Appeals Court Rejects More Media Consolidation

Stephen Lendman
Saturday, July 09, 2011
http://sjlendman.blogspot.com/2011/07/appeals-court-rejects-more-media.html

In six editions of "The Media Monopoly" and subsequent update titled, "The New Media Monopoly," Ben Bagdikian explained how deregulation let major media corporations consolidate to oligopoly size.

Since 1983, the number of corporations owning most newspapers, magazines, book publishers, recorded music, movie studios, television and radio stations shrunk from 50 to a handful, including Time-Warner, Disney, News Corp., Viacom, Comcast, and Bertelsmann AG.

In 1996, Telecommunications Act backers claimed it would increase competition, lower prices, and improve service. In fact, TV station ownership limits were raised to let broadcast giants own twice as many local stations as before, charge what they wished, and dismiss public concerns in the process.

For radio, all national ownership limits were removed, and, in large urban areas, one company could own up to eight stations in a major market. In smaller ones, two companies could own them all.

The bill also consigned new digital television broadcast spectrum space only to current TV station owners, and let cable companies increase their local monopoly positions. Media and telecom giants were clear winners. Consumers lost out.

Yet in October 2007, FCC chairman Kevin Martin proposed lifting the 1975 media cross-ownership rule, forbidding one company from owning a newspaper and television or radio station in the same city even though some conglomerates already did like News Corp. In November, he amended his plan to allow cross ownership only in large markets where competition already exists, with deceptive loopholes through waivers to permit it anywhere.

In 2003, FCC Michael Powell also tried loosening ownership rules, despite opponents saying relaxing them would further stifle debate, inhibit new ideas, weaken diversity, and more greatly consolidate oligopoly power.

In June 2004, the Third US Circuit Court of Appeals ruled favorably for the Media Access Project (MAP) in Prometheus Radio Project v. FCC, ordering the agency to reconsider its ill-advised ownership rule changes that included:

-- ending cross-ownership restrictions that prohibits a company from owning a newspaper and TV or radio station in the same city;

-- eliminating the previous ban on radio/TV cross-ownership, and replacing both types with a single set of cross-media limits;

-- a dodgy "diversity index" based on assigning varying weights to different media to determine if markets retained enough. It not, ownership limits would be restricted, but the formula proposed was deceptive and dishonest, including for smaller markets; and

-- redefining National Market Share to let ownership ceilings rise unfairly.

In fact, the public overwhelmingly wants more, not less consolidation. On July 7, an important victory was won when the same Third Circuit Court issued its long-awaited verdict, throwing out proposed FCC rules changes.

The Prometheus Radio Project (PRP) "builds participatory radio as a tool for social justice organizing and a voice for community expression. (It) advocate(s) for a more just media system, and help(s) grassroots organizations build communications infrastructure to strengthen their communities and movements."

PRP explained the court decision on its web site, accessed through the following link:

http://www.prometheusradio.org/node/2532

Headlining "Federal Court Rejects Media Consolidation in Prometheus vs. FCC," it hailed PRP's "second historic victory" this year, saying:

The Third Circuit Court rejected FCC rules changes "that would have allowed one company to own a newspaper and broadcast stations in the same market," despite some already doing it.

Other FCC broadcast ownership limits were also upheld, as well as agreement that proposed changes failed to consider how women and minorities would be affected.

Media Access Project's PRP attorney Andrew Jay Schwartzman hailed the decision, saying:

"We won on almost every point. This decision is a vindication of the public's right to have a diverse media environment," despite how little now exists, except through alternative media sources, especially online.

On January 4, PRP won another victory when the Community Radio Act became law, permitting thousands of new stations nationally. Praising the decision, PRP's Policy Director Brandy Doyle said:

"Media matters. Thousands of people fought to pass the (law), and thousands more spoke out loudly when the FCC tried to further consolidate broadcast media." However, despite important victories, "we must continue to push the FCC to do the right thing for community radio."

On July 12, ahead of implementing the Local Community Radio Act, "the FCC will again propose new rules." Key is ensuring low-power urban FM community radio stations channel space as Congress mandated.

"Commercial broadcasters must share the airwaves with the urban churches, schools, and non-profits who have waited more than a decade to serve their communities with radio."

On July 7, a Free Press.net press release also hailed the court ruling. Corie Wright (who argued with Schwartzman for PRP) called it:

"a sweeping victory for the public interest. In rejecting the arguments of the industry and exposing the FCC's failures, the court wisely concluded that (media) competition....not more concentration will provide Americans with the local news and information they need and want."

Nonetheless, she said dominant media giants still lobby hard for rules changes, very much against the public interest that won this battle but can't relax.

This win, however, prevented one company from owning a city's dominant newspaper, eight radio stations, three television stations, and a major cable operation, shutting out most other voices entirely.

Distorted Major Media Coverage

On July 7, New York Times writer Bill Carter headlined, "Court Overturns FCC Cross-Ownership Rule," downplaying the decision's importance, saying:

"In a narrow ruling unlikely to have an immediate effect on current broadcasters," the court "did not rule on the merits" of FCC's proposed changes. "Instead, (it) said that the FCC had failed to allow sufficient time for official notice and public comment on them," distorting what, in fact, happened in typical Times fashion, suppressing vital information from its readers.

