Summary of 2nd Meeting of FCC's Consumer Advisory Committee (Nov. 18, 2005)

The newly-rechartered Consumer Advisory Committee met for the 2nd time on Friday, November 18, 2005.

Committee Chair Shirley Rooker opened with a welcome and introductions and CAC Designated Federal Officer Scott Marshall shared logistics information.

I. Consumer & Governmental Affairs Bureau Chief Monica Desai

Consumer & Governmental Affairs Bureau Chief Monica Desai reported on recent FCC activity since the CAC last met in June. Her report focused on the FCC's response to Hurricane Katrina. She also mentioned Commission work on Truth in Billing, wireless early termination fees, enforcement of the Telephone Consumers Patriot Act and the Junk fax Act, and slamming. She noted the four disability-related items on the FCC's July open meeting agenda.

Chief Desai discussed the recent redesign of the FCC's website, including revised online forms aimed at making it easier for consumers to file indecency and telephone-related complaints. She asked for CAC input on the web site redesign.

II. Remarks of FCC Commissioner Jonathan S. Adelstein

Commissioner Jonathan S. Adelstein spoke briefly to the CAC, thanking the members for their service. He noted that in remarks he made to the group in June, he spoke about "access" -- in broadcasting to a diversity of viewpoints, to the economic benefits of the Internet and broadband and in telephony to emergency 911 services. He noted the importance of the day's agenda with a discussion on media ownership, the public interest obligations of digital television broadcasters and access to Video Relay Service, a service, he said, that can change lives and make life easier for those who use it.

Concerning public interest obligations, he noted that the FCC obviously needs encouragement to move forward on this yet undecided part of the digital television transition.

Commissioner Adelstein said the Committee's recommendations will be given great weight at the FCC and he asked that the Committee be creative and challenge the Commission to "put consumers in control."

III. Perspectives on Telecommunications Competition and Consumers

CAC Competition Working Group Chair introduced the day's first panel on competition in telecommunications sectors. The goal of the Working Group, she said, was to begin a dialogue on what's going on in the marketplace so that members could come to a agreement on a definition of competition. Noting the changes in the field since passage of the Telecommunications Act of 1996, she asked what the impact has been on competition and consumers.

Ovum Independent's Roger Entner began the discussion with a report on the wireless industry which he said is consolidating, but very competitive. Two hundred million of two hundred and ninety million Americans now use cell phones. 97% of the US now has a choice between three wireless carriers. Average monthly revenue per wireless subscriber has been flat the past few years (fifty dollars/month), but usage of phones is up. Whereas most people used to pay around twenty-five cents per minute for wireless phone service, now that rate is about seven cents.

Larry Spiwak of the Phoenix Center said that he believes that 2005 will be a year we look back on as a banner year in telecommunications. Why? It is the year he switched to Internet telephony (VoIP). He noted that there will never be more than a couple of terrestrial competitors in the telecommunications markets. He said we always need to keep a eye on these two players (cable/telephone) are competing. He thinks they are trying to now. Although telephone and broadband service are not profitable enough for the buildout of high-speed networks, he noted that video delivery is a "silver bullet" because people are willing to pay for TV. He said local video franchises are a barrier to entry into this market.

Stanford Washington Research Group Senior VP Paul Gallant ranked the various telecom sectors from most to least competitive. 1) Wireless: he noted the FCC's light regulatory touch has created a competitive environment in the wireless cell phone market. 2) Video/pay TV: cable has lost one-third of subscribers to satellite operators. This is putting pressure on cable to rollout broadband, telephony and video on demand. 3) Wireline: AT&T predicted it would have one-third of local phone market within a few years of passage of the Telecommunications Act of 1996 -- who knew the company would have to be purchased by SBC to make that happen? 4)Broadband: This market is a duopoly of cable and telephone companies. Although it is better than a monopoly, it is not competitive enough. There is hope, however, for wireless providers to compete here -- especially when spectrum from the digital TV conversion is made available.

