June 2007 The Benton Foundation, the Chicago Community Trust and the Chicago Media Workshop co-sponsored the first Community Media Summit June 14 and 15, 2007.
TEN YEARS AGO: MONOPOLIES STILL RULE THE LOCAL PHONE MARKETS
[SOURCE: New York Times 5/22/1997, AUTHOR: Mark Landler]
Sixteen months after the Government opened the $100 billion local phone market to no-holds-barred competition, a new study found that fewer than half of 1 percent of Americans receive their residential phone service from a competitor to the monopoly provider. Moreover, the most likely rivals to the local monopolies -- AT&T, MCI, and other long-distance carriers -- were entering the residential market only grudgingly, according to the study, which was compiled by the Yankee Group. Of the 97 million households in the United States with a telephone in 1997, the study estimated that fewer than 500,000 were getting the service from a company other than their local monopoly. Even three years out, the study predicted the incumbent carriers will retain 90 percent of the market.
http://select.nytimes.com/search/restricted/article?res=F30E16FF3E5F0C71...
(requires TimesSelect subscription)
SUPREME COURT RULES FOR BABY BELLS
[SOURCE: Wall Street Journal, AUTHOR: Mark H. Anderson mark.anderson@dowjones.com and Michael A. Pollock michael.pollock@dowjones.com]
The U.S. Supreme Court Monday put the brakes on an antitrust conspiracy lawsuit against several Baby Bell companies, ruling 7-2 that the plaintiffs had failed to present enough facts for the case to survive in federal court. "Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed," Justice David Souter wrote in the majority opinion. "We think that nothing contained in the complaint invests either the action or inaction alleged with a plausible suggestion of conspiracy," he added. The ruling reverses a lower court opinion that had allowed a lawsuit against Bell Atlantic Corp., BellSouth Corp., Qwest Communications International Inc., and SBC Communications Inc. (Bell Atlantic is now Verizon Communications Inc. and SBC bought AT&T Inc. and the renamed company, AT&T, merged with BellSouth. And isn't there just a little bit of irony in that?) The case alleged the companies engaged in an anticompetitive conspiracy to restrict competition in the local telephone and broadband Internet markets. The lawsuit was still early in its litigation. At oral arguments, the companies and the U.S. Justice Department urged the Supreme Court to set private antitrust lawsuit standards high enough to bar expensive legal discovery in a cases with questionable merit. That position was accepted by the high court's ruling, which not only reversed the lower court but definitely said the lawsuit should be thrown out. "Today's decision is the fifth in a series of Supreme Court decisions establishing that firms will not be challenged under antitrust for making independent choices that benefit consumers," said John Thorne, a senior vice president at Verizon Communications. Mr. Thorne added the case will let telecommunications companies continue to have "the freedom to decide when and how to enter new markets." The justices were deciding whether the plaintiffs in the case -- a proposed class-action for customers since 1996 federal telecommunications law changes -- must allege specific anticompetitive acts that are suspicious enough to warrant consideration for a trial. Justice John Paul Stevens and Ruth Bader Ginsburg dissented, arguing the case should have at least been allowed to proceed to discovery so a court could review evidence in the case. "Directing that the case be dismissed without even looking at any of that evidence marks a fundamental -- and unjustified -- change in the character of pretrial practice," Justice Stevens wrote.
http://online.wsj.com/article/SB117975608272309469.html?mod=djemTECH
(requires subscription)
* Ruling Favors Phone Firms
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/21/AR200705...
* Consumers lose suit against 4 big telecoms (Associated Press)
http://seattletimes.nwsource.com/html/businesstechnology/2003716726_tele...
CITIES STRUGGLE WITH WIRELESS INTERNET
[SOURCE: Associated Press, AUTHOR: Anick Jesdanun]
Across the United States, many cities are finding their Wi-Fi projects costing more and drawing less interest than expected, leading to worries that a number will fail, resulting in millions of dollars in wasted tax dollars or grants when there had been roads to build and crime to fight. More than $230 million was spent in the United States last year, and the industry Web site MuniWireless projects $460 million will be spent in 2007. Without revenues they had counted on to offset that spending, elected officials might have to break promises or find money in already-tight budgets to subsidize the systems for the low-income families and city workers who depend on the access. Cities might end up running the systems if companies abandon networks they had built. The worries come as big cities like Philadelphia and Portland, Ore., complete pilots and expand their much-hyped networks. "They are the monorails of this decade: the wrong technology, totally overpromised and completely undelivered," said Anthony Townsend, research director at the Institute for the Future, a think tank.
http://hosted.ap.org/dynamic/stories/M/MUNICIPAL_WIRELESS_CITY_USE?SITE=...
* City use seen as key to Wi-Fi projects
Utility workers armed with the latest wireless gadgets will be able to read electric meters remotely using Wi-Fi networks many cities are contemplating. Police and building inspectors can file and retrieve reports on the go. City employees carrying Wi-Fi phones can also reduce cellular phone bills. In fact, officials in St. Cloud, Fla., figured they were saving enough to pay for their network's $2.6 million construction and estimated $400,000 annual operating costs. It's how they justified giving all residents free Internet access on the system. Yet other municipal projects are counting on subscription or advertising revenues from residential usage. Some are in danger of failing if they cannot boost demand.
http://hosted.ap.org/dynamic/stories/M/MUNICIPAL_WIRELESS_WOES?SITE=VANO...
