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FCC Commissioner Meredith Baker

Baker to Leave FCC to Lobby for NBCUniversal

in FCC/People by

WASHINGTON, May 12, 2011 – FCC Commissioner, Meredith Baker, announced Wednesday that she will resign her post on June 3, after which she will begin her tenure as a lobbyist for NBCUniversal.

Baker’s served as one of the five FCC commissioners for less than two years, after being sworn in by President Barack Obama in July, 2009.  Previously, she spent five years during the second Bush administration at the National Telecommunications and Information Administration, where she rose to the top spot in that agency.

Comcast touted the acquisition through a statement from the company’s Washington, D.C. office president, Kyle McSlarrow.

“Commissioner Baker is one of the nation’s leading authorities on communications policy and we’re thrilled she’s agreed to head the government relations operations for NBCUniversal,” said McSlarrow. ”Meredith’s executive branch and business experience along with her exceptional relationships in Washington bring Comcast and NBCUniversal the perfect combination of skills.”

FCC Commissioner Meredith Baker

The Texas native’s announcement comes scant months following her January vote to approve the merger of Comcast Corporation and NBC-Universal.  That merger, which was laden with conditions to ensure its approval, drew criticisms that it put too much power over content and delivery in the hands of one company.

Baker, however, criticized the merger’s process openly, saying on several occasions that it took the Commission far too long to approve and that the conditions were both beyond the scope of the FCC’s authority and the result of duress leveraged by the regulating body.

“[Conditions] have become the cost of doing business with the Agency,” said Baker during a keynote address at an Institute for Policy Innovation event in March. “It devolves into how to get more out of the transaction.”

The move from one of the top posts at the FCC directly to one of the companies that agency not only regulates, but also on which it handed down a major vote earlier this year, has led critics to call out Baker and what they call a “revolving door” between employees of regulatory bodies and the companies they regulate.

“Less than four months after Commissioner Baker voted to approve Comcast’s takeover of NBC Universal, she’s reportedly departing the FCC to lobby for Comcast-NBC,” said Craig Aaron, CEO of media watchdog Free Press, through a statement Wednesday. “This is just the latest – though perhaps most blatant – example of a so-called public servant cashing in at a company she is supposed to be regulating.”

Former FCC commissioners have also assumed lobbying positions for private industry, including former Chairman Kevin Martin who left his post at the FCC in 2009 and currently lobbies for the law firm of Patton Boggs on telecommunications issues.  Former Chairman Michael Powell, a Clinton appointee Chairman who left the Commission in 2005, became president of the National Cable & Telecommunications Association last month.

Former senior attorney at the FCC and current Brooklyn Law School Professor, Jonathan Askin, noted Baker’s impartiality as a commissioner with respect to her previous experience in private industry, but expressed disappointment in her move to NBC.

“I think it’s generally inappropriate for government officials to immediately go and represent a commercial entity that is so vested in the regulatory structure,” said Askin during an interview Wednesday.  “I expected more from this administration and people appointed to positions in it.”

Moreover, Askin questioned how the FCC staffers who worked closely with Baker and remain at the agency will be able to view matters relating to Comcast-NBCU objectively. The solution, he says,  is to rely less heavily on the private sector in recruiting for government posts and more heavily on individuals from academic institutions.

Comcast stood by Baker’s move, noting that the soon-to-be former commissioner’s role at NBCUniversal will be firewalled from her previous work at the Commission.

“Commissioner Baker did everything in concert with FCC counsel,” said Sena Fitzmaurice, Vice President of Corporate Communications at Comcast, during an interview Wednesday. “This all happened several months after the [Comcast-NBCUniversal merger] review.”

Fitzmaurice noted that talks with Baker did not begin until as recently as four to six weeks ago.  Restrictions on her position will preclude her from working on any matters relating to the Comcast-NBCUniversal merger “forever,” or lobbying political appointees for the duration of the Obama administration.

Baker may, however, contact and lobby representatives in Congress.

“I am privileged to have had the opportunity to serve the country at a time of critical transformation in the telecommunications industry,” Baker said Wednesday through the statement announcing her resignation. “The continued deployment of our broadband infrastructures will meaningfully impact the lives of all Americans. I am happy to have played a small part in this success.”

 

FCC Approves Qwest-CenturyLink Merger

in FCC by

WASHINGTON, March 21, 2011 -The Federal Communications Commission approved the merger of telecommunications carrier, Qwest Communications, and internet service provider, CenturyLink.

Following the completion of the merger, Qwest will become a subsidiary of CenturyLink.

The companies must now wait for approval from the state of Oregon before they can formally merge. Washington, Minnesota and Arizona have already approved the action.

