The FCC has issued the agenda for it’s November 3 meeting. Gone is the proposed Notice of Inquiry on Network Neutrality. And a number of non-merger related items have popped up instead. Meanwhile, the trade press report a hot and heavy debate around forcing AT&T to divest wireless spectrum to create a real competitor (you can read the comments I wrote for Media Access Project here).
My thoughts on all these doings below . . .
A few months back, Robert Atkins and Phil Weiser wrote this paper called a A “Third Way” on Network Neutrality. I recommend reaing the paper, but to summarize: The paper asserts that the NN debate has polarized between the telcos & cable cos, who want an unlimited right to control traffic, and the pro-net neutrality advocates, who want all packets treated equally by the network operator. Atkins & Weiser see this polarization as obscruing the fact that both sides of the debate raise legitimate concerns about market abuse and investment in networks on the one hand, and about government intrusiveness into network management on the other.
Atkins & Weiser therefore recommend an approach they believe addresses both sets of legitimate concerns. Congress should permit network operators to have considerable discretion with tiering — including favoring content based on origin as well as by nature of service. However, to protect consumers from abuses of market power, network operators must (A) fully disclose which packets are favored and why. In this way, consumers can ascertain readily if their lousy connection with mediastreamerA and great connection with mediastreamerB is a consequence of mediastreamerA having a bad service or their ISP cutting a deal with mediastreamerB; (B) Congress should affirm the FCC’s responsibility to monitor the broadband ISP market for anticompetitive abuses and permit the FCC to resolve any abusive practice that may emerge either by adjuidcation or by rule; and (C) the government should provide other incentives — such as tax credits or subsidies — to facilitate broadband deployment.
Recently Dave Isenberg wrote a a strong critique of the paper. Isenberg chastises Atkins and Weiser for falling into what I shall characterize as the attractive trap of the apparently “reasonable compromise.” Isenberg argues that, on the one hand, Atkins and Weiser lack vision. They fail to appreciation of the revolutionary aspects of the internet and the damage to the power of the internet as a disruptive technology if broadband network providers can exercise the kind of control over content and services that Atkins & Weiser would permit under traditional antitrust analysis. On the other hand, Isenberg maintains that Atkins & Weiser fail to appreciate the “Realpolitik” problems of relying on the FCC for enforcement instead of enacting a prophylactic, self-executing rule. Given the potential for agency capture and the length of time it will take the agency to act, a rule which does nothing but set up the FCC as a watch dog with discretion is worse than useless. Only by prohibitting tiering and requiring network neutrality can save the power of the internet as a disruptive technology capable of challenging the core businesses (such as video and voice) of the network providers themselves.
About a month ago, Phil Weiser and I debated this point over on the Public Knowledge policy blog. You can see our back and forth here: Phil’s first post, my response, Phil’s reply to me (with my reply in the comments), and Phil’s final summation.
As folks might imagine, I tend to side with Dave Isenberg on this one, although I recommend the Atkins & Weiser paper to folks interested in alternative views. Atkins and Weiser are no industry shills or ideological Neocons refusing to recognize the potential dangers. And, as I have always said, anyone who wants to formulate real policy rather than foster religious ideology needs to consider other views and recognize where someone else has a valid point. I don’t agree with Atkins & Weiser (for reasons I’ve covered at length in the links and elsewhere), but I’m glad to have considered what they had to say.
Stay tuned . . . .
The U.S. Department of Justice Antitrust Division approved the AT&T/BellSouth mereger without imposing any conditions. By law, the DOJ Antitrust division has no obligation to explain its decision to take no action. Nevertheless, Assistant Attorney General Thomas Barnett did issue a statement explaining the decision to take no action. Apparently, the market has gotten so much more competitive since the DOJ imposed (albeit wussy) conditions last year on the Verizon/MCI merger and SBC/AT&T merger last year that DOJ can’t imagine why this merger might be anticompetitive.
We now bounce over to the FCC, where Kevin Martin has placed approval of the AT&T/BellSouth on the agenda for tomorrow’s FCC meeting. But will the meeting take place? Can Martin get the merger through without conditions? And why didn’t DOJ at least pretend to care and enter into some wussy conditions — rather than just roll over like a good little industry lap dog begging for treats?
Some guesses below . . . .
It’s an old cliche that it’s easy to boil a frog. Don’t drop the frog in the boiling water — he’ll just climb out. Drop him in the pot and raise the temperature a little at a time. Before he knows it, he’ll be dead.
We have that with media consolidation and the non-stop relaxation of the rules. But instead of calling it “boiling,” proponents of consolidation call it “updating.” This attempt to describe relaxing the ownership rules to allow more consolidation as “updating,” when the evidence shows that the last round of consolidation kicked off by the 1996 deregulation has been a disaster for the industry and a disaster for democracy, came up again at yesterday’s media ownership hearings.
