The U.S. Judicial Panel on Multidistrict Litigation randomly selected the U.S. Court of Appeals for the D.C. Circuit as the venue for appeals of FCC media ownership rules and the 2014 quadrennial review, it said in a consolidation order Thursday. Prometheus Radio Project challenged the order in the 3rd U.S. Circuit Court of Appeals, while NAB and the News Media Alliance (see 1611140046) appealed the FCC orders in the D.C. Circuit. Despite the panel’s choice, attorneys connected with the matter have told us the D.C. Circuit is universally expected to transfer the case to the 3rd Circuit, which had retained jurisdiction over the case. The Multicultural Media, Telecom and Internet and Council and the National Association of Black Owned Broadcasters filed a joint appeal of the rules Wednesday, focusing on the FCC's failure to extend rules designed to incentivize diversity in cable procurement to other industries. "Petitioners seek review of this ruling both as arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law and as agency action unreasonably delayed or withheld," the filing said. “Despite representations to the Third Circuit that the FCC Chairman would address this issue in a manner that would allow it to be resolved [in August], the FCC has once again punted the issue,” MMTC and NABOB said. Recounting a call with Media Bureau staff Monday, representatives for Connoisseur Media said in docket 09-182 that it said it was considering filing a petition for reconsideration against the order’s treatment of multiple ownership situations.

The FCC Wireline Bureau cleared the purchase of RCN Telecom Service and Grande Communications Networks by Radiate Holdings. No commenter opposed the grant of a Sept. 1 application to transfer licenses under Section 214 of the Communications Act from Yankee Cable Partners and Grande Investment to Radiate (see 1609020006), said an FCC public notice Wednesday in docket 16-276 noting the bureau approval. The PN said the approval was "without prejudice" to FCC action on "other related, pending applications." The Media, Wireless and International bureaus have yet to act on those applications, an agency spokesman told us. Radiate is a holding company controlled by principals of TPG Capital, with minority partners in Radiate including Alphabet-owned Google Capital, an affiliate of Dragoneer Investment Group and some executives from Patriot Media Consulting. Patriot manages RCN and Grande Communications for Yankee and Grande Investment, respectively, and will do the same for TPG after the close, said a filing (available here). RCN has roughly 474,000 subscribers in Illinois, Massachusetts, Maryland, New York, Pennsylvania, Virginia and Washington, D.C., and Grande has more than 166,000 in Texas.

FCC financial statements received high marks overall from an independent auditor, according to a memorandum Tuesday from Managing Director Mark Stephens accompanying one piece of the agency's FY 2016 Annual Financial Report (AFR). Although the White House Office of Management and Budget granted the FCC an extension until March 1 to publish its FY 2016 AFR, it didn't extend a Nov. 15 deadline for its "improper payment reporting section," said the memo. It said the rest of the report would be issued before March 1 or when the incentive auction bidding process is completed. The auditing firm Kearney & Co. found the FCC's consolidated FY 2016 financial statements "present fairly, in all material respects, the financial position of the Commission as of Sept. 30," Stephens wrote. He said it was the 11th straight year of "clean audit opinions" for the FCC, which was an "unprecedented accomplishment" for the agency. "The Commission made significant strides in FY 2016 by resolving a prior year finding by the auditors that the FCC was not in compliance with the Debt Collection Improvement Act," he wrote. "This is the first year that the auditors have reported no instances of non-compliance with applicable provisions of laws and regulations for the FCC." The audit did not find "any material weaknesses but did identify three significant deficiencies ... related to Universal Service Fund budgetary accounting, accounting for non-exchange revenue, and information technology controls," he wrote, noting his office concurred with auditor recommendations. On USF, the FCC addressed a previous material weakness regarding budgetary accounting in the E-rate telecom discount program for schools and libraries, but auditors found a significant deficiency in the rural healthcare program, Stephens wrote. He said the FCC was committed to addressing a "new control weakness in accounting for non-exchange revenue" and "remediating information technology control deficiencies."

