[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION

                                ________

       SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT 
                             APPROPRIATIONS
                   JOSE E. SERRANO, New York, Chairman
 CAROLYN C. KILPATRICK, Michigan    RALPH REGULA, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER,      MARK STEVEN KIRK, Illinois
Maryland                            RODNEY ALEXANDER, Louisiana
 DEBBIE WASSERMAN SCHULTZ, Florida  VIRGIL H. GOODE, Jr., Virginia
 PETER J. VISCLOSKY, Indiana        JO BONNER, Alabama            
 ROBERT E. ``BUD'' CRAMER, Jr.,     
Alabama                             
 MAURICE D. HINCHEY, New York       
 ADAM SCHIFF, California            

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
      Dale Oak, Bob Bonner, Karyn Kendall, and Francisco Carrillo,
                           Subcommittee Staff

                                ________

                                 PART 9

  PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS TO CABLE TELEVISION

                                   S

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 45-222                     WASHINGTON : 2008

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania       JERRY LEWIS, California
 NORMAN D. DICKS, Washington        C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia    RALPH REGULA, Ohio
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JAMES T. WALSH, New York
 JOSE E. SERRANO, New York          DAVID L. HOBSON, Ohio
 ROSA L. DeLAURO, Connecticut       JOE KNOLLENBERG, Michigan
 JAMES P. MORAN, Virginia           JACK KINGSTON, Georgia
 JOHN W. OLVER, Massachusetts       RODNEY P. FRELINGHUYSEN, New Jersey
 ED PASTOR, Arizona                 TODD TIAHRT, Kansas
 DAVID E. PRICE, North Carolina     ZACH WAMP, Tennessee
 CHET EDWARDS, Texas                TOM LATHAM, Iowa
 ROBERT E. ``BUD'' CRAMER, Jr.,     ROBERT B. ADERHOLT, Alabama
Alabama                             JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       JOHN E. PETERSON, Pennsylvania
 LUCILLE ROYBAL-ALLARD, California  VIRGIL H. GOODE, Jr., Virginia
 SAM FARR, California               RAY LaHOOD, Illinois
 JESSE L. JACKSON, Jr., Illinois    DAVE WELDON, Florida
 CAROLYN C. KILPATRICK, Michigan    MICHAEL K. SIMPSON, Idaho
 ALLEN BOYD, Florida                JOHN ABNEY CULBERSON, Texas
 CHAKA FATTAH, Pennsylvania         MARK STEVEN KIRK, Illinois
 STEVEN R. ROTHMAN, New Jersey      ANDER CRENSHAW, Florida
 SANFORD D. BISHOP, Jr., Georgia    DENNIS R. REHBERG, Montana
 MARION BERRY, Arkansas             JOHN R. CARTER, Texas
 BARBARA LEE, California            RODNEY ALEXANDER, Louisiana
 TOM UDALL, New Mexico              KEN CALVERT, California
 ADAM SCHIFF, California            JO BONNER, Alabama                 
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              

                  Rob Nabors, Clerk and Staff Director

                                  (ii)


   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2009


                                     Wednesday, September 17, 2008.

 PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS TO CABLE TELEVISION

                               WITNESSES

MONICA SHAH DESAI, CHIEF OF THE MEDIA BUREAU, FEDERAL COMMUNICATIONS 
    COMMISSION
BARBARA POPOVIC, EXECUTIVE DIRECTOR, CHICAGO ACCESS CORPORATION, ON 
    BEHALF OF THE ALLIANCE FOR COMMUNITY MEDIA AND THE ALLIANCE FOR 
    COMMUNICATIONS DEMOCRACY
HOWARD SYMONS, PARTNER, MINTZ LEVIN, ON BEHALF OF THE NATIONAL CABLE & 
    TELECOMMUNICATIONS ASSOCIATION
MICHAEL MAX KNOBBE, EXECUTIVE DIRECTOR, BRONXNET
    Mr. Serrano. Good morning to all. The bells indicate that 
there are votes, as there always are. So what we are going to 
do is we are going to make our opening statements, and then we 
will go vote, and then we will be back. And let's just hope 
that the folks across the way today are not in the mood they 
were in yesterday where there might be a motion to adjourn 
every 5 minutes. But that is democracy at its best.
    The subcommittee will come to order.
    And we want to welcome you. Mr. Kirk is acting as the 
ranking member today in place of Mr. Regula. And I have to make 
a wise-guy comment that maybe it is a picture of things to 
come.
    I welcome you to this hearing of the Financial Services and 
General Government Subcommittee. Today, the subcommittee will 
hear testimony on the subject of public, educational, and 
governmental, or PEG, access to cable television. Our witnesses 
represent a broad range of knowledge and perspectives on this 
topic, so we look forward to a spirited and informative 
discussion.
    By way of background, under Federal law, local entities may 
grant franchises to cable operators and may require the 
designation of PEG channels as part of these franchising 
agreements. These local franchising authorities may also 
require cable operators to provide services, facilities, or 
equipment in support of PEG broadcasting. The intent of this 
Federal law is to provide the opportunity for cable operators 
to give back to the community in exchange for being granted the 
valuable right to serve that community and to use public rights 
of way to deliver those services.
    By granting this authority, Congress recognized that PEG 
programming is in the public interest and essential to our 
communities as an outlet for free speech, local information and 
opinions, and emergency communications. PEG supports our 
democratic ideals by helping to develop a well-informed and 
well-educated society. It benefits all of us to support and 
encourage PEG programming.
    Unfortunately, it is not always easy for a PEG broadcaster 
to get on the air, and at times, it is not easy for a viewer to 
view PEG programs. There appear to be many reasons for this.
    Technological and financial challenges for PEG broadcasters 
are often imposing, and new technical challenges are becoming 
apparent as we move toward 100 percent digital television. 
Barriers to PEG programming may be related to whether or not 
cable operators continue to make PEG channels as accessible as 
they have in the past.
    For example, in some areas of the country, cable providers 
have proposed to move PEG channels to digital format well in 
advance of next February's transition date, which mean that PEG 
channels may be harder to find on a channel dial. And viewers 
who still rely on analog signals must rent or buy converter 
equipment now if they want to continue to receive the same 
level of access to PEG channels.
    As another example, AT&T is offering all PEG channels at a 
single channel location, where they would be accessed through a 
menu using Web-based technology. Many concerns have been raised 
that this approach makes the channels more difficult to view, 
offers inferior quality and results in the loss of features 
such as closed captioning.
    I want the subcommittee to know that AT&T was invited to 
testify at this hearing, but they told us less than a week ago 
that they couldn't find someone to testify. I, frankly, find it 
incredible and disappointing that a company the size and 
stature of AT&T can't find or won't find a suitable witness for 
a hearing of this important public policy issue. AT&T's recent 
actions relating to PEG channels go to the heart of many of the 
concerns that will be raised today.
    Let the record show that I consider their decision not to 
send a witness to be indicative of the company's apparent 
disregard of the importance of PEG to local communities.
    Regulatory issues have also raised issues relating to 
support for PEG access. Recent Federal Communications 
Commission franchising rules affect the terms by which local 
franchising authorities can establish cable operator 
obligations for PEG programming. These rules could make it 
harder, for example, to require cable operators to help local 
government or colleges operate TV production facilities. I look 
forward to hearing what the FCC and other witnesses have to say 
about these recent regulatory actions.
    Finally, I think it is extremely important to note the 
current trend away from local authority over cable franchises 
and towards statewide franchise laws. These statewide laws in 
many cases override local franchising authorities, including 
the franchise agreements relating to PEG. As a result, cable 
operators may reduce their support for PEG or even close PEG 
facilities. In fact, a recent survey by the Alliance for 
Community Media indicates that many PEG centers have 
experienced reductions in funding and other forms of support 
under statewide franchising. This is troubling, as I am 
sympathetic to the importance of local community influence over 
PEG access requirements. These local authorities have the most 
thorough understanding of the needs of their communities and of 
how PEG can help address those needs.
    With that, I would like to recognize my friend, Mr. Kirk. 
In fact, I should recognize him in Espanol.
    [Speaking in Spanish.]
    Mr. Kirk. I want to thank my friend for having this 
hearing. It is great to work with him, and I hope it is the 
shape of things to come.
    Although I will criticize, his accent sounds [speaking in 
Spanish]. So if you can just fix some of your accent, I think 
your Spanish would be that much better, Mr. Chairman.
    Mr. Serrano. Do you want me to sing it for you?
    Mr. Kirk. On this hearing, also, if there was any thought 
by AT&T that the Republican member here at the hearing would 
help them out, let me disabuse them now. I spoke with a local 
reporter, and after talking to some of my communities, my view 
on AT&T was: And the horse you rode in on, because I think 
their proposal falls way short of the mark. And I am very glad 
that Barbara Popovic is here representing a number of our 
communities, and Howard Symons is here as a local team.
    We need cable television for more than watching the White 
Sox beat the Yankees.
    Mr. Serrano. This relationship is not getting off to a good 
start.
    Mr. Kirk. But I understand that something is wrong with the 
world when McCain is up and so are the Cubs at this point.
    Mr. Serrano. Yes.
    Mr. Kirk. On this, I think this committee should take some 
action on this. It does appear that AT&T is in direct violation 
of Illinois law. And so whether it is in Springfield or in 
Washington, we should fix this to make sure that there is a 
very convenient place, especially for our seniors, to find what 
is happening in their local community. And especially, this is 
something so important that I breeze through local access 
cable, like everyone else does, except when we are doing a 
zoning or other issue related to my neighborhood, and then we 
are locked on this, like everyone else, and to make sure that 
people can rapidly participate in their local democracy is what 
this is all about.
    I will say, on another note, I am very surprised we are 
holding a hearing on this topic in this committee at this time. 
The Congress has taken itself out of the game of conducting 
legitimate oversight over what is the number one story in the 
country right now, which is the bailout of several major 
financial institutions in the country with next to no oversight 
by the elected representatives of the American people.
    We have now seen a bailout of Bear Stearns at $29 billion; 
Fannie Mae and Freddie Mac at $200 billion; AIG at $85 billion; 
and a pending vote in the House later on tomorrow of the 
Detroit automakers at $25 billion. That is $339 billion going 
out of the Treasury with no oversight by the elected 
representatives of the American people.
    This is a Congress controlled by Democrats, and yet the 
Bush administration is in complete control with almost no 
oversight. And we have a real problem in this House. Much of 
this, many of these subjects are governed by the Ways and Means 
Committee, and yet we have a politically crippled chairman who 
may or may not be able to get anything through the House given 
his growing legal problems, and a Senate Appropriations 
chairman that frankly is not physically up to the job anymore.
    And so I look at the work of our committee, and I see a 
number of words: apathetic, benumbed, comatose, dormant, 
lackadaisical, lethargic, slumberous. I particularly like 
hebetate. But I might describe the best word for our committee 
is torpid, which is physically and mentally inactive.
    The Appropriations Committee has not done this small amount 
of work since fiscal year 1946, of doing no major bill of any 
kind by this date. It is amazing that a political party, the 
Democratic party, that would seek to have some sort of 
oversight on the number one issue facing the American people, 
and yet it is utterly inactive with $339 billion going out of 
the Treasury. The number one goal, I think, of the Federal 
Government is to defend the dollar, and I don't see a defense 
of the dollar by the executive branch or an utterly inactive 
legislative branch.
    It would seem, with how Ways and Means is crippled and how 
Senate Appropriations is crippled, that two very capable 
leaders, the chairman and his chairman, who are not crippled, 
ought to lead the charge of having legislative branch oversight 
over what is going on.
    So, Mr. Chairman, I am completely with you on nailing AT&T 
over what they are doing over public access. But I would hope 
that very rapidly, since you are completely capable of this job 
and this is the Financial Services Subcommittee and hundreds of 
billions of dollars are going out the door, that we move off 
our procurate stance here and get on with the job of 
legislative oversight over financial services.
    I yield back.
    Mr. Serrano. I thank the gentleman for his statement. I 
thank him for the words he just taught me. As you know, I don't 
know most of these words. English is a second language to me. 
That is something I share with President Bush.
    Mr. Kirk. I think we should ``edumicate'' everyone.
    Mr. Serrano. We will go to take our vote, but you did bring 
up interesting issues. And you would be shocked that I am not 
shocked that you agree with us on this whole cable issue. You 
also may not be shocked that this subcommittee is trying to 
find out what role it plays in all of these bailouts. I suspect 
that some day we will have to pay for them. And so your concern 
is as legitimate as it can be.
    I must say, however, in closing, that the largest problem 
we have with the lack of appropriations bills, which frustrates 
me--I mean, I didn't become a chairman not to get at least a 
pen from the President or a certificate for a bill. And I may 
not see that--is that a President who for years thought it was 
okay to spend money, and I agree with him, now in the last 2 
years has decided to veto any bill that spends $1.50 on 
domestic programs. That is the number one reason why we don't 
have bills. And you and I look forward to next year and to the 
rest of this year, whatever is left of it, to ask those 
questions.
    And one may say, well, as a Democrat you are supposed to 
answer him in a different way. No. I myself am asking my 
leadership, what role would this subcommittee and this 
committee take? Will it be like the war where we just print 
money in the basement?
    Mr. Kirk. Right. My hope is that you----
    Mr. Serrano. And let me give you my most profound and most 
sarcastic comment of the week and one I have used for a while 
now: When a lady getting $60 a month for food stamps is singled 
out as being in that position because she cannot deal with her 
own personal responsibility, that is acceptable; when people 
rip us off for a couple hundred billion dollars, it is just a 
glitch in the economy.
    Mr. Kirk. And my hope is that you haul the Chairman of the 
Securities and Exchange Commission and the Secretary of the 
Treasury before the committee that signs their paycheck.
    Mr. Serrano. And on that note, before we leave, this 
committee--and the staff behind you can clue you in on it--this 
committee found itself asking the SEC to take more money to 
hire more people to do the oversight. We have two agencies, the 
other one being the Consumer Product Safety Commission, telling 
us we really don't need any more money.
    Mr. Kirk. You don't need to get me started on the 
incompetence of one of those officials.
    Mr. Serrano. We will go vote and we will return.
    [Recess.]
    Mr. Serrano. We apologize for the interruptions. It is 
democracy at its best and the final days of this session, so it 
is going to be like that for a while.
    We have a lot of material to cover and many people to hear 
from during this hearing, so I ask that each witness strictly 
observe the 5-minute maximum for their opening statements. Your 
complete written statement will be submitted for the record.
    We will hear first from Monica Desai--I want to make sure 
that we are pronouncing names correctly here; I hate it when 
people call me ``Serriano''--chief of the media bureau of the 
Federal Communications Commission.
    Then I will recognize Barbara Popovic, executive director 
of the Chicago Access Network, who is testifying on behalf of 
the Alliance for Community Media.
    The third witness to testify will be Howard Symons, a 
partner at the law firm of Mintz Levin, who is testifying on 
behalf of the National Cable & Telecommunications Association.
    And, finally, we will hear from Michael Max Knobbe, 
executive director of BronxNet, well situated within that 
fabulous 16th Congressional District in the Bronx, New York.
    You are first.
    Ms. Desai. Good morning, Chairman Serrano, and members of 
the subcommittee. Thanks for inviting me here today to discuss 
public, educational and governmental access to cable 
television.
    Promoting localism and diversity are two fundamental goals 
underlying the Commission's media policies. PEG access promotes 
both. The Commission recognizes the importance of PEG access in 
fostering choices for local and diverse programming in 
communities.
    Sections 611 and 621 of the Communications Act allow local 
franchising authorities to require cable operators to set aside 
channels for public, educational or governmental use. PEG 
channels are permitted but not mandated by Federal law. Rather, 
the decision to require the carriage of PEG channels is one 
Congress left solely to the LFA.
    The Commission's rules related to PEG access reflect the 
specific authority granted by the Communications Act. For 
example, Section 623 of the Communications Act requires cable 
systems to carry on their basic service tier any PEG channels 
required by the LFA. Section 76.901 of the Commission's rules 
defines the basic service tier as including, among other 
signals, any PEG programming required by an LFA.
    Under the Communications Act, LFAs may impose reasonable 
franchise obligations to support PEG. Under Section 611, an LFA 
may require that channel capacity be designated for PEG use; 
may require rules and procedures for the use of their PEG 
channels; and may enforce any franchise requirements regarding 
the providing or use of the channel capacity which relate to 
PEG.
    The Communications Act provides that the franchise fees 
paid by a cable operator for any given system may not exceed 5 
percent of gross revenues. In Section 622, Congress 
specifically excluded from the term ``franchise fee'' any 
capital costs which are required by the franchise to be 
incurred by the cable operator for public educational or 
governmental access facilities.
    Accordingly, capital cost payments, such as facilities and 
equipment, are not subject to the 5 percent franchise fee cap, 
while noncapital costs, such as salaries and operating costs, 
by statute must be included in calculating the fee.
    The Communications Act permits LFAs to require adequate 
assurance that cable operators will provide adequate PEG access 
channel capacity, facilities, or financial support. The 
Commission has concluded that completely duplicative PEG and I-
NET requirements imposed by the LFA pursuant to this authority 
would be unreasonable. The Commission has also found it would 
be unreasonable for an LFA to require a new entrant to provide 
PEG support in excess of the incumbent cable operator's 
obligations.
    The Commission has not adopted standardized terms for PEG 
channels, agreeing with LFAs that they are free to establish 
their own requirements for PEG, as set forth in the Act.
    The Commission has continued to monitor cable franchising, 
and especially the increased adoption of franchising laws at 
the State level. The Communications Act requires cable 
operators to offer local broadcast channels and PEG channels on 
the basic service tier. Under Section 623, the basic service 
tier must include PEG access programming required by the 
franchisee to be provided to subscribers. The Commission's 
regulations state that the basic service tier shall include, at 
a minimum, all local broadcasting signals and any PEG 
programming required by the franchise to be carried on the 
basic tier. It has come to our attention that some programmers 
are moving PEG channels to a digital tier or are treating them 
as on-demand channels. We are concerned by these practices. We 
believe that placing PEG channels on any tier other than the 
basic service tier may be a violation of the statute.
    Subjecting consumers to additional burdens to watch their 
PEG channels defeats the purpose of the basic service tier. We 
believe it is important to ensure that consumers are able to 
get access equally to all channels belonging on the basic 
service tier, and that this should be the case regardless of 
what type of system the channels are being carried on.
    In conclusion, the Commission recognizes the importance of 
PEG programming. We will continue to enforce the statutory 
framework Congress enacted to allow adequate PEG support 
without overburdening cable operators and their customers. We 
look forward to working with the PEG community to address any 
challenges to PEG access.
    I look forward to answering your questions.
    [The information follows:]

