AT&T, Verizon Intervene in Lawsuit Against FCC

Center's Suit To Get Broadband Data Draws Industry Interest, Comment

AT&T, Verizon Intervene in Center's Suit Against FCC

WASHINGTON, January 19, 2007 — The Center for Public Integrity is leading an effort to find out more about which companies are providing high-speed Internet access throughout the United States so that citizens have a better understanding of their service options.

A Center lawsuit filed under the Freedom of Information Act is attracting industry-wide interest.

See Drew Clark's Telecom Watch Blog for News and Analysis on Telecom, Media and Technology Policy

The Center's "Well Connected" project originally filed suit in U.S. District Court on Sept. 25, 2006, seeking access to a Federal Communications Commission database listing companies that have deployed broadband services. The FCC has denied academics, journalists, companies and other parties access to the records.

Date Filed	Descriptive Title
8/24/2006	FOIA requested by CPI
9/25/2006	Complaint by CPI
9/25/2006	CPI Corporate Disclosure
9/26/2006	Decision By Wireless Competition Bureau
10/2/2006	Proof of Service by CPI
10/2/2006	Exhibit 1 - Declaration of Service on U.S. Attorney
10/2/2006	Exhibit 2 - Service by Mail on Defendant FCC
10/2/2006	Exhibit 3 - Service by Mail on Attorney General
10/5/2006	Notice of Appearance for FCC
10/19/2006	Administrative Appeal by CPI
10/24/2006	Unopposed Motion for Extension of Time to Respond by FCC
10/24/2006	Proposed Order
10/26/2006	Order by Judge Collyer
11/30/2006	Motion for Extension of Time to Respond by FCC
11/30/2006	Proposed Order
12/1/2006	Order by Judge Collyer
1/8/2007	Motion for Summary Judgment by FCC
1/8/2007	Statement of Material Facts
1/8/2007	Declaration by Alan I. Feldman [added by corrected filing 1/9]
1/8/2007	Exhibit - CPI's FOIA Request
1/8/2007	Exhibit Decision by FCC
1/8/2007	Exhibit - CPI's Administrative Appeal
1/8/2007	Public Notice
1/8/2007	Form 477 and Instructions
1/8/2007	Decision on FOIA Request by ERS Group
1/8/2007	Proposed Order
1/8/2007	Unopposed Motion for Leave to File a Brief Amicus Curiae by CTIA-The Wireless Association
1/8/2007	Memorandum Supporting Motion
1/8/2007	Exhibit - Amicus Brief
1/8/2007	477 and Instructions
1/8/2007	Exhibit 2 - CPI's FOIA Request
1/8/2007	Exhibit Public Notice
1/8/2007	Proposed Order
1/8/2007	Motion to Intervene
1/8/2007	Proposed Order [as corrected 1/12]
1/8/2007	Proposed Answer to the Complaint
1/8/2007	Proposed Motion for Summary Judgment
1/8/2007	Proposed Statement of Material Facts
1/8/2007	Declaration by ATT
1/8/2007	Declaration by Verizon
1/8/2007	Exhibit 3 - Declaration by Kevin J. Albaugh
1/8/2007	Exhibit 4 - Declaration by Colin S. Stretch
1/8/2007	Proposed Order (for Summary Judgment)
1/8/2007	ATT Corporate Disclosure
1/8/2007	USTA Corporate Disclosure
1/8/2007	VerizonDisclosure
1/8/2007	Notice Of Appearance for ATT Inc VerizonUS Telecom Association
1/17/2007	Court Order Reassigning Case

The Center wants to make data about these companies publicly available online through Well Connected's Media Tracker, a free, Internet-based database of the radio, television, newspaper and cable companies that is searchable by ZIP code. Media Tracker was first released in 2003, and updated and expanded in October and November 2006.

Publicly identifying the companies that provide broadband service would help give citizens a more complete understanding of who they could turn to for high-speed access — which is becoming increasingly important in economic development and the spread of information. The availability of competitive broadband service is an issue involved in a range of telecommunications policy debates, including Net neutrality, universal service and video competition.

