Federal Communications Commission (FCC)

Faced with criticism of “creeping commercialism” in public broadcasting following FCC decision to allow PTV stations to solicit ads on their excess nonbroadcast digital capacity, Assn. of PTV Stations (APTS) is reviewing voluntary guidelines for PTV stations’ use of their digital ancillary and supplementary services. APTS intends to revise guidelines to ensure that PTV stations use their “new freedom” responsibly, Pres. John Lawson told us. Guidelines would be strengthened with 2 objectives in mind, he said: (1) To assure that stations use their new funding streams to plow back revenue into developing noncommercial content. (2) To demonstrate to critics that PTV stations will use their freedom to solicit ads on nonbroadcast digital channels responsibly.

Consumer groups said Comcast’s proposed $72 billion merger with AT&T Broadband would “place a chokehold” over nation’s access to TV, Internet and other broadband services and warned they would try to persuade federal regulators to block deal between nation’s first and 3rd largest cable operators. Two senators called for hearing early next year, saying they had “serious concerns” and want to explore impact of new AT&T Comcast as well as proposed merger of satellite service providers EchoStar and DirecTV. Sens. Kohl (D-Wis.) and DeWine (R-O.), chmn. and ranking minority member, respectively, on Subcommittee on Antitrust, said they were particularly bothered by rising cable rates. “We continue to believe that more competition, rather than additional consolidation, is needed in this industry,” they said. However, Kohl and DeWine said they also recognized potential benefits, such as introduction of cable telephony to more consumers as viable alternative to local telephone companies.

In face of lingering questions from FCC, BellSouth (BS) withdrew its Sec. 271 application to provide long distance in Ga. and La. and said Thurs. it planned to resubmit filing with updated information shortly. New filing will provide Commission with additional information on operations support system (OSS) issues such as preordering and order process integration and service order accuracy, BS said. It “will comply with the FCC’s request for additional information to supplement the record,” said Margaret Greene, pres.- regulatory & external affairs, saying company built “solid case” that it had met Telecom Act requirements for long distance entry. FCC Chmn. Powell said: “The FCC cannot approve such applications by the Bell companies unless they satisfy the requirements of Section 271 of the Communications Act.” Competitors praised what they viewed as signal sent by Commission that it was insisting on complete information in long distance filings that OSS systems worked. BS said it planned to resubmit filing “promptly” to restart review process at FCC.

FCC at its agenda meeting Wed. approved 2 notices of proposed rulemaking (NPRMs) to review regulatory treatment of unbundled network elements (UNEs) and ILEC broadband services. FCC said 2 proceedings were part of broader effort to review competition policies in light of developments in marketplace. Agency said that in addition to Wed. items, it would begin “more comprehensive” review of broadband policies in next few weeks in response to concerns that surfaced recently on ILEC provision of DSL services to competitors.

Ranking House Commerce Committee Democrat Dingell (Mich.) and Rep. Markey (D-Mass.) asked FCC for more details on proposed NextWave settlement, which will be focus of House Telecom Subcommittee hearing today (Tues.) Dingell and Markey, who is ranking subcommittee member, asked Commission to furnish details by 6 p.m. Mon. on settlement reached among U.S., Jan. re-auction winners in C-block auction and NextWave. In letter written Fri. to FCC Chmn. Powell, Dingell and Markey said settlement and implementing legislation would “have profound implications for the American taxpayer and for future telecommunications and spectrum management policy.” They said they were seeking more information as part of settlement parties’ request for “expedited consideration” of implementing legislation. Key caveat of NextWave settlement, which would provide $10 billion to U.S. Treasury, is that implementing legislation be passed by Dec. 31. Among 18 questions that Markey and Dingell posed to FCC were: (1) How much money NextWave would receive from settlement before and after federal taxes. (2) Which rules FCC would need to waive to put settlement agreement into effect. (3) What steps FCC has taken on petition filed over summer by Alaska Native Wireless, Verizon and VoiceStream, which sought probe of eligibility of NextWave to hold C- and F-block licenses. (4) Whether FCC was satisfied that NextWave now was qualified licensee under designated entity and foreign ownership rules at FCC. (5) Whether FCC had evaluated NextWave’s financial structure submitted to U.S. Bankruptcy Court, White Plains, N.Y., in Aug. (6) Whether Commission had examined how proceeds of settlement that NextWave would receive would be distributed between its control group and noncontrol group investors. Dingell and Markey noted that Powell had described settlement as resolution that would maximize public interest. “We, too, support a public interest resolution to this matter and are curious as to what public interest conditions the Commission sought to obtain in the settlement agreement with the parties,” letter said. It asked whether settlement would impose conditions on carriers that would receive NextWave licenses, such as whether they would expedite deployment of Enhanced 911 technology. Senate Commerce Committee Chmn. Hollings (D-S.C.) released “Dear Colleague letter Mon. expressing his opposition to the proposed resolution of NextWave spectrum auction case. Hollings described arrangement as “private, back-room settlement [that] is fundamentally at odds with telecommunications and has been presented to us at the eleventh hour.” He urged members not to “legislate a scam,” which he said would happen if Congress acted hastily on matter: “There is no reason for Congress to legislate this settlement. Congress doesn’t legislate FCC decisions. Regardless, since the 2nd Circuit Court found for the FCC and the D.C. Circuit found for NextWave, why should we legislate the wrong result?” Meanwhile, House Telecom Subcommittee released witness list for Tues. NextWave hearing, 3 p.m., Rm. 2123, Rayburn Bldg.,: FCC Chmn. Michael Powell, Verizon Wireless CEO Denny Strigl, NextWave Gen. Counsel Frank Cassou, Urban Communicators Corp. Secy. James Winston.

