Below is the written and prepared statement submitted to the Committee on Commerce, Science and Transportation, United States Senate, March 11, 2010.

Mr. Chairman and members of the Committee, thank you for this opportunity to address the role of the Federal Communications Commission in reviewing proposed mergers in the communications industry, including the contemplated transaction involving Comcast and NBC Universal.

The Commission approaches these matters mindful that maintaining a vibrant, innovative, consumer-friendly, and competitive communications sector is essential for our economy, our society, and our democracy.  Communications policy affects the lives of all Americans – and is becoming ever more important. Communications represents a major sector of our economy and plays a vital role in addressing many of the challenges our Nation faces. 

Congress has set the basic framework for our review of mergers and transactions in the communications industry.  Sections 214 and 310 of the Communications Act require that before FCC licenses or authorizations may be transferred from one holder to another, the FCC must find affirmatively that the transfer is in the public interest.  This is a statutory requirement to protect and promote the interests of all Americans.

In exercising our statutory responsibilities in the context of reviewing transactions, the Commission is focused on several important and interrelated principles.  These include protecting and advancing the interests of consumers, as well as those of children, and families; ensuring effective competition; promoting innovation; and encouraging investment and the broad and rapid deployment of broadband and other advanced communications services throughout the United States.  Specifically with respect to television programming, the Commission’s goals include a vibrant and healthy marketplace, guided by the well-settled Communications Act values of competition, diversity, localism, and a deep respect for the First Amendment.

In the review of any particular transaction, some of these considerations may be more centrally at issue than others.  Additional factors, such as spectrum, universal service, or foreign ownership and national security, may also be important in specific cases.

The law further requires that the Commission analyze these issues through an open process.  The Administrative Procedure Act provides for a record-based agency review, with a full opportunity for interested persons to file their facts and arguments, and a decision supported by the evidence.  The Commission’s staff reviews and analyzes the record, issues information requests when appropriate for additional necessary data, meets with the applicants, opponents, and others to understand and discuss positions on all sides, and reaches out to affected parties to obtain various perspectives on the proposed transaction.  The staff then prepares a draft order addressing the record and reaching tentative conclusions.  Ultimately the five-member Commission votes on whether to approve the transfer, with or without specific conditions, or to reject it.  Our decision can be challenged in court, like any other administrative order.

Consistently over many years, the FCC and the federal antitrust agencies reviewing particular transactions have worked out procedures that allow the agencies to cooperate, taking advantage of the respective expertise of their staffs.  This cooperation includes sharing information and analysis; identifying issues; avoiding conflict regarding any necessary remedies; and making the review process as efficient as possible for all concerned.  At the same time, each reviewing agency must make its own decisions, under its own governing statutes and standards. 

The FCC’s public interest standard and procedures are different from the ones the Department of Justice applies when it reviews transactions.  Unlike the FCC’s review standard, the Department of Justice determines whether the transaction may “substantially lessen competition” under the antitrust laws and, when appropriate, fashions antitrust remedies.  The Department of Justice’s investigations are not focused on issuance of an administrative order, but instead primarily on whether or not to challenge the transaction in court.  The Hart-Scott-Rodino Act, which is its governing statute, requires strict confidentiality concerning the investigative process, allowing public disclosure only under limited circumstances. 

In terms of remedies, in the Communications Act, Congress granted the FCC flexibility to address potential harms and reinforce promised benefits by using tailored remedies requiring or prohibiting particular conduct.  Accordingly, the Commission’s review of communications transactions fills a unique role that complements the role played by the Department of Justice.

Especially given its unique function, the FCC’s review of communications industry transactions must be thorough, efficient, timely, and transparent.  It must have the appearance as well as the reality of objectivity, fairness, and reliance on the best available data and analysis.  In the past, some have expressed concerns about whether FCC review of some transactions has taken longer than the circumstances warranted.  Some have also questioned in particular cases whether the Commission’s processes were sufficiently open and reflected a sufficiently thorough analysis of the relevant data and issues.  I am committed to working with my fellow Commissioners to ensure that the agency’s review procedures meet the highest standards of openness, transparency, rigor, and fairness, and minimize costs and delay while fully protecting the public interest. 

