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GOVERNMENT & COMMUNICATIONS
White House asks for Dismissal of NSA Wiretap Suit

TELECOM LEGISLATION
Wireless Carriers Score Win In Senate Commerce Bill
Tangled Net

ADVERTISING
TV Ad Market Primed for Pay-by-Pod; Move Would Mark Historic Shift
Nielsen Plans to Track Viewership Of TV Commercials for First Time
Polluting The Blogosphere
As more people play, advertisers devise game plan

BROADCASTING
Six-Figure Fines For Four-Letter Words Worry Broadcasters
LOCAL Television Act: Status of Spending for Fiscal Year 2005

QUICKLY -- Martin's Missteps Put FCC Off Game;=20
House to Vote on Bill to Curb Online Gaming;=20
Internet poker could net US billions in tax;=20
Media Balance; Brand It Like Beckham; Comcast=20
Foundation to Back National Council of La Raza;=20
AT&T to Pay $550,000 to Settle Privacy Cases;=20
Spitzer says AOL customer woes remain an issue;=20
As States Aim to Rein in Content, Videogame Makers Fight Back

GOVERNMENT & COMMUNICATIONS

WHITE HOUSE ASKS FOR DISMISSAL OF NSA WIRETAP SUIT
[SOURCE: Reuters, AUTHOR: Jui Chakravorty]
The Bush administration on Monday asked a federal=20
judge to dismiss a lawsuit challenging the=20
National Security Agency's domestic eavesdropping=20
program, arguing that defending the four-year-old=20
wiretapping program in open court would risk=20
national security. In arguments before U.S.=20
District Judge Anna Diggs Taylor in Detroit, the=20
American Civil Liberties Union on Monday renewed=20
its call for a court order that would force the=20
government to suspend its program of intercepting=20
without a court order the international phone=20
calls and e-mails of U.S. citizens. But the U.S.=20
Justice Department has asked federal judges in=20
Detroit and New York to throw out the landmark=20
challenges to the eavesdropping program. In both=20
cases, the Bush administration has invoked a=20
legal doctrine known as the "state-secrets=20
privilege" that it has used to head off other=20
court action spy programs. "If the court accepts=20
the state-secret argument, we are truly facing a=20
constitutional crisis in this country," Michael=20
Steinberg, legal director for ACLU Michigan, told reporters after the heari=
ng.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-07-10T182734Z_01_N10353096_RTRUKOC_0_US-SECURITY-EAVESDROPPING.xml

TELECOM LEGISLATION

WIRELESS CARRIERS SCORE WIN IN SENATE COMMERCE BILL
[SOURCE: Technology Daily 7/7, AUTHOR: Drew Clark]
Wireless carriers unaffiliated with a Bell=20
company scored a win via an amendment to a=20
sweeping telecommunications bill that could curb=20
rates they pay for wholesale access. The=20
amendment, sought by cellular carriers Sprint=20
Nextel, T-Mobile and other Bell competitors,=20
instructs the FCC to take action in revisiting=20
the issue of "special access" to wholesale=20
telecommunications wires. Wireless companies are=20
particularly dependent upon this form of=20
communications to compete the loop between a=20
cellular tower and a central switching station.=20
Sen. John Sununu (R-NH) supported the amendment,=20
which was added to the successful Senate Commerce=20
Committee measure by ranking member Daniel Inouye=20
(D-Hawaii). It essentially was accepted in the=20
fourth of four managers' packages to S. 2686, the=20
omnibus bill sponsored by Chairman Ted Stevens=20
(R-Alaska). The issue did not come up for debate=20
during the three-day vote session on the broader measure.
http://www.njtelecomupdate.com/lenya/telco/live/tb-BJPF1152560666620.html

TANGLED NET
[SOURCE: National Journal 7/8, AUTHOR: Drew Clark]
A long piece on the Net Neutrality debate by one=20
of the best reporters on the beat. Net neutrality=20
is about the rules of the road for the=20
information superhighway -- and whether, some=20
day, traveling in the fast lane will require=20
paying a toll. Because of the convergence of=20
television and telephone service into digital=20
transmissions, the outcome of the battle will=20
affect all aspects of communications.=20
Net-neutrality advocates -- Google, Microsoft,=20
and the other tech companies -- say the telecom=20
companies (the Bells) and the cable industry=20
shouldn't be permitted to control the Internet=20
through discriminatory pricing in which their=20
business partners enjoy a huge competitive=20
advantage by gaining access to the wires into=20
homes and offices. The telecom and cable guys --=20
the neutrality critics -- counter that =93net=20
neutrality=94 is just a fancy way of saying that=20
the government should regulate the Internet. They=20
say, let the free market, not Washington, reign.
Read more excerpts at the URL below.
http://www.drewclark.com/

