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FCC Commissioner Michael Copps

Copps, Clyburn Push Media Reform In Boston

in Broadband's Impact/Congress/FCC/House of Representatives/Media ownership/Minority/Mobile Broadband/Net Neutrality/Spectrum/Wireless by

BOSTON, April 11, 2011 – Speaking to a standing-room only crowd on Friday afternoon, Federal Communications Commissioners Michael Copps and Mignon Clyburn addressed media consolidation and broadband deployment before fielding questions at a town hall meeting during Free Press’s National Conference for Media Reform.

Media scholar, Robert McChesney, offered the introduction for the event, addressing both the packed auditorium, an overflow room and those watching live via the web.  Both commissioners received standing ovations from the crowd as they took the stage.

During his speech, Commissioner Copps focused on the need to reinvigorate journalism, address the consolidation of media outlets into fewer and fewer hands and refocus the FCC to ensure that spectrum licensees are serving the public interest.

Later on, during the question-and-answer portion of the event, Copps encouraged a system wherein use of the license for a demonstrable public service would be required in order to obtain and keep a broadcasting license.  If a licensee did not show that it was using the license for the public good, Copps proposed that the FCC impose a one- or two-year probationary period and, if the licensee still did not serve the public interest, “then [the FCC] ought to take that license back and give it to someone who will.”

“Money controls so much of what’s going on in our society,” said Copps. “We have to get away from Wall St. mentality where it’s only the bottom line that counts.”

Commissioner Clyburn’s remarks focused heavily on the technological progress of the last 20 years and how the FCC could facilitate that progress while ensuring that all Americans have opportunities to access it.

Clyburn noted the rapid increase in wireless Internet use as it becomes the preferred method of access for many, especially among minority populations.  She continued to compare the airport waiting areas of 20 years ago –  where people would “read a book or stare at the ceiling” – with those of today, where people are emailing, texting, or playing a game with a friend halfway across the world.

“This is a new reality and Americans have embraced it,” said Clyburn. “I know that these technologies – the way this world is evolving – hold the potential for unlocking the hopes and the spirits and desires in all of us.”

Volunteers at the event squeezed between standing-room attendees and stepped over those camped out in the aisles to collect questions on index cards from the crowd.  Inquiries ranged from radio spectrum policy to the race and gender diversity goals of the Commission.

As one question asked the commissioners what it thought about the FCC’s ability to regulate the Internet, more than 400 miles away in Washington, Rep. Fred Upton (R-MI) and his fellow Republicans made the final push on the House floor to pass a measure that would undo the FCC’s recent net neutrality rules.

In Boston, the commissioners defended the agency’s Open Internet Order, with respect to both the content of the rules and the commission’s authority to make them.

“What we did was establish high level rules to make sure that people have access to the internet to do what they want,” said Clyburn, noting that the public has expectations of FCC “to ensure that we have a robust communications network and industry.”

Commissioner Copps defended the Commission’s authority to regulate the Internet as a foregone conclusion.

“People ask whether [the FCC] can do this – well of course we can do this,” proclaimed Copps, who has frequently criticized the Order on the grounds that he believes it does not do enough to protect consumers.

“No other country on the face of the earth has gone down this road – calling [the Internet] an information service,” he said, referring to the difficulty the agency has had in making a regulatory classification of the Internet.

The commissioners also addressed the need to free up spectrum for wireless broadband and to keep too many media outlets from falling into too few hands that do not represent the range of voices in America.

“Diversify the space. Have more voices,” Commissioner Clyburn said and then directly addressed the crowd. “I am challenging you to push the agency and the powers that be to diversify.”

FCC Approves Qwest-CenturyLink Merger

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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.

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.

Analysis: CNBCU Conditions Will Stimulate Growth, Not Restrict It

in FCC/Media/Media ownership/Net Neutrality by

The Federal Communications Commission’s recent approval of Comcast’s merger with NBCU has come with some major conditions that will limit any potential discriminatory policies the new firm might have engaged in.

The new entity, CNBCU, will become one of the nation’s largest content creation and distribution companies. CNBCU will be in a unique position in that they will not only control the creation of content but also the method in which it is distributed. Unchecked, this vertical integration could lead to monopolistic actions.

In his dissent to the merger, Commissioner Michael Copps said, “[this merger] confers too much power in one company’s hands.” However, with the conditions imposed by the commission, CNBCU, while powerful, will be unable to act in a monopolistic manner.

