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TELECOM REFORM
Bass Aide: No Telecom Bill in 2006
Does Rupert Murdoch's DIRECTV Own Sen. Ted Stevens?
Net Neutrality Debate still Simmers

UNIVERSAL SERVICE
Universal Service Fund generated remarkably meager results for $50 billion
USF by the Numbers Coalition

BROADCASTING
Will It Be TV Stations or Newspapers for Tribune?
Why Unlicensed Use of Vacant TV Spectrum Will Not
Interfere with Television Reception
Court Delays Start of Profanity Challenge
USDTV Files for Bankruptcy

QUICKLY -- Framework Needed for Social=20
Communications Goals; House approves bill banning=20
Internet gambling; Baseball Sets Television Pacts=20
With Fox, TBS; Online Venture Seeks To Elevate=20
the Debate; New Milestones May be Necessary for=20
ICANN; MySpace gains top ranking of US Web sites; Ted's Techno Tubes

TELECOM REFORM

BASS AIDE: NO TELECOM BILL IN 2006
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Tad Furtado, a telecommunications adviser to Rep=20
Charles Bass (R-NH) said sharp policy disputes=20
and election-year time constraints mean that a=20
major telecommunications bill will not pass=20
Congress in 2006. Furtado, a panelist at the New=20
England Cable & Telecommunications Association=20
convention in Newport (RI), said a wide policy=20
gulf existed between Senate Commerce Committee=20
Chairman Ted Stevens (R-Alaska) and House=20
Commerce Committee Chairman Joe Barton (R-Texas)=20
on rural phone-company subsidies, and the two=20
lawmakers were unlikely to reach a compromise.=20
"Sen. Stevens' interest in passing as part of the=20
telecom bill comprehensive universal-service-fund=20
reform is at direct odds with Chairman Barton's=20
views on USF," Furtado said. "Although there's a=20
small effort in the House Commerce Committee, led=20
by Rep Lee Terry (R-NE), to engage the topic, we=20
have not done the homework or built the record=20
required for such an important topic. So I can't=20
imagine that we will be able to conference a bill=20
where Sen. Stevens is insisting on USF being part=20
of it." Furtado suggested that a bill dealing=20
strictly with cable-franchising issues had some=20
hope. "The franchise stuff -- I think there is=20
middle ground there," he added. But broader=20
legislation, Furtado said, had little chance of=20
success. "I just the think the differences=20
between the Senate and House versions are just=20
too great," he added. Assuming that Republicans=20
retain control of the House and Senate in the=20
November elections, Furtado said, "I do think=20
we'll get a bill ultimately next Congress."
http://www.multichannel.com/article/CA6351498.html?display=3DBreaking+News

DOES RUPERT MURDOCH'S DIRECTV OWN SEN TED STEVENS?
[SOURCE: TVPredictions.com, AUTHOR: Phillip Swann]
Swann follows up on an earlier report by=20
Multichannel News noting that Sen. Ted Stevens=20
(R-Alaska), the chairman of the Senate Commerce=20
Committee, is pushing legislation that could give=20
the Rupert Murdoch owned-DIRECTV a huge advantage=20
over the cable TV industry. In the broad telecom=20
reform bill just passed by the Senate Commerce=20
Committee are provisions that would require cable=20
TV operators to carry all the digital TV signals=20
from local stations. Stevens' aides blocked an=20
amendment by Sen. Jim DeMint (R-SC) that would=20
permit both cable and satellite TV operators to=20
carry just the "primary video" feed rather than=20
"any digital video signal." Consequently, as=20
Stevens' bill now stands, cable TV operators=20
would be required to carry all local digital TV=20
signals while DIRECTV and EchoStar would not. If=20
the language becomes law, this would give the=20
satellite TV operators more flexibility in what=20
channels and services they want to offer. It also=20
could save DIRECTV and EchoStar considerable=20
money because they wouldn't have to create space=20
for the extra channels. Sen Stevens has not=20
explained why he supports the legislation, but=20
Swann reports that nearly 10 percent of the=20
senator's 2005-2006 individual campaign=20
contributions have come from employees of=20
companies owned by Murdoch, such as News Corp.,=20
Fox and DIRECTV. Federal campaign law prohibits a=20
company from contributing more than $5,000 to a=20
single candidate per election. But the law=20
permits each company employee to donate up to=20
$2100 individually, with no limits on total=20
company employee contributions. This loophole=20
allows a company to significantly increase its=20
total contributions to -- and influence with -- a single lawmaker.
http://www.tvpredictions.com/stevens070906.htm
* Part Two: Was Stevens Paid Off?
http://www.tvpredictions.com/stevensparttwo.htm
* See "An Indirect Path to Mandate"
http://www.multichannel.com/article/CA6350826.html
** And recall "Rush's Million Dollar Conflict?"=20
http://www.benton.org/index.php?q=3Dnode/2128

