Telecommunications Law and Policy

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Carolina Academic PressLaw Advisory Board

❦

Gary J. Simson, ChairmanMercer University School of Law

Raj BhalaUniversity of Kansas School of Law

Davison M. DouglasDean, William and Mary Law School

Paul FinkelmanAlbany Law School

Robert M. JarvisShepard Broad Law CenterNova Southeastern University

Vincent R. JohnsonSt. Mary’s University School of Law

Peter NicolasUniversity of Washington School of Law

Michael A. OlivasUniversity of Houston Law Center

Kenneth L. PortWilliam Mitchell College of Law

H. Jefferson PowellDuke University School of Law

Michael P. ScharfCase Western Reserve University School of Law

Michael Hunter SchwartzDean, William H. Bowen School of LawUniversity of Arkansas at Little Rock

Peter M. ShaneMichael E. Moritz College of Law

The Ohio State University

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Telecommunications Law and Policy

fourth edition

Stuart Minor BenjaminDuke University

James B. SpetaNorthwestern University

Carolina Academic Press

Durham, North Carolina

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Copyright © 2015Carolina Academic PressAll Rights Reserved

ISBN 978-1-61163-691-8LCCN 2014953062

Carolina Academic Press700 Kent Street

Durham, NC 27701Telephone (919) 489-7486

Fax (919) 493-5668www.cap-press.com

Printed in the United States of America

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For Arti and Denise

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Contents

Table of Materials xviiCopyright Permissions xxiPreface xxiii

Introductory Materials

Chapter One · Introduction to Telecommunications Regulation 3§ 1.A. Communications as a “Regulated Industry” 4§ 1.A.1. Justifications for Regulation 5

§ 1.A.1.a. Market Failure Justifications 6§ 1.A.1.b. Additional Justifications 10

§ 1.A.2. Basic Regulatory Tools 11§ 1.A.3. The Challenges of Regulation 14

§ 1.B. A Policy Analysis Framework 16

Chapter Two · Telecommunications Policy in Institutional Perspective 17Introduction 17§ 2.A. The Institutional Dimensions of Telecommunications Policy 17§ 2.B. The Federal Communications Commission 20§ 2.C. Regulatory Integration Under the 1934 Act 21§ 2.D. Institutional Structure and the FCC 23§ 2.E. The FCC in a Functional Perspective 25§ 2.E.1. Command and Control 25§ 2.E.2. Rulemaking versus Adjudication 26§ 2.E.3. Licensing 29§ 2.E.4. Norm Entrepreneur 29§ 2.E.5. Standard Setting 30

§ 2.F. The Statutory and Broader Institutional Context 31§ 2.F.1. The Structure of the 1934 Act 32§ 2.F.2. Other Relevant Statutes and Agencies 34§ 2.F.3. FCC Discretion and Its Constraints 35

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part one

Spectrum

Chapter Three · Regulating the Spectrum 41Introduction 41§ 3.A. Defining Spectrum 42§ 3.A.1. Characteristics of Radio Waves 42§ 3.A.2. Transmitting Through the Air 44§ 3.A.3. Transmitting Using Wires 44§ 3.A.4. Signal Modulation 45§ 3.A.5. Newer Wireless Technologies 47§ 3.A.6. The Spectrum as a Resource 49

§ 3.B. A Brief History of Early Spectrum Regulation 50§ 3.C. Rationales for Regulation 55§ 3.C.1. Scarcity/Interference 55Coase, Why Not Use the Pricing System in the Broadcast Industry? 59

§ 3.C.2. Consumer Preferences 63§ 3.D. An Overview of Spectrum Management 65§ 3.E. Regulatory Tradeoffs and Allotment 66

Chapter Four · Zoning the Spectrum 69Introduction 69§ 4.A. Models of Spectrum Control 69Spectrum Policy Task Force Report 72

§ 4.B. Implementing Flexibility 79Redevelopment of Spectrum to Encourage Innovation in the Use of New Telecommunications Technologies 81

§ 4.C. Dedicating Spectrum to Unlicensed Uses 90Benkler, Some Economics of Wireless Communications 90

§ 4.D. Approaches to Unlicensed Access 97§ 4.D.1. White Spaces 97Unlicensed Operation in the TV Broadcast Bands and Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band 98

§ 4.D.2. Spectrum Sharing 106President’s Council of Advisors on Science and Technology, Realizing the Full Potential of Government-Held Spectrum to Spur Economic Growth: Executive Summary 107

Amendment of the Commission’s Rules with Regard to Commercial Operations in the 3550–3650 MHz Band 111

