October 2010

October 30, 2010 (Haloween Special -- It's Scary)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for OCTOBER 30, 2010 (Happy Halloween)


INTERNET/BROADBAND
   Civil Rights, Privacy, and Consumer Organizations Call on the FCC to Adopt Key Goals of National Broadband Plan
   Broadband for the People: From the Net to the Roots
   FCC's Genachowski at Rainbow PUSH Coalition Telecommunications Symposium
   Napolitano: Military agency will be able to help civilian cybersecurity
   European Union: Internet Should Remain 'Open and Neutral'

TELEVISION
   Sports Broadcasts Return as Fox and Dish End Dispute
   Comcast To FCC: Reject ACA's Call For Merger Conditions
   With Internet TV, cable wins even if it loses
   Only A la Carte Can Permanently Resolve Fox-Cablevision Dispute
   Google yearns to make YouTube a TV network

FCC REFORM
   When giants collide: New networks, old laws
   Congress must ultimately solve confusion around FCC role
   FCC invites Web developers over to talk open government, accessibility

MEDIA OWNERSHIP
   Tribune investors sue banks that arranged financing
   Tribune creditors bring their own restructuring plans to court
   Google spent $1.6B on 40 companies in 9 months

CONTENT
   The 'Dancing Baby' Lawsuit Will Shape Future of Fair Use
   Facebook, Twitter say social is the new normal

UNIVERSAL SERVICE REFORM
   FCC Should Assess the Design of the E-rate Program's Internal Control Structure
   FCC taking on cyberbullying in schools
   FCC Inquiry on Special Access

WIRELESS
   Immigrant Rights Groups Ask the FCC to Protect Civic Engagement Over Cell Phones
   Cellphone market slowing but smartphones still boom
   Mobile learning at a tipping point

RESEARCH
   FCC Research Papers Give a Historical Review of Pivotal FCC Decisions, Review of Minimum Subsidy Auctions
   Consumers Foresee Doom for Traditional News Media
   Internet and TV Dominate Youth Tech Time
   New journalism ecosystem thrives

HEALTH
   "Early Innovator" Grants for States that Lead the Race to Develop Health IT Systems for State Exchanges
   Core needs, mobility to fuel health IT spending

GOVERNMENT & COMMUNICATIONS
   Obama's Post-Election Social Media Lapse

MEDIA & ELECTIONS
   Sick of Campaign Ads? TV Stations Aren't
   TV Stations in 2 States Yank American Action Network Ads
   Google Intensity Map Tracks Political Prognostications

MORE ONLINE
   Secretary Locke Speaks with Silicon Valley Leadership Group on Obama Administration's Efforts to Foster Innovation
   Technology Innovation Program Seeks Comments on White Papers, New Contributions

