Monty Tayloe

Programmers are “strongly opposed” to any set-top licensing scheme that gives the FCC the power to alter the terms of content licenses, representatives of Time Warner, Scripps, Viacom, Disney, CBS and 21st Century Fox said in a Sept. 1 meeting with aides to Chairman Tom Wheeler, staff from the Office of General Counsel, and FCC Chief Technologist Scott Jordan, according to an ex parte filing in docket 16-42. Numerous programmer ex parte filings and industry officials have indicated the FCC is proposing a new apps-based set-top plan that includes commission oversight of a licensing program that would allow third parties to run multichannel video programming distributors' apps on their devices (see 1609060080). Though the ex parte letter indicated programmer support for the FCC’s apps-based direction and plans to enforce copyright rules, the content companies restated their concerns about the licensing aspect. “Any arrangement in which they are forced to allow their content to be distributed on terms or conditions to which programmers would not agree would be tantamount to a compulsory copyright license, which the Commission lacks authority to impose,” the filing said. The American Cable Association also met with FCC officials Sept. 1, to ask that any set-top rules exempt MVPDs with fewer than 400,000 subscribers, and allow those with up to a million subscribers more time to comply, according to an ex parte filing. In a separate letter, TiVo indicated support for the small carrier exemption, and asked that any new set-top rules contain provisions requiring MVPDs to continue supplying CableCARDs. The FCC’s new-set top plan is expected to contain a carve-out for smaller carriers, industry officials told us. In its recent letter, set-top maker Roku asked the FCC not to require that third-party box makers use HTML5, which MVPDs had sought in their own apps proposal. Industry officials and ex parte filings indicate the set-top plan currently pursued by the FCC doesn’t require the use of HTML5, though pay-TV interests are still pushing for it. In a Sept. 2 letter, Best Buy filed in support of the original NPRM, which it said could protect the interests of both MVPDs and consumers.

The FCC approved eliminating the UHF discount 3-2 split along party lines, said an order released Wednesday. “The discount has outlived its purpose and intent and, in the current world, acts only to undermine the national audience reach cap.” The order as expected (see 1607210055) grandfathers ownership combinations that were in existence when the NPRM on eliminating the discount was issued. It doesn’t allow grandfathered combinations to engage in further transactions and doesn’t create a VHF discount.

Industry requests for rigid timelines for so-called Team Telecom review of transactions don't properly account for ”the complexity of the national security and law enforcement considerations that the Executive Branch must weigh in its review,” NTIA replied in FCC docket 16-155 by Friday's deadline. NTIA also takes issue with a proposal that applications on which Team Telecom hasn't ruled would be approved if the review lasted beyond a certain time period. “The assumption that silence denotes acceptance creates the potential for a license to be granted without full consideration of potential Executive Branch concerns," NTIA said. Nearly all industry commenters that filed reply comments restated their view (see 1608190048) that NTIA should have a rigid timeline to review a transaction, including CTIA, Incompas, Sprint and USTelecom. “The commission should reject proposals resulting in an unlimited Team Telecom review timeframe,” said joint comments by BT Americas, Deutsche Telekom, Orange Business Services and Telefonica Internacional USA. “This proceeding should reform the current process that provides the Executive Branch with unlimited review and no accountability to the Commission or applicants, not extend it,” CTIA said.

The latest FCC set-top box plan is expected to be apps based and include a licensing system that would be overseen by the commission and involve public comment, industry officials told us. A draft order on the set-top plan is expected to be circulated on the eighth floor this week, with the expectation that it would be on the agenda for the Sept. 29 commissioner meeting, numerous industry officials told us. Such a vote has been expected (see 1608240064).

Nexstar's proposed $4.6 billion purchase of Media General got approval Friday from DOJ, in a consent decree approving the deal and Nexstar's plan to divest seven stations to comply with FCC ownership rules. “This is a positive step for the transaction's approval,” a Nexstar spokesman told us. The agreement still needs FCC approval. The commission has said the Nexstar deal came too late to be approved while the incentive auction is ongoing. The broadcaster could press for early approval, attorneys told us. That possibility is considered to be more likely as the low returns from the stage one forward auction make a 2017 end to the incentive auction seem more probable (see 1608310070). Nexstar initially predicted its transaction would close in Q3 or Q4.

FCC plans for a new headquarters are entangled​ in a web of possible conflicts of interest, according to partially redacted documents filed in U.S. Court of Federal Claims in the agency's current landlord's challenge of the bid award process for commissioners' new home (see 1606080069). Current landlord Parcel 49C, an affiliate of Republic Properties, is arguing that there was a conflict of interest in the General Service Administration's selection of a new FCC headquarters in Sentinel Square, near North Capitol and L Sts., NE in Washington's NoMa district. Parcel 49C said CBRE, which GSA contracted to broker the deal, owns Trammell Crow, which owns Sentinel Square, and the relationship wasn't properly disclosed. The matter is further complicated because CBRE also has represented Parcel 49C, though that's not part of the landlord's challenge.

The U.S. Court of Appeals for the D.C. Circuit rejected Mako Communications' and Beach TV's challenge of FCC treatment of low-power TV stations, said an opinion issued Tuesday. Judges Sri Srinivasan, Thomas Griffith and David Sentelle said the FCC didn't violate its authority or incorrectly interpret congressional intent in not protecting LPTV stations in the incentive auction. The ruling referenced the court's previous finding against challenges by NAB and several broadcasters against incentive auction rules (see 1506120050). It suggests the D.C. Circuit won't be receptive to Free Access and Broadcast Telemedia's ongoing second challenge of the rules, several broadcast attorneys told us.

Some parts of the FCC media ownership order are seen as more vulnerable than others, broadcast and public interest attorneys and former commission officials told us Monday. FCC justification for a revenue-based eligible entity standard (see 1608250063) is on firmer ground than its justifications for retaining most of its broadcast ownership rules, numerous broadcast attorneys said. There’s room for arguments against many aspects of the order, and court challenges and a return to the 3rd U.S. Circuit Court of Appeals (see 1605250073) are seen as extremely likely, lawyers said.

It's too early for broadcasters to reach conclusions about how the forward portion of the incentive auction is proceeding, numerous broadcast attorneys and analysts said in interviews Friday, as the auction went through stages 19, 20 and 21. At the close of stage 21 Friday evening, the forward auction had generated $20.57 billion in proceeds, more than $60 billion short of what would be needed to make this the final stage. Because the FCC controls the increments prices rise between rounds, and wireless providers are concentrating on the largest markets, the early results are almost automatic and don't offer much useful information (see 1608230063), said broadcast attorney Jack Goodman. “It's just a clock ticking.”

The FCC released its media ownership order Thursday. As expected, the order approved Aug. 10 on a party line 3-2 vote (see 1608110058) resolves the 2010 and 2014 quadrennial reviews, leaves most existing ownership rules in place and restores joint sales agreement rules that were knocked down by the 3rd U.S Circuit Court of Appeals. “The record in this proceeding leads us to conclude that retaining the existing rules is the best way to promote our policy goals in local markets at this time,” the FCC said. A court challenge is likely by all sides, both allies of media deregulation and its foes said in interviews.