Tuesday, September 24, 2019
Headlines Daily Digest
Court Overturns FCC Changes in Media-Ownership Rules
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Chairman Pai Remarks at the National Tribal Broadband Summit
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Media Ownership
The Third US Circuit Court of Appeals threw out changes to broadcast media ownership rules approved by the Federal Communications Commission in 2017, saying the agency should have looked more closely at potential impacts on minority ownership. The court said it agreed with public-interest groups that “the Commission did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities.” The court will vacate and remand “the bulk of” the FCC’s actions over the last three years for further consideration by the agency. The changes approved by the FCC in 2017 would have ended or loosened several basic ownership limits in the agency’s rules:
- Elimination of the longstanding rule that generally prohibited a single individual or company from possessing a daily newspaper and a radio or TV station in the same market.
- Eliminated a similar rule regarding cross-ownership of radio and TV stations.
- Make it somewhat easier for a company to own two TV stations in a single market.
- Elimination of the prohibition on owning two of the top four stations in a market.
Benton Senior Counselor Andrew Schwartzman called the decision “a huge victory for the listening and viewing public.” “The Court of Appeals has found that the FCC has yet again failed to assess how changing its ownership limits affect people of color and women. Diverse ownership benefits everyone, and rejection of the FCC’s deregulation is a small step in restoring a system that promotes such diversity.”
I’m proud to have launched several Federal Communications Commission initiatives to expand broadband access on Tribal lands, which complement the efforts of our federal partners. One new policy I’m particularly excited about will give Tribes priority access to spectrum in the 2.5 GHz band. We removed obsolete restrictions on this band, allowing greater flexibility in how the spectrum can be used. We’re giving rural Indian tribes an exclusive window to obtain this spectrum to serve rural Tribal lands. That’s right. Before any commercial auction of this spectrum, Tribes can obtain this spectrum for free. This is the first time in the FCC’s history that we have ever given Tribal entities what we call a “priority window” to obtain spectrum for wireless broadband.
To address the higher costs small, legacy carriers (so-called rate-of-return carriers) typically face, in 2018, the FCC increased the amount of operating expenses that these carriers can recover from the Fund. In Aug, the FCC authorized a new round of support for rate-of-return carriers, which will ensure fixed broadband is available to over 37,000 locations on Tribal lands. Notably, this funding included a Tribal Broadband Factor, which increased financial support specifically for rural carriers serving Tribal lands. Separately, the FCC’s Connect America Fund Phase II reverse auction in 2018 allocated $1.5 billion to expand broadband in rural areas. Six of the winning bidders were Tribally-owned providers. The FCC recently launched an effort to create a $20.4 billion reverse auction to connect rural homes and businesses. We call it our Rural Digital Opportunity Fund. [W]e’re looking at ways to give carriers bidding on Tribal lands an advantage in the auction, such as by giving bids to serve Tribal lands a 25% “bump” and exploring a Tribal bidding credit to incentivize parties to bid on and serve Tribal lands. In 2018, the FCC raised the funding cap for the Rural Health Care program for the first time in the program’s history. Indeed, we increased annual funding by more than 40%, from $400 million to $571 million, and the cap will now be adjusted for inflation going forward. This revamped program is important to many Native communities.
Last Dec, I renewed the Native Nations Communications Task Force. This advisory group includes Tribal members and senior FCC staff, and it’s working to help the FCC better understand and address the unique challenges of increasing deployment on Tribal lands. By the way, we’re currently seeking nominations to fill several Tribal vacancies on this Task Force. The deadline for nominations is Sept 25. If you’re interested, please do apply, and soon. Working together, we can and will bring greater digital opportunity to those living in Indian Country.