§ 4.E. Spectrum Leasing and Private Commons 117Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets 119

Chapter Five · Structuring and Assigning Licenses 125Introduction 125§ 5.A. License Renewal and Transfer 126§ 5.A.1. License Renewal 126§ 5.A.1.a. Early History 127

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§ 5.A.1.a.1. The Shuler Case 128§ 5.A.1.a.2. The Brinkley Case 129§ 5.A.1.a.3. The Judicial Response 130

§ 5.A.1.b. More Recent Developments 130§ 5.A.2. License Transfer 134§ 5.A.2.a. Format Changes 136Changes in the Entertainment Formats of Broadcast Stations 136

§ 5.A.2.b. A Reversal, and a Reversal of That Reversal 137FCC v. WNCN Listeners Guild 138

§ 5.B. License Assignment via Merit-Based Hearings 140§ 5.B.1. Comparative Hearings 141§ 5.B.1.a. Basic Comparative Hearing Criteria 142Policy Statement on Comparative Broadcast Hearings 142

§ 5.B.2. Licensing Case Study 146Applications of Simon Geller for Renewal of License of WVCA-FM and Grandbanke Corporation for Construction Permit 146

§ 5.B.3. Special Considerations for Racial Minorities and Women 151§ 5.B.3.a. Minority Preferences before Adarand 151Metro Broadcasting, Inc. v. FCC 151

§ 5.B.3.b. Preferences for Women 157§ 5.B.3.c. Adarand (Metro Broadcasting Overruled) 158§ 5.B.3.d. Equal Employment Opportunity Regulations 160Lutheran Church–Missouri Synod v. FCC 160

§ 5.C. Transition to Assignment via Auctions 164§ 5.C.1. Reform of the Licensing Process 165Formulation of Policies and Rules Relating to Broadcast Renewal Applicants, Competing Applicants, and Other Participants to the Comparative Renewal Process and to the Prevention of Abuses of the Renewal Process 165

§ 5.C.2. Lotteries and Auctions 167Using Auctions to Select FCC Licensees 168

§ 5.C.3. Initial Assignment by Auction 174Implementation of Section 309(j) of the Communications Act — Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses 174

part two

Regulating Monopoly— The Case of Telephony

Chapter Six · Early Telephone Regulation through Divestiture 187Introduction 187§ 6.A. Telephone History 188§ 6.B. Infrastructure 193§ 6.B.1. Telephone System Vocabulary 193§ 6.B.2. Telephone Economics 194

§ 6.C. Telephone Regulation 195§ 6.C.1. Categories of Regulation 195§ 6.C.2. Who Regulates 196

§ 6.D. Precursors to Divestiture 198

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§ 6.D.1. Competition in CPE 198Huber, Kellogg & Thorne, Federal Telecommunications Law 198

§ 6.D.2. Competition in Long Distance Telephony 201§ 6.D.3. Communications and Computer Convergence 202

§ 6.E. Breaking Up Bell: The 1984 Divestiture 203§ 6.E.1. The MFJ 204United States v. American Telephone & Telegraph Co. 204

§ 6.E.2 Discussion of the Government’s Theory 210

Chapter Seven · Control of Telephone Monopolies 217Introduction 217§ 7.A. Rate Regulation 217§ 7.A.1. Rate of Return Regulation 218§ 7.A.2. Price Cap Regulation 220§ 7.A.3. Rate Regulation as Markets Become Competitive 220

§ 7.B. The Telecommunications Act of 1996 222§ 7.B.1. Introduction 222§ 7.B.2. The Local Competition Provisions 224Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 225

§ 7.B.3. Jurisdiction to Implement the 1996 Act: Local Competition, National Regulation 230United States Telecom Ass’n v. FCC [USTA II] 233

§ 7.C. Unbundling, Interconnection, and Line-of-Business Regulation Under the 1996 Act 235§ 7.C.1. Identifying UNEs 235§ 7.C.1.a. Iowa Utilities Board 235AT&T Corp. v. Iowa Utilities Board 235

§ 7.C.1.b. After Iowa Utilities Board 239United States Telecom Ass’n v. FCC [USTA II] 242

§ 7.C.1.c. FCC Response to USTA II 248Unbundled Access to Network Elements: Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers 248

§ 7.C.2. Pricing Network Elements 252Verizon Communications Inc. v. FCC 254

§ 7.C.3. Interconnection 262§ 7.C.4. BOC Line of Business Restrictions 266

part three

Multichannel Video and Broadcasting

Chapter Eight · Multichannel Video Foundations 271Introduction 271§ 8.A. Paying for Television 271Coase, Why Not Use the Pricing System in the Broadcast Industry? 273

