Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Here are some of the regulatory developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
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In one of those weird little quandaries in the broadcast legal world, the FCC just asked for comments on a petition for declaratory ruling filed by the NAB seeking a clarification as to who is responsible for the content of simulcast streams provided to comply with the ATSC 3.0 conversion rules. Under those rules, for a station to convert to the new NextGen TV transmission system, it must leave behind a simulcast stream of its primary video channel – with that stream being broadcast on a subchannel of a station continuing to operate in the current digital television standard ( a “lighthouse” continuing to transmit the programming to viewers who have not acquired a NextGen TV set – see our articles here, here and here addressing other aspects of the lighthouse signal). In such agreements, there is often a reciprocal agreement that the station hosting the simulcast stream gets to provide its own programming on a simulcast stream of the station that is converting to ATSC 3.0. What has not been explicitly addressed by the FCC is the legal responsibility for the content and other public interest obligations that attach to those streams.
In the normal course, a licensee is responsible for all programming that runs on its station, including on its own subchannel programming streams. As part of the incentive auction and subsequent repacking of the television band, where the FCC blessed channel-sharing arrangements where two or more licensees share a single television channel, the FCC has made clear that there are two separate licensees and each licensee is responsible for their own programming, public file and other regulatory obligations (see our articles here and here on channel sharing). But in the ATSC 3.0 conversion, the question has not been squarely addressed even if the answer is implied, but clearly the NAB is correct that the answer should be made crystal clear.
Continue Reading In the Conversion to NextGen TV, Who is Responsible for the Content of the Simulcast Streams?
At its meeting yesterday, the FCC adopted new rules for post-auction channel sharing by broadcast television stations (see the public notice here, full-text is now available here). Channel sharing was a concept adopted by the FCC in connection with the broadcast incentive auction, to allow two or more stations to share a single 6 MHz TV channel, while retaining separate licenses. To help convince stations to give up their channels in the incentive auction, the FCC allowed licensees to give up their channel in the incentive auction, while retaining their licenses and all the rights that go with these licenses (e.g. the right to sell the license, must-carry/retransmission consent rights, etc.) by sharing a 6 MHz channel with another licensee. The FCC adopted rules for channel sharing in the auction itself (see our summary here). Yesterday’s decision looked at post-auction channel sharing.
The new decision has importance in two principal areas. The first is for stations that entered into channel sharing agreements in connection with the auction that are time-limited rather than of unlimited duration. The second, with perhaps wider impact, is for secondary stations (e.g. LPTV and TV Translator stations). For these secondary stations, real benefits are offered in the potential for increased coverage through sharing with full-power stations.
Continue Reading FCC Adopts New Rules for Post-Incentive Auction Channel Sharing – Including Opportunities for LPTV and TV Translators to Increase Over-the-Air Coverage
Late Friday, the US Court of Appeals denied the last pending request for a stay of the incentive auction by LPTV applicants arguing that they should have been classified as Class A stations and included in the “reverse” auction where they can potentially be compensated by the FCC for the surrender of their spectrum. As we wrote Friday, the FCC was ordered to include one of the licensees in the auction on a provisional basis, but last night’s order extended no such relief to the last applicant – denying the Stay request with no comment other than a statement that the applicant had not met the stringent standards required for the grant of a stay – standards which include the likelihood of success on the merits of the underlying appeal. This would seem to clear the legal way for the incentive auction to proceed.
The other major question for all auction participants has always been whether the auction will be a success. As we wrote back when the legislation authorizing the auction was first adopted, the entire incentive auction is premised on the actions of two distinct groups – (1) TV stations willing to give up their spectrum in exchange for significant cash payments and (2) wireless companies willing to buy that spectrum for a sufficient amount of money to cover the buy-out costs of the TV stations and other associated auction expenses. Yesterday, the FCC released a public notice containing the names of 104 prospective bidders in the forward auction – including 3 of the 4 largest wireless companies (only Sprint appears to be missing) and a number of other companies – some recognizable, some not (the list of accepted applicants is here, the list of those who need to supply some additional information before their application is deemed complete is here). While full details of the ownership of these bidders is not yet available on the FCC website, it is expected to be available for review early in the week.
