PFF hosted a very animated discussion yesterday on the proposal to have broadcasters return some of their spectrum for auction in order to clear more spectrum for wireless broadband services. The event featured Blair Levin, Executive Director of the FCC's Omnibus Broadband Initiative, who has been at the center of recent reports that the agency has been talking to broadcasters and the wireless industry about such a proposal.

The tension between stakeholders was palpable as illustrated by heated exchanges between the panelists. Specific topics ranged from the true economic and social value of the spectrum held by broadcasters, to what specific bands would be viable to use for broadband services, to if there really is an upcoming spectrum crisis that needs to be proactively addressed. Panelists even touched upon how regulation of the broadcast industry could hinder any proposed deal. Excellent coverage of the event which describes the highlights better than I can be found at TVNewsCheck.com, WSJ Online, Communications Daily (subscription) and TR Daily (subscription).

Audio of the event is available here and a recent paper on the issue authored by Adam Thierer and Barbara Esbin is available here. A transcript of the event will be available shortly and Adam, who moderated the event, will share his thoughts on the event upon its release.

... Said former FCC Media Bureau Chief, and current PFF scholar, Ken Ferree at an FCC Workshop held this week on media ownership issues. In his testimony, Ken urged the Commission to consider whether ownership rules concerning broadcasters and newspapers still make sense in today's media marketplace.

While listening to opening remarks given by Commissioner Copps, I was struck by the vastly different portrayals of the media industry by Ken and the Commissioner. For example, Copps claimed media consolidation was temporarily slowed by the economic climate but will soon rear its ugly head again:

These [ownership] issues have been pending before this Commission since I got here and we have done almost nothing to stem the tide of media consolidation and lax government oversight. The consolidation was momentarily slowed by the current economic downturn--itself largely the result of the kind of policies in finance and other businesses that I've been complaining about in media for years. But consolidation is coming back, and once the economic indices start heading north, you'll see media properties galore--all pining for those elusive "economies of scale" whose chase doomed so many companies over the past few years.

Ken's testimony tells a different story:

[W]hy are we fixating on the appropriate ownership limits for broadcast properties? Indeed, today you are working on rules that limit those who may own broadcast properties; tomorrow this all may be inverted and the government may be trying to craft rules to encourage people to buy these same properties, perhaps in distress. The lead news stories today having to do with media ownership are not about acquisitions of broadcast properties, but of sales and disaggregation of large media companies. The list is quite long, but it includes such noteworthy transactions as Disney selling its radio group, Time Warner divesting its cable companies, Viacom splitting with CBS, News Corp. shedding its DIRECTV distribution arm, The Tribune Company's bankruptcy, and Clear Channel's sale of all of its television stations and its efforts to reduce its radio holdings. In short, the age of broadcast media consolidation appears to be past - we are now squarely in the age of media fragmentation.

Indeed, Ken cited various figures (from Adam Thierer's book Media Metrics) on viewership, circulation and ownership to show that the influence and health of traditional broadcasters have been waning for some time and does not directly coincide with the economic downturn.

Ken's comments on the shape of broadcast properties and newspapers also differed from the rest of the members of the panel. While all agreed that something needed to be "done" to help preserve professional media, the roll of competing distribution platforms, especially the Internet, played in the rapid deconsolidation in the market was downplayed by the other speakers. Ken, however, identified the audience fragmentation brought on by these largely unregulated platforms as a key threat to traditional media, not ownership consolidation:

Network broadcast news audiences continue to shrink and circulation figures for even the jewels of the newspaper business like the New York Times, are deteriorating. It takes a certain size and scope to support a sophisticated national news organization with bureaus in far flung locations - a size and scope that is increasingly hard to maintain. Moreover, the audience fragmentation that has occurred with the onset of new media threatens not only the ability of large organizations to cover in depth news stories with national and international implications, but also the continuing viability of local news operations in communities large and small.

Ken concluded that if a goal of the review of ownership rules is to help struggling media properties and preserve "localism" in the media sector, more regulation is definitely not the answer:

The goal of re-energizing and revitalizing local commercial broadcast service, if it ever is to be realized, will come only when the shackles that bind broadcasters' ability to respond to new competitive pressures are removed. Of course, with respect to this proceeding, that would include eliminating outdated ownership restrictions so that broadcasters can organize in economically efficient ways.