FCC'S MARTIN ASKED TO ACT ON TRIBUNE WAIVER REQUESTS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Fourteen members of the Illinois congressional delegation -- Senator Richard Durbin (D) and 13 of the state's 19 representatives -- asked FCC Chairman Kevin Martin to act on Tribune's broadcast-newspaper crossownership waiver requests "in a timely fashion." The letter does not take a position on whether the waivers should be granted, but the legislators do point out that the FCC is in the midst of a years-long review of its media ownership rules. A Philadelphia Federal Appeals Court remanded its 2003 rule rewrite back to the FCC for justification, though it suggested that one of the FCC changes that appeared justified was getting rid of the newspaper-broadcast cross-ownership ban.
http://www.broadcastingcable.com/article/CA6445213.html
* Illinois Lawmakers Seek Quick Tribune Action
http://www.multichannel.com/article/CA6445222.html?rssid=196
GOOGLE PROPOSES INNOVATION IN RADIO SPECTRUM AUCTION
[SOURCE: New York Times, AUTHOR: John Markoff]
Google filed a proposal on Monday with the Federal Communications Commission calling on the agency to let companies allocate radio spectrum using the same kind of real-time auction that the search engine company now uses to sell advertisements. The company had no plans to bid in the closely watched sale of a swath of broadcast spectrum scheduled for February 2009 as part of the nation’s transition to digital broadcast television. The company, the world’s dominant search engine, has, however, become an active participant in the debate over the control of access to broadband digital networks because it wants to create more competition among digital network providers like cable companies and Internet service providers. The Google filing comes two days before a deadline for public comments set in an F.C.C. rule-making procedure for the sale of spectrum in the 700 MHz band, now largely used by UHF television broadcasters. In their proposal, Google executives argue that by permitting companies to resell the airwaves in a real-time auction would make it possible to greatly improve spectrum use and simultaneously create a robust market for innovative digital services.
http://www.nytimes.com/2007/05/22/technology/22google.html
(requires registration)
PHONE COMPANY DEAL IRKS WOULD-BE BIDDERS
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
The Alltel Corporation’s agreement to go private in a $27.5 billion deal, the largest leveraged buyout ever in the telecommunications industry, is not sitting well with some other private equity firms that were lined up to bid for the company. The agreement for Alltel, the wireless service provider, to be acquired by a consortium including the Texas Pacific Group and a unit of Goldman Sachs effectively short-circuits the auction process, in which other groups had hoped to participate. Among them were the Blackstone Group, with Providence Equity Partners, and the Carlyle Group, with Kohlberg Kravis Roberts & Company. The lack of a formal auction may also raise questions among some Alltel shareholders about whether they received the highest price possible.
http://www.nytimes.com/2007/05/22/technology/22alltel.html
(requires registration)
* Alltel Deal Takes Some Bidders by Surprise
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/21/AR200705...
UNIVERSAL SERVICE HANG-UP
[SOURCE: Bangor Daily News, AUTHOR: Editorial Staff]
[Commentary] The Universal Service Fund, money collected by the federal government to subsidize rural telephone service, needs to be revised to reflect the increasing use of electronic communications. Capping payments to wireless carriers for a year while the Federal Communications Commission looks for solutions to a problem it has been unable to solve for more than a decade is not the answer. Instead, federal regulators -- with a push from Congress if necessary -- must bring USF collections and distributions in line with current communications uses and needs without slowing their growth in rural areas. Ensuring USF funds support needed work and looking for ways to include broadband in the fund makes sense. Doing this at the expense of better cell phone service in rural areas does not.
http://www.bangornews.com/news/t/viewpoints.aspx?articleid=150020&zoneid=34
FAIR WARNING TO FAIRPOINT
[SOURCE: Reformer.com]
[Commentary] When we heard the news in January that Verizon wanted to sell off its land line operations in northern New England to FairPoint Communications, we admit it was cause for rejoicing. It seemed then that any potential owner would be an improvement over Verizon. Only 60 percent of Verizon's 1.5 million customers in Vermont, New Hampshire and Maine have access to broadband Internet service -- a level of service that the telecommunications industry newsletter, DSL Prime, recently called one of the lowest broadband access rates in the developed world. But as bad as Verizon has been, there is growing doubt about whether the North Carolina-based FairPoint can live up to the promises it has been making. The $2.175 billion deal, which still needs the approval of state regulators in all three states, would transfer all of Verizon's northern New England land line assets and its 3,000 employees to FairPoint. Is FairPoint strong enough to take over for Verizon? FairPoint has committed to beating Verizon's promise to extend DSL (basic high-speed Internet technology) to at least 80 percent of Vermont by 2010. With the recent passage of a bill in the Vermont Legislature requiring 100 percent access by 2010, can FairPoint deliver? The future economic and social well-being of Vermont is going to rely heavily upon high-speed Internet service being universally available in every corner of the state. If FairPoint does no better than Verizon in living up to this standard, Vermonters will be stuck in a telecommunications backwater for years to come.
http://www.reformer.com/editorials/ci_5924560
INTERNET PIONEER TO OVERSEE ITS REDESIGN
[SOURCE: Associated Press, AUTHOR: Anick Jesdanun]
A government contractor that played a key role in the Internet's birth will oversee efforts to redesign the network from scratch. The National Science Foundation announced Monday that BBN Technologies Inc. will get up to $10 million over four years to oversee the planning and design of the Global Environment for Network Innovations, or GENI. Many researchers want to rethink the Internet's underlying architecture, saying a "clean-slate" approach is the only way to truly address security, mobility and other challenges that have cropped up since the Internet's birth in 1969.
http://www.phillyburbs.com/pb-dyn/news/95-05212007-1350283.html
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