Catalyst Radio News Analysis

News Analysis for February 6th, 2009

Tom - The U.S. Senate unanimously passed a bill last Thursday to delay the national transition to digital television. Efforts to move the transition date to June 12 from February 17 are fueled by worries an estimated 20 million mostly poor, elderly and rural households are not technically ready for the congressionally mandated switch. President Barack Obama supports a delay in the switch. Earlier last week, the Senate passed another bill delaying the DTV transition, but the measure failed in the House of Representatives. The bill is essentially the same that previously passed the Senate, but with a few minor modifications from the House.

Linda - The measure now goes back to the House. Broadcasters are moving from analog to digital signals to give public safety officials more spectrum, especially useful for emergencies, and to improve viewing quality. Only those who watch television on older sets that receive analog signals, and do not get cable, must act to prevent their screens from going black. About 6.5 million households are not ready for the transition, according to the latest data from Nielsen Ratings.

Tom - The Associated Press is reporting this week that some of the nation’s top financial journalists believe reporters dropped the ball as the nation’s economy tumbled toward crisis mode. Sixty-two of 100 journalists surveyed by Abrams Research, a firm started by former MSNBC chief Dan Abrams, criticized the media’s work, suggesting there was an over-exuberance about the economy and a failure to connect the dots as troubles began. The journalists questioned over the past few weeks, mostly reporters from organizations such as CNBC, The Wall Street Journal, The New York Times and others, were promised their identities would be kept confidential in return for their opinions. They split almost evenly on who deserved the most blame for the crisis: 45 said banks and 44 said regulators. Only two believed that the media was mostly to blame, and nine pointed their fingers at consumers. Said one journalist: “Everyone dropped the ball. But the media does not have nearly as much blood on its hands as the financial industry and government.”

Linda - Another reporter wrote: “I blame myself in part,” “I wrote about many of the components of the bust, including the opacity of derivatives, the extremely low interest rates that fueled housing, and declining lending standards. But I failed to put it all together and see how really, really bad things would get.” The survey found that 42 of the journalists believe at least three Fortune 1000 executives will be indicted during the coming year for their roles in the financial crisis. Abrams said he was surprised that the number was so high; 27 of the journalists believed there would be no indictments. Only 30 of the journalists said they thought the current situation will come to be known as a depression. Thirty-one of the journalists said the recession would end by the beginning of next year; most believed it would stretch longer.

Tom - New networks built with stimulus funds will likely have to comply with neutrality standards, under rules proposed by the U.S. House of Representatives and the Senate. The House's American Recovery and Reinvestment Plan passed last Week. It requires high speed and openness on networks built with taxpayer money. The version from the U.S. Senate Appropriations Committee also requires neutral network management and proposes to spend $9 billion on expanding broadband access. That version also offers tax incentives for ISPs that provide 5-Mbps/1-Mbps in underserved areas and faster speeds of 100-Mbps/20-Mbps to areas they already serve.

Linda - Advocacy groups praised the measures. Ben Scott, policy director of Free Press, said the legislation shows that policymakers recognize "the crucial role broadband will play in revitalizing our economy." The plans call for incoming Federal Communications Commission chairman Julius Genachowski to define the terms of network neutrality. Of the $819 billion being spent to shore up the economy, the House set aside $6 billion to expand broadband. Tens of billions of dollars for other projects are likely to benefit the tech sector as well, since IT and data storage are woven into infrastructure projects like the nation's transportation system and energy grids and school modernization, which account for another $113 billion in spending -- not to mention spending on electronic health records.

Tom - Robert Churchwell Sr., the first African-American journalist at a major Southern newspaper, died early Sunday morning in Nashville. He was 91. Mr. Churchwell came to the Nashville Banner in February 1950 to cover the African-American community, and later became the paper's education writer. He often referred to himself as "the Jackie Robinson of journalism," and worked for the Banner for 31 years before retiring in 1981. Mr. Churchwell, born in Clifton, Tenn., served four years in the U.S. Army during World War II in both the European and Pacific theaters. Upon returning, he attended and graduated from Fisk University as an English major before being hired in 1950 at the Banner, a paper known then for its defense of the old South and its segregationist ways.

Linda - Mr. Churchwell began reporting solely on the African-American community in an attempt by the Banner to increase circulation among black readers. The 1998 book The Children — the account by former Tennessean reporter David Halberstam of the Nashville civil rights movement — said Mr. Churchwell met with hostility in his own newsroom and among some African-Americans unhappy with his decision to work at the Banner. In Halberstam's account, Mr. Churchwell was often left out of meetings and retreats held by Publisher Jimmy Stahl man, who did not publish stories on Nashville's sit-ins. Commented retired Banner photographer Jack Gunter, who worked with Mr. Churchwell throughout his career: "He was a really great person, a great American, and I was proud to be with him."

Tom - The New York Times is reporting that last month the music industry and Apple agreed on new terms for pricing on iTunes, Apple’s online music store. Behind the scenes, however, the article maintains the relationship remains as tense and antagonistic. The announcement on Jan. 6 seemed to signal a rapprochement between the music industry and its biggest distributor: record companies gave up their demand for copyright protection (called digital rights management) and Apple allowed flexible pricing, so the labels could charge more for new or popular tracks. But according to one music industry executive involved in the negotiations, Apple’s primary goal was securing distribution of music over its iPhone, as mobile phones are expected to become an increasingly important outlet for music.

Linda - Disagreements over the timing of the changes also resulted in a particularly tense conversation on Christmas Eve between Steven P. Jobs, the chairman and chief executive of Apple, and Rolf Schmidt-Holtz, the chairman of Sony Music. A spokesman for Apple declined to comment, as did a representative for Sony Music. But chatter about Mr. Jobs’s combative tone on the call ricocheted around the music industry, and it was regarded as another display of his tough bargaining tactics, made possible by Apple’s position as the dominant seller of music. Mr. Jobs recently announced that he would step away from his day-to-day duties because of an illness. While Mr. Jobs’s health problems have raised questions about Apple’s operations, music executives expect their tense relationship with the company to continue.

Tom - One result of the dicey relationship is the increasing search by the music industry for a future in which Apple is not so dominant. Many executives say they believe the future of music buying is over the mobile phone, not from buying individual songs but by paying a monthly subscription fee to hear vast database of music. But right now that is a tiny business in the United States. Forrester Research estimates that downloading music from Web stores like iTunes generated $1.5 billion in 2008, compared with just $70 million in wireless sales. Apple could win in this arena as well with its iPhone, but the music industry is looking to others, like Nokia, which offers its Comes With Music service, to become viable players.

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