Ken's entire testimony can be read here and the entire proceeding can be viewed here.

Barbara Esbin recently spoke at the Wireless U. Communications Policy Seminar on a panel on financing wireless broadband. Barbara's remarks specifically addressed the National Broadband Plan and the role of state governments.

In addition to presenting sensible suggestions for policymakers, including creating incentives to spur deployment and redirecting universal service funds, Barbara offered a bit of perspective on the issue of broadband deployment:

As important access to broadband Internet service is, if the choice comes down to clean water, Medicaid benefits, or bandwidth, I submit that limited government financial resources might be best directed first to clean water and health care.

This is particularly true of state or local efforts to finance a second, third or fourth provider of high speed Internet service, or to go into the bandwidth business itself. Government spending on broadband infrastructure should be directed primarily to those areas where market forces are unlikely, due to high costs and low prospect for returns, to extend network infrastructure without government assistance.

Her prepared remarks can be found here.

The announcement by FCC Chairman Genachowski of his intention to have the agency codify, and add to, its "Internet policy principles" overshadowed an equally interesting event in the net neutrality saga: the filing of FCC's Brief with the D.C. Circuit defending the actions taken in its 2008 Comcast P2P Order. The timing of these events seems to have raised some eyebrows, since it appears the agency is saying they were correct in enforcing the policy principles while, at the same time, attempting to codify the principles into enforceable rules. This, combined with Congress jumping into the fray with proposals to grant the agency power to enforce network neutrality, paints a most confusing picture of exactly what the FCC's jurisdiction is over the Internet.

These events did not go unnoticed by Barbara Esbin, who released a short paper this week analyzing the evidence the agency presented in support of its Comcast P2P Order. In "The Audacity to Hope Regulatory Restraint Will Prevail," Barbara discusses the FCC's reliance on "ancillary jurisdiction." Regarding the Brief's discussion of Section 230 of the Communications Act, Barbara wrote:

Section 230 creates protection for "Good Samaritan" blocking and screening of offensive material by interactive computer service users and providers and imposes notice obligations on providers of interactive computer services. In the Comcast P2P Order, the FCC prohibited Comcast's alleged blocking of certain Internet traffic. The Brief attempts to gloss over the obvious contradiction between the operative provisions of section 230, the clear policy statement supporting an unregulated Internet, and its action against Comcast by acknowledging that "Section 230(b) states several potentially conflicting policies, which the Commission has assessed and balanced." The Brief asserts that section 230 as a whole represents "delegated authority to the FCC [to regulate network management practices of ISPs] in the form of broad policy outlines rather than easily outdated commands." While it is conceivable that a court less versed in the FCC's history of creative statutory interpretation might be willing to accept this birds-eye view of things, the D.C. Circuit has been more searching, especially of late, in its review of ancillary jurisdiction claims, and it just doesn't strike me that this claim will fly.

Yesterday afternoon, Tom Sydnor testified at a hearing before the House Subcommittee on Commerce, Trade and Consumer Protection hearing on data privacy. Specifically, Tom's testimony focused on H.R. 1319, the Informed P2P User Act, which attempts to improve disclosure pertaining to file-sharing software.

In a nutshell, Tom voiced support for the Act in light of the apparent failure of voluntary self-regulation. From my release:

Sydnor...urged Congress to not rely on continued self-regulation by distributors file-sharing programs because certain companies have repeatedly proven themselves to be untrustworthy. Specifically, Sydnor cited the deployment of a "search wizard" upon a new installation of the LimeWire file-sharing program, which recommends users share all or almost all files in their "My Documents" folders and subfolders. Since first time users of file-sharing programs tend to be teens or preteens, Sydnor concludes the addition of this feature is deliberate and "an intent to deploy a know means of directing absurdly dangerous guidance towards a program's most vulnerable users in order to cause them to share files inadvertently." Since the "search wizard" function was deployed after a Code of Conduct was agreed upon by distributors of file-sharing software, the actions of LimeWire has illustrated self-regulation will not work in this instance.