ADVERTISING

TV AD MARKET PRIMED FOR PAY-FOR-POD; MOVE WOULD MARK HISTORIC SHIFT
[SOURCE: AdAge, AUTHOR: Claire Atkinson]
This year's $9.05 billion upfront may well be the=20
last negotiated on the basis of program ratings=20
as the TV-ad business embarks on one of the most=20
radical shifts in its 65-year history.=20
Broadcasters are preparing to junk the age-old=20
metric of charging on the basis of who watches=20
the programs and begin charging advertisers based=20
on who watches the commercials. Execs at three of=20
the big networks believe next year's upfront will=20
be negotiated with commercial ratings, and Mike=20
Shaw, president-sales and marketing at ABC, which=20
raked in the biggest upfront ad haul this year,=20
thinks it could happen even sooner, in the=20
scatter market, well ahead of next year's=20
marketplace. "Commercial ratings are going to be=20
the new big thing," he said. "It has huge=20
implications for the TV industry, based on return=20
on investment and return on equity."
http://adage.com/mediaworks/article?article_id=3D110363
* Shaw: ABC Ready to Sell Now Using Commercial Ratings
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=3D100...
2373

NIELSEN PLANS TO TRACK VIEWERSHIP OF TV COMMERCIALS FOR FIRST TIME
[SOURCE: Wall Street Journal, AUTHOR: Brian=20
Steinberg brian.steinberg( at )wsj.com and Brooks Barnes]
Nielsen Media Research, the firm that calculates=20
national television ratings, plans to answer one=20
of advertising's most pressing questions: How=20
many people actually watch TV commercials? In=20
November, Nielsen will begin for the first time=20
to provide formal ratings for commercial breaks,=20
a move with far-reaching implications for the=20
fast-changing media world. Both TV networks and=20
advertisers expect the new Nielsen ratings will=20
show that viewership declines noticeably when a=20
program breaks for commercials. A particularly=20
big drop could fuel advertisers' push for changes=20
in how ads are incorporated into shows,=20
reinforcing demands for fewer or shorter ad=20
breaks and lower ad rates. It could also=20
accelerate the flow of advertising dollars out of=20
television to the Internet and new digital media.=20
Any softening of ad prices would be a big blow=20
for the nation's TV networks and their parent=20
companies. Media stocks overall have been=20
depressed in recent years as technology has=20
whipsawed the industry. Many big advertisers have=20
already cut back on traditional TV spots. General=20
Motors Corp., for example, says its spending on=20
30-second prime-time commercials declined by 50%=20
in the five years between 2000 and 2005.
http://online.wsj.com/article/SB115258347955103007.html?mod=3Dtodays_us_...
e_one
(requires subscription)

POLLUTING THE BLOGOSHERE
[SOURCE: BusinessWeek, AUTHOR: Jon Fine]
[Commentary] Ted Murphy founded an interactive ad=20
agency called MindComet, also runs a side=20
business that pays bloggers to write nice things=20
about corporate sponsors -- without unduly=20
worrying about whether or not bloggers disclose=20
these arrangements to readers. (A scan of=20
relevant blog searches strongly suggests that,=20
often, they don't.) He is launching=20
PayPerPost.com, which will automate such hookups=20
between advertisers and bloggers and thus codify=20
a new frontier of product placement. Advertisers=20
pay to post details about their "opportunity,"=20
specifying, among other things, how they want=20
bloggers to write about, say, a new shoe, if they=20
want photos to be included, and whether they'll=20
pay only for positive mentions. Bloggers who=20
abide by the rules get paid; heavily trafficked=20
blogs may command premium rates. Those seeking to=20
subvert PayPerPost from within can't: No=20
pornographic or "illicit" content is accepted.=20
Thanks in no small part to bloggers, this is an=20
era of increased media transparency, and many=20
shifty dealings between the business and=20
editorial sides have been exposed. An undisclosed=20
PayPerPost placement on a little-seen blog isn't=20
the most egregious thing out there, but it's far=20
from honest. Media may be more transparent, but=20
the line between authentic editorial and paid=20
placement is still often smeared, and defenders=20
of disclosure can feel, like the proverbial buggy=20
whip company, that they're terribly outmoded.=20
Things being what they are, I should mention that=20
no buggy whip association paid me to say that.
http://www.businessweek.com/magazine/content/06_28/b3992034.htm

