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Press secretary says TV reporter ‘doesn’t know what he’s talking about’

WASHINGTON – The White House on Friday dismissed a cable television reporter’s criticism of President Barack Obama’s housing bailout plan as the ranting of an individual who “doesn’t know what he’s talking about.”

In a report on CNBC on Thursday, Rick Santelli animatedly accused the Obama administration of “promoting bad behavior” with its $75 billion lifeline to millions of Americans on the brink of foreclosure. White House press secretary Robert Gibbs poked fun at Santelli by inviting him to come to the White House to read the details of Obama’s plan. “I’d be happy to buy him a cup of coffee,” Gibbs said. In a nod to Santelli’s caffeinated style, Gibbs then wryly added: “Decaf.”

Santelli took the critique in stride, saying Gibbs had hardly offered tough words.

“I think this is terrific that this has been opened up to national debate,” Santelli said in an MSNBC interview shortly after Gibbs’ daily briefing wrapped up. “I think it’s wonderful he invited to me to the White House. I’m really not big on decaf, though. I think I’d prefer tea.”

The episode underscores how closely the Obama White House, like others before it, monitors how media coverage may be shaping public opinion. In particular, the constant chatter of cable television news shows has at times gotten under the skin of White House aides, and they have made no effort to hide their displeasure.

(CNET) — Republican politicians on Thursday called for a sweeping new federal law that would require all Internet providers and operators of millions of Wi-Fi access points, even hotels, local coffee shops, and home users, to keep records about users for two years to aid police investigations.

The legislation, which echoes a measure proposed by one of their Democratic colleagues three years ago, would impose unprecedented data retention requirements on a broad swath of Internet access providers and is certain to draw fire from businesses and privacy advocates.

“While the Internet has generated many positive changes in the way we communicate and do business, its limitless nature offers anonymity that has opened the door to criminals looking to harm innocent children,” U.S. Sen. John Cornyn, a Texas Republican, said at a press conference on Thursday.

“Keeping our children safe requires cooperation on the local, state, federal, and family level.”

Joining Cornyn was Texas Rep. Lamar Smith, the senior Republican on the House Judiciary Committee, and Texas Attorney General Greg Abbott, who said such a measure would let “law enforcement stay ahead of the criminals.”

Two bills have been introduced so far–S.436 in the Senate and H.R.1076 in the House. Each of the companion bills is titled “Internet Stopping Adults Facilitating the Exploitation of Today’s Youth Act,” or Internet Safety Act.

Each contains the same language: “A provider of an electronic communication service or remote computing service shall retain for a period of at least two years all records or other information pertaining to the identity of a user of a temporarily assigned network address the service assigns to that user.”

Translated, the Internet Safety Act applies not just to AT&T, Comcast, Verizon, and so on–but also to the tens of millions of homes with Wi-Fi access points or wired routers that use the standard method of dynamically assigning temporary addresses. (That method is called Dynamic Host Configuration Protocol, or DHCP.)

“Everyone has to keep such information,” says Albert Gidari, a partner at the Perkins Coie law firm in Seattle who specializes in this area of electronic privacy law.

The legal definition of electronic communication service is “any service which provides to users thereof the ability to send or receive wire or electronic communications.” The U.S. Justice Department’s position is that any service “that provides others with means of communicating electronically” qualifies.

That sweeps in not just public Wi-Fi access points, but password-protected ones too, and applies to individuals, small businesses, large corporations, libraries, schools, universities, and even government agencies. Voice over IP services may be covered too.

Under the Internet Safety Act, all of those would have to keep logs for at least two years. It “covers every employer that uses DHCP for its network,” Gidari said. “It covers Aircell on airplanes– hose little pico cells will have to store a lot of data for those in-the-air Internet users.”

In the Bush administration, Attorney General Alberto Gonzales had called for a very similar proposal, saying that subscriber information and network data should be logged for two years.

Until Gonzales’ remarks in 2006, the Bush administration had generally opposed laws requiring data retention, saying it had “serious reservations” about them. But after the European Parliament approved such a requirement for Internet, telephone and VoIP providers, top administration officials began talking about the practice more favorably.

After Gonzales left the Justice Department, the political will for data retention legislation seemed to ebb for a time, but then FBI Director Robert Mueller resumed lobbying efforts last spring.

This tends to be a bipartisan sentiment: Attorney General Eric Holder, a Democrat, said in 1999 that “certain data must be retained by ISPs for reasonable periods of time so that it can be accessible to law enforcement.” Rep. John Conyers, the Democratic chairman of the House Judiciary Committee, said that FBI proposals for data retention legislation “would be most welcome.”

Smith, who sponsored the House version of the Internet Safety Act, had previously introduced a one-year requirement as part of a law-and-order agenda in 2007.

A 1996 federal law called the Electronic Communication Transactional Records Act regulates data preservation. It requires Internet providers to retain any “record” in their possession for 90 days “upon the request of a governmental entity.”

Because Internet addresses remain a relatively scarce commodity, ISPs tend to allocate them to customers from a pool based on whether a computer is in use at the time. (Two standard techniques used are the Dynamic Host Configuration Protocol and Point-to-Point Protocol over Ethernet.)

