United Telecom Council (UTC) said it “adamantly” opposed recent Nextel proposal to FCC that it said would constitute swap of some of that carrier’s wireless spectrum and that of public safety users. In proposal to FCC late last month, Nextel proposed realigning frequencies at 700, 800 and 900 MHz and 2.1 GHZ to reduce interference that had emerged as problem at 800 MHz between specialized mobile radio (SMR) and public safety licensees. Proposal would double public safety’s allocation of 9.5 MHz of noncontiguous spectrum at 800 MHz (CD Nov 23 p1). However, UTC balked at proposed reallocation of 800 MHz private land mobile radio (PLMR) band. If adopted, that “would devastate hundreds of vital critical infrastructure communications systems now operating in this spectrum,” UTC said. UTC Vp-Gen. Counsel Jill Lyon said: “Nextel’s proposal, while politically attractive on the surface, would cause significantly more harm than it would solve.” Nextel’s White Paper calls for “forced migration of thousands of private wireless systems to inadequate and often unavailable spectrum,” she said. That would put at risk ability of utilities, water systems and energy companies to provide “critical services,” Lyon said. Nextel arguments that its plan would reduce interference issues for public safety community would come at expense of critical infrastructure operations, UTC said. Critical infrastructure is “area of national concern no less, if not more, important than public safety emergency communications,” group said. Business and Industrial/Land Transportation (BI/LT) licensees, in addition to public safety users, would be compelled to move from their existing 800 MHz assignments, UTC said. BI/LT licensees could operate only on secondary, noninterference basis in their existing slots at 806/816-851- 861 MHz, it said: “Nextel proposes that these licensees pay for their own forced migration to Nextel’s licenses on other frequency bands.” UTC said it planned to ask FCC to not begin rulemaking based on Nextel proposal, to which public safety community had given early support.
Hispanic groups are latest to oppose NBC acquisition of Telemundo (CD Dec 5 p7), saying media consolidation hurts diversity, program content, minority ownership. “By its very nature, media consolidation means that companies are seeking the greatest market share at the lowest cost,” said Juan Figueroa, pres. of P.R. Legal Defense & Education Fund: “This has had devastating effects on Latinos [including] layoffs, hiring freezes and cuts in critically important but less lucrative program areas such as news and public affairs.” Other groups signing FCC filing included National Council of La Raza (NCLR), National Hispanic Media Coalition, League of United Latin American Citizens, National P.R. Coalition, Mexican American Grocers Assn., Nosotros, National Assn. of Hispanic Publications. Filing also said minority ownership of media was half of level 5 years ago, with Hispanics owning less than 1% of U.S. TV stations. “The NBC- Telemundo merger means the programming aimed at Latino audiences is in the hands of non-Latinos, and we cannot dismiss the importance of Latino ownership,” NCLR Pres. Raul Yzaguirre said.
If rift between Paxson Communications and NBC leads to divorce (CD Dec 5 p7), Paxson might be able to land MGM as new suitor, speakers said Wed. at UBS Warburg conference in N.Y. MGM Chmn. Alex Yemenidjian said “the Paxson asset would fit very well with MGM,” providing it came with “right structure and right price.” He didn’t suggest MGM was poised to pursue Paxson, and when asked about possible parameters for acquiring a network or distribution outlet, he said it would be “difficult to discuss publicly” such matters. Pax TV COO Dean Goodman told conference that despite new deregulation fervor in D.C., possibility of govt. giving blessing to “triopoly” such as could emerge from NBC takeover of Telemundo, along with Paxson, was almost nil. “The Democrats are still upset about 2 stations in a market,” he said. Paxson Pres. Jeff Sagansky said he expected both arbitration and FCC proceedings sought by Paxson would be completed quickly, “certainly within the first 3 quarters of next year.” He also said that “if it comes to an unwind, we will find a new partner or, more likely, a buyer.”
DirecTV supports ban on exclusive agreements between satellite and cable operators, it said in FCC filing Tues. (CD Dec 5 p10). DirecTV said provision was critically important to survival and growth of alternative technological competitors to incumbent cable systems in Multichannel Video Programming Distributor (MVPD) market. Company said rule, which is due to expire next Oct., should be preserved because: (1) Cable exclusivity prohibition remains important protection for DBS and other MVPDs. (2) Regulation hasn’t deterred development of new programming networks. (3) Exclusivity between noncable MVPDs and nonvertically integrated programmers has been boon to new MVPD entrants. (4) There’s no legal basis for Commission to narrow scope of exclusivity restriction.
