Multichannel News

Comcast said it plans to launch a DOCSIS 3.1-based 1-Gig broadband service to residences and businesses in Huntsville (AL) later in 2017, paving the way for a big broadband showdown with AT&T and an expected municipal service offering. Comcast is already selling DOCSIS 3.1 services in Atlanta, Nashville, Chicago and Detroit, and has set plans to introduce D3.1-based offerings in several markets this year, including Denver, San Francisco, and Kansas City, among others. Comcast didn’t announce expected pricing of the 1-Gig service in Huntsville, but, in other markets, it’s been offering it for a base price of $139.95 per month alongside the testing of a promotional price of $70 per month when customers agree to a three-year service contract.

A hearing is scheduled for Feb 14 in the Missouri State Senate Local Government and Elections Committee on a bill that would put new conditions on municipal broadband buildouts. The telecom-backed bill would require a feasibility study before any local government could expand broadband infrastructure and any such expansion would have to be approved by a majority of voters. The bill would also prevent a municipality from cross-subsidizing their service with other revenues if they offered the service in competition with a private provider, and could not use any funds unless the voters approved them. In addition, any subdivision of a municipality wishing to use the service would have to pay "fair market value" and the service could not get preferential access to rights-of-way. Any private provider or other party providing a competitive service that believes the government is violating any of those provisions can sue. Commercial ISPs have long argued that municipalities should not be able to overbuild them with public funds, and that those overbuilds will leave, and have left, taxpayers holding the bag when and if the projects prove unsustainable.

Municipal broadband backer, the Institute for Local Self-Reliance, calls it another attempt by entrenched "monopoly" providers and their lobbyists to protect themselves.

[Commentary] The Federal Communications Commission released its 18th Video Competition Report on Jan 17. Data points in the report demonstrate persuasively that the video services market is characterized by competition among cable, satellite, and telecommunication providers of video subscription services as well as disruptive online video services. The market also is being transformed by the proliferation of media streaming devices and video apps.

Yet for all the technological advancements and proliferation of choices now available to consumers, much of the video market is still subject to regulatory restrictions that originated in the early 1990s, if not earlier. These regulatory burdens, and the uncertainty posed by the threat of new regulations based on leftover cable analog-era perceptions, impose costs and inhibit investment in advanced digital technologies and business models.

[Randolph J. May is president and Seth L. Cooper is a senior fellow of the Free State Foundation]

Sens. Richard Blumenthal (D-CT) and Corey Booker (D-NJ) are leading more than a dozen senators (all Dems except independent Bernie Sanders of Vermont) calling on Federal Communications Commission Chairman Ajit Pai to reverse his decision to withdraw Lifeline broadband subsidy authorizations from nine companies.

Chairman Pai said the decision was due to 1) procedural errors, 2) because they were issued in the waning hours of the previous Administration, something Republicans warned against, and 3) because he suggested the FCC needed to hit the pause button on expanding the low-income subsidy program until it got a better process for monitoring for waste, fraud and abuse. The senators -- who also included Al Franken (D-MN), Ed Markey (D-MA), Elizabeth Warren (D-MA) and Ron Wyden (D-OR) -- said they were deeply troubled by the action. They said the chairman was undermining the program, making it more difficult for low income residents to afford critical communications services, and appearing to run counter to his pledge in the first days of his chairmanship to make closing the digital divide a priority under his watch. The senators pointed out that the customers of at least one of the nine would have to be disconnected.

Evoking section 706 of the Communications Act, they said that the FCC has an obligation to ensure “consumers in all regions of the country, including low-income consumers” have access to “advanced telecommunications services,” and asked him to reconsider the decision.

Credit rating agency Moody’s Investors Service predicts that mergers & acquisitions activity among telecommunication companies will continue as the industry seeks to offset low revenue potential and intensifying competition with deals. Already the sector has seen AT&T announce a $108.7 billion deal with Time Warner in October and Century Link make a $34 billion offer for Level 3 Communications.

Moody’s sees more deals ahead. “Market saturation and tough competition have produced a stagnant US telecom market,” Moody’s said in its report. “Yet regulators remain unlikely to approve consolidation within the traditional telecom sector, especially for large incumbents, so they must look elsewhere for growth.” Moody’s predicts that in the wake of those deals, Verizon Communications will likely accelerate its 5G mobile video strategy either through large scale M&A or partnerships.

The House unanimously passed the E-mail Privacy Act.

