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Independent Show: Panelists Say Broadband's Regulatory Honeymoon Over

7/27/2009 7:59 PM Eastern

Federal Communications Commission chairman Julius Genachowski will most likely focus the agency's efforts in the broadband space for the foreseeable future, according to a panel session at the Independent Show here Monday, and that could spell more onerous regulation for the product in the future.

American Cable Association outside counsel Chris Cinnamon warned that recent efforts in the broadband space -- including the broadband stimulus plan -- could mean that the FCC will be exerting more authority over the space.

"I think the days of the light regulatory touch on broadband are rapidly coming to a close," Cinnamon said during the panel discussion. He added that for the first time, the federal government will have a substantial amount of money invested in broadband infrastructure -through the $7.2 billion Broadband Technologies Opportunities (BTOP) program -- and will have a vested financial interest in how some facilities are managed.

Cinnamon added that there is talk that additional legislation is on the horizon -- he mentioned speculation of a truth in billing law for broadband service that is circulating around Washington.

"That is the first step in a customer service, consumer protection," Cinnamon added. "There is the potential for a lot more to follow."

Alpine Group associate Ansley Erdel said that additional potential legislation includes a possible amendment to the Satellite Home Viewer Extension and Reauthorization Act, which is set to expire by year-end. Erdel said that it is an imperative that the SHVERA will be re-authorized, but that one congressman -- Rep. Mike Ross (D-Ark.) has introduced a bill call the Local Television Freedom Act that would attempt to fix the issue of split markets -- Nielsen DMAs that cross state lines and in which some viewers to cable and satellite services are getting the local station from the adjacent state rather than their own.Erdel said that while Ross is currently preoccupied with health care reform, he has said that he would like to get it included in the SHVERA bill.

Another potential SHVERA amendment involves cable copyright reform, which was included in a House Judiciary Committee draft contains three provisions that also could have an affect on small operators:

• Audit rights: Allows unspecified interested parties to engage in unspecified review and audit of unspecified records to verify copyrights;

• Multicast royalties: Obligates cable operators to treat each multicast broadcast signal as a discreet station for copyright reasons;and

• Potential phase out of cable compulsory license: Cable compulsory copyright licenses would be replaced by a single market service license, similar to an ASCAP license for music.

While those provisions may never make it to the actual SHVERA bill, Cinnamon said the ACA is working hard to educate legislators concerning the importance of small cable operators in bringing broadband to rural areas, the progress they have already made in doing that and the importance less onerous regulations have had in the success of their businesses.

One potential regulatory change could be beneficial to small operators. According to Cinnamon, there is a move afoot to expand the $7.1 billion Universal Service Fund, which is funded by telecom companies to finance rural telephone expansion, to encompass broadband.

That could be an even bigger source of funds for rural cable wishing to expand their broadband reach because, as Cinnamon noted, while the BTOP program is a one-time $7.2 billion program, the USF is a $7.1 billion per year initiative.

Erdel said that expanding the USF may not be passed this year, but it is likely that with the support it has in Congress -- Commerce chairman Henry Waxman (D-Calif.), House Communications Subcommittee chairman Rick Boucher (D-Va.) and Senate Commerce Committee chairman Jay Rockefeller (D-W.Va.)are all backers -- the chances are high that it will eventually be passed.

"The key element is the expansion to broadband," Erdel said. "It's all but certain at this point. It's a matter of how that will be done."

September