by Eric K. Arnold, Media Consortium blogger

The proposed AT&T/T-Mobile merger continues to dominate media policy headlines, but the wireless merger isn’t the only game in town. AOL’s recent buyout of the Huffington Post has raised intellectual property issues, rural communities still lack speedy broadband access, and a proposed Verizon antenna in Oakland has come under fire by neighborhood activists.

AT&T an Underdog?

Telecommunications giant AT&T is many things, and an underdog in need of federal assistance isn’t one of them. Yet Colorlines.com’s Jamilah King says that’s exactly how the company is portraying itself in its proposed $39 billion dollar takeover of T-Mobile.

In its official filing with the Federal Communications Commission (FCC), King reports, “AT&T spends nearly 90 pages describing T-Mobile’s weaknesses, while detailing the roadblocks it says it’ll face if federal regulators don’t green light the deal.” If federal regulators block the deal, AT&T argues, its customers “would face a greater number of blocked and dropped calls as well as less reliable and slower data connections. And in some markets, AT&T’s customers would be left without access to more advanced technologies.”

It’s hard to feel sorry for AT&T, though, since the deal has raised concerns that consumers ultimately will pay more for cell phone service, which could adversely impact low-income, minority, and immigrant users who rely on the low-cost plans currently offered by T-Mobile. If the merger passes federal muster, King writes, “it’ll likely mean the unheralded return to prominence of the former Ma Bell monopoly that ruled American telecommunications for most of the twentieth century.”

Competition without Competitors

As Nancy Scola writes in The American Prospect, AT&T’s 381-page FCC filing essentially comes down to this: “you can have the benefits of competition without actual competitors.”

Scola traces the history of the telecommunications industry, touching on the 1982 antitrust case which resulted in the break-up of Ma Bell (aka AT&T) into seven Baby Bells, as well as analyzing current media policy in Washington:

As a powerful company that just announced $31 billion in revenues last quarter AT&T retains great sway. The FCC often defers to the company’s role as the founders of American telecommunications. And Congress, a recipient of large sums of AT&T cash, often seems dazzled by the company’s bright lobbyists who talk in confusing but exciting ways about ‘spectrum synergies’ and ‘LTE deployment.’

The takeaway? Congress and federal regulators need to put consumers’ needs ahead of the telecoms:

In 21st-century America, mobile phones are simply far too important a technology for Washington to give them the usual treatment. With a breathtaking nine out of 10 Americans now owning a cell phone, the wireless market is one that has to work for consumers.

HuffPo Lawsuit, Boycott Highlight IP Issues in New Media Era

The AT&T/T-Mobile merger has garnered a lot of media attention, but it’s not the only merger worth scrutinizing. Truthout’s Nadia Prupis takes a closer look at reactions to the class-action lawsuit recently filed on behalf of Huffington Post’s unpaid bloggers. HuffPo was recently sold to AOL for $315 million. As Prupis reports, “the class-action suit, filed by freelance journalist Jonathan Tasini, alleges that the posts created by unpaid writers were worth an estimated $105 million, and that the profit should have been used as compensation.”

HuffPo founder Arianna Huffington is quoted as saying, “The vast majority of our bloggers are thrilled to contribute – and we’re thrilled to have them.”

Yet the merger—and the lawsuit—highlight one of the biggest issues facing contemporary journalism: The devaluation of intellectual property. For that reason, a number of former bloggers have instituted a boycott of HuffPo. As Prupis notes, “The Newspaper Guild of America, the National Writers Union and the AFL-CIO have all endorsed the boycott, with many of their members refusing to contribute to the web site until Huffington agrees to talk with the unions about how best to approach the changing landscape of online journalism.”

Rural Broadband Access Still Slow

Mark Scheerer of Public News Service tackles the issue of broadband access in rural communities – an important topic in a down economy, since faster connectivity could result in economic stimulus for small businesses, such as livestock farmers.

A new report (PDF at link) issued by the Center for Rural Strategies concludes that “communities without broadband service could be hobbled economically, losing the race to those with faster connections.”

Farmers in places like Stamping Ground, Kentucky, Scheerer says, are paying for high-speed broadband, yet receiving dial-up download speeds, which hinders efforts to “streamline and economize their livestock sales.”

The report essentially mirrors the FCC’s 2010 findings: “broadband providers are not expanding their services in a timely and satisfactory fashion.”

Activists Push Back Against Verizon Antenna

As Oakland Local’s Dennis Rowcliffe reports, a proposal by Verizon to install a powerful cellular antenna close to two schools and several residential units has been met with opposition by community groups.

