A draft order that would make TV joint sales agreements attributable for the purposes of calculating broadcast ownership is likely to be approved by FCC members Monday with few changes from the way it was initially presented by Chairman Tom Wheeler despite intense opposition lobbying efforts by broadcasters, said agency officials and broadcast attorneys in interviews this week. Although last-minute changes are possible and FCC offices are putting forward possible edits, they're unlikely to shift the core of the draft order, said an agency official. The order (CD March 21 p1) would make JSAs where one company is in charge of more than 15 percent of another’s ad sales attributable and give companies two years to unwind such arrangements. If that version of the draft order becomes a rule Monday, broadcasters are likely to go directly to the courts, several broadcast industry observers told us. A court finding that the rule is arbitrary and capricious is “likely,” said an industry official. An NAB spokesman declined comment.
Notable CROSS rulings
Net neutrality provisions green-lighted Tuesday by the European Parliament Industry, Research and Energy (ITRE) Committee are better than those proposed by the European Commission (CD Sept 12 p5), but still contain “dangerous loopholes,” said French citizens’ advocacy group La Quadrature du Net. The provisions are part of a broad “connected continent” reform package aimed at creating an EU single telecom market. ITRE’s response to the EC proposal inserted strict rules to prevent telcos from degrading or blocking Internet connections to rivals’ services and applications, the committee said. Companies will still be able to offer specialized services of higher quality, such as VOD and business-critical, data-intensive cloud applications, as long as they don’t interfere with Internet speeds promised to other customers, ITRE said. Blocking or slowing the Internet would be allowed only in exceptional cases such as when specifically ordered by a court, it said. But La Quadrature Legal and Policy Analyst Miriam Artino said the vote “is a sign of the massive lobbying influence of big telecom operators.” The loopholes involve discrimination, the Internet’s open character and the definition of specialized services, wrote telecom consultant Innocenzo Genna on his blog (http://bit.ly/PLVEvZ). Genna said his clients include new entrants such as mobile virtual network operators, small ISPs and other non-incumbents. Under the ITRE version, telcos can still discriminate against online services by simply charging or differentiating the price of connectivity to favor one service over another, he said. That issue was present in the EC’s original proposal and hasn’t been addressed, he said. ISPs would still be allowed to establish a two-tier environment: A discounted Tier-1 Internet with selected services, and a pricier Tier-2 with all the rest, he said. To avoid the problem, the draft regulation should clearly state that ISPs can’t charge different prices for Internet access unless there are objective justifications such as quality, not just commercial deals between the ISP and a few online providers, Genna said. A second problem is that the ITRE version doesn’t describe what the “open Internet” is, he said. It should mean that ISPs can’t in any way control which online offerings their subscribers choose and how, he said. Not only should blocking, throttling and bandwidth limitation be banned, but the principle should cover any potential instrument an ISP could use to control user choice, Genna said. Lawmakers made some improvement in the EC definition of specialized services but it still leaves room for ISPs to market as such services products and offerings that are normally accessible on the open Internet, he said. The loopholes will have to be closed when the draft measure goes to plenary vote April 3, Artino said. The many Parliament members (MEPs) who proposed constructive amendments at the committee stage now have the chance to introduce new ones across party lines to ensure that the “general interest prevails over the short-term commercial interests of the telecom industry,” she said. The draft’s gray areas may lead to its rejection in plenary, Genna said. Approving a measure that’s still potentially dangerous to net neutrality “could be a risk for many MEPs which will be soon into elections” in May, he wrote. One MEP also voiced concern about the single telecom package’s net neutrality provisions. It “lacks the necessary guarantees for net neutrality in order to protect consumers against abuse of power by internet service providers,” said Marietje Schaake, of the Alliance of Liberals and Democrats for Europe, and the Netherlands, in a written statement. Net neutrality has been “traded off against abolishing roaming costs,” a “nice message to campaign on,” she said. regressed on net neutrality, said BEUC-The European Consumer Organisation. Net neutrality is essential for consumers to avoid Internet fragmentation and stop operators from becoming economic gatekeepers by prioritizing their and their commercial partners’ content, said Director General Monique Goyens. By failing to set clear safeguards between “Internet access services” and “specialized services” such as DTV, Parliament has allowed telcos to take content off the Internet and sell it as a specialized service, she said. That inevitably reduces consumer choice and harms Internet innovation, Goyens said. ITRE members also voted to end mobile roaming charges within the EU by Dec. 15, 2015, but asked the EC for guidelines for exceptional cases where companies would be allowed to apply such charges. MEPs also approved amendments to make spectrum trading and leasing easier, ITRE said. Digital Agenda Commissioner Neelie Kroes called the vote “great news” for the telecom sector. Also Tuesday, ITRE confirmed a deal with the EU Greek Presidency on a measure to make cross-border electronic deals and e-identification easier. The draft law requires EU countries to recognize each other’s electronic identification systems, the committee said. MEPs also endorsed a compromise with governments on draft legislation to make broadband infrastructure cheaper to build by enabling broadband companies to share plans and costs with other sectors such as gas and transport, the committee said. A plenary vote on all three pieces of legislation is set for April 3. Striking a deal on the telecom reform package with the European Council will be one of the next parliament’s first priorities after May elections, ITRE said. The council defines the general political direction and priorities of the European Union.