Well Connected also tracks the political influence of the major players in the telecommunications, media and technology industries, supplying information on the companies culled from the Center's lobbying, campaign contribution and privately sponsored travel data.

AT&T, Verizon Communications and three leading telecommunications trade groups filed court papers seeking to intervene or comment on the Center's lawsuit last week. The top cable association is also seeking to weigh in. (Links to each of the documents in the official court docket are provided in the box to the right. It will be updated as further documents are filed.)

In court papers filed Jan. 8, AT&T and Verizon, together with the United States Telecom Association (to which both companies belong), objected to the release of the broadband data. Wireless Communications Association International, a trade group representing a range of wireless broadband service providers, said that it had also objected.

Separately, CTIA — the wireless association formerly known as the Cellular Telecommunications and Internet Association — supported the FCC in a "friend of the court" brief filed Jan. 8. A fourth association, the National Cable and Telecommunications Association, seeks to file a similar brief.

The Department of Justice and the FCC filed their response to the Center's complaint on Jan. 8, the court-imposed deadline.

The Center's reply to the government and to the intervening companies is due on Feb.12.

The database in question is referred to as the "Form 477" database, nicknamed after the number of an FCC document. The agency has required communications companies to provide data about the areas they serve, as well as other information, twice annually since 2000.

Although the FCC does not make the database public, it does produce a semi-annual report about broadband availability and competition that is based on the data.

The Center believes that release of the base data is important because the information will aid in the general public's understanding of the importance of broadband.

Dating back to at least to April 2004, President George W. Bush declared that it was a national priority to spur the development of high-speed Internet service. "I'm talking about broadband technology to every corner of our country by the year 2007 with competition shortly thereafter," Bush said then in remarks at the American Association of Community Colleges Annual Convention.

Knowing the identities of the companies would also allow the public to better gauge the reliability of the FCC's own database. In a report released in May 2006, the Government Accountability Office discussed "information [received from the FCC] on the companies providing broadband service in ZIP codes throughout the United States." The GAO's analysis of Form 477 data allowed it to conclude that the median number of broadband providers within a ZIP code was two, rather than eight, as the FCC's analysis of the data found.

Under the Freedom of Information Act, agencies have 20 working days to respond to requests. The Center's FOIA request was hand-delivered to the agency on Aug. 24, 2006. When the agency failed to respond within the required period, the Center filed suit on Sept. 25.

The agency responded to the FOIA request in a letter faxed to the Center on Sept. 26, 2006. The Center filed an administrative appeal to the FCC's rejection letter on Oct. 19. The FCC has not replied to the administrative appeal.

The case, Center for Public Integrity v. Federal Communications Commission, was filed in the U.S. District Court for the District of Columbia. The case had been assigned to Judge Rosemary M. Collyer on Sept. 25, 2006. But on Jan. 17, 2007, the case was reassigned to Judge Ellen S. Huvelle.

By Drew Clark

Sumbitches Vote A Victory For Phone Companies

FCC Vote A Victory For Phone Companies
TV Service Rule Hurts Cable Firms

By Alan Sipress
Washington Post Staff Writer
Thursday, December 21, 2006; D01

A divided Federal Communications Commission yesterday approved a measure aimed at helping telephone companies move into cable television markets by significantly limiting what local officials can demand in return for franchises.

The new rule reflects the intensifying battle between the phone and cable industries over who will control distribution of video, voice and Internet access in an increasingly wired country. But the telephone industry's victory could prove temporary because opponents say the measure will almost certainly be challenged in court.

The FCC voted 3 to 2 along party lines to change how local officials award television franchises to eliminate what Republican supporters said were unreasonable demands and delays.

The measure requires local regulators to rule on franchise applications within 90 days for companies such as Verizon Communications and AT&T that have wires in place. It also bars local officials from requiring that companies provide TV service to everyone in a jurisdiction and prevents them from demanding fees or in-kind contributions exceeding 5 percent of the television revenues.