In addition, Internet providers are required by another federal law to report child pornography sightings to the National Center for Missing and Exploited Children, which is in turn charged with forwarding that report to the appropriate police agency.

The Internet Safety Act is broader than just data retention. Other portions add criminal penalties to other child pornography-related offenses, increase penalties for sexual exploitation of minors, and give the FBI an extra $30 million for the “Innocent Images National Initiative.”

PHILADELPHIA – Porter McConnell gave up on pay TV last summer after noticing that monthly rates kept creeping up. Now with no satellite or cable TV, she watches her trusty old TV set with an antenna or she goes online to catch her favorite programs. Once in a while, she buys shows from Apple Inc.’s iTunes service. McConnell also upped her subscription to Netflix Inc.’s movies-by-mail service so she gets two DVDs at a time instead of one, for $15 a month. “Part of it is, I’ve got to economize,” said the 30-year-old Washington, D.C., resident who works at a nonprofit.

McConnell is the kind of consumer who makes cable and satellite TV operators lose sleep. While a weak economy invariably makes people pinch pennies, this is the first time that viewing shows online has become a viable competitor to pay TV, making cutting the cord easier.

Cable operators are starting to notice. Glenn Britt, chief executive of Time Warner Cable Inc., voiced his concern Wednesday in a quarterly earnings discussion with analysts. “We are starting to see the beginning of cord cutting,” he said. “People will choose not to buy subscription video if they can get the same stuff for free.”

It’s tough to pin down how many people actually have given up cable — most of the evidence remains anecdotal — and which customers moved to a competitor.

Still, Time Warner Cable, the nation’s second-largest cable operator, lost 119,000 basic video customers in the fourth quarter, even after excluding subscribers it gave up from the sale of some cable systems. The company also posted slower growth in new digital cable TV, Internet and phone subscribers. More details will emerge as other cable and satellite TV operators report earnings in the coming weeks.

This is not to say that the cable business is in trouble. It’s a mixed picture in this economy. While there will be some people who will completely give up their pay TV service, many folks will keep the subscription but cut back instead on going out to the movies. They also might give up a movie channel or two and buy fewer pay-per-view shows.

But pay TV providers are right to be alarmed. Not only has a flood of TV shows and movies become available online, but the video quality has gotten better. Netflix is expanding its service that lets subscribers stream movies and shows from the Internet at no additional cost. And more and more people have home broadband — 57 percent of American adults, according to the Pew Internet and American Life Project.

Throw in the worst economic slowdown in nearly a century and people question whether they still want to pay for cable or satellite. As of January 2008, the average monthly home cable bill was $84.59, up 21 percent from two years earlier, according to the Federal Communications Commission.

“You’ve got these factors aligning at the right time,” said Bobby Tulsiani, senior analyst at Forrester Research. “This time there is a real, viable alternative” to cable.

To be sure, there can be drawbacks to canceling pay TV. Watching shows on a PC still isn’t as comfortable as watching TV while relaxing on a couch. The quality of Internet video, while improving, still isn’t as good, especially for live events, in which video and audio might not be in sync. While some game consoles, Blu-ray players and other devices enable video to be seamlessly delivered over the Internet to a TV, hooking up a computer to the TV to watch the full gamut of online shows on a big screen can take some technical savvy.

These downsides mattered to 36-year-old Peter Tierney, who lost his job two weeks ago as a Web producer for a New York advertising agency. With a wife and son to support, he called Time Warner Cable to cut his premium Japanese channel and whittle down his $180 monthly cable bill. Tierney ended up saving nearly $70 a month, after Time Warner Cable gave him discounts good for two years and he canceled the premium channel.

“It’s hard for two people to watch shows on the computer at the same time,” Tierney said. “I can’t sit on the comfy couch. I have to go to my desk and sit on my chair.”

Indeed, a Forrester survey to be released in about a month found out that most people aren’t planning to ditch their cable subscriptions soon. But the Internet is coming on strong as a new way to watch video, especially for the younger set.

Tulsiani noted that the success of Hulu.com, a joint venture NBC and Fox that officially launched last year and offers free TV shows and movies, has attracted other entrants. Perhaps to hedge its bets, Philadelphia-based Comcast Corp. — the nation’s largest cable company — runs a similar site called Fancast.com, while full TV episodes now are available through the networks’ Web sites. YouTube made deals last November to carry full shows in an alliance with CBS and MGM.

This is what worries Time Warner Cable’s Britt. He warned that if cable networks keep moving content online for free, it would hurt them and cable operators like Time Warner. Because with fewer subscribers, cable operators will pay less money to programmers for the right to air their content.

But the networks’ hands largely are tied. People are illegally swapping files of shows and movies over the Internet already, so the networks might as well make money off it with advertising and take some control over their content.

While cable and satellite TV companies worry about any consumers cutting service, it would appear younger people pose the biggest threat, given the wide generation gap in online TV viewing. About 72 percent of people ages 18 to 29 have watched a video online, compared to 34 percent of people ages 50 to 64, according to Pew.