Ad rates are no higher in cities where single company owns TV station and newspaper, and those markets have benefited from pooling of newsgathering resources, broadcasters and newspaper owners said in comments on FCC rulemaking on eliminating newspaper-broadcast cross-ownership ban (CD Dec 4 p9). Cox said data on Dayton and Atlanta markets, where it has grandfathered cross-ownership, clearly support claim of no impact on ad rates. Gannett said improved news availability in markets with cross-ownership “overwhelmingly demonstrate… the societal benefits of encouraging local news outlets to pool resources.” ALTV said ending ban also is justified by increasing competitiveness of local markets since neither broadcast stations nor local newspapers remained “dominant giant” in local markets that they were in 1975 when ban was imposed. Given arrival of cable news and Internet, ALTV said, “long gone are the days where the public waits for the 11 o'clock news or the morning paper.” Schurz Communications said local news outlets now must compete against Internet-delivered newspapers from around world, as well as streaming media, so FCC “should not continue to regulate newspaper owners more strictly than any other media enterprise.” Cox said original spectrum scarcity rationale for ban “has vanished” with media proliferation and “for a broadcast ownership rule to pass judicial muster, the Commission must show both that a specific harm actually exists and that the rule will actually fix or prevent the harm.”.. Tribune Co. said Sept. 11 events, in which broadcasters and newspapers pooled resources, showed benefit of easing ownership rules. It said current environment was “megamall” of media outlets: “Never before has the media marketplace been so fragmented and so clearly incapable of domination… This competitive marketplace, not the rule, is the best guarantor of diversity.”
NCTA said in FCC filing that Congress and Commission never intended 1992 exclusivity ban on horizontal programming by cable MSOs to be “a lifetime guarantee of access” to programming substantially financed by cable companies. Deadline for comments on programming access issue was Tues. NPRM asked whether exclusivity ban still was necessary to promote diversity and competition in marketplace and whether ban should be extended after Oct. 5, 2002, or be allowed to sunset. Cablevision, in its filing, contended that forcing it to sell its programming with DBS or others it competed with would violate its First Amendment rights. It said burdens on protected speech by cable operators and cable programmers was permissible only to “further an important and substantial government interest” and if it was absolutely essential to that cause. Cablevision said robust competition in multichannel video marketplace ruled out that standard. It said ban raised 5th Amendment concerns because it would force cable operators to give up exclusive rights to their own property and turn it over to others. NCTA contended that eliminating ban would increase competition and diversity. Specifically, it said exclusive contracts could spur other investments in content creation and allow cable operators to differentiate themselves from their competitors. “The exclusivity ban is a relic of a bygone chapter in cable regulation,” NCTA said. However, American Cable Assn., which represents more than 900 independent cable companies, said if provision were allowed to sunset, small cable companies could lose access to more than 1/3 of their satellite programming services and would “raise serious questions concerning the continuing viability of many small cable businesses.” EchoStar, which competes against cable, said that in 10 years since system was enacted, strides had been made toward fully competitive marketplace, but full benefits of competition “have yet to be realized by most consumers.” In urging continuation of ban, EchoStar said cable continued to dominate market.
GM, Hughes and EchoStar filed applications at FCC for approval to transfer control of licenses to merged company, companies announced late Mon., outlining plans and goals of merger. There wasn’t much new in filings, which presented familiar EchoStar positions for antitrust approval of DBS merger despite opposition from Hill and broadcast industry. Primary factor was much-repeated premise that Hughes-EchoStar merger would provide many benefits for consumers (CD Nov 30 p6), including more choices, better programming, competitive prices and viable alternative to cable. EchoStar also promised improved DBS service to Hawaii and Alaska. “There will be no anticompetitive multichannel video programming distributor market effects with the proposed transaction” filing said.
House Judiciary Committee and House Telecom Subcommittee took turns Tues. grilling DBS executives on why govt. should approve EchoStar-DirecTV merger. In Judiciary Committee hearing, EchoStar Chmn. Charles Ergen said merged DBS provider entity would provide significant benefits, saying it would create viable nationwide competitive alternative to cable while freeing up spectrum that could be used for rural broadband deployment: “Without this merger we won’t see broadband development in rural America in our lifetime.” He played down criticism that merger would create DBS monopoly. Considering high rates of cable penetration across nation, even merged entity “hardly makes us a monopoly” in multichannel video programming distribution market, he said. Ergen also said new company still would face competition from C-band satellite service providers, contention that Chmn. Sensenbrenner (R-Wis.) said was inconsistent with statements Ergen made last year in federal court.
FCC Common Carrier Bureau (CCB) seeks comment on remand, by 5th U.S. Appeals Court, New Orleans, of $650 million figure set for new universal service fund under CALLS plan. On May 31, FCC adopted CALLS order, which reformed interstate access rate structure for price cap carriers by removing implicit universal service support and replacing it with explicit support. Commission accomplished that by creating new universal service support mechanism and said that amount fell within range of proposed amounts submitted in proceeding. On Sept. 10, appeals court remanded that portion of CALLS order and concluded that Commission had failed to exercise sufficiently independent judgment in establishing $650 million amount. Bureau specifically seeks comment on uses of cost model, including Commission’s forward-looking high-cost model or study submitted by AT&T to identify appropriate amount. Comments are due 30 days after publication in Federal Register.
Saying it could be forced to divest 5 major market stations, and NBC might be unable to complete anticipated takeover of Paxson, Paxson asked FCC and American Arbitration Assn. (AAA) to resolve its disagreement with network. Paxson charged NBC was exerting undue control over Paxson, potentially creating unacceptable duopolies, and its planned acquisition of Telemundo could create multiple “triopolies.”