December 2012

As is our tradition, Headlines will be helping Santa’s elves with clean-up next week. We will return WEDNESDAY, JANUARY 2, 2013. Happy Holidays!
BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, DECEMBER 21, 2012

FROM THE CHAIRMAN
   Time to Reflect: An End-of-Year Message from Charles Benton - analysis

OWNERSHIP
   How to fix the media ownership debate - op-ed
   Rep Waters to FCC: Don't Wade Into Ownership Just Yet [links to web]

INTERNET/BROADBAND
   Senator Wyden introduces bill to regulate data caps
   Broadband Usage Pricing: Let It Flourish - analysis
   Behind closed doors at the UN's attempted "takeover of the Internet - op-ed
   President Obama likely to issue executive order on cybersecurity as early as January
   Joint defense measure seeks to disarm hackers

WIRELESS/SPECTRUM
   Let's be honest, your smartphone's price makes no sense - analysis
   FCC: Broadcasters Can File Anonymously on Spectrum Auctions
   Why the mobile web vs apps debate is a false dichotomy - op-ed [links to web]
   In 5 Years, 4.4% of All Ads will Appear on a Phone Screen [links to web]
   Before it drops subsidies, T-Mobile offers big smartphone rebate [links to web]

PATENTS
   Apple takes quest for Samsung product ban to appeals court
   Apple's patent victory may be small in larger battle with Samsung
   Samsung Faces EU Antitrust Complaint Over Apple Patent Clash

CONTENT
   The Development and Diffusion of Digital Content - research
   Amazon Studios taps the Onion, Daily Show writers, others for comedy pilots [links to web]
   The Scariest Thing About the Newspaper Business Isn't Print's Decline, It's Digital's Growth [links to web]
   In Social Media and opinion pages, Newtown Sparks Calls for Gun Reforms - research [links to web]
   Entertainment Council Re-Launching Initiative to Focus on Consequences of Gun Violence [links to web]
   MPAA’s Dodd: Film studios ready to 'do our part' after shooting [links to web]
   Kids and digital media: removing the fears - editorial [links to web]
   Privacy Icon Big in Facebook Apps As Facebook Itself Opts-Out [links to web]
   Nielsen Tops of 2012: Digital - research [links to web]
   Give Me Control Of Your Currency, And I Care Not Who Makes The Laws - op-ed [links to web]
   Netflix Facebook Sharing Bill Clears Senate, Waiting For Obama’s OK [links to web]
   Gambling Industry Bets Virtual Money Turns Real [links to web]
   TV Rights Split Soccer Clubs in UK [links to web]
   Apple Maps three times more likely to get you lost than Google Maps [links to web]

PRIVACY
   Children’s Online Privacy Rules: Winners and Losers
   Instagram Walks Back Ad Language, but Leaves the Door Open

HEALTH
   Doctors Move to Webcams [links to web]

GOVERNMENT & COMMUNICATIONS
   Civil liberties groups urge Senate to debate surveillance bill
   The least transparent Senators? [links to web]
   New York Police Department to Use Internet to Try to Stop Mass Shootings [links to web]

POLICYMAKERS
   Sen Patrick Leahy declines powerful Appropriations post [links to web]
   Senate Commerce Committee Leaders Seek to Fast-Track Clyburn Approval

MORE NEWS FROM COURT
   Verizon: FCC Not Best Judge of Its Authority

MORE RESEARCH
   Reading Habits in Different Communities - research

MORE ONLINE
   The Two Freds - op-ed [links to web]
   Deutsche Telekom finance chief to replace CEO Obermann [links to web]

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FROM THE CHAIRMAN

TIME TO REFLECT
[SOURCE: Benton Foundation, AUTHOR: Charles Benton]
[Commentary] Personally and professionally, this year has been one for the books. In September, the United Church of Christ, Office of Communications, Inc., honored me with the Everett C. Parker Award in recognition of what they described as my “many years of leadership and support for promoting the public interest in traditional and digital media.” This recognition has special meaning for me, as Rev Parker truly is both a personal hero and an inspiration to all of us who fight for a just, democratic society. The Benton Foundation and our colleagues in the public interest community are all guided by the spirit of Rev. Parker as we work to ensure that everyone is able to enjoy the benefits made possible by 21st century telecommunications. Also in September, Federal Communications Commission Chairman Julius Genachowski said that we need to connect the hardest-to-reach areas of the country and the least-advantaged consumers to the benefits of affordable, high-speed, high-capacity broadband.
http://benton.org/node/142110
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OWNERSHIP

