Category: Time Warner

New York Times and Network Neutrality: Great position. But the paper needs to disclose its own conflicts on the issue

This week the New York Times editorial page weighed-in to support national legislation requiring network neutrality (“Protecting Internet Democracy,” January 3, 2007. Reg. may be required). We share those sentiments, of course. It’s time for a law that restores and extends Internet non-discrimination in the U.S. But we also believe that news organizations need to inform readers/viewers/users about how their own corporate relationships are affected by communications policy issues. The New York Times Co. is staking much of its future on digital media, including interactive advertising. For example, it acquired the About.com informational web service in 2005 for $410 million. The goal, said Times Co. officials, was to “increase the company’s revenue from the expanding online advertising business.” The Times Co. has historically been a leader in developing interactive marketing techniques, including so-called “surround sessions” which enable advertisers to digitally follow New York Times online users as they access the paper electronically. Indeed, as we cover in our new book, Digital Destiny, the Times Co.’s Martin Nisenholtz (who heads its digital operations) has been a key ad industry leader promoting the advance of interactive data collection and personalized targeted marketing. Few Times readers and users really understand what the Times Co. is doing with all this data in the service of its advertisers.

The Times Co. requires network neutrality—otherwise it knows it will have to pay a digital version of the Mafioso-like vig to Comcast, Time Warner, Verizon and AT&T. The major phone and cable conglomerates want to charge everyone an assortment of fees for higher-speed Internet distribution, creating a de facto pay toll road for broadband. Given that everyone will be distributing video-centered multimedia to TV’s, cell phones and PC’s, having such “premium for a price” Internet access will be a necessity to prosper in the Web 2.0 and beyond era. Therefore, the Times Co must have network neutrality if its investments in About.com and other “new media” related strategies will return the profits to help support its journalism (which is a key reason why the country requires network neutrality. Without it, serious journalism will be in future jeopardy—as it is today).

Today, the Times reported that its parent company was selling off its television station group. It’s another indication that the Times Co. (wisely) understands its future lies with broadband. But the success of such a business model depends in part on an open Internet. We believe that the Times should have explained to its readers that when it supports network neutrality, it has its own financial future at stake. The paper, and the rest of the Times properties, should also begin to inform its users about the range of data collection and targeted electronic marketing its doing. Complete and full disclosure should be the rule—not an after-thought serving as fodder for bloggers.

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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NetCompetition.Org: They Have Drunk Too Much Cable/Telco Lobby Kool-Aid

We hate to focus too much on this Telco-Cable industry funded lobbying effort. But its latest [9/29] self-heralded “one-pager” attacking network neutrality proponents requires a response (we admit we may have come down with a Sen. Stevens form of `fetish’ about this lobbying site). Netcompetition’s analysis comes from a naive view of the realities of the broadband market. The paper paints a glowing picture of what it believes is emerging broadband competition. Hence, with such prospective abundance of networks and content likely, it argues that the country ignore the calls for safeguards coming from net neutrality supporters. We are, suggests Scott Cleland, experiencing “unfounded pessimism and fear about the future of broadband…”

First, we have to say that history is on our side. Despite all the talk and proclamations about bypass and competition—we haven’t had much in the multichannel and telecom sector. It’s been a sad story of consolidation and broken promises. Two, Mr. Cleland is ignoring the powerful triple/quad play now being deployed by his funders. Their networks—and content applications and partnerships—will dominate our TV, PC, and mobile experience for many years. The current state of broadband concentration–along with the emerging marketplace conditions–should be unthinkable in a democracy. Two companies control the cable industry; two will dominate the telephone market. Already, old media incumbents are swallowing new players—such as the News Corp. takeover of MySpace. There is tremendous consolidation throughout the digital content marketplace.

Hey Netcompetition. Your argument that just over the hill our digital media system is awash in a Wizard of Oz golden glow doesn’t cut it. We need safeguards now.

It’s not pessimism, but honest realism with an eye on the needs of our democracy. That’s a currency in too short supply in the nation’s capital.

Shame on the GOP and Dems in California: Gutting Community Oversight of Broadband

If we ever needed evidence about how both major political parties are in the pocket of the telecommunications industry’s very deep pockets, all we need to do is look at California. The new cable law kills the historic and critical role local governments have played in ensuring cable systems are held accountable and required to do public service. Now all franchising (the licensing of cable systems) will be governed by a single statewide agreement. Doling out these “one-size fits all, lowest common denominator” deals will be the feckless Public Utility Commission.

