Monty Tayloe

A Charter Communications buy of Time Warner Cable would likely clear regulatory hurdles more easily than a Comcast buy, but TWC’s initial rejection of the Charter offer (CD Jan 15 p12) could spark a competing bid from Comcast or another company, said several cable attorneys in interviews Tuesday. A Comcast deal to buy TWC would bring more political and regulatory scrutiny and stir up issues about vertical integration that wouldn’t be as pronounced if Charter is the buyer, said Garvey Schubert cable attorney Bruce Beckner. “It’s a much tougher sell.”

The threat of large-scale cable mergers involving vertically integrated providers has moved the American Cable Association to pressure lawmakers and the FCC to redefine buying groups to allow program access rules to apply to the National Cable Telecom Cooperative (NCTC), the ACA told us. ACA said it has been “educating members of Congress” and meeting with FCC officials to push the issue, which was addressed but not acted on in an FNPRM more than a year ago (CD Oct 9/12 p1). With vertically integrated providers Charter and Comcast rumored to be among the companies vying to buy Time Warner Cable, “there is a heightened need” to have program access protections extended to the operators who purchase content through the NCTC, said ACA in a presentation to FCC officials. NCTC membership includes nearly all small and medium multichannel video programming distributors, said ACA Vice President-Government Affairs Ross Lieberman.

FCC Chairman Tom Wheeler’s decision to push the incentive auction back to 2015 doesn’t address industry concerns about how broadcasters will be affected by the repacking process, engineers, attorneys and broadcasters told us in interviews. The extra time before the auction doesn’t equate to extra preparation time for the various changes in channel assignments that repacking would be required by equipment manufacturers, broadcast stations, and engineers, because “we don’t know what to get ready for,” said Don Everist, president of broadcast engineering firm Cohen, Dippel.

A U.S. Court of Appeals, D.C., opinion in the FCC’s favor may also be a bad omen for the commission’s must-carry regime, several attorneys told us Friday. In a unanimous decision in Agape Church v. FCC (http://1.usa.gov/19ojjp3), a three-judge panel upheld the commission’s authority to sunset its dual carriage “viewability” rule, which required cable operators to downconvert the digital signals of “must-carry” channels for subscribers with analog television sets.

Gannett’s $2.73 billion purchase of Belo and Tribune’s $2.2 billion purchase of Local TV were approved by the FCC Media Bureau, according to a pair of orders released Friday (http://bit.ly/1ds4aFD) and (http://bit.ly/1cGP7WV). That was as expected (CD Dec 19 p1). Though cable companies and public interest groups had filed oppositions to both transactions, bureau Chief Bill Lake said in an email to us that the agency had considered both deals in terms of their effect on the public interest. “Our public interest mandate encompasses giving careful attention to the economic effects of, and incentives created by, a proposed transaction taken as a whole and its consistency with the Commission’s policies,” said the bureau in the Gannett/Belo order. Free Press, which along with other public interest groups had opposed both deals, said it was “disappointed” by the decisions. The FCC “needs to fix its rules now, and throw out the rubber stamp that’s making America’s media system less local, less diverse and less accountable to the people in hundreds of communities,” said Free Press President Craig Aaron in a release.

Roll out of devices designed to use the unlicensed spectrum in the unused TV bands known as the TV white spaces may ramp up beginning in 2015, said Microsoft Principal Group Program Manager Amer Hassan at a Microsoft panel on unlicensed spectrum Tuesday. Silicon vendors are already starting to design microchips to take advantage of the spectrum, Hassan said. The TV white spaces will become increasingly important as more devices become available that use Wi-Fi connectivity, said several panelists. The Internet of Things, in which everyday devices such as refrigerators and toothbrushes will share data and applications over the Internet, “will be dominated by unlicensed spectrum,” said Richard Thanki of the University of Southampton Institute of Complex Systems Simulation. Thanki said such technology will also have industrial applications, leading to manufacturing equipment and warehouses that take advantage of wireless connectivity. Since the devices don’t need to exchange huge amounts of data, the TV white spaces are particularly suited to their use, Thanki said. All the panelists said the number of devices that take advantage of the white spaces is on the rise. It’s possible that the incentive auction could reduce the amount of available unlicensed spectrum, said New America Foundation’s Wireless Future Project Director Michael Calabrese. The incentive auction has created “uncertainty” about how much of the white spaces will be left in the wake of the repacking process, Calabrese said.

