Won't get fooled again?

By the time The Telecommunications Act of 2006 is finalized ... you will need a scorecard to identify key players
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The year was 1971. The world was awakening to a new era in the evolution of the broadcast media. Revolution was in the streets and in newsrooms, where a war and a president were about to be toppled by an overt effort to influence “public opinion.”

Pete Townshend writes about a revolution in the Who classic, “Won't Get Fooled Again.” In the first verse of the song, there is an uprising. In the mid-dle, those in power are overthrown. In the end, the new regime becomes just like the old one: “Meet the new boss, same as the old boss.” Townshend felt revolution was pointless because whoever takes over is destined to become corrupt.

The year was 1996. After years of debate about the impact that “being digital” would have on telecommunications, Congress finished up the most extensive rewrite of U.S. telecommunications law since the original Telecommunications Act of 1934. The 1934 Act put politicians and regulators into the business of micro-managing a handful of powerful monopolies and oligopolies. The 1996 rewrite was finished just in time to help pay for that year's presidential and congressional elections.

Nearly a decade later, the digital revolution has stalled. Is it a victim of the “irrational exuberance” of the 1990s, the tech meltdown of 2000 and/or the terrorist attack of 9/11? Or was this the predictable outcome to be expected when powerful industries rely upon regulation to impede competition and technical evolution?

Meet the new boss

Based on the analysis in the January 2005 Download column, “The sense of Congress” (see Web links), this outcome was entirely predictable. The industries that helped to write the 1996 Act and pay for the 1996 elections have effectively blocked or delayed the Act's most important provisions. The FCC has gone out of its way — some say beyond its authority — to move things along. And the Federal Appeals Courts have predictably blocked a wide range of FCC decisions, citing the lack of legislative authorization for the commission's actions.

In other words, the predictable outcome has been achieved — gridlock. The ball is now back in Congress, where new bosses have taken control of key congressional committees.

Last year, Rep. Billy Tauzin, who headed up the Committee on Energy and Commerce, announced he was leaving Congress for the “private sector.” Tauzin had been rumored to be next in line to head up the Motion Picture Association of America, to replace an aging Jack Valenti. But Tauzin surprised the pundits, taking the position of president and CEO of the Pharmaceutical Research and Manufacturers of America. During his 15 years in Congress, Tauzin raised more than $218,000 in campaign funds from pharmaceutical manufacturers. This year, he will make more than that as their chief lobbyist.

Tauzin has been replaced by Joe Barton of Texas. Meanwhile, over in the Senate, self-imposed committee chairmanship term limits resulted in Alaska Sen. Ted Stevens taking over from Arizona's John McCain. But the retirement of ranking Democrat Fritz Hollings of South Carolina has been viewed as having greater significance. Hollings, who served as co-chairman with McCain due to the 50/50 split after the 2002 election, consistently opposed telecommunications industry deregulation.

The new chairmen and their ranking Democrat counterparts have already announced intentions to revisit the 1996 Telecommunications Act, as we predicted in January. By the time The Telecommunications Act of 2006 is finalized — just in time to pay for the 2006 elections — you will need a scorecard to identify the key players.

Last year, Robert Sachs, president and CEO of the National Cable & Telecommunications Association (NCTA), announced he would retire effective Feb. 28, 2005. Sachs left on a winning note, having prevailed over the NAB in the recent FCC decision regarding cable carriage of digital broadcasts. The NAB had asked for reconsideration of a 2001 decision on cable carriage that requires only the carriage of a station's primary program channel. The decision announced on Feb. 10, 2005, denies the NAB request that cable systems be required to carry the full 6MHz from each broadcaster, including all multicast content. (See Web links.)

On Feb. 16, NAB president and CEO Eddie Fritts announced his intention to leave that post when his current contract runs out in April of 2006. The press release announcing the beginning of a search for his replacement enumerates a long list of notable accomplishments under Fritts' leadership:

  • Passage of the 1992 Cable Act, in which broadcasters successfully won must-carry/retransmission consent rights and overrode the only veto by President Bush.
  • The 1996 Telecommunications Act, which resulted in a loan of additional spectrum to television broadcasters to facilitate the transition to digital, deregulated radio ownership and granted greater stability to broadcasters by lengthening license renewal terms from three to eight years.
  • Passage of legislation that rolled back an FCC low-power FM initiative that would have eliminated rules protecting radio listeners against additional interference.
  • Elimination of the misnamed “Fairness Doctrine,” which required broadcasters to air both sides of a controversial issue.
  • Passage of “local-to-local” legislation as part of the Satellite Home Viewer Improvement Act, which allowed local TV stations to be “spot-beamed” back to a local market.
  • Blocking government-mandated free airtime for politicians and the so-called “Torricelli Amendment” requiring TV stations to provide deeply discounted airtime above the 30 percent discounts already afforded politicians under the “lowest unit rate.”

