Archive for the ‘Policy’ Category

Escalation Scam: Troops in Afghanistan

Thursday, July 9th, 2009

The president has set a limit on the number of U.S. troops in Afghanistan. For now.

That’s how escalation works. Ceilings become floors. Gradually.

A few times since last fall, the Obama team has floated rising numbers for how many additional U.S. soldiers will be sent to Afghanistan. Now, deployment of 21,000 more is a done deal, with a new total cap of 68,000 U.S. troops in that country.

But “escalation” isn’t mere jargon. And it doesn’t just refer to what’s happening outside the United States.

“Escalation” is a word for a methodical process of acclimating people at home to the idea of more military intervention abroad — nothing too sudden, just a step-by-step process of turning even more war into media wallpaper — nothing too abrupt or jarring, while thousands more soldiers and billions more dollars funnel into what Martin Luther King Jr. called a “demonic suction tube,” complete with massive violence, mayhem, terror and killing on a grander scale than ever.

As war policies unfold, the news accounts and dominant media discourse rarely disrupt the trajectory of events. From high places, the authorized extent of candor is a matter of timing.

Lots of recent spin from Washington has promoted the assumption that President Obama wants to stick with the current limit on deployments to Afghanistan. Soon after pushing supplemental war funds through Congress, he’s hardly eager to proclaim that 68,000 American troops in Afghanistan may not be enough after all.

But no amount of spin can change the fact that the U.S. military situation in Afghanistan continues to deteriorate. It would be astonishing if plans for add-on deployments weren’t already far along at the Pentagon.

Meanwhile, the White House is reenacting a macabre ritual — a repetition compulsion of the warfare state — carefully timing and titrating each dose of public information to ease the process of escalation. The basic technique is far from new.

In the spring and early summer of 1965, President Lyndon Johnson decided to send 100,000 additional U.S. troops to Vietnam, more than doubling the number there. But at a July 28 news conference, he announced that he’d decided to send an additional 50,000 soldiers.

Why did President Johnson say 50,000 instead of 100,000? Because he was heeding the advice from something called a “Special National Security Estimate” — a secret document, issued days earlier about the already-approved new deployment, urging that “in order to mitigate somewhat the crisis atmosphere that would result from this major U.S. action . . . announcements about it be made piecemeal with no more high-level emphasis than necessary.”

Forty-four years later, something similar is underway with deployments of U.S. troops to Afghanistan.

Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said on Tuesday that no limit has been set. Speaking to the Center for Strategic and International Studies, he sounded an open-ended note: “There is not a ceiling on troop levels in Afghanistan.”

Mullen’s comment was scarcely reported in U.S. media outlets. It has become old news without ever being news in the first place.

The war planners in Washington are bound to proceed carefully on the home front. News of further escalation will come “piecemeal” — “with no more high-level emphasis than necessary.”

By Norman Solomon

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FCC: Here’s Why We Denied News Corp. Waiver Challenge in ‘08

Wednesday, May 27th, 2009

Commission Belatedly Publishes Order; Copps, Adelstein Add Dissents

Washington — In the “better late than never” category, the FCC late on the Friday before Memorial Day weekend released an order denying a challenge to News Corp.’s co-ownership of WNYW-TV New York and WWOR-TV Secaucus, N.J., and the New York Post via FCC waivers and reaffirming News Corp. Chairman Rupert Murdoch’s transfer of control of Fox’s TV station group to Fox Entertainment Group.

The challenge had been lodged by the United Church of Christ and Rainbow/PUSH and the decision reached on Jan. 15, 2008.

A Federal Communications Commission spokesperson was not available at press time to explain why it took 16 months to release the order.

When the order was adopted, there were still three Republicans holding the majority. That explains why the decision released Friday included two dissents by the current FCC Democratic majority. Those dissents actually dated, with a slight update, from 2006, when the FCC originally granted/renewed the newspaper-broadcast cross-ownership waivers, a permanent one for WNYW and a temporary for WWOR-TV, as part of approving Murdoch’s restructuring.

Because UCC and Rainbow/PUSH did not file a petition to deny those grants in 2006, the FCC concluded in the 2008 order that they lacked standing to challenge that on reconsideration and denied the petition.

That 2008 decision included a response to an earlier Free Press petition not at issue in the order exactly, but on point the 2008 FCC said. “[E]ven though the petitioners here lack standing, we think that it is appropriate as a prudential matter to consider Free Press’s objections to the 2004 Modification Request because Fox incorporated that request by reference into the transfer applications at issue here. Our failure to do so before was an oversight arising from the informal nature of Free Press’s original objection and the fact that Free Press took no action to renew its objection when the transfer applications were filed and placed on public notice.”

The commission — with a Republican majority in 2008, not the Democrat majority of today — was not persuaded by the Free Press argument that granting the waiver would violate the Third Circuit Court of Appeals stay of the FCC’s media ownership rule changes.

It also concluded that as Murdoch was simply restructuring and not creating any new ownerhip combinations, granting the waiver would not decrease the diversity of voices, as Free Press had argued.

That waiver grant was part of Rupert Murdoch’s application to transfer control of the Fox TV station group from him personally to Fox Entertainment Group. The FCC granted that application in October 2006.

As part of the order released Friday, Commissioners Michael Copps and Jonathan Adelstein put their two dissents worth in, dissents that Adelstein pointed out were “inexplicably” not included by the (Kevin Martin-controlled) commission in the October 2006 order.

Copps called the 2006 decision woefully deficient, saying there had been no “serious” public interest analysis of the waivers before they were renewed. He added an update for the 2008 decision, renewing his dissent and pointing out that in the interim News Corp. had bought The Wall Street Journal, operating two New York’s most popular TV stations and two of its most popular newspapers.

Adelstein said the decision “slighted the needs of the American public, neglected its statutory obligation to protect the public interest, and as a result, produced a decision that falls short even of the Commission’s own standards.”

Adelstein was particularly unhappy with what he saw as the lack of a “thoughtful” review of the implication on WWOR. He pointed out that then-FCC Chairman Michael Powell had promised Senator Frank Lautenburg (D-N.J.) that the commission would review that station’s service to New Jersey.

“The Commission should have taken this opportunity to review WWOR-TV’s service record and encourage more locally focused news coverage,” Adelstein said.

– By John Eggerton, Multichannel News

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Internet Threatened by Censorship, Secret Surveillance, and Cybersecurity Laws

Tuesday, May 26th, 2009



By Stephen Lendman

At a time of corporate dominated media, a free and open Internet is democracy’s last chance to preserve our First Amendment rights without which all others are threatened. Activists call it Net Neutrality. Media scholar Robert McChesney says without it “the Internet would start to look like cable TV (with a) handful of massive companies (controlling) content” enough to have veto power over what’s allowed and what it costs. Progressive web sites and writers would be marginalized or suppressed, and content systematically filtered or banned.

Media reform activists have drawn a line in the sand. Net Neutrality must be defended at all costs. Preserving a viable, independent, free and open Internet (and the media overall) is essential to a functioning democracy, but the forces aligned against it are formidable, daunting, relentless, and reprehensible. Some past challenges suggest future ones ahead.

Censorship Attempts to Curtail Free Expression

The First Amendment states: “Congress shall make no law respecting an establishment of religion, or prohibiting the exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Nonetheless, Congress and state legislatures have repeatedly tried to censor free speech, allegedly regarded as indecent, obscene, hateful, terrorist-related, or harmful to minors. However, the Supreme Court, in a number of decisions, ruled that the government may not regulate free expression, only its manner such as when it violates the right to privacy “in an essentially intolerable manner” — a huge hurtle to overcome, including online, because viewers are protected by simply “averting (one’s) eyes (Cohen v. California, 1971).”

In 1998, the Child Online Protection Act (COPA) passed, but was blocked by federal courts as an infringement of free speech and therefore unconstitutional and unenforceable. In 1999, the law was struck down at the Appellate Court level, but it stayed on the books. In 2002, the Supreme Court reviewed the ruling and returned the case for reconsideration. It remained blocked. Then in March 2003, the Appellate Court again ruled it unconstitutional on the grounds that it would hinder protected adult speech that’s likely what it was about in the first place.

Other litigation followed at the District and Appellate levels until on January 21, 2009, the Supreme Court killed COPA by refusing to hear appeals to affirm it. The Electronic Frontier Foundation put it this way: “After 10 Years, an Infamous Internet-Censorship Act is Finally Dead.” At least that’s the hope, but censorship attempts never die. They just reinvent themselves in new forms made all the easier when powerful corporate interests and their congressional allies support them.

In 2000, the Children’s Internet Protection Act (CIPA) became law, and the Supreme Court upheld it — to regulate online content deemed “indecent (or) harmful to minors.” The law requires schools, libraries and other public institutions to install blocking software to prevent minors from having access to it.

In 2006, the Deleting Online Predators Act (DOPA) passed the House but not the Senate. It also would have mandated schools, libraries and other public institutions to prevent minors from accessing “commercial social networking websites (and) chat rooms.”

Its language was broad enough to apply also to sites like Amazon, Yahoo, Wikipedia and others and would have made the FCC a gatekeeper/censor. As the Protecting Children in the 21st Century Act, the law was reintroduced in the Senate in January 2007 but never passed.

In February 1996, the Communications Decency Act (CDA) was passed to regulate alleged indecent and obscene online content in violation of the First Amendment. Under the law, classic fiction would be banned as well as any material deemed offensive. In June, 1996, a three-judge federal panel partially struck it down for restricting adult free speech. In June 1997, the Supreme Court upheld the lower court ruling in Reno v. American Civil Liberties Union.

The Act was Title V of the 1996 Telecommunications Act titled Broadcast Obscenity and Violence that applied broadcast standards to the Internet. Under Section 230, Internet services operators aren’t considered publishers and thus have no liability for the words of third parties using their services.

In 2003, Congress amended CDA by removing struck down indecency provisions. In 2005, a three-judge Southern District of New York panel rejected Barbara Nitke’s obscenity provisions CDA challenge (in Nitke, et al v. Ashcroft). The Supreme Court upheld the decision.

In 2005, the Violence Against Women and Department of Justice Reauthorization Act (VAWDOJRA) became law and another blow to online free speech by prohibiting “any device (like a modem) or software that can be used to originate… (anonymous or other) communications that are transmitted, in whole or in part, by the internet” for the alleged purpose of harassment, even if only vigorous constitutional debate was intended or ordinary free speech.

In October 2007, the House passed the Violent Radicalization and Homegrown Terrorism Act called “the thought crime prevention bill.” It was introduced in the Senate, referred to the Homeland Security and Governmental Affairs Committee, but never voted on or passed.

If it ever becomes law in its present form, it will establish a commission and Center for Excellence to study and act against “thought criminals” (including online ones) for alleged acts of “violent radicalization (and) homegrown terrorism” defined as follows:

  • “violent radicalization (to mean) adopting or promoting an extremist belief system (to facilitate) ideologically based violence to advance political, religious or social change;”
  • “homegrown terrorism (to mean) the use, planned use, or threatened use, of force or violence by a group or individual born, raised, or based and operating primarily within the United States or any (US) possession to intimidate or coerce the (US) government, the civilian population… or any segment thereof (to further) political or social objectives.”

In other words, this law, if passed, will criminalize whatever the government wishes to include under the above two categories, including constitutionally protected speech online or elsewhere.

Another ongoing censorship issue involves craigslist — a worldwide online community network featuring classified ads for “jobs, housing, for sale, personals, services, local community, and events.”

On May 5, South Carolina Attorney (AG) General Henry McMaster notified its CEO, Jim Buckmaster, that unless an “erotic services” section is removed in 10 days, “craigslist management may be subject to criminal investigation and prosecution.” Other AGs in Rhode Island, Illinois, and Connecticut issued similar threats even though all of them are baseless.

Previous courts have held that Section 230 of the Communications Decency Act (CDA) protects “interactive computer service” providers like craigslist and lets them be self-regulating and free from liability. The law clearly states that they shouldn’t be responsible for third party content because they didn’t do enough to comply with individual State standards that may violate the First Amendment and federal law.

In craigslist’s case, it’s gone way beyond its legal obligations. In November 2008, it agreed to technical and policy changes to curb the use of its site for illegal purposes by third parties, including requiring telephone and credit card verification for “erotic services” ads to reject ones deemed illegal.

Earlier, craigslist screened out 90% of these ads. Nonetheless, it’s being unfairly targeted by AGs interpreting Section 230 and First Amendment rights as they please. Federal law, however, protects craigslist, but not against ambitious AGs harassment for their own political advantage and self-interest.

On May 20, craigslist announced that it filed suit against South Carolina Attorney General Henry McMaster seeking “declaratory relief and a restraining order with respect to criminal charges he has repeatedly threatened against craigslist and its executives.” Craigslist is on solid footing. It’s in full compliance with the law, but McMaster’s persistent threats forced it to sue in federal court.

These and numerous other congressional and other attempts aim to censor protected speech, including online. Expect more of this ahead, some legislation to be enacted, at times upheld by the courts, and, as a result, our liberties to be chipped away incrementally and lost — unless a line in the sand is drawn and defended by enough of the committed to do it.

