Comcast’s decision to limit Internet traffic from the peer-to-peer software BitTorrent would be against the law if Democratic presidential hopeful Barack Obama had his way, an aide to the Democratic Senator said Thursday.
In a conference call organized by the campaign for Sen. Obama, D-Ill., high-profile technology experts Lawrence Lessig, Beth Noveck and Julius Genachowski endorsed the technology and innovation agenda that Obama released on Wednesday. Also on the lines were three Obama aides, who declined to speak for attribution.
“What I find compelling about the Senator’s [stance] is a strong commitment to Net neutrality,” said Lessig, a law professor at Stanford University, referring to the notion that broadband providers be barred from favoring business partners with speedier Internet delivery.
Obama “addresses the problem of Net neutrality in a way that could actually be enforced,” said Lessig. By contrast, Democratic hopeful Hillary Clinton “can’t stand up for Net neutrality.”
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Earlier this week, FCC chairman Kevin Martin announced long-promised revisions to America’s media-ownership rules. As I point out in my latest essay for the City Journal, the results were extremely disappointing and could have grave consequences for the long-term viability of struggling media operators.
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Media Deregulation Is Dead
The FCC’s toothless reforms are a victory for the status quo.
November 15, 2007
by Adam Thierer
This week, Federal Communications Commission chairman Kevin Martin announced long-promised revisions to America’s archaic, convoluted media-ownership rules. The result: no serious deregulation, just tinkering at the margins. In fact, of the half-dozen rules currently on the books, Martin is proposing to revise only one—the newspaper/broadcast cross-ownership rule. “No changes to the other media-ownership rules [are] currently under review,” Martin’s press release notes tersely, leaving many TV and radio broadcasters wondering when they will ever get regulatory relief.
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It’s a familiar storyline: frustrated by political opposition to his agenda, the government head declares a state of emergency, invoking an obscure, never before used, provision of the law to assert virtually unlimited authority. Television is the first target. And lawyers are mobilizing.
A summary of Pervez Musharraf’s power grab in Pakistan? Not quite: the story is being played out right here in Washington, D.C., with reports that the FCC – led by Chairman Kevin Martin – will soon assert emergency rule over cable television. 
The tool is section 612(g) of the Communications Act. This rather obscure statutory provision states that if cable systems reach 70 percent of U.S. households, and 70 percent of those households actually subscribe to cable, then “the Commission may promulgate any additional rules necessary to provide diversity of information sources.” Never mind other provisions of law – 612(g) — read literally — says that if it flickers and arrives by cable, the FCC can regulate it. (It is far from clear, however, whether Congress intended the provision to have such a sweeping impact).
The Commission reportedly plans to assert powers under this “70-70” rule at a meeting later this month. The declaration would buttress a phalanx of new regulations on cable TV service being pushed by Chairman Martin, including mandated carriage of multi-cast broadcast channels, mandated unbundling of cable channels, caps on the cable ownership, new rules on the purchase of content from programmers, expanded mandates on leased access to channels, and new regulations on cable set-top box devices.
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Is the FCC moving too fast on media ownership? Senators Byron Dorgan and Trent Lott think so, announcing new legislation this week to slow things down a bit. His bill, S. 2332, would require the FCC to wait 90 days before promulgating any changes to current ownership rules, and to conduct a separate proceeding on localism. The bill is spurred by reports that Chairman Kevin Martin is pushing for a final vote on changes to the FCC’s ban on cross-ownership of newspapers and broadcast outlets by the end of the year.
House Commerce Committee chair John Dingell has echoed the senators’ call, warning the FCC “against a rush to judgment in its media ownership proceeding,” as has activist groups such as Free Press – the energizer bunny of government regulation – which is warning that:
“Kevin Martin, Chairman of the Federal Communications Commission, has been keeping a secret from the American people. He wants to push through plans to remove decades-old media ownership protections. And he’s trying to do it without public scrutiny”.
Now, I’m the first to recognize that the FCC has a lot of faults, but moving to fast is a new one to me. The Commission deliberations have long been known for their Bleak House qualities, extending – like the case of Jarndyce v. Jarndyce – seemingly for generations. Decisionmaking at the agency is – as long-time FCC policy chief Robert Pepper put it – “infinitely elastic.”
But it this case different? Is the FCC – like a runaway glacier – suddenly moving dangerously fast on media ownership? Hardly.
Take a look at the record.
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Last week, a mob of anti-media activists gathered outside the FCC to protest what they regarded as the agency’s willingness to embrace a radical deregulatory agenda on the media ownership front. The critics fear that the whole media marketplace is being gobbled up by a handful of evil media tycoons in New York and LA. If only the critics spent some time reading the headlines in the media outlets they criticize, they’d know that the marketplace reality is quite different.
In fact, over the past few years, I have been documenting the ongoing DE-consoldation taking place in America’s media market. This series has built upon the themes and evidence I first presented in my 2005 book, Media Myths: Making Sense of the Debate over Media Ownership, in which I made the case that the media marketplace was far more dynamic than critics cared to admit.
