The Senate Commerce Committee appears ready to adopt some, but not all, changes the House Commerce Committee made to indecency legislation. But the Senate doesn’t look ready to raise the fines to the $500,000 level approved last week by the House Commerce Committee. The Senate bill would raise fines to 10 times the current level -- to $275,000 for each utterance and a total fine of $3 million for any one incident.
Notable CROSS rulings
The House Commerce Committee voted overwhelmingly Wed. to raise FCC fines for “indecent” broadcasts to a level even higher than previously proposed. HR-3717, which was completely rewritten, gives the FCC authority to levy fines up to $500,000 for each violation, vs. the $275,000 previously proposed. The rewritten bill, called the Broadcast Decency Enforcement Act of 2004, will require the FCC to hold a license revocation hearing for a 3rd offense and create a 180-day time limit (or so-called shot clock) for the FCC to determine whether broadcasters have violated the indecency statutes.
The American ISP Assn. and BestWeb Corp. accused Verizon of “engaging in anticompetitive activity that will have serious consequences for the DSL-based information services market” because of the way it’s handling its retail DSL service. In a Feb. 20 petition asking the FCC for a declaratory ruling, the companies said Verizon’s tariff filings showed the Bell either “has failed to tariff the DSL transport service that Verizon Online uses in its retail DSL service offerings, or that Verizon is illegally cross- subsidizing its unregulated information services with revenues from regulated telecommunications services.” Either way, “Verizon is engaging in a ‘price squeeze’… because the margin between Verizon’s retail and wholesale rates is so low that it is not economically feasible for non-affiliated ISPs to compete,” they said. They asked the FCC to rule that an ILEC engages in an illegal price squeeze “when the margin between its retail ISP rates and its wholesale DSL transport rates is less than the non-DSL transport costs of providing retail ISP services.” They told the FCC: “Although the Commission has explicitly recognized that ILECs are capable of engaging in price squeezes with respect to DSL-based services, it as never declared the price point at which it presumes an ILEC is engaging in a price squeeze, let alone establish a rebuttable presumption.” They said this rule would mean Verizon was price squeezing “because the monthly rate of $43.95 it charges unaffiliated ISPs for DSL transport services exceeds the rate Verizon charges end users for DSL- based Internet access by $14… The Commission should order Verizon to demonstrate that the margin between its wholesale and retail rates is above an efficient provider’s cost for non-transport related inputs.”
FCC opted to retain existing emission limits as it proposed changes Thurs. in its Part 15 rules to foster broadband over power line (BPL) deployment. The nascent BPL industry welcomed the Commission’s proposals as a step toward lending regulatory certainty for investment and rapid deployment. While Chmn. Powell and 3 other commissioners expressed hope the proposed changes would balance the benefits of broadband deployment with the need to protect against harmful interference, Comr. Copps dissented in part for its failure to deal with policy issues.
The 3rd U.S. Appeals Court, Philadelphia, could issue its decision on FCC media ownership rules as early as next month, and at least one of parties is likely to appeal, several attorneys told us. On Wed. the court in 8 hours of oral argument (CD Feb 12 p8) heard an earful from public interest groups, FCC attorneys and media companies on Commission media ownership rules. Regardless of the court’s decision, at least one party is likely to appeal by either seeking a rehearing from the 3-judge panel or from the full 3rd Circuit, an attorney said. A petition for rehearing must be filed within 45 days of the court’s decision. The court questioned the consistency of the FCC diversity index in determining the newspaper-broadcast cross-ownership rules. The judges, combing through the index, pointed out to FCC Assoc. Gen. Counsel Jacobs Lewis that, according to the FCC’s analysis, a community college TV station had more influence than The N.Y. Times. Although the court’s decision is unpredictable, the judges’ apparent concern with the diversity index “could lead the court to remand the newspaper-broadcast ownership rule back to the FCC, complicating the apparent consolidation plans of companies such as Tribune and Media General,” analyst Blair Levin of Legg Mason said.
PHILADELPHIA -- Judges of the 3rd U.S. Appeals Court here Wed. called FCC’s diversity index for local cross- ownership “inconsistent” and asked the Commission how the court should proceed on challenges to the UHF discount rules.
Comcast is predicting its proposed merger with Disney will face few regulatory obstacles, assuming Disney agrees to it, and -- at least in the traditional sense -- industry officials seem to agree. However, some believe the sheer size of the deal and the visibility of the Disney name could place some nontraditional obstacles in the way of such a merger, possibly even legislative road blocks. Disney’s only comment was that it had received the offer and would “carefully evaluate” it.
Judges on the 3rd U.S. Appeals Court, Philadelphia, may take a pass for now on challenges to the 39% national TV cap, but will get an earful Wed. on FCC’s use of a “diversity index” to determine new local cross-ownership rules, eased restrictions on duopoly rules and allowing triopolies, and other key issues, several attorneys told us. The court scheduled 3-hour oral argument involving: (1) Public interest organizations led by Prometheus Radio Project, which has 45 min. to challenge the FCC rules as too deregulatory. (2) Broadcast companies, contending the rules are too regulatory, also for 45 min. (3) FCC lawyers and 2 groups of private parties supporting the rule, 90 min.
Parties involved in the fight over media ownership are continuing to tell the 3rd U.S. Appeals Court, Philadelphia, their plans for arguing the case. Attorney Henk Brands will argue on behalf of the TV networks, addressing in 10 min. challenges to the local TV ownership and local radio ownership rules; the standard for review; and possibly challenges relating to the national TV ownership rule and UHF discount. Attorney Miguel Estrada, representing Clear Channel, will take 10 min. to discuss the 8-station cap under local radio rules; restrictions on transfer under the local radio rules; and attribution of additional sale sales and marketing. Attorney Donald Verrilli, for NAB and Emmis, will have 10 min. to argue on challenges to the market definition in the local radio ownership rules and the Top-4 restriction in the local TV ownership rules. Sinclair attorney Kathryn Schmeltzer will take 5 min. to talk about the challenges to the Top-4 restriction in local TV and the treatment of triopolies. Attorney Carter Phillips, on behalf of the newspaper litigants, will have 10 min. to discuss challenges to the newspaper-TV cross-ownership restrictions.
Verizon’s proposed plan for determining access charges on VoIP has at least one fan on Capitol Hill: Rep. Boucher (D-Va.), a member of the House Commerce and Judiciary committees. In a National Consumer League forum on broadband Thurs., Boucher said he was “impressed” by the ideas Verizon Senior Vp Thomas Tauke presented last week on VoIP regulation (CD Jan 22 p1). Boucher stressed that reform of access charges and the Universal Service Fund (USF) was critical. Highlighting comments by Senate Appropriations Chmn. Stevens (R-Alaska), who is likely to take the reins of the Commerce Committee in 2005, Boucher said Congress was likely to begin efforts next year on comprehensive reform of USF and other telecom regulations.