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BROADCASTING
Bush Signs Law Boosting Indecency Fines
EMI Agrees to Fine to Resolve Payola Case
The New FCC
Verizon To Carry PBS Multicast Channels
Survey: 48.9% of Marketing Execs Have Paid
for Placement in Content

DIGITAL DIVIDE
Intel's Bridge for the Digital Divide
The Packet Train Needs to Stop at Every Door
AT&T seeks to Bridge the Digital Divide

QUICKLY -- COPE seen hurting localities; Telcos on Defensive in Net
Neutrality Fight; Route To Network Neutrality Uncharted And
Controversial; Mandatory Labeling Bill Threatens Free Speech on the Internet

BROADCASTING

BUSH SIGNS LAW BOOSTING INDECENCY FINES
[SOURCE: Reuters, AUTHOR: Jeremy Pelofsky]
President Bush on Thursday signed into law legislation that raises
fines tenfold for radio and television broadcasters that violate U.S.
decency standards by airing extensive profanity or sexual content.
The new law, which boosts fines to as much as $325,000 per violation
from $32,500, could help congressional Republicans woo conservatives
in a tough election year as they have faced ebbing support from key
core constituencies. The Christian Coalition had placed legislation
to increase the fines as the No. 5 item on its 2006 legislative
agenda. The new law also caps any continuing violations from an
incident at $3 million. While President Bush said that parents are
the first line of defense for monitoring what their children listen
to and watch, he added that broadcasters have a responsibility as
well. "This law will ensure that broadcasters take seriously their
duty to keep the public airwaves free of obscene, profane and
indecent material," President Bush said at a signing ceremony with
lawmakers who sponsored the bill and the five FCC commissioners.
President Bush said the old maximum fine was a problem because "for
some broadcasters, this amount is meaningless."
http://today.reuters.com/news/newsArticle.aspx?type=industryNews&storyID...
* President Bush's remarks:
http://www.whitehouse.gov/news/releases/2006/06/20060615-1.html
* Bush Signs Bill Upping Indecency Fines
http://www.multichannel.com/article/CA6344305.html?display=Breaking+News
* President Signs Indecency Bill
http://www.broadcastingcable.com/article/CA6344118?display=Breaking+News
* New Indecency Fines Take Effect Thursday
http://www.broadcastingcable.com/article/CA6344013?display=Breaking+News
* Bush Signs Legislation On Broadcast Decency
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR200606...
* A Wardrobe Malfunction and You'll Lose Your Shirt, So to Speak
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR200606...
Also see:
* Mission Not Accomplished Against Indecency
[Commentary] "Since everyone including President Bush agrees that
it's up to parents to control what their kids watch, why don't
politicians and regulators finally give parents the complete set of
tools they need to do just that -- freedom to choose what they want
to watch and the power to avoid what they don't? Instead of imposing
censorship under the guise of "victory for America's families," while
quietly promoting policies that deny those families real solutions?
http://www.creativevoices.us/php-bin/news/showArticle.php?id=159&PHPSESS...

EMI AGREES TO FINE TO RESOLVE PAYOLA CASE
[SOURCE: New York Times, AUTHOR: Jeff Leeds]
The EMI Group, the music giant, agreed yesterday to pay $3.75 million
to resolve accusations of paying radio programmers to play specific
songs, becoming the last of four major companies to reach a
settlement as part of an investigation by the New York attorney
general. The office of the New York attorney general, Eliot Spitzer,
which announced the settlement yesterday, released e-mail messages
and other documents showing that EMI executives agreed to give radio
programmers Rolling Stones tickets or offered direct cash payments to
stations for airplay of specific songs. Federal and New York state
laws prohibit broadcasters from accepting payments of cash or
anything of value unless the arrangement is disclosed to listeners.
EMI, the smallest of the four major companies in terms of sales of
new releases in the United States, offered an acknowledgment that
echoed its rivals. The company said certain employees had "engaged in
some promotional activities that were wrong and inappropriate." EMI
also agreed to a series of changes, including a prohibition on
providing cash for use in radio contests. The company had instituted
stricter policies on its promotion practices last year after Mr.
Spitzer started his inquiry. With inquiries into the conduct of the
four record giants now resolved, state investigators are expected to
focus on large radio corporations, including CBS Radio and Clear
Channel Communications. Mr. Spitzer filed a lawsuit against one
broadcaster, Entercom Communications, in March after settlement
discussions foundered. The Federal Communications Commission is
seeking documents from the broadcasters in connection with its own
payola inquiry.
http://www.nytimes.com/2006/06/16/business/worldbusiness/16music.html
(requires registration)
* EMI Settles Spitzer's Payola Allegations
http://www.latimes.com/business/printedition/la-fi-emi16jun16,1,50886.st...

