On December 19, the FCC released a Notice of Proposed Rulemaking (NPRM) relating to the designation of certain online video programming distributors as “multichannel video programming distributors” (MVPDs) under the Communications Act. This NPRM raises important and complex issues for the content community and has implications for other statutory regimes as well as existing program licensing and distribution agreements.
In a recent Further Notice of Proposed Rulemaking (FNPRM), the FCC announced that it is seeking comment on proposals that would require video programmers to file contact information and closed captioning certifications with the FCC. Specific topics on which the FCC is seeking comment include the following:
- Whether video programmers should be required to file contact information for the resolution of closed captioning complaints with the FCC. The FNPRM also seeks comment on whether programmers should be required to place such contact information on their websites.
- Whether the FCC should alter its requirements regarding closed captioning quality certifications by video programmers, such as by requiring programmers to file such certifications with the FCC.
- Whether programming suppliers or video programmers should be required to file compliance certifications with the FCC concerning the provision of closed captioning. As a reminder, the FCC’s current rules allow video programming distributors (VPDs) to rely upon such certifications from programming suppliers, but do not require programming suppliers to provide such certifications.
- If video programmers are required to file closed captioning certifications with the FCC, whether VPDs should be required to alert programmers to this requirement when arranging to carry the programmer’s programming.
Comments on these topics are due 20 days after publication of the FNPRM in the Federal Register, and reply comments are due 30 days after publication.
Speaking at last week’s CRA Competition Conference in Brussels, Alex Chisholm, Chief Executive of the UK Competition and Markets Authority (“CMA”), suggested that competition authorities confronted with antitrust allegations against tech giants should “separate the signal from the noise and the sound from the fury”. His remarks were made against the backdrop of the ongoing European Commission investigation into Google, and the European Parliament resolution to break up the US company. So what is the role of competition authorities when confronted with these antitrust allegations?
Four types of problems, four different reactions
Chisholm posits that there are four types of problems, each of which warrants a different reaction from competition authorities.
- Special pleading – Often competition authorities are confronted with complaints from competitors, and the challenge is to remain objective in their assessment: “In these cases, the role of competition authorities is first and foremost to separate the signal from the noise. To ask: is this complaint a genuine concern that impacts the public good? Or is it the desperate plea of a special private interest? If the latter, then the competition regulator needs to be robust enough to let Schumpeterian competition run its course.” In other words, regulators should not allocate resources to cases only because new comers and new technologies make established business models obsolete.
- Big societal questions – Disruptive innovation can throw up questions “which can be couched in competition terms but actually are much, much bigger”, like questions about the commercial use of personal data. These questions can only be addressed once social and political processes have played their role, i.e., “we have developed a new social contract around privacy.”
- Regulatory barriers to disruption – There are still many new business models to come in the new digital world. Competition authorities need to make sure that those business models are not impeded by regulatory barriers from a different age, because they may no longer be necessary to enhance consumer welfare. For instance, smart meters allow customers to adopt their behavior in response to changes in the energy market in real time, instead of having to wait for the electricity company technician to visit once in a year. This may arguably affect the way energy markets should be regulated.
Competition authorities should try to stimulate creation of new businesses, as the OFT did in recommending open sourcing some public information, a suggestion that Transport of London followed.
- Bread and butter competition issues – Do tech giants tend towards dominance, and if so, what is to be done? Today there is intense competition between platforms, at least on certain parameters. The platforms argue that this competition creates value and drives further innovation. On the other hand, these new business models do seem to have a tendency towards natural monopoly or natural oligopoly, on both sides of the platform. Tech giants might stir up competition on one side of the market, but fail to pass on the benefits to consumers. “What if – hypothetically – one of the digital giants were to come to exercise market power for its own account? We can imagine a scenario where consumers come to them and there is the appearance of a competitive marketplace, with a multitude of offers for goods and their close substitutes. But in reality, the platform is extracting all the rent from that competition through an unchallenged control over listing fees and sales commissions.” Price parity clauses, restrictive agencies, bundling, foreclosure and predation should be considered on a case-by-case basis with a view to maintaining vigorous inter-platform competition. “…it must be remembered that an economy in the throes of creative destruction needs to be kept on a knife-edge (…) Markets need to contain enough promise of profit to spur innovation, while being competitive enough to keep strong incentives to continue to innovate and serve customers.”
Chisholm concluded that markets should reward innovation and investment, and that competition authorities must be vigilant and agile, “with the ability to sort real market distress signals from all the noise of creative destruction; and to tell the sound of actual market failure, from the fury of the out-competed.”
Please click here to read to full text of the speech.
The STELA Reauthorization Act (“STELAR”) has been signed into law by the President. STELAR extends the statutory copyright license for satellite carriage of distant signals for another five years (through December 31, 2019). It also extends through January 1, 2020 the statutory good faith negotiation requirement imposed on broadcasters and MVPDs for retransmission consent negotiations. As discussed below, it makes several other changes to the Communications Act and to the Copyright Act.