AS MORE PEOPLE PLAY, ADVERTISERS DEVISE GAME PLAN
[SOURCE: USAToday, AUTHOR: Theresa Howard]
=93Games are an exploding media channel,=94 says=20
Reuben Hendell, CEO of digital ad agency MRM.=20
Marketers are scrambling to be players in the=20
world of video game advertising. A growing army=20
of game fans and new game advertising options are=20
making games increasingly attractive. Marketers=20
spent about $80 million in 2005 on game=20
advertising -- from product placement in games to=20
sponsoring gaming events =97 according to research=20
firm Parks Associates. By comparison, the value=20
of all media product placement in 2005 was about=20
$3.5 billion, estimates marketing researcher PQ=20
Media. Parks projects game ad spending will top=20
$400 million by 2009. About 75% of U.S. Internet=20
users spend at least an hour a month playing=20
games, according to Parks. About 27% average 30=20
hours a month. And more players are women: They=20
are about 20% of the audience at community gaming=20
site Global Gaming League (GGL), for example, up from 10% last year.
http://www.usatoday.com/printedition/money/20060711/adgames.art.htm

BROADCASTING

SIX-FIGURE FINES FOR FOUR-LETTER WORDS WORRY BROADCASTERS
[SOURCE: Washington Post, AUTHOR: Frank Ahrens]
Last month's tenfold increase in broadcast=20
indecency fines has sent radio and television=20
stations and media giants scurrying to protect=20
themselves, as the cost of uttering a dirty word=20
over the air has turned a minor annoyance into a=20
major business expense. The new law is a boon for=20
companies that make time-delay machines for=20
broadcasters, which are designed to catch=20
offensive language before it hits the airwaves,=20
and a potentially powerful reason for performers,=20
directors and producers to take their talent to=20
cable and satellite outlets, where federal=20
decency standards do not apply. Other=20
repercussions from the escalating crackdown on=20
broadcast indecency: On-air personalities at one=20
radio giant are contractually obligated to pay=20
indecency fines if they say anything that causes=20
their stations to be penalized. Lawyers at=20
another radio company are advising superstar=20
deejays on what material to avoid on air. Public=20
television, still puzzling over a March fine for=20
a Martin Scorsese-produced documentary, is=20
sending periodic legal advice to its member=20
stations. One stand-up comedian took out an=20
indecency-liability policy on himself. Another=20
said he was forced to sign a waiver before he=20
went on the air at a radio station, promising to=20
pay any indecency fine that might result from his=20
appearance. Broadcast companies are taking=20
further measures protect themselves by training=20
their talent and cutting them loose at the first=20
sign of trouble. Radio giants such as Clear=20
Channel Communications have adopted=20
"zero-tolerance" policies for on-air=20
personalities, meaning that they can be fired for=20
offensive language even before an FCC fine is levied.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/10/AR200607...
1245.html
(requires registration)

LOCAL TELEVISION ACT: STATUS OF SPENDING FOR FISCAL YEAR 2005
[SOURCE: Government Accountability Office=20
(GAO-06-858R), AUTHOR: McCoy Williams]
In December 2000, the Congress passed the=20
Launching Our Communities=92 Access to Local=20
Television Act of 2000 (LOCAL TV Act). The act=20
created the Local Television Loan Guarantee=20
Program and established the LOCAL Television Loan=20
Guarantee Board to finance projects to provide=20
access to signals of local television stations to=20
households in areas with limited or no access to=20
such signals from a commercial, for-profit=20
satellite service or other multichannel video=20
provider. The program authorizes the board to=20
approve loan guarantees up to 80 percent of=20
loans, totaling no more than $1.25 billion in=20
aggregate; however, since inception of the=20
program, no loan guarantees have been approved=20
and the program has not been utilized. Section=20
1006 of the act requires that the GAO perform an=20
annual audit of the 1) administration of the=20
provisions of the act and 2) financial position=20
of each applicant who receives a loan guarantee=20
under the act, including the nature, amount, and=20
purpose of investments made by the applicant. In=20
April 2005, the GAO issued the required annual=20
report covering fiscal year 2004. Since there=20
continue to be no loan guarantee recipients for=20
GAO to audit, this report primarily addresses=20
whether program administration during fiscal year=20
2005 satisfied the provisions of the act. Since=20
fiscal year 2002, GAO has reported annually on=20
the administration of the LOCAL TV Act as=20
required by Section 1006 of the act. Since=20
inception of the program, no loan guarantees have=20
been approved and there are no current or=20
anticipated budgetary resources available for=20
future loan guarantees. On December 13, 2004, the=20
board authorized closing out one of two existing=20
contracts. The other contract expired on December=20
31, 2005. Fiscal year 2005 administrative costs=20
totaled about $6,500. Given that the President=92s=20
Budgets for Fiscal Years 2006 and 2007 both=20
pointed out that the unobligated budget authority=20
for this program had been rescinded and the=20
administration was not proposing additional funds=20
for this program, GAO reiterates the previous=20
matter for congressional consideration to rescind=20
the balance of the appropriation for=20
administrative expenses. In oral comments on a=20
draft of this report, the board agreed with the GAO report.
http://www.gao.gov/cgi-bin/getrpt?GAO-06-858R