In general, the FCC begins its transaction-review process once a complete and compliant transfer application has been received from the parties.  At that point, we ask for public comment.  

In the Comcast/NBC Universal proceeding, for example, the companies filed an initial Application and Public Interest Statement on January 28, 2010.  At the request of the applicants, the Commission awaited the filing of a supplemental economic report, which we received last Friday, March 5.  The Commission will soon issue a notice that begins the public comment period and informs interested persons how they can address the applicants’ submissions and participate in the FCC proceeding.

To promote a thorough and efficient process, a dedicated team has already begun work on staff-level review of the proposed transaction.  Reflecting the scope of the transaction, the team members come from a number of the agency’s bureaus and offices and bring to bear years of expertise.  I have directed the team to learn from experience—to examine past similar transactions and see, with the benefit of hindsight, what the FCC did right, and where the agency could have done better.  Our staff has also begun the process of consultation and cooperation with our colleagues at the Department of Justice.

The legal requirements of record-based decision-making prevent me from commenting in any way on the merits of pending transactions, including the Comcast/NBC Universal transaction.  Our decisions on mergers are made only after we compile and review a full record.  The FCC will of course thoroughly consider all of the important issues that have been raised or will be raised in the context of the transaction.

As the Committee is aware, the communications and media landscape is rapidly evolving.  New media and new communications technologies are an increasingly important part of the landscape, even as millions of Americans continue to rely on traditional forms of media and communications.  The landscape today is very different from five and ten years ago, and will be very different five and ten years from now.

While the changing landscape must of course inform the FCC’s decision-making, certain core values remain constant.  Robust and healthy competition is essential to producing consumer benefits – better services, and lower prices.  An important part of our responsibility at the Commission is to ensure that communications industry transactions do not enable firms to frustrate innovation or raise prices ultimately paid by consumers.  We must ensure that American consumers continue to enjoy all the benefits of competition and choice, in a vibrant and diverse communications and media environment that upholds vital First Amendment values.  Investment, innovation, and employment are key objectives, as is the rapid and widespread deployment of advanced communications services.  These and other traditional goals and values will inform our review of transactions.

Thank you for the opportunity to appear before you today.  I look forward to working with the Committee, and I would be happy to address any questions the Committee may have.

The presentation offered a good overview of 3D production in general and then concentrated on the camera.  Small image sensors were chosen to allow a side-by-side configuration, even though that led to reduced sensitivity (the 3D camcorder was the only one in the demo room to require additional lighting instruments).  The lens motors are controlled together (Fujinon had a demo in the same room for a common calibrator and controller for paired 3D lenses), and the same system used for chromatic-aberration correction can be used to correct geometric distortion and differences between the left- and right-eye pickups.

So why isn’t the optical system finalized?  Panasonic wants this to be a 3D-training camcorder and, as such, as simple to use as a bicycle with training wheels.  Zoom range will be affected by convergence angle (and at the HPA Tech Retreat at least one participant expressed an opinion opposing convergence, because it effectively changes the frame shape at any fixed plane from the camera from two rectangles to two trapezoids, with opposite short and long sides for the two views, introducing an undesirable vertical-scale difference).

The presentation also covered the professional monitor, which, unlike consumer devices, uses crossed linear polarization.  One advantage of linear polarization is that it tends to offer less ghosting (especially in blues) than circular polarization, if the viewer’s eyes are as horizontal as the display.

The seeming disadvantage is that a viewer cannot put her or his head on someone else’s shoulder without getting severe ghosting.  But that same characteristic might be seen as an advantage for a professional monitor; when one’s eyes aren’t horizontal, one isn’t seeing 3D properly, regardless of ghosting.  The ghosts act as a self-corrective to head position.

There were many more 3D presentations and demonstrations at the HPA Tech Retreat, including TDVision on 3D to mobile devices (they had an encoding demo), Miranda on the proper z-axis positioning of graphics, and Dolby showing HD 3D on a giant screen in just about 7.5 Mbps.  There was the 1 Beyond Wrangler for portable 3D recording and review, Cobalt’s UDX 3D processor, Doremi’s 3D format converter, DVS’s system for 3D digital-cinema package (DCP) creation, including subtitles, Fraunhofer’s 3D DCP player (and immersive 3D-capture system), GIC’s 3DV quality-control (and subtitling) system, 3D-shooting tools from IFX, Imartis’s rapid-stereo-adjustment SwissRig, and JVC’s 3D upconverter-mixer-monitor system.

