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Indian E-music – The right mix of Indian Vibes… » Television

Copyright Office Grants Second Extension of Comment Dates in Proceeding Looking at MVPD Reporting Obligations and the Definition of Cable System

Delivered... David Oxenford | Scene | Fri 9 Mar 2018 6:16 pm

In December, we wrote about a proceeding initiated by the Copyright Office to review the reporting obligations of cable and satellite television systems related to the statutory license that permits those systems to carry the programming of local television stations.  Systems must report information including revenue and subscriber information that allow royalties to be computed.  This proceeding also asked for comments on the Copyright Office’s tentative conclusion that the Copyright Act’s definition of a cable system did not extend to online services, like those that had been proposed by Aereo and FilmOn.  The Copyright Office has announced a second extension of time to file comments in this proceeding.  Comments are now due June 14, with replies due on July 6, 2018.

Next Media Regulation Modernization Item – Easing Transfer of Satellite TV Stations

Delivered... David Oxenford | Scene | Mon 5 Mar 2018 6:13 pm

The FCC last week released its tentative agenda for its March open meeting. On it was a single item dealing with broadcast issues, a draft Notice of Proposed Rulemaking proposing to ease the paperwork involved in the sale of a satellite TV station. This item is another action as part of its Modernization of Media Regulation Initiative seeking to lessen the paperwork and regulatory burdens of broadcasters. Similar to other actions taken as part of this initiative (see our article here), this proposal is a small step to reduce burdens on a small class of broadcasters – but at least it is another step that is being taken in this initiative. The draft proposal will be considered at the FCC’s meeting scheduled for March 22.

Under current FCC rules, the FCC will authorize an owner to acquire a second full-power television station in a market, a station which will not count against FCC ownership limits, if the applicant can meet a three part test – (1) the station will not have city-grade overlap with the “parent” station, (2) the satellite station will serve an underserved area, and (3) a showing is made that there is no other owner ready to acquire an existing station or activate an unused channel and operate it as a stand-alone station. Satellite television stations were traditionally used in geographically-expansive rural markets to expand the coverage of a parent station to reach outlying areas. In more recent years, as the Commission abolished the requirement that the satellite primarily duplicate the programming of the parent station, these stations have sometimes been used to provide alternate programming in smaller markets unable to economically support an independent operation. The draft NPRM released by the FCC seeks to address the issue of what happens when such stations are sold.

Under current practice, when a parent-satellite combination is proposed to be sold, the proposed buyer has to re-prove all of the elements of the satellite showing to the FCC – hiring experts to prove that the satellite is providing service that otherwise would not be provided but for the common operation with the parent station. This is a costly process that is almost always approved by the FCC. The FCC thus proposes that, instead of providing a detailed showing, the buyer should only need to certify that it believes that satellite operation is still justified and attach a copy of the last showing made to justify such decision (as we have written before in the context of FCC fees, the FCC does not have a comprehensive list of satellite authorizations and is considering how one should be developed). Then, if someone believes that circumstances have changed so that satellite operation should not be continued, they can object to the assignment, when further facts can be advanced. If there is no objection, then the FCC would effectively assume that the satellite status should remain in place. Look for further consideration of this proposal at the March 22 meeting.

March Regulatory Dates for Broadcasters – Including Online Public File for Radio and Biennial Ownership Reports, Effective Date of ATSC 3.0, Comments on TV National Ownership and Media Modernization, and GMR Extension

Delivered... David Oxenford | Scene | Mon 26 Feb 2018 5:58 pm

March is one of those months where without the Annual EEO Public File Reports that come up for different states every other month, or without the Quarterly Issues Programs List and Children’s Television Report obligations that arise following the end of every calendar quarter. But this March has two very significant deadlines right at the beginning of the month – Online Public Files for radio and Biennial Ownership Reports – that will impose obligations on most broadcasters.

For radio stations, March 1 is the deadline for activating your online public inspection file. While TV stations and larger radio clusters in the Top 50 markets have already made the conversion to the online public file, for radio stations in smaller markets, the requirement that your file be complete and active is Thursday. As we wrote here, there are a number of documents that each station should be uploading to their file before the deadline (including Quarterly Issues Programs Lists and, if a station is part of an employment unit with 5 or more full-time employees, Annual EEO Public Inspection File Reports). As the FCC-hosted online public file date-stamps every document entered into the file, and as the file can be reviewed by anyone at anytime from anywhere in the world, stations need to be sure that they are timely uploading these documents to the file, as who knows who may be watching your compliance with FCC requirements. And this is not the only big obligation for broadcasters coming up in March.