HOW TO FIX THE OWNERSHIP DEBATE
[SOURCE: Columbia Journalism Review, AUTHOR: Steven Waldman]
[Commentary] The Federal Communications Commission’s proposed media ownership rules changes: a newspaper and a TV station in the same town would be allowed to merge if the station is number five in the ratings or worse and if it is also in one of the top 20 markets in the country and if there would still be at least eight media voices left in the town. Not exactly radical stuff. Internet has increased the number of voices and provided many other benefits, but at the same time undermined the economic models that had previously subsidized local journalism. Newspapers are still laying off reporters by the thousands. So, if an occasional merger can save a local newspaper, we shouldn’t automatically rule it out just because it is a merger. The FCC is considering the reasonable step of lifting the ban on newspapers owning radio stations in the same town. Yes, this change allows “consolidation,” but permitting a newspaper to buy a radio station—perhaps to create a local radio news channel—could actually help communities. After all, commercial news radio has been declining: only 30 all-news commercial radio stations are left, down from 50 in the 1980s. Instead of having a theological debate about consolidation—“good” vs. “evil”?—is it possible to create media policy that allows mergers that are likely to help the local media ecosystems and blocks those that are not?
benton.org/node/142149 | Columbia Journalism Review
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INTERNET/BROADBAND

DATA CAPS BILL
[SOURCE: ars technica, AUTHOR: Timothy Lee]
Sen. Ron Wyden (D-OR) introduced legislation to regulate the use of broadband data caps. "Data caps create challenges for consumers and run the risk of undermining innovation in the digital economy if they are imposed bluntly and not designed to truly manage network congestion," said Sen Wyden. He hopes to address three issues with his proposal:
First, he wants to increase the amount and accuracy of information provided to consumers. His bill empowers the Federal Communications Commission to regulate ISPs' methods for measuring bandwidth usage with an eye to improving their accuracy. And it requires ISPs to provide their customers with realtime tools for tracking their usage and comparing them with the ISP's established caps.
Second, the bill requires that any data caps employed by ISPs function to "reasonably limit network congestion without unnecessarily restricting Internet use." According to a statement released with the legislation, "some data caps are so blunt that they may work to discourage Internet use even when doing so has no bearing on network congestion."
The most ambitious part of the legislation is a kind of network neutrality rule. It requires that any data cap (which is defined to include metering schemes) not be used to "provide preferential treatment of data that is based on the source or content of the data." That would ban a practice that is frequently mentioned by advocates of network neutrality regulation: the creation of a paid "fast lane."
benton.org/node/142147 | Ars Technica | B&C
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BROADBAND USAGE PRICING
[SOURCE: Multichannel News, AUTHOR: Todd Spangler]
[Commentary] Are Internet data-usage limits and overage fees a way for service providers to extract more dollars from their heaviest-consuming users -- or are they tools that will increase consumer choice and competition in the market? The reality is, they’re both. And ultimately, usage-based pricing models will result in healthier competition among ISPs. Two different policy papers, released within days of each other, reach diametrically opposite conclusions on this issue.
Taking a pro-industry stance is “The Economics of Usage-Based Pricing in Local Broadband Markets.” The paper, funded by the National Cable & Telecommunications Association, argues that usage-based broadband pricing gives ISPs incentives to invest in their infrastructure, to access small markets and to offer lower-priced tiers.
That’s hogwash, according to the second paper, “Capping the Nation’s Broadband Future?” published Dec. 17 by New America Foundation’s Open Technology Initiative. Data caps and usage-based pricing exist precisely because there’s not enough broadband competition in the U.S., according to the paper’s authors. “Data caps may offer an effective means for incumbents to generate more revenue from subscribers and satisfy investors, but making bandwidth an unnecessarily scarce commodity is bad for consumers and innovation,” the OTI paper says.
benton.org/node/142146 | Multichannel News
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THE STORY FROM WCIT
[SOURCE: ars technica, AUTHOR: Eli Dourado]
[Commentary] The first few days of the World Conference on International Telecommunications (WCIT) were mostly, for me, spent figuring out how everything worked. The highest-level meeting was the Plenary, which established several committees, of which Committee 5 (COM5) did the substantive work of revising treaty text. COM5 established two working groups that split up the treaty text between them. At each official meeting, the name of the game was consensus. Where consensus could not be reached on a particular issue, an ad hoc group was created to deal with that issue. The ad hoc group would spend additional time trying to forge a consensus. If a particular meeting could not find language that every member state could agree to, it would report back to the next-highest level meeting with the contentious text in square brackets. The first five days of the conference followed a pattern. Any issue not immediately agreed to on the first day was referred to COM5. Any issue not immediately agreed to in COM5 was referred to a working group, which referred them to ad hoc groups. Because there was little consensus, the ad hoc groups reported back to the working groups with proposals that were filled with brackets, and this bracketed text likewise worked its way back up through COM5 to the Plenary. The host country United Arab Emirates (UAE) dropped a bombshell. It announced that it was putting forward a new “multi-regional common proposal,” a complete rewrite of the treaty to substitute for all the bracketed text we had worked on. It had support from numerous member states. Bahrain, Russia, Iraq, Saudi Arabia, and Oman all expressed support for the document, which was not yet available for inspection.
benton.org/node/142145 | Ars Technica
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EXECUTIVE ORDER ON CYBERSECURITY
[SOURCE: The Hill, AUTHOR: Jennifer Martinez]
An executive order from President Barack Obama aimed at protecting the nation from cyberattacks is likely to be issued in early 2013, and perhaps as soon as January, observers say. The long-awaited executive action is unlikely to be taken before the end of the year, given the delicate negotiations over the “fiscal cliff.” Republican lawmakers have made it known that they strongly oppose an executive order on cybersecurity. GOP members in both chambers of Congress fear the cyber order will pile new regulations onto companies that operate critical infrastructure, such as water plants, financial systems and the electric grid. They argue that boosting the country’s cyber defenses requires a permanent legislative solution, not an executive order that might not carry over into the next administration.
benton.org/node/142162 | Hill, The
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DEFENSE BILL INCLUDES CYBERSECURITY
[SOURCE: Politico, AUTHOR: Tony Romm]
Lawmakers are poised to greenlight a defense bill that would add millions of dollars to federal cybersecurity programs while requiring contractors to inform the government in the event of a cyberattack. The conference report on the House and Senate floors preserves notable increases to Pentagon programs meant to stave off foreign hackers and research new ways to defeat them. But the reconciled 2013 bill also includes new cybersecurity reporting and procurement rules that many in the tech industry are just now reviewing. he House and Senate are barreling before Christmas toward passage of the National Defense Authorization Act after lawmakers from both chambers huddled for weeks to reconcile significant differences between their bills. Many of the disputes have focused on thorny political matters like indefinite detention and not technology policy.
benton.org/node/142161 | Politico
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WIRELESS/SPECTRUM

