FERREE DEFENDS FCC WORK ON BROADCAST FLAG, OTHER TOPICS
MERIDITH, N.H. -- Any possible FCC rulemaking mandating broadcast flag technology won’t alter copyright law, FCC Media Bureau Chief Kenneth Ferree told the New England Cable & Telecom Assn. (NECTA) Fri. “As I learn more about copyright law, I'm not sure anything the FCC does could have any effect on copyright law,” he said, still smarting from a grilling at the House Judiciary Courts, Internet & Intellectual Property Subcommittee last week (CD March 7 p1).
Ferree made his comments in an informal, and often candid, Q&A session here. The broadcast flag, extra software embedded in the digital broadcast stream, would allow content to be distributed only through approved copy-protection technology, he said: “That’s what people worry about. What will be the approved technology -- who picks it -- is it the FCC?” The end result, he believes, will be a rulemaking “very narrowly tailored to structural issues where we have to bless a coding scheme,” Ferree said. “We're going to end up more like mechanics setting up a structure in which copyright holders and users will be able to assert their rights, to the extent they have rights… We don’t want to become the Copyright Office.”
The gathering of cable executives asked Ferree whether it was possible to infer the outcome of the still-open cable modem proceeding from last month’s Triennial Review vote. One attendee asked, perhaps optimistically, whether, if ILECs now could phase out line sharing for DSL, that would mean cable operators wouldn’t have to share cable modem capacity. Ferree warned that it wasn’t easy to read into the Triennial vote: “It’s hard to read much into that from even the inside [of the FCC].” But the agency retains its basic goal of “intellectual consistency” between the treatment of similar services on different platforms, “so to the extent of whatever you liked in the [Triennial Review], should give you a little bit of a warm and fuzzy feeling about ours,” he said.
A less encouraging result of the Triennial Review was the transfer of UNE determination from the FCC to the states, described by an attendee as taking a federal jurisdiction and going into 51 state jurisdictions. The group expressed concerns about a possible shift of cable regulation from the FCC to local municipalities. “You want to be granular, that would be really granular,” Ferree quipped. While concerns of going to 51 jurisdictions “were put aside by 3 commissioners… I'm not wildly enthusiastic about the thought of turning everything over to 30,000-plus franchise authorities. On the other hand, franchise authorities have a legitimate role,” he said. “We have no intention of stepping on those responsibilities. It’s just better to draw the line between where that starts to cut too deeply into a larger federal policy.” But it’s a contentious issue, he said.
Ferree expressed frustration with recent media reports on what he called the diversity index. “A lot of this has been blown out of proportion: This is a tool, not a rule,” he said, denying reports the FCC planned to keep the newspaper-broadcast cross ownership rule intact but with a new name. “Unless the Commission is prepared to abandon diversity entirely,” it needs a measuring process to ensure that “there remains a diverse range of outlets of viewpoint in every local market,” he said. The diversity index “doesn’t tell you how to draw that line -- whether it’s case by case or a hard cap or soft cap or a high cap. It is simply a tool that tells you [whether] Lincoln, Nebraska, is more or less diverse than Kansas City, Kansas.” Calling the diversity index a “work in progress,” Ferree said the agency was trying to be a little more rigorous, “to weigh outlets in terms of their impact on diversity and to be a little more precise.” Expecting any new diversity rule to be challenged in court, “we'd like to be able to go back to court and have a pretty compelling reason for any diversity rule that was adopted and a way to justify it,” he said.
Asked how the FCC balanced rulemaking with the need to allow companies to collect their rewards for new investments, Ferree said “incentives for investment” had become a high priority for the agency. He cited a recent FCC reorganization that created the Office of Strategic Planning & Policy Analysis, headed by Jane Mago, former FCC Gen. Counsel. The Commission wants to be more “market savvy” and try to anticipate what impact decisions might have on the markets and investment “and derivatively on the incentives to invest and access to capital for companies that want to do interesting things,” he said. The thought is always there but, Ferree warned, “the agency is there to protect the public interest generally and not to protect a company’s investment in a particular industry.”