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Senate Commerce Committee to FCC, “The Game is Changing. Are We Keeping Up?”

March 14, 2013 , ,

On
Tuesday, the Senate Commerce Committee held its first FCC oversight hearing of
the year.  All 5 Commissioners attended and Senators discussed their
laundry list of priorities and pet projects.  While Chairman Jay Rockefeller
(D-WV) pressed hard on funding for FirstNet, there were several other topics important
to the public interest addressed in the hearing.

Cell
phone unlocking has dominated the tech news over the last few weeks.  The
backlash over the Library of Congress’s refusal to exempt phone unlocking from
the DMCA prompted an official White House response to a “We the People”
petition, and since this is a DMCA-related issue, PK
also had a few things to say on the matter
.  So did the
Senate.  Senator Amy Klobuchar (D-MN) promoted
her Wireless Consumer Choice Act legislation,
which she co-authored with Sen. Richard Blumenthal (D-CT) and Sen. Mike Lee
(R-UT). 

PK
agrees with Sen. Klobuchar’s comments that the recent Library of Congress
decision creates uncertainty for consumers who want to unlock their cell phones
to switch networks and that this is an opportunity for Congress to act.  However, we believe that this problem is best
addressed through a fix in copyright law. 
As we’ve stated earlier, a cell phone-only fix wouldn’t help in other
circumstances “where an incumbent tried to lock consumers into their own ecosystems
and lock out competitors” such as universal garage door openers, generic inkjet
cartridges, or game consoles unable to play used games.  Commissioners Pai and Rosenworcel
acknowledged the problem and expressed interest in working with Congress on
this issue, but it was reassuring to hear them mention the copyright angle in
their responses to Sen. Klobuchar’s questioning.

Several
senators referenced the notion of regulations not keeping up with technology.  As Sen. Dan Coates (R-IN) stated, Congress
passes “laws and regulations that are out of date before they even get enacted.”  One could infer a couple of policy
implications from this overall sentiment.  The first is the phone network upgrade from
traditional phone technology to an all-IP network.  Chairman Genachowski’s response to Sen.
Coates’s question mentioned the FCC has “focused on some of the enduring
principles in this space that remain consistent even as technology
changes.  One is, make sure we have an
infrastructure to support the new economy. 
The second is principles like universal service, and competition, and
public safety.”  The Chairman should have
just come on out and said “let’s talk about the PSTN transition.”  We welcome this conversation, and believe
that the FCC should
develop a framework
for this transition. 
PK’s Five
Fundamentals of the PSTN
establishes a strong public interest foundation
for this framework and ensures that consumers will not be left behind as the US
upgrades its telecommunications infrastructure.

The
second area of technology and the telecom marketplace outpacing regulations
involves video reform.  Commissioner Pai acknowledged that the US has
seen a “fundamental change” in the video marketplace.  The rules
established by the 1992 Cable Act need thorough review and
revision.  Nowhere is this more applicable than with retransmission
consent rules.  The retransmission consent system governs the
carriage of broadcast stations by cable television systems–the rules say that
cable systems need to get permission from broadcasters to carry broadcast
programs, including programs that the broadcaster itself create.  This
system was designed to ensure that broadcasters continued to have a place at a
time when cable was quickly becoming the dominant force in video content
delivery, to ensure that they could produce locally-oriented programming and
respond to community needs.

These
rules may have made sense in the early 1990s, when cable was gaining ground and
no rival was in sight.  Today, while cable is still quite dominant,
more people subscribe to video service from satellite providers, telecom
companies (like AT&T and Verizon), or even “cut the cord” and get
their content online.  Broadcasters and groups of broadcasters,
instead of using the retransmission consent system to help fund local content,
are instead holding viewers hostage, blacking out their signals, and demanding
high payments for carriage.  Along with other problems, the
retransmission consent system is a contributor to steeply rising cable
bills.  

Many
policymakers are beginning to recognize the consumer harms that result from
this outdated set of rules.  Commissioner Rosenworcel acknowledged
this change and the effects it has on consumers.  “Both as a consumer
and as someone who sits in a regulatory position, I think that’s a problem and
I think it’s something that merits a fresh look.”   Sen. Blumenthal raised the blackout issue as
it relates to sports programming and retransmission consent and Chairman Genochowski believes it may
be time to update the retransmission consent provisions to reduce the chance of
blackouts during future negotiations.  This is a conversation that
needs to happen.

Lastly,
this was the first Commerce Committee hearing after the announcement of Sen.
Mark Pryor (D-AR) as Communications, Technology, and the Internet Subcommittee
Chairman.  Earlier this week, Sen. Pryor
laid out his subcommittee agenda for the next few months that will feature four
“State of” information-gathering hearings on wireless communications, wired
communications, video, and rural communications.  These hearings will be welcome opportunities
to continue the conversations started (video reform through retransmission
consent) and initiate conversations left to be had (like the PSTN transition) from
Tuesday’s hearing.