Ad rates are no higher in cities where single company owns TV station and newspaper, and those markets have benefited from pooling of newsgathering resources, broadcasters and newspaper owners said in comments on FCC rulemaking on eliminating newspaper-broadcast cross-ownership ban (CD Dec 4 p9). Cox said data on Dayton and Atlanta markets, where it has grandfathered cross-ownership, clearly support claim of no impact on ad rates. Gannett said improved news availability in markets with cross-ownership “overwhelmingly demonstrate… the societal benefits of encouraging local news outlets to pool resources.” ALTV said ending ban also is justified by increasing competitiveness of local markets since neither broadcast stations nor local newspapers remained “dominant giant” in local markets that they were in 1975 when ban was imposed. Given arrival of cable news and Internet, ALTV said, “long gone are the days where the public waits for the 11 o'clock news or the morning paper.” Schurz Communications said local news outlets now must compete against Internet-delivered newspapers from around world, as well as streaming media, so FCC “should not continue to regulate newspaper owners more strictly than any other media enterprise.” Cox said original spectrum scarcity rationale for ban “has vanished” with media proliferation and “for a broadcast ownership rule to pass judicial muster, the Commission must show both that a specific harm actually exists and that the rule will actually fix or prevent the harm.”.. Tribune Co. said Sept. 11 events, in which broadcasters and newspapers pooled resources, showed benefit of easing ownership rules. It said current environment was “megamall” of media outlets: “Never before has the media marketplace been so fragmented and so clearly incapable of domination… This competitive marketplace, not the rule, is the best guarantor of diversity.”
FCC Comr. Martin said Tues. he was wary of instituting new regulations on Internet but indicated willingness to lift rules to achieve regulatory parity between cable and other kinds of companies that provided Internet or information services. He told reporters Commission should act soon on Notice of Inquiry pending more than year on how to define Internet delivered over cable. Question whether it’s telecom service, cable service, information service or some other kind of service has regulatory implications no matter which way it is decided, he said. Bankruptcy judge allowed Excite@Home to turn off its Internet network, leaving thousands of AT&T Broadband customers without service (CD Dec 4 p1, Dec 3 p4). Because Internet provided via cable has yet to be defined, FCC has no regulatory role now, raising criticisms from consumer advocates. Internet service provided by telcos over phone lines is regulated, which angers telco executives. Martin pointed to DSL provider Rhythms, which went out of business earlier this year and had to ask FCC for permission to discontinue service. In such case, Commission could provide transition period for consumers.
FCC probably doesn’t even have enough evidence to justify notice of inquiry on broadcast-newspaper cross- ownership rules, NAB said in comments on rulemaking (MM 01- 235). Broadcasters said FCC never had been able to show competitive harms from cross-ownership, so burden of justifying retention of rule “clearly lies with the Commission.” Goal of diversity of voices “reflects an outmoded regulatory philosophy of promoting the maximum diversity of ownership at all costs,” NAB said, and burden of justifying rule was increased by First Amendment implications. NAB also said any justification for ban had been reduced by expansion of information outlets and easing of other ownership rules, and that cross-ownership actually could increase news, information and programming options by allowing pooling of resources. Not surprisingly, Newspaper Assn. of America also supported eliminating rule, saying ban “serves no legitimate purpose in the modern media marketplace.” Group said “explosive” growth in media outlets justified eliminating ban and repeal “would lead to significant efficiencies and operational synergies” that would “benefit both consumers and advertisers.” Pooling resources would allow tailoring news content to different media, newspaper group said, and wouldn’t lead to “any material reduction in viewpoint diversity.” Consumer, civil rights and media public interest groups called on FCC Mon. to maintain limits on broadcast-newspaper cross-ownership. Groups cited study that said media diversity was at risk from mergers and acquisitions. They warned of dire consequences if FCC eliminated its long-standing prohibition against common ownership of newspaper and TV station in same market. Filing called for new policies “to open communications wires and the airwaves to more independent voices, in order to preserve our nation’s commitment to maintaining institutions and market forces that promote a robust democracy.” Document, more than 100 pages long, represented views of Consumer Federation of America, Consumers Union, Center for Digital Democracy, Civil Rights Forum, Leadership Conference on Civil Rights and Media Access Project. Filing cited 1945 Supreme Court ruling that First Amendment “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.” That principle will be jeopardized if broadcasters are allowed to own or be owned by newspaper in same community, filing said. Claims that Internet was viable news and information alternative ignored possibility that same entities could dominate Internet as well, filing said. “A small number of giant corporations interconnected by ownership, joint ventures and preferential deals now straddle broadcast, cable and the Internet,” filing said.
ANAHEIM -- Senior federal copyright attorney warned RIAA and cable companies that streaming media and music downloads might not be covered by traditional compulsory licensing for mechanical recordings. At roundtable discussion at Western Cable Show here, U.S. Copyright Senior Attorney Bill Roberts discussed pending petition by RIAA and others on individual streaming of music that also could cover video streaming.
