The ruling is expected to be challenged in the courts on numerous fronts since it imposes FCC authority over the existing legislative rights of local governments.
If enacted as policy, the FCC ruling will devastate Public, Educational and Governmental access centers and channels (PEG) across the country. At a time when the FCC is investigating the decline of local media, they have chosen to endanger the most local of all non-commercial media - PEG access.
According to the Alliance for Community Media, here is what the FCC order does for the telephone companies:
€ Eliminates PEG funding. (No funding for PEG is allowed over the existing 5% given to cities. In effect this will end current PEG funding).
€ Eliminates support for I-Net's. (I-Nets are typically infrastructure support for institutional networks that link hospitals, libraries, law enforcement and other municipal services. Cities rely on these networks and need them in emergencies. In NYC after 911, the city's I-Net was the most reliable communication system after 9.11).
€ Allows the video provider to charge any services such as cable drops, production facilities, program transmission lines-- any in-kind services-- all are charged back against the 5% maximum franchise fees at the rate determined by the video provider. (This allows telcos to bill cities for facility and interconnection costs currently provided freely by cable companies under local franchises)
€ Eliminates any protection against discrimination. (Limits build-out requirements that may result in economic red-lining. This gives telcos an economic edge on cable companies, allowing them to target more affluent communities whereas cable companies are required to provide service all communities equally).
It's clear the FCC ruling is going to result in litigation and possibly Congressional intervention. The National Cable & Telecommunications Association may sue the FCC on grounds that the commission has overstepped its bounds. The National League of Cities may join in since the new ruling blocks local governments from making decisions on their own. Rep. Ed Markey (D-Mass.), who is the incoming chairman of the House telecommunications subcommittee says the committee will begin studying the implications this year (source: TV Week).
The FCC ruling is the culmination of the Telco effort to push through new legislation favorable to their business interests. AT&T, Bell South, Qwest, and Verizon have culmitively spent hundreds of millions of dollars on lobbying efforts and political donations in Washington and in numerous state capitals to push through state and national video franchising legislation. A bill sponsored by Rep. Barton (COPE HR5252) passed in the House in June, only to be stalled in the Senate when introduced by Sen. Stevens (S 2686, later renamed HR5252). With newly elected democratic majorities in the House and Senate, the FCC was the last national governmental theatre for the telcos to carry out their campaign this year. The telcos are also pursuing video franchise reform at the state level, and have succeeded in pushing legislative through a number of states.
Kevin Martin, chairman of the FCC, appears to be a compliant telco industry conduit. Appointed by President Bush in 2001 to replace Michael Powell, Martin was recently reconfirmed as Chairman for another term. Before joining the FCC, Martin was Special Assistant to the President for Economic Policy. Prior to that position, Martin served on the Bush-Cheney election team in Florida and is rumored to have played a role in the faux public uprising over the election recounts often referred to as the "Brooks Brother Riot". Earlier in his career, Martin worked several years for Wiley Rein & Fielding, a top-rated telecommunications lobbyist.
Martin is accompanied in the Republican majority on the FCC by Robert M. McDowell, a former telco lobbyist and also part of the legal team for the Bush-Cheney ticket during the 2000 Florida recount crisis. The third republican commissioner, Deborah Tate, was formerly the director of the Tennessee Regulatory Authority. In 2003, she served on the FCC's Federal-State Joint Conference on Advanced Telecommunications Services. Prior to appointment, Tate was an something of an unknown, but she since has wholeheartedly supported Martin's agenda.