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TELECOM
Supreme Court Rules for Baby Bells
Ten Years Ago: Monopolies Still Rule the Local Phone Markets
Phone Company Deal Irks Would-Be Bidders
Universal Service Hang-up
Funding for rural wireless faces threat
Fair warning to FairPoint
E-rate Billing Fight

INTERNET/BROADBAND
Cities struggle with wireless Internet
Internet Pioneer to Oversee Its Redesign
75% of house-holds in Pakistan to be covered with high speed Internet by 2015
MySpace in deal with 8 state attorneys general

BROADCASTING/CABLE
FCC's Martin Asked to Act On Tribune Waiver Requests
Crist signs cable TV bill but asks for tighter enforcement
Markey Planning Food Marketing Hearings
WKBW Admonished For Kids TV Reporting Lapses
Consumers want choice, and they should get it

SPECTRUM
Google Proposes Innovation in Radio Spectrum Auction

QUICKLY -- Newhouse School announces Mirror Awards finalists/Benton
on list; FCC Chair Kevin Martin talks tech; Al Gore Speaks of a
Nation in Danger; Media's hand in the Iraq war; $4.7 Billion Private
Equity Buyout Wins Support at EMI; What's hot? Google offers daily
updates on trends

TELECOM

SUPREME COURT RULES FOR BABY BELLS
[SOURCE: Wall Street Journal, AUTHOR: Mark H. Anderson
mark.anderson( at )dowjones.com and Michael A. Pollock
michael.pollock( at )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...

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)

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

FUNDING FOR RURAL WIRELESS FACES THREAT
[SOURCE: Lincoln Journal Star, AUTHOR: Editorial Staff]
[Commentary] The Federal Communication Commission has proposed
capping the amount of subsidies paid to improve cell phone systems in
rural parts of the United States. Cell phone companies are battling
the proposal, but they face a powerful and entrenched foe in the
landline companies who fear future cuts in the subsidies that they
have been receiving for years. The cap could be particularly
detrimental to Nebraska, which only recently has begun to receive
federal subsidies to improve cell phone service, and because state
officials so far continue to funnel all state subsidies to landline
systems even though the state collects millions of dollars from cell
phone customers. It seems reasonable to allow cell phone companies to
finally get a more equitable share of the subsidy while Congress
works on reform. Nebraskans would appreciate fewer dropped calls when
they roam across the wide open spaces of their state.
http://www.journalstar.com/articles/2007/05/21/opinion/editorial/doc464f...

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

E-RATE BILLING FIGHT
[SOURCE: Federal Communications Commission]
The FCC has given interested parties until June 1 to file comments in
a proceeding on AT&T's billing process which requires E-rate
applicants to file a reimbursement form with the phone giant before
receiving E-rate subsidies. The State E-rate Coordinators Alliance
(SECA) requests that the Commission clarify that AT&T must refrain
from imposing late payment charges or from taking any action which
would adversely affect any E-rate customer's credit rating, in the
event that the customer does not remit payment of the discounted
portion of the monthly billing charges. SECA also requests that the
FCC clarify that the relief granted to AT&T pertains only to the
Service Provider Identification Numbers (SPINs) for which AT&T had
implemented its alternative reimbursement process as of July 21, 2003.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-07-2110A1.doc

INTERNET/BROADBAND

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...

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

75% OF HOUSEHOLDS IN PAKISTAN TO BE COVERED WITH HIGH SPEED INTERNET BY 2015
[SOURCE: Pakistan News]
Pakistan Prime Minister Shaukat Aziz says that his country is moving
forward with great speed to bridge the digital divide by improving
the access of information and communication technology to low-income
groups and a target of 1.6 million broadband connections has been set
for the next three years and infrastructure would be developed to
cover 75% of house-holds in the country with high speed Internet by
2015. "Bridging the digital divide is the need of the hour.
Information and communication technology has revolutionized modern
life in many ways and one of the major achievements of our government
is the reform and resultant growth of information and communication
technology sector. We are moving forward with great speed to bridge
the digital divide in the country by improving the access of
information and communication technology to low-income groups."
http://www.onlinenews.com.pk/details.php?id=112335