QUICKLY

MARTIN'S MISSTEPS PUT FCC OFF GAME
[SOURCE: TVWeek, AUTHOR: Editorial Staff]
[Commentary] FCC Chairman Kevin Martin has a=20
large, unwieldy agency to lead. Going forward,=20
with a major rewrite of media ownership rules=20
looming, he should learn from past missteps and=20
err on the side of deliberation.
http://www.tvweek.com/article.cms?articleId=3D30152
(requires free registration)

HOUSE TO VOTE ON BILL TO CURB ONLINE GAMING
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera]
After nearly a decade of trying, Congress appears=20
ready to deal with Internet gambling, a=20
phenomenon that has grown dramatically in recent=20
years as millions of people from college students=20
to retirees log on to play poker or wager on=20
sporting events. The House is set to vote today=20
on a measure -- part of the Republican=20
leadership's election-year "values" agenda --=20
designed to choke off the flow of U.S. money to=20
poker and other gambling sites, most of which are=20
based overseas, because Internet gambling is=20
illegal in the United States. The legislation=20
would make it illegal for banks and credit card=20
companies to make payments to Internet gambling=20
sites. It also allows law enforcement officials=20
to force Internet service providers to remove=20
links to the websites. Many major credit card=20
companies already refuse to process such=20
payments. Opponents of the bill, including online=20
gambling sites and a new group representing U.S.=20
poker players, noted the growing popularity of=20
Internet gambling and predicted that people would continue to sidestep laws.
http://www.latimes.com/news/printedition/asection/la-na-gamble11jul11,1,...
699.story?coll=3Dla-news-a_section
(requires registration)

INTERNET POKER COULD NET US BILLIONS IN TAX: STUDY
[SOURCE: Reuters]
Regulating Internet poker could bring the U.S.=20
government some $3.3 billion in taxes annually,=20
according to a study to be released on Tuesday,=20
ahead of an expected debate over legislation to=20
ban online gambling. Income taxes on winnings=20
from Internet poker alone -- which is estimated=20
to have attracted $60 billion in wagers worldwide=20
in 2005 -- could amount to $2.5 billion each=20
year, according to the study commissioned by the=20
Poker Players Alliance, a group calling for the=20
regulation of online gambling. "The majority of=20
the revenue that's generated would be from=20
reporting of poker winnings," said Michael=20
Bolcerek, president of the group. The study also=20
said that a 1 percent user fee on online poker=20
transactions would generate another $800 million=20
to $1 billion in revenue per year for the U.S.=20
government. The U.S. Justice Department says a=20
1961 law that forbids interstate telephone=20
betting also applies to the Internet, making it=20
illegal for the industry to do business in the country.
http://today.reuters.com/news/newsArticle.aspx?type=3DpoliticsNews&storyID=
=3D2006-07-10T215527Z_01_N10381864_RTRUKOC_0_US-LEISURE-ONLINEGAMBLING.xml&=
archived=3DFalse

WHEN MEDIA AIMS FOR BALANCE, SOME VIEWS AND FACTS GET LOST
[SOURCE: The Christian Science Monitor, AUTHOR:=20
Dante Chinni, Pew Project for Excellence in Journalism]
[Commentary] Balance is one of those issues that=20
seems simple on the surface, but gets more=20
complicated as you look at it more deeply. As a=20
concept, it is often trumpeted by outlets that=20
profess to be objective. The problem, of course,=20
is that balance doesn't necessarily lead to=20
getting the story right. In searching for an easy=20
way to explain the news in a limited space,=20
journalists too often reduce issues to their most=20
rudimentary forms. This is true on debates=20
ranging from gay marriage (a for-or-against=20
argument with little talk of what rights gays=20
should have) to when troops in Iraq should come=20
home (stay or "cut and run" even though both=20
sides are talking about when reductions should=20
occur) and everything in between. The extreme=20
points of view on those issues may be actual=20
positions, but so are the many nuanced views that=20
live between them and get less coverage. In other=20
words, despite its prominent place in many media=20
debates, "balance," as it is usually understood,=20
is often not particularly useful in journalism.=20
All opinions and points of view aren't equal when=20
one digs into the facts and "both sides" leaves a lot of sides out.
http://www.csmonitor.com/2006/0711/p09s01-codc.html