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    Mr. Serrano. Thank you.
    Ms. Popovic.
    Ms. Popovic. Chairman Serrano, thank you for the invitation 
to come here today.
    Representative Kirk, I really appreciate your comments 
earlier and your work on behalf of the residents of Illinois.
    I am Barbara Popovic, executive director of CAN TV in 
Chicago, and I am representing Alliance for Community Media and 
Alliance for Communications Democracy today. These are two 
national organizations that are devoted to public educational 
and government access, PEG access.
    I have been privileged to work through the years with 
public officials, with the vision to recognize the importance 
of giving voice to the local communities.
    So I particularly want to thank you, Chairman Serrano, 
because I know you have that vision in BronxNet, with the 
creation of BronxNet.
    PEG access exists because of regulations that stem from the 
1948 Cable Act, but the FCC's video franchising orders green 
light a major regulatory shift while failing to safeguard PEG, 
ignoring localism and diversity goals mandated by Congress. We 
are addressing this issue today because, as appropriators, the 
FCC's role in this is your business.
    The FCC's video franchising proceeding contributed to 
passage of regressive state laws around the Nation. These laws 
strip away local authority, weaken consumer protection, limit 
buildout, and undermine PEG access. As cable operators opt into 
these State laws, we are seeing a reduction in preexisting PEG 
obligations of incumbents, like studio closures in Michigan, 
Indiana, and other States.
    After 8 years of doing local programming, Sheriff David 
Lane of Porter County, Indiana had his program unceremoniously 
shut down by Comcast when it closed all of its northern Indiana 
studios after passage of Indiana State law. Sheriff Lane said, 
``I've always thought that the organizations with whom we 
partnered, the nonprofits that are out there every day trying 
to improve the quality of life in northern Indiana, lost the 
most when we lost our program.''
    The need for local channels hasn't changed. If anything, 
the need is stronger than ever. The FCC knows that. It has held 
hearings all over the country about the lack of localism in 
broadcast television. But take a walk down Main Street America. 
In many towns, you will find that the only local television 
channel is a PEG channel. It is the go-to place for emergency 
alerts, community festivals, health education, school closing 
information, and local election debates.
    I am disappointed AT&T didn't show up here today as a 
witness, because the public programming they are carrying is 
marginalized on its U-Verse system. Congressional Research 
Services' September 5th report states that AT&T has chosen not 
to make PEG programming available to subscribers in the same 
fashion that it makes commercial programming available. 
Instead, AT&T treats PEG contents the same way it treats 
Internet traffic. The CRS report details the deficiencies of 
AT&T's PEG product. Suffice it to say AT&T consigns PEG 
channels to a format that is inferior to commercial channels in 
virtually every way that matters to a viewer.
    AT&T representatives have repeatedly acknowledged these 
deficiencies, but claim the PEG product is a work in progress. 
So why wait?
    My written testimony includes an independent engineering 
study that shows PEG channels can be treated equally on systems 
like AT&T's with readily available technology. Where the laws 
exist to prevent unequal treatment of PEG, the only reason it 
continues is government's failure to say three simple words: 
Just do it.
    Here is a guide being distributed in the Chicago suburbs, 
and there are about 350, close to 400 channels here, and you 
don't see a single listing of a PEG channel. There will be no 
PEG programming in any electronic program guide. And despite 
the fact that Illinois law prohibits this from happening, 
Representative Kirk, in your district, the shows on hurricane 
relief that you are working on, the programs that your local 
constituents do, gone, nowhere; no one will find them.
    The need--excuse me. The bottom line, AT&T, the company 
that promotes choice in cable franchising, is giving viewers no 
choice when it comes to PEG. This is the 21st century, and 
there are great technological advancements with the potential 
to serve the public good. No one can convince me that the only 
way we can see technological advancement in this country is to 
leave the people behind.
    Chairman Serrano and members of the committee, I speak to 
you as appropriators. You fuel the engine that drives our 
government. And when it comes to PEG access, we are headed in 
the wrong direction. We urge this committee to prohibit funds 
from being used to implement or enforce the FCC's video 
franchising orders, compel the FCC to reconsider these orders 
in light of the adverse effect on PEG, and ask the GAO to 
conduct a study to get to the bottom of the harm that has come 
to PEG from recent regulatory changes.
    My written testimony includes steps we urge Congress to 
take to help keep PEG healthy in the future. Thank you for the 
opportunity to testify.
    [The information follows:]

