Michigan Right-Of-Way Issues

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Private Industry Owners –
In Charge of All Modern Communication

Coupling the deregulation of phone lines as envisioned in AT&T’s proposed Michigan legislation, SB 636 and, as filed in several other states, with the recent US D.C. Court of Appeals Opinion in Verizon v FCC, which overturned FCC Internet Regulation in the form of anti-discrimination and anti-blocking rules, leaves for a time a very small group of private industry owners of the pipe delivering the internet to all of us. This means that they are almost completely in charge of virtually all modern communication.

Why is this? Primarily because

  1. The Internet has become THE mode for communication today, connecting every home, business and governmental entity
  2. The role of the pipe owners of the internet has just been (almost) completely deregulated, at least for the moment
  3. Both traditional phone and cable businesses are now rushing to push the definition of their respective products to be Internet based, and therefore virtually unregulated

Currently, traditional “phone” connections are regulated by Federal law and to some extent State law as part of the exchange completed 100 years ago when the phone company(s) agreed to serve everyone at a certain level of service in exchange for a pure phone industry monopoly. As a few large competitors, like the cable industry, have recently entered the increasingly internet based communication system, the traditional phone companies like AT&T and Verizon have argued that they shouldn’t be forced to do some of the non-profitable services like serving rural or poor areas or the rest of us within certain minimum service standards since they are no longer pure monopolists. The fact is they, along with the cable industry, still dominantly own most of the actual connections across the country, whether in the form of simple copper or even fiber in some cases.

At the same time as they have been straining against traditional phone regulation, the phone companies, and their cable competitors, have been switching as fast as they can to the Internet and wireless systems in order to avoid old phone and cable regulation. Please note that the phone companies have generally been more successful buying up the largely unregulated wireless industry.

As of the DC Circuit Ct of Appeals substantial deregulation of the internet provider industry on January 14, and until the FCC reformulates their rules or the US Supreme Court or Congress says otherwise, both the traditional phone industry and the cable industry have hit a homerun for their shareholders. To the extent they have already transitioned their product to the internet (or “IP” for “internet protocol”) they no longer have to worry about any FCC regulation of how they treat users, particularly edge providers like Google.

Accordingly, we can expect a very hard push to complete this effort and a transition into the wild west of deregulation for all of them, and the wholly unprotected world of David and Goliath for the rest of us. The Cable companies will also very likely claim they are wholly IP-based systems and not cable-based and therefore, like the phone companies, attempt to also slip the costs and hindrances of cable regulation. We have already seen this discussion starting up in earnest.

To the extent AT&T (and Verizon as the other major traditional phone company) succeed in also deregulating traditional phone systems and are able to now call them IP systems, their transition is complete. That is what SB 636 is about. It is an end run on the FCC which has thus far declined to do that on a national scale. So the industry has gone to the States for their deregulation.

Arguably as of January 14 and certainly upon completion of the phone deregulation, efforts at the State level, AT&T, Comcast, Verizon, Cox, Time-Warner and Charter will have become absolute unregulated monopolists of the life’s blood of a free state: Information.

Technically they are “oligopolists,” perhaps nationally, but since they have largely avoided an awful lot of stepping on each other’s territory, they are monopolists at the local level.

If recent disclosures regarding the NSA’s use or abuse of the Homeland Security Act eavesdropping is disturbing, imagine a small group of for profit corporations controlling even what the NSA can do by controlling all the points of access by and from all of us. At least the NSA is related to a commonly elected government.

This development leaps over all the efforts by Congress and the FCC to regulate concentrated media ownership. It arguably no longer matters who owns production, as no one can share any of it without dealing with the now largely unregulated and for profit information data transmission industry.

The Good news: While striking down the common carrier, like regulation of internet pipe providers, the DC Circuit very clearly held that the FCC may regulate those involved with the internet as Telecommunication providers and cites approvingly the many reasons why the FCC wishes to and should regulate them. This will ultimately be very good news for all of us, just as soon as the FCCand/or Congress can reformulate its Internet regulations to fall under the telecommunications portion of the Federal Communications Act.

However, the concern here is that intense lobbying by the industry may not allow a quick correction to occur.

Here is a copy of a letter from Public Knowledge addressing the various AT&T sponsored state legislation, issued one day prior to the DC Circuit Opinion in Verizon v FCC and here is a copy of the Michigan Phone Line dereg Bill.

The DC Circuit opinion can be found here: www.cadc.uscourts.gov ….

