News Headlines from the Jan. 6 Radioshow: New FCC Commissioners Sworn In; No Indecency Fines for 2005; CBS Splits from Viacom; Texas Is IPTV Frontier, but Problems Ahead for Public Interest

These are the media news headlines as read on the Jan. 6, 2006 edition of the mediageek radioshow:

FCC Commissioners Sworn In
On Jan. 3 Michael Copps and Deborah Taylor Tate were sworn in as FCC Comissioners. This will be a second term for Copps, a Democrat who has been on the FCC since 2001, and he remain on the commission through June 30, 2010. Tate is a Republican.

With the exit of Rebublican Commissioner Kathleen Abernathy at the end of the last Congressional term, the FCC remains one commissioner short, with two Democrats and two Republicans. That split likely will continue to slow the introduction of controversial issues for action, like revising media ownership rules.

There are still no clear candidates for the open commission seat. The Bush Administration has largely ceded responsibility for choosing the next commissioner to Senate Commerce Committee Chair Ted Stephens of Alaska.

2006 will be a busy and important year for communications policy and legislation, so the Bush administration and Congressional Republicans are not going to want to be caught in any deadlocks at the FCC.

No Indecency Fines for 2005
One issue that’s been waiting on the table for action has been broadcast indecency. In fact, the entire year of 2005 passed by without the FCC issueing a single fine for indecent content. This, despite the fact that 189,362 complaints were filed with the FCC, more than in any other year except 2004, where the Janet Jackson superbowl halftime helped push the complaint total over a million.

The FCC’s enforcement bureau has reportedly assembled a package of fines and dismissals for the commissioners to vote on as a package, but it has not yet come up for action, even though most commission watchers believed it would before the end of 2005.

CBS Splits from Viacom
On January 3 CBS officially became an independent company again, making its debut on the New York Stock Exchange, after separating from media giant Viacom, and its former siblings like MTV and Paramount Pictures. But that doesn’t mean that CBS is just a television network. The company takes with it such properties as the UPN broadcast network, the Showtime cable network, King World television syndication, and the newly renamed CBS radio, formerly known as Infinity.

That leaves CBS as the second largest radio and TV station owner in the country, by revenue. Rupert Murdoch’s News Corp remains the nation’s largest TV owner, and Clear Channel the largest radio owner.

Texas Is IPTV Frontier, but Problems Ahead for Public Interest
Texas is turning out to be the nation’s hotbed for television provided over broadband internet lines, called IPTV. The newly renamed AT&T, formerly SBC, announced on January 5 that it will begin offering cable television service over broadband to select customers in San Antonio, with up to several hundred customers getting the service within a few months.

There are still several technical issues that AT&T is working on, which is why the company is taking the rollout slowly. At a public demonstration in November some of the advanced features that AT&T is touting didn’t actually work correctly when the company tried to show them off to Texas Governor Rick Perry who attended the demo.

The nation’s other new telephone giant, Verizon, won’t be left too far behind in this race. That company announced that it will make its IPTV system available to one million potential viewers in the Dallas area by the end of 2006.

In order to accommodate the much higher quantity of data necessary for broadcast quality video, both companies are increasing the capacity of their networks. Verizon is bringing high-capacity fiber optic network lines directly to subscribers’ homes, which greatly increases the bandwidth subscribers can theoretically have access to. AT&T is taking a more conservative approach, bringing fiber lines closer to subscribers homes, but not actually running fiber directly to subscribers.

The reason why Texas is the place for IPTV is because last year Gov. Perry signed legislation that brought cable television franchising to the state level. In the rest of the nation, each new cable operator has to negotiate with individual municipalities to begin offering cable TV-like services. Verizon and AT&T have led the fight against local franchises, and they won that battle in Texas, where they are now taking advantage of their state franchises to roll out television services.

While the IPTV looks like a win for consumers because it promises additional choices and competition for television services, there are also several potential snags that consumer groups are watching.

One potential loser with non-local franchising and IPTV is public access TV. The provision of these channels by cable companies is negotiated by local municipalities, and is one of the few points of leverage left for cities over their local media. Negotiating cable franchises on a state or national level threatens to lower the provision of public access to the lowest common denominator, potentially shafting cities that have grown vibrant public access stations.

Another snag is known as “network neutrality.” If a company like AT&T is providing both television and broadband access over the same network to subscriber homes, what’s to stop the company from filtering out video content available on the internet so that it doesn’t compete with its own IPTV offerings? At the moment, the answer is nothing, there is no law or regulation that prevents that from happening. Further, the heads of AT&T and Verizon have made it clear that they want to reserve that right.

Meanwhile, the big phone companies, including AT&T and Verizon, are gearing up to start charging large internet content providers for carrying their high-bandwidth multimedia content.

On Jan. 5 Verizon Communications Inc. Chief Executive Ivan Seidenberg told reporters that his company is in favor of charging companies that provide content like movies over broadband, saying, “We have to make sure they don’t sit on our network and chew up our capacity,”

According to an article in the Jan. 6 edition of the Wall Street Journal, the nation’s major broadband providers are in favor of a system whereby content providers would pay a fee in order to ensure their data receives priority treatment on broadband networks.

Providers of content and services, however, see it differently. Jeffrey Citron, chief executive of internet telephone service provider Vonage told the Journal, “They want to charge us for the bandwidth the customer has already paid for.” Any provider of Internet content also has to pay for its connection to the Internet, and providing services like video or high-fidelity audio already requires expensive high-speed connections.

In essence, what the telephone providers want is the ability to filter out, or slow down access to content they don’t own or directly profit from.

Such a pay-to-play scheme would be especially detrimental to non-corporate content. How many community radio stations or independent video producers could afford to pay additional fees to AT&T to guarantee their programs make it to internet users beyond the bandwidth fees they already pay to get their content on the internet in the first place?

The net effect of telecom companies being able to restrict or prioritize internet content would be the creation of a two-tiered internet with regard to the distribution and sharing of content. Only producers who can afford to pay additional fees imposed by the telephone companies would be able to see their content make it to internet-wired homes, regardless of the fees they already pay for internet service.

This issue of network neutrality will be the subject of much debate in Congress and the FCC in 2006. As part of the FCC’s approval of the AT&T and Verizon mergers last year, the commission imposed limp-wristed and temporary network neutrality conditions on both companies.

The telecomm companies and internet companies are all busy lobbying Congress on this and other issues right now as legislators are assembling what will become the Telecommunications Act of 2006. Here at mediageek I will continue to keep you informed about what’s going on, what it means, and what you can do about it.



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