On February 29, 2008, one skirmish turned out successfully when a federal judge let the anonymous whistle-blowing WikiLeaks resume operations after a week earlier ordering its US hosting company and domain registrar (Dynadot) to shut down and lock out its site. In his reconsidered ruling, District Judge Jeffrey White conceded he was having second thoughts regarding “serious questions of prior restraint (and) possible violations of the First Amendment.” He added that “the court does not want to be a part of any order that is not constitutional.” Even so, one triumph doesn’t mean victory. The struggle for unimpeded free speech continues.

Secret Unconstitutional Surveillance, Including Online Data Mining

The right to privacy is sacred even though no constitutional provision specifically mandates it. Nonetheless, the First Amendment guarantees free and open speech and beliefs. The Third Amendment the privacy of our homes against demands to be used to house soldiers. The Fourth Amendment against unreasonable searches and seizures. The Fifth Amendment against self-incrimination and privacy of our personal information.

Also, the Ninth Amendment states that the “enumeration of certain (of the Bill of) rights shall not be construed to deny or disparage other rights retained by the people.” In Griswold v. Connecticut (1965), the Supreme Court held that the Constitution protects privacy in a case affirming the right to use contraceptives and that banning them violated the “right to marital privacy.”

In Justice Arthur Goldberg’s concurring opinion, he cited the Ninth Amendment in defense of the ruling. Earlier High Courts also affirmed the constitutional right of privacy on matters of marriage, child rearing, procreation, education, termination of medical treatment, possessing and viewing pornography, abortion, and more as well as overall privacy protection.

The 14th Amendment’s “liberty” clause also relates to privacy by stating: “nor shall any State deprive any person of life, liberty, or property, without due process of law…” Courts have broadened the meaning of “liberty” to include personal, political and social rights and privileges. Thus, invasion of private spaces is unconstitutional.

In Olmstead v. US (1928), Justice Louis Brandeis stated:

The makers of our Constitution understood the need to secure conditions favorable to the pursuit of happiness, and the protections guaranteed by this are much broader in scope, and include the right to life and an inviolate personality — the right to be left alone — the most comprehensive of rights and the right most valued by civilized men. The principle underlying the Fourth and Fifth Amendments is protection against invasions of the sanctities of a man’s home and privacies of life. This is a recognition of the significance of man’s spiritual nature, his feelings, and his intellect.

George Bush institutionalized lawless spying invasions of privacy on Americans and others. Barack Obama continues the practice under the same federal agencies, including the FBI, CIA, Pentagon and NSA. On April 15, the New York Times headlined: “Officials Say US Wiretaps Exceeded Law.”

It cited the NSA’s practice in recent months of intercepting private emails and phone calls of Americans “on a scale that went beyond the broad legal limits established by Congress last year…” Briefed intelligence officials and lawyers called it “significant and systematic… overcollection” in violation of the law.

The Justice Department acknowledged the problem but said it was resolved. For its part, the NSA said its “intelligence operations, including programs for collection and analysis, are in strict accordance with US laws and regulations.” The Office of the Director of National Intelligence, in overall charge, downplayed the Times story, referred to “inadvertent mistakes,” and claimed efforts were immediately implemented to correct them.

Nonetheless, the issue remains unsettled, and new details reveal earlier domestic surveillance, including wiretapping a congressional member without court approval, and systematically doing it against many American citizens.

Tom Burghardt writes often on these issues at his Antifascist Calling blog… “Exploring the shadowlands of the corporate police state.” In calling “Spying on Americans: ‘Business as Usual’ under Obama,” he reported that working cooperatively with private corporations, the NSA collects vast amounts of “transactional data such as credit card purchases, bank transactions and travel itineraries… sold to (the agency) by corporate freebooters.” It’s then data-mined for “suspicious patterns,” a practice begun pre-9/11 but expanded greatly since then.

More than just financial transactions are monitored. According to investigative journalist Christopher Ketchum, “as many as ‘8 million Americans are now listed (as) secret enemies… who could face detention under martial law (and subjected) to everything from heightened surveillance and tracking to direct questioning” and possible internment.

Nothing under Obama has changed in spite of serious privacy, civil liberties, and other constitutional issues. Director Rod Beckstrom of DHS’ Cyber Security Center resigned in March because of NSA’s “greater role in guarding the government’s computer systems” and its concentrated power without checks and balances.

According to Electronic Frontier Foundation’s senior staff attorney Kevin Bankston: Obama’s “Justice Department (is continuing) the Bush administration’s cover-up of the National Security Agency’s dragnet surveillance of millions of Americans, and insisting that the much-publicized warrantless wiretapping program is still a ’secret’ that cannot be reviewed by the courts…” because doing so would harm national security.

Worse still is the DOJ’s assertion that the US government is immune from illegal spying litigation even when in violation of federal privacy statutes, an unprecedented claim exceeding the Bush administration citing “sovereign immunity.” Obama is going Bush one better by saying the Patriot Act immunizes the government from being sued under surveillance provisions of the Wiretap Act, Stored Communications Act, and Foreign Intelligence Surveillance Act’s (FISA) enhanced warrantless wiretapping powers in cooperation with complicit telecom providers. In other words, Obama’s DOJ absolves itself and its corporate allies of accountability under existing federal statutes that prohibit illegal spying on Americans.

On April 26, Burghhardt reported that “The Pentagon’s Cyber Command Formidable Infrastructure arrayed against the American People” will be headed by the NSA’s director, Lt. General Keith Alexander, to protect the military’s networks from hacker attacks, especially from countries like China and Russia. How this will “affect civilian computer networks is unclear. However, situating” it alongside NSA at Fort Meade, MD “should set alarm bells ringing (because of NSA’s) potential for (greater) abuse… given (its) role in illegal domestic surveillance… (and its) tremendous technical capabilities.”

“As a Pentagon agency, NSA has positioned itself to seize near total control over the country’s electronic infrastructure, thereby exerting an intolerable influence — and chilling effect — over the nation’s political life.” Recent history shows that “NSA and their partners at CIA, FBI, et. al. have targeted political dissidents,” including anti-war protesters, environmentalists, and others for their activism and beliefs. Greater NSA powers will “transform ‘cybersecurity’ into a euphemism for keeping the rabble in line (and) achieving ‘full spectrum dominance’ via ‘Cyberspace Offensive Counter-Operations.’ ”

Directed against ordinary Americans, democratic freedoms will be severely compromised. No matter as “the Obama administration (prepares) to hand control of the nation’s electronic infrastructure over to a (rogue) agency” — with General Alexander telling the House Armed Services subcommittee that America needs a digital warfare force for defensive and offensive cyber operations. More resources are required to do it, not for public security, but for imperial conquest and containing dissent at home – in violation of constitutional freedoms and international law.

In a follow-up May 4 article, Burghardt explored the secret, unaccountable world of FBI data mining through its Investigative Data Warehouse (IDW) containing over a billion documents, including many on US citizens. They come from our personal records and history, including what’s obtainable online through illegal spying.

According to the Electronic Frontier Foundation’s (EFF) Kurt Opsahl, “The IDW includes more than four times as many documents as the Library of Congress, and the FBI has asked for millions of dollars to data-mine this warehouse, using unproven science in an attempt to predict future crimes from past behavior.” This illegal spying violates our constitutional right to privacy and endangers our freedom by generating unsubstantiated threats based on pure supposition.

Besides the FBI, it’s virtually certain that other, perhaps all 16, government intelligence agencies conduct similar spying illegally, and as such, endanger everyone’s freedom.

Earlier on July 14, 2008, an ACLU press release headlined: “Terrorist Watch List Hits One Million Names” based on government reported figures. They include: “Members of Congress, nuns, war heros and other ’suspicious characters’ (like anti-war and environmental activists)… trapped in the Kafkaesque clutches of this list, with little hope of escape.”

According to the ACLU’s Technology and Liberty Program director, Barry Steinhardt, this data base represents “what’s wrong with this administration’s approach to security: it’s unfair, out-of-control, a waste of resources, treats the rights of the innocent as an afterthought, and is a very real impediment in the lives of millions of (people) in this country. Putting a million names on a watch list is a guarantee (it) will do more harm than good” besides being ineffective to catch real criminals.

Given the current scope and intent of FBI data mining, with millions under surveillance, its potential for abuse far exceeds where it stood less than a year ago – because the Obama administration supports it. No longer is anything about us private, including:

  • all our financial transactions and records;
  • every check written;
  • every credit card or other electronic purchase;
  • our complete medical history;
  • every plane, train, bus or ship itinerary;
  • our phone records and conversations; and
  • every computer key stroke.

Our entire private world is now public if spy snoops decide to invade it.

Key Internet-based companies, like Google, do it routinely; the company UK-based Privacy International ranked worst in its September 2007 “Race to the Bottom” report. It stated:

“… throughout our research we have found numerous deficiencies and hostilities in Google’s approach to privacy that go well beyond those of other organizations.” It tops them all “as an endemic threat to privacy. This is in part due to the diversity and specificity of Google’s product range and the ability of the company to share extracted data between these tools, and in part due to Google’s market dominance and the sheer size of its user base.”

It’s also unmatched in “its aggressive use of invasive or potentially invasive technologies and techniques.” It’s able to “deep-drill into the minutiae of a user’s life and lifestyle choices” irresponsibly. Its attitude toward privacy is blatantly hostile at worst and benignly ambivalent at best. Specifically:

– Google retains a large amount of user information with no limitation on its subsequent use or disclosure and with no chance for users to delete or withdraw it;

– it retains all “search strings and associated IP-addresses and time stamps for at least 18 to 24 months (retention) and does not provide users with an expungement option;”

– it has other personal information, including hobbies, employment, addresses, phone numbers, and more, and retains it even after users delete their profiles;

– it “collects all search results entered through Google Toolbar and identifies all Google Toolbar users with a unique cookie that allows Google to track the user’s web movement;” it also retains information indefinitely with no expungement option;

– it doesn’t follow OECD Privacy Guidelines and EU data protection law provisions;

– users have no option to edit or delete obtained records and information about them; and

– they can’t access log information generated through various Google services, such as Google Maps, Video, Talk, Reader, or Blogger.

In 2004, Google also acquired the CIA-linked company Keyhole, Inc., that has a worldwide 3-D spy-in-the-sky images database. Its software provides a virtual fly-over and zoom-in capability to within a one-foot resolution. It’s supported by In-Q-Tel, a venture capital CIA-funded firm that “identif(ies) and invest(s) in companies developing cutting-edge information technologies that serve United States national security interests.”

In 2003, its CEO, John Hanke, said: “Keyhole’s strategic relationship with In-Q-Tel means that the Intelligence Community can now benefit from the massive scalability and high performance of the Keyhole enterprise solution.”

In 2006, former CIA clandestine services case officer, Robert Steele, said:

I am quite positive that Google is taking money and direction from my old colleague Dr. Rick Steinheiser in the Office of Research and Development at CIA, and that Google has done at least one major prototype effort focused on foreign terrorists which produced largely worthless data… I think (Google is) stupid to be playing with CIA, which cannot keep a secret and is more likely to waste time and money than actually produce anything useful.

On April 29, Willem Buiter’s Maverecon site headlined “Gagging on Google” and said:

Google is to privacy and respect for intellectual property rights what the Taliban are to women’s rights and civil liberties: a daunting threat that must be fought relentlessly by all those who value privacy and the right to exercise, within the limits of the law, control over the uses made by others of their intellectual property.

This company should be rigorously regulated, “and if necessary, broken up or put out of business.” With about half the global internet search market, it threatens enhanced “corporate or even official Big Brotherism.”

For example, Google Street View, an addition to Google Maps, “provides panoram(ic) images visible from street level in cities around the world. The cameras record details of residents’ lives” on all sorts of personal matters that no one should be able to snoop on, then save, without permission, for whatever purposes.

The company also invades our privacy through tracking cookies or “third-party persistent cookies” to assist interest-based advertising, a practice known as behavioral targeting. In the wrong hands, this information can be used “to put a commercial squeeze on people, but also to extort and blackmail them.” And in government hands, it enhances “a pretty effective and very nasty police state.”

Can Google be trusted to use this information responsibly? “Of course not.” It’s a business run by “amoral capitalists,” out to make as much money as possible by any means necessary. Google and other Internet search engines “should not be trusted because they cannot be trusted.” However, because of its size and dominance, Google is “the new evil empire of the internet,” a “Leviathan” that must be tamed.

Cybersecurity Legislation

On April 1, two bills endangering a free and open Internet were introduced in the Senate:

– S. 773: Cybersecurity Act of 2009 “to ensure the continued free flow of commerce within the United States and with its global trading partners through secure cyber communications, to provide for the continued development and exploitation of the Internet and intranet communications for such purposes, to provide for the development of a cadre of information technology specialists to improve and maintain effective cybersecurity defenses against disruption, and for other purposes.”

S. 773 was then referred to the Commerce, Science, and Transportation Committee and thus far not voted on.

– S. 778: A bill to establish, within the Executive Office of the President, the Office of National Cybersecurity Advisor (aka czar). The bill was referred to the Homeland Security and Governmental Affairs Committee and not yet voted on.

Accompanying information said Senators Jay Rockefeller and Olympia Snowe introduced the legislation to address:

“our country’s unacceptable vulnerability to massive cyber crime, global cyber espionage, and cyber attacks that could cripple our critical infrastructure.”