Not mentioned was the amendment to the Balanced Budget Act of 1997, which imposed the 85 percent rule that rendered the FCC timetable for the DTV transition meaningless.

Fritts is not the only boss leaving with claims to a long list of accomplishments. On Jan. 21, Michael Powell, chairman of the FCC, announced he will step down this month. The announcement contained a four-page list of accomplishments. (See Web links.) Regarding the DTV transition, the chairman claims:

  • That the Powell Plan dramatically accelerated DTV. It created the DTV Task Force, which called on broadcasters to build out DTV facilities (now 1445 DTV broadcast stations on air — up from 75 in 2001), cable operators to carry and provide HD and digital programming (now offer HD in 177 of 210 DMAs), and content providers in the TV industry to encourage new HD content. (Today, almost all of prime-time and major sporting events are in HD, and 18 cable channels are dedicated to HD programming.)
  • That the commission made sure consumer electronics could work easily with digital TV content. It issued Plug and Play rules to simplify issues for consumers, the broadcast flag and a DTV tuner mandate to ensure consumers can receive a digital signal.
  • That the commission reached out to help consumers understand the DTV transition. It created the www.dtv.gov Web site and consumer tip sheets.

Despite all of these accomplishments, the number of ATSC receivers being sold is barely measurable. While it is true that there are more than 1400 stations on the air, this was a requirement under the FCC timetable established in 1997. Unfortunately, many of these stations are still operating at low power levels. Cable and DBS are driving the real DTV transition — something that was also entirely predictable.

The DTV tuner mandates have not been effective to date. The cable plug and play agreement is starting to gain some traction; however, the FCC has been unable to create real competition in the cable set-top box market, despite legislative mandates that date back to the early 1990s. And, the broadcast flag order is being appealed.

During a Feb. 22 hearing, Judge Harry Edwards told regulators they had overstepped their authority by imposing a rule designed to limit the copying of digital television programs. “You crossed the line,” Edwards told a lawyer for the FCC during arguments before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit.

“Selling televisions is not what the FCC is in the business of,” Edwards said, siding with critics who charge the rule dictates how computers and other devices should work.

One must question the level of accomplishment when a government regulatory agency is trying to educate consumers about the DTV transition, while the broadcasters offering the services are making little effort to promote them.

Same as the old boss?

All of this raises an important question: With so many of the “inside the beltway” bosses (who have effectively managed to thwart the digital revolution for another decade) leaving their powerful posts, will anything change?

There are clear signs that consumers are beginning to question the cozy relationships between the regulators and the regulated. To question the willingness of our elected officials and regulators to give even more power to a handful of media conglomerates.

History suggests that efforts to block and delay revolutionary changes ultimately fail; pressure builds up behind the dam until it can no longer be restrained. At best, the inevitable can be delayed as the forces of change build momentum.

Are the old bosses leaving to avoid being the first casualties when the dam bursts? Can the new bosses get out of the way and let the marketplace drive the revolution? Or will the new boss be the same as the old boss?

Let's get down on our knees and pray we don't get fooled again.

Craig Birkmaier is a technology consultant at Pcube labs, and he hosts and moderates the OpenDTV Forum.

Send questions and comments to:cbirkmaier@primediabusiness.com

Web Links

The sense of Congress: http://broadcastengineering.com/mag/broadcasting_sense_congress/

FCC Report and Order on cable carriage: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-27A1.pdf

FCC Chairman Michael Powell accomplishments: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-256206A2.pdf

NAB's Fritts launches succession process: http://www.nab.org/Newsroom/PressRel/Releases/021605Fritts.htm

Kyle McSlarrow to serve as next president and CEO of NCTA: http://www.ncta.com/press/press.cfm?PRid=571&showArticles=ok