Administration ‘Worried’ by FCC Steps toward Regulation, Baker Says
The Bush administration is “worried” by recent FCC steps toward more regulation of the broadband, broadcast and cable industries, said Meredith Baker, acting NTIA administrator. Concern she felt earlier over an agency finding that Comcast network management discriminated against peer-to-peer file sharing (CD Aug 1 p1) has been reinforced by recent broadband developments, Baker said in an interview. Adding to her concern is an FCC rulemaking on unbundling programming that she said could violate First Amendment rights without increasing cable competition. A commission proposal to require more community service of radio and TV stations also could have unanticipated effects, she said.
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The administration opposes “overly prescriptive regulations,” Baker said. “We are worried about broader regulations that limit companies’ ability to price or manage their services,” which the wholesale unbundling rulemaking could do if approved in an FCC order, she added.
An FCC spokesman said the commission believes that the administration supports Martin’s actions on the network management complaint against Comcast. Commerce Secretary Carlos Gutierrez has acknowledged the commission has enforcement authority, the spokesman said. “We, like the Commerce Department, believe that transparency promotes competition and network providers should be disclosing the limitations on use of bandwidth to their customers so that people have a full understanding of what they're paying for,” the spokesman said. As for wholesale unbundling, that would have a “very direct impact on consumers,” a commission spokeswoman said. “We believe everyone is concerned about high cable prices,” the spokesman said. “Giving consumers the ability to pick and choose channels would be a practical way to address this.”
Baker’s Wednesday comments are her latest criticism of policies supported by FCC Chairman Kevin Martin. She started July 31, decrying the network management order against Comcast approved 3-2 the next day. Last month, Baker said the FCC’s localism and programming unbundling proposals amounted to unnecessary regulation (CD Aug 19 p10). “We are watching what the FCC does and expressing our opinion,” Baker said Wednesday of the Bush administration. “We've been clear as far as what our policies are” on telecom, she said.
Baker remains concerned about the order against Comcast, she said. Bandwidth usage limits unveiled last week by the cable operator and similar steps by other ISPs “are examples of why we're concerned,” added Baker. “The challenge in devising a standard on network management is to achieve a balance between the benefits of an open network and the adverse consequences that broadband providers confront” in network management.
Enactment of the localism rulemaking could allow the return of the Fairness Doctrine, Baker has said. But she said Wednesday that her concern was based on speculation about what the FCC might do, not firsthand knowledge of the thinking at the commission. She wouldn’t say which parts of the localism proposal concern her most.
Baker’s comments turn up the heat on Martin not to circulate a localism order, industry lawyers said. But if the chairman decides not to seek a vote, it probably will be because he sees as a higher priority enacting rules to let cable and other pay-TV subscribers buy channels individually. “His whole chairmanship has evidenced a great concern about a la carte,” said attorney Henry Rivera, who was a commissioner 1981 to 1985. But Martin “certainly hasn’t been beating the drums” on localism the way he has on a la carte, Rivera said.
Martin may handle localism by seeking a vote on a further rulemaking notice, not an order, broadcast lawyers said. “If the FCC does act before the end of the year, which is highly unlikely, the action would be in the form of a notice of further rulemaking,” attorney Erwin Krasnow predicted. “He’s getting criticism from all over … It’s very, very controversial and it just wouldn’t make any sense for him to take action.” A further notice is “the most that he ought to do,” lawyer Gregg Skall said. But Martin really should reconsider the need for any action on localism, he added.
Baker sees it as positive that Martin has said FCC staffers aren’t preparing a video programming order. That market is competitive and no government action is called for, she said. “Many cable programmers are already making their networks available to multichannel video programming distributors at standalone rates,” Baker said. “Government regulation of rates … [is] difficult and it’s imprecise and it raises really legitimate concerns about the adverse consequences of competition and price and the supply of programming.”