The Commission imposed broadband deployment requirements to the merger which mimic those they applied to the NBCU-Comcast merger. CenturyLink must launch a broadband adoption program targeted toward low-income customers in 37 states. Customers participating in the program will be able to obtain broadband internet service for about $10 per month. Additionally the company will develop digital literacy training programs.

“We are told that this combination will help expand the benefits of broadband to consumers and communities across the country—that the new CenturyLink will be a stronger company with greater resources to invest in its now significantly expanded service territory,” said FCC Commissioner Michael Copps in his concurring statement. “On this score, I believe the applicants’ commitments on broadband deployment are a step in the right direction.“

In his statement of support, FCC Chairman Julius Genachowski said, “The conditions we’ve imposed should effectively protect against the identified transaction-specific harms, and the company’s commitments to help connect so many more Americans to broadband is an important and substantial public-interest benefit.”

Among the major merger conditions, the Quest network must expand its 4 megabit per second (Mbps) network to 4 million new homes and at least 20,000 anchor institutions. To expand higher speed access, the company will have to double the number of homes that can receive a 12 Mbps connection, and triple the number that can receive a 40 Mbps connection.

In her statement, Commissioner Mignon Clyburn offered some concern about the deal.

“The companies asserted that post-merger CenturyLink will continue to focus on rural customers, yet the company did not provide sufficient information in the proceeding so that we could ensure that result,” said Clyburn in her statement. “While the companies pledge to inform us in their regular reporting the broadband deployment that occurs in rural versus non-rural areas, I would have preferred a specific, verifiable commitment to deploy broadband in unserved, rural areas.”

While Commissioner Meredith Attwell Baker approved of the merger, she found fault with the FCC for taking too long in approving the merger, pointing out that the Department of Justice, which works in tandem with the FCC on such mergers, approved the transaction nine months ago. Baker has been an outspoken critic of the length of time the FCC takes to review mergers and the conditions it frequently imposes on them.

The full order can be found here.

FCC Commissioner Baker Outlines Plan For Merger Review Overhaul

in FCC/Media ownership/Net Neutrality by

WASHINGTON, March 3, 2011 – FCC Commissioner Meredith Baker outlined a plan to reform the Commission corporate mergers review process in a keynote address at the Institute for Policy Innovation’s Communications Summit Wednesday.

Commissioner Baker’s plan comes barely a month after the agency’s approval of the Comcast-NBC Universal (CNBCU) merger.  That merger review took nearly a year to complete and resulted in an agreement rife with conditions – including a major concession that the new company would abide by the FCC’s controversial Open Internet Order, even if the Order were eventually struck down in the courts.

Conservative critics have maligned the agreement as an unacceptable intrusion by government regulators into the free market.

Commissioner Baker, in addition to taking issue with the final agreement in the CNBCU merger, has also voiced objections to the merger review process as a whole, typifying it as one that is inefficient, overreaching and unnecessarily time-consuming.

“The Current FCC merger review process is ripe for overhaul,” Baker noted.

Citing concerns that the current merger process will discourage investment in telecommunications – or at least in telecommunications in the U.S. – Baker called out several parts of the review process for revision. Requiring multiple agencies to review mergers, she said, is duplicative and unnecessary, the process takes far longer than it ought to, and conditions attached frequently do not serve the public interest.

In response to the issues she presented, Baker also proposed a number of solutions, including working with Congress to streamline the process, imposing a binding timeline on reviews and ensuring that any conditions are more closely tied to actual and specific harms.

Baker elaborated further on instituting timelines and restricting merger conditions, both of which are issues she has publicly commented on during FCC open meetings and while testifying before Congress.  Her plan would implement a binding 180-day deadline on reviews, with a possible 60-day extension “that would be the exception, not the rule.”

The Commissioner also asserted that calling merger conditions “voluntary” is disingenuous. She then quoted former FCC Commissioner, Kathleen Abernathy, in calling such conditions “quid pro quo.”

“[Conditions] have become the cost of doing business with the Agency,” said Baker. “It devolves into how to get more out of the transaction.”

Rather, she said, conditions should only be allowed where they are closely tied to actual harms.  Specifically, she called out conditions in the CNBCU merger that require the new company to invest in broadband buildout and low-income access.  While Baker lauded the intention and effect of the programs, she took issue with the lack of direct link between the conditions and actual harms stemming from the merger.

“[Allowing expansive conditions] invites special interests to use mergers for their own purposes,” said Baker. “It delays and muddles reviews.”

