I. Legislative Branch Activity
A. Senate Committee Passes Three Telecom Bills.
On July 19, the Senate Commerce Committee approved three telecommunications bills: a broadband data bill (S-1492), a number porting measure (S-1769), and an indecency bill (S-1780). The broadband data bill, as passed by the Committee, directs the Commission to use Form 477 data to determine broadband service tiers, creating a separate tier for advanced services. The requirements for Form 477 would be altered to identify actual numbers of broadband connections associated with subscribers. In addition, the FCC would be allowed to choose whether to utilize 5-digit or 9-digit zip codes, or census tract information.
The controversial indecency bill would punish broadcasters for "fleeting expletives" and single words or images that air. Some groups warn that passage of such a bill reverses the recent U.S. Court of Appeals case that threw out a FCC policy of fining stations for such expletives, and will only invite further litigation.
B. Senate Bill to Increase Funding for Interoperability.
On July 27, the House passed HR-1, a bill based on the recommendations of the 9/11 Commission. Included in the massive bill was $400 million to upgrade the nation’s 911 service and promote increased interoperability of emergency services. The funds will arrive in FY 2009 and will be allocated through grant programs, which will be administered by the Department of Homeland Security. President Bush signed the bill into law on August 3.
C. New Parental Control Bill Clears Senate Committee.
The Child Safe Viewing Act of 2007 (S-602), introduced by Sen. Mark Pryor (D-AR), was approved in a Senate Commerce Committee markup. The bill asks the FCC to examine newer blocking technologies than the current V-chip. These new devices could be used on TVs, DVD players, cable set top boxes, and satellite receivers. The filter itself would be independent of the preexisting TV rating system and would filter language based on closed captioning.
D. Legislative Calendar.
The House and Senate reconvened September 4 and are in session until October 8.
II. Federal Communications Commission (FCC) Activity
A. July FCC Meeting.
Commission Adopts Rules for the 700 MHz Band.
The Commission passed a single order at the July 31 FCC Open Meeting — rules for the 700 MHz band that is being vacated by television stations as a result of the DTV transition. The new rules are intended to promote the creation of a nationwide interoperable broadband network for public safety, as well as to promote new wireless services for consumers. Per the rules adopted, 22 MHz of the spectrum is allocated for open access, 10 MHz for a public-private partnership, and another 10 MHz for the nationwide wireless broadband network.
The Order also set reserve prices for the auction. The C-block of spectrum, allocated for open access, has a minimum bid of $4.6 billion, while the nationwide public-private partnership band is set at $1.3 billion. If the reserve is not met for the C-block, the space will be reauctioned without any open access provisions.
The band space is to be auctioned off by the Congressionally mandated deadline of January 28, 2009.
B. Other July FCC Activity.
1. DTV Transition NPRM Approved (Docket 07-148).
On July 30, the Commission released a Notice of Proposed Rulemaking that seeks comment on possible DTV consumer education initiatives that broadcasters, MVPDs, retailers, and manufacturers would have to undertake. Comments are due on September 17 and reply comments on October 1.
2. Studies on Media Ownership Released (Docket 06-121).
The FCC published on July 31 ten studies concerning media ownership. The studies are intended to inform the Commission during its review of broadcast ownership policies. Comments are due 60 days after release of the public notice, on October 1, with reply comments due October 16. The following are the topics and authors:
- Study 1: How People Get News and Information
Author: Nielsen Media Research, Inc.
- Study 2: Ownership Structure and Robustness of Media
Authors: Kiran Duwadi, Scott Roberts, and Andrew Wise, FCC
Technical Appendix: C. Anthony Bush, FCC
- Study 3: Television Station Ownership Structure and the Quantity and Quality of TV Programming
Author: Gregory S. Crawford, Department of Economics, University of Arizona
- Study 4: News Operations
Section I: The Impact of Ownership Structure on Television Stations’ News and Public Affairs Programming, Author: Daniel Shiman, FCC
Section II: Ownership Structure, Market Characteristics and the Quantity of News and Public Affairs Programming: An Empirical Analysis of Radio Airplay, Author: Kenneth Lynch, FCC
Section III: Factors that Affect a Radio Station’s Propensity to Adopt a News Format, Author: Craig Stroup, FCC
Section IV: The Effect of Ownership and Market Structure on News Operations, Author: Pedro Almoguera, FCC
- Study 5: Station Ownership and Programming in Radio
Author: Tasneem Chipty, CRA International, Inc.