On 5 April 2013, the Landgericht Düsseldorf referred questions relating to injunctive relief over standard-essential patents (“SEPs”) to the Court of Justice (“CJEU”) in connection with a patent dispute between Huawei and ZTE relating to an alleged infringement by ZTE of a patent owned by Huawei and declared to be essential in connection with the LTE standard. As the Advocate General (“AG”) put it in his 20 November Opinion, the CJEU “is called for the first time to answer whether seeking an injunction by the holder of SEP, committed to grant licences on FRAND terms, against a candidate-licensee may amount to an abuse of dominant position and which conditions apply.”
Covington published an alert on 25 November 2014 that summarises the opinion and the potential implications. Please click here to view the alert.
By Nicholas Dashman
This morning the U.S. Court of Appeals for the D.C. Circuit granted a stay of an FCC order that would have made hundreds of thousands of pages of highly confidential unredacted programming distribution and negotiation strategy documents available for inspection by third parties. The disclosure of these materials would have occurred as part of the FCC’s review of the Comcast-Time Warner Cable and AT&T-DIRECTV mergers. The stay was granted in response to a petition filed by a coalition of broadcast and cable programmers (the “Content Companies”) represented by Covington & Burling. The stay will remain in effect pending the D.C. Circuit’s consideration of the merits of the Content Companies’ petition for review of the FCC order. See our previous entry entitled D.C. Circuit Grants Stay in Battle Over Access to Content Companies’ Confidential Information for more information.
In issuing the order, the D.C. Circuit noted that the FCC itself already has access to the confidential documents and therefore can “continue to evaluate the proposed merger during the stay”.
The case is CBS Corporation, et al., v. Federal Communications Commission, No. 14-1242. The full order can be found here.
The FCC was set to release today hundreds of thousands of pages of highly confidential documents — including unredacted programming distribution agreement materials and negotiating strategy documents — for inspection by third parties as part of the Commission’s review of the Comcast-Time Warner Cable and AT&T-DIRECTV mergers. On Friday, November 14, however, a coalition of the largest broadcast and cable networks (“Content Companies”) won a temporary stay from the U.S. Court of Appeals for the D.C. Circuit, which halted the FCC’s disclosure of such documents and ordered briefing to help it decide whether the companies’ confidential pricing and negotiation information should be released by the FCC.
Yesterday, the Federal Communications Commission’s Enforcement Bureau issued an advisory reminding political campaigns about the restrictions placed on the use of autodialed calls, prerecorded calls, and text messages by the Telephone Consumer Protection Act (“TCPA”) and the FCC’s corresponding rules. The Enforcement Bureau warns that it is “closely monitoring this space” and will “rigorously enforce the important consumer protections in the TCPA and [the FCC’s] corresponding rules.”
The advisory summarizes four key restrictions on political calls:
1. Political prerecorded calls or autodialed calls to cell phones and other mobile services are prohibited unless made with the “prior express consent” of the recipient.
- This restriction applies to autodialed live voice calls, prerecorded calls, and text messages.
- Callers contending that they have the “prior express consent” to make such calls have the burden of proof to show that they obtained the requisite form of consent.
2. Political prerecorded calls or autodialed calls to certain types of landline phones are prohibited unless made with the “prior express consent” of the recipient.
These restrictions apply to the following types of landline phones:
- emergency telephone lines, including any 911 line and any emergency line of a hospital, medical physician or service office, health care facility, poison control center, or fire protection or law enforcement agency;
- telephone lines in guest or patient rooms at a hospital, nursing home, or similar establishment; or
- any service for which the recipient is charged for the call, such as a toll-free line.
3. Political prerecorded calls must include certain identification information about the caller.
All prerecorded calls must include the following:
- At the beginning of the message: the identity of the business, individual, or other entity that is responsible for initiating the call. If a business or other corporate entity is responsible for the call, the recording must contain that entity’s official business name (meaning the name registered with a state corporate commission or other regulatory authority).
- During or after the message: the telephone number of such business, individual, or other entity. The telephone number may not be for (1) the autodialer or prerecorded message player that placed the call, (2) a 900 number, or (3) any other number for which charges exceed local or long distance transmission charges.
4. Automatic telephone dialing systems that deliver prerecorded calls must release the recipient’s telephone line within five seconds after the recipient has hung up.
- In addition, an automatic telephone dialing system may not be used in a way that simultaneously engages two or more telephone lines of a multi-line business.
On Wednesday, May 7, Covington attorneys Stefanie Doebler and Saurabh Anand will be participating in a webinar that might be of interest to many of the readers of this blog. The presentation, entitled “Advertising Drugs and Health Care Products via Social Media,” will provide attendees with an overview of a recent FDA draft guidance addressing social media, and will also address the following areas:
- The regulatory scheme and FDA’s policy surrounding advertising and promotion via social media;
- Implications of FDA’s enforcement actions relating to social media on advertising and marketing operations; and
- Open questions relating to FDA’s regulation of advertising and promotion on social media.
By Miranda Cole and Katharina Grosse-Ophoff
In its UPC judgment this week the European Court of Justice (“ECJ”) has clarified the application of consumer protection laws to, and the jurisdiction of national regulatory authorities over, providers of electronic communications services (“ECS”) that are established in one member state who provide services in another. The court also confirmed that ECS providers need not establish a branch in member states in which they provide service, as long as they are established in at least one member state.