PHONE PRICING MAKES NO SENSE
[SOURCE: The Verge, AUTHOR: Chris Ziegler]
[Commentary] Cellphone models are still being updated and replaced at an unprecedented pace that simply isn't sustainable. Seven months is not a reasonable life cycle for any durable product. You wouldn't buy a new TV, game console, Blu-ray player, refrigerator, or car every seven months. In fact, if a manufacturer discontinued and replaced your TV after seven months, you'd be pissed. But it's like an addiction: carriers and original equipment manufacturers (OEMs) need the high they get from the fleeting sales bump after the release of an incrementally new model, a bump that quickly flatlines. Hilarious price adjustments ensue; a $199.99 phone falls to $149.99, $99.99, $49.99, and eventually free over the course of a single year. And that leads to a traffic jam of phones and price points. This industry is eating itself alive, and these nonsensical prices are an early warning sign. Carriers urgently need to incentivize OEMs to slow down, not speed up. While Apple — and to some extent, Samsung — stay even-keeled with a single flagship phone per year, the rest of the industry is still chasing its collective tail, confusing customers, and leaving a mess of the store shelves.
benton.org/node/142117 | Verge, The
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BROADCASTERS AND THE INCENTIVE AUCTIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission wants television broadcasters to know that they can file anonymous comments on the commission's proposed framework for incentive spectrum auctions. In a public notice, the FCC told broadcasters that its rules allow for anonymous comment so long as they have an attorney of record, and even without one they can seek a waiver of that requirement. The legislation creating the auctions recognized that, for business reasons, broadcasters might not want to signal they were interested in selling some or all of their spectrum, and so required the FCC not to identify the bidders publicly. In that spirit, the FCC recognized that some commenters might not want to be associated with the issues or questions they raise. "We want to encourage those broadcasters interested in auction participation to raise issues of specific concern to them regarding the incentive auction process so that we may develop a robust record to assist us in devising auction-related rule," the FCC said in the notice for those providing comment. "At the same time, we recognize that broadcasters may have legitimate reasons for not wanting to disclose their potential interest in reverse auction participation."
benton.org/node/142127 | Broadcasting&Cable
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PATENTS