USTelecom, which represents large and small incumbent telecommunication companies, including AT&T, Verizon, and CenturyLink, supported a report that discusses the Federal Communications Commission's upcoming Rural Digital Opportunity Fund (RDOF). The report was written by Tony Clark, a former chairman of the North Dakota Public Service Commission and past president of the National Association of Regulatory Utility Commissioners, and Monica Martinez, a former Michigan public services commissioner. A current concern expressed by the authors pertains specifically to the price cap carriers – the expectation that these carriers may lose Universal Service Fund (USF) subsidies, at least in some areas, assuming the FCC moves ahead with plans for the RDOF. The authors note, “[c]ompletely shutting off access to federal universal service support to an incumbent in favor of a competitor is a new frontier in the evolution of the support mechanism.” As subsidies for price cap territories go to companies other than the incumbents, “the incumbent local exchange carrier (ILEC) should be relieved of all federal and state obligations to provide service in such areas,” the authors argue. The report makes several policy recommendations, including:
- Where a new entrant wins the subsidy for a specific territory, the carrier of last resort (COLR) obligations for that territory should automatically transfer to the new provider
- The FCC should streamline or eliminate rules that prevent carriers from discontinuing service and exiting the market where competitive alternatives exist, particularly when the competitor is being funded by the government with support previously earmarked for the incumbent
- The FCC should eliminate any eligible telecommunications carrier (ETC) obligations where a provider is no longer receiving a USF subsidy
- State COLR obligations should be preempted where an incumbent provider loses the federal subsidy, unless the state steps in to make up the difference
Senate Commerce Committee leaders aren’t happy that the Senate Appropriations Committee stuck some controversial 5G directives in their Federal Communication Commission funding bill report. Sens. Roger Wicker (R-MS) and John Thune (R-SD) said they’re concerned the report, particularly its wireless airwaves recommendations, treads on their turf. The plea evidently had no effect, however; the measure advanced with the 5G language in question.
Thought things are tough for the tech industry in Washington now? Building Democratic frustration with the industry could bring a bigger crackdown if the 2020 election puts the party back in control of the White House. Look no further than the Federal Trade Commission — and its two Democrats — to see those dynamics at play. In a series of unusually blunt dissents in recent cases involving Facebook and Google, FTC Commissioners Rohit Chopra and Rebecca Kelly Slaughter argued for much tougher financial penalties for companies that break their promises and abuse their users’ privacy. They also urged the commission to demand fundamental changes to the companies’ advertising-driven business model and hold CEOs like Facebook's Mark Zuckerberg personally liable for violations — even if it means taking the firms to court, a tactic the FTC’s Republican majority has avoided. The 3-2 party-line votes marked a break with tradition for the FTC, a once-sleepy agency whose institutional culture has long emphasized consensus in high-profile cases. But more than that, the dissents lay the groundwork for a profound shift in how the commission approaches the giants of the tech industry, should the commission eventually go back to Democratic control.
Government Peformance
Net Neutrality and Investment in the US: A Review of Evidence from the 2018 Restoring Internet Freedom Order
In 2018, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision to apply common carrier regulation to broadband Internet access services under Title II of the Communications Act of 1934. Empirical evidence indicating negative investment effects of the regulation played a key role in this reversal, though the quantification of these investment effects were a matter of substantial controversy. This article surveys the studies cited in the recent decision and the FCC’s scrutiny of them. In all, the FCC considered eight primary works but relied on only two of them, a culling process that relied on four principles: (1) simply comparing outcomes before-and-after an event is not a valid impact analysis; (2) before-and-after comparisons are more probative if regression analysis is used to condition the outcomes by accounting for potentially relevant factors like economic growth, sales, and so forth; (3) the causal effects of a regulation are best determined with reference to a counterfactual; and (4) the application of proper methods does not excuse the use of bad data. These principles are mostly uncontroversial and are consistent with the modern practice of impact analysis.
Nathan Leamer, policy adviser to Federal Communications Commission Chairman Ajit Pai, has left the agency after nearly three years. Leamer is taking up a new role at Targeted Victory. That's the Arlington-based firm once called "the biggest player in Republican digital politics." It's headed by Zac Moffatt, who made his name as the digital director of the 2012 Romney presidential campaign. Leamer's portfolio is expected to include working with clients in both the tech and telecom industries.
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Robbie McBeath (rmcbeath AT benton DOT org) — we welcome your comments.
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