You are undoubtedly aware of the Emergency Alert System (EAS), the national public warning system used to address the American public during emergencies. You may have seen the system in action, used by state or local authorities to deliver important emergency information, such as AMBER alerts and weather information targeted to your area.

The EAS is actually a national system that also provides communications capabilities to the President to address the American public during a national emergency. It involves the resources of broadcasters, cable television operators, satellite radio providers, and direct broadcast satellite (DBS) providers.

On November 9, at 2:00 p.m. (EST), the FCC and FEMA have scheduled the first-ever test of the Presidential Emergency Action Notification (EAN) of the EAS. The test will last about 30 seconds.  During the test, cable customers will see a special EAS channel regardless of the cable channel they are watching (You can see an example of an alert here.).

As the EAS test runs, the audio feed will advise viewers that it is only a test. The onscreen text will simply state:  “This is an Emergency Action Notification,” and in some cases, “for the United States” or “for the District of Columbia,” depending on the equipment.

The EAN message itself is set by the federal government; cable systems are required to pass through the government’s message to their viewers.

The cable industry is taking action to assist the government in educating consumers about the test.  Our member companies are airing public service announcements from the FCC to raise viewer awareness (Copies of these PSAs are posted on NCTA’s website).  Cable systems are also using invoice messages to alert consumers to the upcoming test.  And cable operators and programmers are linking to websites with more government information about the test, such as this one from the FCC.

Our message is simple:  This is just a test of the system, and no action is required.

NCTA continues to inform our member companies about test developments and has briefed other groups, such as the Cable Center Customer Care Committee and state and regional cable associations. Cable programmers also have pledged support in educating consumers.

An end-to-end nationwide test of the system is critical to assess the reliability and effectiveness of the EAS as a public alert mechanism. Cable will be expending every effort to help ensure the test is a success.

UPDATE: You might also want to read this post at the Time Warner Cable Untangled blog.

Steve Morris, Vice President & Associate General Counsel of NCTA, gave BroadbandBreakfast.com his first impressions on this week’s USF Reform Proposal. His commentary is also available here.

The Chairman, the commissioners and the FCC staff all deserve a great deal of credit for bringing this item to completion.  Universal service and intercarrier compensation are some of the most difficult, complex issues faced by the Commission and adopting an item of this magnitude is a significant accomplishment.  That we have concerns about some of the decisions made by the Commission in this order in no way diminishes our respect for its efforts and accomplishments.

On the positive side, we believe the item establishes a reasonable and workable process for transitioning to a more rational intercarrier compensation regime.  The Commission acknowledged over a decade ago that the current intercarrier compensation rules were irrational and created an environment ripe for regulatory arbitrage and disputes.  We are optimistic that the rules adopted today will help put an end to the arbitrage and the disputes.  We are particularly pleased that the item commits to placing carriers of VoIP traffic on equal footing with legacy telephone companies with respect to intercarrier compensation.

We are less enthusiastic about the universal service components of the order, which are far less ambitious than was recommended in the National Broadband Plan and the Notice of Proposed Rulemaking.  At a high level, the Commission’s “new” approach to high-cost support through the Connect America Fund is to give the incumbent phone companies preferred or exclusive access to virtually all the money.  Cable operators will be able to receive broadband support only in areas where an incumbent price cap phone company chooses not to exercise its right of first refusal (or “state level commitment” as it is now called).  This overwhelming preference for incumbent phone companies violates the universal service requirement that support be provided on a competitively neutral basis, and is a step backward from the current regime, which gave competitors an opportunity to receive support in any area where they were willing to meet the Commission’s requirements.

The degree to which the Commission has granted special treatment to large price cap phone companies is particularly disheartening.  AT&T and Verizon are the two largest telecommunications companies in America and the so-called “mid-size” price cap companies (CenturyLink, Frontier, Windstream) pay out the highest dividends among S&P 500 companies.   Given the financial strength and size of these companies, it is unreasonable and unnecessary for the Commission to give them: (1) preferential access to $1.8 billion annually in high-cost support in 100 percent of their territory through a right of first refusal; (2) recovery of as much as 90-100 percent of their access charge losses from an Access Replacement Mechanism that will increase consumers’ phone bills; and (3) exclusive access to $300 million in new high-cost support, in addition to 100 percent of their legacy support (which is phased out for competitors) before the new Connect America Fund begins.  We look forward to reading the order to see if there is a reasonable explanation for this blatant favoritism.

Although the lack of competitive neutrality is a major concern, there are a number of bright spots in the USF reforms adopted.  The Commission proposes to eliminate support in some (but not all) areas where cable operators offer broadband without a subsidy, a policy that NCTA has advocated for many years.  The Commission also adopted a budget for the high-cost program for the first time, another long-standing NCTA policy recommendation.

Consequently, while the item is far from perfect, NCTA greatly appreciates the efforts the Commission has made to begin the process of modernizing the USF regime.

Back in June, on the eve of NCTA’s annual conference, it was clear that a theme had emerged for The Cable Show.  As I wrote on this blog, we were entering “a new world in which Consumer Electronics, Information Technology and Hollywood” have come together into order to deliver our customers new and powerful ways of consuming entertainment and information.

To be more technical about it, as industry observer Leslie Ellis put it:

…we’re moving to a world where stuff can be done without set-top boxes, at least as they exist in hardware. Now, it’s set-tops; next, it’s gateways that bridge between set-tops and cable modems, and ultimately, it’s video delivered completely over IP, from the network, to the end devices.

I bring this up because NCTA’s President and CEO Michael Powell sent a letter last week to FCC Chairman Julius Genachowski about these new developments and what they mean for our ability to achieve a fully competitive and innovative retail video device marketplace.

