If the FCC plans to revise “core elements” of the Connect American Fund Phase II program -- such as the cost model or the challenge process -- it should reopen all core elements to eliminate aspects that are not competitively neutral, the American Cable Association said in meetings with aides to Commissioners Mignon Clyburn, Ajit Pai and Jessica Rosenworcel Thursday (http://bit.ly/1ijdiBs). For CAF Phase II competitive bidding to be successful, the maximum number of qualified providers need to participate, ACA said. Many of ACA’s small and mid-sized cable operators want to participate, but will only do so if “unreasonable barriers are eliminated,” ACA said. That’s why they're “heartened” to hear the commission is considering streamlining the eligible telecom carrier designation process, ACA said. ACA recommended several changes to CAF Phase II: non-ETCs should be able to apply to become an ETC after winning a bid, and groups that participate in the competitive bidding process should need only one ETC. ACA recommended a 60-90 day shot clock should be instituted for state decisions, and that states be prohibited from imposing requirements in addition to those adopted by the commission.

Lawmakers remained dubious of the proposed Comcast/Time Warner Cable merger Wednesday at the first Capitol Hill hearing on the deal. It needs FCC and Justice Department approval. The full Senate Judiciary Committee held the hearing, which lasted just under three hours, and House Judiciary announced a hearing May 8 at 9:30 a.m. in 2141 Rayburn. Comcast filed its long merger application with the FCC Tuesday.

The FCC Media Bureau requested financial information from Sinclair about its relationship to the companies with which it will have sharing arrangements as part of its proposed purchase of Allbritton’s TV stations, said a filing by Sinclair Tuesday (http://bit.ly/MZrO5A). Though the financial details are redacted under a pair of protective orders issued by the bureau Friday (CD Feb 24 p23), the submission includes financial results going back to 2010 for stations involved in the transaction, the details of performance bonuses paid to Sinclair by companies with which it has sharing arrangements and information about Sinclair’s guarantees of bank debts for those companies.

The American Cable Association doesn’t oppose collection of data to examine special access markets, but certain aspects of the proposed data collection “are excessive for smaller cable operators” and violate the Paperwork Reduction Act, ACA told an aide to FCC Chairman Tom Wheeler Thursday, an ex parte filing said (http://bit.ly/MBf8Br). ACA proposed that the collection only require those operators to provide data they collect in the normal course of business. On Phase II of the Connect America Fund, ACA said the program shouldn’t provide support to price-cap LECs in areas where unsupported competitive providers have built qualifying broadband service. Competitive providers should also “be given the opportunity to receive support in eligible areas in states where price cap LECs refuse support since competitive providers often can deploy broadband service more efficiently and effectively than the price cap LECs,” ACA said.

Opposition is building among multichannel video programming distributors to high-technology companies’ renewed request for rules on video device interoperability. Verizon joined the American Cable Association and DirecTV in telling us it, like NCTA (CD Feb 7 p3), opposes recent moves by an alliance that has included heavyweight makers of consumer electronics and Internet companies for an FCC NPRM on the topic. Some told us they're skeptical FCC Chairman Tom Wheeler will want to engage in what’s sure to be a contentious proceeding, because of opposition from most MVPDs. They think the agency will continue holding off on moving beyond a previous notice of inquiry on requiring a universal way for CE devices purchased from companies other than MVPDs’ set-top boxes to connect to pay-TV content.

An FCC move to make TV joint services agreements (JSAs) attributable at the same level they are in radio would be unpopular with broadcasters but is unlikely to cause widespread divestitures or end the practice of using pacts like JSAs to get around ownership rules, said broadcast attorneys in interviews Friday. Such a rule “would be a good first step” for the public interest groups that oppose such sharing arrangements, said Free Press Policy Counsel Lauren Wilson. “We wouldn’t see that as the end."

