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FCC'S KEVIN MARTIN ON THE HOT SEAT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Now serving his second term as chairman of the Federal Communications Commission, 40-year-old Kevin Martin, has been in the hot seat lately. Since he became chairman in 2005, he has pushed for greater curbs on sex and violence. Against great resistance, he has attempted to force cable systems to carry the digital channels of local TV stations. And he has riled many more in the cable industry with his advocacy of “à la carte,†which would allow consumers to purchase only the individual channels they want. Meanwhile, the new Democratic-controlled Congress has threatened frequent oversight hearings of the FCC. On the eve of the National Association of Broadcasters convention in Las Vegas, Chairman Martin sat down with B&C’s John Eggerton to talk about everything from TV violence to the Fairness Doctrine. On media ownership he Chairman Martin says, "I've committed to completing all of the ownership studies and all of the ownership hearings before the commission takes any action to make sure we are going through a process that is transparent and people have the opportunity to raise the issues of concern to them. We have committed to a total of six ownership hearings and two on localism. We have completed three of the six ownership hearings. We have another one coming up in Maine and one in Tampa at the end of April. So we've made some progress, but we still have some work to do. I'm not sure I can say when the earliest we could do something, because I have to make sure we finish all the hearings." On broadcasters' public disclosure rules he says, "Much of the debate over whether broadcasters should be subjected to additional public-interest obligations is based on whether they are serving their communities now. I think most broadcasters are doing a good job, and making public their practices will add concrete facts to this debate and should benefit them. My predecessor circulated an item on enhanced disclosure, and I recently proposed some edits to strengthen it."
http://www.broadcastingcable.com/article/CA6431598.html
FCC's Kevin Martin on the Hot Seat
FCC CHIEF AVOIDS MISSTEPS OF PREDECESSOR
[SOURCE: Los Angeles Times 4/8, AUTHOR: Jim Puzzanghera jim.puzzanghera@latimes.com]
The FCC is in the midst of a periodic review of its media ownership rules, as required by Congress. The agency will spend the rest of 2007 studying whether to relax restrictions on the number of radio and TV stations that a company can own in one market, as well as rules that prevent ownership of a newspaper and a station in the same city. But this review could be much different from the last one, held four years ago. The largest station owners are not as insistent this time around on easing the rules because the broadcasting business has lost some luster since 2003 as advertisers and viewers have become enamored of the Internet. Major station owners such as News Corp., Walt Disney Co. and CBS Corp. are more interested in reducing their broadcast holdings and expanding their presence online. "It does not appear to me that the passion of the opponents has diminished in any way, but the passions of the proponents have diminished significantly," said Blair Levin, a telecommunications analyst at brokerage Stifel, Nicolaus & Co. One exception: Tribune Co., which owns newspapers and TV stations in five markets, including Los Angeles, where it owns The Times and KTLA Channel 5. The company's prospective new owner, Sam Zell, would need waivers in those markets to comply with the rules. Another factor is that FCC Chairman Kevin Martin appears intent on avoiding the mistakes made by his predecessor. Former Chairman Michael Powell, a fellow Republican, was widely criticized for holding just one public hearing, and suffered a humiliating blow to his credibility when Congress reversed part of the FCC's decision to overhaul the ownership rules. As a commissioner in 2003, Martin voted to liberalize the rules. That's one reason opponents worry that his open approach might be simply an attempt to smooth the path for what the media industry wants.
http://www.latimes.com/business/la-fi-fcc8apr08,1,3101936.story?coll=la-...
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http://www.latimes.com/business/la-fi-fcc8apr08,1,3101936.story?coll=la-headline…
LOCAL GOVERNMENT GROUPS OPPOSE FCC ORDER
[SOURCE: Multichannel News 4/3, AUTHOR: Linda Haugsted]
The Federal Communications Commission’s recent order requiring local governments to approve applications from new video providers in 90 days represents an “abuse of discretion†and violates federal law, according to petitions for review filed by a coalition of local government and community media groups. The challenges were filed in the U. S. Courts of Appeal for the Third, Fourth and Sixth Districts. The petitions for review were filed on behalf of the Alliance for Communications Democracy, the Alliance for Community Media, the National Association of Counties, the National League of Cities, the National Association of Telecommunications Officers and Advisors and the U.S. Conference of Mayors. The petition challenges an FCC ruling released March 5. When an application for video certification is made in a city by a telephone company that already has facilities in city rights of way, the city must act on that request within 90 days, according to the order. The FCC concluded that current municipal proceedings drag on too long, frustrating competition. The appellants argued that the FCC order violates the U.S. Constitution, the federal Communications Act and the public-notice requirements of the Administrative Procedure Act.