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INTERNET/BROADBAND

GROUPS PRIORITIZE BROADBAND GOALS
[SOURCE: The Leadership Conference, AUTHOR: Press release]
A coalition of national civil rights, privacy, and consumer organizations is calling on the Federal Communications Commission to move expeditiously to achieve several key goals of the National Broadband Plan. In a letter to FCC Commissioners, the coalition urged the FCC to focus on the importance of achieving four key objectives:
Expansion of the Universal Service Fund to broadband;
Assurance of transparency and truth in billing;
Protection of consumers' privacy online; and
Internet accessibility for those with disabilities.
In light of questions raised in the context of net neutrality and the FCC's authority over broadband, the coalition said the FCC should "adopt a legally justifiable regulatory framework to enact the broadband plan." "Regardless of how organizations view net neutrality, the Commission's authority to achieve many objectives critical to the civil rights community must be affirmed," the coalition said. The letter was sent by the American Association of People with Disabilities, the American Civil Liberties Union, the Asian American Justice Center, the Benton Foundation, Communications Workers of America, Consumer Action, Consumer Watchdog, The Leadership Conference on Civil and Human Rights, the NAACP, the National Consumers League, the National Organization for Women, the National Urban League, Privacy International, Privacy Lives, Privacy Rights Clearinghouse, Privacy Times, and the United Church of Christ, Office of Communication
benton.org/node/44285 | Leadership Conference, The | read the letter | B&C | The Hill
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GENACHOWSKI ON BROADBAND
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairman Julius Genachowski]
Speaking at the annual Rainbow PUSH Coalition Telecommunications Symposium in Washington (DC), Federal Communications Commission Chairman Julius Genachowski stressed the importance of broadband to the economic recovery. "Broadband is indispensable infrastructure for our 21st century economy," he said, noting its crucial role in economic growth and job creation, healthcare, energy and education. The National Broadband Plan, he said, addresses both broadband deployment and adoption. "The digital divide is seriously troubling; more troubling now than in the past, because the costs of digital exclusion are rising. Closing this divide is one of the most important civil rights issues of our time."
benton.org/node/44299 | Federal Communications Commission | Broadcasting&Cable
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NSA WILL HELP CIVILIAN CYBERSECURITY
[SOURCE: Associated Press, AUTHOR: Dan Elliott]
The Defense Department's supersecret National Security Agency can be used "appropriately" on civilian cybersecurity matters, Department of Homeland Security Secretary Janet Napolitano said. Sec Napolitano said the an agreement between the military and Homeland Security, announced this month, takes privacy and civil liberties into account. "We're not going to have two NSAs, we're going to have one NSA that can appropriately be used for defense purposes but also appropriately used for civilian purposes," Sec Napolitano told the National Symposium on Homeland Security and Defense. "That means that we have to, on the civilian side, be particularly cognizant of privacy issues, of civil liberties issues, and we have built that into the memorandum" laying out the arrangement, she said. The agreement allows Homeland Security to tap into NSA expertise on cybersecurity issues. Sec Napolitano said her department and the military are responsible for 95 to 99 percent of the federal jurisdiction for cybersecurity, so a partnership was logical and necessary to make the most of both departments' resources and expertise. "I think (the agreement) will be looked back on as really the foundational agreement for how the United States as a country deals with cybersecurity," she said.
benton.org/node/44307 | Associated Press
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TELEVISION

FOX AND DISH SETTLE
[SOURCE: New York Times, AUTHOR: Brian Stelter]
Dish Network and the News Corporation's Fox Networks unit announced a distribution agreement on Friday restoring Fox's regional sports networks in Dish households after a four-week blackout. Two other channels, FX and the National Geographic Channel, were also immediately turned back on in the homes of Dish's 14 million customers. With the agreement, Dish also averts what was an impending blackout of the Fox broadcast network. Dish's contract for that network was scheduled to expire at the end of Sunday, and there had been questions about whether the two sides would come to new terms, given that the News Corporation is in a dispute with Cablevision over the same right to retransmit Fox's local stations. The stations have been blocked in Cablevision households for two weeks. Using the Dish agreement to add pressure to Cablevision and Fox, Federal Communications Commission Chairman Julius Genachowski released a statement urging the two parties "to complete their negotiations and end the impasse that has disrupted service to viewers." Separately, Chairman Genachowski wrote in a letter to Sen John Kerry (D-MA), who recently proposed updated legislation, that "it is time for Congress to revisit the current retransmission law."
benton.org/node/44309 | New York Times | FCC Chairman Genachowski | Broadcasting&Cable
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COMCAST REJECTS ACA MERGER CONDITIONS
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
Comcast told the Federal Communications Commission to reject the American Cable Association's calls for program-access and retransmission-consent conditions on its proposed joint venture with NBCU, saying they are "wholly unjustified." In a filing at the FCC, the top cable operator said that, as it has demonstrated in "extensive filings" and economic reports, the transaction "poses no competitive harms" that need addressing through such conditions, that ACA's arguments are simply a "rehashing" of its previous calls for industry-wide changes, and are thus neither narrowly tailored or transaction specific. ACA's proposed conditions, which have been endorsed by an alliance of small telcos, including the National Telecommunications Cooperative Association and the Organization for the Promotion and Advancement of Small Telecommunication Companies, would apply program-access rules to all television stations, owned or managed by NBC, as well as to all regional sports nets (RSNs) delivered either by satellite or terrestrially and to online distribution; unbundle TV station retrans deals from other carriage agreements and do the same for RSNs; invoke outside arbitration for retrans impasses and special arbitration for the smaller operators ACA represents; and implement standstill agreements so NBC stations cannot remove signals during retrans impasses.
benton.org/node/44296 | Multichannel News
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CABLE WINS EVEN IF TV LOSES
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
Americans, little by little, are cutting the proverbial cord on cable television. But that doesn't mean they're breaking up with their cable companies. In addition to controlling most of the paid TV market in the U.S., cable companies are also poised to dominate the broadband market. This means that even when people drop their pricey cable TV packages, they're still likely to pay the cable company for access to the Internet, which is used to deliver the video streams to their TVs. For cable operators, it's a "heads we win; tails we win" situation. Neil Smit, president of Comcast's cable division, said, "If over-the-top comes into being, there is more consumption of online video. We feel very good about our capacity. That is one of the reasons we have invested so heavily in DOCSIS 3 (the cable technology that allows operators to provide download broadband speeds up to 160Mbps). We feel that that big pipe into the house is important and we will continue to invest in speed increases like that, like DOCSIS 3. We think it's an important component and the consumers continue to consume more bandwidth." So what does that mean for average consumers? For those of us left behind with traditional cable services, it could well mean that the cable companies increase fees in order to pay for the contracts they have with content producers like the TV networks. For those who do leave cable TV, there's a very good chance they're paying the same provider for a different service -- broadband access.
benton.org/node/44295 | C-Net|News.com
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ONLY A LA CARTE CAN SAVE US
[SOURCE: App-Rising.com, AUTHOR: Geoff Daily]
[Commentary] There's only one permanent solution to retransmission consent problems: a la carte television. "A la carte TV" generally refers to the ability for customers to decide what individuals channels they want to subscriber to, rather than having to pay for a package of channels determined by their cable provider. Though far from a new idea, it's most often talked about in terms of how its potential for maximizing consumer value in terms of what they get for what they pay. But I want to point out today how valuable a la carte TV could be for ridding us of these silly disagreements between content providers and cable operators. It boils down to the simple fact that the current paradigm of TV doesn't allow for true market dynamics to work their magic on keeping value high for consumers. So if the Federal Communications Commission really wants to resolve this situation, let's not take the easy way out and just try to fix the symptom. It's time we acknowledge that what's best for consumers is trying to cure the disease of a broken marketplace that's divorced from demand and driven too much by supply.
benton.org/node/44297 | App-Rising.com
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FCC REFORM