Verizon has been seeking local TV franchises nationwide and has won more than 200, including agreements with most of the counties and cities in the Washington area. The company has said it plans to win 3,300 franchises nationwide and has been lobbying state legislatures and Congress to speed up the approval process.

The FCC's Republican majority said that removing unreasonable hurdles erected by local governments would translate into lower cable rates. Democratic members disagreed and accused the Republicans of overstepping the FCC's authority.

FCC Chairman Kevin J. Martin, a leading proponent of the new federal rule, called it crucial for breaking the virtual monopoly held by cable companies in many areas and reversing the steady increase in cable bills over the past decade. Martin said the measure, which is to take effect next year, also would make broadband Internet access more widely available because telephone companies would gain revenue to continue building fiber-optic networks.

"The record collected by the commission in this proceeding cited instances where [local officials] sat on applications for more than a year or required extraordinary in-kind contributions such as the building of public swimming pools and recreation centers," Martin said.

But the commission's Democrats warned that the FCC, by exceeding its legal mandate, would face time-consuming challenges from opponents, including cable companies and local officials angered by what they say is a preemption of their authority.

"The end result will likely be litigation, confusion of the process and a certain amount of chaos," Commissioner Jonathan S. Adelstein said. He questioned the claim that local officials have unreasonably refused applications, saying the FCC had not cited a single instance in which a franchise was being unduly delayed or held up because of demands for exorbitant fees or concessions.

"The majority simply accepts in every case that the big phone companies are right and the local governments are wrong," Adelstein said.

In the District, where phone companies do not have franchises to provide television service, officials called the FCC decision troubling.

"People in the District would be concerned if control is taken away from local municipalities. Cities could be damaged in many different ways," said J. Carl Wilson, general counsel of the D.C. Office of Cable Television and Telecommunications. He said District residents could suffer if officials no longer asked providers for public channels.

Montgomery County Council President Marilyn Praisner (D-Eastern County) said consumers would suffer from the FCC ruling. "This is an early Christmas present of a stocking full of coal," she said, predicting that the county and other jurisdictions would challenge the decision in court.

Montgomery County and Verizon clashed this year over the company's ultimately successful bid to win a franchise there.

The United States Telecom Association, a telephone industry trade group, said the measure would give consumers more choice.

"The steps outlined today will help fix the franchising process and end the unnecessary delays caused by outdated regulations," said Walter B. McCormick Jr., president of the association.

Kyle McSlarrow, president of the National Cable and Telecommunications Association, said the FCC gave phone companies an unfair advantage over longtime cable providers. FCC officials promised to study how cable providers should be treated when their franchises come up for renewal.

Staff writer Frank Ahrens contributed to this report.

FCC Official Declines to Vote On AT& T Deal

By Alan SipressWashington Post Staff Writer
Tuesday, December 19, 2006; D01

Federal Communications Commissioner Robert M. McDowell announced yesterday that he would disqualify himself from voting on AT&T's proposed purchase of BellSouth on ethical grounds, depriving the FCC of a potential swing vote that could have broken the stalemate among its Democratic and Republican members.

McDowell, saying he felt compelled to silence speculation over whether he would take part in the vote, accused his colleagues of failing to negotiate in good faith over conditions for approving the $86 billion merger proposed seven months ago.

"It appears that the lingering question of my involvement is being used as another excuse for delay and inaction," he told reporters.

McDowell has said for months that he would not vote because he previously worked as senior vice president for Comptel, an association that lobbied on behalf of companies competing with AT&T and BellSouth. But despite his concern about a possible conflict of interest, the FCC's general counsel, Samuel Feder, ruled this month that McDowell could take part because of an overriding government interest in breaking the deadlock.

McDowell rejected that reasoning and criticized Feder's opinion, saying it overlooked important facts and legal considerations. In particular, he said the opinion did not address the ethics agreement reached during his Senate confirmation process this year in which he pledged not to participate for a year in any matter in which Comptel had been involved.

