FCC business marches on in this time of social distancing and mandatory lockdowns, though with modifications caused by the circumstances in which we find ourselves.  The FCC released a Public Notice yesterday announcing that its monthly open meeting scheduled for March 31 will be held by teleconference rather than live in the FCC meeting room.  It can be viewed on the FCC’s website and on its YouTube channel.  Most of the action items will have already been voted on by the Commissioners through the “circulation” process.  This means that the votes will be taken on the written orders without any formal presentations by FCC staff members explaining the actions, and without orally-delivered statements by any of the Commissioners – though the Commissioners can certainly make their feelings known in written statements on the items on which they will have voted.  The meeting itself is likely to consist of Commission announcements and statements by the Commissioners on the current state of affairs.

Issues that were to be considered at the meeting of interest to broadcasters include the adoption of a Notice of Proposed Rulemaking on Distributed Transmission System technology for TV stations – making it easier for TV stations to fill in their market coverage with multiple transmitters spread throughout the market, rather than a single big transmitter in the center of the market – a technology made easier as stations transition to the new ATSC 3.0 transmission system (see the draft NPRM here).  FCC Notices of Proposed Rulemaking on significantly viewed TV stations (draft NPRM here) and cable carriage disputes (draft Further Notice of Proposed Rulemaking here) are also on the agenda.
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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.
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Sometimes the FCC decisions come out in a flurry, often with little nuggets of importance in each one.  Rather than trying to write about each one, we’ll from time to time, just try to highlight those nuggets for your consideration.  At the end of last week, three decisions came out with just such nuggets – all dealing with different issues.  The first case involved the issue of divestiture trusts – trusts set up to hold broadcast assets when a buyer of broadcast properties, usually in connection with the acquisition of a broadcast group, needs to divest some stations so that the buyer remains in compliance with the multiple ownership rules (usually in radio where the attribution of LMAs and JSAs make impossible divestitures like those used in television, to parties with no connection to the buyer but operating with a Shared Services or Joint Sales agreement).  In the past, the FCC has not put any limit on how long the stations could remain in a divestiture trust, with some stations spending 5 or 6 years (or longer) in such trusts before they are finally sold.  This case involved an acquisition of a large number of radio stations by Townsquare Media from Cumulus.  Here, the Commission established a two year limit on period of time that the trust could hold the stations placed in its care.  Thus, the trustee needs to divest of those stations within that period.  We would not be surprised to see that limit imposed on any trusts created in the future – perhaps even on some longstanding trusts still in place when they are subject to renewal applications, where such trusts have been challenged from time to time.

In TV, often stations that cannot be owned by a broadcaster who is buying another station in the same market consistent with the multiple ownership rules are not sold through a trust, but instead they are sometime bought by an independent party who can support the station through some sort of Joint Sales or Shared Services Agreements with the buyer.  In one of those cases, the continuation of an existing Shared Services Agreement was challenged in connection with the sale of the brokering station held by Young Broadcasting to Media General.  The FCC again (as they have in many cases before, see for instance our article here), held that the sale was permissible and that the SSA could continue after the sale.  The brokering station did supply news to the brokered station, but it was under 15% of the program time, and thus not attributable.  The brokered station continued to have a financial incentive to operate the station successfully, keeping 70% of the cash flow of the station.  And the mere fact that the owner of the brokering station guaranteed the debt of the brokered station did not make that interest attributable to the broker.  Note, however, that the Commission did question the staffing of the brokered station but, as that station was not being transferred as part of the sale before the FCC, the Commission said that they would review that issue in connection with the license renewal of the brokered station.  Shared Service Agreements are also under consideration in the current Quadrennial review of the FCC’s multiple ownership rules (see our stories here and here ).  So some of these issues may be revisited again in the not too distant future, when the new FCC Chair decides to complete that review.
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Just a reminder that by October 1, Television stations must once again make their triennial carriage elections.  By that date, TV stations must notify the local cable systems and satellite carriers in their market in writing as to whether the station intends to be carried pursuant to must-carry or a retransmission consent agreement for the