 

House Subcommittee Puts FCC, Net Neutrality On Firing Line

in Congress/FCC/Net Neutrality/Spectrum by

WASHINGTON, February 17, 2011 – Members of the House subcommittee on Communications and Technology took the opportunity during a hearing on Wednesday to grill the five FCC commissioners on the Commission’s recent Open Internet Order in a marathon session.

The Order, which the Commission passed by a 3-2 vote in December of last year, provides three guidelines by which Internet Service Providers (ISPs) must abide in their offerings to consumers.  First, ISPs must provide services in a transparent manner by disclosing their network management practices and performance characteristics.  Second, network providers must not block lawful content from their customers, and third, providers may not unreasonably discriminate by prioritizing certain network traffic without sufficient reason.

The hearing lasted four hours in front of a standing-room only gallery that watched both sides trade barbs with the commissioners and each other.  Republican members attacked the Order as unnecessary, beyond the statutory authority of the Commission, and poorly drafted, opening the door to exploitation and overregulation by the FCC in the future.

“Consumers can access anything they want with the click of a mouse thanks to our historical hands-off approach,” said subcommittee Chair, Rep. Greg Walden (R-OR) in his opening remarks. “Changing direction now will only harm innovation and the economy.”

The Democratic members, meanwhile, defended the Order as protecting consumer interests against historical and ongoing abuses by ISPs, grounded in the Commission’s mandate from the Communications Act and flexible to accommodate a “light-touch” approach to maintaining an open Internet.

“Without some clear rules of the road,” said Rep. Anna Eshoo (D-CA), ranking member on the subcommittee, “large corporations can carve up the Internet into fast and slow lanes, charging a toll for content, and blocking innovators from entering the information superhighway.”

Rep. Ed Markey (D-MD) compared the Order to regulations protecting the market against exploitation by the Bell telephone system in the last century.

“Government policy has created deregulation [in the internet space],” said Markey.  ”You don’t go from black rotary dial phones from blackberry phones unless the government intervenes.”

During their opening remarks, the commissioners largely echoed the sentiments they expressed during the Commission’s vote in December.  Chairman Julius Genachowski described the construction of the Order as a “balanced approach that helps ensure that companies and investors… have the incentives they need to make those investments.”

Commissioners Robert McDowell and Meredith Baker, both of whom dissented to the Order, called into question the need for such a rulemaking in the first place, citing the Internet as a vibrant, competitive marketplace.  Commissioner McDowell also supplemented his statement with his original dissent to the Order – a 28-page document, complete with more than 100 footnotes, much of which questioned the statutory authority of the FCC’s action.

“The Internet is open without the need for affirmative government regulation,” said Commissioner Baker. “Lacking an evidentiary record of documented industry-wide abuses, the Commission’s Net Neutrality decision was based on speculative harms.”

The members and commissioners also disagreed with each other over whether a market failure had actually occurred.  Democrats and Commissioners Michael Copps and Mignon Clyburn, along with Chairman Genachowski, all cited instances of formal complaints against ISPs violating the Commission’s 2005 open Internet principles.  Republicans, along with Commissioners McDowell and Baker called those incidences isolated and questioned that there was sufficient evidence of an overall market failure.

At times, the hearing devolved into a policy grilling on a panorama of issues before the FCC – some only marginally related to the Order itself.

Rep. Marsha Blackburn (R-TN) spent a significant portion of her allotted time focusing on why the Commission’s approval of the Comcast-NBC Universal merger took more than a year.  Several representatives posed questions regarding the Commission’s voluntary incentive auction proposals.

The only time, perhaps, that all the participants in the room were in agreement was when Commissioner McDowell extended a farewell to Rep. Jane Harman (D-CA), who will resign from Congress this month to head the Woodrow Wilson International Center for Scholars.  McDowell thanked Harman for her years of service on the subcommittee, drawing a round of applause from the room.

Later in the afternoon, Rep. Walden, along with Energy and Commerce Committee Chair, Rep. Fred Upton (R-MI) introduced a Resolution of Disapproval to the House floor to overturn the Commission’s order.  Sen. Kay Bailey Hutchison (R-TX), ranking member of the Senate Commerce, Science and Transportation Committee introduced identical legislation in the Senate.

A Resolution of Disapproval is a seldom-used Congressional maneuver that nullifies an action by an administrative agency – in this case, the FCC.  To take effect, both the House and Senate must pass the measure by a simple majority and the President must sign off on the action.

While the measure is filibuster-proof – a fact that both Reps. Upton and Walden were quick to point out – the filibuster is unlikely to be an issue. Even if the measure were to pass both houses of Congress, it would require a two-thirds majority to overcome a nearly certain veto from President Obama.