NEW NETWORKS, OLD LAWS
[SOURCE: Politico, AUTHOR: Sen John Kerry (D-MA)]
[Commentary] Some argue that the public sector should leave communications and information businesses alone -- eliminate regulation, weaken consumer protection agencies or stop those with oversight authority from doing their job. Nothing could be more shortsighted. Not only would it be bad for consumers and competition, but, in the end, it would also likely to be bad for innovation and democratic participation -- and, ultimately, for the next generation of businesses. In fact, we should modernize rather than eliminate our laws and agencies. We need to ensure that they protect consumers, encourage competition and spur innovation -- just as the old laws created a playing field where all these businesses could succeed. The old rules are outdated for the new landscape. Good public policymaking and oversight mean it's our job to leave alone the systems that are working and act when the law doesn't work. And by "working," I mean 1) the market actors do not know what their legal obligations to each other or consumers are, and 2) a conflict between private actors leads to a destructive stalemate or behavior that threatens either consumers, competition or innovation.
benton.org/node/44286 | Politico
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DEFINING FCC'S ROLE
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Former Federal Communications Commission chief counsel Bruce Gottlieb said the disagreement over the proper role of the agency could remain until Congress moves to clarify the function of the FCC. Changing interpretations about what the agency should focus on and who forms its agenda can present challenges for businesses regulated by the FCC. "It has not been a very stable environment for businesses to plan around, to say the least," he said, citing frequent changes in who chairs the agency and the need for the agency to contend with a shifting legal framework as courts strike down FCC actions. Interpretations of the proper role for the FCC vary widely, Gottlieb said. For instance, he said, some people believe it should serve largely as an antitrust agency. Others believe it should mirror the Federal Trade Commission and focus on protecting consumers.
benton.org/node/44308 | Hill, The
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MEDIA OWNERSHIP

