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Telecom Companies Are Using Fight Interrupting Oscar Ceremony Broadcast To Manipulate Public and FCC, Argue Broadcasters

SAN FRANCISCO – U.S. telecom companies are using a high profile programming dispute this March to manipulate public opinion to skew the rules regarding retransmission consent fees against the broadcasting industry, its lawyers argued in a filing with the Federal Communications Commission earlier this week.

“It is the petitioners themselves who are creating an artificial ‘problem’ and then asking the government to solve it,” according to the National Association of Broadcasters, and the associations for ABC, CBS, FBC and NBC affiliates.

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SAN FRANCISCO – U.S. telecom companies are using a high profile programming dispute that broke into public view this March to influence the shaping of the rules regarding retransmission consent fees against the broadcasting industry, its lawyers argued in a filing with the Federal Communications Commission earlier this week.

The rules governing retransmission consent fees aren’t outdated, argue the National Association of Broadcasters, and a group of affiliate associations.       Photo by: gbaku

“It is the petitioners themselves who are creating an artificial ‘problem’ and then asking the government to solve it,” according to the National Association of Broadcasters, and the associations for ABC, CBS, FBC and NBC affiliates.

The 139-page argument, packed with statistics, came in response to a petition signed this March by a group of non-profits, think tanks, the American Cable Association, and 10 of the 13 largest multichannel video programming distributors in the nation.

The fight between the broadcasters and the video distributors is of interest to lawmakers because cable rates are regulated by law and the sharp increases in pay TV rates over the years has been a concern to constituents.

The current petition came after a high profile incident just before the Oscar ceremonies this March when negotiations over retransmission consent fees between ABC and Cablevision broke down, leaving more than three million Cablevision customers in the New York City area without the channel for the day, and high and dry until the beginning of the ceremonies.

But the service interruption didn’t just spark off outrage among Oscar party hosts in the New York City region. It precipitated action by the cable, telecom and satellite TV companies, who charge that the broadcasters are abusing the rules laid down in a 1992 law to both extort ever-higher levels of compensation for the retransmission of their signals, and to force the inclusion of programming that the distributors’ customers don’t want — all resulting in ever-escalating monthly cable bills for those customers.

The broadcasters themselves point to a 2008 FCC report on cable industry prices that shows that the weighted average price of cable television service has increased by 163 percent between 1995 and 2008, while the Consumer Price Index increased by only 38.4 percent. The authors of the letter argue through detailed analysis how retransmission fees can’t be the source of this rise in cable bills. They also reference a 2003 Government Accountability Office Report that said it was a lack of competition, and not retransmission consent fees, that was to blame for rising cable bills.

But all these points are just a red herring, argues a telecom industry source. The prices are going up because the cost of paying for all the programming – for the copyright fees associated with the programs, as well as the fees for the signal, are increasing. Cable companies feel that they must have the programming from the broadcasters, but broadcasters will often only make their broadcast channel available on certain conditions.

“The broadcasters use the leverage of the retransmission consent negotiations to extract higher fees for all of their programming,” said the executive.

“Programming costs going up is definitely a result of retransmission consent fees … they are able to, by tying/connecting the licensing process of the other channels to the broadcast signal, charge higher fees for everything.”

For example, as part of some past retransmission consent compensation packages, broadcasters required cable companies to carry new channels.

“That’s how FX was launched, that’s how SOAPnet was launched, that’s how the FOOD Network was launched – these were all channels that were launched as compensation for retransmission consent.”

The petition asks the FCC to establish a “dispute resolution mechanism” when the two sides can’t reach an agreement over retransmission consent fees, and that the programming distributors should be allowed to continue carrying the broadcasters’ signals even if an agreement has not been reached by the time that their contracts have expired.

Retransmission consent fees are the cash fees and other forms of compensation that cable and satellite companies pay to broadcasters to carry their signals. Congress established the regulatory regime governing the marketplace through the 1992 Cable Act on the basis that cable companies were local monopolies.

But the programming distributors say that the marketplace has changed dramatically since 1992, and that they don’t have the monopoly market power that they wielded back then because of today’s increased competition between providers in the television marketplace.

That’s bunk, argue the broadcast industry’s lawyers, calling the coalition’s explanation of the 1992 Cable Act “revisionist history,” replete with “rhetorical hyperbole –not facts.”

“In the end, the petition is really about the fact that the pay TV industry preferred it when they could force television stations to give away their signals at a discounted rate or, in many cases, for free,” they argue.

