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from: Broadcasting and Cable

Washington Watch
By John Eggerton -- Broadcasting & Cable, 12/18/2006

Video-Franchise Law in Neutral

Telephone companies spent millions of dollars pushing for national video-franchise reform that would allow them to more easily compete with cable in video and broadband access.

The issue had the backing of Rep. Joe Barton (R-Texas), chairman of the House Energy and Commerce Committee; Rep. Fred Upton (R-Mich.), chairman of the House Telecommunications Subcommittee; Rep. Ted Stevens (R-Alaska), chairman of the Senate Commerce Committee; and FCC Chairman Kevin Martin.

But the seeds of the bill’s undoing had been sown in fall 2005.

That’s when AT&T’s Ed Whitacre, in an interview with BusinessWeek, said he wasn’t going to give companies like Google and Yahoo! a free ride on his pipes: “For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for free is nuts!”

Computer companies and anti-Big Media activists rallied. Many had been complaining about the FCC’s decision to declare telcos free of mandatory-access requirements for outside Internet Service Providers. The “net neutrality” issue was born.

The issue of how telcos and cable companies would be able to manage the Internet traffic on their networks steamrolled the broader issue of video-franchise reform.

A bill that appeared to be headed for passage after the House approved its version of the bill barely passed the Senate Commerce Committee on an 11-11 tie and failed to get floor time from Senate Majority leader Bill Frist (R-Tenn.).

Barton’s bold pledge that the reform legislation would pass by year’s end—he had challenged reporters to bet him on it, although none took the bet—went unfulfilled. After big talk about the need to reform telecom law, the lame-duck Congress exited without passing the bill.

Telcos were looking for help from Martin last week. He has scheduled a vote on several possible franchise reforms that could go a long way to giving the telcos the relief they were seeking.

You Can’t Say That on TV
The FCC may not get the final word on profanity. In March, the agency released a package of indecency rulings, including a big fine against CBS’ Without a Trace.

In addition to the fines, it issued four profanity rulings without any penalty. The FCC called them an effort to give broadcasters the guidance they had asked for on the commission’s new policy on cussing.

But because there was no fine, the guidance was essentially the FCC’s final word on the subject in those cases. Broadcasters could appeal the decisions directly to court, and most did.

The FCC took a second look at those decisions, however, saying it was wrong not to have given broadcasters a chance to respond or appeal, even though the rulings produced no fine or black mark in the record.

Others suggested that the FCC, by asking for that second look, was just trying to strengthen its case in court by removing the weaker elements. It arguably did that by declaring that a ruling against a CBS News show should have been given wider leeway and taking back the ruling against NYPD Blue on procedural grounds.

Now broadcasters have a second big case to make in court—CBS is challenging the Janet Jackson fine in another federal court—and the FCC has arguably made itself more vulnerable to a court challenge that will likely ultimately reach the Supreme Court.

John Crigler, an attorney with Garvey Schubert Barer and a veteran of the indecency wars, agrees: “The rationale for indecency is at least there is language in the old Pacifica case [the “seven dirty words” case] that the commission can go back to. But for profanity, it’s got nothing to go on. That’s just pulled out of the air.

“The FCC,” he adds, “keeps finding something that it wants to regulate that isn’t covered, so it creates a new category to cover that.”

The Disappearing Multicast Must-Carry
FCC chairman Kevin Martin had waited more than a year to get his Republican majority at the FCC. But when Republican Robert McDowell was finally installed early last summer, Martin’s plan to hand broadcasters a big victory by requiring cable to carry broadcasters’ multicast digital signals was thwarted when he couldn’t muster that third vote from McDowell.

The item had to be pulled from a June 2006 meeting, McDowell’s first, and the Martin majority was off to a shaky start.

That frustration carried over into the high-profile Bell South/AT&T merger.

With the Justice Department timing its approval of the deal to jibe with Martin’s scheduling of a vote, the chairman had to yank the item from the agenda three times in the fall, thwarted by commission Democrats angry over Justice’s conclusion that the merger didn’t raise network-neutrality issues or decrease competition.

Now Martin has potentially broken that tie. The FCC’s general counsel, following Martin’s inquiry, cleared McDowell to vote on the merger.

General Counsel Sam Feder argued that the appearance of a conflict was not sufficient to trump the commission’s interest in breaking the deadlock.

But that decision has further exercised Democrats, who have peppered the FCC with e-mails carrying pointed requests for information on the merger, media ownership and more, with no sign of letup.

Martin could have a big victory, however, if he gets McDowell’s vote for those video-franchise reforms.