Multichannel video programming distributors, programmers, tech companies and civil rights groups continued to lobby the FCC over the agency's set-top proposal until the beginning of the sunshine period Thursday evening, according to ex parte notices posted in docket 16-42 that day and Friday. Groups on both sides repeated their opposition or support for the draft item set for commissioner's coming Thursday meeting, T-Mobile announced support for the FCC plan, and a coalition of civil rights groups asked the FCC to delay the vote. Amazon proposed an alternative to the commission’s licensing plan that was raised by FCC officials in discussions with content companies, according to an ex parte filing.
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 .
FCC Commissioner Ajit Pai's proposal to explore creating a new C4 class of FM stations with a wider range than Class A stations but smaller than C3 FM stations (see 1609220070) has some broadcast attorneys concerned about the translators granted under the agency's AM revitalization. “Translators are secondary facilities,” said Womble Carlyle radio attorney John Garziglia. The expansion of the contours of Class A FM stations could interfere with existing translators, including the hundreds recently purchased by AM stations under the revitalization effort, broadcast attorneys told us. Any final order would have to protect existing translators, especially the translators granted under the revitalization effort, a Pai spokesman told us.
Nexstar pushed the FCC to grant a waiver to have its $4.6 billion planned buy of Media General approved despite the ongoing incentive auction, as expected (see 1607190058). “When the FCC adopted its rules for the Incentive Auction, it declared that the 'quiet period' and the corresponding prohibition on major ownership changes for stations subject to an Incentive Auction application would last 'only a matter of months,'” Nexstar said in a supplementary filing on the waiver: “More than eight months have passed since the commencement of the Incentive Auction quiet period and the prohibition on major ownership changes, and the Incentive Auction has now entered a second stage with no definitive end date in sight.” Nexstar initially requested the waiver in February when it filed the Media General application too late to have it approved before the auction began, but the broadcaster remained silent on the waiver until its new supplementary filing. DOJ has given its nod to the deal, the FCC's 180-day shot clock has expired, and the time period for petitions to deny the transaction has passed, Nexstar said. “The FCC now stands as the only obstacle to closing, and the Applications are ripe for grant.” Attorneys have told us the FCC would likely not grant the waiver out of concern it would further complicate the incentive auction; Nexstar said that isn't a significant issue. “With the exception of two stations, the actual licensee of any Media General station will not change nor will its [FCC registration number] in connection with this Transaction,” Nexstar said. Delaying the deals approval because of the auction “unnecessarily subject the Applicants’ consummation of the Transaction to the vagaries of an Incentive Auction that will last several more months in a best-case scenario and could well stretch beyond that into 2017,” Nexstar said. “There are no public interest benefits to be gained by applying these rules to the Transaction. In fact, the growing delay in concluding the Incentive Auction steadily increases the market distortion and public harm caused by strict application of these rules.” Bayou City Broadcasting, which is set to buy two stations being divested by Nexstar as part of the transaction, also urged the commission to expedite the approval process. BCB is small and African-American owned, said CEO DuJuan McCoy in a letter supporting the waiver request. "Any extended delay in closing this transaction could have extreme negative financial consequences for me and my company and could perhaps create insurmountable obstacles that could jeopardize my ability to close this transaction and/or financially operate the properties after closing based on our original financial assumptions."
Eighth-floor officials are in talks over possible changes to the FCC draft set-top order, agency and industry officials said in interviews. Those negotiations are believed to center on the licensing aspects of the set-top plan called problematic by programmers, legislators and Commissioner Jessica Rosenworcel, who's seen as the key vote required for Chairman Tom Wheeler to get the plan approved. There's no appetite in Wheeler's office to remove the item from the Sept. 29 commissioner meeting agenda, industry officials said.
Lower-than-expected political advertising revenue for Gray Television and Sinclair is more likely a one-time outlier than an indication of a permanent shift in TV ad spending, numerous analysts and broadcasters said in interviews Wednesday. “Of course, online [advertising] is increasingly relevant, but all politics is local, and local stations are still important” for disseminating political advertising, said BIA/Kelsey Chief Economist Mark Fratrik. Both broadcasters announced revisions to their projected political ad revenue for Q3 Tuesday, and both companies cited the unpredictable advertising strategy of the current presidential campaign as the cause, as analysts told us last week (see 1609160068).
