Plan Plants Red Flags

By John Eggerton -- Multichannel News, 3/22/2010 12:21:09 PM

Washington — The Federal Communications Commission has pledged to roll out proposals every month for the foreseeable future as it implements action items in the national broadband plan. Some parts are already raising eyebrows and blood pressure in certain segments of the cable and broadcast communities:

Title II Reclassification: Republican commissioner Robert Mc- Dowell said he was concerned that the plan “opened the door” to classifying broadband as “old-fashioned, monopoly-era, circuit- switched voice telephone services under Title II of the Communications Act.” That would make ISPs subject to common carrier-style mandatory access regulations. The plan does not say it will assert that authority, but discusses it and says it will “consider these and related questions” as it implements the plan.

Set-Top Gateway Device: The FCC wants to spur broadband adoption by turning TV sets — currently in 99% of households, versus about 75% for computers — into multiplatform players displaying both traditional content and broadband. The National Cable & Telecommunications Association said a government-mandated one-size-fits all set-top device mandate “would undercut the very premise of innovation we should want, and are likely to fail.”

CableCards: The plan proposes a number of “fixes” to the CableCard conditional-access regime, a hardware-based system cable operators were required to adopt after the FCC mandated that channel-surfing and security needed to be separated in order to spur a retail market in set-tops. Cable operators have long argued that the CableCard was a cumbersome, inelegant fix and the FCC should have let the industry develop a software solution rather than mandate the card. To continue to focus on the card, said NCTA president Kyle McSlarrow last week, is to “dwell on issues that are increasingly stale and, more important, increasingly irrelevant to the marketplace of today, let alone tomorrow.”

Internet Taxes: “The federal government should investigate establishing a national framework for digital goods and services taxation,” reads the plan. That could be good if it preempts a patchwork of state and local taxes, but bad if federal pre-emption means a new tax. As one ad-industry lobbyist put it: “You can be nibbled to death by piranhas or squeezed to death by a python.”

Unbundling: The plan describes increasing access to broadband networks by competitive providers as a way to promote more widespread deployment and competition, which could discourage investment if that investment will go partly to underwrite the competition. No action items, but enough talk to raise concerns.

Spectrum-reclamation plan: The FCC says its plan to reclaim 120 Megahertz of broadcast spectrum is voluntary and will be targeted at only some stations in only some more urban areas, but it also talks about getting 36 MHz of spectrum by changing the rules on separation between stations and “repacking” the band. That would mean reducing broadcasters’ allocation by six 6-Mhz channels. An FCC spokesman said that repacking would not happen until after spectrum was voluntarily turned in by a broadcaster .