NET NEUTRALITY DEBATE STILL SIMMERS
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Thomas Tauke, Verizon Communications' top=20
lobbyist, on Tuesday said the tussle over Net=20
Neutrality laws may be the "oddest" Capitol Hill=20
debate that he's ever experienced. The feud over=20
whether to prohibit network operators from making=20
deals to prioritize certain Internet content is=20
puzzling because it "amounts to holding a=20
congressional vote on hypothetical business=20
plans," he said at a luncheon organized by the=20
nonprofit Media Institute. "For consumers and the=20
country, government regulation of this developing=20
market is a lose-lose proposition," he said.
http://news.com.com/Net+neutrality+debate+still+simmers/2100-1028_3-6092...
.html?tag=3Dhtml.alert

UNIVERSAL SERVICE

UNIVERSAL SERVICE FUND GENERATED REMARKABLY=20
MERGER RESULTS FOR $50 BILLION SPENT
[SOURCE: Jeff Pulver Blog, AUTHOR: Daniel Berninger, Tier1 Research]
[Commentary] Berninger publishes online a July 10=20
letter he sent to the Senate and House Commerce=20
Committees. In it he writes, "The importance of=20
achieving universal access to telephone service=20
motivates a request that your committees open=20
hearings to account for how the $50 billion spent=20
by the Universal Service Fund (USF) over the last=20
20 years contributed to the cause of universal=20
service. More than five million households remain=20
without regular access to telephone service in=20
the United States. Penetration rates increased 2%=20
from 1985 to 1995 as the USF consumed $7 billion=20
in the program's first decade and an additional=20
1% of households got telephone service between=20
1996 and 2005 as the USF spent another $43=20
billion. This might seem like progress albeit=20
small and expensive ($16,000 per additional=20
telephone line) until one notices the penetration=20
rate for telephone service grew 2% in the 70's before the USF existed.
http://pulverblog.pulver.com/archives/004993.html

USF BY THE NUMBERS COALITION
[SOURCE: USF by the Numbers Coalition press release]
A group of telecommunications industry giants=20
announced the formation of a new coalition to=20
urge policy-makers to act in the interest of=20
telecommunications industry giants quickly and=20
adopt a numbers-based system for collecting=20
universal service funding. The new coalition,=20
called the USF by the Numbers Coalition (or=20
Numbers Coalition for short) will highlight the=20
consumer and economic benefits of replacing the=20
current revenues-based system of collecting funds=20
for the federal Universal Service Fund (USF) with=20
a system based exclusively or primarily on=20
telephone numbers. =93The current revenues-based=20
system is not sustainable in the changing telecom=20
environment,=94 said John Windhausen, Jr.,=20
Coordinator of the USF by the Numbers Coalition.=20
=93The current assessment on consumers=92 bills is=20
confusing and unpredictable. For example,=20
consumers are increasingly buying bundles of=20
services that do not distinguish between=20
interstate and intrastate services, or between=20
=91telecommunications=92 and =91information=92 services.=20
Collecting the universal service funds based on=20
working telephone numbers, with an exemption for=20
Lifeline customers, is an equitable and=20
consumer-friendly way to ensure that universal=20
service funding is preserved for the foreseeable=20
future.=94 The USF by the Numbers Coalition=20
includes AT&T, BellSouth, CTIA =AD The Wireless=20
Association, IDT Corporation, GCI, the National=20
Cable & Telecommunications Association (NCTA), USTelecom and Verizon.
http://www.ncta.com/ContentView.aspx?hidenavlink=3Dtrue&type=3Dreltyp1&c...
entId=3D3348
http://www.ustelecom.org/news_releases.php?urh=3Dhome.news.nr2006_0711

