Monty Tayloe

The FCC unanimously approved an NPRM on proposals to make it easier for broadcasters to have foreign owners and change the way the commission assesses foreign ownership, as was expected (see 1510190064). The foreign ownership rules for broadcasting act as funding constraints that other industries don’t face, said Commissioner Jessica Rosenworcel at Thursday’s commissioner meeting. The proposals in the NPRM would allow the FCC to allow broadcasters better access to foreign capital without “sacrificing” security, Rosenworcel said. “It’s time to fix these constraints,” she said. “If a common carrier can request commission approval for up to 100 percent foreign ownership, why shouldn’t a broadcaster be able to do the same?” Commissioner Ajit Pai asked.

Three incentive auction items that had been on the agenda for Thursday’s FCC meeting were approved and won’t be part of Thursday’s session, agency officials said in interviews. An item involving proposed rules for broadcaster channel sharing was released Wednesday after being approved by the full commission. Rules on interference after the auction between wireless carriers in the 600 MHz band and broadcasters, and an item defining when broadcasters and unlicensed users need to vacate their spectrum to make way for the new wireless owners, have also been approved, they said.

Broadcast deals are happening in the shadow of the looming incentive auction, but they aren't a reaction to it, broadcasters, attorneys and analysts told us. Deals such as Gray/Schurz (see 1510010020) involve stations and groups that mostly won't be participating, while other transactions -- such as the ongoing dance among Nexstar, Media General and Meredith (see 1510150071) -- stem from discussions that started before the auction was so imminent, analysts and broadcasters told us. The auction and its accompanying communication prohibitions and repacking add some risk and complications to transactions happening now, the experts said.

A draft NPRM on relaxing foreign ownership rules (see 1510010042) is expected to be approved at Thursday’s FCC meeting, and it could be a unanimous vote, agency and industry officials told us Monday. The NPRM seeks comment on rule changes that would apply largely to situations involving foreign ownership of broadcasters, but some that also apply to common carriers, an agency official said. Relaxation of rules making it difficult for foreign investment in broadcasting was spoken of favorably in blog posts from Commissioner Mike O'Rielly and Chairman Tom Wheeler (here and here) in recent months, and previous efforts to relax the rules met no opposition, broadcast attorneys said. The proposals in the NPRM are widely supported by broadcasters, industry attorneys said.

Incentive auction-eligible broadcasters now know the highest bid their stations will receive, and that they have to decide whether to participate by Dec. 18, after the agency released a pair of public notices on application procedures and opening bids Thursday and Friday. “We’ve fired the starting gun,” Chairman Tom Wheeler said in a statement. The FCC also indicated that the window for carriers and other forward auction bidders to submit their short-form applications is Jan. 14-28.

The FCC’s quadrennial review of its ownership rules is seen as being on the back burner and not likely to be a focus for the current FCC, numerous communications attorneys told us in interviews. That’s despite an NAB petition (see 1510130061) to hold the Charter/ Time Warner Cable/ Bright House deal in abeyance filed Sunday asking the FCC to take up the matter. Though Chairman Tom Wheeler has said the commission will address the 2014 ownership review in time for the June statutory deadline, the FCC is known for not completing ownership rule reviews on time. The politically charged atmosphere around the ownership rules, the upcoming TV incentive auction, and the ongoing litigation with NAB and Prometheus Radio Project over the 2010 quadrennial review are all reasons the FCC is unlikely to tackle a review of media ownership anytime soon, attorneys told us.

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.

MVPDs clashed with TiVo, Public Knowledge and Google in comments filed in FCC docket 15-64 this week on the Downloadable Security Technology Advisory Committee's final report. The latter entities and other members of the Consumer Video Choice Coalition (CVCC) said Congress meant for the FCC to take action when it mandated the formation of the DSTAC in the Satellite Television Extension and Localism Reauthorization Act. Meanwhile, Comcast, NCTA, AT&T and others said there's no indication in the DSTAC report that the FCC should take action. A “fair reading of the report” suggests that dictating downloadable security or set-top box policy to multichannel video programming distributors “would overtax the agency’s administrative capabilities and cause harm to the development of technologies and business models,” the Free State Foundation (FSF) said in its comments. By emphasizing a competitive set-top box (STB) market the FCC “can foster the competition and consumer benefits seen in other, vibrantly competitive consumer electronics markets,” the CVCC said.

The FCC AM revitalization draft order has received three commissioner votes, triggering a soft deadline in a few weeks by which all commissioners must vote yea or nay on it, said Media Bureau Associate Chief Holly Sauer Thursday on a panel at a National Association of Black Owned Broadcasters’ conference. The NABOB conference also featured Commissioner Mike O’Rielly, Incentive Auction Task Force (IATF) Chairman Gary Epstein and Enforcement Bureau Deputy Chief Bill Davenport. Sauer wouldn’t comment on which commissioners have voted or how, but O’Rielly and Commissioner Ajit Pai have indicated they don’t support the current draft order, while Commissioner Mignon Clyburn has said she does, and it's also seen as supported by Chairman Tom Wheeler.

Guidance released by the FCC on how broadcasters and their lawyers can comply with the communication prohibitions in the incentive auction anti-collusion rules provide some flexibility to broadcasters in their daily operations but could make things difficult for smaller law firms, attorneys said in interviews Wednesday. The rules prohibit auction-eligible broadcasters from communicating information about their bidding strategies or specific plans in the reverse auction to other auction-eligible broadcasters. The clarification came in the form of a Tuesday evening public notice (see 1510060058).