ACA filed a petition Fri. for a rulemaking that would change retransmission consent regulations “to reflect marketplace changes for broadcasters, consumers and smaller cable companies,” the group said. The rule changes would: (1) maintain the broadcast exclusivity regulations for stations that elect must carry or do not seek additional consideration for retransmission consent. (2) Eliminate broadcast exclusivity when a broadcaster elects retransmission consent and seeks additional consideration for carriage by a small cable company. (3) Prohibit any party, including a network owner, from preventing a broadcast station from negotiating retransmission consent with a small cable company. “Broadcaster cash demands threaten to add more than $860 million to the basic cost of cable,” ACA said. “Competition and consumers are harmed when broadcasters use exclusivity and network affiliate agreements to extract supracompetitive ‘prices’ for retransmission consent from small cable companies.” The group has filed a petition for inquiry into retransmission consent practices but said the changes requested in the rulemaking could resolve issues raised in the inquiry and therefore ACA would be willing to withdraw its inquiry petition.
There isn’t any reason for the FCC to recommend additional govt. intrusion into private contractual negotiations, ABC, CBS, Fox and NBC TV affiliate associations said in comments filed on the Satellite Home Viewer Extension & Reauthorization Act (SHVERA) rulemaking. “Neither the Commission nor the court has ever determined that a broadcast station has abused the retransmission consent process or that the rules are, in a any sense, anti-competitive,” the networks said. Earlier, cable companies issued comments that raised concerns that cable rate increases were being driven by retransmission consent rules that allow broadcasters to obtain higher license fees while putting cable at a competitive disadvantage (CD March 3 p6). But now that SHVERA has extended the “good faith” negotiation requirement to 3rd parties seeking to retransmit broadcast signals, the competitive playing field has been leveled even further, the networks said.
Cable rate increases are being driven by retransmission consent rules that allow broadcasters to obtain higher license fees while putting cable at a competitive disadvantage with DBS, according to comments filed Wed. by NCTA, the American Cable Assn. (ACA) and several cable companies in the Satellite Home Viewer Extension & Reauthorization Act (SHVERA) rulemaking (CD Jan 26 p15). Broadcasters defended the rules, while EchoStar said the FCC needs to clarify good faith negotiation rules.
Cal. PUC Comr. Susan Kennedy -- a national leader among deregulatory policy makers -- is pushing for the states to assert themselves on communications policy, even in gray jurisdictional areas, based on an “Internet freedom” principle to ensure access to VoIP. She’s also proposing her commission undertake a sweeping, possibly fast-tracked remake of the basic state regulatory structure. Kennedy is emboldened by the emergence of IP-based and other competitive services; growing receptivity among fellow state regulators to market-based premises; and what she sees as an FCC “void” creating an opening for state activism, she indicated in a speech this week.
“Don’t invite us to write a rule book on this subject,” FCC Chmn. Powell told public broadcasters in Washington on Tues., when asked about broadcast indecency. That would be a great mistake, he added. Speaking at a Capitol Hill Day event of the Assn. of Public TV Stations (APTS), Powell said the subjectivity and case-specificity of FCC tests allowed for context, tone and other factors in determining indecency in broadcasts. He said he wasn’t sure an FCC rulemaking could provide clarity to the subject and would be the right way to go. He said govt. policy, like business cycles, tended to ebb and flow and correct itself. To let that happen, broadcasters shouldn’t go into “excessive self-censorship. The danger is in self-censorship,” he said. Powell said most of the material that the Commission had held liable isn’t “stuff that is close to the line.” Praising public TV for DTV transition leadership, he said public broadcasters embraced DTV rather than viewing it as a burden. Pointing out that satellite providers had seen the potential of digital and high-definition content before cable, Powell said public TV could leverage its recent voluntary cable carriage agreement to get a similar deal with satellite.
The Bells lined up against competitors on a Verizon petition seeking forbearance from Title II and Computer Inquiry rules as they apply to broadband service. The Bells said the broadband marketplace is highly competitive and the regulatory structures they face give cable providers in particular an unfair advantage. Competitors argued that Verizon wants to destroy competition. The 2 sides recently faced off in a similar battle over a BellSouth forbearance petition also before the Commission.
