roundtable: Telecom Post #18
roundtable: Telecom Post #18
Telecom Post #18
CWHITCOM@bentley.edu
Thu, 09 Nov 1995 10:44:26 -0400 (EDT)
Date: Thu, 09 Nov 1995 10:44:26 -0400 (EDT)
From: CWHITCOM@bentley.edu
Subject: Telecom Post #18
To: roundtable@cni.org
Message-Id: <01HXFQ6W0OSY8WZ13Y@bentley.edu>
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Free Speech Media, LLC
Computer Professionals for Social Responsibility
November 9 1995
Number 18
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Compiled, written, and edited by Coralee Whitcomb
Please direct comments and inquiries to cwhitcom@bentley.edu.
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For more information on Computer Professionals for Social
Responsibility, please write CPSR@CPSR.ORG or call
415-322-3778.
====================================================
The Telecom Post is posted to several distribution lists and is also
available from the CPSR listserv. To subscribe, send to LISTSERV@CPSR.ORG
with the message SUBSCRIBE TELECOM-POST YOUR NAME. Unsubscribtion requests
should be sent to the list from which you receive the Telecom Post unless
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to LISTSERV@CPSR.ORG with the message UNSUBSCRIBE TELECOM-POST.
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The Telecom Post is posted more or less weekly. My apologies
for cross-posts.
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TOPICS:
1. S.652 is in Conference
2. Telecom Bill Issues of Concern - a Primer
3. 90's Channel & CNN Editorial Discretion
a sign of things to come
S.652 IS IN CONFERENCE
The Conference Committee for the Telecommunications Bill has
begun to meet. Staff for the Committee members are now in
intense deliberations in an effort to get a reconciled bill out
of committee by December. So far, however, the House and Senate
staffs have run into many more snags than they expected. When
the staffers can't reconcile differences, the list grows for the
members, themselves, to get down and dirty. They've been
remanded to around the clock negotiations through the
Thanksgiving recess if necessary.
It should be noted up front that the leaders of the Conference
Committee are also the largest recipients of telecom industry
PAC dollars. Of the $2m that industry has showered on Congress
since the beginning of the year, Sen. Pressler (R-SD) found
$103,165 in his bank account and Rep Jack Fields (R-TX) found
$97,500. In total, conference committee members enjoy the bulk
of the donations with the Reps averaging $18,824 and the
Senators $58,182. I'm following this Post with the promised
Conferee list, contact information, donation data, and bill
oversight.
The President has reiterated his displeasure with much of the
bills. He has threatened to veto the legislation if it remains
true to the House and Senate bills. He is working on recruiting
Hollings (D-SC) and Daschle (D-SD) to carry his banner in
negotiations. Hollings is seen as a key advocate and is wedded
to a clear approach for ensuring adequate competition exists
before Bells are allowed into long distance. Though Hollings
worked hard for passage of the Senate bill due to various
commitments he had made, those have now been honored and it is
hoped by the President that he is now free to work on the
President's behalf.
The list of detractors for this bill seems to be growing. So
far those opposed to anything close to what we have are the
President, the long distance industry, state utilities, local
authorities, consumer groups, and public advocacy groups.
Education and libraries want stronger universal service
language. To override a presidential veto, the Senate must come
up with 60 votes. There are 53 Republicans in the Senate. The
Bell companies, cable, entertainment, and media love the bills
as does the disabled community. Public access television likes
the language they've received. Indeed, if this thing does pass
despite the wishes of much of the public - public access
television could well be our only public voice left - get out
those camcorders.
Freedom of Speech Roster
In terms of representation on the conference committee, our
First Amendment is in serious trouble. Included in the
conference committee:
Senator Exon - Exon Amendment
Senator Gorton - Communications Decency Act, CDA
Rep. Hyde - sponsored indecency amendments in House bill
All Senate conferees voted for the CDA
All House conferees voted for the indecency amendments in the
House bill (but they were slipped in at the last minute)
Excluded from the conference committee:
Rep. Cox and Wyden - authors of the Internet Freedom and Family
Empowerment Act
Sen. Leahy - sponsored study alternative to CDA
Senate Judiciary members
Senators who voted against the CDA
TELECOM BILL - A PRIMER
1. Media Concentration - We face entire information markets
owned by a single entity. Barriers will be lifted from a single
owner accumulating radio stations, TV, cable, newspaper,
electronic network providers, and, in markets of under 50,000,
phone. This will look like the mergers we are already seeing
and will serve to put most of the content delivered into our
homes in the hands of a few mega-companies. Hardly the
competition de-regulation is supposed to inspire.