The Department of Justice should ensure that the terms of a settlement between federal prosecutors and tobacco companies direct advertising dollars to black-owned broadcasters, said the National Association of Black Owned Broadcasters (NABOB) in a newsletter to members Friday. A proposed consent order in the fourteen-year-old U.S. District Court for the District of Columbia case requires the tobacco company defendants to fund commercials informing the public of the harmful effects of smoking, and includes a list of TV networks and newspapers where the campaign must run. However, the settlement doesn’t require the companies to “place any commercials on Black owned media, or even media targeting the African American community,” said NABOB. That’s irksome to NABOB because the DOJ case “demonstrated that the tobacco companies had specifically targeted African American communities, particularly young people, with advertising and promotions designed to increase smoking,” said the newsletter. NABOB, the National Newspaper Publishers Association and the NAACP filed amicus briefs asking the court include black-owned media in the consent decree. That request came too late, said the tobacco companies in a response. “It has been more than seven years since this Court first specified the newspapers and television networks in which Defendants would be required to place corrective statements,” said the tobacco company filing. The companies also said changing the list of stations to receive the advertising would nullify the settlement agreement, “leaving the parties back at the negotiating table to see if a revised agreement can be reached.” The ability of the corrective advertising to “reach all affected Americans” is one of the concerns about the proposed settlement raised by the federal judge who would need to approve it, NABOB said. “The settlement can be set aside and the parties can be forced to consider adding Black owned media to the advertising plan if the Department of Justice tells the judge that it agrees with her that the plan needs to be amended to target Black consumers,” said NABOB. To make that happen, NABOB wants all black-owned broadcast stations to publicize the matter on their airwaves. “The DOJ will only change its position and oppose the current advertising plan if there is a vocal outcry from the African American community,” said NABOB. A similar NABOB effort to get advertising dollars from publicity efforts connected to the Affordable Care Act to go to black-owned broadcasters (CD Oct 4 p1) was stymied by the “disarray” of the ACA, said NABOB Executive Director Jim Winston. The association is still pursuing the matter, he said.

Video interests reign, as industry has spent tens of millions of dollars lobbying Capitol Hill on key communications issues, Q4 lobbying disclosure reports showed this week. Spending was often significantly up from the same period last year, particularly for stakeholders with video interests, but not always. Many disclosure reports highlighted pending priorities before Congress, such as the reauthorization of the Satellite Television Extension and Localism Act (STELA), which expires at the end of 2014 and is the source of much debate -- such as whether the reauthorization should address updates to retransmission consent law. Lobbying is widely expected to spike in 2014 as the House takes on an overhaul of the Communications Act.

The American Cable Association wrote to “commend” the FCC and its Wireline Bureau “for the recent decision establishing ‘eligible’ areas” for the use of Connect America Fund Phase I support. A “key principle” of the CAF program is to ensure support is “not provided in areas served by unsubsidized providers that compete” with ILECs, it said. “ACA believes that in addressing the many thousands of challenges” received during Phase I, the bureau “held true” to that principle. The Phase II challenge process will be “much more complex,” and it will again be important to ensure “CAF support is not provided where cable operators and others have already expended private capital to build broadband plant,” ACA said.

The Department of Justice made a second request for information on the $1.5 billion Gannett/Belo merger, the companies said in a news release Friday. A Department of Justice spokesman said DOJ would not confirm that a second request had been made but said it was “reviewing the transaction.” DOJ wouldn’t comment on the specifics of the request, but public interest groups, the ACA, Time Warner Cable and DirecTV have filed petitions targeting sharing agreements connected with the merger as violating FCC ownership rules and antitrust laws. A second request is “a standard part of the DOJ review process,” said Gannett and Belo in their release. Though such requests are “not infrequent” in large mergers, they do delay a transaction’s completion and add expense, said a broadcast attorney with a connection to the matter. Second requests also indicate that some portion of a transaction raised enough questions with a federal agency to spark further review, the attorney pointed out. Gannett and Belo may not close the transaction until 30 days after they have “substantially complied” with the request or the waiting period is otherwise terminated by the DOJ, said the release. Gannett and Belo said they will “respond promptly” to the second request and that they expect to close the transaction by the end of 2013. The merger also is awaiting FCC approval.