September 29 will be a big day for broadcasters and other media companies when the FCC holds its next open meeting. In the tentative agenda for that meeting released on Thursday, the FCC identified several issues that deal with the media including two big items on video issues – the decision as to what to do about the Commission’s proposals to open the cable set top box to competing systems, and a new proposal designed to promote sources of independent programming for video distributors. In addition to these two items, the FCC also says that it will resolve the proposals to make the FCC’s foreign ownership rules for broadcasting more like those applicable to non-broadcast companies, easing some of the procedural restrictions that made it difficult for non-US investors to become owners of US broadcast stations.
The set top box debate is perhaps the debate that has garnered the most publicity, with the Commission proposing to allow more companies to offer a means to access cable and satellite TV programming – perhaps enabling the use of new apps to access and inventory that programming. Content owners and program distributors have worried about security issues with opening programming to access on a myriad of devices, and have also been concerned that the loosening of these restrictions could interfere with contractual rights limiting access to certain programs to certain devices and distribution channels. The FCC Chairman yesterday released this fact sheet about the proposal setting out some specifics of the proposal that will seemingly be voted on at the late September meeting, and the Chairman published this op-ed article in the LA Times explaining what he is trying to do. The matter is sure to remain controversial right through the late-September meeting, and perhaps after the decision as well.
In a proceeding that has received less press coverage, the FCC is also poised to release a Notice of Proposed Rulemaking designed to help promote more sources of independent video programming. The parameters of the FCC’s proposals here are less clear, with an FCC blog post released yesterday indicating that the proposals will focus on “unreasonable” Most Favored Nations Clauses (“MFNs”) in program distribution agreements that could limit the compensation that programmers get paid for their programming, and contract clauses dealing with Alternate Distribution Methods (“ADMs”) which may prohibit the distribution of independent programming to over-the-top video providers when an agreement is reached for the distribution of programming by more traditional methods. The scope of any restrictions that may be adopted, and the specifics of what else might be included in this proposal, are not clear at the moment. This is certainly a proposal that will be reviewed very carefully by program producers and distributors when it is released after the September 29 meeting.
Finally, the FCC is poised to rule on its proposal to relax the restrictions on foreign ownership of broadcast stations. We wrote about the FCC’s proposals here. While the FCC in 2013 clarified its policies to make clear that 25% alien ownership was no longer an absolute cap in broadcast ownership considerations (see our article here), in cases including that of Pandora, the relaxation of that earlier decision proved somewhat illusory. Old policies dealing with the computation of alien ownership in broadcast companies clashed with modern methods of stock trading, making the evaluation process very cumbersome even in cases where it was clear that there was little or no national security risk (and in some cases where it was even unclear whether there was any significant foreign ownership at all, but compliance could not be proved because of presumptions about who need to be counted as foreign when shareholders did not respond to surveys or could not otherwise be identified). See our article here on the Pandora case for more details on some of the issues. It is expected that the decision later this month will deal with some of these issues, making the broadcast ownership rules much more like those applicable to other communications services, and perhaps opening the door to more foreign investment in US broadcast stations. The demand is evident from the number of requests currently pending before the Commission (see, e.g. our articles here and here).
It is clear that the September 29 FCC meeting will be one worth watching with all of these issues on tap. So stay tuned to see what the FCC does on these important issues at its meeting later this month.