Wall Street Journal writer Amy Schatz was no better, headlining, "Appeals Court Bumps Up Pressure to Overhaul Media-Ownership Rule," unsurprisingly siding with media giants while ignoring the decision's importance.

Bloomberg's Sophia Pearson and Todd Shields also offered a distorted, biased account, headlining, "FCC's Rules on Media Cross-Ownership Are Vacated by Federal Appeals Court," saying:

The court ruled that the FCC "failed to provide adequate notice," downplaying the decision's importance like The Times, including by quoting Newspaper Association of America president John Sturm calling the decision "very disappointing. We're back to the original rule that was passed in 1975. It strains credulity to understand why that is."

In fact, following daily major print and broadcast media explains clearly why less (lots less), not more, concentration is needed.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour

Comic Book Creator Seek to Recapture Copyrights

http://online.wsj.com/article/SB125349626919226359.html

Heirs of Comic Book Creator Seek to Recapture Copyrights
By LAUREN A.E. SCHUKER
SEPTEMBER 21, 2009

The heirs of late comic-book creator Jack Kirby served 45 copyright-termination notices to Marvel Entertainment Inc., Walt Disney Co. and other Hollywood studios relating to comic-book characters and stories created by Mr. Kirby, including "X-Men" and "The Fantastic Four."

Mr. Kirby's four children are seeking to recapture as early as 2014 copyrights to characters he created. Those creations and co-creations are currently owned by Marvel. But if the heirs gain control of the copyrights, they could license them without Marvel's permission, or at least secure a share of the profits generated by those characters.

The heirs served the notices under the auspices of the U.S. Copyright Act, which permits authors and their heirs to terminate old copyright grants after a long waiting period, allowing them to recapture the rights for their own use.

A spokeswoman for Disney said: "The notices involved are an attempt to terminate rights seven to 10 years from now and involve claims fully considered in the acquisition."

Disney last month agreed to acquire Marvel for $4 billion.

In a federal court lawsuit that hasn't been fully resolved, the heirs of "Superman" co-creator Jerry Siegel recently recaptured limited rights relating to the original "Superman" from Time Warner Inc.'s Warner Bros. and DC Comics.

—Ethan Smith contributed to this article.

Write to Lauren A.E. Schuker at lauren.schuker@wsj.com

Time Warner Backs Away from Pricing Change

http://www.businessweek.com/technology/content/apr2009/tc20090416_696468.htm

Internet April 16, 2009
Time Warner Cable Backs Away from Pricing Change
Amid widespread consumer outrage, the No. 2 U.S. cable provider is putting on hold plans to change the way it charges for Internet access
By Tom Lowry

Time Warner Cable caved—for now. In the face of widespread consumer outrage over its plan to change its pricing for Internet access, the company said it will shelve plans to implement the new price formula in several new markets.

The about-face comes just two weeks after BusinessWeek.com first reported that Time Warner Cable (TWC) would roll out usage-based pricing to four cities. The No. 2 U.S. cable operator hoped to begin charging high-speed data subscribers for the amount of bandwidth they used in Rochester, N.Y., Austin and San Antonio, Tex., and Greensboro, N.C.

Time Warner Cable CEO Glenn Britt said the consumption-based model was needed to maintain an expensive, burdened broadband network, citing other countries that for years have had broadband-metering models, including Canada. But the plan unleashed a firestorm among the public and politicians who say the new method is discriminatory and would stifle innovation. Some politicians called for congressional hearings.

Surprised by Backlash

Britt and his executive team appear to have been unprepared for the pushback from consumers and are putting the plan on ice. On Apr. 16, Britt issued a statement saying: "It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption-based billing." Time Warner won't broaden its testing of the plan "until further consultation with our customers and other interested parties, ensuring that community needs are being met," Britt said.

What's more, Time Warner Cable said it would be working to make measurement tools available as soon as possible so consumers can learn just how much bandwidth they consume on average. For Britt, the episode was not exactly an auspicious start at the helm of a newly independent Time Warner Cable, fully spun off from parent Time Warner on Mar. 30. Shares of the company rose 2.7% to 29.58 on Apr. 16.

From the moment the news broke on Mar. 31, the blogosphere was filled with vitriolic posts and e-mails from Internet users slamming Time Warner Cable's plans. Within days, hearings were being held in Rochester and Austin. Rochester Congressman Eric Massa threatened to introduce legislation aimed at bringing more broadband competition to his home city. Massa also said he wouldn't rule out imposing price limits on Time Warner Cable, which he called a "functioning monopoly."

On Apr. 16, U.S. Senator Charles Schumer (D-N.Y.) and founders of a Web site called Stop The Cap! stood on the steps of Time Warner's Rochester offices to celebrate the company's decision to abandon broadband metering for now. Among the rally cries posted on Stop The Cap! over the past two weeks: "Caps are for bottles, not broadband, in the United States of America."

Lowry is a senior writer for BusinessWeek in New York.