The FCC just issued a Report to Congress concerning the access of television viewers to in-state television stations.  This report was requested by Congress as part of STELA (the Satellite Television Extension and Localism Act), which extended the compulsory license for direct to home satellite television operators (DISH and DirecTV) – a license which gives them copyright clearances to retransmit all the programming transmitted by the broadcast television stations that they make available as part of their service packages.  Congress also requested a Report from the Copyright Office on the need for the compulsory license – a report also issued this week, which we will write about in another article.  The issue of access to in-state television stations has been a controversial issue, as several Congressmen have sought (and in a few cases actually received) legislative authority for cable providers to carry out-of-market television stations on cable systems serving areas in one state that are part of television markets where the television stations come from a different state.  The report refers to these areas as "orphan counties."  Once legislative authority was granted in one state, many other bills popped up in Congress trying for the same relief in their state – causing concern that the existing television markets (or Designated Market Areas or "DMAs", designated by the Nielsen Company) might be undermined.  To see what impact such changes would have, Congress requested this report from the FCC.

The report for the most part does not make recommendations, but instead simply provides information about the service provided to US television viewers, the potential options for bringing an in-state service to all viewers, and the issues that such proposals would raise. Perhaps the most interesting fact revealed by the report is that 99.98% of all US television households already have access to an in-state television station, either over-the-air or through a Multichannel Video Programming Distributor (e.g. cable or satellite TV system), so this is a very isolated issue.  However,when the FCC sought comments on the issues discussed in the report, a number of individuals in particular DMAs responded about situations where they could not get access to in-state television stations and asked that something be done.  The report assesses the implications of any action that could be taken.


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The FCC has issued another in a series of Notice of Proposed Rule Makings aimed at implementing changes to the satellite television rules brought about by the recently enacted Satellite Television Extension and Localism Act of 2010 or "STELA".  In particular, by its NPRM issued last week, the Commission proposes a predictive model to provide presumptive determinations as to whether a household is considered unserved by a local network-affiliated digital station.  The model proposed is a point-to-point predictive model that will allow parties to determine whether a particular location has the ability to receive an over-the-air digital television broadcast signal at the intensity level necessary for service.  The predictive model proposed by the Commission is based on the current model used for predicting reception of analog signals, which uses Longley-Rice to predict signal propagation. 

In proposing this predictive model, the Commission tentatively concludes that the current standard for an outdoor antenna should continue be used in predicting digital television signal strengths at individual locations.  Although STELA revised the definition of an "unserved" household by changing the previous statutory reference to a "conventional, stationary outdoor rooftop antenna" to refer simply to the use of an "antenna" (as we mentioned in our earlier blog), the Commission’s recent NPRM finds that the Act’s specification of the DTV standard incorporated in the FCC’s rules implies the use of an outdoor antenna to receive service.  Therefore, the predictive model the Commission proposes in its NPRM for determining reception of over-the-air digital television signals will continue to include the outdoor antenna standard (with some adjustments for height).  That said, and as the Commission itself notes, given that both of the satellite television providers are moving towards providing local-into-local service in most markets, the need for making determinations as to which households are "unserved" (and hence eligible to receive distant signals), is diminishing, although there are still a number of markets where such local-into-local service has yet to be implemented. 

Although STELA also narrowed the unserved standard to focus just on the reception of signals from an in-market affiliate (rather than simply any affiliate) and to address the notion of multicast digital streams, these changes do not impact the Commission’s adoption of a predictive model, and thus were not explicitly addressed by the NPRM.  However, the Commission does include a Further Notice of Proposed Rule Making to address issues regarding on-site measurements in the event that a subscriber requests an on-site signal strength test following application of the predictive model.  Here again, the Commission proposes to limit measurements to outdoor antennas.  Comments on the Commission’s proposed rule changes will be due 20 days after publication of the NPRM in the Federal Register, which, as of this writing, has not yet occurred. 


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