TRIBUNE INVESTORS SUE BANKS
[SOURCE: Reuters, AUTHOR: Tom Hals, Mark Weinraub]
A group of investors in bankrupt Tribune Co sued JPMorgan, Merrill Lynch, Citicorp and Bank of America, claiming the banks arranged $3.7 billion in loans in 2007 they knew the company could never repay. "The Lead Banks knew that this financing was barred by the terms of the Credit Agreement and it was tainted with fraud and other misconduct," said the lawsuit, which was filed late on Oct 29. The lawsuit, which claimed that the banks had no exposure to the loans and collected more than $120 million in fees, was filed in the New York Supreme Court in Manhattan. The plaintiffs, including Alden Global Distressed Opportunities Fund and Arrowgrass Distressed Opportunities Fund, claim that the loans arranged by the defendants prevented Tribune from paying back earlier debt obligations.
benton.org/node/44305 | Reuters | Chicago Tribune | MediaPost
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TRIBUNE RESTRUCTURING PLANS
[SOURCE: Chicago Tribune, AUTHOR: Mike Oneal]
Disgruntled Tribune Company bankruptcy creditors filed three new restructuring plans aimed at toppling a company-sponsored plan already on the table. The new plans arrange parties that have battled among themselves for nearly two years into four rival camps and define the terms of conflict as the Chapter 11 proceeding moves toward either a broader settlement or years of litigation.
One new plan, which calls for all-out litigation, came from a group of junior bondholders led by Aurelius Capital Management and was joined by a subordinate group of investors who hold junior bonds known as the PHONES. Together those group represent more than $2 billion in claims.
Another plan, which disputes a key sharing provision included in the senior credit agreement, came from a group of senior creditors dubbed the Step-One Credit Agreement Lenders, or SoCal, that includes hedge funds like Alden Global Capital and Greywolf Capital. They hold more than $800 million in claims.
The third plan was filed by a group of bridge loan holders led by King Street Capital, which has about $1.6 billion in claims. Its document proposes a series of settlements instead of a single, all-inclusive one.
These plans will compete against one filed Oct. 22 by Tribune Co. and the biggest senior creditors in the case: Oaktree Capital Management, Angelo, Gordon & Co. and a group of senior lenders led by JPMorgan Chase. They have claims of more than $8 billion. The plan, which is also supported by the Official Committee of Unsecured Creditors in the case, represents the broadest attempt yet to settle a thicket of legal claims related to the disastrous 2007 leveraged buyout led by real estate magnate Sam Zell.
benton.org/node/44304 | Chicago Tribune
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UNIVERSAL SERVICE

E-RATE PROGRAM CONTROLS
[SOURCE: Government Accountability Office, AUTHOR: Mark Goldstein]
In a September 29 report, GAO found that the design of E-rate's internal control structure may not appropriately consider program risks. GAO found, for example, that the Universal Service Administrative Company's application review process incorporates a number of different types and levels of reviews, but that it was not clear whether this design was effectively and efficiently targeting resources to risks. Similarly, GAO found no controls in place to periodically check the accuracy of USAC's automated invoice review process, again making it unclear whether resources are appropriately aligned with risks. While USAC has expanded and adjusted its internal control procedures, it has never conducted a robust risk assessment of the E-rate program's core processes, although it has conducted risk assessments for other purposes, such as financial reporting. A risk assessment involving a critical examination of the entire E-rate program could help determine whether modifications to business practices and the internal control structure are needed to appropriately address the risks identified and better align program resources to risks. The internal control structure--once assessed and possibly adjusted on the basis of the results of a robust risk assessment--should then be periodically monitored to ensure that the control structure does not evolve in a way that fails to appropriately align resources to risks. The results of beneficiary audits are used to identify and report on E-rate compliance issues, but GAO found that the information gathered from the audits has not been effectively used to assess and modify the E-rate program's internal controls. As a result, the same rule violations have been repeated each year for which beneficiary audits have been completed. For example, of 64 beneficiaries that had been audited more than once over a 3-year period, GAO found that 36 had repeat audit findings of the same rule violation. GAO found that the current beneficiary audit process lacks documented and approved policies and procedures. Without such policies and procedures, management may not have the assurance that control activities are appropriate and properly applied. Documented and approved policies and procedures could contribute positively to a systematic process for considering beneficiary audit findings when assessing the E-rate program's internal controls and in identifying opportunities to modify existing controls. GAO recommends that FCC conduct a robust risk assessment of the E-rate program, conduct a thorough examination of the overall design of E-rate's internal control structure, implement a systematic process to assess internal controls that appropriately considers beneficiary audit findings, and establish procedures to periodically monitor controls. The Federal Communications Commission agreed with GAO's recommendations. (GAO-10-908)
benton.org/node/44288 | Government Accountability Office
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CYBERBULLYING IN SCHOOLS
[SOURCE: Reuters, AUTHOR: Jasmin Melvin]
The Federal Communications Commission said it will issue an order to schools receiving funds from the E-rate program, which subsidizes school Internet access, to address cyberbullying and improper use of social media sites. The FCC said the order would put its regulations in line with the Protecting Children in the 21st Century Act. E-rate funded schools, which the FCC said represent the "vast majority of schools," must have Internet safety policies and filters to prevent access to inappropriate content. The new order will ensure that these policies also include online safety education. The FCC also announced plans to open the application process for a pilot program that would fund wireless Internet access and mobile learning devices, which could become increasingly important as students use new devices like tablet PCs and smartphones to get access to their schoolwork. The agency said schools and libraries can apply for the program in the coming days, with applications due by mid-December. To further its education agenda, the FCC will also host a forum on kids' use of mobile technology on December 1.
benton.org/node/44302 | Reuters
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DATA REQUESTED IN SPECIAL ACCESS NPRM
[SOURCE: Federal Communications Commission, AUTHOR: ]
The Federal Communications Commission is asking for voluntarily submission of facilities data to assist in evaluating the various issues that have been raised in the Special Access Notice of Proposed Rulemaking. The FCC requests all providers, including ILECs, CLECs, interexchange carriers, cable operators and companies that provide fixed wireless communications services, to provide location and facilities data for each listed Statistical Area. Data that contain confidential and proprietary information should be submitted in accordance with a revised protective order that was released at the same time. Submissions are due by Jan. 27, 2011.
Public Knowledge Legal Director Harold Feld said, "We are pleased that the FCC is moving ahead with a targeted data request to find the facts from a very distorted special access market that is overcharging business customers by an estimated $10 billion. The nature of the request encourages us to believe that the FCC is closing in on the key issues, and will be able to propose needed changes to promote competition and lower prices sooner rather than later. We note that while the request is voluntary at this point, the FCC has the power to compel full and honest responses. We expect the FCC will use that authority if it doesn't receive the information it needs."
benton.org/node/44298 | Federal Communications Commission | Protective Order | Public Knowledge
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WIRELESS

