Posted on April 14, 2011 by David Oxenford

As Broadcasters Return From NAB Convention, FCC Extends Date for Comments on Policies Leading to Repurposing TV Spectrum for Broadband

The FCC has granted a one week extension for reply comments in the proceeding looking to take many of the preliminary steps toward incentive auctions by which the FCC would reclaim parts of television spectrum for use by wireless broadband companies.  Comments are now due on April 25.  We wrote about the many issues in this proceeding, here.  Issues include the sharing of channels by independent television stations, whether stations that share spectrum are entitled to must carry rights under governing law, and how the FCC can change the digital television operational rules to make the use of VHF frequencies, where stations operating on those channels have experienced severe technical issues after the digital transition, more friendly for digital operations if the television spectrum needs to be repacked so that contiguous portions of the UHF band can be auctioned to wireless companies.

The extension was requested by a number of broadcast groups, partially based on the fact that the NAB Convention in Las Vegas has just concluded, and that there was much discussion at the Convention on the topic - including much discussion from FCC officials.  The broadcast community wanted the opportunity to respond to digest and respond to these discussions, thus the need for the brief extension.  This remains a very hot issue, with the FCC officials who attended the NAB Conference clearly pushing the agenda advanced in the Broadband Plan to reclaim some of the television spectrum for wireless uses.  Thus, these replay comments are very important, as they may set the stage for the incentive auctions and possible repacking of the television spectrum that may follow. 

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Posted on February 6, 2011 by David Oxenford

While Few Vie for New VHF TV Stations in NJ and Delaware, FCC Sets Comment Date on Improving VHF Digital Reception and TV Channel Sharing With Must Carry Rights As Ways to Help Clear TV Band for Broadband Users

The FCC's auction of new VHF TV channels in New Jersey and Delaware (about which we have written many times including here) has resulted in only three qualified bidders.  Despite this lack of interest in these VHF channels, the FCC seems to be looking at VHF as a way to facilitate its announced plans for the clearing of significant portions of the television spectrum for wireless broadband use.  The Commission this week set the comment date - March 18, 2011 - on ways to overcome the issues that have been posed to TV stations that have remained in VHF channels after the digital transition.  In the same proceeding, the FCC also seeks comments on allowing TV stations to share the same 6 MHz channel, with both stations retaining their cable and satellite must-carry rights.  That same proceeding implies that we may well have seen the last new over-the-air television stations.  This crucial proceeding on the future of the television band requires careful attention by all parties who may be affected by the many proposals contained in this relatively compact Notice of Proposed Rulemaking. 

The first part of the FCC's proposal (about which we previously wrote here), is to look at ways to get some of the television stations to give up their current channel to allow the FCC to use it for broadband, and having that station share another station's channel to continue to provide its program service on what is the equivalent of a digital subchannel.  The proposal to encourage multiple TV stations to share the same 6 MHz channel raises many issues.  First, the FCC recognizes that the proposal may result in some television stations giving up their ability to broadcast in High Definition (one of the principal reasons for the initial transition to digital), but suggests that stations sharing the same channel could work out "dynamic arrangements" to allow sharing the spectrum flexibly, increasing the portion digital bandwidth allocated to one station when it has programming that would benefit from higher definition, while switching some of the bandwidth allocation to the other station at other times. 

While the Commission assumes that each station will continue to exist as an independent station even when sharing a channel with another station, many of its questions in this proceeding seem to signal uncertainty about this conclusion.  Issues on which the Commission seeks comment include:

  • What effect will channel sharing have on the deployment of HD programming and mobile television?  The Commission does not ask about 3-D television, which some broadcasters have begun to experiment with, and might be worth a comment if there are those who expect that to be part of the television future that could be affected by channel sharing arrangements.
  • In channel sharing, would each station be able to maintain a Standard Definition signal at all times?
  • The Commission assumes that each station sharing a single channel (and thus a single transmission facility) would retain a separate license, and be individually responsible for FCC-rule compliance (e.g. EAS, indecency, children's television, political broadcasting, etc).  How would responsibility over the technical compliance be apportioned?
  • Should commercial and non-commercial stations be allowed to share the same channel?  Could commercial stations share channels that have, to this point, been reserved for noncommercial educational uses?
  • Will there be a loss in service to the public from such combinations?  Will there be television "white" and "gray" areas created, i.e. areas where there will be no over-the-air television service or only a single service?
  • Should cable and satellite service be included when evaluating questions of loss of service?
  • What impact should channel sharing have on other FCC rules, like the media ownership rules?

Perhaps the biggest issue with channel sharing is the cable and satellite carriage issue, which raised a number of issues for the Commission.  The issues, summarized below, also demonstrate the Commission's tentativeness in its conclusion that two stations sharing the same channel are really independent stations.

