Three attorneys arguing appeal of FCC approval of Fox Bcstg. purchase of Chris-Craft TV stations before U.S. Appeals Court, D.C., Fri. had little chance to make their arguments because of repeated interruptions by 2 members of 3-judge panel. After FCC attorney Grey Pash had used up all his allotted minutes, presiding Judge Harry Edwards said: “I'll give you one more second. You're way over your time,” then promptly asked Pash another question. Judge David Tatel joined in with repeated questions and statements, while Judge Raymond Randolph didn’t say word until rebuttal by Angela Campbell, attorney for appellants. Case had been appealed by United Church of Christ and Media Access Project (MAP), who said granting 2-year waiver of newspaper cross-ownership rule (instead of standard 6 months) to Fox parent News Corp. wasn’t in public interest. Campbell, who argued deal shouldn’t have been approved without public hearing, responded “yes” when Tatel suggested “your whole argument is whether the sale was in the public interest.” Edwards said public interest could be “variable, depending on what we're looking at.” Pash said public interest determination came with waiver -- and FCC order explained why. Responded Edwards: “I don’t see how [order] gets you where you want to go” on public interest mandate: “Where is the policy statement on public interest in this case?” Answering his own question, Edwards said it wasn’t there. Fox attorney John Roberts argued FCC had adequately applied and explained public interest in its order and said none of cases cited in support of MAP’s position by Campbell involved broadcast licensees. Edwards called Roberts’s argument “very strange opinion [but] it may be right.” FCC approved Fox purchase of Christ-Craft stations in Aug. 2001, and deal was consummated last Aug. after Fox had swapped TV stations required by FCC to comply with duopoly rule. Following hearing, MAP Pres. Andrew Schwartzman told reporters Commission “should be anxious… There’s a reasonable chance for reversal.”
FCC shouldn’t “rush to judgment” before Justice Dept. (DoJ) completes its review of plan to take over General Motors’ Hughes Electronics and DirecTV, EchoStar said: “There are a many important benefits for consumers at stake.” Facing uphill battle to win approval for $18 billion transaction, EchoStar in ex parte filing Mon. (CD Oct 8 p1) asked Commission to delay decision until DoJ completed its review and to hold en banc hearing or public forum “consistent with practice for complex and important mergers” such as AOL-Time Warner. During AOL-Time Warner merger, FCC waited until DoJ gave its approval before making decision. Commission said it was “reviewing transaction” and set no timetable for acting on EchoStar’s delay request.
EchoStar acquisition of Hughes Electronics and its DirecTV subsidiary threatens to “impede the deployment and ultimate success” of Americom2Home service planned by SES Americom, SES said in letter from attorney Phil Spector to Dept. of Justice (DoJ) and FCC Fri. Unless conditions are imposed, combined company would have “necessary market power and incentive” to prevent Americom2Home from becoming competitive force in DBS arena, SES said. FCC should impose conditions on New EchoStar’s future practices and operation so service of Americom2Home and other potential DBS competitors could develop, SES said. Conditions will be “much more important if there is a merger,” Spector said: “If there isn’t a merger, we would expect both EchoStar and DirecTV to be more willing to welcome competition.”
Only one of major Washington advocacy groups on electronic media issues takes significant money from corporations, according to Washington Internet Daily study, and that group has faced criticism over it. Most of rest of advocacy groups we looked at are heavily funded by small private contributions and large donations from foundations. This is first of a 3-part series on key advocacy groups.
Observers of FCC and cable industry didn’t mince words Fri. when asked about Commission’s admission that there were “computational errors” in its experimental study on cable ownership, one saying research now should be deemed “irrelevant” and another referring to it as “a stupid little study.” They noted FCC released revised study and press release enumerating at least 4 errors at 5 p.m. on July 3, just before long holiday weekend. “They clearly wanted to bury the bad news,” one observer said. FCC official with firsthand knowledge of study and methods used acknowledged errors but said study wasn’t fundamentally flawed and, in fact, was quite relevant. Major change, official said, was that area of concern has shifted from market with 2 major cable operators to market with one dominant player holding at least 51% of market.