Supreme Court declines to hear cable DVR case

http://news.cnet.com/8301-1023_3-10141706-93.html

January 13, 2009
Supreme Court declines to hear cable DVR case
Marguerite Reardon

The Supreme Court has declined to hear what could be a watershed copyright case that has the potential to make it easier for people to record and watch their favorite movies and TV shows at home.

On Monday, the Supreme Court asked the U.S. Department of Justice to look at a case involving a new service proposed by Cablevision that allows people to record broadcast TV shows and movies on a digital video recorder that sits in Cablevision's network instead of in their living rooms.

Cablevision started testing its new remote storage-digital video recorder service called Mystro TV in 2003. And the TV networks and Hollywood film studios sued the cable operator in New York, seeking to block the service. The networks and studios have argued that recording programming in this way violates copyrights.

The case has been winding its way through the court system for three years. In 2007, a U.S. District Court in New York barred Cablevision from launching the service after the cable operator lost its initial suit. Cablevision appealed the decision. And in August 2008, a U.S. appeals court overturned the lower court's ruling, siding with Cablevision.

The TV networks and movie studios appealed to the Supreme Court in October, arguing that Cablevision was violating the law because it did not plan to pay a licensing fee to make copies of their TV shows.

But Cablevision has argued that it is the cable subscriber who is determining what is copied. The networked DVR only sits in the Cablevision network where the content is stored and accessed. The company wants to keep this technology in its network because it is more efficient and cost effective to deliver the service than providing every home with multiple DVR set-top boxes.

Cablevision, which services over 3 million customers in the New York metropolitan area, claims each set-top box costs about $100. This cost is passed on to consumers who must pay a rental fee for their DVR set-top-boxes. The cable operator also incurs costs for installing and maintaining this equipment. Eliminating the need for one of these boxes in the home could reduce Cablevision's capital costs, and it could also help reduce the cost of the service for consumers.

It could also allow consumers to get rid of their set-top boxes altogether or at least get smaller devices that don't take up as much room as the bulky DVR boxes of today. And because the DVR function is housed in Cablevision's network instead of at home, consumers also won't have to deal with the hassle that often comes along with housing a relatively complex piece of networking equipment in their homes.

Experts agree that how the legal questions surrounding the case are ultimately decided will likely have a huge effect on the TV industry. Some believe it could even be as important a decision as the 1984 Supreme Court decision to allow consumers to record TV shows and movies on home videocassette recorders. That decision paved the way for the VCR, and it also cleared the way for DVR services that were first offered by Tivo and are now a mainstay of every cable, satellite, and phone company offering paid TV services.

It's been reported that Comcast and Time Warner Cable are also planning to introduce a networked DVR service if Cablevision wins its legal battles. And Verizon, which offers TV service through its Fios service, has also said it would consider offering a similar service.

For now the Supreme Court has sent the case to the Justice Department to consider. But the solicitor general at the Justice Department still has the option to toss the case back to the Supreme Court. If that happens, it wouldn't be heard until fall.

AT&T to try limits on monthly Internet traffic

http://apnews.myway.com/article/20081104/D9487NGO0.html

AT&T to try limits on monthly Internet traffic
Nov 4, 2008
By PETER SVENSSON

NEW YORK (AP) - AT&T Inc., the country's largest Internet service provider, is testing the idea of limiting the amount of data that subscribers can use each month.

AT&T will initially apply the limits in Reno, Nev., and see about extending the practice elsewhere.

Increasingly, Internet providers across the country are placing such limits on the amount of data users can upload and download each month, as a way to curb a small number of "bandwidth hogs" who use a lot of the network capacity. For instance, 5 percent of AT&T's subscribers take up 50 percent of the capacity, spokesman Michael Coe said Tuesday.

But the restrictions that Internet providers are setting are tentative. And the companies differ on what limits to set and whether to charge users for going beyond the caps.

Starting in November, AT&T will limit downloads to 20 gigabytes per month for users of their slowest DSL service, at 768 kilobits per second. The limit increases with the speed of the plan, up to 150 gigabytes per month at the 10 megabits-per-second level.

To exceed the limits, subscribers would need to download constantly at maximum speeds for more than 42 hours, depending on the tier. In practice, use of e-mail and the Web wouldn't take a subscriber anywhere near the limit, but streaming video services like the one Netflix Inc. offers could. For example, subscribers who get downloads of 3 megabits per second have a monthly cap of 60 gigabytes, which allows for the download of about 30 DVD-quality movies.

The limits will initially apply to new customers in the Reno area, AT&T said. Current users will be enrolled if they exceed 150 gigabytes in a month, regardless of their connection speed.

"This is a preliminary step to find the right model to address this trend," Coe said. The company may add another market to the test before the end of the year, he said.

Customers will be able to track their usage on an AT&T Web site. The company will also contact people who reach 80 percent of their limit. After a grace period to get subscribers acquainted with the system, those who exceed their allotment will pay $1 per gigabyte, Coe said.

