This article is presented for historical context. I am not encouraging anyone
to respond to this thread as it simply represents my analysis of the evolution
of "The Information Superhighways" at the beginning of 1994. The article
discusses a Superhighway Summit, organized by the Academy of Television Arts &
Sciences at UCLA.
It was very clear at this summit that there were a wide range of opinions about
how things would evolve. It is particularly interesting to see the Clinton
Administration proposals for updating the Communications Act of 1934, and to
see how many of these concepts were implemented or are being advanced by the
Progressives today.
Regards
Craig
Television Broadcast
February 1994
Craig J. Birkmaier
Vice-President Gore launches initiative to restructure telecommunications
policy at Superhighway Summit . . . have television broadcasters missed the
boat?
The Academy of Television Arts & Sciences played host to an all-star cast of
industry leaders who hope to build and provide content for digital
superhighways--officially known as the National Information Infrastructure
(NII)--at a day long summit, held on the campus of UCLA, January 11, and
televised nationally on C-Span. The keynote speaker, Vice-President Al Gore,
detailed the administrations plans to work with Congress on the first major
overhaul of telecommunications policy in sixty years.
The Chairman of the Federal Communications Commission, Reed Hundt, in his first
major address, set the stage for a day filled with panel discussion among the
industry leaders who plan to invest hundreds of billions in the 21st century
infostructure. The goal set by the administration and generally supported by
the panelists is to bring interactive broadband communications-- two-way audio,
video, and data--to every business, government office, classroom, library,
hospital, health clinic, and home, by the turn of the century.
While the panels included representatives from the television industry, the
future of terrestrial television broadcasting was largely ignored. One had to
read between the lines to get any idea of the role of the television
broadcaster in the emerging digital world.
Laying the groundwork for the Vice-President's speech, Chairman Hundt appeared
focused on role that the FCC may play as regulator of the information highways.
He detailed the major goals for the commission in 1994: "reinventing" the
Commission to become an efficient regulator; full implementation of the Cable
Act; and the auctioning of spectrum for PCS (personal communications services).
Hundt explained: "To assist you in meeting your unprecedented challenges, we
intend to reinvent ourselves. Consistent with the Vice-President's National
Performance Review of last fall, the FCC will act to:
- Cut red tape;
- Put the customer first;
- Empower employees to get results; and - Get back to basics.
We intend to make the Commission as efficient as the most efficient 21st
century business. In an age of microprocessors and speed-of-light
communication, there's no reason why you should tolerate quill and ink
regulators."
At a press conference after his speech, I asked Hundt about the role of the
terrestrial television broadcaster: "Do you anticipate that the regulatory
changes being proposed for the information highway may cause you to revisit the
process of establishing an advanced terrestrial television broadcast service
and the role that it may play in a complementary sense to the wired information
infrastructure?" Side stepping the question, Hundt replied: "I think all the
transmission mediums are going to be enhanced in value and enhanced in
opportunity by the information technology."
Big Crunch. . . Big Bang
In his keynote address, Vice-President Gore drew parallels between the current
convergence among infotainment industries and the Big Crunch/Big Bang theories
of the universe put forth by British physicist Stephen Hawking.
"Our current information industries--cable, local telephone, long distance
telephone, television, film, computers, and others--seem headed for a Big
Crunch/Big Bang of their own. The space between these diverse functions is
rapidly shrinking--between computers and televisions, for example, or
interactive communication and video.
But after the next Big Bang, in the ensuing expansion of the information
business, the new marketplace will no longer be divided along current sectoral
lines. There may not be cable companies or phone companies or computer
companies, as such. Everyone will be in the bit business. The functions
provided will define the marketplace. There will be information conduits,
information providers, information appliances and information consumers."
Establishing the construction of these digital highways as a national priority,
Gore challenged industry to make the NII a reality. "Setting goals for
ourselves is important. Setting the right goals is critical. So let me be clear
here today, in articulating what I believe is one of the most important goals
for all of us to agree to at this meeting. That by January 11th of the year
2000, you will connect and provide access to the National Information
Infrastructure for every classroom, every library and every hospital and clinic
in the entire United States of America.