Continue Reading More Incentive Auction News: Last LPTV Request for Stay Denied, Forward Auction Applicants Revealed, Comments Requested on Channel Sharing and Ownership Waivers
With the January 12 deadline for the Form 177 incentive auction filings by broadcasters coming ever closer, there is more information from the FCC providing guidance to broadcasters on their participation in the process. The folks at the FCC running the auction posted an article on the FCC blog yesterday, promising an online tutorial…
The FCC seems to almost daily be issuing orders in the incentive auction proceeding, looking to the filing of applications in December by TV stations ready to give up their spectrum to the FCC so that it can be repackaged and resold to wireless users. In the last two days, the Commission has issued orders further clarifying the channel sharing rules and defining when a wireless user of the newly repackaged spectrum “commences operations” requiring that LPTV stations and TV translators operating on frequencies that would cause interference to the wireless operators to cease operations.
On channel sharing, the FCC ruled on a few issues not addressed in earlier channel sharing orders, clarifying issues raised by these prior orders (see our articles on channel sharing agreements here and here) some of which will affect very few TV stations. For instance, it decided that TV stations which entered into channel sharing agreements in which both parties offer their spectrum for surrender can designate alternative channel sharing partners in the event that both stations to the initial sharing agreement are “frozen” in the incentive auction at the same time – meaning that both will be bought out by the FCC if the auction is a success in the round in which they are frozen. While it is commendable that the FCC is providing stations with this flexibility to designate a backup sharing partner in case their initial partner’s station is also bought out in the auction, it would seem that it is unlikely that many stations will put themselves in a position to take advantage of this provision, as most channel sharing agreements will require one station to retain a channel on which the partners in the agreement can operate post-auction. It would seem as if it will be the rare case where all parties to a channel sharing agreement will be subject to being bought out by the FCC at the same time. Probably much more important is the decision of the FCC to extend the dates by which stations that agree to channel sharing agreements must actually implement those agreements after the auction has concluded.
Continue Reading The Incentive Auction Moves Forward – FCC Decisions Further Defining Channel Sharing, and Order Setting When Wireless Users “Commence Operations” Ending LPTV Operations
At the end of last week, the FCC took the expected steps of releasing its public notice setting out the specific procedures for broadcasters interested in participating in the incentive auction by selling their spectrum back to the FCC to be repurposed for wireless broadband, and a notice setting out the specific opening prices that each full-power and Class A TV station will be offered in the auction. These notices also set December 18 as the deadline for stations to submit a new Form 177, declaring if they are interested in participating in the auction. While the dollar numbers to buy out stations perhaps got the most attention, stations need to remember that they are only opening prices – prices which will fall in the reverse auction process until the FCC has only enough interest in stations selling their spectrum to meet its spectrum clearing target. But the release of the numbers and the deadline for participation highlights for many stations the need to focus on the realities of the auction and make their plans for participation (or non-participation) accordingly.
The incentive auction procedures public notice is one that broadcasters need to carefully review and, for those intending to offer their spectrum for sale, to have their economic advisors review as well. Not only does the notice provide information about forms to be completed and the specific steps to be taken by broadcasters to participate in the auction, but it also includes exhibits setting out the mathematical models used by the FCC to determine the descending prices to be offered to broadcasters as the auction continues and when the offers will be frozen (meaning that the FCC has accepted the station’s offer to vacate their current channel, subject to the success of the forward auction raising sufficient funds to pay out the amounts offered to the broadcasters). Exhibits setting out the formulas used to calculate interference between broadcasters remaining after the auction and wireless users are also included in exhibits to the notice. What are some of the other specific issues for broadcasters addressed in the notice?