§ 8.B. Why Regulate? Are There Natural Monopolies? 276§ 8.C. Why Regulate? Implications for Broadcast 277Besen & Crandall, The Deregulation of Cable Television 278

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Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310–2360 MHz Frequency Band 285

§ 8.D. Who Regulates Cable Television? 289§ 8.E. Promoting Competition in MVPD Markets 294Alliance for Community Media v. FCC 295

Chapter Nine · Shared Content 303Introduction 303§ 9.A. Individual Programs 303§ 9.A.1. Compulsory Copyright Licenses 303§ 9.A.1.a. Cable Television 303§ 9.A.1.b. Direct Broadcast Satellite 306

§ 9.A.2. What Constitutes a Performance under Copyright Law? 310American Broadcasting Companies, Inc. v. Aereo, Inc. 310

§ 9.A.3. Syndicated Exclusivity and Network Nonduplication 318§ 9.B. Programs Grouped into Signals 320§ 9.B.1. Retransmission Consent 321Amendment of the Commission’s Rules Related to Retransmission Consent 322Amendment of the Commission’s Rules Related to Retransmission Consent 328

§ 9.B.2. Must-Carry 331§ 9.B.2.a. First Amendment Challenges to Cable Must-Carry 332Turner Broadcasting System, Inc. v. FCC [Turner I] 332Turner Broadcasting System, Inc. v. FCC [Turner II] 345

§ 9.B.2.b. DBS Carry One, Carry All 358§ 9.C. Programming Delivered à la Carte 362§ 9.D. The FCC’s Role in Digital Copyright Policy 364

part four

Antitrust and Structural Regulation of Media

Chapter Ten · Structural Regulation of Media 369Introduction 369§ 10.A. Structural Regulation of Broadcasting 369§ 10.A.1. Television Networks and Vertical Integration 370Schurz Communications, Inc. v. FCC 372

§ 10.A.2. Ownership Restrictions 379Prometheus Radio Project v. FCC [Prometheus I] 3832006 Quadrennial Regulatory Review — Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 397

§ 10.B. Structural Regulation of Cable Providers 405§ 10.B.1. Judicial Review of the FCC’s Cable Ownership Rules 406Time Warner Entertainment Co. v. FCC [Time Warner II] 407Comcast Corp. v. FCC 414

§ 10.C. Regulation of Vertical Foreclosure by MVPDs 418§ 10.C.1. The Initial Program Access Rules 419§ 10.C.2. Extensions of the Program Access Rules 420§ 10.C.3. Expansion of the Program Access Theory 422

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§ 10.C.3.a. Extension of the Program Access Rules to DirecTV 422General Motors Corp. and Hughes Electronics Corp., Transferors, and the News Corp. Ltd, Transferee, for Authority to Transfer Control 423

§ 10.C.3.b. MVPD Access to Buildings 428National Cable & Telecommunications Ass’n v. FCC 428

§ 10.C.3.c. Extension of the Program Access Rules to Terrestrially Distributed Programming 433Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements 433

Cablevision Systems Corp. v. FCC 441§ 10.D. MVPD Non-Discrimination Obligations 446

Comcast Cable Communications, LLC v. FCC 447§ 10.E. Spectrum Caps 453

Policies Regarding Mobile Spectrum Holdings: Expanding the Economic and Innovation Opportunities of Spectrum through Incentive Auctions 453

§ 10.F. Choice 468§ 10.F.1. Is More Always Better? 468Sunstein, The First Amendment in Cyberspace 468Posner, Bad News 474

§ 10.F.2. What Could the FCC Do About It? 482Waldman et al., The Information Needs of Communities: The Changing Media Landscape in a Broadband Age 482

Chapter Eleven · Antitrust and Merger Review 487Introduction 487§ 11.A. Merger Enforcement and Telecommunications Regulation 488§ 11.A.1. Background on Merger Policy 488Applications of Comcast Corp., General Electric Co., and NBC Universal, Inc. for Consent To Assign Licenses and Transfer Control of Licensees 490

§ 11.A.2. The SBC/Ameritech Proceeding 491Applications of Ameritech Corp., Transferor, and SBC Communications, Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95 and 101 of the Commission’s Rules 492

Separate Statement of Commissioner Harold Furchtgott-Roth Concurring in Part, Dissenting in Part 496

