October 2007

Devastating wildfires fires destroyed portions of southern California in October, but Washington witnessed its own firestorms in media policy. Two long-smouldering debates -- over media ownership rules and Network Neutrality -- flared-up when the plans of FCC Chairman Kevin Martin and the policies of commercial Internet service providers were revealed. It all began with a couple of innocent-looking hearings on digital television...

I. DTV Transition Oversight Continues

On October 17, both the House and Senate Commerce Committees held hearings on the transition to digital broadcasting. In the House, lawmakers said the government so far has done a poor job of educating the public about the 2009 nationwide switch to digital television that could unwittingly leave millions of viewers without programming they currently receive. They said it's critical for the government to oversee the outreach to minority and rural communities, elderly people and others, who are likely to be more affected by the transition than others. FCC Chairman Kevin Martin used the House DTV hearing to pitch 1) mandated broadcaster digital-TV-education public-service announcements in a range of dayparts, and 2) mandatory cable carriage of broadcasters' multiple digital signals as a particularly effective way of driving DTV adoption. Rather than pitching the DTV-to-analog converter box as something to prevent viewers from losing TV altogether, he said, there would be a more positive message about watching a wide array of new free programming. "What was a burden becomes a meaningful benefit," he added.

Senate Commerce Committee Chairman Daniel Inouye (D-Hawaii) wrote an op-ed that appeared in The Hill on October 16 saying, "To ensure success, we must draw up a battle plan." Committee Vice Chairman Ted Stevens (R-Alaska) said "it is critical that Congress maintain an active oversight role to ensure that consumers are properly educated about this transition and know how to avail themselves of the convertor box program." They both expressed support for creating a DTV Task Force as suggested by FCC Commissioner Jonathan Adelstein.

II. Media Ownership Firestorm

The October 17 Congressional hearings were, in part, supposed to bring more public attention to the coming digital television transition. However, the Senate hearing sparked a renewed interest in the FCC's review of media ownership rules. During the hearing, FCC Commissioner Adelstein confirmed that FCC Chairman Martin had proposed a timetable for completing -- by December 18 -- the years-long media-ownership rule review. The chairman's timeline included holding the last localism hearing Oct. 31, and the last media ownership hearing in early November, then collecting final comments. Chairman Martin had already committed to completing a separate review on broadcast localism and issuing a report on it before proceeding with broader media ownership rule changes, that report would have to be issued in time to meet the December timetable for a possible vote.

Martin's plan was first hinted at in the press in an article that appeared in Variety on October 9. The piece noted that time was running out on President Bush's FCC and expressed skepticism that Chairman Martin could quickly end the media ownership proceeding. Variety predicted the debate "will only grow more shrill and unproductive amid campaign-year rhetoric." The Los Angeles Times, owned by Tribune, connected the $8.2-billion deal to take Tribune Co. private and Martin's push. Tribune needs FCC waivers to complete the deal because it owns newspapers and TV stations in Los Angeles and four other markets in violation of rules that prevent such cross-ownership. Times writer Jim Puzzanghera suggested Martin is trying to capitalize on Tribune's push to complete the deal by year's end and its support from some key lawmakers. "He's tying the fate of the Tribune deal that he wants to a large proceeding on media ownership," said FCC Commissioner Michael J. Copps. "To say we have to change the media ownership rules so we can get the Tribune deal done does not strike me as . . . a good way to make public policy."

Unhappy Senators vowed to hold a hearing quickly on that Chairman Martin's plan. "[T]here is going to be a firestorm of protest, and I will be carrying the wood," said Sen Byron Dorgan (D-ND). He called for a Senate hearing and Commerce Committee Chairman Daniel Inouye (D-Hawaii) agreed. Sen Dorgan later held a press conference with Sen Trent Lott (R-Miss) at which they discussed possible ways for the Congress to slow down the FCC. The two sent a letter to FCC Chairman Kevin Martin and were reportedly also considering 1) legislation and 2) a rarely used mechanism called a "resolution of disapproval" which allows Congress to overturn agency rules. "I think (relaxing media ownership rules) is not a good policy," Sen Lott said. "I just don't think this is in the people's best interest." Dozens of Members of Congress -- including presidential hopefuls Sens Joe Biden (D-DE) and Barack Obama (D-IL) -- also asked Chairman Martin to slow the proceeding.

The media ownership debate was also a big part of the FCC's final hearing on localism held at FCC headquarters on Oct 31.

III. Network Neutrality: the Solution Finds a Problem

In late September, Verizon Wireless made headlines when it asserted it had the right to block “controversial or unsavory” text messages. The move lead to a New York Times editorial calling for freedom of speech protections in the digital world. Soon the Open Internet Coalition, the ACLU, and NARAL Pro-Choice America and the Christian Coalition of America were asking for government oversight of the issue.

Network Neutrality gained more attention when it was reveled that Comcast was interfering with broadband consumers' attempts to share files online. (See also Comcast denial.) The revelations led BusinessWeek columnist Stephen H. Wildstrom to retract an earlier statement and say, "The hands-off approach hasn't served consumers well. And the Web is far too important to entrust the free flow of information to the shifting whims of a few big companies. Government must step in and tell them to leave our content alone." Then Rep Rick Boucher (D-VA) said. "The inability of customers to (share files) significantly diminishes their ability to utilize the Internet for one of its most important applications, which is user-to-user content." He also noted that "file sharing is already being used for a wide variety of perfectly lawful and appropriate applications."

The Verizon and Comcast revelations finally led Sens Dorgan and Olympia Snowe (R-Maine) to ask Commerce Committee Chairman Inouye to hold a hearing on possible "service discrimination" by cable and telco providers. The senators said the committee needs to determine whether the various actions "were based on legitimate business and network-management policies or part of practices that would be deemed unfair and anticompetitive."

Finally, Network Neutrality became an issue in the race for President when Sen Obama said that, if elected, he would make the issue a top priority in his Administration.

IV. The FCC Becomes the Issue

Bart Preecs of the Seattle Post-Intelligencer sent us a note about one of the most unreported stories of the month. GAO released a report that FCC staff routinely leaks meeting agenda items to industry associations and lobbyists, leaving consumers and public interest activists in the dark. GAO recommended that the FCC Chairman take steps to ensure equal access to rulemaking information, particularly in regard to the disclosure of information about proposed rules that are scheduled to be considered by the Commission. In response, Rep Ed Markey (D-MA) said, "I believe the FCC should take immediate steps to protect the integrity of its rulemaking process. The public deserves to know that these decisions are made on the up-and-up, with no unfair advantage to any one side in these important policy debate."

The GAO report was followed closely by a FCC Inspector General report found that no evidence senior managers suppressed an agency report on locally owned TV stations because the results conflicted with FCC policy. The yearlong investigation came after a former staff attorney for the FCC’s Media Bureau, Michigan State University College of Law Professor Adam Candeub, alleged that senior managers had suppressed media ownership reports and ordered that copies be destroyed. The IG concluded that personality differences between the authors and management led the authors to experience criticisms of the reports as inaccurate and pretextual. Candeub responded to the IG report saying, "What is most disturbing about the IG's report is its willingness to credit... management's claims that they did not stifle the TV report for political reasons—when there is indisputable evidence" that management did so.