natoa kissinger & fellman, p.c. jersey access group power of partners conference how new...

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Kissinger & Fellman, P.C.www.kandf.com

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Jersey Access GroupPower of Partners

Conference

How New Regulations Impact Your Station

Morristown, NJMay 21, 2015

Ken Fellman Steve Traylor

Kissinger & Fellman, P.C Executive Director, NATOA

[email protected] [email protected]

www.kandf.com www.natoa.org

mailto:[email protected]


http://www.kandf.com/

http://www.natoa.org/

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How Are We Communicating Digitally?

Cable Television Access Channels

Municipal Websites

Social Media

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To be Prepared for New Regulations, Have a Good Policy

for Your Channel

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Access Channel Policies - Purpose

PEG access channels intended to strengthen a municipality’s community outreach program by providing information to citizens about city issues, services, programs, and activities involving or affecting local government and the community

Establish guidelines for the use of access channels

Policies are intended to guide the City Manager/GM or designee in decisions regarding authorized use of the access channels

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Municipal Channel Policies - Purpose

Designated government access channel to be used for matters directly related to municipal issues, services, programs, and activities involving or affecting local government and the community, and directly impacting or benefiting citizens of the municipality

Channel is not a public or education access channel

Not intended to create a public forum, or limited public forum, for purposes of First Amendment rights under the US or State Constitutions

Channel under the authority of local government manager (if you have a council – manager form of government), or Mayor, or other appropriate person

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Issues to AddressScheduling – prioritization of kinds of programmingHow programming requests will be evaluatedBulletin board and public service announcementsDisclaimersProhibitions – obscenity; discriminatory/slanderous; religious; anything that would violate FCC regsCopyright Sponsorships/underwritingElection programmingStudio rental by outside partiesGrievance process

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Cable Service Now Being Delivered Over Internet Protocol

(IP)

So what? It’s still a cable service –

if it is multi-channel video programming service, delivered over a network using public rights-of-way, that is in large part owned or control by the provider, it’s a cable service IP is a format, not a delivery mechanism

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Institutional NetworksA communication network which is constructed or operated by the cable operatorUsed by a local government free of charge or at a low cost for voice, video and data transmissionsA franchising authority may require I-Net capacity as part of a cable operator’s proposal for a franchise renewal Operators may want to convert I-Nets to: – commercial services contracts - increase profits– can the operator “mandate” a commercial contract?– new regulations do not require this … yet … it’s subject

to negotiations

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Amendments to Commission Rules Concerning Effective Competition

What is Effective Competition?

If any of the 4 statutory tests are met, LFA cannot regulate basic cable rates

Under current rules, there is a presumption that there is no effective competition – cable operator has the burden to show that effective competition exists

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Amendments to Commission Rules Concerning Effective Competition

fewer than 30% of households in the franchise area subscribe to the cable service of a cable system; franchise area is (i) served by at least two unaffiliated [MVPDs] each offering comparable video programming to at least 50% of households in the franchise area; and (ii) the number of households subscribing to programming services offered by [MVPDs] other than the largest [MVPD] exceeds 15 percent of the households in the franchise area; the franchising authority for that area offers video programming to at least 50% of the households in that franchise area; or a LEC (or any [MVPD] using the facilities of such LEC) offers comparable programming service to that provided by an unaffiliated cable operator

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How it Works Today

Cable operator has burden to show the criteria for effective competitionLFA may show evidence to overcome thisDelay in decisions have been legendaryNPRM: commenced pursuant to requirement in Section 111 of STELA re: establishing streamlined process for small operatorsFCC determined to expand the scope of the proceeding and determine if a new approach - beginning with an across the board presumption of effective competition

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Effective Competition

NATOA’s comments:– Some streamlining may be appropriate, but

operator should retain the burden to prove effective competition

– Findings of effective competition impact more than rate regulation -- basic service tier must include, at a minimum, the local broadcast television stations and any PEG channels required pursuant to a franchise

agreement– And it has been argued that since this basic tier

carriage requirement is tied to rate regulation, FCC’s proposal could permit cable operators to move these stations to a higher priced tier of service

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Effective Competition

Other impacts of EC findings: LFA can no longer require same pricing for same services throughout franchise areaNAB comments: Congress granted FCC power to revoke the rate regulations certification of LFAs, but that requires “a petition by the cable operator or other interested party, notice to the franchising authority, and a finding by the Commission”NATOA and NAB suggest establishing an internal timeframe within which FCC must act on petitionsDecision expected in June

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NPRM on Multi-Channel Video Programming Distributors

MVPD is a “person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a [DBS] service, or a [TVRO] satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming.” 47 U.S.C. § 522(13)

Important to remember: not all MVPDs are “cable operators” subject to Cable Act franchising

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NPRM seeks comment on what MVPD rights and obligations should apply to linear programming “Over the Top” (OTT) providers– Rights include programming access rules (access to

vertically integrated programming) and right to seek relief under retrans consent rules

– Obligations include program carriage agreement limitations (47 U.S.C. § 536); competitive availability of navigation devices (47 U.S.C. § 549); retrans consent (47 U.S.C. § 325); EEO requirements; closed captioning