The Commission suggests that television broadcasters who elect to share channels would both be entitled to full must-carry rights on cable and satellite, even though these rights are currently accorded only to the primary video stream on any television station.  Thus, if two stations, who each currently operate on a 6 MHz channel were to combine their operations, then each would continue to have full must carry rights, even though one of those 6 MHz channels has been returned to the FCC for other uses.  This obviously raises issues.  Questions raised by the FCC include:

  • Are both of such stations "licensed and operating on a channel regularly assigned to its community", which is what is required by the statute covering mandatory cable carriage for commercial stations.?
  • For noncommercial stations, are both stations licensed to a specific principal community that has a Noise Limited Signal Contour over the cable headend, again the standard for carriage?
  • Are both stations still located in the DMA of the cable system?
  • What if one station on a shared channel elects must-carry, while the other elects retransmission consent.  Does that make any difference since the FCC proposes to recognize each as a primary station?
  • Are there any technical issues that would make mandatory carriage of such stations problematic?

The Commission also suggests that the ability of a station to elect channel sharing would be limited to those stations that currently (as of the date of the NPRM) have "existing applications, construction permits, or licenses."  Does this imply that future stations have no ability to later decide to combine their operations with another station in their area?  Or does this imply that there will be no future stations?  What will happen to those in the current VHF auction referenced in the first paragraph? 

 In opening television spectrum for wireless, the FCC has one significant problem, especially in congested areas like the Northeast.  Even if some stations choose to combine their operations, to open broad swaths of spectrum for wireless uses, the FCC will have to repack television stations into a smaller part of the band.  But that would require using the VHF channels which, in the experience of television broadcasters all around the country, is problematic for digital operations. Noise from other electronic devices and other coverage issues simply make that spectrum inferior for digital television operations.  So what is the FCC to do?  The Commission seeks comments on proposals to make VHF stations more digital friendly.  Questions include:

  • Will increasing the power permitted for VHF digital operations overcome interference issues?  How would this affect interference to other stations?  Would it overcome interference? (Some engineers at a recent FCC forum on the issue were skeptical)
  • To overcome potential interference that could arise from increased power, the FCC states that some have suggested that required distance between co-channel stations be increased, but also states that it finds it desirable to not increase such spacings.  Will spacings have to be increased? 
  • Will vertical polarization of stations decrease their susceptibility to interference?
  • Could the Commission establish mandatory performance standards for indoor antennas, and would that have an effect on the performance of VHF digital television stations?  Does the FCC have authority to do so?
  • Are there other ways to increase digital television operations on VHF channels?

The FCC also asks for comments on whether the current television spectrum should be redesignated in the FCC rules as shared-use spectrum, shared between television stations and wireless users.

Comments on these important issues are due on March 18, 2011, and replies on April 18, 2011.
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Posted on March 19, 2010 by David Oxenford

FCC Asks for Comments on Petition Seeking Reform of Retransmission Consent Process

The FCC’s Media Bureau today asked for public comment on the Petition recently filed by a number of multichannel video providers - including seven large cable companies, both DBS companies, and Verizon – along with the American Cable Association and several public interest and trade organizations. The Petition seeks changes in the rules governing the retransmission consent process, including potentially requiring arbitration of disputes and limiting the ability of television stations to withhold their signals while the retransmission consent negotiation process is proceeding. Comments in this proceeding are due on April 19 and replies on May 4.

This Petition was prompted in part by several recent high profile retransmission consent negotiations, where television stations threatened to pull their signals from cable systems if their requests for compensation were not met. While television companies argue that being able to pull their signals is a necessary bargaining chip in the negotiation process, petitioners submit that the changed video marketplace makes this option unreasonable, as it can harm both the video provider and the local viewers who are deprived of the station’s signal while negotiations are ongoing.

This is the first step in the consideration of this Petition. If the FCC decides to pursue the matter, it would start a rulemaking proceeding to more specifically explore options for reform of the retransmission consent process. Even at this early stage, this is bound to be a controversial proceeding, which companies on both sides of the issue will vigorously debate. The FCC has designated it as a permit-but-disclose proceeding, meaning that parties can make oral presentations to the Commissioners and FCC staff, if they file the appropriate ex parte disclosures (see our post on the ex parte rules here). There are sure to be many such notices filed. 
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Posted on April 23, 2007 by David Oxenford

Copyright Office Begins Inquiry to Reexamine Cable and Satellite Statutory Licenses - and Asks if Statutory Licenses are Appropriate for Internet Video

