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The Third Circuit Court of Appeals yesterday issued an opinion faulting the FCC for not completing any required review of its broadcast ownership rules since the 2006 review was completed in 2007. These reviews of its ownership rules, now done as “Quadrennial Reviews” every four years, but previously required to be done biennially, have been the subject of much judicial review and delay in the past 9 years. Because of the delays in finalizing a review and addressing issues previously raised by the Court, yesterday’s decision ordered the FCC to meet with certain parties who brought the appeal to finalize a timetable for FCC review of the rules designed to promote minority ownership of broadcast stations. At the same time, the Court threw out the FCC’s 2014 decision determining that television Joint Sales Agreements were attributable interests (see our article here), which had essentially banned these agreements in most markets as the attribution of an interest in one station to the owner of another station in the same market would constitute a combination of stations not permitted under the local TV duopoly rules. The discussion in the decision also raised questions as to whether the FCC could justify the continued existence of the broadcast-newspaper cross-ownership rules given the radically changed state of the newspaper industry since these rules were adopted over 40 years ago.

While much has been made of the decision overturning the attribution of television Joint Sales Agreements, that part of the decision was actually a narrow one, and one which leaves the FCC in a position where it could reinstitute the attribution requirement when it completes its current review of the ownership rules. The Court looked at the 2014 decision determining that JSAs should be attributable, and concentrated on the dissenting opinion of Commissioner Pai. The Commissioner argued that the FCC’s decision making the interests attributable ignored record evidence that such combinations were in the public interest. The dissenting opinion said that some combinations were necessary, particularly in smaller television markets, to permit the profitable operations of weaker stations in these markets, and that the agreements otherwise contributed to the public interest by allowing stations that could not afford news and other beneficial programming to air such programming. The Commission dismissed those arguments, contending that they were really addressing questions as to whether more small market TV duopolies should be permitted. But, as the FCC did not address whether small market TV duopolies might be in the public interest, but instead deferred that decision until the next Quadrennial Review, the Court found (as Commissioner Pai had argued) that the FCC decision could not be justified. The FCC could not ban JSAs as not being in the public interest until they considered the arguments as to whether small market duopolies, which could permit many of the JSAs to continue even if attributable, were in the public interest.
Continue Reading Appeals Court Tells FCC to Finalize Multiple Ownership Review, Throws Out TV JSA Attribution, and Questions Newspaper-Broadcast Cross-Ownership Ban

The FCC today issued a Public Notice that the obligation will begin on June 24 to start uploading documents to the online public file for radio stations in the Top 50 markets .   For Top 50 market commercial radio stations that are part of employment units with 5 or more full-time employees, the June 24 date will mark the start of their obligation to upload materials to the online public file.  New public file documents (including political file documents) created on or after that date are to be placed in the online public file.  These stations will have 6 months from the effective date (until December 24, 2016) to upload to the online public file existing documents that are already in their paper public file.    This would include documents like EEO Public Inspection File Reports and Quarterly Issues Programs Lists. Pre-effective date political file documents need not be uploaded. Letters from the public also do not need to be uploaded (see our article here about the FCC’s proposal to entirely do away with the requirement that letters be kept). We wrote more extensively about the obligations for the radio online public inspection file here.

TV, too, needs to pay attention to this notice.  The Public Notice announces that the online public file will be moving to a new database.  Effective on June 24, TV licensees will need to use this new database too – what the FCC calls the “OPIF” (for expanded online public inspection file) as opposed to the old “BPIF” (“broadcast public inspection file”).  The FCC suggests that the new OPIF database will allow for easier uploads – including the ability to upload a single document into multiple stations’ files at the same time.  It will also have a more user-friendly interface, and will work better with other online systems like Dropbox and Box.  This database moves these files off the FCC server and onto a cloud-based storage system.  Stations can already try out the new system here. 
Continue Reading FCC Announces June 24 Effective Date for Radio Online Public Inspection File and New System for TV Stations Online File, Plus a Reminder to Upload JSAs

As one of the many legislative changes that made their way into the Congressional Omnibus Spending Bill set to be voted out of Congress this week and signed by the President to keep the government operating for the next year, there is a provision authorizing TV stations to continue through September 30, 2025 operating with …

Last month, we wrote about the FCC issues facing broadcasters in 2015.  Today, we’ll look at decisions that may come in other venues that could affect broadcasters and media companies in the remaining 11 months of 2015.  There are many actions in courts, at government agencies and in Congress that could change law or policy and affect operations of media companies in some way.  These include not just changes in communications policies directly, but also changes in copyright and other laws that could have a significant impact on the operations of all sorts of companies operating in the media world.

