Sept 18, 2009 (FCC Oversight Hearing Recap)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, SEPTEMBER 18, 2009

A very full agenda of telecom policy events next week -- http://bit.ly/KkKuI

NEWS FROM THE HILL
   Genachowski, Colleagues Outline FCC Reform Agenda for Congress
   Genachowski Commits to Feb. 17 Deadline for Universal Service Reform, Spectrum Options
   House FCC Oversight Hearing Addresses Lloyd, Diversity and Fairness Doctrine
    See also: Smear Buster: Mark Lloyd Wants To Reinstate The Fairness Doctrine
   GOP FCC members back exclusive cellphone deals
   Chairman Waxman Added as Co-Sponsor to Network Neutrality Bill
   Judiciary Takes No Action On Shield Law

NATIONAL BROADBAND PLAN AND THE STIMULUS
   On the Lookout for Stimulus Fraud
   Patent, Entertainment Reps Talk Online Content Protection at FCC Workshop
   100 Megabits or Bust!
   Alaskans Seek $1.3 Billion in Broadband Stimulus Funds
   Microsoft Differs With AT&T Over Exclusion of Games From Broadband
   Full list of applicants for broadband stimulus funding
   New Zealand Unveils National Broadband Plan

SPECTRUM/WIRELESS
   Paul Allen Sells Wireless Spectrum Licenses to AT&T

OWNERSHIP
   Media Rules Complicate Restructurings
   Will The DC Circuit Pull The Plug On Program Access?
   US to File Concerns Over Google Book Pact

TELECOM
   Telecom Chiefs See a Turn to Stability
   Telecom Firm Weighs West Bank Pullout

MORE ONLINE ...
   Healthcare IT is the means, but not the end, says Blumenthal
   Rat, Wilson Overtake the Blogosphere
   Smart Grid a Reality in Boulder, Colorado
   Google to reincarnate digital books as paperbacks
   Google Aims to Wrest Display Ads From Yahoo

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NEWS FROM THE HILL

GENACHOWSKI, COLLEAGUES OUTLINE FCC REFORM AGENDA FOR CONGRESS
[SOURCE: BroadbandCensus.com, AUTHOR: Drew Clark]
Federal Communications Commission Chairman Julius Genachowski has "tried to hit the ground running" on a reform agenda since taking office last summer, he told members of a House Commerce Subcommittee on Thursday. During the first FCC oversight hearing of the 111th Congress, Chairman Genachowski was joined by all four of his colleagues as the full commission appeared before the Communications, Technology and Internet Subcommittee for the first time. Many members of the subcommittee devoted significant time to praising the commission's efforts for a national broadband strategy, which is scheduled to be delivered to Congress by February 2010. But the new chairman and colleagues are looking beyond the broadband plan towards ways to improving the operations of the FCC, they said. While Genachowski's tenure is only a few months old, he said he has already begun to articulate specific strategic priorities for the commission. These include "fostering investment and innovation, promoting competition, and protecting and empowering consumers, children, and families." The commission has already begun work on these goals, he said.
http://benton.org/node/27990
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GENACHOWSKI COMMITS TO FEB 17 DEADLINE FOR UNIVERSAL SERVICE REFORM OPTIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
At Thursday's oversight hearing, Federal Communications Commission Chairman Julius Genachowski committed to a deadline of no later than February 17,2009 to come up with "real options" on universal service reform and a plan for re-auctioning the D block of spectrum. That is the same date that the National Broadband Plan is due to Congress. Chairman Genachowski said he supported legislation requiring the FCC to inventory spectrum, and FCC Commissioner Michael Copps seconded that, saying the country was clueless about how much spectrum was being used, where and for what. FCC Commissioner Robert McDowell said he welcomed a "careful inventory" to find the spectrum, but also pointed out that the government already knew where some of it was, pointing to spectrum in a 2006 advanced wireless services auction and the more recent 700 mhz auction that had not yet been built out, and in the white spaces between TV channels. That is all fabulous spectrum in terms of propagation characteristics he said. He also reminded the audience that technology was allowing the government to become increasingly efficient with the spectrum it had. He cautioned not to micromanage, and that a government-mandated business plan would likely be superseded by the market.
http://benton.org/node/27989
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HOUSE FCC OVERSIGHT HEARING ADDRESSES LLOYD, DIVERSITY AND FAIRNESS DOCTRINE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Communications Commission Chairman Julius Genachowski said the FCC's Chief Diversity Officer, Mark Lloyd, would be concentrating on broadband and would not be dealing with FCC broadcast license issues. Rep Greg Walden (R-OR), a former broadcaster, said he took personal offense at Lloyd's writings that "commercial broadcasters want to be public trustees but without responsibility," and said he was further troubled by a paper he suggested indicated that Lloyd supports reaching the same comes of the Fairness Doctrine via different means. Chairman Genachowski once again reiterated his opposition to the Fairness Doctrine. Saying sometimes "repeating relentlessly" was necessary, he told a House Communications Subcommittee oversight hearing audience Thursday that he did not support the doctrine's return, "either through the front door or the back door." He also said he respected the First Amendment and freedom of expression and opinion. But Chairman Genachowski also drew the distinction between that and promoting diversity. He said that there is a bipartisan consensus that media diversity is an important objective of FCC policy, as it has been since it was made part of the core principles back in 1934, as it has been supported by the Supreme Court. "The idea of having diversity as an objective of the FCC and having a staff focused on it seems to be a natural extension." Rep Walden was still not mollified given some of the "outrageous things" he said Lloyd has said in the past. "That is not going to bring balance to that diversity position you created." Also weighing in was Commissioner Michael Copps, who has been highly critical of what he sees as an attempt by critics to paint diversity initiatives as a stealth campaign to muzzle the media. He said the committee should take the chairman up on getting to know Lloyd better. He praised Lloyd's work at the Leadership Conference on Civil Rights, saying he was of "inestimable help with the DTV transition in helping mobilize nontraditional stakeholders in getting the word out on DTV. He has a very distinguished record."
http://benton.org/node/27988
    See also:Smear Buster: Mark Lloyd Wants To Reinstate The Fairness Doctrine