On March 2, all full-power stations, commercial and noncommercial, and all LPTV stations, need to complete and file with the FCC their Biennial Ownership Reports (see our article here). These reports are supposed to give the FCC a snapshot of the ownership of broadcast stations as of October 1, 2017 so that interested parties can see who owns what stations, and have a complete database from which they can assess broadcast ownership by the gender and ethnicity of all attributable owners. Even parties who sold their stations since October 1 have to file reports detailing what they owned on that date. As this comprehensive database is so important to the FCC and to some public interest groups interested in assessing diversity in broadcast ownership, be sure that you meet this deadline.

March also brings comment dates in various FCC proceedings. Initial comment in the FCC proceeding looking at whether to change the national ownership cap for television are due on March 19. See our article here about the extension of the comment date to March 19, and our summary of the issues in the proceeding here.

Comments in the FCC proceeding, as part of its Modernization of Media Regulation Initiative, looking to eliminate the FCC filing requirement for certain documents relating to ownership – including corporate organizational documents, documents related to future ownership (like options and stock pledges) and other documents that restrict the operational decisions of broadcasters – are due on March 19. We wrote about that proceeding here.

For TV, the effective date of the rules permitting the use of ATSC 3.0, the new transmission standard for next-generation television, is March 5. See the Federal Register notice of that effective date here . Reply comments on some open issues on ATSC 3.0, about which we wrote here, are due on March 20 – initial comments having been filed in February.

For radio, be looking for communication from Global Music Rights, the newest of the performing rights organizations, about an extension of their license to play music written by the songwriters that this organization represents. The current interim license that GMR offered to broadcasters expires at the end of the month. As we wrote here, as GMR is still litigating with the Radio Music License Committee (RMLC) about whether their rate-setting should be subject to some antitrust review, GMR has agreed to extend their interim license until September 30, and has promised to contact stations about an extension soon. Stations should reach out if they have not heard from before the end of the month.

As in any month, these are just some highlights of the regulatory issues facing broadcasters in the coming days. Every station has its own set of regulatory questions too, so be sure that you are staying on top of these nagging legal and regulatory matters. Even though they can be time consuming, staying on top of these matters will save money and aggravation in the long term.

Another Media Regulation Modernization Proposal – Abandon the Form 397 EEO Mid-Term Report (Though Maintain the EEO Performance Review)

Delivered... David Oxenford | Scene | Fri 23 Feb 2018 5:57 pm

At its meeting yesterday, the FCC adopted a Notice of Proposed Rulemaking suggesting the abolition of the EEO Mid-Term Report, FCC Form 397. That form is filed at the mid-point of the renewal term of TV stations with 5 or more full-time employees and radio clusters with 11 or more full-time employees (see our post here about the form). As the content of the report is principally made up of the broadcaster’s last two EEO Public Inspection File Reports, and those reports are available in a broadcasters online public inspection file (which should be in place for virtually all broadcast stations when the final radio stations covert to the online public file next week, see our post here), the FCC concluded that there is no real reason that these reports need to be separately submitted, and thus proposed its elimination.

The Notice of Proposed Rulemaking did suggest that there were issues on which comments would be appropriate. The one bit of information that would not be readily available without the filing of the Form 397 would be which TV stations have 5 full-time employees and which radio clusters have more than 11 full-timers. That is important as Congress required the mid-term review of the EEO performance of stations meeting these employment thresholds. So the FCC asks how that information should be tracked. It is also noteworthy that the FCC will continue to conduct the EEO mid-term review of stations meeting these employment thresholds even without the filing of the Form 397 reports.

As the FCC says that they will continue to conduct that mid-term review, it is interesting that the FCC also asks in the NPRM what other EEO review should be conducted to assess the EEO performance of stations, seemingly at the insistence of Commissioner Clyburn who feared that the abolition of the Form 397 might send the wrong message about the FCC’s commitment to EEO even if its retention served no useful purpose. Commissioner Clyburn’s comments are available here. Seemingly, as the Commission will continue to do the EEO mid-term review, and continue audits and complaint-based reviews, many methods of assessment are already in place.