MYSPACE IN DEAL WITH 8 STATE ATTORNEYS GENERAL
[SOURCE: Reuters, AUTHOR: Kenneth Li]
Popular Internet social network MySpace said on Monday it reached an
accord with eight U.S. state attorneys general and has worked out a
legal mechanism to hand over information on convicted sex offenders
found on its service.
http://www.reuters.com/article/internetNews/idUSWEN827920070521

BROADCASTING/CABLE

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

CRIST SIGNS CABLE TV BILL BUT ASKS FOR TIGHTER ENFORCEMENT
[SOURCE: Associated Press, AUTHOR: Bill Kaczor]
Florida Gov. Charlie Crist (R) signed a bill into law Friday that is
designed to increase cable television competition, but he also asked
lawmakers to strengthen its consumer protection provisions in the
future. Some consumer groups and local governments had urged Gov
Crist to veto the legislation (SB 529). They disputed claims it would
reduce rates and argued the measure's service standards are too loose
and enforcement provisions too weak. Gov Crist agreed on the latter
point, but wrote in a letter accompanying the new law that he
believes it will mostly benefit consumers as claimed by the measure's
sponsors, who titled it the "Consumer Choice Act of 2007." The law,
sought by telephone companies to make it easier for them break into
the cable market, will shift authority to grant franchises from
cities and counties to the state.
http://www.theledger.com/apps/pbcs.dll/article?AID=/20070518/APN/705181725
* Gov. Crist Signs Florida Franchise-Reform Bill
http://www.multichannel.com/article/CA6445207.html?rssid=196

MARKEY PLANNING FOOD MARKETING HEARINGS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The question is not "if" but "when" -- House Telecommunications &
Internet Subcommittee Chairman Ed Markey (D-MA) will most likely hold
hearings on the media's food marketing to kids. The issue now is
timing -- whether to hold them before or after a government-industry
task force on childhood obesity and food marketing makes its
recommendations to Congress, which is targeted for mid-summer.
http://www.broadcastingcable.com/article/CA6445155.html?rssid=193

WKBW ADMONISHED FOR KIDS TV REPORTING LAPSES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The FCC has given WKBW-TV Buffalo (NY) an official reprimand for
failing to maintain its files on children's programming. As part of
its application to renew its license, the station admitted it had
forgotten to place one quarterly report on its educational and
informational kids programming in the public file, but it had also
not publicized the existence or location of that file for a couple of years.
http://www.broadcastingcable.com/article/CA6445190.html?rssid=193

CONSUMERS WANT CHOICE, AND THEY SHOULD GET IT
[SOURCE: The Daily Herald, AUTHOR: Editorial staff]
[Comentary] We are faced with so much choice in this country --
seemingly 100 different types of Coke alone, for example - that it
can drive consumers a little batty. On the other hand, there's cable
TV. Consumers usually have three choices: Bare bones "basic" cable,
expanded basic and premium channels. In this case, less is not more.
http://www.heraldnet.com/stories/07/05/21/100edi_editorial001.cfm

SPECTRUM

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)

QUICKLY

NEWHOUSE SCHOOL ANNOUNCES MIRROR AWARD FINALISTS
[SOURCE: Editor&Publisher]
Twenty-three finalists were named Monday in the first annual Mirror
Awards, which are being presented by Syracuse University's S.I.
Newhouse School of Public Communications. The new awards honor
excellence in media industry reporting. Nominees include reporters
and columnists from Fast Company, the New York Times, the Wall Street
Journal, New York Magazine, the Washington Post, Broadcasting&Cable,
National Public Radio, the New Yorker, the American Journalism
Review, and WNET New York. There are three finalists in the
"Excellence in Media Information Services": Mediabistro.com,
HealthNewsReview.org and, yours truly, the Benton Foundation's
Communications-related Headlines. Best of luck to all the finalists.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...

