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Federal Communications Commission To Update Media Marketplace Rules

WASHINGTON, March 4, 2011 — The Federal Communications Commission on Thursday moved to tweak the rules governing the terms on which cable companies and satellite operators can re-transmit the signals of broadcasters in the wake of several high-profile disputes that often left consumers in the dark at critical programming moments.

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“It’s time to take a fresh look and explore whether there are measures we can take to allow the market-based process contemplated by the retransmission consent laws to operate more smoothly, and serve consumers and the marketplace,” says FCC Chairman Julius Genachowski PHOTO: V. Proffer

WASHINGTON, March 4, 2011 — The Federal Communications Commission on Thursday moved to update the rules governing the terms on which cable companies and satellite operators can re-transmit the signals of broadcasters in the wake of several high-profile disputes that often left consumers in the dark at critical programming moments.

“Retransmission consent negotiations have become more contentious recently, and consumers have gotten caught in the middle,” said FCC Chairman Julius Genachowski in a statement issued Thursday.

“Last fall, millions of cable subscribers lost access to baseball playoff and World Series games, and many other viewers have been blindsided by less publicized disputes,” he noted.

“It’s time to take a fresh look and explore whether there are measures we can take to allow the market-based process contemplated by the retransmission consent laws to operate more smoothly, and serve consumers and the marketplace.”

The commission decided to examine several proposals that it hopes will better protect consumers during the retransmission consent negotiation process between the various media and telecommunications companies, but it declined a request to get directly involved in the negotiation process from a large coalition of cable and satellite companies, and public interest groups.

Specifically, the commissioners declined to arbitrate disputes when they break down and come to an impasse, and they rebuffed the idea of ordering continued carriage of the broadcasters’ signals during such impasses.

They said they don’t have the authority to do those things.

Instead,  the commissioners want to examine how the mechanics of the marketplace can be improved in light of the radical changes in the modern media marketplace.

They’re interested in the idea of eliminating the commission’s network non-duplication and syndicated exclusivity rules. That would mean that broadcasters would have to enforce their contractual rights through litigation in the courts, rather than through the commission.

The commission is also interested in rules that would require more notice to consumers about possible disruptions during negotiation impasses, and providing more detailed guidance to players in the marketplace about what the “good-faith negotiation” requirements are.

Consumers lately have often gotten plenty of notice about disruptions to their service as companies on both sides publish YouTube videos and web sites blaming each other for being unreasonable during business negotiations.

Retransmission consent fees are a form of compensation either in cash — or some other non-cash deal — that video distributors pay for broadcasters’ programming.

Last year, a coalition of 14 entities that include the American Cable Association, Cablevision, Charter Communications, DIRECTV, Dish Network, Public Knowledge, The New America Foundation, Time Warner Cable, and Verizon petitioned the FCC to change the rules, which were first brought into being by the 1992 Cable Act.

The group wanted the FCC to allow distributors to carry the broadcasters’ signals on an interim basis during negotiations, even if contracts have expired.

They also wanted the FCC to step in to arbitrate if two negotiating parties failed to arrive at a new agreement, which is re-negotiated every three years.

The petitioners argued that these steps would prevent the showdowns that can lead to service interruptions for consumers at critical television viewing moments, such as the Oscars and during sporting events.

Most of the parties that had become involved in the process applauded the commission’s proposals on Thursday.

“NAB is pleased the FCC correctly concluded that the marketplace is best equipped to negotiate private business contracts, and that it lacks authority to impose the heavy-handed government tools that pay-TV providers desire,” said Gordon Smith, the National Association of Broadcasters’ president and CEO in a statement.

“In more than 99 out of 100 retransmission consent negotiations, agreements are concluded successfully and invisibly. Broadcasters will continue working earnestly to ensure that consumers receive no TV service disruptions, mindful that even the threat of injecting government into a market-based process only incentivizes pay TV providers to game the process.”

New York-based Cablevision responded to the FCC’s Thursday decision by saying that it wants the commission to enact more specific rules governing the terms of negotiations between video distributors and broadcasters.