Once the broadcast incentive auction is completed, participants barred from transaction talks will likely start up again with possibilities including cable/wireless such as a Comcast/Sprint or Comcast/T-Mobile, wireless/wireless such as T-Mobile/Sprint or some company -- potentially any of the four major wireless operators -- combining with Dish Network, Macquarie analyst Amy Yong wrote investors. Convergence is being driven by AT&T's DirecTV Now and by its pending takeover of Time Warner, as well as by Comcast and Charter Communications having activated their mobile virtual network operators, Yong said. She said that given President-elect Donald Trump's opposition to net neutrality, and a change in chairmanship at the FCC -- potentially in the form of current Republican Commissioner Ajit Pai -- likely "will reflect a similar stance."

The enhanced security measures CTA put in place for the last CES (see 1512170062) will largely be repeated for the upcoming January show, Karen Chupka, CTA senior vice president-CES and corporate business strategy, told us at last week’s CES Unveiled New York event. The security measures, including airport-style metal detectors and tight restrictions on bags that could be carried onto show property, were imposed after the Paris and San Bernardino, California, terrorist attacks in fall 2015. “For the most part, we’re going to stick with the same rules,” Chupka told us. “We’re at the point where we have to do what’s right for the show,” she said. “We do have to protect people. That’s the way it is now. We have things in place now, and we have the ability to tighten them, or maybe shift them a little bit.” At last CES, “as we got through the show, we weren’t stopping everybody,” Chupka said. “We were using our best judgment to do things. But had something changed, and we had to go into that lockdown, we would have been able to do that. So we still have to plan for that expectation.” A new change for the upcoming show is asking CES attendees to provide additional personal data such as date of birth when they register, she said: “That’s just one more piece of security.” CES opens Jan. 5 for a four-day run.

FTC Commissioner Maureen Ohlhausen sees the need for repeal of the FTC’s common-carrier exemption as all the more important. That is in light of possible FCC reversal of its Communications Act Title II reclassification of broadband under a Republican majority (see 1611100041) and questions surrounding the FTC's request for an en banc rehearing of 9th U.S. Circuit Court of Appeals ruling on its fight with AT&T Mobility (see 1611080053), she said Tuesday at an event hosted by the Phoenix Center. “I would hope Congress might consider at least repealing the common-carrier exemption for the consumer protection side,” said Ohlhausen when considering what might follow an FCC Title II reversal. “The problem with the consumer protection side is you don’t have somebody else ready to step into the space.” Ohlhausen is expected to be in the FTC majority next year. She called the exemption “outdated” and referred to the bipartisan objections to retaining it. “The reasons we’re keeping the FTC out of the picture don’t really make sense anymore.” The 9th Circuit ruling “is a broad decision,” she added. “Of course, it is only one court of appeals and we have asked for rehearing.” She has a forthcoming law review article about taking competition seriously in the broadband space, she said, defending the role of antitrust principles playing a “fundamental approach to all industries, including internet industries.” She objects to those who say antitrust only takes economic values into consideration, calling it a “misunderstanding of how markets work.” She also addressed broader antitrust concerns. “I don’t want to see the liability for activity in the economy turn on whether your conduct, your merger goes to the FTC or the DOJ,” she said. “I think that causes a problematic state of affairs and a lack of certainty for companies.” She backed the Standard Merger and Acquisition Reviews Through Equal Rules Act (HR-2745), a partisan measure that passed the House this fall (see 1603230047).

Infrastructure policy kept coming up this week, with an eye toward President-elect Donald Trump’s plan for a $1 trillion infrastructure funding package that he has said he wants to advance before Congress early next year. “The whole idea around infrastructure is something that not only crosses lines between parties but it also crosses lines between federal government, state governments and local governments,” said Verizon Smart Communities Vice President Mrinalini Ingram Monday, speaking at an event hosted by Bloomberg Government and referring to smart city and autonomous vehicle initiatives. She called for “synergies” and “seamless” coordination involved in such infrastructure: “Look at infrastructure as a whole.” Chamber of Commerce Transportation Infrastructure Executive Director Ed Mortimer said the Chamber backs a “long-term sustainable funding solution,” questioning the merits of repatriated tax funds -- one debated source of funding for infrastructure as part of a greater package -- as sufficient. AFL-CIO Policy Director Damon Silvers mentioned a need for broadband funding, part of Trump’s proposal: “There is a need for broadband both in our nation’s inner cities and in our nation’s rural communities,” he said, while also questioning the racial climate that he says is preventing a fulsome infrastructure discussion.

