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AT&T-BELLSOUTH MERGER
FCC Delays AT&T/BellSouth and Net Neutrality Votes
AT&T, BellSouth merger passes antitrust test
Statement by Assistant Attorney General Thomas O. Barnett
Criticism of DoJ Decision
Press Releases
Additional Coverage

INTERNET/BROADBAND
Google and the Myth of an Open Net
It's time for the Feds to subsidize broadband

JOURNALISM
FCC is No Place for TV News Regulation
A Newspaper Investigates Its Future
British Court Ruling Gives Boost To Serious Journalism

QUICKLY -- Group: Cable Spends Big in D.C.; FTC=20
launches blog on marketplace tech changes;=20
Prime-Time Rating Points Valued At Nearly $400=20
Million; Solomon Trujillo in Australia;

AT&T-BELLSOUTH MERGER

FCC DELAYS AT&T/BELLSOUTH VOTE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The FCC has pulled the AT&T/BellSouth merger from=20
its Thursday meeting agenda. Also gone is the=20
planned launch of a notice of inquiry on network=20
neutrality, the issue that has stalled=20
telecommunications reform legislation in the=20
Senate. But the commission has only put off those=20
two controversial items for a day. It has=20
scheduled another meeting for Friday, Oct. 13,=20
where it still plans to take up both items,=20
though that is not a certainty either. The FCC=20
could be deadlocked on the merger, with Robert=20
McDowell not participating. That leaves two=20
Democrats and two Republicans, with the Democrats=20
highly critical of the DOJ decision and wanting=20
conditions on the merger. Commissioner McDowell=20
has been operating as though he will not vote.=20
That's because his former employer, telecom lobby=20
COMPTEL, has weighed in on the merger.
http://www.broadcastingcable.com/article/CA6380251.html?display=3DBreaki...
News
* See FCC public notice:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-267857A1.doc

AT&T, BELLSOUTH MERGER PASSES ANTITRUST TEST
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
AT&T and BellSouth got the green light from U.S.=20
antitrust authorities on Wednesday to move=20
forward with their proposed $67 billion merger,=20
which will create the largest phone company in=20
the United States. The Department of Justice's=20
antitrust division issued a statement approving=20
the merger unconditionally. The merger still=20
needs approval from the Federal Communications=20
Commission, which is scheduled to vote on the=20
matter Thursday. The unconditional approval also=20
drew harsh words from Sen. Daniel Inouye, the=20
Democratic co-chairman of the Senate Commerce=20
Committee, which counts communications laws among=20
its responsibilities. The Hawaii politician=20
accused the Justice Department of ignoring=20
potential negative effects from the reduced=20
competition wrought by the merger, saying in a=20
statement that the decision "not only flies in=20
the face of the department's own merger=20
guidelines, but also rests on the hope of=20
potential facilities-based competition that may=20
never materialize." Sen Inouye said it's now up=20
to the FCC "to stand up for consumers and to=20
insist upon strong conditions to protect competition."
http://news.com.com/AT38T,+BellSouth+merger+passes+antitrust+test/2100-1...
_3-6124785.html?tag=3Dhtml.alert

* Statement by Assistant Attorney General Thomas=20
O. Barnett Regarding the Closing of the=20
Investigation of AT&T=92s Acquisition of Bellsouth
"After thoroughly investigating AT&T=92s proposed=20
acquisition of BellSouth, the Antitrust Division=20
determined that the proposed transaction is not=20
likely to reduce competition substantially. The=20
Division investigated all areas in which the two=20
companies currently compete =96 including=20
residential local and long distance service,=20
telecommunications services provided to business=20
customers, and Internet services =96 and the=20
merger=92s impact on future competition for=20
wireless broadband services. The presence of=20
other competitors, changing regulatory=20
requirements and the emergence of new=20
technologies in markets for residential local and=20
long distance service indicate that this=20
transaction is not likely to harm consumer=20
welfare. The proposed acquisition does not raise=20
competition concerns with respect to Internet=20
services markets or =91net neutrality=92. The merged=20
firm would continue to face competition from=20
other facilities-based rivals in the provision of=20
telecommunications services to business customers=20
including local private line services. The=20
combination would not significantly increase=20
concentration in the ownership of spectrum in any=20
geographic area or give AT&T control over a large=20
enough share of all spectrum suitable for=20
wireless broadband services to raise competitive=20
concerns. Finally, the merger would likely result=20
in cost savings and other efficiencies that should benefit consumers."
http://www.usdoj.gov/opa/pr/2006/October/06_at_692.html