APPLE APPEALS
[SOURCE: Los Angeles Times, AUTHOR: Chris O'Brien]
Apple has decided to appeal a federal judge's ruling that denied the company's request to ban 26 Samsung products. In August, a jury ruled that the Samsung products had infringed a handful of Apple patents and ordered the South Korean tech giant to pay $1.05 billion in damages to the maker of the iPhone. Apple then sought a potentially more devastating punishment against Samsung by requesting a permanent injunction against those products. While many of the Samsung products in question are older, such a move could be used as leverage in a second lawsuit pending in federal court that involves some of Samsung's most popular current products, including the Galaxy S III smartphone. However, U.S. District Court Judge Lucy Koh recently ruled that Apple had failed to demonstrate that the features at issue were significant enough to play a big role in persuading consumers to buy one phone or the other. As expected, Apple informed Koh on Thursday that it intends to appeal that decision to 9th U.S. Circuit Court of Appeals in San Francisco. Judge Koh still has yet to rule on Apple's request to increase the damages verdict by $500 million. Samsung, which was denied by Koh its request for a new trial, is also expected to appeal the case.
benton.org/node/142142 | Los Angeles Times
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APPLE PATENT WIN AND THE LONG WAR
[SOURCE: Los Angeles Times, AUTHOR: Chris O'Brien]
In denying Apple's motion to ban sales of some Samsung Electronics products that a jury had determined infringed its smartphone patents, legal observers say a federal judge delivered a potentially troublesome message to the technology giant: These violations are small potatoes. That might sound odd, considering that a jury in August found the patent infringements serious enough to award Apple $1.05 billion in damages. But U.S. District Judge Lucy Koh made it clear in a ruling this week that the scope of the violations was tiny relative to the enormous number of features contained in a smartphone. In winning the jury verdict, Apple successfully proved that Samsung had willfully copied several features. But Apple faced a great burden to persuade Koh to issue a permanent injunction against the 26 Samsung products in question. Apple had to prove that the features played a decisive role in why consumers might choose to buy a Samsung phone over an iPhone. "Apple has simply not been able to make this showing," Judge Koh wrote. That ruling was a surprise to some legal experts and will almost certainly be appealed by Apple. But should it stand, the decision could substantially blunt Apple's two-year quest to use litigation to tilt the competitive playing field against Samsung, now the world's leading seller of smartphones.
benton.org/node/142134 | Los Angeles Times
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SAMSUNG FACES COMPLAINT
[SOURCE: Bloomberg, AUTHOR: Aoife White]
Samsung faces a European Union antitrust complaint over its use of standard- essential patents in legal disputes with Apple, the EU’s competition commissioner said. “We will adopt the statement of objections very soon,” said Joaquin Almunia, the bloc’s antitrust chief. He said the formal notice listing antitrust concerns could be sent as soon as the end of the year. The EU is probing whether Samsung violated agreements to license key patents to other mobile-phone manufacturers on fair terms. “We are dissatisfied every time that we see the launching of injunctions” involving standard-essential patents,” Almunia told reporters at a press conference in Brussels. “The injunctions in the Apple-Samsung case were launched; it was not only a threat.”
benton.org/node/142133 | Bloomberg | Reuters
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CONTENT

DIGITAL CONTENT
[SOURCE: Organization for Economic Co-operation and Development, AUTHOR: Kevin Werbach]
Viewers are watching a growing share of video via Internet-based distribution systems. New digital content distribution services are having appreciable impacts on established media industries and network service providers in many OECD countries. The competitive landscape in media, already complex, will become even more multifaceted. Public policy frameworks in the media and telecommunications sector must be reviewed in light of these developments. This paper argues that convergence should be taken as the rule, rather than the exception. Careful application of best practices can address most policy concerns.
benton.org/node/142112 | Organization for Economic Co-operation and Development
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PRIVACY