§ 11.A.3. Reconsidering the FCC’s Merger Review Process 501§ 11.A.4. The FCC’s Own Institutional Reforms 501§ 11.A.5. The Elusive Effort to Restrict the Scope of FCC Merger Review 503Statement of the Department of Justice Antitrust Division on Its Decision to Close Its Investigation of XM Satellite Radio Holdings Inc.’s Merger with Sirius Satellite Radio Inc. 505

Commission Approves Transaction between Sirius Satellite Radio Holdings Inc. and XM Satellite Radio Holdings, Inc. Subject to Conditions 508

§ 11.A.6. The Comcast/NBCU Proceeding 510

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Applications of Comcast Corp., General Electric Co. and NBC Universal, Inc. for Consent to Assign Licenses and Transfer Control of Licensees 510

§ 11.B. Antitrust in a Regulatory Thicket 522Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP 522

part five

The Internet

Chapter Twelve · Introduction and Evolution 529§ 12.A. The History and Architecture of the Internet 529§ 12.A.1. Basic Characteristics 531§ 12.A.2. Network Elements 533§ 12.A.3. Packet Switching and Addressing 534§ 12.A.4. Services 535§ 12.A.5. Layers 536

§ 12.B. Initial Principles of Internet Policy 537A Framework for Global Electronic Commerce 539Communiqué on Principles for Internet Policy-Making:OECD High Level Meeting on the Internet Economy 540

NTIA Announces Intent to Transition Key Internet Domain Name Functions 543

Chapter Thirteen · Universal Service: From Telephony to Broadband 545§ 13.A. Origins of Universal Service Policy 545§ 13.B. Equity and Efficiency in Subsidizing Universal Service: Ramsey Pricing versus Distributional Policy 547

§ 13.C. Universal Service After Divestiture 549§ 13.D. Universal Service After the 1996 Act 551§ 13.D.1. Access Charge Reform 552§ 13.D.2. Intercarrier Compensation Reform 553In re FCC 11-161 553

§ 13.E. Broadband Universal Service 561Federal-State Joint Board on Universal Service 562National Broadband Plan: Connecting America 565In re FCC 11-161 567

§ 13.F. A New Blank Slate: The IP Transition 578Technology Transitions 578

Chapter Fourteen · Broadband Jurisdiction and Structural Regulation 587Introduction 587§ 14.A. The Ancillary Jurisdiction Doctrine and the Past as Prologue? 588United States v. Southwestern Cable Co. 589FCC v. Midwest Video Corp. [Midwest Video II] 591

§ 14.B. Regulatory Characterization of Broadband Services 595AT&T Corp. v. City of Portland 596National Cable & Telecommunications Ass’n v. Brand X Internet Services 600

§ 14.C. Net Neutrality 614§ 14.C.1. The Broadband Internet Access Marketplace 614

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National Broadband Plan: Connecting America 615§ 14.C.2. Net Neutrality Policy (and Jurisdiction, Again) 619Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities 620

Service Rules for the 698–746, 747–762 & 777–792 MHz Bands 622Comcast Corp. v. FCC 628Verizon v. FCC 632

§ 14.D. Voice over Internet Protocol 653Minnesota Public Utilities Commission v. FCC 655Nuvio Corp. v. FCC 660American Council on Education v. FCC 664

§ 14.E. “Over the Top” Online Video Competition 668

part six

Direct Regulation of Content

Chapter Fifteen · Direct Regulation of Content Deemed Valuable 675Introduction 675§ 15.A. The Fairness Doctrine and Related Obligations 676§ 15.A.1. Tornillo and Red Lion 676Miami Herald Publishing Co. v. Tornillo 676Red Lion Broadcasting Co. v. FCC 678

§ 15.A.2. The FCC Abandons the Fairness Doctrine 685§ 15.A.2.a. The Fairness Doctrine Report 685Inquiry into the Commission’s Rules and Regulations Concerning the General Fairness Doctrine Obligations of Broadcast Licensees 685

§ 15.A.2.b. Syracuse Peace Council 693§ 15.A.3. The Personal Attack and Political Editorial Rules 696§ 15.A.4. Political Broadcasting 699Request of ABC, Inc. for Declaratory Ruling 700

§ 15.A.5. The Scarcity Rationale in Other Media 710Time Warner Entertainment Co. v. FCC 710Time Warner Entertainment Co. v. FCC 712

§ 15.B. Children’s Television 715Children’s Television Programming and Advertising Practices 716Policies and Rules Concerning Children’s Television Programming 721Policies and Rules Concerning Children’s Television Programming 723

