By Owen D. Kurtin

This month we examine the net neutrality, franchise relief and media concentration debates. Anyone who thinks the satellite industry does not have a dog in this fight is wrong.

Net neutrality refers to whether broadband network operators must grant non-discriminatory access to all content providers. The emergence of two major incumbent telephone companies, following a wave of consolidating merger and acquisition activity, to compete with the already consolidated cable operators, has placed the U.S. broadband landline infrastructure in the hands of several major players. The U.S. Federal Communications Commission (FCC) assisted this process by approving the mergers, by ruling that both digital subscriber line (DSL) and cable modem service are "Information Service" under the 1996 Telecommunications Act and therefore not subject to the non-discriminatory access regimes imposed on basic telephone and cable service and by decreeing that both services would be treated with "regulatory parity," notwithstanding the different technological platforms involved.

Telephone companies have asserted their right to price access or offer faster connections for some content providers to their networks, reasoning that they are entitled to recoup their capital expenditures in building out and maintaining those networks and investing in new technologies. Content providers object, citing the Internet’s low and non-discriminatory entry barriers as the reason for its unparalleled growth as a source of communication, information storage and information dissemination throughout the last decade and raising the fear that new price and connection speed barriers will prevent the next generation of companies like Google, Yahoo! And eBay from taking root.

Although major telephone companies and cable operators may be on the same side of the net neutrality debate, they part company on "franchise relief." Cable operators’ local franchise authority confers uponthem preferential regulatory status to offer subscription video service, subject to rules intended to assure the public access and interest. Telephone companies want to dismantle cable operators’ franchise advantage. In June, the U.S. House of Representatives passed anew telecommunications bill called the "Communications Opportunity, Promotion and Enhancement Act."

The bill rejected net neutrality protections for content providers, but accepted franchise relief by proposing to facilitate entry of telephone companies into the video market through the creation of a national franchising process. Senate action is pending.

The FCC has launched a new regulatory proceeding to liberalize media concentration rules, the rules governing how many broadcast and radio stations and other media in a given national or local market anyone can own. Liberalized media ownership rules would facilitate media industry consolidation. The FCC tried to liberalize the rules in 2003, but public and congressional opposition to the potential reduction of diversity of readily available content came from both sides of the political spectrum, and a U.S. Court of Appeals decision nullified the FCC rulemaking.

These three currents of terrestrial telecommunications and media policy intersect at the grail of triple-play offerings of voice, data and video broadband service. Net neutrality is a debate over content providers’ access to distribution channels and the continued growth of the Internet versus the right of network operators to be fairly compensated for their capital investments. The availability of broadband Internet content will figure in arguments of media ownership concentration liberalization proponents that content diversity will not be endangered by media consolidation. Franchise relief would presumably increase video subscriber choice and promote content diversity. At the heart of the debates are opposing visions of telecommunications as a service in the nature of a public utility versus the private, competition-based paradigm.

Satellite service also offers a triple play, and satellite operators of fixed and mobile, telecommunications and broadcast, and other services should be wary of sitting on the sidelines while terrestrial service hammers out a new generation of access and content rules that takes scant account of our sector. These may be the lazy days of summer, but we should not be caught napping.