Coalition of civil rights and consumer groups urged FCC Chmn. Powell to conduct more thorough study of what they called “the anticompetitive and other dangerous effects” of growing number of media mergers. In letter written Tues., they said Powell should heed advice of Sens. Hollings (D- S.C.), DeWine (R-O.), and Kohl (D-Wis.) to study how media ownership influenced programming decisions and opportunity for new programmers to offer news, information and entertainment to public. Groups, which included National Urban League, NAACP, National Council of La Raza, National Congress of American Indians, Consumers Union, Consumer Federation of America (CFA), Media Access Project (MAP) and others, said debate wasn’t about entertainment variety and number of channels available, but rather how consolidation of ownership of transmission lines and programming networks “undercut diversity of thought and speech, undermine the creation and distribution of independent news and limit the range of culturally important entertainment products.” Groups said in accompanying press release that Powell in recent speeches had signaled increasing inclination to relax media ownership rules. Commission is weighing new rules after U.S. Appeals Court, D.C., struck down FCC’s old 30% ownership cap as being arbitrary and without justification.
FCC Tues. rejected applications by Northpoint and Satellite Receivers to use satellite spectrum for new terrestrial-based broadband service, adopting rules that included auction for multichannel video distribution & data service (MVDDS) in 12.2-12.7 GHz band. Commission said MVDDS operators such as Northpoint could share 12 GHz band with DBS and nongeostationary satellite operators (NGSO) and fixed service satellite (FSS) operators on co-primary basis, provided they didn’t cause interference (CD April 18 p3). FCC also dismissed corresponding waiver requests in favor of new service rules to resolve complex technical and sharing issues.
Ninth U.S. Appeals Court, San Francisco, won lottery Mon. to hear federal challenge to FCC’s declaratory ruling that cable modem service is interstate “information service.” Several challenges were filed, including one by coalition of consumer groups led by public interest law firm Media Access Project (MAP), as well as separate suits filed by EarthLink, Brand X Internet and Verizon Communications. Of 4 plaintiffs, only Brand X Internet filed in 9th Circuit, with others filing in U.S. Appeals Court, D.C. Nevertheless, 9th Circuit won lottery, said spokeswoman for judicial panel on multidistrict litigation. Now, all cases filed against FCC on issue will be combined and heard by 9th Circuit. Other entities that want to file suit against FCC in case must do so within next 60 days.
With ink barely dry on FCC’s ruling that Internet service delivered over cable was “information service,” coalition of consumer groups filed suit challenging agency’s decision. Media Access Project (MAP), representing Consumer Federation of America, Consumers Union and Center for Digital Democracy, didn’t reveal substance of its arguments in one- page filing to U.S. Appeals Court, D.C., saying only that ruling was “arbitrary, capricious, an abuse of discretion, contrary to statutory authority, and otherwise not in accordance with law.” MAP Pres. Andrew Schwartzman said FCC’s ruling violated public’s First Amendment rights to engage in uncensored “social, artistic and political discourse, as well as to receive information.” Specifically, groups objected to FCC’s determination, saying it freed cable operators delivering Internet services from any “open access” requirements, which would give subscribers choice among multiple ISPs. Schwartzman said FCC should have called product telecom service, which would have made it subject to common carrier regulation. Common carriers providing DSL must offer multiple ISPs under current govt. rules.
Comcast announced deal with Internet service provider United Online to offer its NetZero and Juno high-speed Internet services via Comcast cable modems, producing charges from public interest groups that Comcast was trying to keep Dept. of Justice (DoJ) from placing conditions on its proposed merger with AT&T Broadband. Comcast had said in earlier filings to FCC that it opposed open access requirements that would force it to open its pipes to 3rd parties. But Comcast Pres. Brian Roberts said in conference call that that had nothing to do with pending deal, which is contingent upon approvals of DoJ and FCC. “This is not done for anything but a commercial opportunity,” Roberts said. “If this was borne out of a regulatory solution, I don’t think both companies would be as excited as we are to get going.”