May 2005

There’s been a lot written in recent months about the “death of old media” in general and the demise of newspapers in particular. Regardless of where you get your news, the headlines all scream that the days of old media are numbered. Here’s a small sample of some of my recent favorites:

>”The Collapse of Big Media” (a special cover story / feature section in the most recent Wilson Quarterly)
>”Newspapers Struggle to Avoid Their Own Obit” (Christian Science Monitor, 4/25)
> “Print Insists It’s Here to Stay” (New York Times, 5/2)
> “Unread and Unsubscribing” (a George Will Washington Post column, 4/24)
> “Newspaper Circulation Dives As Readers Get News From Web Sites” Investors’ Business Daily, 5/16)
> “Farewell to Newspapers: Will Increased News Options on the Web Lead to the Death of Newspapers?” (Michael Malone on ABC News.com, 5/24)
> “Hard News: Daily Papers Face Unprecedented Competition Including From Their Own Online Offspring” (Washington Post, 2/20)

Again, that’s just a small sample. Every day there seems to be another person wanting to pen old media’s obituary. In fact, today’s Wall Street Journal featured an entire pull-out section entitled “How Old Media Can Survive in a New World.” The story’s subtitle was the real kicker: “The Digital Revolution Threatens to Push the Traditional Newspaper, Television, Music and Advertising Industries Into the Dustbin of History.”

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In its biggest decision since new chairman Kevin Martin took over, the FCC voted last week to impose federal regulation on Internet telephone service. Specifically, the Commission required VoIP providers to provide 911 connections as a standard feature of their service within 120 days. The decision was not surprising, and is something consumers were demanding in any case. For that reason fellow Techliberation blogger Tim Lee gave the decision positive marks. I’m less sanguine. Not only may the decision chill some competition in VoIP markets, but–perhaps more important–the extent of the ruling doesn’t bode well for the new chairman’s commitment to minimal regulation of new technologies.

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The FCC recently voted to require VoIP providers to offer full 911 support.

Obviously, my initial libertarian reaction is that the government should butt out and let consumers choose the phone service they like. If 911 service is important to them, they can choose a provider that offers it. If none do, they can stick with good old Plain Old Telephone Service. No one is being forced to get VoIPed.

But I think it’s not crazy to argue that 911 service is one of those things you don’t really think about until you need it, and then it’s too late. Moreover, one can’t always tell if one has 911 service–you can’t exactly call 911 to find out if the service is working. So I’m not sure I’m necessarily opposed to a 911 mandate as such. In the POTS world, at least, it’s minimally intrusive and probably saves lives.

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Tonight I’ll be moderating an America’s Future Foundation roundtable discussion on broadcast indecency and you’re all invited. Speakers will include Drew Clark of the National Journal, former former radio news anchor and reporter Ken Wolfe, and Marvin Johnson of the ACLU. The event will take place at the Fund for American Studies (1706 New Hampshire Ave. NW). Drinks will begin at 7:00 p.m., with dinner and discussion following at 7:30. There’s a $5 cover for non-members, but membership is only $35 and that gets you in to a year’s events. Hope to see you there!

How quickly we all forget the collective hand-wringing and mass hysteria that was generated by the announcement just five years ago that AOL and Time Warner would be merging. As journalist Matt Welch has noted, when the deal was announced, the Chicken Little crowd came out in full force with claims that the AOL-Time Warner deal represented “Big Brother,” “the end of the independent press,” and a harbinger of a “new totalitarianism.”

As it turned out, Welch notes, AOL-Time Warner was “the Big Brother who never was.” In fact, by April of 2002, just two years after the marriage took place, the firm had reported a staggering $54 billion loss. Losses grew to $99 billion by January of 2003. And then in September of 2003, Time Warner decided to drop AOL from its name altogether. It would be an understatement to say that the merger failed to create the sort of synergies (and profits) that were originally hoped for.

And as Fortune reported yesterday, Time Warner CEO Dick Parsons announced that he would consider entirely spinning off AOL as a separate stock if the division’s latest business strategy doesn’t work.

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FCC Commissioner Michael Copps never ceases to amaze me. Like a fire-and-brimstone preacher prophesizing the impending apocalypse, his speeches sometimes border on the neurotic rantings of madman.