BROADCASTING

WILL IT BE TV STATIONS OR NEWSPAPERS FOR TRIBUNE?
[SOURCE: AdAge 7/10, AUTHOR: Ira Teinowitz]
Consumer groups are aiming to do what the=20
Chandler Trusts haven't successfully accomplished=20
-- force the Tribune Co. to sell off some of its=20
newspapers or TV stations. As the Federal=20
Communications Commission launches its=20
re-examination of media-ownership rules, Tribune=20
Co. is already facing a breakup six years after=20
its purchase of Times-Mirror and the=20
cross-ownership violations it created in the New=20
York; Los Angeles; and Hartford, Conn., markets.=20
When Tribune Co. bought Times-Mirror, it did a=20
bit of gambling. Though FCC rules banned=20
newspapers and broadcasters from licensing new=20
cross ownerships, Tribune bet the rules would=20
change by the time the license of KTLA-TV in Los=20
Angeles, WPIX-TV in New York and its Harford=20
station, WTIC-TV, came up for renewal. (Tribune=20
later acquired a second Hartford station,=20
then-struggling WTXX-TV, which it operated under=20
a management agreement via an FCC waiver.) The=20
Times-Mirror purchase included newspapers in=20
those markets, namely the Los Angeles Times, the=20
Hartford Courant and Newsday. It has turned out=20
that the cross-ownership issue isn't yet decided,=20
and the Tribune's licenses for TV stations are=20
now starting to come due. The first for Los=20
Angeles station KTLA-TV has to be filed early=20
next month and the current FCC rules say that=20
license can't be granted while the Tribune still=20
owns the L.A. Times. Tribune Co. will seek a=20
waiver of the cross-ownership rules to allow it=20
to keep both the Los Angeles newspaper and TV=20
station. The company is expected to have the=20
backing of FCC Chairman Kevin Martin, who has=20
been an outspoken critic of the cross-ownership=20
rule. Consumer groups concerned about growing=20
media concentration are gearing up for a fight=20
that includes attempts to thwart the Tribune=20
Co.'s efforts to seek a waiver. "The basis for=20
which waivers are granted is financial hardship=20
and difficulty of effectuating a sale," said Andy=20
Schwartzman, director of the Media Access=20
Project. "They've had five or six years to do=20
something with the Los Angeles Times. It doesn't=20
make any sense. No one is going to say that any=20
of their properties are distressed, with the=20
possible exception of one Hartford television=20
station, and no one is going to say they don't=20
have ready buyers. People are lining up to buy=20
these properties." Mr. Schwartzman said consumer=20
groups would likely sue to try to overturn any=20
FCC wavier grant. Mark Cooper, research director=20
for the Consumer Federation of America, also=20
believes a lawsuit against any waiver that is=20
granted is inevitable. "I am certain that many in=20
the public interest community will oppose the=20
waiver," he said. "No doubt someone will sue."
http://adage.com/mediaworks/article?article_id=3D110446

WHY UNLICENSED USE OF VACANT TV SPECTRUM WILL NOT=20
INTERFERE WITH TELEVISION RECEPTION
[SOURCE: New America Foundation, AUTHOR: Michael=20
J. Marcus and Paul Kolodzy and Andrew Lippman]
The FCC made a reasonable and important proposal=20
in May 2004 to give devices that meet rigid=20
technical specifications unlicensed access to=20
under-utilized TV band frequencies. The FCC has=20
proposed several alternative means to ensure=20
there would be no harmful interference to=20
television reception or to public safety=20
operations, as required by law. The ability of=20
=93smart radio=94 technologies to avoid interference=20
is well-established, and technology industries=20
have suggested additional improvements. A=20
comprehensive record has been established at the=20
FCC. Legislation that mandates an end to the DTV=20
transition will have the side effect of removing=20
a major uncertainty affecting this proposal. The=20
other concerns about interference raised by the=20
broadcast interests in this proceeding can be=20
easily resolved through normal FCC rulemaking.
http://www.newamerica.net/Download_Docs/pdfs/Doc_File_3166_1.pdf