Telecommunications Industry Association CEO Scott Belcher is leaving at year-end, TIA said in a Friday news release. A search for a new CEO is underway, and incoming Chairman David Heard will serve as interim CEO starting Dec. 1, said TIA, which, in conjunction with a board meeting this week, will also present "a new slate of board leaders with strong industry experience." Belcher "has helped the organization establish a strong operational foundation and strategic plan from which to grow," said current Chairman Mark Walker. "In line with this, we will seek a new leader with strong industry knowledge and technology background.” Belcher was named CEO two years ago (see report in the Oct. 9, 2014, issue). A TIA spokeswoman told us by email Monday: "At this time, no one else is leaving TIA, and no one else has left recently.”

Ex-Rep. Henry Waxman, D-Calif., warned FCC Commissioner Mignon Clyburn that "millions of Lifeline consumers would be adversely affected" if the agency proceeds with a "reduction in the de-enrollment for nonusage rule" from 60 days to 30 days on Dec. 2, as scheduled. "As my client, TracFone described in a motion to stay or defer the effective date of the revised rule, many Lifeline consumers temporarily cease using the service for short periods due to illness, hospitalization, or due to broken or misplaced handsets. However, those consumers fully intend to remain in the program," said Waxman, chairman of Waxman Strategies, in a filing posted Monday in docket 11-42 reporting a call with the Clyburn. "TracFone estimates that it would have had to de-enroll from the Lifeline program approximately 1.1 million low-income households during the first quarter of 2016 had the revised rule been in effect at that time." He asked the FCC to stay or defer the effective date, or grant a blanket interim waiver as requested by the Lifeline Connects Coalition (see 1610260033). On another Lifeline deadline issue, USTelecom said Alaska, Kansas, Kentucky, Minnesota, Nebraska, Nevada, New Jersey and Ohio have made legal changes such that they no longer are believed to need a waiver the association is seeking to give states more time to align their Lifeline rules with broadband and administrative changes to the federal program to assist low-income telecom users. The association said it understands that Oregon, South Carolina and Washington, D.C., will soon be making such changes, which would leave 16 states and Puerto Rico still needing the waiver relief (see 1610210046). Michigan, Missouri, New York, Utah, Vermont and Puerto Rico have filed in support of the petition and California, Vermont and Wisconsin have filed separate waiver requests, a USTelecom filing said. GVNW Consulting meanwhile supported an NTCA/WTA petition seeking a temporary waiver for their members and similarly situated rural telcos "of the language contained in the Lifeline Modernization Order that requires 'ETCs [eligible telecom carriers] receiving high-cost support [to] offer a Lifeline-supported standalone broadband offering where the ETC is required to offer Lifeline-supported BIAS [broadband internet access service].’”

Just providing Internet access doesn't infringe copyright, and a U.S. District judge in Alexandria, Virginia, "effectively guided the jury" to do exactly what the Supreme Court has cautioned against in other copyright infringement cases -- to find contributory infringement based solely on not taking active steps to avert infringement by a third party, CTA and Computer & Communications Industry Association said in a joint amicus curiae brief (in Pacer) filed Monday with the 4th U.S. Circuit Court of Appeals. The brief was filed in Cox Communications' appeal of the lower court's ruling in favor of BMG Rights Management in its torrent piracy lawsuit against the cable ISP (see 1608190030). CTA/CCIA said Judge Liam O'Grady "compound[ed] this error" when he instructed the jury that it could find willful blindness from a general awareness of possible infringement instead of following Supreme Court precedent that requires deliberate actions. The lower court also held that the Digital Millennium Copyright Act wasn't a defense yet let the jury base its verdict on facts related to whether Cox had satisfied its safe harbor immunity from damages under the DMCA, CTA/CCIA said. "The jury was essentially invited to draw inferences of liability" from Cox not shutting off alleged copyright infringers rather than from whether the cable operator's workers took any volitional acts to encourage copyright infringement, the trade groups said. They called the ruling "contrary to sound public policy," arguing it undermined congressional intent in Section 512 of the DMCA, which covers liability limitations. CTA/CCIA called for the judgment against Cox to be reversed and for the case to remanded for entry of judgment in favor of the cable ISP or a new trial. Counsel for BMG didn't comment.