Despite move by FCC to put ultra-wideband (UWB) order on agenda for Dec. 12 meeting (CD Dec 6 p8), chances that item will be approved then are seen as slim, industry observers said Thurs. Sources have indicated that in areas of UWB policy where federal agencies can’t reach agreement, Commission will allow more time beyond Dec. 12 for coordination on final item. Commerce Secy. Donald Evans told FCC Chmn. Powell Nov. 30 that additional 60 days were needed to complete final analysis to ensure protection of critical govt. operations and safety of life services. “This additional time seems eminently reasonable given the stakes of the proceeding and the high demands placed on our national defense and transportation agencies during this extraordinary time in our nation’s history,” Evans said in letter obtained by Communications Daily. Sen. Burns (R-Mont.) wrote to Powell Dec. 4 citing “significant alarm” raised by aviation industry on impact of UWB interference with “critical” safety-of-flight operations. “Potential interference with aviation operations is entirely unacceptable in light of recent aviation tragedies,” Burns wrote.

FCC Wed. turned back petition for rulemaking filed by Public Employees for Environmental Responsibility (PEER) that had sparked strong opposition from wireless, wireline and undersea cable operators. Commission unanimously adopted order, although Comr. Copps issued separate statement saying PEER had raised “important questions” about how FCC carried out environmental duties mandated by Congress. PEER had asked FCC to change how environmental rules were applied to undersea cables, fiber lines, wireless towers. Group of govt. employees concerned about environment wanted agency to conduct rulemaking to ascertain whether it needed to create Office of Environmental Compliance and separate joint rulemaking with other agencies. Companies ranging from Verizon to Global Crossing had balked at PEER petition, telling FCC such action wasn’t needed and unjustifiably would add to regulatory burdens. Commission rejected PEER arguments that due to explosive growth in wireless and wireline infrastructure since Telecom Act, agency should take fresh look at cumulative impacts of spectrum auctions, tower registrations, undersea cable landing licenses, Sec. 214 authorizations. PEER doesn’t offer “rationale for treating all actions as actually or potentially damaging to the environment,” FCC said. “We do not believe that the evidence of environmental harm proffered by PEER reflects any environmental processing failings by the Commission.” Even if PEER successfully pointed to such shortfalls, “a few examples in no way justify the complete overhaul of the Commission’s long-standing environmental rules across all service areas,” it said. PEER had challenged FCC environmental rules that implemented National Environmental Policy Act (NEPA), which required federal agencies to account for environmental impact of projects they oversaw. PEER had urged FCC to require applications for all Commission actions involving submarine cables, fiber lines and spectrum requiring communications towers to file environmental assessment for public utility facility. Private utility would have to file environmental impact statement. PEER defined public utilities as supplying last-mile connections while private utilities would be parts of network needed to transmit over long distances. FCC said its regulations implementing NEPA already identified 9 types of actions that could have significant environmental impact and evaluate through environmental assessment all actions that involved projects that fit into those categories. In its May 2000 petition, PEER had cited growing number of cases in which laying of fiber cable had damaged coral beds and harmed habitat of endangered marine species. PEER said that in other cases, buildings and towers could have significant effect on environment and historic areas. Copps said that “while this proceeding did not provide adequate record evidence for a restructuring of our policies at this time, the Commission should undertake a thorough review of our obligations under the National Environmental Policy Act and the National Historic Preservation Act.” He said that as part of Chmn. Powell’s recently launched review of FCC procedures, assessment of agency’s responsibilities under NEPA and National Historic Preservation Act should be included. Copps said FCC should: (1) Determine whether it had devoted enough resources to meet its environmental responsibilities under those laws. (2) Examine how accessible such proceedings were to “nontraditional stakeholders” such as small businesses. PEER Gen. Counsel Daniel Meyer told us group planned to file petition for reconsideration at FCC by early Jan. “I do take Commissioner Copps’s separate statement as an indication the Commission knows it’s not addressing environmental concerns from environmentalists in an appropriate manner,” Meyer said. He said one example of types of cumulative environmental impacts that FCC must consider involved wireless towers that hadn’t complied with Sec. 106 review under National Historic Preservation Act. Assessing cumulative impacts of towers, Copps said, “the danger is the actual spectrum auction will have to be environmentally reviewed. That would be a nightmare for industry.” Lack of uniformity in compliance and enforcement means that most of industry has been erecting towers without environmental review, he said.