By meeting this challenge we can realize the full potential of the information
revolution. To educate, save lives, provide access to health care, and lower
medical costs.
Our nation can and must meet this challenge. The best way to do it is by
working together. Just as communications industries are moving to the unified
information marketplace of the future, so must we move from the traditional
adversarial relationship between business and government to a more productive
relationship based on consensus."
Re-writing the Communications Act
Gore then went on to detail the administrations plans to work with Congress on
an enabling legislative package, proposing sweeping changes to the
Communications Act of 1934. The goal is to move this package through Congress
this year.
"The administration will:
-- Encourage Private Investment
-- Provide and Protect Competition
-- Provide Open Access to the Network
-- Take Action to Avoid Creating a Society of Information 'Haves' and 'Have
Nots'
--Encourage Flexible and Responsive Governmental Action"
Specific highlights of the administration proposal include:
-- Support for the basic principles of the Brooks-Dingell bill, which proposes
a framework for allowing long-distance and local telephone companies to compete
against each other. Gore recommended that regulation and review of this
framework should be transferred from the courts to the Department of Justice
and the Federal Communications Commission.
-- Support for cross ownership between cable and regional telephone companies,
but continued prohibition of cross ownership within the same service areas.
Telephone companies would be permitted to offer video programming over new,
open access systems.
-- Provisions to assure open access to these networks by all competitors,
including public access to the information highways. Providing a clue as to the
future of television program distribution, Gore stated: "We must also insure
the future of non-commercial broadcasting.
-- A new regulatory landscape, allowing the companies that build these networks
to choose to be regulated by a single unified national administrator-- the FCC.
Gore justified this move away from the patchwork quilt of local, state and
national regulation: "This administration will not let existing regulatory
structures impede or distort the evolution of the communications industry."
Sweeping changes in telecommunications policy will be implemented in what the
administration is calling Title VII, an amendment to the communications act.
The system would work as follows. Service providers--most likely the local
telco in your region, or a merged cable/telco company (a local cable company
and a telco from outside this region) would be allowed to elect Title VII
regulation in lieu of the existing regulatory infrastructure--these Title 7
service providers would be regulated by the FCC. To become a Title VII provider
the company would be required to comply with the following guidelines:
- Open access - all content providers (including broadcasters) would be
guaranteed access to these networks on a non-discriminatory basis. The system
would be monitored by the FCC to prevent abuse through preferential pricing and
cross-subsidization for subsidiaries of the Title VII provider.
- Universal Service - Title VII providers would be required to offer service to
all customers within their operating region.
The legislative package would provide guidelines to the FCC for administration
of this process during the transition to a full implementation of the NII. For
example, the concept of open access would evolve as the capacity of these
systems increases. A fifty channel cable system would not be required to accept
content from all providers--open access would become the rule when their
infrastructure supported broadband switched digital services.
Don't bet against the broadcaster. . .
While the Vice-President's speech made no mention of the role of television
broadcasters in the new digital infostructure, he did provide a strong note of
encouragement in response to a question from the audience. When asked if the
proposed legislative changes would mean a new set of rules for broadcasters--
for example, would newspaper/broadcast cross-ownership rules be relaxed-- Gore
responded:
"Well first of all, let me state my firm conviction that anyone that bets
against the broadcaster is probably making a serious mistake. Because with
digital compression and with other advances, broadcasters are likely to play a
somewhat different but vital and extremely important and lucrative role. All
the excitement about wireless industry--we use these new phrases--well
broadcasters are wireless, and they have tremendous advantages. They have
tremendous experience, a big level of investment, and they are going to play a
critical role. We intend to pay careful attention to the barriers they now
have, subject to the principles that we outlined in this speech and those
reflected in the white paper, we are going to apply that approach."