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    Mr. Serrano. Thank you.
    Mr. Symons.
    Mr. Symons. Thank you, Mr. Chairman and members of the 
committee. And thank you for the invitation to appear.
    Mr. Chairman, my father grew up at 176th Street and Tremont 
Avenue, so it is a special pleasure to be here before you 
today.
    Mr. Serrano. It is nice of you to score those points.
    Mr. Symons. Thank you for recognizing that, too, Mr. 
Chairman.
    I would just like to make a couple of points in my oral 
presentation. First, cable has long supported public access 
programming. Over three decades of support include millions of 
dollars annually for studios and other training; channels, 
sometimes as many as 20, on cable systems or public access 
programming; and service to schools and libraries. Cable is 
very proud of its commitment to public access programming. We 
think it helps distinguish us in the marketplace as well as 
serve the community.
    The good news for PEG programmers and for subscribers today 
is that cable intends to continue its commitment to public 
access programming and continue to fund public access. In the 
digital environment, there is no less of a need for public 
access programming than there has been historically in an 
analog world.
    Cable also remains the leading PEG supporter among 
multichannel video programming distributors. You have heard 
from Ms. Popovic, and you yourselves have mentioned AT&T, but 
other multichannel providers that we compete with don't have 
the same level of commitment to public access programming. 
Satellite services like DirecTV don't have any local access 
programming. And in every case, even Verizon's public access 
programming requires everyone to have a set top box to receive 
it.
    It is undeniable that the world is going digital, and we 
want to help public access providers that make that transition 
as well. Cable alone is the only provider of analog service 
right now, but that is going to change, and it is changing. Not 
only are broadcasters going digital, but cable is going 
digital, and cable programming is going digital.
    Rather than leaving public access programming groups with 
increasingly fewer number of analog channels, we want to work 
with PEG programmers to bring them into the digital age, and 
make sure that our digital customers, which represent a 
majority of our cable customers today, 60 percent are digital, 
make sure that they have access to public access and 
educational and governmental programming as well.
    I can assure you that all PEG channels will remain on the 
basic service tier where required by the franchising authority 
as required by the Cable Act. Where boxes are necessary, our 
companies have engaged in a variety of programs to make sure 
those boxes are readily available to consumers.
    The end result is going to be more channels, better 
quality, features and interactivity that aren't available today 
in an analog world. We think that is a plus for all consumers, 
and we think the greater competitiveness of cable that results 
from the digital transition of cable programming will benefit 
even analog customers who will find that the cable system works 
better and delivers more services.
    We believe that PEG can remain a valuable part of cable 
programming, and we commit to working with local governments 
and to the public access community to make sure that happens.
    Thank you again for inviting me to speak with you today, 
and of course look forward to any questions.
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    Mr. Serrano. Thank you.
    Mr. Knobbe.
    Mr. Knobbe. Good day. I am Michael Max Knobbe, executive 
director of BronxNet.
    Thank you, Chairman Serrano, and members of the 
subcommittee, for focusing on important issues that impact 
communities in terms of democracy, education, diversity, 
locally generated content, and access to technology.
    Chairman Serrano, you consistently and effectively 
demonstrate tremendous leadership and courage in representing 
the people of the Bronx with what will be 40 years of public 
service.
    The robust PEG environments in New York City and other 
parts of the New York State can be fostered by State 
regulations on franchising which encourage and allow for local 
authority and in fact require PEG programming. At BronxNet, a 
voice is given to those who have no access to traditional media 
by providing training and media production and access to 
technology. This is democracy in a digital age.
    Brooklyn Community Access TV, QPTV, Manhattan Neighborhood 
Network, Staten Island TV, and BronxNet provide locally 
produced content on the public's channels that reflect the 
diversity of New York City. Together, New York City's public 
access centers have provided media production training to more 
than 20,000 people and have cable casts of over 80,000 hours of 
original local programming a year. In a city where 170 
languages are spoken, residents can find content in Spanish and 
English, and everything from Urdu to Garifuna, to Albanian, to 
American Sign Language on PEG.
    BronxNet produces award winning programming by, for, and 
about the Bronx. Locally produced programs concerning health, 
education, public affairs, arts and culture inform the public 
and help connect the Bronx to the world.
    For example, BronxNet teamed up with Centro de Estudios 
Puertorriquenos of Hunter College and the Bronx Historical 
Society to produce Migration, the Puerto Rican Experience, the 
first in a series about the Puerto Rican people in New York 
City.
    The BronxNet Training Program for Future Media 
Professionals has provided internships to over 1,000 high 
school and college students. Our partnerships, training for the 
public and students, and locally generated content contribute 
to community development through media.
    BronxNet and all the PEG centers that serve New York City 
exemplify the vision that Congress has for PEG access. We are 
fortunate that, so far, reasonable franchises have been 
negotiated with telecommunications companies entering the New 
York City market. However, all of this is in jeopardy because 
of FCC orders on video franchising through legislation passed 
in 19 States preempting local control and other problems.
    Media consolidation diminishes the local voice and leads to 
homogenous, centralized programming. You won't see City 
University of New York basketball and other athletics on ESPN; 
you will see them on PEG channels.
    Cable operators are required by Federal law to carry PEG 
programming on the basic tier of services. Unfortunately, in 
many States, operators will exile PEG channels to a digital 
Siberia, not anywhere near the basic tier. This practice is 
known as channel slamming. Charter Communications, Comcast, 
Bright House, and Time Warner are moving PEG channels into the 
upper 300s to 900-channel block in parts of the country.
    When Comcast attempted to channel slam in Michigan, a 
Federal court found that the Comcast's argument was flawed and 
issued a temporary restraining order while the matter is being 
further litigated.
    In addition to channel slamming, signal degradation and 
interior deployment for PEG channels, some cable providers 
require the purchase or rental of additional equipment to view 
PEG channels. In New York, New Jersey, Michigan, Connecticut, 
and other States, analog cable customers will have to pay an 
extra monthly fee ranging from $4.50 to $6.50 to receive PEG 
channels. This discriminatory practice pushes what is intended 
to be open, accessible, and inexpensive programming outside the 
reach of many consumers.
    We cannot provide PEG services if our hands are tied by 
State legislatures, the FCC, and cable operators. We support 
the Alliance for Community Media's three requests to this 
subcommittee.
    We also urge Congress to take concrete actions to, one, 
correct the FCC's limitations and misreading of the franchise 
fee provisions of the Cable Act; two, provide protections 
against channel slamming and discriminatory treatment of PEG 
channels; and, three, direct the FCC to conduct a study on 
technological needs for 21st century PEG services. Emerging and 
new technologies, digital functionality, interactivity, Video 
On Demand, high definition, and other upcoming technological 
advances are ideally suited and integral for 21st century PEG 
access services for our Nation.
    We thank you for your commitment and important work on 
behalf of the people of the United States.
    Stay strong.
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    Mr. Serrano. That is the way you always end the 
programming.
    Thank you so much.
    Before we move on with the questions, a personal gripe and 
question.
    First of all, the members know I do this with everything 
since becoming chairman, I ask the question: Are the 
territories included? In the activism to preserve PEG channels 
and in the coverage that cable companies and the New York 
companies coming in have, are there any territories that do not 
have the services, to your knowledge?
    Mr. Symons? I mean, cable television.
    Mr. Symons. To my knowledge, no. The Cable Act covers cable 
operations in all the territories as well as the States.
    Mr. Serrano. I know that. But those services are available?
    Mr. Symons. Yes. To my knowledge, they are.
    Mr. Serrano. And as far as the activism to save public 
access, are the territories also active in this fight?
    Ms. Popovic. We are local people, and we are spread around 
the country. And there are many thousands of us. What you find, 
though, is that in some situations the city has not chosen to 
activate PEG channels. But we are throughout the country where 
the city has seen the value.
    Mr. Serrano. But outside the 50 States, is there an 
activist movement on behalf of PEG channels within the 
territories, to your knowledge?
    Mr. Knobbe. There are very robust PEG facilities in Puerto 
Rico. And they have a slightly different model. They are kind 
of like PBS, but they offer training for the public. And I have 
met some of the leaders of the stations down there, and we are 
looking to collaborate. They are actually an amazing model for 
this industry.
    Mr. Serrano. I know their programming, which brings me to 
my gripe. Their programming comes through New York through WAPA 
America.
    Here is my gripe, just trying to figure out how this works. 
Cablevision in the Bronx gets me for a couple of bucks extra a 
month, I think it is about 25 channels from Latin America.
    Most of the time, Mr. Kirk, when I get on the House floor, 
when I speak about Colombia or Venezuela, I am speaking from 
information I am getting where I see people who oppose and 
support President Chavez going at it, rather than getting a 
filter through CNN or Fox or CBS and so on.
    Now, I have Comcast here locally, and I wanted that 
package. But that package doesn't include the station from 
Puerto Rico. When I go online to get it, because you could see 
it online, it tells me that I can't access it online because it 
is available in my area. Yes, it may be, but it is not 
available through my cable system.
    So how does one deal with that? Is that just Serrano 
griping? Is that a problem elsewhere? In other words, I can't 
get it on my laptop, and I can't get it on my TV set because it 
is not included in the Spanish Comcast package.
    Mr. Symons. Mr. Chairman, I am not familiar with the 
specifics of that, but I will check with Comcast and find out.
    Mr. Serrano. And I guess better to check, the other 
question, which is, if it is available in an area, does that 
automatically knock it off online, but it could be available by 
another provider in the area, not the one you have?
    Mr. Symons. Right. That is right. Because multiple 
providers--we have Cox here as well as Comcast.
    Mr. Serrano. Okay. In adopting rules and guidance that 
reduces the ability of localities to impose specific 
franchising requirements, including PEG requirements, on 
potential new entrants, the FCC appears to have made the 
decision that, in this instance, the goal of reducing barriers 
to competitive entry outweighs the goal of local fostering 
localism. And where the FCC rules also would reduce or 
eliminate the ability of localities to impose specific 
franchising requirements on incumbent cable providers once 
competitive entry occurs, the FCC appears to have made the 
decision that, in this instance, the goal of creating a level 
competitive playing field outweighs the goal of fostering 
localism.
    While I appreciate all the arguments made in support of 
promoting competition as well as those made in support of 
promoting localism, in my opinion, localism must not be 
diminished in importance. So I ask the FCC, what are the FCC's 
views regarding the relative importance of localism with 
respect to PEG requirements? And, have those views evolved in 
recent months and years?
    Ms. Desai. First of all, I would respectfully disagree with 
the premise of the question. The 621 franchising orders did not 
change the ability of the local franchising authority to choose 
whether or not to require PEG. It didn't change the ability of 
the local franchising authority to choose how to allocate the 
revenues they collect. And, it didn't change the amount--and 
the franchising orders didn't change the amount of money that 
