Reacting to cable operators’ decision to stop collecting and remitting franchise fees on cable modem service in light of FCC ruling that it was interstate information service, many cities have told MSOs that it’s “premature” move that could find them in breach of local franchising agreements. Cities that have contested cable modem franchise fees decision of MSOs are basing claims on franchise agreements that require cable operators to pay percentage of gross revenue of all services provided on cable system. Some other cities such as Portland (Ore.), wary of costs of likely legal battle, are choosing not to fight MSOs on issue, preferring to have National Assn. of Telecom Officers & Advisors (NATOA) and other local govt. organizations take up legal challenge on their behalf.
Minority Media & Telecom Council (MMTC) and more than 40 other groups representing minorities endorsed most of FCC’s proposals on EEO rules, they said in comments Mon. on rulemaking. EEO compliance is essentially only public service Commission requests of radio stations and one of very few required of TV stations, cable systems and other mass media outlets, MMTC coalition said. “Equal opportunity should be sacrosanct in the law of broadcasting and cable,” group said. “By seeking to curtail the tradition of exclusionary word-of-mouth recruitment that is so common in close-knit industries like broadcasting and cable, the Commission’s civil rights policies can ensure that the mass media industries are held to the highest standards of enlightened business in providing equal opportunity.” Comments on were due Mon., replies May 15. NCTA endorsed FCC’s plan on EEO rules, including proposed menu of recruitment options. It said cable systems would choose 2 options from menu to increase awareness of cable industry job opportunities, except for cable systems with 6-10 employees, which would be required to choose one option from menu. NCTA also said systems should be required to maintain records that documented recruitment efforts and compliance. Cable industry doesn’t oppose continued filing of reports, it said. NAB offered what it called “a realistic alternative EEO plan” that would have stations with 10 or more full-time employees certify every 4 years that they had either complied with EEO regulations for federal contractors, completed their state broadcaster association’s “Broadcast Careers” program or completed required mix of NAB’s general or specific outreach initiatives. Mesquite Independent School Dist., licensee of radio station KEOM in Mesquite, Tex., asked FCC to raise level for exemption to EEO rules to operations with 10 or fewer full-time employees. School district said its station had only 5 employees and rules were “burdensome” for such small operation that could use its recruitment resources only during school year. Media Captioning Services, women-owned Cal. company, asked FCC to extend EEO requirements on cable operators and broadcasters to vendors such as itself. It complained that it was losing business to companies that sought merely to cut costs without regard to hiring minorities and women. Having twice been reversed by courts, FCC in Dec. proposed new set of rules that were worded more broadly than predecessors (CD Dec. 13 p4). Proposed new set essentially is repeat of Option A of earlier version, requiring broadcast licensees to widely disseminate information about job openings to various segments of community and asking cable entities to conform to same principle as much as possible. In addition to requiring broad outreach for all full-time vacancies, proposed rules would require selecting from menu of general outreach activities, including job fairs and internship programs.
Potential impact on competitive local exchange carriers (CLECs) from several FCC proceedings is “just as big” as what competitive carriers face under Tauzin-Dingell data deregulation bill (HR-1542), CompTel Pres. Russell Frisby said Fri. Significant difference between outcomes of FCC and congressional actions on broadband-related issues is that only 3 votes are needed at Commission to change competitive landscape, Frisby said at Competitive Broadband Working Group press lunch in Washington. Frisby, ALTS Pres. John Windhausen and telecom attorney Marc Snyder briefed reporters on concerns of CLEC industry in FCC dockets involving: (1) Notice of Proposed Rulemaking (NPRM) on dominant vs. nondominant status of ILEC broadband services. (2) NPRM on whether to define broadband as information or telecom service. (3) Triennial review of unbundled network element platform (UNE-P) requirements. (4) Notice of Inquiry that tentatively determined cable modem service was an interstate information service under FCC jurisdiction. Windhausen said FCC’s proposed actions in those areas were tantamount to overriding will of Congress since agency could alter rules that would be contrary to competitive provisions of the 1996 Telecom Act: “I don’t think they realize the consequences for us.” Snyder said FCC didn’t appear to be looking at those provisions, particularly in its UNE-P docket, which he described as “stealth proceeding.” Frisby said working group would seek congressional assistance in protecting CLEC industry and promoting broadband competition, but wouldn’t elaborate: “There’s more to come.”
