Federal Communications Commission (FCC)

Cable modem service is cable service within meaning of Communications Act and FCC was wrong in concluding otherwise in its March declaratory ruling, coalition of local govt. organizations said Thurs. in their opening brief filed in 9th U.S. Appeals Court, San Francisco. Alliance of Local Govt. Officials Against Preemption (ALOAP) brief challenges FCC’s classification of cable modem service as interstate information service, taking it outside the scope of Title VI of the Act. Cities said that at stake in appeal was estimated $300 million per year in cable franchise fees, a figure that was likely to increase in the years ahead. Local govts. couldn’t afford that in light of current economy and increasing costs being incurred for homeland security, ALOAP said.

U.S. Supreme Court justices peppered Justice Dept. attorney Tues. with questions on how FCC could have cancelled NextWave’s PCS licenses for missed payment when agency was acting as both regulator and creditor. U.S. Bankruptcy Code bars agency from cancelling licenses in such cases if nonpayment is only reason. DoJ attorney Paul Clement said FCC took steps to relax installment payment deadlines for auction winners, but ultimately decided not to waive automatic cancellation rule when NextWave missed payment deadline. While missed payment is regulatory trigger for automatic cancellation, Clement stressed FCC had studied other public interest factors when deciding not to make exception. Justice Stephen Breyer appeared most sympathetic to govt. stance, questioning what impact would be if there wasn’t implied exception in Bankruptcy Code for agencies in such circumstances, because otherwise they would be on worse footing than other creditors when reclaiming debts tied up in bankruptcy. But Justices Antonin Scalia and David Souter voiced skepticism about FCC’s regulatory and -- in some cases -- financial motives.

Paul Gallant, chmn. of FCC’s Media Ownership Working Group, told 30 state and local utility officials that Commission would take public interest into account as it tried to decide new rules for media ownership. He faced skeptical audience attending Consumer Federation of America’s utility conference in Washington Fri. Gallant said courts hade struck down rules on broadcast ownership, so Commission couldn’t simply defend rules as having “a legitimate government purpose.” He said Commission was “no longer free to hypothesize,” but must back up rules with evidence. NBC Washington Vp Robert Okun, another panelist, tried to convince audience that “changes can be positive” but attendees seemed to believe Commission would choose to deregulate broadcast. Several complained that all TV and radio stations were beginning to look and sound alike and gave little attention to local news and public affairs. But Okun said any local TV station that became disconnected from audience would lose that audience: “Localism is profitable.” Okun said maintaining old 35% cap on audience reach didn’t take into account that not nearly that many people watched particular network’s programming at any one time, that many instead watched cable or surfed Internet. “The ability to monopolize anything is much, much reduced at this point,” because of media proliferation,” Okun said. Mark Lloyd, exec. dir. of Civil Rights Forum, disagreed. He began by asking for show of hands if attendees thought there should be more media consolidation. No one did. “I think it will be very difficult to convince the American public that it is okay for 10 or 12 companies to essentially concentrate all the media ownership in local communities,” he said. Lloyd said some companies did provide diverse viewpoints, but they weren’t antagonistic viewpoints, which he said was vital. He compared media ownership to one company’s owning all different brands of soap on store shelves. Lloyd also questioned why, when FCC still had not acted on rulemaking by Commission under former Chmn. William Kennard that asked what public interest obligations of broadcasters would be in digital world, agency had begun rulemaking on broadcasters’ business interests. “That proceeding somehow went away,” Lloyd said. Earlier in week, Comr. Copps had made similar point, saying that rulemaking should be resurrected (CD Oct 3 p3). FCC sources said item still was live issue on 8th floor, but it was unclear what action Commission would take now. However, Lloyd said he believed agency was heavily influenced by partisan politics and, hence, deregulatory agenda. “I think it’s pretty clear to say that we do not have a great deal of confidence that this particular Federal Communications Commission with this chairman and 3 of those from the Republican Party, that we will see… rules establishing public interest obligations to broadcasting and limiting the power of broadcasters to buy more property,” he said.