they are allowed to collect from cable operators and their 
customers.
    I would respectfully suggest that the balance that is in 
place was set by Congress. Congress specifically said that the 
local franchising authorities had to cap the franchise fee at 5 
percent. So that was the maximum amount that they could pass 
along to cable operators and their customers.
    What they could charge on top of the 5 percent and what is 
stated explicitly in the statute is for capital costs related 
to PEG facilities. If Congress wants to change that balance, I 
think that is completely appropriate for Congress to do. But 
what came up in this 621 franchising proceeding were reports 
from potential new entrants that said they were unable to get a 
foothold in locations because local franchising--some local 
franchising authorities were attempting to collect fees above 
and beyond the caps set by Congress.
    Mr. Serrano. Well, my follow up to that question was going 
to be, if Congress were to determine that localism is too 
important a policy goal to be endangered by State laws that 
undermine local requirements, what actions do you suggest 
Congress take in regards to these FCC actions? So, in addition 
to what you spoke about, is there something else that Congress 
could do to deal with this issue?
    Ms. Desai. I think, if what is resulting isn't consistent 
with what Congress intended when it set the statute, when it 
enacted those very specific provisions, I think Congress can go 
back to what was in place and allow cable operators--I mean, 
allow local franchising authorities to completely cover all the 
cost of PEG programming, both capital and noncapital, costs 
above and beyond the 5 percent that was already--that has been 
set in the statutes. So it is something that Congress could do.
    Congress could, if it believed that the 5 percent wasn't 
enough to charge cable operators and customers, it could 
increase that amount; and/or it could, instead of giving local 
franchising authorities a choice of whether or not to require 
PEG channels, it could require local franchising authorities to 
have some PEG channels.
    Mr. Serrano. Cable operators don't complain to the FCC that 
they are going broke. Do they?
    Ms. Desai. I personally haven't heard that complaint.
    Mr. Serrano. I suspect you may not.
    The recent FCC cable franchising orders appear to have 
thrown into question what payments local franchise authorities 
may require from cable operators to support PEG services. 
Despite the legislative history of the 1984 Cable Act, which 
indicates that payments for services, in addition to facilities 
and equipment, may not be considered part of the franchise fee, 
the FCC order seems to take a more narrow view of the capital 
cost that cable operators may be required to pay for PEG 
support over and above the franchise fees.
    So, for all witnesses, but starting with the so-called PEG 
advocates, how does the FCC position on capital costs and 
franchise fees affect the financial resources PEG broadcasters 
have available? Have broadcasters been forced to cut back on 
programing because of reductions in financial support?
    Ms. Popovic. You can't put cameras in a studio and have no 
people to operate them. You can't offer a training program and 
have no one to conduct them.
    This arbitrary and unreasonable separation of capital and 
operating costs for PEGs makes no sense, and it never has. And 
I would agree with Monica Desai, that Congress taking a hard 
look at this unnecessary restriction on capital costs paid 
above the 5 percent is something concrete that we would look to 
Congress to do.
    Mr. Symons. I would actually agree with the FCC, that the 
621 order properly reflects the balance struck by Congress back 
in 1984.
    And on another personal note, I will go out on the limb 
here. I was senior counsel to the House Telecommunications 
Subcommittee in 1984, when Congress passed the Cable Act, and 
this issue was very thoroughly debated and the compromise, the 
balance that was reflected in section 622 very carefully 
considered. For franchises that were in effect prior to 1984, 
noncapital costs were not counted against the franchise fee 
cap.
    But post-1984 Congress made this distinction between 
capital costs, which were not subject to the cap, and other 
contributions to PEG, which would be subject to the cap. Now 
let me hasten to add in the 20, almost 30, 25 years since the 
enactment of that statute, many cable operators have continued 
to provide support for PEG, noncapital support for PEG over and 
above the cap, but that was the balance the Congress struck.
    Mr. Serrano. Mr. Knobbe.
    Mr. Knobbe. The FCC order we believe too narrowly defines 
that definition of capital expenses or what is considered 
appropriate above the 5 percent franchise fee. And the idea of 
taking a look at updating the Cable Act with the new 
telecommunications act, as well as I guess having some of our 
legal counsel address technical points within the existing 
Cable Act framework, which does provide and we believe permits 
there to be above and beyond the 5 percent support for PEG. So 
it is important that we not go backward, and I think that I can 
provide through counsel information regarding some of the 
technical points and the nuances of that narrow, that we 
believe a narrow definition. I would agree with Monica Desai 
that perhaps this also is something we can look at working 
through our elected leaders.
    Mr. Serrano. Thank you.
    I am going to recognize Mr. Kirk, and after Mr. Kirk, I 
would recognize members of the committee in the order that they 
attended the meeting. And I would remind them not to misbehave 
like the chairman or the ranking member and stick to the 5-
minute rule.
    Mr. Kirk.
    Mr. Kirk. Thank you, Mr. Chairman.
    Just to reiterate what we talked about privately, for this 
subcommittee, that now we have reports that there may be short-
selling runs on WaMu and Wachovia, which could jeopardize 
further big retail banks. And with press reports now you know 
that FDIC may have inadequate resources, my hope is the 
leadership, which really only has one stimulus package bullet 
to shoot, doesn't miss this one. We talked, and you will be 
taking that up with your team, and I hope that that does 
happen.
    On this subject, if we let the marketplace fully rule, 
looking at my wife and I, our TV habits, we would have ESPN 1 
through 50, E channel 51 through 100 and call it a day. I might 
not want to have the marketplace offer just that, because of 
the vital role that local access plays in democracy. And even 
though there are 9.2 people watching at some point, it is the 
9.2 people that are watching the local jurisdiction talk about 
paving over their house. And so this is a vital service, I 
think, that is provided.
    With regard to proposals then to take local access off of 
the basic channel selection and move them into what I would 
regard as digital Siberia over in On Demand, and not just 
easily found On Demand, buried deep within On Demand.
    Monica, in your testimony, you said, ``We believe that 
placing PEG channels on any tier other than the basic service 
tier may be a violation of the statute, which requires PEG 
access programming to be placed on the basic service tier.'' 
And what they will say, is hey, man, it is on the basic service 
tier because you don't have to pay for it; you just can't find 
it.
    And then you say, ``subjecting consumers to additional 
burdens to watch PEG channels defeats the purpose of the basic 
service tier,'' which sounds to me like the Commission would 
then say exiling PEG to On Demand and deep within it is a 
violation of the statute in your view. We believe it is 
important that your consumers are able to get access equally to 
all channels belonging to the basic service, and this should be 
the case regardless of what type of system the channels are 
being carried on, meaning whether it is digital or analog.
    And so my question is this: What are your plans to 
implement your testimony from the Commission to make sure that 
AT&T is forced to bring PEG back to the basic tier, so that 
they have a channel somewhere between 1 and 100 on the basic 
service tier, and are not exiled to On Demand?
    Ms. Desai. First, I think it is important to clarify that I 
am speaking as chief of the media bureau at the FCC. I cannot 
speak on behalf of the commissioners. But I would be anxious to 
place this issue in front of the commissioners for them to 
decide with our view that this would be a violation of the 
statute. But what we would need is to have a specific and 
formal complaint filed in front of us. We would need something 
to act on. And then we would look at what was filed and look at 
the law, look at the statute and give our recommendation.
    Mr. Kirk. And does Michael or Barbara have standing to put 
that complaint before you?
    Ms. Desai. I would think so, yes.
    Mr. Kirk. All right, okay. So then I assume you will get 
that later this afternoon. And then you would put this then 
before the Commission.
    And how would this then move forward? You know, obviously 
you haven't formally prepared this, but you put before the 
Commission that a ruling of exiling local access to On Demand, 
in our view, is a violation of the statute. And then there 
would be a rule-making procedure that would go forward?
    Ms. Desai. It may be an enforcement proceeding. It would 
depend on whether there is, what exactly was filed in front of 
us. If there is a petition for declaratory ruling, it may be a 
ruling by the Commission if they chose to act on it. If there 
was a formal complaint, then you move through an enforcement 
proceeding.
    Mr. Kirk. Generally, an enforcement proceeding would then 
require that AT&T is reversing its decision and bringing local 
access back to the basic channel mix by when, in a month or a 
year? How long in general do enforcement proceedings take to 
put into place?
    Ms. Desai. I apologize, I don't know off the top of my 
head, but I will definitely get back to you. In part, that 
would depend on how quickly we were able to move this forward 
to the Commission, and how quickly the Commission would vote on 
an item. But I will find out for you how quickly typically a 
company would be required to come into compliance if the 
Commission determined that they were in violation.
    Mr. Kirk. One other question, say you are a random 
congressman representing the northern suburbs of Chicago and 
planning on a nice Saturday evening at home, and instead, 
Hurricane Ike shows up in its journey through the gulf, so we 
have flooding throughout Des Plains, Mount Prospect and 
Glenview. Everything is shutdown, all roads, emergency services 
are tasked out the yin-yang, and no ability to get that 
information out via the AT&T provider, because Mount Prospect 
showed me the complicated procedure it now takes to put out 
information on where the flood is, who is wiped out. We had a 
couple of fires. I spent most of Saturday night loading sand 
bags with a couple of hundred Navy recruits, and yet we are 
having difficulty getting the emergency information out. Have 
you engaged on that issue as well, because we exiled this all 
to digital Siberia. Especially for seniors who are suddenly 
being flooded out of their homes, they can't even find the 
channel to get the village information.
    Ms. Desai. Sure. I mean, public safety, there are 
absolutely public safety implications.
    Mr. Kirk. Right. Is that a separate issue in your mind or 
is that the same issue as just digital democracy of making sure 
that folks can find the channel?
    Ms. Desai. I mean, I would have to think about it. I think 
the statute is pretty clear in its language. And I----
    Mr. Kirk. Do you have higher or separate standards with 
regard to conveying emergency information?
    Ms. Desai. I think that always influences Commission 
decisions, absolutely something that they take into account.
    Mr. Kirk. Thank you, Mr. Chairman.
    Mr. Serrano. Thank you.
    It is interesting that I hear you speak on this subject, 
Mr. Kirk, that it is not just public access, but it is physical 
access. It is also being able to find it. I saw a video on You 
Tube, of all places, that explains the set up where you have to 
go to channel 99 and then go through a menu and try to get one, 
and then there is 30 seconds, 90 seconds.
    So my biggest complaint is I used to get two Western 
channels, and now I only get one.
    Folks, lighten up.
    My colleague, my dear respected colleague, Ms. Kilpatrick, 
is recognized for 5 minutes.
    Ms. Kilpatrick. I heard that, sir.
    Thank you very much and thank you for coming. When I came 
in and read my staff's work, I thought it was FCC that I was 
going to be damning today, but I am not quite sure where it 
fits.
    So I am trying to put this where I understand it. 
Regulatory shift is what you said, Ms. Popovic, I like that 
word, but as we go on, I think that is still in play, from 
channel slamming to my judge, Judge Victoria Roberts, who you 
referred to--Knobbe?
    Mr. Knobbe. Knobbe.
    Ms. Kilpatrick. Who did rule and put a stay, in my words a 
restraining order, that they could not go ahead, because what 
she called it was unreasonable discrimination, which the 
statute does speak to. And so she ordered that it be restrained 
for a while.