FCC Chairman Tom Wheeler’s use of delegated authority reached a high point of sorts last week when AT&T’s buy of Leap Wireless was approved by the Wireless and International bureaus, rather than by commissioner vote (CD March 14 p5), officials said. Commission Democrats Mignon Clyburn and Jessica Rosenworcel complained internally that they would have preferred a commission vote on that deal, which gave one of the two biggest wireless carriers control of an important prepaid service player, FCC officials told us. Republicans Ajit Pai and Mike O'Rielly have complained about other items being approved on delegated authority, agency officials said.
An order to make TV-station joint sales agreements (JSAs) attributable for calculating ownership caps and to prohibit joint negotiation in retransmission consent agreements will go on circulation Monday, the FCC said. Also on circulation then will be an FNPRM seeking comment on shared services agreements (SSAs) and FCC ownership policies that kicks off the 2014 quadrennial review of media ownership, the commission also said Thursday. The FNPRM proposes retaining the current dual-network rule and the local radio rule, tentatively concludes that cross-ownership rules for newspapers and TV stations should remain, and asks whether to eliminate rules against newspaper/radio and the radio/TV combinations rule “in favor of reliance on the local radio and local television rules,” a senior commission official told reporters Thursday. Broadcasters criticized the draft order, while pay-TV interests seeking changes to retrans rules cheered it.
A group of international officials Thursday unveiled a checklist for companies wishing to transfer data among Asia, Europe and the U.S. The “referential tool” is the culmination of two years of conversations between the Asia-Pacific Economic Cooperation (APEC) group and the European Commission’s Article 29 Working Party, with input from the U.S. FTC and Department of Commerce (DOC), said Isabelle Falque-Pierrotin, president of France’s data privacy regulatory agency Commission Nationale de L'Informatique et des Libertés, during a press conference at an International Association of Privacy Professionals conference. The Article 29 Working Party includes all EU data protection authorities, according to a release about the checklist (http://bit.ly/1jWbfTB). The tool is “an early step” but “an important step” in building toward interoperability between various countries’ data privacy rules, said FTC Chairwoman Edith Ramirez. “Interoperability is absolutely critical,” she said.
Global cybersecurity rules and standards are needed to counter the “bad, scary world out there,” said Society for Worldwide Interbank Financial Telecommunication (SWIFT) CEO Gottfried Liebrandt Friday. He and other industry and EU speakers at a Brussels conference reviewing progress on the EU cybersecurity strategy backed more coordinated efforts in fighting cyberthreats. Several said they have learned lessons from Edward Snowden’s revelations about National Security Agency spying. For Digital Agenda Commissioner Neelie Kroes, the lesson is that “technology and democracy have to talk to each other,” she said. Snowden’s insights can be used to ensure a more secure online world and a more competitive environment for European industry, she said.
FCC Chairman Tom Wheeler’s office appears poised to circulate Wednesday a proposed rule change on how joint sales agreements will be used to calculate TV station ownership, said agency officials Monday. They had said the item may be planned for a vote at the March meeting (CD Feb 12 p1), which would make Wednesday the “white-copy” deadline to circulate the item among the commissioners before it shows up on the commission’s agenda. The draft item will include a proposal to make stations that have 15 percent or more of their ad sales handled by another station attributable as being same-owned, and include a grandfathering provision similar to the one used for radio, under which stations would have two years to come into compliance with the rule, FCC officials have said. Last week, the Justice Department asked the FCC to require JSA attribution (CD Feb 24 p7).
Dish Network’s play for spectrum comes down to having options, said Dish Chairman Charles Ergen. Dish is expected to end up with about a $5 billion investment in spectrum, he said Friday on Dish’s Q4 earnings call. He also said he’s worried about the media environment if a proposed merger of Comcast and Time Warner Cable is approved.
The FCC should encourage opportunities for minority ownership in the media, telecommunications and broadband industries, the Minority Media and Telecom Council (MMTC) told Chairman Tom Wheeler, commissioners Jessica Rosenworcel and Mike O'Rielly, an aide to Commissioner Ajit Pai, and Enforcement Bureau staff in a series of meetings Friday, according to an ex parte filing released Monday. To encourage minority ownership, the commission should revise its designated-entity rules to “take into consideration the scale that is needed to participate as a competitor in the spectrum auctions” and encourage major telecom carriers to conduct secondary transactions with minority-owned businesses, the MMTC filing said. The commission should also relax cross-ownership rules “except in smaller and some medium markets where relaxation might result in excessive concentration of the media and, therefore, harm minority ownership,” the filing said. The commission should also tighten the rules governing sharing arrangements, MMTC said. On the open Internet, the commission should institute “light touch regulation premised on transparency and vigilant oversight and monitoring to discourage abusive practices,” MMTC said. The commission should also “give credence” to the FCC Diversity Advisory Committee’s recommendations, MMTC said.
An aging Communications Act framework is forcing the FCC to get more “creative” to keep regulating new technologies, Commissioner Mignon Clyburn said on an episode of C-SPAN’s The Communicators, which was set for telecast Saturday. Clyburn also said she anticipates “some action” on media ownership rules “in the coming weeks,” but she declined to go into detail about what such an item might contain. The commission has recently discussed relaxing the newspaper-broadcast cross-ownership rule in the local market. “These are things that we have been talking about for a number of months,” Clyburn said. “I am looking forward to whatever the chairman … circulates.” The agency is “due to conduct the quadrennial review [on the topic] and when we are ready to move, we will let the public know,” an FCC spokesman said.