2. Cable-Telco mergers - The natural competition for phone and
video service is between cable and telephone companies. Yet in
markets of under 50,000 they will be allowed to merge. Where
are the lower prices and better service from that arrangement?
3. Universal Service - The Senate bill provisions for universal
service are referred to as the "Snowe-Rockefeller-Kerrey-Exon
Amendment". They provide discounted telecommunication rates for
libraries, k-12 schools and rural health-care providers. The
amount of the discount would be determined by the FCC and the
states. Providers would be subsidized by a universal service
fund made up of contributions from all providers. Though the
House did not include this provision it is looked upon favorably
by both sides. One note - S652's universal service provisions
must be included in the final bill to achieve the results we're
looking for.
Universal service is where the "have-not" issue comes in. Many
of us - even beyond schools and libraries - will not be able to
afford rates that are based on the cost of providing the
service. The 1934 Communications Act used the concept of
affordable rates to everyone as a basic principle in designing
the regulatory environment that brought us today's telephone
infrastructure. This principal has now taken a back seat to the
belief that competition will suffice in serving the public need.
Most public advocates simply don't believe that competition
will do the trick. Pro|visions like cross-subsidization were
built into the original design to ensure universal service. The
Snowe-Rockefeller amendment is the only protection in the
current legislation.
There is a provision for a Federal-State Joint Board to address
important universal service issues. The Joint Board will review
the definition of and adequacy of support for universal service.
HR1555 includes one state-appointed utility consumer advocate
on this board. S652 does not. This is generally seen as
inadequate representation on behalf of the consumers. Other
members will be state and federal regulators.
4. Freedom of Speech - It's ugly. On the Senate side we have
the CDA, Title IV, Section 402, which makes someone who
"initiates the transmission of any comment, request, suggestion,
proposal, image, or other communication which is obscene, lewd,
lascivious, filthy, or indecent, with intent to annoy, abuse,
threaten, or harass another person," can be fined up to $100K
and imprisoned for two years.
The same holds true for whoever " knowingly within the United
States or in foreign communications with the United States by
means of telecommunications device makes available any indecent
communication in any form including comment, request,
suggestion, proposal, or image, to any person under 18 years of
age regardless of whether the maker of such communication placed
the call or initiated the communication". Similar language is
found in the House bill.
Many of us took heart when the House, Cox/Wyden amendment passed
overwhelmingly. The amendment denied FCC regulation of the
Internet. We must not allow that victory to make us complacent.
The Religious Right has caught the attention of Bliley and
Pressler with a letter from Ed Meese. The letter claims "[i]t
is not possible to make anything more than a dent in the serious
problem of computer pornography if Congress is willing to hold
liable only those who place much material on the Internet while
at the same time giving legal exemptions or defenses to services
or access providers who profit from and are instrumental to the
distribution of such material". Meaning Internet Service
Providers will be expected to monitor EVERYTHING and we will be
forced to restrict all speech to that deemed acceptable by our
souls' watchdogs.
5. Spectrum Flexibility - By now everyone has heard of the
spectrum auctions and the big bucks they are bringing in to
reduce the deficit. Broadcasters were given a nice chunk of
spectrum in order to develop HDTV capability. Well, HDTV hasn't
really gone anywhere and broadcasters would like to take that
extra spectrum and put it to more profitable lines of business.
Both bills would allow them to do that without making a peep.
This spectrum is worth a lot of money and is a public good.
Many feel that we should get SOMETHING out of it. Initiatives
have been launched for really *radical* public concessions like
free time for political candidates, enhanced children's
informational and educational programming, and a reservation of
capacity for low-cost nonprofit use.
6. Cable Rate Deregulation - supposedly upon competition, rates
will naturally fall to their lowest level from market forces.
Both bills will lift current regulation on cable rates well
before adequate competition can possibly exist. The Consumer
Federation of America expects with will result billions of
dollars in overcharges to the American people.