"While I expected the legal equivalent of body armor, I was handed Swiss cheese," McDowell said.

FCC Chairman Kevin J. Martin, who asked Feder to issue the opinion, has been urging McDowell to take part in the considerations. Late yesterday, Martin said his aim had been to make sure the commission considered the merger in a timely fashion.

"With Commissioner McDowell having made his decision, I will continue to try to work with my colleagues to bring our consideration of this merger to conclusion," Martin said in a statement.
He also said he respected McDowell's decision to abstain. Though both men are Republicans, their relations have been strained since McDowell joined the FCC.

Martin has been an advocate of approving the merger without conditions. But the two Democratic members have insisted that the deal, which would create a telecommunications giant, include safeguards to ensure competition and protect consumers.
The FCC has repeatedly postponed acting because of the stalemate, and no vote is scheduled.

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Big media versus cyber surfers

Dotcom mania returns

Glynn Davis

Published : Wed 22 Nov, 2006


There’s no doubt about it, the big media companies are in a spin. They are under threat from a growing band of small, fleet-footed upstarts who are creating websites of user-generated content.

The problem with these sites for Big Media is that they are proving such terrific social networking platforms that they are attracting young people in their millions and are quickly becoming their preferred media option above the traditional formats of newspapers and TV.

Needless to say, the likes of News International, Trinity Mirror, Emap, Daily Mail and Pearson, along with the large media agencies such as WPP, are struggling to work out how best to react to this phenomenon. They are facing a market where their audience of the future is drifting away in their droves.

Evidence of the seriousness of the situation was the move by the mighty Rupert Murdoch to purchase social networking site MySpace last year for $580m. At the time this was regarded as a pretty full price but in recent months it has been called the deal-of-the-century by some media industry professionals.

This is because, compared with the recent $1.65bn that Google splashed out for the video sharing website YouTube, it may well be a steal. Whatever the potential of such sites you cannot escape the fact that these are ludicrously high prices to pay for businesses that have yet to generate any meaningful revenues.

Big media versus cyber surfers: Broadband internet taking TV and print audience

It might not be too off-the-mark to suggest that these social networking sites are as insanely valued as any of the dotcom stocks that roamed the virtual planet of the late 1990s. We have entered another period of internet land grab where the biggest pockets initially prevail, but also run the risk of paying a high price for their actions. Witness yesterday’s hot website, old pals get together, Friends Reunited. Bought last year by ITV for £120m, now it is falling fast in consumers’ affections, according to a recent YouGov Brand Index poll.

Murdoch famously missed most of the boat on the dotcom boom-and-bust luckily avoiding pumping too much of his cash into helping further inflate the bubble.
But this time he is pretty gung-ho about investing in internet businesses.

And so he might because it is a sensible countermeasure to put in place as the media industry is undergoing a seismic shift with consumers moving from the print and TV channels and onto online platforms. Research from Credit Suisse found that households with internet access watched four to five hours less TV a week than those without, and for 12-to-24-year-olds the internet is now the dominant entertainment source.

But let’s not forget that a marriage between old and new media can end in tears as we have seen all too clearly before. Remember the Time Warner purchase of AOL – what a disaster that was. And then there were the internet purchases by German-based media giant Bertelsmann by its Chief Executive Thomas Middelhoff who had designs on creating a world leader in new media. This time around the company prefers to cautiously develop its own social networking site rather than splash out on a costly bolt-on acquisition.

What we are really questioning about these moves by Big Media today is that they are paying too high a price for social networking and user-generated-content businesses when there are scant traditional metrics available to calculate their true worth.


Big media versus cyber surfers: Youth market tough to crack

Yes, we admit that they do draw in millions of youngsters who are spending increasing amounts of their time on such sites – sharing stories, videos and music with their new like-minded "friends".

