February 2009

Funding for broadband deployment makes up approximately one percent of President Obama's approximately $820 billion economic stimulus package. But a hearty debate has unfolded over how, where, and to whom those funds should be distributed. After a late-Friday deal that keeps the momentum going on negotiations in the Senate, a vote to cut off debate on the broader package was expected on Monday, to be followed by a final Senate vote on Tuesday. As regards the Senate's $9 billion proposed for broadband - a sum that CNN and The New York Times reported had been cut to $7 billion - the heart of the debate was over who would receive the billions of dollars in funding for broadband deployment. The House-passed bill split its $6 billion for broadband between $2.825 billion in grants to be made from the Commerce Department and $2.825 billion in loans to be made by the Agriculture Department. An additional $350 million would go to administering the new grants at Commerce. By contrast, the Senate bill would put the Commerce Department's National Telecommunications and Information Administration in charge of channeling almost all of the $9 billion in Thursday's version of the Senate bill. That Senate version also allowed for some of those funds to be transferred to the Agriculture Department, or the Federal Communications Commission, subject to various preconditions.

The US has planned for more than a decade to have TV broadcasters turn off their analog signals, yet when the Feb. 17 deadline loomed, it flinched, delaying the mandatory shutdown for four months. The delay, which causes confusion for TV viewers and havoc for broadcasters, is a symptom of the unique way the US conceived the shutdown: No other big country has dared to, or plans to, end its analog TV broadcasts all in one go. All developed countries are looking at turning off their analog TV signals because of the obvious benefits. Going digital improves the quality of TV reception and frees up large swaths of the airwaves for other services like wireless data. But other countries are being more cautious about moving into the digital age. Austria, which is the size of South Carolina, turned off its analog signals over seven months in 2007, moving area by area from west to east. Germany, slightly smaller than Montana, shut down area by area over five years. To find countries that turned off their signals all in one go, as the U.S. essentially was about to do Feb. 17, you'd have to go to countries like the Netherlands, about the size of Maryland, and Luxembourg, which is smaller than Rhode Island. Those countries aren't just small - they also have very few households that watch over-the-air TV broadcasts.

So, if Julius Genachowski will be named the next Federal Communications Commission chair and Mignon Clyburn of the Public Service Commission of South Carolina gets a seat vacated by current Commissioner Jonathan Adelstein, who fills the vacant Republican seat? Over the last decade or so, choosing minority commissioners has almost become the prerogative of the minority party. The list of possibilities include: Brian Hendricks, a telecom aide to Sen. Kay Bailey Hutchison; David Cavicke, the top GOP staffer on the House Energy and Commerce Committee; Lee Dunn, an aide to Sen. John McCain; Mike O'Reilly, an aide to Senator John Ensign; and Ajit Pai, deputy general counsel of the FCC and former aide to Sen. Sam Brownback. Do you see the common denominator? All these people work or used to work on Capitol Hill. They are basically experts on policymaking, crafting legislation and Washington politics, but not much else. The seat is turning into a reward for loyalty and a test of whose boss has the most clout. Bad idea. As the professed champion of business, the Republicans should award the seat to a businessman or a businesswoman

On Tuesday two top executives from Sony Television and Sony Pictures, accompanied by an influential lobbyist, met with the Federal Communications Commission to talk up "the advantages of expanded consumer choices in the marketplace" which would supposedly come with a waiver on the agency's ban on Selectable Output Control. That bright idea originates with the Motion Pictures Association of America. Present at the meeting were Sony Pictures TV President Steve Mosko, Sony Executive Vice President Frances Seghers, and Jim Free of the Free-Smith Group, which got almost a million bucks to lobby for Sony in 2008. They met with FCC Chair Michael Copps and Paul Murray, the Wireless Bureau's senior attorney. It's unclear what Chairman Copps thinks of the MPAA's proposal, which his predecessor Kevin Martin essentially punted to the latest FCC. As Ars reported, in early June the MPAA filed a request for agency permission to work with cable and satellite providers to disable analog output of pre-DVD release movies in favor of "secure and protected digital outputs." Current Commission rules forbid SOC use limiting either analog or digital transmission. But the MPAA says that analog streams are insecure. They "either lack, or can easily be stripped of, protection measures," in the trade group's words, and broadcast over them will "facilitate the illegal copying and redistribution of this high value content, causing untold damage to the DVD and other 'downstream' markets." Hollywood contends that relaxing SOC rules will allow the studios to release movies over cable and satellite prior to their DVD release without fear of copyright infringement.