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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Margo Reyna X-To: Sue Nord, Scott Bolton, Lara Leibman, Donald Lassere, Mona L Petrochko, Barbara A Hueter, Jeff Dasovich, Susan M Landwehr, Marchris Robinson, Ricardo Charvel, Stephen D Burns, Xi Xi, Allison Navin, John Neslage, Eric Benson, Karen Huang, John Neslage, Carmen Perez, William Patrick Lewis, Richard DiMichele X-cc: X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\All documents X-Origin: DASOVICH-J X-FileName: jdasovic.nsf CABLE, BROADCAST, DBS, CE, PHONE PLAYERS DUEL OVER ITV POLICY 04/06/2001 Public Broadcasting Report © Copyright 2001 Warren Communications News, Inc. All Rights Reserved. Cable operators, programming networks, broadcasters, DBS providers, consumer electronics interests, Bell companies, ISPs, sports leagues, software developers, electronic program guide creators, personal video recording firms and consumer groups all battled over possible interactive TV (ITV) regulations at FCC. In comments filed in response to Commission's ITV inquiry, 28 entities debated whether federal govt. should regulate nascent interactive market in wake of AOL's takeover of Time Warner (TW) earlier this year. They also feuded over how govt. should define interactive services if it chose to regulate them. Pushing for "technologically neutral nondiscrimination safeguards" on such vertically integrated MSOs as AOL TW, group of major programmers urged FCC to mandate that all broadband distributors carrying any ITV signals forward signals for all programmers on their cable systems. Group, consisting of Disney, Univision, USA Networks and Viacom/CBS, also called on Commission to ban discriminatory routing or caching practices that would permit cable operators to send their affiliated programming at faster speeds than rival networks. Programmers contended that consumers shouldn't have to buy additional set-top box to receive unaffiliated ITV services. "It is far easier and requires far less intrusive government regulation to prevent monopoly power from distorting a relatively new market than it is to combat monopoly power already unleashed in a more developed market," group said. Public interest groups, ALTV, APTS, BellSouth, EarthLink, Gemstar-TV Guide International, MSTV, NAB, PBS (PBR March 23 p3) and SBC Communications all made similar arguments in favor of FCC's adopting ITV rules. For instance, joint filing by Media Access Project, Consumers Union, Consumer Federation of America and Center for Media Education called on Commission "to move expeditiously to begin a rulemaking establishing open access for providers of enhancements on all platforms, whether cable, DBS, DTV or new technologies yet unknown." They contended that agency's failure to act would allow cable MSOs to "become the gatekeepers of what has thus far been a gateless online community" and devastate independent content providers. Without safeguards, they said, "ITV is likely to become a digital mirror image of the current closed multichannel cable model." Regulatory opponents countered that imposing ITV restrictions on cable systems would discourage them from starting new services, hampering development of emerging industry. Opponents, including AOL TW, AT&T, Cablevision Systems, Charter, Canal Plus Technologies, Comcast, NCTA, NFL, OpenTV, Progress&Freedom Foundation and group of 4 programmers, declared it was too early to impose obligations on ITV providers. They said early regulation would be unworkable, creating administrative nightmare. Calling even "the threat of regulation" of ITV market "a major mistake," NCTA, for example, argued that "there is simply no basis for assuming a problem and proposing regulatory solutions." Saying FCC deliberately had refrained from imposing similar rules on cable high-speed data services, which are much further along in development, NCTA said Commission should refrain from regulating ITV services for same reason. It also warned that agency had very limited authority to regulate ITV services under Communications Act and easily could violate First Amendment rights of cable operators if it tried to do so. Calling inquiry "a peculiar and misguided proceeding," NCTA said First Amendment "would seem to preclude the very regulations suggested by the notice which would interfere with cable operators' constitutionally protected editorial judgments." Taking different tacks, DBS providers EchoStar and DirecTV said in separate filings that they wanted FCC to keep close tabs on cable operators so they wouldn't use their market power to keep interactive TV services from other multichannel operators, including satellite TV companies. DBS companies said they were concerned that cable companies might have unfair advantage in marketplace if both industries were regulated in same way by Commission. DirecTV said it was "premature" for agency to fully regulate ITV services, but it favored "continued monitoring by the FCC of the potential for anticompetitive behavior by cable operators." "Regulatory intervention at this nascent