Category: media criticism

The Adelphia Cable and Bank Settlement: Illustrating the Big Media/Telecom/Banking Nexus

Even though investment banks knew that former Adelphia exec’s–primarily the Rigas family–were using the cable giant as a personal “ATM machine”–they kept lending it money. Now, 39 banks (and the Deloitte & Touche auditing firm) have settled a bankruptcy-related lawsuit with investors–to the tune of $455 million. Neither the banks nor Deloitte admitted wrongdoing. But Citigroup, JPMorganChase, Wachovia, Bank of America and so many others have agreed to pay. The settlement, btw, is just a fraction of what investors say they lost from the cable industry shenanigans of the former Adelphia management. But so eager to make transaction fees and so sure that Adelphia’s cable subscribers would ultimately have to foot any red-ink, the banks kept lending and lending [according to the unsecured creditors complaint]. But we want to make a related point. Wall Street has helped fuel a conglomerated media and telecom culture–despite negative consequences to our democracy. Investment banks have too often operated in a self-serving and short-term focused manner when it comes to communications, We think it has had particularly negative consequences to both journalism and civic discourse. Reading the original complaint and related documents would be a perfect way to start thinking about what should be done to better protect the public.

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Follow the Data—N.Y.Times Overlooks

Today’s business story on Microsoft’s online business honcho Steve Berkowitz over-looked a key critical dimension with what is really going on at that company. Microsoft is now focused on interactive advertising–and data collection–as a primary source of revenue. Microsoft has turned every bit of itself into a system that serves the needs of its adCenter [Microsoft Digital Advertising Solutions]. As we explained recently in a complaint to the Federal Trade Commission, Microsoft’s bundling of search, rich media, user-generated content (blogs, videos), email, instant messenger, etc. to help collect the data used for advertising microtargeting is on the cutting-edge of what threatens consumer privacy, in the U.S. and everywhere else.

We hope that the news media will look closely at its own operations as its relates to interactive marketing and privacy. Everyone, including the New York Times, is engaged in interactive data collection and ad schemes that threaten our privacy. Perhaps if business reporters, editorial boards, and executive producers were willing to cast a critical eye at themselves in this regard, we would have business stories that got to the core of what is driving e-commerce today.

“Looking for a Gambit To Win at Google’s Game.” Saul Hansell, NYT. 12/9/06

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Time for a Bold Public Interest Media/Telecom Agenda

We hope readers will look at Matt Stoller’s blog and his important piece entitled “On Building a Progressive Governing Coalition Around Net Neutrality.” It should be a part of a much larger debate about what should be done—at this critical juncture with our digital media system—to ensure that it truly serves democracy. We believe that there now must be a major push—in Congress and the marketplace–to advance a comprehensive agenda that will:

• require broadband content non-discrimination;
• invest in digital content services designed to foster news and public affairs;
• invest and support digital media services owned by women, persons of color, and low-income Americans;
• “save” newspaper journalism through changes in tax laws, SEC rules, and via new policies encouraging employee and non-profit ownership;
• expand “universal service” so that everyone who cannot afford it receives free residential broadband service;
• open up Internet-connected cell phone/mobile platforms (the “deck”) and digital cable and satellite services to all broadband content (in other words, ensure network neutrality gets content wherever the Net is—not just on PC’s);
• foster the development of financially sustainable and diverse Web 2.0 social networks which build communities of interest that can help organize for a more equitable society;
• enact privacy and interactive advertising safeguards so that we aren’t digitally “shadowed” online from marketers and government. This will also act as a check against the stealth machinery promoting consumption that has been placed throughout our digital environment. [We know more must be added to this draft digital media agenda].

In the next few months, it will be important for all the groups and individuals concerned about the U.S. media system to come together and foster a serious plan and strategy. One reason why some groups haven’t focused on the emerging threat to democracy in the digital era [such as the loss of broadband content and network non-discrimination due to cable/telco lobbying the Bush FCC] is that advocates [including myself] haven’t made the case well enough about what the alternative vision can be. It should be a broadband content system that truly reflects U.S. diversity—and strives to promote the artistic, cultural, political, and even spiritual aspects of a “Just” society. I envision such a system everywhere—a diverse “digiplex” of dedicated and inter-networked public interest Web 2.0 sites in cities, state capitals and nationally [connected, of course, to many like-minded global services]. It would offer a range of programming and community-connecting efforts on cell phones, digital TV, and PC’s that would help challenge the status quo. If such services now existed in the Gulf Coast region, for example, there would be more powerful voices offering video and other programming that holds the country and political leaders accountable for failing to effectively rebuild. It would be run by—and better represent—those Gulf Coast residents who today do not own any major media outlet (namely, most people). I believe that such services could also generate revenues that would help pay for the programming and organizing which must be done.

