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Antitrust
Fireworks, Folly Ensue At FCC Over Media Rules
by David Hatch
Media consolidation opponents turned out in force at a high-profile Halloween Day FCC meeting featuring a protest outside the agency, activists in cheerleader uniforms, and a self-described "corporate media whore" in a French maid outfit who briefly upstaged the agency's chairman while being momentarily detained in the hearing room.
With dozens of lawmakers outraged that the FCC tentatively plans a mid-December vote on easing the nation's broadcast ownership limits, the agency's sixth and final public hearing on broadcaster commitments to local content acquired a strong sense of urgency.
"Sadly, millions of Americans will never have a seat at this table," Rev. Jesse Jackson, president of the Rainbow PUSH Coalition, told the commission. "Too few own too much, at the expense of too many." He called it "disgraceful" that only 7 percent of broadcast outlets are minority-owned.
"We must listen to the public," said FCC Commissioner Jonathan Adelstein, one of two Democrats at the five-member agency. "It is not just a moral obligation. It is the law." Michael Copps, the other Democrat, noted that lawmakers in both parties have urged the FCC to issue rules about promoting local programming before tackling ownership.
"There is no question that the consolidation of media ownership has led to the coarsening of the culture," added Dan Isett, director of government affairs at the Parents Television Council.
Marcellus Alexander, executive vice president at the National Association of Broadcasters, was one of the few supporters of loosening the restrictions. He emphasized that television stations produce more regional news than ever before, a point underscored by a video presentation about Los Angeles-based KABC-TV's extensive coverage of San Diego-area fires.
But Jim Goodmon, president and CEO of Raleigh, N.C.-based Capitol Broadcasting, implored the agency not to vote on media ownership during the transition to digital signals. "Why would we work on ownership regulation at the end of an era?" he asked, noting that TV stations can expand now by offering multiple digital channels.
"If you permit this consolidation, television stations and newspaper will behave as commercial radio owners behaved when they were largely deregulated," added Bob Edwards, a radio host on XM Satellite who spoke on behalf of the American Federation of Radio and Television Artists.
"The intensity of the public's concerns about how broadcasters serve their community is something the commission should not, and in practice, cannot, ignore," said Andrew Schwartzman, president and CEO of the Media Access Project, a public-interest law firm.
FCC Chairman Kevin Martin, a Republican, reiterated steps he supports to increase opportunities for minorities and women, including tax credits and leased access of unused television spectrum. He told reporters that he will take congressional concerns into account but also wants to fulfill a 2004 court order requiring the agency to review its media thresholds.
Commissioner Deborah Taylor Tate, also a Republican, spoke briefly about the contributions of local broadcasters, but the agency's third GOP regulator, Robert McDowell, considered a potential swing vote, did not tip his hand.
The protestor in the French maid outfit, with Code Pink Women for Peace, spoke during an open-mike session dominated by critics of media concentration: "I'm dressed today as a corporate media whore because I believe that our airwaves have been sold to the highest bidder," she said.
A security officer relented in trying to remove her earlier in the day.
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Television
Will Digital TV Be A Trick Or Treat To Consumers?
by Heather Greenfield
In a little more than a year, millions of television viewers will know whether the transition to digital signals is a trick or a treat, a lawmaker who has oversight of the change said Wednesday.
Massachusetts Democrat Edward Markey, chairman of the House Energy and Commerce Telecommunications and the Internet Subcommittee, invited broadcasters, retailers and cable operators for a Halloween Day update on the progress of the DTV transition set for Feb. 17, 2009, and to ask whether the better TV picture and new channels will outweigh potential problems.
"Will stores trick [consumers] into buying equipment they don't need?" Markey asked. "In February 2009, will they see their screens summarily turn as black as a Halloween cat? Will they long for their old analog signal, even with its friendly ghosting?"
Michael Willner, CEO of the cable firm Insight Communications, assured lawmakers that the industry is "ready, willing and able" to meet the 2009 deadline. But he also questioned the legality of an FCC requirement that cable operators carry broadcast stations in both analog and digital formats.
"The FCC order is clearly deficient," Willner said. He said the FCC should provide an exemption for small cable companies, though his company would be too large to qualify.