stage of ITV development makes little sense," DirecTV said: "There are as yet no dominant providers of ITV services, and the marketplace is still in the process of sorting out the technological standards" that it will follow during future delivery. EchoStar said there was "absolutely no basis for imposing" ITV carriage obligations on distributors lacking market power in any relevant market such as itself. Such action would penalize new entrants and favor incumbent cable operators, filing said. FCC/CAPITOL HILL In action that will significantly limit number of low-power FM (LPFM) stations to be licensed, FCC released decision April 2 saying LPFM stations must meet same 3rd adjacent channel interference protection requirement as full-power stations. Order implements requirements of rider on FCC appropriations bill signed into law in Dec. Commission expects to complete action on its LPFM licensing window in few months, it said in order, and then will direct Mass Media Bureau to open window to allow LPFM applicants that didn't meet 3rd channel requirements to try to come into compliance. FCC Chmn. Powell said action allowed Commission to begin granting construction permits for at least some LPFM stations, and agency had begun independent testing to determine impact of LPFM stations on full-power FM stations and translators. As part of order, FCC also implemented congressional mandate that denies LPFM license to former pirate radio operators. FCC Comr. Furchtgott-Roth issued separate statement saying he supported move to implement congressional mandate but believed FCC should have delayed LPFM licensing while it went through rulemaking process in order to comply with Administrative Procedure Act. ------ Sen. Cochran (R-Miss.) introduced S-604 to reauthorize PTV's Ready to Learn and Ready to Teach programs. Bill also would graduate Mathline, a component of programs providing professional development models for teachers of mathematics, to TeacherLine, more comprehensive professional development tool for K-12 teachers. Citing research by U. of Ala. and U. of Kan., Cochran said Ready to Learn was having positive impact on children and their parents. Studies showed that Ready to Learn families read books together more often and for longer periods than nonparticipants. Surprisingly, studies said Ready to Learn children watched 40% less TV and were more likely to choose educational programs when they did watch, he said. Advent of digital broadcasting, which allows broadcast of multiple video channels and data simultaneously, will make it possible for instructional materials to be distributed on full-time, continuous channels when teachers and students need it, Cochran said. ------ FCC regulatory fees would increase average of 7.75% for FY 2001, agency said in proposed rulemaking released March 29. Fees generally followed previous 2 years' practice of across-board increase to meet congressional mandate for FCC to recoup larger portion of its operating budget through regulatory fees. Congress required Commission to collect $200.1 million in regulatory fees this year, up $14.4 million from FY 2000. In early years, FCC attempted to base regulatory fees on actual cost of regulation, but it generally has used across-board increases since FY 1999. It said it hoped to have new cost accounting system in place in time for setting fees for FY 2002. Comments on fees are due April 27, replies May 7 (MD 01-76). ------ Heads of 4 national public broadcasting organizations and many local PTV station managers expressed appreciation at April 3 gathering in Washington to Public Broadcasting Caucus in House which now has 70 members. Saying public broadcasting always had enjoyed strong support in Congress, CPB Pres. Robert Coonrod said new group would be asset in furthering that support "for our mission of providing valuable education services to the American people." NPR Pres. Kevin Klose said he hoped caucus would serve as effective forum for discussion of complex policy issues facing public radio. Pres. Pat Mitchell said "PBS looks forward to working with the caucus to strengthen the unique and important role that public television plays in providing nonviolent and educational programs and services to America's children and their families." New APTS Pres. John Lawson said caucus came at "critical" time, when PTV stations were bracing for transition to DTV. ------ If FCC reallocates any part of Instructional TV Fixed Service (ITFS) spectrum or 3G mobile device service, "the capacity, usefulness and value of ITFS would be significantly reduced," Miss. Humanities Council said in ex parte filing on notice of proposed rulemaking on 3G spectrum allocations. Even if only part of spectrum is taken away, many educational institutions would either lose their ITFS service altogether or face new equipment costs, service disruption, cutbacks, lower quality of service and signal interference, council said. "In either scenario, the ITFS community would be incapable of supporting advanced wireless services and promoting the development of broadband services to the