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The Commission is also, on a different track, completing its Future of Media proceeding (which we have summarized before).  That proceeding also looks at whether and how the local news and information needs of today's consumer are being met by the media, and how those needs will be met in the future.  This study, too, is expected sometime near the end of the year.  There have been discussions by those involved in these proceedings that the ownership review, while not formally tied to the Future of Media study, will nevertheless look at the findings of that review to inform its discussion of the ownership issues facing the FCC.  If that is in fact the case, and the Future of Media report is not completed until the end of the year, how can the modification of the ownership rules that relies on this study be completed before the end of the year?

The majority of the Commission is new since the last ownership review was completed in late 2007.  Given the emphasis on so many new issues since that time (including the broadband roll out and the proposals to reclaim some of the television spectrum for wireless broadband uses), one wonders if the Commission really will have the capacity to move quickly on the ownership review, which always involved many controversial issues.  And, with issues such as shared service agreements, newspaper-broadcast cross-ownership, television duopoly in small markets, and revisions to local radio ownership rules all seemingly on the table, there is no lack of controversy that will face the Commission this year.  So, prepare your comments, and get ready to let the FCC know what you think by the July 12 deadline.

The Commission, while clearly having a mandate to foster broadband development, seems to be taking steps that look toward possible intervention in the technological development of the video marketplace - seemingly standing ready to help pick winners and losers through regulatory actions.  The proposals in this proceeding, if the Commission were to follow through with mandates that are mentioned in this Request for Comments, could impose costs on MVPD providers and others to assist in providing access to potentially competing video - video that developments from other companies (both Apple and Microsoft, for instance, having introduced systems over the years to make TV and Internet content available on a television screen) seem to demonstrate that the marketplace is quite capable of providing if there is consumer demand. 

The questions asked in the first of the paired Requests for Comments, the one looking at whether to reclaim the television spectrum, adds to this perception that the Commission is looking to select winners and losers in the video environment.  The questions asked in that proceeding raise so many fundamental issues about over-the-air television in a manner that seems to indicate a preference for other uses of the television spectrum that, by just asking the questions it does, the Commission could scare off vital investment just as the television industry is looking for ways to utilize the digital television spectrum that has just so recently been fully deployed (e.g. though the mobile digital television deployment which is only just beginning).  While we wrote about some of the general questions asked in that proceeding here, there are many complex, specific issues on which the Commission seeks detailed comment in just over two weeks.  These include:

• The factors that the Commission should review in assessing relative spectrum needs
• The impact on the US economy of increased wireless broadband and of any decrease in the amount of spectrum used by television broadcasters.
• The current and future uses of the digital capacity of television stations
• The views of the financial community on mobile TV broadcasting
• Whether over-the-air television could be more efficiently used through more co-location of facilities and though other compression technologies that could allow more services in less spectrum, and the costs of developing and implementing such changes - both to stations and consumers
• Whether better antenna standards or more use of MVPD retransmission could lessen the need for spectrum currently used by TV stations
• What benefits do over-the-air television stations provide in terms of local news, education, emergency information and political coverage
• What market-based solutions could be used to encourage broadcasters to be more efficient with spectrum and to potentially  free some of that spectrum.

Perhaps the most loaded question was one which started with a premise that appeared to contain a conclusion for all of the other questions asked:

Consumers are migrating away from mass-market “appointment” viewing to more fragmented and time-shifted viewing. What impact will this trend have on the television broadcasting industry? What can the Commission do to help broadcasters participate in this evolution?

This question alone seems to conclude that "appointment television" is dead - despite the fact that even on the Internet, appointment television seems to be continuing to play a big role - whether through coverage of a political speech, preliminary games of March Madness, a live U2 concert, or a swimsuit photoshoot.  Even on the Internet, appointment television seems to be alive and well - so a conclusion that its death is imminent seems difficult to reach at this time, and perhaps presumptuous for the Commission to even posit.  Even if one were to conclude that television broadcasters were the buggy whip manufacturers of the 21st century (and, given the continued reliance of advertisers - both political and commercial - and viewers on programming provided by such broadcasters, that seems a difficult conclusion to reach), should the Commission be encouraging or potentially be mandating their demise by pulling spectrum out from under them - when the stations and consumers have just spent billions of dollars to foster the digital transition that was only completed in June - before television broadcasters have even been given the opportunity to prove their ability to operate and function in the digital world?  Particularly in smaller television markets, these very broadcasters may well be the ones who are most likely to bring video programming innovations to their service areas - both in connection with their over-the-air operations and on other digital platforms.  Should the Commission presumptuously label their business model as one that is being replaced?

