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Big media companies are relying more on growth in the fees they get from pay-TV distributors to offset a tepid and uncertain advertising market, a trend highlighted in their quarterly results.

  • Time Warner, which reported a 23% increase in profit for the quarter ended March 31, said ad revenue at its television networks shrank 1%. By contrast, the "affiliate fees" it charges cable and satellite operators to carry its networks—such as TBS, TNT and premium channel HBO—grew 5.3%.
  • Comcast’s NBCUniversal division said earnings growth at its cable networks, which include USA Network, MSNBC and Bravo, was driven by an 8.6% rise in affiliate fees, outstripping their 2.5% growth in ad revenue. Comcast's first-quarter earnings rose 17%, fueled by growth in its broadband and business-services units as well as NBCUniversal, which also owns the NBC broadcast network.

Cable networks have become the profit engine of the big media companies over the past decade because they generate two streams of revenue. While their ad revenue can fluctuate wildly depending on economic conditions, their affiliate fees, which come from multiyear deals in which pay-TV providers agree to share a portion of their subscriber revenue, are more predictable. But the networks' increased reliance on affiliate fees raises questions for the pay-TV industry, such as how cable and satellite operators will handle steadily rising content fees without robust subscriber growth.


Pay-TV Fees Lift Media Firms

Media companies are banking on the prospect that tech firms will continue to pay up for digital rights to their programs, despite recent warnings from Netflix that it would become choosier in its deals for traditional television content.

“With people consuming more and more video all the time, the key to success is pretty simple. If you keep creating the best content, you will keep getting paid better and better as technology improves,” said Les Moonves, chief executive of CBS. Jeff Bewkes, chief executive of Time Warner, echoed that sentiment, saying his company is in an enviable position with its top-tier programming on networks such as HBO becoming more valuable as tech firms become more selective in striking content deals. “We think we’re in the catbird seat from that point of view with all of the [subscription video on demand] buyers,” he said. The comments came as a slew of media companies, including Comcast, Viacom, CBS and Time Warner, reported a mixed bag of quarterly earnings.


US media groups bank on digital rights
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Making official what many Democrats have expected for weeks, President Obama plans to nominate Chicago business executive Penny Pritzker, a longtime political supporter and heavyweight fundraiser, as his new Commerce secretary on May 2.

Pritzker’s nomination could prove controversial. She is on the board of Hyatt Hotels Corp., which was founded by her family and has had rocky relations with labor unions, and she could face questions about the failure of a bank partly owned by her family. With a personal fortune estimated at $1.85 billion, Pritzker is listed by Forbes magazine among the 300 wealthiest Americans. She is the founder, chair and chief executive of PSP Capital Partners, a private equity firm, and its affiliated real estate investment firm, Pritzker Realty Group. She played an influential role in Obama’s rise from Illinois state senator to the nation’s 44th president, serving as his national finance chairwoman in his 2008 campaign for the White House and as co-chairwoman of his reelection campaign.