THE NEW FCC
[SOURCE: Washington Times 6/15, AUTHOR: Editorial Staff]
[Commentary] Two weeks ago, the Federal Communications Commission
finally secured a Republican majority, something it has not had for
almost a year and half. During that time, FCC Chairman Kevin Martin
has had no choice but to work with the two Democrats on the
commission and has generally done quite well minimizing the potential
for the usual regulatory, big-government intervention in an
incredibly dynamic telecommunications marketplace. Thus, one would
think that there is cause for relief now that two new Republican
commissioners have joined the FCC and that this agency would not
begin regulating for no good reason. But, surprisingly, the first
issue teed up for decision is something called "multicast must
carry," a big government mandate pressed by broadcasters for years.
In essence, this mandate would force cable and satellite providers to
carry all the programming streams dreamed up by broadcasters, instead
of allowing the marketplace and consumers to drive the demand for
what they want to watch. The FCC has twice previously rejected
multicasting requirements for two reasons. One, it's a bad idea. Two,
it's unconstitutional. Unfortunately, FCC Chairman Martin has always
supported this mandate. So, the test of whether President Bush will
finally get a free-market-oriented commission that understands that
government intervention is a last, and usually bad, resort rests with
the two new commissioners, Robert McDowell and Deborah Tate. We hope
they understand how important the stakes really are.
http://www.washtimes.com/op-ed/20060614-091336-1651r.htm

VERIZON TO CARRY PBS MULTICAST CHANNELS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Verizon will take a page from the cable industry and give
noncommercial stations' digital multicast must-carry channels a home
on its FiOS video service. The deal is said to be effective
immediately and to include all the multicast channels of all PBS
stations in all markets. PBS, the Association for Public Television
Stations, and Verizon have scheduled a Friday press conference where
they plan to discuss a "far-reaching agreement on digital
programming," which will include multicast carriage. Last year,
noncoms and the cable industry struck a carriage deal that the cable
industry used as evidence that private negotiations, not
government-mandated carriage, was a viable route to carriage of TV
station's multicast signals.
http://www.broadcastingcable.com/article/CA6344318?display=Breaking+News
* Verizon to Carry Array Of Public TV Channels
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR200606...

SURVEY: 48.9% OF MARKETING EXECS HAVE PAID FOR PLACEMENT IN CONTENT
[SOURCE: AdAge, AUTHOR: Gavin O'Malley]
Something's rotten with the state of media. Nearly half -- 48.9% --
of senior marketing executives admit to paying for editorial or
broadcast brand placement, according to an industrywide survey just
released by PRWeek and PR agency Manning Selvage & Lee. What's more,
the survey of 266 chief marketing officers, marketing VPs and
directors found that half of those who haven't paid for placement
said they would if the opportunity arose. "This type of behavior is
as harmful to PR professionals as it is to consumers and the media,"
said Mark Hass, CEO of the Publicis Groupe-owned public-relations agency.
http://adage.com/article?article_id=109902

DIGITAL DIVIDE

INTEL'S BRIDGE FOR THE DIGITAL DIVIDE
[SOURCE: C-Net|News.com, AUTHOR: Michael Kanellos]
Intel is developing a sub-$400 notebook for kindergartners through
high school students in emerging nations. The notebook is part of a
first wave of PCs that the chipmaker hopes will help it establish the
personal computer as the tool for bridging the digital divide.
Several individuals and organizations -- MIT's Nicholas Negroponte,
Microsoft, thin-client manufacturers, phone makers -- are touting
machines for bringing the Internet to Africa, rural Asia and Latin
America. By various estimates, more than a billion PCs will be
connected to the Internet by 2010. That still leaves more than 5.5
billion people out, and they won't have much money. Bill Siu, general
manager of Intel's Channel group, says that of the 800 million people
worldwide who make more than $25,000 a year, 70 percent have access
to a computer. Of the 4.7 billion people who make between $1,000 and
$25,000, only 10 percent have access to a computer. The 1 billion who
make less than $1,000 have virtually no access. PCs are the best
tools for reaching this market, Siu argues, because the world's
software and communication tools are already written for them.
Devices like the Simputer or Negroponte's $100 laptop are more
isolated, he said.
http://news.com.com/Intels+bridge+for+the+digital+divide/2100-1005_3-608...

THE PACKET TRAIN NEEDS TO STOP AT VERY DOOR
[SOURCE: National Exchange Carrier Association press release]
On Wednesday, NECA released an outline of its newest study, The
Packet Train Needs to Stop at Every Door. The study provides the
latest data on the broadband revolution in rural America, network
upgrade and tripleplay multimedia package cost estimates and
availability issues, and the implication of the packet revolution on
Universal Service and Intercarrier Compensation reform. The Packet
Train Needs to Stop at Every Door reports that maintaining and
evolving rural network infrastructure remains critical to meeting the
future needs of rural consumers and their communities, including the
provision of new IP-based services like VOIP. However, this cannot be
achieved based solely on competitive model assumptions applied to
urban areas; rural America still requires a carrier of last resort
due to the lower density, higher cost characteristics of rural
service areas. The study also finds that as excess network capacities
diminish and demand for voice, video and data multimedia packages
increase, all carriers including companies serving rural consumers
will require significant additional investment in their broadband
networks. For rural carriers, this
requires stable cost recovery mechanisms including adequate
intercarrier compensation and sustainable universal service funding.
http://www.neca.org/wawatch/wwpdf/061506_5.pdf