FCC Paves Way For Comprehensive USF Reform At Open Meeting

in Broadband's Impact/FCC/National Broadband Plan/Universal Service by

WASHINGTON, February 9, 2011 – The FCC adopted a measure during Tuesday’s open meeting that lays the groundwork for revisions to the nation’s telephone subsidy systems in the near-term and an eventual overhaul to transition those systems into building and supporting broadband infrastructure.

The Notice of Proposed Rulemaking, which was adopted unanimously by the Commission, draws a roadmap to reforming the Universal Service Fund (USF) and the closely related intercarrier compensation (ICC) system.

The USF subsidized the build out of the telephone system in the last century to areas where it was not cost-effective for private industry to do so.  Subsequently, it subsidized service to those so-called “high cost” lines and phone service to low-income families.  The ICC is a system by which carriers make payments to each other for connecting calls.

As part of the National Broadband Plan unveiled last March, the administration laid forth the goal of updating the nation’s aging and increasingly anachronistic telephone infrastructure with broadband internet, which is capable of carrying both data and voice telephone transmissions.

“USF and ICC helped connect virtually every American to our 20th century communications grid,” noted Chairman Julius Genachowski during his remarks Tuesday, recognizing the positive legacy of the programs. “But the communications landscape has fundamentally changed since then… [broadband] is the indispensible infrastructure of the 21st century.”

In addition to widespread consensus that the USF and ICC support antiquated infrastructure, the programs also generously serve up instances of excessive wastefulness and gaming the system.  One such example Genachowski brought up during a speech earlier in the week cited a single residence that drew more than $20,000 per year in USF funds to maintain service.  In another, carriers artificially inflated telephone traffic across their lines to increase ICC revenue while disguising the origin of their own traffic to avoid paying fees.

The USF in particular has drawn the ire not only of the telecommunications industry but also from both sides of the aisle in Congress.

The guiding principles the FCC has laid forth for reform closely mirror the major criticisms of the programs, which have come from both lawmakers and the telecommunications industry alike. The current measure proposes to guide reform of both the USF and ICC by seeking paths to not only modernize the programs to apply to broadband technologies, but also ensure that the programs are accountable, fiscally responsible, and encourage efficient deployment of private-sector resources to build out and maintain networks.

“As a 21st century program,” said Commissioner Robert McDowell during his remarks, “the Universal Service Fund should evolve away from subsidizing inefficient, 20th century systems and support the efficiencies of current technologies as brought about by competitive pressures.”

The Commission also laid out loose mechanisms by which it would accomplish reform, both in the near- and long-terms.  Immediate remedies include cutting waste, rewarding efficiency and closing loopholes.  Long-term solutions call for transitioning the several programs that exist under the USF into a single Connect America Fund (CAF) and eliminating ICC altogether.

Though the plan amounted to little more than a set of guiding principles and high-level mechanisms by which the Commission hopes to conduct the reform, the action drew widespread support from Congress and the telecommunications industry alike.

“This fund needs to be reformed,” said Rep. Lee Terry (R-NE), who is Vice Chair of the subcommittee on Communications, Technology and the Internet, and now-famously joined former Chair of the subcommittee, Rick Boucher, in calling the USF simply “broken.”

“I’m looking forward to working with my colleagues and the FCC to ensure rural areas are able to enjoy the same communication access as urban areas.”

Rep. Henry Waxman (D-CA), ranking member of the House Energy and Commerce Committee, echoed Lee’s sentiments, saying that ”the [USF] must be modernized to support broadband networks, reformed to use public dollars wisely, and strengthened to ensure full transparency and accountability.”

Meanwhile, even before the Commission’s meeting had adjourned, representatives from the telecommunications industry began firing off press releases simultaneously airing their grievances with the fund and adding their support to the vote.

“We applaud the FCC for moving forward on the important task of reforming the Universal Service Fund, especially the bloated high-cost fund that sometimes provides government subsidies in communities that already enjoy robust competition,” said National Cable and Telecommunications Association CEO, Kyle McSlarrow. “Restructuring the Universal Service Fund so it promotes broadband deployment in truly unserved communities is critical to accomplishing the national priority of connecting all Americans.”

Though statements of support flooded in from seemingly all corners of the industry, the current measure is only a first step on what promises to be a long road.  Chairman Genachowski, as he did during his remarks at the Information Technology and Innovation Foundation Monday, implored those in the industry to engage the process to drive fact-based solutions. The rest of the commissioners, for their parts, were careful to acknowledge that though progress had begun.

“There are significant and difficult decisions ahead,” said Commissioner Meredith Baker, concluding her remarks, “and it will be important for all of us to work together to redefine universal service and intercarrier compensation for the broadband age.”

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