Oculus 3D showed a brand-new system for film-based 3D in movie theaters (Technicolor just announced another).  OmniTek offered 3D test patterns and a range of 3D displays (waveform, histogram, metadata, and picture-difference among them).  Quantel had their latest 4K 3D software.  Ross Video had a 3D character generator.  SpectSoft had a new 3D converter (as well as other 3D features).  THX had 3D signaling for home theaters.  T-VIPS had 3D-over-IP using JPEG2000.  And I might have missed some of the 3D demos.

There were also at least a dozen breakfast roundtables at which 3D was discussed — everything from the effect of blur on the perception of depth to the use of 2D equipment in 3D production.  What there didn’t seem to be was anything on the mysterious single-lens 3D camera shown by Sony at CEATEC.

The unofficial motto of the HPA Tech Retreat, however, is “someone will be there who knows the answer.”  Sure enough, at a networking opportunity, it was possible to get not only the lowdown on the single-lens Sony 3D camera but even an unpublished paper about it and the published research on which it’s based.

The subject of that research is “microstereopsis,” and it has been studied in many labs around the world.  At a breakfast roundtable at the HPA Tech Retreat, Professor Martin Banks of the University of California – Berkeley noted that the human visual sensitivity to disparity between the left- and right-eye views (stereopsis) is a full factor of magnitude greater than its sensitivity to detail resolution.

In an ideal 3D system, the cameras would shoot views matching the distance between the centers of a viewer’s pupils (pupillary distance, or PD), and the display would duplicate that.  But different viewers have different PDs, and screens come in a range of sizes.  To keep viewers from ever having to (unnaturally) diverge their eyes, the views, especially on TVs, are usually presented at considerably less than the viewer’s PD.  If the cameras had a greater separation, the result can be a sensation of looking at a doll house, with a shortened depth sensation.

So why not shoot with a reduced PD in the first place?  That’s the idea behind microstereopsis.  One paper about it is called “Kinder Gentler Stereo.”  Another is “Just Enough Reality.”

Digital Optical Television Systems used a single-lens 3D camera in the early 1970s.  Sony’s CEATEC camera — not yet intended as a product — is another.  It shoots at 240 frames per second for a different kind of sensation and uses ordinary zoom lenses, which cannot be mismatched because only one is used at a time.  Behind the lens, a mirrored optical system splits the two views and sends them to different paths, but the two eye views can actually be recombined and viewed comfortably as 2D.  Pictures from the camera were actually shown at last year’s Consumer Electronics Show.

There was lots more at the 2010 HPA Tech Retreat.  If I get a chance, I’ll provide some more in a future post.  Meanwhile, you can read up on it at the URLs I provided last time: http://schubincafe.com/blog/2010/03/2010-hpa-tech-retreat-what-gave-some-avatar-viewers-discomfort/

www.stuff.co.nz reports that Sky Television will end its New Zealand UHF pay-television transmissions at midnight on March 10, switching off a service once used by hundreds of thousands of households.

You can read all about the 100 or so UHF viewers who will loose their UHF pay service at http://www.stuff.co.nz/technology/3426685/Sky-to-switch-off-UHF-service.

BusinessInsider.com has about how when Walmart announced it had acquired VUDU, quite a few discussions were taking place on the web suggesting that Walmart would now need to setup a data center to be able to handle the delivery of videos, or that Walmart wasn’t going to want to support VUDU’s P2P based technology.

Since neither of those assumptions are accurate, Dan Rayburn thought it might be helpful to detail what video technology VUDU is using and how they encode and deliver content to devices.

Here’s the story: http://www.businessinsider.com/everything-you-need-to-know-about-vudu-2010-3

Andrea Adelson of the Orlando Sentinel has an interesting piece on ESPN 3D and TV viewing habits. You can read the piece at http://www.orlandosentinel.com/sports/os-espn-3d-0306-20100305,0,5826537.story