Swift and harsh criticism from CE industry was predictable reaction to legislation introduced in Senate Thurs. that would require entertainment, CE and PC industries to craft standards for digital copy protection -- or have govt. do it for them (CED March 22 p5). Meanwhile, long-expected and controversial proposed “Consumer Broadband and Digital Television Promotion Act of 2002” (S-2048) brought cheers from content owners. Bill was filed by Commerce Committee Chmn. Hollings (D-S.C.) and co- sponsored by Sens. Stevens (R-Alaska), Inouye (D-Hawaii), Breaux (D-La.), Nelson (D-Fla.) and Feinstein (D-Cal.), with strong backing from all Hollywood studios except for Warner Bros., owned by AOL Time Warner.
Telecom industry remained confused and curious about FTC proposal to regulate common carriers (CD March 18 p1) because legislative proposals didn’t appear imminent. FTC Chmn. Timothy Muris told Consumer Federation of America (CFA) March 15 that FTC was hampered by common carrier exemption that prevented it from examining any issues relating to common carriers. FTC officials told us common carrier exemption was problem for agency in several enforcement and policy areas. In fact, exemption could cause problems for agency as it worked to develop nationwide “Do Not Call Registry” (DNCR), FTC sources told us, because it might not be able to address telemarketing for common carriers.
NTIA Wed. released long list of participants for April 4-5 Spectrum Summit aimed at developing more efficient use of spectrum and finding spectrum for new technologies. Sessions will include speeches by FCC and Dept. of Commerce officials as well as numerous panels. Some panels focus on types of experts such as spectrum users, economists and analysts, “technologists and futurists.” Two other panels will look at spectrum management and international issues, with panelists representing users, industry, regulators. For example, spectrum management panel has 14 members, including representatives of AT&T Wireless, CTIA, NTIA, city govt., Assn. of American Railroads, FCC, Motorola, other govt. agencies. April 4 sessions will be held at Dept. of Commerce auditorium, 1401 Constitution Ave. N.W. April 5 sessions will be at Ronald Reagan International Trade Center, 1300 Pennsylvania Ave. N.W.
House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) got their chance Wed. to attempt to convince Senate Commerce Committee their data deregulation bill (HR-1542) was worthy of consideration. As expected, Chmn. Hollings (D-S.C.) again said bill appeared to be “wolf lurking in sheep’s clothing,” providing “smokescreen” for Bell remonopolization. Several members were supportive of Tauzin’s and Dingell’s efforts in bringing issue of broadband deployment to forefront of congressional debate. However, members indicated Tauzin-Dingell bill in its current form probably wouldn’t survive in Senate. Members’ views of bill were mixed, as were industry responses to committee’s general call for further assessment of technology policy.
Sen. Hollings (D-S.C.) directly threatened funding for FTC in tense appropriations hearing with FTC Chmn. Timothy Muris Tues. that focused on recent merger review agreement between FTC and Justice Dept. (DoJ). Hollings, Senate Appropriations Commerce Subcommittee chmn., expressed concern with agreement because DoJ would be given authority to review all media, cable and Internet mergers. Muris argued that DoJ already had significantly more experience than FTC in such mergers and under current “clearance” agreements Justice already would be granted authority to review media mergers. But Hollings questioned authority of FTC to make change and said he would use budget request as leverage. By law, agencies are required to have any budget restructuring approved by Appropriations Committee under process called “reprogramming,” Hollings said, and he would use that vehicle to influence change. He said if budget cuts didn’t get FTC’s attention, pay cuts would. However, Muris said change wouldn’t require reprogramming by FTC. Hollings spokesman said Appropriations Committee could decide whether reprogramming had taken place and act accordingly, despite agency’s representation to committee.
Congressional pressure or pressure from ballot box is needed to slow trend toward media consolidation, consumer advocates said at Consumer Federation of America (CFA) conference in Washington. Mark Cooper, CFA research dir., and Gene Kimmelman, Consumers Union (CU) Washington office co-dir., expressed concerns about media consolidation that they said were likely to result from several proposed rule changes before FCC, including allowing cross-ownership of newspapers and TV stations and raising the media cross- ownership cap. Kimmelman said rule changes proposed by FCC Chmn. Powell went against intentions of Congress and Supreme Court rulings. Congressional decrees pushed FCC into making rules, he said, and courts had shown that First Amendment concerns elevated media consolidation beyond standard economic issues. “The chairman of the FCC doesn’t see the use for the rules,” Kimmelman said: “But that’s not what Congress believes.” He said recent announcement that Senate Commerce Committee would review merger review agreement between FTC and Justice Dept. (DoJ), which gave DoJ review authority over media mergers, showed Capitol Hill still was willing to scrutinize media merger issues. Cooper compared recent population trends with media ownership and said ownership rules are more necessary than ever despite Powell’s argument more TV channels and Internet access make ownership rules ineffective. Cooper said since the population has become more diverse, but TV programming hasn’t necessarily followed suite, a more diverse media ownership structure is more relevant now than in the 1970s when ownership rules were first enacted. “We need the rules more than ever,” Cooper said. “In fact, we need more rules, not fewer.” Relaxation of rules would create a “merger wave,” Cooper said. “If you let them, they will merge,” he said. Total ownership of TV and newspapers already had dropped to 600 now from 1,500 in 1965 and Cooper said it would fall to 400 if TV-newspaper cross-ownership were allowed. He said 6 companies, ABC, AOL, AT&T-Liberty, CBS, NBC and Fox already controlled nearly 2/3 of all TV. Cooper said Internet shouldn’t be treated as mass media because its reach was much more limited than many believed, adding that 57% of people in country didn’t have Internet in home while only 2% didn’t have TV. Cooper said high-speed Internet access service was highly concentrated market, leaving little room for competition. He said 50% of Internet content came from 4 companies.