Clarification of what constitutes broadband service and infrastructure is critical to laying groundwork for effective govt. policy, FCC Chmn. Powell said at ALTS conference in Arlington, Va., Fri. He said broadband Notice of Proposed Rulemaking (NPRM) was on horizon at Commission, measure that he said was necessary to correct what thus far had been govt. policy of “lurching and reacting” to unanswered questions about broadband. He lamented pervasive references to broadband as “simple incremental advance from telephone service.” Debate over this evolving area of communications “continues to be hobbled by no uniform definition or understanding” of what broadband represents: “In my view, broadband is not some simple high-speed pipe. It is a convergence, a fusing, of communications power, with computer power, with content. If any one of those key pieces are missing, I don’t think you have broadband.”
ANAHEIM -- Attorneys for major operators appeared to have single mantra at Western Cable Show here this week: FCC must provide regulatory certainty if MSOs are to offer more services. Four MSO gen. counsels on panel said their companies were having trouble setting business plans because govt.’s rules were uncertain. They cited questions on classification of high-speed data as either cable or telecom service, digital dual must-carry, ownership caps and pole attachment rates as some of issues pending.
Complying with U.S. Supreme Court mandate, FCC Wed. announced it had repealed its rule requiring that “sexually explicit adult programming” on cable be scrambled. At same time, agency terminated pending rulemaking (CS Doc. 96-40) to implement rule declared unconstitutional last year by Supreme Court. Playboy Entertainment Group had challenged rule in U.S. Appeals Court, D.C., which ruled it violated First Amendment. FCC then was unsuccessful in asking Supreme Court to overturn lower court ruling. Saying alternatives for parents to protect children from such programming were “woefully inadequate,” Comr. Copps called on agency to begin new rulemaking, consistent with court ruling, “to determine how… we can protect children from being exposed to sexually explicit programming without their parents’ knowledge.”
Coalition of long distance companies and user groups proposed revising method of collecting Universal Service Fund contributions from carriers, approach that could please some in industry, dismay others. Proposal, outlined to news media Mon. and submitted to FCC in Nov. 7 ex parte letter, was put forward by AT&T, WorldCom, E-commerce Telecom Users Group (ETUG) and Ad Hoc Telecom Users Committee. It would replace revenue-based contribution scheme with flat-rate per- connection fee. Current system collects contributions from carriers for $5.5 billion USF based on percentage of carrier’s interstate revenues. Coalition members told group that current method was unfair to long distance companies that bore bigger share of it than other parts of industry.
FCC denied bid by consumer groups to hold AT&T to original divestiture conditions on its acquisition of MediaOne. Consumers Union, Consumer Federation of America and Media Access Project wanted FCC to enforce its original deadlines for AT&T and MediaOne to meet certain conditions before their merger could proceed. FCC suspended deadlines 2 weeks after U.S. Appeals Court, D.C., on March 2 struck down Commission’s rules limiting media ownership, finding that agency’s 30% cap on number of subscribers nationwide any one cable operator could reach was arbitrary (CD March 5 p1). Original conditions were that by May 19 AT&T would divest its interests in Time Warner Entertainment or end its involvement in video programming or divest its interests in other cable systems to meet 30% horizontal cap. Under original order, AT&T was supposed to report on March 20 whether it believed it would meet May 19 deadline and, if not, immediately submit trust agreement to sell off some of its assets to meet requirements. FCC, in issuing its latest order, said it recently issued Further Notice of Proposed Rulemaking in hope of resolving cable ownership issues. AT&T argued that Appeals Court ruling undermines FCC ownership rules and essentially made merger conditions null and void. At minimum, AT&T argued, FCC should continue to suspend deadlines until agency had new, legal ownership rules. Consumer groups cited public interest as overriding interest, saying FCC should stick to its original deadlines. Consumers Union also sought further reconsideration, asking that FCC reopen case in order to conduct new public interest analysis. Consumers Union’s Gene Kimmelman said Commission was “obviously disinterested” in enforcing ownership limits but must set cable ownership limits if it was to fulfill Congress’s goal of protecting public interest. FCC order, Kimmelman said, “shines a very strong light” on agency’s ownership proceedings. Comrs. said in their order that they believed suspending deadlines was “the prudent and proper course of action” and that it would be “inappropriate” to reopen merger process now. Comr. Copps, only Democrat on Commission, said in separate statement that while he was sympathetic with consumer groups, he “reluctantly” concurred with his colleagues. However, he said, Commission should keep in mind that, as time went by, continuing to suspend rules “becomes tantamount to their elimination.”
FCC Cable Bureau will take novel approach in analyzing cable ownership rules, using experimental economic model to try to predict how cable operators and programmers would behave if ownership rules changed, Bureau Chief Ken Ferree said Wed. in press briefing at bureau. He said he and other Commission staff members still were “hammering” industry and public interest groups to produce data and analysis, but FCC staff members also would produce their own independent research examining cable horizontal and vertical ownership limits to supplement effort. Ferree said staff was “suspending judgment” on whether experimental economics would produce results, but said new “cutting edge” economic models had proved to be “very good science.” “Rather than sit around and theorize about what would happen in certain circumstances, you can model them and play out these experiments and see what would actually happen with different variables and varying conditions,” Ferree said. FCC staffer Paul Gallant said model was “widely accepted” among economists and outside experts were expected to be called in to aid effort.