“Few regulations are more disconnected from today’s realities than the F.C.C.’s media ownership rules,” said Chairman Ajit Pai in a New York Times commentary Thursday on proposed elimination of the newspaper/broadcast cross-ownership rule. The rule is outdated and has harmed newspapers and broadcasters, while internet news outlets are unaffected, Pai said. "This rule thus singles out struggling news outlets for stringent regulation while leaving the biggest players untouched.” Though Pai conceded some believe eliminating the rule will allow too much consolidation of media voices, he said regulations barring broadcasters from owning more than two stations in a market still will preserve outlet diversity. “I understand that point of view and recognize that some limits are needed,” Pai said. In communities where grandfathered combinations of newspapers and broadcasters have been allowed, “we generally see news outlets that have been able to better serve the public,” Pai said. “The print newspaper business is dying, and for some papers, this rule has probably hastened their demise.”
Notable CROSS rulings
Privacy advocates are monitoring European Commission plans for dealing with encryption in the fight against terrorism. The EC anti-terrorism package, announced Oct. 18, includes measures to support law enforcement and judicial authorities when they encounter encrypted information, including a proposal, due next year, to make it easier to access electronic evidence across borders, and technical tools to support EU governments. The Security Union progress report stressed encryption won't be barred, limited or weakened. Digital rights and privacy experts and tech companies said they will be watching.
Domain name abuse, a tussle between Amazon and two national governments, and data protection/privacy were among key topics set for discussion at the ICANN meeting in Abu Dhabi, said ICANN and stakeholders. The meeting was to begin Saturday and run through Friday. A research paper by the Internet Governance Project (IGP) seeks to spur debate on how the internet body and the domain name system (DNS) should deal with content regulation, said Georgia Institute of Technology School of Public Policy researcher Brenden Kuerbis. The ICANN board is likely to act on a long-running dispute over Amazon's application for a .Amazon generic top-level domain (gTLD), Allen & Overy (London) intellectual property attorney David Stone posted on the firm's Digital Hub. And there will be talks on ICANN efforts to comply with new EU data protection rules effective next year.
The FCC plans Nov. 16 votes on media ownership and ATSC 3.0, as expected, (see 1710250049), and wireless and wireline infrastructure and cable items, Chairman Ajit Pai blogged, although drafts of the items have not yet been issued. Commissioners also will vote, as expected (see 1710100063), on the next phase of the FCC's spectrum frontiers initiative, setting aside high-frequency spectrum for 5G. The order would make available another 1,700 MHz of high-frequency spectrum “for flexible terrestrial wireless use while providing 4 gigahertz for core satellite use,” Pai said. The FCC approved the first order under ex-Chairman Tom Wheeler in July 2016 (see 1607140052).
A draft order on reconsideration that would eliminate cross-ownership and duopoly rules was circulated to the eighth floor to be voted at the FCC’s Nov. 16 meeting (see 1710250037), as expected, Chairman Ajit Pai told the House Communications Subcommittee during an oversight hearing (see 1710250050) Wednesday. The November meeting is widely expected to include a vote on authorizing ATSC 3.0, industry officials said. FCC action on net neutrality rules isn’t expected until December, agency and industry officials told us.
A media ownership reconsideration order that does away with cross-ownership rules, joint sales agreement attribution rules and the eight-voices test, and allows case-by-case waivers of the top-four network rule was circulated to the eighth floor for a vote at the Nov. 16 commissioners' meeting, Chairman Ajit Pai told the House Communications Subcommittee Wednesday. The draft of the item will be made public Thursday. Pai framed the recon order as taking steps to keep the government out of newsrooms: “If you believe as I do that the federal government has no business intervening in the news, then we must stop the federal government from intervening in the news business.” The order also would establish an incubator to encourage diversity in media ownership, and would retain disclosure rules for broadcaster shared service agreements, Pai said. Industry officials told us Wednesday they expect the recon order to be approved with a 3-2 party line vote, and that a court challenge from public interest groups is extremely likely.
FCC review and updating of media ownership rules is “long overdue” and not precipitated by Sinclair buying Tribune, blogged Commissioner Mike O’Rielly Friday, referring to perception deregulation efforts are connected to the takeover. The deal is “in no way the catalyst for FCC action on these issues,” O’Rielly said. Such reviews are statutorily required and requested in petitions for reconsideration, and relaxing the “shoddy” rules is a cause he has long supported, he said. “It’s not a new position or reaction to a pending application. Instead, for the first time, we finally have a Chairman receptive to these ideas.” In considering ownership rules, the FCC should “reasonably define markets” to account for competition from internet-based entities such as over-the-top services and social media platforms, O’Rielly said. The agency should also go after cross-ownership bans and rules that prevent duopolies, he said. “To my friends who think we need regulations to ensure a diversity of viewpoints, here’s a newsflash: you are regulating the wrong market. Today, with thousands of new options, how can the FCC justify maintaining this rule in its current form?” O’Rielly said. The agency also should do away with additional restrictions as it did the UHF discount, O’Rielly said. Without mentioning the national ownership cap closely associated with the UHF discount, he said that “the Commission must resist calls that are counter to our goals of modernization and/or often outside the scope of our authority.” O’Rielly repeatedly has said he doesn’t believe the FCC has the authority to tackle the national cap. The agency should go beyond the petitions for reconsideration in relaxing media ownership, he said. “It’s possible that procedurally we may be unable to address all of our media ownership rules now, but we must tee them up for future consideration.” Commissioner Jessica Rosenworcel spoke against relaxing media ownership rules on Oct. 13 (see 1710120057).
