The EU and U.S. finalized a trans-Atlantic data flow pact Thursday. The "umbrella agreement," which provides safeguards and guarantees for data transfers carried out for law enforcement purposes, and which gives Europeans the same rights of redress before U.S. courts as U.S. citizens, is a "major step forward" in EU-U.S. relations, the EU Council said. The instrument needs European Parliament approval.
Notable CROSS rulings
Broadcaster joint sales agreements may come up in an appropriations rider this year despite Wednesday's court ruling remanding to the FCC JSA TV limits. House Communications Subcommittee Chairman Greg Walden, R-Ore., sees the 3rd U.S. Circuit Court of Appeals media ownership ruling, which vacated limitations on JSAs due to process concerns over the agency's delaying its quadrennial reviews (see 1605250073) as a bigger impetus for telecom oversight and overhaul, particularly in the form of FCC reauthorization legislation. Attorneys and analysts are divided over how the FCC will respond to the ruling, with some seeing a retooled JSA attribution rule in the offing and others expecting some deregulation.
FCC Chairman Tom Wheeler could face an uphill battle trying to reestablish the joint sales agreement attribution rule vacated by the 3rd Circuit U.S. Court of Appeals in a majority opinion by Judge Thomas Ambro, broadcast attorneys told us. Along with vacating the JSA rule as expected (see 1604190041) in Wednesday’s Prometheus III decision, the 3rd Circuit took the commission to task for delaying the 2010 and 2014 quadrennial reviews and not abiding by the court’s decision in the previous two Prometheus cases (see 1605250016). That was the subject of a Communications Daily Bulletin.
A federal court hinted it may side with ISPs in a case about whether a state commission can compel disclosure of subscriber data to a third party. In a Friday order (in Pacer), the U.S. District Court in San Francisco temporarily banned the California Public Utilities Commission from enforcing a May 3 ruling compelling top ISPs to disclose subscription data to The Utilities Reform Network (TURN) as part of a state investigation of market competition (see 1605130025). The data involves carrier market share and includes Form 477 data that carriers report to the FCC. In their complaint (in Pacer), AT&T, Comcast, CTIA, Verizon and other industry plaintiffs said the data is confidential. Friday, the court granted the telecom companies a preliminary injunction. Judge Vince Chhabria said the ISPs don’t have to provide the data “until cross-motions for summary judgment are adjudicated,” and set a hearing on the cross-motions for Aug. 4 at 10 a.m., with a ruling to follow shortly thereafter. “The plaintiffs have shown a likelihood of success,” Chhabria wrote. “Although the FCC materials cited by the plaintiffs are not crystal clear on whether federal law allows a state commission to disclose this kind of data to a third party pursuant to a protective order, those materials suggest the answer is ‘no.’” The judge sympathized with the CPUC’s desire for the data. “Nobody disputes that the state commissions themselves need this kind of data,” he said. “The issue presented by this preliminary injunction motion is whether the state commissions may require the data to be disclosed to third parties.” The CPUC didn’t comment Tuesday.
The FCC's upcoming quadrennial review of its broadcast ownership rules will be greatly complicated by the ongoing incentive auction and is unlikely to be resolved under the current commission, broadcast attorneys told us. FCC Chairman Tom Wheeler repeatedly has said and the FCC told a federal appeals court that a draft quadrennial review order will be on circulation by June 30, but that date almost certainly will fall in the midst of the incentive auction, broadcast and public interest attorneys told us. That means at the time of circulation, neither the FCC nor the broadcast industry itself will know what broadcast stations in what markets will be staying in business, or how diverse the remaining owners will be, the attorneys told us. “The auction is a black hole,” Fletcher Heald broadcast attorney Frank Montero said. “It's going to be extremely difficult to come out with reasoned policy,” he said.
Bemoaning a lack of openness and transparency and repeating recent criticisms about merger oversight, the FCC's two Republican commissioners -- Mike O'Rielly and Ajit Pai -- presented a litany of complaints about the agency on a panel at the FCBA annual seminar Friday. "I look forward to the next" chairman, O'Rielly said.
Broadcast cross-ownership rules should be eliminated, NAB said in a meeting with FCC Media Bureau staff Thursday, said an ex parte filing posted online Monday in docket 14-50. “Retaining the cross-ownership rules in today’s media market would be arbitrary and capricious,” NAB said. The market has changed as newspapers have greatly declined while online news has become much more competitive and diverse, NAB said. “This should not come as a surprise, as the Commission, in contexts other than the broadcast ownership rules, has recognized the revolutionary nature of the Internet on competition and diversity.”