Comment dates on this proposal will be set when it is published in the Federal Register. This is one more proposal for procedural reform advanced as part of Chairman Pai’s Modernization of Media Regulation Initiative. As we wrote earlier this week, we are looking forward to more substantive proposals in the months to come.

FCC LMS Filing System Off-Line for Maintenance For Parts of This Weekend – Making Biennial Ownership Report Filings More Difficult

Delivered... David Oxenford | Scene | Fri 16 Feb 2018 5:26 pm

Note, for all of you who are trying to complete your Biennial Ownership Reports that are due for commercial and noncommercial stations on March 2 (see our post here about the March 2 filing date), the FCC yesterday posted a notice on the log-in screen for its LMS electronic database, in which the ownership reports are filed, that it will be off-line for maintenance during parts of the upcoming 3-day weekend. As the system has had glitches in recent weeks, that maintenance may be overdue, but if you are running late on completing the Biennial Ownership Reports, this may not be welcome news.  Plan accordingly. 


Court of Appeals Denies Rehearing on Multilingual EAS Obligations for Broadcasters

Delivered... David Oxenford | Scene | Fri 16 Feb 2018 4:54 pm

As we wrote here, MMTC (a DC-based public interest group) had petitioned the US Court of Appeals for a Rehearing on its decision (about which we wrote here) upholding the FCC decision deciding not to impose any multilingual EAS obligations on broadcasters.  The full Court of Appeals has just issued a one sentence order denying that reconsideration request.  While, theoretically, MMTC’s next appeal would be to the Supreme Court, lacking an issue of major significance or constitutional importance, that is unlikely. 

Thus, as we wrote here, the next step in any attempt to deal with multilingual EAS alerts will be with the FCC, which has agreed to further consider a survey of state EAS coordinators (“SECCs”) to see how best to insure that EAS alerts are distributed widely to the entire population.  By May, SECCs are supposed to integrate information about non-English speaking groups within their states into their State EAS plans, and file those revised plans with the FCC.  After that has occurred, we will see if the FCC takes further action in this area.  So stay tuned, as the issue continues to evolve. 


FCC Extends Comment Dates on National Caps on TV Ownership

Delivered... David Oxenford | Scene | Tue 13 Feb 2018 5:38 pm

The FCC in December issued a Notice of Proposed Rulemaking, looking at changes in the national television ownership caps. We summarized the issues raised in that Notice here. The FCC yesterday issued an Order extending the comment dates in that proceeding. Comments are now due on March 19, with replies on April 18.

LPTV and TV Translator Displacement Window Announced – April 10 through May 15

Delivered... David Oxenford | Scene | Mon 12 Feb 2018 6:21 pm

The FCC on Friday issued a Public Notice announcing that LPTV stations and TV translators displaced by the Incentive auction and repacking of the TV band will have an opportunity to file for replacement channels for the ones on which they currently operate in a window that will run from April 10 through May 15.  This is for LPTV and TV translator stations that operated on channels above channel 37, which will no longer be part of the TV band after the post-Incentive auction repacking of TV stations is complete. Also filing will be LPTV stations and TV translators that operate on channels in the core TV band on which full-power stations have been relocated as part of the post-auction repacking. Stations planning to file in this window also need to take into account improvement applications filed by full-power stations in the windows held during the latter part of 2017 (see our articles here and here on those windows). The Public Notice offers access to an FCC tool that will help LPTV and translator station operators locate available channels in the area in which they operate.

The Public Notice for the most part simply announces the dates, as the FCC had promised 60 days prior notice of the opening of the window.  The procedures to be followed during the window were set out in a Public Notice released last May, which we summarized here. So if you operate translators or LPTV stations which were precluded by the repacking, start preparing now for the window.

Five Fines of $10,000 or More Proposed for Radio Stations Missing Quarterly Issues Programs Lists in their Public File – New Concerns for Stations as Public File Goes Online and License Renewal Approaches

Delivered... David Oxenford | Scene | Fri 9 Feb 2018 5:36 pm

The FCC’s Audio Division yesterday issued “Notices of Apparent Liability for Forfeiture” to five radio stations; all owned by Cumulus Licensing. Each of these notices proposed a fine (called a “forfeiture” in FCC-speak) of either $10,000 (here) or $12,000 (here, here, here and here), all for violations of the FCC public file rules. All of these stations, located in close proximity in eastern South Carolina, were missing numerous sets of Quarterly Issues Programs lists that should have been included in their public files in the last license renewal term. The stations voluntarily reported that the lists were missing in their license renewal applications filed in 2011. In clearing up these long-pending renewals, the FCC proposed to issue these fines – again emphasizing that even this deregulatory FCC does not hesitate to enforce the rules that remain on the books (see our previous warnings here and here).

