Tales of the Sausage Factory

The Boston Tea Leaf Party

Those interested in a great eye witness account of what happened at the FCC hearing in Boston on February 25 should read fellow Wetmachiner John Sundman’s piece on the part he saw (including the reception afterwards). But after listening to the FCC’s video archive, reading the statements, and reading the coverage, I’m willing to read the Boston Tea Leaves and see where we are so far and how I think this ends up.

Speculation below . . . .

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Tales of the Sausage Factory

Potentially Much More At Stake In Michigan Than PEG — NAB, PBS and Folks Worried About Bundling of Services Better Wake Up And Pay Attention!

Compared to the primary battles in Michigan, the fight between Comcast and local governments about Comcast’s decision to migrate Public Educational and Government (PEG) channels to digital seems like small potatoes. But potentially, the lawsuit filed by the cities of Dearborn and Meridian in local federal court could have huge impact on how cable operators carry broadcast television and even how they bundle video services with their voice and broadband offerings.

For those just tuning in: Comcast has decided take advantage of Michigan’s franchise reform law and forcibly migrate PEG channels to digital tier, which will require anyone who wants to see PEG channels to get a digital box and will put the PEG channels waaaay up the dial where channel surfers rarely tread. This has prompted angry protests by city officials, and even a reprimand from House Commerce Chair Rep. John Dingell (D-MI). While other cable operators have used such tactics in the past, Comcast appears to be the first operator to do this for an entire state at once.

As a result, Dearborn and Meridian challenged Comcast’s right to move the PEG channels without consent by the localities in federal court. But while this focus remains on PEG, it goes much further. In 1992, Congress mandated that cable operators must offer subscribers a “basic tier” that consists of the broadcast channels and PEG channels. Congress also prevented cable operators from bundling this “basic tier” with any other service or “buy through.”

For reasons having to do with the Telecommunications Act of 1996, cable operators may no longer need to offer a “basic tier.” But if that’s true, what does that mean for broadcasters? Can cable operators forcibly migrate broadcast channels in the same way they claim they can forcibly migrate PEG? And — looking ahead — does that mean that cable operators will have the freedom to change how they bundle packages? Right now, cable operators generally offer their basic video product and then offer all manner of additional services. But what happens if the “basic tier” requirement is really dead? Will we see cable operators get more aggressive, forcing customers to take additional services if they want video programming?

From where I sit (which is really just looking at the plain language of the statutes), it’s a real muddle. I’m glad I’m not litigating. But if I were the NAB and PBS, I’d start paying real close attention here. Otherwise, they may wake up and discover that they are also going on a forced march migration to digital, even if they can keep their channel position and not end up in the 900s.

Analysis below . . . .

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Tales of the Sausage Factory

Meanwhile….Back at the FCC….

The forces of media consolidation continue to make headway now that the FCC has a full contingent of 3 Republicans and 2 Democrats. At the June 21, 2006 meeting, the FCC, by 3-2 vote, began the process of reexamining the rules on broadcast media ownership. Last week, the proposed order approving the Adelphia transaction began circulating. It has a very narrow outlook and very meager conditions (so far). Procedural moves by Martin could cut off any further public debate or input as early as this Thursday (July 6).

But all is not yet lost. Chairman Kevin Martin had also intended to adopt a rule requiring cable operators to carry the additional digital streams of broadcasters after the DTV transition, the so-called multicast must-carry. The Dems have long refused to go along unless the Commission also resolved the long-pending proceeding to define new public interest obligations for digital broadcasters. Martin had long made it clear that he did not intend to impose any new obligations on broadcasters, and that as soon as he had a third Republican, he would ram through multicast without public interest obligations.

But it didn’t happen. Robert McDowell, the new Republican Commissioner, refused to go along. Either because he didn’t like the idea, or because he didn’t like getting pushed so hard so quickly on a controversial matter, McDowell refused to vote “yes” on the multicast item. As a result, Martin pulled the item from the June meeting.

What will McDowell do on Adelphia? With the Dems dead set against approval without firmer conditions, Martin needs both Rs to toe the line.

More analysis and speculation below . . . .

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Tales of the Sausage Factory

WiFi Turbulence at Logan could be trouble for WISPs, CWNS and Munis.

Sadly, the latest fuss about wifi and airports doesn’t come from an Apple update. As some of you may have read, Logan airport wants to stop Continetal from running its own wifi network. Instead, it wants Continental to pay to use Logan’s wifi network. While this might look like just a local fight, it has big implications for wireless ISPs, community wireless networks, and municipal wireless networks.

The FCC has put out a public notice on the matter. So it looks like I have a new set of comments to file when I get back from vacation (sigh).

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Tales of the Sausage Factory

Tales From the Sausage Factory: Telephone Competition in the U.S.

I’m taking the opportunity to post a little essay I wrote when I moved last March. It illustrates the problems of implementing domestic phone competition in the U.S. I have no reason to believe that anyone in either company (Verizon or Cavalier Telephone) were trying to screw us or were playing fast and lose with the rules. Each one was genuinely trying to do its job, and all the people I talked with were uniformly polite, friendly, and well intentioned. I love well intentioned people, they provide me with such great paving stones that the handcart I’m in rides smooth to the end. . .

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