Tales of the Sausage Factory

The Last Day of (Full Power) Analog TV And Our Post Transition To Do List.

Well, here it is at last. Finally, more than 13 years after the 1996 Act created a scheme to transfer us to digital television by giving all existing broadcasters $70 billion (at the time) in new spectrum rights, the great day of reckoning is here.

Give the FCC and NTIA, especially mid-season replacements Acting FCC Chairman Michael Copps and Acting NTIA Administrator Anna Gomez, massive applause for seeing this through to the end. You guys rock! As one of your 300 Million taxpayer bosses, I’m telling you to sleep in tomorrow. Oh yeah, it’s Saturday.

Once you’re back on Monday, however, and assuming the world as we know it did not end, we have a few items left on the clean up list: Wireless Microphones, LPTV, the UHF Discount for Ownership, and Public Interest Obligations.

This post is dedicated to the memory of Libby Beaty, Executive Director of NATOA. A tireless advocate for the importance of local government and its power to protect consumer interests. Today, Libby tragically lost her battle with lung cancer. She will be sorely missed.

More below . . . .

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Tales of the Sausage Factory

Dave Sez: “It's raining, and I can't watch Charlie Brown in HD.”

Some of you may remember my friend “Dave” who tried to get the $10 DSL deal from AT&T in ’07 when he moved to Sacremento. As I noted at the time, Dave does not get cable TV “on the grounds that 99% of the programming ‘sucks.’” Being a smart and technologically savvy fellow, as well as keeping up on all things media and telecom by reading this blog, Dave went and got his NTIA coupon and bought a converter box and did everything like a technologically savvy consumer should.

Did this bring Dave the wonders of digital television? Sadly, no. But let him tell you in his own words below . . . .

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Tales of the Sausage Factory

Cable Ownership Limits: This Is The Jonathan Adelstein I know

OK, first, as our Great Hero and the real Favorite Son of South Carolina, Stephen Colbert would say: Martin as a true set of huevos grande. On Tuesday, when it looked like he was going down in flames, I opined that Martin wouldn’t risk touching cable again with a ten foot pole and wondered whether he would be relegated to the status of a “lame duck” Chairman. Boy was I wrong. Not only did fight his way back from a total loss to a partial win against the massed might of the cable lobby, but he has emerged determined to go on for another round in bringing cable market power to heel, and this time with no distractions about a la carte.

This time, it’s a vote on the proposed cable ownership limit. Under Martin’s proposal, a cable company may control no more than 30% of the total number of cable, satellite, or other “multichannel video programming distributor” (MVPD) subscribers. As usual, we in the media reform/diversity community have been pushing this for years and, as usual, the cable industry insists it is totally unnecessary, ilegal, fattening, and will mean that the terrorsts win.

So I take a moment to appluad Kevin Martin for his continued courage and willingness to do the right thing on cable, even while making a huge mistake on broadcast ownership. But perhaps more importantly, Jonathan Adelstein has jumped on this puppy and run with it. After the bitter disappointment of this past week’s cable vote, it is a much needed shot in the arm to see Adelstein back in his usual form as a defender of diversity and an opponent of market power. Not to take anything away from Michael Copps, mind, who as usual has a track record of opposing consolidation in cable and has worked with Martin on a host of issues limiting cable market power. I’m just saying that seeing Adelstein act decisively on this one restores my faith that while we may have disagreed on 70/70 (and as usual when these things happen, I’m the one whose right), it was an honest disagreement and not something more nefarious. So while I remain disappointed, I am no longer dismaly disillusioned or dismayed.

More below . . . .

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Tales of the Sausage Factory

Quick On Cable: Martin and Copps Pull Out A Partial Win By Persuading Adelstein To Meet Them Halfway

Well, I’ll have a lot more to say over the next few days. And there were a bunch of very good Orders that came out on other subjects, like Low Power FM and mandatory disclosure requirements for broadcasters. But here’s the summary:

1) The Commission acknowledges that data about the 70/70 threshold remains unclear, and will therefore require that all cable operators must report real subscriber numbers, including all MDU subscribers, for 2006 and 2007.

