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Plan Plants Red Flags

3/22/2010 12:21 PM Eastern

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.”

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 .