Consider Thomas Senger and his family. The 23-year-old security officer decided not to get cable recently after moving out of his parents’ house and into his own apartment in Bayonne, N.J. He doesn’t watch that much TV anyway and prefers playing video games or viewing DVDs with friends.

“It’s pointless to pay for something that I watch over the Internet,” he said.

But that’s not an option for his grandparents, who don’t know how to use a computer and watch a lot of TV. His parents are more savvy about the Internet, but not enough to change their viewing habits. Senger said his mother likes to watch the QVC shopping channel live. She and his stepfather also watch TV while eating dinner — a tough proposition over a PC screen. “Both of them will still need TV,” Senger said.

WASHINGTON – Among the economic stimulus proposals moving through Congress is one that fulfills an old dream of broadband boosters. It would offer substantial funding for high-speed Internet networks in corners of the country that still rely on dial-up connections or have only one broadband option.

The hope is that construction of these networks will create jobs, and that better access to broadband will spur all sorts of new economic activity. Yet not everyone agrees that broadband funding belongs in a stimulus plan.  Some critics of the idea wonder how many people will actually sign up for the new networks once they are built. Others question how many jobs broadband investments will really create. Even supporters debate whether Congress is going about funding broadband expansion the right way.

Recent surveys by the Pew Internet & American Life Project have found that 57 percent of Americans subscribe to broadband at home, while 9 percent rely on dial-up service. Others go online elsewhere — but 25 percent simply don’t use the Internet at all.

Those holdouts are the hardest to reach. They include many poor and elderly people, as well as residents of rural areas that the big broadband providers have abandoned as too costly to serve — an issue that Congress is trying to address.

The broadband proposals are still taking shape as Congress debates the broader stimulus plan. But the bill that ultimately emerges is likely to contain $6 billion to $9 billion to help fund landline and wireless broadband networks in unserved and underserved areas. It also is likely to give tax incentives to encourage companies to invest in new or faster broadband networks.

These investments will create new jobs up and down the economic food chain, said Robert Atkinson, president of the Information Technology and Innovation Foundation. His group estimates that a $10 billion investment in broadband would produce as many as 498,000 new jobs.

Those include the construction workers and telecommunications technicians who must dig up streets, lay down fiber-optic lines and install wireless towers, as well as the engineers and factory workers at companies that make the fiber, electronics and computer equipment needed to build the networks. Much of that equipment is made overseas now, but Atkinson’s projections exclude jobs that would go abroad.

Broadband also produces what Atkinson calls a “network effect” that creates many more indirect jobs. People who sign up for broadband, for instance, are more likely to purchase a new computer and buy services online, he said. Broadband also serves as a foundation for businesses that otherwise might not exist — from Internet retailers to online entertainment services to social networking sites.

In addition, broadband makes it possible for doctors to consult with patients hundreds of miles away, for students to take online classes at universities across the country and for governments to deliver services more efficiently, said Jeff Campbell, a senior policy and government affairs director at Cisco Systems Inc., a leading maker of networking equipment.

However, Scott Wallsten, senior fellow with the Technology Policy Institute, is dubious that those indirect benefits really produce the vast number of new jobs that supporters presume. And he questions whether the broadband proposals in the stimulus plan could simply reward telecommunications companies for making network investments that they would have made anyway.

John Horrigan, associate director for research at the Pew Internet project, also points out that just because more Americans are given access to broadband doesn’t guarantee that they will subscribe.

A Pew study found that 14 percent of today’s dial-up and non-Internet users say they don’t subscribe to broadband because it is not available where they live. But far more — 51 percent — say they are just not interested.

Senate Democrats have been seeking $250 million to promote broadband adoption. Proponents say those efforts could include helping poor people buy computers and teaching people how to navigate the Web. But if the goal is to increase broadband adoption, “does that belong in a stimulus package?” Horrigan said. “I don’t know.”

For his part, Atkinson, head of the technology foundation, has a different worry: that Congress is attaching too many strings to the broadband grants.

While private companies, state and municipal governments, nonprofits and public-private partnerships would all be eligible for federal support, it remains unclear whether big broadband providers would actually apply.

That is because some proposals being debated would give a significant amount of their grant money to networks that can deliver Internet connection speeds that might be difficult for most broadband providers to offer in the next 12 to 18 months, Atkinson said.

What’s more, Congress appears likely to require many of the grant recipients to comply with “open access” or “nondiscrimination” mandates. While those terms would be left to the Federal Communications Commission to define, some technology-policy analysts believe the rules could end up imposing “network neutrality” rules that would officially bar broadband providers from prioritizing certain kinds of Internet traffic.

Those details aside, this is a crucial moment for supporters of a big government investment in broadband. Much as the rollout of the electrical grid and the U.S. highway system helped spark economic growth in rural areas during earlier generations, they say, more widespread and affordable broadband today could spur benefits that otherwise might not occur.

“This is an important recognition by the government that broadband is the infrastructure for the 21st century,” said Cisco’s Campbell. “It’s not just about roads and bridges anymore.”