Obama to nominate Penny Pritzker as Commerce secretary

Lifeline intro

Placement 

<p>The Federal Communications Commission&#39;s Lifeline program is a government benefit program that provides discounts on monthly telephone service for eligible low-income consumers to help ensure they have the opportunities and security that telephone service affords, including being able to connect to jobs, family, and 911 services. Lifeline is supported by the federal Universal Service Fund (USF).</p>
<p>Lifeline provides discounts on monthly telephone service (wireline or wireless) for eligible consumers. These discounts average $9.25 per month, and may be more depending on the state.</p>
<p>In early 2012, the FCC addressed Lifeline administrative issues <a href="https://apps.fcc.gov/edocs_public/attachmatch/DOC-312210A1.pdf" title="FCC news release">adopting new rules</a> aimed at:</p>
<ul>
<li>Setting a savings target of $200 million for 2012, and putting the Commission in a position to adopt an appropriate budget for the program in early 2013 after review of a six-month report and one-year report on the effects of the Order.</li>
<li>Creating a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber. The database will build on FCC efforts in 2011 that eliminated nearly 270,000 duplicate subscriptions in 12 states following review of over 3.6 million subscriber records, saving $33 million.</li>
<li>Creating eligibility databases from governmental data sources, enabling fully automated verification of consumers&rsquo; initial and ongoing Lifeline eligibility.</li>
<li>Establishing a one-per-household rule applicable to all providers in the program, defining household as an &ldquo;economic unit&rdquo; so that separate low-income families living at the same address can get connected.</li>
<li>Establishing clear goals and metrics to measure program performance and effectiveness.</li>
<li>Phasing out support for services such as Toll Limitation &ndash; subsidies to carriers for blocking or restricting long-distance service&mdash;and ending Link Up &ndash; subsidies to carriers for initial connection charges. Link Up will continue in Tribal lands.</li>
<li>Reducing burdens on carriers by establishing a uniform, interim flat rate of reimbursement, allowing carriers to obtain a subscriber&rsquo;s signature electronically, and streamlining enrollment through uniform, nationwide eligibility criteria.</li>
</ul>
<p>Traditionally, the Lifeline program has supported just landline or very basic wireless service, but we&rsquo;re seeing efforts to modernize the program so it can bring broadband to low-income consumers. The FCC&rsquo;s early 2012 reforms also included:</p>
<ul>
<li>Adopting an express goal for the program of ensuring availability of broadband for all low-income Americans.</li>
<li>Establishing a Broadband Adoption Pilot Program using up to $25 million in savings from other reforms to test and determine how Lifeline can best be used to increase broadband adoption among Lifeline-eligible consumers. The FCC solicited applications from broadband providers and selected a number of projects to fund. Lifeline would be used to help reduce the monthly cost of broadband service, but applicants would be expected to help address other challenges to broadband adoption, including the cost of devices and digital literacy.</li>
<li>A proposal to increase digital literacy training at libraries and schools. A Further Notice of Proposed Rulemaking sought comment on using savings from other Universal Service Fund reforms to increase digital literacy training at libraries and schools, a key step in increasing broadband adoption.</li>
<li>Addressing broadband adoption barriers through digital literacy training and low-cost broadband availability with public-private partnerships including the <a href="http://everyoneon.org/">Connect-to-Compete</a> initiative.</li>
<li>Allowing Lifeline support for bundled services plans combining voice and broadband or packages including optional calling features.</li>
</ul>
<p>These modernization goals got a new jolt in November 2014. FCC Commissioner Mignon Clyburn <a href="https://apps.fcc.gov/edocs_public/attachmatch/DOC-330453A1.pdf" title="Speech">spoke at the American Enterprise Institute</a> saying Lifeline should be expanded to cover broadband Internet access and reformed in other ways so that it helps everyone connect in the 21st century. She offered five principles to guide Lifeline reform:</p>
<ol>
<li>Getting the most bang for the universal service buck by establishing minimum service standards &ndash; that include both voice and broadband -- for any provider that receives the $9.25 Lifeline subsidy.</li>
