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US Regulatory Spotlight: Cable group 'shocked' as FCC leaves retrans regime unchanged


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US Regulatory Spotlight: Cable group 'shocked' as FCC leaves retrans regime unchanged

In this weekly feature, SNLKagan provides a roundup of significant recent regulatory events in the U.S.

*Pay TV providers hoping the FCC might overhaul the retransmission consentregime were left disappointed on July 14 when Commission Chairman Tom Wheelersaid the agency would not adopt any new rules governing good faithnegotiations. "Based on the staff's careful review of the record, it isclear that more rules in this area are not what we need at this point,"Wheeler wrote in a blogpost. Though the National Association of Broadcasters was quick to the news, the AmericanCable Association expressed its strong dismay. "ACA is shocked andappalled that FCC Chairman Tom Wheeler, who has placed such urgency in reducingconsumer confusion in the marketplace, has decided to leave unchanged theretransmission consent regime," ACA President and CEO Matthew Polka saidin a statement. "Todo so in the face of historic numbers of broadcast blackouts and clear signs ofmarket failure and widespread consumer harm is stunning." Wheeler didindicate the FCC is monitoring the disputes taking place. Its staff has sentrequests for information from the parties involved in the ongoing between and , for instance. "Weare reviewing their responses as I write," Wheeler said in his post. "Ifthat review reveals a dereliction of duty on the part of one or both parties, Iwill not hesitate to recommend appropriate commission action."

*The FCC faced harsh criticism from multiple members of Congress on July 12 asall four commissioners and the chairman were brought before the HouseSubcommittee on Communications and Technology. "Calls for openness andtransparency have gone unanswered, certain agency proposals place undue burdenson consumers and broadband providers," said subcommittee Chairman Rep.Greg Walden, R-Ore., during the hearing.Walden also asked about Wheeler's proposedupdate of the commission's media ownership rules. "I'm toldthat the commission majority has now voted on that and I'm also told that weprobably won't see many changes when it comes to the ownership rules andregulations," Walden said. Asked about the rules on July 14, Wheeler saiddiscussion was still ongoing and it was "premature to speculate" onwhat the final rules will look like. Also addressed during the subcommitteehearing were the FCC's proposals on set-top boxes and privacy.

*The House Energy and Commerce Committee advancedfour bills on July 14 aimed at modernizing the Federal Trade Commission. Whilecommittee chairman Rep. Fred Upton, R-Mich., said the bills were aimed ateliminating "outdated policies that are harming innovation," critics saythe bills weaken the FTC's ability to protect consumers.

*During an event sponsored by the Multicultural Media, Telecom and InternetCouncil, Former FCC Chairman Reed Hundt reportedly voiced his support forallowing some form of zero-rating plans to continue. Broadcasting & Cable quotedHundt as saying, "Being against free is not very popular." The FCC isinvestigating these plans, having sent letters to various wireless operatorsasking for information. Under the plans, mobile carriers offer access to selectwebsites and content without it counting against customers' data plans. Alsospeaking at the event, the FCC's Michael O'Rielly said the agency'sinvestigation had caused some companies to delay launching zero-ratingofferings as they await a decision. The MMTC released a whitepaper in May arguing that zero rating is "poised to play a key role inhelping to close the digital divide by addressing cost concerns andstrengthening the value proposition offered to skeptical non-users."

*During a July 12 hearing,ACA's Polka warned members of the Senate Committee on Commerce, Science andTransportation that the FCC's proposed privacy and data security rules forbroadband internet access service providers could hurt broadband deployment inrural areas. He noted that these markets are often served by smaller cableoperators that have 10 or fewer employees. As such, Polka argued that if theseoperators are forced to devote staff and money to regulatory compliance, it willmean diverting those resources away from deployment. "What this wouldcause is a shift of resources from investment and deployment into regulatorycompliance for smaller businesses. And that means less deployment of broadbandin smaller markets and rural areas, slower speeds, maybe less capacity,"Polka said. The ACA is pushing the FCC to adopt a privacy regime similar tothat of the FTC, or to at least offer smaller operators exemptions to certainelements of the current proposed rules.

*Based on the FCC's current proposalto reform the $45 billion business data services — or special access — market,a Wells Fargo analyst reportedly believes AT&T Inc. has the most to lose from the proposedchanges. FierceTelecom citedWells Fargo analyst Jennifer Fritzsche as saying AT&T "has the highestexposure of any player in this debate if rates see a meaningful haircut givenits footprint and reach." Under the proposal, the FCC is collectinginformation on which marketplaces are more competitive than others. Fornoncompetitive markets, the FCC is looking to implement a tailored set of rulesto safeguard customers, including the use of price regulation. The commissionis also considering measures to discourage special access tariffs.

*The FCC's Enforcement Bureau saidJuly 6 that it reached a $2.4 million settlement with followingan investigation into five 911 service outages that occurred on the company'swireless network between August 2008 and April 2016. As part of the settlement,the Alaskan cable operator has agreed to strengthen its procedures forproviding 911 service and implement safeguards in its network architecture.