We presently face cyber espionage threats, they said, as well as “another great vulnerability… to our private sector critical infrastructure — banking, utilities, air/rail/auto traffic control, telecommunications — from disruptive cyber attacks that could literally shut down our way of life.”

“This proposed legislation will bring new high-level governmental attention to develop a fully integrated, thoroughly coordinated, public-private partnership to our cyber security efforts in the 21st century” through what’s unstated — government affecting our private lives by threatening the viability of a free and open Internet.

During a March Senate Commerce, Science and Transportation Committee hearing, Senator Rockefeller said that we’d all be better off if the Internet was never invented. His precise words were: “Would it have been better if we’d never have invented the Internet and had to use paper and pencil or whatever!” Left unsaid was that without a free and open Internet, few alternatives for getting real news and information would exist, at least with the ease and free accessibility that computers can provide.

The Electronic Frontier Foundation’s Jennifer Granick expressed alarm about the risk of “giving the federal government unprecedented power over the Internet without necessarily improving security in the ways that matter most. (These bills) should be opposed or radically amended.”

Here’s what they’ll do:

  • federalize critical infrastructure security, including banks, telecommunications and energy, shifting power away from providers and users to Washington;
  • give “the president unfettered authority to shut down Internet traffic in (whatever he calls) an emergency and disconnect critical infrastructure systems on national security grounds…;”
  • potentially “cripple privacy and security in one fell swoop” through one provision (alone) empowering the Commerce Secretary to “have access to all relevant data concerning (critical infrastructure) networks without regard to any provision of law, regulation, rule, or policy restricting such access….”

In other words, the Commerce Department will be empowered to access “all relevant data” – without privacy safeguards or judicial review. As a result, constitutionally protected private information statutory protections will be lost — guaranteed under the Electronic Communications Privacy Act, the Privacy Protection Act, and financial privacy regulations.

Another provision mandates a feasibility study for an identity management and authentication program that would sidestep “appropriate civil liberties and privacy protections.”

At issue is what role should the federal government play in cybersecurity? How much power should it have? Can it dismiss constitutional protections, and what, in fact, can enhance cybersecurity without endangering our freedoms? S. 773 and 778, as now written, “make matters worse by weakening existing privacy safeguards (without) address(ing) the real problems of security.”

In late February, Director of National Intelligence, Admiral Dennis Blair, told the House Intelligence Committee that the NSA, not DHS, should be in charge of cybersecurity even though it has a “trust handicap” to overcome because of its illegal spying:

“I think there is a great deal of distrust of the National Security Agency and the intelligence community in general playing a role outside of the very narrowly circumscribed role because of some of the history of the FISA issue in years past…” So Blair asked the committee’s leadership to find a way to instill public confidence.

On February 9, Obama appointed Melissa Hathaway to be Acting Senior Director for Cyberspace for the National Security and Homeland Security Councils in charge of a 60-day interagency cybersecurity review, now completed.

On April 21, NSA/Chief Central Security Service director, General Alexander, told RSA Conference security participants that “The NSA does not want to run cybersecurity for the government. We need partnerships with others. The DHS has a big part, you do, and our partners in academia. It’s one network and we all have to work together…. The NSA can offer technology assistance to team members. That’s our role.”

But someone has to be in charge. It may or may not be NSA, but no matter. At issue is our constitutional freedoms. Any infringement on them must be challenged and stopped.

Stephen Lendman lives in Chicago. Contact him at: lendmanstephen@sbcglobal.net. Also visit his blog site and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM-1PM US Central time for cutting-edge discussions with distinguished guests.

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FTC to examine news media via workshop

Thursday, May 21st, 2009

Source: The Deal

FTC_building_125x100.jpgThe Federal Trade Commission announced late Tuesday that, although the Justice Department investigates mergers of newspapers and is responsible for evaluating Joint Operating Agreements under the 1970 Newspaper Preservation Act, the FTC will hold a hearing on competition in the chaotic news industry.

Titled “Can News Media Survive the Internet Age? Competition, Consumer Protection, and First Amendment Perspectives,” the workshop, which is slated to be held Sept. 15, is intended to create a body of knowledge on the industry that will be compiled by Susan DeSanti, the head of the Office of Policy Planning.

According to the FTC, there’s a need to evaluate the collection and dissemination of news, not just because newspapers are closing down in the face of increasing Internet competition, but because of predictions that television and radio too will suffer the same fate.

FTC Chairman Jon Leibowitz said in a statement:

“Many industries have experienced transitions to new business models in response to new forms of competition on the Internet, and consumers generally have benefited in the process. But the news business may be different because of the First Amendment values at stake. Whether we get our news from ink on paper, TV, radio, laptops, or mobile devices, we need a strong news industry for our democracy to thrive. Bringing together competition, consumer protection, and First Amendment perspectives can help all of us understand how best to serve Americans’ interests given the new realities affecting news organizations.”

The FTC has broad authority under its consumer protection auspices to conduct and report on a range of industries.

- Cecile Kohrs Lindell in Washington

FTC press release

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Big Media Myopia

Monday, May 18th, 2009

It’s hard to empathize with struggling newspapers when those running them continue to suffer from the short-sightedness that got their industry into a mess.

The editors at the Washington Post put on a display of such backward thinking on Saturday, when they published an op-ed by two lawyers from the influential D.C. firm Baker Hostetler.

In writing this op-ed, the lawyers hide certain conflicts of interest that should weigh heavily against their analysis. The Post ’s editors might have connected the dots for readers, but didn’t.

But the piece is just so stunningly stupid that it falls apart all by itself. In it, Esq. Bruce W. Sanford and Bruce D. Brown call for reactionary legal measures that would stifle access to news and information and return us to the grand old days of consolidated ownership, bloated media giants and information gatekeepers.

To save journalism, Brown and Sanford argue, we must “eliminate ownership restrictions” and open floodgates to a new wave of media concentration.

We should also “grant an antitrust exemption” for consolidated media, allowing them to join together and wall off content from users. “Antitrust immunity is necessary because most individual news sites can’t go it alone,” they explain in the op-ed. “Readers will simply jump to sites that are still free.”

They urge readers to support more stringent copyright restrictions that would bar bloggers, Web sites and all others from the online sharing of even a small portion of mainstream media news content.

Nowhere in this silliness do they see the consolidation and walling off of news for what it is: more the real culprit in the demise of newspapers than is their favorite bogeyman — the free flowing Internet.

We have nearly survived an era of media mergers that shackled newspapers with massive amounts of debt and high shareholder expectations. Look no further than real estate magnate Sam Zell, who in 2007 purchased the Tribune Company using financial contortions and shifting debt structures that made heads spin among even the most seasoned bean counters.

Zell is not alone. Media consolidation over the last 20 years has been typified by leveraged deals and unserviceable debts. But consider this. Just a few years ago, the average profit margin for newspapers was 20 percent — with some raking in twice as much or more.

“Did they use these astronomical profits to invest in the quality of their products or to innovate for the future?” asked Free Press’ Craig Aaron on Thursday. “No. They just bought up more newspapers and TV stations.” (On May 12 Free Press released a National Journalism Strategy that outlines forward-thinking policies to save journalism, and not merely prop up the creaking old guard.)

This debt-loaded structure began to implode as their monopolies over local advertising revenue were undercut by Internet upstarts such as Craigslist and Google News.

The recent economic downturn was the final straw. And the aftermath has been dire — at least for journalists. By one count, 24,000 journalism jobs have been lost since 2008. Foreign, Washington and statehouse bureaus have been shuttered. Major news organizations are in bankruptcy. Others, like the Rocky Mountain News, have closed their doors for good. Newspaper circulation is nose-diving. The Seattle Post Intelligencer and Tuscon Citizen have shed their print operations opting (far too late) to take exclusively to the Web.

In Saturday’s Post op-ed, both Brown and Sanford are nostalgic for the corporate media oligarchs that predated the Internet. This fantasy is so far removed from the contours of today’s media landscape that it’s easy to dismiss these two lawyers as ancient barristers who rely on secretaries to print and hand deliver their email.

They aren’t. And that is what’s disturbing about this article.

Undisclosed by neither Brown and Sanford nor the Washington Post is the A-list of corporate media clients represented by the authors.

Here’s what I found from quick scan of the Baker Hostetler Web site: Sanford has been counsel in cases representing publishers E.W. Scripps Co, Tribune Co., the Hearst Corporation, Random House, Simon & Schuster and Bertelsmann, A.G. He also represents consolidated broadcasters Clear Channel Communications, ABC/Disney, NBC, Fox Television as well as AOL/Time Warner. Brown has represented Scripps Howard Broadcasting Co. and the New York Times.

This list is not complete. (I encourage people to use the comment thread to add new names of the firm’s mainstream media clients.)

As far as I can tell the Post doesn’t seek counsel from Baker Hostetler. But that doesn’t preclude the paper’s publishers from benefiting from Brown and Sanford’s myopia.

That these two lawyers have sold themselves out to corporate media seems no surprise in a city of lobbyists and snake oil. What’s disturbing is the lengths to which the Washington Post will go to promote such swill without full disclosure to readers.

– By Tim Karr

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A fairness doctrine for newspapers?

Thursday, May 14th, 2009

So why did the Philadelphia Inquirer hire war criminal John Yoo as a columnist, despite serving an extremely liberal city?

“There was a conscious effort on our part to counter some of the criticism of The Inquirer as being a knee-jerk liberal publication,” [Inquirer editorial page editor Harold] Jackson said. “We made a conscious effort to add some conservative voices to our mix.”

They were being criticized for being too one-sided? Well, all the power to the conservatives who may have just delivered the killing blow to the financially troubled Inquirer.  

But that’s certainly odd behavior for a conservative movement that lives in mortal fear of the “fairness doctrine”, so much so that they invent fanciful conspiracy theories as to its imminent return. If they want their one-sided radio (and I have no trouble with that), then they should be happy to tolerate one-sided newspapers.

Not that the Inquirer was even that one-sided. They run a weekly column by Rick Santorum. Let’s see Rush Limbaugh run a weekly segment by Al Franken…

For more on this issue read Rory O’Connor’s Media Torture

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How the next internet revolution will save your favourite TV shows, newspapers and magazines

Monday, May 11th, 2009

You, dear reader, are a dinosaur. Please don’t take offence. It’s not you that’s the problem – it’s us, the world’s newspapers. Or so we are told.

The pundits have been saying for years that simply reading these words condemns you as a relic of social history. Newspapers, and by extension their readers, are on their way to the fossil beds as sharper, faster-moving websites bite and claw at their lumbering flesh.

Take last month’s British newspaper circulation figures. Only two titles saw their sales increase compared with the year before: the Daily Star (thanks to price cutting) and your Sunday Times.

In America, readers are fleeing online at such a rate and newspapers are closing so fast that there is talk of nationalising The New York Times.

It’s not just print, all “old media” is suffering – even Simon Cowell. Susan Boyle, the hirsute singing star of his show Britain’s Got Talent, charmed the world and attracted more than 100m viewers to the YouTube video-sharing website last month. But all that extra online exposure earned Cowell and ITV, which screens the show, not a penny. And ITV cannot afford to miss chances to make money. The broadcaster recently announced that it lost £2.7 billion last year after write-offs of assets.

“Television is in denial,” said Brian Elsley, creator of E4’s teen drama Skins. “The only thing that has kept audiences glued to the screen is the fact that most people don’t know which wire to plug into the back of the TV to get the internet on their screens.

“All that changes with the new sets coming out this year that have internet connections built in. There’s a real danger that audiences will drift, advertisers will follow and there simply won’t be enough money to make decent British TV dramas and comedies.”

Elsley was merely adding to what smart young management gurus have been saying for years – until last week, that is. Those with finely tuned ears heard a sudden and seemingly unconnected series of growls that proved there’s some spirit in the old thunder lizards yet.

Perhaps, in years to come, May 2009 will be seen as the month that old media started to fight back and as the beginning of a new internet revolution.

FIRST came news that Disney Corporation would take a stake in Hulu, a website set up by the American networks Fox – which is owned by News Corporation, ultimate owner of The Sunday Times – and NBC.

Hulu stores hours and hours of new and old programming – the latest 24 or classic Seinfeld, for example – which viewers can watch for free on their PC, all paid for by adverts embedded in the programmes. It’s just like normal TV, but available any time the viewer wants.

Initially mocked by the technorati for its name – it means “cease and desist” in Swahili – and because the old media has had limited success with such ventures in the past, Hulu has turned out to be a massive hit with net users and advertisers.

Although still way behind YouTube’s billions of video views per month, Disney made its move just as Hulu leap-frogged Yahoo! to become the third most-watched video site in America. Available only in the United States for now, Hulu has already begun hiring staff and talking to broadcasters with an eye to launching in Britain and seven other countries.

It is a bold attempt to freeze out the pirate sites that illegally copy and share TV programmes and movies in the way Napster used to pirate music in the late 1990s.

“It’s obviously going to be great to be able to watch The Sopranos or Cheers whenever you want [on Hulu], although US programming is rarely watched over here with as much passion as TV critics write about it,” said Simon Wilden, a partner at the advertising agency Good-stuff. “What’s interesting is if the BBC, ITV and Channel 4 get their own version – Project Canvas – off the ground.”