- Study 6: The Effects of Cross-Ownership on the Local Content and Political Slant of Local Television News
Author: Jeffrey Milyo, Center for Applied Economics, University of Kansas, School of Business; Department of Economics and Truman School of Public Affairs, University of Missouri
- Study 7: Minority and Female Ownership in Media Enterprises
Authors: Arie Beresteanu and Paul B. Ellickson, Duke University
- Study 8: The Impact of the FCC’s TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast Stations 1999-2006
Author: Allen S. Hammond, IV, Santa Clara University
- Study 9: Vertical Integration and the Market for Broadcast and Cable Television Programming
Author: Austan Goolsbee, University of Chicago, Graduate School of Business; American Bar Foundation; and National Bureau of Economic Research
- Study 10: Review of the Radio Industry, 2007
Author: George Williams, FCC
C. August FCC Meeting.
The August Open Meeting also had only one item on its agenda: automatic roaming rules. The approved Report and Order and Further Notice of Proposed Rulemaking requires carriers to offer automatic roaming to customers of other carriers. Some data, such as text messaging, was included in the Order. Wireless broadband was not, however, and the FCC agreed to open a rulemaking on the subject. Of some controversy, though, was the stipulation that to qualify for roaming protection, carriers must not only have bought licenses in the area, but have built out their networks. Companies who bought licenses in last year’s Advanced Wireless Auction may be affected, as many have not built out yet.
D. Other August FCC Activity.
1. USF Protections Strengthened.
On August 29, the FCC released an order that expands the scope of punishment for defrauding the Universal Service Fund ("USF"). Previously, participants could only be debarred if they defrauded schools and libraries, known as the E-Rate Program. Now the possibility of sanctions has been expanded to encompass all aspects of the USF, including high-cost, rural health care and low-income programs.
2. Long Distance and Local Rules for Bells Lessened.
Late on August 31, the FCC gave Bell Operating Companies ("BOCs") more opportunity to integrate their long distance and local service. BOCs like AT&T and Verizon will not face tariffs and other penalties for not separating the services. The Commission is believed to have acted because of an AT&T Forbearance Petition on the same matter that would have taken effect Friday.
E. Next Commission Meeting.
The September open meeting is scheduled for Tuesday the 11th at 9:30 AM.
III. National Telecommunications and Information Administration (NTIA)
IBM Team to Lead DTV Coupon Program.
In August, the NTIA awarded an IBM-led team a $120 million contract to organize and implement the DTV coupon program. On February 17, 2009, televisions will not longer receive analog signals and by then consumers must have converter boxes for digital signals. The move won high praise from consumer groups such as CEA and NAB.
IV. Antitrust Agency Activity/Deal Announcements
Parties File Comments on XM-Sirius Merger.
In July, parties filed comments on the proposed merger between satellite radio providers XM and Sirius. NAB contended that, when the FCC set up satellite digital audio radio service (DARS) in 1997, it intended the service to contain two distinct competitors. Any merger between those two, NAB argued, would constitute a monopoly and thereby raise prices and reduce programming for consumers. Other opponents, such as Media Access Project (MAP), claimed that the satellite radio providers use a overly broad definition of their service when they posited inclusion with a market including broadcast radio, iPods, and CDs. MAP maintained that XM and Sirius represent a distinct market and should be treated as such.
Supporting comments were filed by former Attorney General Edwin Meese, a few consumer groups, and supply companies. Most argued that satellite radio providers should be considered within the larger audio market; they also touted the benefits the merger would provide consumers in terms of programming choice and availability.