“The residents, school parents and teachers express concerns about the potential health effects of sustained nearby exposure to increased levels of the electromagnetic frequency, or EMF, radiation emitted by the antennas,” Rowcliffe writes, adding that a group called East Bay Residents for Responsible Antenna Placement (EBR-RAP) has suggested several alternate sites, all of which were rejected by Verizon.

Verizon executive John Johnson is quoted as saying, “Please note that we intend to retain our rights to the city-approved location and to use it as the project site if we are unable to identify a viable alternative after further review.”

However, EBR-RAP members say they intend to keep up the pressure on Verizon until an alternate site is found.

This is a project of The Media Consortium, a network of leading independent media outlets. This post features links to the best independent, progressive reporting about media policy and media-related matters by members of The Media Consortium. It is free to reprint. To read more of the Wavelength, click here. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets, and is produced with the support of the Media Democracy Fund.

By Acquiring the Wildly Successful Online News Portal for $315 Million, Can the Internet Company Once Known as America Online Overcome Its Reputation for Making Bad Business Decisions -- From Its Failure to Adapt to the Rise of Broadband, to Its Disastrous Merger With Time Warner?

(Posted 11:30 a.m. EST Tuesday, February 8, 2011)

NOTE TO READERS: Due to a computer crash, this week's column is being posted six hours later than normal. We apologize for the delay.

By SKEETER SANDERS

When the announcement hit the business-news wires Monday, it struck with the force of an earthquake measuring 7.0 on the Richter scale.

The Huffington Post, a five-year-old Web site that began as a blog but grew into one of America's largest online news sites, has reached an agreement in principle to be acquired by the once-dominant Internet service provider-turned news portal AOL Inc. for a reported $315 million.

According to the announcement, posted Monday on both the HuffPost and AOL Web sites, Arianna Huffington, the co-founder and editor-in-chief of the HuffPost, has been named president and editor-in-chief of the enlarged company -- to be known as The Huffington Post Media Group -- which will include all HuffPost and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and others.

In a blog posting on HuffPost explaining her reasons for the sale, Huffington dismissed concerns about the sale tarnishing HuffPost's liberal editorial reputation -- or the apolitical reputation of AOL's news operations.

"Far from changing our editorial approach, our culture, or our mission," she wrote, "this moment will be for HuffPost like stepping off a fast-moving train and onto a supersonic jet. We're still traveling toward the same destination, with the same people at the wheel, and with the same goals, but we're now going to get there much, much faster."

Many longtime HuffPost readers, however -- particularly those on the political left -- are likely to be highly skeptical. And from a business perspective, given AOL's checkered past, the deal has a 50-50 chance of being either a brilliantly successful move -- or another of AOL's horribly disastrous blunders.

Wall Street so far isn't impressed. AOL stock fell 3.4 percent Monday to $21.27 a share on news of the HuffPost purchase and as of 11:30 a.m. EST today (Tuesday) dropped another 2.784 percent to $20.60 a share.

AOL HAS LONG HISTORY OF POOR PUBLIC RELATIONS

AOL is a company that is saddled with one of the worst public reputations of any Internet-related firm in the country -- a reputation that stems from a series of decisions the company has made over the past decade for which it was not fully prepared and for which it has never fully recovered -- to the point that AOL today is a company seeking an entirely new identity.

And AOL's poor reputation could potentially put HuffPost at serious risk of both editorial and commercial disaster, Huffington's new position as president and editor-and-chief of the expanded company notwithstanding.

AOL -- formerly known as America Online -- was founded in 1983 as Quantum Computer Services (renamed America Online in 1991) and quickly became the most dominant Internet service provider (ISP) in the United States. At its peak in the late 1990s under CEO Steve Case, AOL had become the ISP of choice for millions of Americans who were unfamiliar with computers, eventually eclipsing its rivals, CompuServe and Prodigy with its now-iconic "You've Got Mail!" greeting and online games.

But over the years, AOL made a series of decisions that proved to be disastrous for the company. AOL initially charged its subscribers by the hour, but in 1996 switched to a flat monthly rate. While this proved to be wildly popular with AOL subscribers, it resulted in a massive overload of AOL's servers, resulting in thousands of subscribers cancewlling because they kept getting busy signals when they tried to log on. AOL soon became the butt of jokes, with its initials derisively referred to by disgruntled users as "Always Off-Line" or "A-O-Hell."

The situation got so bad that it prompted Case to appear in an AOL television commercial in which he told viewers that the company was "working day and night to fix the problem."