OK, as regular readers will know by now, I think it was clear that cable penetration passed this threshold long ago. But since we at MAP have been asking the FCC to collect real data on this stuff from the cable operators since 2000, I am pleased with the ultimate outcome. Hell, I was telling Steve Effross of NCTA last night that I’d wait on the result to get real data from all cable operators so that we could do this right.

If I’m wrong on penetration, so be it. This is an empirical question and we should solve it through the obvious expedient of telling cable operators to actually report their subscriber numbers. Three cheers for Kevin Martin for having the courage to stand up to the wholly bought cable subsidiaries in the GOP, and three cheers for Michael Copps for pushing for collecting actual data from cable companies for years now.

As for Jonathan Adelstein. _sigh_ Yes, I’m still disappointed. I get that Adelstein doesn’t like being in the hot seat, that he thinks Martin is a — if you’ll excuse me — martinet who cooks the books, etc. etc. But he is just plain wrong on this one. As noted with copious citations in the MAP filings (see links in comments in previous post) the FCC has always relied on Warrens data and exclusively on Warrens data, which showed cable penetration hovering at pretty damn close to 70%.

And as for the much vaunted Cable 325 Reports that Adelstein and McDowell went on at great length about, I shall refer interested parties to the GAO’s analysis, with the lengthy but descriptive title “Data Gathering Weaknesses in FCC’s Survey of Information On Factors Underlying Cable Rate Changes.” And, as also mentioned in MAP filings, the FCC’s regulatory fees NPRM determined that cable gained 1.5 million subscribers in 2006. If we’re going to include all the FCC data, the fact that everyone (including McDowell and Tate) already voted to find that cable gained 1.5 million subscribers in 2006 should be included in the discussion as well.

But, at the end of the day, Adelstein voted to demand the cable companies provide the data and end this debate once and for all. That counts for a lot. Nevertheless, for me on this, Adelstein comes out of this a lot less like Han Solo and a lot more like Hamlet, spending five acts waffling and causing havoc before finally managing to stab the right villain.

As for Tate and McDowell — hardly a surprise. Given how thoroughly the cable guys appear to own the Republicans, the surprise is not that McDowell and Tate went with the cable boys but that Martin actually went ahead and defied them.

2) Leased Access: The Commission adopts a pretty good Order that will lower the rate, require cable operators to be more responsive, and generally force staff to get complaints processed quickly. Surprisingly, it took some convincing to get Adelstein to go along with this one, as the cable operator’s last minute complaint that they didn’t get enough due process struck a chord. (I love it that industry always discovers due process when they are about to get their comeuppance, but when it’s about shafting us the due process concerns go out the window.) Fortunately, Copps and Martin were able to broker a compromise that the FCC will stay operation of the new rate formula until after they process Petitions for Reconsideration. And surprise! Tate and McDowell dissented. McDowell’s comments about how leased access doesn’t work as an economic model run afoul of the fact that the record contains several examples of programmers that do make a go of it even under the existing abominable rules (such as CaribeVision). But when your “Mr. DeReg Guy” a little thing like facts will not figure into your theorizing.

A minor tweak. The Commission will not apply the new rate to home shopping channels, but rolled that over into a separate rulemaking. Given my general feeling on home shopping channels and the public interest, I can’t complain too loudly about this one. I don’t think it’s terribly needful, but I can live with it.

3) Section 616 Carriage Complaint: The process for independent programmers to file complaints with the Commission was up for major reform. It didn’t happen. Score a kill for the cable guys.

That’s the quick and dirty. I’ll try to have more over the next couple of days. But first I gotta take a little nap. It’s been a Hell of a month.

Stay tuned . . . .