BRAND IT LIKE BECKHAM
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The NewsMarket, which supplies corporate video=20
news releases and footage to media worldwide,=20
says that more than 50 broadcast quality "news=20
stories" from corporate suppliers including Coke,=20
Adidas, BMW, were downloaded during the World=20
Cup. NewsMarket said that more than 4,000 clips=20
were requested by 180 media outlets.
http://www.broadcastingcable.com/article/CA6351021?display=3DBreaking+News

COMCAST FOUNDATION TO BACK NCLR
[SOURCE: Multichannel News]
The Comcast Foundation will invest in a new=20
initiative by the National Council of La Raza to=20
build the capacity of eight NCLR affiliates=20
around the United States. Each affiliate will=20
receive a three-year grant totaling up to $75,000=20
to support program and advocacy initiatives to strengthen the Latino commun=
ity.
http://www.multichannel.com/article/CA6351249.html?display=3DBreaking+News

AT&T TO PAY $550,000 TO SETTLE PRIVACY CASES
[SOURCE: Bloomberg News]
AT&T settled two Federal Communications=20
Commission enforcement actions by paying $550,000=20
and agreeing to strengthen customer privacy=20
practices. The nation's largest phone company=20
didn't admit to violating any law and the payment=20
doesn't constitute a fine or penalty, according=20
to a consent decree announced Monday by the FCC.=20
The settlement ends actions against the former=20
AT&T Corp. and SBC Communications. The FCC=20
claimed AT&T Corp. failed to certify it complied=20
with privacy rules. San Antonio-based SBC bought=20
AT&T Corp. last November and then renamed itself=20
AT&T. The agency cited increasing concern over=20
the security of customers' personal data and=20
evidence that records can be obtained easily by unauthorized users.
http://www.latimes.com/business/printedition/la-fi-att11jul11,1,4638408....
ry?coll=3Dla-headlines-pe-business
(requires registration)
See FCC Order:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-100A1.doc

SPITZER SAYS AOL CUSTOMER WOES REMAIN AN ISSUE
[SOURCE: Reuters, AUTHOR: Joseph A. Giannone]
New York Attorney General Eliot Spitzer, who last=20
year struck a settlement with America Online=20
regarding its customer service policies, will=20
meet with AOL to discuss if the Internet services=20
giant still blocks customers from canceling their accounts.
http://today.reuters.com/news/newsArticle.aspx?type=3DinternetNews&storyID=
=3D2006-07-10T212510Z_01_N10371239_RTRUKOC_0_US-MEDIA-AOL-SPITZER.xml

AS STATES AIM TO REIN IN CONTENT, VIDEOGAME MAKERS FIGHT BACK
[SOURCE: Wall Street Journal, AUTHOR: Andrew=20
LaVallee andrew.lavallee( at )wsj.com ]
The videogame industry is locked in a battle with=20
state and local lawmakers around the country who=20
want to rein in access to what they see as=20
increasingly violent and sexually explicit games.=20
At issue are the content ratings attached to=20
videogames, and the steps retailers take (or=20
don't take) to make sure some games -- like Grand=20
Theft Auto: San Andreas, which included hidden=20
nude scenes -- aren't sold to young players.=20
Critics of the industry say that even though=20
major retailers like Wal-Mart and Best Buy have=20
voluntarily adopted policies to restrict sales of=20
such games, enforcement can be lax. Several=20
states want to impose fines on underage sales.=20
What's more, some argue the ratings system needs=20
to be overhauled because ratings are determined=20
by a group created and funded by the game=20
industry itself. The videogame industry,=20
meanwhile, is fighting back on two fronts. Last=20
month, an industry trade group launched an=20
initiative in cooperation with major retailers=20
and three senators aimed at tightening sales=20
policies for games. Less publicly, the group=20
continues to aggressively challenge local=20
legislative efforts in the courts, and has had=20
success in getting some state laws overturned.=20
The new initiative, dubbed "Commitment to=20
Parents," was launched after a June hearing in=20
Congress in which lawmakers slammed game makers=20
for the bloody sequences and racy scenes in some=20
of the most notorious (and popular) titles.
http://online.wsj.com/article/SB115100063777787743.html?mod=3Dtodays_us_...
sonal_journal
(requires subscription)
--------------------------------------------------------------
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.
--------------------------------------------------------------