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GOP FCC MEMBERS BACK EXCLUSIVE CELLPHONE DEALS
[SOURCE: Reuters, AUTHOR: John Poirier]
Exclusive deals between mobile phone makers and carriers got support on Thursday from two Republican members of the Federal Communications Commission, which is probing if the arrangements harm consumers in rural markets. The backing of Commissioners Robert McDowell and Meredith Attwell Baker was the first glimpse into the positions of the commission since FCC Chairman Julius Genachowski told lawmakers in June the agency would examine deals such as the one between Apple's popular iPhone and carrier AT&T. In response to a yes-or-no question at a congressional hearing on Thursday, the three Democrats on the FCC -- Commissioners Genachowski, Michael Copps and Mignon Clyburn -- declined to take a position. Exclusive arrangements are common among the biggest carriers but have recently faced opposition from rural carriers, which say they lack the clout to make deals to carry the most popular phones. At a Goldman Sachs conference, Sprint Chief Executive Dan Hesse said exclusive carrier deals with handset vendors are important for promoting innovation in the industry. He also said it was fair for regulators to ask whether handset exclusivity deals should have time limits.
http://benton.org/node/27987
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CHAIRMAN WAXMAN ADDED AS CO-SPONSOR TO NETWORK NEUTRALITY BILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
House Commerce Committee Chairman Henry Waxman (D-CA) said Thursday that he had added himself as a co-sponsor to the Network Neutrality bill introduced by Rep Ed Markey (D-MA). At the Federal Communications Commission oversight hearing Thursday, Chairman Waxman said, "Industry will benefit from clarity, consistency, and predictability with regard to Net neutrality. I think that the time is right to formally establish, through legislation if required, the rules of the road with respect to Net neutrality." He also said fears that network neutrality will stifle investment have been proven unfounded.
http://benton.org/node/27986
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JUDICIARY TAKES NO ACTION ON SHIELD LAW
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Senate Committee on the Judiciary ended its hearing on a federal shield law bill without a vote Thursday because of a lack of a quorum. The bill, which passed in the House last March, prevents journalists or their sources from being compelled to testify in federal courts, with carve-outs for national security, cases of imminent harm, and leaks of personal, medical or information related to trade secrets. Apparently, the Committee will reconsider the bill again on Sept 24. Committee Chairman Senator Patrick Leahy (D-VT) said that, "despite weeks of debate and months of negotiations, Committee Republicans stonewalled consideration of amendments." He continued, "Today is Constitution Day and as we mark the 222nd anniversary of the adoption of our nation's charter...I had hoped the Committee could proceed with this open government legislation. I am committed to reporting a reporters' shield bill from the Judiciary Committee this year, and I hope all Senators will work with us to reach that goal." Republicans have raised concerns that the law tilted too much in favor of journalist protections and away from the interests of law enforcement and national security.
http://benton.org/node/27985
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NATIONAL BROADBAND PLAN AND THE STIMULUS

