Senate Commerce Members Urge Modernization of FCC Rules

Ranking Member John Thune, R-S.D., said it “may be time to develop a new FCC reauthorization bill to ensure the commission is an efficient and truly modern regulator -- one that is a reliable resource for Congress and an effective agency for American citizens and industry alike.” Thune said he’s disappointed by the White House’s “politically motivated scare tactics” regarding the sequester. He said he hopes the FCC won’t “try to find cuts that can trigger a press release before looking to internal cost-saving measures that are less newsworthy.”

Thune said it must be a priority to “increase the availability of spectrum for commercial uses as quickly as possible, and to do so in collaboration with industry and government stakeholders.” He asked the five FCC members whether they thought that the agency will successfully be able to begin the broadcast incentive auction in 2014, noting that Chairman Julius Genachowski’s term expires this summer. Genachowski said the commission is “on track” to run the spectrum incentive auction in 2014 and the FCC is committed to “ensuring healthy financial incentives for broadcasters to facilitate their participation.”

Commissioner Robert McDowell said “these things can take longer than planned.” The auction “is by far the most complicated auction in world history,” he said. “It is important to work hard to work towards a goal but let us not be surprised if something unforeseen happens.” Commissioner Mignon Clyburn agreed there could be “unforeseen circumstances” but said “all the momentum is in place to achieve the 2014 goal.” Both commissioners Ajit Pai and Jessica Rosenworcel said it’s important to put the incentive auctions on a clear timeline to provide greater certainty to stakeholders.

Committee Chairman Jay Rockefeller, D-W.Va., urged the FCC to “future proof” what he considers one of his key education accomplishments: The E-rate program. Rockefeller challenged all five commissioners to modernize the 1996-era broadband program to deliver 1 Gbps of downstream connectivity to every school in America by 2020. “We need to create E-rate 2.0,” Rockefeller said. “We need to fund and adapt E-rate to meet the needs of a data-driven society.” Genachowski has also sought such gigabit networks, saying every state should have at least one by 2015 (CD Jan 22 p1).

Rockefeller also urged the commissioners to embark on an “aggressive timetable” to complete the broadcast incentive auction in a way that maximizes the resources for the development of FirstNet. “Getting these auctions right and making them simple enough to encourage significant broadcaster participation will be incredibly complex,” he said. “I hope it cannot lose sight of the broader national purpose to fund FirstNet,” which he called a “blockbuster.”

Communications Subcommittee Ranking Member Roger Wicker, R-Miss., said he also believed it’s time to “modernize communications laws particularly in the video marketplace.” He said modernizing the 1992 Cable Act is “a major undertaking that will take some time and some doing,” and asked commissioners how the agency can help “provide relief” in the meantime. Pai elaborated on a speech he recently gave that urged Congress to provide the agency with a statutory framework for cable forbearance similar to what exists for telecom issues (CD Feb. 8 p1). “If we did have that forbearance authority, it would allow the commission to be more flexible,” Pai told Wicker. Pai said the commission should spend more time updating its rules.

Rosenworcel said she agreed with Pai the FCC should “regularly scour” its rules to “determine which ones we can get rid of.” She acknowledged that the 1992 Cable Act is “old” but said there are “some virtues in the law that are still important to us,” specifically the rules regarding competition, local content and diversity. Genachowski said continuing to look at the agency’s rules remains vital. “I agree with Commissioner Pai that we should think about how to continue to do this,” he said. “And I agree with Commissioner Rosenworcel that there are enduring values in the Communications Act.”

Sen. Dean Heller, R-Nev., said he agreed with Wicker that the committee needs to have a “strong discussion” about whether the Cable Act and the Telecom Act are promoting innovation and investments in broadband infrastructure. Heller said he plans to reintroduce the FCC Consolidated Reporting Act in this Congress. Sen. Mark Warner, D-Va., also advocated for a “broader based look” at reworking the Telecom Act.

Genachowski said the commission needs to continue its work to free up more spectrum for wireless use, increase broadband speed and capacity across the U.S. and promote media diversity, among other issues. Genachowski commented briefly on the commission’s approval of the T-Mobile/MetroPCS deal (see separate report in this issue) and announced the commission’s $1 million consent decree regarding rural call completion issues. (See separate story on that settlement with Level 3.) Genachowski said he has “serious concerns” that sequestration will harm the FCC’s ability to “deliver on its vital mission, including universal service, public safety, spectrum management, and consumer protection.” He said the commission is already operating at its lowest staffing levels in years as the agency prepares to face an estimated $17 million in budgetary cuts for FY 2013. Genachowski said the FCC will start a rulemaking next week to strengthen the reliability and resiliency of U.S. 911 systems. The commission is “making good progress” finalizing the cost model for the Connect America Fund and is on track to start the initiative in late 2013, he said. Genachowski gave no indication as to what his future plans at the commission are. Many inside and outside the agency have said they expect him to leave soon.

McDowell relayed his “serious concerns” on increased international regulation of the Internet and said Congress can help by “amplifying their call” for more Internet freedom. “We are losing the fight for Internet freedom,” McDowell said. The treaty negotiation from the 2012 World Conference on International Telecommunications “dramatically ended the era of international consensus to keep intergovernmental hands off the Internet,” he said. Genachowski is committed to working with lawmakers and the administration to “preserve Internet freedom and openness and resist efforts to balkanize the Internet,” said his prepared testimony.

Implementing the spectrum incentive auction has “got to be a priority” for the FCC this year, McDowell said. The commission shouldn’t impose anything resembling a spectrum cap, should refrain from reserving portions of the 600 MHz band to create a nationwide unlicensed spectrum band and ensure that the auction process is transparent and avoids harmful consequences, said his prepared remarks. McDowell’s testimony said the FCC’s newspaper/broadcast cross-ownership ban is unnecessary and “appears to be harming the public interest.” McDowell said the FCC is “overdue” for a fresh look at which rules should be reformed to account for the telecom market’s transition from analog to digital services.

McDowell called for a full audit of federal spectrum, “because right now the process is far too opaque.” He said the government is discouraged from relinquishing spectrum and that “simply put, spectrum sharing is not going to meet the nation’s needs.” Rosenworcel urged the government to adopt a new approach to its spectrum policies to better incentivize agencies to free their spectrum holdings for commercial wireless use.

Genachowski briefly addressed the commission’s media ownership proceeding. Though “the world has changed and newspapers have come under real pressure … we are in an interim period where the concerns about media consolidation are important,” he said. McDowell said the commission is “long overdue for the modernization of our media ownership rules.” He said the last ruling was “mild and meek” and he thought the “marketplace has moved past the commission.” Clyburn said the commission must be “careful” to ensure that every citizen has a “pathway to engagement.” The agency has paused a vote on an order deregulating some cross-ownership rules, and attributing ownership of some TV ad brokerage agreements to the station doing the brokering.

Rosenworcel said “this is the right time” to talk about the resiliency of the nation’s communications networks that depend on commercial energy sources. “Superstorm Sandy wreaked havoc on our communications systems,” she said. “It demonstrated that as the nation transitions to IP and wireless networks, we need to have a conversation about commercial power.”