    And now we find that the box that you have to have to 
receive the PEG channels, there is a cost of $4 and up, or else 
you can't see it. The placement of the channel itself is now in 
question. It is an educational, as well as a security, and 
service, and education to the people of this country that they 
have such a thing.
    So I wasn't sure, Mr. Symons, if I was going to blame you. 
In my area, it is Comcast, and we are outraged about the cost, 
first of all, of cable, and that is not in this discussion, but 
I hope we will have it. It goes up, we have 100 or 200 
channels, and there is about four of them that you watch, so 
that is another discussion for another time.
    What do your buttons say by the way?
    Ms. Popovic. ``Keep connected.''
    Ms. Kilpatrick. Love it. Let me have one of those before I 
leave.
    But, no, really, it is important, a lot of people don't 
just watch the movies and Discovery. A lot of people do watch 
PEG channels and get a lot of information, which I think in a 
lot of cases is way better than network and CNN, because you 
get something, and they feel like they are teaching their 
children with it. So from channel slamming to unreasonable 
discrimination regarding the boxes and then moving them to 900 
instead of the first 100 or so, that is a real problem.
    I think what Ms.--I am going to say Monica because I don't 
want to mispronounce your name, I hope you will have a 
complaint, and we don't know if it is going to be enforcement 
or whatever. But I want that to come together because I think 
the PEG channels, to lose them and AT&T with its U-verse, I am 
considering U-verse as we speak because my cable bill has gone 
from $100 to $130, and today it is $180. That is outrageous. 
And in our town, where a lot of people are laid off, I am 
blessed that I can pay it, but a lot of places, they can't pay 
it because they are paying their gas and lights and food and 
rent and all of that.
    So I want you to come together in some kind of way. I don't 
want you to be adversaries. I would like to stay connected, and 
it is not just for the association; it is for the 650,000 or 
700,000 people that we each represent. And how we go about 
that, yes, FCC has a role. And Kevin Martin is a great guy, and 
you know your stuff real well. All of you all do.
    The cable association, you have a role to play in this, 
too. I don't want to see PEG regulated to some substandard 
something. It ought to be right up there with all the other 
major channels, and whatever we have to do to get it there. It 
sounds like it is a regulatory something as well as a people 
something. And if we have to mobilize America to educate them 
to what it is, I think we have to do that.
    I don't know that I have a question, except to ask anyone 
who can answer, Judge Roberts, when she issued her restraining 
order, said that she felt that it was unreasonable 
discrimination and that Comcast did not give property notice.
    And I guess that is to you, Mr. Symons, I guess you would 
know a bit about the order. What is the status of it? And how 
do we go forward from this? And can you all keep the PEGs up, 
or what do we have to do to beat you over the head to do that?
    Mr. Symons. You don't have to beat us over the head.
    Ms. Kilpatrick. Good, right answer, that was the right 
answer.
    Mr. Symons. As you may know, around the time the lawsuit 
was filed and just after Judge Roberts' order, the 
Telecommunications Subcommittee held a hearing, and Comcast 
appeared and assured Chairman Dingell that they were going to 
work together with the City of Dearborn and fix this. My 
understanding is that there have been many meetings between 
Comcast, the public access community in the City of Dearborn, 
and they are making progress on that. They are going to work it 
out. Comcast committed to Chairman Dingell. They are going to 
work it out, and you don't make a commitment to Chairman 
Dingell without making good on that so.
    Ms. Kilpatrick. Right. And that is my subscriber, but I am 
sure all of the other cables, and you represent the network, 
the cable association or whatever. Do you take it, because the 
others didn't get Dingell, that they don't have to do it, or 
are we going to do a comprehensive something?
    Mr. Symons. I think everybody understands, everyone in the 
cable industry, the operators understand the importance of PEG 
and want to make sure it remains a viable part of the cable 
line-up.
    I draw the distinction between what Congressman Kirk was 
talking about, which was making public access channels into 
some sort of video On Demand product; a number of you watched 
that You Tube video that AT&T does. That is not something we 
do.
    We do, we have some of our companies that have gone digital 
have moved their PEG channels. Now I guess I take issue with 
Mr. Knobbe's characterization of it as channel slamming. I 
think, as you move into a digital environment, there are a lot 
of challenges with that. There are a lot of benefits. There are 
a lot of challenges to it.
    Ms. Kilpatrick. Hold it right there, because this is my 
last 30 seconds. You are right. I don't want to slam. I just 
want you to get it done because it is an educational, security, 
yackety yack, thing for millions of families in America.
    Mr. Symons. Well, we want to work with them and make this 
happen in a way that works for everybody, strikes the right 
balance and gets everyone into a digital environment, which, in 
the end, is good for everyone.
    Ms. Kilpatrick. At the lowest, most cost-efficient price 
available.
    Mr. Symons. Absolutely.
    Ms. Kilpatrick. U-verse, or AT&T, don't let them off the 
hook. They have a commitment. We approved them. Sometimes, I 
know the U.S. Conference of Mayors were opposed to it because 
they thought they would lose some of their whatever. Now they 
are operating in my area in some places, and they are phasing 
in, but they have a responsibility for PEG, too. I want FCC to 
be on top of that.
    Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Serrano. Thank you.
    Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Mr. Chairman, for this 
hearing and bringing attention to this issue.
    A couple of questions, but before I ask the questions, I 
can't help but respond briefly to what was said by our friend 
and colleague, the ranking minority member, in his opening 
remarks with regard to the adverse economic circumstances as a 
result of the failure of oversight and regulation. And it is 
important to understand that the failure of this oversight and 
regulation goes back to the first 6 years of the 21st century 
and were initiated by former Senator Graham, who curiously 
enough is now the chief economic advisor for Senator McCain. So 
I just wanted to get those facts on the record so the situation 
is more clearly understood.
    I thank you very much for being here. The first question I 
have is a local question. I have a public access station back 
in my district in the City of Binghamton that, unfortunately, 
is not provided with the facilities and training by its cable 
service providers. So I am wondering what you think could be 
done so that the Federal Communications Commission will have 
the authority to enforce perhaps a Federal minimum of financial 
support that could be provided by cable service providers so 
that rural areas generally have the same capability for public 
access as do larger cities.
    Mr. Symons. Well, Congressman, today, under the Cable Act, 
if a franchising authority wants a cable operator to provide 
channels and facilities for those channels, it can order that, 
and failure to comply with the franchise would be something 
that could be challenged.
    With respect to funding for services and assistance, again, 
that is something that the local franchising authority works 
out with the cable operator. I think in every circumstance 
where they ask for it, where the local franchising authority 
asks for it, the cable operator and the local franchising 
authority works something out. So I am not aware, if there 
isn't that kind of funding in the Binghamton area, I don't know 
whether that is a function of the franchise or whether, when 
they negotiated the franchise, they didn't think it was 
necessary; now it is. But I assume, and I think Time Warner is 
the provider in Binghamton, maybe something could be worked 
out. I am happy to go back to Time Warner and get some details 
on the situation.
    Mr. Hinchey. Thank you, I appreciate that.
    I wonder if I might use your first name?
    Monica and Barbara, if you don't mind responding to that.
    Ms. Popovic. I am Barbara. Go ahead.
    Ms. Desai. I would agree that, under the Communications 
Act, the local franchising authority has discretion as to how 
it wants to allocate the 5 percent tax it collects in revenue 
from cable operators and their customers. So if they wanted to 
support those types of noncapital costs, like salaries and 
training and the other types of operations you were talking, 
they could.
    Mr. Hinchey. They could, yes. But I wonder if there is 
anything that we could do that would enable the FCC, if the FCC 
might be interested, in ensuring that those kinds of things 
take place.
    Ms. Desai. If Congress wanted to change the statute to say 
that capital and noncapital costs could be passed along above 
and beyond the 5 percent, then it would be up to Congress to do 
that. If Congress decided to change the balance of the 5 
percent and decided, well, instead of charging cable operators 
and their customers 5 percent, we decided to move that up to 7 
percent or some other number and with the requirement that some 
percentage be allocated to PEG as opposed to giving local 
franchising authorities that discretion, that is something 
Congress could do.
    Mr. Hinchey. Thank you.
    Ms. Popovic. I really appreciated that Monica Desai keeps 
going back to the statute because I do think there are 
weaknesses in it.
    And I think you have just pointed out why, Representative 
Hinchey, because when small communities don't have this, it is 
a great loss. And what we have seen around the country is where 
it has developed, it has been an awesome and important local 
benefit. So the idea of minimums, the idea of how do you set a 
platform below which the industry cannot go, I am all for it. I 
think we need protection, and we need your help to make that 
happen.
    Mr. Hinchey. Yes, I agree. Thank you.
    I have one other question. The State of Illinois was able 
to bring all interests together and bring a solution to keep 
PEGs thriving while also allowing cable companies to negotiate 
statewide franchises. The terms that they reached serve as a 
model for the FCC to change their regulation so both cable 
companies and PEGs really come out in better conditions than 
they were. How do you think the FCC could use the success of 
the State of Illinois and New York City as a model for new PEG 
policy are to us at the Federal level?
    Mr. Symons. Congressman, I think, again, the balance that 
was struck and is currently struck in the statute with respect 
to public access channels, PEG channels, is the right one, 
where the decisions about the number of channels and the nature 
of the services is really done at the local level. The current 
Federal law gives wide discretion to local governments to 
negotiate public access channels. I am not sure you can give 
them much more that broad grain of authority to give them what 
they need and want and what kind of facilities they can use. 
You get more detailed than that, and in some sense, you may 
wind up restricting the local governments.
    Ms. Popovic. I appreciate your comments about Illinois law; 
I worked it on. But I will be the first to tell you that there 
are big problems in State legislation that is out there. What 
we did in Illinois is we clung to the cliff. And we were able 
to reverse a train that was already moving in a wrong direction 
for the public. So I am proud of the fact that we were able to 
get what we got, but frankly, State law, the way it stands in 
the 19 States where it exists, goes from barely acceptable to 
awful.
    So I would prefer that based on some of what I heard Mr. 
Knobbe talk about, and I have seen in New York, and what you 
all have done for the people in New York, is that that is a 
stronger model. Local franchising still exists. You are 
standing up for your PEG centers.
    And I think that Representative Kirk pointed out that you 
can have very well-worded and good law, and a major 
multibillion dollar company is ignoring it. So we have got some 
problems with the models that are out there now. And I do think 
we managed to turn around a near disaster, but I think we can 
do much better, much better.
    Mr. Hinchey. I thank you very much.
    Thank you, Mr. Chairman.
    Mr. Serrano. You, I alert all members that there will be a 
second round of questioning if you are interested. The one 
thing we know for sure is I suspect this hearing will be on a 
lot of PEG channels throughout the country, and you guys will 
be huge stars.
    Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    The first request I would have is to enter into the record 
a 1-page letter from Sheriff David E. Lain, who is sheriff of 
Porter County, Indiana.
    Mr. Serrano. Without objection.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T5222.050
    
