Category: FCC

IAB and its Proposed Privacy Guidelines: Will Fail to Effectively Protect the Public

So relieved where some in the interactive ad business when they read the FTC’s staff proposed privacy principles released last month that commentators described the reaction as the industry had “dodged a bullet” and “breathed a sigh of relief” [“FTC Online Ad Targeting Guidelines: Industry Breathes A Sigh Of Relief”].

Now Paidcontent describes plans underway by the IAB to offer “privacy standards,” via a “15-member working group,” that includes Time Warner, Microsoft, Yahoo! and others [“Online Ad Industry Groups Take Steps To Self-Police”]. According to the January 4, 2008 article by David Kaplan “[T]he IAB task force will address issues of consumer notice and choice, in terms of deciding the context for selecting opt-in or opt-out.”

IAB lobbyist Mike Zaneis says in the article that “[T]he level of appropriate choice needs to be flexible…consumer regulation will prove to be more efficient and powerful than government regulation.” Zaneis considers the campaign against Facebook that resulted in some modest–and ineffective in my view–changes in its data collection system as an illustration of “consumer regulation.” It’s clear that the IAB is incapable of developing a policy that will protect consumers. Anyone who understands the contemporary dimensions of the interactive marketing industry–and has the public welfare in mind–should recognize what is required. The IAB will not be taken seriously if it can’t deliver the truth (it’s so far failed to protect the public from troubling online lead generation practices, for example. See our November 1, 2007 FTC filing). Yahoo!, Microsoft, Time Warner and others on the committee should lead–and not follow–advice from the IAB that will lead to prolonged political conflict–in Europe, in Congress, at the FTC and FCC, and with the incoming Administration.

Real governmental rules are required–including measures that effectively protect every consumer and also address vulnerable groups and sensitive marketing issues. The IAB’s old school Beltway mentality will likely give online advertisers a bad name. Where are the ad industry’s thoughtful leaders who can help steer the IAB in an honorable direction?

FCC Chairmen and the Revolving Industry Door: A Higher Standard is Required

The list of former FCC chairs working in the media and communications business–either as lobbyists, consultants, or investors–is in illustration of why the commission is badly in need of reform. One day a chair is overseeing a media company–or a policy directly affecting it. The next day–after they leave office–they are working for the company or the industry. We really require FCC commissioners who are independent of the media and communications industry–before and after they leave the commission.

Michael Powell took a job as senior advisor at the buy-out firm Providence Equity Partners. Since he joined the firm, they have acquired–in whole or part–TV stations, a spanish language network, other media properties. Take a look at this report from the Los Angeles Times about the Orange County Register and note the role of Powell’s Providence. The deal was made prior to Powell joining the firm, but he’s there now, while these layoffs are happening [my italics]:

“Newsroom staffers described a morose — and tense — newsroom. Dragging out the layoffs for a week, they said, seemed particularly cruel and stressful.

“The way they’re doing this is just horrible,” one longtime staffer said. “It’s like, ‘Thanks for everything. Get out. Here’s some boxes, start packing.’ ”
…In 2004, privately held Freedom Communications Inc., parent of the Register, worked out a $1.3-billion buyout deal that saw more than half of the members of the founding Hoiles clan cash out their holdings and private equity firms Blackstone Group and Providence Equity Partners purchase nearly 40% of the shares. At the time, insiders said the investors borrowed a little less than $1 billion and provided about $400 million more in private capital to finance the deal.”

Then we have former Clinton appointed chair Reed Hundt engaged in his favorite twin occupation of media industry guru/investor. Hundt had been helping lead the effort by his Frontline Wireless company to have the commission approve policies compatible to his interests. Even former Reagan-era FCC chair Mark Fowler is working with Hundt’s Frontline.

FCC reform should be at the top of the public interest policy agenda, esp. with the future of democratic communications at stake.
source for Powell/Provide/OC Register story: “O.C. Register lays off workers: The newspaper will also trim news space to reduce costs as its revenue decline.” Kimi Yoshino. Los Angeles Times. Aug. 7, 2007.

Ad Age’s Perceptive Piece on Murdoch and WSJ Future

We think this point by Matthew Creamer deserves a highlight:

“A News Corp.-owned Wall Street Journal begs a question: In a world where the attention of consumers and hence advertisers is divided among video games, “American Idol” and LOLCats, can a business built solely to deliver news — especially long, serious articles about complicated topics — remain independent and successful? … The nation’s leading purveyor of business information, still an agenda-setter for the planet’s biggest economy, becomes a cog in a vertically integrated, multinational creator and distributor of entertainment, a machine engineered to pump out synergies such as “The Simpsons” movie or, more scarily, that aborted O.J. Simpson extravaganza, rather than Pulitzers… Sure, Mr. Murdoch will pump capital into the paper, allowing it to build out its international operation, but some are predicting that one effect of that bulking up could be to further his business goals, especially in China. And Journal reportage, now a means to the purist end of watchdogging the business community, will be called upon also to add more grist to that massive multimedia content mill, in the form of the Fox Business Network — which is already being positioned as more pro-business than CNBC, absurd as that sounds.”

from: “Stand-Alone News Brands Are Doomed.” Matthew Creamer. Advertising Age. Aug 6, 2007 [sub may be required]

As Murdoch-run WSJ Plans to compete with NYT, FCC Must Review its status as “national” newspaper

We have urged several FCC commissioners to support a review of the Wall Street Journal and its relationship to the New York City DMA. We believe that News Corp.’s plans to have the Journal compete with the New York Times, among other factors, require serious scrutiny by the commission. The broadcast-newspaper cross-ownership safeguard, we suggest, may apply in this case.