The release of these proposed fines also sends a warning to broadcasters about to convert to the online public inspection file (as all radio stations will need to have their public file online by March 1 – see our discussion of the online public file here), that these reports will be able to be viewed by anyone, anywhere, to see if they have been prepared and timely placed into the stations online public file. Each document deposited in the public file is date-stamped as to when it was uploaded. So anyone trying to assess a station’s compliance with the public file rule can see whether the Quarterly Issues Programs list was uploaded to the file and whether the upload was timely – within 10 days of the end of each calendar quarter.

This warning takes on added significance as, believe it or not, we are approaching the beginning of another license renewal cycle. The first radio license renewal applications in the next license renewal cycle will begin with the filing of license renewal applications by stations in Maryland, Virginia, West Virginia and the District of Columbia in June, 2019 – just over a year away. TV license renewal will start a year later. During the 3-year radio renewal cycle, every other month a group of stations in certain states will have to file their renewal (see the calendar for filing radio renewals here – TV is in the same order, just one year later).. In the last cycle, the largest single cause of fines was missing Quarterly Issues Programs lists. And these violations were all self-reported by stations or, on occasion, discovered by interested local residents who actually visited the paper public file maintained at the station’s main studio. This time around, the FCC, or interested public-interest groups, will be able to raise questions about a station’s compliance with the rules from afar – just by looking at the online public file.

These Quarterly Issues Programs lists are taken seriously by the FCC, as they are the only official station records of how broadcasters served the public in their local service area. 30 years ago, stations were required to keep more detailed records of all their public service programming – in the form of program logs and other documents that itemized news and public affairs programs, PSAs, commercials and all other aspects of station performance. At license renewal time, the FCC would pick 7 days from the previous license renewal term, and a station would have to report on the amount of news and public affairs programming it carried on those days, and the number of PSAs that were run on the station. When, during a prior deregulatory period in the 1980s, the FCC did away with specific requirements for the amount of non-entertainment programming required to be broadcast by every station (and the requirement that stations maintain program logs as official FCC records), it left stations with more discretion as to how they addressed local issues. But the FCC substituted for the detailed paperwork that it used to require the Quarterly Issues Programs lists as the document in which broadcasters would show how they served the public interest.  These lists are now the only officially-mandated document to show how you served the interests of your community (and, as we noted here, they take on added importance to demonstrate local service by stations that decide to no longer maintain a manned main studio).

So, by the 10th day of April, July, October and January, each station (commercial or noncommercial) is supposed to list the most important issues that faced its community in the prior quarter, as determined by station management, and the programs that the station aired to address those issues. We always suggest that stations have multiple programs that address each issue, and that some of the programs that address each issue contain in-depth discussion of the issue. While the FCC has said that even a PSA campaign may be listed as programming that addresses an important issue, such spots should never be the only program that addresses an issue of importance in any quarter (see our summary here of a case where the FCC made this clear).

Any program that addresses an issue of importance in a serious manner can be listed as being issue-responsive, even if the program where the discussion takes place might normally be considered an entertainment program. So, if one of your issues is an increased aging population, it is possible that a serious discussion of the issues facing the aging that takes place in an entertainment TV program could be considered issue-responsive. Similarly, if your morning DJ who normally spins records gets incensed by traffic issues on his way to work one morning and decides to turn his program into a call-in show to discuss local problems with the roads, that discussion can be considered issue responsive. News segments and public affairs programs are of course issue-responsive.

Make sure that multiple programs address each issue in a serious manner. For each issue that you have found in your community, list all of the programs that you aired that addressed the issue. For each program, include the name of the program on which the issue-responsive segment aired, the duration of the discussion, the time and date that it aired and a brief description of what the segment was and how it addressed the issue. As you are giving the time and date, it probably does not look good if all of your issue-responsive programming airs at 5 AM on Sunday morning.

While there have been some calls to change the way that issue-responsive programming is addressed, at this point, the Quarterly Issues Programs lists are all that we have. So treat them seriously to avoid the kinds of issues (and the accompanying fines) that are being faced by the stations who received the notices of apparent liability yesterday.

