Qwest asked the Utah Tax Commission to change property tax assessment rules so property valuations for cable companies would be set at the state level, the same way valuations are set for telecom companies’ property. Cable companies’ properties now are assessed locally, but Qwest said the disparate assessment puts telecom companies at an economic disadvantage in the property taxes they must pay. Qwest said cable companies’ data, Internet and voice services cross county and state lines, just like telephone service does, so central assessment is required for cable property. But Comcast, the state’s largest cable provider, said cable companies aren’t public utilities and they're subject to 130 different local franchise agreements, not a single state franchise. Comcast also said its voice and data services are Internet applications, not a telephone service, so they're not subject to state authority. State Senate Majority Leader Curt Bramble, R-Provo, and Sen. Wayne Niederhauser, R-Sandy, who heads the Senate Revenue and Taxation Committee, said they would prefer the tax commission refer this matter to the legislature. A bill to shift cable company tax assessments to the state failed in the 2008 session.
Notable CROSS rulings
The market’s lack of any interoperable satellite radio receiver puts Sirius and XM in violation of a condition of their 1997 licenses, the FCC said in its merger approval order released late Tuesday. Still, the agency believes the merged Sirius XM will deliver on a “voluntary commitment” to market interoperable radios within nine months, the order said.
Major phone companies and industry groups allied to urge intercarrier compensation reform. An a Wednesday letter to FCC commissioners, the coalition commended the agency for its commitment to overhaul compensation by November. The ex parte was signed by AT&T, Verizon, T-Mobile, Sprint Nextel, CTIA, CompTIA, VON Coalition, Global Crossing, Telecommunications Industry Association, the Information Technology Industry Council, National Association of Manufacturers, New Global Telecom and PointOne. “It no longer makes sense to perpetuate a system that requires or permits terminating carriers to apply different rates for different traffic based on arbitrary distinctions,” the group said. “Comprehensive reform of the existing intercarrier compensation system is critical to accommodate progress and innovation, and to ensure technological and competitive neutrality.” The FCC should start by clarifying regulatory requirements for Internet Protocol-based technologies, it said. The FCC should “reaffirm that all IP-based voice services, if regulated at all, are subject to exclusive federal jurisdiction,” it said. Next, the FCC should set uniform compensation rules and terminating rates for all traffic “exchanged with or on the public switched telephone network,” it said. The new rates should be less than existing ones and not exceed $0.0007 per minute, the rate the FCC uses for ISP-bound traffic, the group said. The FCC should require all carriers to move promptly to the new rate, allowing for “appropriate alternative recovery mechanisms, if needed,” it said. Rural local exchange carriers likely will oppose cutting access charges “without corresponding revenue offsets,” Stifel Nicolaus said in a note. The analysts are “skeptical” about seeing comprehensive FCC reform this year, they wrote. It will be hard to cut intercarrier rates, “given the complexity and contentiousness of the issues, which also implicate” universal service reform, they said. Worse, “virtually any substantial action the FCC takes will be subject to significant litigation risk,” the analysts said.
Consumers are being scammed by online sellers of ringtones and wallpapers, European Consumer Protection Commissioner Meglena Kuneva said Thursday. She announced the results of a June 2-9 enforcement sweep of mobile phone services encompassing all 27 EU countries plus Iceland and Norway. The survey of hundreds of Web sites showed that 80 percent appeared to be ripping off consumers, in violation of EU consumer protection, e-commerce and distance-selling regulations, she said.
The FCC would be banned from implementing its newspaper- broadcast cross-ownership rules, under an appropriations bill approved Wednesday in the House Appropriations Committee. The provision, promoted by Financial Services Subcommittee Chairman Jose Serrano, D-N.Y., drew only mild disapproval from subcommittee ranking member Ralph Regula of Ohio.
The FCC should require real time disclosure of product placement in broadcast programming, Writers Guild of America West President Patric Verrone wrote in a letter to Chairman Kevin Martin. “Since DVRs and other such devices allow viewers to skip or fast forward through opening and closing credits, requiring disclosures at some other moment in the programming will simply not offer adequate protection,” he said. TV programmers already use text crawls at the bottom of the screen for new, sports and stock updates, he said. Requiring something similar during product placement “would be no more intrusive than the warnings required for pharmaceutical ads, or the network identifiers or ‘bugs’ that are now a mainstay of our TV visual field.” Rules should require the name of the product and its parent company to be included in the crawl, he said. But such rules wouldn’t benefit the public, said attorney Jordan Yospe. “With kids programming, I can understand to a certain extent,” he said. “But for us normal adults, it’s already transparent.” Creating explicit rules would invite industry to push the envelope and flout them, said Yospe, former general counsel for Mark Burnett productions, which developed the Apprentice and other reality TV series. “Brands are very concerned about making sure that they don’t cross any lines,” he said. “Right now there isn’t one and I think that’s actually more effective in having advertisers police themselves.” Banning all brand mentions from programming would lead to less realistic programming, Yospe said. Brands are a part of daily life, and TV programming that doesn’t include them would seem jarring, he said. Producers that go over the top with too much brand integration will turn off viewers, he said. “If you have a show that is so blatantly integration oriented that it doesn’t entertain you, you won’t watch it,” he said. “Advertisers won’t be involved. The network won’t air it. It will go away.”