http://www.multichannel.com/article/CA6430593.html?rssid=108
* Cable Firms May Get Relief Despite Wave Of Lawsuits
[SOURCE: Technology Daily 4/3, AUTHOR: David Hatch]
http://www.njtelecomupdate.com/lenya/telco/live/tb-VPRP1175799175556.html
http://www.multichannel.com/article/CA6430593.html?rssid=108
MARTIN'S DTV LEASE PLAN DRAWING LITTLE SUPPORT
[SOURCE: tvnewsday 4/4, AUTHOR: Kim McAvoy]
FCC Chairman Kevin Martin's plan to create a new class of “small and independently owned†TV broadcasters using digital channels leased from conventional, licensed broadcasters is generating more confusion than enthusiasm. So far, only religious broadcasters have embraced the idea. Most others are waiting to see the full proposal before passing final judgment. It’s now being circulated among the other FCC commissioners. Under Martin’s rent-a-channel plan, the digital broadcasters would have all the obligations of regular broadcasters, but would also have all the rights. In other words, they will have to air three hours a week of children’s programming, but they will also be able to demand carriage on local cable systems. The opportunity would be limited to “small and independently owned businesses,†Chairman Martin suggested in a March 9 speech before the American Women in Radio and Television.
http://www.tvnewsday.com/articles/2007/04/04/daily.2/
Martin's DTV Lease Plan Drawing Little Support
CONSUMER GROUPS SUGGEST RULES FOR US WIRELESS SALE
[SOURCE: Reuters 4/5]
A coalition of consumer groups -- including heavyweights such as Consumers Union, New America Foundation and Media Access Project -- have proposed a set of proposals aimed at ensuring that an upcoming sale of U.S. wireless airwaves will create more competition in the communications industry. The Federal Communications Commission is expected to let bidders know sometime in April exactly what kind of services can be offered using the airwaves as well as how the auction will work and provide a set of rules on how the spectrum will be divided up. "We are asking them to set auction rules so it is not just the incumbents that win," said Art Brodsky, spokesman with Public Knowledge. The coalition is proposing three rules: 1) network neutrality, 2) reserving 30 MHz as "open access" spectrum, and 3) allowing more competitors than just the major incumbents to bid.
http://www.reuters.com/article/bondsNews/idUSN0522320220070405
* Coalition Pushes FCC For Open Spectrum Auction
http://www.informationweek.com/shared/printableArticle.jhtml?articleID=1...
* Silicon Valley Moneymen Make a Play for Airwaves
[SOURCE: New York Times, AUTHOR: John Markoff]
Some of Silicon Valley’s most powerful venture capitalists and technology investors have joined an investment group that is preparing to challenge cellphone carriers, cable and satellite companies for valuable radio spectrum that will be freed when television broadcasters convert to digital signals. The government mandated the transition to digital, to be completed by Feb. 19, 2009, so it could reclaim a broad swath of radio spectrum and reallocate the frequencies to public safety organizations and commercial broadband networks. The venture capitalists L. John Doerr and James L. Barksdale have joined an investment group that is promoting a plan that would open a portion of the radio spectrum for both uses, through technologies flexible enough to support both next-generation wireless Internet devices and public safety emergency communications. The plan is being put forth by Frontline Wireless, formed earlier this year by Reed E. Hundt, the former Federal Communications Commission chairman. Frontline Wireless is one of several potential bidders for spectrum in the 700 MHz band, used until now by UHF television, that is being opened up by the move to digital.
http://www.nytimes.com/2007/04/09/technology/09spectrum.html
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Consumer groups suggest rules for US wireless sale
ZELL WINS TRIBUNE IN BID TO REVIVE A MEDIA EMPIRE
[SOURCE: Wall Street Journal 4/3, AUTHOR: Sarah Ellison sarah.ellison@wsj.com]
On April 2, the Chicago Tribune, Los Angeles Times, several other newspapers and 23 television stations fell into the hands of an unlikely newspaper baron, iconoclastic real-estate magnate Sam Zell, whose bid had come at the eleventh hour. Mr. Zell's plan suggests that he has some degree of confidence in the beleaguered newspaper business. He has told people he sees promise in the company's Internet assets. But the deal leaves many unanswered questions about the future of Tribune. company's board accepted a revised $34-dollar-a-share proposal from Mr. Zell to take the company private. The complex deal is structured around an employee stock-ownership plan, or ESOP. When it is completed, most of the company's shares will be held by Tribune employees. Although he has no background in journalism, Mr. Zell will become chairman of a media company that will be carrying a heavy debt load, which will force its new owners to face tough questions. How Mr. Zell will be received remains to be seen. He has said he doesn't intend to break up the company, but Tribune said it will sell off the Chicago Cubs after the completion of the current baseball season. One person who has spoken to Mr. Zell about his plans says he is likely to seek further budget cuts, a move that will likely be unpopular with staff, particularly at the Los Angeles Times, where the editor and publisher both stepped down last year to protest budget cuts ordered by Tribune's headquarters.