Public Knowledge, one of the public interest groups that had petitioned the FCC to change the rules last year, disagreed with the commission’s Thursday decision.

“We hope that at some point the Commission will come to realize it has the statutory authority to relieve the consumer distress at being caught in the middle of the disputes, said Harold Feld, the group’s legal director. “We will make that point again to the Commission, and hope it will take a more active role than it has in the past in bringing some order to the retransmission chaos.”

For a detailed discussion about the retransmission consent debate, and to see what ideas have been floated in the policy community about how the law might change, check out theIntellectual Property Breakfast Club’s June discussion panel on the subject.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

Antitrust

American Innovation and Choice Online Act Advances to Senate Floor With Bipartisan Alliance

Klobuchar was able to rally Democrats and Republicans to support her bill, but its future depends upon a shaky alliance.

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Sen. Amy Klobuchar

WASHINGTON, January 21, 2022 – Senators on the Senate Judiciary Committee have formed a tenuous, bipartisan alliance to curb allegedly anticompetitive behavior by large tech companies.

During a Thursday markup, the Senate Judiciary Committee voted 16-6 to send the American Innovation and Choice Online Act, S. 2992, to the Senate floor. The bill would prohibit certain companies with online platforms from engaging in behavior that discriminates against their competitors.

There is a laundry list of violations and unlawful behaviors enumerated in the bill, including unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

This bill would only apply to companies with online platforms that meet one of the following criteria:

  • Has at least 50,000,000 United States-based monthly active users on the online platform or 100,000 United States-based monthly active business users on the online platform
  • Is owned or controlled by a person with United States net annual sales or a market capitalization greater than $550,000,000,000, adjusted for inflation on the basis of the Consumer Price Index and is a critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform

Sen. Amy Klobuchar, D-Minn., the sponsor of the bill, referred to the bipartisan effort as “the Ocean’s 11 of co-sponsors,” featuring a diverse line-up of legislators, from Sen. Josh Hawley, R-Miss., and Sen. John Kennedy, R-La., to Sen. Dick Durban, D-Ill., and Sen. Richard Blumenthal, D-Conn.

Senators embrace specific and direct targeting of Big Tech

Klobuchar spoke directly about the need to target large companies, “We have to look at this differently that just startup in a garage – that is not what they are anymore. They may have started small, but they are [now] dominant platforms,” she said. “For the first time, the monopoly power is going to be challenged in what I consider to be a smart way.”

At the outset of the meeting, there were more than 100 amendments proposed by members of the committee, but by its conclusion, more than 80 of them had been withdrawn.

One of the amendments that worked its way into the bill was a markup that exempted subscription-based services from complying with the legislation, allowing services like Amazon Prime and Netflix to promote their own content above others’.

“The bill strikes the right balance between preventing the conduct that hurts competition, while also ensuring that platforms can continue to provide privacy and data security features to their users, compete against rivals in the United States and abroad, and maintain services that benefit consumers,” Klobuchar said.

A fragile alliance between read-meat Republicans and progressive Democrats

Though there were big names on both sides of the aisle supporting the bill, the alliance seemed fraught. Despite being supportive of the bill, Kennedy made it clear that his support was conditional. “I am a co-sponsor of this bill, but this bill is going to change – it is going to change dramatically,” he said. “I hope to be in the room when those changes are made, otherwise I will be off this bill faster than you can say ‘Big Tech.’”

Some of Kennedy’s criticisms harkened back to Section 230 issues raised by former President Donald Trump – calling some of the targeted companies “killing fields for the truth,” and stating that “their censorship is a threat to the first amendment.”

Despite his criticisms, Kennedy echoed other senators, both Republican and Democrat, who emphasized that they did not want the perfect to become the enemy of the good. “All we have done [for five years] is strut around, issue press releases, hold hearings, and do nothing. So, this is a start.”

Klobuchar also received push-back from members of her own party, with Sen. Dianne Feinstein, D-Calif., stating that she was critical of the bill because it is designed to specifically target large tech companies, many of which are based out of California (though she ultimately voted to advance the bill to the Senate floor).