    Mr. Visclosky. Thank you very much.
    First question I have, Ms. Desai, is, has AT&T requested a 
waiver for the emergency alert system?
    Ms. Desai. I believe that it has.
    Mr. Visclosky. What is the status of that request?
    Ms. Desai. I apologize, I don't recall off the top of my 
head, but I will get back to you on that.
    Mr. Visclosky. Do you know why the company made that 
request for emergency alert system, for a waiver?
    Ms. Desai. I do not. I just don't have that information, 
but I will get back to you on that.
    Mr. Visclosky. You will provide that for the record, and 
what the status is?
    Ms. Desai. Sure.
    Mr. Visclosky. Is it Symons?
    Mr. Symons. Symons.
    Mr. Visclosky. Mr. Symons, it is interesting, my colleague 
from New York mentioned that he had a parochial question and 
Ms. Kilpatrick also referenced a situation in Michigan. I think 
if every Member of Congress was here, they would have a 
parochial interest, which I think really evidences the broad 
ranging problems and concerns people have with cable and with 
access.
    What happens to the constituent in, say, southern Indiana, 
that I don't represent, who doesn't know Mr. Dingell? What 
happens if somebody has a complaint and they don't have Mr. 
Dingell to go to bat for them to get a problem solved?
    Mr. Symons. Well, Congressman, I think, while the Dearborn 
case has been well publicized, it is not the norm. I take your 
point about not everyone can call up Chairman Dingell. I think, 
given the number and nature of cable systems out there, the 
challenges that attend the digital transition, while there are 
complaints and I don't want to minimize them, they are not 
widespread to the point where people are losing these channels 
everywhere.
    I think things are changing; technology is changing. I know 
you bring Sheriff Lain's letter into the record, and I heard 
Barbara talk about that. But in Indiana, for instance, under 
the State law, local governments are charged with taking over 
the public access business, and Comcast offered to turn its 
facilities over to local governments, and so far they have no 
takers.
    Mr. Visclosky. I will follow up on that in a minute.
    Is Verizon a member of your association?
    Mr. Symons. No, it is not.
    Mr. Visclosky. So I can't ask my rhetorical question.
    Mr. Symons. I would be happy to speak on behalf of Verizon.
    Mr. Visclosky. Let me then reference a couple of your 
comments in your opening statement. You mentioned that ``the 
cable industry has long been a supporter of PEG programming. 
For over 30 years, cable operators have spent millions of 
dollars each year to construct local studios and other 
facilities necessary to produce this programming . . . this 
commitment of channel capacity, funding and assistance ensures 
that all members of the community can stay in touch with town 
meetings and other activities of their local government and 
take advantage of tutoring or other community communication 
programs . . . the good news for PEG programmers today is that 
cable intends to continue its commitment.''
    The State of Indiana, talking about State law changes, and 
you referenced the State of Indiana passed House Bill 1279 
signed into law in 2006. On August 28th, 2007, Comcast sent 
letters to municipalities, as you rightfully pointed out, in 
northwest Indiana claiming there was no provision within the 
bill requiring them to provide production, playback facilities, 
even though these had been negotiated in good faith for more 
than 25 years at the local level.
    Comcast then demanded that Hammond, Indiana, all these are 
Indiana communities, Portage, Mishawka, Valparaiso Plymouth, 
Goshen, South Bend and Elkhart, many of these communities are 
not in my congressional district, had 30 days to find housing 
for old facilities, hire staff and develop a management 
organization.
    As of December 15th, Comcast stopped providing playback or 
local programing in these cities. These cities are broke. We 
have a property tax problem. We have job loss. They are broke. 
Last time I looked, Comcast was making a lot of money. Isn't 
there some public responsibility where there is a public 
franchise?
    Mr. Symons. Yes, there is clearly a public responsibility.
    Mr. Visclosky. Why is it lacking with Comcast in northern 
Indiana? These communities encompass the entire northern part 
of the State of Indiana, and they pulled the rug out on them in 
30 days.
    Mr. Symons. Well, Congressman, the cable industry didn't 
ask the State legislatures to change the law, and they did.
    Mr. Visclosky. Oh, don't say that. Don't say that. I would 
suggest it that is not a correct statement to be polite.
    Mr. Symons. Well, they didn't----
    Mr. Visclosky. And the fact that now they are not required 
to do something doesn't mean they don't have a public 
obligation to do something.
    Mr. Symons. I take that point, Congressman, but we do 
provide service in a competitive environment. And if our 
competitors are able to forego these costs, these obligations, 
it puts us at a disadvantage. If Indiana wants to change the 
law back and treat everybody equally, but, you know, these are 
obligations, as you point out, Comcast had undertaken and its 
predecessors companies had undertaken for two decades. So, but 
for a change in the law, they would have continued. We can't 
compete against Verizon and AT&T if they are not going to 
undertake these obligations and we are expected to do so. They 
are bigger companies.
    You talk about Comcast being a big, rich company. AT&T 
alone is bigger than the entire cable industry. And, you know, 
Comcast and any other cable company that wants to continue 
these obligations in the face of laws that eliminate them is in 
tough shape competitively. We are losing customers to, you 
know, AT&T and Verizon, are regularly competing for our 
customers.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Serrano. Thank you, just picking up on your comment, 
Mr. Visclosky.
    Not wanting to give you a hard time, but something tells me 
that these laws do not get changed without the cable industry 
not being at the table or being aware of it or lobbying against 
it if they don't like it. You made it sound like it was done, 
you know, in spite of what you might have wanted.
    Mr. Symons. I didn't mean to suggest that. Clearly, once 
the legislative ball got rolling, cable participated in the 
process, but cable didn't go to the Indiana legislature and ask 
for these changes and in fact----
    Mr. Visclosky. Mr. Chairman, that is a correct statement, 
but my point is, you are a major corporate entity. And the fact 
now that the law was changed and there is not a requirement, 
you took advantage of it.
    Mr. Symons. That is right. And again, I think it is tough. 
You look back at the history of Comcast and its predecessor 
company's commitment to Indiana and elsewhere, and you look at 
the change in the law, a change in the law for all video 
service providers. We compete against these other providers, 
and it becomes tough to maintain a costly obligation in the 
face of a regulatory environment in which our competitors do 
not take it on. It is just a fact of market under those kind of 
regulations.
    Mr. Serrano. Thank you.
    Mr. Schiff.
    Mr. Schiff. Thank you, Mr. Chairman.
    Ms. Desai, I join a number of my colleagues in expressing 
my concerns on this issue in particular. I am concerned about 
the effect of PEG channels in my area. As in many other areas 
of the country, my constituents rely on local PEG channels for 
information about local issues, local church services, city 
council meetings, even information on what their congressman is 
doing in Washington. These are services that are important to 
those who watch them, and they provide necessary information.
    As you know, California recently enacted a law that allows 
statewide franchising agreements. While competition in the 
cable market will benefit not only consumers but PEG channels 
as well, I am concerned that new providers no longer have 
incentive as they did with city-wide franchising agreements to 
continue offering the same PEG access if they decide to offer 
it at all.
    I have a couple of questions. One, in your testimony, you 
expressed concerns about practices that move PEG channels to a 
digital tier to treat them as On Demand channels. I want to ask 
you, what action the FCC has taken to ensure that PEG channels 
are accessible to all cable customers?
    I want to mention one or question as well, and that is, 
California franchise regulations require new entrants to treat 
PEG channels the same as incumbent cable providers do. But 
there is a concern that certain new providers are not meeting 
those requirements by offering PEG channels at lower quality 
resolutions, not offering closed captioning, not putting PEG 
channels on the scrolling TV guide, and making it difficult and 
time-consuming to access PEG channels. Since many belive there 
are inadequate enforcement mechanisms in the California 
statute, local cities interested in protecting PEG access for 
the citizens may have little recourse aside from civil action 
to ensure that PEG channels are accessible. So I would also 
like to ask you what tools the FCC has at its disposal to 
ensure that companies are complying with their franchise 
agreements, and what advice you have for local communities 
struggling with issues of noncompliance?
    Ms. Desai. Sure, once we have a formal complaint in front 
of us, the staff would be able to evaluate that complaint and 
bring it up to the full Commission to evaluate. We actually 
don't have something in front of us right now that we can act 
on. So, you know, what I can tell you, that my view is those 
practices would violate the straight terms of the statute. And 
I should also clarify that I am speaking as a chief of the 
media bureau; I don't have the authority to speak for all the 
members of the Commission. But I can tell you that what the 
normal process is; if we have a formal complaint filed before 
us, we evaluate it and then give our recommendation working 
with the enforcement bureau, and that would go to the full 
commission to decide. But we need something to act on.
    Mr. Schiff. So it would be your opinion, though, that 
putting the PEG channels, combine them all on one channel and 
making you go through a menu to find them, basically making 
them more inaccessible than other channels you think would 
violate the statute?
    Ms. Desai. Right. The statute requires PEG channels to be 
placed on the basic service tier along with your local 
broadcast channels. So to place additional burdens on consumers 
to have to find their PEG channels seems to defeat the purpose 
of the basic service tier.
    Mr. Schiff. But unless someone files a formal complaint, 
the FCC can't take action?
    Ms. Desai. There is nothing specific in front of us that we 
can act on. There is no petition for declaratory ruling. There 
is not an actual formal complaint filed on the issue.
    Mr. Schiff. I would think----
    Mr. Serrano. If the gentleman would yield.
    Prior to your arriving, Mr. Kirk had gotten two of these 
folks ready to start writing their complaint out.
    Mr. Schiff. Okay, very good.
    I am surprised that it really requires that. I mean, I 
would think that if you have an oversight responsibility in 
this area and you see major companies who are not complying 
with the statute, that you have the authority on your own to 
take action to communicate with the companies that this does 
not meet the requirements of the statute. If the companies 
still fail to take action, I would think, on your own 
authority, you would have the action to step forward. It may 
help as a practical matter to have a private party or other 
party municipality file a formal complaint, but I shouldn't 
think that is necessary. What is it about the statute, your own 
governing authority, that makes you think you need a complaint 
to take action?
    Ms. Desai. You know, I am not sure what is in the statute, 
but generally, the practice is we take a specific issue that 
has been brought to us, that is in front of us in a formal way, 
and then we evaluate that issue and bring it before the 
commissioners.
    I can tell you from personal experience. I can get back to 
you on the statutory or legal authority issue if that is right. 
But I can tell you, from personal experience, there are times 
when if we have brought an issue in front of the commissioner, 
sometimes the question is asked, why are you bringing this 
issue to us? No one has complained to me about this issue; if 
no one has filed on this issue, there are so many issues to 
work on, why aren't you working on the ones where people have 
filed something formal?
    The general practice is there is something specific to act 
on. And actually, we spoke with the Alliance For Community 
Media about this issue as well when they brought it to our 
attention last year when the issue came up in Michigan, and 
Barbara can speak to that probably more fully. But we did 
explain that it would be helpful to have a formal complaint so 