http://online.wsj.com/article_print/SB117551431653956734.html
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WHAT THE TRIBUNE SALE MEANS
[SOURCE: Broadcasting&Cable, AUTHOR: Paige Albiniak]
Sam Zell’s $8.2 billion purchase of the troubled Tribune Co. is going to put more pressure to perform than ever on the company’s 23 TV stations. While the TV stations represent only one-quarter of the company’s total revenue, they turn in healthier cash flows than Tribune’s 11 newspapers. And their profit margins range in the low- to mid- 30% range, while the papers hover around 20%. The company is going to depend on those cash flows to handle the huge amount of debt -- between $12 billion and $13 billion, up from $5 billion in existing debt -- Tribune is taking on to complete this deal. “They don't have a large margin of error when they take on that much leverage,†says James Goss, senior investment analyst with Chicago-based Barrington Research. “But their cash flows and revenue base, which people presume are just falling off the cliff, are really not. They've just leveled off.†Pressure to improve efficiencies at the stations, and thus throw off more cash, may result in layoffs, for which employees at Tribune’s Los Angeles Times have been bracing for months now. Tribune executives say they do not expect widespread cutbacks, but that’s going to depend on TV-station performance in coming months.
http://www.broadcastingcable.com/article/CA6431678.html
* Zell Gets Veto Power at Tribune
although Sam Zell will control only a minority of the board, he will have the right to veto any major transactions. The employees, who will get company shares but who will no longer get 401(k) contributions from Tribune, will have far less control.
http://www.nytimes.com/2007/04/06/business/media/06tribune.html
PAPERS, WEB FIRMS NEED 'A NEW DEAL,' ZELL SAYS
[SOURCE: Los Angeles Times 4/6, AUTHOR: David Streitfeld david.streitfeld@latimes.com]
Sam Zell, who agreed to a takeover this week of Tribune Co., came to the heart of Silicon Valley on Thursday evening and said there needed to be "a new deal and new formulas" between newspapers and Internet companies. Journalists produce the news that search engines such as Yahoo Inc. and Google Inc. seamlessly and freely make available to anyone with a computer, Zell said during a presentation on corporate governance at Stanford University. "If all the newspapers in America did not allow Google to steal their content for nothing, what would Google do, and how profitable would Google be?" the Chicago real estate maverick mused. His answer: Not very. He said he had been in the news business for less than a week, so he wasn't a genius at it yet. Told that many people didn't think that newspapers were a good business because of declining circulation and falling ad revenues, he fired back: "A lot of people didn't think the railcar business was a good investment. I made a quarter-billion dollars. A lot of people didn't think container leasing was a good investment. I made a half-billion. Should I go on?" "The Tribune deal, no matter what happens, is not going to change my life," Zell said. "But it's a fascinating challenge. And it's even more of a challenge when I see other people haven't been successful in figuring it out."
http://www.latimes.com/business/printedition/la-fi-zell6apr06,1,2129698....
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ZELL IN TALKS WITH GEFFEN ON DEAL FOR LA TIMES
[SOURCE: Washington Post 4/5, AUTHOR: Frank Ahrens]
Chicago real estate mogul Samuel Zell, whose $13.2 billion bid for the Tribune Co. media empire was accepted April 2, has already talked to entertainment mogul David Geffen about a possible deal for the Los Angeles Times and dismissed a pair of rival bidders as backstabbers. Zell said Eli Broad and Ronald Burkle, Southern California billionaires who also bid on Tribune, approached him late in the process about forming a partnership to buy the company. Zell said in yesterday's Chicago Tribune that he put them off until his bid was accepted. Broad and Burkle then complained in a letter to the Tribune board that Zell's bid got preferential treatment over their original offer. "If somebody calls me and says 'I want to be a partner' and the next day tries to stick a knife in my back, tell me again why I would want to do business with him?" Zell told the Tribune.
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/04/AR200704...