ACA is drafting a petition for rulemaking that would ask the FCC to alter its retransmission consent and network nonduplication rules so cable operators have more flexibility in negotiations with broadcasters. The current rules give broadcasters a “monopoly” to dictate the terms of cable carriage in small markets, said ACA Pres. Matthew Polka: “We think that the free market ought to be allowed to work.”
The NAB said it would work to overturn the FCC’s decision that cable systems don’t have to carry all broadcast TV digital signals. “NAB will be working to overturn today’s anti-consumer FCC decision in both the courts and in Congress. We look forward to the fight,” NAB Pres. Edward Fritts said in a statement.
Legg Mason listed intercarrier compensation reform as the lead issue among those facing the FCC in the final days of the Powell chairmanship. “With FCC Chairman Powell expected to leave in March, the agency’s primary focus seems to be on opening a new intercarrier compensation reform initiative and on tying up various related loose ends,” the report said. “We expect the FCC will propose driving down and streamlining the fees to eliminate arbitrage opportunities -- which appear to be increasing due to VoIP -- possibly by moving to a ‘bill and keep’ system under which carriers eventually would no longer charge each other for traffic exchanges,” Legg Mason said. “We expect the FCC will seek comment on a broad range of issues and proposals; the question is how strong its leanings will be. Whatever this FCC says now, the rulemaking will likely take at least a year, and much could happen in the meantime.” Pressure for an intercarrier compensation overhaul is increasing as the FCC is forced to referee numerous disputes,” the report said, and in particular, “a showdown is looming over the Level 3 forbearance petition that asked the FCC not to apply access charges to certain VoIP calls.” Along with an intercarrier compensation proceeding and action on the Level 3 petition, other actions that appear to be on the front burner for action before Powell leaves, according to Legg Mason: (1) DTV must-carry. (2) AT&T’s calling card petition. (3) Other intercarrier compensation issues such as rural carriers’ effort to collect access charges from long-haul carriers that connect “virtual NXX” traffic from ILEC customers to VoIP providers and ISPs. Also on the front burner is a petition from wireless carriers asking the FCC to prevent ILECs from unilaterally imposing high per-minute termination tariffs on some wireless traffic. (4) The UNE remand order, which is scheduled for release today (Feb. 4). (5) An order due Feb. 27 in response to a federal-state joint board recommendation aimed at reducing the growth of universal service funding in rural areas. (6) Review of the International Bureau’s grant of ancillary terrestrial authority to mobile satellite operator Mobile Satellite Ventures. (7) Another spectrum sharing order, probably one permitting the use of white space in the 3650-3700 MHz band. (8) Further action on the July 2006 cable set-top box deadline, which the cable industry and suppliers want to delay.
The FCC will consider 2 high-profile items -- intercarrier compensation for telecom carriers and DTV must-carry for cable -- at the Feb. 10 agenda meeting. As expected, the Commission will open a rulemaking to consider various proposals for reforming the intercarrier compensation regime and will vote on an order dealing with a number of outstanding issues such as Sprint’s rating and routing petition and T-Mobile’s petition on ILEC wireless termination tariffs. On DTV must-carry, the FCC is expected to reject broadcasters’ request that cable carry all their DTV signals. Also on the agenda: (1) The agency will launch a rulemaking on the use of “white spaces” in the 900 MHz business and industrial land transportation pool. The Wireless Broadband Access Task Force will also report on its findings and recommendations relating to the Commission’s wireless broadband policies. (2) Petitions for reconsideration of the national do-not- call registry and related rules. (3) Mandatory exchange of customer account information among local and interexchange carriers. (4) What ILECs charge for changing subscribers’ presubscribed interexchange carriers. (5) An application for review filed by Sinclair Bcst. regarding a decision by the Media Bureau dismissing applications by Sinclair to acquire TV stations from licensee subsidiaries of Cunningham Bcstg. (6) A review of the International Bureau’s 2003 decision to grant Mobile Satellite Ventures authority for an Ancillary Terrestrial Component. Legg Mason analysts don’t expect the Commission to backtrack from IB’s position or loosen the so-called gating factors designed to ensure that the satellite licensees’ terrestrial spectrum use is truly ancillary to a functioning satellite system.