Wireless carriers raised concerns to FCC late Mon. that “interference temperature” touted by agency’s Spectrum Policy Task Force report wasn’t yet backed up by real-world information, such as noise floor data. Responding to task force recommendation, several commenters cautioned Commission against basing spectrum allocation and policy decisions on technology advancements that hadn’t yet materialized. Among common themes that emerged in comments this week was need for more unlicensed spectrum, requirement for additional public safety bands, concern over auctioning of satellite spectrum.
Country of origin cases
In ruling that could mark end of protracted NextWave litigation, U.S. Supreme Court Mon. upheld lower court decision that reversed FCC on cancellation of carrier’s licenses. Court ruled 8-1, with dissent by Justice Stephen Breyer, that Bankruptcy Code barred FCC from revoking licenses held by bankrupt debtor for failing to make timely payment. Writing for majority, Justice Antonin Scalia said that reading of bankruptcy law didn’t conflict with Communications Act, which he said didn’t require FCC to cancel licenses as penalty for missed payment. “What the petitioners describe as a conflict boils down to nothing more than a policy preference on the FCC’s part,” he wrote.
House Commerce Committee is considering setting 5-year review period for FTC’s authority to collect fees from telemarketers in order to fund its proposed do-not-call list, House source said. Committee Chmn. Tauzin (R-La.) originally expressed reservations about authorizing fees for do-not-call list that wasn’t yet operational, but he later said that such authority would need to include congressional review of FTC’s list and fee collections. Committee will consider bill Wed. that would give FTC 5-year authorization, source said. Recently passed Senate omnibus spending bill (H.J.-Res. 2) includes authorization for FTC to collect fees, but doesn’t include any congressional review of authorization. Committee also will formally organize itself Wed. to adopt rules, subcommittee jurisdictions and ratios, and appointment of subcommittee chmn., vice chmn. and members. Following that meeting, committee will address authorization of FTC do-not- call list and other bills in mark-up session, Jan. 29, 1 p.m., Rm. 2123, Rayburn Bldg. Senate Commerce Committee has canceled its organizational meeting, originally scheduled today (Tues.) and hasn’t rescheduled it.
Public broadcasters won’t be able to obtain digital carriage on cable through “must-carry,” but may through “must-convince,” said report by CPB-funded public broadcasting working group. Asked whether group thought current PTV programming wasn’t compelling enough, Dennis Haarsager, consultant to Digital Distribution Implementation Initiative project, said that, like other media, cable systems were ratings-oriented and some off-air stations and PTV stations were lower “audience performers” than others: “So cable systems understandably want to populate their systems with the highest audience programming they can.” There also is problem with contractual obligations for cable to carry content of cable programmers, he said: “We need to make a compelling case why our programming is compelling. I think the main stations in the market don’t have a problem with that.” It was 2nd and 3rd PTV stations in market that had difficulty securing carriage because “some of those stations are considered by cable operators to be superfluous.” Haarsager said PTV should ensure that all stations were providing “unique” programming and were serving substantial audience: “If we do that we can be successful in convincing cable systems to carry us.” Trend of audience decline faced by PTV and commercial networks will continue, study said, and “threaten the existence of a substantial number of licensees, at least as standalone operations.” Because audience drives membership for PTV, Haarsager said, PTV also was losing out in terms of members. Because members that remain contribute a “little bit more,” PTV income hasn’t dipped significantly, he said: “But it seems safe to predict that if the audience continues to go down for over-the-air stations, then income will dip as well and at some point… stations that are marginally financed are going to feel economic pressure.” For that reason, PTV system may be more condensed in 2008 than today, report said. Over-air broadcasting, it said, has been overtaken or “seriously threatened” in many ways: (1) Cable and DBS gatekeepers stand between broadcasters and 85% of TV homes. (2) Proliferation of cable and satellite channels compete for audience share with increasing amount of original programming. (3) Free-to-air ad supported broadcasting still commands bulk of commercial TV revenue, but cable channels are on threshold of overtaking broadcast channels in total viewing and ad revenue: “Terrestrial broadcasting’s primacy in advertising revenue may erode swiftly as cable operators develop enhanced abilities to package and sell very precise spot and local advertising.” Set-top box memory may even give DBS operators ability to target ads to specific geographic or demographic markets, report said. Other projections by group: (1) Local stations will continue to serve mass audiences, but primarily through cable and DBS. (2) Viewers will choose programming from among increasingly customized and personalized options, using on-demand services provided by content aggregators. (3) Ownership of both distribution infrastructure and program production will be even more concentrated than it is today. (4) TV revenue will continue to shift away from ads to subscriptions. Ad revenue is likely to be insufficient to support current array of channels available to cable and DBS customers, forcing many to fold and spurring cable and DBS operators to shift bandwidth to alternative revenue models.
