Lawmakers Eye Cable Act Rewrite for 2013

Subcommittee Chairman Greg Walden, R-Ore., said in his opening remarks he didn’t believe lawmakers should expand video regulation. “Regulation is not only unnecessary in such a vibrant market it can harm this nascent competition,” he said. “The last thing we want is to shackle everyone’s entrepreneurial spirit with one size fits all rules designed for another time.” Walden added that if new regulations are proposed, it would be unfair to apply them in a disparate fashion. “Everybody wants a little different deal than everybody else’s deal, and we are trying to find out what is the right regulatory regime.”

Rep. Lee Terry, R-Neb., thinks there “probably needs to be some revisions” to the 1992 Cable Act, he told us. “It looks like it is going to boil down to a retrans fight. But I think the issues are bigger than just retrans, so we have got to figure out a way not to get bogged down into that and look at the big picture.” Terry said it is “highly probable” that members could start crafting a reform of the 1996 Telecom Act as early as next year. “We haven’t made any official decisions, but this hearing and a couple more on video is to see if we really need to delve into that,” he said. “I think probably the answer is we could do something next year. I think that would be in the highly probably range.”

Rep. Joe Barton, R-Texas, advocated a rewrite of the 1992 Cable Act. “It’s obvious just looking and listening to the witnesses that it’s really time to do a major rewrite,” he told us. “You can’t stop progress, and we are trying to fit a marketplace into a regulatory scheme that was designed for a technology that was 50 years ago. … Some sort of FCC oversight to monitor things is probably still necessary, but it’s a debatable proposition whether you need the scheme that you have right now.” Barton said it’s “too late in this Congress, but I hope in the next Congress we take this up."

Rep. Steve Scalise, R-La., also advocated a modernization of the laws that govern the video and communications market. He held up a 1992 Motorola DynaTAC cellphone, memorable for its use by Zack Morris in Saved By The Bell and said “the laws were written when we used these devices to connect.” Modernizing “this decade’s regulatory framework should focus on providing relief to all stakeholders by repealing the intertwined 1976 and 1988 copyright licenses as well as the 1992 Cable Act,” he said. Scalise is the author of the Next Generation Television Marketplace Act (HR-3675), which would repeal from the Communications Act mandates on carriage and purchase of certain broadcast signals by cable and satellite companies; repeal retrans and compulsory license provisions; and repeal media ownership rules.

NAB representative and Hearst CEO David Barrett said Congress “got it right in 1992” when it noted that broadcasters must be allowed to control the use of their signals. He urged lawmakers to “reject any erosion of the bedrock principles” of retransmission consent and exclusivity rules. But Dish Network Chairman Charlie Ergen described the retrans battles and subsequent TV blackouts over disagreements as “a bit of an unfair food fight."

Subcommittee Ranking Member Anna Eshoo, D-Calif., and full Committee Ranking Member Henry Waxman, D-Calif., beseeched the chairman to hold a hearing to consider the market impact of the proposed deal between Verizon Wireless and SpectrumCo. Both members have repeatedly asked for a hearing to question stakeholders in Verizon Wireless’s buy of AWS licenses from SpectrumCo and Cox Communications (CD June 21 p16). Public Knowledge President Gigi Sohn said that the joint operation entity agreement in the proposed deal has “enormous capability to be anticompetitive.” Sohn said it’s an agreement to develop patents and technologies to help stream video from wireless to wireline that will be used by the cable “cartels” to exclude other competitors.

Sohn urged lawmakers to carefully consider the Justice Department’s reported investigation into cable’s alleged discriminatory use of broadband data caps. Sohn told lawmakers that broadband data caps “aren’t inherently bad,” but warned that they “can be abused and it is important to know how they are used.” NCTA President Michael Powell bristled at Sohn’s suggestion that the cable industry uses data caps to manage network congestion. Rather, they are necessary in order to “monetize a high cost fixed network,” he said. “How you do that fairly is something that cable companies are experimenting with.” Powell said accusations that suggest the cable industry is discriminating against over-the-top video providers are “flatly wrong and belied by the facts.” The Justice Department has reportedly been examining whether or not the industry is discriminating against online video distributors.