This week brought the news that the Biden administration has nominated Anna Gomez for the open Democratic FCC seat that Gigi Sohn was to fill until she asked that her nomination be withdrawn in March, after a prolonged debate over her confirmation. Gomez is experienced in government circles, having worked at NTIA (a Department of
Looking Into the Crystal Ball – What’s Coming in Broadcast Regulation in 2023 From the FCC
It’s a new year, and it’s time to look ahead at what Washington may have in store for broadcasters this year. The FCC may be slow to tackle some of the big issues on its agenda (like the completion of 2018 Quadrennial Review or any other significant partisan issue) as it still has only four Commissioners – two Democrats and two Republicans. On controversial issues like changes to the ownership rules, there tends to be a partisan divide. As the nomination of Gigi Sohn expired at the end of the last Congress in December, the Biden administration was faced with the question of whether to renominate her and hope that the confirmation process moves more quickly this time, or to come up with a new nominee whose credentials will be reviewed by the Senate. It was announced this week that the administration has decided to renominate her, meaning that her confirmation process will begin anew. How long that process takes and when the fifth commissioner is seated may well set the tone for what actions the FCC takes in broadcast regulation this year.
Perhaps the most significant issue at the FCC facing broadcasters is the resolution of the 2018 Quadrennial Review to assess the current local ownership rules and determine if they are still in the public interest. As we wrote last week, the FCC has already started the 2022 review, as required by Congress, even though it has not resolved the issues raised in the 2018 review. For the radio industry, those issues include the potential relaxation of the local radio ownership rules. As we have written, some broadcasters and the NAB have pushed the FCC to recognize that the radio industry has significantly changed since the ownership limits were adopted in the Telecommunications Act of 1996, and local radio operators need a bigger platform from which to compete with the new digital companies that compete for audience and advertising in local markets. Other companies have been reluctant to endorse changes – but even many of them recognize that relief from the ownership limits on AM stations would be appropriate.…
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Comment Dates Set on National TV Ownership Caps – Can and Should the FCC Amend the 39% Audience Cap?
At its December meeting, the FCC adopted a Notice of Proposed Rulemaking to review the national ownership cap for over-the-air television, which limits one owner from having attributable interests in television stations reaching more than 39% of the national audience. That Notice was published in the Federal Register on Friday, setting February 26 as the date for initial comments, and March 27 as the date for reply comments. When the FCC last year reinstated the UHF discount (see our article here), one of its justifications for the reinstatement was that the elimination of the discount could not be done without a full review of the national ownership rules – as the elimination of the discount could affect the video marketplace, and any potential adverse effects should be studied before abolishing the UHF discount (the discount counts each UHF station as reaching only one-half the audience of a VHF station). When the FCC reinstated the discount, the Commission promised to initiate this rulemaking proceeding.
The NPRM basically asks two fundamental questions – does the FCC have the authority to amend the cap, and if does, should it use that authority to make changes now? The initial question is based on the fact that the 39% limit is written into statute by Congress. Obviously, this is a fundamental question, and the usual political party divide over the interpretation of ownership rules is not fully in evidence here. Republican Commissioner O’Rielly indicated in his statement supporting the initiation of the proceeding that he believes the FCC does not have the power to change the cap – only Congress can do that, as Congress set the cap and did not provide explicit authority for the FCC to review or amend it. The two Democratic Commissioners also questioned that authority – so one of these three Commissioners would have to change their initial understanding of the law for any change to become effective, or Congress would have to step in.
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December FCC Meeting to be an Important One for Broadcasters and Other Media Companies
Last week, just before Thanksgiving, the FCC released the tentative agenda for its December meeting. From that agenda, it appears that the meeting will be an important one for broadcasters and other media companies. Already, the press has spent incredible amounts of time focusing on one item, referred to as “Restoring Internet Freedom” by the FCC, and “net neutrality” by many other observers. The FCC’s draft of the Order that they will be considering at their December meeting is available here.
