Analyzing all the various leaks to the media about the FCC’s plans to relax media ownership rules (CD May 13 p1), the Consumer Federation of America (CFA) and Consumers Union (CU) said the new rules would lead to consolidation of the 2 most important sources of news -- newspapers and local TV -- for as many as 70 million U.S. households. CFA and CU argued that the FCC proposal effectively would gut the public interest standard of the Communications Act and would afford less protection for media mergers than the antitrust laws traditionally did for other kinds of mergers. “The Justice Department doesn’t do democracy, they do commerce,” CFA Research Dir. Mark Cooper said. The FCC is set to vote June 2 on the draft proposal. CFA and CU said their own sources within the FCC confirmed the media reports on which they based their analysis. “Unfortunately, the proposed rules circulated by the FCC are driven by political deals and deregulatory ideology, not rigorous analysis or First Amendment principles,” said Gene Kimmelman, CU senior dir.- public policy. Cooper, who wrote the analysis, said the FCC draft order ignored audience size, actual patterns of media use and the dramatic difference between entertainment and the dissemination of news and information. The analysis said mergers would be allowed in 140 concentrated local markets and in as many as 100 of the local markets representing nearly half the national population there already was one dominant newspaper. Allowing a merger between a dominant newspaper and a large TV station would create a local news giant that would threaten alternative news viewpoints, Cooper and Kimmelman said. In those markets, Cooper said, one company would have half of the total audience and half of the reporters. They criticized the idea of allowing cross- ownership in places other than small rural areas, such as Atlanta, Louisville, New Orleans and San Antonio, where one newspaper would have a 90% or larger share of the newspaper circulation and a merger typically would attract 1/3 of the TV audience. CFA and CU said the FCC proposal failed to properly define markets by ignoring the fact that almost half of all broadcast stations did not provide news and would set a “dangerously low standard” for competition in local media markets by allowing the count of major news media voices to decline to as low as 3 or 4 in many markets. The groups also charged that the draft appeared to be driven by a “results- oriented political agenda.” One example they cited is that UHF stations appear to be discounted for purposes of the national cap on network ownership of local stations, but not for purposes of the cross-ownership and the duopoly rule. CFA and CU proposed that no mergers between TV stations and newspapers be allowed if the market was or would become concentrated because of the merger, that no mergers involving TV stations be allowed if the same conditions existed. At the beginning of a news conference discussing the analysis, Kimmelman wryly noted that none of the major TV networks were covering the event. Cooper later said he didn’t expect that the new analysis would necessarily sway the Republican members of the Commission. “The battle over media ownership doesn’t end on June 2. It begins on June 2” when people and communities react to a wave of consolidation, he said.
The FCC maintains a “cozy relationship” with the telecom and broadcast industries, taking more than 2,500 trips paid for by the industries to the tune of $2.8 million over the last 8 years, the Center for Public Integrity charged in a new report. That was in addition to $2 million a year in official travel funded by taxpayers. “The report… reveals more than ever before just how incestuous the relationship is between the Federal Communications Commission and the broadcasting and cable industries it is supposed to regulate. The idea that the FCC can render an objective, independent judgment about media ownership is laughable,” said Center Exec. Dir. Charles Lewis. An FCC spokesman said it was important for Commission officials to get outside the Beltway to exchange information with a wide variety of groups and to get a wide variety of opinions. He said some of the trips are sponsored by universities and some were for technical conferences. In the report itself, Comr. Abernathy said she believed in meeting with an array of people and such trips provided crucial opportunities for information-gathering. The report also quoted an FCC ethics official as saying each trip was scrutinized to determine whether it was legal and “seemly.” Other FCC officials said those trips were important for learning what each industry was doing. The report said FCC commissioners and agency staffers attended hundreds of conventions, conferences and other events all over the world, including Paris, Hong Kong and Rio de Janeiro, staying in such high-priced hotels as the Bellagio in Las Vegas. The report said the top destination was Las Vegas, with 330 trips, 2nd was New Orleans with 173, 3rd was N.Y. with 102, and 4th was London, with 98. Other popular destinations included Orlando, San Francisco, Miami, Anchorage, Palm Springs, Buenos Aires and Beijing. The biggest industry sponsor of the trips was the NAB, which paid $191,472 for 206 FCC officials at its events. The center also unveiled a 65,000-record, searchable database containing ownership information on virtually every radio station, TV station, cable system and telephone company in America. In its report, the center analyzed media ownership in the home towns of the 5 FCC commissioners. Of the 203 commercial radio stations in those 5 home towns, 50 are owned by 4 publicly traded, out-of-state radio conglomerates and 27 by radio giant Clear Channel Communications. The cable systems in the 5 communities are controlled by 4 companies -- AOL Time Warner, Advance/Newhouse, Insight -- and one locally owned company. Of the 20 network affiliates in the 5 cities, 14 are owned by out-of-state companies, including 2 each by News Corp. and Hearst-Argyle. The center said the FCC was too dependent on information from the companies it regulated in making its regulatory decisions.
