Regulation has become telecom’s central issue, said Bernstein Research analyst Craig Moffett. He cited recent developments including the FCC’s wireless competition report, a forthcoming proposal from some key lawmakers to rewrite the 1996 Telecom Act and a commission proceeding re-examining media cross-ownership rules. Letters from Congress urging the FCC to stand down in its quest to regulate broadband under Title II were followed by a strong rebound rally in cable shares last week, Moffett said. Investors presumably think the rules coming from the “re-regulatory fervor” in Washington will be benign, he said. But asking Congress to step in is a high-risk gambit, Moffett said: The FCC is moving forward with reclassification, even if now on more uncertain ground. A new Telecom Act would take more than a few years to craft, and it’s “no slam dunk that what (eventually) comes out will be any better than Title II from the FCC,” he said. The question for investors is more than just whether there will be a change in the rules, Moffett said: “It is whether we are witnessing a fundamental change in ideology.” He said, “After all, the rules themselves are simply the manifestation of far more sweeping policy goals."
Notable CROSS rulings
The three legislators most likely to be the next House Commerce Committee Republican leader have been active on telecom in the Communications Subcommittee. Current Ranking Member Joe Barton, R-Texas, could have to relinquish his post after the November election due to a House GOP caucus rule limiting Republicans to three two-year terms at the top of committees, whether the party is in the majority or minority. Communications Subcommittee Ranking Member Cliff Stearns, R-Fla., wants the job, his spokesman said. Telecom industry lobbyists said Reps. Fred Upton, R-Mich., and John Shimkus, R-Ill., may have a better shot.
The FCC wants to know if consumers are satisfied with media they use, and how to measure that satisfaction. Those are among the more than 100 questions on online, print, radio and TV media asked in a notice of inquiry on the 2010 quadrennial review. It was released Tuesday afternoon, with questions largely along the lines of what had been anticipated (CD May 18 p4). Some questions about measuring the extent to which broadcasters serve their community raised the hackles of Commissioner Robert McDowell, who, like some industry and public interest officials (CD April 2 p1), suggested a rulemaking would have been possible without an inquiry.
"Holistic” FCC review of media ownership rules is the way to go, Chairman Julius Genachowski wrote House Communications Subcommittee Chairman Rick Boucher, D-Va., and ranking member Cliff Stearns, R-Fla. The legislators had written him March 1 asking that the 2010 quadrennial ownership review be separated from consideration of cross-ownership of a radio or TV station and daily newspaper in the same market, so evaluation of the latter area could proceed quickly. Commission staff “made a strong case that local broadcast ownership rules are interrelated,” Genachowski said in a May 10 letter recently made public by the agency, at http://xrl.us/bhmmr7. He understands their concern “about the delays in addressing” the cross-ownership rules, Genachowski wrote: He’s confident the broad review “can craft an ownership regulatory regime that will address the evolving media landscape and resist weaknesses that marred previous reviews.” A notice of inquiry to start the 2010 review, which may not conclude until early next year, is on circulation and expected to be approved soon (CD May 18 p4).
STANFORD, Calif. -- An FCC media-ownership workshop on new technologies became a platform for executives to lobby against taking spectrum away from broadcasters and the exclusion of low-power stations from must-carry requirements, as well as for dropping cross-ownership restrictions. “The time for repeal of the newspaper-broadcast cross-ownership rules is long overdue,” because of the hardships and diminished roles of older outlets resulting from the rise of the Web and other digital technologies, Los Angeles Times Publisher Eddy Hartenstein said in prepared testimony at Stanford University.
A new digital agenda is the “first flagship that is leaving the port” in Europe’s effort to jump-start its economy and catch up with global competitors, Digital Agenda Commissioner Neelie Kroes said Wednesday. Part of the EU 2020 strategy, the plan focuses on seven priorities, including the promise of broadband for all by 2013 and access to increased online content through changes in copyright licensing and online payment regimes. It won praise, and a few complaints, from industry and rights groups.
The FCC likely will request about ten media ownership studies from outside experts around the time it releases the forthcoming notice of inquiry (CD April 16 p3) formally starting the quadrennial review mandated by Congress for 2010, agency officials said. With revisions to the draft notice by commissioners’ offices nearing an end, it could be released within a week but may take longer, they said. The latest edition of the draft item, circulated last week, has many changes but none deemed likely to alter the course of the inquiry, they said.
STANFORD, Calif. -- “A lot of back and forth, a lot of angst” resulted inside the FCC from dealing with the Comcast decision, said Sherrese Smith, aide to Chairman Julius Genachowski. Trying to keep regulating Internet access under Title I could create uncertainty for investors and consumers throughout long court fights, and “Congress probably did not intend for broadband to be under” a Title II common carrier framework, she said Friday. Genachowski’s “third way” calls for “reclassification under Title II” with forbearance on the “very onerous” obligations in the title, Smith said at the Legal Frontiers in Digital Media conference. Asked about coverage of wireless broadband, Smith said only, “I think we'll be working on that."
Repeal of cross-ownership rules banning common ownership of a daily newspaper and a radio or TV station in a market in some cases is needed because the current regulatory system is “broken,” Tampa Tribune Publisher Denise Palmer told visiting FCC officials last month, a filing Friday by owner Media General said. Repealing the rules “will allow the marketplace to function in a manner that will supply better and more local news” and is “particularly justified” by growing competition from “unregulated media, and resulting decreases in newspaper circulation and television viewership,” it said. “Without reform, localism is jeopardized, not only in large markets like Tampa but in smaller and medium sized markets throughout the country.” Attendees at the meeting, held the day of a Media Bureau ownership workshop in Tampa, included Bureau Chief Bill Lake and Future of Media project head Steve Waldman.
Companies large and small, public interest groups and trade associations offered a divided FCC very different takes on whether proposed net neutrality rules would stifle or spur competition, in replies in the net neutrality proceeding. The biggest change from the first comment round, in January, is that many filers focused on the Comcast decision and the complicated question of whether the FCC has authority to proceed with new net neutrality rules or first would have to change the way broadband is classified to gain clear authority.