Postings on media issues from Benton.org (most recent at top)

June 2006

(June 29) BUSH, CHENEY ASSAIL MEDIA OVER BANK-DATA PROGRAM [SOURCE: Reuters, AUTHOR: Caren Bohan] President George W. Bush on Monday denounced as "disgraceful" the revelation by the media of a secret U.S. program that tracks international financial records in pursuit of terrorists. Vice President Dick Cheney also singled out The New York Times for criticism of its reporting on both bank-records searches and a separate anti-terror program involving warrantless eavesdropping on phone calls. The U.S. Treasury Department since the September 11 attacks has been examining data from a Brussels-based financial consortium for evidence of potential activity by terror groups. Despite the government's efforts to keep the program quiet, The New York Times laid out the program in detail last week and other major U.S. newspapers also reported on it. President Bush said the financial-records monitoring was legal and an important tool for preventing terror attacks. "Congress was briefed. And what we did was fully authorized under the law. And the disclosure of this program is disgraceful," President Bush said. http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-06-26T205233Z_01_N26249133_RTRUKOC_0_US-SECURITY-SWIFT-BUSH.xml&archived=False
* Bush Says Report on Bank Data Was Disgraceful http://www.nytimes.com/2006/06/27/washington/27prexy.html

CHINA MAY FINE NEWS MEDIA TO LIMIT COVERAGE [SOURCE: New York Times, AUTHOR: Joseph Kahn] Chinese media outlets will be fined if they report on "sudden events" without prior authorization from government officials, under a draft law being considered by the Communist Party-controlled legislature. The law would give government officials a powerful new tool to restrict coverage of mass outbreaks of disease, riots, strikes, accidents and other events that the authorities prefer to keep secret. Officials in charge of propaganda already exercise considerable sway over the Chinese news media, but their power tends to be informal, not codified in law. More than 100 million Chinese have access to the Internet, and hundreds of commercially driven newspapers, magazines and television stations provide a much wider selection of news and information than was available in the past. But Chinese authorities have sought fresh ways to curtail reporting on topics they consider harmful to social and political stability. http://www.nytimes.com/2006/06/27/world/asia/27clampdown.html (requires registration)
* Chinese Media Law Would Require Consent http://www.washingtonpost.com/wp-dyn/content/article/2006/06/26/AR2006062601242.html

MEDIA MERGERS ARE DAMAGING US DEMOCRACY [SOURCE: Financial Times, AUTHOR: FCC Commissioner Michael Copps] [Commentary] Americans have always been crazy for news. When Alexis de Tocqueville toured the nations back roads nearly two centuries ago, he marvelled at the astonishing circulation of letters and newspapers among these savage woods. De Tocqueville chalked this up to our uniquely local politics. Under a centralized government, a handful of national newspapers might have been enough. But America offered the utmost national freedom combined with local freedom of every kind. Today, the US is richer and more powerful than when de Tocqueville visited. But do we still have media capable of keeping democracy strong? Not by a long shot. Newspaper competition has died in most cities and towns. Radio, television and the Internet have replaced them but these are primarily national, not local, and geared towards selling products through entertainment. In the last off-year elections, more than half of local newscasts contained no campaign coverage at all. Why and how has this happened? A leading culprit is the staggering consolidation among communications companies in recent years. A handful of conglomerates now controls nearly all the mainstream media. An even smaller group of network providers controls Internet access. These two trends are not typically thought to be related. But both are attempts at stifling competition by seizing control of content and distribution. The fight against consolidation is not liberal versus conservative or red state versus blue. It is a grassroots, all-American campaign to preserve the very democracy that de Tocqueville saw in America. Every citizen is a stakeholder in the outcome and every citizen should be part of the decision-making. http://www.freepress.net/news/16168 (via Free Press)

BIG MEDIA CROSS TO BEAR [SOURCE: The Street 6/22, AUTHOR: Sandy Brown] Newspapers and local TV stations aren't necessarily a match made in heaven, big media companies are learning. A number of big newspaper outfits bought into the TV business in a bid to reap supposed advertising synergies. But while some operators have succeeded -- E.W. Scripps and Belo come to mind -- such cases are proving to be the exception, not the rule. Hard-won experience shows both the paper and the TV station must be market leaders for the owner to enjoy the benefits of cross-ownership. Newspaper companies that don't enjoy significant efficiencies from local TV assets might be smart to sell some stations. http://www.thestreet.com/_tscfoc/stocks/media/10293067.html

AN INTERNET FOR THE FEW OR THE MANY? [SOURCE: C-Net|News.com, AUTHOR: Stefanie Olsen and Anne Broache] An interview with FCC Commissioner Michael Copps. He'd like the technology industry to become more engaged in the Net neutrality debate. "I'm a believer that we have to preserve the openness of the Internet. What this boils down to is Internet freedom. Are we going to keep this platform open and dynamic and--small "d"--a democratic technology platform that we have gotten accustomed to with dial-up Internet? Or in this age of high-speed broadband, are we going to turn it over to others to operate? Are we just going to transform the whole nature of the Internet from where the pipe in the middle was dumb and the intelligence was on the ends--are we going to reverse that and give all the control and intelligence to the pipe and network operators and relegate ourselves to less of a role on the edges?" http://news.com.com/An+Internet+for+the+few+or+the+many/2008-1028_3-6088206.html?tag=nefd.lede

DON'T LET SERVICE PROVIDERS DISCRIMINATE ON THE INTERNET [SOURCE: San Jose Mercury News 6/25, AUTHOR:John Doerr (Kleiner Perkins Caufield ) and Reed Hastings Netflix)] [Commentary] A debate about the future of the Internet is taking place now in our nation's capital, and American innovation as we know it is at stake. The debate is over "net neutrality," an obscure term that refers to control of Internet content: What Web sites can be shown; what products can be displayed; what costs Internet consumers will pay. The term may be arcane, but it is net neutrality that has ensured the Internet's growth as a vibrant, open and non-discriminatory marketplace since its inception. This longstanding principle of net neutrality is now under threat, and the implications for the Internet and for American innovation are profound. This is not a debate about imposing new regulations on the Internet. This is a debate about preserving a fundamental principle of openness and non-discrimination that has always been a foundation of the Internet's growth and vitality. At its core, this is a debate about competition, consumer choice and above all, the innovation that has been a hallmark of the Internet http://www.mercurynews.com/mld/mercurynews/news/opinion/14899507.htm

NET NEUTRALITY -- SPRING SWEEPS OR LAST SEASON'S RERUN? [SOURCE: Broadcasting&Cable, AUTHOR: Deborah Lathen, former chief of FCC's Cable Services Bureau ] [Commentary] Is the "Net Neutrality" debate really a rerun from the "open access" debate of the 1990s? Not long ago, "open access" was the rallying cry of consumer advocate groups, independent Internet service providers ("ISPs"), noted academics and, yes, even some of the major telephone companies. They argued that ISPs would wither away unless cable companies were required to share their proprietary facilities with them. Their predictions that cable companies would discriminate by providing better quality of service for their content, block access to their competitors' and raise prices, did not happen. Fortunately the leaders of the day decided to "do no harm" and said "no" to open access. Subsequently, the telephone companies were deregulated and competition and investment in new high speed networks exploded. So, why would anyone want to go backward? Is network neutrality legislation really necessary? No.Net-neutrality seeks to reverse a regulatory policy that has proved effective. The metamorphosis of the Internet occurred in an unregulated environment. Its continued evolution is contingent upon maintaining its freedom from those who ironically think they can protect it by regulating it. Undue regulation is perhaps the biggest threat to the openness of the Internet. Net neutrality is a remedy looking for a problem; instead of living through the summer re-runs of the seasons' best and worst, we should look to the future and the future's "must see TV." http://www.broadcastingcable.com/article/CA6347085?display=Breaking+News

