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Capital Watch

MMTC Wants FCC To Revisit EEO

The Minority Media Telecommunications Council wants the FCC to strengthen minority- and gender-recruiting rules for broadcast stations and cable systems in light of last week's Supreme Court ruling on affirmative action. The council also said it will ask the FCC to reconsider much of its recent broadcast-ownership deregulation in light of judicial support for promoting racial diversity.

MSOs Caught Between Sheetrock and Hardwired Place

Cable operators should not have to provide overbuilders with alternative access to wiring inside multiple-dwelling units and office buildings when the wires are behind sheetrock walls, says the National Cable & Telecommunications Association.

NCTA wants the federal appeals court in Washington to relax a provision in FCC inside-wiring rules that requires cable operators to provide competitors with other options for access when the traditional "demarcation point" between cable-controlled wires and the building's wires is inaccessible.

NCTA agrees that wiring embedded in brick, metal conduit or cinder blocks may be too costly or impossible to access but sheetrock can be easily cut into and repaired.

SEC Charges Yuen

The SEC has filed a raft of securities-fraud charges against the ousted management team of Gemstar-TV Guide. Ex-CEO Henry Yuen and CFO Elsie Leung were charged with cooking the books to meet inflated revenue projections related to the company's interactive program guides, then reaping millions in personal financial gains from compensation tied to company performance.

"In total," the SEC said, "the defendants caused Gemstar to overstate its total revenues by at least $223 million from March 2000 through September 2002." They did so, said the commission, by, among other things, moving revenue from media and licensing sectors to the IPG advertising column "to show dramatic growth and acceptance of IPG advertising when such growth and acceptance did not exist."

The SEC is still investigating whether others at the company were involved in the alleged fraud.

For its part, Gemstar-TV Guide says that it continues to cooperate fully with the SEC, has resolved its past accounting issues and continues to withhold the former executives' settlement money per SEC instructions.

A New Shingle

A quintet of communications attorneys have taken their clients and moved from Shook, Hardy & Bacon to Vinson & Elkins. The five: Former FCC Commissioner Henry Rivera, former FCC Allocations Branch Chief Mark Lipp, former NAB Associate General Counsel Michael Berg, Tom Nolan and Edgar Class. V&E is the 20th-largest U.S. law firm, with headquarters in Houston and offices in Dallas; Austin, Texas; Washington; New York; London; Moscow; Beijing; and Singapore.

Edward's Drug-Ad Amendment Blocked

The Senate last week voted down (69-26) a "truth in drug advertising" amendment from presidential hopeful Sen. John Edwards (D-N.C.) (above). The amendment would have required direct-to-consumer drug advertisers to make information about side effects and risks as prominent in the ads as they do the benefits. Edwards failed to attach the provision to Medicare legislation being crafted in the Senate.

The Association of National Advertisers' Dan Jaffee had criticized the amendment, saying it would have had an "enormously detrimental impact on broadcast advertising," making ads longer, more expensive and potentially ineffective.