Cable operator assurances that they will continue to provide and support CableCARDs, even though FCC requirements that they do so were struck down, “do not rise anywhere near the level of certainty required for a retail market to exist,” said TiVo in a filing Friday in docket 97-80 (http://bit.ly/1f06GET). NCTA and others had commented on TiVo’s petition to have the rules reinstated that there’s no evidence companies have slackened their CableCARD support since the U.S. Court of Appeals for the D.C. Circuit’s EchoStar decision struck them down (CD Sept 19 p8). TiVo said that’s not so. The company’s internal surveys on CableCARD compliance following EchoStar “show a drop in the percentage of MSOs offering discounts off their bundled prices for customer-owned DVRs” and more cable operators “requiring provider-only installations of CableCARDs,” said TiVo. “One has to wonder why NCTA is opposed to the reinstatement of the CableCARD standard if cable operators plan to comply with the rule by continuing to provide CableCARDs.” NCTA said the CableCARD rules are an “anachronism” due to the competitive media market, where customers have many choices outside of cable. However, TiVo argued that on-demand video services and products such as Xbox and Roku are complements to multichannel video programming distributors rather than competitors, pointing to a reported deal that’s in the works for Netflix to become available on set-top boxes as evidence. “These negotiations are further proof that prominent [online video distributors] OVDs like Netflix are not viable competitors to MVPDs and are not viewed as alternatives by consumers,” said TiVo. NCTA again said Friday that the commission shouldn’t reinstate the CableCARD rules, and said the EchoStar decision means the commission doesn’t have the authority to do so. If the commission does issue an NPRM based on TiVo’s request, NCTA said the rulemaking should include consideration of an automatic three- to five-year sunset for the reinstated rules. TiVo said it would support a sunset clause if it was conditional on a “successor solution” being in place. “If the Commission were to sunset the CableCARD standard prior to a successor solution being in place, it will be failing to live up to its mandate,” said TiVo. Without the CableCARD encoding rules, “nothing would prevent programming interests, through retransmission consent negotiations, from imposing unreasonable restrictions on consumers’ use of programming,” said TiVo. CEA, the AllVid Tech Company Alliance and TiVo said any rulemaking on this issue that considers more than the relief sought by TiVo should propose a specific successor interface for CableCARD, said their filings. CableCARD requirements could be further knocked down by a House bill introduced last month by Communications Subcommittee Vice Chairman Bob Latta, R-Ohio (CD Sept 30 p6). No hearings for the bill have been scheduled.
Foreigners could own more than 25 percent of U.S. broadcasters if the FCC grants a licensee’s petition for declaratory ruling, clarified a draft that circulated for a vote at the agency’s next meeting, said commission and industry officials in interviews Thursday, the day the item described as concise and straightforward circulated for the Nov. 14 meeting. The declaratory ruling would clarify what some in the industry and at the agency said they had considered a de facto ban on such ownership. The item said there’s not such a ban, said agency and industry officials.
Securus Technologies asked the Massachusetts Department of Telecommunications and Cable in a filing Monday to suspend its investigation on inmate calling services (http://1.usa.gov/1cc4bSh). This follows Global Tel Link’s similar motion Friday to the DTC citing the FCC’s ongoing rulemaking on interstate ICS rates (CD Oct 22 p11). The DTC should not “expend resources addressing the same issues” being considered by the FCC because the DTC could have to “redo” its decision after the FCC proceeding, said Securus. If the DTC denies Securus’s motion, the ICS company said it requests 10 days after the denial for interested parties to respond to the Prisoners’ Legal Services of Massachusetts petition to consider ICS changes.
The Massachusetts Department of Telecommunications and Cable (DTC) should reverse a portion of its interlocutory ruling dismissing an investigation of the rate component of the state’s inmate calling service (ICS) rate-setting mechanism, said a Prisoners’ Legal Services of Massachusetts petition filed Wednesday (http://1.usa.gov/H8wQsL). The usage rate of $0.102 per minute and a flat usage rate of $1.50 per 15-minute call is not “just and reasonable,” said PLS. Rates under $0.102 still yield a “fair profit to ICS providers,” said the petition. PLS said ICS can be profitable for $0.07 per minute with no additional surcharge, based on evidence from the FCC rulemaking proceeding on interstate rates (CD Sept 30 p9). “The Federal Communications Commission has cited the wide variation of interstate ICS rates as evidence of a market failure in the intrastate market as well,” said the petition. For the DTC to ratify a per-minute rate of $0.10 “flies in the face” of the FCC’s own analysis, said PLS. The FCC order made plenty of good points that help PLS argue its case to the DTC, Bonita Tenneriello, an attorney with PLS, told us Friday. “You can’t ask consumers to pay for kickbacks, and almost half of these rates are kickbacks,” she said. “You need to charge consumers fees that only cover the costs of a call.” The FCC’s case will be helpful for DTC regulators in their decisionmaking, said Tenneriello. “The calling companies asked the DTC to dismiss the case, but after the FCC decision, the DTC decided to go forward,” she said. Prison calling rates are unfair to families because prisons often drop the calls, and collect calls are not allowed, said Tenneriello. “The FCC understands that prison rates make it hard for prisoners to stay in touch with their families and keeping in touch is important for reentry after prison,” she said.