COPPA’S WINNERS AND LOSERS
[SOURCE: New York Times, AUTHOR: Natasha Singer]
Now that the Federal Trade Commission has published its updated privacy protections for children online, Facebook may finally open its site to children under 13, industry analysts say. But those very same new rules, they say, may prompt some small app developers to pull out of the children’s market altogether. The revised rules, widen the list of children’s personal information that will require parental permission to collect. It will now include children’s photos, videos or voice recordings, the IP addresses of their computers and the locations of their mobile phones. The updated rule also requires social networks, advertising networks and other third parties to get parents’ permission before knowingly collecting data from children’s sites and apps. But the rules have radically different implications for big Web sites and small app developers. The final children’s online privacy rule uses an “actual knowledge” standard for collecting information about children. That means social networks and ad networks that collect information from children without knowing that their software is operating on a children’s site or app will not be liable.
benton.org/node/142154 | New York Times
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INSTAGRAM TERMS OF SERVICE
[SOURCE: Wall Street Journal, AUTHOR: Peter Kafka]
Instagram has taken another step to mollify users who balked at the photo-sharer’s recent terms of service changes. But it has left itself plenty of room to maneuver. Co-founder Kevin Systrom says the company will change part of its new contract with users that deals with advertising, and will use the same language the company has always employed. But to be clear: Instagram still plans on introducing advertising to the service. And that advertising could conceivably incorporate users’ photos. And to be clearer: Instagram’s original language already said that. If you don’t want to see ads on the service, or want to be assured that your stuff won’t show up in an ad, you’re going to want to look somewhere else.
benton.org/node/142153 | Wall Street Journal
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GOVERNMENT & COMMUNICATIONS

FISA AMENDMENTS ACT
[SOURCE: The Hill, AUTHOR: Jennifer Martinez]
Civil liberties and privacy groups are urging the Senate to debate a handful of amendments that are aimed at beefing up the privacy protections in a controversial surveillance bill. Senate Majority Leader Harry Reid (D-NV) said he plans to file cloture by the end of the Dec 20 on the FISA Amendments Act, which would reauthorize the 2008 surveillance bill for another five years. The measure gives U.S. officials the authority to conduct surveillance on suspected terrorists abroad without a court order. Sen Reid is currently in discussions with lawmakers about taking up the bill with a limited number of amendments, a Senate aide said. Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) are among the senators that hope to have their amendments considered. The American Civil Liberties Union (ACLU), Electronic Frontier Foundation (EFF) and Free Press have pressed the public to contact their senators this week about debating these amendments. The groups charge that the surveillance measure lacks transparency and could be used to sweep up American citizens' communications without a warrant.
benton.org/node/142143 | Hill, The
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POLICYMAKERS

NOMINATION VOTE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
With Senate floor time "in flux" and unable to get a quorum of the Senate Commerce Committee to vote on the nomination of Federal Communications Commission commissioner Mignon Clyburn, the heads of the committee have come up with plan B -- seeking unanimous consent from the Senate on discharging the nominees from the committee. That would mean they would only need a full Senate vote to be confirmed. If no Senator objects, the nominations would not have to go through a committee markup and vote. There would still need to be a vote in the full Senate, but that one could happen quickly, too.
benton.org/node/142151 | Broadcasting&Cable
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MORE NEWS FROM COURT

VERIZON ON FCC AUTHORITY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Verizon Wireless is hoping to have its wireless deregulatory cake and eat it too. In a brief in the Supreme Court, the company said the court should rule that the deference the courts generally give an expert agency's subject area expertise when it reviews a challenge to one of those decisions should not extend to the agencies' determination of the scope or existence of its statutory authority. In other words, the Federal Communications Commission should not be the arbiter of the limits of its own authority, which should be the purview of the courts. But the case at issue was one in which the FCC determined it had the authority to cut through local delays in tower citing approvals, a move applauded by cell companies including Verizon Wireless. In its filing, Verizon says as a general matter, courts should not give Chevron deference, but instead adjudicate de novo on whether there is statute providing the authority, but that the court need not overturn the ruling itself, since the company argues Congress has given the FCC that express authority to preempt local and state regulations.
benton.org/node/142144 | Broadcasting&Cable
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MORE RESEARCH

READING HABITS
[SOURCE: Pew Internet and American Life Project, AUTHOR: Carolyn Miller, Kristen Purcell, Lee Rainie]
Reading is foundational to learning and the information acquisition upon which people make decisions. For centuries, the capacity to read has been a benchmark of literacy and involvement in community life. In the 21st Century, across all types of U.S. communities, reading is a common activity that is pursued in myriad ways. As technology and the digital world expand and offer new types of reading opportunities, residents of urban, suburban, and rural communities at times experience reading and e-reading differently. In the most meaningful ways, these differences are associated with the demographic composition of different kinds of communities — the age of the population, their overall level of educational attainment, and the general level of household income. Several surveys by the Pew Research Center’s Internet & American Life Project reveal interesting variations among communities in the way their residents read and use reading-related technology and institutions.
benton.org/node/142113 | Pew Internet and American Life Project
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