that we can actually in a formal vehicle bring this issue to 
the commission or through the enforcement bureau to act on.
    Mr. Schiff. Do you also believe that the failure to provide 
the closed captioning, as is the situation with the AT&T Uverse 
PEG product also would depart from the statutory requirements?
    Ms. Desai. I would have to look at the closed captioning 
rules specifically to see if there would be a violation, but it 
appears that, depending on--there are some situations where 
there are some exemptions to the closed captioning rule. I just 
don't know offhand whether they are applicable, but generally, 
the closed captioning rules, I would think, would apply.
    Mr. Schiff. So, is it a general rule, if a provider is 
providing closed captioning on all the other channels but not 
providing it on PEG channels, they are not permitted to give 
discrepant treatment to the PEG channels?
    Ms. Desai. Well, there are definitely pass-through 
requirements. I don't remember the details of them offhand, but 
if the PEG channel is captioning its programming, generally 
that captioning needs to be passed through, I believe. I 
believe that is what the rule is.
    Mr. Schiff. I thank the Chairman.
    Mr. Serrano. Thank you.
    I must say that, when I was a ranking member on the 
Commerce, Justice, State, the FCC was under our jurisdiction; 
that whole issue came up, and it always troubled me. I asked 
the FCC, at that time I was spending a lot of time defending 
Howard Stern's right to say whatever he wanted, and he was 
getting fined every other day. And I said, you know, I 
understand some people find his locker room humor offensive, 
but I find Rush Limbaugh blaming minorities for everything that 
is wrong with the country more offensive. I won't complain 
about it, but why aren't you investigating him? And the answer 
was, the one that was always shocking and still is today: 
People complained about Stern; people did not complain about 
Rush Limbaugh.
    So it would seem to me that the FCC would have to consider 
at some time enforcing laws that exist and not necessarily 
waiting for someone to complain, because you do have in this 
country more organized folks that can complain on some issues 
and others that will not.
    Let me just, I know, Mr. Symons, you touched on this, this 
whole issue of the cost and the competition creating--could you 
explain in more detail why you believe that cutbacks to PEG 
support an appropriate response to these competitive pressures 
that we have been mentioning here. Aren't these alternatives to 
these PEG cutbacks that cable companies could have implemented? 
Finally, does there need to be a more level regulatory playing 
field between cable, telecom, and satellite companies in your 
opinion?
    Mr. Symons. Let me take each of those in order, Mr. 
Chairman.
    First, I wasn't trying to say that cutbacks in PEG were an 
appropriate response to changes in technology. What I was 
saying was that change in technology, the major change in 
technology that we are all facing across media platforms is 
from analog to digital. And that requires a lot of work among 
all the affected parties, the regulators, the service 
providers, the access community. And we are trying to do that. 
Obviously, it is difficult, but I think the response is not so 
much--the change in PEG is not----
    Mr. Serrano. Excuse me. You did say in the testimony, in 
the few instances in which cable operators have cut back on PEG 
programming or funding lately is to respond to the competitive 
pressures created by the regulatory disparity.
    Mr. Symons. Yes.
    Mr. Serrano. And the other thing that gets people like me 
is, whenever there is a problem where some people claim there 
is a cost involved, it is always certain people, certain 
programs, certain agencies that take the cut, and others do 
not. I mean, we are going to see this here. I assure you, and I 
don't want to get Mr. Kirk going again, I assure you that all 
these bailouts are going to work out to someone telling us a 
year or 2 years from now, when we have a new President, whoever 
it is, that we can't fund education at the level we want to 
because we paid out money, even though we are being told now 
that it is not going to cost anything. It is going to cost, and 
you know who is going to feel the brunt of it. Sure there is 
competition and the digital costs and so on. Why is it always, 
in this case, PEG that has to? I don't see NBC 4 New York or 
CBS complaining. I know they have their own cash, but the cable 
companies are not saying, boy, we have problems; we are going 
to charge more or whatever.
    Mr. Symons. Well, I think there are two reasons. One is, 
and we talked about this, many, if not most, of the State laws 
on franchising that have been passed in the last 18 months to 2 
years have reduced PEG requirements, I think for a variety of 
reasons, in part because there are other alternates for local 
programming, in part because the State legislatures for 
whatever reasons decided to reduce those.
    My point to Congressman Visclosky was the legislature 
having decided to do that--Congress first having given to the 
local governments and the State government's the determination, 
the decision how to determine how much PEG there is going to 
be. The legislatures then decide to cut it back. My point is, 
where we face competition from Verizon, AT&T, DirectTV 
satellite, the rest, we need to stay competitive. And if the 
law is changed and the PEG requirements are reduced, then it is 
very difficult for us in a competitive marketplace to take on a 
greater cost, a greater burden on things our competitors don't 
have.
    I think the second issue is, I think we touched on this, 
too, in the first round, is this dispute over whether funding 
for PEG services that we provide, as opposed to capital costs, 
comes out of the 5 percent franchise free or is over and above 
the 5 percent franchise fee.
    As I mentioned, I think we think the FCC got that right. 
Our companies have historically contributed above the 5 percent 
fee anyway, but those kind of contributions, again, become much 
more difficult when our competitors are not doing the same 
thing.
    Mr. Serrano. Let's move on to a related subject, but the 
issue of quality. And this is for all. If a franchising 
authority requires a cable provider to set aside channels for 
PEG use, do you believe that there is a Federal requirement 
that those channels be made available in the same fashion and 
same technical quality as non-PEG channels. If so, what 
elements must be considered when determining if PEG channels 
are being provided in the same fashion and same technical 
quality?
    I am not going to make comments about some of the shows 
that go on where the folks are learning how to put on a show 
and the scenery falls and so on. I actually think that is kind 
of cool. It reminds me of the old Jack Benny show where the 
scenery fell behind you. But sometimes, on the channels 
themselves, the quality coming through is not the same as the 
others. I am not suggesting they all have to be in HD at this 
point, but is there a Federal requirement, starting with the 
FCC, do you believe to provide the same quality?
    Ms. Desai. Well, there are certainly technical standards 
that are in place for the quality of what is on the signal and 
what is on the system. And so the programing that is on the 
system has to meet those technical standards.
    Mr. Serrano. When you say the programming, that is not 
speaking to the quality.
    Ms. Desai. I am sorry, I meant the technical quality. There 
are technical standards specifically, technical standards. I 
mean, what we----
    Mr. Serrano. Do you feel that they are being met, or do you 
have to wait for a complaint?
    Ms. Desai. Well, I would need to see the specific 
situation. Our engineers would have to evaluate. And the local 
franchising authority oftentimes has their own technical 
requirements as well. And then we have got requirements for the 
technical standards for what is shown over a cable system.
    Ms. Popovic. Separate and unequal doesn't cut it. We can 
spend years talking about this. If we are around in a couple of 
years and come back and tell you about all the more harm that 
has happened, I don't think it will be a very happy day for the 
people.
    I appreciated your line of questioning on enforcement. How 
can this committee help light the fire behind this, because 
what we are seeing is an abandonment of these channels, is an 
abandonment of quality in the best sense, which means the 
people count? So we are really looking to you, and 
Representative Schiff has left, but if this hearing doesn't 
represent having something before the FCC, then I must be 
missing something.
    So I would really beseech you to ask the FCC to put this up 
on their agenda much higher so that we don't see this gradual 
erosion and loss that, Representative Kirk, you know, in 
Illinois, your constituents in a demo with AT&T were told, you 
can fight it or you can embrace it. That is what we are being 
told. So we need some help with this. I will file a complaint 
this afternoon. I have no issue with that. What else?
    Mr. Symons. Cable companies don't degrade the quality of 
public access channels. We don't put them on VOD. You don't 
have to go through a menu to get them. Where we have 
disagreements, it is probably over where in the line up you put 
them, what channel you put them on. Again, Mr. Knobbe talks 
about channel slamming; I think that is a little bit of a 
loaded term. We try to work with local communities and the 
access community to put these channels in a place where people 
can get them and educate people as to where the channels are 
when they have moved in a digital environment.
    Mr. Serrano. Mr. Knobbe.
    Mr. Knobbe. We can have the community interest, the public 
interest served with the competition, and New York City shows 
that. We can have competition without harmful State regulations 
and with the local franchising authority. That is shown in New 
York. But there are places in New York State and around the 
country that just have channels; they don't have facilities. 
They don't have the training that will allow people to have 
access to the technology to put on their programs. And at 
BronxNet, viewership is, well, according to independent market 
research, 60 percent of the Bronx watches BronxNet on some 
level. And if you look at all the city access centers, usage is 
up.
    If we can protect and provide provisions for our colleagues 
and the public across the country, we are doing something 
excellent that is part of democracy in a digital age and 
community development through media. It is something that we 
are passionate about and a lot of people around this country 
are passionate about and all the volunteers, over a million 
around the country, get passionate about because the services 
we provide, well, there are positive outcomes, whether it be 
locally generated content or whether it be professional 
development, career development for students. The first time 
they are working with this technology and having this media 
access is through our facilities. And we have people who are 
Emmy-award-winning producers who started at stations like ours, 
who got a fast-track in their careers because of this 
availability and this access.
    So when we partner with cable companies and cable companies 
are good corporate citizens, there is a lot of good that can 
come from that. And in New York, if AT&T in New York City, even 
with all of the leverage of what I consider the greatest city 
in the world or a media capital in the world, in New York City, 
even with all the leverage, if AT&T were to be negotiating and 
were to attempt to enter the market and provide competition in 
New York City, it would be a different story than the new 
entrant that is Verizon in terms of public interest being 
served.
    So channel slamming, degradation of quality and making sure 
that our communities have the best access to the best 
technologies, the most cutting-edge technology, it is vital, 
and it is important, and we want to work with you on that.
    Mr. Serrano. You know, before I turn to Mr. Kirk, it is 
interesting, but right before this hearing I got an e-mail from 
my son. Mr. Hinchey knows my son, who is a State senator in New 
York. It was an e-mail he sent to a lot of folks saying, I did 
two shows on BronxNet that will be played the rest of this 
month. Now when you think of it, in New York City, the chance 
that a State senator, except maybe for the Senate majority 
leader or minority leader, will get on NBC or CBS for half an 
hour to talk about issues that are directed to the whole 
banking industry with Wall Street is not an easy thing to 
accomplish regardless of who you are. It has to do with New 
York and the environment and so on. I mean, I don't get invited 
but once or twice a year because it is New York.
    So when we think about PEG channels, we think of the school 
board or some local program and so on. But it is also a vehicle 
for many of us to get a message out, to instruct people. The 
ability to have a show replayed over and over again so that 