When AOL wanted to merge with Time Warner back in 2000, critics feared the marriage of such a large content company with an Internet service provider would put a stranglehold over a relatively new communications technology -- Instant Messaging (IM). The federal govt. agreed then, placing as one of the conditions on the merger a requirement that the new company work toward developing interoperability for IM that would allow other companies to provide IM services that would let their customers communicate with AOL’s IM customers.
Changes at Sprint: William Esrey retires as chmn., succeeded by CEO (Gary Forsee; Howard Janzen, ex-Williams Communications, named pres.-Global Markets Group; Michael Stout, ex-GE Capital, becomes exec. vp-CIO; Bruce Hawthorne, ex-King & Spalding, appointed exec. vp-chief staff officer… Nominated by NARUC to the Federal-State Joint Board on Separations: John Burke, member of Vt. Public Service Board; Paul Kjellander, Ida. PUC pres.; Judith Ripley, Ind. Utility Regulatory Commission comr… Brian Urban, ex-Unilab, named CFO, Gemstar-TV Guide, replacing acting CFO Paul Haggerty, who returns to News Corp… New Belo board members: France Cordova, U. of Cal., and Wayne Sanders, ex-Kimberly-Clark… Anne Doris promoted to Cox vp-system mgr., southern Ariz… New Cable Center board members: James Chiddix, AOL Time Warner; James Duratz, Barco/Duratz Foundation; David Zaslav, NBC Cable Networks… Comr. Frederick Butler was reappointed to his 2nd term on N.J. Board of Public Utilities… Comr. Connie Murray was reappointed to her 2nd PUC term in Mo.; Hannibal attorney Robert Clayton succeeds retiring Comr. Sheila Lumpe… Me. Senate confirmed appointment of new Comr. Sharon Reishus to PUC.
The FCC entered a consent decree with Qwest Wed. in which the company agreed to pay the govt. $6.5 million and admitted violating a ban on providing long distance in its territory before receiving Commission approval. The payment eclipses a $6 million fine the FCC levied on SBC in Oct. for violating a condition of its 1999 merger with Ameritech, which the agency touted at the time as its largest fine ever.
Rural ILECs and their competitors agreed in comments filed Mon. at the FCC that the advent of competition in rural areas was placing a strain on the universal service program but they offered widely divergent ways of fixing the problem. The comments responded to a variety of questions and recommendations by the FCC and the Federal State-Joint Board on Universal Service, generally about the process for designating competitors as eligible telecommunications carriers (ETCs) and the concept of portability.
