Tales of the Sausage Factory

Adelstein To Go To RUS, But When?

In a not entirely unexpected move, FCC Commissioner Jonathon Adelstein will shift over to the RUS program. One would be hard put to think of anyone better qualified to oversee spending to stimulate rural broadband deployment (granted, as regular readers know, I am huge fan of Adelstein’s and hardly impartial). Adelstein comes from a rural state (South Dakota) and has long been a champion of rural issues — particularly broadband and wireless deployment — at the FCC. Overseeing a program to spend $2.5B explicitly on rural broadband seems tailor made for Adelstein, especially if this is just the “down payment” for making sure that we make the benefits of high-speed access available to all Americans.

When Adelstein will get a chance to shift over, however, is less clear. The FCC has dropped down to the bare minimum for a functioning quorum of three commissioners. The Administration has now officially nominated Julius Genachowski for FCC chair. In theory, the Senate could hold a hearing, confirm Genachowski, and then shift Adelstein over to RUS at any time. In practice, however, some other considerations intervene. And while a few months might not normally make much difference in the grand scheme of things, the RUS, like the NTIA, is very busy at the moment setting the ground rules for the availability of the stimulus money. No one wants to show up after the rules are already settled, especially if you have some significant experience that would give you some strong ideas on how to spend the money effectively.

Some elaboration and speculation below . . . .

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Tales of the Sausage Factory

Adelstein Is Right On FCC Authority to Launch An Investigation Into Arbitron Portable People Meter.

FCC Commissioner Adelstein wrote Chairman Martin a letter yesterday asking Martin to launch a formal inquiry into Arbitron’s use of the new portable people meter (PPM). As I noted back in September when the FCC put the Petition for an inquiry out on Public Notice, this issue means a lot to minority-oriented stations and their audiences, as they believe the PPM undercounts listeners to minority radio programming.

Also as I said back then, I think the FCC has very broad authority to investigate just about anything related to its core mission of, in the words of Section 1 of the Communications Act, “to make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, for the purpose of promoting safety of life and property through the use of wire and radio communications.”

Mind you, having the power to launch an official inquiry does not mean you have the power to actually do anything. The FCC’s mandate is fairly broad, but it has limits. But one of the questions the FCC can ask is: “So, if we discovered something we didn’t like, what could we do about it?” That answer may be nothing more than “tell Congress this sucks,” a conclusion the FCC has reached in the past on occasion when it concluded it could take no action under existing law. But it also allows the FCC to explore other options. For example, the FCC could decide that concerns over the ppm make Arbitron ratings unreliable for certain measurements relating to its rules, like determining whether or not a station is in the “top four” for purposes of permitting a merger. Or the FCC could decide, after seeing lots of opinions and legal research from interested parties pro and con, that the FCC does have authority even if it has never exercised this authority. Adelstein cites 47 U.S.C. 257, which requires the FCC to eliminate market barriers to entry. I think a fairly strong case can be made that regulation of ratings services falls under the FCC’s ancillary authority over broadcasting. That’s a little difficult after American Library Association v. FCC (the broadcast flag case), because a ppm is not a “communication” and ALA held that ancillary jurisdiction must regulate an actual communication or transmission rather than simply have some possible impact on the future of television. OTOH, ratings are so clearly integral to the entire broadcasting industry that the connection with the “statutorily mandated” responsibilities and goals of the Communications Act is very strong.

Neither of these views may bear out on close investigation as authority to act. But again, this is why the FCC conducts inquiries. While it is easy to point to things that might have an impact on broadcasting that clearly lie outside the FCC’s jurisdiction, such as building the Sears Tower in Chicago, and easy to point to things that lie squarely inside the authority of the FCC to regulate (such as media ownership limits), there is also a middle ground of things that are rather murky. In a case such as this, where interested parties have submitted a mess of evidence that raises questions on a matter that potentially impacts millions of people getting access to diverse programming, I think the FCC ought to go ahead and have an inquiry.

Stay tuned . . . .

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Tales of the Sausage Factory

Update: Cable Cos Respond, FCC Reviewing.