A version of the bill, which boosts protections of information stored in the cloud, passed the House unanimously in the last session of Congress in April and supporters were hoping for clean passage in the Senate as well, but it was held over by the Senate Judiciary Committee after amendments were offered that could have undone a compromise approach. The baseline bill updates the Electronic Communications Privacy Act to require the government to get a probable cause criminal warrant to access emails, social media posts and other online content stored in the cloud by internet service providers and other email service providers, like Google. In a nod to the longevity of cloud storage, it eliminates the 180-day sunset on stored communications. Previously a warrant was not required for communications stored beyond 180 days.

New Federal Communications Commission Chairman Ajit Pai revoked Lifeline service provision eligibility and accompanying streamlined treatment, citing a National Tribal Telecommunications Association petition to reverse the eligibility on some of the companies, and because it would "promote program integrity by providing the Bureau with additional time to consider measures that might be necessary to prevent further waste, fraud, and abuse in the Lifeline program."

Chairman Pai complained that the FCC under his predecessor, Tom Wheeler, had failed to sufficiently root out such abuse. Citing what it said were "shortcomings in the Bureau’s prior orders" and "procedural failings" including allegedly not informing tribal governments that they were seeking eligibility from the FCC, Acting Bureau Chief Kris Montieth said the bureau "cannot conclude at this time that LBP designations are in the public interest for any of the entities."

The message seemed to be that Pai administration would review such applications more thoroughly for potential abuses, but others saw it as a way to target a program Chairman Pai has criticized.

“Since 2010, the FCC has been consistently working to improve and modernize the Lifeline program. Vulnerable communities, such as our nation's veterans -- who make up 13 percent of Lifeline users -- and low-income students -- who need broadband to succeed at school -- were poised to benefit from the low-cost broadband services the Lifeline program can bring," said Amina Fazlullah, director of policy at the Benton Foundation. "These unexpected revocations will not only limit choices for Lifeline consumers, but also have a chilling effect on participation of other potential broadband providers of Lifeline service."

The Federal Communications Commission’s Media Bureau set aside its actions on political file complaints involving a host of TV stations, saying they were more appropriately handled at the bureau level.

"The complaints will be returned to pending status and considered by the Commission," said acting bureau chief Michelle Carey. On Jan. 6, the bureau on its own authority — rather than by a commission vote — admonished Scripps’ WCPO-TV Cincinnati for "failing to include in WCPO-TV’s political file certain information about two requests to purchase broadcast time for non-candidate issue advertisements." Separately, in resolving complaints against a number of stations, the FCC took no enforcement action, but provided clarification going forward about how political ads need to be disclosed, clarification that has been mooted for the moment.

The American Cable Association has filed an opposition to broadcasters' request that the Federal Communications Commission reconsider its decision in the Quadrennial ownership rule review to retain local ownership limits on broadcast stations, saying broadcasters are rehashing arguments that the agency has already rejected. The deadline for filing was Jan 24. After the FCC, in a politically divided vote, decided to leave most media ownership rules intact, the National Association of Broadcasters, Nexstar and Connoisseur Media petitioned the FCC to reconsider that decision. The NAB initially challenged the decision in court, but after Donald Trump won the presidency and a Republican FCC was taking over, it decided to shift the challenge to the FCC (it could not simultaneously pursue a court challenge). The ACA suggested that shift or not, broadcasters don't have a case.

The successful completion of the final stage rule was a going-away present of sorts for Federal Communications Commission Chairman Tom Wheeler, who exits Jan 20. Chairman Wheeler took a bow for the entire FCC team, past and present, in a statement following the announcement that the auction would close after the current stage. “The word’s first spectrum incentive auction has delivered on its ambitious promise. Reaching the Final Stage Rule means the benefits of the auction are indisputable. We will repurpose 70 MHz of high-value, completely clear low-band spectrum for mobile broadband on a nationwide basis," Chairman Wheeler said. "On top of that, 14 MHz of new unlicensed spectrum – the test bed for wireless innovation – will be available for consumer devices and new services. The auction will provide $10.05 billion to broadcast television licensees who participated and billions towards deficit reduction."

“There is still a long road ahead to successfully implement the post-auction transition of broadcast stations to their new channels and bring the new wireless and unlicensed spectrum to market. This will be an extremely important task for my successor and the new Commission; I wish them well," he said. The fact that the FCC had to reduce its spectrum clearing target from 126 MHz to 84 Mhz will mean less money for broadcasters and less spectrum for wireless operators, but it will make that repack easier given that there is much more room to repack TV stations in, which means not TV stations will be repacked into the duplex gap (between wireless uplink or downlink spectrum, or in the wireless band at all.