MULTICAST MADNESS [SOURCE: Multichannel News, AUTHOR: Steve Donohue] When television stations owned by NBC, CBS and other broadcasters first began transmitting digital-TV signals in 1998, the concept of "multicasting" -- squeezing up to four networks into space previously occupied by a single analog channel -- seemed like it could revolutionize the TV business. Some stations quickly jumped on multicasting to offer viewers local news and weather channels -- or even broadcast up to four "March Madness" college basketball games simultaneously. Now, the Big Four TV networks and stations have instead chosen to distribute programming directly to viewers via the Internet. Rather than repeats of 24 or Desperate Housewives showing up on multicast channels, ABC, Fox, NBC and CBS have turned to platforms such as Apple Computer Inc.'s iTunes Music Store and their own Web sites in fresher bids to drive new subscription ($1.99 downloads) and ad revenue. Why funnel programming through the Internet, instead of targeting viewers watching TV in their living rooms? About 70% of Americans rely on basic-cable subscription packages to watch broadcast networks. The only way for viewers to get HDTV and multicast networks over the air from broadcast towers is with a rooftop antenna and a digital-broadcast receiver, the latter can cost up to $500. "I think people were very hesitant about going back to the days of antennas," said John Harris, director of programming at Raleigh, N.C., CBS affiliate WRAL-TV, owned by Capitol Broadcasting Corp. http://www.multichannel.com/article/CA6346618.html

BY THE NUMBERS [SOURCE: American Journalism Review, AUTHOR: Jube Shiver Jr.] Television has always relied on ratings to know what people are watching. Now newspapers can get statistics showing which stories on their Web sites attract the most attention. Will those numbers heighten the tabloidization of America's newspapers? http://www.ajr.org/Article.asp?id=4121

(June 28) PATRIOTISM AND THE PRESS [SOURCE: New York Times, AUTHOR: Editorial Staff] [Commentary] Over the last year, The New York Times has twice published reports about secret antiterrorism programs being run by the Bush administration. Both times, critics have claimed that the paper was being unpatriotic or even aiding the terrorists. Some have even suggested that it should be indicted under the Espionage Act. There have been a handful of times in American history when the government has indeed tried to prosecute journalists for publishing things it preferred to keep quiet. None of them turned out well -- from the Sedition Act of 1798 to the time when the government tried to enjoin The Times and The Washington Post from publishing the Pentagon Papers. The United States will soon be marking the fifth anniversary of the war on terror. The country is in this for the long haul, and the fight has to be coupled with a commitment to individual liberties that define America's side in the battle. A half-century ago, the country endured a long period of amorphous, global vigilance against an enemy who was suspected of boring from within, and history suggests that under those conditions, it is easy to err on the side of security and secrecy. The free press has a central place in the Constitution because it can provide information the public needs to make things right again. Even if it runs the risk of being labeled unpatriotic in the process. http://www.nytimes.com/2006/06/28/opinion/28Wed1.html (requires registration)
* Piling On the New York Times With a Scoop http://www.washingtonpost.com/wp-dyn/content/article/2006/06/27/AR2006062701708.html

NEW MEDIA LURING MONEY AWAY FROM NETWORKS [SOURCE: New York Times, AUTHOR: Stuart Elliott] Advance advertising sales for the fall television season will probably be down for a second year in a row, reflecting the growing impact of new media outlets on broadcasters. Estimates are that the five networks will sell $8.9 billion to $9 billion in commercial time ahead of the 2006-7 season, in what is known as the upfront market. That compares with an estimated $9.1 billion sold in the upfront market last year, before the start of the 2005-6 season, and an estimated $9.3 billion in the upfront market two years ago, ahead of the 2004-5 season. http://www.nytimes.com/2006/06/28/business/media/28adco.html (requires registration)
* 'Upfront' Closes With a Whimper http://online.wsj.com/article/SB115145077373792431.html?mod=todays_us_marketplace

BREAK-UP OF TELCOS COULD SPUR GROWTH: EU'S REDING [SOURCE: Reuters, AUTHOR: Huw Jones] A forced separation of a telecom company's network from its services could inject fresh competition into the sector to create more growth, the European Union's telecoms chief said on Tuesday. European Information Society and Media Commissioner Viviane Reding threw down the gauntlet to the EU's 25 member states, saying they should act radically if they believed in the strategic importance of the communications sector. Reding unveils proposals on Thursday to overhaul EU telecoms rules and markets to reflect advances in technology and competition, such as multi-service offerings. Her proposals, many of which have been leaked, have sparked outrage among telecoms firms, who accuse Reding of being a populist who fails to listen to the industry. http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-27T170653Z_01_L27769012_RTRUKOC_0_US-TELECOMS-EU.xml&archived=False

(June 26) LAWMAKER URGES ACTION AGAINST NEWSPAPERS [SOURCE: Associated Press, AUTHOR:Devlin Barrett] House Homeland Security Committee Pete King (R-NY) urged the Bush administration on Sunday to seek criminal charges against newspapers that reported on a secret financial-monitoring program used to trace terrorists. He cited The New York Times in particular for publishing a story last week that the Treasury Department was working with the CIA to examine messages within a massive international database of money-transfer records. He also said he would write Attorney General Alberto Gonzales urging that the nation's chief law enforcer "begin an investigation and prosecution of The New York Times -- the reporters, the editors and the publisher." http://www.usatoday.com/printedition/news/20060626/a_king26.art.htm
* See also Congressman Wants NY Times Prosecuted http://www.latimes.com/news/printedition/asection/la-na-paper26jun26,1,2376876.story?coll=la-news-a_section

WHAT IF THEY BUILT AN URBAN WIRELESS NETWORK AND HARDLY ANYONE USED IT? [SOURCE: New York Times, AUTHOR: Ken Belson] Despite it's ubiquity -- with 4,100 hot spot access points reaching 90 percent of the population -- just 40,000 of Taipei's 2.6 million residents have agreed to pay for WiFly since January. Q-Ware, the local Internet provider that built and runs the network, once expected to have 250,000 subscribers by the end of the year, but it has lowered that target to 200,000. That such a vast and reasonably priced wireless network has attracted so few users in an otherwise tech-hungry metropolis should give pause to civic leaders in Chicago, Philadelphia and dozens of other American cities that are building wireless networks of their own. Like Taipei, these cities hope to use their new networks to help less affluent people get online and to make their cities more business-friendly. Yet as Taipei has found out, just building a citywide network does not guarantee that people will use it. Most people already have plenty of access to the Internet in their offices and at home, while wireless data services let them get online anywhere using phones, laptops and P.D.A.'s. Like Q-Ware, operators in the United States, Europe and other parts of Asia are eager to build municipal networks. But they are grappling with the high expectations politicians are placing on them. On June 9, MobilePro backed out of plans to develop a wireless network in Sacramento because it said the city wanted it to offer free access and recoup its investment with advertising, not subscriptions, a model that other cities are hoping to adopt. Elsewhere, incumbent carriers have challenged cities' rights to requisition new networks. And many services have had difficulty attracting customers. http://www.nytimes.com/2006/06/26/technology/26taipei.html (requires registration)

