A draft FCC rulemaking notice seeking comment on permitting modification of TV markets for satellite carriage is being watched closely by broadcasters, several broadcast attorneys told us. On the agenda for Thursday's FCC meeting, the NPRM seeks comment on how the FCC should implement Section 102 of the 2014 Satellite Television Extension and Localism Act Reauthorization. Though satellite industry officials told us they expect the measure to be noncontroversial, broadcast industry attorneys said the item has the potential to affect retransmission consent negotiations.
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 .
The FCC shouldn't stop broadcasters from pre-empting political advertisers using last-in, first-out (LIFO) policies, broadcast companies, associations and affiliate groups said in reply comments in docket 15-24, responding to Canal Partners Media’s request that the commission do so. “The law requires that stations treat candidates as well as they treat their best commercial advertisers -- but stations certainly are not required to provide candidates with better treatment than their best commercial advertisers,” said Media General, echoing NAB, Sinclair and every other entity that filed reply comments. It would be “a mistake” for the FCC to start dictating the way stations sell advertising time, said the ABC affiliates. CBS and NBC affiliate groups also opposed Canal in their reply comments, and nearly all endorsed NAB’s position opposing the change. NAB has acknowledged that the LIFO policies favor commercial advertisers over political candidates, Canal said, pointing to an NAB publication called The Political Broadcast Catechism. Canal also said TV stations haven't been disclosing their LIFO policies to political ad buyers, and disputed that blocking LIFO policies would elevate candidates over other advertisers. “Until someone becomes a “legally qualified candidate,” that person "cannot get in line to establish a position in the LIFO pecking order,” Canal said. “But commercial advertisers can get in the LIFO line whenever they want.”
A win for the FCC in its Court of Appeals battle with content companies over releasing confidential programming and retransmission consent contracts could push back a decision in the Comcast/Time Warner Cable and AT&T/DirecTV transactions, said communications attorneys on both sides of the dispute. Oral argument in CBS et al v. FCC was Feb. 20 (see 1502200051). “They would have to give parties a chance to review the information,” said American Cable Association Senior Vice President-Government Affairs Ross Lieberman. ACA supported the FCC in filings with the U.S. Court of Appeals for the D.C. Circuit, and Lieberman was blocked from access to the Video Programming Confidential Information (VPCI) at the request of the content company petitioners, which include CBS, Disney, Time Warner and Univision.
Cable associations, direct broadcast satellite companies, public interest groups and broadcasters support extending online political file rules to cable and satellite providers and commercial radio stations, according to reply comments posted Tuesday in docket 14-127. But the groups differ on the threshold for exempting smaller entities, the timing for phasing in new rules, and the formatting requirements for online files. The lone category of regulated entity opposed to falling under online political file requirements is noncommercial radio stations, an exemption supported by nearly all broadcast commenters. In a joint filing, the Campaign Legal Center, Common Cause and the Sunlight Foundation said the FCC should be in a hurry to extend the filing obligations. “It is imperative that all new entities required to upload political files to the online database are doing so as soon as possible, and at least before the next general election in 2016,” the reply comments said.
The FCC paused 180-day shot clocks for the AT&T/DirecTV and Comcast/Time Warner Cable transactions while it waits for the U.S. Court of Appeals for the D.C. Circuit to issue an opinion on a petition for review brought against the agency by a group of content companies over the release of contract information. It’s “prudent” to pause the transaction clocks because the FCC “would be advantaged” by knowing the court’s decision before the clocks run out, “which both are slated to do by the end of March,” the FCC said in a public notice Friday. The Comcast clock is stopped at Day 165 while the AT&T clock is stopped at Day 170, said the FCC transaction webpages. Though the public notice points to the court case as the rationale for stopping the clock, Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman said it’s likely the FCC also has other reasons. At least on Comcast/TWC, the transaction review team sent out information requests that have been fulfilled only recently, and they may not have been in a position to meet the deadline even without the court delay. The FCC had no comment. Comcast said it's fine with the pause. "We understand the FCC's decision to pause the informal review clock while the court continues to review a procedural matter related to the transaction,” Comcast said. “A decision is expected shortly.” The FCC “appears to be making significant progress in the review of our transaction in order to bring it to a conclusion,” Comcast said. The commission was more measured. “The clock carries with it no procedural or substantive rights or obligations but merely represents an informal benchmark,” the PN said. Oral argument was heard in the case Feb. 20 (see 1502200051), and it’s not clear when a decision in the matter could be issued, Schwartzman told us. Though the court usually tries to keep within a 120-day time limit, expedited cases such as the FCC’s are on a faster track, and could arrive much sooner, he said. The D.C. Circuit could also issue an order in one side’s favor or another and then follow it with a written opinion much later, Schwartzman said. Representatives for the content company petitioners, which include CBS, Disney and Viacom, declined to comment. AT&T expects "issues surrounding the litigation between the FCC and the programmers to be resolved quickly so the FCC can complete its review of our transaction," a company spokesman emailed. "We continue to look forward to closing our deal in the first half of the year."
