Federal Communications Commission (FCC)

The appropriateness of public TV (PTV) stations’ using federal, state and local govt. allocations to fund their proposed ad-supported ancillary and supplementary services was raised by judges of a U.S. Appeals Court, D.C., panel hearing a challenge to the FCC order that permitted PTV stations to solicit ads on their excess nonbroadcast digital capacity. While the arguments of petitioners the United Church of Christ and Media Access Project (MAP) and the FCC focused on whether the statutory prohibition on carrying ads covered PTV’s subscription services and the definition of broadcasting, Judges Raymond Randolph and Judith Rogers showed more interest in issues such as tax dollars’ being used for such services and the tax status of PTV. Randolph asked Kevin Newsom, counsel for the Assn. of Public TV Stations (APTS), the intervenor, whether: (1) There was no prohibition on the use of federal, state and local funds for funding subscription services. (2) PTV stations proposed to use taxpayer dollars for these services to turn a profit. PTV stations weren’t planning on turning a profit from those services, Newsom said, but would plough all revenue generated from them back into the system to broaden their noncommercial educational service offerings. Rogers asked what problems would be created under tax laws if public broadcasters put their spectrum to commercial use and why it would be a good thing for them to do so. Newsom clarified that ad-supported revenue wouldn’t supplant govt. and membership funding. In fact, he said, Sec. 399(B) of the Communications Act, gives broad authority to public broadcasters to use their facilities for remunerative purposes, he said. Referring to FCC counsel Daniel Armstrong’s statement that PTV stations would use excess digital capacity to provide Internet service to rural areas, stock quotes and information on homeland security, Randolph wondered whether the stock quote service by PTV stations would be in competition with cable and other offerings. “You are subsidized and they are not,” he said. Newsom said the Commission had made it clear in its order that it would address such issues. Harold Feld, counsel for petitioners, said it was clear that Congress intended the meaning of “broadcasting” to include subscription services and Congress had no reason to think it had to explicitly prohibit ads on subscription services. Even if the meaning of broadcasting were ambiguous in the statute, the FCC’s order was “arbitrary and capricious” and contrary to past precedent, he said. The Commission in 1951 had rejected the public broadcasters’ plea for limited commercial operations, Feld said, saying it was imperative to insulate noncommercial educational stations (NCEs) from commercial pressures. Armstrong sought to assure the court that the Commission’s order would ensure that the ad-free nature of PTV’s over-the- air broadcasts would continue. The FCC’s order allows ad- support only on PTV’s ancillary and supplementary services, while stipulating that public broadcasters should use a substantial majority of their digital capacity for noncommercial educational services. The same court 15 years ago in National Assn. for Better Broadcasting v. FCC had upheld the Commission’s authority to interpret the term “broadcasting” to not include subscription services. Referring to tax breaks enjoyed by NCEs, Randolph asked whether if there were anything to prevent them from putting all kinds of editorials on their subscription services. Armstrong said that as long as public broadcasters’ tax- exempt status was in jeopardy, there were limitations on their ability to do that.

Senate Commerce Technology Subcommittee Chmn. Brownback (R-Kan.) said Wed. he wanted FCC reform to be a priority for the Commerce Committee this session. In a statement to accompany a Communications Subcommittee hearing on E911, Brownback said he would meet with Committee Chmn. McCain (R- Ariz.) to discuss the committee’s agenda, particularly FCC reform. “How can the Commission be expected to help make E911 a success if the Commission is broken?” Brownback asked, again criticizing the agency for its Triennial Review ruling. “Today we are faced with unprecedented uncertainty in the telecom sector created by fly-by-night rulemaking, public admissions by a Commissioner suggesting he didn’t know what he was voting on and a final product consisting of what appears to be conflicting federal-state jurisdictional standards supposedly derived from one federal standard in the [Telecom] Act.” He said he voted for the Telecom Act, but didn’t recall voting in favor of “regulation by multiple choice.” Brownback also said the process leading to the order “leaves much to be desired.” A spokeswoman for McCain said FCC reauthorization was included in the committee agenda McCain released in Nov.

OPASTCO said Tues. it was upset with way many state PUCs were allowing competitive carriers to receive Universal Service Fund (USF). Group said it would start pushing message to Congress that states were straying from congressional intent of Telecom Act of 1996 and that FCC needed more oversight of PUCs. With OPASTCO members in Washington for annual legislative and regulatory conference, many were planning to meet with members of Congress this week in attempt to put more focus on USF issues, particularly designations of eligible telecom carrier (ETC) by state PUCs.

Verizon agreed to pay $5.7 million to U.S. Treasury to settle FCC investigation into violations of Telecom Act ban on Bell companies’ providing long distance service before receiving authority from FCC. Commission announced it had entered into consent decree with Verizon in which company admitted it had marketed long distance in its local service region on 5 occasions in Jan.-July 2002 through cable TV ads, bill inserts and direct mail solicitations. FCC Chmn. Powell said action demonstrated agency’s “commitment to deterring companies from entering the market prematurely.”