(June 21) Media Ownership Rule Review Launched [SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton] On Wednesday, the FCC officially launched its review of media ownership rules with some of the same fireworks and contentious talk that characterized its first attempt to deregulate media ownership in 2003. The vote was unanimous to launch the proceeding, part of which is actually required by Congress to begin in 2006, the other part on orders from a federal court over two years ago. While they agreed it was time to get on with it, Commissioner Michael Copps and Jonathan Adelstein dissented in part, arguing passionately that the proceeding was not sufficiently attuned to issues of localism and diversity. Adelstein called it an inadequate start, saying it was akin to turning in a high school term paper for a PhD thesis. If we don't change course, he said, the rules would be rejected once again. FCC Chairman Kevin Martin pledged an open and neutral process, saying the FCC would hold at least a half-dozen public hearings, fund studies of the effects of consolidation on family-friendly programming, kids programming, news, localism, independent programming and more, budget willing. The FCC will also hold an extended comment period of 120 days to provide the public ample opportunity to weigh in, said Martin. But Adelstein and Copps argued that the review was deficient in failing to incorporate a completed localism review launched in 2003, that it failed to assure that the public would be able to comment on individual proposed rule changes before they were voted on, and that the rules were not being treated as an organic whole, with studies of the changes in one rule, say lifting the ban on newspaper/TV station cross-ownership, on other changes, like allowing companies to own more stations in a single market. Chairman Martin said the FCC would incorporate an interim status report on the localism proceeding in the rule review, calling it an important element. While he saluted the passion of his colleagues on the left, he also said his "dissenting colleagues may be rushing to judgment," likening it--to pick up on Adelstein's school theme--to giving him an F grade on the first day of school. He said Copps and Adelstein were focusing on past processes, and that he was confident that they would "be able to work together through all this very contentious process." http://www.broadcastingcable.com/article/CA6345862.html
• FCC News Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-266033A1.doc

'NEUTRALITY' REGULATION COULD STIFLE EVOLUTION OF HIGH-SPEED INTERNET [SOURCE: San Jose Mercury News, AUTHOR: Michelangelo Volpi, Cisco] [Commentary] The net neutrality debate comes down to this: content providers and aggregators want to regulate the Internet so that service providers cannot charge for different levels of service among their customers. The proposed rules would be akin to regulating that there cannot be carpool lanes on a highway. Broadband service providers who build the networks believe they should be able to manage the networks for efficiency, security and quality of service. Broadband providers believe they should be able to place intelligence in the core of their network as well as the edge, or the part that reaches consumers. The debates between these two camps centers on whether Congress should step in to create such regulation. It should not. A lot is at stake for the ordinary broadband user. The success of the Internet has surpassed our wildest dreams. But overall, these services have been relatively easy to deliver because they are not time-sensitive and are not affected by congestion in the network. If an e-mail takes an extra five seconds to reach you, it does not matter. However, you will be very frustrated if the movie you are watching online is choppy. The House of Representatives recently recognized that a market-based approach is the correct way to go with the Internet. We all agree that broadband service providers should not block, impede or slow any legal application or service connected to the Internet. FCC Chairman Kevin J. Martin has stated the FCC has the power and ability to make sure this is not happening. Regulatory actions are unnecessary at this point since there is no existing problem or harm occurring to consumers or content providers. Enacting new regulations as some of the content providers propose, however, would dampen the development of the Internet and its future waves of innovation. Innovation has been the lifeblood of the Internet and of the U.S. economy for the last decade. Our nation should think carefully before taking a step that would stifle what will be an exciting and important wave of new innovative services. http://www.mercurynews.com/mld/mercurynews/news/opinion/14867068.htm

MYSPACE TO ADD RESTRICTIONS TO PROTECT YOUNGER TEENAGERS [SOURCE: New York Times, AUTHOR: Saul Hansell] Starting next week, MySpace, the popular online hangout, will make it harder for strangers to send messages to younger teenagers. The site, which has more than 70 million members, has been under pressure because members are frequently subjected to lewd or inappropriate messages and occasionally lured into dangerous real-world encounters. The site will also stop showing advertisements for certain products -- like online dating sites -- to those under 18. The owner of MySpace, the News Corporation, has been working to address concerns about the safety of the many teenage users of the site, while not clamping down on the freewheeling and flirtatious interchanges that are the source of its appeal. Next week, the site will restrict how users over 18 can contact those aged 14 and 15. Older users sending a message asking to become friends with younger users will have to enter the recipients' actual first and last names or their e-mail addresses, rather than simply their user names. The new policy still allows people under 18 to send messages to those under 16 without knowing their full names or e-mail addresses. http://www.nytimes.com/2006/06/21/technology/21myspace.html (requires registration)

37 PERCENT OF EU CITIZENS LACK COMPUTER SKILLS: SURVEY [SOURCE: Reuters] Because they grow up playing soccer and are more adept using their feet than their hands, about 37 percent of people living in the European Union have no computer skills, with Scandinavians being the most computer-literate and Greeks the least, a survey showed on Tuesday. Among 16-24 year olds, some 10 percent have no computer skills, while 65 percent of people aged 55 to 74 are unable to use the computer. http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-20T175958Z_01_L20862739_RTRUKOC_0_US-EU-COMPUTERS.xml

(June 20) THE DEATH OF NEWS [SOURCE: The Nation, AUTHOR: Mark Crispin Miller] [Commentary] Although its history is far from glorious, the US press has never been as bad as it is now; and so we rarely hear, from any serious reporters, those blithe claims that all is well. Contrary to the counterclaims in 1996, there was, as The Nation noted then, copious hard evidence of corporate meddling with the news, and also, even more important, lots of subtler evidence of reportorial self-censorship throughout the media cartel. And yet what stood out as egregious back then seems pretty tame today, now that the press consistently tunes out or plays down the biggest news, while hyping trivialities, or, if it covers a disaster, does so only fleetingly and without "pointing fingers." The press that went hoarse over Monica Lewinsky's dress is largely silent on the Bush regime's subversion of the Constitution; its open violation of the laws here and abroad; its global use of torture; its vast surveillance program(s); its covert propaganda foreign and domestic; its flagrant cronyism; its suicidal military, economic and environmental policies; and its careful placement of the federal establishment into the hands of Christian extremists. Whether it's such tawdry fare as Jeffrey Gannon's many overnights at Bush's house, or graver matters like the Patriot Act, or the persistent questions about 9/11, or the President's imperial "signing statements" or -- most staggering of all -- the ever-growing evidence of coast-to-coast election fraud by Bush & Co., the press has failed in its constitutional obligation to keep us well informed about the doings of our government. http://www.thenation.com/doc/20060703/crispinmiller

FIGHT FOR A FREE PRESS [SOURCE: The Nation, AUTHOR: Robert W. McChesney] [Commentrary] Although concentration has not increased especially over the past few years, the damage has been done. Democracy is premised on a free press, and freedom of the press is premised on the absence of public or private gatekeepers with monopolistic power. It is why the Supreme Court ruled in 1945 that antitrust was probably more appropriate in the realm of media than in any other area. This concentrated, conglomerated and profit-driven media system is hardly the result of "free enterprise." These giant companies are the recipients of enormous direct and indirect subsidies and/or government-granted monopoly franchises. They include: monopoly licenses to radio and TV frequencies, cable and satellite TV monopoly franchises, magazine postal subsidies and copyright, to mention a few. For these firms the most important competition may well be in Washington, getting the cushy subsidies and licenses. These policies, worth tens of billions annually, are generally made in our name but without our informed consent. That is the heart of the problem, and it points us to the solution: informed public participation on media policy-making. http://www.thenation.com/doc/20060703/mcchesney