Project Canvas will gather together each broadcaster’s version of the BBC’s phenomenally successful iPlayer to offer a grab bag of the best British programming on demand. This would spell bad news for such sites as Joost or BlinkBox, which are shopping for TV shows to provide on-demand internet television.

They would like to be the TV equivalent of iTunes Store, Apple’s online shop, which is often credited as the saviour of the music industry. But if Hulu and its British equivalent succeed, it is existing television companies that will own the “iTunes of TV”.

Last week the world of print also received some welcome news for once. Key to the excitement was the launch by Jeff Bezos, founder of the online retailer Amazon, of a new version of Kindle, his firm’s electronic book reader. The Kindle DX has a larger, roughly tabloid-sized screen designed to display newspapers, magazines and electronic documents. Several newspaper groups have already signed up to offer their wares on the reader.

Its launch marked a new stage in the race to capture the market for ereaders. These are portable, lightweight devices that will eventually offer a full-colour version of your daily paper or favourite magazine, whose pages you will be able to flick on a daily commute without worrying about elbowing the person next to you.

Several firms are developing their own versions that are set to hit the market in the next couple of years. Apple, for one, is rumoured to be launching a Kindle-style bigger version of the iPhone, capable of playing video, surfing the web and hosting papers and magazines.

For newspaper groups, the attraction is clear: distribution costs associated with paper would be reduced eventually to near zero if everyone used an ereader, and they would be able to identify readers who could be targeted with personalised advertising.

But why would readers bother when they can get their news for free on the internet? The answer is that they might not be able to for much longer, at least not from established sources. Last week Rupert Murdoch, the chairman of News Corporation, announced that he planned to start charging for access to his paper’s websites – possibly within a year – to fix a “malfunctioning” business model. Even the head of Guardian Media Group, one of the apostles of free news on the internet, has said they are considering doing the same.

TRYING to get people to pay for something they have received for free is, of course, difficult. For once, however, old media seems to have the whip hand because things appear to be going wrong for new media firms.

There are huge problems in Silicon Valley. The sheer cost of running the huge servers required to store tons of information has started to worry the sort of free media and social networking sites that came of age during what is known as the “Web 2.0” era – defined as 2004 to the beginning of the economic crisis at the end of 2007.

All of them subscribed to a widely accepted business blueprint: build huge global audiences with a free service and let advertising pay the bills. The problem is: the model doesn’t seem to be working.

In April, for example, a startling report by analysts at Credit Suisse bank estimated YouTube will lose $470m this year. Despite the site’s 41% share of the online video market, Credit Suisse projects that it will pull inonly$240m in advertising revenue this year against costs of $711m. Google, YouTube’s owner, said the numbers were incorrect but refused to release any alternative figures.

It is far from alone. Last year, Veoh, a San Diego-based video-sharing site, decided to block its service to users in Africa, Asia, Latin America and eastern Europe, citing the dim prospects of making money and the high cost of delivering there.

Facebook, the social network, is also considering lowering the quality of videos and photographs to some regions in an effort to reduce costs.

“The idea that everything has to be free was so voguishly accepted and this is an epochal moment in the fightback,” said Ashley Highfield, managing director of consumers and online at Microsoft and the man who created the BBC’s iPlayer.

“That doesn’t mean everything will remain the same as always. The recession will only encourage people and publishers and producers into the digital world – it’s just now there’s a business model for survival in that world.”

THE precise shape of that world is unknown. Jeff Jarvis, author of the BuzzMachine blog, remains convinced that mass media is doomed.

“I spent the last month trying to read The New York Times on the Kindle,” he said last week. “It’s not very satisfying. If I read it on the iPhone or online, I know it’s being updated all the time. Also I have to start at the front page with the Kindle, most of the audiences online don’t start on the home page. It’s no salvation. This idea that a new device will save us is grasping at straws.”

There are signs, however, that the method of delivery of media does not change basic human desires, which in many cases old media companies have served for decades, even centuries.

It had, for example, become axiomatic that the multi-channel and internet era led to a loss of that shared sense of a national television culture that existed when there were four wonky channels with only one decent programme between them. The days of rushing into work after, say, Morecambe and Wise or Cracker and finding almost everyone had seen the same show are long over.

Unless, surprisingly, you are a youngster and thus the future of media. “For younger viewers, watching TV is a social experience,” explained Tess Alps, chief executive of the marketing body Think Box. “One of the trends that’s growing is teens and twentysomethings watching TV and using social networking sites like Twitter to conduct online conversations about what they are watching.”

Lyndsey Cameron, an 18-year-old student at Durham University, is a classic example. She prefers to use MSN’s instant messenger to Twitter but will happily chat away to a friend on the other side of town while they watch the same programme on TV – creating their own “virtual water cooler” that doesn’t have to wait until the next day at college.

“It’s not like we’re going through the show blow by blow,” she explained. “We’ll just be chatting as you would if you were in the same room, but because we’re watching the same programme we get to discuss, say, the X Factor vote as it’s going out.”

The “live” experience is clearly still valued. In a recent blog posting Clay Shirky, the author and internet guru, compared the current era to the upheaval that was caused by the invention of the Gutenberg printing press in the 15th century. What initially seemed like incremental changes, such as the invention of the small-scale octavo book, eventually proved hugely influential.

“That is what real revolutions are like,” wrote Shirky. “The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears: big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.”

There might yet be life left in those dinosaurs.

– By Stephen Armstrong
Additional reporting: Dominic Rushe in New York

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Senators ponder the future of journalism

Friday, May 8th, 2009

At a three-hour hearing, representatives of old and new media throw out their ideas.

Reporting from Washington — They like us. They really like us. Just don’t expect them to help us invent the future.

A string of U.S. senators delivered so many lofty odes to the American newspaper at a “Future of Journalism” hearing this week, it almost made me blush.

When a Republican senator suggests you’re something like a bulwark of democracy, you’ve got to smile.

But that doesn’t mean newspapers command a winning majority around here. Not even in good times and especially not now, when the government has a few other items atop its agenda, like economic turmoil, dysfunctional healthcare and Islamic extremism.

So senators and a panel of experts mulled antitrust exemptions and nonprofit status for newspapers, but Wednesday’s three-hour session had all the urgency of a confirmation hearing for postmaster general.

That left plenty of time for the Senate Subcommittee on Communications, Technology and the Internet to take testimony from a panel of experts, who brimmed with New Media triumphalism, Old Media hand-wringing and hopes for an old-new “hybrid” that will be the future of news.

I don’t know which was scarier: hearing from Dallas Morning News Publisher James M. Moroney that his paper gets as little as 40 cents for 1,000 views of an ad on the paper’s website, or listening as Arianna Huffington crooned in mesmerizing Greek English that “seetazooon joornolusts” (that’s “citizen journalists”) will make it all better.

Sen. John Kerry (D-Mass.) called the hearing because he sees newspapers as an “endangered species,” one that has traditionally provided the vast bulk of investigative and public interest reporting.

Kerry and several other senators, particularly Claire McCaskill (D-Mo.), said they saw websites and amateur reporters providing information, but not of the quantity or quality of old line news organizations.

(McCaskill reported that, even as she sat in the hearing, she BlackBerryed in a rebuttal to a false blog report about her on a St. Louis website.)

Huffington told the senators and newspaper folk they should stop clinging to the past and submit to an emerging “pro-am model,” in which amateur reporters get guidance from professional journalists and editors.

She noted that the website Talking Points Memo relied in part on citizens to discern a pattern, when the Bush Justice Department dumped U.S. attorneys who would not toe its political line.

The Huffington Post founder also celebrated Web upstarts like Voice of San Diego that have had some success with investigative reporting. She touted her own launch of an investigative team and her plan to hire local reporters in a dozen cities.

I welcome all the upstarts. News consumers need more, not less. But even most of the newcomers concede that newspapers still provide the bulk of the news. And Huffington gets a little ahead of the facts when she claims that powerful new journalism is blooming in every corner of the nation.

Former Baltimore Sun crime reporter David Simon played Arianna’s foil.

“The day I run into a Huffington Post reporter at a Baltimore Zoning Board hearing is the day that I will be confident that we’ve actually reached some sort of equilibrium,” said Simon, creator of the gritty HBO hit “The Wire.”

Simon said newspapers, cutting staffs to make higher profits, had partly brought on their own demise.

But he heaped extra derision on Web aggregators, “parasites” he accused of sucking the life from their hosts.

Newsroom cuts, Simon said, mean that “the next 10 or 15 years in this country are going to be a halcyon era for state and local political corruption.”

Moroney, the Dallas publisher, noted that, if 2009 revenue continues its current decline, some papers will have lost as much as half their ad revenue in just three years.

It would help considerably, he argued, if the government (via an antitrust exemption) would allow print companies to come together to try to cut revenue-sharing arrangements with Google and, perhaps, Amazon, maker of the automated Kindle reader. (Moroney said Amazon wanted 70% of the revenue generated by running newspaper content.)

Marissa Mayer, a Google vice president, virtually dared newspaper execs — albeit in a prim, business-school tone — to follow through on their complaints and simply block listings of their stories and pictures from turning up on the search engine. The technology allows it.

But most papers have been loath to give up the considerable traffic Google drives their way.

Mayer told the senators that papers should be paying more attention, first, to mending their own houses. She said “reader engagement” could be improved markedly by better directing readers from one story to other, similar features and advertising. “What concerns me” she said after the hearing, “is, do we have the product right?”

Former Washington Post Managing Editor Steve Coll said he feared “a lost generation of American journalism,” before new outlets step up to replace the old.

In the meantime Coll held out hope that the Corporation for Public Broadcasting and the National Endowment for the Humanities (among others) can support some of the watchdog reporting siphoned from old media outlets.

I told my colleagues before I jumped the Metro to Capitol Hill that I would be back by cocktail time with the solution to all our problems.

Newsies watching on C-SPAN began slinging barbs long before the end of the hearing.

“This makes me so angry. It’s humiliating,” one of Coll’s old Post colleagues messaged me. “Let us succeed or fail, but as a business, not a charity.”

But why not throw in with a nonprofit or journalism school to, for example, pay for an investigative reporting unit? More power to the news company that can figure out a way to get consumers to pay for some select content online, though I think it will be tough. We’ve only begun to explore the possibilities of truly immersing ourselves in the new universe of linking and shared content.

Bless our pals in the U.S. Senate for their kind words. But when it comes to saving the news business, we’re probably going to have to figure it out for ourselves.

– By James Rainey
james.rainey@latimes.com

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Metering: The End of The Internet As You Know It

Thursday, May 7th, 2009

Last month, the nation’s No.2 cable company Time Warner Cable announced plans to test a new billing system known as “metering” that charges Internet customers depending on how much they download. Customers who exceed their limit–say, by viewing online videos–would face steep penalties on top of their subscription rate.

Time Warner Cable’s usage penalty would take the unlimited service we enjoy today (albeit slow compared to other nations), and make Internet more like cell phones, where you get overcharged by companies making record profits. It is the latest version of the Net Neutrality debate: should the companies that deliver Internet be allowed to block it, slow it down, or in this case, overcharge for it?

Here’s why this issue threatens the Internet as you know it: Cable companies Time Warner and Comcast, and phone giants AT&T and Verizon sell the vast majority of high-speed Internet service in the United States. Phone and cable companies like these have no other competition in 97% of US markets, thanks to corrupt policies passed by the Bush Administration at the companies’ behest.

These duopolies are betting on the future of their “triple-play” phone-Internet-TV service, so that you’ll pay them more than $100 per month and they can keep earning record profits. They know that if you start downloading video from online innovators like Hulu.com and Roku.com, eventually you won’t need their expensive, advertising-ridden television service. If you decide to use online phone providers like Skype, you won’t need their expensive phone service. The answer? Jack up the cost of Internet, and once again eliminate the competition. This is exhibit A for when we need government to establish and enforce consumer protections; the same brand of policies we needed to prevent the financial meltdown and protect New Orleans.

Fortunately, Time Warner Cable’s pricing scam was met by fierce opposition from consumers, public interest groups and members of Congress. Rep. Eric Massa (D-NY) and Sen. Charles Schumer (D-NY) spoke out against the scheme, and Time Warner Cable scuttled the plan in four of the five test cities. Beaumont, Texas, was the city left as the lone petri dish, and Congressman Massa has promised legislation to curb the price-gouging. Yesterday, Rep. Massa told the Philadelphia Inquirer he is looking for a Republican co-sponsor for the bill: “This is bigger than a college kid surfing the Internet. Anything that limits access to the basic Internet is a threat to the economy.”

Time Warner Cable is regrouping, and says it is planning a “customer education process” to teach the public that high prices and Internet caps are good for us. And while the company tries to get its messaging right, other phone and cable companies are dipping a toe in the metering pool. AT&T is already testing a billing scheme that caps Internet use, and other Internet service providers are preparing to do the same. Comcast is billing for over-usage, but they are using a cap that is much higher than Time Warner, and more reasonable.

