November did not see a holiday slowdown in the world of telecommunications policy. In fact, rapid developments seem likely through the rest of 2007.
I. Media Ownership Debate Moving Right Along
On November 13, just four days after the Federal Communications Commission's last of six field hearings on media ownership, FCC Chairman Kevin Martin, in a New York Times op-ed, proposed lifting the longstanding "cross-ownership" ban that keeps one company from owning both the daily newspaper and radio or television stations in the same town. He wrote, "The challenge is to restore the viability of newspapers while preserving the core values of a diversity of voices and a commitment to localism in the media marketplace." Later that same day in a press release, Chairman Martin proposed that the Commission make no changes to the other media ownership rules currently under review.
Fellow FCC Commissioners Michael Copps and Jonathan Adelstein responded saying, "This is portrayed as a moderate proposal, but it is a wolf in sheep's clothing. Don't let the wool be pulled over your eyes. The proposal could repeal the ban in every market in America, not just the top twenty. Any city, no matter how small, could be subjected to newspaper broadcast ownership combinations under a very loose standard." The commissioner point out that:
- The top 20 markets account for over 43% of U.S. households. Even on its face, this proposal directly affects over 120 million Americans.
- The Chairman then creates a loophole that Big Media will drive a truck through, permitting a newspaper-broadcast combination in any market in the country. We have seen how loosely the Commission has granted waivers in the past. If this proposal goes through, the FCC could grant cross-ownership applications in such small towns as Meridian, Mississippi and Bend, Oregon. When big conglomerates can't get their way in a general rule, they press for loopholes that swallow the rule, and they would succeed with this approach.
- The non-top four stations that major newspapers will now be competing for are precisely the stations more likely to be owned by small, independent broadcasters. If we ever got serious about women and minority ownership, these are also the stations most available to them. Chairman Martin's rule pretty much reserves these outlets for the big guys. So this proposal actually perpetuates the shamefully low levels of minority and female media ownership.
Chairman Martin gave the public 19 working days to respond to his proposal with comments due Tuesday December 11, 2007. He plans to vote on the proposal the following week on December 18. However, both the Senate and House Commerce Committees have scheduled oversight hearings to slow down the process. The Senate is also considering legislation that would require the FCC to 1) give the public ample time to comment on the proposed rule change, 2) complete a separate proceeding on how localism is affected by media consolidation, and 3) establish of an independent panel on female and minority ownership.
On November 30, the Commission granted the Tribune Company waivers of the newspaper-broadcast crossownership rules so the company could complete its sale to billionaire Sam Zell. Media Access Project CEO Andrew Jay Schwartzman said, "Tribune was given more than it requested in a decision which is deceptively packaged to make it seem more reasonable than it really is."
II. Is the Cable Market Competitive?
Perhaps the most controversial item on the FCC's monthly meeting agenda November 27 was its Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming. Specifically, the Commission was trying to determine if 1) cable systems with 36 or more activated channels are available to 70 percent of households within the United States and 2) 70 percent of the households to which such systems are available subscribed to them. (Some call this the "70/70 threshold.") As early as November 11, there were press reports that Chairman Martin was proposing that A) the 70/70 threshold had been met and that the Commission should impose significant new regulations to open the cable television market to independent programmers and rival video services. But cable executives soon launched a lobbying blitz and raised concerns about the data the Commission was relying on to reach its decision. On November 14, Commissioners Tate and McDowell, regularly Chairman Martin's allies, sought clarification on the data from Warren Communications. The controversy over the data continued through the Nov 27 meeting, resulting in a compromise to postpone for months the decision on the 70/70 threshold. But cable companies will for the first time have to give the FCC the most complete data available on how many subscribers they have. The FCC also lowered the price that cable systems charge smaller programmers, such as religious community broadcasters, to lease space on unused cable channels.
The day after the meeting, Chairman Martin proposed that the Commission quickly adopt a rule that would prevent Comcast, the nation’s biggest cable company, from becoming larger. The rule would prohibit a cable company from controlling more than 30 percent of the market. Comcast is at about that level. By the end of the week, a trade press report said Martin already had the three votes needed to adopt the rule.
III. Extending Broadband to Rural America
Just before Thanksgiving, the Federal-State Joint Board on Universal Service issued a Recommended Decision calling on the FCC to expansion of the definition of supported services to include broadband. The Joint Board recommended: A) The creation of three separate “funds” with distinct budgets and purposes: 1) The Broadband Fund to disseminate broadband Internet services to unserved areas, 2) The Mobility Fund to disseminate wireless services to unserved areas, and 3) A Provider of Last Resort (POLR) Fund to support wireline carriers that perform that function; B) An overall cap on the total amount of high-cost funding at $4.5 billion; C) Elimination of the identical support rule; D) Expansion of the definition of supported services to include broadband and mobility; E) A transition period, during which, each of the five current mechanisms are separately capped at 2007 levels; and F) Exploration of the most appropriate reverse auction mechanisms.
Chairman Martin noted, "The broadband program recommended by the Joint Board is tasked primarily with disseminating broadband Internet access services to unserved areas. This is a laudable goal as we work to make broadband services available to all Americans across the nation." Fellow Commissioner Michael Copps, however, while applauding the decision to support expansion of high-speed Internet infrastructure, said the limited funding -- just $300 million annually -- is "like fighting a bear with a fly swatter." "It's a move in the right direction," said Free Press policy director Ben Scott, "but the amount of money they set aside is not going to do the trick."
The Joint Board's recommendations came just a few weeks after the FCC released new data on high-speed connections to the Internet in the US. While defining high-speed lines as connections that deliver services at speeds exceeding 200 kilobits per second (kbps) in at least one direction and advanced services lines as connections that deliver services at speeds exceeding 200 kbps in both directions, the Commission reported that:
- High-speed lines increased by 27% during the second half of 2006, from 65.0 million to 82.5 million lines in service,
- Of the 82.5 million total high-speed lines reported as of December 31, 2006, 58.2 million served primarily residential end users,
- DSL lines increased by 2.8 million lines during the second half of 2006 compared to an increase of 3.2 million lines for cable modem service,
- Advanced services lines increased by 17% during the second half of 2006, from 50.8 million to 59.5 million,
- Of the 59.5 million advanced services lines reported as of December 31, 2006, 63% were at least 2.5 mbps in the faster direction and 37% were slower than 2.5 mbps in the faster direction,
- Of the 59.5 million advanced services lines, 53.5 million served primarily residential end users,
- As a nationwide average, we estimate that high-speed DSL connections were available to 79% of the households to whom incumbent LECs could provide local telephone service as of December 31, 2006, and that high-speed cable modem service was available to 96% of the households to whom cable system operators could provide cable TV service,
- Providers list the Zip Codes in which they have at least one high-speed connection in service to an end user, and over 99% of Zip Codes were listed by at least one provider. Our analysis indicates that more than 99% of the nation’s population lives in those Zip Codes. The most widely reported technologies by this measure were satellite (with at least some presence reported in 91% of Zip Codes), ADSL (in 84% of Zip Codes), and cable modem (in 65% of Zip Codes). ADSL and/or cable modem connections were reported to be present in 90% of Zip Codes.