As the new year begins, lawmakers in Washington are struggling to resolve issues that have divided the TV-industry trade groups for years. Here is what Congress and the FCC will be up to:
The FCC kicks off 2005 by missing its self-imposed Jan. 1 deadline for deciding whether cable operators can continue offering the same all-in-one converter boxes they've always leased to customers.
Cable operators and the National Cable & Telecommunications Association have asked the FCC to eliminate the ban on boxes that contain both channel-scrambling and surfing functions, set to take effect July 2006. The commission imposed the prohibition to jump-start a retail market for set-top boxes with fancy program guides. Cable operators, who supply subscribers with nearly all set-top boxes today, say the ban will cost consumers more.
Now, commissioners promise to make a decision on the ban before February.
Sens. Ted Stevens (top) of Alaska and Daniel Inouye of Hawaii become chairman and ranking Democrat (respectively) on the Senate Commerce Committee, setting the stage for them to oversee a sweeping rewrite of the country's telecommunications laws. They promise to hold field hearings nationwide before drafting legislation. Debate (and passage) could take several years, but if a new bill passes, the legislation could fundamentally alter media ownership limits.
Paxson Communications explains to the federal appeals court in Washington why the FCC should be forced to quickly decide whether broadcasters are entitled to cable carriage for each of the six or so digital channels that digital TV allows them to offer. Paxson's stations are mostly low-rated UHF stations unlikely to survive without cable carriage.
The FCC must file a brief with the Supreme Court explaining why cable operators' Internet services should remain free of telephone-style “open access rules.” In April, a lower court ordered the FCC to require Comcast and other operators to carry a variety of Internet Service Providers, not just their in-house ISPs. The FCC says imposing ISP-carriage obligations would slow the rollout of cable broadband. Cable operators agree.
With an eye toward an FCC vote in February or March, agency chairman Michael Powell formally proposes his controversial plan for ending the DTV conversion. His plan, in the works for 11 months, would require TV stations to go all-digital by Jan. 1, 2009. Broadcasters are wary because most viewers won't yet own digital sets and many cable systems won't be ready to carry local TV stations in digital format.
After President Bush's inauguration, Congress begins legislative work in earnest. House Commerce Committee Chairman Joe Barton is expected to announce a quick round of hearings on the DTV switch, including scrutiny of Chairman Powell's plan. For the moment, Barton insists that Powell's 2009 deadline is too far out; Barton wants to shut off analog broadcasts two years earlier. But broadcast lobbyists bet Barton isn't serious about a Dec. 31, 2006, deadline—too many voters would be angry if their old TV sets stopped working.
The FCC faces a choice: either ask the Supreme Court to uphold its 2003 deregulation of broadcast ownership limits or accept a lower court order to rewrite the rules. The 2003 revisions would have made it easier for broadcasters to own two-station TV duopolies, eliminated the ban on ownership of local newspapers by TV stations and allowed conglomerates to own more TV stations nationwide. In June, the federal appeals court in Philadelphia said the FCC hadn't justified specific changes to the rules, which were originally designed to prevent media monopolies. FCC lawyers have said they needed more time to decide whether to appeal, an indication to anti-deregulation activists that the commission was having trouble finding sufficient grounds to pursue the case.
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