AOL, with its dial-up Internet service via telephone lines, failed to keep up with changing Internet technology such as DSL and high-speed broadband, which were much faster and could carry far more graphics-heavy data than dial-up -- costing the company even more subscribers.

To this day, AOL's largest source of revenue remains its increasingly obsolete dial-up Internet service and e-mail. The problem is, most of AOL's 5.2 million remaining Internet-service subscribers are people for whom high-speed broadband is either unavailable (particularly in rural areas) or unaffordable; have obsolete computers that cannot handle today's graphics-heavy Web pages and/or they cannot afford to replace them.

AOL ACCUSED IN 1999 LAWSUIT OF VIOLATING AMERICANS WITH DISABILITIES ACT

In 1999, the National Federation of the Blind filed a class-action lawsuit against AOL, accusing the company of violating Title III of the Americans With Disabilities Act for not making its proprietary software compatible with screen readers used by the blind to convert information appearing on computer screens into synthesized speech or a refreshable Braille display.

The NFB argued that AOL's extensive entertainment, sales and other services make it a "public accommodation" that is required under the ADA to to be accessible to people with disabilities.

AOL and the NFB reached an out-of-court settlement in 2000.

AOL-TIME WARNER: A CORPORATE 'MARRIAGE FROM HELL'

But of all of AOL's missteps, none proved to be more disastrous to the company than its ill-fated merger with media conglomerate Time Warner in 2000 -- a deal that former Time Warner chairman and CEO admitted in a rare interview with CNBC's "Squawk Box" a year ago was "the worst deal of the century" and the business network called a corporate "marriage from hell."

Levin acknowledged his failure to foresee the dot-com bubble that burst in 2002 when he and Case announced the merger of AOL and the parent company of Time magazine and CNN on January 10, 2000. "I was the CEO. I was in charge," he said. "I'm really very sorry about the pain and suffering and loss that was caused."

The merger wasn't actually a merger in the truest sense of two companies combining into one. In fact, it was an acquisition, with AOL buying Time Warner for a staggering $164 billion in AOL stock -- which, as it turned out, was grossly overvalued. After the dot-com bust, the value of the combined company's stock plunged by 90 percent, which cost thousands of Time Warner employees their jobs and wiperd out their retirement savings.

For his part, Case acknowledged that he and Levin spent too much time focusing on internal company politics -- "and, frankly, on Wall Street" -- and spent too little time on "innovating for customers, and seizing the day."

Time Warner finally unloaded AOL in December 2009. When stock in the newly-independent AOL began trading on the New York Stock Exchange, it was valued at only a fraction of what it was a decade earlier, at $2.8 billion, according to stock-market analysts.

NEW AOL EAGER TO SHED BAD IMAGE -- POSSIBLY WITH NEW NAME?

AOL's current chairman and CEO, Tim Armstrong -- eager to shed the company's tarnished image -- has concentrated on transforming AOL into a diversified online media giant and that its acquisition of the HuffPost is a major step toward that transformation.

"The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers," said Armstrong. "Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers."

As president and editor-in-chief of the enlarged company's editorial operations, Huffington, said Armstrong, "is a singularly passionate and dedicated champion of innovative journalistic engagement and a master of the art of using new media to illuminate, entertain and enhance the national conversation."

Left unclear is whether the enlarged company will continue to bear the AOL name, given Huffington was put in charged of of what has been dubbed The Huffington Post Media Group.

Also left unclear is whether the HuffPost, with its image as a left-leaning news site, will move to the center -- or whether AOL's news operations, seen until now as apolitical, will take a left turn.

Given the toxic history associated with the AOL name, a change of brand identity might not be so bad. Nonetheless, only time will tell whether AOL's acquisition of the HuffPost will be a stroke of genius or another horrible corporate blunder.

# # #

Copyright 2011, Skeeter Sanders. All rights reserved.

By Acquiring the Wildly Successful Online News Portal for $315 Million, Can the Internet Company Once Known as America Online Overcome Its Reputation for Making Bad Business Decisions -- From Its Failure to Adapt to the Rise of Broadband, to Its Disastrous Merger With Time Warner?

(Posted 11:30 a.m. EST Tuesday, February 8, 2011)

NOTE TO READERS: Due to a computer crash, this week's column is being posted six hours later than normal. We apologize for the delay.

By SKEETER SANDERS

When the announcement hit the business-news wires Monday, it struck with the force of an earthquake measuring 7.0 on the Richter scale.