“Virtually all” European public service broadcasters oppose changing European Commission (EC) policy on state aid to public broadcasting, Competition Commissioner Neelie Kroes said Monday. EU nations have complete discretion over their PSB financing, but state aid for public broadcasters must pass three tests, she said: (1) Has the government clearly defined public services a public broadcaster must perform to get the aid? (2) Does the state officially entrust PSBs to provide these services and is their delivery verified? (3) Does the government ensure that the aid doesn’t affect development of cross-border trade in a manner contrary to European Community interests? In the seven years since the policy took effect, European media markets have changed dramatically due to digitization, changing consumption patterns and new platforms like the Internet, Kroes said. The EC, now reviewing its policy on state aid to broadcasters, received more than 120 comments, she said. Many governments oppose reform, declaring that the 2001 version works, and nearly all PSBs rejected any change in policy, she said. But newspapers and all kinds of media companies have allied with commercial broadcasters in complaining about PSBs’ “unrestrained use of public money” on the Internet and other platforms, convinced that they crowd out private online offerings and distort competition, she said. One reason the issue stirs such debate is that existing rules give only limited guidance on when to use state aid to fund new media services that aren’t programs in the traditional sense, Kroes said. The EC has clarified the issues case by case, leaving many questions, she said. It “certainly isn’t obvious to the naked eye or the taxpayer why public broadcasters should be using state money to run online video games, dating clubs and calculators, amongst other offerings,” she said. The private sector offers “no shortage” of such services that must survive without subsidies, she said. Among other issues, the EC will review the definition of PSBs’ public service mission, and whether public broadcasters should face different openness and proportionality requirements than electric companies and other utilities, Kroes said. She spoke at Medienforum in Cologne. Kroes said she didn’t need help from fellow commissioner Viviane Reding, who in an interview over the weekend asked German politicians to not allow “unfair competition” by public broadcasters against private media companies. Commission had received 120 comments in its consultation about the 2001 Communication, Kroes said. “One has to take into account the reality that newspapers and all kinds of media companies have now joined commercial broadcasters in complaining about their unrestrained use of public money on platforms like the Internet,” she said. “They allege that private initiatives on the Internet are crowded out and that competition is distorted.” Reactions to Kroes and Reding were mixed at the conference in Cologne. Private broadcasting association VPRT welcomed the statements. But NRW president Juergen Ruettgers warned that the European Commission should stop questioning the German public-broadcasting system. A representative of the ARD pointed to powerful global players like Microsoft and Google and recommended joint ventures by public and private broadcasters and media companies. Though limits on the funding of online activities may be all right, they said, a time-limit for archiving their programs is not acceptable. The heads of the German states are expected to decide Thursday on the latest version of the State Law on Broadcasting.
A draft FCC order denies a challenge to its 3-2 approval of Tribune’s sale (CD Dec 4 p6) by media consolidation foes, said agency officials. The order dismisses a petition for reconsideration of the $8.2 billion deal by Benton Foundation Chairman Charles Benton, the Media Alliance and United Church of Christ, they said. FCC Chairman Kevin Martin circulated the order May 1, when he voted for it, but it may be a while before it’s voted on by all members and publicized, they said.
Documents in a suit against the FCC over its media ownership order were moved to the 9th U.S. Appeals Court in San Francisco, in a Thursday order by the U.S. Appeals Court for the District of Columbia Circuit. On Newspaper Association of America v. FCC, the D.C. Circuit said motions to unconsolidate challenges to the partial lifting of a ban on common ownership of a paper and radio or TV station in the same market aren’t overridden by the possibility of exclusive jurisdiction. The appeal of cross-ownership rules will stay at the 9th Circuit (CD March 12 p13) at least for now, said Media Access Project President Andrew Schwartzman, a participant in the case. Once the 9th Circuit gets other courts’ paperwork on the case, some being sent by the D.C. Circuit, it will decide whether to keep the case or send all or part of it back to D.C. or the 3rd U.S. Appeals Court in Philadelphia, he added.
Media General and other broadcasters “play procedural games” and cause “great confusion” by demanding that the FCC ignore objections to cross-ownership waivers given four of the company’s stations (CD March 27 p16), said groups opposing them. In its Dec. 18 media ownership order, the FCC made an “unusual decision” to approve the waivers of a rule barring a company from owning a radio or TV station and daily newspaper in the same market - rather than doing so when renewing a license, Free Press and the NAACP said last week in a filing. Media General wrongly claims that the objection missed an FCC deadline because the groups didn’t ask the commission to overturn the media ownership order, they said. “Neither Gannett nor Media General cite any precedents that suggest that Free Press et al. can only seek relief in one or the other manner.” The stations getting waivers are WJHL-TV Johnson City, Tenn., WBTW Florence, S.C., WRBL Columbus, Ga., and WMBB-TV Panama City, Fla.