June 2016

FCC Announces Tentative Agenda For June 2017 Open Meeting

Federal Communications Commission Chairman Tom Wheeler announced that the following items are tentatively on the agenda for the June Open Commission Meeting scheduled for Friday, June 24, 2016:

Reforming Executive Branch Review Process of Certain FCC Applications and Petitions Involving Foreign Ownership: The Commission will consider a Notice of Proposed Rulemaking that seeks comments on changes to streamline and increase the transparency of the Executive Branch review of applications and petitions for national security, law enforcement, foreign policy and trade policy concerns. (IB Docket No. 16-155)

Adding Hurricane-Related Event Codes to the Emergency Alert System: The Commission will consider a Report and Order that would revise the Emergency Alert System rules by adding new event codes covering extreme high winds and storm surges caused by Category 3 (and greater) hurricanes. (PS Docket No. 15-94)

Improving Outage Reporting for Submarine Cables: The Commission will consider a Report and Order to require submarine cable licensees to report communications network outages to the FCC. (GN Docket No. 15-206)

Enhancing Public Safety, Network Reliability, and Agency Operations

Hurricane season officially arrived. It’s important for people who live in potential hurricane zones to think ahead about what their plan is if a storm threatens. The Federal Communications Commission and our government partners also need to make sure we are doing all we can in advance to help the public the next time disaster strikes. That is why I am proposing that we update the nation’s Emergency Alert System (EAS) codes. I am circulating rules for consideration at our June meeting that would add three new event codes to the EAS – “Extreme Wind Warning,” “Storm Surge Watch,” and “Storm Surge Warning.” – so that the public can receive more specific and relevant alerts, particularly for hurricane-related weather. If adopted, the updated rules would require EAS equipment manufacturers to integrate the codes into new equipment and enable EAS participants to update their existing equipment in advance of next year’s Atlantic hurricane season.

Another way the FCC promotes public safety in times of crisis is by collecting data on network outages. Our outage reporting rules have enabled us to detect adverse outage trends and work with industry on solutions, monitor and assist restoration efforts, and coordinate with public safety officials and other affected third parties during crises. In 2015, we identified submarine cables as a gap in our reporting rules. These cables are essential to America’s economic stability and national security, yet licensees currently only report outages on an ad hoc basis. The information we receive is too limited and inconsistent to be of much use. Today, I circulated to my fellow Commissioners new rules that would require submarine cable licensees to report major communications outages to the FCC. Our June open meeting will feature a third item that seeks to improve FCC coordination with Executive Branch agencies concerning issues of national security, law enforcement, foreign policy, and trade policy raised by certain applications involving foreign ownership. Applicants seeking foreign ownership rulings from the FCC have raised concerns that this Executive Branch review process is too slow and needs greater transparency. The 2014 Staff Process Reform Report identified this coordination as needing reform, and since that time the FCC has been working with the Executive Branch and industry on ways to make improvements.

Principles for Media Ownership Reform

The Federal Communications Commission can better promote localism, competition, and diversity – and be consistent with the public interest – by thoughtfully removing outdated restrictions to media combinations. Specifically, the following principles should receive priority consideration in the media ownership reform effort to come:

Reasonably Define Markets: As with all Commission issues, definitions matter, and accordingly, our definition of the markets in which newspapers, radio stations, and television stations operate is the source of much line drawing in the application of the media ownership rules. In the 2014 Quadrennial Review FNPRM, the Commission shockingly refused to acknowledge any non-broadcast or non-newspaper competitors as market participants. Think about how misguided that is. As part of this year’s review, the Commission must take a realistic market view and account for the significant role that competitors such as MVPDs, over-the-top video providers, websites, streaming music services, and satellite radio play in the 2016 media marketplace.

Eliminate cross-ownership bans: Consumers are demanding 24/7 access to media content on numerous platforms, but artificial silos created by the cross-ownership bans are keeping broadcasters and newspapers from innovating into multi-platform entities that could better serve these needs. Evidence of synergies already exist in the form of grandfathered combinations and giving the opportunity for more, with additional outlets and platforms, could generate a boom in local content or perhaps prevent a further erosion from occurring in some markets. Eliminating the restrictions on newspaper/radio and radio/television combinations, as the 2014 FNPRM suggested, would be a proper start to reform our ownership rules, while the newspaper/television limits should follow the same course rather than face some type of incremental relief. If the Commission is serious about preserving localism and perhaps the newspaper industry, it should remove these artificial barriers keeping the most likely interested and qualified investors – local broadcasters – on the sidelines.

Eliminate Duopoly Rule: Perhaps restricting common ownership of two television stations in the same market may have made sense in 1964, when consumers only had a handful of programming options. Four decades later, surrounded by thousands of new options, how can the FCC justify maintaining this rule in its current form? In many markets, duopolies or even triopolies could strengthen the overall state of broadcasters and allow stations to concentrate more resources on bringing more and higher quality local content to their viewers. At the very least, some of the conditions attached should be eliminated or relaxed. For example, the “Eight Voices Test” was previously struck down by DC Circuit in 2004, and a previous Commission concluded that it could not be justified. It makes even less sense now. Why exactly eight in every case? This condition disproportionately impacts stations in small and mid-sized markets, more frequently preventing these stations, and their viewers, from accessing the benefits and efficiencies a combination could provide.

Provide More Waivers and Grandfathering: To the extent that any of the rules are left unchanged and my views are ignored, the Commission should, at a minimum, reform current waiver processes to make them clear and realistically obtainable, provide more opportunities for waivers, and allow grandfathering of existing combinations. The market size waivers proposed by various parties could mitigate the constrictive impact of these outdated rules on broadcasters in smaller markets. The Commission has properly grandfathered existing combinations in many contexts, and this policy should continue and expand wherever possible, such as by allowing grandfathered combinations to be freely transferrable. Additionally, the Commission should follow through on its proposal to grandfather radio intra-market community of license changes.

Resist Reinstating the JSA Ban: This rule has met its demise in the Third Circuit, and should not be resurrected under any circumstances. Congressional input both before, and even more so, after this ill-advised change has been crystal clear: JSAs have served the public interest well in many circumstances, and the Commission’s rules should not be interpreted to prevent them.
Reject Additional Restrictions: Public advocacy groups have clamored for additional tightening of the ownership rules. Proposals such as eliminating the UHF discount and limiting shared services agreements are completely illogical if the underlying rules are not properly addressed and modernized at the same time. To add further restrictions would harm the media industry and those it serves, including underrepresented populations.

Data caps are a business decision—not a network necessity, Frontier says

Frontier Communications, newly expanded after purchasing Verizon wireline networks in three states, says it has no plans to impose Comcast-style data overage charges. "We have not really started or have any intent about initiatives around usage-based pricing," CEO Daniel McCarthy told investors at the Bernstein Strategic Decisions Conference. "We want to make sure our product meets the needs of customers for what they want to do, and it doesn't inhibit them or force them to make different decisions about how they're going to use the product."

McCarthy noted that networks are facing fewer capacity constraints as technology improves and data transport costs decline. Therefore, Frontier isn't necessarily making pricing decisions based upon its own costs per megabit. Instead, the company prices Internet service based on what's competitive in the market, generally charging less than cable companies, he said. "There may be a time when usage-based pricing is absolutely the right solution for the market, but I don't see that as the path the market is taking at this point in time," he said.