Chapter 16 Telecommunications Regulation INTRODUCTION Volumes of federal rules govern the operation of telecommunications in the U S A substantial number of them focus on technical rules such as the height of broadcast towers or the power of transmitters This chapter focuses on the other two kinds of rules those that govern who can own and operate telecommunications facilities and those that regulate content carried over these facilities The FCC has had recent efforts to regulate the Internet and broadband providers A PROLOGUE TO THE PRESENT The past three decades witnessed a revolution in the governance of broadcasting and telecasting a revolution not yet over The telecommunications industry is viewed as less of a publicly oriented entity designed to serve society and more of a private business whose primary responsibilities lie with its customers primarily advertisers and its stockholders HISTORY OF REGULATION Radio Act of 1912 The first federal broadcast law which imposed only minimal regulation on the fledgling broadcast industry Radio operators were required to have a license under this statute Radio Act of 1927 The first comprehensive national broadcast law which provided the basic framework for the regulation of broadcast that was later adopted in the Federal Communications Act of 1934 Rules aimed at creating order from the problem caused by too many people trying to broadcast radio signals at the same time Federal Communications Act The law adopted in 1934 that is the foundation for the regulation of broadcasting in the United States Remains as the base for all telecommunications regulation today It expanded the earlier statute to include telephones the telegraph and radio Provided for the appointment of the Federal Communications Commission or FCC to regulate all these telecommunications media The Truth in Caller ID Act addresses the problem of spoofing which involves transmitting caller ID information that makes it appear that a person is calling from a consumer s bank or credit card companies in an attempt to trick the recipient into providing his or her account numbers or other sensitive information Page 1 THE CHANGING PHILOSOPHY OF BROADCAST REGULATION The broadcast spectrum is a limited transmission pathway not all who want to transit signals can do so Spectrum scarcity The notion in the realm of the FCC s regulation of over the air broadcasting that there are a finite number of frequencies on which to broadcast and that in turn there are more people who want to broadcast than there are available frequencies While private individuals may own the transmitters the towers the microphones and all the other paraphernalia that allow radio signals to be transmitted the American people own the transmission path the radio spectrum through which the signals travel to the listener s radio set Broadcasters have the responsibilities of meeting the public interest convenience or necessity or PICON an acronym that became the code word to justify all the rules relating to broadcasting Three major policy objectives that allegedly lead to the promotion of public interest Competition Diversity Localism Congress and the FCC created rules to ensure the fidelity of broadcasters between 1920 1960 The notion that broadcasters must serve the public interest began to erode in the last 25 years of the 20th century So capitalism and market driven theories were in There became a heated battle over the meaning of the term public interest in the PICON acronym that still exists today whether public interest is whatever the public wants or whatever the public needs THE PROMETHEUS DECISION AND SUBSEQUENT FALLOUT Prometheus Radio Project v FCC Affirmed the power of the FCC to regulate media ownership and held that the Commission has not sufficiently justified its particular chosen numerical limits for local television ownership local radio ownership and cross ownership of media within local markets There is a 39 national audience reach limit on television ownership with UHF ultra high frequency stations attributed with only 50 of the television households reached a 50 UHF discount There continues to be no limit on the total number of radio stations that a single entity licensee can own on a national basis The 3rd Circuit in Prometheus Radio Project rejected the FCC s relaxation of the newspaper broadcast cross ownership rule because the FCC had failed to give adequate public notice back in 2007when it made the change In the past 30 years broadcasting and the telecommunications industry have seen a period of substantial deregulation although the 2004 appellate court decision in Prometheus Radio Project v FCC may have put a halt to that at least when it comes to ownership issues Page 2 BASIC BROADCAST REGULATION FEDERAL COMMUNICATIONS COMMISSION The 1934 Federal Communications Act provided that a seven member Federal Communications Commission FCC regulate the broadcast industry In 1982 Congress reduced the size of the commission to 5 members They are appointed by the president with the approval of the Senate to serve a 5 year term One member selected by the president is the chairperson and no more than a simple majority 3 members can be from the same political party Federal Communications Commission FCC A five member body appointed by the president whose function is to administer the federal broadcasting and communication laws In 2009 President Barack Obama nominated attorney and media executive Julius Genachowski to be the new chairperson of the FCC A leading item on his agenda was to expand the FCC s jurisdictional authority to regulate the Internet Other top items on his agenda included the National Broadband Plan efficient use and reallocation of the spectrum to where it is needed most and preserving an open Internet The FCC has the power and regulations within the broad framework of the Federal Communications Act and these regulations carry the force of the law The law with some matters is very specific and other areas it is vague The National Telecommunications and Information Administration NTIA is an agency in the U S Department of Commerce that serves as the executive branch agency principally responsible for advising the president of the United States on telecommunications and information policies Powers States counties and cities have no regulatory power over broadcasting stations The federal government has pre empted the law in this area FRC v Nelson Brothers The U S Supreme Court ruled
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