NTIA Dir. Nancy Victory submitted updated financial disclosure form for 2001 Fri. to Office of Govt. Ethics, Commerce Dept. spokeswoman said. Victory had said earlier in week, through spokeswoman, that she would report as gift contributions that industry lobbyists made to Oct. 2001 party for her. Move was response to new advice provided by OGE on how to calculate what hosts paid for party as gift, which changed outcome for what she reported as gift (CD Jan 23 p6). News reports last week focused on Oct. 2001 party at her Great Falls, Va., home by 6 lobbyists that Victory said she counted as personal friends. Commerce Dept.’s ethics officials originally ruled contributions to party by co-hosts were gifts that didn’t qualify as reportable. OGE asked Commerce Dept. by midweek to re-interpret calculation it used to arrive at that conclusion, leading to decision by Victory to report contributions in amended financial disclosure statement.
FCC’s Media Bureau denied request by New Yorkers for Fair Use for extension of time to file reply in agency’s rulemaking on whether regulatory copy protection regime was needed to protect digital broadcast TV. FCC noted that original rulemaking set deadlines at Oct. 30, 2002, for comments, Dec. 13, 2002, for replies. Media Bureau granted extension requested by Public Knowledge, Center for Democracy and Technology and Consumers Union, pushing comment deadlines to Dec. 6, 2002, and Jan. 17, 2003, respectively. Bureau later granted limited extension for filing replies to Feb. 18, following request by American Library Assn., American Assn. of Law Libraries, Assn. of Research Libraries, Medial Library Assn., Special Library Assn. “In light of this action, the Media Bureau denies the… request,” order said. New Yorkers for Fair Use had asked for reply deadline to be pushed back another 180 days.
Gemstar-TV Guide International will restate earnings for last 3 fiscal years, widening scope of accounting probe that originally covered first 2 quarters of 2002 and all of 2001, company said Thurs. As result of restating financial results for fiscal 2000, 2001 and 2002, $19 million in previously reported licensing revenue, including $18.1 million from pact with AOL Time Warner and $8.2 million in ad revenue from interactive program guide (IPG), won’t be recognized, company said. Another $26.8 million reported as licensing revenue gained via arbitration award and settlement agreement with Motorola will be reclassified as reduction of operating expenses or other income, while $47 million will be recognized over term of 10-year agreement. Gemstar said it was likely that further restatements would be implemented as result of Ernst & Young’s probe and its own review. Additional restatements may be material and will be filed with SEC in March, company said.