A TEN-POINT PLAN FOR MEDIA DEMOCRACY [SOURCE: The Nation, AUTHOR: Jeffrey Chester] [Commentary] Ten years after the passage of the Telecommunications Act of 1996, digital technologies are rapidly reshaping the country's communications system. It will be the most powerful media environment ever created -- always "on" with connections via PCs, digital TVs and an array of mobile devices, delivering a torrent of personalized, interactive and virtual content, much of it coming from the nation's most powerful traditional and new media companies. The next several years are critical to insure that the promise of what we now experience online -- and its vast potential to help build a just civil society -- is fulfilled. With Congress poised to pass legislation that rewrites key parts of the Telecom Act, the following ten action items should be on any media reform agenda: 1) media ownership, 2) mergers, 3) network neutrality, 4) spectrum management, 5) community broadband, 6) privacy, 7) intellectual property, 8) universal service, 9) diverse content and 10) minority ownership. http://www.thenation.com/doc/20060703/chester

CELLPHONE START-UPS STRUGGLE AS MEDIA SERVICES FAIL TO CATCH ON [SOURCE: Wall Street Journal, AUTHOR: Li Yuan li.yuan@wsj.com, Amol Sharma, Merissa Marr ] Setting the stage for another round of losses in the volatile telecom sector, a wave of cellphone start-ups that were counting on TV, music and other premium services to attract users is floundering. Among the companies struggling to sign up customers: Mobile ESPN, a venture backed by Walt Disney Co., and Amp'd Mobile, a youth-oriented wireless start-up backed in part by Viacom Inc. and Vivendi SA. The companies are among about 30 wireless operators and hundreds of related wireless-technology companies that have been launched over the past four years. They hope to carve out a profitable niche in the mobile-phone business with networks leased from the nation's major phone carriers and new services pushed by heavy marketing. Not since the late 1990s has the telecom sector seen such a wave of investment. In the past 16 months, start-up cellular carriers have raised at least $1 billion, according to San Francisco investment bank Rutberg & Co., compared with just $100 million in the three years from 2002 to 2004. But many of the new carriers are struggling as they fight over a relatively thin slice of the market. While the number of U.S. cellphone users has doubled over the past six years to 215 million, only around 1% of them regularly use cellphones to watch videos, for example. Cellphones also are facing competition from iPods, Blackberries and other multimedia devices. http://online.wsj.com/article/SB115076181440284664.html?mod=todays_us_page_one (requires subscription)

DISNEY SAYS ABC FREE WEB TV A HIT WITH CONSUMERS [SOURCE: Reuters, AUTHOR: Gina Keating] Prime-time ABC television shows were viewed more than 11 million times on the Web in the first month of a test by the Walt Disney Co. of whether consumers will watch ads online if the shows are free. An online exit survey posted the first week of the two-month trial showed that 87 percent of respondents could recall the advertisers that sponsored the episodes they watched. That compares with typical ad recall of about 40 percent for commercials viewed on television, industry sources said. A retooled version of the free site, which incorporates data gathered during the test, will be launched in the Fall, Disney Media Network Co-Chair Anne Sweeney said. http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-20T110850Z_01_N19342378_RTRUKOC_0_US-MEDIA-DISNEY.xml&archived=False

MARKETERS AIM FOR 'ENGAGED' CONSUMERS [SOURCE: USAToday, AUTHOR: Theresa Howard] The spread of broadband Internet access and resulting growth in Web advertising in the past year have made the pursuit of interactive consumer "engagement," rather than the number of viewers seeing a TV ad, the new hot button for agencies and clients. The resulting surge in online activity, alone or as part of multimedia campaigns, has driven a nearly 32% increase to 2,502 entries for the Web ad competition -- called the Cyber Lions -- at this week's 53rd Annual Cannes Lions International Advertising Festival. Grand Prix and gold, silver and bronze Lions recognize the world's best advertising in nine categories. Much of the ad industry has been converted to the belief that engagement -- adspeak for getting consumers to spend time with brand messages -- is what gets results from advertising. One way to do that is to send the consumer -- often with a traditional TV ad -- to a website to interact with or sometimes create the ad. Such interaction can extend a consumer's time spent with a brand to minutes or longer vs. 30 seconds for TV ads. http://www.usatoday.com/printedition/money/20060620/cannesengagement.art.htm

CLEAR CHANNEL GRABS WEB SHARE WITH MUSIC VIDEOS [SOURCE: Reuters] Advertising sales at the online arm of Clear Channel Communications jumped 30 percent compared with last year after it restructured its roster of 950 radio Web sites, the largest U.S. radio broadcaster said on Monday. The radio company's network of Web sites collectively were among the top five most-visited online music sites in May, according to comScore Media Metrix, ahead of Apple's iTunes and MTV.com after a year of steady growth. http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID=2006-06-19T184007Z_01_N16204137_RTRUKOC_0_US-MEDIA-CLEARCHANNEL.xml

TECH CREATES BUBBLE FOR KIDS [SOURCE: USAToday, AUTHOR: Sharon Jayson] To baby boomers and other adults of a certain age, young people may seem rude, disrespectful and generally clueless about established social mores. But to social scientists, the phenomenon is more complicated. Raised by parents who stressed individualism and informality, these young people grew up in a society that is more open and offers more choices than in their parents' youth, says child and adolescent psychologist Dave Verhaagen of Charlotte. Unlike their parents, they have never known anything but a world dominated by technology. Even their social lives revolve around the Web, iPods and cellphones. So they dress down, talk loose and reveal their innermost thoughts online. "Put that all together and you've got a generation that doesn't have the same concept of privacy and personal boundaries as generations before," Verhaagen says. "They're tuned out in some ways to the social graces around them and the people in their lives, in their physical realm, and tuned in to the people they're with virtually," says psychologist and sociologist Sherry Turkle of the Massachusetts Institute of Technology in Cambridge. http://www.usatoday.com/printedition/life/20060620/d_cover20.art.htm

(June 19) SPEED BUMPS ON THE INFORMATION HIGHWAY [SOURCE: San Francisco Chronicle, AUTHOR: Tom Abate] In this age of information, wealth and ideas flow through wires and cables just as wheat, iron and other goods once traveled over railroads and highways. Who controls today's digital thoroughfares, and whether they get to charge extra for safe and speedy passage, has emerged as a potentially defining debate for the Internet. This issue is commonly referred to as "network neutrality," a slogan that leans heavily to one side of the argument. The debate, which the Senate is poised to consider as soon as this week, centers on whether all Internet traffic should be given the same delivery treatment at the same price, as it has since the start of the Internet, or whether the companies that deliver the traffic to consumer's homes can charge heavy users more. A major reason for the debate is the Internet's stunning growth -- and the new uses to which companies and their customers are putting it. A system once used almost exclusively for e-mail is now eyed by businesses that want to send huge video files as large as 75,000 e-mails. The result is a growing traffic jam that threatens everyone's deliveries. http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/06/18/NET.TMP
* Analysis: Courts May Have To Decide Rules Of The Internet Road [SOURCE: InfoWeek, AUTHOR: K.C. Jones] http://www.informationweek.com/internet/showArticle.jhtml;jsessionid=RI0HPMTLOP5VKQSNDLOSKHSCJUNN2JVN?articleID=189500106&subSection=
* Tangled web of fear, greed and Internet's fate http://www.philly.com/mld/inquirer/business/14850257.htm
* Small companies want to maintain Net's neutrality http://www.usatoday.com/printedition/money/20060619/1b_smallbiznet19.art.htm