ON THE LOOKOUT FOR STIMULUS FRAUD
[SOURCE: New York Times, AUTHOR: Michael Cooper]
Compared with the immense size of the stimulus program, the actual number of arrests so far has been microscopic. Earl Devaney, the chairman of the Recovery Accountability and Transparency Board, the watchdog for stimulus money, said recently that federal prosecutors were looking at only nine stimulus-related cases, including accusations of Social Security fraud and of businesses improperly claiming to be owned by women and members of minorities. The small number of cases is partly a function of how much stimulus money has been spent so far, and how it has been spent. While more than $150 billion of it has been pumped into the economy, according to a recent report by the White House, some $62.6 billion of that was in the form of tax cuts. Of the rest, $38.4 billion was sent to states for fiscal relief; $30.6 billion was spent to help those affected by the recession by expanding unemployment benefits and other safety-net programs, and $16.5 billion was spent in areas like infrastructure, technology and research. The biggest accusations of stimulus-related fraud so far have not involved the theft of public money at all. Rather, they have involved con artists fleecing gullible people and businesses hoping to profit from the stimulus.
http://benton.org/node/27997
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PATENT, ENTERTAINMENT REPS TALK ONLINE CONTENT PROTECTION AT FCC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
On September 17, the Federal Communications Commission help a National Broadband Plan workshop focused on issues pertaining to online content and its role in the broadband ecosystem. John Horrigan, consumer research director for the national broadband plan, said the underlying goal was to figure out what drives adoption, specifically what users want, saying content from entertainment industries plays a big part. He said it would have taken three workshops to fit all the people in the room who wanted to attend. Michael Shapiro of the Patent and Trademark Office brought a brief message. He said his department had a keen interest in the development of the broadband plan, and cited the "great peril" of the potential of the plan accelerating trends in digital piracy. Dan Glickman, head of the Motion Picture Association of America, said that the expansion of broadband could have an enormously positive impact, but said the Internet economy will not flourish if it becomes a lawless place. "It must be a safe and secure environment," he said. Michael Bracy, policy director of the Future of Music Coalition, said there was a public interest in economic structures that allow creators to be compensated. He said a big part of the new model will be universal broadband with network neutrality protections. Public Knowledge President Gigi Sohn said, "The last time the FCC mandated a copy protection technology without Congressional authorization, the DC Circuit slapped it down. That case involved the infamous broadcast flag. Any copy protection mandate the FCC could devise here would suffer the same fate."
http://benton.org/node/27984
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100 MEGABITS OR BUST!
[SOURCE: New America Foundation, AUTHOR: Chiehyu Li, James Losey]
Looking at the successful broadband goals of Japan, Korea, Finland, Sweden, Denmark, and Taiwan, the New America Foundation's Open Technology Initiative demonstrates the viability of not only reaching universal broadband access, but also reaching the speeds that will allow for continued leadership in the growth and innovation of the Internet. The report highlights the broadband goals of six technology-advanced countries and their recent achievements providing universal access to broadband speeds from a low of 2 Mbps downstream to 100 Mbps symmetric speeds. "Countries that set substantive broadband speed goals have achieved far faster speeds than we have here in the United States," says Sascha Meinrath, Director of the Open Technology Initiative. "The lesson that should be learned is clear and has profound implications for U.S. broadband policy: countries that set their sights high have excelled. While more and more countries are aiming for '100Mbps or bust' the United States hasn't even set a goal 1/100th as fast."
http://benton.org/node/27983
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ALASKANS SEEK $1.3 BILLION IN BROADBAND FUNDS
[SOURCE: IDG News Service, AUTHOR: Grant Gross]
Alaskan organizations have applied for $1.3 billion in broadband deployment stimulus funding from the US government, out of a total of $4 billion in funding available in the first round of grants and loans. The 26 applications from Alaskan groups may demonstrate both the perceived need for broadband in rural states and optimism from some groups looking for a piece of the $7.2 billion available for broadband development across the US. The money is available through a huge economic stimulus package passed by Congress early this year. The largest request for broadband money in Alaska comes from Kodiak-Kenai Cable, which asked for a $172.3 million grant and a $172.5 million loan to fund a submarine fiber-optic cable that would bring broadband to 140 communities in sparsely populated western Alaska. "I think the first step in trying to sort out all of these is to put these applications into three loosely defined categories: The dreamers, the hopeful and the planners," said Craig Settles, a community broadband consultant. "The dreamers, a.k.a. the 'In your wildest dreams' people who threw a proposal out there because lightning might strike and they'll get lucky. Like ... one state asking for a billion dollars. Entertaining reading, but not likely to get funded."
http://benton.org/node/27982
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MICROSOFT DIFFERS WITH AT&T OVER EXCLUSION OF GAMES FROM BROADBAND
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
What do you expect from your high-speed Internet connection? If you listen to AT&T, it wouldn't necessarily include the ability to play Halo or Call of Duty online, even as online gaming has become one of the most popular things to do on the Web. Microsoft and game makers, as you'd imagine, don't share that view. Robbie Bach, Microsoft's president of entertainment and devices, says that AT&T's definition, which was recently submitted at the Federal Communications Commission, flies in the face of what consumers want. That disagreement lies at the heart of some of the biggest struggles taking place in telecom and technology, as network operators grapple with new business models and move to digital networks from their shrinking traditional business of voice communications.
http://benton.org/node/27981
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FULL LIST OF APPLICANTS FOR BROADBAND STIMULUS FUNDING
[SOURCE: Fierce, AUTHOR: Mike Dano]
Here's the list of the applicants vying for broadband stimulus grants and loans for last-mile projects broken down by technology.
http://benton.org/node/27980
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NEW ZEALAND UNVEILS NATIONAL BROADBAND PLAN
[SOURCE: TelecomPaper, AUTHOR: ]
The New Zealand communications ministry has unveiled details of its NZD 1.5 billion ($1.06567 US) broadband investment initiative. The initiative aims to roll out ultra-fast broadband to 75 percent of New Zealanders over ten years, concentrating in the first six years on priority broadband users such as businesses, schools and health services, plus greenfield developments and certain tranches of residential areas. Next month, the government will establish a Crown-owned investment company, Crown Fibre Holdings, to carry out a partner selection process and manage the investment in fibre networks
http://benton.org/node/27979
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SPECTRUM/WIRELESS