The Copyright Office last week released a wide-ranging Notice of Inquiry, asking many questions about the statutory licenses that allow cable and satellite companies to retransmit broadcast television signals without getting the specific approval of all the copyright holders who provide programming to the television stations. The notice was released so that the Copyright Office can prepare a report to Congress, due June of 2008, in which it will present its views as to whether the various statutory licenses still perform a necessary function, and whether any reforms of the current licenses are necessary. To complete its report, the Notice asks many questions about how these licenses currently work, whether the licenses function efficiently, and whether they should be retained, modified or abolished in favor of marketplace negotiations. The Notice even asks whether the existing statutory licenses should be expanded to take into account the different ways video programming is now delivered to the consumer, including various Internet and mobile delivery systems. Thus, virtually anyone involved in the video programming world may want to be part of this proceeding. Comments are due July 2 and reply comments are due September 13.

The cable and satellite statutory licenses were adopted by Congress to allow these multi-channel video systems to retransmit broadcast  signals. Without these licenses, the individual owners of copyrighted material – including syndicated,  network, sports, and music programming -- would have to be consulted to secure necessary copyright approval before the television signal could be retransmitted. As the multi-channel video providers would, in many cases, not even know who held all these rights, they instead pay a statutory license which is collected, pooled, and then distributed to the various rights holders in proportions agreed to by those copyright holders or, in the absence of agreement, set by the Copyright Royalty Board.

As the Notice sets out, the statutory rights held by cable and by satellite are different in many ways. Cable systems pay certain minimum fees which vary depending on the revenue of the cable system, and increase when a system carries a “distant signal,” i.e., a television signal from outside of its market area. However, the definitions of a distant signal for purposes of these rules is based  on byzantine FCC rules in existence back in 1977, which long ago were eliminated except for purposes of these copyright calculations. Satellite carriers also pay fees to the Copyright Office, but these fees are based on a per subscriber fee, and the importation of distant signals by satellite carriers remains heavily regulated. At the same time, while cable operators pay a “minimum fee” to carry any broadcast signals, satellite carriers are able to carry local broadcast signals at no cost. 

The Notice requests comment on whether these different licensing schemes, and the different royalties that they entail, continue to make sense. Should the systems be modified to provide greater parity between the platforms? Do royalties that are paid approximate the royalties that would be received by copyright holders if there were negotiations for rights in an open market, unfettered by the statutory license? Should these licenses even continue to exist, or should the parties simply negotiate for the rights to the programs they retransmit (perhaps by shifting the burden to broadcasters to obtain the underlying rights, which the broadcaster would then grant as part of the retransmission consent negotiation process)? Obviously, these are fundamental questions about the manner in which the statutory license operates – and recommendations from the Copyright Office could have an impact on virtually every aspect of the video marketplace – from the course of retransmission consent negotiations between broadcasters and multichannel video providers, to the prices and terms that burden those providers under their statutory license, to the competition that broadcasters face in their marketplace (if, for instance, the higher rates for cable importation of distant signals were reduced, or if the limits  on such importation by satellite carriers were relaxed, more competition to the local broadcaster could result).

Finally, in its discussion of the future of statutory licenses, the Copyright Office asks if the existing statutory licenses should be modified, or new licenses adopted, to facilitate the emergence of new video technologies. For instance, the Notice asks if such licenses would hasten the inclusion of local television programs on video mobile phones. The Copyright Office also asks whether new IPTV systems using Internet technologies to retransmit broadcast programs are covered by the existing cable statutory license or must a new license be adopted.  The Copyright Office simultaneously asks whether the on-demand availability of much broadcast programming through the Internet, by the programming networks and by services like You Tube, undercut the need for the statutory licenses. As the statutory license was designed to foster the distribution of programming by making it easier to obtain the necessary copyright rights, if that programming is already available on-line, has the underlying purpose of the license been met?

The Notice also specifically mentions several discrete issues affecting the existing cable statutory license.  For example, it specifically asks how the ongoing digital transition should impact cable royalty calculations. The Copyright Office also appears prepared to address how a “network” should be defined for purposes of the cable royalty calculations, as FOX broadcast affiliates historically received different treatment than ABC, CBS, and NBC broadcast affiliates. The Notice also raises longstanding concerns regarding system consolidation and the relationship between subscriber groups, the signals they receive, and the resulting royalty calculation. The Copyright Office suggests that a reform to the statutory license might remove the troubling “phantom signal” issue, under which cable systems pay royalties for signals that are not actually delivered to certain subscriber groups. 

In addition to comments and reply comments, the Copyright Office plans a hearing on these important issues. It is clear that this proceeding, and the ultimate recommendations of the Copyright Office, should be closely monitored by all video industry participants. 
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