To update on the question of whether cable companies think they are above the law. According to this piece by Ted Hearn in Multichannel News, all 13 cable cos responded to the FCC’s letter of inquiries (LOIs) issued in response to the consumer complaints. The FCC is apparently now reviewing the adequacy of the response.

Mind you, according to the article, we are still likely to find that the cable cos responded in a less than thorough way, and will necessitate the FCC coming back with another request. But this is merely the usual fun and games by which large companies avoid obeying the law, rather than an outright statement of defiance that the law simply doesn’t apply to them.

I suspect the cable cos will do their best to run out the clock, in the hopes that the next FCC will be more tolerant of their exercise of market power. Whether that is true or not (and it will certainly NOT be true if either Adelstein or Copps is chair), I would hope that all the FCC Commissioners, but especially the two Democrats, back Martin on this investigation and make it clear to the cable cos they will not tolerate any efforts to run out the clock.

As President-elect Obama observed at his first press conference: “The United States only has one President at a time.” Similarly, the FCC has only one Chairman at a time. Certainly when it comes to investigating consumer complaints, all FCC Commissioners need to stand united in making it clear to industry that a time of transition is not a time when you can get away with screwing consumers.

Stay tuned . . .

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Tales of the Sausage Factory

Sixth Circuit Upholds FCC on LFA Limits: A Bad Decision and A Sad Day for Localism, With Possible Silver Lining for Ancillary Authority and Leased Access.

The Sixth Circuit has denied the Petitions for Review filed by local franchise authorities (LFAs) and PEG programmers challenging the FCC’s December 2006 Order limiting the ability of LFA’s to negotiate with telco video overbuilders. (You can read a copy of the decision here.)

I am rather disappointed with the decision, as readers might imagine. Not only do I think limiting the authority of LFA’s to protect their residents is a phenomenally bad idea, I think the court takes a very expansive view of FCC authority over LFAs given the legislative history and the statute in question.

On the other hand, the decision potentially provides a substantial boost both the FCC’s ancillary authority and to its leased access reform order, currently pending before the Sixth Circuit. While I find this rather cold and uncertain comfort at the moment, it’s the best I can do in the face of what has become an utter rout for LFAs and PEG programmers. God willing, a future FCC will conduct the inquiry into strengthening PEG programming Commissioners Adelstein and Copps have repeatedly urged.

Some further analysis of the decision and what it might mean below…

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Tales of the Sausage Factory

YAMA (“Yet Another 'Mission Accomplished'”) On Wireless Carterfone.

“Mission Accomplished” has become a useful catch phrase denoting a declaration of victory so premature as to be ironic, comical, and/or tragic. Sadly, Kevin Martin’s decision to circulate an Order denying the Skype Petition is the latest YAMA (for “yet another ‘Mission Accomplished’”). To refresh folk’s memories, in the Skype Petition, Skype asked the FCC to enforce the Broadband Policy Statement against wireless broadband networks: specifically, the part that says that consumers have the right to attach any device to the network that will not harm the network, and run any application of their choosing.

While not official, Martin has stated that he has circulated a draft Order dismissing the Petition, although Martin indicated at last week’s House 700 MHz hearing that he would dismiss the Petition “without prejudice” (meaning “not now, but try again later if things don’t improve”). Indeed, although none of the coverage of the 700 MHz hearing focused much on this, Martin’s statements and answers to questions indicate that he thinks (a) the C Block open device condition was the right thing to do, and (b) the FCC shouldn’t do anything else on “wireless Carterfone” until we see how the C Block open device condition works out.

While disappointing, this decision is hardly surprising. And, as usual, it is weirdly consistent with Kevin Martin’s First Church of the Market, Reformed ideology and a dash of realpolitik (waste not, want not after all, and if you can make what you think is the right decision serve your political ends, so much the better). Lamentably, Martin clearly has the votes from his fellow Republican Commissioners — although Tate appeared to hedge a bit. Nor do I expect there is much for Copps and Adelstein to do here, other then issue a strong dissent and make sure the damage (in the form of bad precedent) is limited. Indeed, there is a certain appeal to taking a dismissal without prejudice and living to fight another day rather than getting into a fight that may end up with stronger language a future Commission would need to overcome.

Some more analysis below . . . .

