Rather than rely on cable industry and public alone to provide data on FCC’s pending proceedings on cable access and horizontal ownership rules, Commission staff will do its own research and seek independent data to support any decisions by agency, Cable Bureau Chief Ken Ferree said Tues. at Schwab Capital Markets conference. When cable rulemakings were issued, Chmn. Powell and other commissioners stressed that they were depending on industry and public to provide data on which to develop record and base their decisions. However, public interest groups have complained that they lack resources to support such research and would be seriously outgunned by billion-dollar cable industry.
As expected, FCC agenda meeting Nov. 8 will take up report and order on whether there’s still need for wireless spectrum cap, now set at 45 MHz for most markets and 55 MHz for rural areas. Commission has been examining staff proposal to lift cap to 55 MHz for period of time in all markets before it sunsets completely. Agenda also includes: (1) Notice of proposed rulemaking (NPRM) from Common Carrier Bureau on establishment of national performance measurements and standards for unbundled network elements and interconnection. (2) Another NPRM on rules and policies for multiple ownership of radio broadcast stations in local markets and how radio markets are defined. (3) Policies affecting conversion to digital TV in memorandum opinion and order on reconsideration of its periodic review of progress of DTV conversion. (4) Report and order from International Bureau on FCC consideration of applications under Cable Landing License Act, covering policies, rules and requirements for cable landing licenses. Following open portion of meeting, FCC will hold closed session on item to be presented by General Counsel’s office. For item, “Commission will discuss possible changes to its internal processes,” according to public notice, which didn’t provide more detail.
FCC’s proposed rulemaking on whether it’s still necessary for programmers affiliated with cable operators to sell programming to their competitors was published Wed. in Federal Register. Comments are due Dec. 3, replies Jan. 7.
WSI Net will ask EchoStar to give up one prime Conus slot in exchange for support at FCC for its merger with DirecTV (CD Oct 30 p1), CEO Jared Abbruzzese told us. It would be part of negotiated deal designed to gain support from rural operators for EchoStar-DirecTV deal. EchoStar spokesman said he couldn’t comment until he saw parameters of offer. WSI Net based in Austin, Tex., provides wholesale services to cable operators and consumers in rural areas. “We're concerned that all of the high-powered DBS capacity will be in the hands of one company,” Abbruzzese said. “The merger can make sense [if there] is real competition. If one could access one of these high-powered Conus slots, then there would be competition, but under current circumstances there is going to be none.” He said merger would further “stifle investment in advanced services in rural areas.”
FCC Chmn. Powell announced new Media Ownership Working Group to seek evidence on how Commission should evaluate media ownership when many companies are merging. Commission has rulemakings pending that would set new ownership limits for broadcast and cable companies. Powell, who has largely embraced deregulatory agenda, said group would provide empirical evidence and analysis with “sharp focus” so Commission could promote diversity, localism and competition in media. He made announcement at media ownership policy roundtable discussion Mon. designed in part to be first installment of new group’s work. “Rebuilding the factual foundation of the Commission’s media ownership regulations is one of my top priorities,” Powell said. He chided previous Commissions for instituting “sweeping” regulations without complete picture of media market, and called previous attempts “superficial” exercises colored by politics: “We need to rigorously examine whether current forms of media regulation are achieving the Commission’s policy objectives.” Members of group are: FCC Cable Bureau Chief Ken Ferree, Ferree special adviser Paul Gallant; Nandan Joshi, attorney- adviser in Office of Gen. Counsel; Jonathan Levy, deputy chief of Office of Plans & Policy; Robert Ratcliffe, deputy chief of Mass Media Bureau; David Sappington, FCC chief economist; Royce Sherlock, deputy Chief of Policy Div. in Cable Bureau.
Satellites offer best hope of eliminating Digital Divide between “information rich and “information poor” in delivery of broadband services to rural U.S., Satellite Industry Assn. (SIA) said in reply comments on proposed rulemaking on issue. Commission seeks comment on best way to provide advanced broadband telecom services throughout U.S. and remove barriers to receiving service. Letter signed by Exec. Dir. Richard Dalbello challenged ability of terrestrial wireline and terrestrial wireless companies to provide service.
FCC established pleading cycle for rulemaking on cable horizontal and vertical ownership limits. NPRM was published in Federal Register Oct. 11, so parties may file comments by Dec. 26, replies by Jan. 25.
FCC began examining whether it still was necessary for programmers affiliated with cable operators to sell programming to their competitors, especially DBS providers that appear to be gaining ground on cable in market. Notice of Proposed Rulemaking (NPRM), which Commission adopted 4-0 Thurs., looks at rules that require vertically integrated programming vendors to make satellite-delivered programming available, not only to their affiliated cable operators in which they have financial stake, but also to satellite TV operators and other multichannel video providers in whom they don’t have investment. That provision, in Sec. 628 of Cable Act of 1992, is set to sunset Oct. 5, 2002. Law says rules should sunset unless FCC finds in proceeding that ban is necessary to preserve and protect competition and diversity in marketplace.
When U.S. Supreme Court hears arguments Tues. on pole attachments, justices are expected to wade into debate over open access. One hour of oral argument will pit FCC and NCTA against Gulf Power, defendant representing various utilities that filed suit around country. Question is whether Commission has authority to regulate rates utilities can charge cable companies to attach their lines to utility poles to deliver cable-based and wireless Internet service. Lower courts have ruled Commission has no authority, and Supreme Court will look at ruling by 11th U.S. Appeals Court, Atlanta, which held Commission’s regulations didn’t apply to Internet service. NCTA and FCC contend that same rates should apply to Internet as to video and it doesn’t matter what service is provided. Utilities say FCC regulations weren’t intended to protect cable companies’ ability to provide advanced services such as Internet that offer increased profits. Utilities say Internet is neither cable nor telecom service, which are only services FCC can regulate. Issue has enormous implications for NCTA and its members because siding with utilities could mean much higher rates for pole attachments and consequently, for Internet service for consumers. FCC has been reluctant to define Internet as either cable or telecom service because technology still is developing and classifying it would encumber Internet with its own set of regulations. For now, FCC sees issue in context of who is providing service, in this case cable companies. As long as service is provided by cable or telecom company, service falls under Sec. 224 of 1996 Telecom Act, FCC says. Agency currently has notice of proposed rulemaking on open access pending, so observers said they doubted it would undermine its own proceeding by trying to classify Internet service in court. Analyst Scott Cleland of Precursor Group said he expected Supreme Court to uphold FCC without deciding how to classify Internet. “I think they're going to decide it on a plain reading of the law,” he said.
Intel suggestion that reducing ILEC regulation could stimulate broadband deployment has ALTS up in arms. Filing comments Mon. in FCC’s inquiry on status of advanced services, Intel expressed concern that placing unbundling requirements on ILECs’ last-mile broadband facilities could impede investment in advanced broadband infrastructure. It called on Commission to open rulemaking to determine whether continued unbundling rules, for example, would impede development of more advanced services in future. Seeing that as call for Bell company deregulation, ALTS Pres. John Windhausen issued statement Wed. saying Assn. “completely disagrees with Intel’s suggestion that deregulating monopoly carriers is the best way” to increase broadband deployment. What’s needed is more competition, not deregulation, ALTS Gen. Counsel Jonathan Askin said. He said deregulating Bells would make it even harder for competitors to get access to incumbent network elements and customers.