Comcast Corp., the nation's second-largest Internet service provider and AT&T's competitor in Reno, last month officially began a nationwide traffic limit of 250 gigabytes per subscriber. Comcast doesn't charge people extra for going over the limit, but will cancel service after repeated warnings. Previously, it had a secret limit.

Two other ISPs, Time Warner Cable Inc. and FairPoint Communications Inc., are planning or testing traffic limits as low as 5 gigabytes per month, which is easily exceeded by watchers of DVD-quality online video.

Among the largest ISPs, Verizon Communications Inc. is a holdout, and has said it does not plan to limit downloads.

Yahoo, AOL in due diligence on combination

http://www.reuters.com/article/innovationNews/idUSTRE49S7EQ20081029

Yahoo, AOL in due diligence on combination: source
Wed Oct 29, 2008
By Anupreeta Das

SAN FRANCISCO (Reuters) - Yahoo Inc and Time Warner Inc's AOL unit are looking at each other's books to figure out how much money they could make together and where costs can be saved, a person familiar with the talks said on Wednesday, indicating a merger may finally be on the way.

While noting a deal was not imminent, the source said the two companies have engaged in "meaningful" due diligence about a possible combination for the past couple of weeks.

Talks are focused on how to integrate AOL's content and advertising business into Yahoo, said the source, who was not authorized to speak publicly because the discussions are confidential.

Yahoo and Time Warner began talks several months ago, when the Internet company was looking for an alternative growth strategy to fend off a $47.5 billion takeover bid from Microsoft Corp.

Yahoo had repeatedly rejected Microsoft, which finally withdrew its $33-per-share proposal in June after Yahoo cut a search advertising partnership with Google Inc.

But the Google deal, also part of Yahoo's alternative strategy, is mired in the regulatory process because critics have said it is anti-competitive. Meanwhile, Yahoo shares have plunged to around $12.

Time Warner shares are down about 45 percent from year-earlier levels, while Yahoo shares have fallen about 63 percent, as fears of an economic recession curbed corporate spending on advertising while Google continued to dominate in the Web search market.

Under the deal Yahoo and Time Warner have discussed, Yahoo would fold AOL's content and advertising business into its own operations, and Time Warner would get a stake in the combined company.

Executives and advisers from both sides met last week as part of the due diligence process, the source said. Both sides are being cautious because any potential deal carries "a lot of risk," the source said, without providing further details.

Integration concerns would likely revolve around how to fold AOL's advertising network into Yahoo's operations, choosing whether to keep separate portals and email services, and squeezing out cost savings by reducing duplication, one former AOL executive said on condition of anonymity.

Yahoo and Time Warner declined comment. News of the due diligence was first reported by the AllThingsDigital blog.

Shares of Yahoo were up 4 cents at $12.40 in late trading, while Time Warner shares were down 15 cents or 1.5 percent at $9.95.

(Editing by Gerald E. McCormick and Brian Moss)

Time Warner AOL discussions

http://news.cnet.com/8301-1023_3-9992465-93.html

Yahoo and Microsoft step up Time Warner AOL discussions
July 16, 2008

Yahoo and Microsoft have both accelerated their respective deal-making talks with Time Warner's AOL, as a proxy fight looms less than three weeks away between Yahoo and investor activist Carl Icahn, according to a source familiar with the discussions.

"The ongoing talks between all the companies have recently picked up," said the source.

That may come as no surprise, given that Yahoo over the weekend rejected a sweetened Microsoft offer to buy just its search assets and the board of directors for the Internet pioneer will be up for grabs when Yahoo and Icahn face off at the August 1 annual shareholders meeting.

Specifics about the types of deals that are currently underway in these two separate discussions and the likelihood of an outcome are not clear.

But previously, talks between Yahoo and AOL reportedly involved discussions of Yahoo acquiring AOL and, then, Time Warner taking an investment in Yahoo.

And as noted in the Silicon Alley Insider last month, a Microsoft buyout of AOL could come sooner than later. In fact, Silicon Alley Insider posted this nugget Tuesday that a team from AOL was in Seattle to talk about a potential deal with the software giant.

And a report in Reuters Tuesday was the first to note talks had "heated up" among the three parties.

Ruling Gives Heirs a Share of Superman Copyright

http://www.nytimes.com/2008/03/29/business/media/29comics.html

March 29, 2008
Ruling Gives Heirs a Share of Superman Copyright
By MICHAEL CIEPLY

LOS ANGELES — Time Warner is no longer the sole proprietor of Superman.

A federal judge here on Wednesday ruled that the heirs of Jerome Siegel — who 70 years ago sold the rights to the action hero he created with Joseph Shuster to Detective Comics for $130 — were entitled to claim a share of the United States copyright to the character. The ruling left intact Time Warner’s international rights to the character, which it has long owned through its DC Comics unit.

And it reserved for trial questions over how much the company may owe the Siegel heirs for use of the character since 1999, when their ownership is deemed to have been restored. Also to be resolved is whether the heirs are entitled to payments directly from Time Warner’s film unit, Warner Brothers, which took in $200 million at the domestic box office with “Superman Returns” in 2006, or only from the DC unit’s Superman profits.

