NAB Petition To Deny Charter Deal Seen as Political Theater, Critics Say
An NAB petition to deny asking the FCC to freeze its review of Charter Communications' planned buys of Bright House Networks and Time Warner Cable until the agency completes the 2010 and 2014 quadrennial ownership reviews is intended to gain attention rather than a sincere attempt to block or slow the deals, industry critics said in interviews Tuesday. Approving huge pay-TV deals while not reviewing or eliminating the rules that prevent broadcasters from matching their scale is anticompetitive, NAB General Counsel Rick Kaplan said. NAB and others have challenged the FCC’s lack of action on the quadrennial review in an ongoing proceeding in the U.S. Court of Appeals for the D.C. Circuit. Though numerous industry officials agreed that the FCC has been ignoring the quadrennial review, NAB’s gambit is expected to get little to no notice from the agency, they said.
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NAB has also upset some in the broadcast and other industries, officials said. The petition is “amusing” but doesn’t show any connection between the stalled quadrennial review process and the transaction, said Georgetown Institute for Public Representation Senior Counselor Andrew Schwartzman. Filing an unlikely petition to deny instead of substantive comments will get NAB ”a press bump, that’s it,” a pay-TV industry official said.
By not completing the 2010 quadrennial review and rolling it into the 2014 review, the FCC has flouted its congressional directive to review and update its rules, NAB said in the petition to deny. “With 2016 rapidly approaching, the 2006 quadrennial review remains the last one completed.” The FCC “has evaded its basic obligations” and “unlawfully retained its ownership rules,” NAB said. “Broadcasters have been waiting for a long time to have relief from ownership rules while watching the industries we compete with get bigger and bigger and have mergers approved we can’t even dream about,” Kaplan said. “When are we going to get ownership relief?” If the FCC won’t pause the deal reviews until the quadrennial reviews are completed, it should deny the transaction, NAB said. The “vast gulf” between the size of broadcasters and their pay-TV competitors will “only expand” while the FCC “allows unprecedented consolidation in the MVPD [multichannel video programming distributor] industry, while still preventing the common ownership of two broadcast TV stations in most" designated market areas, NAB said. Charter didn’t comment.
NAB didn’t try to connect previous deals to the ownership rules because it was focused on more-narrow concessions in Comcast/TWC (since abandoned) and AT&T/DirecTV, Kaplan said. But the effects of the latter deal are part of the inspiration for the filing, he said. “We are already feeling the effects of what the world looks like with a huge company to deal with," Kaplan said of AT&T/DirecTV. “We can’t compete with both hands tied behind our back." The FCC's lack of action in one proceeding shouldn’t mean it can’t take action in an unconnected proceeding, industry officials said. The agency’s “handling of the obligation to complete its quadrennial review of the ownership rules is deplorable,” but that doesn’t justify putting a hold on Charter/TWC/BHN, Schwartzman said. “Either this merger meets the public interest or it doesn’t,” Fletcher Heald communications lawyer Thomas Dougherty said.
The NAB petition “should be quickly dismissed,” Free State Foundation President Randolph May said. “I’ve long been supportive of reforming the outdated broadcast ownership rules, but the Commission's failure to do so thus far is no reason to argue that the agency should not fulfill its responsibilities to review proposed transactions on a timely basis,” he emailed. “As it is, the FCC takes too long to review mergers without any suspensions or stops of the so-called 'shot clock.'”
NAB has challenged in the D.C. Circuit the FCC’s failure to finish the 2010 review and rule changes to the way joint sales agreements are attributed. Schwartzman represents the Prometheus Radio Project on a separate challenge to the same rules; his clients contend that the FCC should have acted on shared services agreements, and that the FCC improperly disregarded the information gathering requirements of the 3rd U.S. Circuit Court of Appeals in closing the 2010 review. The Minority Media Internet and Telecom Council and broadcaster Howard Stirk Holdings are also involved in the court case, which is set for oral argument Dec. 3.
NAB's goal with the petition is to bring attention to the ownership rules rather than block the deal, Dougherty said. But one MVPD industry official said the move could be seen as “desperate.” The NAB should be able to get the FCC to take action on media ownership through more direct lobbying or congressional pressure, the pay-TV official said.