NEW CABLE BUREAU CHIEF PLANS REORGANIZATION, BROADBAND TEAM

New FCC Cable Bureau Chief Kenneth Ferree said he was focusing first on retooling Bureau to make it more efficient and forming group of staffers to grapple with complex broadband and convergence issues. Questioned in his 3rd floor office at agency hq Thurs., Ferree expressed his aversion to regulating such new cable services as high-speed data and interactive TV (ITV), preferring to let free market rule. He also showed little desire for Commission to intervene in such issues as DTV-cable compatibility standards and copyright protection issues. But he indicated interest in extending and possibly expanding cable program access rules, now set to expire next year.

In his maiden interview since taking office last week, Ferree told us that his first priority was to “make sure it’s [the Cable Bureau is] a model” of efficiency, effectiveness and speed. “As a former private attorney, I know the frustration of waiting for the Commission to act on things,” he said. Reflecting Chmn. Powell’s focus on management issues, Ferree said he was “talking to folks throughout the Bureau” about possible ways to improve unit’s performance, including restructuring divisions and moving staffers around. Although he has drawn no conclusions, he said he aimed to make evaluations in next few weeks and begin carrying out changes in month or 2. “I want to resolve this soon,” he said, noting that proposed Bureau reorganization “has to accommodate” Commission-wide restructuring that Powell is planning.

As part of retooling, Ferree said he wanted to create some sort of special team or task force of staffers to help Cable Bureau deal with “new issues related to broadband advanced services.” He said he already had started to put group together, citing last week’s appointment of Sarah Whitesell as assoc. bureau chief. Whitesell, most recently legal adviser on common carrier issues for Comr. Tristani, has legal experience primarily on telecom side. Ferree said he also planned to bring in technical broadband experts. “There will be more,” he said.

While emphasizing management issues, Ferree declined to say much about idea of creating umbrella TV office by combining Cable Bureau, Mass Media Bureau and satellite unit of International Bureau. Old law school friend of Powell’s, he said he had held “a couple of discussions” with chairman about FCC reorganization but had “no insights” on latter’s conclusions. But, while hedging his bets, he cautiously expressed support for concept. “There’s a lot to be said for some sort of functional reorganization,” he said. However, he quickly added, “I don’t know whether it’s do-able or not. If it would be a good thing, I would like it. If it would be a bad thing, I wouldn’t like it.”

Ferree also steered away from discussing cable regulatory forbearance proposal of his predecessor, Deborah Lathen (CD May 18 p3). Saying he hadn’t seen proposal yet, he declined comment on its specifics. But he said that on principle, “I think I'd be in favor of anything giving the Commission additional flexibility” to refrain from regulating new cable-related services. “In theory, more forbearance authority would be a good thing,” he said.

Ferree didn’t carve out position on cable open access and ITV inquiries now wending their way through FCC. But, while supporting idea of openness, he expressed strong resistance to regulating markets for such new services, particularly such as ITV that’s “not really well defined” and still is emerging. “My predisposition is not to regulate unless there’s a demonstrable case of market failure or [there are] consumer protection concerns,” he said. “The emphasis is on demonstrable,” he said, and he’s not inclined to “act on inchoate fears or speculation.”

Unlike Lathen, Ferree said he wasn’t sure whether there should be some type of cable horizontal ownership limits, following recent ruling by U.S. Appeals Court, D.C., striking down current 30% cap as unconstitutional. While “a number of economists will tell you horizontal ownership limits don’t make economic sense,” he said, “I'm not convinced of that.” Despite his uncertainty, he said Commission’s planned further notice of proposed rulemaking on issue, now being drafted by Cable Bureau and agency’s chief economist, would abide by Congress’s wishes and suggest new, presumably higher cap. “We're confined by the statute,” he said. “We're going to come up with a standard and defend that standard rigorously on the record.”

Like Lathen, Ferree hinted at inclination to retain and possibly expand program access rules, enacted as part of 1992 Cable Act and scheduled to sunset after 10 years. As veteran communications lawyer who represented such private cable operators as Optel in past, he said he had seen how limited access to cable programming had hampered cable rivals. “I'm sensitive to the needs of competitive MVPDs [multichannel video programming distributors],” he said. He also expressed concern about problems caused by law’s limited applicability to satellite-delivered cable programming and vertically integrated programmers.

Ferree said he didn’t see need for FCC to intervene further in DTV-cable compatibility and copyright protection disputes among broadcasters, cable operators, consumer electronics makers. movie studios. He said Commission would “continue to monitor discussions” and “have the topside look” at issues but probably would refrain from imposing any new mandates on industries. He also all but scotched idea of Cable Bureau’s making any more regulatory moves to spur cable competition. “I don’t want to regulate for the sake of regulation,” he said.