PROTECTING CIVIC ENGAGEMENT OVER CELL PHONES
[SOURCE: National Hispanic Media Coalition, AUTHOR: Alex Nogales]
In a letter to the Chairman of the Federal Communications Commission (FCC), nearly thirty non-profit organizations representing people of color and/or working towards comprehensive immigration reform requested that the FCC swiftly exert authority over cell phone text messages.
"Text messaging is a necessary tool for many members of our organizations and for countless public interest and civil rights groups because, while many of our constituents do not have Internet access, nearly all of them have wireless cell phones," said Alex Nogales, President and CEO of the National Hispanic Media Coalition (NHMC). "Wireless service providers should not be permitted to discriminate against certain types of text messages at the expense of the general public."
Communities of color have been using text messaging to encourage democratic participation and galvanize support for important causes. One example is our "Text JUSTICE" campaign, which relies on text messages to mobilize communities across the nation whenever action is needed to support immigration reform. With over 100,000 subscribers, some estimate that "Text JUSTICE" is the largest text message action list in the country. This has given voice to many who, traditionally, have not been heard in this important debate. And it has been used to great effect. In May of this year, the "Text JUSTICE" campaign was implemented to assemble over 500,000 people throughout 30 states in support of just and humane immigration reform. This is only one of the many examples of how text messaging plays a vital role in activism in our communities.
benton.org/node/44284 | National Hispanic Media Coalition
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RESEARCH