Still, the ruling threatened to complicate Warner’s plans to make more films featuring Superman, including another sequel and a planned movie based on the DC Comics’ “Justice League of America,” in which he joins Batman, Wonder Woman and other superheroes to battle evildoers.

If the ruling survives a Time Warner legal challenge, it may also open the door to a similar reversion of rights to the estate of Mr. Shuster in 2013. That would give heirs of the two creators control over use of their lucrative character until at least 2033 — and perhaps longer, if Congress once again extends copyright terms — according to Marc Toberoff, a lawyer who represents the Siegels and the Shuster estate.

“It would be very powerful,” said Mr. Toberoff, speaking by telephone on Friday. “After 2013, Time Warner couldn’t exploit any new Superman-derived works without a license from the Siegels and Shusters.”

Time Warner lawyers declined to discuss the decision, a spokesman said. A similar ruling in 2006 allowed the Siegels to recapture their rights in the Superboy character, without determining whether Superboy was, in fact, the basis for Warner Brothers’s “Smallville” television series. The decision was later challenged in a case that has yet to be resolved, said Mr. Toberoff, who represented the family in that action.

This week’s decision by Stephen G. Larson, a judge in the Federal District Court for the Central District of California, provided long-sought vindication to the wife and daughter of Mr. Siegel, who had bemoaned until his death in 1996 having parted so cheaply with rights to the lucrative hero.

“We were just stubborn,” Joanne Siegel, Mr. Siegel’s widow, said in a joint interview with her daughter, Laura Siegel Larson. “It was a dream of Jerry’s, and we just took up the task.”

The ruling specifically upheld the Siegels’ copyright in the Superman material published in Detective Comics’ Action Comics Vol. 1. The extent to which later iterations of the character are derived from that original was not determined by the judge.

In an unusually detailed narrative, the judge’s 72-page order described how Mr. Siegel and Mr. Shuster, as teenagers at Glenville High School in Cleveland, became friends and collaborators on their school newspaper in 1932. They worked together on a short story, “The Reign of the Superman,” in which their famous character first appeared not as hero, but villain.

By 1937, the pair were offering publishers comic strips in which the classic Superman elements — cape, logo and Clark Kent alter-ego — were already set. When Detective Comics bought 13 pages of work for its new Action Comics series the next year, the company sent Mr. Siegel a check for $130, and received in return a release from both creators granting the company rights to Superman “to have and hold forever,” the order noted.

In the late 1940s, a referee in a New York court upheld Detective Comics’ copyright, prompting Mr. Siegel and Mr. Shuster to drop their claim in exchange for $94,000. More than 30 years later, DC Comics (the successor to Detective Comics) gave the creators each a $20,000-per-year annuity that was later increased to $30,000. In 1997, however, Mrs. Siegel and her daughter served copyright termination notices under provisions of a 1976 law that permits heirs, under certain circumstances, to recover rights to creations.

Mr. Toberoff, their lawyer, has been something of a gadfly to Warner in the past. In the late 1990s, for example, he represented Gilbert Ralston, a television writer, in a legal battle over his rights in the CBS television series “The Wild Wild West,” which was the basis for a 1999 Warner Brothers film that starred Will Smith. The case, said Mr. Toberoff, was settled.

Compensation to the Siegels would be limited to any work created after their 1999 termination date. Income from the 1978 “Superman” film, or the three sequels that followed in the 1980s, are not at issue. But a “Superman Returns” sequel being planned with the filmmaker Bryan Singer (who has also directed “The Usual Suspects” and “X-Men”) might require payments to the Siegels, should they prevail in a demand that the studio’s income, not just that of the comics unit, be subject to a court-ordered accounting.

Mrs. Siegel and Ms. Larson said it was too soon to make future plans for the Superman character. But they were inclined to relish this moment.

“I have lived in the shadow of this my whole life,” Ms. Larson said. “I am so happy now, I just can’t explain it.”

Last 'Harry Potter' Film To Be Released in 2 Parts

http://online.wsj.com/article/SB120541636975433351.html

Last 'Harry Potter' Film To Be Released in 2 Parts
By JOHN FLOWERS
March 13, 2008

Time Warner Inc.'s Warner Bros. Pictures will release its film adaption of the final "Harry Potter" book in two parts, saying doing so is necessary to stay true to the tome.

Part one of "Harry Potter and the Deathly Hallows" will open during the holiday season of 2010, with part two to be released the following summer. The first five films in the series have grossed $4.5 billion globally. The sixth movie, based on "Harry Potter and the Half-Blood Prince" is due to be released in the U.S. on Nov. 21.

Warner Bros. President Jeff Robinov said "Harry Potter and the Deathly Hallows" is "packed with vital plot points" and that "the best way to do the book, and its many fans, justice is to expand the screen adaptation."

David Yates, who directed last summer's "Harry Potter and the Order of the Phoenix" and currently helming "Half-Blood Prince" will direct both "Deathly Hallows" films.

The series, which first hit bookshelves in 1997, has hold some 400 million copies worldwide. "Deathly Hallows" was released last year and sold at a record-breaking initial rate.

