All 6 pending FCC proceedings dealing with broadcast ownership rules will be combined into “omnibus blockbuster report and order” to be sent to commissioners for action in spring, Media Bureau Chief Kenneth Ferree said Mon. Briefing reporters on Bureau’s plans, he said results of several studies now under way (some from outside Commission) would be available by late summer and soon thereafter Bureau would release its proposed report and order for comments. That’s expected to take until end of year, he said, after which staff will work on recommendations to be sent to commissioners in spring.
Dozens of cities and municipalities said FCC didn’t have authority to usurp local govt. control of public rights-of- way under either Communications Act or Constitution, in comments filed jointly at FCC Mon. in rulemaking on appropriate regulatory treatment of broadband access to Internet over cable facilities. Cities -- more than 55, including Nashville, Minneapolis and Oklahoma City -- said they would lose $1.8 million this year, more than $2.5 million in next 2 years and more than $50 million over course of 15-year franchise because of FCC’s declaratory ruling that cable modem service was “interstate information service” not subject to Title II requirements. That ruling, if it withstands court challenges (CD April 2 p1), means service wouldn’t be subject to local franchise fees.
FCC extended for 5 years rule enacted by Congress in 1992 that prohibits cable operators from withholding their own programming from their competitors, particularly satellite rivals. While decision wasn’t unexpected, it also wasn’t without dissent. Vote was 3-1, with Republican Comr. Abernathy voting against it. Chmn. Powell, who also is Republican, said that despite growth of competition in multichannel video marketplace, cable industry held 78% of market and thus remained “phenomenally concentrated” and must be looked at by regulators with “a scrutinizing eye.” He said increased concentration of media companies and efforts by those companies to cluster their systems “increase the probability of some forms of anticompetitive behavior that the government has an obligation to watch.” Powell said cable had demonstrated ability to exert undue influence over programming market. Cable critics had argued -- and he apparently agreed -- that large media companies could make it difficult, if not impossible, for upstart programmers to gain viability through carriage and that such large companies could drive down programming prices artificially. Powell said he was “convinced there remain both the incentive and ability to act in an anticompetitive manner” and that while healthy competition had developed, it hadn’t reached level at which he believed cable wouldn’t try to defeat competition through exclusive contracts with affiliated programmers.
With court-requested date for FCC ruling less than 2 weeks away, question remains at Commission whether mobile carrier may seek compensation from IXC for long distance traffic terminated on wireless network. U.S. Dist. Court, Kansas City, last year stayed litigation brought by Sprint PCS against AT&T, directing companies to take those issues to FCC. U.S. Dist. Judge Nanette Laughrey said if Commission didn’t rule on referred issues by June 24, litigation would move forward. Several sources said this week that direction Commission would take on issue still wasn’t clear. Sprint PCS has argued in ex parte filings that no federal law or Commission policy bars it from recovering all termination costs from AT&T. But AT&T told agency in filing last week that “any decision to modify current compensation arrangements between CMRS providers and IXCs is better suited to the intercarrier compensation proceeding where all the relevant factors can be evaluated.”
House Budget Committee member Capuano (D-Mass.) told FCC in letter dated June 4 that Commission shouldn’t strip local govts. of their ability to regulate broadband access to Internet over cable. Capuano, former mayor of Somerville, Mass., said rulemaking on issue would “drastically impact” local communities’ ability to charge franchise fees based on cable modem service revenue. “This creates economic hardship for thousands of cities and towns, many already struggling with revenue shortfalls,” Capuano wrote, saying rulemaking had potential to deny communities opportunity to recoup expense of providing right-of-way to cable companies. “If local communities cannot recoup these expenses, they will be forced to subsidize these firms at the expense of providing services to taxpaying citizens,” he wrote. Capuano said rulemaking also would raise constitutional issues by expanding federal authority over local govts. and could eviscerate local communities’ leveraging power, which he said often must pressure cable companies to provide better customer service and help local communities address “the digital divide.” Capuano complained that cable companies engaged in “economic redlining” by upgrading their networks in affluent neighborhoods while ignoring poorer ones. “Local governments have been leaders in forcing cable firms to provide these new services to every household,” he wrote. “Removing this regulatory power will only exacerbate the division between rich and poor.”
At June 13 agenda meeting, FCC will consider notice of proposed rulemaking on upper millimeter wave bands that will involve service rules for fixed point-to-point operations at 71-76 GHz, 81-86 GHz and 92-95 GHz. Planned applications for that spectrum include gigabit-per-sec. broadband capacity with fixed wireless applications in areas where fiber capacity can’t reach. Other wireless item is annual report on competitive market conditions for commercial mobile services. On media side, FCC will consider order sunsetting cable exclusive contract provision, as well as possible rulemaking on revising cable rate regulation, including accounting and pricing flexibility rules. Commission also is expected to open inquiry to gather data for its 9th annual report to Congress on status of video competition. Commission also will consider 2 wireline items: (1) Order modifying e-rate rules for unused funding. (2) Report on Telecom Service Priority program.