Democratic honcho Fabian Nunez, the Speaker of the Assembly, concocted the new law. Yesterday, GOP Gov. Arnold Schwarzenegger signed it. According to the Los Angeles Times, “AT&T spent $18 million through June lobbying and running television and full-page newspaper ads urging consumers to support the Nuñez bill — and then to thank Nuñez after it passed the Legislature.” [registration required]

The argument that Nunez and his Verizon and AT&T pals made to pass the bill was that only by gutting local oversight could California see cable competition. Boy, these folks should be ashamed. They have removed the key mechanism designed to ensure broadband networks serve local needs. There won’t be any serious competition—in either price or content. Just a few extra giants who are now free to run roughshod over both the cable TV and broadband business.

But money and power talks—and Nunez, Schwarzenegger and company played ball. Both parties in California have helped turn over a sizeable part of the country’s broadband resources to the very same interests which eliminated network neutrality.

PS: We note in the Los Angeles Times story the generally approving comments for the bill from USC’s Jeff Cole, the executive director of its Center for the Digital Future. Cole should have said [and the reporter should have identified if he did] that his center’s “Board of Governors” includes executives from AT&T (and other interests that supported the bill). As I said, money talks—with policymakers and too many “educational” institutions.

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Business for Social Responsibility: At Annual Conference, Guest Speakers Feature Anti-Internet Freedom and Obesity Boosting CEOs.

The Business for Social Responsibility (BSR) group has an ad touting its annual conference in today’s New York Times business section [the Times Co. is a BSR “media sponsor”]. Featured as keynote speakers are Time Warner CEO Richard Parsons and Coca Cola’s chair and CEO Neville Isdell. The conference is supposed to help executives “learn about the best practices in corporate social responsibility (CSR) today — and what lies ahead.” The program has panels with titles as “Being Green is Glorious,” “Replicating Better Factories Cambodia,” and “Strategic Decision-Making on Climate Change: Exploring Voluntary and Regulatory Approaches.” H-P, Altria (Philip Morris), GE, McDonalds and many other heavyweights are sponsoring the conference. NGO’s also appear to play a role at BSR, as evidenced by the session entitled “Strategies for Improving Business Impact on Poverty: Unilever and Oxfam Look Ahead.”

But the idea of featuring keynotes from Parsons and Isdell, who are positioned as some kind of global corporate role model, is absurd. Parsons leads a company fighting against Internet Freedom in the U.S. Time Warner, as we know, is opposed to broadband network neutrality. Instead of being honored, Dick Parsons should be scolded. Parsons was also the key executive helping his former boss Gerry Levin and eventual partner Steve Case fool shareholders and investors (including pension funds) when they engineered the AOL-Time Warner deal [Washington Post may require registration]. Parsons was a key leader of the Time Warner effort to further media consolidation in the cable TV business—despite its consequences to freedom of expression and ownership diversity.

Now, Time Warner is working with AT&T, Verizon, Comcast and other allies to thwart the passage of network neutrality safeguards. Instead of being honored, Parsons should be roundly criticized for his lack of real corporate social responsibility.

As for Mr. Isdell. Well, let’s just say that Coca-Cola is actively promoting a digital media-saturated global youth obesity epidemic. Take a look here.

Among the funders of BSR include the Ford Foundation, the Hewlett Foundation, the (get ready for this!) U.S. Department of State, and the U.S. Environmental Protection Agency. I think we should ask for a taxpayer refund and also urge those charitable foundations to press for some serious change at BSR. [The confence has one breakout session titled “The Internet, Freedom of Expression and Privacy.” It should be made a plenary event with both Parsons and Isdell required to listen to real leaders fighting for social justice, including an open and democratic Internet].

Hey, Big Spender: Telco’s and Cable Buy Favor on the Hill

The National Journal’s excellent David Hatch has kept his journalistic eye on all the telecom/cable lobbying money flowing in to Congress. Millions are being spent to keep lawmakers favorably disposed against net neutrality and other broadband safeguards. The majority of AT&T’s giving (67%) has gone to the GOP. Other big spenders include Comcast, BellSouth, Verizon and Time Warner (the latter should spend less on lobbying and more on privacy. But, of course, they really don’t want to).

Read David’s article. See how Speaker Hastert, House Commerce chair Joe Barton and many others have done well for themselves. And then follow the money when the voting on network neutrality comes this fall.

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Telco CEOs to the Internet: We Own You and You Will Never Be Free

Top execs from Verizon, Qwest, and the USTA lobbying machine attacked the concept of network neutrality yesterday. They spoke at the annual lobbyist love-fest run by the Progress and Freedom Foundation. The exec remarks make clear that the leadership of the U.S. telephone industry is hazardous to the Internet’s health. For example, Verizon’s Tom Tauke dismissed concerns about what will happen to our democratic rights now that neutrality is lost. For the former Congressman turned top lobbyist, there are only consumer interests. “…I believe,” he said, “there is now an emerging consensus” that’s it’s all about consumers, reported Communications Daily [Aug. 23, 2006. Subscription only]. He said that calls for “non-discrimination” were coming from advocates of “old rules” (he meant the policies that made the Internet an open forum]. Meanwhile, the chief of the United States Telecom Association–Walter McCormick–said that his members “would oppose any bill with strong net neutrality language.” Qwest CEO Richard Notebaert chimed in that there was “no need for Congress to act where there’s no problem…”

Bolstering the industry’s jeremiad was the chief staffer for House Commerce chair Joe Barton. Howard Waltzman predicted, “there would not be a bill sent to the president that included [non-discriminatory net neutrality requirements] because the House would not agree to it.” Waltzman, the majority chief counsel, also proclaimed that “the Snowe-Dorgan amendment” requiring net neutrality would fail in the Senate.