Chapter Sixteen · Direct Regulation of Content Deemed Harmful 739Introduction 739§ 16.A. Indecency 740§ 16.A.1. Regulation of Broadcast Indecency 740FCC v. Pacifica Foundation 740Action for Children’s Television v. FCC [ACT III] 750Complaints Against Various Broadcast Licensees Regarding Their Airing of the “Golden Globe Awards” Program 764

FCC v. Fox Television Stations, Inc. 768FCC v. Fox Television Stations, Inc. 777

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§ 16.A.2. Regulation of Cable Indecency 780§ 16.A.2.a. Denver Area 781Denver Area Educational Telecommunications Consortium, Inc. v. FCC 782

§ 16.A.2.b. Playboy Entertainment 797United States v. Playboy Entertainment Group, Inc. 798

§ 16.A.3. Regulation of Indecency via Telephone 809Sable Communications of California, Inc. v. FCC 809Regulations Concerning Indecent Communications by Telephone 814

§ 16.A.4. Regulation of Internet Indecency 817Reno v. ACLU 818Ashcroft v. ACLU [Ashcroft II] 825ACLU v. Mukasey 832

§ 16.B. Violent Programming 839Violent Television Programming and Its Impact on Children 843

Epilogue

Chapter Seventeen · Why an FCC? 855Introduction 855A New Federal Communications Commission for the 21st Century 856Huber, Abolish the FCC and Let Common Law Rule the Telecosm 859Lessig, It’s Time to Demolish the FCC 864

Statutory Appendix 869

Conceptual Index and Telecommunications Glossary 943

CONTENTS xv

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Table of Materials

xvii

ACLU v. Mukasey (2008), 832Action for Children’s Television v. FCC[ACT III] (1995), 750

Unbundled Access to Network Elements:Review of the Section 251 UnbundlingObligations of Incumbent LocalExchange Carriers (2005), 248

Alliance for Community Media v. FCC(2008), 295

American Broadcasting Companies, Inc.v. Aereo, Inc. (2014), 310

American Council on Education v. FCC(2006), 664

Applications of Ameritech Corp.,Transferor, and SBC Communicat-ions, Inc., Transferee, for Consent toTransfer Control of CorporationsHolding Commission Licenses andLines Pursuant to Sections 214 and310(D) of the Communications Actand Parts 5, 22, 24, 25, 63, 90, 95 and101 of the Commission’s Rules (1999),492Separate Statement of CommissionerHarold Furchtgott-Roth Concurringin Part, Dissenting in Part (1999), 496

Applications of Comcast Corp., GeneralElectric Co. and NBC Universal, Inc.for Consent to Assign Licenses andTransfer Control of Licenses (2011),490, 510

Appropriate Framework for BroadbandAccess to the Internet over WirelineFacilities (2005), 620

Ashcroft v. ACLU [Ashcroft II] (2004),825

AT&T Corp. v. City of Portland (2000),596

AT&T Corp. v. Iowa Utilities Board(1999), 235

Benkler, Some Economics of WirelessCommunications (2002), 90

Besen and Crandall, The Deregulation ofCable Television (1981), 278

Broadcast Ownership Rules and OtherRules Adopted Pursuant to Section202 of the Telecommunications Act of1996, 2006 Quadrennial RegulatoryReview— Review of the Commission’s(2008), 397

Broadcast Renewal Applicants,Competing Applicants, and OtherParticipants to the ComparativeRenewal Process and to the Preventionof Abuses of the Renewal Process,Formulation of Policies and RulesRelating to (1989), 165

Cablevision Systems Corp. v. FCC(2011), 441

Changes in the Entertainment Formats ofBroadcast Stations (1976), 136

Children’s Television Programming andAdvertising Practices (1983), 716

Children’s Television Programming,Policies and Rules Concerning (1991),721

Children’s Television Programming,Policies and Rules Concerning (1996),723

Children’s Television Programming, seealsoViolent Television Programming

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Coase, Why Not Use the Pricing Systemin the Broadcast Industry? (1959), 59,273

Comcast Cable Communications, LLC,v. FCC (2013), 447

Comcast Corp. v. FCC (2009), 414Comcast Corp. v. FCC (2010), 628Comcast Corp., see also Applications ofComcast Corp.