Both broadcast and cable interests continue to lobby the FCC on proposed changes to retransmission consent negotiation rules. People who have been part of recent retrans ex parte meetings told us the agency doesn't seem ready to circulate soon for commissioner approval new rules for the totality of circumstances test for good-faith negotiations, with the FCC perhaps still trying to figure out what it plans to do. But, given the agency staff taking part in those meetings, it seems likely the FCC is intent on getting feedback on the NPRM on 15 negotiation practices (see 1509020061). In a meeting with Chairman Tom Wheeler aide Jessica Almond, NAB said it cited the pro-competitive aspects of bundling, such as efficient economies of scale and cost savings, and the role they play in fostering creation of new and diverse programming, said a filing Thursday in docket 15-216. NAB also said multichannel video programming distributors "are the true masters of the bundle" with their double-, triple- and quadruple-play packages, "sometimes giving consumers little or no choice to select just one service if they prefer." NAB said the FCC should be "tickle[d] that MVPDs -- in this one instance -- are asking for the government to intervene to severely curtail or eliminate completely the ability of broadcasters to offer programming bundles." NAB also said it backs changing or eliminating media cross-ownership rules, citing "today's intensely diversified media marketplace." The American Television Alliance and member Mediacom, meanwhile, met with Media Bureau and Office of General Counsel staff to argue the FCC has authority to direct broadcasters to grant retrans consent for a limited period, said a Thursday filing in the docket. While Congress said MVPDs can't retransmit a broadcaster signal without that broadcaster's consent, lawmakers never limited FCC authority to require a station to give consent on a limited-time basis, ATVA/Mediacom said. Instead, Section 325 of the Cable Act and sections 201(b) and 303(r) of the Communications Act are sources of FCC authority to adopt such a rule, they said: "It is safe to say that there is virtually no part of a broadcaster's operations that are within its 'unqualified' control and immune from the Commission's regulatory authority absent an express and specific withdrawal of that authority by Congress." ATVA/Mediacom also said the FCC's requiring that a broadcaster consent to interim carriage would be akin to its authority to deem an interim franchise to have been granted to a competing cable operator after a franchising authority failed to act on a pending franchise application. Congress directed the agency to prohibit unreasonable denials of franchises, and the FCC would be now allowing unreasonable denials of retrans consent by requiring interim carriage, they said.
House lawmakers sent the FCC a letter Thursday as expected (see 1605040068) with 60 signatures criticizing the set-top box NPRM. “We strongly urge you to press pause,” they told the FCC, citing uncertainty and the possible effects on small businesses. Reps. Kevin Cramer, R-N.D., Bob Latta, R-Ohio, Kurt Schrader, D-Ore., and Collin Peterson, D-Minn., led the letter. It prompted praise from the American Cable Association, as expected, and others. The letter, signed mostly by Republicans but also some Democrats, “sent a strong message to the FCC today to consider the threats to rural consumers and small companies before pressing ahead with a mandate requiring implementation of technology that does not yet exist,” said NTCA CEO Shirley Bloomfield. “The cost of implementing the commission’s set-top box proposal could devastate the video business in rural areas, where many consumers do not receive an over-the-air signal and many small, rural telcos already struggle mightily with the costs of delivering video services. Now that the commission has heard from a broad, bipartisan cross-section of elected officials on an array of concerns with the set-top box proposal, we hope the agency will heed these calls and reconsider the proposed rules.” WTA also lauded the message: “It’s not often you see content providers, distributors, economists, Republicans, and Democrats all aligned against a proposal from the FCC,” said WTA Vice President-Government Affairs Derrick Owens. The Future of TV Coalition, which opposes the NPRM, circulated the letter. “To date, more than 150 Members of Congress -- including nearly half of all House Democrats -- have expressed serious concerns with the proposed mandate,” Future of TV said. The lawmakers began circulating a letter draft and gaining backers last week (see 1604270063). The FCC has received and is reviewing the letter, a spokeswoman said.
Verizon union workers claimed safety violations by their fill-ins in New York as the East Coast telecom strike continued into its third week. Verizon meanwhile won an injunction to stop alleged acts of sabotage by the union workers represented by the Communications Workers of America. As the standoff continues, analysts told us they didn’t expect a big financial impact on Verizon unless the strike drags on for many more weeks. The telco had warned such effects were possible (see 1604210043).