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An itch for telecom reform

Fri, 03/15/2013 - 2:46pm
Brian Santo

More than two decades after the Cable Act of 1992, and almost that long since the Telecommunications Act of 1996, it appears that the sentiment that it’s time for wide-ranging, substantive telecom reform is beginning to coalesce among legislators.

In the past, individual Congressman have brought their attention to bear on some facet of communications policy (i.e., shared access DSL; blackouts resulting from retransmission consent arguments; broadband consumption caps; etc.), but few major policy changes resulted.

In recent weeks, however, a herd of legislators have gone on record, saying that it’s time for reform. Furthermore, Congressmen from both parties support the idea, suggesting that some attempt at reform is likelier than it might otherwise have been.

Various politicians spoke about reform at the American Cable Association’s recent 20th anniversary Summit. Other comments came from testimony at a recent FCC hearing. Also, Greg Walden, a GOP legislator from Oregon and a former broadcaster, has been quietly gaining influence in his party, and has written forcefully about communications reform.

Various elements of the communications industry began agitating for telecom regulation reform almost immediately after the Telecommunications Act of 1996 was passed. There have been some modest policy changes since then, largely shepherded by the FCC.

Part of the reason there has been little change in telecom policy may be that various sectors of the communications industry have fundamentally opposite views of what form “reform” ought to take. But there is growing consensus by nearly everyone that the technology and the business have changed so significantly that the current regulatory framework is no longer functional.

With elements of one major political party skeptical of any regulation at all, it’s become a requirement to justify that process.

So while Rep. Edward Markey (D-Mass.), a co-author of the 1992 Cable Act, did not address telecom reform directly, he did make the case for the value of telecom regulation during his recent speech to the ACA.  

He made the case that legislation such as the Pole Attachment Act of 1978 and the Telecommunications Act of 1996 were what fostered competition, encouraging the entry of smaller players by removing barriers to entry. He did allude to the sentiment for reform, however, saying “The rules must assure that the Davids can compete with the Goliaths.”

Sen. Dean Heller (R-Nev.), also speaking to the ACA, agreed that telecom regulations need to better protect smaller service providers. He also spoke about the transition to all-IP networks, and how the current regulatory regime might be a hindrance to that goal.

“…The current regulatory system is outdated.  Older, regulated companies and newer, unregulated companies are providing the same services,” he said (his remarks were transcribed by the ACA). “Failure to enact telecommunications reform will affect consumers,” he continued.  “Government cannot stand in the way of the IP transition.  Congress cannot regulate broadband the same as the old wired universe without slowing down deployment and progress.”

Sen. Roy Blunt (R-Mo.) and Rep. John Barrow (D-Ga.) also addressed the ACA Summit, and also offered support for updating telecom regulations.

On Tuesday there was an FCC oversight hearing before the Senate Commerce Committee, during which several policymakers called for updating the rules and regulations governing video services.

FCC Chairman Julius Genachowski spoke directly about the need to update various rules, including retransmission consent. “It may be time to update those provisions to reduce the chances of blackouts during retransmission consent negotiations,” he said. Fellow commissioner Ajit Pai essentially concurred

Genachowski remark was in response to questions from Sen. Richard Blumenthal (D-CT), who said his constituents have been subject to sporting event blackouts.

Sen. John Thune (R-SD) said “I believe we also must focus on establishing a 21st century legal and regulatory structure that serves the purposes of our 21st century economy. It’s time for this committee to take a look at modernizing our nation’s rules and regulations to better reflect today’s converged marketplace.”

Pai, in his testimony, said, “I think one of the central problems that we confront as regulators is that our rules simply haven’t kept up the pace with changes in the video marketplace…The 1992 Cable Act, as you pointed out, captured a snapshot of the market at a moment in time that no longer really applies. Cable operators, for example, had a 95 percent market share 21 years ago; that has gone below 60 percent now. Over-the-top distribution was unheard of even 10-15 years ago. Now you have people who are running Internet-only channels reaching millions and millions of people.”

At the same hearing, Sen. Dean Heller, Sen. Dan Coats, and Sen. Roger Wicker, Republicans all, expressed overt interest in updating outmoded regulations.

Transcriptions of the Senate committee hearing testimony were provided by the American Television Alliance (ATVA), a coalition of consumer groups, cable, satellite, telephone companies and independent programmers.

Speaking to the ACA, Rep. Steve Scalise (R-La.), said, “Our telecom laws were written back in the days of the brick cellphone. Meanwhile, broadband services like the Internet and portable devices have rendered the old laws obsolete.”

Scalise is the chief sponsor of the Next Generation Television Marketplace Act, a measure that would, among other things, repeal retransmission consent provisions contained in the 1992 Cable Act and rely mostly on copyright law to underpin private negotiations between content owners and pay-TV distributors.

 “The cable operators will negotiate with the broadcasters as they would with [cable] programming networks. You pay for the content you carry,” Rep. Scalise said.

Clearly, what form “reform” takes is likely to be debated, but it seems it’s on the agenda.

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