Criticism of DoJ Decision
* Justice OK's AT&T/BellSouth Merger
Media consolidation critic Jeff Chester, of the=20
Center For Digital Democracy, was neither=20
surprised nor pleased with the decision: "The=20
Bush Administration's DOJ has surrendered the=20
rights of the public to have a competitive and=20
democratic broadband media system." Big computer=20
companies like Google, Microsoft, Yahoo Intel and=20
others are also concerned with the merger,=20
suggesting it constitutes one of the final pieces=20
in the effective reconstitution of the old Ma=20
Bell. Gigi Sohn, President of Public Knowledge,=20
said she was concerned that the FCC will vote on=20
the merger tomorrow as it also considers a Notice=20
of Inquiry (NOI) on Net Neutrality: "coupling"=20
the merger vote with the NOI was a "bait and=20
switch," that will allow the FCC to attach few or=20
no conditions on the merger while saying they are=20
"taking care of Net Neutrality through the notice of inquiry."
http://www.broadcastingcable.com/article/CA6379848.html?display=3DBreaki...
News

* Copps, Adelstein Criticize Justice's Approval Of Merger
The FCC's two Democratic regulators harshly=20
criticized the Justice Department for approving=20
the $78 billion AT&T, BellSouth merger without=20
conditions. The department, however, said "the=20
presence of other competitors, changing=20
regulatory requirements and the emergence of new=20
technologies" prompted its decision. "The=20
Justice Department has packed its bags and walked=20
out on consumers and small businesses by refusing=20
to impose even a single condition in the largest=20
telecom merger the nation has ever seen,"=20
Commissioner Michael Copps complained in a=20
statement. Because Justice did not issue a=20
consent decree, or a settlement with the parties,=20
a combined AT&T, BellSouth would not be subject=20
to an automatic judicial review. "This=20
abdication looks suspiciously like an end-run=20
around the public-interest review" required under=20
antitrust law, Commissioner Copps added. His=20
views were echoed by the Commissioner Jonathan=20
Adelstein, who issued a statement characterizing=20
Justice's conclusions as "a reckless abandonment=20
of [Justice's] responsibility to protect=20
competition and consumers." Several observers=20
said Justice's ruling would motivate the two=20
Democratic FCC commissioners to fight harder for=20
consumer protections. But if the Democrats push=20
too far, Republican FCC Chairman Kevin Martin=20
might include GOP Commissioner Robert McDowell in=20
the negotiations, giving the Republicans a 3-2=20
advantage. Without McDowell, the parties are=20
split 2-2. Commissioner McDowell may be recused=20
due to his background at CompTel, which=20
represents Bell competitors. But sources note=20
that Chairman Martin has the authority to involve=20
McDowell if the talks with Democrats reach an impasse.
http://www.njtelecomupdate.com/lenya/telco/live/tb-RONK1160597560735.html

* DOJ Defends AT&T/BellSouth Investigation
Charged by FCC Democrats with taking a dive and=20
"reckless abandonment" of consumers, the Justice=20
Department Wednesday defended its decision that=20
the $67 billion merger of AT&T and BellSouth did=20
not raise anitcompetitive issues sufficient to attach conditions.
http://www.broadcastingcable.com/article/CA6380223.html?display=3DBreaki...
News

Press Releases
* Justice Department Rubber Stamps AT&T Mega-Merger
Free Press: "The merger of AT&T and Bell South=20
would take a big step toward the resurrection of=20
Ma Bell, and its magnitude demands thorough=20
scrutiny and careful review. Instead, the=20
officials charged with protecting the public=20
interest are rubber-stamping the deal in the most=20
irresponsible manner imaginable. The consent=20
decree and subsequent judicial review have been=20
tossed out the window. It appears the fix is in.=20
The public interest is not served by handing out=20
favors to large corporations without any=20
safeguards. We are witnessing a wave of=20
concentration in the telecommunications market=20
that threatens to sweep away the free and open=20
Internet. Yet the watchdogs in Washington can't=20
be bothered to require even the most basic=20
consumer protections. The new AT&T wants all the=20
market power of its old monopoly without any=20
consumer protections. The FCC must not sign off=20
on this deal without applying serious conditions=20
that prevent discrimination and foster broadband=20
competition. First and foremost, this merger=20
should not be allowed to proceed without=20
permanent, binding protections for Net Neutrality."
http://www.freepress.net/press/release.php?id=3D173