7. Bell Entry into Long Distance - Several issues arise over the
process devised to open the gates to the Bells, freeing them from
monopoly regulation. Let's remember that it is basically
un-American to be a monopoly. In cases where there is market
failure we do let monopolies exist but only within a strict
regulatory environment. Bells and cable companies both serve as
monopoly entities and their revenues are carefully monitored to
protect the rate payer. We are looking at eliminating much of
today's governmental oversight and if we don't this right, we
unleash enormous unregulated monopoly power onto the public
giving us no recourse for phone or cable rates but to pay -
whatever.
History shows that the Bells are not adverse to making big
profits. The Consumer Federation of America released a report
claiming that the Bells have enjoyed excess profits of nearly
$30b since divestiture. This study finds that price increases on
basic service have increased 80% since divestiture. Plus they
are able to divert this money into unregulated businesses
bypassing traditional capital markets. Additionally the
telecommunications industry is a declining cost industry. If
free market economics are meant to control pricing, there is no
reason to believe that telephone rates should increase.
Clearly the Bells are very formidable players in this game and
we stand to lose a lot as ratepayers if this transition is not
handled wisely.
Role of the Justice Department - The Justice Department has
been demoted dramatically in both bills. It retained an
advisory capacity but that's all. The President and, obviously,
the DOJ are not happy about that. Both want the Justice
Department OK to serve as a key test the Bells must pass before
releasing them to "fair" market competition.
Rate of Return Regulation - Both bills would prevent a state
enacted rate-of-return approach to establishing price limits.
Rate-of-return ties profits to expenses ensuring that the
customer benefits proportionately to the company's revenues.
The Bells hate ROR pricing and look forward to "flexible
pricing" often in the form of "price caps". Price caps would
place a ceiling on what the Bells could charge. Problem is that
a recent study by four consumer groups see Bell operating costs
as decreasing by as much as $14b. Using a price cap approach,
consumers will likely be overcharged by that same $14b.
Separate Subsidiaries - Both bills require that the local
exchange portion of Bell business be put into a separate
subsidiary before they are given free reign. The House bill
sunsets that requirement in 18 months. The Senate bill leaves
it up to the FCC. Reconciliation of this point is causing a
surprisingly big problem among the conference staffs.
8. Pre-emption of state and authority - Once competition in a
state has been determined adequate and the Bells are released,
that state's regulatory authorities are prohibited from making
rulings regarding any of the three issues listed above -
eliminating local rate supervision of this very important
infrastructure.
The bills also prohibit states from requiring intraLATA dialing
parity prior to entry the interLATA (long distance) market.
IntraLATA refers to long distance calls within the LATA. The
bills prohibit requiring that competition exist intraLATA prior
to deregulation.
HR1555 prohibit states from imposing reasonable quality
standards and consumer protections on new carriers. A clause
establishes an absolute requirement that all "effective"
barriers to entry be removed. Therefore a new carrier could
bypass state consumer protection regulations by claiming that
the state prohibited it from entry.
THE DEMISE OF THE 90'S CHANNEL AND CNN GETS SHY
A Sign of Things to Come
If we were at all unsure as to what media concentration will
look like should this legislation pass, two current examples
paint a fairly clear picture. In the interest of ensuring a
diversity of voices, The Cable Act of 1990 provided for 15% of
cable capacity to be made available for independent programming.
The 90's Channel, a progressive cable TV network, has used this
provision as an outlet for many independent producers - making
it one of the few successful implementations of this policy.
TCI, the giant cable parent of the 90's Channel has been trying
for some time to force it off the air. With a giant rate
increase, TCI was successful on November 1.
Though the leasing mechanism in the Cable Act never really
worked, it, at least, sustained the principle that our airwaves
should be shared by the wide diversity that is America. The
current telecom legislation will both shut down all existing
diversity safeguards and add no new ones.
Meanwhile, CNN refused to carry the long distance industry ads
that speak out against the telecom bill. It's not a stretch to
figure out whether or not Time-Warner is for passage of the
bill. The discouraging aspect of CNN's refusal is the contrast
to its prior willingness to air advocacy commercials and its
recent claim that it should refuse to air any commercials, pro
or con, on this issue due to its vested interest in the outcome.
Time Warner controls 40% of what is delivered into our homes.
If our broadcast industry arbitrarily decides not to air
advocacy commercials we will be effectively cut off from many
issues we might like to know about.
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