The one pure broadcast item on the agenda is the Notice of Proposed Rulemaking, looking to determine if the FCC should amend the cap limiting one TV station owner to stations reaching no more than 39% of the national audience. The FCC asks a series of questions in its draft notice of proposed rulemaking, available here, including whether it has the power to change the cap, or if the power is exclusively that of Congress. The FCC promised to initiate this proceeding when it reinstated the UHF discount (see our articles here and here). In that proceeding, the FCC determined that the UHF discount should not have been abolished without a thorough examination of the national ownership cap – an examination that will be undertaken in this new proceeding if the NPRM is adopted at the December meeting.
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FCC Declares Sinclair/Tribune Transaction a Permit-But-Disclose Proceeding Allowing for More Public Participation in the Review Process
Yesterday, the FCC issued a Public Notice declaring the proposed acquisition of the Tribune television stations by Sinclair Broadcast Group a “permit-but-disclose” proceeding. This is not an unusual occurrence in a large broadcast combination where policy issues may be considered. This simply allows the parties to the transaction, and any other party who files…
Court Rejects Stay on FCC’s Reinstatement of UHF Discount – Does it Mean TV Ownership Consolidation is in the Clear?
Yesterday, in a very short one page decision, the US Court of Appeals rejected the requests filed by public interest groups to stay the effect of the FCC’s decision to reinstate the UHF discount (see our article here about some of the issues involved in this stay request, and our article here about the reinstatement of the UHF discount by the current FCC). For the foreseeable future, this decision will free many broadcast television groups to acquire more television stations as UHF stations (which most TV stations now are) count for only half their audience reach in assessing compliance with the 39% limit on the national audience share that any TV owner can have. While, contrary to some press reports, this does not signal the Court’s final approval of the FCC’s decision to reinstate the discount, it does suggest the direction which the Court is likely to take in its assessment of this Commission decision.
In rejecting the stay, the Court merely says that the public interest groups did not meet the high standards necessary for a stay. As we wrote in our article the week before last, and have written before in other contexts where stays of administrative decisions have been sought (see e.g. our article here), there is a high burden for any petitioner to meet before a stay is ordered. Basically, the court looks at questions including whether the petitioner has shown that it is likely to ultimately prevail in the final decision in the case, whether there are irreparable damages that will occur from not issuing the stay and how the equities of the situation weigh in deciding whether a stay should be imposed. Presumably, the Court here either decided that the public interest groups had not shown that they were likely to prevail in the ultimate appeal of the FCC’s decision, or that they had not shown that there would be irreparable harm from not imposing the stay.
Continue Reading Court Rejects Stay on FCC’s Reinstatement of UHF Discount – Does it Mean TV Ownership Consolidation is in the Clear?
Court Issues an Administrative Stay on Effective Date of Reinstatement of UHF Discount While It Considers Arguments as to Whether to Put the Discount on Hold
When the FCC last month reinstated the UHF discount (see our article here), it opened the door to ownership consolidation in the television industry, and immediately deals were announced based on the discount being back in place. But public interest groups in DC, fearing too much consolidation, asked the FCC to stay the effect of the rules. When the FCC did not act, the public interest groups last week asked the US Court of Appeals in the District of Columbia for a stay to put the rules on hold. In response, the Court order expedited briefing on the stay request, with the FCC filing its brief Thursday (here) and the public interest groups scheduled to file their brief shortly. Then late yesterday, the Court issued what it termed an “administrative stay” – temporarily putting the rules on hold while it considers the briefs filed by the parties. The Court was careful to say that this administrative stay was not any sort of judgment on the merits of the stay request – it was just putting everything on hold while the Court considered the arguments of the parties.