Stage has been set for annual battle between White House and Congress over funding for Advanced Technology Program (ATP), R&D grant initiative that supporters say reaps dividends for entire nation by backing high-risk information technology and telecom projects. Bush Administration proposed scaling back fiscal year 2003 ATP budget to $108 million from $185 million in FY 2002, part of reform measure that Commerce Dept. would undertake to address ATP’s stigma as “corporate welfare” program (CD Feb 6 p3). House Science Committee Chmn. Boehlert (R-N.Y.) told Commerce officials Thurs. in Environment, Technology & Standards Subcommittee’s Technology Administration budget hearing to “be prepared” for congressional fight over ATP and Manufacturing Extension Partnership (MEP) funding.
Senate Commerce Committee will conduct “formal review” of merger review agreement between FTC and Justice Dept. (DoJ), which has caused controversy in consumer advocacy circles and been criticized by committee chmn. Sen. Hollings (D-S.C.). In letter dated March 11 to Attorney Gen. John Ashcroft and FTC Chmn. Timothy Muris, Hollings expressed his disapproval of agreement, particularly provisions that give DoJ review authority over nearly all media mergers. “I view this as a substantial change in antitrust enforcement policy, and one which only Congress should determine,” Hollings said. He also criticized behind-scenes process that led to agreement: “These actions not only raise questions about possible conflict of interests, but clearly were inappropriate given the ramifications of the agreement regarding antitrust enforcement policy.” Merger review was to have been announced in early Feb., but was postponed to March 5 after Hollings raised concerns. After FTC and DoJ announced agreement, he said his concerns never were addressed adequately.
Minn. PUC ordered an administrative law judge to investigate 11 agreements between Qwest and certain CLECs to determine whether they contained secret terms or conditions not available to other local competitors. PUC was responding to complaint filed by Minn. Dept. of Commerce Telecom Div., acting as utility consumer advocate, that alleged Qwest had violated state and federal law by offering some CLECs secret preferential terms for unbundled network elements (UNEs) and interconnection if CLECs withdrew opposition to Qwest long distance entry and other regulatory initiatives such as merger with U S West that formed current Qwest. Complaint seeks penalties of up to $200 million. CLECs allegedly involved included USLink, InfoTel Communications, McLeod USA, Covad Communications, Eschelon Telecom. Types of alleged preferences included secret extra discounts on service purchases and expedited handling of service and repair orders. Qwest has denied allegations of discriminatory “sweetheart” deals and has filed with PUC all terms of 11 agreements under investigation. Under law, Qwest is prohibited from favoring any CLECs over others, but CLECs bear no legal liability if they received special preferential treatment from incumbent. In another Minn. matter, PUC approved agreement by Qwest, Microsoft Network (MSN) and Minn. Attorney Gen. Office that settled slamming complaint against Qwest. Complaint filed Jan. 16 by coalition of Minneapolis ISPs alleged Qwest, as part of its exit from Minn. retail DSL Internet access market, migrated thousands of its DSL Internet access customers to DSL services of MSN without authorization and failed to give customers opportunity to select other providers. Qwest denied slamming charges and asserted PUC lacked jurisdiction over high-speed Internet access services. Under settlement, Qwest must notify customers it migrated to MSN that they had opportunity to choose another ISP without penalty but that if they failed to take action, their service automatically defaulted back to MSN. Qwest and MSN also must work with AG’s office to resolve problems of customers who were misbilled or double billed after switch. Settlement doesn’t require any admissions of guilt and doesn’t settle jurisdictional question.
House Commerce Committee Chmn. Tauzin (R-La.) has concerns about process leading up to ultra-wideband (UWB) order approved by FCC last month (CD Feb 15 p3), aide told conference at Va. Center for Innovative Technology (CIT) Wed. After panel discussions in which several industry and govt. officials referred to order as having “ultra-conservative” interference protections, House Commerce Committee Senior Counsel Howard Waltzman said: “That’s an understatement.” CIT conference touched on concerns raised by federal agencies such as Defense Dept. and FAA over potential for UWB devices to interfere with GPS and other critical safety-of-life systems, issue that was major point of contention among stakeholders in UWB proceeding. Of UWB’s potential to put intentional emissions in protected govt. bands, Waltzman said that “issue has been described in terms of being ‘religious’… The problem with that is there is a certain thing called separation of church and state, and government agencies are supposed to be agnostic.” Waltzman also questioned whether emission mask adopted by FCC for UWB devices was based on sound science. “There are a couple of things about the whole proceeding that really concern us,” he said.