Court decision Tues. overturning FCC’s cable-TV station cross-ownership ban (CD Feb 20 p1) could have significant effect on how biennial review process is conducted, FCC Chmn. Powell said Wed. In somewhat unusual action, U.S. Appeals Court, D.C., acted not on any new FCC order but on agency’s decision to retain existing rule, in decision made during biennial review. Telecom Act requires FCC to review existing regulations every 2 years to determine whether they remain necessary.
Senate Commerce Committee leadership is being pressed to hold hearings on FCC’s tentative decision to reclassify wireline broadband services as information services. Commission said last week that designating “telephone-based” Internet services as information rather than common carrier services could spur investment by eliminating regulatory uncertainty (CD Feb 15 p1). Agency’s notice of proposed rulemaking (NPRM) on issue “may reflect a fundamental misreading of the intent and purpose” of Telecom Act, Sen. Dorgan (D-N.D.) said Feb. 15 in letter to Commerce Committee Chmn. Hollings (D-S.C.) and Communications Subcommittee Chmn. Inouye (D-Hawaii). He said he agreed with FCC Comr. Copps’s dissenting position that decision “appears to lead to the strange conclusion that Congress intended to remove these services from the numerous competition, universal service and consumer protection provisions that Congress imposed on common carriers providing telecommunications services.” FCC Chmn. Powell last week rejected such concerns as “shortsighted and incorrect” and emphasized the NPRM would leave intact interLATA restrictions and ILEC obligations under Telecom Act’s Sec. 251 and 252. Alliance for Community Media Exec. Dir. Bunnie Riedel said purported need to reclassify Internet access as information service was “the very argument the cable operators have used to keep cable modem service closed to competition.” Just as cable operators currently can choose Internet service providers (ISPs) for their customers, FCC would enable ILECs to do likewise, she said. Both industries “must be open to competition so when you or I don’t like our Internet service we can go shopping for a better one, just like we can do now with long distance service,” she said: “It’s time for the FCC and Congress to put consumer interests ahead of the insatiable desires of the telecommunications industry.”
Justice Dept. told FCC that changes in horizontal and vertical ownership limits on cable companies wouldn’t diminish DoJ ability to evaluate mergers and acquisitions for anticompetitive effects. “Regardless of the Commission’s ultimate determination in this proceeding, the Department will continue to exercise its enforcement responsibilities,” it wrote. Comments came in reply to those submitted earlier on cable industry vertical and horizontal ownership limits, with deadline Mon. NAB supported NCTA’s petition for rulemaking that asked FCC to reevaluate its attribution policies and whether minority shareholders should be considered “owners” of company if they held as little as 5% stake. World Satellite Network contended that Commission had more than enough evidence to justify its previously stated caps. Group calling itself Concerned Citizens proposed FCC create common carrier framework for cable that would allow unaffiliated programmers access to cable networks. Concerned Citizens acknowledged current law expressly prohibited subjecting cable operators to common carrier regulation but said Congress should consider amendments and FCC should consider creating common carrier system anyway.
Saying FCC had “no valid reason to think [national TV station ownership cap] is necessary to safeguard competition,” U.S. Appeals Court, D.C., remanded ownership cap to Commission, saying it needed further justification. In same decision, appeals court completely overturned ban on cable systems’ owning TV stations in same market, saying remand wasn’t justified because of “low” probability that FCC could justify that rule. In TV ownership cap case, court rejected networks’ suggestion that ban be overturned completely, saying rule wasn’t inherently unconstitutional and FCC might be able to justify it.
FCC’s tentative conclusion that DSL and other phone- based Internet services should be reclassified as information services (CD Feb 15 p1) is likely to have broad impact on cable industry, which is nation’s leading provider of high- speed Internet access. With parallel proceedings examining classification of cable modem service pending, Commission appears to be extending its vision of broadband across platforms, observers say, and that could add regulatory burdens to cable modem service that aren’t there today. For example, in FCC’s notice of proposed rulemaking (NPRM) are questions about universal service requirements and whether companies other than traditional wireline telephone service providers should be only ones contributing to it.
FCC adopted proposed rules for consumers to file informal complaints that are patterned after existing rules for informal complaints filed against common carriers. Under proposal, approved at FCC’s Feb. 14 agenda meeting, complaints filed about any of services regulated by Commission would follow same format and be handled in same way. This “uniform, streamlined” complaint process now would include consumer complaints that raised issues in FCC’s jurisdiction and filed against broadcast station licensees and cable franchise operators. Proposal asked whether existing rules should be changed to specify type of documentation that should accompany informal complaints and to set specific timeline within which company must respond to complaint. FCC officials said goal of proposed changes was to provide single point of entry for consumer complaints that would allow Consumer Information and Enforcement bureaus to better respond. In separate statement, FCC Comr. Copps said he supported proceeding but wasn’t convinced that proposals in notice of proposed rulemaking would move agency toward goal of less-burdensome process for consumers. NPRM outlined 3 ways that consumers could seek redress for their complaints -- direct complaint to company, proposed informal complaint process and traditional formal complaint process, Copps said. “We need to be crystal clear that these are options and that one process should not be a prerequisite for another,” he said. “Nor must the exhaustion of one remedy preclude the utilization of another.” In moving toward simplified consumer complaint process, he said, FCC shouldn’t inadvertently create new bureaucratic layers for consumers to deal with before agency addressed their complaint. Comr. Abernathy said “it is past time for us to amend the complaint process.” She said FCC should encourage companies to respond on their own to consumer concerns. “But for those complaints that do require the attention of the FCC, we must provide a prompt and sure resolution,” she said.