Commercial Operations in the 3550–3650 MHz Band, Amendment of theCommission’s Rules with Regard to(2012), 111

Communiqué on Principles for InternetPolicy-Making: OECD High LevelMeeting on the Internet Economy(2011), 540

Comparative Broadcast Hearings, PolicyStatement on (1965), 142

Competitive Bidding for CommercialBroadcast and Instructional TelevisionFixed Service Licenses,Implementation of Section 309(j) ofthe Communications Act— (1998),174

Denver Area EducationalTelecommunications Consortium,Inc. v. FCC (1996), 782

Digital Audio Radio Satellite Service inthe 2310-2360 MHz Frequency Band,Establishment of Rules and Policies forthe (1997), 285

FCC v. Fox Television Stations, Inc.(2009), 768

FCC v. Fox Television Stations, Inc.(2012), 777

FCC v. Midwest Video Corp. [MidwestVideo II] (1979), 591

FCC v. Pacifica Foundation (1978), 740FCC v. WNCN Listeners Guild (1981),138

Federal-State Joint Board on UniversalService (1997), 562

Framework for Global ElectronicCommerce, A (1997), 539

General Fairness Doctrine Obligations ofBroadcast Licensees, Inquiry into theCommission’s Rules and RegulationsConcerning the (1985), 685

General Electric Co., see Applications ofComcast Corp.

General Motors Corp. and HughesElectronics Corp., Transferors, andthe News Corp. Ltd., Transferee, forAuthority to Transfer Control (2004),423

“Golden Globe Awards” Program,Complaints Against Various BroadcastLicensees Regarding Their Airing ofthe (2004), 764

Huber, Law and Disorder in Cyberspace:Abolish the FCC and Let CommonLaw Rule the Telecosm (1997), 859

Huber, Kellogg, and Thorne, FederalTelecommunications Law, 198

In re FCC 11-161 (2014), 553, 567Indecent Communications by Telephone,Regulations Concerning (1990), 814

Key Internet Domain Name Functions,NTIA Announces Intent to Transition(2014), 543

Kwerel and Felker, Using Auctions toSelect FCC Licensees (1985), 168

Lessig, It’s Time to Demolish the FCC,(2008), 864

Local Competition Provisions in theTelecommunications Act of 1996,Implementation of the (1996), 225

Lutheran Church–Missouri Synod v.FCC (1998), 160

Metro Broadcasting, Inc. v. FCC (1990),151

Miami Herald Publishing Co. v. Tornillo(1974), 676

Minnesota Public Utilities Commissionv. FCC (2007), 655

Mobile Spectrum Holdings: Expandingthe Economic and InnovationOpportunities of Spectrum throughIncentive Auctions, Policies Regarding(2014), 453

National Broadband Plan: ConnectingAmerica (2010), 565, 615

National Cable & TelecommunicationsAss’n v. Brand X Internet Services(2005), 600

National Cable & TelecommunicationsAss’n v. FCC (2009), 428

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NBC Universal, Inc., see Applications ofComcast Corp.

New Federal CommunicationsCommission for the 21st Century, A(1999), 856

Nuvio Corp. v. FCC (2006), 660Posner, Bad News (2005), 474President’s Council of Advisors onScience and Technology, Realizing theFull Potential of Government-HeldSpectrum to Spur Economic Growth(2012), 107

Program Access Rules and Examinationof Programming Tying Arrangements,Review of the Commission’s (2010),433

Prometheus Radio Project v. FCC[Prometheus I] (2004), 383

Promoting Efficient Use of SpectrumThrough Elimination of Barriers tothe Development of SecondaryMarkets (2004), 119

Red Lion Broadcasting Co. v. FCC(1969), 678

Redevelopment of Spectrum toEncourage Innovation in the Use ofNew TelecommunicationsTechnologies (1992), 81

Reno v. ACLU (1997), 818Request of ABC, Inc. for DeclaratoryRuling (1999), 700

Retransmission Consent, Amendment ofthe Commission’s Rules Related to(2011), 322

Retransmission Consent, Amendment ofthe Commission’s Rules Related to(2014), 328

Sable Communications of California,Inc. v. FCC (1989), 809

Schurz Communications, Inc. v. FCC(1992), 372

SBC Communications, Inc., seeApplications of Ameritech Corp.

Service Rules for the 698–746, 747–762 &777–792 MHz Bands (2007), 622

Simon Geller for Renewal of License ofWVCA-FM and GrandbankeCorporation for Construction Permit,Applications of (1985), 146

Sirius Satellite Radio Holdings Inc. andXM Satellite Radio Holdings, Inc.Subject to Conditions, CommissionApproves Transaction Between (2008),508

Sirius Satellite Radio Inc., see also XMSatellite Radio Holdings Inc.