PAUL ALLEN SELLS WIRELESS SPECTRUM LICENSES TO AT&T
[SOURCE: Bloomberg, AUTHOR: Miles Weiss]
Paul Allen -- the billionaire co- founder of Microsoft and creator of Charter Communications, the 4th-largest cable operator in the US -- agreed to sell wireless airwaves he acquired in 2003 to a unit of AT&T for an undisclosed price. The 24 wireless licenses cover spectrum in parts of Washington and Oregon, including the cities of Seattle and Portland, according to documents filed with the Federal Communications Commission. Allen holds the licenses through his Seattle-based Vulcan Spectrum. AT&T is acquiring the spectrum to support the rollout of a fourth-generation wireless technology known as long-term evolution, or LTE, and to meet the demand for mobile services in the Northwest. The licenses cover the C-block segment of the airwaves within the 700 megahertz frequency, a portion of the spectrum previously reserved for ultra-high frequency, or UHF, television channels. This spectrum was freed up for wireless use when TV broadcasters switched to digital signals earlier this year. Vulcan Spectrum also bought licenses in the A-block portion of the spectrum as a participant last year in an FCC airwave auction that raised almost $20 billion. Vulcan Spectrum's A- block licenses, which also cover the Seattle and Portland areas, aren't included in the proposed sale to AT&T.
http://benton.org/node/27978
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OWNERSHIP