While there seems to be a rush to put everything on hold, it is interesting to note that there does not seem to be any imminent risk of anything happening, as the FCC procedurally does not seem to be in a position to imminently grant any application that would create new combinations taking advantage of the reinstated UHF discount. Regardless of this anomalous rush to a decision, the issue to be considered by the Court in assessing any stay request is whether the public interest groups have a likelihood of success on the merits of the case, and whether there is irreparable injury if the stay is not issued (see our article here discussing the standards for a judicial stay). In this case, the Court will be assessing whether the new FCC’s reinstatement of the UHF discount was an arbitrary and capricious decision to overturn the FCC’s abolition of the discount – which took place just last August (see our article after the full text of that order was released in September, here).
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FCC Releases Draft Order to Reinstate UHF Discount at April 20 Meeting – A New Round of TV Consolidation?
The FCC yesterday released the agenda for its April 20th meeting – and it includes three broadcast items. Two deal with noncommercial broadcasters (undoing the requirement for noncommercial broadcasters to get Social Security Numbers from its board members so that they can acquire an FCC Registration Number for them – see our articles here and here on this issue – and one allowing noncommercial broadcasters to interrupt programming to raise funds for unrelated non-profit organizations- see our article below). But in a decision which, if adopted, will likely have an immediate impact on the market for the purchase and sale of television stations, the FCC released a draft order, to be voted on at the April 20 meeting, proposing to reinstate the UHF discount.
That discount, in assessing the broadcaster’s compliance with the 39% cap on the nationwide audience that any broadcaster can reach with TV stations in which it has an attributable interest, accords half the weight to the population of television markets in which a broadcaster holds a UHF station. The discount was adopted back in the days of analog television, when UHF stations had signals that were harder for most viewers to receive, and the stations were more expensive to operate than VHF stations. In the digital world, that deficit has disappeared, underlying the September decision of the Commission (which we summarized here) to abolish the discount. The September decision did away with the discount, and the Commission had effectively put on hold television transactions that would exceed the cap for several years while considering the September order. This effectively froze the acquisition of new stations by the major television groups – a freeze that may quickly thaw if the Commission follows through and adopts its draft order on April 20.
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What’s Up for Broadcasters in Washington Under the New Administration – A Look Ahead at TV and Radio FCC Issues for the Rest of 2017
A new President and a new Chair of the FCC have already demonstrated that change is in the air in Washington. Already we’ve seen Chairman Pai lead the FCC to abolish the requirement that broadcasters maintain letters from the public about station operations in their public file (which will take effect once the Paperwork Reduction Act analysis is finalized), revoke the Media Bureau guidance that had limited Shared Services Agreements in connection with the sales of television stations, and rescind for further consideration FCC decisions about the reporting of those with attributable interests in noncommercial broadcast stations and the admonitions given to TV stations for violations of the obligation for reporting the issues discussed in, and sponsors of, political ads (see our article here). Also on the table for consideration next week are orders that have already been released for public review on expanding the use of FM translators for AM stations and proposing rules for the roll-out of the new ATSC 3.0 standard for television. Plus, the television incentive auction moves toward its conclusion in the repacking of the television spectrum to clear space for new wireless users. Plenty of action in just over 3 weeks.
But there are many other broadcast issues that are unresolved to one degree or another – and potentially new issues ready to be discussed by the FCC this year. We usually dust off the crystal ball and make predictions about the legal issues that will impact the business of broadcasters earlier in the year, but we have waited this year to get a taste for the changes in store from the new administration. So we’ll try to look at the issues that are on the table in Washington that could affect broadcasters, and make some general assessments on the likelihood that they will be addressed this year. While we try to look ahead to identify the issues that are on the agenda of the FCC, there are always surprises as the regulators come up with issues that we did not anticipate. With this being the first year of a new administration that promises a different approach to regulation generally, what lies ahead is particularly hard to predict.
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FCC Grants Extension of Time to Comment on Reconsideration of the Elimination of the UHF Discount
As we wrote here, the FCC has requested comments on a petition for reconsideration of the elimination of the UHF discount – which had counted UHF stations as reaching only half of their market in assessing an owner’s compliance with the National Ownership Rules for TV. These rules limit an attributable owner from having…