ROUNDUP: Media Law 05.07.2014


Non-traditional media is the focus today. First up is “net neutrality.” The Federal Communications Commission refers to net neutrality as the Open Internet, and had promulgated a rule back in 2010 designed to promote it. Under the principle of net neutrality, service providers cannot discriminate among users or information providers in terms of price or quality of service.  Because many Internet service providers are cable companies, for example, they are not traditional “common carriers,” (telephone companies, for example), and don’t come under the same kind of FCC regulation as do telephone companies. Therein lies the problem for the FCC.

Verizon challenged the FCC’s statutory authority to regulate it and other non-traditional Internet service providers under the principle of net neutrality, bringing a suit in federal court. On January 14, the U. S. Court of Appeals for the D.C. Circuit agreed with Verizon that the agency had exceeded its authority. Several of the FCC Commissioners are now considering whether another stab at regulation is a wise idea. Commissioner Ajit Pai has testified before the Senate Subcommittee on Financial Services and General Govenrment of the U.S. Senate Committee on Appropriations that he thinks net neutrality is an “unnecessary distraction,” and that other FCC priorities, including auctioning off more of the spectrum as required under the Spectrum Act,  are more important. FCC Chair Tom Wheeler, by contrast, has issued a statement saying he intends to offer revamped rules that respond to the Verizon decision. He says in part, “We will carefully consider how Section 706  might be used to protect and promote an Open Internet consistent with the D.C. Circuit’s opinion
and its earlier affirmance of our Data Roaming Order. Thus, we will consider (1) setting an enforceable legal standard that provides guidance and predictability to edge providers,
consumers, and broadband providers alike; (2) evaluating on a case-by-case basis whether that  standard is met; and (3) identifying key behaviors by broadband providers that the Commission would view with particular skepticism.” Many FCC watchers have reacted with, at best, skepticism, even though they have not yet seen the proposal, which the FCC will consider at its May 15 meeting. The FCC has opened up a digital “in box” to accept public comments here.

On April 3, the European Parliament threw its weight behind net neutrality, voting to adopt a net neutrality proposal which would provide equality for end users and end roaming charges by 2016.

On April 2, the Writers Guild and Hollywood’s movie producers (the Alliance of Motion Picture and Television Producers, or AMPTP) reached a three year deal that spells out some important guarantees for writers on scripted shows, including a guaranteed salary increase, payments into pension funds, and agreements with regard to streaming. Members of WGA must still vote on the contract, but industry watchers seem to think that the vote will be much less contentious than that in 2008, for example, which followed on a more than 3 month strike. That ugly negotiation was the first during which new media became an issue for both sides. David Robb discusses the long term effects of the WGA strike here. The Writers Guild members voted overwhelmingly to ratify the contract (98.5 percent to 1.5 percent) at the end of April. Up next, the SAG/AFTRA (Screen Actors Guild/American Federation of Television & Radio Artists) negotiations with AMPTP. While SAG and AFTRA are now one union, the two still have separate contracts with AMPTP.

The U.S. Supreme Court heard oral argument April 22 in American Broadcasting Companies Inc, et al, v. Aereo Inc, (a list of docs filed and lots of opinion over at Scotusblog), in which Aereo, a feisty little startup, is arguing that its product, a high-tech version of rabbit ears that consumers use to stream off the air broadcasts to personal devices (computers, tablets, what-have-you) does not violate copyright law. The cable companies, networks, and some content providers  (ABC, CBS, the NFL) are protesting loudly, saying that Aereo is doing an end-run around licensing fees, essentially snatching copyrighted material that consumers would otherwise pay for (through fees to cable companies) and providing it to users through its $8 a month service. Aereo argues that it is simply providing an updated version of the old “rabbit ears” technology we used to have with our old tvs, and simply updating it for the Internet. The difference? Aereo’s technology allows streaming to devices, a technology that did not exist with over the air broadcasts and rabbit ear antennas. The cable companies and networks are worried that, should Aereo prevail, even partially, in the high court, it will upset the model that the companies have so carefully worked out over the last several years. Court watchers are divided on how the Justices received the arguments. MSN suggests the Justices were skeptical of Aereo’s arguments. On the other hand, the New York Times points out that, although some of the Justices seemed a little concerned about Aereo’s business model, they also were worried about a possible chilling effect should they rule against Aereo.  J. J. Colao weighs in here in Forbes on the possible future of Aereo should it lose in the high Court.  Stay “tuned.” We should get a decision sometime in June.



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