Appeals Court Denies Request to Put Changes in FCC Ownership Rules on Hold

Delivered... David Oxenford | Scene | Thu 8 Feb 2018 2:41 pm

In a very short order, the US Court of Appeals for the Third Circuit denied the request filed by certain public interest groups that had asked that the Court stop the new FCC ownership rules from taking effect and suggesting that a special master be appointed to oversee the FCC’s ownership review process. We wrote about that request, filed as an Emergency Petition for Mandamus, here. If it had been adopted, the changes to the rules on broadcast-newspaper cross-ownership and other changes to the ownership rules that we detailed here would not have gone into effect on February 7, as expected. However, the denial of the stay does not end the case.

Instead, the public interest groups can continue their appeal of the FCC decision and present the Court with arguments as to why the decision should be overturned. The principle basis of the appeal seems to be that the FCC did not, before the new rules were adopted, adequately address how to encourage a more diverse ownership base in the broadcast industry. The Third Circuit, in previous ownership appeals, had faulted the FCC for not taking this issue into account. In yesterday’s ruling, the Court recognized that the FCC has agreed to implement an incubator program to encourage more diversity in ownership. The Court put the appeal on hold for 6 months while the FCC takes comments on how to implement the incubator program and presumably takes some action on those comments (see our summary of the questions asked by the FCC about the incubator program here). Given this delay, and the time that it will take to file briefs and argue the case, the appeal itself will be unlikely to be decided until next year. In the interim, the new rules are in effect, but any deals done in reliance on those rules are theoretically subject to any ruling that the court may make when it considers the merits of the appeal. Something for broadcasters who make deals in reliance on the change need to keep in mind.

FCC to Randomly Inspect TV Stations Repacked by the Incentive Auction

Delivered... David Oxenford | Scene | Tue 6 Feb 2018 6:15 pm

The FCC yesterday released a Public Notice indicating that they will be inspecting approximately 60 of the over 900 TV stations changing channels as a result of the incentive auction and the repacking of the TV spectrum that took place after that auction.  The FCC notice says that it is hiring contract employees who will conduct these inspections on a randomly selected set of stations to assess the equipment that they have on hand and will be replacing when moving to their new channel. The stations are seeking reimbursement from the FCC’s $1.75 billion pool of money set aside to reimburse stations for equipment that needs to be replaced to allow the stations to operate on their new channels.

The notice says that the FCC will be assessing the “existence and functionality” of the equipment for which reimbursement is sought.  The FCC seems to be saying that it will be making sure that stations really have the equipment that they are seeking to replace through reimbursement funds.  The “functionality” aspect may be an assessment as to whether that equipment really needs to be replaced, though the notice does not specifically make that statement.  The approximately 60 stations selected at random will be used as a statistical sample to assess the reliability of repacking estimates provided by stations to the FCC.  Nothing forecloses the FCC from conducting further audits in the future.  So if you have a TV station that has been repacked, and the FCC comes knocking, you will know what the inspection is all about.

FCC to Randomly Inspect TV Stations Repacked by the Incentive Auction

Delivered... David Oxenford | Scene | Tue 6 Feb 2018 6:15 pm

The FCC yesterday released a Public Notice indicating that they will be inspecting approximately 60 of the over 900 TV stations changing channels as a result of the incentive auction and the repacking of the TV spectrum that took place after that auction.  The FCC notice says that it is hiring contract employees who will conduct these inspections on a randomly selected set of stations to assess the equipment that they have on hand and will be replacing when moving to their new channel. The stations are seeking reimbursement from the FCC’s $1.75 billion pool of money set aside to reimburse stations for equipment that needs to be replaced to allow the stations to operate on their new channels.

The notice says that the FCC will be assessing the “existence and functionality” of the equipment for which reimbursement is sought.  The FCC seems to be saying that it will be making sure that stations really have the equipment that they are seeking to replace through reimbursement funds.  The “functionality” aspect may be an assessment as to whether that equipment really needs to be replaced, though the notice does not specifically make that statement.  The approximately 60 stations selected at random will be used as a statistical sample to assess the reliability of repacking estimates provided by stations to the FCC.  Nothing forecloses the FCC from conducting further audits in the future.  So if you have a TV station that has been repacked, and the FCC comes knocking, you will know what the inspection is all about.