NEW FCC PAPERS
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission released the first two of its new FCC Staff Working Papers. This agency-wide research paper series replaces all of the earlier working paper series that had been issued by individual bureaus and offices. It is intended to encourage staff research that furthers the "expert" function of the agency and builds agency intellectual capital. This active research program is managed by the Office of Strategic Planning and Policy Analysis (OSP).
The first paper in this series is "Transformative Choices: A Review of 70 Years of FCC Decisions" by Sherille Ismail, a Senior Attorney in OSP. The paper presents a historical review of a series of pivotal FCC decisions that helped shape today's communications landscape. It finds that there have been a number of successful efforts by the FCC, before and after the 1970s, to promote new entrants, especially in the markets for commercial radio, cable television, telephone equipment, and direct broadcast satellites.
The second paper is "Maximum Impact for Minimum Subsidy: Reverse Auctions for Universal Access in Chile and India," by Irene Wu, Acting Chief Data Officer for the International Bureau. Dr. Wu argues that government funding for universal service and broadband support programs could be quicker and more efficient if the FCC were to use reverse auctions (also called "minimum subsidy auctions") to support those programs. Toward that end, she examines the implementation of such auctions in the last 15 years in Chile and India.
benton.org/node/44301 | Federal Communications Commission | Transformative Choices: A Review of 70Years of FCC Decisions | Maximum Impact for Minimum Subsidy: Reverse Auctions for Universal Access in Chile and India
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CONSUMERS FORESEE DOOM FOR TRADITIONAL MEDIA
[SOURCE: 24/7 Wall St, AUTHOR: Douglas McIntyre]
The print industry is dead. That has been the conventional wisdom for years, and it is becoming increasing clear that the conventional wisdom is correct. What may be news is that network and cable TV are rapidly being flanked by the online media providers. The rate at which premium video content has moved online should be throwing the media platforms into a panic. These are some of the findings of a new 24/7 Wall St./Harris Poll survey of 2,095 U.S. adults surveyed online between October 8 and 12, 2010 by Harris Interactive for a survey designed in collaboration with 24/7 Wall St. The 24/7 Wall St./Harris Poll on American Media shows that 81% of people believe that the use of print news will decline. That, however, is cold comfort because 55% of those questioned said that traditional media will no longer exist in 10 years. Half said that they get almost all of their news online. This number increases to 65% among the media consumers of the future - people 18 to 34 years of age. Print has been pushed into a corner which is getting smaller and smaller each day. The modest recent increase in print advertising is likely due to the economic recovery and not a rebound of its viability as a source of news and information.
benton.org/node/44280 | 24/7 Wall St | AdWeek
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NET DOMINATES YOUTH TECH TIME
[SOURCE: MediaPost, AUTHOR: Jack Loechner]
Edison Research finds that media consumption habits have changed with Internet, phone and radio increasing most, and TV, video games and movies decreasing most. During an average day, Americans age 12-24 spend two hours and 52 minutes on the Internet, making the web the media format American young adults spend the most time consuming. Television closely follows with a daily average of two hours and 47 minutes. Listening to the radio came in a distant third with a one hour and 24 minute daily average. With a daily average of one hour and 10 minutes, video games closely trailed radio, followed by talking on the telephone (one hour and four minutes). Time spent reading magazines and newspapers is negligible. More than four in five 12-24s own a mobile phone in 2010 (up from only 29% in 2000), and these young Americans are using these phones as media convergence devices:
50% of younger mobile phone users have played games on their phones
45% have accessed social networking sites
40% have used their phones to listen to music stored on their phones
In 2000, 44% of 12-24s most often began their day by listening to the radio. Today, radio continues to lead, with 29% of that same cohort (today's 22-34 year-olds) reporting that radio is the medium they use most in the morning, while Television (25%) and the Internet (23%) have gained significantly.
benton.org/node/44279 | MediaPost | Edison Research
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MEDIA & ELECTIONS

STATIONS LOVE POLITICAL ADS
[SOURCE: Associated Press, AUTHOR: Andrew Vanacore]
For television stations, this year's election is a stimulus package. The Campaign Media Analysis Group, a unit of the consulting firm Kantar Media, expects TV political spending to hit a record $3 billion, and the windfall may continue well past Election Day because regular advertisers are getting squeezed out of the schedule and could spend their ad budgets later. Coming out of a recession that put some broadcasters in or near bankruptcy protection, political spending is emerging as a critical , but temporary , source of revenue. Several factors created the upsurge: tea party enthusiasm, self-financed millionaire candidates, an unusually high number of toss-up races and a Supreme Court ruling in January that eased rules on corporate campaign donations. Ad rates are going up overall because political campaigns are taking up much of the commercial time. Station managers say many regular advertisers aren't able to buy ads now. That frees up money to spend later.
benton.org/node/44282 | Associated Press
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STATIONS YANK BOGUS POLITICAL ADS
[SOURCE: Congressional Quarterly, AUTHOR: Steve Peoples]
At least two television stations in Connecticut and Colorado have yanked misleading attack ads in the last 24 hours financed by the conservative group American Action Network. Rep. Chris Murphy (D-CT) was the target of an ad taken off the air by Hartford's Fox affiliate. Among other accusations, the ad noted that the new health-care overhaul would force "jail time for anyone without coverage." Rep Ed Perlmutter (D-CO), another American Action Network target, reports that a Denver-based NBC affiliate has pulled a second ad off the air because it alleged Rep Perlmutter voted for a provision of the healthcare law that would provide federal funding to give rapists Viagra. While at least two stations have had problems with the ads, other stations, sometimes in the same markets, are running the same, or very similar commercials.
benton.org/node/44281 | Congressional Quarterly
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Sports Broadcasts Return as Fox and Dish End Dispute

Dish Network and the News Corporation's Fox Networks unit announced a distribution agreement on Friday restoring Fox's regional sports networks in Dish households after a four-week blackout.