* DOJ Rubberstamp on AT&T/BellSouth Merger=20
Recreates the MA Bell Dynasty, Sells Out Consumers
"DOJ's rubberstamp on this merger suggests the=20
Justice Department has thrown in the towel on=20
competition between the Bell phone companies,"=20
said Gene Kimmelman, senior vice president for=20
Consumers Union. "The Justice Department has=20
abdicated responsibility to promote the=20
competition it promised when it broke up AT&T 20=20
years ago," he added. "In the end, the majority=20
of consumers will end up paying inflated prices=20
that result when Bell companies merge and=20
dominate local, long distance, wireless and=20
Internet services in their territories."
http://www.hearusnow.org/other/newsroom/phoneservices/dojrubberstamponat...
llsouthmerger/

Additional Coverage
* Justice Dept. Approves AT&T-BellSouth Deal
http://www.nytimes.com/2006/10/12/business/12att.html
* Justice Department Criticized For Approving Big AT&T Deal
http://online.wsj.com/article/SB116058124083289458.html?mod=3Dtodays_us_...
ketplace
* AT& T Deal Wins A Key Go-Ahead
http://www.washingtonpost.com/wp-dyn/content/article/2006/10/11/AR200610...
0915.html
* BellSouth deal faces FCC fight
http://www.usatoday.com/printedition/money/20061012/3b_fcc12.art.htm
* AT&T Gets Closer to Purchase of BellSouth
http://www.latimes.com/business/printedition/la-fi-att12oct12,1,3589829....
ry?coll=3Dla-headlines-pe-business

INTERNET/BROADBAND

GOOGLE AND THE MYTH OF THE OPEN NEW
[SOURCE: Financial Times, AUTHOR: Thomas Hazlett]
[Commentary] =93Network neutrality=94 rules are=20
needed, Google argues, because the architecture=20
of the Internet demands it. That structure relies=20
on traffic flowing freely over a network that is=20
=93open, end to end=94. Yet the capitalist engine=20
that powers the Internet demands something=20
completely different, as Google=92s acquisition of=20
YouTube makes clear. That strategy is to=20
integrate Google=92s search and advertising sales=20
with YouTube=92s users, which could potentially=20
impede access to one of the hottest technologies=20
by other service providers. Jeremy Schoemaker, a=20
net economy expert, sees the deal as superb for=20
Google, =93merging to form the biggest video=20
network=94 and winning a =93land-grab for publisher=20
space=94. Perhaps even better, it boxes out a=20
rival: =93This move is a total =91in your face=92 to=20
Microsoft,=94 which had made YouTube an offer for=20
an advertising agreement. The Internet lurches=20
forward in spasms of business model discovery, as=20
when Google figured out how to auction off=20
search-targeted advertising slots, leaving banner=20
advertisements behind. Today, Google=92s absorption=20
of its little video cousin is part of this=20
jockeying for positions of competitive=20
superiority. The Internet really is not open =96=20
if, as Google hopes, it is doing it right.=20
Innovation on the web requires market=20
transactions, including deals that integrate=20
once-independent operations. That is the=20
Internet=92s DNA. You can call it =93open=94, but=20
YouTube just got bought. That gives Google=20
something special that it will develop, to the=20
exclusion of Yahoo, Microsoft, NewsCorp and other=20
rivals. For investors, the game is rough and=20
wild. But as a consumer, what=92s not to like?
http://www.ft.com/cms/s/c1b2ac76-5883-11db-b70f-0000779e2340.html
(requires subscription)

IT'S TIME FOR THE FEDS TO SUBSIDIZE BROADBAND
[SOURCE: ComputerWorld, AUTHOR: Preston Gralla]
[Commentary] The U.S. is falling so far behind=20
the rest of the world in broadband that it's time=20
for the government to take some action -- and=20
Senator Hillary Clinton's proposed Rural=20
Broadband Innovation Fund is a good first step.=20
Now, I know there are a lot of wingnuts out there=20
who believe that Senator Clinton is the spawn of=20
the devil, but whatever you think of Clinton, her=20
idea is on-target. Sen Clinton's bill would set=20
up the Office of Rural Broadband Initiatives at=20
the Department of Agriculture. The office would=20
administer grants and loan programs to encourage=20
investment in broadband infrastructure in=20
underserved rural areas. It would also create a=20
Rural Broadband Innovation Fund which would=20
invest in services hat can deliver broadband=20
service to rural areas including satellite,=20
fiber, WiFi, and broadband over power lines (BPL).
http://www.computerworld.com/blogs/node/3683