Though an FCC rulemaking proposal to eliminate the UHF discount could eventually lead to legal challenges, broadcasters will likely wait for an actual order to be passed before heading to court, several attorneys and a broadcast executive told us in interviews this week. They said broadcasters will wait for an order even though the NPRM proposes applying the new ownership calculation to any new ownership group not in existence or pending by the release of the NPRM, rather than pegging the cutoff to the release of an actual order (CD Sept 27 p1). FCC Commissioner Ajit Pai condemned the timing of the cutoff because it means the proposed law could have real-world effects before going through the full rulemaking process, but broadcasters are still likely to let the NPRM go through the normal commenting process and see what emerges rather than go for an early court challenge, several attorneys said. “I don’t think you'd get much value from a legal challenge” to a law that is still in the proposal stage, said Fletcher Heald broadcast attorney Donald Evans in an interview.
A House bill that would remove the integration ban requiring cable operators to use CableCARDs instead of built-in security in set-top boxes doesn’t have a clear path to passage but has generated a lot of industry interest, a Republican lobbyist who represents cable interests and a consumer electronics official told us Friday. Both NCTA and ACA have issued statements in support of the bill, while CEA, TiVo and Public Knowledge denounced it as anti-consumer. The League of Rural Voters, National Puerto Rican Coalition and National Congress of Black Women support the bill, said a spokeswoman for House Communications Subcommittee Vice Chairman Bob Latta, R-Ohio, who introduced the bill. “I think there’s going to be a big push to get this done somehow, some way,” said the lobbyist.
Expanding the amount of information on political ad sales TV stations are required to post online would needlessly burden broadcasters, said NAB, Raycom, LIN Media and others Monday in comments in docket 00-168 on possible changes to the online political file rule. “No additional burdens on broadcasters can be justified by the bare desire to amplify the political file’s ancillary benefits,” said NAB, responding to a proposal from the Public Interest Public Airwaves Coalition(PIPAC), Sunlight Foundation and Center for Effective Government to have stations post political ad sales data using detailed, standardized forms of the type used for disclosures by the Federal Election Commission.
The Lifeline reporting requirements proposed by the Massachusetts Department of Telecommunications and Cable (DTC) are reasonable, said eligible telecommunications carriers in their comments. ETCs and Massachusetts Attorney General Martha Coakley submitted comments on proposed rulemaking procedures for state implementation of the FCC’s Lifeline program (CD Aug 26 p8). The requirements to report non-usage disconnections and the number of customer complaints to DTC are reasonable because these data are already required by the FCC, said TracFone (http://1.usa.gov/16uWApG). The DTC’s proposal to require wireless ETCs to provide notice of any material changes to rates, terms and conditions of the ETC’s Lifeline service at least five business days prior to implementation is unnecessary because wireless service is not subject to rate regulation, said TracFone. T-Mobile said it supported the five-day proposed requirement because “implementation minimizes the operational burden and risk of competitive harm” (http://1.usa.gov/18g9iMO). However, the competitive environment of Lifeline services prevents “any significant risk of carriers implementing changes that may harm consumers,” said T-Mobile. TracFone said it has no “philosophical objection” to providing DTC contact information on Massachusetts Lifeline applications, but the resulting call volume “may impose a substantial burden” on the DTC. Boomerang disagreed with TracFone in its comments (http://1.usa.gov/18GCUVH), and said putting the DTC’s contact information on “generic” marketing and advertising content is “not intended to be state-specific.” The DTC-specific complaint information to the Lifeline application “may prevent Boomerang and other ETCs from maintaining the current one piece of paper application,” which is important to Boomerang’s “customer identification and anti-fraud efforts.” The DTC’s proposed rulemaking procedures require the ETCs to provide responsive customer service, said Coakley in her comments (http://1.usa.gov/15IuIBK). The DTC should “revive its proposals” dealing with the training of customer service representatives, prompt processing of Lifeline subscriber applications and access to person-to-person customer service assistance, said Coakley. These proposals for the ETCs could “decrease the number of subscriber complaints and the delay in resolving those complaints,” said Coakley. The requirement of the ETCs to report the number of customer complaints would impose additional compliance costs on the ETCs with “little resulting public benefit, said Verizon in its comments (http://1.usa.gov/16MjrjV).
Creating new CableCARD and encoding rules that would apply only to cable operators would “hamstring” their ability to compete in the current video marketplace, said NCTA in comments responding to a TiVo petition (http://bit.ly/12VRaS) asking the FCC to reinstate the portions of the rules knocked down by the EchoStar decision (http://bit.ly/10nMM3E). CEA, Public Knowledge and the All-Vid Tech Company Alliance voiced support for the petition, while Verizon, cable providers and broadcasters opposed TiVo’s proposal, along with NCTA. “In such a dynamic and vibrant marketplace, there is no place for decade-old plug-and-play regulations premised on an entirely different competitive landscape” said NCTA.
If a panel of appellate court judges decides the FCC has no authority to enforce its open Internet order, another federal agency could take its place, several industry officials said in recent interviews. With its expertise in consumer protection and antitrust issues, the FTC is ideally positioned to take over if the net neutrality rules fall, industry and FTC officials have said publicly and in interviews. It’s by no means a common assumption. Many fear that, with its more case-by-case approach to resolving competitive harms, the FTC would be an inadequate protector of an open Internet.