Larry Irving -- the former Director of the National Telecommunications and Information Administration at the U.S. Department of Commerce -- said he disagreed that 2005 would be the year we looked back on as "the year," predicting that 2006 would be the banner year. And instead of repeating that the goal in telecommunications policy is competition, he redefined the goal as the benefits of competition: innovation, better services and lower prices. He noted, as an example, that satellite's entry into the video delivery market saw more US Latinos signing up for the service in part because recent immigrants from Central and South America were accustomed to this technology. Satellite operators seized this opportunity, offering my Latino-focused channels. The cable industry soon followed. The entry of telephone companies into this business, he predicted, should mean even more competition to serve presently-underserved communities.

Mr. Irving said the next few years should be really interesting should the field. He noted that universal service needs to be measured in a new way -- based on the individual, not the household. He also noted the need to bring the price of broadband down so penetration increases -- and the need to better serve rural areas, people of disabilities and people of color.

The issues before policymakers in 1995 (when Congress was last working on telecom overhaul) are much different than what we're facing 2005. And the issues of 2010 will be much different, too.

IV. Recommendation Concerning Consumer Interest Obligations of Digital Television Broadcasters

The CAC adopted a recomendation calling on the FCC release Reports and Orders within six months on the following dockets: 1) Public Interest Obligations of TV broadcast Licensees (MM Docket No. 99–360)and 2) Standardized and Enhanced Disclosure Requirements for Television Broadcast Licensee Public Interest Obligations (MM 20 Docket No. 00–168).

Before the Committee adopted the recommendation, it heard a short appeal from Capitol Broadcasting's James Goodmon, who argued that minimum public interest obligations would help preserve local television broadcasting in the US. Without defined obligations to serve local communities, he argued, local broadcasting will be dead within 15-20 years. Localism, diversity and competition, he said, provide the compass that keeps broadcasting on the right course. He cautioned that consumers have too little say in proceedings at the FCC and that is why the Commission's ruling on media ownership went so array. The Commission has been considering the public interest obligations of digital television broadcasters for six years, he said, he is concerned that broadcasting is not getting the attention it should because it is not a trendy new technology.

Goodmon distributed a proposed processing guideline for ensuring that broadcasters meet their public service obligations. The plan calls for expedited license renewals for stations that provide 3 hours/week of local public and electoral affairs programming; 75 unpaid public service announcements per week; and electronically report quarterly on their public interest performance.

V. Recommendation Regarding Access to VRS Networks

The CAC strongly recommended that the FCC mandate the removal of existing barriers to video relay services (VRS). More specifically, the CAC urged the Commission to require that the video equipment of providers who are reimbursed through the Interstate TRS Fund allow every VRS consumer that is deaf or hard of hearing the privilege of a dial tone -- anytime, anywhere.

VI. Public participation via New Information and Communication Technologies at the FCC

Joanne Holman, Associate Professor at the School of Media Arts & Design at James Madison University, gave a brief presentation on how communication technology is changing the way the public participates in FCC proceedings. More than two million comments were filed in the FCC's media ownership proceeding alone, but there's little evidence that the FCC considered these comments when formulating a decision.

Prof. Holman argued that increased public participation in FCC proceedings should lead to better decisions by the Commission because an engaged public would feel more ownership of the resulting policy. However, Prof Holman indicated that there's a lack of information about the FCC's work. She identified three types of information that people need to effectively participate in rulemakings: 1) Issue reports (news articles, etc), 2) Contextualization (analysis often offered in white papers) and 3) Enabling (the info that educates and mobilizes people to participate).

The media, Prof Holman said, should provide these three types of information, but they rarely do so. In fact, the media may actually hinder public participation (especially in the media ownership proceeding). Media reform organizations have stepped in, using the Internet, to fill this educational and enabling role. But for all the public participation generated in the media ownership proceeding, again, there's little evidence that the Commission considered those public comments.

In conclusion, Prof Holman said communication technology should be helping FCC staff incorporate public opinion, but to date, it has not.

VII. Captioning and DTV Demonstration

Julie Kearney, CAC Member from the Consumer Electronics Association, organized a demonstration of digital television closed captioning.

The presenters were Brian Markwalter, Vice President Technology and Standards, Consumer Electronics Association; Paul Thomsen, Director, Design/Technology & Standards, Hitachi Home Electronics (America), Inc.; Robert N. Blanchard, Standards Coordinator, Sony Electronics Television Operations of the Americas, Advanced Technology and Planning Division.

They demonstrated the technology behind the captions that can appear in digital television content, if provided by producers and programmers.