Stevens Bill Score Card Pre-Mark Up

And what a mark up it will be! Senators have proposed hundreds of amendments (more than 250 at one point, but now down to something over a hundred as deals get done). Meanwhile, the Stevens Bill itself has undergone significant rewrite. You can find the final pre-mark up draft at Jim Baller’s site here. For comparison, you can read about the Democratic substitute here (and my brief summary of same here).

Below, a brief score card on some issues I singled out previously: Opening broadcast white spaces (still in, but facing a “poison pill” amendment from DeMint (R-SC)), program access (dropped by Stevens); Broadcast flag (sadly alive and well); Munibroadband (much improved, thanks in no small part to Jim Baller and the coalition of tech folks, muni orgs, and public interest folks put together by Jim Kohlenberger); and, of course, net neutrality (brought up to COPE levels, with some flavoring added to try to buy off the Christian conservatives).

Most importantly, the telcos have inserted a very nasty joker in the deck, known as “Section 1004.” This Section is designed to rig any post-legislation appeal by giving the D.C. Circuit exclusive jurisdiction over all things FCC. This would be a catastrophe not merely for network neutrality, but for media ownership and just about any other provision of law (and therefore merits a post of its own).

More details below . . . .

It’s a last minute war of manuever, as the Stevens bill careens into mark-up. Usually, when you get several hundred amendments, it’s a sign a bill is still way too controversial and not ready to bring to mark up. But, by God, Ted Stevens is gonna ram this one through if it kills him (and the economy)! He and the Republican leadership want to go home and campaign on a platform that says they brought cable competition and lower prices to America the REpublican way, by totally deregulating the industry and ignoring reality. (Actual competition and lower prices to follow, of course, so please ignore the no doubt temporary lack of competition you will continue to feel for some time. Happily, after this legislation, competition is a “slam dunk”!).

Sadly, of course, the one provision that would actually make real competition possible, the program access provision, got dropped. To refresh the memory, the proposal would have required cable companies like Comcast to make their regional sports programming and video on demand programming available to competitiors on reasonable terms — just as they need to make affiliated programming like CNN or HBO or the Golf Network available. The provision would have plugged the “terrestrial loophole” of the existing law and extended the deadline on the current rules another ten years.

Instead, the Stevens Act only extends existing law another five or so years, with further renewal possible by the FCC.

What happened? The cable cos came in full bore and threatened to pull out all the stops to kill the bill if it included a program access provision beyond extension of the current law. They apparently can live with franchise relief for the Bells (puting up only a modest fight against bthe national bill), live with neutered net neutrality instead of the original Stevens plan, but will fight to the death to keep from sharing their sports or VoD programming.

This should give one a clue as to what provisions really make a difference for competition. But the Bells backed out. They settled for franchise relief and neutered net neutrality and gave up on program access in order to get a bill through. They did not send their CEOs. In fact, they curtailed their previous efforts on program access, suddenly dropping it from their must have demands.

I can only conclude either the Bells never plan to seriously deploy video to consumers or they suffer from the worst case of arrogant optimism on the planet (probably both). The history of cable video competition makes it clear that cable operators will forgo the revenue from selling programming to rival distributors as a strategy for keeping the demand for rivals low. (You can read about this and why works in my previous cable market power for dummies post.) Either the Bells continue to think that somehow they will be the exception (after all,they’re big and used to winning) and cable will deal with them, or they just don’t care about doing video to residential customers.

Anyway, the upshot is that because the Bells have backed off, the program access provision is off the table except in the Dem substitute for the bill as a whole. And I don’t see enough (indeed, any) Republicans voting only for the Democratic version (even if they prefer pieces of it).

Two other provisions offer hope of competition in broadband, if not in video. The provision opening broadcast white spaces and the provision preempting state prohibitions on a href=”http://www.wetmachine.com/item/498″>munibroadband.

White spaces remains virtually unchanged. Senator DeMint (R-NC), at the apparent urging of the broadcasting and cell phone industries, will offer an amendment that would require the FCC to auction access to the white spaces instead of simply making them available. In fairness to DeMint, my free market opposite numbers at Progress and Freedom Foundation have been pushing this nonesense for some time.

As an economic matter, this proposal sucks rocks. Critical to exploiting value from access to the white spaces is that it remain “unlicensed,” i.e., open for common use. I have written about this at length on unlicensed generally here and about white spaces in particular here. I also highly recommend Yale Law Professor Yochai Benkler’s excellent work on the subject, as well as what my friends at the New America Foundation have to say. P&FF justify auctioning access as mximizing immediate return on the public asset and creating a property right, which is just soooooo much more superior to anything else that it must be better than this dumb old “commons” that has worked in WiFi and elsewhere.

Happily, the smart money gives the DeMint bill little chance of passage. But there are always surprises.

The muni broadband provision, which sucked utterly in the first draft, has now been considerably improved to match the generally good version in the otherwise wretched COPE that passed the House. Happily, Jim Baller, who understands municipal law, explained this to me at Esme’s conference last week, because it is still a mass of verbiage. But I take Jim’s word that the final product preempts states that try to ban local governments from offering broadband and gives local governments flexibility to tailor their offerings to fit.

Broadcast flag. Still in there, still sucks. For those just tuning in, this provision would require digital tv and digital radio manufacturers to build all receivers in a way that allows them to recognize a “flag” embedded by the copyright holder that controls whether you can record the video/audio, and if so under what conditions (e.g., will it disappear after some number of days? No copying beyond the first copy?) The good folks at Public Knowledge are leading the effort to kill it. They can use all the support they can get in getting this rancid piece of industry pork stripped out.

As with COPE, the net neutrality provision has attracted the most press and the most controversy. In an effort to get the bill through and persuade folks like the Christian Coalition and the United States Conference of Catholic Bishops, the latest version of the Stevens Bill contains much flowery language how it violates the First Amendment and is illegal for broadband operators to block service based on religious content, or any other content for that matter, but especially religious content, because it would be very nice to be able to go back to framing this as a left v. right dems v. repubs issue.

But, sadly, the meat of the latest Stevens version merely takes the FCC “four freedoms” outlined in COPE (see my network neutrality primer for the full explanation and state of play) and requires the FCC to set up an after-the-fact-adjudicatory process to handle complaints. Like COPE, it strips the FCC of any rulemaking authority to prevent abuses before they happen (as the current rules do), and permits Whitacre Tiering (creating a “fast lane” for third parties that choose to pay more).

Snowe, Inouye and Dorgan will offer their amendment prohibiting Whitacre Tiering. Know one knows how this one comes out, so do what you can to get your Senator in the right place. (Find out how via Save The Internet.)

That wraps up all the provisions previously covered. In my next post, the little joker that threatens to mangle the entire Communications Act.

Stay tuned . . . .

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One Comment

  1. mitchipd says:

    Harold,

    Great post. Thanks for digesting and summarizing all that stuff. Do you know how things went re:

    Section 1004
    DeMint’s white space amendment
    Broadcast flag

    My understanding is that there were no amendments to the revised muni-broadband section which, as you note, is a major improvement from the original version.

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