The Huffington Post, a five-year-old Web site that began as a blog but grew into one of America's largest online news sites, has reached an agreement in principle to be acquired by the once-dominant Internet service provider-turned news portal AOL Inc. for a reported $315 million.

According to the announcement, posted Monday on both the HuffPost and AOL Web sites, Arianna Huffington, the co-founder and editor-in-chief of the HuffPost, has been named president and editor-in-chief of the enlarged company -- to be known as The Huffington Post Media Group -- which will include all HuffPost and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and others.

In a blog posting on HuffPost explaining her reasons for the sale, Huffington dismissed concerns about the sale tarnishing HuffPost's liberal editorial reputation -- or the apolitical reputation of AOL's news operations.

"Far from changing our editorial approach, our culture, or our mission," she wrote, "this moment will be for HuffPost like stepping off a fast-moving train and onto a supersonic jet. We're still traveling toward the same destination, with the same people at the wheel, and with the same goals, but we're now going to get there much, much faster."

Many longtime HuffPost readers, however -- particularly those on the political left -- are likely to be highly skeptical. And from a business perspective, given AOL's checkered past, the deal has a 50-50 chance of being either a brilliantly successful move -- or another of AOL's horribly disastrous blunders.

Wall Street so far isn't impressed. AOL stock fell 3.4 percent Monday to $21.27 a share on news of the HuffPost purchase and as of 11:30 a.m. EST today (Tuesday) dropped another 2.784 percent to $20.60 a share.

AOL HAS LONG HISTORY OF POOR PUBLIC RELATIONS

AOL is a company that is saddled with one of the worst public reputations of any Internet-related firm in the country -- a reputation that stems from a series of decisions the company has made over the past decade for which it was not fully prepared and for which it has never fully recovered -- to the point that AOL today is a company seeking an entirely new identity.

And AOL's poor reputation could potentially put HuffPost at serious risk of both editorial and commercial disaster, Huffington's new position as president and editor-and-chief of the expanded company notwithstanding.

AOL -- formerly known as America Online -- was founded in 1983 as Quantum Computer Services (renamed America Online in 1991) and quickly became the most dominant Internet service provider (ISP) in the United States. At its peak in the late 1990s under CEO Steve Case, AOL had become the ISP of choice for millions of Americans who were unfamiliar with computers, eventually eclipsing its rivals, CompuServe and Prodigy with its now-iconic "You've Got Mail!" greeting and online games.

But over the years, AOL made a series of decisions that proved to be disastrous for the company. AOL initially charged its subscribers by the hour, but in 1996 switched to a flat monthly rate. While this proved to be wildly popular with AOL subscribers, it resulted in a massive overload of AOL's servers, resulting in thousands of subscribers cancewlling because they kept getting busy signals when they tried to log on. AOL soon became the butt of jokes, with its initials derisively referred to by disgruntled users as "Always Off-Line" or "A-O-Hell."

The situation got so bad that it prompted Case to appear in an AOL television commercial in which he told viewers that the company was "working day and night to fix the problem."

AOL, with its dial-up Internet service via telephone lines, failed to keep up with changing Internet technology such as DSL and high-speed broadband, which were much faster and could carry far more graphics-heavy data than dial-up -- costing the company even more subscribers.

To this day, AOL's largest source of revenue remains its increasingly obsolete dial-up Internet service and e-mail. The problem is, most of AOL's 5.2 million remaining Internet-service subscribers are people for whom high-speed broadband is either unavailable (particularly in rural areas) or unaffordable; have obsolete computers that cannot handle today's graphics-heavy Web pages and/or they cannot afford to replace them.

AOL ACCUSED IN 1999 LAWSUIT OF VIOLATING AMERICANS WITH DISABILITIES ACT

In 1999, the National Federation of the Blind filed a class-action lawsuit against AOL, accusing the company of violating Title III of the Americans With Disabilities Act for not making its proprietary software compatible with screen readers used by the blind to convert information appearing on computer screens into synthesized speech or a refreshable Braille display.

The NFB argued that AOL's extensive entertainment, sales and other services make it a "public accommodation" that is required under the ADA to to be accessible to people with disabilities.

AOL and the NFB reached an out-of-court settlement in 2000.

AOL-TIME WARNER: A CORPORATE 'MARRIAGE FROM HELL'

But of all of AOL's missteps, none proved to be more disastrous to the company than its ill-fated merger with media conglomerate Time Warner in 2000 -- a deal that former Time Warner chairman and CEO admitted in a rare interview with CNBC's "Squawk Box" a year ago was "the worst deal of the century" and the business network called a corporate "marriage from hell."