Write to John Flowers at john.flowers@dowjones.com

Yahoo, Time Warner step up combination talks

http://news.yahoo.com/s/nm/20080305/bs_nm/yahoo_timewarner_dc

Yahoo, Time Warner step up combination talks: report
Wed Mar 5, 2008

Yahoo Inc (YHOO.O) and media conglomerate Time Warner Inc (TWX.N) have stepped up talks to create an alternative to Microsoft Corp's (MSFT.O) offer to take over the Web company, the Wall Street Journal reported on Wednesday citing people familiar with the matter.

The paper reported that the talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, according to the people, who still consider a Yahoo purchase by Microsoft as the most likely outcome.

Last month Microsoft made a $41 billion offer to buy Yahoo, which was rejected as undervaluing the business.

Yahoo and Time Warner were not immediately available for comment.

(Reporting by Yinka Adegoke, editing by Elizabeth Fullerton)

Yahoo’s Unlikely Alternatives to Microsoft

http://bits.blogs.nytimes.com/2008/02/13/a-guide-to-yahoos-unlikely-alternatives-to-microsoft/

February 13, 2008
A Guide to Yahoo’s Unlikely Alternatives to Microsoft
By Saul Hansell

In the course of a terminal illness, a person will often start to cast about for alternative therapies: herbs, acupuncture, fasting on a Tibetan mountain. This exploration is simply part of the process of coming to terms with the painful truth.

That’s the best way to understand all the reports of possible deals coming from Yahoo. Jerry Yang, Yahoo’s chief executive, has engaged a bevy of creative bankers who are busy trying to concoct all sorts of fanciful business arrangements. They tried and failed to find any takers in the private equity world, and they have run proposals by the business development departments at all the usual suspects -– Google, AOL and News Corporation, among them, according to executives at those companies.

There is indeed some active discussion between News Corporation and Yahoo now (as first reported by Silicon Alley Insider). But News Corporation senior executives say they don’t believe anything will come of this.

The diagnosis is even more clear now than it was 12 days ago when Microsoft first announced its unsolicited bid: Yahoo will get sold to Microsoft. All that’s left to work out is the price.

In the meantime, here is a guide to all of the alternative therapies that Yahoo has been exploring, and why they are not safe or effective.

The key to understanding this is to realize that Yahoo is considering two types of procedures. The simplest would be to sell itself outright to some other company or group willing to outbid Microsoft. This is a long shot. No one but Microsoft and Google have the cash or stock market valuation to make this work. Private equity funds in this market can’t get their Visa credit limits raised, let alone borrow $50 billion.

The other possibility is that Yahoo could restructure in some way, perhaps taking an outside investment, so it can try to convince a majority of shareholders that it is better off as a standalone company than as part of Microsoft. This is unlikely to work because shareholders may well prefer the certainty of Microsoft’s offer, particularly given the lack of confidence in Yahoo’s current management. But it is at least possible to consider such a deal, so that is what is being discussed.

A big variable in any possible deal structure is the role of Google, which has indicated that it would like to help Yahoo fight off Microsoft. Presumably this means having Google sell search ads on Yahoo in return for a stream of guaranteed cash payments. There has been a lot written about how such an arrangement would undergo a lot of antitrust scrutiny. That’s true.

But another problem came up in the negotiations about this last week. Some people who toyed with making a run at Yahoo figured that they would get a big guarantee from Google and then borrow a lot of money against it in order to help finance their bid for Yahoo. It turns out, several dealmakers told me, that Google insists on minimum traffic levels in return for a guarantee of ad revenue. That provision doesn’t stop companies like AOL and News Corporation from cutting search ad deals with Google. But they are enough to stop a bank from backing such a buyout.

And if Yahoo simply announced a deal with Google, and no outside investment, it would have a hard time convincing shareholders that the extra money from search alone is reason enough to turn down Microsoft.

The deal under discussion with News Corporation, according to an executive briefed on the talks, involves a variation of a deal that it proposed to Yahoo last year. It would give Yahoo MySpace, its other Internet properties, some advertising credit and perhaps some cash, in order to take a 20 percent to 30 percent stake in Yahoo. A search deal with Google might be part of that too.

The hope would be that synergies with MySpace, as well as management help from News Corporation, would seem appealing enough to investors to rebuff Microsoft. Moreover, if News Corp. had a 25 percent stake, say, along with the 10 percent of the shares owned by Mr. Yang and David Filo, his co-founder, they would have enough of a voting bloc to win a shareholder vote if it came to that. Whether Yahoo really could play that tough, given its corporate governance structure, is an open question, however.

The deal proposed with Time Warner was similar: Trade AOL and perhaps some cash for a big stake in Yahoo. This has all the problems of the proposed deal with News Corporation and one more: Unlike News Corporation’s chief executive, Rupert Murdoch, who has already expressed interest in Yahoo, Jeff Bewkes, Time Warner’s new chief executive, is skeptical, according to an executive who has spoken to him. He soured on big Internet deals after Time Warner’s disastrous combination with AOL. Still, fixing AOL is one of Mr. Bewkes’s key challenges. So his business development staff is firing up its spreadsheets to consider the possibilities with Yahoo, according to a person familiar with the analysis.