Technology companies opposed petition that asked FCC to require retailers of 2-way voice or data radio equipment, excluding mobile phones, to undertake detailed record-keeping on customers. Dale Reich, self-described retail vendor of used radio equipment, petitioned FCC in Nov. to require retailers of such equipment, including unlicensed devices, to keep records of buyers’ names, addresses, phone numbers, signatures. CompUSA, Intersil, Symbol Technologies, Vanu and XtremeSpectrum jointly opposed petition Fri., citing burdens such requirements would impose without regulatory purpose. Such mandates would threaten market for consumer wireless devices such as Wi-Fi, filing said. “Emerging technologies such as ultra-wideband would be cut off before they can establish a foothold,” companies said. Requested labeling and record-keeping would extend to devices such as cordless phones, wireless speakers, garage door openers, baby monitors and wireless toys, joint comments said. Request would have FCC require ownership tagging for certain radios, including Part 15 devices, used beyond operator’s home area, which would include information such as whether license was required and FCC call sign or file number. “It is simply not feasible for the checkout clerks at CompUSA or Toys ‘R’ Us to interrupt their duties to fill out purchaser-specific paperwork, open boxes and prepare and apply individualized labels,” filing said. Petitioners raised concern that under proposal retailers would have to keep large amount of material “private from unauthorized inspection, yet accessible to a ‘reasonable request’ from law enforcement officials; and a retailer can invite police inspection if it suspects the radios are used unlawfully.” That means retailers would have to make “close judgment calls” on which law enforcement requests were reasonable and “what observations about a customer create a sufficient suspicion to justify showing the records to police,” filing said. Companies said no govt. agency required such detailed level of records for any consumer product other than vehicles. Agere Systems opposed Reich’s petition, citing potential impact on devices that operate under Part 15 unlicensed rules. Agere said petition was without merit, would impose unnecessary burdens on FCC and retailers and would “represent an unwarranted invasion of privacy of the purchasers of such equipment for no legitimate regulatory purpose.” It said Reich had failed to establish problem that record-keeping proposals would address. IEEE group raised similar concerns, including invasion of privacy involving consumer purchases. IEEE 802.18 radio regulatory technical advisory group said proposals “fly in the face of federal preemption of local and state regulation of radio communications devices, which the Commission reserves to itself the right to regulate.” Local agencies don’t have authority over such matters because of federal preemption of state and local regulation of such radio communications devices, IEEE group said.

FCC’s recent mobile satellite service (MSS) order chose less conservative emissions limits to protect GPS from ancillary terrestrial operations than power levels that were advocated by NTIA, private sector and other agencies, including Defense Dept. Five days before FCC adopted order Jan. 29, NTIA raised concerns that out-of-band power limits ultimately approved for ancillary terrestrial service would “significantly degrade” performance of GPS receivers to meet Enhanced 911 accuracy requirements. NTIA and FCC reached agreement that entailed latter’s Office of Engineering & Technology’s soliciting comments “shortly” on what changes, if any, were needed in GPS protection, NTIA Dir. Nancy Victory said.

NARUC is forming 2 task forces to address state-related issues arising out of last week’s FCC Triennial Review order on UNEs (CD Feb 21 p1). Meanwhile, NARUC speakers at group’s annual winter meeting in Washington explored potential ramifications of Commission’s order on states and industry.

NARUC is scheduled to consider telecom policy resolutions at its winter meeting this week in Washington, addressing spam, Internet telephony, emergency spectrum, broadband, universal service and competition. Draft resolutions proposed for adoption would: (1) Call on FCC and FTC to take action against deceptive marketing tactics by mass e-mail advertisers, such as misleading subject lines, false routing information, invalid opt-out provisions. Draft resolution doesn’t take position on no-spam lists that many states are considering, but does urge state commissions to put consumer information about spam on their public Web sites. (2) Ask FCC to reject AT&T petition seeking access charge exemption for voice-over-Internet Protocol (VoIP) telephone service because move would throw into turmoil most existing state and federal universal service and intercarrier compensation arrangements. Draft said FCC shouldn’t consider granting AT&T’s request until it first conducted proceeding, through joint conference with states, to throughly examine impacts. (3) Call for more emergency communications spectrum and more state participation in national emergency communication coordination efforts. (4) Ask Congress, FCC and other policymakers to take stances on wireless and landline technology issues that would encourage broadband Internet access. (5) Ask FCC to consider switch to connection-based rather than revenue-based system for universal service assessments, where carriers’ contributions would be based on quantity of phone numbers assigned to end- users and on capacity of private lines in service; benefits would include more efficient use of number supplies. (6) Ask FCC to open rulemaking on establishing minimum requirements for exchange of customers’ account information when they changed carriers, such as which customer data fields must be exchanged and time frames for information exchange between carriers. Meeting runs through Feb. 26.

Environmental groups took their challenge to FCC’s environmental requirements for antenna structures to U.S. Appeals Court, D.C., last week. American Bird Conservancy, Forest Conservation Council and Friends of the Earth asked court to direct FCC to prevent new towers from being built until it completed program environmental impact statement on its tower licensing decisions in Gulf Coast area. Groups also want new tower approvals halted until Commission implements requirements for bird protection measures and initiates certain public participation procedures.

FCC’s long-awaited and much-lobbied Triennial UNE Review is on agenda for Commission’s open meeting Feb. 13. Most observers said it was doubtful agency would be ready to issue order after Commission voted at meeting and instead would provide news release outlining Commission’s action in broad terms. That approach isn’t unusual and was taken by FCC several times while it was implementing 1996 Telecom Act under tight statutory deadlines. One lobbyist speculated that order probably wouldn’t be issued for another month because it would take staff that long to put substance on decisions and compromises of commissioners at last min.