Verizon urged the FCC to ensure a "national, light touch" broadband framework that promotes investment and innovation, and that isn't undermined by a "patchwork of contrary state or local regulation." Regulation of broadband access services should "recognize that these services are inherently interstate" in nature, said the telco, backing an "open Internet" and voicing concern about Communications Act Title II classification. "State-specific rules relating to these services simply don’t work when we are talking about services that freely cross state boundaries: a user may be in one state, but accessing content from a host in another state, while using a provider from yet a third," said a Verizon filing posted Thursday in docket 17-108 on meetings Monday with outgoing acting General Counsel Nick Degani (see personals section in this issue), Special Counsel Kristine Fargotstein and aides to Chairman Ajit Pai. The company said courts "consistently recognized" FCC authority to pre-empt state or local laws obstructing or conflicting with federal objectives. New America's Open Technology Institute and Free Press backed Title II and detailed the "flaws in the arguments offered by carriers, and adopted" in the recent NPRM proposing to reclassify broadband as Title I and revisit net neutrality regulation. Meeting with Commissioner Jessica Rosenworcel and aides, OTI and Free Press cited "seeming irregularities in the commenting process and the Commission's approach," including regarding consumer complaints not included in the record. The FCC's Title II net neutrality order is popular and support is growing, but public support could make little difference, former Commissioner Michael Copps said in a speech at the Public Interest Advocacy Centre in Ottawa, Ontario. Copps is now at Common Cause, which provided a copy of his remarks. Copps warned against what he sees as the danger of increased broadcast consolidation, conceding mergers were also approved under the Obama administration. The FCC has launched “an assault” on the internet, he said. “On this issue, as on so many others, opinions inside the fabled Washington Beltway bear little resemblance to what most citizens are thinking,” Copps said. “Special interests and discredited ideology trump what citizens clearly want their communications ecosystem to look like. You know, net neutrality is such a no-brainer. I don’t believe it would even be an issue without the big money interests and the power they wield in our nation’s capital. But they have that power, so the future of net neutrality in the United States is under dire threat, from our FCC and possibly Congress, too.”
Tech allies are wary of some nations' privacy endeavors and data localization, and Congress can play a role, a House Digital Trade Subcommittee heard Thursday. Keeping data flowing across borders benefits jobs and economic growth, tech industry officials testified, as expected (see 1710110045). Officials pressed lawmakers to pursue favorable digital trade policies and urge the administration to work with governments on North American Free Trade Agreement negotiations. Chairman Bob Latta, R-Ohio, said the hearing is a “jumping-off point for a closer examination” of non-tariff trade issues in months to come. “Congress can play a significant role in supporting the people and businesses that depend on the free and open flow of data,” Latta said. He criticized actions some U.S. trading partners took to restrict cross-border data flows through requirements to localize data storage, production and facilities, raising costs for U.S. businesses. Such restrictions are “counterproductive to data security and privacy,” said ranking member Jan Schakowsky, D-Ill. Differences among countries “create challenges,” she said. The U.S. should balance between constructing policies that remove harmful barriers and those protecting privacy and security where “current law is lacking,” Schakowsky said, citing Equifax's breach and urging Congress to compel more answers (see 1710120016). Data flow across borders is a big, new policy concern, said BSA|The Software Alliance CEO Victoria Espinel. “NAFTA is a good place to start,” she said, urging the administration to work broadly with countries around the world to “set ground rules on international data.” Information Technology Industry Council President Dean Garfield said Congress can provide the “kinds of oversight and support” to create policies supporting growth in the sector. He cited a recent Information Technology and Innovation Foundation study that said EU states "differ significantly" on how much they used data to illustrate the uneven perspectives among trading partners. Requiring some data be stored locally is counterproductive to open borders, and harmful to companies that can’t afford the costs, ACT|The App Association President Morgan Reed said. “Companies will opt out of global opportunities if there are restrictions.” Reed praised the Privacy Shield framework (see 1709210011) as a workable cross-border policy, saying his members “have undertaken significant effort” to comply.
Industry groups plan to seek stronger digital trade laws during a House Digital Commerce Subcommittee hearing Thursday on barriers to trade and cross-border data flows, according to prepared testimony. Information Technology Industry Council President Dean Garfield outlined top administration priorities Congress should support: Negotiate new rules preventing barriers to digital trade; enforce existing trade agreements; and designate a senior official at the Office of the U.S. Trade Representative responsible for digital trade. ACT|The App Association President Morgan Reed says Congress should update the Electronic Communications Privacy Act to "ensure U.S. companies doing business abroad do not face conflicts between law enforcement requests and foreign laws." BSA|The Software Alliance CEO Victoria Espinel wants a "modernized" North American Free Trade Agreement that will ban barriers to market access for e-commerce and digital trade. NAFTA should promote cooperation among trade partners on cybersecurity and prohibit measures that require technology transfers, such as source code or algorithms, as a condition of market access, Espinel says. American University associate law professor Jennifer Daskal is to back a “multipronged strategy” to address privacy and security concerns of foreign governments without endorsing “protectionist impulses.”