FITFULLY BLENDING PAPERS AND TV [SOURCE: New York Times, AUTHOR: Richard Silkos & Katharine Seelye] Where's the synergy? In hometown Chicago, the Tribune owns the Chicago Tribune, WGN radio, WGN TV, CLTV (a regional cable news channel) and our beloved Cubs. Reporters for The Trib share their work with their broadcast siblings appearing on screen or being heard over the air. When it works well, information from each outlet flows in a coordinated way among all the outlets and onto their Web sites. When the Tribune Company brought the Times Mirror company for $8.3 billion in 2000, the promise was that this approach could be successfully transplanted to the nation's most cutthroat media markets, on the East and West Coasts. With its combined properties -- The Los Angeles Times and KTLA in Los Angeles, and Newsday and WPIX in New York -- Tribune would have a stake in the three biggest markets in the country and could reach 80 percent of all Americans. Not only would the properties in each city cross-promote and cross-pollinate their editorial content, but advertisers could make sweeping national buys across the media and across the country. John W. Madigan, then Tribune's chief executive, called the merger with Times Mirror "the multimedia company of the future." But the strategy has failed. While the entire media landscape is in turmoil, the Tribune properties in Los Angeles and New York have fared particularly poorly. Circulation is down, below the industry standards at both The Los Angeles Times and Newsday; at KTLA and WPIX, viewers have declined and audience share has plummeted. Nor has a synergistic bump in ad revenue materialized. http://www.nytimes.com/2006/06/19/business/media/19tribune.html (requires registration)

BROADCAST DECENCY BILL PRO OR CON? [SOURCE: Broadcasting&Cable, AUTHOR: Allison Romano] An interview with House Telecommunications Chairman Fred Upton (R-MI), a strong proponent of new legislation that has upped the maximum fines for broadcasting indecent programming. He says broadcasters brought the law and its tenfold increases in fines upon themselves. He points out it was former FCC chief Michael Powell who launched the Congressional push for boosting indecency fines, aided by Janet Jackson's Super Bowl number and FCC complaints that simply disgusted him. He says, "From the day that we introduced the bill and the hearings and the likelihood that this was going to move along to become law, the industry has changed its MO. They are much more cognizant of the rules and potential penalties, and they have made necessary adjustments to being flagged in the future. That means different contracts with personnel, delays on live events and a greater awareness of their responsibility, particularly for the few who are racing to the bottom." See more at the URL below. http://www.broadcastingcable.com/article/CA6344827?display=News
See also -- The Big Chill Becomes Law [Commentary] "This law is so unnecessary. Even Rep Upton, who started this indecency crusade even before the 2004 Super Bowl, pointed out last week that just the threat of this and worse had already made broadcasters change their ways." http://www.broadcastingcable.com/article/CA6344831?display=Opinion

TELECOM GIANTS IN EUROPE PLAN $30 BILLION DEAL [SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin] Nokia of Finland and Siemens of Germany are expected to announce today that they will merge their telecommunication network equipment businesses in a deal valued at more than $30 billion, people involved in the transaction said last night. The merger is likely to set off a new global wave of consolidation and a round of price wars as the telecommunication industry continues to remake itself after last decade's boom-and-bust cycle. The cross-border deal, which was approved by the boards of both companies, would create the world's third-largest network equipment concern behind Ericsson and a combined Lucent and Alcatel, which announced plans to merge three months ago. The transaction is also likely to put considerable pressure on Motorola, which will fall to the No. 4 position among network equipment makers in the world, just as its business is turning around as a result of its hot-selling Razr cellphones. http://www.nytimes.com/2006/06/19/business/worldbusiness/19merger.html (requires registration)

(June 16) 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.story?coll=la-headlines-pe-business

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 industry-wide 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

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 triple-play 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

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

(June 15) USF CAN PROVIDE COST-EFFECTIVE BROADBAND ACCESS TO EVERY STATE [SOURCE: The Hill, AUTHOR: Sen. Ted Stevens (R-Alaska)] [Commentary] A recent Government Accountability Office report found that two-thirds of Americans do not have access to broadband service. Several factors have prevented Americans from accessing broadband service; chief among these is cost. Broadband is too expensive for some families, and others cannot even afford to purchase home computers. We must address this issue now because the delay in deploying affordable high-speed Internet service is stifling innovation and limiting our ability to compete in the global marketplace. Later this month, the Senate Commerce Committee will consider S. 2686, the Communications, Consumer’s Choice and Broadband Deployment Act of 2006. The centerpiece of S. 2686 is a program called Universal Service, which helps provide affordable communications services in every state. This bill updates the program for the digital age by using Universal Service Fund money to establish a $500 million account that will finance broadband deployment to unserved areas. http://thehill.com/thehill/export/TheHill/News/Frontpage/061406/ss_stevens.html

ROCKERS PUSH POLICY, NOT PRODUCT [SOURCE: BusinessWeek, AUTHOR: Carlos Bergfeld] As a rule, rock stars have never shied away from taking up a political cause. But the advent of the Digital Age is giving musicians a host of new ways to mix both tech savvy and their rock star status to further an agenda. Coordinators of the SavetheInternet.com coalition back so-called "Net neutrality," or rules that would bar phone and cable companies from creating a multi-tiered fee structure on the Internet. They're hoping that participation of artists like Moby will help them spread the word. At least 10 other musicians and celebrities will soon add their voices to the plea, says Craig Aaron, a spokesman for FreePress.net, which is organizing the coalition. "These are folks that have a loyal fan base that looks to the artist," he says. "It's an opportunity to reach out to a new audience that is not necessarily paying attention to the ins and outs of media policy" at the Federal Communications Commission. So is this marriage of technology and politics on the part of musicians working out? Artists who back the free dissemination of music via the Web remain lone voices in the music industry. Meantime, the Net-neutrality backers have made little headway in Congress. Still, the influence these musicians can have with the public is undeniable. "For better or for worse, the mainstream media loves to write about celebrities," Aaron says. And the technologically advanced ways those celebrities try to bring their messages across. http://www.businessweek.com/technology/content/jun2006/tc20060614_409987.htm?chan=technology_technology+index+page_more+of+today%27s+top+stories

GOVERNMENT INCREASINGLY TURNING TO DATA MINING [SOURCE: Washington Post, AUTHOR: Arshad Mohammed and Sara Kehaulani Goo] Industry executives, analysts and watchdog groups say the federal government has significantly increased what it spends to buy personal data from the private sector, along with the software to make sense of it, since the Sept. 11, 2001, attacks. They expect the sums to keep rising far into the future. Privacy advocates say the practice exposes ordinary people to ever more scrutiny by authorities while skirting legal protections designed to limit the government's collection and use of personal data. Critics acknowledge that such data can be vital to law enforcement or intelligence investigations of specific targets but question the usefulness of "data-mining" software that combs huge amounts of information in the hopes of finding links and patterns that might pick someone out as suspicious. http://www.washingtonpost.com/wp-dyn/content/article/2006/06/14/AR2006061402063.html (requires registration)

RUSSIA'S LID ON MEDIA [SOURCE: Washington Post, AUTHOR: Masha Lipman, Carnegie Moscow Center] [Commentary] Earlier this month Moscow hosted a congress of the World Association of Newspapers. The organization's president, Gavin O'Reilly, deplored the Russian government's encroachments on media freedom. Then President Vladimir Putin took the podium to respond. The media's situation has grown better, not worse. In its hypocrisy, its utter lack of credibility, Putin's statement was reminiscent of the most blatant Soviet propaganda. In fact, it's not just foreign observers but also Russian media professionals who are deeply concerned about state control of the media. In the autumn of 2004 a number of members of the Russian Television Academy signed a letter that stated that "Russian television today is not free." They said they were being forced to broadcast official reports "instead of objective information. Propaganda instead of free discussions. Censorship has been basically established on television." And other restrictions, the letter emphasized, had led to self-censorship. There are still other, smaller outlets besides Kommersant that have preserved independent editorial stances. But these can barely break the basic media monopoly of Putin's Kremlin. The state television news channels reach 100 percent of the Russian audience, while alternative sources of information have limited circulation. Moreover, the Kremlin has ensured that national television is separated from independent-minded media: Television does not pick up their stories or invite their reporters to appear on the air. Today's Kremlin is wholly unconstrained. There is nothing, inside or outside the country, to stop Putin and his regime from doing anything they wish on the domestic scene -- political, media or otherwise. http://www.washingtonpost.com/wp-dyn/content/article/2006/06/14/AR2006061402006.html (requires registration)