CTIA, NAB and PCIA planned to file an intervenor brief late Wed., siding with the FCC and asking that the U.S. Appeals Court, D.C., deny a challenge by environmental groups to the Commission’s environmental requirements for towers. Earlier this year, the American Bird Conservancy, Forest Conservation Council and Friends of the Earth asked the court to direct the FCC to prevent the building of new towers until it completed a program-wide environmental impact statement on its tower licensing decisions in the Gulf Coast area. The groups also sought a halt in new tower approvals until the Commission implemented requirements for bird protection measures and initiated certain public participation procedures. The groups cited alleged FCC violations of the National Environmental Policy Act (NEPA), the Migratory Bird Treaty Act (MBTA) and the Endangered Species Act (ESA). They charged that towers killed 4-5 million birds annually. CTIA Gen. Counsel Michael Altschul said: “While we dispute the scientific basis for these figures, they mean nothing without some context. A recent University of Wisconsin study found that domestic cats kill between 7.8 and 219 million birds annually just in rural Wisconsin.” The Forest Conservation Council and other groups had petitioned the FCC earlier this year to require environmental assessments under NEPA for 5,797 antenna structures on the Gulf Coast that they said were harming migratory birds. The broadcast, public safety and wireless towers challenged by the groups cover a coastal region that spans 6 states. The NAB, PCIA and CTIA intervenor brief wasn’t available at press time. But CTIA said its filing noted “tower siting decisions are the result of purely private actions, with no federal funding, and minimal oversight, control or participation by the FCC.” CTIA said that when a tower was sited, there was no federal action that fell under the purview of the ESA, which controlled an “agency action;” the MBTA, which oversaw the conduct of hunters or poachers; or NEPA, which regulated a “major federal action.” CTIA said that when a tower was sited, there was no federal action for those statutes to regulate. It also said those laws don’t apply to tower builders, “as they are neither government agencies nor hunters.” The FCC, in a response brief filed late Wed., said because the Commission hadn’t “unreasonably delayed” acting on the 2 migratory bird matters that the groups said were still pending, they aren’t entitled to the extraordinary relief of mandamus to compel agency action. The FCC asked that the court turn down the petition for mandamus. The D.C. Circuit directed the FCC March 31 to respond to the mandamus petition and discuss the factors in a 1984 ruling, Telecommunications Research & Action Center v. FCC, for determining whether an agency’s action had been delayed unreasonably. The Commission told the court that the groups had participated in meetings held by the Fish & Wildlife Service Communications Tower Working Group, which was formed to develop research on the impact that towers might have on birds. They have participated in other proceedings pending before the FCC, the Commission said. In the matters cited in the court challenge, however, the FCC hasn’t acted, or failed to act, in a way that would warrant mandamus, the agency said. In the case of the Gulf Coast petition, which was filed in Aug. 2002, and a Jan. 2002 order by the Wireless Bureau, neither has “been pending for as long as even 18 months,” the FCC said. “That does not constitute an unreasonable delay, especially when, as here, the agency faces no statutory deadline.” The FCC also said the extent of the claimed injury to migratory birds raised in the petition was “speculative and the FCC has more substantial and pressing priorities that require immediate attention.”
FCC Chmn. Powell pledged Thurs. a more “proactive approach” to environmental and historic preservation issues related to tower siting, ranging from better coordination with other agencies to stepped-up enforcement. Under an “environmental and historic preservation action plan,” he told reporters the Commission would take up a proposal addressing human radiofrequency exposure and open an inquiry to evaluate the impact of towers on migratory birds. Powell also wrote Thurs. to Fish & Wildlife Service Dir. Steven Williams suggesting the agencies agree on streamlining measures, such as identifying tower categories that posed little risk to endangered species and could be excluded from routine review under the Endangered Species Act (ESA).
Stakeholders who are deploying Enhanced 911, including state regulators, wireless carriers and public safety officials, told the FCC Tues. that coordination efforts were improving, in part due to a culture shift toward more cooperation. But at the first meeting of the agency’s E911 Coordination Initiative, they cited remaining challenges, including the raiding of state E911 funds for other purposes and the extent to which new wireless devices should be built with E911 in mind. National Emergency Number Assn. Pres. John Melcher said a new estimate forecast that it would cost public safety agencies $8.4 billion over the next 5 years to implement wireless E911 in every county.
The FCC this month made 2 enforcement decisions that had legal significance because they asserted the agency’s jurisdiction in interconnection disputes, FCC Comr. Abernathy said at an FCBA seminar Mon. The seminar offered lawyers basic information about the FCC’s enforcement activities. Abernathy said there had been uncertainty about the Commission’s authority under Sec. 208 of the Communications Act and it could be resolved only in a complaint proceeding. She said the cases, which involved CLEC complaints against SBC and Verizon (CD April 18 p5, April 24 p8), were significant not because of the merits as much as the fact that “the Commission has now grappled with this difficult jurisdictional question and we unanimously found that Sec. 208 does provide jurisdiction to adjudicate interconnection disputes.” She said the courts would have the final say on the issue but she expected them to agree with the FCC. She emphasized, however, that she thought the agency’s involvement in adjudicating violations of interconnection agreements would be limited. There are 2 reasons for that, she said: (1) Sec. 208 would apply only if the complaining party had adhered to all the requirements of the interconnection agreement, including “change-of-law provisions that govern how FCC decisions will be implemented.” A CLEC can’t file an FCC complaint before going through the contractually prescribed steps, she said. (2) A carrier that invokes arbitration by a state commission and loses has no alternative but to file an appeal in federal district court and can’t “collaterally attack the state action before the FCC in a Sec. 208 complaint.”