Payment originally made by SBC lobbyist for her part in Oct. 2001 party for NTIA Dir. Nancy Victory came from company’s coffers, SBC spokesman said Thurs. Officials originally said $480 spent by SBC Senior Vp-Regulatory Compliance Priscilla Hill-Ardoin came from personal funds. “She didn’t remember accurately. She had thought up until recently that she had covered it because it is such a small amount,” SBC spokesman said: “We continued to go through records. It turns out the company originally paid her share.” Hill-Ardoin “immediately” reimbursed company, he said. Federal govt. ethics guidelines stipulate gifts from company that has business before govt. official aren’t acceptable, govt. officials have said (CD Jan 22 p1). However, gifts can come from long-time personal friend, even if that person is lobbyist, as long as it came from personal, not corporate funds, officials said. While corporate funds can’t be accepted as gifts, several sources suggested that ethics guideline lapse that such scenario raised for govt. official could be corrected as long as gift-giver reimbursed company with personal funds. Victory earlier this week decided to report as gift contributions that industry lobbyists made to party for her at her Great Falls, Va., home (CD Jan 23 p6). Decision to amend her financial disclosure form to reflect those contributions came after Office of Govt. Ethics offered new advice on how calculation should be made as to which part of gift was reportable. Hosts of party listed on invitation were lobbyists for Cingular, CTIA, Motorola, SBC and partner at Wiley, Rein & Fielding. Meanwhile, buzz continued about party, including Washington Post editorial that took aim at Victory’s event and House Majority Leader DeLay’s annual charity golf tournaments. Such events “underscore the endemic sense of entitlement among those in power to have someone else foot the bill -- and their obliviousness (or perhaps indifference) to why that might be wrong,” editorial said.
In response to new advice late Tues. by Office of Govt. Ethics (OGE), NTIA Dir. Nancy Victory plans to report as gift contributions that industry lobbyists made to Oct. 2001 party for her, officials said. Her plan to report what hosts paid for party as gift represents change from earlier this week (CD Jan 22 p1). After AP reported party, hosted at her Great Falls, Va., home by 6 lobbyists she counts as personal friends, Victory said Commerce Dept.’s Ethics Office had ruled “benefit” didn’t qualify as reportable gift. Commerce Dept. spokeswoman said Wed. that OGE subsequently asked department to re-interpret calculation used to make original assessment whether gift had to be reported. Based on that math, Victory now will report party as gift in amendment to her financial disclosure form for 2001, spokeswoman said. Gen. Counsel’s office at Commerce Dept. initially had interpreted federal ethics standards based on Victory’s portion of party, spokeswoman said. What has changed in latest calculation is that she had suggested list of some people to be invited to party, spokeswoman said. Dollar threshold for what had to be reported as acceptable gifts in 2001 was $260 under federal guidelines, officials said Tues. “The pro rata shares of the invitees moves that above the $260 limit,” spokeswoman said. Original ruling examined only Victory’s share of party costs, spokeswoman said. Updated advice late Tues. from OGE came after Victory asked Gen. Counsel’s office to take another look at how it reached conclusion on whether gift had to be reported. “What she had done at the beginning was exactly what she was supposed to do,” spokeswoman said, noting that she had asked Gen. Counsel’s office to vet party in advance: “A few days ago she asked them to take a look at it again.” Hosts of party listed on invitation were lobbyists for Cingular, CTIA, Motorola, SBC and partner at Wiley, Rein & Fielding. Motorola Vp Richard Barth, not his company, was co-host of party, spokesman said. “It was his initiative motivated by personal friendship,” Motorola spokesman said. “He has said he doesn’t remember if he later got reimbursed for it.”
WorldCom filed opposition at FCC to challenge by United Church of Christ (UCC) to company’s transfer of licenses from its pre-bankruptcy entity to its new debtor-in-possession unit. UCC’s petition for reconsideration, filed with FCC Wireless Bureau this month, was follow-up to challenge last year that Bureau rejected in Dec. In original filing, UCC urged Commission to block WorldCom’s request to transfer licenses and authorizations, saying company wasn’t qualified to hold them because of false reports to SEC, contrary to character standards of Communications Act. Bureau turned down that objection, saying that assignment of licenses simply marked change of status in which licensee held licenses. WorldCom also urged Bureau to reject latest challenge, arguing it didn’t provide new information. “In addition, it is entirely unclear whether UCC’s pleading even presents a facially plausible for reconsideration or clarification,” WorldCom said. It also took exception to UCC request that FCC consider character issues at next opportunity.