Levin acknowledged his failure to foresee the dot-com bubble that burst in 2002 when he and Case announced the merger of AOL and the parent company of Time magazine and CNN on January 10, 2000. "I was the CEO. I was in charge," he said. "I'm really very sorry about the pain and suffering and loss that was caused."

The merger wasn't actually a merger in the truest sense of two companies combining into one. In fact, it was an acquisition, with AOL buying Time Warner for a staggering $164 billion in AOL stock -- which, as it turned out, was grossly overvalued. After the dot-com bust, the value of the combined company's stock plunged by 90 percent, which cost thousands of Time Warner employees their jobs and wiperd out their retirement savings.

For his part, Case acknowledged that he and Levin spent too much time focusing on internal company politics -- "and, frankly, on Wall Street" -- and spent too little time on "innovating for customers, and seizing the day."

Time Warner finally unloaded AOL in December 2009. When stock in the newly-independent AOL began trading on the New York Stock Exchange, it was valued at only a fraction of what it was a decade earlier, at $2.8 billion, according to stock-market analysts.

NEW AOL EAGER TO SHED BAD IMAGE -- POSSIBLY WITH NEW NAME?

AOL's current chairman and CEO, Tim Armstrong -- eager to shed the company's tarnished image -- has concentrated on transforming AOL into a diversified online media giant and that its acquisition of the HuffPost is a major step toward that transformation.

"The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers," said Armstrong. "Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers."

As president and editor-in-chief of the enlarged company's editorial operations, Huffington, said Armstrong, "is a singularly passionate and dedicated champion of innovative journalistic engagement and a master of the art of using new media to illuminate, entertain and enhance the national conversation."

Left unclear is whether the enlarged company will continue to bear the AOL name, given Huffington was put in charged of of what has been dubbed The Huffington Post Media Group.

Also left unclear is whether the HuffPost, with its image as a left-leaning news site, will move to the center -- or whether AOL's news operations, seen until now as apolitical, will take a left turn.

Given the toxic history associated with the AOL name, a change of brand identity might not be so bad. Nonetheless, only time will tell whether AOL's acquisition of the HuffPost will be a stroke of genius or another horrible corporate blunder.

# # #

Copyright 2011, Skeeter Sanders. All rights reserved.

It looks like AOL is going to be all alone in their pay-to-send email scheme.  Google isn't going to join them.

Leaving AOL further out on a limb holding its Goodmail playbook, Google said it will not be instituting a payment system to ensure email delivery to Gmail users. The power of email filtering, said the company, should rest in the hands of its users.

Until now, Google had been very quiet about AOL's controversial plan to implement Goodmail's CertifiedEmail system, one that would require approved bulk mailers to pay a small fee per email in order to ensure delivery to member inboxes.

Esther Dyson and AOL's corporate suite heard a lot from users that no one wants a two tiered internet.  So did AOL's competitors.  Yahoo is running away from their use of Goodmail, delineating a much more limited policy.  This was a clean victory for a progressive internet.  Next up is net neutrality.

For the record, I use Gmail.  And it's great.

There's more...

I've blogged a lot on AOL's scheme to tax email. It's really about raw control over information flow.

And if you think that the right-wing isn't interested in dominating email communications and cutting off the ability of ordinary Americans to organize without their permission, you haven't watched how they have systematically attempted to control every other communications medium over the last forty years.

And today, AOL blocked email that included a link to www.DearAOL.com, a site contesting AOL's policies.  From a press release today:

AOL is blocking delivery to AOL customers of all emails that include a link to www.DearAOL.com.  Today, after this was discovered, over 150 people who signed a petition to AOL tried sending messages to their AOL-using friends, and received a bounceback message informing them that their email "failed permanently.

...

"The fact is, ISPs like AOL commonly make these kinds of arbitrary decisions - silently banning huge swathes of legitimate mail on the flimsiest of reasons - every day, and no-one hears about it," said Danny O'Brien, of the Electronic Frontier Foundation. "AOL's planned CertifiedEmail system would let them profit from this power by offering to charge legitimate mailers to bypass these malfunctioning filters."

This is not about profit.  It's not about spam.  It's not about customer service.  It's not even about greed.  It's simply about control.  The execs at AOL are mad that their customers are contesting their decisions, and choose to censor email in response.  

Along with ruining net neutrality, this is just one more way to destroy the internet.  We're going to win, but it's going to be a fight.

There's more...