Hawley rebuffed Feinstein in his comments, stating that he supports the bill for the same reason Feinstein refuses to. “[Feinstein] pointed out – I think rightly – that this bill is very specific and does target specific behavior – anti-competitive behavior – in a specific set of markets. I think that that’s a virtue and not a vice.”

The measure must be passed by the full Senate, as well as the House, before it goes to the president for his signature.

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Free Speech

Former GOP Congressman and UK MP Highlight Dangers of Disinformation and Urge Regulation

Will Hurd and Member of Parliament Damien Collins say disinformation on social media platforms a worry in midterm elections.

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Photo of Will Hurd from March 2016 by Paul Morigi used with permission

WASHINGTON, January 11, 2022 – Former Republican Rep. Will Hurd said that disinformation campaigns could have a very concerning effect on the upcoming midterm elections.

He and the United Kingdom’s Member of Parliament Damien Collins  urged new measures to hold tech and social media companies accountable for disinformation.

Hurd particularly expressed concern about how disinformation sows doubts about the legitimacy of the elections and effective treatments to the COVID-19 virus. The consequences of being misinformed on these topics is quite significant, he and Collins said Tuesday during a webinar hosted by the Washington Post.

The Texan Hurd said that the American 2020 election was the most secure the nation has ever had, and yet disinformation around it led to the insurrection at the Capitol.

The British Collins agreed that democratic elections are particularly at risk. Some increased risk comes from ever-present disinformation around COVID and its effects on public health and politics. “A lack of regulation online has left too many people vulnerable to abuse, fraud, violence, and in some cases even loss of life,” he said.

In regulating tech and media companies, Collins said citizens are reliant on whistleblowers, investigative journalists, and self-serving reports from companies that manipulate their data.

Unless government gets involved, they said, the nation will remain ignorant of the spread of disinformation.

Tech companies need to increase their transparency, even though that is something they are struggling to do.

Yet big tech companies are constantly conducting research and surveillance on their audience, the performance of their services, and the effect of their platforms. Yet they fail to share this information with the public, and he said that the public has a right to know the conclusions of these companies’ research.

In addition to increasing transparency and accountability, many lawmakers are attempting to grapple with the spread of disinformation. Some propose various changes to Section 230 of the Telecom Act of 1996.

Hurd said that the issues surrounding Section 230 will not be resolved before the midterm elections, and he recommended that policy-makers take steps outside of new legislation.

For example, the administration of President Joe Biden could lead its own federal reaction to misinformation to help citizens differentiate between fact and fiction, said Hurd.

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Antitrust

CES 2022: Patreon Policy Director Says Antitrust Regulators Need More Resources

To find the best way to regulate technology, antitrust regulators need more tools to maintain fairness in the digital economy.

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Larent Crenshaw (left), head of Patreon's global policy team

LAS VEGAS, January 7, 2021 – The head of Patreon’s global policy team said federal regulators need more resources to stay informed about technology trends.

Laurent Crenshaw told CES 2022 participants Friday that Congress should provide tools for agencies like the Federal Trade Commission to enforce consumer protection standards.

“I’m not going to say that big tech needs to be broken up, but there should be appropriate resources for federal regulators to understand the digital marketplace,” he said. “We’re are still living in a world that is dominated by big actors, and we’re debating about whether to even give federal regulators the power to understand how the marketplace is moving toward digital.”

Crenshaw of Patreon said that more resources were necessary at the FTC in order to understand the digital marketplace. Patreon is a membership platform that provides a subscription service for creators to offer their followers.

Such resources would empower the agency to place appropriate safeguards for smaller technology innovators. “So in 10 [or] 20 years, it’s not just the replacements of the current Google, Apple, or Facebook, but something entirely new,” he said.

Panelists echoed Crenshaw’s point that consumer welfare should guide competition policy. Tyler Grimm, chief counsel for policy and strategy in the House Judiciary Committee, said that antitrust should bend to the consumer welfare standard. “Antitrust should leave in its wake a better economy,” he said.

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