There are a host of other reasons why we should be worried about Internet service providers’ march toward overcharging for high usage: First is journalism. We continue to learn about Madonna’s adoption problems and Ms. California’s old photos, but if you want substance in your news, you’ll have to look beyond corporate media’s steady stream of sensationalism, celebrity gossip and product placement. We need fast, neutral, affordable Internet that can deliver video, audio and other multimedia to enable efficient production and distribution of journalism and other educational content.

Another is access. Today, some 40 percent of American homes do not have high-speed Internet, according to the U.S. Census Bureau. And high-speed Internet access in the US is already far more costly and slower than in 21 other developed countries. Time Warner’s pricing plans would put the Internet even further out of reach for tens of millions of Americans.

Time Warner Cable and other Internet providers say they need to penalize users to slow down an impending “Internet brownout”–a day when we run out of bandwidth. That bandwidth doomsday, however, isn’t about to happen anytime soon. Even one of Time Warner Cable’s own executives offers evidence that bandwidth scarcity is a ruse: “Cable is like the Federal Reserve of bandwidth…we can practically print the stuff!” said Mike LaJoie, the company’s chief technology officer. LaJoie has also said that supplying consumers with more bandwidth is “basically free” for his company.

As Phillip Dampier, who runs the Web site StoptheCap.com, put it: “[The cable companies] still think they’re right: the problem isn’t draconian usage caps, it is that people weren’t properly conditioned to accept them first…the OPEC of the Internet will be back by the fall, probably with almost the identical plan they ’shelved’ yesterday.”

We can and should celebrate last month’s victory. Public pressure foiled cable’s plan for now, but Time Warner Cable – and their telco friends – will soon be back. It’s up to us and our elected officials to stop them.

By Josh Silver
Executive Director, Free Press

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Court: FCC ‘Fleeting Expletive’ Rule OK — For Now

Wednesday, April 29th, 2009

The Supreme Court deleted expletives left and right Tuesday in narrowly upholding a government policy that threatens broadcasters with fines over the use of even a single curse word on live television.

But in six separate opinions that used none of the offending words over 69 pages, the justices suggested they could yet find the Federal Communications Commission’s “fleeting expletives” policy unconstitutional. The court said a federal appeals court should weigh whether it violates First Amendment guarantees of free speech.

The precipitating events were live broadcasts of awards shows in which Bono, Cher and Nicole Richie — Justice Antonin Scalia referred to the latter two as “foul-mouthed glitteratae from Hollywood” — let slip or perhaps purposely said variations of what Scalia called “the F- and S-words.”

By a 5-4 vote, the court threw out a ruling by the 2nd U.S. Circuit Court of Appeals in New York. That court had found in favor of a Fox Television-led challenge to the FCC crackdown and had returned the case to the agency for a “reasoned analysis” of its the tougher policy on indecency.

The commission appealed to the Supreme Court instead.

Scalia, writing for the court, said the FCC policy, adopted in 2004, was “neither arbitrary nor capricious.”

Acting FCC Chairman Michael Copps called the decision “a big win for America’s families.” Copps said the “decision should reassure parents that their children can still be protected from indecent material on the nation’s airwaves. ”

Fox expressed disappointment but said it was “optimistic that we will ultimately prevail when the First Amendment issues are fully aired before the courts.”

The FCC toughened its long-standing policy after it concluded that a one-free-expletive rule did not make sense in the context of keeping the air waves free of indecency when children are likely to be watching television.

Under the new FCC rule, some words are deemed to be so offensive that they always evoke sexual or excretory images. So-called fleeting expletives were not treated as indecent before the change.

The policy essentially excludes news programming and some other broadcasts, including ABC’s airing of “Saving Private Ryan” in 2004.

In the short term, the decision probably will lead the justices to reverse a similar appeals court ruling in the FCC’s effort to fine CBS Corp. over Janet Jackson’s wardrobe malfunction at the 2004 Super Bowl. That case has been pending at the high court since November.

The federal appeals court in Philadelphia threw out a $550,000 indecency fine against CBS over Jackson’s breast-baring episode during the halftime show. The court said the incident lasted nine-sixteenths of a second and should have been regarded as “fleeting.”

Tim Winter, president of the Parents Television Council advocacy group, said he was thrilled by Tuesday’s decision. Winter said he hopes the FCC now takes up “tens of thousands” of pending indecency complaints.

The FCC said it is reviewing the ruling before deciding how to proceed on pending complaints.

In its last major broadcast indecency case, the court ruled 31 years ago that the FCC could keep curse words off the airwaves between 6 a.m. and 10 p.m.

Justice Clarence Thomas sided with the majority Tuesday, but he nevertheless noted that the previous decision and an even earlier case “were unconvincing when they were issued, and the passage of time has only increased doubt regarding their continued validity.”

When the court upheld the FCC regulation in 1978, broadcast TV was the only television available to most Americans.

Today, the Internet, cable and satellite television are in millions of homes, yet the FCC’s authority extends only to broadcast television and radio, as Thomas noted.

“For most consumers, traditional broadcast media programming is now bundled with cable or satellite services,” he said.

Justice Ruth Bader Ginsburg, who dissented Tuesday along with the other three liberal justices, similarly raised constitutional concerns. Ginsburg said that in a case that turns on government restriction of spoken words, “there is no way to hide the long shadow the First Amendment casts over what the commission has done.”

The nub of Tuesday’s ruling was whether the FCC took a reasonable course in changing its policy and concluding that profanity referring to sex or excrement is always indecent.

Scalia, joined by his four conservative colleagues, said the FCC “could reasonably conclude that the pervasiveness of foul language, and the coarsening of public entertainment in other media” justified a stricter policy “so as to give conscientious parents a relatively safe haven for their children.”

But Justice John Paul Stevens said in dissent that the FCC missed the mark in failing to distinguish how the offending words are used.

“As any golfer who has watched his partner shank a short approach knows,” said Stevens, an avid golfer, “it would be absurd to accept the suggestion that the resultant four-letter word uttered on the golf course describes sex or excrement.”

Stevens also noted the frequent airing of television commercials during the prime-time hours under FCC surveillance — advertisements which, for instance, ask viewers “whether they, too, are battling erectile dysfunction or are having trouble going to the bathroom.”

Fox Television Stations, owned by Rupert Murdoch’s News Corp., and other networks challenged the policy after the FCC singled out use of profanity during awards programs that were aired in 2002 and 2003.

In each instance, a variation of the F-word was used either as a modifier — as in Bono’s comment that an award was “really f—ing brilliant” — or as a metaphor, as when Cher said, “F— ‘em,” to her critics.

The case is FCC v. Fox Television Stations, 07-582.

– By Mark Sherman
Associated Press writer Daniel J. Caterinicchia contributed to this report.

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Bridging the Rural Digital Divide: FCC Starts Work on National Broadband Strategy

Thursday, April 9th, 2009

The Federal Communications Commission begins work on a yearlong national broadband strategy to bring high-speed broadband internet into every American home. Under the $7.2 billion broadband stimulus plan, the FCC is responsible for developing a strategy to improve broadband coverage and present it to Congress in February of 2010. We speak with Wally Bowen, executive director of the Mountain Area Information Network in Asheville.

Guest: Wally Bowen, Executive director of Mountain Area Information Network, a nonprofit internet service provider that offers internet service in western North Carolina. It is based in Asheville, North Carolina. He is also the founder of the low-power FM station WPVM.

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AMY GOODMAN: The Federal Communications Commission, or the FCC, began work yesterday on a yearlong national broadband strategy to bring high-speed broadband internet into every American home. Under the $7.2 billion broadband stimulus plan, the FCC is responsible for developing a strategy to improve broadband coverage and present it to Congress in February of 2010.

Acting FCC Chair Michael Copps has described the plan as, quote, “the biggest responsibility given to the FCC since the Telecom Act of 1996.” Improving and expanding internet service is expected to be a central part of the plan.

My next guest is Wally Bowen, longtime activist on bridging the rural digital divide. He is the executive director of the Mountain Area Information Network in Asheville, North Carolina, a nonprofit internet service provider that offers internet service in western North Carolina. He is also the founder of the low power FM station WPVM and a former member of the North Carolina Rural Internet Access Authority.

Wally Bowen, it’s nice to have you with us.

WALLY BOWEN: Great to be here, Amy.

AMY GOODMAN: It was great to be on PVM when I was in Asheville last time around.

WALLY BOWEN: Right.

AMY GOODMAN: But talk about what you think is most critical right now around the issue of rural broadband.

WALLY BOWEN: Well, it’s rural broadband and broadband in low-income urban neighborhoods. Well, it’s the stimulus package, it’s the $7.2 billion that you referenced, and it’s just an historic opportunity for the creation of local networks and moving away from the kind of absentee-owned networks that we’ve suffered under all these decades that are beholden to Wall Street and not beholden to our communities.


And what’s interesting about the $7.2 billion that has been allocated in the stimulus bill for broadband build-out is that the regulation is written specifically for community-based groups. It’s nonprofits, local and state governments are given priority for this funding. For-profit carriers, the Verizons and AT&Ts and the cable companies, have to show that they are working in the public interest before they’re eligible for any of this funding for a particular project. So the door is wide open for the creation of community-based internet service providers, like what we’ve been doing in western North Carolina.

AMY GOODMAN: Explain what MAIN is.

WALLY BOWEN: Mountain Area Information Network, it’s a nonprofit internet service provider, and what—we got started in around 1994, ’95, when we discovered that many of the rural counties here in the mountains had to call long distance to get on the internet. There was no public access at the public libraries for internet access. And so, we were fortunate enough to get a grant, a federal grant, to bridge the digital divide and put servers in each of these counties, and so people could get dial-up, get to the internet with a local phone call, and so there would also be public access at our public libraries.

And we woke up one day, and we were an ISP. And we had a business model. We had sustainable revenue. My background is journalism, so I always—you know, I was wanting to bridge the digital divide but also create sustaining revenue for journalism. And so, that’s what we’ve been moving toward all these years. And five years ago, we launched WPVM, a low power FM radio station, and brought Democracy Now! for the first time to Asheville public access TV. So we’ve been concentrating our efforts on creating media infrastructure that is grounded in our community and beholden to our community and not beholden to Wall Street.

AMY GOODMAN: As newspapers fold, what is this nonprofit model you see?

WALLY BOWEN: Well, you know, at the media reform conferences, when I present our work, it’s always this paradox, because all of us are trying to find a new way to do journalism and alternative media, and yet every month people are writing a check to Verizon, AT&T, Charter. And so, all those digital dollars are flowing out of our communities and going to these big companies that are working in the interests of Wall Street and not in the interests of democracy.


And so, what the community-based nonprofit ISP, internet service provider, does is capture some of those digital dollars, keeps them in the community to support things like low power FM radio, public access TV. Eventually we hope to be paying journalists to do stories in our community using this revenue from our ISP.

AMY GOODMAN: Explain how the stimulus package affects you.

WALLY BOWEN: Well, again, it’s just a historic opportunity, because we need to build our network out further to reach more people. We’re also using—most of the stimulus money we’re going to be going after will be used for fiber, to lay the groundwork, to extend our last-mile wireless network out further and reach more people.

One of the interesting things about western North Carolina is that we’re probably one of the only regions of the country that has both a last-mile wireless provider, which is Mountain Area Information Network, but a middle-mile, nonprofit fiber provider, which we have several of. One is a rural electric co-op, nonprofit, local. Another is called ERC Broadband; it’s a nonprofit we helped create through other allies in the community to own our own fiber. It’s reduced our bandwidth costs. We were paying $2,500 a month for a T1 line in 1996; we’re now paying about $200 for an equivalent amount of bandwidth. And so, we’ve been able to bring our bandwidth costs down, expand our capacity, because we have a locally owned fiber network and a locally owned last-mile network to reach homes and businesses.

This is a model that could be done anywhere in the country. And I’m particularly excited to be on your program, because you reach the 750 community-based media centers, community radio, public access operations that could also implement this model and thereby support their efforts by also helping bridge the digital divide.

AMY GOODMAN: And yet, public access is under attack right now.

WALLY BOWEN: Exactly, exactly. And so, you know, it’s just critical that we find alternative revenue streams, and here comes along the stimulus package, which is presenting that opportunity. One thing I’m concerned about is that—

AMY GOODMAN: And we just have thirty seconds.

WALLY BOWEN: —a lot of our colleagues in the media reform movement think that becoming an ISP is like rocket science. It’s not. And so, it’s just a terrific opportunity. I’ve drafted about a 5,000-word cookbook for local broadband networks, which is going up on our website today, Mountain Area Information Network, MAIN, main.nc.us, and maybe you could put it on the Democracy Now! website, as well .

AMY GOODMAN: We will link to it at democracynow.org.

WALLY BOWEN: But it’s a step-by-step process to show community radio, public access TV, community media centers around the country just how they can begin planning. The interesting thing about broadband stimulus is that the three windows for applications are June, November and May of next year, so there’s is still time to plan for broadband stimulus.

AMY GOODMAN: Well, I want to thank you for being with us. We will certainly link to your cookbook. What is it? A recipe book.

WALLY BOWEN: It’s a local broadband network cookbook, how to do it yourself.

AMY GOODMAN: And we’ll link to it at democracynow.org.