<li>Providers should no longer be responsible for determining customer eligibility: &quot;Lifeline is the only federal benefits program that I am aware of where the provider determines the consumer&rsquo;s eligibility. Removing this responsibility from the provider will shore up the integrity of the program by further eliminating incentives for waste, fraud and abuse. The consumer would benefit through the reduction of privacy concerns.&quot; For the provider, this would mean a substantial reduction in the administrative burdens.</li>
<li>Encourage broader participation through a streamlined approval process.</li>
<li>Leverage efficiencies from existing programs and institute a coordinated enrollment.</li>
<li>Public-private partnerships and coordinated outreach efforts.</li>
</ol>
<p><a href="http://benton.org/headlines/fcc-continues-e-rate-reboot-meet-nations-dig... title="FCC Continues E-rate Reboot to Meet Nation's Digital Learning Needs">While voting to modernize E-Rate, another universal service program </a> which discounts broadband connections for schools and libraries, a majority of FCC Commissioners voiced support to complete Lifeline modernization, too. Commissioner Clyburn talked about the three-legged broadband stool: broadband at school, broadband in the library and broadband at home. &ldquo;Absent one leg,&rdquo; <a href="http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db1212/DOC-... said</a>, &ldquo;the stool does not stand.&rdquo; She said the educational success hoped for by reforming the E-rate program would not be fulfilled &ldquo;unless everyone has access to all three legs of that stool. Reforming the FCC&rsquo;s Lifeline Program is key to this and should be a major priority for the Commission, schools, libraries and the education community. Absent the ability to close the affordability gap for broadband everywhere, the laudable reforms we are poised to launch today will not completely bring [low-income students] out of the digital darkness.&rdquo;</p>
<p><a href="http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db1212/DOC-... Commissioner Jessica Rosenworcel agreed</a> that the job was not yet completed. &ldquo;We need to recognize that expanding opportunity goes beyond the school doors,&rdquo; she said. &ldquo;We can&rsquo;t forget that in a world where students rely on online resources and digital content in the classroom, they also need access to broadband when they go home.&rdquo; The &ldquo;Homework Gap,&rdquo; as Commissioner Rosenworcel calls it, is holding back both individual students and our education system as a whole. Rosenworcel pointed to research indicating that roughly 70 percent of teachers assign homework that requires access to broadband. But FCC data suggest that almost one in three households do not subscribe to broadband services at any speed &mdash; for reasons including lack of availability, affordability and interest. For teachers in low-income communities, the Pew Research Center finds that students&rsquo; lack of access to online resources at home presents a major challenge to integrating technology into teaching. The result is too many young people going through school without fully developing the skills that give them a fair shot at success in the digital age. Pointing to the FCC&rsquo;s reform of the E-rate program that is refocusing funding on making broadband more affordable, Rosenworcel proposed allowing Lifeline consumers to choose between applying program support to either voice service or broadband service. &ldquo;Doing so,&rdquo; she said, &ldquo;would modernize the Lifeline program &mdash; and also help address the Homework Gap.&rdquo;</p>
<p>FCC Chairman Tom Wheeler chimed in saying, &ldquo;I think that we have just counted three votes for Lifeline reform.&rdquo;</p>
<p>We&#39;ve noticed a pattern at the FCC: first comes the administrative streamlining, then comes modernization with a focus on broadband.&nbsp;</p>
<p><span style="text-align: center;">See a full recap of the FCC&#39;s Lifeline reform efforts in&nbsp;</span><a href="http://benton.org/blog/time-lifeline-reform">A Year in Review (and a Look Ahead): Time for Lifeline Reform</a> and&nbsp;<a href="http://benton.org/initiatives/lifeline" title="Lifeline reform news">stay tuned</a> for updates in 2015!</p>
<hr />
<p>On June 17th, 2013 the CPUC held a Public Participation Hearing in Eureka to discuss potential changes to the California LifeLine program, Benton Foundation&#39;s Director of Policy <a href="http://benton.org/about/whoweare#amina" rel="nofollow">Amina Fazlullah</a> participated in the panel, view the video below:</p>
<p><iframe allowfullscreen="" frameborder="0" height="300" mozallowfullscreen="true" src="http://archive.org/embed/AH-bos-pm_7-17-13" webkitallowfullscreen="true" width="400"></iframe></p>