COURT DELAYS START OF PROFANITY CHALLENGE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The U.S. Court of Appeals for the Second Circuit=20
in New York will delay the briefing schedule for=20
the broadcaster challenge of four FCC profanity=20
rulings until after the court rules on an FCC=20
request to take another look at those decisions=20
before the case begins. The first round of briefs=20
in the case were due Wednesday, July 12, but=20
sources familiar with the situation says the=20
clerk of the court has informed attorneys that=20
briefs will not be due Wednesday. One source says=20
the clerk also told them a decision is=20
forthcoming, though not likely by Tuesday night,=20
and that the briefing schedule will be deferred=20
until the court rules on the FCC's request,=20
backed by some broadcasters, and several other=20
motions to reject that request. The FCC has also=20
asked the court to reject CBS' motion, saying it=20
contained information on pre-argument talks,=20
which violated confidentiality agreements. The=20
FCC also said it was bound by those agreements=20
and could not respond to reports in the media of=20
the CBS filing. CBS says it will revise the filing to remove those parts.
http://www.broadcastingcable.com/article/CA6351606.html?display=3DBreaki...
News
* FCC Fires Back at Nets
http://www.broadcastingcable.com/article/CA6351630.html?display=3DBreaki...
News

USDTV FILES FOR BANKRUPTCY
[SOURCE: Multichannel News, AUTHOR: Mike Farrell]
Fledgling wireless-cable-television-service=20
provider U.S. Digital Television, which offered=20
30 channels of basic-cable TV for just $19.95 per=20
month, threw in the towel last week, filing for=20
Chapter 7 liquidation bankruptcy. USDTV used=20
digital-broadcast spectrum to beam its signals to=20
homes in Dallas; Salt Lake City; Albuquerque,=20
N.M..; and Las Vegas. The company has said that=20
it has about 16,000 subscribers. The company=20
leased digital spectrum from television stations=20
in the markets it targeted and sold the service=20
through Wal-Mart Stores locations, select dealers=20
and via the Internet and telephone orders. USDTV=20
has struggled since its inception in 2003, but in=20
2005, it got a much-needed capital infusion when=20
a handful of TV-station groups -- Fox Television=20
Group, Hearst-Argyle Television, LIN TV,=20
McGraw-Hill Broadcasting, Morgan Murphy Stations=20
and Telecom DTV -- agreed to invest a combined=20
$26 million in the company. A Chapter 7=20
bankruptcy is essentially a liquidation. Unlike a=20
Chapter 11 bankruptcy -- which keeps creditors=20
off the bankrupt company=92s back as it assembles a=20
reorganization plan -- a Chapter 7 liquidation is=20
usually an orderly sale of all of a company=92s assets.
http://www.multichannel.com/article/CA6351631.html?display=3DBreaking+News

QUICKLY

FRAMEWORK NEEDED FOR SOCIAL COMMUNICATIONS GOALS
[SOURCE: Progress and Freedom Foundation press release]
Current communications reform legislation lacks=20
an overarching framework to guide policymakers in=20
their pursuit of social goals through regulation,=20
states Kyle Dixon in "Beginning to Limit 'Social'=20
Regulation of Communications," a new Progress on=20
Point released today by The Progress & Freedom=20
Foundation. Dixon, PFF Senior Fellow and Director=20
of the Federal Institute for Regulatory Law and=20
Economics, suggests building on the Federal=20
Communications Commission's forbearance and=20
biennial review authority, directing the=20
Commission "to evaluate and eliminate social=20
obligations to the extent they no longer can be justified."
http://www.pff.org/news/news/2006/071006socialreg.html

HOUSE APPROVES BILL BANNING INTERNET GAMBLING
[SOURCE: Reuters]
The House of Representatives on Tuesday approved=20
a Republican-written bill to limit Internet=20
gambling by making it illegal for banks and=20
credit card companies to make payments to online=20
gaming sites. The measure awaits Senate action.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-11T193850Z_01_WBT005635_RTRUKOC_0_US-LEISURE-GAMBLING-VOTE.xml
* House Backs Crackdown on Gambling on Internet
http://www.nytimes.com/2006/07/12/washington/12gamble.html