Two other channels, FX and the National Geographic Channel, were also immediately turned back on in the homes of Dish's 14 million customers. With the agreement, Dish also averts what was an impending blackout of the Fox broadcast network. Dish's contract for that network was scheduled to expire at the end of Sunday, and there had been questions about whether the two sides would come to new terms, given that the News Corporation is in a dispute with Cablevision over the same right to retransmit Fox's local stations. The stations have been blocked in Cablevision households for two weeks.

Using the Dish agreement to add pressure to Cablevision and Fox, Federal Communications Commission Chairman Julius Genachowski released a statement urging the two parties "to complete their negotiations and end the impasse that has disrupted service to viewers." Separately, Chairman Genachowski wrote in a letter to Sen John Kerry (D-MA), who recently proposed updated legislation, that "it is time for Congress to revisit the current retransmission law."

Congress must ultimately solve confusion around FCC role

Former Federal Communications Commission chief counsel Bruce Gottlieb said the disagreement over the proper role of the agency could remain until Congress moves to clarify the function of the FCC.

Changing interpretations about what the agency should focus on and who forms its agenda can present challenges for businesses regulated by the FCC. "It has not been a very stable environment for businesses to plan around, to say the least," he said, citing frequent changes in who chairs the agency and the need for the agency to contend with a shifting legal framework as courts strike down FCC actions. Interpretations of the proper role for the FCC vary widely, Gottlieb said. For instance, he said, some people believe it should serve largely as an antitrust agency. Others believe it should mirror the Federal Trade Commission and focus on protecting consumers.

Napolitano: Military agency will be able to help civilian cybersecurity

The Defense Department's supersecret National Security Agency can be used "appropriately" on civilian cybersecurity matters, Department of Homeland Security Secretary Janet Napolitano said.

Sec Napolitano said the an agreement between the military and Homeland Security, announced this month, takes privacy and civil liberties into account. "We're not going to have two NSAs, we're going to have one NSA that can appropriately be used for defense purposes but also appropriately used for civilian purposes," Sec Napolitano told the National Symposium on Homeland Security and Defense. "That means that we have to, on the civilian side, be particularly cognizant of privacy issues, of civil liberties issues, and we have built that into the memorandum" laying out the arrangement, she said. The agreement allows Homeland Security to tap into NSA expertise on cybersecurity issues. Sec Napolitano said her department and the military are responsible for 95 to 99 percent of the federal jurisdiction for cybersecurity, so a partnership was logical and necessary to make the most of both departments' resources and expertise. "I think (the agreement) will be looked back on as really the foundational agreement for how the United States as a country deals with cybersecurity," she said.

Facebook, Twitter say social is the new normal

The social networking phenomenon has nowhere to go but up as computer use becomes more mobile, according to leading figures in the development of the popular sites Facebook and Twitter.

"Two to five years from now, the whole question of what other social networks you use will be moot, because it will all be social," Chris Hughes, co-founder of Facebook, said. "Social is becoming the frame, the filter to a lot of information," Hughes, 27, said. Facebook has over 500 million active users, including more than 150 million who access the site through their mobile devices. The number of registered Twitter users is estimated at more than 165 million. Both companies are privately held, and investors are on constant alert for any sign either will go public. Biz Stone, co-founder of Twitter, said the expansion of social networking would closely track a rise in personal mobility as devices such as smart phones replace traditional computers.

Tribune investors sue banks that arranged financing

A group of investors in bankrupt Tribune Co sued JPMorgan, Merrill Lynch, Citicorp and Bank of America, claiming the banks arranged $3.7 billion in loans in 2007 they knew the company could never repay.

"The Lead Banks knew that this financing was barred by the terms of the Credit Agreement and it was tainted with fraud and other misconduct," said the lawsuit, which was filed late on Oct 29. The lawsuit, which claimed that the banks had no exposure to the loans and collected more than $120 million in fees, was filed in the New York Supreme Court in Manhattan. The plaintiffs, including Alden Global Distressed Opportunities Fund and Arrowgrass Distressed Opportunities Fund, claim that the loans arranged by the defendants prevented Tribune from paying back earlier debt obligations.