And we also admit that this young demographic has become ever-more important to advertisers in recent times as Big Media doesn’t want to run the risk of entirely losing their links with this audience who are choosing to shun traditional media channels. But in all this frenzied activity there seems to have been a few points missed. For one thing, while these sites attract many millions of young people, there is very little cash spent when they get there. This is because one of the most appealing aspects of these sites is that they effectively represent free entertainment. This makes the prospect of monetising them all the more difficult for their Big Media owners.

They are seeking to engineer revenue from them in a way that avoids rocking the boat and pushing them too much towards being a corporate entity. If this were to happen then we would undoubtedly see a migration of many of their users to the numerous other sites that are springing up and are deemed to be of a more cutting-edge and less corporate bent.

It is therefore a mighty fine line that Big Media treads in trying to extract cash out of these people who are not only difficult to find, but when they are found then they are very reluctant recipients of advertising. They are therefore a particularly expensive group to access.


Big media versus cyber surfers: Affluent 50+ forgotten as ad spend rushes the Net

This makes them a very different beast to the over-50s who are generally a cost-efficient bunch to access because they are easy to find as many remain relatively heavy users of traditional media (although they are also increasingly frequent users of the internet). And they are pretty receptive to advertising as they are used to receiving it through these recognised points of contact.

The only thing is that these people have pretty much been forgotten about as the media companies and brand owners have chosen to flock to the latest online sites in search of the lesser-spotted (or more spotty as the case may be!) 18-to-30 year-olds.

With this desertion is it any wonder that we have seen a fall off in the levels of TV advertising. For example, ITV experienced a fall of around 18% in the third quarter and Channel 4 suffered a 6%-7% decline this year, and predicts the same next year.
Could it be that Channel 4 has suffered less of a fall because it has pandered more to the whims of the 18-to-30 year-old market with its myriad reality TV shows and this has ensured it has retained more of its advertisers?

In contrast, advertising online has continued to grow. IPA Bellwether found that the number of companies spending more than 15% of their marketing budgets on the internet had risen sharply this year to the point that it is now double the level of the peak of the dotcom boom in 2000.

The advertising that has been delivered – via the traditional channels of print and TV – to older consumers has been largely irrelevant, according to US research from Focalyst (involving ad group WPP), which found that almost 25% of people over 42 years old are insulted by the advertising messages that companies are sending them.

The view was that overly-general messages, based on stereotypes, were being delivered – in stark contrast to the heavily segmented approach taken by advertisers when trying to appeal to the 18-to-30 market – because of the belief that many people in this age group were unwilling to change brands.

However, the research found that this was untrue and that as many as 66% of people based their purchasing decisions not on "brands" but on "value", thereby suggesting that this group are not half as stuck-in-their-ways as many media professionals would have us believe.

What also seems to have been forgotten is that this group have plenty of disposable income in their pockets. Unlike many younger people whose live-for-today mentality has played a major part in driving up the personal levels of debt in the UK to unprecedented highs.

For many such individuals the capacity for spending will surely become severely restricted as interest rates gradually move further upwards; unlike their parents who are likely to be far less indebted and have greater freedom to respond with their wallets to well-targeted advertising campaigns.


Big media versus cyber surfers: Fashion victim risk of Big Media make niche plays look good

But until we see such targeted campaigns that appeal to the older consumer then the only people opening their wallets with any great frequency look likely to be the large media companies, as they fight it out for the right to buy the very latest whizz-bang social networking site – yours for only $2bn.

Against this backdrop small media companies look a much more enticing prospect for investors than their larger rivals. With their niche market positions they have proven to be something of a safe haven of late and there looks to be more mileage in this subsector, particularly as consolidation at the bottom end continues to pick up pace.

We believe that business publishers in particular represent an attractive proposition with their relatively secure subscription and advertising bases. While these businesses are also having to react to their audiences moving online this is taking place at a much more manageable speed than with younger consumers who are flocking to the likes of MySpace at an increasing pace.


Regards,

Glynn Davis
for The Daily Reckoning

http://www.dailyreckoning.co.uk/article/221120063.html