FCC issued notice of proposed rulemaking Fri. seeking comment on tentative conclusion that it should adopt proposed changes in rules for public safety emission limits at 700 MHz. Rulemaking said proposed changes were designed to “remove potentially conflicting regulations.” Modifications would align FCC rules with industry standard documents and revise Adjacent Channel Coupled Power (APCC) emission limits for public safety transmitters in 700 MHz band. Most new data applications for public safety equipment have been accommodated within existing channel and technical requirements for voice transmissions, FCC proposal said. That has meant Commission requirements on emission limits generally haven’t made distinction between voice and data transmissions. Rulemaking sets out changes in APCC values proposed by private radio section of Telecom Industry Assn.’s wireless communications div. TIA unit said its recommendations represented consensus opinion of manufacturers interested in constructing 700 MHz public safety equipment. Comments will be due 30 days after proposal is published in Federal Register, replies in 45 days.

BOCA RATON, Fla. -- Proposal to use “bill-&-keep” system for intercarrier compensation could cause significant problems for rural carriers unless universal service was increased to cover shortfall in revenue, panelists said Wed., last day of USTA’s annual convention here. Idea of moving to bill & keep to replace access charges and other carrier compensation systems has been under study at FCC for at least 2 years. Commission has been looking at having one compensation system replace myriad of carrier-to-carrier payment plans, including access charges and reciprocal compensation. Carriers, especially Bells, support moving to bill & keep as that one payment system. As originally proposed in White Paper by FCC staffers, bill & keep would divide network into 2 parts, with caller’s phone company billing from caller to central point and call recipient’s network charging for completion of call. System is considered simpler than those used now.

Letter from Senate Majority Leader Daschle (D-S.D.) was praised by all sectors of telecom industry, but many said noncommittal letter from powerful senator represented loss for Bells’ lobbying effort. In letter sent Wed. to FCC Chmn. Powell, Daschle urged quick completion of triennial review of unbundled network elements (UNEs). He didn’t recommend action, and said clearly that letter wasn’t not intended to do so. Consumer advocates and CLEC representatives said Bells had mounted intense lobbying campaign in recent weeks to win support for changes in UNE regulations. Although SBC and USTA said they were pleased with letter, many suggested it fell far short of what Bells wanted. Some said it essentially signified that Senate had finished work on telecom issues in 107th Congress.

PCIA, now representing wireless communications tower companies, will try to convince govt. to simplify tower installment and operation processes, PCIA Pres. Jay Kitchen told press in Washington Tues. PCIA filed motion late Mon. asking FCC to dismiss Gulf of Mexico petition filed by Friends of the Earth (FoE), Forest Conservation Council and American Bird Conservancy (ABC) last month. PCIA also said it anticipated filing letter with FAA “within next couple of days” asking it to streamline rules and procedures affecting tower owners and managers. Former paging industry group, PCIA now will concentrate 90% of its attention on tower industry, splitting remaining 10% between Microwave Clearinghouse and frequency coordination, Kitchen said: “Wireless will always be a very strong part of our everyday life, and there is no wireless without towers.”

Senate Commerce Committee hearing on broadband Tues. stressed importance of wireless technology as 3rd pathway for broadband deployment, with telecom experts painting grim picture of “depression” that had beset sector. While he and others acknowledged that time was running out to take action on broadband legislation this year, Chmn. Hollings (D-S.C.) stressed importance of moving away from “finger-pointing” in Congress. “We need to move beyond the intramurals up here over Tauzin-Dingell and parity,” Hollings said. “If the market demonstrates anything, it is that competition, not deregulation, drives the Bells to invest in their networks and comply with Section 271 to open their markets,” Hollings said. While panelists, which didn’t include telecom company officials, emphasized need to “jump-start” funding for sector, another common theme was how to structure unlicensed wireless rules and spectrum to allow Wi-Fi and other technologies to compete with DSL and cable.

Against backdrop of new study that showed minorities hadn’t risen to senior levels of cable industry to degree that mirrored society, NCTA Pres. Robert Sachs told almost 200 cable executives here in N.Y. that cable must step up its efforts to rectify “underrepresentation of minorities and women on boards and in senior management.” Sachs’s comments came at opening of 2-day conference of National Assn. of Minorities in Communications (NAMIC).

Senate Commerce Committee approved granting FTC jurisdiction over common carriers, though measure was greeted with some scepticism from Republican senators who said it isn’t likely to pass full Senate. FTC official told us agency doesn’t anticipate House addressing issue this term, but said agency is pleased it moved this far in Senate because it bolsters common carrier case for next term.