Verizon doesn't see the need to engage in “massive M&A” in 2017, President of Operations John Stratton said Thursday at a Wells Fargo investor conference in New York. He added that it's good to have the option to pursue mergers and acquisitions in case something comes up. Stratton also discussed the company's wireless business, its focus on fiber, its IoT business and its priorities for 2017, which include plugging cash into improving network infrastructure, he said: “Back to the fundamentals.”
Monty Tayloe
Monty Tayloe, Associate Editor, covers broadcasting and the Federal Communications Commission for Communications Daily. He joined Warren Communications News in 2013, after spending 10 years covering crime and local politics for Virginia regional newspapers and a turn in television as a communications assistant for the PBS NewsHour. He’s a Virginia native who graduated Fork Union Military Academy and the College of William and Mary. You can follow Tayloe on Twitter: @MontyTayloe .
Broadcast attorneys and public interest groups describe the 3rd U.S. Circuit Court of Appeals as “frustrated” with FCC actions on media ownership and likely to look favorably on appeals of the 2014 quadrennial review. Prometheus Radio Project filed one such appeal last week in the 3rd Circuit (see 1611040054), and NAB has said it will file another in the D.C. Circuit by Monday (see 1611070052). The Multicultural Media, Telecom and Internet Council has also said it will appeal the ownership rules.
An FCC NPRM on ATSC 3.0 is expected to contain few surprises, but it's not clear when it will be issued, broadcast industry officials said in interviews this week. The April petition submitted by NAB, CTA, America's Public TV Stations and the Advanced Warning and Response Network Alliance didn't include a mandatory transition (see 1604130065). So the NPRM isn't expected to be overly complicated, the officials told us.
The FCC Media Bureau and Office of Engineering and Technology are working on an ATSC 3.0 NPRM, Chairman Tom Wheeler said in a letter to Rep. Gene Green, D-Texas, posted online Monday. Wheeler was responding to a letter from Green expressing the legislator's worry that an NPRM wouldn’t be issued before 2016 is out.
The influx of FM translators expected from the two FCC translator application windows could cause a rise in interference conflicts with existing full-power FM stations, and some broadcasters believe the rules for those conflicts are due for reform, broadcasters, attorneys and industry officials told us last week. “I believe we are gonna see a spike in these kinds of battles,” said Fletcher Heald broadcast attorney Frank Montero. It's far too easy for a full-power FM station to accuse of a translator of interfering with its signal, said Cromwell Group President Bud Walters, who owns both full-power FM stations and FM translators. “There needs to be some standards,” Walters said, saying broadcasters should work toward a consensus on how to address interference issues between translators and full-power stations. Several radio industry officials said NAB is looking into the matter. “NAB is working closely with our members on this issue. It is important that there is a reasonable way to deal with interference complaints as new translators come on line,” an NAB spokesman said in an email. “We are confident the FCC will work with us to develop meaningful solutions for all involved.”
Industry officials see the set-top box draft order as stalled, even as FCC officials told us work on the item is still occurring. Ex parte filings show a small surge in recent conversations on the document between stakeholders and Commissioner Jessica Rosenworcel's office. Rosenworcel has been viewed as the deciding vote on the item since it was pulled from the September commissioner meeting agenda (see 1609290076). Since Monday, Incompas, Microsoft and a group of content company officials spoke with Rosenworcel's office, according to industry officials and ex parte filings. “Productive conversations are ongoing,” an FCC spokesman told us.
An FCC draft order on increasing the required amount of video description, set for commissioners' Nov. 17 meeting, likely won't get unanimous support from the members and strongly resembles the NPRM from which it sprang, industry and agency officials told us Wednesday. The draft would raise the amount of video description required for networks -- an adjustment authorized by Congress in the 21st Century Communications and Video Accessibility Act (CVAA) -- and the number of networks covered by the requirement, which industry groups and Commissioners Ajit Pai and Mike O'Rielly said oversteps FCC authority (see 1603310058). The draft item also includes a “no backsliding” rule that industry opponents have called outside FCC authority.
Wireless carriers and broadcasters disagree about the viability of the FCC's repacking schedule and how it should be changed, according to comments filed in docket 12-268 in time for Monday's comment deadline, which saw some earlier comments from all sides (see 1610310052). Some broadcasters believe FCC prioritization of clearing the 600 MHz band of stations gives too much emphasis to the needs of wireless carriers and not enough to the health and safety of tower crews, while the Competitive Carriers Association argued that not enough emphasis is being given to clearing the spectrum quickly. “Allowing stations to move forward when ready, potentially out of order with the schedule produced by the Phase Scheduling Tool, will remove unnecessary impediments and ensure timely reassignment of stations that may be prepared to move sooner than anticipated,” commented CCA.
An FCC proceeding on Entercom's KDND(FM) Sacramento license renewal application likely will take years and is seen as unlikely to result in the station losing its license, despite a 2007 radio contest that led to the death of a listener, attorneys told us. Though hearing designation orders such as that issued against KDND are exceedingly rare, larger companies such as Entercom generally are able to handle the burden of the expensive litigation required and reach some sort of resolution with the commission that allows them to keep the license, said Fletcher Heald broadcast attorney Peter Tannenwald. But Tannenwald, who has defended clients in such proceedings, said the process probably will be difficult, comparing the hearing process to a “death ray.” Such hearing proceedings are rare, Tannenwald said, but when the FCC “gets really mad” at a licensee, it “lets them have it,” he said. The order directs the ALJ to commence the hearing within nine months.
Even as Beasley Broadcast's $240 million dollar agreement to buy Greater Media and some related spinoff transactions grabbed headlines (see 1607200076), there isn't an uptick in radio mergers and acquisitions, brokers, attorneys and analysts told us. Beasley/Greater Media and its related sales are outliers, brokers said, with their scale possibly magnified by a lack of deals in other industries. Though the market for radio deals is down from where it was at this time 2015, some brokers said investors view radio in a better light. Investors increasingly see radio as a stable place to put their money, especially compared with newspapers, said Media Services Group-Chicago Director Robert Heymann: “Buyers and sellers have become more rational in their valuations of stations.”