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* FCC member raises potential issue for Tribune sale
FCC Commissioner Robert McDowell is raising some additional worries for Tribune Co. in its sale to Sam Zell, saying the FCC shouldn't be granting waivers to its newspaper-broadcast cross ownership ban just because it's reviewing media ownership rules.
http://chicagobusiness.com/cgi-bin/news.pl?rssFeed=news&id=24498
* FCC could force company breakup
http://www.chicagotribune.com/business/chi-0704050146apr05,0,1569133.sto...
CLINTON INTRODUCED RURAL BROADBAND BILL
[SOURCE: Sen Hillary Clinton press release 3/29]
Sen Hillary Clinton (D-NY) introduced The Rural Broadband Initiatives Act. This legislation will extend and improve access to broadband services in small towns across America. It creates a policy and action framework to ensure that the federal government employs an effective and comprehensive strategy to deploy broadband service and access in the rural areas of the United States. The bill will also establish a Rural Broadband Innovation fund to explore and develop cutting edge broadband delivery technologies to reach underserved rural areas. The Rural Broadband Initiatives Act has been endorsed by the Communications Workers of America.
http://clinton.senate.gov/news/statements/details.cfm?id=271662&&
http://clinton.senate.gov/news/statements/details.cfm?id=271662&
HELPING OUR CHILDREN SUCCEED: WHAT'S BROADBAND GOT TO DO WITH IT?
[SOURCE: The Children's Partnership , AUTHOR: April KirkHart and James Lau with Wendy Lazarus and Laurie Lipper]
This issue brief is designed to help leaders for children better understand what broadband is and what is at stake for our nation's 73 million children in the policy debate. It offers concrete ways that leaders can make children's needs a priority and advocate for digital opportunities for all youth.
http://www.techpolicybank.org/AM/Template.cfm?Section=Publications_from_...
PHONE FIRMS HUNG UP OVER FEES
[SOURCE: Los Angeles Times 4/5, AUTHOR: James S. Granelli]
A legal fight involving two Southern California companies and AT&T is exposing an ominous reality: Phone companies say they can decide whom their customers can't call. The Kidney Cancer Assn., a small charity watching its nickels and dimes, found that out the hard way. The nonprofit had been using a free, Web-based conference-calling service from a Long Beach company to connect patients with medical experts. But last month, the charity's cellphone provider, Cingular, began blocking calls to the system run by FreeConferenceCall.com. The same thing happened to Richard Rezabek, a software consultant, when he tried to conduct free conference calls with his U.S. Navy clients. "For two days, I had to pay to arrange long-distance calls, paying 30 to 40 cents a minute for each caller," said Rezabek "I couldn't charge my customers -- I had to swallow that cost." Swallowing the cost is exactly what Cingular parent AT&T, Sprint Nextel and Qwest are saying they're forced to do when they pay the high fees smaller phone carriers charge on the back end to connect callers. The conferences may be free to the consumer, but they're costing long-distance carriers millions of dollars. The blocked calls exposed a long-brewing dispute over how much it really costs to complete calls over a nationwide public telephone system that connects separately owned networks. It was believed to be the first time that the disagreement had spilled into the consumer's consciousness.
http://www.latimes.com/business/la-fi-phone5apr05,1,5194606.story?coll=l...
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http://www.latimes.com/business/la-fi-phone5apr05,1,5194606.story?coll=la-headli…
VONAGE WINS TEMPORARY REPRIEVE IN VERIZON CASE
[SOURCE: Reuters 4/7, AUTHOR: Rachelle Younglai]
Vonage won a temporary reprieve from an appeals court on Friday, hours after a lower court barred it from adding new customers while it appeals a finding it infringed Verizon patents for making phone calls over the Internet. U.S. District Judge Claude Hilton had limited Vonage to serving its existing customers. He also required Vonage to post a $66 million bond. The stay is good until the U.S. Court of Appeals for the Federal Circuit hears Vonage's request for a permanent stay of Judge Hilton's injunction. However, it does not mean that Vonage will necessarily be able to continue its business as usual for the length of the appeals process.
http://www.reuters.com/article/technologyNews/idUSN0625380920070407
* Vonage Gets Temporary Reprieve on Ruling
http://www.multichannel.com/article/CA6431520.html?rssid=108
* After setback, Vonage wins temporary relief
http://news.com.com/Judge+puts+halt+on+new+Vonage+customers/2100-1036_3-...
* Temporary reprieve allows Vonage to keep signing up customers
http://www.usatoday.com/printedition/money/20070409/2b_vonage09.art.htm
Vonage wins temporary reprieve in Verizon case