate into what our military calls operational-level engagements — decisive attacks or incidents that gain front-page attention in the news (such as the Stuxnet virus that attacked Iran’s nuclear program) but do not significantly alter the daily lives of Americans.

TV and Severe Weather: Stations Save Lives

[Commentary] During emergencies, it was impressive to see Raycom Media-owned Alabama television stations spring into action with life-saving information for our communities as the storms approached and then with wall-to-wall coverage of the aftermath.

In an effort to fully understand our viewer’s needs in the wake of the storms, the senior management at Raycom Media commissioned me to do a survey in our three affected DMAs as well as Tuscaloosa, the area with the most damage. We learned that 71% of adults living in these affected areas first learned about the approaching storms through TV. Schools and businesses were closed early in an effort to get people off the roads and 75% of residents were at home when the storms hit. Seventy-nine percent were tracking the storms on TV as they impacted their communities. It is probably not surprising that viewers relied on their local stations more than any other medium for information on the storms. This was true for every age group, including 18-24 year-olds, and was particularly true in African-American households, which relied on television at a higher rate than the population in general.

[McDowell is VP of research for Raycom Media]

Hill Lights Up With LightSquared

LightSquared's waiver has become the topic du jour in DC, what with Michele Bachmann (R-MN) taking aim at the President and the Federal Communications Commission and the company claiming to have found a tech fix to the GPS interference problem.

Interest on Capitol Hill continues to be high, with House Strategic Forces Subcommittee Chairman Michael Turner (R-OH), joined by five other House colleagues, now calling for a House Oversight and Government Reform Committee investigation into how the FCC granted the company use of satellite spectrum for terrestrial wireless broadband, or as Chairman Turner put it in a release: "investigation in the role of the Chairman of the Federal Communications Commission (FCC), the White House, and the Harbinger Capital Partners hedge fund, in a short-circuited rule making process which threatens to jeopardize national security." In the letter Chairman Turner and the others, all Republican members of the Strategic Forces Subcommittee, claimed that witnesses at a recent LightSquared hearing were asked by the White House during testimony prep to include language they did not agree with, saying they feared that was an example of bias toward LightSquared.

Reality TV Grabs Most Viewers, Sports Nabs 20%

Over the past five years, sports programming has climbed sharply among U.S. viewers -- with reality TV programming maintaining its position at the most dominant TV genre.

A report from The Nielsen Company says in the 2010-2011 season, sports programming commanded 20% of the 187 million U.S. viewers ages 2 years and older. This is up from 19.4% the year before, and 9.4% and 8.1% in the two preceding years. Reality television still commands the biggest share of U.S. TV viewing -- now at 56.4% for the 2010-2011 season. This is up from 47.9% the year before. The high spot for reality came in the 2007-2008 season, where it had a 77.3% share of all U.S. TV viewing. The year before it had a 68.3% share. Scripted drama TV shows are in second place behind reality, accounting for 23.6% of U.S. TV viewing in 2010-2011 -- down from 32.7% in 2009-2010 and 32.8% in 2008-2009 season. During the last decade, scripted dramas were at their lowest point in the 2007-2008 season (14.6%) and the 2002-2003 season (11.0%). Their highest was in the 2005-2006 season, accounting for 42.8% of the total audience.

At the beginning of the decade, in the 2001-2002 season, things were very different. Reality accounted for 22.4% share -- with the highest viewing going to sitcom TV viewing at around 38.9%. Dramas were next at 29.5%.

USPS May Raise Rates, After All

A year after an industry alliance helped defeat a proposed exigent rate increase by the U.S. Postal Service, the price hike may go through after all, as part of a larger plan to save the troubled institution, which is rapidly approaching insolvency. The rate hikes, including an increase of 8%-9% for periodicals and 5.8% for other types of mail, were rejected last year by the Postal Regulatory Commission. But they have been dusted off by the Obama Administration as a possible, partial solution to USPS financial woes. Periodicals are one of the least profitable mail classes for the USPS, partly because of repeated rejections by the PRC of proposed rate hikes. Catalogs and other types of direct-marketing solicitation, classified as "standard," are also less profitable than first-class mail, requiring about three pieces of standard mail to equal the profit from one piece of first-class mail. The USPS has nonetheless resorted to periodicals and standard mail as a way of maintaining delivery capacity when first-class mail volumes dropped, in effect subsidizing delivery of first-class mail with increased volumes of standard mail.

Benton

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