Patrick Knorr, president and general manager of Sunflower Broadband, agreed, He said some small cable operators do not have the revenue or bandwidth to broadcast each station twice.
"If operators can't afford the equipment, what makes the FCC think they can hire a lawyer?" Knorr asked.
Broadcasters used the hearing to argue against requirements to air public service announcements in order to alert customers about the transition.
David Barrett, president and CEO of Hearst-Argyle Television, said such announcements are not necessary because broadcasters plan to provide 98 billion advertising messages. In addition to TV ads, he said stations' Web sites will have information, stations will run crawls with a 100-day countdown, and the news media already have run 5,000 stories on the transition.
"No set will go dark for lack of information," Barrett said.
The hearing was the third to update Congress on the progress of the transition, and eight witnesses crowded around the table to testify. Full committee ranking Republican Joe Barton of Texas joked that if Markey continued to have hearings, "we won't have to have an education campaign as everyone in the country will have testified."
Lawmakers expressed concern about $40 coupons the government will issue so that consumers who don't want to buy new TV sets can buy $60 boxes to convert digital signals to analog.
Rep. Mike Doyle, D-Pa., said he wants to ensure that customers can use the coupons even if a store runs out of converter boxes. Energy and Commerce Committee Chairman John Dingell, D-Mich., pressed a Best Buy representative about offering free shipping to customers if they come in to buy converters and none are available at the time.
The Consumer Electronics Association estimates that 22 million to 28 million boxes could be needed, but others estimate that just 8 million may be needed if more consumers buy new TVs.
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Civil Liberties
Senators Signal Support For Allowing Telecom Suits
by Chris Strohm
Key members of the Senate Judiciary Committee indicated support Wednesday for lawsuits against telecommunications companies that helped the Bush administration with anti-terrorism spying but perhaps with the condition that the government pay any damages.
The committee held a hearing to consider legislation to overhaul the Foreign Intelligence Surveillance Act. One of the critical issues under debate is whether telecom companies should be granted retroactive legal immunity for giving the government e-mails and telephone records of U.S. citizens without warrants from the secret FISA court.
Judiciary Committee Chairman Patrick Leahy, D-Vt., said the committee has started to review key White House legal documents about the program, including administration letters that told telecom carriers the warrantless spying program was on sound legal footing.
"The lawsuits that would be dismissed as a result of such a grant of immunity are perhaps the only avenue that exists for an outside review of the government's program and honest assessment of its legal arguments," Leahy said.
About 40 lawsuits have been filed against telecom companies for assisting the administration. The committee's top Republican, Sen. Arlen Specter of Pennsylvania, said plaintiffs in the lawsuits "ought to have their day in court" and that granting immunity would be "undercutting a major avenue of redress."
But he said perhaps the companies could have indemnification, meaning the government would cover the costs of any judgments against them. "Isn't the cost of those lawsuits part of our overall cost in the battle against terrorism?" he asked.
Sen. Dianne Feinstein, D-Calif., said the cost of indemnification could reach $30 billion. Instead, she suggested offering indemnification with the condition that damages are capped.
Assistant Attorney General Kenneth Wainstein said the administration supports immunity for the telecom companies. He argued against indemnification, even if the damages were capped.
He said allowing the lawsuits to proceed could disclose classified information. He added that the telecom firms still would have to bear the brunt of litigating the lawsuits, which could affect their reputations or public values. He also said foreign facilities and personnel of companies being sued could become targets of attacks.
Several Republicans on the committee, such as Jon Kyl of Arizona and John Cornyn of Texas, indicated their support for giving the companies immunity.
The Senate Intelligence Committee approved a bill two weeks ago that would give the companies retroactive legal immunity for helping the government. Wainstein called the Intelligence Committee's bill "balanced" and "a good middle ground."
He added, however, that the administration opposes at least two provisions. One would require the administration to get a court warrant to monitor the communications of a U.S. citizen or legal permanent resident abroad. The other would make all provisions of the bill expire in six years.
Wainstein also indicated the administration has concerns about language stipulating that FISA is the exclusive means under which the administration can conduct surveillance.
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Security
Lawmakers: Secure IDs Lack Tools To Scan Them
by Michael Martinez
House lawmakers on Wednesday expressed concern that new, highly secure credentials for port workers have been made ready long before the scanners needed to verify them.