FCC involvement in writing “the substantive terms of any license” under the set-top box proposal would exceed its authority, NAB CEO Gordon Smith said in a call Friday with Commissioner Jessica Rosenworcel. The licensing plan would “fatally undermine the Commission’s stated goal of protecting content and respecting copyright and contracts,” NAB said. Public Knowledge disagreed, in a letter citing legal precedent for the FCC's proposed licensing body. The agency has the authority to “counter factors it believes may 'impede' competition, and as an expert agency, its decision-making is entitled to deference,” Public Knowledge said. “The case that some oversight is necessary to ensure that [multichannel video programming distributors]/device agreements do not undermine competition does not seem particularly difficult to make,” Public Knowledge said. “There is no support for claims that the FCC’s authority somehow does not apply to the apps-based proposal -- which is, after all, based on proposals put forward by the MVPD and programming industry themselves.” The FCC set-top plan also was endorsed in a letter from numerous rural advocacy organizations, including the National Digital Inclusion Alliance and Access Humboldt. “We urge you and your fellow Commissioners to stay strong and to side instead with consumers -- especially rural consumers -- who pay Big Cable and Big Content hundreds of dollars extra every year because of this monopoly they want to protect,” the rural groups said. The FCC should make clear in its final set-top order that “all components of the pay-TV ecosystem, including the pay-TV apps and the devices on which they are viewed, must be directly and unquestionably subject to the Commission’s accessibility rules,” said Telecommunications for the Deaf and Hard of Hearing and others in a meeting with aides to Chairmen Tom Wheeler Monday, said an ex parte filing. The apps and third-party devices will all be subject to the 21st Century Video Accessibility Act, the filing said. “Ensuring that all apps and devices are directly subject to the Commission’s accessibility rules, regardless of whether apps are preinstalled or downloaded later, is essential to ensuring certainty and consistency in application and enforcement of the rules.” The FCC didn't provide enough notice for a final set-top rule to apply to direct broadcast satellite, Dish Network and EchoStar said in a joint filing on meetings last week with aides to Commissioners Jessica Rosenworcel and Ajit Pai and Media Bureau staff. DBS providers would require a “gateway” device to comply with the proposed set-top rules, but the NPRM “did not seek comment on the issues related to such a device, much less propose actual rules to govern its design and operation,” the companies said. Rosenworcel is seen as a holdout on FCC Chairman Tom Wheeler's set-top box order (see 1609150045).
A foreign ownership item circulating on the eighth floor will make it easier for broadcasters to be foreign owned and change the way the FCC assesses foreign ownership, agency and industry officials said in interviews. The item is seen as widely supported among all FCC commissioners and is expected to be unanimously approved, industry attorneys told us. "These process reforms will provide the broadcast sector with greater transparency and more predictability, while reducing regulatory burdens and costs for all sectors,” FCC Chairman Tom Wheeler said in a Sept. 8 blog post. In recent months, Frontier Media and Univision have asked the FCC to approve foreign-ownership situations above the 25 percent threshold (see 1609120072). The order is preliminarily set for commissioners' Sept. 29 meeting (see 1609080083).
Purchases of TV political spots are down from what was expected for 60 days before the general election, analysts said in interviews Friday. In 2012, $2.5 billion was spent on political ads between Labor Day and Election Day, said Kantar Media Campaign Media Analysis Group General Manager Steven Passwaiter: “This cycle, we're not even close.” Low spending on TV ads reduces revenue for TV stations and cable networks, and means there's less data for entities monitoring political ad spending to collect, said Robert Maguire, political nonprofits investigator for the Center for Responsive Politics (CRP).
Opponents and proponents of the app-based set-top order scheduled for the FCC's Sept. 29 meeting (see 1609080085) disagree on how intrusive the proposed rules will be for programmer contracts, according to recent ex parte filings, news releases and interviews with industry officials. The plan would create an “unworkable de facto compulsory licensing regime that requires creators to allow their work to be shared across multiple platforms without compensation and without regard to the creators’ rights to exclusively control their distribution,” said a large group of programmer associations, including MPAA, RIAA and the Copyright Alliance, in a statement Wednesday.
The stage is set for the Sept. 28 nationwide test of the emergency alert system to go smoothly, said broadcasters, the FCC, Federal Emergency Management Agency officials and EAS test industry officials in interviews this week. Designed to address the shortcomings revealed by the 2011 test (see 1607180062), the 2016 version is expected to be successful, broadcast industry officials and the government agencies that oversee EAS told us. Checking those expectations is why such tests are conducted, said Maine Association of Broadcasters CEO Suzanne Goucher, who chairs the Joint NAB-National Alliance of State Broadcasters Associations EAS Committee.