But the bargain between all parties–the broadcasters, the video distributors and the public — is far more complex than what’s portrayed in the filing.

“When you look at the question of interim carriage, it’s very important to think about the public interest here,” shoots back the industry executive. “The copyright fees have already been paid to the creators and producers of the programming. The signal belongs to the public — it’s the retransmission of a broadcast signal, and the spectrum is the public’s asset, which broadcasters get for free, but for which they are charging.”

The broadcasters also argue that the ABC-Cablevision incident is a rare occurrence.

“In tens of thousands of retransmission and consent negotiations, there have been few showdowns, even fewer shutdowns, less than a handful of complaint adjudications by the Commission – just four in total – and zero findings by the Commission that a broadcast station has failed to negotiate in good faith or has otherwise abused the Commission’s rules or processes (the same, unfortunately, cannot be said with respect to MVPDs,)” write the broadcasters’ lawyers.

The lawyers recounted a radically different historical narrative than the one provided by the petitioners to bolster their argument that interim carriage is not something that can be even contemplated by the FCC.

“To the same extent a television station is not permitted to retransmit and resell the signal of another station without its consent, a cable system should not be permitted to retransmit or resell the signal of a television station without its consent,” they argue.

But this isn’t just another marketplace, argues the industry insider.

Because of the history of the development of the two markets, and the perception that cable was a monopoly, the rules governing the business negotiations between the two sides favors the broadcast industry while the cable industry is hamstrung by a thicket of rules that prevent them from searching out alternatives.

“It’s a marketplace where you’re going to the supermarket, and being told what you have to buy,” said the industry executive.

The petitioners include the American Cable Association, Cablevision, Charter Communications, DIRECTV, Dish Network, Public Knowledge, The New America Foundation, Time Warner Cable, and Verizon. Notably, it doesn’t include Comcast, which is in the process of buying NBC.

BroadbandBreakfast.com is hosting a panel discussion about retransmission fees and video program licensing issues June 8 at Clyde’s of Gallery Place in Washington, DC. The event is free and open to the public. Join us!

FCC

FCC Commissioner Supports Rural Telco Efforts to Implement ‘Rip and Replace’

In remarks at the Rural Wireless Association event on Wednesday, Commissioner Geoffrey Starks reaffirmed the FCC’s goals.

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Photo of Carri Bennet, general counsel of the Rural Wireless Association, leading a discussion at the summit on Wednesday by Drew Clark

PARK CITY, Utah, June 30, 2022 – Federal Communications Commissioner Geoffrey Starks acknowledged the agency’s goal of obtaining secure broadband networks at an event of the Rural Wireless Association on Wednesday.

“We must ensure that our broadband networks are secure,” Starks said in keynote address at the Rural Wireless Infrastructure Summit here, delivered via Zoom. “This is evident in the constant barrage of attacks of American networks from hostile state and non-state actors.”

Starks continued, “insecure networks, by definition, can’t provide the stable, reliable, always on communications we need. Especially during emergencies… Broadband must be secure for the full benefits of broadband to be achieved.”

The issue of ridding American telecommunications networks of equipment manufactured in China was a constant theme during the conference.

In addition to Starks’ presentation, several sessions addressed the dilemma faced by telecommunications carriers, particular rural ones, that had in the past invested heavily in lower-cost equipment from Huawei, a leading Chinese manufacturer.

As the political winds have changed on the topic over the past three years, Congress has allocated funds for a “rip and replace” program. The FCC is expected to announce the providers that will receive nearly $2 billion as part of the program by July 15.

But some fear that number could be more than $4 billion short of needed funds.

“The funds available will cover only a very small portion” of the costs to replace Huawei with non-Chinese manufacturers, said Carri Bennet, general counsel of the Rural Wireless Association.

Potential new requirements imposed on telecom providers

The commission recently sought comment on whether it should require carriers that receive high-cost support to have include baseline cyber security and supply chain risk management plans.

If these plans are included in requirements, Starks said that American communication networks would be protected from bad actors. Moreover, they are consistent with requirements already included in the Infrastructure Investment and Jobs Act.

Starks thanked the RWA for its activity and advocacy in the “rip and replace” proceedings, officially dubbed the Secure and Trusted Communications Network Reimbursement Program.

“The threat is real,” called Starks. “Companies that are deemed by the federal government to be a threat to the United States and its people can not have free reign in data centers featuring some of the most sensitive data of Americans.”