House Judiciary Committee and House Telecom Subcommittee took turns Tues. grilling DBS executives on why govt. should approve EchoStar-DirecTV merger. In Judiciary Committee hearing, EchoStar Chmn. Charles Ergen said merged DBS provider entity would provide significant benefits, saying it would create viable nationwide competitive alternative to cable while freeing up spectrum that could be used for rural broadband deployment: “Without this merger we won’t see broadband development in rural America in our lifetime.” He played down criticism that merger would create DBS monopoly. Considering high rates of cable penetration across nation, even merged entity “hardly makes us a monopoly” in multichannel video programming distribution market, he said. Ergen also said new company still would face competition from C-band satellite service providers, contention that Chmn. Sensenbrenner (R-Wis.) said was inconsistent with statements Ergen made last year in federal court.

FCC probably doesn’t even have enough evidence to justify notice of inquiry on broadcast-newspaper cross- ownership rules, NAB said in comments on rulemaking (MM 01- 235). Broadcasters said FCC never had been able to show competitive harms from cross-ownership, so burden of justifying retention of rule “clearly lies with the Commission.” Goal of diversity of voices “reflects an outmoded regulatory philosophy of promoting the maximum diversity of ownership at all costs,” NAB said, and burden of justifying rule was increased by First Amendment implications. NAB also said any justification for ban had been reduced by expansion of information outlets and easing of other ownership rules, and that cross-ownership actually could increase news, information and programming options by allowing pooling of resources. Not surprisingly, Newspaper Assn. of America also supported eliminating rule, saying ban “serves no legitimate purpose in the modern media marketplace.” Group said “explosive” growth in media outlets justified eliminating ban and repeal “would lead to significant efficiencies and operational synergies” that would “benefit both consumers and advertisers.” Pooling resources would allow tailoring news content to different media, newspaper group said, and wouldn’t lead to “any material reduction in viewpoint diversity.” Consumer, civil rights and media public interest groups called on FCC Mon. to maintain limits on broadcast-newspaper cross-ownership. Groups cited study that said media diversity was at risk from mergers and acquisitions. They warned of dire consequences if FCC eliminated its long-standing prohibition against common ownership of newspaper and TV station in same market. Filing called for new policies “to open communications wires and the airwaves to more independent voices, in order to preserve our nation’s commitment to maintaining institutions and market forces that promote a robust democracy.” Document, more than 100 pages long, represented views of Consumer Federation of America, Consumers Union, Center for Digital Democracy, Civil Rights Forum, Leadership Conference on Civil Rights and Media Access Project. Filing cited 1945 Supreme Court ruling that First Amendment “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.” That principle will be jeopardized if broadcasters are allowed to own or be owned by newspaper in same community, filing said. Claims that Internet was viable news and information alternative ignored possibility that same entities could dominate Internet as well, filing said. “A small number of giant corporations interconnected by ownership, joint ventures and preferential deals now straddle broadcast, cable and the Internet,” filing said.

Deputy Defense Secy. Paul Wolfowitz asked Commerce Secy. Donald Evans to advocate delay in final regulatory decision on ultra-wideband (UWB) until “at least February.” Expectation of some industry observers had been that UWB could be taken up at FCC’s Dec. 12 agenda meeting, although timing was unclear because NTIA still must submit final input to FCC on rulemaking, sources said. FCC Chmn. Powell told House Appropriations Subcommittee earlier this year that Commission could issue UWB rulemaking by year-end, although he said at time that agency was awaiting final evaluation from govt. on UWB interference issues (CD May 23 p7). In letter to Evans last week, Wolfowitz said DoD’s review of preliminary draft of FCC’s UWB rules “indicates they will not provide adequate protection for GPS and other critical DoD systems… They also raise significant national spectrum management policy issues such as the intentional operation of nonlicensed devices in nationally restricted bands and in internationally designated passive-only bands.” Several sources said item on UWB began circulating on 8th floor at FCC earlier this week.