One approach to some of this is to propose federal legislation–the Community Digital Diversity and Civic Engagement Act–that would provide a portion of the necessary funds and the equitable access policies. It would build upon the good work already being done by community cable, low power radio, citizen journalists, newspaper unions and many others. It’s time, frankly, that policy advocates looked beyond broadcast ownership: a new world has already dawned. A number of my proposals require a marketplace intervention that would explore business models for sustainability, so there’s a role for public interest minded funders here. We will be turning more to this topic in the New Year. Let’s have a serious debate, build and embrace allies, and work as hard as we can to make the necessary changes.

CDT Works to Undermine the Public Interest in Broadband/ Allies with PFF

The Center for Democracy and Technology (CDT) has long served as part of the political support system for the telecom and media industries. While many view CDT as a privacy group, a great deal of what the organization does benefits its corporate supporters—which have been some of the biggest media and data collection companies in the country. They have included Axciom, Doubleclick, Time Warner, AT&T, Microsoft, Yahoo!, Google and Intel.

Now, CDT has joined forces with one of the key corporate funded groups that has been leading the charge against network neutrality: the Progress and Freedom Foundation. PFF, co-founded by Newt Gingrich, is also supported by numerous corporate media/telecom interests, including Murdoch’s News Corp. (Fox), AT&T, BellSouth, Comcast, Clear Channel, GE/NBC, Google and Microsoft.

Yesterday, the two groups jointly filed amicus briefs in federal courts supporting News Corp./Fox and NBC’s efforts to undermine the ability of the FCC to regulate communications. The TV networks are fighting the FCC’s recent decisions on broadcast indecency. But the CDT/PFF filing wasn’t only about over-turning the FCC’s foolhardy and inappropriate efforts on so-called indecent content. The message CDT and PFF gave to the courts was they should rein in any effort by the FCC to ensure that the public interest be served in the digital media era. The filing claims that convergence of various media, including the Internet, make any policy role for the FCC related to diversity of content a threat to free speech itself. A very convenient argument that must warm the hearts of both CDT’s and PFF’s corporate funders, because they are precisely the companies who wish to avoid having a public interest regulatory regime in broadband.

Missing from the brief is any discussion of the regulatory areas for broadband (including PC, mobile, and digital TV [IPTV] platforms) that will require federal policy, including a key role for the FCC. Among them, ensuring an open, non-discriminatory content distribution policy for the Internet—network neutrality. Other rules that will require FCC action in the broadband era include ensuring “free” and “equal” time for political speech; diversity of content ownership, including by women and persons of color; localism; public service; privacy; and advertising regulation. There will need to be ad safeguards, for example, protecting children from interactive marketing that promotes obesity as well as with prescription drug ads targeting seniors via immersive “one-to-one” media techniques.

CDT and PFF argue that the new media environment provides the public with greater choice, another reason they urge the courts to limit FCC authority. But what’s really happening with digital media is that we are facing a system where the “choices” are being meaningfully reduced by the market. Wherever the public goes, the forces of conglomerate media and advertising will confront them. Consider, for example, News Corp.‘s MySpace now running Fox programming. (It’s interestingly, by the way, that neither CDT nor PFF told the courts that they have a financial relationship with some of the interests involved in the indecency debate).

We have long opposed FCC efforts to “regulate” indecency, including being critical of FCC Commissioner Michael Copps (whom we otherwise strongly admire). The indecency effort by the FCC has helped let it become vulnerable to this attack by the media conglomerates, and their supporters, who have a longstanding political agenda aimed at sweeping away all regulation and safeguards. Fox, NBC, Viacom, Disney and the rest want a U.S. media system where they can own as many media outlets as they want, not have to do any public service, nor worry about regulators concerned about threats to privacy and interactive marketing abuses.

The emerging broadband era in the U.S. will see us face further consolidation of ownership of media outlets, including the Internet, as well as an increase in overall commercialization. The cry that Wall Street has for broadband is “monetization.” But our electronic media system must also serve democracy—not just the interests of those who want to make money. Civic participation, public interest civic media, and safeguards from content and services designed to manipulate us must be addressed. There is a role for the FCC in all this. (We shouldn’t throw-out as “bathwater” the potential of our broadband media to serve democracy and a role for the FCC because we are upset about it catering to zealous social conservatives who don’t like some programming).

Finally, shame on CDT for joining up with PFF. PFF is an opponent of the network neutrality policy for the Internet. It has also long opposed any meaningful role for the FCC. But, perhaps that’s the point. If PFF gets it way, its backers–and many of CDT’s–will be free to do as they please, regardless of the consequences to our democracy.