NIELSEN TO GAUGE TV VIEWING ON WEB, MOBILE DEVICES [SOURCE: Reuters, AUTHOR: Paul J. Gough] In a move with far-reaching implications for commercial television, Nielsen Media Research said Wednesday it plans to integrate TV with Internet ratings and to measure viewership for such portable devices as cell phones and iPods. Nielsen also set a firm date of 2011 for the end of paper diaries still used for collecting local ratings data in the smallest markets during "sweeps." The scope of Wednesday's announcement stunned many in the media industry, who had for years told Nielsen that it moved too slowly in reacting to changes in the TV business. It also came months after Nielsen opted not to go ahead with a joint venture involving radio ratings service Arbitron and its Portable People Meter technology. http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-15T104144Z_01_N14251279_RTRUKOC_0_US-MEDIA-NIELSEN.xml&archived=False

(June 14) INDIE-ROCK REVOLUTION, FUELED BY NET NEUTRALITY [SOURCE: The Hill, AUTHOR: Jenny Toomey and Michael Bracy] [Commentary] Over the past several years, the independent music community has flourished. It now represents over 80 percent of music released in this country and nearly 30 percent of the overall music marketplace. That’s no surprise to those who have been living at the intersection of music and technology. While many argue the Internet has had a negative impact on traditional record sales, it has also helped artists to tear down the walls between themselves and their fans and created the foundation for an unparalleled musician-powered renaissance. If this transformation continues, musicians may leave behind the long-standing imbalance that requires them to sign away their copyrights as a condition of gaining a major-label contract. If they do so, artists’ gratitude should flow to the principle of network neutrality. For musicians, net neutrality means they should have the unfettered ability to make their work available to potential fans without undue interference from corporate gatekeepers. Similarly, music fans should have the ability to access this music via a range of legitimate business models. Net neutrality also ensures the continued innovation that has spurred the growth of the indie sector, the transition to a legitimate digital economy and, more widely, consumer adaptation of broadband services. To understand the importance of net neutrality for artists, look at the lack of a similar principle in modern commercial radio. When informally polled as to why they sign away their copyrights to major labels, most artists explain that they need to be on a major label in order to have a shot at commercial radio airplay. And, sadly, these artists have a point. http://www.thehill.com/thehill/export/TheHill/Comment/OpEd/061306_oped1.html

HIDING IN PLAIN SIGHT, GOOGLE SEEKS AN EXPANSION OF POWER [SOURCE: New York Times, AUTHOR: John Markoff & Saul Hansell] On the banks of the windswept Columbia River, Google is working on a secret weapon in its quest to dominate the next generation of Internet computing. But it is hard to keep a secret when it is a computing center as big as two football fields, with twin cooling plants protruding four stories into the sky. The complex, sprawling like an information-age factory, heralds a substantial expansion of a worldwide computing network handling billions of search queries a day and a growing repertory of other Internet services. And odd as it may seem, the barren desert land surrounding the Columbia along the Oregon-Washington border -- at the intersection of cheap electricity and readily accessible data networking -- is the backdrop for a multibillion-dollar face-off among Google, Microsoft and Yahoo that will determine dominance in the online world in the years ahead. Microsoft and Yahoo have announced that they are building big data centers upstream in Wenatchee and Quincy, Wash., 130 miles to the north. But it is a race in which they are playing catch-up. Google remains far ahead in the global data-center race, and the scale of its complex here is evidence of its extraordinary ambition. Even before the Oregon center comes online, Google has lashed together a global network of computers — known in the industry as the Googleplex — that is a singular achievement. "Google has constructed the biggest computer in the world, and it's a hidden asset," said Danny Hillis, a supercomputing pioneer and a founder of Applied Minds, a technology consulting firm, referring to the Googleplex. http://www.nytimes.com/2006/06/14/technology/14search.html (requires registration)

COULD A 15-YEAR-OLD WITH A LAPTOP BE THE NEW CAMPAIGN MEDIA GURU? [SOURCE: New York Times, AUTHOR: Adam Cohen] [Commentary] Daily Kos's convention -- the in-person gathering of the nation's most-read online political blog -- was practically carpeted with presidential candidates. But perhaps the most notable presentation came from Ava Lowery, a 15-year-old from rural Alabama, whose homemade video was shown at the convention on jumbo television screens. Ms. Lowery's video, set to the Queen song "We Will Rock You," contrasted the "liars" and "leakers" in the Bush administration with "those of us who choose to stand up for truth and justice." Her handiwork, which can be seen at Youtube.com (Ava Lowery's video), is a bit over the top. But it shows that a 15-year-old with video software and Internet access can now create and disseminate a professional-quality political ad. Last week's gathering was widely described as a bloggers' convention, but it was a lot more. It was the mainstream debut of "Internet-powered politics," and it made a convincing case that the Internet will quickly surpass television as the primary medium for communicating political ideas. This could be good news for progressives, as the Daily Kos community hopes, and for the Democratic Party, which sorely needs some. But like all technological revolutions, Internet-powered politics could have some unintended consequences. http://www.nytimes.com/2006/06/14/opinion/14wed4.htm (requires registration)
• Progressive Nation 1.0 http://www.alternet.org/mediaculture/37537/

(June 13) SURGE IN INTERNET USE, ENERGY COSTS HAS BIG TECH FIRMS SEEKING POWER [SOURCE: Wall Street Journal, AUTHOR: Kevin J. Delaney kevin.delaney@wsj.com and Rebecca Smith] With both Internet services and power costs soaring, big technology companies are scouring the nation to secure enough of the cheap electricity that is vital to their growth. The search is being led by companies including Microsoft Corp., Yahoo Inc. and IAC/InterActiveCorp. Big Internet firms have been adding thousands of computer servers to data centers to handle heavy customer use of their services, including ambitious new offerings such as online video. But that is feeding a thirst for more power. One large data center can consume enough juice to power a small city of 30,000 to 40,000 people -- and also requires a fat Internet linkup to stay connected to the outside world. The power-guzzling centers are such big energy users that shaving as little as a penny per kilowatt-hour from electricity rates can knock off millions of dollars in annual expenses. Some Internet executives say electricity has become a closely watched expense and can even be a factor when they consider rolling out new services. While always a concern, the cost of power has become more important amid a recent run-up in energy prices and increased use at data centers. To satisfy their power needs, Internet companies are exploring options ranging from building facilities in former defense bunkers -- which already have rugged grid connections -- to plunking themselves down near hydroelectric plants to get a slice of the inexpensive power. Anticipating demand a decade from now, some executives even are mulling whether proximity to nuclear-power plants could be a plus. http://online.wsj.com/article/SB115016534015978590.html?mod=todays_us_page_one (requires subscription)