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Mark Zuckerberg is being unfriended by progressives angered by television ads from his political advocacy group Fwd.us that praise lawmakers for supporting the expansion of the Keystone XL oil pipeline and drilling in the Arctic National Wildlife Refuge. Their ire is being directed at the billionaire founder and chief executive of Facebook with a protest planned for May 1 at the company's Menlo Park (CA) headquarters shortly before the company releases its first-quarter earnings.

The TV ad campaign is designed to give political cover to vulnerable conservatives back home to rally support for comprehensive immigration reform. But controversy generated by the ads could become a problem for Zuckerberg and Facebook. Though none of the ads suggest that Zuckerberg or Facebook support these policies, that distinction may be lost on the general public. "Years and years ago, Michael Jordan was asked why he was not endorsing a Democratic candidate for senator in North Carolina. He said: 'Republicans buy shoes, too.' One of the biggest obstacles for a business leader considering political involvement is the potential impact it would have on his client base," said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC. "Zuckerberg’s primary goal is to have immigration reform, and this is a very savvy way of making that happen. But invariably there is going to be people who don’t understand and the inevitable result is going to be this type of press fire."


Mark Zuckerberg's Fwd.us in heated controversy over political ads House Keystone pipeline advocate cheers ad linked to Facebook founder (The Hill)
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It doesn't sound like the smartest strategy for success. Despite all the travails in the newspaper business today, a not particularly distinguished paper with a circulation under 100,000 decides to compete in a market 80 miles away. But that's what is happening in southern Louisiana, where The Advocate in Baton Rouge, under new ownership and new leadership, seems poised to significantly expand its foray into New Orleans.

Of course, this is New Orleans, where the rules are different. So the audacious game plan might not be so crazy. The Newhouse family's Advance Publications, which owns New Orleans' Times-Picayune, opened the door to this unlikely newspaper war last May when it announced that it was adopting a digital-first strategy and that the paper would only come out three days a week, laying off a third of its staff in the process. Sensing an opening, The Advocate opened up a New Orleans bureau and last October launched a New Orleans edition. It now sells about 20,000 copies a day there, a remarkable number in such a short time. And the stakes are about to be raised, big time.


Battle for New Orleans on the journalism front
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Violence, gore and gunplay were staples on prime-time television even in the most sensitive period directly following the Newtown school shooting.

A study of 392 prime-time scripted programs on broadcast networks shown during the month following Vice President Joe Biden's January meeting with entertainment industry executives on the topic revealed that 193 had some incident of violence, according to the Parents Television Council. Some are cartoonish – quite literally, with Homer strangling Bart for mouthing off on "The Simpsons" – but there is plenty of gunplay, stabbings and beat-downs.


TV Violence Still Prevalent, According To New PTC Study
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Our government collects a lot of information about us. Tax records, legal records, license records, records of government services received-- it's all in databases that are increasingly linked and correlated. Still, there's a lot of personal information the government can't collect. Either they're prohibited by law from asking without probable cause and a judicial order, or they simply have no cost-effective way to collect it. But the government has figured out how to get around the laws, and collect personal data that has been historically denied to them: ask corporate America for it. Soon, governments won't have to bother collecting personal data. We're willingly giving it to a vast network of for-profit data collectors, and they're more than happy to pass it on to the government without our knowledge or consent.


Do You Want the Government Buying Your Data From Corporations?
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The Electronic Frontier Foundation released a report, Who Has Your Back?, which asks a probing question: What does the company do to keep customers' personal information out of the government's hands?

The examined companies could receive a gold star in each of six categories:

  1. If the company requires a warrant before releasing information to the government.
  2. If the company notifies customers when their information has been requested (except when prohibited by law).
  3. If the company publishes a report about how many government requests it has fulfilled.
  4. If the company has published formal guidelines on how it responds to information requests from governmental bodies.
  5. If the company has ever fought a request for information in the courts. "[N]ot all companies will be put in the position of having to defend their users before a judge, but those who do deserve special recognition."
  6. If the company belongs to the Digital Due Process Coalition, a group that is pushing the U.S. Congress to rewrite the (largely outmoded) Electronic Communications Privacy Act of 1986.

Of the companies surveyed, only Twitter and Sonic.net lit up the boards with six stars, and Dropbox, LinkedIn, and SpiderOak fell short only in the "fought a request" category -- quite possibly through no fault of their own.


Apple, AT&T, and Verizon fall short in protecting your data
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Privacy groups are denouncing a federal government move to force Internet companies like Facebook and Google to build backdoors that would let the FBI and other agencies snoop on real time online communications.

Privacy advocates say the plan could bankrupt smaller Internet companies and increase chances that hackers can access user data. I n the past, the Federal Bureau of Investigation has complained about a growing inability to collect evidence against online criminals, drug traffickers and terrorism suspects that use Internet-based communications services to communicate. Such concerns are valid said Joshua Hall, senior staff technologist at the Center for Democracy and Technology (CDT). However, threatening Internet companies with financial penalties is wrong, Hall said. Alan Butler appellate advocacy counsel at the Electronic Privacy Information Center (EPIC), said the FBI proposal would force companies to build unsecured backdoors into otherwise secure communications services.


Groups criticize FBI plan to require Internet backdoors for wiretaps