There’s “real opportunity” in current round of retransmission consent negotiations between cable and broadcasters for broadcasters to make progress on getting DTV signals carried, attorney Robert Rini said at NAB convention in Las Vegas. He said analog signals are still important to cable, and broadcasters can link carriage rights to long-term carriage of DTV. Broadcasters have to be careful, however, to make sure entire DTV signal is carried, not just main video signal, Rini said. He also suggested broadcasters seek most-favored-nation status guaranteeing that if any other local broadcasters get better carriage deal, station gets equal treatment. Broadcasters “have to be realistic” about what to expect from carriage negotiations, said attorney Scott Johnson. He said there was “great hope” about earlier rounds of negotiations, but “in most cases it didn’t pan out.” “Good news” is that all but one FCC commissioner who voted on earlier decision not to grant DTV dual must-carry has left Commission, said attorney Julian Shephard, but he said he still wasn’t optimistic on DTV must-carry: “It may well be that for the duration of the DTV transition there will only be DTV retransmission consent.” -- MF
TV Music License Committee sees real progress in its music licensing agreement with BMI, officials said here. Settlement at least partially accepts TV station arguments that each station’s actual audience is down, and that amount of music used on each station is down because of growth of news, talk and reality programming, said Catherine Nierle of Post-Newsweek Stations. Settlement also includes license covering stations’ web sites, both for live and archived streaming, and DTV signals, she said. One concern, said broadcaster lawyer Bruce Rich, is that new licensing firm, SESAC, is competing for music composers by promising higher license fees. Traditional groups BMI and ASCAP have had to counter with their own fee promises, Rich said, and broadcasters worry fees will be passed on to them. New final se agreements provide local broadcast TV stations with public performance rights to BMI’s repertoire of about 4.5 million musical works. Agreements run from April 1999 through Dec. 2004. Parties agreed to settlement for April 1999 through Dec. 2001 period that will be paid by local TV stations over next 3 years along with their newly agreed to fees. Stations licensed on blanket basis will pay their allocated share of $85 million annual blanket base fee. Stations also may choose per-program license agreement, and will pay their allocated share of $98.1 million per program base fee. Under new agreements, stations can Webcast locally produced news and news-based public affairs programming on live or archived basis from their Internet sites. Stations’ digital TV signals also are covered in agreements. “We have worked hard with representatives from the local television industry to create an agreement that fairly compensates BMI songwriters, composers and music publishers and encourages our television customers to use BMI works for the purpose of increasing their viewership,” BMI CEO Frances Preston said. TMLC Co- Chmn Charles Sennet said new agreement “provides fair compensation to BMI for their share of the music we broadcast on local television. This was and will continue to be the focus of our negotiations with all music performing rights organizations.”
After “sleepless night,” CEA Pres. Gary Shapiro said he would begin meeting with CEA members on possibility of compromise on FCC Chmn. Powell’s DTV plan. CEA had indicated DTV tuner portion of plan would be unacceptable because of cost of adding tuners to low-priced TVs. However, Shapiro, in Mon. keynote at MSTV meeting during NAB convention in Las Vegas, indicated CEA was caught partly by surprise by Powell announcement and might have to “modify our initial reaction a bit.” Shapiro wouldn’t discuss possible shape of compromise, saying only that he would discuss issue with members and “see what we can do.” He told us later some members might find including tuner easier than others: “There is some room for discussion.” There were other indications at convention that CEA might seek stronger commitment on cable compatibility issues in return for agreeing to some version of tuner plan, although timing of tuner adoption also remained issue. -- MF
FCC Media Bureau Chief Kenneth Ferree told reporters Fri. that cable operators should feel pressure to comply with Chmn. Powell’s “voluntary” plan to speed nation’s digital transition. Asked if fact that cable had several pivotal rulemakings and AT&T Comcast merger pending before Commission should weigh on industry as it considered its response to plan, Ferree said: “That probably should be their assumption… I don’t think they do themselves any favor at the Commission by not being proactive players in the digital transition.” He also held out possibility that if any of industries affected -- cable, broadcasters, satellite providers, equipment manufacturers and retailers -- balked, Commission could adopt formal rulemaking procedures to make any and all parts of Powell’s plan mandatory. He hinted that lawmakers could become involved, leaving door open for Congress to take lead if industries didn’t step in line. Ferree said House Commerce Committee Chmn. Rep. Tauzin (R- La.) had been consulted on plan before it was released publicly. “I don’t know whether there’s another step after this where the Hill gets involved or we get involved and things stop being voluntary and start being mandatory, but we're hoping to get the industry to commit to this,” Ferree said.
FCC Comr. Abernathy told reporters Wed. she thought it was “very good news” that providers of cable modem service had started to negotiate voluntarily to give access to independent Internet Service Providers (ISPs). She indicated those moves by cable MSOs would play key role as Commission considered whether to impose “open access” standards on cable modem service. While agency recently declared cable modem service to be interstate information service, it also opened rulemaking seeking to determine, among other things, whether open access was necessary or appropriate, given current market conditions (CD March 15 p1). In recent weeks, Comcast (CD Feb 27 p4) and AT&T Broadband (CD March 13 p6) -- which have merger application pending before Commission -- both announced agreements to allow outside ISPs aboard their pipes. Consumer groups have questioned their motives and whether companies were offering true “open access.” AOL Time Warner also allows multiple ISPs but is under FTC consent decree. AOL TW executives contend, however, that multiple ISPs are good business model and would make sense with or without consent decree.
U.S. Appeals Court, D.C., in decision Tues., remanded FCC’s TV station local ownership limits to Commission for reconsideration of its decision not to include newspapers, cable and other media outlets in its definition of “voices.” However, court refused to overturn rules entirely, rejecting arguments by Sinclair Bcst. that they violated First Amendment and that requirement for 8 independent voices in market was arbitrary. FCC officials said only that they still were studying decision. NAB Pres. Edward Fritts said same thing.
Ninth U.S. Appeals Court, San Francisco, won lottery Mon. to hear federal challenge to FCC’s declaratory ruling that cable modem service is interstate “information service.” Several challenges were filed, including one by coalition of consumer groups led by public interest law firm Media Access Project (MAP), as well as separate suits filed by EarthLink, Brand X Internet and Verizon Communications. Of 4 plaintiffs, only Brand X Internet filed in 9th Circuit, with others filing in U.S. Appeals Court, D.C. Nevertheless, 9th Circuit won lottery, said spokeswoman for judicial panel on multidistrict litigation. Now, all cases filed against FCC on issue will be combined and heard by 9th Circuit. Other entities that want to file suit against FCC in case must do so within next 60 days.