As expected, the House Energy and Commerce Committee has shown great interest in communications issues and the activities of the Federal Communications Commission now that it is under Democratic control. The past several months have witnessed a flurry of hearings exploring major media issues, including the first appearance of the full FCC before the Committee in nearly four years. The sharp and probing questions from the members of the Committee during these hearings indicate that the FCC Chairman and Commissioners, the head of NTIA, and representatives of media organizations and companies can expect to be frequent guests of the Committee.

FCC Oversight

Following close on the heels of its appearance before the Senate Commerce Committee, the full FCC was the subject of an oversight hearing by the House Energy and Commerce Subcommittee on Telecommunications and the Internet in March. The opening statements delivered by Chairman Martin and the other Commissioners reiterated many of the themes presented to the Senate Commerce Committee in its FCC oversight hearing in February (for a discussion of that hearing, see the Winter issue of this newsletter). The Chairman again noted that the communications industry in America remained strong, and he, along with Commissioners Tate and McDowell, was proud of the accomplishments of the Commission with respect to telecommunications and media issues. Commissioners Copps and Adelstein were less laudatory, calling on the Commission to place strong public interest obligations on broadcasters and to carefully examine any changes to the media ownership rules to avoid problems associated with media consolidation.

The Subcommittee, in a wide-ranging examination of FCC activity, addressed a number of media issues, including the following:

Video franchises: Both Subcommittee Chairman Ed Markey (D-MA) and full Energy and Commerce Committee Chairman John Dingell (D-MI) were critical of the Commission's recent order concerning local video franchises. They suggested that the Commission had overstepped its bounds in acting on the issue, venturing beyond its statutory guidelines to address a question best left to Congress. Chairman Dingell particularly disapproved of a procedural decision made by the Commission to allow Verizon to file a clarification for the record after a final decision had been reached in the proceeding.

DTV transition: Several members of the Subcommittee questioned the Chairman and Commissioners at length on the FCC's efforts to educate consumers about the upcoming DTV transition. They were displeased with the fact that the Commission had only requested a total of $1.5 million for its consumer education effort. Chairman Martin reminded the Subcommittee that NTIA had been given significant responsibility for educating consumers about the transition, which had prompted Congress to decrease past requests by the FCC for additional funding for its consumer education efforts.

Media ownership: Several members of the Subcommittee questioned the status of the ongoing media ownership review at the Commission and suggested that moves to permit additional media consolidation would be unwelcome. In a similar vein, Representative Hilda Solis (D-CA) questioned the Chairman's support for a la carte programming in light of evidence that such programming could harm minority and women-owned programming.

White spaces: White spaces were also a favorite topic of the Subcommittee, with several members asking questions about the status of the Commission's proceeding on white spaces use. Several Representatives encouraged the Chairman and the Commissioners to expand that order to include portable wireless devices. The question was also raised whether use of white spaces should be licensed, a suggestion that Chairman Martin and Commissioner Copps disagreed with.

Must carry: In response to a series of questions from Representative Barbara Cubin (R-WY), Chairman Martin indicated that the Commission was considering the release of an NPRM that raises the question and proposes to seek comment on the question of whether the must carry rules should be modified to allow for carriage of the closest broadcast station in a different state.

Retransmission: Representative Nathan Deal (R-GA) expressed support for reform of the current retransmission consent regime and quizzed Chairman Martin on the operation of the current retransmission system and the Commission's powers with respect to that system, suggesting that the Representative may introduce legislation on the issue. He also questioned the entire panel on its opinion of the current retransmission consent system, receiving responses indicating that Commissioners Copps and Adelstein favor an examination of that system, while the other members of the Commission have a generally favorable opinion of the system. Chairman Martin went so far as to suggest that cable costs are as much an issue of the cost of non-broadcast programming as they are of retransmission consent, arguing for greater transparency of those costs for consumers.

DTV Transition

Just a week after the FCC appeared before it, the Subcommittee on Telecommunications and the Internet questioned Assistant Secretary of Commerce Kneuer on NTIA's DTV converter box program and other NTIA initiatives. While Mr. Kneuer was confident that the rules adopted by NTIA would ensure the success of the converter box program established by Congress in late 2005, the members of the Subcommittee were skeptical of his confidence. Many members questioned the initial decision by NTIA to limit distribution of converter boxes to homes that only receive programming through over-the-air broadcast signals, although they welcomed later changes to the rules that allow all homes to participate in the program until the initial coupons have all been distributed. Subcommittee Chairman Markey expressed his opinion that the reason NTIA initially wanted to limit distribution of the coupons to solely over-the-air homes was to mask the fact that the program does not have enough money to ensure that every home that needs a converter box can get one.

Also of interest to the Subcommittee were the efforts NTIA was preparing to undertake to educate consumers about the upcoming DTV transition and the need for a digital-to-analog converter box for analog television sets. Assistant Secretary Kneuer told the members of the Subcommittee that NTIA was committed to making the most of the $5 million reserved by statute for its education efforts. This commitment did not assuage the fears of the members of the Subcommittee, however, who viewed that $5 million as totally inadequate to fully inform consumers of the impact of the DTV transition. Representative Solis was particularly concerned that NTIA was not preparing an education plan that accounted for the unique problems associated with informing low-income households, the elderly, and Latino communities. Assistant Secretary Kneuer conceded, under intense questioning from the Subcommittee, that NTIA was depending a great deal on the education efforts of the private sector to bolster its own plans.

This concession by Mr. Kneuer prompted Subcommittee Chairman Markey to bring media representatives before the Subcommittee a week later to explore private sector initiatives concerning converter box development and consumer education. Once again the members of the Subcommittee sought reassurance that the program would be successful and that consumers would be adequately educated about the transition before February 18, 2009, but they appeared uncomfortable with the responses received from the witnesses. Even though Mr. John Taylor of LG Electronics was confident that his company will have converter boxes ready for consumers in January 2008, when the converter box coupon program is set to begin, Mr. Michael Vitelli, representing Best Buy and other electronics retailers, refused to make a commitment to the Subcommittee that those boxes would be available in all Best Buy stores around the nation. Republican members of the Subcommittee also used the hearing as a platform to call for Subcommittee action on H.R. 608, the "Digital Television Consumer Education Act of 2007," which would place certain mandatory education requirements on retailers, manufacturers, and broadcasters.

Other Hearings of Note

The House Energy and Commerce Committee's Subcommittee on Telecommunications and the Internet, the House Judiciary Committee's Antitrust Task Force, the Senate Judiciary Committee's Subcommittee on Antitrust, Competition, and Consumer Rights and the Senate Commerce Committee have all held hearings exploring the propriety of the possible merger between Sirius Satellite Radio and XM Satellite Radio.

The Senate Commerce Committee has explored the question of the propriety of exclusive sports programming contracts. Although ostensibly meant to examine the contract reached by Major League Baseball with DirecTV, the Committee showed great interest in other exclusive sports programming arrangements, including the contract between the NFL and DirecTV and contracts between cable companies and local sports teams for exclusive access to games.