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FCC adviser Sherrese Smith discusses media, consumer protection

Sherrese Smith, a legal adviser to the chairman of the Federal Communications Commission, explains how bill shock for wireless customers, early termination fees and truth in billing have taken high priority at the agency. Yes, the FCC is in the middle of a wonky and contentious battle over reclassification of broadband services. But the agency is also addressing what most customers of communications services care about most: good service, fair pricing and getting what they paid for.

In the video, Smith sat down to talk about the agency's recent bill shock initiative that will explore the use of text messaging to alert wireless users when they are about to go well above their normal service fees. We also sat down for a longer interview on some of her top priorities as adviser to FCC Chairman Julius Genachowski on media, consumers and enforcement. After eight years as The Washington Post's general counsel for its digital operations, she saw firsthand the dramatic changes sweeping the media industry. She's a Kindle devotee and voracious consumer of newspapers and magazines such as the Economist. Smith now finds herself looking at media from a different perspective. In her new role in the federal government, she's contemplating the future of journalism, how to approach negotiations between broadcasters and cable operators on retransmission fees, and the future of video online -- an area the FCC hasn't regulated.

Here's an edited transcript of our interview Monday:

Q: What have you brought from the private side of the media business into a regulatory agency in charge of communications oversight?
A: I can't imagine being in this position without the benefit of being on the online side at The Post. At that time, we were at the cutting edge of where the newspaper industry was moving. So I'm able to bring to the FCC the ability to look at issues not only with how they impact consumers, but how they impact the industry. Our actions have real consequences. We don't want unintended consequences and I think I'm able to bring that to decision-making at the chairman's office.

Q: Have you found the FCC's frameworks and rules suited for the digital media age?
A: We're getting there. The chairman made a big step in a lot of his hires. A lot of people came from non-regulatory practices and that combined with people who have been there forever working on these topics is a good mix. It forces us to think of landscape as it is now, but also 10 years from now. We're going through growing pains as any government agency and we will do whatever it takes to make sure we are on top of any issue as we think about how the landscape has changed.

Q: Specifically, how does that pertain to your rules, or lack of rules, on online video?
A: When it comes to online video, we are all cognizant of the fact that this is a big industry and will be bigger as part of the landscape in coming years. That has to be part of our decision-making as we go forward.

Q: So do you think the approach should be enforcement of harmful business practices? Or new rules of the road as more entertainment and news is viewed online?
A: It depends. We have to understand what we are dealing with in the landscape. So we're doing a lot of fact-finding and reaching out. The jury is still out but we need to figure out how to approach it.

Q: What did you think about NBC withholding some Winter Olympics content just for online subscribers of its partner carriers?
A: I won't touch the NBC example per se because we have a pretty big transaction before the FCC and we don't want to say anything that will impact that particular merger. But with anything, we will think about how it impacts consumers first.

Q: Back to consumer issues, I get e-mails from readers saying they want low-end smartphones so they can text easily but hate being forced into Internet data plans. Have you touched on this aside from noting that in your early termination fees letters to carriers? What is your opinion on that?
A: You want to make sure consumers understand what they are getting and that they ultimately sign up for what they want. In general, the landscape is changing and there will be a lot of consumers who didn't want one thing before but may be interested in the future. The biggest thing is education, that they understand up front, at the time of purchase, what they are getting.

Q: I don't think there is any dearth of information out there. Lots of words in fine print. Why not make it easier to understand and standardized?
A: So clearly you read our notice of inquiry. What we want to do, whether it's a standardized box on terms of service, it has to be understandable for the consumer. Taking all the fine print and gobbledygook and condensing it into simple and understandable information is what we want at the end of the day.

Q: Now being at the FCC, able to peer into other businesses and what they are thinking, what have you learned? And what advice do you have for the media industry from your vantage point?
A: One thing that amazes me every time is how innovative and creative people are being. The media gets a bad rap for being stodgy, but people are reinventing themselves and coming up with creative ideas that I think will move the needle in a lot of ways. My advice would be to keep doing that, to reinvent and recreate yourselves. We saw a lot of glory days for a number of years and it's now time to try something else.

Q: How are you handling the retransmission dispute between broadcasters and paid video providers such as cable and satellite providers?
A: We are dealing with a system that has been in place for a number of years. We have seen a couple big companies engaged in battles where consumers ultimately suffered. We aren't judging the industry by those because there are a number of retransmission agreements that work every day. Our concerns aren't about the companies in private transactions, but how that impacts consumers. It's not okay that consumers were surprised a couple days before their signals were going to be pulled. So our public notice looks at how consumers are being affected and how (retransmission disputes) can impact rates.

Q: What's your morning routine? What do you read and do before heading to the FCC?
A: The first thing I do is look at my BlackBerry, where I will usually have messages from colleagues from the night before or earlier in the morning. Then I head off to work out (around 5:45 a.m.) and read the Wall Street Journal, The Washington Post, New York Times and press clippings.

By Cecilia Kang  |  May 18, 2010; 9:30 AM ET
Categories:  Consumers , FCC , Media  
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Next: FTC probes privacy concerns with digital copiers


I'm glad at least one person in the Chairman's office reads The Economist. She seems to have a lot on the ball. I think come the November elections, implementation of the National Broadband Plan is going to stall.

Posted by: RepealObamacareNow | May 18, 2010 8:37 PM | Report abuse

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