FCC CHAIR KEVIN MARTIN TALKS TECH
[SOURCE: San Jose Mercury News, AUTHOR: Troy Wolverton]
A Q&A with Federal Communications Commission Chairman Kevin Martin.
Interview covers US broadband penetration, the upcoming spectrum
auction, increasing broadband speeds, TV violence, a la carte cable
pricing, the transition to digital television technology, and Network
Neutrality.
http://www.siliconvalley.com/news/ci_5929239
* US switchover vouchers 'to have impact': FCC
http://www.dtg.org.uk/news/news.php?id=2444

AL GORE SPEAKS OF A NATION IN DANGER
[SOURCE: New York Times, AUTHOR: Michiko Kakutani]
In "The Assault on Reason" former Vice President Al Gore diagnoses
the ailing condition of America as a participatory democracy -- low
voter turnout, rampant voter cynicism, an often ill-informed
electorate, political campaigns dominated by 30-second television
ads, and an increasingly conglomerate-controlled media landscape --
and it does so not with the calculated, sound-bite-conscious tone of
many political-platform-type books, but with the sort of wonky ardor
that made both the book and movie versions of "An Inconvenient Truth"
so bluntly effective. Mr. Gore's central argument is that "reason,
logic and truth seem to play a sharply diminished role in the way
America now makes important decisions" and that the country's public
discourse has become "less focused and clear, less reasoned." His
argument that radio was essential to the rise and reign of Hitler,
Stalin and Mussolini ("without the introduction of radio, it is
doubtful that these totalitarian regimes would have commanded the
obedience of the people in the manner they did") is highly reductive,
just as his argument that television has enabled politicians to
manipulate mass opinion while preventing individuals from taking part
in the national dialogue seems overly simplistic. As for his
conviction that the Internet can help re-establish "an open
communications environment in which the conversation of democracy can
flourish," it plays down the more troubling aspects of the Web, like
its promotion of rumor and misinformation alongside real information,
and its tendency to fuel polarizing, partisan warfare.
http://www.nytimes.com/2007/05/22/books/22kaku.html
(requires registration)
* Free To Be Al Gore
[Commentary] Al Gore's revenge is to have been right: right about
the Internet and global warming, and right about Iraq.
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/21/AR200705...

MEDIA'S HAND IN THE IRAQ WAR
[SOURCE: The Christian Science Monitor, AUTHOR: Dante Chinni]
Bill Roggio, a blogger who covers US military campaigns, thinks the
coverage in Iraq lacks context, and reporters as a whole display a
lack of knowledge of counterinsurgency and the role the media plays
in an insurgency's information campaign.
http://www.csmonitor.com/2007/0522/p09s01-codc.html

$4.7 BILLION PRIVATE EQUITY BUYOUT WINS SUPPORT AT EMI
[SOURCE: New York Times, AUTHOR: Jeff Leeds]
The music company EMI Group, which has been the subject of takeover
speculation since the 1990s, said yesterday that its board supported
a new $4.7 billion offer from a private investor, Terra Firma Capital
Partners. EMI, which is based in London and releases music by the
Beatles and Coldplay, said it would recommend the offer to
shareholders. EMI said the enterprise value of the company was $6.3
billion, including debt. If approved, the acquisition by Terra Firma,
a private equity company started in 2002 by the financier Guy Hands,
would take EMI off the market at a time when the company has been
delivering poor financial results and industrywide CD sales are
plummeting. The sale would be a setback -- though perhaps a temporary
one -- for the Warner Music Group.
http://www.nytimes.com/2007/05/22/business/media/22music.html
(requires registration)
* EMI scores $4.7B offer from private equity firm
http://www.usatoday.com/printedition/money/20070522/1b_emi22.art.htm

WHAT'S HOT? GOOGLE OFFERS DAILY UPDATES ON TRENDS
[SOURCE: Reuters, AUTHOR: Eric Auchard]
The art of trend-spotting is set to take a more scientific turn as
Google Inc., the world's top Web search company, on Tuesday unveils a
service to track the fastest-rising search queries. Google Hot Trends
combines elements of Zeitgeist and Trends -- two existing Google
products that give a glimpse into Web search habits, but only in
retrospect based on weeks-old data. Hot Trends, a list of the current
top-100 fastest-rising search trends, will be refreshed several times
daily, using data from millions of Google Web searches conducted up
to an hour before each update, the company said.
http://www.reuters.com/article/technologyNews/idUSN2136402620070522
--------------------------------------------------------------
Communications-related Headlines is a free online news summary
service provided by the Benton Foundation (www.benton.org). Posted
Monday through Friday, this service provides updates on important
industry developments, policy issues, and other related news events.
While the summaries are factually accurate, their often informal tone
does not always represent the tone of the original articles.
Headlines are compiled by Kevin Taglang headlines( at )benton.org -- we
welcome your comments.
--------------------------------------------------------------