people can see it. It is not only what it appears to be. It is 
much more and it gives people the chance at opportunities that 
just don't exist.
    Mr. Kirk.
    Mr. Kirk. Thank you.
    Mr. Serrano. On this subject?
    Mr. Kirk. You said a couple of things. I just would say, 
first, on Rush Limbaugh and Howard Stern, my experience is that 
only Republicans listen to Rush Limbaugh, and so the reason why 
no one is complaining is because Democrats don't tune in.
    Mr. Serrano. No, I tune in just to see how bad it can get.
    Mr. Kirk. Collecting enemy intelligence.
    Mr. Serrano. I used to be----
    Mr. Kirk. Whereas, with Howard Stern, I think the problems 
was the kids were all listening to it, but then their parents 
would tune in.
    Mr. Serrano. Well, Howard Stern said that 90 percent of the 
people who listen to him won't admit it; the ratings would be 
through the roof.
    Mr. Kirk. Michael, you have a future career on Saturday 
Night Live as an imitator of Rahm Emanuel.
    Seriously, with Howard, obviously, we have a struggle with 
satellite, and I was just thinking out of the box that a 
requirement that satellite carry local access, you know, you 
could just designate 100 channels that satellite would have to 
carry. That would be the hundred biggest markets. So Chicago, 
New York would be carried, and then, when the customer signs 
up, getting their zip code in, you would be probably providing 
local access to a very large number of Americans. And then they 
would have an equal burden to cable, which I think these are 
all authorizing committee issues, but still I do feel your pain 
on that.
    My worry is, without an enforcement action, we will quickly 
see the cable industry race to the bottom by wiping out PEG as 
much as the Commission would let us. And obviously, our action 
here is to not allow that to happen.
    Just provide any comments you may have on this.
    Mr. Symons. I think trying to ensure equal obligations, a 
level playing field, should be a goal in this area and, I 
think, any area of communications policy, and that is certainly 
a point we made to the authorizing committee.
    I would, I guess, respectfully disagree. I don't see PEG 
disappearing. I think PEG is going to change. It is going to 
have to change as technology changes and takes public access 
with it. I don't think we want to see it disappear. As I said 
at the outset of my testimony, we think PEG has been a very 
valuable part of what cable is and what people think of as 
cable. And I think the difficulty is moving from the analog 
world to the digital world and all that entails and some of the 
difficulties and challenges that have been posed by the FCC. I 
don't think it is going to disappear as long as the statute 
stays the way it is and franchising authorities have the 
authority to ask for it, because, as this hearing illustrates, 
local franchising authorities as least as much if not more so 
than this subcommittee has an interest in making sure PEG 
continues to exist and provide that local outlet. So it will be 
there, and we are talking about making sure it is viable.
    Mr. Kirk. When we look at leveling the playing field with 
satellite, you might not require the satellite to carry Wasilla 
cable, but----
    Mr. Serrano. Why are you picking on Wasilla?
    Mr. Kirk. Yeah, at least if they are carrying Anchorage, to 
level the playing field.
    I would say that, in my own State of Illinois, the 
communities involved and their approach to Lisa Madigan shows 
that AT&T will lose this battle politically in Springfield, 
just as a political observer in my State.
    But let me ask Monica, I would be willing to sign a letter 
with the chairman to you saying, hey, get on the case here. Is 
that enough for you to get rolling?
    Ms. Desai. You know, I am sure a letter from you and 
Chairman Serrano would be taken--we would act on it posthaste.
    Mr. Kirk. Thank you.
    Thank you, Mr. Chairman.
    Mr. Serrano. Your cue, you took your cue beautifully. I had 
just turned to my right--well, never to my right, but I had no 
choice, and discussed with staff that we will, the subcommittee 
will, put this subject on the table with the FCC. That is a 
commitment right now. I think it is at the best interest of all 
involved. If the picture is not where it appears to be, then 
cable providers need an opportunity clear that up. And if the 
public, indeed as I am, is concerned that PEG channels may 
disappear or may be hard to reach or there is a problem with 
it, then it serves our purpose, too. So you went ahead, a step 
ahead of me. But it is the committee's intent immediately to 
put this on the table as a request.
    Mr. Hinchey.
    Mr. Hinchey. I understand Verizon that has completed more 
than 124 franchise negotiations through the franchising 
structure in New York. I am just wondering what you might say 
with regard to that and what you might think about it. 
Specifically, what about the experience of BronxNet and the set 
of circumstances, what has been their response? How are they 
dealing with it? Also if you don't mind, has there been an 
effect on quality, has quality been a problem?
    Mr. Knobbe. When the new entrants to this industry sought 
harmful legislation in various States, it didn't happen in New 
York, and there are local franchising authorities. I guess New 
York State and other places that don't have these harmful State 
regulations are examples that you can have this competition and 
you can have the public interest served. Because, it is 124 
Verizon communities, there are 124 franchises that Verizon has 
already made, and counting. It is happening. In New York City, 
there are, I guess, cable providers and Cablevision and Time 
Warner, and now Verizon is entering into this market. And we 
recently completed an agreement with them, which is positive 
for the communities that we serve in New York City. And I guess 
we would look to that as the exception to the rule in some ways 
when you are looking at these other States.
    So, quality, when you ask the question of quality, you 
know, there are times when the channels are being transmitted 
on old demodulators, or sometimes it is not satisfactory, the 
audio and video, the technical quality of what you see on the 
PEG channels, and it is not by any fault of the PEG facility 
itself, the staff or the equipment. It is the cable providers 
or demodulators that are contributing to poor quality. What we 
would like to see is, we work with our cable providers to 
correct that problem, and we would like to make sure that what 
people experience with their PEG channels, that there is no 
distraction or noise of poor quality as well as digital 
functionality issues that we would seek to have as technologies 
are developing, including Video On Demand.
    There is something to be said for being able to access that 
town hall meeting that you weren't able to attend when you need 
to look at it to reference something. Or if you are a young 
person, and your child is in a school play. You want to see 
that play, and you were out of town when it was being featured, 
that video On Demand can be vital.
    So quality I think is connected to these digital 
functionality issues in terms of high definition. If all the 
other channels are in high definition and right next door to 
the PEG channels or in other places on the dial, on the box, 
well, you know, PEG should be high definition. Down the road, 
as we enhance technologies, there is no reason to leave the 
communities and people that utilize PEG out because it is 
important that our folks, our people, our students have access 
to this up-to-date technology, this relevant technology.
    Mr. Hinchey. With your relationship to Verizon, do they 
provide you with some financial assistance?
    Mr. Knobbe. They do.
    Mr. Hinchey. Significant?
    Mr. Knobbe. Significant.
    Mr. Hinchey. In the context of the financial assistance, do 
they negotiate with you or work with you to effect the outcome 
what you are doing, including the quality and the circumstances 
upon which you may be focused or not focused?
    Mr. Knobbe. There is a community needs assessment that is 
usually completed in communities, including in New York City, 
and you partner with the video provider to fulfill these needs 
and interests.
    And the agreement with Verizon provides for the ability for 
us to better serve our constituents in the Bronx and all over 
New York City through our facilities, which would be upgraded, 
as well as perhaps satellite facilities in the south Bronx. 
There was a community need and interest that determined that 
that is important to the people of the south Bronx, that they 
be able to have access there. And along with that, we are 
expecting to be able to see a match from the cable provider, 
which is also a franchise that is being renewed currently.
    And there was another part of your question; I can't 
remember what it was. Was there a second part?
    Mr. Hinchey. It must have been very intriguing, because 
neither can I. But thank you for the response.
    Mr. Knobbe. I will go back to the point that New York has 
the spaces where people can go in for training, but there are 
so many places. In your district, there is Woodstock, that does 
have a PEG facility. And there is Ithaca, which also has a 
studio and training, but there are so many places where there 
is just opportunity, and it is missing, and it would be 
important to do something about that.
    Mr. Hinchey. Yes. That is something that I think really is 
important.
    This may have come out in the context of your response to 
questions, but I don't remember it myself. What is the general 
circumstances with PEGs around the country? Are they getting 
better? Are they getting worse? Are they getting broader? Are 
they out there more? It seems to me that in some rural areas 
and small cities that they are not quite as visible, not quite 
as obvious as they used to be.
    Ms. Popovic. I will take that. Just to put it in 
perspective, CAN TV in Chicago is probably one of the largest 
access centers in the Nation. We operate on a budget that would 
not buy a 30-second commercial during the Super Bowl. You can 
imagine what is going on in rural America. You can imagine what 
is going on in southern Indiana, and yet over this couple of 
decades, amazing things have been done with a little bit of 
resource. So we see this as doable.
    I think Howard Symons pointed out that there are many 
examples of a strong partnership with cable where the 
regulations have existed and we have been able to do it, but we 
need a floor to stand on. And I think it is important to note, 
the FCC order limits the ability of local franchises and so do 
the States.
    And Representative Visclosky, when you talk about, who is 
going to look out for those other communities, I really admire 
what Representative Dingell did, but from what I hear today, we 
have got Representatives Serrano and Kirk and Visclosky and 
Hinchey. And each of you can help us move this ball forward, 
and we need that.
    Mr. Hinchey. Thank you.
    Mr. Visclosky. Thank you for holding the hearing as a 
Slovak from Gary, I learned something today, and that is always 
very difficult, so I commend you.
    Mr. Serrano. Thank you so much.
    And we thank all of our witnesses today. We apologize for 
the interruption. It is part of what we do here, interrupt each 
other quite a bit.
    We stay committed to the commitment I made before to Mr. 
Kirk and to the committee that the issues that have been 
discussed here will be placed by this committee officially, in 
a formal fashion, before the FCC to make sure that we begin to 
look at the whole issue and how best we can stick to the intent 
of the law, notwithstanding some changes that have to be taken 
along the way.
    My message to the cable operators is not to feel that this 
committee wants in any way, shape, or form to create a 
confrontation, but rather to get all of us to come to a 
conclusion as to what best serves the community. Now that is 
the bottom line on the agenda, better service to the community, 
but you have the ability to provide it. They have the ability 
to coordinate it. And the FCC has the ability to regulate it. I 
think if we all do that and if we look at the fact that markets 
increase, not decrease, that yes, competition can be tough, but 
we can always begin to pay attention to those people coming in 
now as new entrants and remind them that the spirit of the law, 
if not the actual content of the law, is for them not to be 
different than those of you who in the early days put up these 
PEG channels. So, from them, we ask that they stick to the 
ability of community to have these channels. From you, we ask 
that you don't put them on channel 1003 and that you keep up 
the quality. And I think, in the long run, we can work it out. 
I really believe that. So that is my hope. That is our intent. 
And we thank you for your participation today. And we hope that 
this hearing does reach about a thousand stations throughout 
the country.
    Ms. Popovic. Absolutely.
    Mr. Serrano. Thank you.
    The hearing is adjourned.

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