Starting with FCC issues in the courts, there are two significant proceedings that could affect FCC issues. First, there is the appeal of the FCC’s order setting the rules for the incentive auction.  Both Sinclair and the NAB have filed appeals that have been consolidated into a single proceeding, and briefing on the appeals has been completed, with oral arguments to follow in March.  The appeals challenge both the computation of allowable interference after the auction and more fundamental issues as to whether an auction is even permissible when there is only one station in a market looking to give up their channel.     The Court has agreed to expedite the appeal so as to not unduly delay the auction, so we should see a decision by mid-year that could tell us whether or not the incentive auction will take place on time in early 2016.
Continue Reading What Washington Has in Store for Broadcasters and Digital Media Companies in 2015 – Part 2 – Court Cases, Congressional Communications and Copyright Reform, and Other Issues

Last week, the Senate approved a reauthorization of STELA, the new bill called STELAR (the “STELA Reauthorization Act of 2014”), adopting the version that had been approved by the House of Representatives earlier in the month.  In addition to simply giving satellite television companies (essentially DISH and DirecTV) the a five-year extension of their rights to rebroadcast the signals of over-the-air television stations without authorization from every copyright holder of the programming broadcast on those stations, STELAR made other changes to both the Communications and Copyright Acts that will have an impact on TV station operators once this bill is signed by the President.  The Presidential signing is expected before the end of the year.  [Update, 12/5/2014 – the President signed the Bill yesterday evening, so it is now law]

Some of the important provisions for TV stations contained in this bill include provisions that impact not only the relationship between TV stations and satellite TV companies, but also ones that have a broader impact on the relationship of TV stations with all MVPDs, including cable systems. There is also a provision actually providing more latitude for LPTV stations to negotiate carriage agreements.  Some of the specific provisions of this bill include:

JSA Extension:  STELAR will give TV stations currently operating with a Joint Sales Agreement with another station in their market which they cannot own under the current multiple ownership rules 6 more months to terminate such operations – until December 19, 2016 (after the next Presidential election).  See our discussion of the changes in JSA attribution here and here.
Continue Reading Congress Passes STELAR – Renewing Authorization of Satellite Carriers Carriage of TV Stations – With Some Important Changes to JSA, Retransmission Consent and Market Modification Rules

Next week, on August 6, the FCC will be taking the initial comments on its Quadrennial Review of the multiple ownership rules – looking at what limitations should be placed on the ownership of broadcast stations by one individual or company.  As we have written, this Review follows the FCC’s resolution of the last Quadrennial Review, started in 2011, where the FCC made joint sales agreements between TV stations in the same market “attributable interests” – meaning that you can’t enter into a JSA unless you can own that station under the rules.  All of the other issues on the local ownership rules – including whether to change the rules setting the number of radio or TV stations that can be owned in a single market, and whether the rules against the same market cross-ownership of radio and TV stations, and of daily newspapers and broadcast stations should be modified – were pushed back to this new Review, which is not supposed to be finally decided for another two years.  While we wrote about some of the hidden nuggets in this proceeding in defining radio and TV markets here, let’s look a little deeper at some of the other issues involved in the review – today the local TV ownership rules.  In advance of next week’s comment deadline, there has already been much relevant regulatory action this past week – including the FCC’s approval of the Sinclair’s acquisition of the Allbritton TV stations (but only after Sinclair agreed to surrender to the FCC for cancellation TV stations licenses in two markets as its ownership of those stations would not be allowed under the current rules), and a GAO report addressing Shared Services Agreements between TV stations.

Currently, the FCC allows an owner to hold one TV license in a market, except in certain limited circumstances where two can be owned.  An ownership combination is allowed in the normal course only where there would be eight independently owned stations left in the market after the combination, and only where the combining stations are not both Top 4 stations in the market.  The Commission does also allow some combinations where one of the stations is “failing,” but that is looked at only on a case-by-case waiver basis.  Many broadcasters have argued that, particularly in small markets where there is insufficient revenue to support multiple fully competitive stations, greater consolidation should be allowed.  But the Commission has tentatively rejected that idea in its Notice of Proposed Rulemaking in the new Quadrennial Review.  Why?  Seemingly, small market consolidation was not favored on the simple theory that consolidation is bad, and on the hope that, if the FCC forbids consolidation (and stops any sort of sharing arrangement, like the JSAs that it has already prohibited, and the Shared Services Agreements that it has suggested in this proceeding need to be further limited), minorities and other new entrants will enter the market.  Both of this week’s events – the Sinclair acquisition and the GAO report, seem to cut against the FCC’s beliefs.
Continue Reading Comments on Quadrennial Review of FCC’s Broadcast Ownership Rules due Next Week – Local TV Ownership Issues Highlighted By GAO Report and Sinclair Acquisition Approval