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Tales of the Sausage Factory

700 MHz Endgame: Wholesale Open Access Down, But Not Quite Out.

Yesterday, the House Commerce Committee held its FCC Oversight hearing. As expected, the 700 MHz auction attracted a great deal of attention. As I wrote in previous entries, this was make or break time for wholesale open access. If Commerce Committee Chair John Dingell (D-Michigan) and Telecom Subcommittee Chair Ed Markey (D-MA) voiced strong support, that might push Martin to adopt full wholesale open access in light of Google’s commitment to bid. OTOH, if the House Dems did not back wholesale, then Martin would be unlikely to budge.

Dingel and Markey did not back wholesale open access. Indeed, Dingell backed off slightly from his previous hard-line stance on even device open access (aka, “open access-lite” aka the “Martin plan”), asking for assurances that including such a condition would not hurt auction revenue or limit bidding. Markey, while enthusiastically supporting device open access and suggesting ways to improve it and make it effective, did not mention wholesale at all.

The biggest supporter of wholesale open access was Mike Doyle (D-PA), who gets a huge Sausage Factory cheer for stepping up to the challenge. You can see a clip of him asking the Commissioners where they stand on wholesale open access here. The good news is that Democratic Commissioners Michael Copps and Jonathon Adelstein remained staunch in their defense of wholesale open access as a means of encouraging competition and deployment. Intriguingly, Martin did not slam the idea, but said this was not the place to do it because he had concerns about the incentives for network build out of wholesalers. McDowell remained adamant against (as he did against even Martin’s device open access proposal), although McDowell praised the pending FCC proceeding to open the broadcast “white spaces” for unlicensed use (which I hope he remembers when the time comes). Tate did not answer Doyle’s question (no time), but elsewhere said she was keeping an “open mind” on device open access.

Republicans, with the exception of Pickering (R-Miss) slammed Martin hard for supporting even device open access. To his credit, Martin defended the idea that the auction was not about maximizing revenue but about getting the best policy. But the near-uniform opposition to any conditions on licenses by Republicans, combined with the silence of key Democrats on wholesale, puts Martin in a real bind.

So what happens now? Are there any cards left to play, rabbits to pull out of hats, or Corbemite maneuvers to run that could still save wholesale open access. Yes, but they are very long odds indeed. With the vote now scheduled for July 31, we are just after the two minute warning and down a touchdown and a field goal.

More analysis below . . . .

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Tales of the Sausage Factory

The AT&T Merger Saga Continues . . .

No one could mistake last week’s twists and turns in the proposed AT&T/BellSouth merger for the excitement, titilation and hijinks of the Foley Follies. But by the staid standards of telecom policy, last week’s swirl of activity constituted a veritable Telanovella of intrigue and power politics. Duelling Congressional Committees! Kevin Martin pushes for a showdown, but Dems Michael Copps and Jonathon Adelstein hang tough! Martin stages a “strategic withdrawal,” but schedules a new vote for November 3 after he returns from his long-planned trip to Asia. AT&T offers new concessions, kicking off a fresh round of public comment and criticism of the merger. And what will happen to the Notice of Inquiry on network neutrality that Martin offered the Dems as an incentive to approve the merger? Is it still on the table?

I’m all aflutter, I tells ya. For my continued speculation, as well as my thoughts on the proposed AT&T conditions and how you can still make a difference, see below….

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Tales of the Sausage Factory

Senate Confirms Tate and Copps

Late last night the Senate confirmed Deborah Tate and Michael Copps for the FCC Commissioner slots. I’d like to think it was my eloquence shaming them into sanity, but I doubt it anyone on the Hill reads this blog (Wonkette this ain’t).

My congratulations to new Commissioner Deborah Tate and reconfirmed Commissioner Michael Copps. Sad for me, I will have to work for a living in January after all.

Stay tuned . . . .

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Tales of the Sausage Factory

A 2-1 FCC?

Unbelievably, the vote on confirmation for Deborah Tate (the new Republican replacement for Kathleen Abernathy) and Michael Copps (Dem) (to sit another 5 year term) is delayed. Why? Because Senators act like 6 year olds.

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