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Tales of the Sausage Factory

Nothing Like Biting Industry On The Ass To Get Republicans Hot For Process

OK, color me cynical, but I find this recent bipartisan interest in the fairness of FCC processes a source of some considerable eye rolling on my part. Not because the issue isn’t timely, important, etc., etc. But because it wasn’t until the cable industry started bleating their little heads off that this amazing bipartisan consensus suddenly emerged.

For some background here, I wrote my first major paper on how badly the FCC processes suck rocks back in 2003. I and my employer, Media Access Project, have complained about the crappy way the FCC behaves going back to when the Democrats ran the show and the Media Bureau routinely issued “letter opinions” and developed “street law” that eventually became binding agency precedent. The whole business of how stations could circumvent the ownership limits by engaging in local marketing agreements (LMAs) and joint sales agreements (JSAs) which sold everything but the actual license was bitterly fought by MAP and goes back to the Bush I administration. And yes, I fully agree with the recent GAO Report about how FCC processes favor industry over the public because the long-standing relationships between FCC staff (including career staff well below the Commissioner level) and industry become back channels for critical information and influence.

But it sticks in my craw no end to see Republicans come alive to this issue for the first time because it bit the cable industry on the rear end instead of sticking it to the public interest community.

Nor am I overly thrilled with my friends and colleagues in the movement who seem to believe that Martin invented this mess. Certainly Martin has used every procedural device and negotiating tactic available to him. He is, as I have observed on more than one occasion, a hard-ball player. And his hrdball negotiating tactics — a huge list of agenda items, last minute negotiations, everything Adelstein complained about in his concurrence at te last meeting — have clearly generated ill-will and suspicion among his fellow Commissioners.

But when I think about all the crap that Powell pulled as Chairman with nary an eyebrow raised and compare it to the conduct of this FCC, I could just weep. Martin met with us in the Public Interest Spectrum Coalition (PISC) on multiple occasions when Senate Democrats wouldn’t even invite us to testify. And I still remember back in 2003 during the Comcast acquisition of AT&T Broadband that it was Martin who insisted that Powell issue a written denial of our motion to get access to certain agreements so that we would have a basis for appeal.

So while I normally am in full agreement with my friends at Free Press, I must vehemently dissent from their apparent insistence that Martin has debased the FCC’s processes to new depths. Martin’s FCC is such an improvement over the pro-industry/anti-public interest/don’t bother us because we pre-decided it cesspit that was the Powell FCC that these allegations can arise only because Free Press did not exist when Powell was running the first dereg show. As George Will noted, Michael Powell met a total of twice with public interest groups (once with my boss, Andy Schwartzman, and once with Consumers Union’s Gene Kimmelman) and conducted exactly one public hearing outside of DC before issuing his ownership order — in far off Richmond Virginia.

And as for the recent Tribune merger — please! I certainly disagreed with the result, but Martin has nothing on Powell’s former Media Bureau Chief Ken Ferree. Ferree twisted FCC law and process like a pretzel to give Tribune a waiver extension it didn’t deserve. This is the same Ken Ferree, btw, who informed the public interest community that the FCC would hold no public hearings on media ownership because the FCC didn’t need “foot stomping” to make a decision. Indeed, the list of the sins of Ken Ferree — whose arrogant disregard for process remains unsurpassed in the annals of the FCC — could fill several more pages of blog postings.

And while all this crap was going on, we had nary a peep from the Republicans in Congress. But as soon as Martin made it clear he intended to actually enforce the existing law against the cable industry, SUDDENLY Congressional Republicans woke up to due process issues and beagn to fret about “abuses of power” and Martin being “out of control.”

I can forgive my colleagues in the movement who weren’t around the first time. And I understand the Congressional Democrats, who were either out of power when Powell was running the show or simply not yet arrived on the scene. Certainly Markey and other Congressional Democrats were equally loud in their complaints about process when Powell sprang a spanking new “diversity index” on the public with no warning as they have been n recent weeks against Martin — but being in the minority their protests amounted to little. But when I hear Republicans like Barton and Upton, who positively applauded sticking it to the public time and again, rush to the defense of the poor beleaguered cable industry on process grounds, I have to say something. Even for the self-serving cynicism and hypocrisy that passes for principles in the Republican party these days, this is just too much.