educational community and to underserved communities nationwide," it said. ------ FCC Chmn. Powell called on Congress to bolster agency's enforcement powers, measure he said was necessary to protect consumers as Commission executed streamlined business plan that's "aligned with the realities of a dynamic and converging marketplace." He also told House Telecom Subcommittee at hearing March 29 that legislative approval was necessary to carry out his bureau restructuring plan, which still was being formulated, and his "policy vision" of making FCC more "efficient, effective and responsive." Powell said FCC, if given sufficient enforcement capabilities, would guarantee "fairness to all, and allegiance to none," but warned potential regulatory violators that Commission likewise would levy severe penalties. "If you cheat, I'm going to hurt you, and hurt you hard," he said. Ability to impose heavier fines and having fewer time constraints to carry out enforcement action via changes in statute of limitations are 2 tools Congress could give FCC, Powell said. If Commission can fine a company only $15,000 when companies earn millions or even billions of dollars annually, then they will view fines "just as the cost of business" and have less incentive to comply, he said. Commerce Committee Chmn. Tauzin (R-La.) said Powell spent 3 years as commissioner "watching how not to run the FCC" and expressed confidence that under his leadership it "would become an agency that fosters innovation and investment rather than one that inhibits the deployment of new services." He told Powell he would work with him to "rationalize the structure" of agency so services, rather than service providers, are subject to regulatory or deregulatory framework. ------ Communications lawyers on Washington Legal Foundation panel on FCC and Communications Policy split 2-2 on whether major revamp of FCC was needed immediately. "It's hard to disagree about the need to overhaul the FCC," said attorney Nick Allard of Latham&Watkins. Moderator and former FCC Chmn. Richard Wiley did disagree, sharply, with Allard -- who called for abolishing 4 of 5 commission seats and actively involving Commerce Dept. and NTIA in regulation of various communications industries. What FCC needs, countered Wiley, is more delegation of authority to staff and more rapid decisions -- something that can be accomplished with present structure -- and "Chmn. Powell can get it done." Because of congressional respect for Powell, any agency reform "is going to come first from the FCC itself," rather than from Hill, Wiley predicted. Panelist Charles Kennedy of Morrison&Foerster generally agreed with Allard, while David Poe of LeBoeuf, Lamb, Greene&MacRae partly sided with Wiley. Commission doesn't need revamping for short term, Poe said, but major overhaul may be necessary in long term. Kennedy said FCC operations were "outmoded... We are going to have to make some fundamental changes... if things don't turn around." Allard listed 10 questions that must be answered on FCC's future, including whether competition was prerequisite for deregulation or was it other way around and did Commission's current organizational structure make sense. Poe said Powell had shown "he's not afraid to grapple" with tough issues and that there were many "ambiguities and contradictions" in 1996 Telecom Act. "Statutory reform" of FCC is needed, he said, but it will be very hard to get Congress to pass legislation on issue. On digital TV, Poe said FCC had tried to push broadcasters into new technology but "you can't make a market if the market isn't there." ------ FCC set deadlines March 28 for comment on its proposed rulemaking on DTV must-carry issue following publication of notice in Federal Register. Commission tentatively concluded in Jan. against imposing dual-carriage obligations on cable operators during current digital broadcasting transition but left issue open for final determination. Comments are due May 10, replies June 25. ------ Rep. Boucher (D-Va.) challenged TV copyright owners concerned about piracy from digital set-top boxes to "present a united front" on what home copying they would accept in exchange for encryption technologies. At kickoff of American U. Washington College of Law's new Glushko-Samuelson Intellectual Property (IP) Clinic, he said he hoped Congress would approve measure akin to Sec. 1201(k) of Digital Millennium Copyright Act. That Act requires VCRs to respond to technologies encoded on videocassettes to stop people from copying films where there's no reasonable expectation of being allowed to do so (as, for example, when movies are rented from video store). Folder Name: Cable Open Access Relevance Score on Scale of 100: 79 ______________________________________________________________________ To review or revise your folder, visit Dow Jones CustomClips or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.) ______________________________________________________________________ Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved
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