Headline News from Aug. 19 Radioshow

These are some of the news headlines as read on the Aug. 19, 2005 edition of the radioshow: Media Ownership Back on FCC Table in 30-60 Days; Two Big Telecomm Mergers on the Horizon; SBC Spends Big in Texas; CBC Labor Lockout; Indecency Complaints Down; Muni Broadband a Hot Topic with State Legislators.

Media Ownership Back on FCC Table in 30-60 Days
Despite FCC Chairman Kevin Martin’s wishes, it didn’t happen at the Commission’s last meeting. But word inside the Beltway is that the FCC is gearing up to take on the issue of media ownership regulation again very soon – probably within 30 – 60 days. The Commission’s last stab at a rules rewrite in 2003 passed by a very oppositional party line vote, with the Republican majority approving relaxation on several key points, including the cross-ownership of newspapers and TV stations.

But last year the 3rd Circuit Court of Appeals struck down that rewrite, and this year the Supreme Court refused to review that decision.

Now itÂ’s back to the drawing board, with the Commission instructed to follow the CourtÂ’s criticisms. But right now the Republicans donÂ’t have their usual majority under a Republican president because the spot vacated by former chairman Michael Powell hasnÂ’t been filled yet, and thereÂ’s already a long line of presidential nominees waiting for Senate approval.

However, the names of two likely candidates have been circulating around DC as of late, giving the impression that nominations shouldnÂ’t be too far away. Perhaps Chairman Martin is hoping to get the media ownership rules revision underway just in time to welcome two new Republican commissioners.

Two Big Telecomm Mergers on the Horizon
In the telecommunications world the big keep trying to get bigger, though you might not be hearing about it in your daily paper or nightly news. Right now there are two telecommunications mergers pending, involving big, well-known names, simmering just below the public radar.

In one, the former Ma Bell, but now stripped AT&T is seeking a merger with SBC, the Texas-based mega-baby-bell that provides primary telephone and data service in 13 states. That $16-billion deal just got a boost from the New Jersey Board of Public Utilities, which approved it on Aug. 17. That approval comes with the condition that some major assets of the New Jersey based AT&T, including AT&T Labs, AT&T Network Operations Center and AT&T Enterprise Operations, stay in the state.

But another big-name deal is not doing so well with other state regulators. The Virginia Corporation Commission has advised against approving a proposed merger between Verizon and MCI. The CommissionÂ’s staff said the companies haven’t met the burden of proof that the merger will specifically benefit Virginia citizens. The staff recommended either denial without prejudice so the companies can refile with the additional information, or imposition of several conditions, including placing minimum response times for customer service complaints and requiring Verizon to track and report the cost savings in the state of Virginia for three years.

SBC Spends Big in Texas
In related story, just how much do you think SBC spends on lobbying in its home state? The answer is $6.8 during this yearÂ’s Texas state legislature term — more than three times as much as the entire cable industry spent. ThatÂ’s according to Texans for Public Justice which just released a report on legislative lobbying in that state. Overall, the major phone interests spent up to $10.2 million on lobbying, compared with just $1.7 million for cable.

And what does SBC get for that $6.8 million? Now the company will be allowed to compete with cable for a piece of their pie in delivering video services to consumers and businesses. That market is estimated to be worth between $2.5 billion and $3.3 billion in annual revenue.

Phone industry political action committees also gave far more in campaign contributions in the election cycle leading up to the session to politicians who could influence the legislation, including Gov. Rick Perry and key committee chairs, according to the report.

CBC Labor Lockout
ThereÂ’s something going on in Canadian media that we donÂ’t see too often here in the US, and thatÂ’s a major labor dispute. The Canadian national broadcaster, the CBC, has locked out 5300 hundred employees, which has forced the suspension of its English-language programming on two radio networks, one television networks, cable channels and its web sites. That means Canadians looking for the nationÂ’s most-watched nightly news program, The National, have instead been treated to BBC World.

Some of the effects of the lockout have also been felt in the US, as syndicated Canadian radio programs, like the daily hour-long public affairs program As It Happens, have been replaced by other programming.

The dispute between the CBC and the Canadian Media Guild centers on the broadcaster’s desire to expand the number of jobs that can be filled by contract employees, rather than permanent workers. Currently about 28 percent of the CBC’s English-service employees are on contract or in temporary and freelance positions.

The Guild doesnÂ’t want to see that percentage expanded, as temporary and freelance workers donÂ’t have the same employment security or rights as permanent workers.

Arnold Amber, president of the CBC branch of the Canadian Media Guild, told the New York Times, “We believe that people working together, doing the same job should have the same rights and privileges.” He went on to say, “The health of public broadcasting rests on people actually being able to build a career.”

The CBC is already hurting, having lost $16.5 million US as a result of the National Hockey League lockout last season. The NHL normally generates the CBC’s single-biggest generator of ads and audience from October to June. The CBC receives about two-thirds of its budget from the federal government, which substantially reduced its contribution a decade ago.