I certainly hope the concerns of Mr. Boehner, Mr. Sunnunnu, and the other Republicans that have suddenly become obsessed with process persist after their master in the cable industry get what they want.

Stay tuned . . . .

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Tales of the Sausage Factory

Time For Some Hot Bi-Partisan Action on Cable: Or, Why Copps and Adelstein Need to Work With Martin Here Part I

I gotta hand it to the NCTA – they really know how to spin the press. Given the outrageous excesses of market power displayed by incumbent cable operators, you would imagine that activists would leap at the opportunity offered by Kevin Martin to reign in cable market power – regardless of whether one likes Martin personally or thinks he is a Bellhead or industry tool in other respects. But no, over the weekend, the NCTA has done an exemplary job of spinning the upcoming sledgehammer to cable market power as a bad thing.

I am talking primarily about the news that the FCC may invoke the “70/70″ provision of Section 612(g) of the Communications Act (codified at 47 U.S.C. 532(g)). For those not as obsessed with the Communications Act as yr hmbl obdnt, this provision states:

[A]t such time as cable systems with 36 or more activated channels are available to 70 percent of households within the United States and are subscribed to by 70 percent of the households to which such systems are available, the Commission may promulgate any additional rules necessary to provide diversity of information sources. Any rules promulgated by the Commission pursuant to this subsection shall not preempt authority expressly granted to franchising authorities under this subchapter.

Now you would think anyone who opposes media concentration would be jumping for joy here, wouldn’t you? At last, a clear source of authority for the FCC to regulate cable in the name of diversity, and a directive from Congress to do it (without preempting local franchise authorities). And one would certainly expect that the Democratic Commissioners, Copps and Adelstein, who have repeatedly shown themselves stalwart champions of diversity and enemies of consolidation, would rush to seize the moment. But while I hope the later is true, some normally sensible people are buying into the cable spin that this is somehow bad because (choose however many apply):

A) It’s an “archaic leftover” of another time and nowadays cable is “highly competitive.”

B) It’s not really true that the 70/70 test is met anyway so the courts will just reverse it.

C) Kevin Martin is an evil Bellhead who has it in for cable, wants to deregulate broadcast media, and shafted local franchising authorities, so you know this must somehow be evil, even though it is something media reform advocates have fought for over 20 years to achieve.

D) Somehow, this is just an effort to distract us from the fact that Kevin Martin is an evil Bellhead who eats puppies and throws kittens into trees for his amusement.

E) Martin is just slapping the cable guys around because they didn’t do family tier.

G) Somehow this helps Kevin Martin deregulate the broadcast industry.

Having spent the last several years trying to get the FCC to recognize the goddamn truth that 70/70 was met years ago, and trying to get the FCC to address leased access and carriage complaint issues, the 30% cable ownership cap, and a bunch of other reforms to address cable market power, I am just a shade peeved to see folks who should know better eating out of NCTA’s hand. Because public policy is not about whether I like or dislike the current FCC Chair or whether I would rather he focus on reigning in telcos rather than cable cos. It’s about what is the best public policy. And what Martin has put out for a vote: 70/70, reform of leased access and the carriage complaint process, and reaffirming the 30% cable ownership cap, are all things justified by the record and urgently needed.

We have already seen that when the Democrats work with Martin to protect independent programmers, good things happen. Holding the cable operators accountable under the set-top box law, letting The America Channel arbitrate its case against Comcast, these are areas where Copps and Adelstein recognized that their interest in promoting diversity and free expression converged with Martin’s interests in restricting cable market power and worked together to create well-crafted rules that promote the public interest without selling anyone out. This is that “bipartisan” thing everyone claims they want – work together where you can, oppose each other when you must, and always keep in mind the public interest rather than your partisan ends.