In late 2003, for example, he delivered an entertaining sermon at the New America Foundation entitled: “The Beginning of the End of the Internet? Discrimination, Closed Networks, and the Future of Cyberspace.” In the speech, Copps lamented that the “Internet may be dying” and only immediate action by regulators can save the day. Copps laid on the sky-is-falling rhetoric fairly thick: “I think we are teetering on a precipice . . . we could be on the cusp of inflicting terrible damage on the Internet. If we embrace closed networks, if we turn a blind eye to discrimination, if we abandon the end-to-end principle and decide to empower only a few, we will have inflicted upon one of history’s most dynamic and potentially liberating technologies shackles that make a mockery of all the good things that might have been.”

Who knew the end was so near? Of course, it isn’t really. Copps and the “Net commons” crusaders have been preaching this gloom-and-doom gospel for some time now in an effort to impede governance solutions based on property rights in the communications and high-tech sectors and supplant them with collective governance structures.

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The dog-bites-man story of the past week was no doubt a petition filed at the FCC by the Consumer Federation of America, Consumers Union and US PIRG urging rejection of Verizon’s acquisition of MCI. The petition (virtually a carbon-copy of a filing by the same groups on the SBC-AT&T deal) was rather breathless in tone–warning of all kinds of consequences should the merger go through–destroyed competition, higher prices, bad breath, and so on. The chicken little claims are groundless–as discussed here and here both mergers are the natural consequence of the decline of the long-distance industry, and are a sign of a healthy, not a troubled industry. But what got my attention was an “I told you so” reference, arguing that the FCC made a mistake in OKing previous Bell mergers in 1999-2000, specifically SBC-Ameritech and the Bell Atlantic-GTE merger which formed Verizon. Specifically, they say:

“The Commission simply cannot look back on the carnage of the past six years and conclude that its decision to allow a handful of incumbents to dominate the local telecommunications market has served the public interest.”

What in heaven’s name are they talking about?

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Cherchez le Web

by on May 12, 2005 · 2 comments

The Wall Street Journal today reports on France’s efforts to create a competitor to Google. As described in an earlier post, France’s ever-vigilent culture wardens see Google as a threat. Specifically they find galling (pun intended) Google’s initiative to scan millions of books from US and UK libraries into its database. This, says French President Chirac, presents “immense danger” of “cultural standardization.” France has managed to get the EU on its side in fighting the threat, with some $77 million committed to an EU book-scanning project, and $46 million toward other projects, including development of a EuroGoogle. All this despite the fact that Google seems perfectly willing to scan European volumes as part of its own project.

Strangely enough, despite the concerns of the French government, the French themselves seem unperturbed by Google–it has a higher share of the search engine market (66%) in France than it does in America (47%). No doubt French websurfers are busy Googling the address of their nearest McDonald’s.

There’s an important piece on B1 of today’s Wall Street Journal about the growing market for mobile media content. In particular, the article focuses on the potential for sexually oriented content to be a major driver in this market over the next few years. Already, several cell phone carriers or content providers are developing such services.

That should hardly be surprising. One of the uncomfortable realities of the media marketplace is that sexually oriented content has been wildly popular–indeed, it has been the ultimate “killer app.” You can go back to the early history of newspapers, magazines, photography, cable, satellite, and the Internet and see how sexual content has been a major driver of growth for each medium. So, it will be the same for cell phones. That’s why today’s WSJ article uses the creative title: “Sex Cells.”

As I’ve mentioned in several previous posts (here, here and here), this raises the possibility for cell phone content regulation by federal officials. There have been some rumblings in Washington already about the need for the wireless industry to take steps to shield children from potentially objectionable material even before it hits the market. But there’s no denying that this content will soon be available. The question is, once that happens, will broadcast TV and radio “indecency” controls be imposed on wireless content in coming years?

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“Orphan works” are artistic works still under copyright but whose owner cannot be identified. Because the owner can’t be found, these copyrighted works are not able to be used and society loses out on their creative utilization. The Copyright Office has a proceeding underway on how to solve the orphan works problem. In comments I and Rudy Rouhana, a law student at Catholic University, filed earlier this week, we propose a way that the market can be the Daddy Warbucks for orphan works.

Competing copyright registries, similar to that for Internet domain names, could help provide incentives for the registration of works, especially digital works. What is needed is a registry system that conforms to the wide range of uses and values in copyright, ubiquity of copyrighted works, and easy registration process. A compulsory registration requirement would go against the no formalities requirement of the Berne Convention for the Protection of Literary and Artistic Works. However, this treaty does not preclude private registries. Private registries that are not compulsory but have legal recognition might provide the proper incentives for creators to register their works, thus diminishing the future instances of orphan works.

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