This issue has been discussed for some time, but 2011 has brought a host of services entering the marketplace.  See some of our previous posts:

• Consumers Reaping Benefits of Smart Video Device Revolution
• Connected TV… Here to Stay

All of that was before The Cable Show. As Michael Powell’s letter pointed out, the various demos and panels from our event help show how the cable industry “is providing American consumers with powerful, personal, and portable services and networks that support unprecedented mobility of content to multiple devices both in and out of the home.”

The Cable Show demonstrated that Congress’s and the Commission’s video device goals are already being achieved in the marketplace.  …there is broad-based momentum in the cable industry to deliver cable services to consumers on any device.

Today, consumers have more sources of video programming and content on more devices than ever before, and the choices are only growing through a variety of market-based approaches: smart TVs, iPads and other tablets, TV from the “cloud,” set-top boxes that can combine TV with Internet content, the growing role of home networking and connected devices. All of these approaches are playing a role.

As quoted in this write-up in Multichannel News, NCTA is suggesting that regulatory efforts intended to encourage innovation may instead impede.

“The problem that remains in this marketplace is not the need for a single guiding regulatory prescription,” like the FCC’s proposed AllVid solution, wrote Powell. “The marketplace is at a critical juncture, inviting participants to make major bets and even more major investments in technology to meet rapidly developing consumer demand with rapidly changing technological tools. This kind of innovation is about risk taking. The environment that invites the greatest risk taking is one with the certainty that regulators will not step in and displace new technologies or new investments.”

FOOTNOTE: There was a lot of activity at The Cable Show along these lines, but you get a taste of what’s happening in this area, watch some videos from The Park, such as the demos from Comcast, Cablevision and HBO.

The blogosphere has been buzzing since last night, with all manner of “experts” offering opinions about the dispute between Comcast and Level 3 over their commercial arrangement for the exchange of Internet traffic.  While I am a bit hesitant to add to the ruckus, I think it is important to refute the misguided notion that this business dispute is really a “net neutrality” problem that can and should be solved by federal regulation.

We all have heard the Internet described as a “network of networks” but we generally give little thought to the remarkable logistics involved.  For the Internet to operate, thousands of networks – small and large, wireless and wireline, urban and rural, domestic and global – must establish arrangements to govern how they interconnect and exchange traffic.  While there are different types of providers (backbone, content delivery network (CDN), etc.) and different types of arrangements (settlement-free peering, paid transit) – see this White Paper for a good explanation – the key point is that these myriad of arrangements have developed over time, in the marketplace, without any legislative or regulatory intervention.  That the Internet works at all is amazing; that it works 24/7 to bring consumers content from around the world at lightning speed borders on the miraculous.

The FCC consistently has taken a “hands off” approach to these arrangements. It has not imposed any form of regulation on these arrangements, nor has it intervened in the periodic disputes that occur between backbone providers, like Level 3’s dispute with Cogent in 2005 – in which Level 3 insisted that Cogent pay a fee for transmitting content on Level 3’s network rather than peering on a settlement-free basis. Moreover, while the FCC has been considering net neutrality regulations for some time, it has never suggested that it was considering any change in the regulatory treatment of backbone and CDN providers. (Indeed, even the most fervent net neutrality advocates, like Free Press, have recognized the legitimacy of these commercial arrangements; see note 8 on pg. 17 in these comments).

So is there anything unusual about the dispute between Comcast and Level 3 that should cause the Commission to reassess its hands off approach to these types of arrangements?  No.  While some of the initial commentary, reacting solely to Level 3’s press statement, reflected a knee-jerk reaction that any dispute involving the Internet implicates net neutrality; as the day wore on, cooler heads seem to be prevailing, with most observers, including some net neutrality advocates, recognizing that this was nothing more than one party to a commercial negotiation trying to use the regulatory process to gain negotiating leverage (Also see this article from Multichannel News).

Nor can Level 3 credibly claim to be surprised by Comcast’s approach.  Comcast’s policy on settlement-free peering – including its expectation that any peering partner “maintain a traffic scale between its network and Comcast that enables a general balance of inbound versus outbound traffic” – is posted right on its website. When Level 3 approached Comcast and asked for a significant change in the parties’ physical interconnection arrangement, it should have fully expected that Comcast would seek a corresponding change in the parties’ business arrangement, consistent with the general practice across the industry.

Under the circumstances, Level 3’s plea for government intervention in this commercial negotiation is entirely unwarranted.

I have previously mentioned the critical role of editorial discretion in creating packages of content that serve the public interest.  But not everyone agrees on the extent to which First Amendment speakers should be able to exercise their editorial discretion.

Both the government and particular speakers may have interests in regulating the media that are, arguably, at odds with the “public interest.”  Policymakers, for example, may favor particular viewpoints and/or particular speakers.  They may have an interest in maximizing the public’s exposure to those viewpoints, and they may have an interest in ensuring a soapbox for those speakers.  Correspondingly, they may have an interest in suppressing certain viewpoints and dampening the impact of particular speakers.

It’s not hard to see the danger to democracy and free discourse when the government attempts to promote the latter interests by directly targeting and suppressing particular content or particular speakers.  This is the most obvious of First Amendment offenses, and it was among the first to be successfully challenged by cable operators and programmers – most often in the context of state and local laws restricting nudity and “indecent” content on cable networks.

But the government also poses a threat when it puts a thumb on the scales of public discourse – a thumb backed by the force of law – by seeking to promote particular speech or speakers.  Public officials can artificially skew the marketplace of ideas and issues by forcing the media to carry particular programming that they would not otherwise carry.

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