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U.S. bill seeks to rescue faltering newspapers

Wednesday, March 25th, 2009

WASHINGTON (Reuters) – With many U.S. newspapers struggling to survive, a Democratic senator on Tuesday introduced a bill to help them by allowing newspaper companies to restructure as nonprofits with a variety of tax breaks.

“This may not be the optimal choice for some major newspapers or corporate media chains but it should be an option for many newspapers that are struggling to stay afloat,” said Senator Benjamin Cardin.

A Cardin spokesman said the bill had yet to attract any co-sponsors, but had sparked plenty of interest within the media, which has seen plunging revenues and many journalist layoffs.

Cardin’s Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies.

Under this arrangement, newspapers would still be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.

Advertising and subscription revenue would be tax exempt, and contributions to support news coverage or operations could be tax deductible.

Because newspaper profits have been falling in recent years, “no substantial loss of federal revenue” was expected under the legislation, Cardin’s office said in a statement.

Cardin’s office said his bill was aimed at preserving local and community newspapers, not conglomerates which may also own radio and TV stations. His bill would also let a non-profit buy newspapers owned by a conglomerate.

“We are losing our newspaper industry,” Cardin said. “The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.

Newspaper subscriptions and advertising have shrunk dramatically in the past few years as Americans have turned more and more to the Internet or television for information.

In recent months, the Seattle Post-Intelligencer, the Rocky Mountain News, the Baltimore Examiner and the San Francisco Chronicle have ceased daily publication or announced that they may have to stop publishing.

In December the Tribune Company, which owns a number of newspapers including The Baltimore Sun, The Chicago Tribune and The Los Angeles Times filed for bankruptcy protection.

Two newspaper chains, Gannett Co Inc and Advance Publications, on Monday announced employee furloughs. It will be the second furlough this year at Gannett.

– By Thomas Ferraro

(Additional reporting by Chuck Abbott)

(Editing by David Storey)

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Save America’s Newspapers: Bailout Needed For Journalism

Monday, March 23rd, 2009

John Nichols and Robert W. McChesney were the founders, with Josh Silver, of Free Press, which has launched a campaign to save the news. Their book, Saving Journalism: The Soul of Democracy, will be published by New Press in the fall.

Communities across America are suffering through a crisis that could
leave a dramatically diminished version of democracy in its wake. It is
not the economic meltdown, although the crisis is related to the broader
day of reckoning that appears to have arrived. The crisis of which we
speak involves more than mere economics. Journalism is collapsing, and
with it comes the most serious threat in our lifetimes to
self-government and the rule of law as it has been understood here in
the United States.

After years of neglecting signs of trouble, elite opinion-makers have
begun in recent months to recognize that things have gone horribly awry.
Journals ranging from Time, The New Yorker, The
Atlantic
and The New Republic to the New York Times

and the Los Angeles Times concur on the diagnosis: newspapers, as
we have known them, are disintegrating and are possibly on the verge of
extinction. Time’s Walter Isaacson describes the situation as
having “reached meltdown proportions” and concludes, “It is now possible
to contemplate a time in the near future when major towns will no longer
have a newspaper and when magazines and network news operations will
employ no more than a handful of reporters.” A newspaper industry that
still employs roughly 50,000 journalists–the vast majority of the
remaining practitioners of the craft–is teetering on the brink.

Blame has been laid first and foremost on the Internet, for luring away
advertisers and readers, and on the economic meltdown, which has
demolished revenues and hammered debt-laden media firms. But for all the
ink spilled addressing the dire circumstance of the ink-stained wretch,
the understanding of what we can do about the crisis has been woefully
inadequate. Unless we rethink alternatives and reforms, the media will
continue to flail until journalism is all but extinguished.

Let’s begin with the crisis. In a nutshell, media corporations, after
running journalism into the ground, have determined that news gathering
and reporting are not profit-making propositions. So they’re jumping
ship. The country’s great regional dailies–the Chicago Tribune,
the Los Angeles Times, the Minneapolis Star Tribune, the

Philadelphia Inquirer–are in bankruptcy. Denver’s Rocky
Mountain News
recently closed down, ending daily newspaper
competition in that city. The owners of the San Francisco
Chronicle
, reportedly losing $1 million a week, are threatening to
shutter the paper, leaving a major city without a major daily newspaper.
Big dailies in Seattle (the Times), Chicago (the
Sun-Times) and Newark (the Star-Ledger) are reportedly
near the point of folding, and smaller dailies like the Baltimore
Examiner
have already closed. The 101-year-old Christian Science
Monitor
, in recent years an essential source of international news
and analysis, is folding its daily print edition. The Seattle
Post-Intelligencer
is scuttling its print edition and downsizing
from a news staff of 165 to about twenty for its online-only
incarnation. Whole newspaper chains–such as Lee Enterprises, the owner
of large and medium-size publications that for decades have defined
debates in Montana, Iowa and Wisconsin–are struggling as the value of
stock shares falls below the price of a single daily paper. And the

New York Times needed an emergency injection of hundreds of
millions of dollars by Mexican billionaire Carlos Slim in order to stay
afloat.

Those are the headlines. Arguably uglier is the death-by-small-cuts of
newspapers that are still functioning. Layoffs of reporters and closings
of bureaus mean that even if newspapers survive, they have precious few
resources for actually doing journalism. Job cuts during the first
months of this year–300 at the Los Angeles Times, 205 at the
Miami Herald, 156 at the Atlanta Journal-Constitution, 150
at the Kansas City Star, 128 at the Sacramento Bee, 100 at
the Providence Journal, 100 at the Hartford Courant,
ninety at the San Diego Union-Tribune, thirty at the Wall
Street Journal
and on and on–suggest that this year will see far
more positions eliminated than in 2008, when almost 16,000 were lost.
Even Doonesbury’s Rick Redfern has been laid off from his job at
the Washington Post.

The toll is daunting. As former Washington Post executive editor
Leonard Downie Jr. and Post associate editor Robert Kaiser have
observed, “A great news organization is difficult to build and
tragically easy to disassemble.” That disassembling is now in full
swing. As journalists are laid off and newspapers cut back or shut down,
whole sectors of our civic life go dark. Newspapers that long ago closed
their foreign bureaus and eliminated their crack investigative
operations are shuttering at warp speed what remains of city hall,
statehouse and Washington bureaus. The Cox chain, publisher of the
Atlanta Journal-Constitution, the Austin
American-Statesman
and fifteen other papers, will padlock its DC
bureau on April 1–a move that follows the closures of the respected
Washington bureaus of Advance Publications (the Newark
Star-Ledger, the Cleveland Plain Dealer and others); Copley
Newspapers and its flagship San Diego Union-Tribune; as well as
those of the once great regional dailies of Des Moines, Hartford,
Houston, Pittsburgh, Salt Lake City, San Francisco and Toledo.

Mired in debt and facing massive losses, the managers of corporate
newspaper firms seek to right the sinking ship by cutting costs, leading
remaining newspaper readers to ask why they are bothering to pay for
publications that are pale shadows of themselves. It is the daily
newspaper death dance-cum- funeral march.

But it is not just newspapers that are in crisis; it is the institution
of journalism itself. By any measure, journalism is missing from most
commercial radio. TV news operations have become celebrity- and
weather-obsessed “profit centers” rather than the journalistic icons of
the Murrow and Cronkite eras. Cable channels “fill the gap” with
numberless pundits and “business reporters,” who got everything about
the last decade wrong but now complain that the government doesn’t know
how to set things right. Cable news is defensible only because of the
occasional newspaper reporter moonlighting as a talking head. But what
happens when the last reporter stops collecting a newspaper paycheck and
goes into PR or lobbying? She’ll leave cable an empty vessel and take
the public’s right to know anything more than a rhetorical flourish with
her.

The Internet and blogosphere, too, depend in large part on “old media”
to do original journalism. Web links still refer readers mostly to
stories that first appeared in print. Even in more optimistic scenarios,
no one has a business model to sustain digital journalism beyond a small
number of self-supporting services. The attempts of newspapers to shift
their operations online have been commercial failures, as they trade old
media dollars for new media pennies. We are enthusiastic about Wikipedia
and the potential for collaborative efforts on the web; they can help
democratize our media and politics. But they do not replace skilled
journalists on the ground covering the events of the day and doing
investigative reporting. Indeed, the Internet cannot achieve its
revolutionary potential as a citizens’ forum without such journalism.

So this is where we stand: much of local and state government, whole
federal departments and agencies, American activities around the world,
the world itself–vast areas of great public concern–are either
neglected or on the verge of neglect. Politicians and administrators
will work increasingly without independent scrutiny and without public
accountability. We are entering historically uncharted territory in
America, a country that from its founding has valued the press not
merely as a watchdog but as the essential nurturer of an informed
citizenry. The collapse of journalism and the democratic infrastructure
it sustains is not a development that anyone, except perhaps corrupt
politicians and the interests they serve, looks forward to. Such a
crisis demands solutions equal to the task. So what are they?

Regrettably the loud discussion of the collapse of journalism has been
far stronger in describing the symptoms than in providing remedies. With
the frank acknowledgment that the old commercial system has failed and
will not return, there has been a flurry of modest proposals to address
the immodest crisis. These range from schemes to further consolidate
news gathering at the local level to pleas for donations from news
consumers and hopes that hard-pressed philanthropists and foundations
will decide to go into the news business. And they range from
ineffectual to improbable to undesirable. Walter Isaacson has proposed
that newspapers come up with a plan to charge readers “micropayments”
for online content. Even if such a system were practically possible, the
last thing we should do is erect electronic walls that block the
openness and democratic genius of the Internet.

Don’t get us wrong. We are enthusiastic about many of the efforts to
promote original journalism online, such as ProPublica, Talking Points
Memo and the Huffington Post. We cheer on exciting local endeavors, such
as MinnPost in the Twin Cities–a nonprofit, five-day-a-week online
journal that covers Minnesota politics with support from major
foundations, wealthy families and roughly 900 member-donors contributing
$10 to $10,000. But even our friends at MinnPost acknowledge that their
project is not filling the void in a metro area that still has two
large, if struggling, daily newspapers. Just about every serious
journalist involved in an online project will readily concede that even
if these ventures pan out, we will still have a dreadfully
undernourished journalism system with considerably less news gathering
and reporting, especially at the local level.

For all their merits and flaws, these fixes are mere triage strategies.
They are not cures; in fact, if there is a risk in them, it is that they
might briefly discourage the needed reshaping of ownership models that
are destined to fail.

The place to begin crafting solutions is with the understanding that the
economic downturn did not cause the crisis in journalism; nor did the
Internet. The economic collapse and Internet have greatly accentuated
and accelerated a process that can be traced back to the 1970s, when
corporate ownership and consolidation of newspapers took off. It was
then that managers began to balance their books and to satisfy the
demand from investors for ever-increasing returns by cutting journalists
and shutting news bureaus. Go back and read a daily newspaper published
in a medium-size American city in the 1960s, and you will be awed by the
rich mix of international, national and local news coverage and by the
frequency with which “outsiders”–civil rights campaigners, antiwar
activists and consumer advocates like Ralph Nader–ended up on the front
page.

As long ago as the late 1980s and early 1990s, prominent journalists and
editors like Jim Squires were quitting the field in disgust at the
contempt corporate management displayed toward journalism. Print
advertising, which still accounts for the lion’s share of newspaper
revenue, declined gently as a percentage of all ad spending from 1950 to
‘90, as television grew in importance. Starting in 1990, well before the
rise of the web as a competitor for ad dollars, newspaper ad revenues
went into a sharp decline, from 26 percent of all media advertising that
year to what will likely be around 10 percent this year.

Even before that decline, newspaper owners were choosing short-term
profits over long-term viability. As far back as 1983, legendary
reporter Ben Bagdikian warned publishers that if they continued to water
down their journalism and replace it with (less expensive) fluff, they
would undermine their raison d’être and fail to cultivate younger
readers. But corporate newspaper owners abandoned any responsibility to
maintain the franchise. When the Internet came along, newspapers were
already heading due south.

We do not mean to suggest that ’60s journalism was perfect or that we
should aim to return there. Even then journalism suffered from a
generally agreed-upon professional code that relied far too heavily on
official sources to set the news agenda and decide the range of debate
in our political culture. That weakness of journalism has been magnified
in the era of corporate control, leaving us with a situation most
commentators are loath to acknowledge: the quality of journalism in the
United States today is dreadful.

Of course, there are still tremendous journalists doing outstanding
work, but they battle a system increasingly pushing in the opposite
direction. (That is why some of the most powerful statements about our
current circumstances come in the form of books, like Naomi Klein’s
The Shock Doctrine; or documentaries, like Michael Moore’s
Bowling for Columbine; or beat reporting in magazines, like that
of Jane Mayer and Seymour Hersh at The New Yorker.) The
news media blew the coverage of the Iraq invasion, spoon-feeding us lies
masquerading as fact-checked verities. They missed the past decade of
corporate scandals. They cheered on the housing bubble and genuflected
before the financial sector (and Gilded Age levels of wealth and
inequality) as it blasted debt and speculation far beyond what the real
economy could sustain. Today they do almost no investigation into where
the trillions of public dollars being spent by the Federal Reserve and
Treasury are going but spare not a moment to update us on the “Octomom.”
They trade in trivia and reduce everything to spin, even matters of life
and death.