As the dispute drags on, the Canadian Labour Congress, which represents 3 million Canadian workers, has accused the CBC of unwisely spending money on advertising and PR efforts against the locked out workers.

CLC President Ken Georgetti told reporters, “The last budget gave the CBC new funding to put towards better service. Rather than using that money for better programming, it’s being wasted on advertising at the competition! It’s being used to promote an agenda that insults its workers and fails the CBC audience, as well as its mandate,”

Indecency Complaints Down
Last week I reported that the FCC has hired on a new special advisor on indecency who was previously a right-wing anti-pornography activist. But a report issued by the FCC this month says that complaints about indecent or obscene content on radio and television declined dramatically in the first quarter of 2005, compared with the last quarter of 2004.

FCC officials attributed the marked drop — which saw complaints plummet from 317,833 to 157,650 from one quarter to the next — to the end of e-mail and write-in campaigns aimed at certain television and radio stations.

Recall that the first quarter of 2004 saw the famous Janet Jackson Superbowl half-time incident, which essentially kicked off the indecency crusade amongst conservative groups, congresspeople, and FCC commissioners.

Meanwhile, the latest FCC report also showed a noticeable jump in programming complaints about cable TV and satellite radio services. Complaints rose from 37 in the fourth quarter of last year to 502 in the first quarter of 2005.

Unlike broadcast television and radio, cable and satellite services are not subject to indecency enforcement, although the possibility that it might has been considered by the Senate Commerce Committee and publicly mentioned by FCC Chair Kevin Martin.

Still, just because a complaint has been filed, that doesnÂ’t mean the FCC will necessarily take any action. But, the FCC does not monitor the airwaves for indecency, it only acts on complaints filed by viewers and listeners. Therefore, itÂ’s logical to expect increases in filed complaints to result in increases in fines.

Yet, thus far in 2005, no fines for indecency have been issued, though the recent appointment of the conservative Republican activist Penny Nance as a special advisor in the FCCÂ’s Office of Strategic Planning and Policy Analysis is seen as a sign that a new set of fines is just around the corner.

One person who agrees with this interpretation is stalwart shock-jock Howard STern. On his Aug. 17 and 18th programs he has made remarks about hearing a rumor that the FCC will soon be serving his program with new indecency fines. He has also taken shots at the FCC’s hiring Penny Nance. Stern will soon be free of that threat at the end of this year when his program moves to Sirius Satellite radio – that is, provided Congress or the FCC doesn’t decide to put satellite services under the indecency microscope.

Muni Broadband a Hot Topic with State Legislators
The Nation Conference of State Legislators met in Seattle the week of Aug. 15. One of the hot topics under discussion was the issue of municipal broadband, where local municipalities offer broadband internet and network technologies over wires or wirelessly.

Detractors of municipal broadband claim that itÂ’s not worth it for municipalities to take on the security concerns and potential economic pitfalls that come with running a telecommunications service.

Many legislators said that they believed that the market would drive broadband development in their communities, but Pennsylvania State Rep. W. Curtis Thomas said, “That has not happened, and the ball is now in the courts of the municipalities to handle the last mile of connectivity.” He added, however, that any plan should make sure, “taxpayers are not adversely harmed.”
Portland, Ore., is exploring free wireless access, though officials are seeking a private-sector partner rather than pursuing it alone, said David Olson, director of the city’s Office of Cable Communications. Olson told the conference that broadband access is necessary for cities to remain economically competitive.
Opponents of municipal networks often cite the potential for government involvement to stifle innovation. Olson acknowledged that such a situation could arise but at the hands of private industry, not cities.
Olson said that, “The phone industry, the cable industry, telecom lobbyists are mounting attacks at every state legislature and introducing bills left and right to shut down innovation.” He said that itÂ’s those kinds of efforts that actually shut down innovation.
The battle over municipal broadband has been waged in state legislatures around the country, the most prominent being Pennsylvania, where a last-minute compromise allowed a plan to offer municipal wireless to go forward in Philadelphia, while putting significant restrictions on future municipal broadband networks in other municipalities.
Some municipal broadband supporters have been hoping for Congress to step in with support. Sens. Frank Lautenberg, D-N.J., and John McCain, R-Ariz., have introduced a bill to bar states from opposing municipal networks as long as they do not discriminate against private competitors. Two rival bills would bar states from allowing municipal broadband where communities already are served by the private sector.

According to the National JournalÂ’s Insider Update, some observers believe Congress may not interfere in the relationship between states and municipalities. They cite the Supreme Court’s 2004 ruling in Nixon v. Missouri Municipal League, which upheld a Missouri statute forbidding the state’s political subdivisions from offering telecommunications or Internet services. The court’s vote was 8-1.
The US Telecomm Association hasnÂ’t yet taken a public position on the issue, though itÂ’s vice-president of law and policy stresses their belief that it is a statesÂ’ right issue, whether or not a state government and prevent a municipality from offering broadband services.