The FCC voted to approve a draft order that would make cable effective competition a rebuttable presumption nationwide, with both Democratic commissioners dissenting in part and approving in part and FCC Chairman Tom Wheeler and the Republican commissioners supporting the item, an FCC official told us Tuesday, the deadline for congressionally mandated changes to the rule to be approved.
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 .
Both Republican FCC commissioners have already cast votes in favor of a draft order making effective competition a rebuttable presumption nationwide, while eighth-floor Democratic offices have yet to throw their support behind the item, FCC officials told us Monday. Commissioners Mignon Clyburn and Jessica Rosenworcel are seen as having concerns about the draft item in its current form, industry and FCC officials told us.
The FCC deadline for Class A's and full-power TV stations to build and license new facilities to have them protected in the incentive auction spurred a wave of construction by Class A stations working to get their new digital footprint in under the deadline, broadcast attorneys said in interviews last week. Many Class A's had put off such conversions because the auction deadline kept being moved and the prohibitive cost of upgrades, said Fletcher Heald broadcast attorney Peter Tannenwald. He said he knew of several stations working hard in the last days before the deadline to get their facilities completed and proper filings in.
A push by NAB and public interest groups to limit a change in cable effective competition rules to small cable is getting traction in Democratic eighth-floor FCC offices, while Republican offices remain favorable to the draft order as originally circulated (see 1505150035) by Chairman Tom Wheeler, said broadcast, cable and agency officials in interviews. They said that with a congressionally mandated deadline for the rule change coming Tuesday, the Democrats have concerns about the draft. Some cable industry officials believe a majority of the commission is favorable to making effective competition a rebuttable presumption for all cable, as the draft proposes and as broadcasters oppose.
Charter Communications’ planned buy of Bright House Networks and Time Warner Cable doesn’t face the same regulatory hurdles as Comcast/TWC, said industry officials, analysts and public interest groups. But they don’t agree on the new deals' prospects, according to interviews and statements Tuesday. Charter CEO Tom Rutledge is “confident” regulators will sign off on the deal, he said on an investor call Tuesday. “We’re a very different company than Comcast.” Comcast/TWC opponent Free Press said Charter/BHN and TWC doesn’t offer a public interest benefit, which FCC Chairman Tom Wheeler highlighted in his statement.
Rules that will require device manufacturers to create a simple mechanism to switch between a main program audio feed to an emergency alert on the secondary audio stream are outside the authority granted to the FCC by Congress in the 21st Century Communications and Video Accessibility Act, said Commissioners Ajit Pai and Mike O’Rielly at Thursday’s agency meeting. The rule was part of a 2nd report and order requiring pay-TV carriers to pass through such screen-crawl TV alerts to tablets and smartphones streaming multichannel video programming distributors' content through the companies' apps, as expected (see 1505120027). Pai and O’Rielly voted with the rest of the FCC to approve the order and an accompanying Further NPRM, but dissented over the simple mechanism portion.
Upcoming deals such as Luxembourg-based Altice's $9.1 billion proposed buy of 70 percent of Suddenlink or Charter Communications' expected offer to buy Time Warner Cable might seem more palatable to regulators than Comcast/TWC, but that deal's dissolution left the regulatory landscape for transactions unclear, said cable attorneys and analysts Wednesday. After Comcast's withdrawal and with AT&T's proposed purchase of DirecTV still not yet cleared, the multichannel video programming distributor merger and acquisition landscape is “in flux” and “clear as mud,” MoffettNathanson analyst Craig Moffett emailed investors. The Comcast deal showed that the politics surrounding of a transaction can turn what appear to be minor legal issues “into mountains,” said BakerHostetler cable attorney Gary Lutzker.
The LPTV Spectrum Rights Coalition will lobby Congress to hold an auction of low-power TV spectrum separate from the incentive auction, said Director Mike Gravino. Under the coalition's proposal, the federal government would purchase the LPTV spectrum now but not auction it off until after the incentive auction is completed. The promise of future gains from the sale of the LPTV spectrum could be used to justify adding more money to the incentive auction’s relocation fund, or to put off the incentive auction to allow the repacking to coincide with the adoption of ATSC 3.0.,Gravino said. “It’s a Christmas tree bill” that could be used to fix “everything wrong” with the incentive auction, and provide a future source of valuable spectrum, Gravino said. Gravino told us he had been scheduled to brief NAB on the proposal, but he said the meeting was canceled by the broadcast association after we contacted NAB for confirmation. An NAB spokesman said his association has no meetings scheduled with Gravino. In the group's Monday newsletter, it took aim at CEA CEO Gary Shapiro for not knowing some of the intricacies of LPTV. At an ATSC meeting last week, Gravino wrote, he had spoken with Shapiro about the "tax credit plan to free up spectrum and pay LPTV." Shapiro, "as intense as everyone says he is," "simply did not know the basic facts about LPTV, nor the auction process itself," wrote Gravino. "He certainly did not know about the potential impacts on LPTV from the auction, nor how LPTV can screw up the auction process. But there is a reason he is considered the toughest guy in the room when it comes to lobbying and TV. He listened very carefully to the distilled data I presented, was literally shocked by it, and asked my permission to quote me when he was on the panel." At the panel, Shapiro challenged NAB CEO Gordon Smith to agree that broadcasters wouldn't further try to delay the auction (see 1505140040). CEA had no comment Tuesday.
The FCC is likely to affirm a compromise between NAB and the American Cable Association over the ACA-requested extension of an exception of the HD-carriage requirement for small cable systems distributing must-carry stations (see 1505150052), cable attorneys said in interviews Tuesday. The current exemption is set to expire June 12. The proposed compromise wouldn’t have an expiration date, said an ACA and NAB filing posted Friday to docket 98-120. Instead, small cable systems would be exempt from carrying HD must carry broadcast stations in that format as long as they don’t carry any high-definition programming, and would cease being exempt the moment they began carrying any high-def content.
FCC anti-collusion rules will put strong controls on bidding-related communication between TV licensees during the incentive auction, without preventing broadcast attorneys from representing more than one licensee in the proceeding, experts on the issue said in interviews Friday and Monday. As long as an attorney doesn’t act as a ”conduit” for one licensee to learn about another’s bidding strategy, that attorney can represent more than one client in the reverse auction, they said. That interpretation of the rules was brought to the FCC by representatives of FCBA in a letter posted Wednesday to docket 12-268 asking for commission guidance on whether FCC officials disagree with FCBA’s view of the rules (see 1505140068).