Monty Tayloe

Leaving dynamic reserve pricing out of the incentive auction is likely to lead to the FCC paying higher prices to some stations, Incentive Auction Task Force Vice Chairman Howard Symons said at a Hudson Institute event Monday. DRP, which would have allowed the FCC to freeze the prices of some stations or repack them in the wireless band, was included in earlier auction plans to allow the commission to offer higher opening bid prices. A draft order on circulation and also on the agenda for the July 16 commissioner meeting would do away with DRP (see 1506170052).

Though the approaching incentive auction is seen as quieting mergers and acquisitions among TV stations, a flurry of discussions on channel sharing and possibly M&A is expected behind the scenes, said panelists speaking about the 2015 financial landscape at a SNL Kagan conference in New York Thursday. There will be “a very, very active marketplace for channel sharing over the next three to six months,” Titan Broadcasting President Bert Ellis said. Deals are likely among some of the larger, publicly traded broadcasters over the next two years, said RBC Capital Markets Managing Director Marcus Torres, along with consolidation among smaller privately held broadcasters. Earlier Thursday, some broadcasters expressed interest in the incentive auction (see 1506250060).

Sinclair Broadcast is considering participating in the TV incentive auction, said CEO David Amy on a panel of broadcast executives at the SNL Kagan TV and Radio Finance Summit Thursday. “There are some markets where it could make sense,” such as designated market areas where Sinclair has duopolies and could sell spectrum while maintaining the same presence through channel sharing, Amy said. Amy's profession of interest in the auction was just 10 days after losing a court challenge along with NAB against the auction in the U.S. Court of Appeals for the D.C. Circuit. NAB General Counsel Rick Kaplan conceded Thursday that the decision's language means future court challenges against the FCC aren't likely to succeed. Litigation “is not a major threat” to the auction happening on time, Kaplan said. The auction and a transition to ATSC 3.0 aren't likely to synchronize, he said.

Noncommercial educational and low-power TV stations are among the most affected by last week's FCC incentive auction reconsideration order (see 1506190064), which rejected all requests to redo auction rules, said lawyers representing those licensees in interviews this week. They said the groups have limited resources and it's unclear whether they'll sue the commission. The public TV groups are considering their position in the wake of the recon order, said an APTS spokeswoman.

Satellite operators oppose an FCC proposal to charge them a 12-cent-per-subscriber regulatory fee (see 1505290033), and are concerned about what may come next, said DirecTV, Dish Network, EchoStar and Hughes Network in comments on the commission’s regulatory fee NPRM posted in docket 15-121 Tuesday. “There is no limiting principle that would stop the Commission from doubling or tripling the rate next year,” said Dish, saying such an outcome wouldn't be legal or in the public interest, and would negatively affect DBS subscribers.

The U.S. Court of Appeals for the D.C. Circuit should transfer all challenges against the FCC 2014 quadrennial review rulemaking and the rule increasing attribution of joint sales agreements (JSAs) to the 3rd U.S. Circuit Court of Appeals or dismiss them, said the FCC in a brief filed Thursday in case 14-1090. Though Prometheus Radio Project and others in the case also have asked for the 3rd Circuit venue change, NAB said the case should be heard in D.C. The D.C. Circuit asked the parties to argue both the venue change and the merits of the case. As of a briefing schedule change earlier this month, final briefs in the case are due Aug. 27, with oral argument expected to be scheduled in the fall, said attorneys following the case.

An FCC rulemaking on reserving TV spectrum for white spaces use unified disparate broadcast interests in opposition to it, said officials at the LPTV Spectrum Rights Coalition, NAB and National Translator Association in interviews. Coalition Director Mike Gravino, who in recent weeks filed an unsuccessful complaint with the FCC against NAB (see 1506050059) and had recently told us the association wasn't looking out for LPTV interests, said his previous stance no longer applies as of the FCC issuing its NPRM Tuesday. The proposed rule is “a seismic shift” that threatens all licensees who value their spectrum, he said, promising to work with NAB to oppose the proposed rule. “If they're able to do this to primary licensees, they can do it to anyone,” Gravino said. “It's completely unlawful,” said NAB General Counsel Rick Kaplan.

FCBA officials have been told the FCC is preparing a response to the bar association's letter on the commission's incentive auction anti-collusion rules, Wiley Rein broadcast attorney Kathleen Kirby said Tuesday at an FCBA lunch. The response is being prepared by the Office of General Counsel, she said. In the FCBA letter on the rules (see 1505180056), the association said the rules let broadcast attorneys represent multiple licensees in the auction. If attorneys can't represent multiple licensees, there likely are not enough attorneys to go around, FCBA said. Broadcast attorneys have told us a response to the FCBA letter wasn't expected unless the commission disagreed with the association's stance. The OGC didn't comment.

Channel sharing agreements (CSAs) under new FCC rules (see 1506120051) will be complicated, highly individualized deals that must account for a range of contingencies, said attorneys Tuesday at an FCBA brown bag lunch event on the rules issued in a reconsideration order Friday. Though the new rules allow term limits on CSAs, they’re still largely designed for agreements that last many years, and if a station in a CSA is sold, a station could find itself in a channel sharing agreement with a relative stranger, said Wiley Rein broadcast lawyer Jessica Rosenthal. Broadcasters interested in channel sharing needed to start exploring such deals “a couple months ago,” said Dorann Bunkin, aide to the FCC Incentive Auction Task Force (IATF).

The U.S. Court of Appeals for the D.C. Circuit utterly rejected all arguments by NAB and Sinclair Broadcast in their petitions against the FCC's Incentive Auction Report and Order, in an opinion written by Judge Sri Srinivasan and issued Friday.