Continue Reading Broadcast Incentive Auction Moves Forward – Specific Auction Procedures and Opening Bids Released, Applications to Participate Due By December 18
The FCC this week issued a document called “Guidance Regarding Prohibition of Certain Communications During the Incentive Auction, Auction 1000.” That mouthful of a title identifies a document which clarifies the restrictions which apply during the incentive auction on communications by and between broadcasters (and wireless companies) that could influence the bidding in the auction. In other auction proceedings, these kinds of restrictions have commonly been referred to as “anti-collusion rules.” Here, the FCC talks about “prohibited communications” during the “quiet period.” The quiet period extends from the filing of applications evidencing an intent to participate in the auction (likely to happen in December of this year for TV broadcasters who are interested in offering their channel for surrender the FCC, see our article here about the auction timing and procedures, including a link to the slides from a presentation on auction issues that we conducted for several state broadcast associations), until the very end of the auction when the FCC announces the final results. Thus, this quiet period will potentially extend many months, especially if there are multiple “stages” of the auction where broadcasters offer their licenses for sale and wireless companies bid on the spectrum that has been surrendered. Many broadcasters and other industry participants – from programmers worried about being the conduit of information about broadcasters’ auction intentions, to noncommercial licensees worried about representations to their audiences that could be made during pledge drives – were concerned about the very strict rules initially adopted by the FCC, which prohibited almost any communications by broadcasters that would hint as to their intentions as to whether or not they would participate in the auction. The rules also threatened to bring station sales to a halt during this period. This week’s Guidance should alleviate at least some concerns, but significant restrictions remain, and the FCC demands that auction participants educate their employees about what can and cannot be said during the auction, as a disclosure of bidding strategy or tactics can result in severe penalties.
While the Guidance addresses both broadcasters participating in the Reverse Auction to sell their spectrum to the FCC to be repurposed for wireless uses, and the Forward Auction, where the wireless companies bid on the returned spectrum, we’ll focus on the broadcast issues. There were a number of significant clarifications that affect broadcasters. While we will briefly discuss some of the issues addressed by the Guidance, the penalties for the violation of these rules are so severe, and the rules so nuanced, that we feel the obligation to warn broadcasters not to rely on this summary or any other that you read in the trade press. This is one of those areas where getting legal advice from your own attorney about the ins and outs of these rules is crucial.
Continue Reading FCC Issues Clarification of Incentive Auction Quiet Period – How Will It Affect Television Station Sales, and What Other Restrictions are Imposed on Broadcasters’ Communications About the Auction?
Last week, we noted that the FCC was planning for today a webinar on channel-sharing issues in connection with its incentive auction. That same article also summarized the FCC’s decision modifying the rules for channel sharing. Yesterday, the FCC announced that the webinar has been postponed until August 13, presumably so that the…
A webinar to explain the new rules for TV stations that want to share 6 MHz channels after the incentive auction (so that the broadcasters sharing the channel post-auction can enjoy the financial benefit of selling one of their channels during the auction), will be held by the FCC on July 22 from 2 to 3 PM ET. Information about the webinar and a place to register can be found on the FCC website, here. This webinar follows the FCC’s recent decision to provide more opportunities and flexibility for post-auction channel sharing, and the FCC’s other recent actions (see our article here) in moving the incentive auction forward. The webinar will also be on the heels of the decision to be announced on Thursday as to specific auction bidding procedures – including issues such as how the amounts of the initial monetary offers to TV stations to surrender their spectrum will be set, and how much those offers will be reduced in the subsequent bidding rounds until the FCC reaches its target amount of TV spectrum to be cleared for sale to wireless users. Today, let’s look at the channel sharing changes made in the FCC’s order released last month.
Channel sharing has been pushed by the FCC as a way for broadcasters to have their cake and eat it too in the incentive auction. By agreeing to share a 6 MHz channel with another broadcaster, a broadcaster can stay in the TV business and, at the same time, offer a channel for sale in the incentive auction and, if they are successful in that auction, reap the financial benefits of the sale (of course, they will have to share some of those benefits with the other station with which they plan to share). The FCC has even promised that stations that share will still be considered independent stations, so they can each sell their stations independently, and each station on a shared channel will have all the must carry and retransmission consent rights that they had when they independently operated on separate 6 MHz channels. But these agreements cannot be entered into without significant planning and forethought.
Continue Reading FCC to Conduct Channel Sharing Webinar after Revising Rules for Post-Incentive Auction Channel Sharing
