The FCC's planned review of the national TV ownership cap could influence how broadcasters react to the expected restoration of the UHF discount, said Wells Fargo analyst Marci Ryvicker at a Media Institute lunch Monday. Commissioners tentatively are to vote April 20 on bringing back the discount (see 1703300066), Though analysts initially thought the ownership cap could be pushed high enough to make some very large combinations possible, Ryvicker said she no longer believes that's likely. Companies could begin announcing deals the day after the FCC’s April 20 meeting, Ryvicker said. Numerous large broadcast entities are expected to seek acquisitions, she said, including Cox, Tegna and Scripps. “Everybody’s a buyer,” Ryvicker said, though she said Tribune is an exception, and is seen as looking to sell. With the NAB Show the week after the April FCC meeting, more dealmaking than usual could happen there, she said. Though investors see ATSC 3.0 as a positive concept, there’s too much uncertainty about the future of the new standard for it to do much to move the needle on broadcast investment, Ryvicker told us. It’s not clear if plans for broadcasters to begin offering up wireless spectrum will materialize, she said. Though Ryvicker said the Wall Street view of broadcast regulation under FCC Chairman Ajit Pai has been “positive,” she said unrealistic expectations for the Trump administration's pro-business policies and the recent failure to repeal the Affordable Care Act made investors leery. Investors are anxious about the growth of streaming media hurting broadcasting, and about ratings showing general decline in TV viewership and increased time shifted viewing, she said. Broadcasting is considered dependent on live viewership, she said: “That’s why there’s a perception that broadcast is dying.” Though spending on political advertisements during the presidential campaign was down, Ryvicker expects those numbers to rebound in 2018, saying the low spending in 2016 was a onetime fluke. Recent negative attention about the placement of online ads could be a boon to broadcast advertising, she said. Total audience measurement for broadcast would help compete with pay-TV and online, Ryvicker said.
The FCC will vote whether to eliminate the UHF discount at commissioners' April 20 meeting, as expected (see 1703070055). They will take up two public media issues -- third-party fundraising, and reversing a rule approved under the previous FCC that would require public media board members to submit personal identification information, said the tentative agenda. Broadcasters anticipated UHF discount’s restoration since Ajit Pai took over the agency, and the item originally was expected in March (see 1703010074). In a blog post, Pai said one reason to restore the discount is that the way the FCC eliminated it is vulnerable to litigation, and he pledged to launch “a comprehensive review” of the national ownership cap “later this year.” The draft text of each item was released Thursday, in keeping with the chairman's transparency plans.
There are signs the FCC is more proactive about pirate radio enforcement, broadcast industry officials said in interviews. They didn’t cite examples, but broadcasters facing a high volume of pirate activity said their encounters with officials about unlicensed broadcasters have been more positive under the new administration. Enforcement officials are “taking a more proactive role” and the commission has undergone “an attitude change” toward pirate radio, said David Donovan, president of the New York State Broadcasters Association.
Advocates for unlicensed use of TV white spaces are concerned ATSC 3.0 could be a future threat, but supporters of the new standard say no such threat exists and the FCC shouldn’t put unlicensed use of spectrum ahead of broadcast licensees. “The idea that you would constrain broadcasting to protect unlicensed service is anathema to the purpose of the FCC,” said Pillsbury Winthrop communications attorney John Hane, who represents broadcasters pushing for the new standard.
A group of net neutrality supporters engaged in a silent protest “walk-out” from Thursday’s FCC commissioners' meeting during remarks by Commissioner Mignon Clyburn on contraband cellphones. The dozen or so protesters abruptly stood up from the audience as Clyburn spoke, all wearing white T-shirts that said “Protect Net Neutrality.” They then left the meeting room, escorted by security. The protesters were representatives from Free Press, Popular Resistance OpenMedia, Women’s Institute for Freedom of the Press and Demand Progress, said a tweet from Free Press Campaign Director Candace Clement. In a video that Clement linked on Popular Resistance’s Facebook page, one of the protesters describes the walk-out as “an action to let the FCC know the movement is watching and a campaign is beginning to protect net neutrality.” The protesters didn’t interrupt Thursday’s meeting, which continued as they were escorted out. Also Thursday, the Senate OK'ed an override of FCC net neutrality privacy rules (see 1703230070).
FCC Chairman Ajit Pai said he wouldn't “wade into” the argument over fake news (see 1703150063) because it's a “political debate." His remarks came during a news conference Thursday. News media “perform an important job,” Pai said, declining to respond to questions about whether he agreed with President Donald Trump that media outlets such as The New York Times and ABC News were fake news. “I’ve been very clear about the importance I place on First Amendment freedoms,” Pai said. “This is a political debate that is happening with political actors.”
FCC rules for channel sharing were approved Thursday on yes votes from Chairman Ajit Pai and Commissioner Mike O’Rielly. Commissioner Mignon Clyburn approved in part and concurred in part, over a change to the draft item’s effect on must-carry rules for low-power TV stations. “What disappoints me is that today we have actually closed the door on the very rare instances in which a secondary station could gain must-carry rights as a result of channel sharing,” she said. That alteration was praised by O’Rielly. “The commission is making clear with changes made to the text before us compared to the circulated version that television station must-carry rights are not being expanded in any aspect,” O’Rielly said. “As someone who is not necessarily the biggest supporter of must carry, we are correctly deciding not to reopen that can of worms here.”
FCC Chairman Ajit Pai is seen as receptive to a petition from NAB (see 1703170055) for changes to the post-incentive auction repacking plan, but any changes to the repacking timeline are likely to face considerable pushback from industry, said broadcast officials and analysts in interviews. Though broadcasters repeatedly praised Pai, his previous positions in their favor -- on ATSC 3.0, and his perceived plans to roll back media ownership rules -- haven’t faced strong opposition from a competing industry. On the repacking, NAB’s requests for a looser timeline are diametrically opposed to calls for a faster transition from wireless providers such as T-Mobile, said Roger Entner, analyst at Recon Analytics: “They need that spectrum tomorrow!”
Entercom and CBS Radio filed applications with the FCC for approval of Entercom’s all-stock buy of CBS (see 1702020070), show FCC and SEC filings. As part of deal approval, Entercom agreed to divest stations in seven markets, and the companies are asking the FCC for a six-month waiver of the TV/radio cross-ownership rules to allow CBS CEO Les Moonves and CBS Chief Operating Officer Joseph Ianniello to sit on the Entercom board (see 1703210041), said an SEC filing. The deal is expected to close in the second half of 2017, Entercom said.
Preliminary work to repack broadcasters after the incentive auction has begun and is going smoothly, said engineers, broadcasters, antenna manufacturers and industry officials in recent interviews. But they said that’s likely to change, both in April when the 39-month countdown clock on the repacking starts ticking and when it comes time to install all the new broadcast equipment stations will need to transition to their new channel assignments. A lack of experienced tower crews and the sheer amount of work needed is going to create a bottleneck, numerous industry officials said.