February Regulatory Dates for Broadcasters – Including EEO, Online Public File, Biennial Ownership Reports, ATSC 3.0 and FM Translator Comments, Effective Dates of Ownership Rule Changes

Delivered... David Oxenford | Scene | Thu 1 Feb 2018 3:34 pm

We are already a full month into the New Year, and the regulatory issues for broadcasters keep on coming. February brings the usual requirements for Annual EEO Public File Reports, which should be placed into the public inspection files (those public files being online for TV stations, big clusters of radio stations in Top 50 markets, and for those other radio stations that have converted to the online public file in anticipation of next month’s deadline) of stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma that are part of an Employment Unit with 5 or more full-time employees. Radio stations with 11 or more full-time employees in New Jersey and New York also must file with the FCC a Mid-Term EEO Report on Form 397 by the end of the day today. TV stations with 5 or more full-time employees in Kansas, Nebraska and Oklahoma also must file the Mid-Term Report.

As noted above, March 1 brings the deadline for all radio stations to convert to the online public file hosted by the FCC (see our article here for more details about this requirement). For those radio stations that have not yet completed their conversion, February is the month to be uploading those documents. As the FCC automatically uploads most of the applications and other FCC filings that need to be in the public file, the documents that will likely take the most time for the broadcaster to upload are Quarterly Issues Programs Lists and Annual EEO Public File Reports, documents not filed with the FCC on a regular basis. We have already heard reports that the FCC’s public file system is running slow at certain times of the day, probably because of the strain of so many people uploading documents. We expect that these issues will only get worse as the March 1 deadline approaches. So, if you are a procrastinator, get on this now, as time is getting short.

March 2 is also the deadline for the filing of Biennial Ownership Reports for all radio and TV operators, commercial and noncommercial. As we wrote here, this is a deadline that was delayed from December 1, as the FCC has introduced a new Ownership Report form in the new LMS electronic filing database. While this database provides more functionality than the FCC’s old CDBS, it does take some getting used to. So stations need to be using February to complete these reports before the March 2 deadline.

February will may also signal some big changes in broadcast ownership, as the FCC’s revised ownership rules, which, among other things, allow newspaper-broadcast cross-ownership and allow TV duopolies in markets where there are fewer than 8 independent operators, go into effect on February 7 (see our article here), unless their effect is put on hold by the US Court of Appeals for the Third Circuit, as requested by some public interest groups (see our article here).   Also, initial comments on the FCC’s Notice of Proposed Rulemaking looking to determine if the FCC can and should change the 39% national cap on television station ownership are due on February 26 (see our article here).

February also brings comment deadlines on the rules for two translator auctions scheduled to be held later this year. First, as we wrote here, the FCC is planning an auction to determine which mutually exclusive translator applicants will receive construction permits for new translators – selecting among mutually exclusive applications filed in 2003. Comments on the auction procedures for this auction are due on February 6. Yesterday, the FCC also released proposed auction procedures for auctions among mutually exclusive applications filed this past summer for FM translators to rebroadcast AM stations. This auction is among those applicants that did not reach a settlement in November’s settlement window (see our article here). Comments on these procedures are due by February 13.

Comments on unresolved issues in the conversion of television stations to the new ATSC 3.0 standard are also due this month – on February 20 (see our article here). Many of the unresolved issues deal with questions about how the conversion will be handled by stations that cannot find a suitable partner to act as a “lighthouse” station, continuing to operate in the current broadcast standard and rebroadcasting the converted station’s signal to those viewers not yet equipped to receive the new transmission standard.

So, while February is a short month, these highlights indicate just how many issues are on the table to be dealt with immediately. As in any month, there are no doubt many other issues that we have not mentioned, and many issues that may affect only individual stations. So consult with your attorneys and advisors to stay on top of whatever regulatory obligation that you may have this month.

Comment Dates Set on National TV Ownership Caps – Can and Should the FCC Amend the 39% Audience Cap?

Delivered... David Oxenford | Scene | Mon 29 Jan 2018 5:49 pm

At its December meeting, the FCC adopted a Notice of Proposed Rulemaking to review the national ownership cap for over-the-air television, which limits one owner from having attributable interests in television stations reaching more than 39% of the national audience. That Notice was published in the Federal Register on Friday, setting February 26 as the date for initial comments, and March 27 as the date for reply comments. When the FCC last year reinstated the UHF discount (see our article here), one of its justifications for the reinstatement was that the elimination of the discount could not be done without a full review of the national ownership rules – as the elimination of the discount could affect the video marketplace, and any potential adverse effects should be studied before abolishing the UHF discount (the discount counts each UHF station as reaching only one-half the audience of a VHF station). When the FCC reinstated the discount, the Commission promised to initiate this rulemaking proceeding.