FCC “tentatively concluded” at its agenda meeting Thurs. that DSL and other “telephone-based” Internet services should be reclassified as information services, action that could lead to less regulation for Bell company-provided broadband services although it was uncertain exactly what impact would be. Information services such as voice mail and e-mail traditionally operate under fewer regulations than do common carrier services. FCC said action could improve investment climate by eliminating regulatory uncertainty. It said it also could lead to more equitable regulatory treatment across different broadband platforms. Bells have been asking for long time for lessened regulation of their broadband services, saying that would make them more comparable to cable modem services.
FCC is expected to open proceeding today (Feb. 14) “that could have profound and damaging effects on the future openness and diversity of the Internet and communications networks,” 2 consumer groups said Wed. At issue is broadband item on agenda for FCC open meeting that will look at regulatory framework for Bell company provision of Internet access such as DSL. FCC is considering notice of proposed rulemaking to determine whether such service is common carriage telecom service or information service. Difference could determine whether Bell has to make its Internet access service available to its competitors. Most regulation, including unbundling, is based on common carriage. Consumer Federation of America and Center for Digital Democracy said action could result in placing “the future of the broadband Internet squarely in the hands of a handful of large cable and telephone companies” because small telecom competitors would be shut out. “Cable and telephone giants will be free to engineer the broadband Internet and favor their affiliated Internet service and content providers as they see fit,” if proposal were approved, groups said. Item is outgrowth of concerns expressed by several commissioners when FCC approved SBC’s Ark. and Mo. Sec. 271 applications in late Nov. Comr. Copps said at time that rules weren’t clear on Bells’ DSL resale obligations.
FCC Comr. Martin Fri. proposed speed-up in Commission action on formal complaints. Speaking at FCBA lunch, he said draft orders on formal complaints should begin circulating among commissioners within 8 months of their filing. That’s “reasonable goal” in light of other deadlines agency now follows for action on mergers and environmental issues, he said. Basing his speech on tenets of book All I Really Need to Know I Learned in Kindergarten, Martin said facilities- based telecom competition was example of book’s “play fair” rule. Without move to facilities-based competition, “we will always need government regulators to manage and control the game, setting wholesale and retail prices,” he said. Martin said book’s tenet of “put things back where you found them” should be FCC’s “overriding goal for the digital transition.” Commission can do several things to “hasten” broadcasters’ return of spectrum, he said: (1) FCC may have to step in if talks among movie studios, broadcasters, cable providers and consumer electronics industry don’t produce agreement soon on protecting digital content. “The lack of progress is seriously impeding the availability of digital content and thwarting any progress in the transition.” (2) “Broadcasters’ must-carry rights in the digital world” must be defined. For example, FCC should quickly conclude rulemaking started last year on meaning of “program-related” in digital world. It also should act on petition to reconsider its conclusion on definition of “primary video,” he said. “Broadened interpretation” of primary video may warrant consideration, he said. (3) FCC should address cable compatibility. “Cable operators need to make firm commitments to technical standards for a plug-and-play set and the consumer electronics industry needs to accept those commitments and start building.” Consumers would be more likely to pay high price tag for HDTV if they knew it would work with their local cable system, he said. Martin drew laughter when he said “don’t take things that aren’t yours” tenet obviously applied to NextWave re-auction. He began his speech by comparing FCC commissioners to characters in movie Shrek, showing slides comparing Chmn. Powell to movie’s “lovable ogre” Shrek, Comr. Copps as Lord Farquaad who “desperately wants to be in charge of the kingdom,” apparent reference to Copps being lone Democrat. Comr. Abernathy was compared with Princess Fiona and he compared himself to Shrek’s sidekick donkey. Martin also made fun of his youthful appearance, showing pictures of his similarity to Harry Potter, both in books’ illustrations and in actor who plays Harry Potter in movie.
FCC Chmn. Powell’s special counsel Mary Beth Richards said Thurs. she was “confident” Congress would approve overhaul of agency in coming days. She said she had spent much of this week, and would spend much of next, with Hill staffers to “make sure they are comfortable with the plan and understand the benefits.” Letter outlining changes went up to Congress Jan. 17, and congressional appropriators of FCC budget have 15 days in which to express objections. “I am hopeful that there are no surprises. I am hopeful that they all agree that it is a wise and judicious decision,” Richards said in conference call hosted by Communications Daily. Given that changes must be published in Federal Register before they can take effect, Richards said she expected effective date either in late Feb. or early March. In meantime, once congressional approval is assured, Commission plans to issue news release outlining staff changes, specifically who will head divisions and makeup of front office staff. Release, to include structural charts, also will be posted at Commission’s Web site, Richards said.