Powell tried to frame it as a debate about evidence v. “emotionalism.” He lost because the evidence did not justify his efforts to relax the rules. Now FCC Chairman Martin is trying to frame this as “updating” the rules, when a real “update” would mean forcing the biggest companies to sell off assets to scale back to a healthier size.
My analysis below . . .
The FCC has now announced the schedule for the first of six public hearings on media ownership to take place outside of Washington DC. According to the official announcement, the FCC will hold two separate hearings in the Los Angeles area next Tuesday, October 3. One at USC from 1:30- 4:30 p.m. and the other at El Segundo High School in El Segundo from 6:30-10:30 p.m.
Of possible interest is the fact that the Mayor of El Segundo, Kelly McDowell, is the brother of Republican FCC Commissioner Robert McDowell. As Commissioner McDowell remarked at his confirmation hearing last spring:
> “My oldest brother, Kelly McDowell, is the mayor of El Segundo, California. And if you’ve ever flown
> into Los Angeles Airport, you’ve flown into my brother’s town.“
It certainly makes sense for McDowell to want to have a hearing in his brother’s home town, and for Martin to acquiesce. For one thing, it will certainly raise the visibility of the hearing for El Segundo residents and local press. It makes getting a community location and local coordination easier. Heck, if my brother were mayor somewhere, I’d want to have a hearing in his town. And, as Robert McDowell observed, it’s close to the airport. Given that the Commissioners will be on red-eye flights going home, that has to be convenient.
On the other hand, it raises obvious concerns about giving pro-consolidation folks a ”home court“ advantage. As Mayor, Kelly McDowell is uniquely positioned to encourage witnesses who will support the current FCC’s policy of relaxing ownership rules while subtly discouraging attendance by folks who might challenge accepted FCC positions.
This puts the pressure on Martin to ensure not merely impartiality, but the appearance of impartiality. After the recent reports that — prior to Martin becoming chair — the FCC suppresed studies demonstrating the negative impacts of media consolidation, public trust for the FCC as an institution interested in an impartial investigation and analysis of the facts is at an all-time low.
Martin has already taken a good first step in neutralizing any accusation of bias. The FCC will have a hearing at the USC in Los Angeles before going out to El Segundo. This same location recently hosted a media ownership event sponsored by media activists and attended by FCC Commissioners Copps and Adelstein, neutralizing any ”home court advantage“ for indusry on at least the first hearing.
But the FCC has yet to announce how it will assign seats or provide ”open microphone“ opportunities at either hearing. Nor has the FCC yet announced its witness lists. A highly suspicious audience will look carefully to see if the ”local leader“ pool is stacked with pro-consolidation witnesses, while local leaders, local business folks and residents opposed to consolidation don’t make the list. It is essential to any appearance of fairness that the FCC announce procedures for getting seats and signing up for speaking opportunities well in advance, and adopt procedures that give as many people as possible a chance to speak.
Martin has repeatedly proven himself a man who plays hardball, but an honest game of hardball. He has demonstrated sophisticated political skills while navigating highly controversial issues. Unlike his predecessor Michael Powell, Kevin Martin has proven time and again that he recognizes the value of meeting with people with whom he disagrees, and actually listening to what they have to say.
But real public hearings that foster genuine public input provide challenges for even the most skilled. That’s why Republicans in this administration have assidulously avoided them, preferring ”town meetings“ filled with supporters and lackeys. The media ownership hearings provide an opportunity for Kevin Martin to show his commitment to real openness — if he can resist the urge to use a ”home court” advanatge.
Stay tuned . . . .
As I said last night, the refusal to look at new evidence is what makes the difference between religious conviction and mere operating bias. More recent stories now quote the only FCC source to go on the record (as opposed to unnamed sources) as saying the suppression of the report was ordered by “a senior official,” rather than definitively going up to Powell. Powell denies he ever saw the report or ordered it destroyed.
All the more reason for Martin to conduct an investigation and get this matter resolved. Because I’ve read the study and run it past an economist and, as far as he and I can determine, it is sound methodologically and valuable in the debate on ownership. It should have been published when it came out. If there is a “senior official” at the FCC who ordered it destroyed who is still there, that “senior official” needs to get removed from the process.
So I will start with an apology to Powell for rushing to judgment. It is entirely possible that some “senior official,” entirely unknown to Michael Powell, killed the report to avoid giving Powell news he thought Powell would not want to see. I will add that I wish I lived in a world where my first thought was not “that is just so typical of this administration.” And no, it’s not Powell’s fault that after admant denials that the administration was spying on Americans, it turned out they were, and after adamant denials that the administration did not keep prisoners in secret prisons in Europe, we did, etc. But Powell deserves to have his chance to reply and deserves an investigation at the FCC to resolve the matter once and for all.
Stay tuned.