While some critics have called the FCC’s conditions restrictive, they are directed at potential areas where the new firm could do direct consumer harm. The main goal of these policies is to protect consumer welfare once CNBCU becomes a major market force in all of the cable, broadband, and online video markets. The FCC worked with the Department of Justice to include provisions that will ensure that the new firm will not violate anti-trust regulations.

The conditions placed upon the merger will guarantee the consumer welfare is protected while also supporting a vibrant marketplace.

The most prominent anti-discriminatory directives – compliance with the Open Internet Order –  is a major factor in ensuring broadband competitiveness. CNBCU will become one of the nation’s largest internet service providers offering access in over 30 states. The merger agreement mandates that the firm must follow all the provisions of the FCC’s Open Internet Order. Even if the Order is modified or struck down in court, CNBCU must adhere to the rules and regulations within the Order.

Compliance with the Open Internet Order by such a large player in the market will not only affect CNBCU but also its competitors.  To remain competitive with CNBCU’s open network, market pressure will mount for rival ISPs to follow the Open Internet Order as well. Given a choice between the open CNBCU network and a potentially closed or limiting internet service, consumers will likely pick the open network.

Verizon and MetroPCS have already filed suit against the FCC over the Open Internet Order; however, regardless of the outcome it will presumably be adopted by all major ISPs. The market power that CNBCU holds will ensure that its competitors will also follow the same rules to offer a competitive product.

CNBCU will be in a unique position of being a content provider and content maker. It will also be the largest player in the emerging online video distribution market. CNBCU will control nearly 5 percent of the online video distribution market including Hulu, Daily Candy, and NBC.com. Additionally CNBCU has signed a lucrative deal with Netflix to offer a large back catalog of content.

The online video market is growing faster than ever as more consumers “cut the cord” and drop traditional cable in favor of online video. The research firm SNL Kagan, estimates that 741,000 customers dropped their cable subscriptions.

CNBCU will presumably earn more revenue from advertising on its traditional cable properties than its online video properties.  The Commission, recognizing the financial incentive for CNBCU to force consumers to watch their programming over cable versus online video distributors, explicitly forbids the blocking or degrading of online video content. This anticipation shows that the FCC believes this emerging market will soon take off and become a major way in which consumers will access content.

The most prominent of these online video distributers is the popular free website Hulu, in which CNBCU - along with ABC and News Corp. - holds a major stake. The website is a limited alternative to traditional cable access. Since CNBCU competes with Hulu in the cable market, however, the FCC is justified that CNBCU may try to limit Hulu. In fact, the 2010 Comcast v. FCC case sprung from accusations that in 2007, then standing alone, Comcast degraded service to services such as Hulu and Skype, which provided free alternatives to their cable and telephone products.  The merger conditions restrict CNBCU from exercising any operational power over Hulu, but it will be allowed to keep its financial stake in the firm. To ensure that Hulu continues to get content from CNBCU at a fair price the FCC has mandated that CNBCU must maintain its current contract with Hulu and continue to provide the same level of content that its partners provide. By maintaining its financial stake in Hulu CNBCU will presumably want the company to do well and provide it with quality programming.

To prevent any exclusionary deals that would prevent other cable providers from access to its online video, the Commission has mandated that CNBCU must offer its online content to others at a reasonable market rate.

Additionally CNBCU is prohibited from offering to its broadband subscribers specialized online video content that includes only NBC programming. In order to offer an online video service the firm must include programming from outside sources as well. However, with its stake in Hulu it seems unlikely that the firm will launch a new online video service.

The online video conditions may seem unnecessary due to the relative size of the market in comparison to that of cable, but online video is continuously growing. The concern by the FCC over the market indicates that the Commission anticipates it becoming a prominent method of watching television and movies in the near future. If CNBCU blocks access to its content, it will severely hinder the growth of the online video market.

While some may claim that the conditions imposed by the FCC on the merger is strong handed government overreaching by the commission, these conditions actually promise to create new markets while protecting consumers and preventing years of anti-trust litigation.

FCC Establishes LTE Standard for Nationwide Public Safety Broadband Network

in FCC/Mobile Broadband/National Broadband Plan/Public Safety/Spectrum/Wireless by

WASHINGTON, January 25, 2011 – The FCC issued an order Tuesday at its January open meeting that set a 4G common standard for a nationwide, interoperable, public safety mobile broadband network.