Government auditors told the House Homeland Security Committee that card readers for the transportation worker identification credentials will not be ready for about two years. Under the initiative, hundreds of thousands of maritime workers will receive biometrics-based ID cards, as well as undergo immigration, criminal and terrorist background checks.
Cathy Berrick, the homeland security and justice director at the Government Accountability Office, said at a committee hearing that it will be difficult to assess whether the TWIC program ultimately will be successful until its reader component is implemented. She said she is cautiously optimistic about the initiative.
A GAO study found that the Transportation Security Administration has made some progress in implementing TWIC, but significant challenges remain. GAO said it is too early to tell how well TWIC enrollment and card-issuance systems will perform during full-scale implementation, which will cover about 770,000 workers at roughly 3,200 maritime facilities.
Rep. Norman Dicks, D-Wash., said he is particularly frustrated that handheld scanners have not been considered as an option while the permanent scanning system is being developed. He said he knows of companies that produce technologies that would be ready to do the work off the shelf.
California Democrat Loretta Sanchez, chairwoman of the committee's Border, Maritime and Global Counterterrorism Subcommittee, also asked whether waiting for the readers for two more years might compromise the security of the new cards.
TSA Administrator Edmond (Kip) Hawley told the panel the cards that have been developed are uniquely sophisticated and resistant to tampering. He said his agency has initiated pilot programs with five partners to test readers in real-world maritime environments. Specifications for the biometric readers were published last month.
Adm. Brian Salerno, the Coast Guard's director of inspection and compliance, also told the panel there is no evidence that anyone already has tried to compromise the card.
"No one else on earth has a program as advanced as this," Hawley said.
California Democrat Jane Harman, who heads the committee's intelligence panel, urged Hawley and Salerno to avoid making implementation of the program more complicated than it needs to be. She said a secure border program managed by the Homeland Security Department went awry because it became too complex.
"We have to be smart about this," she said.
Hawley acknowledged that implementation has moved slowly but insisted that those behind it are focused on doing it correctly. "It is complex, and we've paid the price for it in terms of how long we've taken to get it right," he said.
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Privacy
Privacy Advocates Want List To Block Web Tracks
by Andrew Noyes
A coalition of the nation's top privacy advocates on Wednesday proposed that the FTC create a database of online behavioral advertisers so that consumers who do not want their Internet surfing habits to be trailed can opt out.
The "do not track" proposal is modeled after the federal "do not call" call list, a four-year-old program run by the FTC that includes telephone numbers of more than 145 million Americans who do not want calls from telemarketers.
Unlike the do-not-call database, the would-be Web registry would include the names of computer servers belonging to advertisers, and that list would be publicly available so consumers could block tracking tools, like cookies, that are tied to those servers.
"Any network advertiser that wishes to have mainstream advertisements seen by American citizens would have to comply or face losing all of their advertisers," said Ari Schwartz, deputy director of the Center for Democracy and Technology.
The server information recorded by the FTC could be pasted into people's Web browsers to block content from certain sites. "In the future, you can imagine that browsers might compete over building tools for consumers to use the list more granularly," Schwarz said.
CDT, the Consumer Federation of America, Electronic Frontier Foundation, Privacy Rights Clearinghouse, World Privacy Forum and others publicized the idea on the eve of a two-day FTC Internet advertising summit.
The proposal does not call for the blocking of actual ads, Schwartz said. "An advertising firm could decide to send out an ad from a different server than they do the tracking from," he said.
Other recommendations demand a notice requirement for the ads themselves when tracking occurs and the creation of a federal advisory committee to oversee the growing industry. Schwarz said the panel would include representatives from consumer and privacy groups; local, state and federal governments; and business stakeholders.
The Network Advertising Initiative, a group of third-party advertisers that addresses consumer-protection issues, in 2000 developed standards and an opt-out procedure for its members to follow. "Since then, we haven't had a public discussion involving the FTC," Schwartz said.
He said the initiative's self-regulatory principles have not been effective and disputed the group's claim to work with more than 90 percent of online ad firms.