Spectrum Policy Task Force Report(2002), 72

Sunstein, The First Amendment inCyberspace (1995), 468

Technology Transitions (2014), 578Time Warner Entertainment Co. v. FCC(1996), 710

Time Warner Entertainment Co. v. FCC(1997), 712

Time Warner Entertainment Co. v. FCC[Time Warner II] (2001), 407

Turner Broadcasting System, Inc. v. FCC[Turner I] (1994), 332

Turner Broadcasting System, Inc. v. FCC[Turner II] (1997), 345

United States Telecom Ass’n v. FCC[USTA II] (2004), 233, 242

United States v. American Telephone &Telegraph Co. (1982), 204

United States v. Playboy EntertainmentGroup, Inc. (2000), 798

United States v. Southwestern Cable Co.(1968), 589

Unlicensed Operation in the TVBroadcast Bands and AdditionalSpectrum for Unlicensed DevicesBelow 900 MHz and in the 3 GHzBand (2008), 98

Verizon Communications Inc. v. FCC(2002), 254

Verizon Communications Inc. v. LawOffices of Curtis V. Trinko, LLP(2004), 522

Verizon v. FCC (2014), 632Violent Television Programming and ItsImpact on Children (2007), 843

Waldman et al., The Information Needsof Communities: The ChangingMedia Landscape in a Broadband Age(2011), 482

XM Satellite Radio Holdings Inc.’sMerger with Sirius Satellite Radio Inc.,

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Statement of the Department ofJustice Antitrust Division on ItsDecision to Close Its Investigation of(2008), 505

XM Satellite Radio, see also SiriusSatellite Radio

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Copyright Permissions

Our sincere thanks go to the following copyright holders, who have granted permis-sion for us to reprint or excerpt copyrighted materials in this book:

Aspen Publishers, Inc., for permission to excerpt Federal Telecommunications Law byPeter W. Huber, Michael K. Kellogg, and John Thorne. Copyright 1992 by Peter W.Huber, Michael K. Kellogg, and John Thorne. All rights reserved.

Aspen Publishers, Inc., for permission to excerpt Federal Telecommunications Law,Second Edition, by Peter W. Huber, Michael K. Kellogg, and John Thorne. Copyright1999 by Peter W. Huber, Michael K. Kellogg, and John Thorne. All rights reserved.

Yochai Benkler and the Harvard Journal of Law and Technology for permission to ex-cerpt Yochai Benkler, Some Economics of Wireless Communications, 16 Harv. J.L. &Tech. 25 (2002).

Ronald Coase for permission to excerpt Why Not Use the Pricing System in the Broad-cast Industry? Testimony before the FCC (December 1959), reprinted in 4 Study of Radio& T.V. Broadcasting (No. 12,782) (1959).

The Duke University School of Law, Law and Contemporary Problems, Stanley Besen,and Robert Crandall, for permission to reprint The Deregulation of Cable Television, 44Law & Contemp. Probs. 77 (1981).

Thomas Krattenmaker and Lucas Powe, for permission to adapt various sections oftheir text, Regulating Broadcast Programming (1994). All rights reserved.

Lawrence Lessig for permission to reprint It's Time to Demolish the FCC, Newsweek(December 22, 2008, updated March 13, 2010).

Oxford University Press and Peter Huber for permission to excerpt Law and Disorderin Cyberspace: Abolish the FCC and Let Common Law Rule the Telecosm. Copyright1997 by Oxford University Press, Inc. All rights reserved.

Richard Posner, for permission to excerpt Bad News, The New York Times Book Re-view (July 31, 2005).

The University of Chicago, the Journal of Legal Studies, and Thomas W. Hazlett forpermission to reprint a figure from Thomas W. Hazlett & David W. Sosa, Was the Fair-ness Doctrine a “Chilling Effect”? Evidence from the Postderegulation Radio Market, 26J. Legal Stud. 294 (1997). Copyright 1997 by the University of Chicago.

The Yale Law Journal Company and William S. Hein Company for permission to ex-cerpt Cass Sunstein, The First Amendment in Cyberspace, 104 Yale L. J. 1757–1804 (1995).

xxi

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Preface

The theme of almost any law school casebook is apparent from the outset. An ad-ministrative law casebook, for example, pulls together materials about governmental ad-ministration. An antitrust law book evaluates the basic laws and judicial decisions thatprotect competition by limiting how and when firms can cooperate, engage in potentiallyanticompetitive behavior, and merge with one another. Thus, even though an adminis-trative law book will consider agencies as diverse as the Environmental Protection Agencyand the Federal Aviation Administration, and even though an antitrust law book willapply to industries ranging from real estate to computer software to supermarkets, it isnot difficult to describe the overarching themes that structure the set of materials coveredby the text.