A three-judge panel of the U.S. Court of Appeals gave few hints of how it is leaning during oral argument Thursday on NAB and Sinclair’s challenge of the FCC’s incentive auction rules, several attorneys who watched the event told us. Though the judges allowed NAB’s advocate, Gibson Dunn attorney Miguel Estrada, to speak for more than 15 minutes beyond his allotted time with relatively few interruptions, both sides were asked roughly a similar number of questions. The judges didn’t noticeably seem to favor the arguments of either side, several attorneys connected to both sides of the case told us on background. “This is a really hard one to predict from oral argument,” said Jack Goodman, a former NAB attorney who attended the hearing but wasn’t participating. Though each side was allotted 20 minutes, the judges allowed oral argument to go on for an hour and seven minutes.
A group of broadcast companies worked together to hamper Aereo’s ability to sell its assets at auction after it declared bankruptcy, the now-defunct streaming TV service said in a complaint filed in U.S. Bankruptcy Court in New York Monday. ABC, CBS, Univision, WNET and numerous other broadcasters argued in a series of court filings that Aereo’s network of antennas and other equipment could only be used to infringe broadcast copyrights, the complaint said. The broadcasters ran a "concerted campaign of tortious conduct" that had a “substantial chilling effect” on the sale of those assets in February, the complaint said. During the lead-up to the auction, several prospective purchasers “expressed concern regarding the consequences of purchasing the Debtor’s content-delivery assets given the Broadcasters’ conduct,” Aereo said. Instead of Aereo’s technology being bought by an online video distributor service that could have made use of it, Aereo’s tech was sold “piecemeal” the complaint said. “The Debtor’s patents were sold to RPX Corp., a company specializing in defensive patent acquisitions, for $225,000; the Debtor’s trademarks, domain names and customer lists were sold to TiVo Inc. for $1,000,000; and portions of Aereo’s equipment was sold to Alliance Technology Solutions, Inc. for $320,000.” The value of Aereo’s patents “is highest when owned by an entity actually practicing the technology disclosed in those patents,” the complaint said. The piecemeal sale “forced by the lack of bidders, severely reduced their overall value,” said Aereo. The defunct company is seeking damages to be determined at trial, the complaint said. The Supreme Court found against Aereo in a case concerning its right to retransmit broadcast content, prompting its shutdown and bankruptcy filing (see 1406260071). Several broadcasters contacted for comment on the Aereo complaint declined to respond. NAB declined comment on the complaint.
The FCC likely will try to highlight the most complicated aspects of the incentive auction as it defends its auction policies from challenges by NAB and Sinclair Broadcast Group during oral argument at the U.S. Court of Appeals for the D.C. Circuit Thursday, several broadcast attorneys told us. Emphasizing the technically challenging aspects of the auction makes it more likely that the three-judge panel hearing the case will defer to the FCC as an expert federal agency and uphold the auction order, the attorneys told us. Attorneys for NAB and Sinclair will in turn try to present their issues in as simple terms as possible, an attorney who represents broadcasters told us. The FCC, NAB and Sinclair all declined to comment on their strategies for the court proceeding.
Incumbent online video distributor AT&T and relative new entrant FilmOn X disagree whether the FCC should consider online video distributors (OVDs) as multichannel video programming distributors, but agree federal regulation could be bad for the emerging business, in comments filed Tuesday in docket 14-261. Applying the “anachronistic” rules that burden MVPDs to over-the-top (OTT) services could have negative consequences, AT&T said. “Given the rapid development of the unregulated online video marketplace, it is unclear why the Commission believes it necessary -- or even wise -- to extend its regulatory authority into this space,” said Discovery, taking a similar stance. FilmOn, the Electronic Frontier Foundation and Public Knowledge see the MVPD designation as an opportunity to boost the OTT industry, if “a light regulatory touch” is used, according to FilmOn.
The FCC intentionally ignored edge providers and content companies blocking ISP customers in its new net neutrality rules, said ACA Board Chairman Robert Gessner in a press conference at the association's Summit 2015. FCC officials had acknowledged the issue as a problem that could be addressed by the commission but abandoned that stance after President Barack Obama supported Communications Act Title II regulation, ACA President Matt Polka said. ACA representatives and speakers at the event Wednesday also discussed the Comcast/Time Warner Cable merger and future FCC policies on retransmission consent and program carriage.