House Commerce Committee Chmn. Tauzin (R-La.) and Telecom Subcommittee Chmn. Upton (R-Mich.) urged FCC to repeal broadcast-newspaper cross-ownership rule and “expeditiously complete the rulemaking process” on issue begun in Sept. In June 4 letter to FCC Chmn. Powell, Tauzin and Upton said media markets had changed since 1975 when cross-ownership rules, preventing common ownership of broadcast station and daily newspaper in same market, were adopted. “We believe the explosion of media sources should eliminate any concern regarding a lack of diversity of views in the marketplace and competition, which have been the principles of justifications for the rule,” letter said. Cable, direct broadcast satellite and Internet have opened new media outlets, making repeal of rule “long overdue,” letter said. NAB supports repealing rule, with spokesman saying “it’s a relic of a bygone era.”
FCC Comr. Abernathy said at Thurs. press breakfast that she expected Commission to act before one-year anniversary of Verizon Wireless petition for forbearance on wireless local number portability (LNP) requirements. Verizon last July asked forbearance on requirement that carriers began providing wireless LNP capabilities by Nov. 24 of this year. If FCC doesn’t act on such forbearance petitions within one year of original filing, they're automatically granted unless agency grants temporary extension. Abernathy told reporters that range of dates under discussion to give wireless carriers more time appeared to be between 6 months advocated by public safety groups in recent filings and year or more, which she advocated. Asked whether last week’s U.S. Appeals Court, D.C., ruling that vacated certain line-sharing and unbundled network element (UNE) requirements would make it harder to impose Internet access requirements on MSOs or other service providers, she said: “I don’t think it has done that… We are trying to figure out exactly what the standard is that the court articulated in that decision.” D.C. Circuit had remanded FCC orders on line-sharing requirements and UNEs, handing ILECs victories in both cases (CD May 28 p1). Commission still is examining what “reasonable” interpretation of that decision would be. “We are still working through that, it’s very complex,” Abernathy said. In some regards, FCC is “fortunate” because notice of proposed rulemaking already is examining issues that court had highlighted as needing more justification by Commission. Example, she said, is that FCC is seeking comment on issues such as national list of UNEs. “We have already asked if additional granularity is required in this area,” she said. “It certainly gives us some more information about the court’s thinking when it comes to under what circumstances do you force line-sharing, under what circumstances do you impose unbundling requirements,” Abernathy said. Asked whether Commission still had maneuvering room to require cable operators to carry unaffiliated ISPs, she said, “I think that’s still an option.” She said she hadn’t spoken directly to Gen. Counsel’s office on issue, but it still appeared to be option, although Commission would need to justify such step. “You can’t just do it because you think it’s nice.” Asked about recent series of cases in which Supreme Court has gone different way than circuit courts on issues such as TELRIC and pole attachments, Abernathy acknowledged, “it is frustrating.” But she said Commission was obligated to abide by Circuit Court rulings in such cases unless Supreme Court held otherwise. On recent legal challenge to FCC’s classification of cable modem service as information, Abernathy said agency’s order was “very well written. I feel very strongly that we should be able to win that.” Local govt. groups recently announced they were asking U.S. Appeals Court, D.C., to review that decision.
FCC should repeal radio-TV cross-ownership rule because it no longer is necessary to promote economic competition and diversity, Viacom said in petition for Commission rulemaking. Petition called rule “historical anomaly,” saying FCC had “based all of its recent radio ownership decisions on the presumption that radio and television stations compete in different advertising markets.” Separate ownership also isn’t necessary for diversity of ideas, Viacom said, because marketplace for ideas “is rich and robust” with addition of new cable channels, Internet, other sources. It noted that radio-TV cross-ownership rule was only broadcast-related cross-ownership rule not currently under review.
Federal regulators “appear to have at their core the single-minded but mistaken notion that open, nondiscriminatory telecommunications platforms no longer serve the public interest when they are used to provide so- called ‘broadband’ services,” Vint Cerf WROTE Mon. to key Washington officials, adding “the FCC appears determined to deny CLECs and ISPs the very capabilities they need to survive.” Cerf, co-creator of Internet Protocol (IP) standard used for Internet and now senior vp-Internet Architecture & Technology for WorldCom, wrote FCC Chmn. Powell and Commerce Dept. Secy. Donald Evans urging open broadband markets to promote competition. “If you want competition there is one absolute way to guarantee it,” Cerf told our affiliated Washington Internet Daily -- namely, that federal regulators should ensure that “we compete within each medium.”