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Online Ad and Data Collection Watch

My group has launched a new project to keep the public better informed about the latest threats to our privacy. Click here to visit Online AdWatch. It will regularly highlight new developments in the interactive ad marketplace across the PC, mobile, and digital TV platforms. Send me your favorite examples of technologies, applications and market strategies that should be included.

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Yahoo!’s Deal with the Newspaper Industry: Papers should come clean about the data they will now collect/share and our privacy

We are troubled, as are many, about the crisis occurring within the U.S. daily newspaper industry. The lay-offs, cut backs, and other problems besetting such distinguished papers as the Los Angeles Times, San Jose Mercury News, Philadelphia Inquirer, and too many others, requires the attention of policy makers and civic leaders. We believe a principal cause for the current problem are publishers and newspaper holding companies whose first interest is squeezing out maximum revenue returns—for themselves and shareholders. Newspapers can make a reasonable profit and support serious journalism. But when they are seen as just another vehicle designed to generate lots of cash, the defenders of the First Amendment have been replaced by white-collar criminals. It’s time for new federal laws that would enable newspapers to be operated without regard to maximizing shareholder return.


 We also know we are in a key transition period for all media. That’s why we should publicly examine all the major deals shaping our future information landscape—to determine how well they will serve the public interest [Yes. We think that’s more important than just making money from the deals]. So, when William Dean Stapleton, CEO of MediaNewsGroup, says in a joint statement that the new partnership with Yahoo! and 176 newspapers is “transformational”–it requires a closer look. Some of the biggest names in the news business—Belo, Cox, Hearst, Scripps and MediaNews—have now hitched their digital wagons to Yahoo! Papers such as the San Francisco Chronicle, San Jose Mercury News, and Dallas Morning News are now a part of what is called the “most comprehensive advertising network in the online industry.” A major facet of the deal, notes the release, is for the papers to “[U]se Yahoo!’s search monetization functionality on newspapers Web sites, such as Web search, downloads of the Yahoo! toolbar and sponsored search.”

We recognize that newspapers must boldly work to secure new digital revenues. But in doing so, they must be responsible. That includes explaining carefully to every reader and user the kind of personal and other data Yahoo! is now able to collect and financially harvest. Readers/users need to know how Yahoo! and its newspaper partners will “target” them. When Yahoo! acquired rich media ad firm AdInterax last month, they noted that “Rich media technology enables marketers to create more compelling and interactive advertising units online using sight, sound and motion to deliver a message to target consumers. Yahoo! plans to further integrate rich media capabilities into its current leading offerings by developing a self-service model for marketers based on the AdInterax platform. This new rich media solution will enable advertisers and agencies to create and run rich media campaigns coupled with other Yahoo! capabilities including behavioral targeting, geo-targeting, demo-targeting, and dayparting.” The release also noted that “the AdInterax tracking and reporting module tracks traditional metrics including impressions, clicks, and reach and frequency, in addition to other key branding and direct marketing data.”

Newspapers should be protecting the privacy of the public—from both the excesses of government as well as commercial interests. Journalistic-related companies should make deals with online marketers such as Google and Yahoo! which place the privacy interests of readers/users first. We suggest that the editors from the papers now working with Yahoo! commission stories that will explain the deal in terms of what data is being collected and how it will be used. Then, the papers should run editorials calling on Congress to pass meaningful privacy safeguards on electronic data gathering. But—if they did that—wouldn’t it now threaten the very deal they just made? We will be tracking this story.

PS: We also want to see the same privacy-related disclosure from the 50 papers now involved with Google, via a deal announced earlier this month. They include the New York Times and Washington Post.

NYT’s on Media Cross-Ownership: Too Much Frenzy and Not Enough Reporting and Reflection

Today’s business section column [reg. required] on why concerns over newspaper-broadcast ownership safeguards are “yesterday’s news,” illustrates how poorly informed too many media beat reporters are about their own industry. First, writer Richard Siklos fails to acknowledge that his own employer—The Times Co.—lobbied the FCC to sweep away such rules during the 2001-3 proceeding. Reporters need to do a better of digging to learn about what their own employers are doing—both politically and in terms of market investments. In addition, Siklos, like so many others, fails to address how the Internet, due to recent FCC decisions, may not be able to provide a meaningfully diverse array of information sources in the near future. The elimination of network neutrality for U.S. broadband permits a very few—including cable, telephone, and broadcast TV stations—to send their content on so-called “fast lanes” [and for the 98% of the public, captive customers at that]. Siklos argues that “… the most important reason that cross-ownership rules no longer make sense is this: the distinctions between print and television are starting to blur in a digital world. Video on the Web is the biggest thing since turkey and gravy.” But today’s wide-open broadband frontier is likely to be tamed by the growing power of the Internet monopolies, now freed from operating their networks under a non-discrimination requirement [broadcast TV stations are already using their legislatively-procured “retransmission consent” to obtain favorable digital transport and promotion. Such market power is enhanced by the Congressional digital TV spectrum giveaway—which the Times Co. stations also received. Digital “retrans consent” has made owning a station a strategic investment during this transition period in the broadband market. Such a selling point is no doubt part of what the Times Co. is now making as it sells its stations.]