Below, I run through some background on what’s going on — especially with the 70/70 test. Since that will make this ridiculously long, I will save for Part II why Copps and Adelstein need to seize this opportunity before the NCTA gets a chance to work its mind-clouding magic and once again get a quorum to vote that slavery is freedom and market power is competition. And, since Martin’s motives appear to absolutely rivet everyone’s attention, I will give my best speculative guesses followed by my explanation of why Martin’s motives don’t matter. Because, as in all good politics, Martin has maneuvered it so that he will get his political pay off whether the Democrats vote for the cable items or not. So rather than waste the best chance at cracking cable market power in the last 20 years and give Martin a political victory anyway, the only sensible thing to do is vote for the items and make it clear that doing the right thing in cable over here doesn’t give Martin a pass on previous bad Orders (like preempting local franchise authority) or give a license to deregulate broadcast ownership.

More below . . . .

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Tales of the Sausage Factory

700 MHz Appendix: A List of All My Posts on The 700 MHz Auction Proceeding

Well, it’s been a fun couple of months. I expect we will see more action on the actual implimentation of 700 MHz Auction, new developments, and so forth. But I’m rather hoping to ratchet 700 MHz back from overwhelming white-whale-type obsession to just one more spectrum item amidst the spectrum and non-spectrum stuf I cover. For example, the M2Z application has taken a serious turn for the interesting.

So, preserved for posterity, and because it makes my life easier than going through the archives, I list every TotSF 700 MHz Auction post to date.

Stay tuned . . . .

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Tales of the Sausage Factory

Assessing the 700 MHz Order Part II: “C” Does Not stand For “Crap;” Why the Wireless Carterfone Condition Is A Big Win.

Few things in the last few days have generated more discussion and overall pessimism in the Order than the C Block “wireless Carterfone” or “network attachment” conditions. “A tease,” says Art Brodsky. “Crippled by loopholes,” opines Susan Crawford.

“Not so fast!” Says yr hmbl obdnt blogger. In point of fact, there is a a hell of a lot here to like in the C Block conditions. Not just for trying to get actual devices attached, but in terms of FCC precedent and broader spectrum policy. This is an “Eyes on the Prize” moment, similar to the preliminary decisions that culminated in Brown v. Board of Education. We did not win the grand prize, but we got a lot good precedent for future spectrum reform.

Further, as I explain below, I do not think the conditions the FCC imposed here are meaningless. To the contrary, I think the rules are about as aggressive as possible to draft (as I worked hard with Commissioner Adelstein and his staff to think of anything I could possibly add to them). But at the end of the day, what matters is the political will. If the next FCC (which will be the FCC that enforces this) wants to give these license conditions meaning, it has the tools to do so. If a future FCC wants to make this meaningless, then there is nothing we can do no matter how well we draft things.

And I will add that if anyone has some better ideas on what to put in as rules, they should certainly file Petitions for Reconsideration

My analysis of why the C Block conditions do matter below . . . .

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Tales of the Sausage Factory

FCC loses Barry Ohlson

At the conclusion of yesterday’s meeting, Commissioner Adelstein announced the departure of Barry Ohlson. Barry has been Adelstein’s wireless adviser since forever, and Adelstein’s senior legal adviser for sometime. Lord knows he deserves a rest.

Commissioners, of necessity, rely very heavily on their advisers because Commissioners must be generalists. In addition, because the Government in the Sunshine Act prevents the Commissioners from meeting together except at public meetings, a far amount of the drafting and negotiating on FCC decisions happens at the adviser level. Finally, advisers serve an important meeting and screening function for overworked commissioners. A Commissioner must therefore rely on an adviser for a multitude of skills. An adviser must not merely have expertise in the law, policy, economics and engineering of the subject matter, but must have a rare combination of discretion, diplomacy and judgment.

In my opinion, Barry has been one of the best and a fantastic asset to Commissioner Adelstein’s office. I will miss working with Barry on wireless issues, although his successor, Renee Crittendon, has certainly come through her trial by fire in the 700 MHz auction with a fine crown of laurels based on the conditions Adelstein and Copps were able to secure for enforcement of the device open access rule in the C Block.

So good luck to Barry Ohlson, wherever he ultimately lands. Who knows, perhaps someday he will be back on the FCC’s 8th floor, but as a commissioner instead. After all, Kevin Martin got his start at the FCC as adviser to Commissioner Furchgott-Roth. I can hope, anyway.

Stay tuned . . . .

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