MR PULVER HAS JUST TWO WORDS: INTERNET VIDEO [SOURCE: Wall Street Journal, AUTHOR: Amol Sharma at amol.sharma@wsj.com] Jeff Pulver, the self-described futurist and entrepreneur who started the company that was Vonage's predecessor, left Vonage before the company started to sizzle. Now, he is on to the next big thing: Internet video. And he is trying to ensure he doesn't get left out again. Mr. Pulver is creating his own Internet TV show, which he is modeling on Rocketboom, a popular Internet video-blog that broadcasts a three-minute news show daily. He is considering launching a broader Internet TV subsidiary and is weighing whether to invest in several emerging Internet video companies, though he won't name them. Someday he wants to start an Internet reality TV show. "The same DNA that disrupted the telecom industry is well on its way to totally revolutionizing the way the TV, film, and broadcast industry is going to be," Mr. Pulver says, adding that he's now looking for "the Vonage of Internet video." The revolution this time, he says, isn't coming from small upstarts, as was the case with Internet calling, but primarily from established media and tech giants. He points to a variety of developments, ranging from Google Inc.'s video service, which provides easy online access to content from a range of providers, to Walt Disney Co.'s decision to offer Internet downloads of some of its most popular shows. http://online.wsj.com/article/SB115015879072178440.html?mod=todays_us_marketplace (requires subscription)

TECHNOLOGISTS ASSAIL FEDERAL NET-TAPPING RULES [SOURCE: C-Net|News.com, AUTHOR: Anne Broache and Declan McCullagh] Federal regulations saying that police must be able to tap into Internet phone conversations with ease are coming under renewed attack from academics, engineers and one of the Net's founding fathers. A 21-page study to be released today says it's impossible for the government to expect all products that use voice over Internet protocol, or VoIP, to comply with the Federal Communications Commission's September 2005 requirement mandating wiretapping backdoors for government surveillance. That requirement is backed by the Bush administration. The study, organized by the Information Technology Association of America, says that because VoIP relies on a fundamentally different network architecture from that of traditional phone lines, such a mandate would pose "enormous costs" to the industry and could even introduce significant security risks. The nine contributors included Vint Cerf, Google's chief Internet evangelist and one of the Net's founding fathers; Steven Bellovin and Matt Blaze, both prominent computer security professors who specialize in security; Clinton Brooks, a former National Security Agency official; and engineers from Sun Microsystems and Intel. http://news.com.com/Technologists+assail+federal+Net-tapping+rules/2100-1028_3-6083066.html?tag=nefd.top

IAA CHIEF SAYS ILLEGAL SONG-SHARING 'CONTAINED' [SOURCE: USAToday, AUTHOR: Jefferson Graham] Nearly a year after the Supreme Court issued a landmark ruling against online music file-sharing services, the CEO of the Recording Industry Association of America says unauthorized song swapping has been "contained." "The problem has not been eliminated," says association CEO Mitch Bainwol. "But we believe digital downloads have emerged into a growing, thriving business, and file-trading is flat." That's an optimistic view from an industry that saw its numbers slide to near oblivion after the launch of the original Napster in 1999. CD sales fell as much as 30%, and the RIAA pressed Congress and the courts for relief against what it said was rampant piracy. http://www.usatoday.com/printedition/money/20060613/1b_riaa13.art.htm

E-NEWSPAPERS JUST AROUND THE CORNER. REALLY [SOURCE: Reuters, AUTHOR: Kenneth Li] The newspapers of the future -- cheap digital screens that can be rolled up and stuffed into a back pocket -- have been just around the corner for the last three decades. But as early as this year, the future may finally arrive. Some of the world's top newspapers publishers are planning to introduce a form of electronic newspaper that will allow users to download entire editions from the Web on to reflective digital screens said to be easier on the eyes than light-emitting laptop or cellphone displays. Flexible versions of these readers may be available as early as 2007. The handheld readers couldn't come a moment too soon for the newspaper industry, which has struggled to maintain its readership and advertising from online rivals. http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-12T180233Z_01_N07428289_RTRUKOC_0_US-BIZFEATURE-NEWSPAPERS-EPAPER.xml

NEWSPAPERS FIGHT BACK AGAINST ONLINE CLASSIFIEDS [SOURCE: Reuters, AUTHOR: Lisa Baertlein] For the past decade, newspapers have seen their help-wanted advertising under siege from online rivals. Now, as the Internet begins to eat into automotive and real estate classifieds as well, newspapers are fighting back. Classified advertising accounts for more than a third of revenue at newspapers, which until recently didn't want to accept that advertisers are increasing their spending on the Web, which is better suited to connecting individuals and delivering up-to-the-minute information."Now they totally get it and they're scrambling to make sure they're not left out of the equation," said Peter Zollman, founding principal of Classified Intelligence, a research and consulting firm. Favored attack strategies include banding together, buying or forming partnerships with upstart Web sites and building new sites to serve local needs. http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID=2006-06-12T174257Z_01_N12344697_RTRUKOC_0_US-BIZFEATURE-NEWSPAPERS-CLASSIFIED.xml&archived=False

(June 12) LOCAL STATIONS STRUGGLE TO ADAPT AS WEB GRABS VIEWERS, REVENUES [SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes brooks.barnes@wsj.com] The 1,300 other commercial television stations in the U.S., much like newspapers and magazines, are under attack as new technologies roil the industry. The Internet, in particular, is sucking away both viewers and advertisers. The shift is sending ripples through the broader media industry. For decades, TV stations have been a fount of cash for some of the industry's biggest players such as Viacom, News Corp. and General Electric's NBC. Newspaper publishers such as Tribune Co. and Gannett Co., also diversified into television. For many of these companies, steady profits from their stations funded expansion into other businesses. At News Corp., which at one time derived about one-third of profits from its station group, proceeds helped the company to become a global powerhouse. Tribune's station profits funded its efforts to become a newspaper giant with the 2000 acquisition of Times-Mirror Co. The picture has changed. Total local broadcast revenue fell 9% in 2005 to $16.8 billion, according to the Television Bureau of Advertising. The chief culprit: Big advertisers cutting back budgets or moving to the Web. Among auto marketers, which have long accounted for about a third of station revenue, DaimlerChrysler AG cut spending on local TV by 13% in 2005. Ford Motor Co. slashed its local TV budget by 15%. "Stations are getting beaten up," says Brad Adgate, senior vice president at media consultancy Horizon Media in New York. "They have to dramatically reinvent themselves and many don't know how." The slump in TV-station revenue and profits is causing some companies to consider drastic action. Tribune has spent months contemplating a spinoff of its TV-station group. Such a move could undermine the rationale for the Times-Mirror purchase, which was aimed at pairing Times-Mirror's collection of big-city papers like the Los Angeles Times with Tribune's TV stations in the same markets. Tribune's deliberations come six months after Viacom broke into two, separating its broadcast-TV operations from its cable channels. NBC Universal just sold four stations in smaller markets. News Corp., whose station group has been stung by operating-income declines for more than a year, is also considering selling some smaller stations. Local stations are suffering a full-fledged identity crisis. Networks used to need them to broadcast shows. But 85% of U.S. households now receive TV via cable or satellite, and the Internet is a fast-emerging competitor. As TV companies allow people to watch shows whenever they want -- on iPods, on-demand cable services and network Web sites -- local stations are apt to endure even more losses. http://online.wsj.com/article/SB115007459811277478.html?mod=todays_us_page_one (requires subscription)