The NPRM basically asks two fundamental questions – does the FCC have the authority to amend the cap, and if does, should it use that authority to make changes now? The initial question is based on the fact that the 39% limit is written into statute by Congress. Obviously, this is a fundamental question, and the usual political party divide over the interpretation of ownership rules is not fully in evidence here. Republican Commissioner O’Rielly indicated in his statement supporting the initiation of the proceeding that he believes the FCC does not have the power to change the cap – only Congress can do that, as Congress set the cap and did not provide explicit authority for the FCC to review or amend it. The two Democratic Commissioners also questioned that authority – so one of these three Commissioners would have to change their initial understanding of the law for any change to become effective, or Congress would have to step in.

But even if the FCC does have the authority to change the cap, should it do so? If it does, what kind of change should be made? The Commission asks a series of questions on these issues, including:

  • If a change is made, to what level should the cap be adjusted?
  • How should compliance with any cap be measured? Should the FCC continue to attribute all the households in a DMA to a station that operates in that market, or would more precise coverage metrics be more appropriate?
  • Would a change affect network/affiliate relationships? Or would changes in the marketplace, including the rise of large independent television groups like Sinclair and Nextstar, mitigate any risks that might exist?
  • Would a change affect localism – and how should that effect be measured?
  • Does greater ownership diversity breed innovation in programming?
  • Do recent changes in the dynamics of the video marketplace affect the issues to be considered – as many competing program services (e.g., cable channels, Netflix, etc.) have no national cap, and in fact have a nationwide reach?
  • Should there now be a VHF discount, as VHF stations are perceived to be weaker than UHF stations?

In addition, the Commission asks for a cost-benefit analysis of any changes. And, it asks what to do with groups that don’t comply with any new standard. Should their ownership be grandfathered if they own more stations than allowed under any new cap? If so, for how long should any grandfathering last?

Given that the Chairman at least initially seems outnumbered on this issue, it will be interesting to see how this decision plays out. It will also proceed under the shadow of the appeal of the reinstatement of the UHF discount (see our article here), so any court decision in that case may provide some insight on the issue of whether the FCC has the authority to change the cap. There are many moving parts in this proceeding to watch during and after the just-announced comment period.

Public Interest Groups Ask for Ownership Rule Changes to be Put on Hold and Special Master to Be Appointed to Oversee FCC Review

Delivered... David Oxenford | Scene | Fri 26 Jan 2018 5:42 pm

As we wrote last week, Prometheus Radio Project and the Media Mobilizing Project have filed an appeal of the FCC’s November decision to eliminate the newspaper-broadcast and radio-television cross-ownership rules and to relax the local TV ownership rules (see our summary here).  These groups have now filed a request – an Emergency Petition for a Writ of Mandamus – asking not only that the Court put the rule changes on hold, but also that the Court appoint a “special master” to oversee the FCC’s further action on the ownership rules.  The request to put these rules on hold could, if adopted, block transactions that are pending or those that parties are planning on filing to take advantage of the changes in the ownership limits.  The request also asks that the case be assigned to judges on the Third Circuit who have dealt with prior appeals of the FCC’s ownership rules and have, in a few cases, overruled those decisions (see, for instance, our article here).

These public interest groups allege that the FCC has ignored prior decisions of the Court which the groups characterize as requiring that the FCC look at the impact of any rule change on minority ownership, and look for ways to enhance ownership diversity, before any changes are made in the ownership rules.  Of course, the same court has also suggested that the FCC do away with the newspaper-broadcast cross-ownership rules and recognized that other changes in the ownership rules (like on JSAs) need not be stopped in their tracks (see our post here on one such order from the Court).  And several broadcast owners previously asked the Third Circuit to wipe all the media ownership rules off the books—creating, in effect, complete deregulation in the industry. While the court declined to do so, it noted that “this remedy, while extreme, might be justified in the future if the Commission does not act quickly to carry out its legislative mandate.”

So the public interest groups’ filing is, as is always the case, one side of the story.  We will be watching to see further developments in this case in the near future.  As the ownership decision is set to go into effect on February 7 (see our post here), if any action is taken on this motion, it would have to be taken quickly.



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