FCC Chmn. Martin’s limited multicast must-carry plan is gaining momentum (CD March 1 p2) as a rulemaking nears 8th floor circulation and Comrs. Adelstein and McDowell offered encouraging, though cautious, comments at a conference. The Media Bureau is finalizing a notice of proposed rulemaking (NPRM) for FCC members to study, Martin told reporters Fri. after a speech at the same American Women in Radio & TV conference. In remarks to media, he urged Commissioners to vote on a customer proprietary network information (CPNI) order and a wireless broadband declaratory ruling, both under consideration for some time.
The FCC video franchise order (CD March 6 p3) was panned by municipal groups, cable lawyers and cable companies such as RCN, that say they worry the action will hurt cities and give an unfair advantage to Bells. Instead of clarifying franchising -- as telcos and Chmn. Martin contend -- Mon.’s order left unanswered may questions about what cities can demand of video providers, they said. Not so, said 2 telecom industry officials: The order will create a more consistent franchising process so Bells can further expand pay-TV and better compete with cable operators.
The FCC’s eagerly awaited franchise order (CD Dec 21 p1) limits cities’ ability to regulate Bell video rollouts and impose fees on the new entrants to underwrite municipal data networks and public access channels. The Commission reiterated previous comments by Chmn. Martin and other officials that local franchise authorities (LFAs) can’t make telcos build out video systems to all homes in an area as a condition of a permit to sell TV service. Mon.’s order said the Telecom Act precludes cities from imposing franchise fees on products other than cable, including broadband service and public, educational and govt. (PEG) access channels beyond the cost of supporting “PEG services and equipment.”
An FCC order clarifying interconnection rules won praise from a group of VoIP providers. Acting on a Time Warner Cable petition Thurs., the Wireline Bureau said incumbent LECs must give cable operators and other companies VoIP interconnection rights and exchange traffic with cable systems and state efforts to prevent such action run afoul of FCC rules (CD March 2 p2). The order is favorable to a wide range of VoIP providers, said the VON Coalition, whose members include AT&T, Covad, Earthlink, Pulver.com and Skype, among others. “The FCC was right to find that states cannot unilaterally twist the meaning of the Telecom Act to hang up on broadband-enabled voice competition,” VON Coalition Pres. Staci Pies said in a prepared statement: “The problems that Time Warner faced in South Carolina and Nebraska were not isolated. They threatened the competitive availability of VoIP services overall.” AT&T, which had supported the Time Warner petition, told the FCC that state rulings that not all telcos must provide interconnection violated the Act. Verizon declined comment. The FCC rulemaking, at first glance, doesn’t seem to intrude on state rights, NARUC Gen. Counsel Brad Ramsay told us: “It does appear the FCC really tried to take a minimally intrusive approach with respect to state jurisdiction in the decision. I'm not sure they succeeded.” NARUC, however, didn’t participate in the rulemaking, he noted, adding the order “was an obvious effort at comity.” - JM
FCC Comr. McDowell laid out ways the FCC could help industries from broadcasters to wireless by boosting 700 MHz spectrum use and broadband deployment and promoting newer technologies and parental TV controls. Speaking to NAB members, he pushed to hold the 700 MHz auction soon, voicing support for several rules circulating on the 8th floor that could help radio stations (CD March 1 p1). McDowell became the first commissioner to make a public link between the XM- Sirius merger and the FCC media ownership rulemaking, saying both proceedings likely will involve examination of how new technologies affect media.
Cable operators got some clarity on VoIP interconnection rules from an FCC order saying incumbent LECs must give them interconnection rights and exchange traffic with cable systems. The Wireline Bureau order approved a Time Warner Cable (TWC) request seeking interconnection rights for certain types of phone calls. The order came after cable operators had argued before the Commission for such rights, and exactly a year after TWC complained to the agency about a S.C. PSC denial of a certificate it said it needed for interconnection agreements to sell VoIP (CD March 6 p12).
FCC Comr. Tate offered an ambitious set of steps the FCC should take to boost diversity in broadcast ownership, which she called a priority. Commissioners can speed investment in small TV stations by relaxing an ownership attribution rule, and help minority-owned AM stations by letting them use FM translators, Tate told a Media Institute lunch. Other ways to boost minority and female participation in the industry include seeking Congressional restoration of a minority tax credit rescinded in 1995 and giving small businesses limited must-carry status on cable systems (CD Feb 15 p7), she said.
“Dominant carrier” regulation of long distance services no longer makes sense, Verizon told the FCC Thurs. in a 30- page “competitive analysis” of the market. A separate long distance market no longer exists, Verizon said. It’s now an “'any distance’ market for communications services regardless of geography,” it said: “Under current market conditions, there is no plausible argument that traditional wireline carriers could use their local networks to dominate the long- distance component of voice services at issue here.” In assessing the market, the FCC should weigh the wide variety of voice services, and substitutes for voice services, offered, the company said. Cable, wireless, VoIP and new technologies like instant messaging compete with wireline voice service, Verizon said: “Re-regulating Verizon and other carriers as dominant in the provision of long-distance service is unnecessary and counterproductive.” The company filed the document in a proceeding the FCC opened several years ago to see if the Bells should face stronger control of long distance operations when combined with local businesses. The Telecom Act’s Sec. 272 required Bells to run their new long distance operations in separate units, but with reduced regulation. The subsidiary requirement has “sunset,” but Bells have hesitated to combine their operations because it would subject the long distance service to the stiffer dominant carrier regulation imposed on local services. Qwest, AT&T and Verizon also filed forbearance petitions seeking to end the dominant definition for long distance service (CD Jan 26 p3). The FCC must act on Qwest’s petition by Tues. or it takes effect automatically. A Verizon spokesman said the company is revisiting the Separate Affiliate proceeding (Doc. 02-112) because it thinks “a broader rulemaking is more constructive” than action through the forbearance process. The filing gives Verizon a chance to “chronicle the successes of recent FCC policymaking,” which led to the increased competition that makes dominant carrier regulation unnecessary, he said.
FCC rules shouldn’t bar Comcast from buying cable systems, Comcast said, calling an FCC-proposed 30% cap on horizontal cable ownership outdated and unnecessary. Chmn. Martin wants to get moving on cable ownership limits remanded by a federal court (CD Jan 18 p5), he has said. In setting new limits for cable, the FCC can’t justify a 30% cap, Comcast said: “Local exchange carriers (LECs) have entered the video business on a large scale; Internet video sources such as YouTube, which did not even exist at the time [the FCC made its last ownership rulemaking], are highly popular and revolutionizing the video programming market.” And mobile video is growing in line with wireless broadband capacity, it said. Comcast’s call for deregulation marks a shift in tone for the only U.S. cable operator that owns enough systems to be affected by the 30% limits today, an industry lawyer said: “Every time they've made an acquisition up to now they've emphasized it would be consistent with the 30% cap.” Consolidation among phone companies strengthen’s Comcast’s case for doing away with the cap, the lawyer said.
Broadcasters have varied positions on leasing digital multicast spectrum to 3rd-party programmers, officials said: Some see leasing as another way to profit on digital signals, others want to develop additional original programming. “If it makes sense from a business opportunity, we would certainly look at it,” a broadcast official said of leasing: “The whole industry is looking at ways to capitalize on that opportunity.” Meanwhile, FCC Chmn. Martin has revived the multicast must-carry debate, recasting it around broadcaster leasing of digital spectrum to eligible 3rd-parties, though details are scant. The plan isn’t good for broadcasters or cable, said another industry official.