MEDIA RULES COMPLICATE RESTRUCTURING
[SOURCE: Wall Street Journal, AUTHOR: Mike Spector, Sarah McBride]
Wall Street lenders are tripping over federal media-ownership rules as they find themselves the unexpected owners of several distressed radio, television and newspaper companies. The issue has taken center stage at Citadel Broadcasting, as one of the US's largest radio broadcasters races to revamp its balance sheet. Citadel has offered senior lenders owed $2 billion -- including JP Morgan Chase, General Electric's GE Capital and ING Groep NV -- a deal that would exchange a big chunk of debt for equity. Some lenders have been caught off-guard by Federal Communications Commission rules designed to limit concentrated holdings of media firms. The snag shows another unintended consequence of the credit boom: Lenders are being forced to take on equity stakes of companies that borrowed large amounts of debt and now can't make payments and must restructure. But for big banks and hedge funds holding debt in everything from radio and television stations to newspapers, FCC rules have made restructurings more complex. The FCC must approve media sales and has specific rules that limit ownership of multiple media outlets in individual markets, even when such shareholder stakes are small. The calculus can be even more difficult for hedge funds, some of which are registered offshore. The FCC caps foreign ownership at 20% of a U.S. broadcaster -- 25% if the stake is through a holding company -- which can change how new ownership stakes are structured. Many investors were aware of the rules when they made the loans. But few likely contemplated a historic financial crisis and advertising downturn that would upend scores of firms.
http://benton.org/node/27994
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WILL THE DC CIRCUIT PULL THE PLUG ON PROGRAM ACCESS?
[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] Next week, the DC Circuit Court will hear oral argument on the Federal Communications Commission's 2007 decisions to extended the program access rules another five years. What surprises Feld is how few people seem to have considered the possibility that the court will reverse this decision and vacate the rule, as it did last month with the 30% cable horizontal ownership limit. If, as the court found last month as a matter of law, the MVPD market is wildly competitive and consumers switch willy-nilly from one to the other rendering it impossible for a cable provider to block a rival programming network from emerging, how on Earth can cable programmers below the 30% limit exercise foreclosure?
http://benton.org/node/27977
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US TO FILE CONCERNS OVER GOOGLE BOOK PACT
[SOURCE: Wall Street Journal, AUTHOR: Jessica Vascellaro]
The Justice Department is expected to outline a range of concerns it has about a settlement that Google struck with authors and publishers over the rights to distribute digital copies of certain works. Apparently, the Justice Department will submit those concerns in a filing to the U.S. District Court of the Southern District of New York, which must decide whether to approve agreement, the people said. The filing is likely to discuss the department's concern that parts of the agreement may hurt the interests of other parties, such as Google's potential competitors in the nascent digital-book market. For example, the Justice Department is concerned that one of the agreement's features -- a "registry" that governs aspects of the agreement such as some pricing and payment distributions -- could allow publishers to set prohibitively high prices for their works.
http://benton.org/node/27993
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TELECOM
   Telecom Chiefs See a Turn to Stability
   Telecom Firm Weighs West Bank Pullout

TELECOM CHIEFS SEE A TURN TO STABILITY
[SOURCE: Wall Street Journal, AUTHOR: Roger Cheng]
"Stabilization" was the key buzzword for the heads of AT&T, Verizon, Sprint Nextel and Qwest, all of whom spoke Thursday at an investor conference hosted by Goldman Sachs. They gave a mixed outlook on the economy, saying business conditions have stabilized but they don't see signs of a quick recovery. The telecom industry has been relatively shielded from the worst effects of the downturn thanks to the growing need for wireless and Internet services. But it isn't completely immune, as carriers face continued landline losses, weak demand from businesses and pricing pressure in wireless.
http://benton.org/node/27996
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TELECOM FIRM WEIGHS WEST BANK PULLOUT
[SOURCE: Wall Street Journal, AUTHOR: Charles Levinson]
A Qatari-backed telecom start-up in the West Bank is threatening to pull the plug on its investment here, citing the Israeli government's refusal to turn over all the bandwidth it promised in a deal with the Palestinian Authority last year. A pullout by Wataniya Mobile, majority-owned by Qatar Telecommunications Co., or Qtel, would be a big blow to the West Bank economy. Wataniya has promised to invest $700 million in the Palestinian territories over the next 10 years. A private investment fund linked to the Palestinian Authority and tasked with promoting long-term Palestinian growth owns a minority stake in the company. It already employs 250 Palestinians and says it expects to generate 3,000 jobs in indirect employment once it is fully operational. The company represents one of the biggest foreign investments in Palestinian history.
http://benton.org/node/27995
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