December 21, 2006
Art Brodsky is communications director for Public Knowledge, a public interest group working at the intersection of information and technology policy.
It’s never over until it’s over, and it’s never over. That’s a primary rule for those who try to follow the various policy debates in Washington, D.C. Exhibit A? On December 19, the Federal Communications Commission approved a draft proposal to speed up the methods by which local governments grant franchises for video services, usually provided by cable.
The Commission’s action is a reflection of what AT&T and Verizon failed to achieve during the last couple of years in Congress. Telecommunications legislation would have “streamlined” the franchise process for those two telecom giants who want, to one degree or another, to offer cable service. The legislation failed to pass, for some very good reasons. Of course, that wasn’t the end of the debate. It’s not even the end in Congress, but at least that next phase will wait to start up again in January.
Not content to have their fate dependent on one government body, the telephone companies also went to the FCC, which is generally as compliant to the wishes of the telecom industry as the many industry-friendly members of Congress. The goal was the same—to find a way around the thousands of local franchising authorities which set the terms and conditions for how cable can be offered. They want into the lucrative cable business in the worst way.
There’s general agreement in principle that competition can benefit consumers. In the rare examples so far of competition in video, the over-priced cable services have had to lower their rates to compete with telephone company entrants. A cynic might say that, over time, as telephone companies enter the market, a nice, comfy duopoly will settle in and price decreases will moderate. For now, the idea of cable having some serious competition is good.
But beneath that general agreement are those damnably disagreeable details, which can transform in a flash the gold of principles into the trash of reality. So it is here, as the Republican contingent at the FCC, Chairman Kevin Martin, along with Commissioners Deborah Tate and Robert McDowell, voted to approve an approach to preempt state and local authorities. Democratic Commissioners Michael Copps and Jonathan Adelstein dissented. That’s because as worthy a goal as competition to cable is, how you go about doing it, and exactly what competition would be created, are the details that throw a whole different perspective on the FCC’s action. The reality is that even if the FCC goes along with what AT&T and Verizon want now, it’s unlikely to have much of an effect.
At a minimum, a bare minimum at that, when Congress tried to pass legislation preempting the state and local governments that set the rules for cable competition, no one could argue that Congress didn’t have the authority to do it. Amending the Communications Act is a perfectly valid exercise for a lawmaking body. Whether it is similarly valid for an administrative agency will be the subject of intense debate over the next few months, and could ultimately derail the FCC’s actions.
At its meeting on December 19, the Commission approved a proposed rule that would set a 90-day limit on local authorities for approving a franchise from a cable competitor, based on the theory that any negotiations with local authorities longer than that are “unreasonable,” according to the law. To be sure, there are some examples of communities making outrageous demands of telephone companies, and some taking a long time for negotiations.
Having said that, however, the question is whether those anecdotal examples are worth the attempt to override the practices of local government generally. A larger question is whether the Commission has the authority to do so. Copps and Adelstein said no, and the others disagreed. A court will work it out, and the Commission will have to defend such sticky questions as how it came up with the arbitrary 90-day limit, and how that came to meet the legal standard of “unreasonable” on which the FCC based its decision.
It’s worth noting that in proposing to override state and local authorities, the Commission gave a pass to those states that have already made it easier for telephone companies to enter the market while ignoring the progress made by the telephone companies in obtaining local franchises.
The debate over the FCC’s action is certain to mirror the debates that Congress had over the same issues. Local officials will scream that the FCC is disregarding their authority to adapt to local conditions. Congress ignored them. As with the congressional legislation, the FCC proposal contains the same fatal flaws: namely that there’s no guarantee competition will take place, or that it will take place where it is needed. Even with the speeded-up franchising, there’s no requirement that the newly enfranchised telephone company make certain that an entire county or city have access to the best and latest technology. Some areas, probably affluent ones, will get competition, others won’t.
Video franchising is also the ticket to offering high-speed Internet access. Some argue that program services drive the offering of Internet services. They do, after all, go over the same wires. As with the congressional debate, the franchising issue ignores that reality. If the plan is carried out, the telephone companies will install their programming services and sell the Internet service using the same model—they control consumer choice of programming and could also control the consumer’s experience online without any requirements that they don’t discriminate in provision of services.
At the end of the day, AT&T and Verizon got what they wanted from the FCC. They will probably get what they want when the rulemaking is approved next year. Whether any of that will improve the lot of consumers is a much different question.
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Response from Senator Murray
Dear Mr. Brineman:
Thank you for sharing your concerns regarding the Federal Communications
Commission's (FCC) media ownership rules. I share your concerns on this
important issue. I apologize for the delay of my response.
As you know, in 2003 the FCC voted along party lines to relax several rules that
govern media ownership. Specifically, the FCC lifted the decades-old restriction
prohibiting a company from owning both television stations and newspapers in any
one media market. The FCC also relaxed rules to allow multi-media corporations
to own more stations at the national and local levels, and also voted to raise
the maximum coverage a broadcast network can own of nationwide television
stations from 35 percent to 45 percent.
In June 2004, the U.S. Court of Appeals for the Third Circuit held that the FCC
did not provide a reasoned analysis to support its specific local ownership
limits, and therefore ruled against the new local ownership rules. Despite
appeals by many media companies and associations, this ruling has not been
reversed, and the proposed FCC media ownership rules never went into effect.
During 2006, the FCC issued a “Further Notice of Proposed Rulemaking”, which
sought comments on how to address the issues raised by the Third Circuit.
Senator Ted Stevens (R-AK) also introduced the Communications, Consumer's
Choice, and Broadband Deployment Act of 2006, S.2686, which would have required
the FCC to issue another Notice detailing the specific proposed changes to the
rules prior to adopting any new rules. This language is important because it
would void the cross-media ownership rules adopted on by the FCC in 2003. In
addition, it would have required the FCC to complete its proceeding on small
business, women, and minority ownership of media before creating new media
ownership rules. The 109th Congress adjourned before S.2686 could receive
consideration from the full Senate.
Broader media ownership regulations would likely pave the way for a few media
giants to acquire more news outlets. Increased consolidation means that fewer
and fewer powerful corporations will be able to control more and more of our
news and information. We depend on our news outlets to be free, diverse and
unbiased sources of information. Unfortunately the FCC's previous action serves
to limit the alternative viewpoints and information that Americans value.
Congress must protect and defend the American people’s access to diverse sources
of news and information, especially in the face of more media consolidation. I
will continue to work to promote diversity over the publicly-owned airwaves as
Congress heads into the 110th Congress.
Once again, thank you for writing. Please keep in touch.
Sincerely,
Patty Murray
United States Senator
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