The implicit logic of a telecommunications book, at least on first blush, may be harderto understand. Why should statutes and regulations related to broadcast television, cable,satellite, wireline telephony, cellular telephony, and the Internet all be considered in asingle volume? Do these communication mechanisms really have that much in common?

The challenge of capturing the story of telecommunications law is particularly inter-esting and important today because of technological convergence. This means that once-distinct technologies— for example, the traditional telephone infrastructure and thetraditional cable infrastructure— can provide very similar and substitutable services, in-cluding telephone service, cable television, and broadband Internet access. The questionof how to treat different technologies, be they telephone networks, cable networks, orwireless providers, can no longer be answered by reference to the service that those net-works titularly support. Given that this answer was often the way such policies developedin the past, this book can be read on two levels: (1) what is the best policy for telecom-munications networks of all kinds; and (2) in light of the legacy of policies long in place(and a statute first written in 1934), how can the administering agency (in almost allcases, the Federal Communications Commission) move towards the best policy (or finda second best one) if practical, legal, or political constraints limit its ability to get there?

Given the nature of technological convergence, it is hard to consider any one branchof telecommunications in isolation. It is the combination of broadcast, cable, telephone,and Internet regulation that together determine how wire, air, and other telecommuni-cations resources are allocated between all their myriad competing uses. Because almostany telecommunications resource can be put to more than one telecommunications use,telecommunications topics are necessarily interconnected. And, as noted above, today’sdecisionmakers are not writing on a clean slate, creating challenges insofar as decisionsof yesterday, such as how much wireless spectrum to dedicate to over-the-air televisionbroadcasts, are not easily reversed to address the needs of today— say, more spectrum forwireless broadband services.

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The topics addressed in this book are not only related in terms of basic technologies,but also they share common economic and institutional characteristics. On the economicfront, the range of technologies we discuss raises the question of whether competition iseither unworkable or undesirable. To give but one example, policymakers have long wor-ried that the economics of local wireline telephone service are such that either only onefirm can survive in the long run (“competition is unworkable”) or a single firm can pro-vide a given quality of phone service at lower total cost than can multiple competitors(“competition is undesirable”). Policymakers in this area therefore struggled with thequestion of whether regulation should displace competition as the principal mechanismfor ensuring good performance. Similar arguments that regulation might have advan-tages over competition arise in every telecommunications market. This is therefore an-other reason to consider all of these topics in a single conversation. On the institutionalside, the Federal Communications Commission has extensive regulatory authority overtraditional telephony, broadcast, cable television, and satellite services, and at least someresidual authority over all other telecommunications technologies. Thus, before we dis-cuss the substantive telecommunications policy issues, Chapters One and Two begin withthe basic economic and institutional issues that will be discussed throughout the book.

Now, some acknowledgments. This book grew out of an earlier book written by TomKrattenmaker, and so first and foremost our thanks to Tom for getting us started back in2001. Howard Shelanski and Phil Weiser were on previous editions, and their ideas andanalyses remain in these pages, for which we are deeply indebted. We also thank Doug Licht-man who was on the first two editions. Jack Balkin, Dale Hatfield, Karl Mannheim, Pre-ston Padden, John Roberts, Peter Shane, and Doug Sicker also have contributed significantlyto this project over the years. We owe each sincere thanks for helping us think throughissues. Our thanks go to Stanley Besen and Lucas Powe as well. While their contributionscame to us through Krattenmaker, those suggestions nevertheless benefit the book still today.Sincere thanks, too, to the family at Carolina Academic Press. Linda, you especially havebeen supportive of our work on this project; we genuinely appreciate everything you dofor us and our readers. For this edition we owe a particular debt to a few people whosecareful reading of the text helped it immeasurably: Julie Moushon and Balfour Smithfrom Duke Law School and Duke Law students Ben Chalfin, Matthew Craig, Daniel Stock-ton, and Bill Warren.

One final word before we step aside: the materials included in this book have beenruthlessly edited for style, length, and clarity. To avoid clutter, we have left almost all ofthose changes unmarked. While we are confident that none of our edits altered the mean-ing of the relevant passages, we do want to warn readers that the materials have been ed-ited so as to maximize their value in the educational setting and, thus, attorneys lookingto cite materials in court documents are advised to look to the original sources beforequoting any of the materials excerpted here.

With that, we welcome you to the text. We hope you find your study of telecommu-nications law to be a rewarding one.

Stuart Benjamin and Jim Speta

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