The FCC’s proceeding on its multiple ownership rules, adopting rules that make Joint Sales Agreements “attributable” (meaning that they “count” for multiple ownership purposes – one TV station can’t do one with another unless it can own that other station) and starting a new proceeding to review its other ownership rules, was adopted in late …

The text of the FCC’s decision on the attribution of Joint Sales Agreements for multiple ownership purposes, and the termination of the 2010 Quadrennial Review of the ownership rules and the start of the 2014 Quadrennial Review, has now been released by the FCC.  In a slim 211 pages of text, plus another 24 pages of concurring and dissenting opinions, there is more than enough for broadcasters, lawyers and regulators to digest for weeks.  The Order addresses in detail the matters that had already been made public – the attribution of TV JSAs, the further examination of TV shared Services Agreements, and tentative decisions to not fundamentally change any of the Commission’s other ownership rules (with the possible exception of a favorable inclination to look at elimination of the radio-newspaper cross-ownership)(see our summary here).  But there are many details to be examined as to how the Commission reached the decisions that it did and the nuances of the decisions that were made (e.g. the waiver policy that would allow some JSAs to remain in place – the Commission’s decision does not provide much detail – essentially saying that they will grant waivers to deserving JSAs that serve the public interest, but providing little detailed guidance as to what would make a good waiver case, except to say that temporary or short-term waivers were better than long-term ones, and that ones where there was little sharing of other services are better than ones where there is more sharing).  We will cover all of these areas in more detail over the next few days.

But there were some interesting and less expected nuggets that popped out in a first read of the Order, and have not been much covered elsewhere.  For TV, these include the tentative decision to replace the TV Grade B contour with the digital Noise Limited Service Contour for determining whether an individual or entity can own two TV stations in the same market.  Instead of allowing ownership where the Grade B contours do not overlap, the Commission proposes to allow that ownership where the NLSC do not overlap, and to grandfather any combinations that would be affected by this rule change.  Similar small but significant issues were also raised for radio.
Continue Reading The Text of the FCC’s Order on JSAs and Other Broadcast Ownership Issues is Released – Part One, Hidden Nuggets on TV and Radio Market Definitions

The FCC meeting yesterday proposed to attribute Joint Sales Agreements (making them “count” for multiple ownership purposes – meaning that one broadcaster can’t do a JSA with another station unless it can own the other station).  The Commission also apparently kicked the can down the road on all other multiple ownership matters – not changing the local TV ownership rules or amending the newspaper broadcast cross-ownership restrictions, instead deciding to further consider any modification of the rules.  No decision on these issues is expected until probably 2016.  See the FCC’s Public Notice of that action here.  Shared Services Agreements will also be examined – though new ones have effectively been put on hold during the course of the examination by an FCC processing policy released two weeks ago that requires that any party proposing any sort of sharing agreement in a transaction requiring FCC approval demonstrate how that sharing agreement serves the public interest.  Also at the meeting, the FCC took actions to ban joint negotiation of retransmission consent fees by any two of the top 4 rated stations in a TV market, and to reexamine the network nonduplication and syndicated exclusivity rules (see the FCC’s decision here).  While we will have more details on these decisions in the coming days, as we fully analyze the texts of the FCC decisions as they are released, for now it is interesting to look at these decisions with the perspective of history.

Having represented broadcasters in Washington for over 30 years, one sees many of the same issues debated over and over again.  Many of the issues that were thought to be settled years ago come to the fore after most of the participants at the FCC, and even those in industry, forget that these battles had already been fought and seemingly decided.  In introducing the FCC’s examination of Shared Services Agreements at yesterday’s meeting, the representative of the FCC’s Media Bureau talked about how the examination of each transaction will be important for the FCC to determine if there are too many interlocking ties between stations that are supposed to be competitors in a market.  Not mentioned was the fact that this same kind of review used to be done by the FCC under what was called the “cross-interest policy,” a policy that was repealed by the FCC in 1988.
Continue Reading FCC Attributes JSAs, to Examine SSAs and Network Nonduplication and Syndex Rules – A Return to the 1980s?