When Media Bureau Chief Kenneth Ferree first announced that Commission would try using abstract study methodologies to examine cable company consolidation, he said there was possibility study (CD Nov 8 p3) would be found useless and FCC would “throw it out the window.” Despite Commission’s admission that study contained computational errors -- which it said have since been corrected -- and abundance of criticism, even from sworn enemies in telecom industry, FCC insists study has some merit. How much merit it should be given, however, when Commission makes determinations about cable concentration continues to be subject of debate. Staff members we spoke with said privately that study, Horizontal Concentration in the Cable Television Industry: An Experimental Analysis, would be given little weight, if only because it was merely one piece of evidence in proceeding on cable ownership limits.
ASPEN -- Broadband will succeed when content can be distributed online with technological protections from piracy, along with concerted consumer education campaign, News Corp. COO Peter Chernin said at Progress & Freedom Foundation Aspen Summit here. Same argument was pitched by Intel Exec. Vp Leslie Vadasz and RIAA Pres.-Gen. Counsel Cary Sherman and cheered by Asst. Secy. of Commerce for Technology Policy Bruce Mehlman. But summit didn’t see resolution of contentious issue of online content distribution, with off- the-record panel on subject Mon. quickly degenerating into name-calling and accusations of industries’ enabling criminal behavior. Much hallway conversation Tues. focused on negative and unproductive tone of much of that dialog, and at least one participant had intended to take some of remarks on record by addressing them in Tues. meeting, but was dissuaded when told it would only further degrade level of dialog. Mehlman, who has hosted several digital rights management forums at Technology Administration, told Summit Tues. that Mon. panel contained more contention than solutions.
ASPEN -- New technologies and services such as Wi-Fi and Voice-over-IP (VoIP) should be sheltered from burdensome regulation in their infancies, with regulators perhaps even acting proactively to promote their growth and spur competition with incumbent industries, FCC and Commerce Dept. officials said here Mon. Speaking at Aspen Summit organized by Progress & Freedom Foundation, FCC Comrs. Kathleen Abernathy and Kevin Martin, along with NTIA Dir. Nancy Victory, agreed on need for what Abernathy called new services doctrine, and even drew some support from industry representatives who would find themselves at regulatory disadvantage in such model.
Dearth of extenuating circumstances makes it unlikely CEA will petition FCC for reconsideration of Aug. 8 order mandating DTV tuners in TVs (CD Aug 9 p1) and other NTSC receiving devices by 2007, CEA Pres. Gary Shapiro told us Mon. He said lack of new evidence on DTV tuner mandate would make reconsideration petition virtually “fruitless.”
In one of most significant steps FCC has taken to transition to DTV, commissioners voted 3-1 Thurs. to force CE manufacturers to include over-the-air DTV tuners in virtually all TV sets by 2007. Move had been expected (CD Aug 8 p3). Broadcasters applauded decision, with NAB Pres. Edward Fritts calling it “an important first step” in ensuring all Americans would have access to over-the-air broadcast DTV after they returned highly valuable spectrum to govt. CEA vowed challenge either by seeking reconsideration or by filing lawsuit in federal court on behalf of CE manufacturers who must comply with Commission’s order.
Federal Election Commission (FEC) asked for comments on rulemaking to carry out provisions of campaign reform bill that becomes effective Nov. 6 -- day after voting in 2002 non-Presidential elections. FEC scheduled Aug. 28-29 hearing on proposal, with comments by those seeking to testify due Aug. 21, others by Aug. 29. Congress gave FEC 270 days (until Dec. 22) after bill became law to adopt new rules. FEC proposals seek comments on as many as 5 different interpretations of some of bill’s requirements, defines “electioneering communications [as] certain broadcast, cable or satellite communications that refer to a clearly identified candidate” for House or Senate carried within 30 days of primaries, 60 day of general elections, “targeted to reach” at least 50,000 people eligible to vote. Proposal asks for comments on “how to determine, and where to obtain the data on, the number of persons a communication reaches.” FEC rules would exempt communications limited to Internet and Webcasts. FEC already has adopted rules covering spending of political “soft money” in campaigns that have been highly criticized as ineffective by Alliance for Better Campaigns (ABC) and others. Coalition, led by Sen. McConnell (R-Ky.), has filed suit in U.S. Appeals Court, D.C., charging campaign law is unconstitutional. Court has put appeal on “fast track,” setting arguments for early Dec. Commenting on FEC proposal, ABC Exec. Dir. Paul Taylor said: “The Commission has decided to write law instead of interpreting law… creating exemptions that [Congress] never intended” -- particularly in its rules on soft money. Proposed FEC rules are scheduled to be published tomorrow (Wed.) in Federal Register and are available at www.fec.gov/register.htm.
