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.
The revised FCC set-top box plan mentioned in recent programmer ex parte filings is an apps-based model that isn't based on HTLML5 and could include commission involvement in licensing arrangements between programmers and pay-TV carriers (see 1608180062), said such documents and interviews with industry. The apps-based set-top plan backed by multichannel video programming distributors uses HTML5 and would require third-party devices to use that technology (see 1607110042). The revised plan is in its early stages, with agency officials aiming to have it approved at the Sept. 29 commissioner meeting, which would require it to go on circulation in roughly two weeks, officials from all sides said Wednesday.
NAB and public interest groups disagree on whether the FCC should eliminate the requirement that broadcasters keep a hard-copy file of correspondence from the public available for viewing at TV stations, according to replies in docket 16-161 in time for Monday's deadline. “Members of the public rarely -- if ever -- access stations’ paper correspondence, instead relying on digital forms of communication to comment about a station’s performance,” said NAB. But “moving to an online-only format would frustrate poor people and people of color -- who still tend to rely on over-the-air television -- from effectively communicating with their local broadcasters,” said the National Hispanic Media Coalition with the AFL-CIO, Public Knowledge, Free Press, Common Cause, Communication Workers of America and Center for Media Justice. Eliminating the correspondence file doesn't have to stop the public from communicating with broadcasters, NAB said. “If members of the public still want to communicate with broadcasters through written mail or e-mail,” they can still do so, NAB said. Broadcaster arguments that the files are an unnecessary burden fly in the face of their claim that no one ever looks in the correspondence file, the public interest groups said. “One cannot claim credibly that staff are burdened by constant visits from the public and then also argue that such visits never actually happen because communications occur largely through social media.” The public groups downplayed broadcasters' concerns that allowing the public into stations to view such files is a security threat. The groups “support safe workspaces for broadcasters, but there are simply no documented incidents of violence resulting from an individual inspecting the public file," they said. The public interest groups haven't shown why such files are needed, NAB said. “If NHMC believes it imperative that broadcasters maintain their correspondence files, then it should produce at least some shred of evidence demonstrating the continuing value of those paper files.” The American Cable Association was the sole reply commenter to file on a commission proposal to eliminate a similar requirement for cable headend information. ACA wants the FCC to allow companies to continue to hold that information in their office and to be able to make it available to authorized representatives if they wish. “There is no policy justification for imposing new burdens on cable operators” ACA said.
Three months before a presidential election that could signal the end of his time in the driver’s seat, has Chairman Tom Wheeler’s FCC done what he said it would when he took office? Based on interviews with FCC officials, pay-TV executives and communications attorneys of many stripes, the answer is, “Mostly.”
Associations and companies of every stripe support FCC efforts to streamline rules for so-called Team Telecom reviews of transactions involving foreign ownership, according to comments posted Friday in docket 16-155. “Protection of U.S. national security, law enforcement, and public safety interests need not entail the uncertainty, costs, and inequitable treatment embodied by the current Team Telecom review process,” said Level 3. Commenters want the FCC to hold executive branch review to certain timelines and reduce the scope of deals that trigger Team Telecom review, they said.