And today we have yet another case study of DE-consolidation to report: Media tycoon Barry Diller announced yesterday that his conglomerate IAC/Interactive Corp. would be splitting into not 2, not 3, not 4, but FIVE different divisions. IAC controls more than 60 brands including Ticketmaster, Ask.com and the Home Shopping Network, but they have not been able to find a way to build “synergies” (an over-used business school term if there ever was one) together. And so Diller is separating those divisions so that they can pursue their “core competencies” (another business school term, but one that does not get enough attention).
Here’s how the NY Times summarized what is going on:
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Just when you think the debate over media ownership regulation in this country can’t get any more absurd, along comes this letter from FCC Commissioner Michael Copps arguing that Rupert Murdoch’s deal for the Wall Street Journal should be blocked to somehow save the nation (especially those poor New Yorkers) from an evil media monopoly. “It will create a single company with enormous influence over politics, art and culture across the nation and especially in the New York metropolitan area.”
PUH-LEASE! How can someone make such an argument with a straight face? Rupert Murdoch is going to control “the politics, art and culture” of the nation with the WSJ?? Come on, get serious. The Journal isn’t exactly the standard-bearer when it comes to setting artistic or cultural trends for the nation. And the argument that Murdoch is somehow going to control “the politics, art and culture” of the New York area with the Journal is even more absurd. Is there really any shortage of inputs in the New York area when it comes to those things? Are the artsy-fartsy liberals of NYC suddenly going to wake up one day, start reading the Journal, and completely change their lifestyles? Please.
Anyway, I wrote a much longer essay for the City Journal back in August predicting all this “Chicken Little” nonsense would be coming. As I said then:
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I want to comment on Adam Thierer’s recent paper, “Unplugging Plug-and-Play Regulation,” which makes several excellent points. Adam briefly summarized his thesis (i.e., there is no need for government “assist” in private standard-setting) here a couple days ago and generated a couple comments.
The cable industry and consumer electronics manufacturers are touting competing standards initiatives. The pros and cons of each approach, from a technology perspective, are somewhat bewildering to a non-engineer like myself. But there appears to be one clear difference that matters a lot. Adam points out that under the initiative sponsored by the consumer electronics industry,
the FCC would be empowered to play a more active role in establishing interoperability standards for cable platforms in the future. [It’s] a detailed regulatory blueprint that specifies the technical requirements, testing procedures, and licensing policies for next-generation digital cable devices and applications.
Why would ongoing assistance be required from the FCC, which mainly consists of lawyers?
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In response to my post two days ago about my new paper on interoperability standards in the cable marketplace, one of our savvy TLF commenters (Eric) made the following argument about how he believed the lack of standardization killed high-def audio:
“In the world of high definition audio, the lack of standardization did not lead to innovation and exciting new services. It led to the languishing of two competing formats, SACD and DVD-Audio. The current fight between two high definition video formats may delay the mass market penetration of any hi-def video disc. Virtually everyone loses. … Freedom is great, but when you need a mass market application, standardization becomes a crucial consideration.”
But another reader (Mike Sullivan) makes an excellent counter-point when he notes:
“Isn’t it also possible that the two HD audio formats have “languished” not because of the fact that there are two competing formats, but because there is limited demand for HD audio recordings at a premium price?”
This is something I happen to know quite a bit about, so I wanted to respond in a separate, detailed post.
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I have a new paper out this week entitled “Unplugging Plug-and-Play Regulation” in which I discuss the ongoing dispute between cable operators and the consumer electronics industry over “digital cable ready” equipment and “plug-and-play” interactive applications. Basically, it’s a fight about how various features or services available on cable systems should work, including electronic programming guides (EPGs), video-on-demand (VOD), pay-per-view (PPV) services, and other interactive television (ITV) capabilities.
This fight is now before the Federal Communications Commission where the Consumer Electronics Association (CEA) has asked the agency to mandate certain standards for those next-generation interactive video services. In my paper, I argue that regulation is unwise:
Ongoing marketplace experimentation and private negotiations represent the better way to establish technical standards. There is no need for the government to involve itself in a private standard-setting dispute between sophisticated, capable industries like consumer electronics and cable. And increased platform competition, not more government regulation of cable platforms, is the better way to ensure that innovation flourishes and consumers gain access to exciting new services.
To read the entire 7-page paper, click here.
In an editorial in yesterday’s Washington Post, Roberta Combs, president of the Christian Coalition of America, joins Nancy Keenan, president of NARAL Pro-Choice America, in calling for congressional investigation of purported censorship by wireless operators. Combs, who has vociferously argued for net-neutrality regulation for communications and Internet companies, is now stepping up those calls, claiming that private companies want to squelch speech over wired or wireless networks. “We’re asking Congress to convene hearings on whether existing law is sufficient to guarantee the free flow of information and to protect against corporate censorship,” Combs and Keenan write.
Prompting this latest call for regulation was an incident two weeks ago in which Verizon Wireless blocked text messages from NARAL. Verizon admitted that it had made a mistake and immediately changed its policy. But net-neutrality fans like NARAL and Christian Coalition say that the incident shows why a Fairness Doctrine for the communications and online sector is essential. In reality, as I point out in my latest City Journal column, the incident proved the opposite: the message got out, and this episode is hardly an excuse for imposing Net neutrality mandates on the Internet. Read on…
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.