JOURNALISM

FCC IS NO PLACE FOR TV NEWS REGULATION
[SOURCE: tvnewsday, AUTHOR: Harry Jessell]
[Commentary] The Martin FCC is betraying=20
traditional, small-government Republican=20
principals in its crackdown on broadcast=20
indecency, its sudden interest in media=92s role in=20
childhood obesity and its mindless extension of=20
children=92s programming rules to digital=20
broadcasting. But the worst example of=20
overreaching government by the Martin FCC is its=20
current investigation into how TV stations are=20
using video news releases. The newsroom is a=20
place that no government official should want to=20
be, especially a Republican. But, right now, with=20
its letters of inquiry, the FCC is right in the=20
middle of more than three dozen newsrooms,=20
looking over the shoulder of news directors,=20
producers and reporters. Much of the concern=20
about VNRs stems from reports that the Bush=20
administration was making heavy use of them to=20
sell its policies. Some called it domestic=20
propaganda. Now, if the government wants to=20
curtail the executive branch=92s ability to send=20
out VNRs, that=92s fine. But it should not get in=20
the way of anybody receiving and using VNRs,=20
regardless of their source. The use of VNRs is=20
self-regulating. Viewers can sniff out their=20
indiscriminate use and will avoid newscast that=20
rely too heavily on them. TV stations have been=20
embarrassed repeatedly by press reports of their=20
use, particularly those from the Bush=20
administration, and the lack of responsibility=20
shown in airing them without proper attribution.=20
By harassing TV stations about VNRs, the FCC has=20
climbed in bed with the brain-dead advocacy=20
group, the Center for Media and Democracy. The=20
FCC investigation springs from a study the group=20
did into VNR use. The CMD apparently wants=20
greater government regulation and oversight of TV=20
news. At the same time, it wants TV news to be a=20
more aggressive government watchdog. It=92s too=20
dumb to see the inherent conflict in those goals.
http://www.tvnewsday.com/articles/2006/10/11/daily.4/

A NEWSPAPER INVESTIGATES ITS FUTURE
[SOURCE: New York Times, AUTHOR: Katharine Seelye]
Newspapers are all looking for ways to gain=20
readers, and many have hired consultants to help=20
them. In an unusual twist, The Los Angeles Times=20
is looking to chart its future by using its own=20
reporters and editors, who rank among the best=20
investigators in the business. The Times is=20
dedicating three investigative reporters and half=20
a dozen editors to find ideas, at home and=20
abroad, for re-engaging the reader, both in print=20
and online. The newspaper=92s editor, Dean Baquet,=20
and its new publisher, David Hiller, plan to=20
convene a meeting today to start the effort,=20
which is being called the Manhattan Project. A=20
report is expected in about two months.
http://www.nytimes.com/2006/10/12/business/media/12paper.html
(requires registration)

BRITISH COURT RULING GIVES BOOST TO SERIOUS JOURNALISM
[SOURCE: Wall Street Journal, AUTHOR: Aaron O. Patrick aaron.patrick( at )wsj.co=
m]
Britain's top court strengthened protections for=20
media firms against libel suits in the U.K. if=20
they can show their stories serve the public=20
interest. Until now, British libel laws were=20
among the friendliest to plaintiffs anywhere,=20
making the nation's courts a magnet for foreign=20
celebrities taking action against U.S.=20
publications. When faced with a libel action,=20
publications essentially had to prove their=20
articles were true or meet a detailed checklist=20
about their reporting that considered such things=20
as the seriousness of the allegations and the=20
steps that were taken to verify the information.=20
Truth remains a defense against libel. But now a=20
"qualified privilege" defense under which the=20
defendant does not have to prove the truth of the=20
allegedly defamatory statement is a viable=20
option. The new ruling brings United Kingdom law=20
closer to the protections U.S. media are afforded=20
under the First Amendment of the U.S.=20
Constitution. U.S. law sets strict and limited=20
standards for when public figures can=20
successfully win libel suits. As honed in a 1964=20
Supreme Court decision, known as New York Times=20
v. Sullivan, U.S. public figures must show that a=20
story was false and that the publication knew it=20
was false or acted in reckless disregard for the=20
truth. The British standard defined yesterday=20
doesn't give all publications such blanket=20
protection as in the U.S. Rather, it will only=20
apply to what a judge deems responsible=20
journalism that is of value to the public.
http://online.wsj.com/article/SB116055935348389227.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

