2. The Next Arena: FCC Rulemakings

Although enactment of the Telecommunications Act of 1996 foreclosed many public interest policy goals, it left many other issues unresolved. Within the next two years, the FCC plans to carry out more than eighty rulemakings pursuant to the Act, many of which are supremely important to the public interest. New FCC regulations will affect the prices that consumers will pay for telecom services, and the choices they will have; the diversity of voices they will be able to hear via new media; and the overall ecology of public discourse and cultural expression. What follows is a brief survey of some of the more important proceedings.

Digital Broadcast Spectrum
Will broadcasters be allowed to have a valuable public resource for free? If not, what will be the terms of the public benefit?

Existing TV station owners have asked Congress and the FCC to give them vast quantities of additional space on the valuable public airwaves without any significant public interest benefits received in exchange. Broadcasters claim they need the new space to move from the current analog transmission system to digital broadcasting. This sweeping giveaway of the airwaves, worth as much as $70 billion, was nearly sanctioned by Congress. The final telecom bill, however, made a few alterations. It did not require the FCC to give the spectrum to incumbent broadcasters, and does not permit broadcasters to provide just one free channel (while using the rest of the spectrum for revenue-generating ventures). Moreover, each service, whether broadcasting or not, would be required to serve the public interest.

As Congress now mulls whether to require an auction of the spectrum, broadcasters are asking the FCC to endorse their specific technical standards for digital television. This so-called Grand Alliance standard (developed with no input from the public interest community) needs a large amount of spectrum to work, raising questions about the efficient use of spectrum and unjust enrichment for broadcasters. Also, the standard is not compatible with personal computers, which would force citizens to buy new, expensive TV equipment instead of relying upon technology they may already have.

Concentration of Media Ownership
Will the number of corporate owners of mass-audience media shrink even more, fueling vertical integration and limiting the diversity of voices the public can hear?

Even with the proliferation of the Internet's many networking functions, today's centrally distributed "mass media" -- the gatekeeper-controlled systems of broadcasting, cable and satellite TV -- are likely to remain in place for years to come. Given the scarcity of such outlets and limited number of gatekeepers hostile to open access, it remains important that media ownership be as diverse as possible by maintaining strict ownership limitations. Even though the White House helped eliminate some of the most egregious provisions, the final telecom bill allows unlimited ownership of radio and TV stations nationally; huge increases of radio ownership locally; and automatic telephone company buyouts of cable systems in smaller towns.

Strict monitoring of the FCC's behavior in this area is critical, especially since the Act directs the FCC to consider eliminating or modifying its "duopoly" rule, which prohibits common ownership of two stations in a local market. Worse, the Act requires a biennial FCC review of its multiple ownership rules, providing the industry with regular opportunities to press for further rollbacks on ownership restrictions.

Open Video Systems
Will telcos be allowed to discriminate against unaffiliated programmers, limiting the diversity of views and programming? Or will alternative viewpoints have guaranteed access?

One of the most serious losses of the telecom bill was any provision requiring "common carriage" access to video services. By ensuring non-discriminatory access, telephone companies (for example) would not have been able to exert editorial control over the programmers using their system. This so-called "video dial-tone" system has been abandoned. One provision in the Act, however, allows for something short of common carriage, yet still significant in terms of enhancing access. A telephone company can choose to be regulated as a cable system, common carrier, or a newly created "open video system." If it chooses the latter (chiefly to avoid having to obtain a franchise from the local government), the telco must make channel capacity available to unaffiliated programmers on a non-discriminatory basis. If demand exceeds capacity, the telco may not select programmers for more than one-third of the system's capacity. Properly drafted FCC guidelines could create tremendous new opportunities for access by diverse programmers. Or the door could slam shut on alternative voices.

Affordable and Universal Access
Will low-income and rural residents, schools and libraries, among others, enjoy affordable access to advanced telecommunications systems?

One of the more significant FCC proceedings will determine the future of universal service and low-cost access to the new media. The FCC has already begun a two-track proceeding to define what universal service should mean in the new environment, and what discounted rates will be granted to schools and libraries. The first track will feature an inquiry by a federal/state Joint Board composed of FCC commissioners, state regulators and consumer advocates. The FCC will solicit further comments before a second round of comments are solicited in response to the Joint Board's recommendations. At this time there are no clear indications how the Joint Board and FCC will engage with this issue. Public Access to the Internet (MIT Press, 1995), an anthology edited by Brian Kahin and James Keller, appears to be a useful set of policy essays exploring these issues.

Interconnection to Local Telephone Company Infrastructure
Will the Baby Bells be allowed to thwart genuine competition in local telephone networks, or will robust competition and lower prices be allowed to emerge?

One goal of the telecom act is to force local telephone companies to surrender their monopoly privileges and become competitors with newcomers who choose to provide local telephone service. To ensure that local telcos do not foil new competition, Section 251 of the Act permits consumers to keep their phone numbers if they use another carrier; gives competitors access to poles and other rights-of-way; requires telcos to provide interconnections between their networks and competitors' facilities and equipment at reasonable rates; and provides competitors with non-discriminatory access to any services the local network may provide, such as voice mail and call waiting. Section 252 sets forth procedures for ensuring fair negotiations between a telco and competitors. The Media Access Project warns: "If the stranglehold of the Bells is to be broken, these rules must provide for broad, inexpensive and simple access to local telephone networks, zero tolerance for anticompetitive behavior and for swift resolution of disputes."


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