As the Journal reported on August 1, 2007:

“Just as vulnerable could be the New York Times, published by New York Times Co., and Pearson PLC’s Financial Times. In a May letter to Dow Jones’s controlling shareholders, the Bancroft family, Mr. Murdoch said he would want Dow Jones properties to “reach a broader domestic audience by expanding the content base.” He emphasized yesterday he “would not want to step back from any of the business coverage” but he would “like to add more general news,” repeating comments about plans to expand the Journal’s Washington bureau. He said that to accomplish his goal there “could be another four pages a day” for news coverage. A person with knowledge of his plans said Mr. Murdoch believes more general news and political coverage would make the Journal a stronger rival to the New York Times, which has a bigger share of consumer advertising.”

Ad Age reported [listen to Nat Ives video] that News Corp. is even considering adding sports news to the Journal, as it competes “head-to-head” with the Times.

As for calls for a national cross-ownership safeguard, we point to the recommendations in our new book which describe a new model for measuring media diversity in the digital era. But if new safeguards are to be enacted, foremost should be policies supporting sustainable community and national services that provide for both diverse expression–and news gathering/reporting–in the digital and multi-platform interactive era. In other words, we should be focused on adding what is missing and will still be ignored by the mainstream. They haven’t got it right so far–and won’t in the future.
Source for Wall Street J. quote: “Deal Will Test a Media Titan’s Instincts:
Rupert Murdoch’s Long-Sought Purchase
Of Dow Jones Could Change Business Journalism”
By MARTIN PEERS, SUZANNE VRANICA and STEPHANIE KANG
August 1, 2007; Page B1

Google Buys More Lobbyists and Influence

excerpt from Washington Post: “…Google went on a hiring spree and now has 12 lobbyists and lobbying-related professionals on staff here — more than double the size of the standard corporate lobbying office — and is continuing to add people. Its in-house talent includes such veteran government insiders as communications director Robert Boorstin, a speechwriter and foreign policy adviser in the Clinton White House, and Jamie Brown, a White House lobbyist under President Bush.

Google has also hired some heavyweight outside help to lobby, including the Podesta Group, led by Democrat Anthony T. Podesta, and the law firm King & Spalding, led by former Republican senators Daniel R. Coats (Ind.) and Connie Mack (Fla.). To help steer through regulatory approvals in its proposed acquisition of DoubleClick, an online advertising company, Google recently retained the law firm Brownstein Hyatt Farber Schreck.”

from: “Learning from Microsoft’s Error, Microsoft Builds a Lobbying Engine. Jeffrey H. Birnbaum. June 20, 2007

PS: And that’s before Johanna Shelton, former aide to Rep. John Dingell and FCC Commissioner Adelstein, starts working for Google on Monday!

Congressional Dems Helping Media Consolidation?

When heavyweights like Sen. Dick Durbin, Rep. Rahm Emanuel and others in the Illinois Congressional delegation write to the FCC Chairman about the Tribune Company’s request for media ownership waivers, it’s not so subtle message is: help this giant constituent out, asap!” The May 18th letter, urged Chairman Martin and the other Commissions to act “expeditiously and to avoid administrative delay.” “We believe that prompt consideration of the merits of the Tribune Company applications is in the public interest and would be very grateful if you would give this matter your personal attention and act upon these applications in a timely fashion.” They were joined by former Speaker Rep. Denny Hastert (a total of 14 out of 19 members of the state’s delegation signed the letter). Broadcasting & Cable magazine explained [reg. may be required] that “Tribune has to file for transfer of control applications for its TV stations as it moves to take the company private. Some of those stations have been operating under a waiver of the FCC’s newspaper-broadcast cross-ownership rule.”

While the letter says the lawmakers don’t take a position on the merger-related request, it serves as placing pressure on the FCC to help out Tribune. Such a request, of course, should receive a complete and in-depth review by the agency, and not be rushed through. But the Durbin/Emanuel/Hastert letter suggests that many from both political parties–as usual–are inclined to help out powerful media companies. The letter from Durbin and the Dems should have said: FCC, we’re worried about media consolidation and you better take your time and do this right!

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Youth Health Crisis: New Report on Digital Marketing of Food & Beverage Products

I co-authored a report released yesterday. For those concerned about the obesity crisis, it’s a useful resource. It also offers a good overview about the forces shaping the global media system. It’s available here.

Revolving Door Watch on Michael K. Powell: Consolidating the Media for a Living

Is it ironic, tragic, or absurd that Mr. “Deregulator” (meaning end all rules because the market knows best) Michael K. Powell is working for the firm which just scooped up 56 Clear Channel TV stations for $1.2 billion? The former FCC chairman aggressively pushed to end rules that placed limits on the ownership of multiple broadcast television outlets by a single company. Guess what Powell’s Providence Equity Partners got in the Clear Channel deal, according to Media Daily News: “The portfolio houses a series of duopolies and triopolies, including two stations in top-50 markets, such as Cincinnati, Salt Lake City and Jacksonville. Twenty-seven stations are affiliated with the Big 4 networks.”

No FCC official should be permitted to work in any media industry related commercial venture for at least ten years after their term. That air blown-in by the FCC’s golden revolving door stinks.

PS: We should have acknowledged that Mr. Powell—who eliminated broadband network neutrality rules while at the FCC—has also just joined the board of directors for Cisco. Cisco has also been opposed to network neutrality, since it makes the equipment designed to give phone and cable companies control over broadband content flow.