BASEBALL SETS TELEVISION PACTS WITH FOX, TBS
[SOURCE: Wall Street Journal, AUTHOR: Brian=20
Steinberg brian.steinberg( at )wsj.com]
Major League Baseball reached new seven-year=20
deals with News Corp's Fox Sports and Time=20
Warner's Turner Broadcasting System to broadcast=20
various regular-season and postseason games.=20
Under the new pacts, Fox will reduce the number=20
of postseason games it airs while retaining the=20
All-Star Game and the World Series through 2013.=20
The network will pay around $250 million a year,=20
or around $1.8 billion, compared with the $2.5=20
billion value of its last deal in 2000. In total,=20
Major League Baseball expects to secure more than=20
$3 billion over seven years from the Fox and TBS=20
deals combined with payments for the remaining=20
games to be sold. There were no reports of using=20
any of the money to field a decent team on Chicago's Northside.
http://online.wsj.com/article/SB115266984549704229.html?mod=3Dtodays_us_...
ketplace
(requires subscription)

ONLINE VENTURE SEEKS TO ELEVATE THE DEBATE
[SOURCE: Washington Post, AUTHOR: Howard Kurtz]
A group of political strategists who have spent=20
years firing heavy artillery at each other came=20
together at the Hay-Adams Hotel yesterday, put=20
aside their weapons, decried the polarized state=20
of debate in America and vowed a new approach to=20
peaceful coexistence. Toward that end, they are=20
launching a Web site that they hope will=20
eventually reach 30 million opinion leaders,=20
elevate public discussion on matters from=20
politics to sports to culture and, in the=20
process, make them some money. Mark McKinnon and=20
Matthew Dowd, who were senior advisers in=20
President Bush's last two campaigns, are joining=20
forces with Joe Lockhart, who served as a=20
spokesman for President Bill Clinton, and Carter=20
Eskew, a top strategist in Al Gore's presidential=20
campaign, in creating what they have dubbed HotSoup.com.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/11/AR200607...
1104.html
(requires registration)

NEW MILESTONES MAY BE NECESSARY FOR ICANN
[SOURCE: Center for Democracy and Technology]
The US Government may need to develop new=20
milestones and benchmarks to determine when it=20
would be appropriate to relinquish its special=20
role in overseeing the Internet's global=20
addressing system, CDT said in comments to the=20
National Telecommunications and Information=20
Administration (NTIA). The Internet Corporation=20
for Assigned Names and Numbers (ICANN) manages=20
the Domain Name System (DNS) under a contract=20
with NTIA that is set to expire in September.=20
NTIA requested comments form the public on a=20
range of issues, including whether ICANN has made=20
enough progress to operate free of direct=20
governmental involvement. CDT suggested that=20
NTIA may need to study what safeguards would be=20
needed to ensure that ICANN would be able to=20
remain independent in the current global environment. July 10, 2006
CDT Comments to NTIA: http://www.cdt.org/standards/20060707noiresponse.pdf

MYSPACE GAINS TOP RANKING OF US WEB SITES
[SOURCE: Reuters]
Move over Yahoo and Google. Internet tracking=20
firm Hitwise said on Tuesday that online teen=20
hangout MySpace.com ranked as the No. 1 U.S. Web=20
site, accounting for 4.46 percent of all US=20
Internet visits for the week ending July 8.=20
MySpace captured nearly 80 percent of visits to=20
online social networking sites, up from 76=20
percent in April. A distant second was FaceBook=20
at 7.6 percent. Rupert Murdoch's News Corp bought=20
MySpace for $580 million one year ago.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-11T154250Z_01_N11382172_RTRUKOC_0_US-MEDIA-MYSPACE.xml

TED'S TECHNO TUBES
Missing a timely tune for this weekend's dance=20
party? It's not for the 80's, but Ted is in his 80's.
http://www.freepress.net/docs/dj_teds_techno_tubes.mp3
--------------------------------------------------------------
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.
--------------------------------------------------------------