This comes only days after Commissioner Brendan Carr called for Apple and Google to remove Beijing-based popular video-sharing application, TikTok, from their app stores in response to the apps’ obligation to comply with the Peoples Republic of China’s surveillance demands.

Broadband Breakfast Editor and Publisher Drew Clark contributed to this report.

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FCC

FCC Commissioner Geoffrey Starks Calls for Environmental Sustainability at Summit

Environmental sustainability in telecom has been a key talking point for Starks.

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Photo of FCC Commissioner Geoffrey Starks

June 27, 2022 – Federal Communications Commission Commissioner Geoffrey Starks raised on Monday the importance of sustainability in telecommunications as a speaker at the 2022 Broadband for All Summit in Stockholm, Sweden.

An important responsibility for agencies in the industry is building infrastructure that is environmentally sustainable, Starks said, suggesting four avenues to improve sustainability.

First, “we must continue to find ways to do more while using less, and that begins with the way we use spectrum,” he said. We need to “squeeze” the most out of the finite spectrum while simultaneously building networks that draw less power.

Second, “we need to realize our full potential to help other sectors consume less, too.”

We are entering an era where we can “collect, communicate, and analyze massive quantities of data to improve decision-making in real-time. Everything from traffic flow to energy transmission to orders of operation on the factory floor can benefit from data-driven efficiencies that were previously impossible,” he said.

Third, “industry-led initiatives must continue to play a significant role, from progressing towards reducing or eliminating the carbon emissions associated with their operations, to increasing renewable energy and minimizing electronic waste.”

Some manufacturers, according to Starks, have gone beyond carbon neutrality and are aiming for net-zero operations.

Fourth, “we must collectively do our part to mitigate climate change’s harmful effects at the network level”. With harsher weather patterns than previous generation, we should invest in networks that will keep communities connected during storms, floods, wildfires, and other disasters.

Starks, who has pitched environmental sustainability in telecommunications on a multiple occasions, advocated for players in the industry to be “as aggressive as possible with our climate commitments, and we should be as comprehensive as possible in our effort to comply with them.” This should include eliminating waste during the production phase, he said.

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FCC

FCC to Gather Information on Offshore Spectrum, Accurate 911 Call Routing

The FCC is examining the need and use cases for allocating spectrum for offshore use.

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Photo of Nathan Simington

WASHINGTON, June 8, 2022 – The Federal Communications Commission voted in an open meeting Wednesday to examine technology that can improve wireless 911 call routing, propose a fine for interrupting U.S. forest service radio communications, and to seek comment on offshore spectrum needs and uses.

The FCC voted to begin gathering information through public comment on the “possible current and future needs, uses, and impacts of offshore wireless spectrum use,” including for cruise ships, oceanography and wind turbine projects. Other options, like satellite-based systems, are available to provide service.

The construction and operation of windfarms in the Atlantic and Pacific oceans and communication services between at-sea vessels require offshore spectrum. The notice of inquiry asks what other cases exist that require offshore spectrum access that are not being provided for under existing models.

“We seek more broadly to understand the extent of the demand to use offshore spectrum and more generally where that demand is concentrated,” stated the inquiry.

“It is important that the FCC stay ahead of the curve in its consideration of upcoming commercial spectrum needs and this item does just that,” said commissioner Nathan Simington.

911 call routing

The FCC launched an examination into technology that could result in faster response times by more precisely routing wireless 911 calls to the correct call center.

Some wireless emergency calls are made near city or county borders where the closest call center is in the neighboring jurisdiction, resulting in lost time as calls are rerouted to the correct call center.

Since 2018, when the FCC issued a Notice of Inquiry seeking comment on feasibility of routing 911 calls based on location of the caller versus location of the cellular tower, there have been many advancements in location-based routing technology. The FCC issued a Public Notice Wednesday seeking updated information on these technologies and the feasibility of adopting them into public use.

Last month, AT&T announced a new technology that would allow dispatchers to get a more accurate location of distressed calls by using the phone’s GPS.

Proposed fine for violating radio interference rules

The FCC also proposed a $34,000 fine Wednesday against Jason Frawley who, in 2021, allegedly interfered with radio communications that were guiding firefighting during the 1000-acre wildfire near Elk River, Idaho.

Frawley reportedly admitted to a Forest Service supervisor that he broadcasted on government frequencies in direct defiance to the Communications Act which prohibits any interference with authorized radio communications.

Neither the allegations nor the proposed sanctions are final FCC actions, said the press release.

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