Monty Tayloe

Rules that will require device manufacturers to create a simple mechanism to switch between a main program audio feed to an emergency alert on the secondary audio stream are outside the authority granted to the FCC by Congress in the 21st Century Communications and Video Accessibility Act, said Commissioners Ajit Pai and Mike O’Rielly at Thursday’s agency meeting. The rule was part of a 2nd report and order requiring pay-TV carriers to pass through such screen-crawl TV alerts to tablets and smartphones streaming multichannel video programming distributors' content through the companies' apps, as expected (see 1505120027). Pai and O’Rielly voted with the rest of the FCC to approve the order and an accompanying Further NPRM, but dissented over the simple mechanism portion.

Upcoming deals such as Luxembourg-based Altice's $9.1 billion proposed buy of 70 percent of Suddenlink or Charter Communications' expected offer to buy Time Warner Cable might seem more palatable to regulators than Comcast/TWC, but that deal's dissolution left the regulatory landscape for transactions unclear, said cable attorneys and analysts Wednesday. After Comcast's withdrawal and with AT&T's proposed purchase of DirecTV still not yet cleared, the multichannel video programming distributor merger and acquisition landscape is “in flux” and “clear as mud,” MoffettNathanson analyst Craig Moffett emailed investors. The Comcast deal showed that the politics surrounding of a transaction can turn what appear to be minor legal issues “into mountains,” said BakerHostetler cable attorney Gary Lutzker.

The LPTV Spectrum Rights Coalition will lobby Congress to hold an auction of low-power TV spectrum separate from the incentive auction, said Director Mike Gravino. Under the coalition's proposal, the federal government would purchase the LPTV spectrum now but not auction it off until after the incentive auction is completed. The promise of future gains from the sale of the LPTV spectrum could be used to justify adding more money to the incentive auction’s relocation fund, or to put off the incentive auction to allow the repacking to coincide with the adoption of ATSC 3.0.,Gravino said. “It’s a Christmas tree bill” that could be used to fix “everything wrong” with the incentive auction, and provide a future source of valuable spectrum, Gravino said. Gravino told us he had been scheduled to brief NAB on the proposal, but he said the meeting was canceled by the broadcast association after we contacted NAB for confirmation. An NAB spokesman said his association has no meetings scheduled with Gravino. In the group's Monday newsletter, it took aim at CEA CEO Gary Shapiro for not knowing some of the intricacies of LPTV. At an ATSC meeting last week, Gravino wrote, he had spoken with Shapiro about the "tax credit plan to free up spectrum and pay LPTV." Shapiro, "as intense as everyone says he is," "simply did not know the basic facts about LPTV, nor the auction process itself," wrote Gravino. "He certainly did not know about the potential impacts on LPTV from the auction, nor how LPTV can screw up the auction process. But there is a reason he is considered the toughest guy in the room when it comes to lobbying and TV. He listened very carefully to the distilled data I presented, was literally shocked by it, and asked my permission to quote me when he was on the panel." At the panel, Shapiro challenged NAB CEO Gordon Smith to agree that broadcasters wouldn't further try to delay the auction (see 1505140040). CEA had no comment Tuesday.

The FCC is likely to affirm a compromise between NAB and the American Cable Association over the ACA-requested extension of an exception of the HD-carriage requirement for small cable systems distributing must-carry stations (see 1505150052), cable attorneys said in interviews Tuesday. The current exemption is set to expire June 12. The proposed compromise wouldn’t have an expiration date, said an ACA and NAB filing posted Friday to docket 98-120. Instead, small cable systems would be exempt from carrying HD must carry broadcast stations in that format as long as they don’t carry any high-definition programming, and would cease being exempt the moment they began carrying any high-def content.

FCC anti-collusion rules will put strong controls on bidding-related communication between TV licensees during the incentive auction, without preventing broadcast attorneys from representing more than one licensee in the proceeding, experts on the issue said in interviews Friday and Monday. As long as an attorney doesn’t act as a ”conduit” for one licensee to learn about another’s bidding strategy, that attorney can represent more than one client in the reverse auction, they said. That interpretation of the rules was brought to the FCC by representatives of FCBA in a letter posted Wednesday to docket 12-268 asking for commission guidance on whether FCC officials disagree with FCBA’s view of the rules (see 1505140068).

A draft order to make effective competition a rebuttable presumption for all cable companies circulated at the FCC, as expected (see 1505140063), agency officials said Friday. As also expected, the proposal is largely unchanged in scope from what was proposed in the NPRM, they said. As was originally put out for comment, the item would make all cable companies exempt from rate regulation unless a local franchising authority challenged their status as facing effective competition. The proposed rule change is moving forward in the face of a concerted opposition from broadcasters and some lawmakers.

Broadcasters, DBS providers and members of the House of Representatives support an FCC proposal to let designated market areas (DMAs) be modified so satellite subscribers can have access to locally focused programming they might not be able to currently receive, according to comments in docket 15-71 posted Wednesday. The NPRM that inspired the comments from Dish Network, NAB and others is a result of Section 102 of the Satellite Television Extension and Localism Act Reauthorization, and the rule change is intended to address the issue of “orphan counties” that are in a DMA primarily based in another state. “It is paramount for public safety and fairness reasons that counties have access to in-state broadcast television stations,” said Alabama GOP Reps. Mike Rogers and Robert Aderholt, who together represent three orphan counties in Alabama. The act requires the FCC to approve final rules for DBS market modification by September.

A draft FCC order that would significantly broaden the number of cable companies exempt from rate regulation is expected to go on circulation Friday, agency officials told us. The effective competition draft order was expected to be shared among eighth-floor offices at the start of the week, but that didn’t happen, commission officials told us. A wave of broadcaster opposition and legislator letters opposing the rule change’s breadth may be connected to the item's not being circulated when it was expected, industry officials said.

Though the Downloadable Security Technology Advisory Committee had its shortest, least contentious meeting Wednesday, opposing letters to the FCC from its member groups (see 1505110060) and an after-meeting tech presentation that turned contentious show that the DSTAC is still divided along industry lines. While multichannel video programming distributors favor an approach that concentrates narrowly on downloadable security solutions, Google, Public Knowledge, TiVo and others want a more comprehensive product that promotes competitive third-party devices and user interfaces, they said in a letter Monday.

Verizon and Sprint agreed to consent decrees requiring them to pay $158 million in penalties and redress for wireless cramming, said the FCC, FTC, the Consumer Financial Protection Bureau and state attorneys general in a news conference Tuesday. Sprint will have to pay $68 million under the settlement, while Verizon will have to pay $90 million, said the consent decrees. Sprint and Verizon set up a third-party billing system that included consumers without their approval, allowed them to be billed for questionable services, and ignored “red flags” about the issue, Vermont Attorney General Bill Sorrell said Tuesday. Companies representing “98.5 percent of the wireless market” were charging consumers “for things they didn't buy,” said FCC Chairman Tom Wheeler. Last year regulators reached consent decrees with AT&T and T-Mobile addressing alleged cramming.