Tribune creditors bring their own restructuring plans to court

Disgruntled Tribune Company bankruptcy creditors filed three new restructuring plans aimed at toppling a company-sponsored plan already on the table. The new plans arrange parties that have battled among themselves for nearly two years into four rival camps and define the terms of conflict as the Chapter 11 proceeding moves toward either a broader settlement or years of litigation.

  • One new plan, which calls for all-out litigation, came from a group of junior bondholders led by Aurelius Capital Management and was joined by a subordinate group of investors who hold junior bonds known as the PHONES. Together those group represent more than $2 billion in claims.
  • Another plan, which disputes a key sharing provision included in the senior credit agreement, came from a group of senior creditors dubbed the Step-One Credit Agreement Lenders, or SoCal, that includes hedge funds like Alden Global Capital and Greywolf Capital. They hold more than $800 million in claims.
  • The third plan was filed by a group of bridge loan holders led by King Street Capital, which has about $1.6 billion in claims. Its document proposes a series of settlements instead of a single, all-inclusive one.

These plans will compete against one filed Oct. 22 by Tribune Co. and the biggest senior creditors in the case: Oaktree Capital Management, Angelo, Gordon & Co. and a group of senior lenders led by JPMorgan Chase. They have claims of more than $8 billion. The plan, which is also supported by the Official Committee of Unsecured Creditors in the case, represents the broadest attempt yet to settle a thicket of legal claims related to the disastrous 2007 leveraged buyout led by real estate magnate Sam Zell.

Cellphone market slowing but smartphones still boom

Cellphone market growth slowed slightly in the September quarter due to worries over economic growth and component shortages, and the market growth would slow further in the current quarter, researchers said.

The phones market -- the largest volume electronics industry -- has surged this year from a slump in 2009 when the recession hit consumer spending on the latest gadgets around the world. Strategy Analytics (SA) said the overall annual market growth slowed to 13 percent in the third quarter, from 16 percent in the first half, and forecast growth to slow further to 10 percent in the fourth quarter. The smartphone market continued to surge in the quarter, with Apple's iPhone sales rising 91 percent from a year ago, making it the No. 4 global handset vendor measured by volume. Since 2009 it has created the largest profits in the industry.

FCC taking on cyberbullying in schools

The Federal Communications Commission said it will issue an order to schools receiving funds from the E-rate program, which subsidizes school Internet access, to address cyberbullying and improper use of social media sites.

The FCC said the order would put its regulations in line with the Protecting Children in the 21st Century Act. E-rate funded schools, which the FCC said represent the "vast majority of schools," must have Internet safety policies and filters to prevent access to inappropriate content. The new order will ensure that these policies also include online safety education. The FCC also announced plans to open the application process for a pilot program that would fund wireless Internet access and mobile learning devices, which could become increasingly important as students use new devices like tablet PCs and smartphones to get access to their schoolwork. The agency said schools and libraries can apply for the program in the coming days, with applications due by mid-December.

To further its education agenda, the FCC will also host a forum on kids' use of mobile technology on December 1.

FCC Research Papers Give a Historical Review of Pivotal FCC Decisions, Review of Minimum Subsidy Auctions

The Federal Communications Commission released the first two of its new FCC Staff Working Papers. This agency-wide research paper series replaces all of the earlier working paper series that had been issued by individual bureaus and offices. It is intended to encourage staff research that furthers the "expert" function of the agency and builds agency intellectual capital. This active research program is managed by the Office of Strategic Planning and Policy Analysis (OSP).

The first paper in this series is Transformative Choices: A Review of 70 Years of FCC Decisions by Sherille Ismail, a Senior Attorney in OSP. The paper presents a historical review of a series of pivotal FCC decisions that helped shape today's communications landscape. It finds that there have been a number of successful efforts by the FCC, before and after the 1970s, to promote new entrants, especially in the markets for commercial radio, cable television, telephone equipment, and direct broadcast satellites.

The second paper is Maximum Impact for Minimum Subsidy: Reverse Auctions for Universal Access in Chile and India, by Irene Wu, Acting Chief Data Officer for the International Bureau. Dr. Wu argues that government funding for universal service and broadband support programs could be quicker and more efficient if the FCC were to use reverse auctions (also called "minimum subsidy auctions") to support those programs. Toward that end, she examines the implementation of such auctions in the last 15 years in Chile and India.