No wonder young people find mainstream journalism uninviting; it would
almost be more frightening if they embraced what passes for news today.
Older Americans have been giving up on old media too, if not as rapidly
and thoroughly as the young. If we are going to address the crisis in
journalism, we have to come up with solutions that provide us with
hard-hitting reporting that monitors people in power, that engages all
our people, not just the classes attractive to advertisers, and that
seeks to draw all Americans into public life. Going backward is not an
option; nor is it desirable. The old corporate media system choked on
its own excess. We should not seek to restore or re-create it. We have
to move forward to a system that creates a journalism far superior to
that of the recent past.

We can do exactly that–but only if we recognize and embrace the
necessity of government intervention. Only government can implement
policies and subsidies to provide an institutional framework for quality
journalism. We understand that this is a controversial position. When
French President Nicolas Sarkozy recently engineered a $765 million
bailout of French newspapers, free marketeers rushed to the barricades
to declare, “No, no, not in the land of the free press.” Conventional
wisdom says that the founders intended the press to be entirely
independent of the state, to preserve the integrity of the press. Bree
Nordenson notes that when she informed famed journalist Tom Rosenstiel
that her visionary 2007 Columbia Journalism Review article
concerned the ways government could support the press, Rosenstiel
“responded brusquely, ‘Well, I’m not a big fan of government support.’ I
explained that I just wanted to put the possibility on the table. ‘Well,
I’d take it off the table,’ he said.”

We are sympathetic to that position. As writers, we have been routinely
critical of government–Democratic and Republican–over the past three
decades and antagonistic to those in power. Policies that would allow
politicians to exercise even the slightest control over the news are, in
our view, not only frightening but unacceptable. Fortunately, the rude
calculus that says government intervention equals government control is
inaccurate and does not reflect our past or present, or what enlightened
policies and subsidies could entail.

Our founders never thought that freedom of the press would belong only
to those who could afford a press. They would have been horrified at the
notion that journalism should be regarded as the private preserve of the
Rupert Murdochs and John Malones. The founders would not have
entertained, let alone accepted, the current equation that seems to say
that if rich people determine there is no good money to be made in the
news, then society cannot have news. Let’s find a king and call it a
day.

The founders regarded the establishment of a press system, the Fourth
Estate, as the first duty of the state. Jefferson and Madison devoted
considerable energy to explaining the necessity of the press to a
vibrant democracy. The government implemented extraordinary postal
subsidies for the distribution of newspapers. It also instituted massive
newspaper subsidies through printing contracts and the paid publication
of government notices, all with the intent of expanding the number and
variety of newspapers. When Tocqueville visited the United States in the
1830s he was struck by the quantity and quality of newspapers and
periodicals compared with France, Canada and Britain. It was not an
accident. It had little to do with “free markets.” It was the result of
public policy.

Moreover, when the Supreme Court has taken up matters of freedom of the
press, its majority opinions have argued strongly for the necessity of
the press as the essential underpinning of our constitutional republic.
First Amendment absolutist Hugo Black wrote that the “Amendment rests on
the assumption that the widest possible dissemination of information
from diverse and antagonistic sources is essential to the welfare of the
public, that a free press is a condition of a free society.” Black
argued for the right and necessity of the government to counteract
private monopolistic control over the media. More recently Justice
Anthony Kennedy, a Reagan appointee, argued that “assuring the public
has access to a multiplicity of information sources is a governmental
purpose of the highest order.”

But government support for the press is not merely a matter of history
or legal interpretation. Complaints about a government role in fostering
journalism invariably overlook the fact that our contemporary media
system is anything but an independent “free market” institution. The
government subsidies established by the founders did not end in the
eighteenth–or even the nineteenth–century. Today the government doles
out tens of billions of dollars in direct and indirect subsidies,
including free and essentially permanent monopoly broadcast licenses,
monopoly cable and satellite privileges, copyright protection and postal
subsidies. (Indeed, this magazine has been working for the past few
years with journals of the left and right to assure that those subsidies
are available to all publications.) Because the subsidies mostly benefit
the wealthy and powerful, they are rarely mentioned in the fictional
account of an independent and feisty Fourth Estate. Both the rise and
decline of commercial journalism can be attributed in part to government
policies, which scrapped the regulations and ownership rules that had
encouraged local broadcast journalism and allowed for lax regulation as
well as tax deductions for advertising–policies that greatly increased
news media revenues.

The truth is that government policies and subsidies already define our
press system. The only question is whether they will be enlightened and
democratic, as in the early Republic, or corrupt and corrosive to
democracy, as has been the case in recent decades. The answer will be
determined in coming years as part of what is certain to be a bruising
battle: media companies and their lobbying groups will argue against the
“heavy hand of government” while defending existing subsidies. They will
propose more deregulation, hoping to capitalize on the crisis to remove
the last barriers to print, broadcast and digital consolidation in local
markets–creating media “company towns,” where competition is
eliminated, along with journalism jobs, in pursuit of better returns for
investors. Enlightened elected officials, media unions and public
interest and community groups that recognize the role of robust
journalism are going to have to step up to argue for a real fix.

Fortunately, an increasing number of veteran journalists, scholars and
activists are beginning to grasp the historical significance of the
present moment and the central role of public policy. It was the late
James Carey, decorated University of Illinois and Columbia journalism
professor and no fan of government power, who saw this before almost
anyone else, writing in 2002: “Alas, the press may have to rely upon a
democratic state to create the conditions necessary for a democratic
press to flourish and for journalists to be restored to their proper
role as orchestrators of the conversation of a democratic culture.”

We have to ask where we want to end up, after the reforms have been
implemented. In our view we need to have competing independent newsrooms
of well-paid journalists in every state and in every major community.
This is not about newspapers or even broadcast media; it entails all
media and accepts that we may be headed into an era when nearly all of
our communication will be digital. Ideally this will be a pluralistic
system, where there will be different institutional structures.
Varieties of nonprofit media will have to play a much larger role,
though not a monopolistic one.

We recognize and embrace the need for a system in which there will be a
range of perspectives from left to right, alongside some media more
intent on maintaining a less explicitly ideological stance. We must have
a system that prohibits state censorship and that minimizes commercial
control over journalistic values and pursuits. The right of any person
to start his or her own medium, commercial or nonprofit, at any time is
inviolable. From this foundation we can envision a thriving, digital
citizen’s journalism complementing and probably merging with
professional journalism. What will the mix be? It would vary, with more
not-for-profit and subsidized media in rural and low-income areas, more
for-profit media in wealthier ones. The first order of any government
intervention would be to assure that no state or region would be without
quality local, state, national or international journalism.

We begin with the notion that journalism is a public good, that it has
broad social benefits far beyond that between buyer and seller. Like all
public goods, we need the resources to get it produced. This is the role
of the state and public policy. It will require a subsidy and should be
regarded as similar to the education system or the military in that
regard. Only a nihilist would consider it sufficient to rely on
profit-seeking commercial interests or philanthropy to educate our youth
or defend the nation from attack. With the collapse of the commercial
news system, the same logic applies. Just as there came a moment when
policy-makers recognized the necessity of investing tax dollars to
create a public education system to teach our children, so a moment has
arrived at which we must recognize the need to invest tax dollars to
create and maintain news gathering, reporting and writing with the
purpose of informing all our citizens.

So, if we can accept the need for government intervention to save
American journalism, what form should it take? In the near term, we need
to think about an immediate journalism economic stimulus, to be
revisited after three years, and we need to think big. Let’s eliminate
postal rates for periodicals that garner less than 20 percent of their
revenues from advertising. This keeps alive all sorts of magazines and
journals of opinion that are being devastated by distribution costs. It
is these publications that often do investigative, cutting-edge,
politically provocative journalism.

What to do about newspapers? Let’s give all Americans an annual tax
credit for the first $200 they spend on daily newspapers. The newspapers
would have to publish at least five times per week and maintain a
substantial “news hole,” say at least twenty-four broad pages each day,
with less than 50 percent advertising. In effect, this means the
government will pay for every citizen who so desires to get a free daily
newspaper subscription, but the taxpayer gets to pick the
newspaper–this is an indirect subsidy, because the government does not
control who gets the money. This will buy time for our old media
newsrooms–and for us citizens–to develop a plan to establish
journalism in the digital era. We could see this evolving into a system
to provide tax credits for online subscriptions as well.

None of these proposed subsidies favor or censor any particular
viewpoint. The primary condition on media recipients of this stimulus
subsidy would be a mild one: that they make at least 90 percent of their
content immediately available free online. In this way, the subsidies
would benefit citizens and taxpayers, expanding the public domain and
providing the Internet with a rich vein of material available to all.

What should be done about the disconnect between young people and
journalism? Have the government allocate funds so every middle school,
high school and college has a well-funded student newspaper and a
low-power FM radio station, all of them with substantial websites. We
need to get young people accustomed to producing journalism and to
appreciating what differentiates good journalism from the other stuff.

The essential component for the immediate stimulus should be an
exponential expansion of funding for public and community broadcasting,
with the requirement that most of the funds be used for journalism,
especially at the local level, and that all programming be available for
free online. Other democracies outspend the United States by whopping
margins per capita on public media: Canada sixteen times more; Germany
twenty times more; Japan forty-three times more; Britain sixty times
more; Finland and Denmark seventy-five times more. These investments
have produced dramatically more detailed and incisive international
reporting, as well as programming to serve young people, women,
linguistic and ethnic minorities and regions that might otherwise be
neglected by for-profit media.

Perhaps in the past the paucity of public media in the United States
could be justified by the enormous corporate media presence. But as the
corporate sector shrivels we need something to replace it, and fast.
Public and community broadcasters are in a position to be just that, and
to keep alive the practice of news gathering in countless communities
across the nation. Indeed, if a regional daily like the San Francisco
Chronicle
fails this year, why not try a federally funded
experiment: maintain the newsroom as a digital extension of the local
public broadcasting system?

Currently the government spends less than $450 million annually on
public media. (To put matters in perspective, it spends several times
that much on Pentagon public relations designed, among other things, to
encourage favorable press coverage of the wars that the vast majority of
Americans oppose.) Based on what other highly democratic and free
countries do, the allocation from the government should be closer to $10
billion. All totaled, the suggestions we make here for subscription
subsidies, postal reforms, youth media and investment in public
broadcasting have a price tag in the range of $60 billion over the next
three years.

This is a substantial amount of money. In normal times it might be too
much to ask. But in a time of national crisis, when an informed and
engaged citizenry is America’s best hope, $20 billion a year is chicken
feed for building what would essentially be a bridge across which
journalism might pass from dying old media to the promise of something
new. Think of it as a free press “infrastructure project” that is
necessary to maintain an informed citizenry, and democracy itself. It
would keep the press system alive. And it has the added benefit of
providing an economic stimulus. If these journalists (and the tens of
thousands of production and distribution workers associated with
newspapers) are not put to work through the programs we propose, their
knowledge and expertise will be lost. They will be unemployed, and their
unemployment will contribute to further stagnation and economic
decline–especially in big cities where newspapers are major employers.

These proposals are a good start, but then the really hard work begins.
We have to come up with a plan to convert failing newspapers into
journalistic entities with the express purpose of assuring that fully
staffed, functioning and, ideally, competing newsrooms continue to
operate in communities across the country. The only way to do this is by
using tax policies, credit policies and explicit subsidies to convert
the remains of old media into independent, stable institutions that are
ready to compete and communicate in the decades to come. To get from
here to there, and especially to make possible multiple competing
newsrooms in larger communities, policy-makers should be open to
commercial ownership, municipal ownership, staff ownership or
independent nonprofit ownership. Ideally the next media system will have
a combination of the above; and the government should be prepared to
rewrite rules and regulations and to use its largesse to aid a variety
of sound initiatives.

We confess that we do not have all the answers. Neither, we have
discovered, does anyone else. The fatal flaw in so many sincere but
doomed responses to the current crisis is that they try to do the
impossible, to create a system using varying doses of foundation grants,
do-gooder capitalism, citizen donations, volunteer labor, the
anticipation of a miraculous increase in advertising manna and/or a
sudden–and in our view unimaginable–reversal on the part of Americans
who have thus far shown no inclination to pay for online content. At
best, these are piecemeal proposals when we are in dire need of building
an entire edifice. The money from these sources is insufficient to
address the crisis in journalism.

We have to open the door to enlightened public policies and subsidies.
We need our members of Congress and our leading scholars to approach
this matter with the same urgency with which they would approach the
threat of terrorism, pandemic, financial collapse or climate change. We
need an organized citizenry demanding the institutions that make
self-government possible. Only then can we, like our founders, build a
free press. The technologies and the economic challenges are, of course,
more complex than in the 1790s, but the answer is the same: the
democratic state, the government, must create the conditions for
sustaining the journalism that can provide the people with the
information they need to be their own governors.

About John Nichols

John Nichols, a pioneering political blogger, has written The
Beat since 1999. His posts have been circulated internationally, quoted
in numerous books and mentioned in debates on the floor of Congress.