But the initiative's executive director, J. Trevor Hughes, said in an FTC filing that the work has "served consumers well." In 2006, the initiative's opt-out page was visited more than a million times, and by the end of this year, that number is expected to grow by almost 30 percent.
Schwartz responded: "We need to build new controls for consumers. We've been lacking new ideas in this space, and we thought it was important to work with other privacy groups to come up with new solutions rather than wait for industry to act."
AOL, meanwhile, launched a consumer-awareness program to provide enhanced notice and information about behavioral targeting across its own and third-party advertising networks. The company also announced improvements to its opt-out process to keep current users who opt out of behavioral targeting from losing their preference.
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Net Governance
Domain Retailers Oppose Formal Attack On Abuses
by Andrew Noyes
LOS ANGELES -- Internet registrars meeting here Tuesday agreed that a concerted effort to fight abusive registration of Web addresses is needed but said a formal policy development within the Internet's management body is not the right approach.
The leadership of the Generic Names Supporting Organization, a major group within the Internet Corporation for Assigned Names and Numbers, was scheduled to vote Wednesday on how to address domain-name "tasting" and "kiting," officials at a registrar constituency session said. Registrars are the firms that sell domain names to the public.
Tasting is when an entity registers several Web addresses and exploits a five-day grace period, during which names can be returned for refunds. Kiting is repeatedly adding and dropping domains to avoid registration costs while making money off pay-per-click links.
Ross Rader, an executive with the Canadian registrar Tucows, said a formal policy development process, known as a PDP, is not warranted, "especially given the practical things we can do to eliminate or minimize tasting that we're not availing ourselves of."
Rader said he would "like to see ICANN staff start charging a fee on all transactions whether [the domain is] activated or not. That 20-cent fee could change the face of tasting in many ways we don't understand yet."
Robert Connelly of Domains Only; MarkMonitor General Counsel Margie Milam; and GoDaddy Vice President Tim Ruiz also expressed displeasure with the prospect of a PDP. "A PDP never solves anything because it never gets done in time," Connelly said.
Frustration over PDP inefficiencies is not a good enough reason to reject action by the GNSO, EnCirca President Tom Barrett said. Alternatives that have been proposed would give ICANN staff too much control and if the PDP does not work, "we should get it to work."
At a separate session, Mike Rodenbaugh of ICANN's commercial and business users constituency, said there is a "pretty broad consensus" that the council will move forward with a special kind of fast-tracked PDP.
Some solutions that have been floated include eliminating the add-drop grace period entirely or delaying activation of a Web address until a registrant's payment is processed, said Jonathan Frakes, a member of an ICANN working group on the topic.
Creating financial disincentives for those who exploit the system is another option, he said. ICANN could impose a restocking fee -- similar to the one used by the group that manages domains ending in .org -- or make registration fees nonrefundable.
Nixing the grace period "would eliminate tasting as we know it" but carries technical and financial costs, Frakes said, adding that the current system provides a mechanism for registrants to address buyer's remorse and helps registrars mitigate fraud and monitor security.
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Broadband
Expected Energy Savings From Broadband Critiqued
by Aliya Sternstein
Any legislation regarding high-speed Internet access must consider expanding the technology's energy-saving advantages, experts said Wednesday at a roundtable discussion on the environmental benefits of broadband.
The event was held to coincide with the release of two studies from the American Consumer Institute and the Consumer Electronics Association that found the use of Internet applications can help reduce greenhouse gases.
"We can have economic growth, increase the standard of living and not sacrifice anything" in the process, institute President Steve Pociask said. Widespread adoption of broadband tools in the United States could produce a net reduction of 1 billion tons of greenhouse gases over 10 years -- or, converted to energy saved, 11 percent of annual U.S. oil imports -- according to his organization's study.
E-commerce, teleconferencing, telecommuting and telemedicine, which all require broadband, not only increase productivity and reduce absenteeism, Pociask said, but they also spare the energy associated with building offices, heating offices, and driving.
Douglas Johnson, CEA's senior director of technology policy, said the association's study on the environmental impacts of electronics determined that just one day of telecommuting has the net benefit of saving 12 hours of an average household's electricity use. He said the message is that a part of corporate responsibility should be measuring a company's overall environmental footprint to ensure it is contributing to a low-carbon atmosphere.
