Consumers are using TVs that can receive digital video, using DVRs and watching online video on their sets in increasing numbers, said the FCC’s 15th Annual Video Competition Report, the full text of which was released Monday. As expected (CD July 22 p12), the report showed some shifts in consumer behavior toward alternative methods of viewing content, though it also shows the number of broadcast TV viewers remaining the same since the last report. Some cable attorneys told us Monday that little in the video competition report was surprising or unexpected, in keeping with what the draft document reportedly said (CD July 18 p1).

The FCC Wireline Bureau revealed details of its challenge process for the second phase of the Connect America Fund. The bureau plans to look to the National Broadband Map “to find the presence of unsubsidized providers that deploy fixed, land-based technologies such as cable, fiber, DSL, or fixed wireless providers like WISPs,” check if they provide voice and then publish a list of census blocks lacking an unsubsidized provider and eligible for CAF, bureau Chief Julie Veach explained in an FCC blog post Thursday (http://fcc.us/109gerU). She described a challenge framework intended to “expedite resolution of disputes” that “includes collecting specific and consistent information, on a form, of facts and evidence ranging from census tract identifiers to advertisements for service and customer data.” The bureau plans to collect challenges, review them and issue public notices seeking any rebuttals, she said. The challenge order was released and adopted Thursday (http://bit.ly/10VVOnG). “We particularly encourage state public utility commissions and broadband mapping authorities to participate in the challenge process and provide any information they believe to be relevant to our consideration of which census blocks should be eligible for the offer of Phase II model-based support,” it said. NTCA CEO Shirley Bloomfield judged these to be “significant developments in the continuing debate over how to create regulatory certainty and build a broadband future for consumers and businesses located in the most rural areas,” she said in a statement. “Given that the FCC is already implementing a broadband-oriented Connect America Fund for consumers in areas served by larger carriers, it’s encouraging to finally see progress toward tailored updates that would enable smaller carriers to also respond more effectively to the broadband demands of their customers.” She praised the “greater clarity” on the reporting requirements for companies. The American Cable Association also praised the order. “The FCC’s approach is particularly reasonable because it establishes a presumption that cable operators shown on the National Broadband Map to be offering broadband speeds of 3 Mbps/768 kbps in a census block and also offering voice service in that area satisfy the FCC’s other non-speed criteria for deeming an area as served,” said ACA President Matt Polka. “Price cap carriers then appropriately have the burden to prove that the cable operator’s service does not meet at least one of these criteria.”

If eligible areas for the Connect America Fund Phase I program are expanded to include households without 4/1 Mbps service, the amount of support per location “should decrease significantly” below the $775-per-household given in the first round of the program, the American Cable Association told the FCC in a letter Friday (http://bit.ly/Ya6BtY). That’s because the average cost of the locations without 4/1 service that price-cap LECs could serve is “well below” the average cost of locations without 760/200 kbps service, it said. Using the current version of the commission’s Connect America Cost Model, ACA found that the expanded locations should require only 60 percent of the 2012 support amount, or $468 per location, it said. A circulating draft order would extend eligibility to additional homes for an amount somewhat lower than $775, agency officials told us (CD April 25 p1).

Another $300 million round of Connect America Fund Phase I money is set to be doled out, as outlined in an order circulated Wednesday by FCC Chairman Julius Genachowski, agency officials said. The order would maintain the existing benefit of $775 per location for unserved homes available in the first round of Phase I funding last year, while extending eligibility to additional homes that have low-speed Internet such as legacy 1.5 Mbps service, officials said. Those locations will be eligible for an amount somewhat lower than $775, they said. Funding will be available exclusively in areas where no unsubsidized competitors offer service, officials said.

The FCC Wireline Bureau sided with advocates of using a greenfield Connect America Fund cost model rather than a brownfield one for estimating costs. Industry officials have characterized this choice as the most important before the commission as it develops a forward-looking cost model to estimate the support necessary to serve areas where costs are above a specified benchmark, but below a second “extremely high-cost” benchmark (CD Jan 16 p3). Monday’s order is a win for the ABC Coalition, made up of USTelecom and several ILECs, which support the greenfield approach. Commission officials signaled earlier this month they would endorse a greenfield approach over the alternative approach (CD April 5 p3). A greenfield approach estimates the full cost of constructing and operating a network from the ground up, while a brownfield approach takes into account the existing infrastructure already in the ground.

DirecTV and the Weather Channel would get more time to comply with coming FCC requirements (CD March 29 p4) for on-screen emergency information to be carried in a format where it can be aurally relayed to those with vision problems, while some small cable operators could seek waivers, said agency and industry officials. They said Media Bureau staff recently proposed to other FCC officials making such changes to a draft order due under statute to be issued by Tuesday. Those changes address some of the concerns of DirecTV and the Weather Channel to give the DBS provider and the programmer a delay in making localized emergency information available on the secondary audio programming stream, or carrying that SAP information as video descriptions, said commission and industry officials. Those two companies and the American Cable Association had sought changes for passing along SAP to TV viewers to what’s in the Feb. 28 version of the draft order.

The FCC Wireline Bureau has chosen a “greenfield” model for Phase II of the Connect America Fund, said industry and agency officials. A greenfield approach estimates the full cost of building and operating a network from scratch. The ABC Coalition, consisting of USTelecom and several ILECs, supports the greenfield approach. The American Cable Association, a primary proponent of the competing brownfield model (CD Jan 16 p3), criticized the choice of a greenfield model as a “wasteful” move that will hurt consumers and small cable operators.

The American Cable Association spoke with FCC Wireline Bureau officials Monday to discuss the Connect America Fund Phase II cost model, it said in an ex parte filing (http://bit.ly/10zjrNi). ACA discussed how the model accounts for the tax shield associated with interest payments on debt, it said.

Requirements for video descriptions from emergency on-screen crawls haven’t changed much from what was in an FCC draft that has been circulating for a month (CD March 11 p3), said agency and industry officials. They said in interviews Thursday that the draft Media Bureau order and further NPRM hasn’t been controversial among the agency’s members, and a public-interest official said it may be approved largely intact. He said he hopes the further notice on Internet Protocol programming sent by MVPDs to connected devices in a pay-TV household gets a section added on accessibility of emergency crawls to those with both sight and hearing impairments.

Connect America Fund Phase I support should be awarded “efficiently” so “scarce government resources are not wasted,” the American Cable Association told an aide to FCC Commissioner Ajit Pai Thursday, an ex parte filing said (http://bit.ly/ZUTARX). The commission should make available an amount of funding that “closely matches the cost to deploy broadband in the location to be served,” ACA said. The commission should be cautious of adopting a “new and more elaborate regulatory regime” that would lower the average cost of eligible locations, or increase the amount of funding available per location, it said. The commission should “certainly not” amend its rules without “sufficient evidence” that they're “so restrictive or arbitrary that they do not meet the original objectives for the program,” ACA said. Price cap LEC filings are “largely devoid of data” justifying expansion of the areas where should be provided, increase in the amount of support, or its use for deployment of second-mile fiber, ACA said.