(Adds details on Cablevision proposal, consumer comments)
By Kim Dixon
WASHINGTON Dec 3 U.S. communications
regulators will consider a controversial spectrum auction plan
for free Internet and new rules governing disputes between
cable operators and programmers at their December meeting, the
agency's chairman said on Wednesday.
Federal Communications Commission Chairman Kevin Martin is
proposing that the agency auction off some airwaves, with a
mandate that 25 percent be set aside for free Internet.
To address concerns that finding the financing to build out
the spectrum in a tough economic environment would be
challenging, the plan includes a provision requiring the
winning bidder to meet benchmarks by five years, or have the
spectrum reclaimed by the agency.
"It will be use it or lose it," said Martin, a Republican
whose chairmanship will likely end when the Obama
administration takes office next month.
The plan also contains a provision to be voted on by the
five-member FCC that any spectrum portion reclaimed be opened
up for unlicensed use.
Martin, as he has done in the past, dismissed the concerns
of Deutsche Telekom AG's (DTEGn.DE) T-Mobile cellphone unit
that the free Internet component would lead to interference
with its adjacent spectrum, for which it paid $4.2 billion.
He said more protection to prevent technical interference
are in place now than there were for a nearly $20 billion
auction earlier this year, won in large part by Verizon
Wireless and AT&T Inc (T.N). Verizon Wireless is owned by
Verizon Communications Inc (VZ.N) and Vodafone Group Plc
The plan also contains a controversial mandatory filter
requirement for customers under the age of 18 years old, to
address concerns about children getting access to pornography
on the Internet.
Free speech advocates say that provision would surely be
challenged in court.
A separate auction plan for a different slice of the
spectrum, with a requirement that it be used in coordination
with public safety officials, did not make it onto the December
Martin said there was no consensus among the commissioners
on how to move forward with that plan.
The cable rules to be considered come as the FCC arbitrates
several disputes between cable companies Time Warner Cable Inc
TWC.N and Comcast Corp (CMCSA.O), and content programmers
such as NFL Networks.
The disputes involve what tier of service a content
provider such as NFL Networks gets on a cable system and
whether there is discrimination in that process based on other
content the cable operator controls.
The proposal would set up a resolution process for such
disputes, giving the FCC six months to evaluate the claims and
setting legal standards for when a programmer can reasonably
claim discrimination by a cable company.
Consumers groups lauded that idea.
"The FCC's proposed guidelines will accelerate a clear and
evenhanded resolution of disputes between cable companies and
TV programmers -- this reform should mean more diverse
programming and lower prices for consumers," said Joel Kelsey,
a policy analyst for Consumers Union.
The FCC is also seeking comment on a proposal from
Cablevision Systems Corp CVC.N related to contracts between
broadcasters, other content providers and cable companies.
It would bar broadcasters and other content providers from
demanding that cable or satellite companies put them on a
certain tier, or reach a minimum number of subscribers, in
exchange for being carried by the cable company.
Cable programmers say these requirements from broadcasters
contribute to higher prices for consumers.
(Editing by Gerald E. McCormick and Andre Grenon)