Siklos also fails to meaningfully assess how the business models of so many publicly traded newspapers have helped bring the industry to its current crisis point. Tribune tried to squeeze every dime out of its operations—hurting journalism as a result. Mr. Siklos should be interviewing colleagues who work at the LA Times and other Trib papers. Or get embedded in a paper run by Dean Singleton. We also wish Mr. Siklos had spent more time thinking about the unique journalistic culture of a newspaper—and why maintaining its editorial independence from TV/show-biz focused businesses is important to protect.

Diversity of media ownership is an serious topic—not one to be treated so flippantly as Mr. Siklos does for his largely business readers. It’s about the First Amendment in the digital era; open broadband networks; local and national news operations with the resources and commitment to do a serious job covering private and public power; and ownership by people now largely left out—namely everybody else other than white men. Cross-ownership is an important part of the “check and balances” the U.S. has relied on to ensure the electronic media can serve the public interest. Granted, things are changing—but much is not in the short term. This is a story that Mr. Siklos should return to soon—but do more careful reporting. Whether we have a media system capable of doing the investigative reporting necessary so it can stand up to a future Administration wanting to go to war without real documentation is part of what’s at stake.

Political Games Advertisers Play: A GOP Protection Racket

The nation’s biggest advertisers and marketers have developed an effective political operation in Washington. Madison Avenue and its clients have been able to ward off calls for policies, for example, that would protect our privacy. How the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA) conduct its lobbying efforts have largely been off the radar screen. After all, the press cannot examine itself (since the ad lobby is ultimately tied to the fate and fortunes of broadcasting, cable, newspaper, and much of online).

So we thought it was worth pointing out a telling comment in a recent Advertising Age story written by its indefatigable and enterprising D.C. bureau chief Ira Teinowitz. In his story titled “What Democratic Control May Mean for Marketers” (Oct. 16, 2006), he quotes AAAA VP Dick O’Brien. A change in control, said O’Brien, would mean that “[T]he sort of protection we have had on the House Commerce Committee will disappear.”

While not a bombshell, such admissions help tell the story of how all too often, Commerce chair Joe Barton and Telecom subcommittee chair Fred Upton have worked to help the big buck special interest agenda (think Bells, cable and no network neutrality for broadband). While we don’t believe the Democrats are Saints, at least once in a while they will yell and scream. The Ad industry, in our opinion, needs to lose its protection racket defense.

Stupid Ads Running at [Non-commercial!] PBS: “Ancient Tea that Dissolves Belly Fat”

Hey, folks at Nova—or better yet Frontline. Better launch an investigation into the health claims originating from PBS. One of the site’s “sponsored” ads asks: “Hate Your Body Fat? Drop 1 Jean Size Every 7 Days. The Tea that Dissolves Belly Fat!”

AncientOkinawanTea’s site, which one is transported to from PBS.org, claims that it “Boosts Energy and Mental Well-Being.” “Reduces Cancer Risk.” “Strengthens Your Immune System.” “Each cup of Ancient Okinawan Slimming Tea melts away stubborn bodyfat, reduces wrinkles, boosts brain power and enhances your health. Scientific Research proves it!….Not available in stores. Hurry, going fast! Normally $95.99. Today Only $37.”

The tea, so it is claimed, can help one shrink “8 Jean Sizes in 8 Weeks.” We think someone has been putting it in the water cooler at PBS HQ. But it’s their brains that have shrunk—so they cannot imagine a PBS digital environment without ads.

AT&T’s “30-Month” Net Neutrality Merger Trade-in Offer: What a Joke!

So desperate to become a digital colossus once it swallows BellSouth, AT&T offered the dissident Democrats on the FCC a network neutrality “concession” today. Unbelievably, AT&T offered to operate its broadband Internet system as an open and democratic network—but only for 30 months! The offer illustrates how unethical and cynical the top executives are at Ma(d) Bell. `Yes, U.S. public,’ they say. `We will give you a democratic Internet for a brief moment, if you let us grow as an even larger unaccountable monopoly.’ AT&T’s offer underscores why permanent network neutrality safeguards are worth fighting for. The very companies who will provide the vast majority of broadband service, such as AT&T, really don’t want the public to have it.

AT&T is trying to sell to FCC Commissioners Copps and Adelstein the digital equivalent of the Brooklyn Bridge. They should say: “sorry, wrong number.”

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