This Commission, in may ways, has striven to be an open one - seeking public comment on many topics, including broadband innovation and even the broadcast multiple ownership review that is coming next year, encouraging diverse and robust debate, as early in the process as possible.  Yet on these fundamental questions facing the television industry, there seems to be a rush to judgment - asking pointed questions where it is suggested that answers have already been reached, and giving interested parties such a short time frame to answer such fundamental questions that the Commission cannot possibly expect searching, detailed responses.  While we understand the Commission's need to meet it mandate to report to Congress on broadband deployment by February, must it really engage in this rush to judgment on questions concerning all video operations?  The history of the television digital transition shows the bumps in the government's handling of a basic change in just one portion of the video industry - and that was part of a 15 year process.  To reform the entire video industry at the speed with which the Commission now seems to be moving can only invite trouble.  We hope that affected parties file comments in response to these two Requests for Comments that fully state their cases by the December 21 deadline in a way that makes the Commission recognize that there need not be government anointed solutions to the major industry development issues now facing the various industries involved.  The evolution of the television industry is a process that needs to be allowed to develop in response to consumer demands - not in response to government mandates. 

Users of the Internet, led by Google, have argued for an open system, where a subscriber pays for access to the wireless spectrum, and can essentially connect any device or receive any service, just as long as it does not damage the network.  This is much like the current wired telephone network, where a consumer can connect a telephone or a fax machine or a laptop computer and get access to the network.  Proponents of this model contend that it will encourage technological development as companies compete to develop different applications that can run on the network,and provide a "third pipe" into the home providing high speed Internet access to compete with that provided by cable and telephone companies.  Some might assume that content providers like broadcasters would favor that open approach so that their content can be easily delivered to the consumer, without the broadcaster having to cut any sort of deal with the network provider to get access.

However, many of the existing wireless providers have opposed such open access.  In order to build out a tremendously expensive nationwide system high speed wireless system on these channels, the carriers need an incentive to make that investment.  If the carriers are expected to build out the system and then open access to any content provider at no cost, in essence the operator of the system is subsidizing the operations of the content provider by freely transporting their content to the user.  If the carrier is not making money off of the content that is provided on the network, the amount the government will receive from the auction will be less, as the carriers will not have the ability to fully to monetize the system in the way that current wireless carriers do.  The expectation would also be that buildout, especially to rural areas where there are fewer subscribers to pay for access to a wireless service, will be much slower than might otherwise occur.  When one of the hoped for benefits of the wireless service is access to the Internet in rural areas, the regulators would hope to avoid disincentives to the provision of such service.  While some content providers might say that access to rural areas will not provide the anticipated benefits if it is not full and open access to the entire Internet, others will retort that some access is better than no access at all.  And many broadcasters have found that existing wireless carriers are open to deals with broadcasters, as they want to feature the local content that the broadcaster can deliver.

The arguments come in all shades and with many nuances - as some carriers have now come out in favor of some degree of open access, while some content providers are pushing for a totally open system where parties can come in and lease access from a network at wholesale prices to provide their own services.  The arguments being made on both sides are incredibly technical, with good points being made by all parties.  And there is lots of money at stake, as the spectrum is expected to fetch billions of dollars for the Federal government at auction..  For the broadcaster, future access to the consumer may be at stake, not only for the broadcaster and new digital services that it may want to provide, but also for the new media content providers who are more and more becoming the broadcaster's competition.  So the decisions made in the next few weeks as to how this service develops will have profound impact on the entire communications industry.  Thus, while next week's meeting may look like one that a broadcaster can ignore, in fact the broadcaster's attention should be focused on the developments regarding this spectrum.