COMING SOON (MAYBE): EVEN MORE TV CHANNELS [SOURCE: New York Times 6/11, AUTHOR: Richard Silkos] As America careers toward its much-touted conversion to the all-digital transmission of television signals -- the digital switchover is now set in stone for February 2009 -- the debate over multicasting is looking like another shining example of the law of unintended consequences when technology comes into play. Multicasting, by the way, is the entertainment industry term for broadcasting several television channels in the space, or bandwidth, of a current analog broadcast signal. There are technical issues related to this, but the upshot is that with new digital frequencies and equipment, a local station can now beam roughly four digital channels on its signal where a single analog channel once existed. Or it can broadcast the current signal and sublet the extra spectrum, or space, for other purposes, like Internet access, infomercials or pay-TV services. Now, the first question one might rightly ask is this: Who cares about multicasting when there are already hundreds of cable channels available in millions of households, and a bewildering array of new download services and Webby ways of getting video material? Where television programming is concerned, there is no reason to believe that more is more. But there is a compelling argument to be made that multicasting is a public good because it uses a national resource -- the airwaves -- to deliver more and better free television into people's homes. While only 15 percent of America's households currently receive their television over the airwaves, rather than through cable or satellite, some cool new channels may help to quell a potential uproar over the fact that old analog televisions will not work with new digital signals. Bruce Leichtman of the Leichtman Research Group in Durham, N.H., estimates that when the digital switch is thrown in 2009, there will be about 75 million analog TV's nationwide that get their signals only from rabbit ears. Their owners will need to buy $50 converter boxes to tune in after that. Unfortunately for broadcasters -- and, arguably, for viewers -- that 15 percent of households is not a big-enough market to make these new niche channels economically viable. For the model to work, broadcasters also need to make the new channels available to people with cable and satellite services -- and they want the channels to be distributed free, in the way federal law currently obligates cable companies to carry their primary local channels. The law is known as the must-carry rule, and several groups, led by the National Association of Broadcasters, are lobbying for what they call the digital must-carry rule: that all their broadcast signals, including whatever new digital multicast channels they cook up, should be included, free, on the basic cable lineup. There are several arguments for this. One of the most sensible is that local broadcasters have had to invest small fortunes in equipment to convert to digital broadcasting at Washington's behest, and that this is a way for them to recoup their costs. http://www.nytimes.com/2006/06/11/business/yourmoney/11frenzy.html?_r=1&oref=slogin (requires registration)

MEDIA ACTIVISTS FIGHT CLEAR CHANNEL'S 'HATE RADIO' [SOURCE: The NewStandard, AUTHOR: Catherine Komp] A broadcasting giant that swallowed up more than 1,200 radio stations across the country after Congress relaxed ownership rules a decade ago is once again at the center of controversy over offensive programming. But this time, Clear Channel's ongoing tolerance of "shock-jock" programmers resulted in on-air threats of death and references to sexually assaulting a 4-year-old girl on one of the New York City's highest-rated urban stations. New York City police last month arrested Troi Torain, also known as DJ Star of the nationally-syndicated "Star & Buc Wild Morning Show." They charged him with harassment and endangerment of a child. Torain's tirade about a rival DJ's family also included racial and sexual slurs against the deejay's wife. Clear Channel then fired the top-rated personality, who has a reputation for hateful, racist programming, but only after city leaders held a press conference denouncing his behavior. The company issued a statement apologizing "to those who may have been offended by his remarks." Long-time critics of Clear Channel, including media diversity activists and community organizations, are using the event to reignite a national movement against the company and remind people about the responsibility of broadcasters to serve the public interest in exchange for their free use of the public airwaves. Activists say that despite millions of dollars in federal fines and settlements, and promises to adopt a zero-tolerance approach to "indecency," Clear Channel continues to use "hate radio" as a business model, supporting derogatory programming because it attracts advertisers. Last month, media reform, training and access groups launched the "No Hate Radio" campaign. Groups, including New York-based Radio Rootz, San Francisco's Youth Media Council and the national organizing groups Prometheus Radio Project and Free Press, are urging people to file complaints with the Federal Communications Commission (FCC) about Clear Channel's broadcasts through the nohateradio.org website. They are also asking the agency to consider the need for more diverse, local voices on radio stations. http://newstandardnews.net/content/index.cfm/items/3266

IDEAS FOR ELECTRONIC MESSAGE TAX PROMPTS SWIFT OUTCRY FROM EUROPE [SOURCE: New York Times, AUTHOR: Thomas Crampton] A French member of the European Parliament, Alain Lamassoure, recently uttered the dreaded T-word -- taxes -- in connection with e-mail and mobile phone text messages, and in so doing earned the wrath of the Internet generation. No matter how remote the possibility may be -- or how useful such taxes might be in financing the European Union budget -- the mere mention of taxing messages was enough to ignite the blogosphere and industry lobbying groups. http://www.nytimes.com/2006/06/12/technology/12email.html (requires registration)

INTERNET SERVICE PROVIDERS EVOLVE, DIVERSIFY IN FACE OF GROWING BROADBAND ADOPTION [SOURCE: Associated Press, AUTHOR: Anick Jesdanun] "The state of the independent ISPs today is a sad one," said Dane Jasper, president of the California ISP Association. "What we are selling today is by and large a commodity. Fast Internet is fast Internet." See how traditional Internet Service Providers are evolving into "broadband communications companies" as the era of dial-up access ends. http://wire.jacksonville.com/pstories/technology/20060609/4001176.shtml

THOSE KIDS TODAY: PC OVER TV, STUDY SAYS [SOURCE: Reuters, AUTHOR: Chris Marlowe] In households with children, the screen being watched is more likely to be a PC than a television. A recent study by the NPD Group found that 94% of households with children ages 4-14 had a computer. That edges out TVs, which the consulting firm's report, "Kids and Consumer Electronics," found are in slightly less than 90% of households with that group represented. Kids own their own electronic products as well, most often a video game system of some kind (slightly more than 40%), a CD player or a television (31%). http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&storyID=2006-06-10T000545Z_01_N09217575_RTRUKOC_0_US-KIDS.xml&archived=False

30 COUNTRIES PAST 100% MOBILE PHONE PENETRATION [SOURCE: Telecommunications Online 6/9, AUTHOR: Bob Wallace] Athletes often talk about giving 110%, but how does a country exceed 100% in mobile phone penetration? From Aruba to Italy, the Czech Republic, Hong Kong and Kuwait, the list of countries where the number of mobile phone subscriptions exceeds the size of the population continues to grow. Thirty countries had exceeded 100% cell phone penetration by the end of the first quarter of this year, according to a report released today by Informa Telecoms and Media. The group predicts that country count will reach 40 by year-end, noting that some countries, such as the UK, Sweden and Italy have already exceeded 110%. "While the proportion of the population using mobile phones has stabilized in most developed-world markets at around 80-85%, the trend among many users for buying second or even third subscriptions shows no sign of slowing," comments Devine Kofiloto, Principal Analyst at Informa Telecoms and Media. http://telecommagazine.com/newsglobe/article.asp?HH_ID=AR_2148

PRODUCT PLACEMENT DEALS MAKE LEAP FROM FILM TO BOOKS [SOURCE: New York Times, AUTHOR: Motoko Rich] By now, television and movie viewers have become used to product placements: when they see sneakers or cars on a show or in a film, they generally assume that these appearances have been paid for by the companies that make the brands. But product placement in books is still relatively rare. The use of even the subtlest of sales pitches, particularly in a book aimed at adolescents, could raise questions about the vulnerability of the readers. http://www.nytimes.com/2006/06/12/business/media/12book.html (requires registration)

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Communications-Related Headlines are compiled, summarized and edited by Rachel Anderson (rachel@benton.org), Andy Carvin (andy@benton.org) and Charles Meisch (charlie@benton.org) of the Benton Foundation -- we welcome your feedback. Based in Washington DC, the Benton Foundation's mission is to articulate a public interest vision for the digital age and demonstrate the value of communications for solving social problems. Other projects at Benton include:
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