Finally, to the extent concentration of media ownership relates to this subject, see the home page of the 2011 FCC NPRM on the subject here: www.fcc.gov ….

Shot Clock for Pipelines: H.R. 1900, the Natural Gas Pipeline Permitting Reform Act

Possibly emboldened by the recent Supreme Court Opinion in Arlington v FCC which favored the telecom industry’s efforts to have the FCC impose shot clocks on everything from cell towers to cable franchising, or perhaps simply pressing its own agenda for a uniform national system, the pipeline industry has had the above referenced legislation introduced in Congress which among other things would impose 90 day shot clocks for local approval, and not from the date of application to the local government, but from the date of approval of the project by FERC! Meanwhile, like our MPSC, FERC would have only one year to approve or deny a pipeline project or it will be deemed approved. This is proposed in favor of an industry already imbued with powers of eminent domain, which goes far beyond the rights of the telecom industry and their cell towers.

This legislation continues the assault on local community self-governance and any notion of private property rights. It is an unnecessary expansion of Federalism and large corporate dominance into each of our own homes and backyards. Please oppose this legislation.

FCC Chairman Hopes FCC Will Act on PEG Petitions in “Near Future”

FCC Chairman Julius Genachowski has recently said he hopes the FCC will soon take action on the Petitions for a Declaratory Ruling PEG channels that were filed in response to actions taken by AT&T and Comcast. He stressed his belief in the importance of PEG channels as a source of local programming, mentioning that the channels must receive “equitable treatment.”

The FCC Media Bureau is currently reviewing the record that has been developed by the request for comments on the petitions, which closed on April 1.

Genachowski’s statements were prompted by a letter sent by Representative Baldwin in August where she urged the FCC to “act promptly” on the petitions that were filed in response to “inappropriate actions” taken by AT&T and Comcast that made PEG channels “less accessible” to the public. She said that these actions resulted in lower transmission quality and higher prices for viewers.

House Bill HR 3745 Formally Introduced

Rep. Tammy Baldwin (Wisconsin) has formally introduced her PEG bill to the House, which is intended to protect PEG from abuses which are currently being discussed at the FCC and in courts around the country, including at the Detroit Federal Court. It is called the CAP (Community Access Preservation) Act (HR 3745 IH). It was referred to the Committee on Energy and Commerce.

It states “To amend the Communications Act of 1934 to provide for carriage and display of public, educational, and government channels in a manner consistent with commercial channels, and for other purposes.”

The CAP Act does not assume a “one size fits all” PEG structure. It leaves the decision to negotiate for PEG channels to franchising authorities and the local communities they represent. The Act would address the immediate issues facing PEG channels by:

  • Allowing PEG fees to be used for any PEG-related purposes;
  • Requiring PEG channels to be carried in the same manner as local broadcast channels;
  • Requiring the FCC to study the effect state video franchise laws have had on PEG channels, and requiring operators to provide the greater of the support required under state laws, or the support historically provided for PEG; and
  • Making cable television-related laws and regulations applicable to all landline video providers.

Since being introduced, the Act has already picked up two new sponsors - Representatives Mike Thompson (CA) and John Larson (CT).

Charter Working To Move PEG Channels

Charter is trying to unilaterally move PEG channels to the 90-channel range from historic locations in the single digits. Their action is due on December 1. Litigation may follow to prevent this.

Should California Tax Satellite Television Companies?

The cable television industry in California is quietly trying to persuade the state Legislature to levy a tax on its competitors.

Cable advocates in Sacramento want lawmakers to impose a new five percent tax on satellite service to match the five percent franchise fee that cable companies pay to string or bury their wires across public property and into homes.

The companies argue that it is a matter of fairness. They have to pay a fee while satellite providers DirecTV and Dish Network do not have to pay for the right to beam their signals into people's homes from space.

Satellite companies disagree, saying such a tax discriminates against their 3.6 million customers in California, especially rural residents living in remote areas not served by cable. They believe they should not be penalized with a tax because, as DirecTV mentions, they use innovative technology and do not need to dig up the streets or people's backyards.

Discussion of the proposed satellite TV tax has been fairly quiet in the legislature with no bill actually being written and no committee hearings held. Additionally, consumers are critical about the proposal, as they do not think it is fair to tax someone for the use of a satellite, as it does not encroach on their property.

The cable companies’ movements mirror similar proposals debated in other states. It has passed in Massachusetts but has failed in eight other states. Some lawmakers say the California effort may have to be put on hold until 2010.