But Emma Stewart, the director of environmental strategy at Business for Social Responsibility, said that in conducting a recent literature search, she found numerous studies that concluded the energy-consumption benefits of technologies are "ambiguous."
She proposed that industry respond to such articles with quantitative measurements rather than anecdotal evidence and continued delivery of the positive benefits seen in some of Wednesday's findings.
Resources for the Future fellow Elena Safirova, an economist, said some of the new results seem a bit optimistic.
"The next step is to come up with a strategy of how to get from A to B in the next 10 years," she said, adding that companies need to address the costs and the barriers of conducting most business online. "It might be not completely painless. It might be less painless than other ways. What are those ways?"
Likewise, John Donoghue, senior vice president of the World Wildlife Fund, said Wednesday's reports are great but industry also needs to be "looking at product design and taking into account ... carbon inefficiency." He noted that some microwaves use more energy to power clocks than heat food, and similar shortcomings can be identified in the personal computer sector.
Verizon Communications is looking forward to a discussion on such efficiency issues, human behavior analyses and policy development, said Kathryn Brown, the company's senior vice president of public policy. She noted that any proposed national broadband policy should be aligned with a national energy policy.
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Wired In Washington
Who Will Be The Media Champion Of The World?
by David Hatch
Get ready to rumble. In communications circles, Washington showdowns don't get much bigger or potentially uglier than the one building now over media ownership.
If the looming battle between Congress and the FCC were a heavyweight fight, it would rival the 1975 "Thrilla in Manila" between Muhammad Ali and Joe Frazier or the 1997 "bite fight" in which Mike Tyson chomped the ear of Evander Holyfield.
With the thresholds governing ownership of broadcast properties and newspapers on the line, some powerful lawmakers have drawn a proverbial line in the sand that FCC Chairman Kevin Martin has been dared not to cross.
Fighting to preserve the status quo are the eclectic team of Democratic Sens. Byron Dorgan of North Dakota and Barack Obama of Illinois. Other defenders of current law include: House Energy and Commerce Committee Chairman John Dingell, D-Mich.; Massachusetts Democrat Edward Markey, the panel's Telecommunications and the Internet Subcommittee chairman; and FCC members Jonathan Adelstein and Michael Copps.
They are backed by Republican Sens. Trent Lott of Mississippi and Olympia Snowe of Maine and several watchdogs.
Their opponents: Martin, a Republican who is likely to be paired with Commissioner Deborah Taylor Tate and perhaps Commissioner Robert McDowell, both Republicans, along with some business-friendly lawmakers who've yet to show their faces.
Supporters include the National Association of Broadcasters and the Newspaper Association of America, which represent media companies that stand to benefit from proposed changes.
For Martin, memories of 2003, when the Republican-led FCC triggered a harsh congressional backlash for substantially relaxing the ownership rules along party lines, are ever present. As a commissioner then, he supported the modifications, but he now distances himself from the vote.
The chairman's critics say he is rushing to weaken the rules, in limbo since 2004 when an appeals court sent most of the 2003 changes back to the FCC for further review. Curiously, Copps had the opposite complaint last year -- that the chairman was dragging his feet on the review, though he raised the concern when the FCC was evenly split between Democrats and Republicans.
This bout will test the mettle of Democrats who have done little on communications matters since retaking Congress. And it could determine the legacy of an FCC chief who walks a political tightrope as he tries to delicately push a deregulatory agenda without enraging his overseers.
What makes this showdown so interesting to watch is that a clear victor is likely to emerge. Of course, Martin might broker a last-minute, complex deal that gives everybody a partial victory -- he has done so in the past -- causing the congressional fury to dissipate.
Paul Gallant, a communications analyst with the Stanford Washington Research Group, said he thinks it is too early to declare war. "If the chairman and the Republicans put forward a moderate proposal with some appealing aspects for Democrats, it's far from clear there will be a gigantic clash on this issue," he said.
Yet several shots already have been fired. Martin's Oct. 25 announcement of a Halloween Day hearing on localism drew unusually harsh barbs from the FCC's Democrats, who accused him of undermining the public with the last-minute scheduling. One can only imagine the chills when they pass in the hallways these days.