The Order, which addressed changes recommended by the 9/11 Commission Report, would require the use of a Long Term Evolution (LTE) air interface in the 700Mhz range of radio spectrum allocated to public safety, as well as lay down other technical specifications for nationwide interoperability.  LTE, a next-generation standard for mobile broadband, provides download speeds of at least 100Mbps and upload speeds of at least 50Mbps.  The standard, along with several others currently emerging, are commonly referred to under the umbrella terms “4G,” or “Fourth Generation.”

The 9/11 Commission report, released in 2004, recommended improved communication capabilities not only between first responder agencies within the same geographic area, but also called for interoperability between similar agencies in different regions.  That is to say, for example, equipment used by the Metro Police Department in Washington, D.C. should be able to communicate directly not only with the DC Fire Department, but also with other police departments across the nation.

Though the Order establishes rules for a common nationwide air interface standard, lingering questions over the future of the D Block have kept the FCC from fully developing a plan for a public safety network in the 700Mhz range.

The D Block is a segment of spectrum in the 700Mhz range – considered prime real estate for mobile broadband use – that the FCC attempted to auction off in 2008, but bids failed to meet the Commission’s reserve price.  Currently, the swath is allocated for use by public safety, however, Congress is expected to consider competing plans, one to re-auction the D Block to commercial licensees and another to reallocate it solely to public safety.  Additionally, parties have considered a third option wherein commercial licensees would buy spectrum licenses at a re-auction and share the block with public safety .

FCC Chairman Julius Genachowski declined to comment on the future of the D Block at a press conference following Tuesday’s meeting, saying only that “the National Broadband Plan says what it says” with regards to recommendations on the block.  The NBP recommends auctioning the 10Mhz segment to commercial licensees to help reallocate 500Mhz of spectrum to wireless broadband over the next 10 years.

Commissioner Robert McDowell, however, had fewer reservations expressing his support for an expeditious auction of the D Block.

“In a perfect world, we would have already finalized an order setting forth auction and service rules for the D Block spectrum,” said McDowell.  “I am eager to move to this step, which I urge that we undertake sooner rather than later.”

All the commissioners agreed, however, that nationwide interoperability is both necessary and a long time coming.

“More should have been done immediately after 9/11 to address the needs of public safety,” said Commissioner Michael Copps.  “I called for it then, but little action was taken.  Quite frankly, it is inexcusable that we still do not have a nationwide interoperable public safety network.”

Copps Takes Broadcasting, Cable and More Out to the Woodshed

in Broadband Updates/Broadband's Impact/FCC/Net Neutrality/States by

WASHINGTON, August 20, 2010 – Michael Copps, a commissioner on the Federal Communications Commission, spoke in Minneapolis Thursday at a public hearing on the future of the internet, touting the important of broadband to the future of the United States and slamming the broadcasting and cable industries for bad behavior.

“I think most of you understand how important the internet and access to high-speed broadband are to the future or our country,” he said at the event, which was also attended by Democratic Minnesota Sens. Al Franken and Amy Klobuchar. “The question is: will we use it in such a way as to maximize its small ‘d’ democratic potential – or will we turn this too over to the special interests and gatekeepers and toll-booth collectors who will short-circuit what this great new technology can do for our country?”

Copps said the openness of the internet must not become another pawn in the hands of powerful corporate interests and while some of those entities “tell us not to worry,” he’s worried.

In his speech, he slammed broadcasters for taking hundreds of billions of dollars worth of free spectrum in the interest of the public good and failing to live up to their promises. He also criticized the cable industry for poor programming and high consumer bills, saying the FCC in both cases took the industries’ words too quickly.

“Now the big internet service providers give us the same pitch: Don’t worry; be happy; we would never compromise the openness of the internet.’ After what happened to radio and television, and after what happened to cable, should we take their word? I don’t think so!

The FCC’s job is now to correct course by reclassifying broadband as a telecommunications service and then to create rules and procedures to protect consumers, according to Copps.

He criticized the announcement last week by Verizon and Google which announced they’ve agreed on a policy framework: “Of course it wasn’t developed with input from the American people, but it is, they assure us, for the American people.”

And he highlighted how the pact by the large firms would almost completely exclude wireless broadband from the future of internet openness, even though more Americans are going mobile yearly.

“Powerful interests are spending millions of dollars to make sure the waters of truth don’t flow on this issue,” he said. “What can counter them is you.”

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