Sources report FCC staff is near completion of draft of proposed rulemaking to require digital tuners to be built into TV sets by manufacturers (CD July 23 p3). Proposal reportedly also includes several other DTV-related issues, including cable-related matters. We're told proposal could be circulated among commissioners for vote or placed on agenda for Aug. 8 FCC meeting. CEA Gary Shapiro told us if Commission moved forward on tuner mandates, “we will challenge their jurisdiction and legal right to do so in every way possible,” including petition to U.S. Appeals Court, D.C.
Sen. Hollings (D-S.C.) and Reps. Tauzin (R-La.) and Dingell (D-Mich.) told FCC Chmn. Powell in letters that they believed FCC had authority to implement broadcast flag solution to problem of digital content piracy, irrespective of actions by Congress, and urged him to begin work on such solution “immediately.” Hollings, chmn. of Senate Commerce Committee, wrote Fri. that Commission had authority under Title I of Communications Act and its general public interest authority to implement solution “for the benefit of the digital TV transition and consumers across America.” On broadcast flag, he said, “the FCC may act absent legislation.” However, Hollings held out threat that Senate might jump in if broadcast, cable, satellite, motion picture and CE industries stopped cooperating. “While we do not want to have to legislate in this area, the industries must know that the government stands ready to ratify consensus agreements, and to step in if no agreements can be reached after a reasonable time is given for negotiations to move forward,” he wrote.
FCC Comr. Copps proposed 3-part proceeding Thurs. that would (1) develop strategy for avoiding major telecom service disruptions, (2) determine tactics for how FCC should react when telecom company failed, and (3) assess Commission’s authority to do job. Copps said agency must use its current authority to reduce chances of accounting irregularities, market misdeeds, corporate mismanagement. FCC shouldn’t do job of SEC and protect against securities irregularities, he said, but must reexamine its accounting requirements and reliance on corporate-furnished data in light of revelations at Enron, WorldCom, Adelphia and others. “I'm concerned that when it comes to something like accounting, that we're moving in precisely the wrong direction,” he said. He cited pending further rulemaking proposing to roll back and then eliminate accounting rules. “This is not the time to eliminate those protections. It’s not the time to make it harder for us to audit these companies. It’s not the time to handcuff the states in trying to do their job of oversight, too,” he said.
Many ISPs have told FCC that if it deregulates Bell companies’ DSL services, ISP industry will cease to exist. Group of 60 small businesses rounded up by BroadNet Coalition’s grass-roots efforts wrote FCC Chmn. Powell Wed. saying they could lose CLEC DSL providers they used by proposed FCC actions. BroadNet said ILECs after deregulation would lose incentive to offer fair wholesale rates to competitors. BroadNet also has organized “fly-in” next week, when small ISP owners and chairmen of several state ISP associations will meet with FCC officials and Hill leaders to argue their case. Powell has indicated that his desire for broadband market is competition between platforms such as DSL and cable, known as intermodal competition, but ISPs say deregulation to accomplish that could doom some classes of competitors, particularly ISPs offering DSL without their own facilities. BroadNet Coalition Exec. Dir. Maura Colleton said it wasn’t just ISPs that would suffer, but it would hurt small businesses that relied on competition in commercial DSL offerings. “These are not the usual suspects” pleading with FCC, she said of businesses writing to Powell: “They don’t lobby these issues for a living.” In letter, small businesses wrote that they couldn’t afford T-1 lines but DSL competition had “afforded us, for the first time, with a viable alternative to bring our businesses into the networked economy.” Cable isn’t built out to many small businesses, Colleton said, and its asymmetrical architecture doesn’t work well for businesses that require large uploading capability, and security risks remained higher on that platform. FCC has 3 rulemakings under way that could affect DSL -- triennial review of unbundled network elements (UNEs), with reply comments due earlier this week; ILEC “dominant-nondominant” broadband rulemaking and search for regulatory framework for wireline broadband access, which gathered reply comments July 1.