But this person said that like Mr. Murdoch, Mr. Bewkes thinks it would be hard to win this one away from Microsoft.

Internet, AOL, Google, Microsoft, News Corporation, Time Warner, Yahoo, Yahoo In Play

Who on Earth Would Want to Buy Yahoo?

http://blog.wired.com/business/2008/01/who-on-earth-wo.html

Who on Earth Would Want to Buy Yahoo?
By Betsy Schiffman
January 02, 2008

While pundits yap away about how Yahoo is fresh acquisition meat, we find it hard to believe. The company is pretty pricey, with a market cap of roughly $33.5 billion, and the number of businesses that could actually swing it is minuscule.

We understand why internet industry watchers think Yahoo is in play. At the very least, it's in flux. Former CEO Terry Semel was ousted last spring, management is fleeing the scene in droves, and the stock is drifting.

But even if Yahoo's business has been dwarfed by Google, its revenue is still growing (it grew by about 12 percent in the third quarter); and more importantly, co-founders David Filo and Jerry Yang, who own roughly 10 percent of the company, are dead set on executing on a turnaround plan.

The bigger question is who would want Yahoo? The major media players (Time Warner, News Corp., Viacom) are desperate to build out their online media businesses, but probably not to the tune of $33.5 billion. We asked a slew of analysts to weigh in on the odds of potential acquirers, and here's what they had to say:

NBC - The network, which is owned by conglomerate General Electric, has flailed on the web over the last decade, and while it needs to grow its online business, at least one analyst, who asked not to be named, thinks GE is more likely to sell NBC in the next couple years than it is to grow the business. The upshot? The chances that GE would have any interest in buying Yahoo are slim to none.

Microsoft - It just won't die: For at least a year, gossipers keep rehashing the same old rumor that Microsoft is in talks to buy Yahoo. While the company is one of the few businesses positioned to do it (Microsoft has plenty of cash on hand, a rich market cap, and would have no problem raising additional financing) such a deal would be a total disaster for Microsoft, according to Global Equities Research analyst Trip Chowdhry. "Microsoft has all the pieces it needs to build its Live brand. A Yahoo acquisition will disrupt Microsoft's execution, confuse customers, and dilute -- without repair -- Microsoft's brand," Chowdhry says. "The Live brand is youthful, while Yahoo resonates as an internet site for old people."

News Corp. - Rupert Murdoch is in it to win it, and he's willing to spend exorbitant sums of money to own the internet (as evidenced by his $580 million acquisition of MySpace). Still, an outright acquisition of Yahoo isn't really his style. "I think Rupert's been willing to take minority stakes in companies where he can take control," says Pali Research analyst Richard Greenberg. "I'm skeptical of the portal business in general and with the MySpace acquisition, I think News Corp. has some big opportunities to attack portals' core business."

Time Warner - It's been eight years since AOL announced its bid to buy Time Warner in a $165 billion deal. Since then, the AOL business has deteriorated dramatically, and Time Warner has even toyed with the idea of spinning it off. "We've seen how the AOL Time Warner merger just didn't work," says Greg Gorbatenko, an analyst with Jackson Securities. "Now AOL's dragging Time Warner down. If you were to introduce Yahoo into the mix, it would be like . . . you gotta be kidding me!"

Viacom - Although Viacom is expected to shop around for acquisitions this year, Yahoo is probably not on the shopping list. "We would expect Viacom to be more active in buying online assets in 2008, but these acquisitions would be small-to-medium moderately sized deals. A large acquisition, the size of Yahoo, would surprise us," says Laura Martin, Soleil-Media Metrics analyst. "It's more important for Viacom to get their core business in shape, and resolve issues with DreamWorks."

We're not saying a deal won't happen -- anything is possible -- but it seems a little far fetched to us.

Stamp Out the Rate Hike

http://action.freepress.net/freepress/postal_explanation.html

Stamp Out the Rate Hike: What's at Stake

"Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter."
-- Thomas Jefferson, Jan. 16, 1787

What's at Stake

Our nation's founders understood the First Amendment would be worth little without a postal system that encouraged broad public participation in America's "marketplace of ideas."

Thomas Jefferson supported this with calls for a postal service that allowed citizens to gain "full information of their affairs," where ideas could "penetrate the whole mass of the people." Along with James Madison, he paved the way for a service that gave smaller political journals a voice. Their solution included low-cost mailing incentives whereby publications could reach as many readers as possible.

Other founders soon came to understand that the press as a political institution needed to be supported through favorable postal rates. President George Washington spoke out for free postage for newspapers through the mail, and Treasury Secretary Alexander Hamilton -- no proponent of government deficit -- conceded that incentives were necessary to spawn a viable press.

The postal policies that resulted have lasted for more than 200 years, spurring a vibrant political culture in the United States. They have eased the entry of diverse political viewpoints into a national discourse often dominated by the largest media organizations.

Time Warner Rewrites History

All of this could change in 2007.