QUICKLY

GROUP: CABLE SPENDS BIG IN DC
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
Common Cause charged Wednesday that the cable=20
industry=92s nearly $100 million in spending on=20
campaign contributions and lobbying has led to=20
favorable treatment in Washington, resulting in=20
higher prices for consumers and the defeat of a=20
la carte legislation. =93The return on cable=92s=20
investment has been impressive: a 90% increase in=20
cable rates since 1995 and industry-friendly=20
regulations that boost profits, coupled with even=20
more consolidation among cable companies,=94 Common=20
Cause said in unveiling its first Ask Yourself=20
Why report. =93Big cable=92s spending has also=20
limited the tools that parents have to shield=20
their children from inappropriate cable=20
programs.=94 The National Cable &=20
Telecommunications Association immediately=20
disputed Common Cause=92s findings and allegations.=20
=93It=92s ridiculous,=94 NCTA spokesman Brian Dietz said.
http://www.multichannel.com/article/CA6380151.html?display=3DBreaking+News
* See the report "Ask Yourself Why... Cable rates Got So High"
http://www.commoncause.org/atf/cf/{FB3C17E2-CDD1-4DF6-92BE-BD4429893665}/CO=
ST%20OF%20CABLE.PDF

FTC LAUNCHES BLOG ON MARKETPLACE TECH CHANGES
[SOURCE: Reuters]
The Federal Trade Commission has joined the=20
blogosphere with a site to explore how technology=20
is changing the way consumers shop, bank, pay=20
bills and communicate. The "Tech-ade Blog" will=20
include interviews with technology experts ahead=20
of the agency's November 6-8 public hearing on=20
how to protect consumers from ID theft, spyware,=20
online shopping fraud and other Web-related=20
marketplace issues. See http://ftcchat.us/blog/
http://today.reuters.com/News/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-10-11T200225Z_01_N11286347_RTRUKOC_0_US-FTC-BLOG.xml&WTmodLoc=3DInt=
ernetNewsHome_C1_%5bFeed%5d-9

PRIME-TIME RATING POINTS AT NEARLY $400 MILLION
[SOURCE: MediaDailyNews, AUTHOR: Joe Mandese]
Using estimates compiled by the Broadcast Cable=20
Financial Management Association, a prime-time=20
rating point on the Big 3 networks is worth=20
nearly $400 million per year. The costs are even=20
higher when looked at on the basis of the key=20
demographics that the major broadcast networks=20
actually guarantee their prime-time advertising=20
deals on. During the 52-week 2004-05 season, the=20
Big 3 networks delivered a combined rating of 9.7=20
adults 18-49, meaning that each rating point in=20
that demo yielded $763.9 million in annual broadcast year ad revenues.
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
9458&Nid=3D24151&p=3D368626
* Live Ratings Kill Network Ad Yield, Hundreds Of Millions Sacrificed
http://publications.mediapost.com/index.cfm?fuseaction=3DArticles.san&s=...
9451&Nid=3D24151&p=3D368626

AFTER BARBS, AUSTRALIAN CHIEF STARTS TO GET SOME RESPECT FOR REVAMPING
[SOURCE: New York Times, AUTHOR: Wayne Arnold]
A profile of Solomon D. Trujillo, who has drawn=20
criticism over his running of Australia=92s=20
dominant phone company, Telstra. Trujillo, an=20
American who formerly led US West and the French=20
cellular operator Orange, was hired in July 2005=20
as chief executive to prepare Telstra for a giant=20
share sale. Since then, he has managed to=20
antagonize not only Telstra=92s customers but also=20
its biggest stakeholder, the Australian government.
http://www.nytimes.com/2006/10/12/business/worldbusiness/12telstra.html
(requires registration)
--------------------------------------------------------------
Communications-related Headlines is a free online=20
news summary service provided by the Benton=20
Foundation (www.benton.org). Posted Monday=20
through Friday, this service provides updates on=20
important industry developments, policy issues,=20
and other related news events. While the=20
summaries are factually accurate, their often=20
informal tone does not always represent the tone=20
of the original articles. Headlines are compiled=20
by Kevin Taglang headlines( at )benton.org -- we welcome your comments.
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