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NPRM proposes to classify providers of OTT subscription linear (i.e., pre-scheduled) programming as MVPDs … this would suggest that any entity that provides such services over landline, ROW-crossing facilities that it owns or in which it or its affiliates have a significant interest is a “cable operator,” providing a “cable service” over a “cable system” NPRM tentatively concludes on-demand (like Netflix) and free OTT would not be classified as MVPDs, but seeks comment on that conclusion

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NPRM tentatively concludes that OTT video provided by a cable operator is not a cable serviceThis conclusion is at odds with Cable Act’s definitions of “cable service” and “cable operator”But cable operators argue that FCC does has no authority to define some OTTs as MVPDs for purposes of ensuring they receive nondiscriminatory access to programming Poses potential negative consequences to LFA ability to impose franchise obligations as cable operator provisioning of programming service shifts to OTT

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Paradigm Shift A-Coming

From NATOA President Tony Perez’ latest message to members:

We always overestimate the change that will occur in the next two years and

underestimate the change that will occur in the next ten. Don't let yourself be lulled

into inaction.- Bill Gates

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Paradigm Shift A-ComingThis is not the way to prepare for it:

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Cable appears to be in the position of the music industry in the days before I-TunesAre four converging forces that will soon lead to major disruption of the Cable TV business model– good for consumers, but …– likely to lead to adverse consequences for

local governments without changes to existing laws

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Intense customer dissatisfaction with cable companiesIncreasing Bandwidth – capacity makes it easier to access large video files over the InternetEmergence and acceptance of low-cost and no-cost alternatives to cable Tech Industry Innovation – leading to disruption of the existing pay TV model

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The Classic “No-Brainer”

Do I continue to pay my cable company over $200 a month for triple play or obtain virtually the same services over the Internet at about half the price?Smart money is on the latter Problematically, one reason why Internet option is so much cheaper is because consumers won't be paying PEG fees, franchise fees and other taxes that support local governments How do we plan for the future and avoid, as much as possible, detrimental outcomes?

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NATOA Blueprint for Localism in Communications “Communications Policy in an IP Environment:

Principles, Challenges and Strategies”

A transformation is taking place at a time of increasing industry consolidation Concentration of political and economic power in the hands of a few incumbent providers

This has led to deregulatory measures, laws and regulations that have the potential to be harmful to the interests of the public and local communities At stake is local government’s ability to ensure provision of important public benefits such as local consumer protection, support for multiple voices in media through PEG programming, and regulation and compensation for the private use of public property, to name just a few

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NATOA Blueprint for Localism in Communications: Principles, Challenges and

Strategies

We are operating under a federal statute – The Communications Act of 1934, that has only had minor amendments until its one major overhaul, the Telecommunications Act of 1996

The 96 Act was over 100 pages long

Guess how many times the word “broadband” appears in that statute?

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NATOA Blueprint for Localism in Communications: Principles, Challenges and

Strategies

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NATOA Blueprint for Localism in Communications: Principles, Challenges and Strategies

Congress is talking about rewriting the 1934 ActFact: broadcast/media/telecom industry relies upon its use of a variety of publicly owned assets …– Public airwaves– Rights-of-Way– Other public property

… to run their businesses and generate profits for their shareholdersAs a result, they all have (or should have) public interest obligationsWhat should those obligations be under a new Communications Act?

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Preserve localism and tradition of community media Consumer protection - consumers must have ready access to all information that might be relevant or useful to their purchasing decisionsManagement of Public Property and Land Use Authority - Communications providers should be subject to same local rules that govern other entities to protect public safety, property, community character, and local commerce – the rights-of-way are dedicated primarily to ensure the

safe and efficient movement of vehicular and pedestrian traffic

NATOA Blueprint for Localism in Communications: Principles, Challenges,

Strategies

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Preserve local taxing authorityLocal governments should retain authority to determine appropriate level of compensation paid for use of public property by communications providers, as with all other private users of public resources – Laws have been changed to reduce the compensation received

by local communities for use of their property – Local governments have a fiduciary duty to manage multiple

uses of the public assets that communications firms use for their private operations,

– to do that, communications firms, like all other users of public property, should pay a reasonable amount as determined by the local government, and not receive special, subsidized treatment that is not afforded to any other private entity


Strategies

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Compensation/public interest obligations should be for use of public assetsShould be technology agnosticLocal governments should be focused on impacts of useLocal government should be focused on promoting communications infrastructure investment and deployment of all kinds, but all kinds of entitiesGoal: internationally competitive, affordable and available broadband in every part of every community


Strategies

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Strategies

Critically important for the future of PEG:

funding to support vibrant community media and digital divide programs and allocating channels or equivalent network

capacity to serve local content

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Ken FellmanKissinger & Fellman, [email protected]

Steve TraylorExecutive DirectorNational Association of Telecommunications Officers and [email protected] www.natoa.org


http://www.kandf.com/


http://www.natoa.org/

natoa kissinger & fellman, p.c. jersey access group power of partners conference how new...

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