Tom's written testimony can be found here and video of the hearing can be found here.

Ken Ferree testified earlier this week at a House Communications, Technology, and the Internet subcommittee hearing on renewal of the Satellite Home Viewer Extension and Reauthorization Act. The crux of his argument: Congress should take into account the current competitive market for video delivery services and, specifically, they should amend rules that prevent DBS carriers from providing consumers signals from stations located within their state of residence and refrain from imposing enhanced carriage mandates on satellite video distributors.

Ken's written testimony can be found here and a webcast of hearing can be found here.

My colleague Barbara Esbin recently released a paper interpreting the very-belated Thirteenth Annual Video Competition Report. In "A Tale of Two Reports," Esbin explains that, although the data used in the report is 30 months out-of-date, it illustrates a steady trend of increasing competition among video service providers and increasing sources of diverse information and video programming.

Her conclusion:

"These developments have programmatic significance in at least two ways: they indicate, as Commissioner McDowell foreshadowed in his November 2007 dissenting statement, that the 'diversity of information sources' that Section 612(g) of the Communications Act was enacted to safeguard has already been achieved by market forces without the intervention of the FCC. Second, the proliferation of easily available Internet video programming choices severely undercuts the rationale behind the cable ownership limits Congress authorized the FCC to implement in Section 613 of the Act.40 Serious consideration should be given to the repeal of these provisions, and to a wholesale evaluation of the continued need for much of the Cable Act, now in its 25th year. Soon, rather than worry, as did former Chairman Martin, about the level of profitability of the cable industry, we instead may be worried about its continued viability as more and more subscribers 'cut the video cord.'"

AC/DC recently reaffirmed their refusal to offer their music on iTunes. In fact, their new album will be released only in physical album format, offered at WalMart and through the band's website.

In an interview, the group claims they want to protect the album format, forcing consumers to purchase it in its entirety. Moreover, the singer claims that iTunes is ruining the music industry: "It's a... monster, this thing. It just worries me. And I'm sure they're just doing it all in the interest of making as much... cash as possible. Let's put it this way, it's certainly not for the... love, let's get that out of the way, right away."

The band certainly has the right to offer its product in whatever format it wishes. Don't want to use iTunes? Go to a competitor or distribute your album via your own site. I can also understand the idea of wanting to sell and entire album as a product (i.e. like a "concept album") which should be listened to beginning to end. (However, having heard many an AC/DC albums over the years, I highly doubt this is the case.)

However, they are discriminating against an increasingly important segment of their market - the younger (and not-so-young) consumer. I personally don't even have a stand alone CD player anymore, except in my car, and I imagine I'm not the only (young) thirty-something in this situation. Adding a barrier to consumption doesn't seem like a great way to endear yourself to new fans. Also, I have to echo Greg Sandoval's sentiment regarding iTunes being all about the money: "Let me state the obvious: plenty of people profited off of music long before iTunes was formed, including AC/DC. What, is Wal-Mart donating Black Ice profits to charity?"

Issues surrounding digital distribution are far from being sorted out but shackling the consumer by simply not acknowledging the benefits of the model doesn't seem like good business.

Adam Thierer will be a guest on C-SPAN's "The Communicators" this weekend, where he will share his opinions on tech policy happenings so far this year and what can be expected in next administration.
If you happen to be out Saturday at 6:30pm (C-SPAN) or Monday at 8:00am and 8:00pm (C-SPAN 2), it should be posted online here.
They also have a fancy you tube channel here.

Barbara Esbin was asked to contribute a piece on network neutrality to "La Lettre de l'Autorite," a newsletter published by the Autorité de Régulation des Communications électroniques et des Postes. The english version can be found here.

Her conclusion:

I have written elsewhere on legal and procedural flaws that may doom the Network Management Order.[1] In summary: (1) the FCC has not been granted explicit authority to regulate the provision of broadband "information services;" (2) the "ancillary jurisdiction" on which the FCC relied was not reasonably related to its other statutorily mandated responsibilities; (3) having failed to adopt enforceable rules concerning broadband network management, the FCC could not lawfully subject Comcast to an "adjudication" concerning its practices; and (4) the Complaint filed against Comcast was defective in several respects and should have been dismissed.