Deal or No Deal: FCC Undermines Community Broadband

By: Jennifer Harris and Jeff Chester
February 2007

The FCC's decision to weaken community oversight of video and ultimately broadband providers, approved on December 20, 2006, was overshadowed in the press by another decision to approve the AT&T/BellSouth mega-merger. But the FCC's new " Rules to Ensure Reasonable Franchising Process for New Video Market Entrants ", in limiting the authority of a local government to determine how its community places value on its right of ways in exchange for video service, diminishes negotiating power and oversight by both local government and citizens

The statement of FCC Chairman Kevin Martin stated the reason such an order was necessary is due to unfair practices, such as asking “unreasonable requests” as terms of negotiations, used by local franchising authorities that made it difficult for phone companies to enter communities as a new video provider. However Commissioner Adelstein, who voted against the order, noted that “record evidence [of any unreasonable request] provides scant, dated, and isolated examples that fall far short of demonstrating a systematic failure of local governments to negotiate in good faith”.

The wide and vague umbrella of "unreasonable requests" even includes funding for public, educational and government (PEG) access stations, thus further harming an already endangered resource for noncommercial, community-focused media. New entrants are not even bound by obligations to serve the entire community by build-out requirements to areas perceived as being economically displeasing. The net might be neutral, but the scale of localism appears to be tipped in favor of the phone companies.

In a 3-2 vote, split by party lines, the FCC gave up the following community assets in order to give phone companies a greater advantage in entering the video marketplace:

  • 90-day Franchise Shot Clock An imposition on local government authority that requires municipalities to either accept or deny applications from new entrants within 90 days. “If no franchise is granted within 90 days, AT&T, for example, could provide cable service under an ‘interim authorization,’ according to Rosemary Harold, deputy chief of the FCC’s Media Bureau. If the city were to reject the application later, AT&T’s interim authorization would sunset and the company would have to take the city to court, she added.”
  • Endangers PEG funding Local government previously had the option to negotiate above the 5% cap now placed on franchise fees. With the additional funding, communities were able to maintain and enhance the offerings of their local media centers. The funding sought to ensure that media centers could offer citizens equal access to the modern training and equipment being used by commercial media counterparts while broadcasting solely to a local media audience. The newly adopted FCC ruling means that cities will be limited to the 5% community compensation fee and will ultimately face cut backs to PEG improvements.

    While the modest funding given to PEG access centers barely accounted for the upkeep of such expensive television equipment, the cap on funding decreases the likelihood of PEG access centers from being able to successfully transition into the inevitable digital media environment. Ultimately, the FCC decision sends the message that community access to media no longer has significance in the new media market.

  • Eliminates funding for Institutional Networks (I-Nets) Similarly, funding for I-Nets will no longer be supported according to this FCC ruling. These networks provide valuable infrastructure which links hospitals, libraries, public safety and other municipal services. During the September 11 th attacks, the I-Net was considered a reliable emergency communications system.
  • No Build-Out Protections Phone companies will be able to “cherry-pick” the communities that can be expected to return high profits. While phone companies are indeed businesses and therefore must be mindful of expenses and profits, it falls on the shoulders of any communications provider to build out the option of all services to any resident.

If value isn't placed on building out the public interest portions of the key digital infrastructure that connects most American cities, then communities across the country will suffer. Powerful corporate media and telecommunications companies will be making decisions about a city's digital future--not local citizens or their elected representatives. For communities either economically challenged or geographically isolated, the loss of meaningful community oversight over vital broadband connections threatens their future.

In order to reverse the damaging consequences of this FCC ruling, the movement around net neutrality needs to take a more offensive approach to enact a proactive broadband agenda that promotes community media on national, state and local fronts. In the broadband era, there must be protections for both neutrality and community, without such safeguards, we can expect the same old treatment in the new media world.