These are the people—along with their bosses—who are placing the business plans of a few special interests before everyone else now online. Web 2.0 will be shaped to fit their image of broadband unless they are stopped.

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Kill Bill: Steven’s Commerce Committee Posts “Tube” (I mean Telecom) Bill

Here’s an example of the narrow-minded, telecom lobbyist written, communications policies that undermine the development of a U.S. democratic media system in the digital era. Congress–as usual–doesn’t really want to acknowledge why the cable and telephone industry are so afraid of the Internet as we now know it (real competition for ideas and commercial advantage). Leaders such as Sen. Stevens have their heads in the digital sands. By letting a few narrow (but powerful) interests–such as AT&T, Verizon, Comcast, and Time Warner–dominate the distribution of digital media, Stevens/Joe Barton and company are undermining both democratic discourse and competition.
This is the marked-up bill passed by Senate Commerce. It should be called the “Telephone & Cable Monopoly Giveaway and Anti Consumer/Community Act of 2006.” We will be back soon with a full analysis. But it’s revealing that the U.S. public is treated as “subscribers” or “consumers”–not as citizens and others deserving a broad and expanded set of rights.
http:// www. commerce.senate.gov/public/_files/HR5252RS.pdf

PS: The Stevens Committee also released–and then pulled, we were told–a “brochure” promoting its bill. Sen. Stevens apparently feels desperate that his bill–and lack of understanding about how the Internet works–was getting so much bad press. I guess he–and his aides–don’t know much about PR either. Here’s the brochure.

Time Warner’s AOL: Bad Broadband Karma

No matter how Richard Parsons and company spin it, AOL is ultimately a loser. What the press coverage on AOL’s ever-changing business model ignores is that the online service doesn’t have legal access to broadband. AOL is frozen in digital time, able to offer most users only outmoded dial-up access. But AOL’s ignoble demise is fitting—given the company’s abandonment of its call for non-discriminatory “open access” to broadband (the key issue underlying today’s network neutrality debate).

It was AOL, after all, that led the corporate campaign in the late 1990’s calling on the Clinton FCC and the Congress to require non-discriminatory access for ISPs to cable broadband. AOL argued—as net neutrality proponents are today—that the Internet’s success had been based on federal policies requiring phone networks to serve everyone in a fair and open manner. AOL’s Steve Case understood that soon high-speed Internet service would replace dial-up and that cable systems would be the leading provider of broadband. Case desperately sought to have cable operate its Internet access service under the same federal policy safeguards that governed phone company dial-up. (He even backed a non-profit group called “No Gatekeepers”).

The cable industry, including Time Warner, used its political clout to prevent any policy that would have ensured the U.S. broadband system be operated in a non-discriminatory and more competitive manner. Recognizing that AOL would be shut out of broadband and that its future was doomed, it engineered a take-over of number two cable giant Time Warner. Both AOL’s Steve Case and Time Warner’s Gerry Levin shared a similar view for the future of the Internet—to turn it into an even more powerful advertising medium than television. To achieve this goal, Case quickly dropped his call for “open access” for broadband. He foolishly believed that by having AOL merge with Time Warner it would be part of the cable “costa nostra,” its broadband access assured.

On the day the merger deal was announced, Case stood by Levin as open access to broadband became another victim of corporate greed. Levin declared that the new AOL Time Warner was “going to take the open access issue out of Washington, and out of city hall and put it into the marketplace, into the commercial arrangements that should occur to provide the kind of access for as much content as possible.” That was shorthand for: “AOL will have access through us. Everyone else forgetaboutit.”

So now Dick Parsons—who was part of the team that created the most infamously unsuccessful merger in U.S. media history—is once again re-engineering AOL. It may in the short term bring in more ad dollars, helping it fulfill the Case/Levin/Parsons vision that the Internet’s future is interactive TV-like marketing. But AOL’s real problem is that it can’t offer its users broadband since it has no legal access to it—a political cause it gave up when the going got rough in the (admittedly) politically corrupt culture of Washington, D.C. media politics. That’s why we believe the eventual demise of AOL is a fitting conclusion to its own self-serving role in the U.S. broadband debate.