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Clarification
Monday's PM Edition reported that White House Office of Science and Technology Policy Director John Marburger acknowledged deleting references to draft testimony by the Centers for Disease Control and Prevention on the health impacts of climate change. OSTP said Marburger did not delete the references but asked the CDC director to make those changes to better match the administration's interpretation of a particular U.N. report on climate change.
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Today's Feature:
International Roundup
In the past 10 years, the use of mobile telephones in Africa has evolved from a gadget of the rich and privileged to a basic necessity in urban and rural areas, Rwandan President Paul Kagame told government and business leaders on Monday.
Every Wednesday, read the International Roundup by Winter Casey.
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E-briefs
Telecom: The FCC Wednesday unanimously barred exclusive contracts between cable operators and apartment and condominium buildings in an effort to open the market to AT&T, Verizon and other new entrants. The action occurred at a public meeting. Democrats Michael Copps and Jonathan Adelstein applauded the move, which drew support from Democratic presidential hopeful Hillary Clinton, D-N.Y., though Copps raised concerns that it might benefit "particular services or particular competitors." Commissioner Deborah Taylor Tate, a Republican, cautioned that as a former state official she's wary of acting where "states have taken the lead." Her Republican colleague, Robert McDowell, warned the decision, which affects all multiple dwelling units, could be overturned in court. The agency noted that 30 percent of Americans live in such dwellings, a disproportionate number of whom are minorities. In other action, members voted 3-2 along party lines to extend regulatory relief previously granted to new video entrants to incumbent providers. The deregulation governs franchise agreements.
Trade: The House Ways and Means Committee unanimously approved legislation Wednesday that would implement the Peru Free Trade Agreement. The legislation, H.R. 3688, was approved on a 39-0 vote and is expected to go to the House floor next week for a vote. Committee Chairman Charles Rangel, D-N.Y., praised the language for being the first free trade agreement to include core standards for labor and the environment. "By including these provisions, we make it possible for members to consider these agreements on their merits and substance, rather than feel as though they have been excluded from the process," Rangel said. Tech industry lobbyists have been adding their voice of support for the Peru agreement for the past year, hoping it paves the way for other agreements -- especially one with South Korea.
Security: The House Homeland Security Committee is getting an update Wednesday afternoon on a scary scenario -- how to get critical infrastructure up and running after a natural disaster or terrorist attack. The hearing is focused on what the Department of Homeland Security is doing to better protect systems like electricity, water and telecommunications from cyber attacks. DHS Assistant Secretary Greg Garcia testified on a similar matter before the House Oversight and Government Reform hearing last week, saying DHS is preparing for a second major cyber security exercise in March. The Government Accountability Office released a report last week, however, that said despite many meetings with the private sector, little progress has been made to protect systems from cyber attacks. The House High Tech Caucus, meanwhile, watched a demonstration Wednesday of how personal data thieves trade and sell information online.
Nanotechnology: Despite a good start, the government's approach to ensuring safe and successful nanotechnology development falls short, a scientist testified at a House hearing Wednesday. Andrew Maynard, chief science adviser for the Woodrow Wilson Center's Project on Emerging Nanotechnologies, called for a strategy by year's end and updates biannually to identify the goals of nanotechnology risk research government-wide. He added that a new federal advisory committee is needed to foster transparent review by industry, academia, non-government organizations and other stakeholders. Ten percent of the nanotech R&D budget should be dedicated to environmental, health and safety research, Maynard said, and $1 million annually should go toward engaging consumers. He said "driving blind" on nanotechnology, will "prevent us from seeing and navigating around the inevitable bends associated with possible risks" and give a competitive edge to economies with the foresight to identify and negotiate the bends.
E-Government: The Election Assistance Commission on Wednesday launched an online tool that lets users submit comments on pending nationwide e-voting guidelines. The technical guidelines committee delivered a draft of the proposed voluntary standards this summer. Federal election officials plan to hold another public comment period on the guidelines after they publish a new draft in the Federal Register. "The initial public comment phase is only the first step in EAC's inclusive and thorough approach as we move toward the adoption of the next iteration of voluntary voting system guidelines," commission Chairwoman Donetta Davidson said in a news release. "Throughout the process, public input and involvement will be extremely important to the EAC, and we will review each and every comment that is submitted."
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