The FCC shouldn’t eliminate the UHF discount without also examining the possibility of increasing or eliminating the 39 percent broadcast ownership cap, and the commission may not have the authority to change the discount at all, said 21st Century Fox, Univision, Sinclair and other major broadcasters in comments filed Monday in docket 13-236. The broadcasters were responding to an FCC rulemaking notice seeking comment on eliminating the discount (CD Aug. 14 p1), possibly grandfathering existing and pending ownership combinations, and a proposed VHF discount. Though most broadcaster comments characterized the NPRM as a backdoor method of changing the ownership cap, Free Press, the Competitive Carrier Association and broadcaster Block defended the measure. “Eliminating that discount doesn’t change the cap; it merely changes the calculation under the cap because the equation was unequivocally wrong,” said Free Press.

Gannett, its affiliate Sander Media and Belo agreed to divest a St. Louis TV station as part of a Department of Justice consent decree issued in response to Gannett’s $2.2 billion deal to buy Belo, said DOJ. Gannett already owns KSDK (NBC) St. Louis, and provides news services to KDNL (ABC) St. Louis, according to the Georgetown University Law Center’s Institute for Public Representation. It objected to Gannett/Belo at the FCC on behalf of several public interest groups (http://bit.ly/18MwNux).

Broadcasters’ legal attacks against Aereo are “the first battleground” for “control of the cloud,” said CEO Chet Kanojia at a Computer & Communications Industry Association’s event Tuesday. The Cablevision decision -- which established the legal precedent behind Aereo’s arguments that it doesn’t need broadcasters’ permission to stream their content -- also created the legal window for cloud computing services like Google Drive, said Kanojia. Broadcaster repudiations of Cablevision in their arguments against Aereo are an attack on the “commonsense” principle that consumers who buy information and content still own it when it’s stored in the cloud, he said. Kanojia said consumers are entitled to view their broadcast content streaming over the Internet if they choose. “The things I buy belong to me,” said Kanojia. He said the idea for Aereo was born out of one of his previous companies, which gathered information from customer’s cable boxes. Kanojia said he noticed that though customers paid to receive hundreds of channels, they typically only watched the same eight or 10. That showed “an imbalance between value and price,” and led to Aereo being created to address that imbalance, he said. “Bringing choice to the marketplace is absolutely critical for moving the marketplace forward.”

FCC Chairman Tom Wheeler’s first FCBA Chairman’s Dinner speech began with him being upstaged by his predecessor. When “the FCC chair” was announced, former acting Chairwoman Mignon Clyburn took the podium instead of Wheeler. “Most of you bought your tickets with high expectations when I was the headliner,” Clyburn told the crowd, which numbered more than 1,600 according to FCBA President Joe Di Scipio. After collecting her own laughs, Clyburn yielded the floor to Wheeler. “Why would anyone voluntarily subject themselves to a comedy routine by me or any other FCC chairman,” asked Wheeler, before starting a speech and multimedia presentation that included vintage video from a 1980’s NCTA event at which a much younger, mustachioed Wheeler was serenaded by a group of dancers dubbed “the Tomettes.” Wheeler’s speech advised the gathered attorneys on the best ways to curry favor with his office -- quoting his books is “very good,” asking for autographs is “tacky” -- and was peppered with pictures of his grandchildren and advice on how to find his books on Amazon.com. Wheeler also told the crowd there was enough wine at the event for everyone, but only if the AT&T and Verizon tables agreed to limit their intake -- which comes as the FCC prepares a voluntary broadcast-TV incentive auction where some have called for limiting the top two carriers’ participation. “Thank the broadcasters for sharing,” Wheeler said. He also made many references to his age as the oldest FCC chairman, implying that his interest in the Civil War comes from having witnessed it -- “You just had to be there,” he said -- and saying he doesn’t understand Commissioner Ajit Pai’s references to 1990s R&B group Boyz II Men. “Many people assume this will be my last gig,” Wheeler said. “Are you kidding? I'm that close to being a senior fellow of the Aspen Institute.” Aspen is where many ex-members go immediately after leaving the agency. Wheeler ended his speech on a more serious note, saying the passing of Nelson Mandela made the night “a historically sad evening” and praising the South African leader’s principles and life.