Nichols writes about politics for The Nation magazine as its
Washington correspondent. He is a contributing writer for The
Progressive
and In These Times and the associate editor of
the Capital Times, the daily newspaper in Madison, Wisconsin.
His articles have appeared in the New York Times, Chicago
Tribune
and dozens of other newspapers. more…

About Robert W. McChesney

Robert McChesney is Gutgsell Endowed Professor in the Department of Communication at the University of Illinois. He hosts the program Media Matters on WILL-AM every Sunday afternoon from 1-2PM central time. He and John Nichols, The Nation’s Washington correspondent, are the founders of Free Press, the media reform network, and the authors of Tragedy and Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy (New Press). He has written 16 books and his work has been translated into 15 languages. more…

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What Genachowski’s Role As New FCC Chairman Means for Broadcasters

Wednesday, March 4th, 2009

President Barack Obama nominated Julius Genachowski as head of the Federal Communications Commission on Tuesday. Genachowski, who served as Obama’s technology adviser, raised more than $500,000 for Obama’s campaign and is widely credited for moving the Obama campaign toward the Web.

Among his top priorities are helping broadcasters through the digital transition and shaping the spending for the stimulus package, which will help move high-speed Internet connections to rural America.

Journalists working on stories about Genachowski might benefit from using a Google News timeline to find out more information about him. 

The Web site ARS Technica said:

Genachowski served as law clerk to Supreme Court justices David Souter and William Brennan in the early 1990s. Then he signed on as Senior Legal Advisor to FCC Chair Reed Hundt in 1994. A year later, he went out on a limb and wrote a letter to The New Republic, urging its readers to file comments on Hundt’s proposal that broadcasters “generate a minimum amount of children’s educational programming each week (say three hours rising to five).” The FCC eventually got this done, settling on three hours.

He also helped a bit with his boss’s crusade against broadcasters who dropped the voluntary ban on hard liquor ads on television.


In this higher capacity, he helped Hundt make growling sounds at the Nielsen rating service, which the FCC feared might have been undercounting minorities and children as TV viewers.

”We rely on Nielsen data in making policy judgments,” a 1996 New York Times article quoted Genachowski as saying.


Genachowski, whose appointment must still be confirmed by the Senate, was a top aid to former FCC chairman Reed Hundt during the Clinton administration. He served on the board of directors of JackBe, Expedia Inc., Hotel Reservations Network, Inc., and Ticketmaster. He is also co-founder of LaunchBox digital, an early stage investment firm.

He holds a bachelor’s from Columbia University and a J.D. from Harvard Law School, where he was Obama’s classmate.
Genachowski is on the board of Web.com, which says on its Web site that he “has vast experience in the Internet, e-commerce, and media, and played a key role in building IAC/InterActiveCorp into one of the world’s largest e-commerce and media companies.”

Genachowski helped the religious Web site Beliefnet emerge from bankruptcy and was instrumental in helping to develop Truveo, a search engine for Web video.

The Wall Street Journal said:

During the campaign, Genachowski served as the top technology adviser to Obama, putting together a detailed technology and innovation plan that expressed support for open Internet or “net neutrality” protections; media-ownership rules that encourage more diversity; and expansion of affordable broadband access across the country.


The New York Times reported that Genachowski has a “reputation for being more of a deal maker and an executive than a pure technology expert, a criticism already circulating on Silicon Valley Web sites.”

– By Al Tompkins

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The Great Broadband Scam

Wednesday, February 25th, 2009


Why the Recovery Plan Will Fail to Meet America’s Broadband Needs

By David Rosen

As President Obama’s American Recovery and Reinvestment Plan begins to be implemented, all the hoopla about infrastructure renewal has evaporated. Unfortunately, as the Associated Press estimates, only $7 billion of the estimated $789 billion stimulus plan (or less then 1 percent) will be targeted to expansion of broadband service and only in underserved rural areas. Other “infrastructure” spending topped $78 billion. These allocations are far below what advocates called for and what America really needs to address the specific requirements of infrastructure renewal, let alone to effectively stimulate the economy. [AP, February 12, 2009]

During the presidential campaign, a diverse assortment of technology advocates had urged significant spending for internet broadband upgrade – and the Obama administration-in-waiting seemed to be listening. Educause proposed $100 billion in spending, while Free Press called for $40 billion, the Information and Technology Innovative Foundation asked for $30 billion and Business Week advocated for $20-$30 billion in tax breaks and spending. All were pissing in the wind.

The pathetic level of broadband spending will do little to address the fundamental failures of America’s internet service. And these failures have nothing to do with rural service.

First, the U.S.’s share of worldwide internet traffic has shrunk over the last decade from 70 percent to 25 percent. Second, the Organization for Economic Cooperation and Development (OECD) ranks the U.S. 15th out of 30 post-industrial nations in per capita broadband use. Third, and most troubling, Americans are getting poorer broadband telecommunications services (i.e., lower bandwidth) and paying more than citizens in most other advanced countries. [NY Times, Aug. 30, 2008; www.oecd.org/sti/ict/ broadband]

Even more critical, since the passage of the 1996 Communications Act, the Federal Communications Commission (FCC) has facilitated increased media monopolization. For example, while the Act called for increased competition, telecom lobbyists and compliant regulators rewrote FCC rules so that internet services are no longer covered under traditional “common carriage” requirements.

As part of a shortsighted policy to encourage globalization, both the Clinton and Bush administrations championed greater domestic industry consolidation by the leading telecommunications conglomerates. The outcome of this strategy is the creation of an essential duopoly marketplace where two firms dominate the two principal sectors of mass communications. What was once the telephone business is now controlled by AT&T and Verizon; and what used to be the cable television industry is dominated by TimeWarner and Comcast. However, as all communications goes digital, a slugfest among these dominant players will only intensify and lead to further consolidation.

While these companies have witnessed significant growth in terms of their respective market capitalization, America’s rank in broadband standing has systematically declined. Much of the responsibility for this decline in internet standing is due to the telecom industry’s efforts to maximize short-term financial gains over long-term innovation.

Bruce Kushnick, Executive Director, New Networks Institute, recently argued in the Harvard-Neiman Watchdog, “Examining some of the 25-year statistics on capital expenditures, it’s clear that in the period 2000 to 2008, the [telecom] companies have spent a lot less money on new construction (averaging 14%-18%) as compared to revenue than they did from 1984 through 2000 (averaging 20-25%).” [Watchdog, Feb. 3, 2009]

In all likelihood, the economic recovery will do little to address rural America’s communications needs and only further intensify conglomerate control over the communications marketplace.

According to Speed Matters, a broadband advocacy group, the National Telecommunications and Information Administration (NTIA) will receive $4.7 billion to distribute as grants designed to improve broadband deployments and the Department of Agriculture’s Rural Utility Service will receive $2.5 billion to connect rural Americans to broadband. Among the spending targets are: $350 million to create a “broadband inventory map”; $250 million for innovative programs that “encourage sustainable adoption of broadband service”; $200 million to enhance and increase public computer center capacity at community colleges and public libraries; $100 million for distant learning and telemedicine; and $10 million for Department of Commerce audit and oversight — i.e., transparency and accountability. [see www.speedmatter.org]

(Two questionable provisions — one, proposed by Dianne Feinstein, would have restricted net neutrality and, another, to provide Verizon with a $1.6 billion tax credit — were dropped from the final bill.)

In May 2008, Pew Research estimated that 55 percent of all adult Americans had a high-speed internet connection at home — up from 42 percent in 2005. Among home internet users, nearly four-fifths (79%) have a high-speed or broadband connection while 15 percent still use dialup. However, internet usage among rural Americans is a different story. According to Pew, only 38 percent of those living in rural American have broadband at home, up from 31 percent in 2007. [Pew Internet & American Life Project, May 2008 survey]

The 1934 Communications Act frames America’s telecommunications policy. Seventy-five years ago, rural America was recognized as suffering from underdevelopment. Little has changed. Rural America accounts for between 10 to 15 percent of the population. Then, as today, a different economic model was required to underwrite rural communications services. This model had to take into account rural America’s significantly smaller, more dispersed and often-poorer population compared to urban areas. Thus, the cost of wiring homes is more expensive. To bring communication to rural Americans, it has to be subsidized.

This subsidy was originally known as Universal Service fees. The 1996 Communications Act refashioned the subsidy into the Universal Service Fund (USF) and run by an arm of the FCC, the Universal Service Administrative Company (USAC). The fund is suffering due to a variety of factors. Historically, the principal source of fees came from taxes on long distance calls but, over the last few years, these rates have fallen. Second, in 2006, the telecom’s leading broadband offering, Digital Subscriber Line or DSL service, was mysteriously removed from the approved list of “telecommunications services,” thus no longer subject to being taxed.

According to telecom analyst Fred Goldstein, the rural USF is a boondoggle. AT&T is the biggest winner in USF payouts, receiving $440 million in 2007; Verizon received $287 million. As Goldstein laments, “So this [USF] system fails in both directions: Bells have an incentive to do as little as possible in these unprofitable areas, while rural carriers have an incentive to spend with reckless abandon.” [TMCnet.com. Dec 19, 2008] Rural communications is also witnessing an unprecedented level of consolidation as exemplified by AT&T’s recently announced acquisition of Centennial wireless for $944 million and Verizon’s acquisition of Rural Cellular Corporation (RCC) for $2.7 billion, among other deals. [Tech-Blorge.com., Nov 7, 1008]

In all likelihood, Obama’s rural broadband recovery plan will benefit the dominant players, further fuel telecom consolidations and only marginally improve broadband service in rural America.

Today, America is in the midst of the greatest economic crisis since the Great Depression. One can only hope that the Obama recovery plan not only stimulates the economy, but stimulates the spirits of his fellow Americans. Ironically, as the Clinton and Bush administrations pushed an aggressive campaign to deregulate the financial services industry that led to the collapse of the U.S. economy, similar FCC policies of deregulation led to the faltering of the nation’s broadband services.

A quarter-century ago, American legislators undertook a bold effort to deregulate the telecommunications industry. In 1984, AT&T, then the largest company in the U.S. with over one million customers, was broken up because it didn’t want to open its networks to competitors, notably the small MCI, to offer long-distance service. Now, as we celebrate the 25th anniversary of the AT&T breakup, we are witnessing the reconsolidation of communications market, but with even graver, longtime consequences.

In 1984, AT&T controlled long-distance telephony and some 1,300 small companies operated the local phone services. Then Judge Harold Greene broke-up AT&T into seven operating companies spread across the country. Today, the old communications industry has essentially reconstituted itself, with two massive companies, AT&T and Verizon, together controlling thirty-five states and expanding service offerings to not only long-distance and local telephony (wiping out the small local providers), but the internet, wireless and broadband video as well. Now they are aggressively expanding against the cable and broadcast television industries.

The two dominant telecom behemoths, AT&T and Verizon, have been constituted through mergers, not competition. AT&T controls the largest long-distance company and dominates 22 states; it took shape through the integration of Southwestern Bell (SBC), Pacific Telesis, SNET, Ameritech and BellSouth, the legacy-AT&T. Verizon controls the second-largest long distance company and dominates 13 states and 28 former-GTE territories throughout the U.S.; it took shape through the integration of Bell Atlantic, NYNEX, GTE and MCI and, with its recent $27 billion acquisition of ALLTel, has become the nation’s largest wireless provider.

A parallel, although mostly invisible, process of consolidation has also remade the Internet Service Providers (ISPs) sector. ISPs provide individual internet users access to the World Wide Web and, not unlike the fate of small providers in other sectors of the culture industries, the large and diversified collection of small companies that provide internet access is shrinking. According to the Census Bureau, between 2000 and 2005, the number of ISPs shrank by almost 75 percent, from 9,335 to 2,437.

Equally significant, as of 2008, the top five ISPs controlled 56 percent of all internet access; the top twenty-three ISPs controlled approximately 75 percent of all access. The top five ISPs and their relative market share are: Time-Warner, 16.7% (Road Runner, 9.0%, and American Online, 7.7%); AT&T 15.4%; Comcast, 15.3%; and Verizon, 8.7%. Further shakeout among ISPs should only intensify during the economic crisis. [ISP-Planet, Dec. 13, 2007]

Many in Congress have raised a red flag about the banking industry’s move to jack up credit cards fees as a way to make up for the loses it incurred playing the speculator’s game of casino capitalism. Similar, the Congress needs to carefully review ever-increasing telephone and cable television bills and finally expose the monumental rip-off American consumers have suffered at the hands of the telecom industry. As a new spirit of re-regulation has begun to be raised over the questionable if not corrupt practices of the financial services industry, a similar jaundiced eye needs to be focused on the telecommunications industry.

As new regulation is applied to the financial sector to clean up a troubled industry, a new spirit of re-regulation needs to be applied to the telecom sector, once again returning real competition (under the principals of net neutrality) to America’s communications industry. Only through such a thorough housecleaning will America begin to regain its leaders stature in broadband to meet the needs of the 21st century.

* * *
David Rosen is author, most recently of “Ways of Seeing: Movies on Mobile Devices,” FilmInFocus, November 19, 2008; “What now for broadband and the telecoms?,” Harvard-Neiman Watchdog (with Bruce Kushnick), November 17, 2008; and “The Next Telecom War: Moving from Net neutrality to infrastructure common carriage,” Filmmaker Magazine, Summer 2008. He is also the author of Off-Hollywood: The Making & Marketing of Independent Films. He can be reached at drosen@ix.netcom.com.

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