Author’s note. I have significantly reedited this story in light of the fact that Michael Powell denies seeing the report or ordering it purged and that the only source on record states only that the order came from “a senior FCC official.” It is entirely possible that Powell never saw the study, and that someone much lower down the chain took action on his or her own. But this is why we need a thorough investigation.
“Unfortunately, many have turned this critically important policy debate into a political one, substituting personal ideology and opinion for the facts. If we are to craft responsible media policy for the 21st century, everyone involved in this debate must set aside the rhetoric, put the public interest before political interest and focus on ‘just the facts.’”
So wrote Michael Powell in an Op Ed in USA Today in January 2003. Powell was talking about the FCC proceeding to review its media ownership rules. He believed the facts would prove that deregulating the mass media would not harm local news. If anything, I expect Powell believed it would improve it. Doesn’t deregulation make everything better?
But according to this story by the Associated Press, The FCC conducted a study on the impact of deregulation of the media on local news, only to suppress it when it proved deregulation significantly hurts local news.
I do not believe Kevin Martin knew this report even existed before Senator Barbra Boxer (D-CA) sprung it on him yesterday. But I do think Martin has an obligation to investigate and make the results of the investigation known. If the FCC did suppress the report, then it needs to take steps to ensure that such things will not happen again. Because, while Powell was wrong about the impact of deregulation, he was right about one thing: “Only the facts will enable us to craft broadcast-ownership restrictions that ensure a diverse and vibrant media marketplace for the 21st century.”
A bit of back story below.
How the heck did the Federal Aviation Administration (FAA) get into regulating the wireless industry (both licensed and unlicensed)? The FAA has proposed requiring pretty much any wireless service with an antenna to fill out a form for every antenna and antenna change. Right now, only services with big antennas (like broadcasters) near airports fill out FAA paperwork.
As the FCC gently points out in its own filing, the FAA does not seem to understand just how much this would increase paperwork for the industry — and for the FAA to process. Given that the FAA does not seem to have any reason to think that these antennas will cause rampant interference and bring planes out of the sky, maybe the FAA wants to rethink this?
Other industry groups, such as the National Association of Broadcasters, the Cellular Telecommunications and Internet Association, and various professionals have all stopped by to politely sugest to the FAA that, perhaps, the FAA HAS LOST ITS BLEEDIN’ MIND AND DOES NOT KNOW WHAT THE HECK IT IS TALKNG ABOUT.
What’s interesting for me is that this is yet another demonstration of how the various components of the Bush administration just don’t seem to ever speak to each other. During Katrina, the FCC outshone just about every other federal agency in the competence department. But as the FCC’s Katrina Report (and testimony from my friends in the wireless community who came down to help in the crisis) shows, there were huge problems getting the other government agencies to respect FCC authorized damage control teams and FCC licensed services. Meanwhile, we have the Patent and Trademark Office negotiating a major overhaul of broadcaster rights at a WIPO treaty, with apparently no involvement from the FCC or any other potentially impacted agency. The Chair of the Federal Trade Commission has announced it will set up its own task force on net neutrality — again without any apparent involvement of the FCC.
And that’s just the stuff in my own little corner of the world. Look around Washington these days and you see little effort by the Bush administration to require any kind of cooperation among the various agencies. We get overlap, paralysis and turf wars galore. But we don’t seem to be getting much done.
It’s not all bad, of course. Traditional relationships, like between the FCC and the National Telecommunications Information Administration (NTIA) appear to be working just fine. But something is seriously wrong when the FAA just decides to issue a notice about all antenna structures in the United States, and apparently does not even think about picking up the phone first and calling someone at the FCC and saying “Hi there, we’re thinking of doing a rulemaking on stuff that impacts industries you closely regulate; can we get together and chat first so we don’t horribly embarass ourselves?”
Stay tuned . . . . .
Today marks the 40th Anniversary of Star Trek, now referred to as Star Trek: The Original Series (or just ST:TOS). I make no secret of my love for ST:TOS, and credit it with (among other things) imbuing me with a sense of idealism and optimism against the odds. But few realize how FCC regulation of broadcasting made the creation and syndication of Star Trek possible — and why deregulation has made it so much harder for something like Star Trek to hapen today.
Lest you think I only speak ill of FCC staff, I was quite sorry to see on Mike Marcus’ Spectrumtalk blog that Alan Scrime, Chief of the Policy and Rules Division of the Office of Engineering and Technology, is leaving the FCC to take a job with the Army close to his home in New Jersey.
In the time I’ve been working on unlicensed spectrum issues (which OET handles), Alan has always been a pleasure to work with. A smart fellow who has been just as interested in what the non-commercial folks are doing as he has been with the established players or well-funded start ups, Alan has also displayed considerable patience and willingness to explain things to non-technical folks such as myself.
Sorry to see Alan go, and wishing him luck with the Army.
Stay tuned . . . .
