Monty Tayloe

NAB’s court challenge of the FCC incentive auction order is likely to delay the auction and unlikely to be the only such challenge, broadcast attorneys said in interviews Thursday. Though NAB, AT&T (see separate report below in this issue) and others have said the broadcast association’s petition for review (CD Aug 19 p1) was filed early enough in the U.S. Court of Appeals for the D.C. Circuit that it can be resolved without causing undue delays, few in the broadcast industry believe that’s the case, attorneys said. Increasing the likelihood of delay, the auction order is also going to be the focus “numerous separate and distinct” challenges from the low-power TV industry, said LPTV Spectrum Rights Coalition Director Mike Gravino.

Media General is divesting stations in five markets to get regulatory approval for its $2.59 billion buy of LIN Media (CD March 24 p6), said the companies in a news release Wednesday (http://bit.ly/1tqM8fr). The divestitures include Media General and LIN swapping three stations with Sinclair (http://bit.ly/1oSguJd), Media General and LIN each selling a station to Hearst Corp. (http://bit.ly/1tilKWU), and LIN selling a station to Meredith Corp. (http://bit.ly/1mmV69a), according to news releases from the companies involved. The deals are contingent on approval of the Media General/LIN deal, the releases said.

An FCC proposal to tighten rules on broadcasters swapping network affiliations within a market might lead to a rulemaking but is unlikely to result in a final policy banning the practice, said attorneys who oppose the proposed rule, in interviews. FCC ownership rules already prevent a single broadcaster from owning two Big Four-rated network affiliates in a market, but the 2014 quadrennial review Further NPRM tentatively concluded in favor of extending those rules to keep broadcasters from coming into ownership of two Big Four stations in the same market through network affiliation swaps. Initial comments were recently due on the FNPRM (CD Aug 8 p7).

NAB filed a court challenge on the use of auction software TVStudy in the FCC incentive auction order. “Broadcasters are effectively left with an auction that benefits everyone else while harming only them,” said NAB Executive Vice President-Strategic Planning Rick Kaplan in a blog post (http://bit.ly/VA7RWM).

Low-power TV broadcasters and interest groups all want deadlines for construction permits for new LPTV stations extended well beyond the FCC incentive auction. They disagree over the method the FCC should use to do so, according to comments filed Thursday in docket 03-185 in response to an Advanced Television Broadcasting Alliance petition. The FCC should deny the ATBA petition and address CPs as part of a larger rulemaking on other LPTV issues, said the LPTV Spectrum Rights Coalition (http://bit.ly/1rdZizE). “A permittee must be able to anticipate at least the near-term fate of its station before investing in construction,” said LPTV licensee CTB Spectrum Services (http://bit.ly/1vSibK).

The FCC’s 2014 Quadrennial Review of broadcast ownership rules is unlikely to lead to substantive change in the commission’s rules, several broadcast attorneys and industry observers told us. Comments on the quadrennial rulemaking were due last week, and though many commenters asked for rule changes, some didn’t seem to think such changes were likely. The review is mandated by Congress.

The FCC shouldn’t tell video distributors how often to check their closed captioning equipment or tighten rules for live and near-live captioning, said NAB, NCTA and other industry commenters in reply comments filed Friday in docket 05-231 in response to an FCC rulemaking on video closed captioning quality. Though the commission created caption quality standards in February, it also issued a Further NPRM seeking comments on some deferred issues from the rulemaking (CD Feb 21 p5).

The FCC shouldn’t regulate broadcast ownership at all, commented CBS, NAB and 21st Century Fox in docket 14-50 on a rulemaking on proposed changes to ownership rules as part of the 2014 quadrennial review. Though the Further NPRM sought comment on specific ownership changes, such as relaxing the ban on newspaper/radio cross-ownership, Nexstar and other broadcasters said the competitive video market justified the relaxation of all such regulations. The FCC should “amend or, where necessary, remove ownership restrictions that apply solely to the broadcast industry,” said NAB (http://bit.ly/1nwY5eA). Public interest, labor and consumer groups argued against any rule relaxation. The FCC “must maintain existing media ownership rules to protect local market competition and prevent further media concentration,” said the Writers Guild of America, West (http://bit.ly/1kM3Qup).

AT&T’s plan to buy DirecTV could be used to allow set-top box manufacturers to sell retail boxes for DBS customers as they do for cable, but such an initiative may not find support, said consumer electronics industry observers and communications attorneys in interviews this week. DBS companies are excepted from rules imposed by the FCC on cable companies intended to create a viable retail set-top market, and DirecTV customers can buy TiVo boxes, but there’s interest among CE companies in expanding their market, said a CE company official. Though getting the FCC or legislators to change rules or impose deal conditions or enact new laws requiring DBS companies to make retail competition with their boxes possible would be difficult, getting such rules imposed as conditions on AT&T/DirecTV would be a viable possibility, said Chadbourne and Parke technology, media and telecom attorney James Stenger.

A GAO report on broadcaster sharing agreements issued last week (http://1.usa.gov/1nOn1nv) could be used to support arguments both for and against FCC regulation of those arrangements, public interest and broadcast attorneys told us. The report concluded that the FCC has little data on the prevalence of such agreements, and that the agency needs to decide if it must have that information to regulate them (CD July 29 p14). “Without data and a fact-based analysis of how agreements are used, FCC cannot ensure that its current and future policies on broadcaster agreements serve the public interest,” said GAO. The FCC’s lack of information on such arrangements could be used to challenge the foundation for limits on joint sales arrangements, or could serve the interests of public interest groups challenging the FCC closure of the 2010 quadrennial review, attorneys told us.