AT&T SEEKS TO BRIDGE THE DIGITAL DIVIDE
[SOURCE: San Francisco Chronicle, AUTHOR: Ryan Kim]
AT&T on Wednesday launched a $100 million initiative to provide
computer equipment, Internet access and training to 50,000 low income
families. The three-year project, called AT&T Access All, is a
partnership between AT&T and its charitable foundation with Habitat
for Humanity and One Economy Corp., a nonprofit that brings
technology to underprivileged families. Under the program, up to
15,000 households will be equipped with a computer, printer, software
and Internet access. One Economy is also working to provide an
additional 35,000 households with free Internet access and discounted
computer equipment. The final component includes computer training
for the low-income families.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/06/15/BUG5TJE65A1....

QUICKLY

CABLE ACT SEEN HURTING LOCALITIES
[SOURCE: Washington Times, AUTHOR: Jacqueline Palank]
Passed by the House last week, the Communications, Opportunity,
Promotion and Enhancement Act of 2006, known as the COPE Act, would
create a national franchising system in lieu of the local franchises
that currently exist. The Federal Communications Commission would be
in charge. "It's not a very good day for local government and it's
not a good day for consumers," said Marilyn Praisner, vice president
of the Montgomery County Council. The Senate Commerce, Science and
Transportation Committee on Thursday will review its own, broader
version of the House bill. A major role of the local cable
administrative offices is to act as an intermediary between consumer
and cable provider when a complaint can't be resolved. If a national
franchising system is established, local officials question the
federal government's ability to handle the detail and quantity of the
complaints, which include unrestored construction sites, missed
appointments and billing errors. Officials worry that a federal
franchise would not require cable providers to service an entire
geographic area. Local officials say the House bill may take funds
away from the public, educational and governmental channels that make
up local programming, called PEG channels, as well as the fiber
network that allows for communication between all government
buildings and schools, called an institutional network or I-net.
http://www.washtimes.com/business/20060615-095645-5861r.htm

TELECOS ON DEFENSIVE IN NET NEUTRALITY FIGHT
[SOURCE: CIO Insight, AUTHOR: Edward Cone]
The major telecommunications companies spend billions of dollars each
year on advertising, and millions more on political lobbying. So
imagine their shock when a low-budget campaign led by a motley
coalition of bloggers and techies helped throw into doubt their
cherished plans for making more money on the Internet. That the
coalition perpetrated its revolt over the very fibers the telcos long
to further monetize only adds insult to the injury. But the larger
lesson is that the Web-borne rebellion of Internet users says a lot
about the way the Web is changing marketing and politics.
http://www.cioinsight.com/article2/0,1540,1977373,00.asp

ROUTE TO NETWORK NEUTRALITY IS UNCHARTERED AND CONTROVERSIAL, REPORT SAYS
[SOURCE: Standard & Poor's press release]
The route toward network neutrality in which consumers enjoy
broadband Internet access unhindered by connectivity, hardware, and
software issues is uncharted and controversial, Standard & Poor's
Ratings Services said in an article on the U.S. telecommunications
sector. "Given that network neutrality is an evolving and largely
untested concept, the degree of potential future Internet-related
regulation is likely to depend greatly on providers' behavior over
the next year or two as they roll out advanced networks and
services," said Standard & Poor's credit analyst Catherine Cosentino.
The article, "Path To Network Neutrality Is Uncharted -- And
Controversial," was published June 13, 2006, on RatingsDirect. It is
part of Standard & Poor's Special Report on the U.S. telecom industry
that will be published in the June 21, 2006, issue of CreditWeek, the
weekly magazine on credit risk. "In light of the politically charged
and high-profile nature of the debate over network neutrality, our
view is that both cable TV and telephone companies are not likely to
engage in practices that would prompt additional regulatory oversight
by the FCC through existing or new legislation," Ms. Cosentino said
in the article.
http://www2.standardandpoors.com/servlet/Satellite?pagename=sp/sp_articl...

MANDATORY LABELING BILL THREATENS FREE SPEECH ON THE INTERNET
[SOURCE: Center for Democracy and Technology]
New legislation allowing for the imprisonment of Web site operators
who fail to label adult-oriented material -- including sexual health
information -- would undermine First Amendment free speech
protections and do nothing to protect children on the Internet. The
Internet SAFETY Act (S. 3499) would require Web site operators who
post adult-oriented material to place markers on every Web page
containing such content. Violators would face prison terms up to 15
years. CDT believes the measure would have a profoundly damaging
chilling effect, deterring bloggers, artists and even health
advocates from posting legitimate information that could expose them
to jail time.
http://www.cdt.org
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...and we're outta here. Have a great weekend. And let's get some runs!
--------------------------------------------------------------
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.
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