In an unprecedented move, the agency that oversees postal rates in the United States has quietly attempted to unravel much of what the founders accomplished. Earlier this year, the Postal Regulatory Commission (PRC) rejected a postal rate increase plan offered by the U.S. Postal Service. Instead they opted to implement a revised version of an extraordinarily complicated plan submitted by media giant Time Warner. (Click here to read the decision and click here for a timeline).

Although there was a formal review and comment process, the matter was so complicated and unreported that the public played no role whatsoever, and publications that could not afford significant lobbying and lawyer fees faced high barriers to effective participation.

Under the original U.S. Postal Service plan, all publishers would have a mostly equal increase (approx. 12 percent) in the cost for mailing their publications. This Time Warner plan is so complex that many publications are still unclear what their rate hikes will be if implemented; those smaller publications that have been able to do the math are finding shocking increases on tap, well above the 12 percent they had budgeted based upon the recommendation of the U.S. Postal Service.

The Time Warner plan overturned this level playing field to a system that by most indications favors large, ad-heavy magazines like People at the expense of smaller publications like In These Times and The American Spectator. It penalizes thousands of small- to medium-sized outlets with disproportionately higher rates while locking in privileges for bigger companies.

Fight Back: Tell Congress to Act

The PRC has aligned itself with a media giant with the apparent effect of stifling smaller media in America. The stunning move is an unprecedented abuse of the agency's discretion. Congress must now step in to protect smaller media from these unfair rate hikes.

The Postal Service should not be forced to use its monopoly power to favor the largest publishers and undermine the ability of smaller publishers to compete. The PRC and the postal authorities must be held accountable for a plan that could drive smaller publications to the brink of bankruptcy. With public involvement we can reverse the PRC decision and restore the postal system that has served free speech and freedom of the press in America so well.

Demand a formal and open accounting of why more than 200 years of pro-democracy postal policy was abandoned.

References:

John, Richard R. Spreading the News: The American Postal System from Franklin to Morse (Cambridge: Harvard University Press, 1995).

Kielbowicz, Richard B. News in the Mail: The Press, Post Office, and Public Information, 1700-1860s (Greenwood, 1989).

Christopher W. Shaw, Preserving the People's Post Office (Washington, D.C.: Essential Books, 2006).

Richard B. Kielbowicz, "Preserving Universal Postal Service as a Communication Safety Net: A Policy History and Proposal," Seton Hall Legislative Journal, Vol. 30, No. 2 (2006): pp. 383-436.

Mark Lloyd, Prologue to a Farce: Democracy and Communication in America (Urbana: University of Illinois Press, 2007).

Robert W. McChesney, The Problem of the Media: U.S. Communication Politics in the 21st Century (New York: Monthly Review Press, 2004).

Burns, Eric. Infamous Scribblers: The Founding Fathers and the Rowdy Beginnings of American Journalism (New York: Public Affairs, 2006).

Fuller, Wayne E. "The Populists and the Post Office." Agricultural History 65, no. 1 (1991): 1-16.

Kielbowicz, Richard B. "Postal Subsidies for the Press and the Business of Mass Culture, 1880-1920." Business History Review, 64 (Autumn 1990): 451-88

Kielbowicz, Richard B. "Origins of the Second-Class Mail Category and the Business of Policymaking, 1863-1879." Journalism Monographs 96 (April 1986): 1-26.

Kielbowicz, Richard B., and Linda Lawson. "Protecting the Small-Town Press: Community, Social Policy, and Postal Privileges, 1845-1970." Canadian Review of American Studies 19 (Spring 1988): 23-45.

Kielbowicz, Richard B., and Linda Lawson. "Reduced-Rate Postage for Nonprofit Organizations: A Policy History, Critique, and Proposal." Harvard Journal of Law and Public Policy 11 (Spring 1988): 347-406.

Kielbowicz, Richard B. "Cost Accounting in the Service of Policy Reform: Postal Rate Making, 1875-1926." Social Science Quarterly 75 (June 1994): 284-299.

Peters, John Durham. "The Marketplace of Ideas: A History of the Concept," in Andrew Calabrese and Colin Sparks, editors, Toward a Political Economy of Culture: Capitalism and Communication in the Twenty-First Century (Boulder: Rowman and Littlefield, 2004), pp.65-82.

http://action.freepress.net/freepress/postal_timeline.html

Timeline

May 2006: The USPS submitted an omnibus postal rate increase to the PRC. This rate increase proposal included a provision that would increase the periodical rate by 11.7 percent -- a cost increase that was supposed to impact all publishers more or less equally.

February 2007: After a 10-month comment and testimony review period, the Postal Regulatory Commission released its 758-page recommended decision to the Postal Board of Governors. To the surprise of many, the PRC rejected the USPS planned periodical rate scheme, and replaced it with a scheme based on a complex proposal submitted by Time-Warner.

March 2007: The USPS allowed just 8 business days for formal responses to the 758 page February 26th recommendations. The recommended Time-Warner periodical proposal was so complex that smaller publishers couldn't adequately assess how the rate change would impact their businesses. On March 19, the Postal Board of Governors issued the final decision, adopting the PRC's February recommendations.

July 15, 2007: Without public action the change in the periodical rates goes into effect.