Cable companies aren’t planning to create an Internet “fast lane,” and doing so wouldn’t make good business sense, said NCTA President Michael Powell on C-SPAN’s The Communicators (http://bit.ly/SGCvMz). “I don’t think we even know what a fast lane is, and I don’t think anyone is contemplating doing one.” His interview was scheduled to be shown this weekend on the cable channel.
An FCC Media Bureau freeze on digital replacement translator (DRT) applications and low-power, translator and Class A TV displacement applications won’t have strong consequences for broadcasters, said industry lawyers in interviews Thursday. They said the DRT freeze(CD June 12 p14) may slightly complicate things for low-power TV (LPTV) and Class A operators experiencing interference. DRTs are used by full-power stations to bridge gaps in their coverage left by the transition to DTV. LPTVs use displacement applications to move to a new channel when a full-power station interferes with their signal.
Comcast and Charter Communications filed applications with the FCC for approval of Comcast’s divestiture of 3.9 million subscribers to Charter in connection with Comcast agreeing to pay about $66 billion for Time Warner Cable (http://bit.ly/1kNJ1Yp). As expected (CD April 29 p1), the deal will involve 2.5 million Comcast subscribers being transferred to a newly created Charter affiliated company known as SpinCo, 1.5 million subs going to Charter, and a swap of subscribers among the companies to allow geographic concentration. The filings made public Thursday include Comcast’s listing of the public interest benefits of the deal and SpinCo details. Since the delay will leave Comcast shareholders owning parts of all three companies, regulators could pay special attention to the viability and independence of the spinoff company, said James Stenger, a mergers and acquisitions attorney at Chadbourne & Parke.
The specifics on incentive auction repacking and reimbursement in the FCC auction order released Monday (CD June 4 p4) leave a lot of uncertainty for broadcasters, said broadcast attorneys in interviews. Though the order details how broadcasters will be paid up front and how their costs caused by the repacking will be assessed, the specifics of the process remain unclear, which makes it hard for broadcasters to plan, the attorneys said. NAB said in a news release Monday that holding nonparticipating stations harmless in the auction is one of its aims, and an organization representing low-power TV has already said it will pursue legal action against the order over repacking costs. Not compensating stations for repacking costs puts a “huge financial burden” on stations, said Fletcher Heald broadcast attorney Peter Tannenwald, who has many LPTV clients.
The NAB and Prometheus Radio Project each filed court challenges to new FCC rules on joint sales agreements (JSA) and its handling of the quadrennial review of media ownership rules, according to court documents and an NAB news release Friday (http://bit.ly/1o7ZMRY). The order barring JSAs where one station accounts for more than 15 percent of another’s ad sales (CD April 1 p4) without similarly attributing shared service agreements is “arbitrary and capricious,” public interest group Prometheus told the 3rd U.S. Circuit Court of Appeals. The JSA rule is against the public interest because it puts broadcasters at a competitive disadvantage, NAB told the U.S. Court of Appeals for the D.C. Circuit. “Ownership restrictions against free and local broadcasters are outdated in a world of national pay TV giants,” said an NAB spokesman in a written statement.
An order related to the Commercial Advertisement Loudness Mitigation Act rules listed as circulating among FCC members is a procedural update to the act’s loudness standards, an agency official told us. As explained in an FNPRM last year, the proposed update was prompted by changes to the Advanced Television Systems Committee algorithm used to calculate loudness (CD Nov 5 p18), according to the official. The legislation references the old ATSC standard, and the order would update the language with the new one, the official said. The FNPRM didn’t receive any opposing comments, according to the proceeding’s docket 11-93 (http://bit.ly/1trMIbw). NAB asked that stations be permitted flexibility and time extensions for updating their equipment to the new standard. The Media Bureau didn’t comment.
Consumer groups representing the hearing impaired and video programmers disagree with pay-TV distributors over who should be held responsible for the quality and other aspects of closed captions, according to reply comments filed Tuesday in docket 05-231 (http://bit.ly/1nCSvLs) in response to an FCC FNPRM on the issue (CD May 1 p9). Charter Communications, Comcast and DirecTV support a “burden shifting” model that puts the onus for quality on programmers, while CBS and Viacom, along with consumer groups like Telecommunications for the Deaf and Hard of Hearing, don’t think the current system holding video distributors responsible should be changed. Distributors are “in a better position to police the captioning practices” of programmers than the FCC, the consumer groups said.
Having to handle at once AT&T’s plan to buy DirecTV and Comcast/Time Warner Cable will tax regulators without overwhelming them, said former FCC officials, industry attorneys and analysts in interviews. While regulators will likely face the extra step of having to consider AT&T/DirecTV in light of Comcast/Time Warner Cable, the extra demand on staff in the deals each worth more than $65 billion is unlikely to substantively strain resources at the FCC or Department of Justice, said American Antitrust Institute Vice President Diana Moss. “You can’t stop the trains just because multiple deals come in,” said Moss. “You have to process them."
Broadcasters on the fence about participation in the incentive auction are unlikely to be encouraged to participate by Thursday’s auction order (CD May 16 p5), and aspects of the FCC’s repacking plans may lead to litigation before the auction, several broadcast attorneys told us. An NAB release immediately after the FCC vote criticized the commission’s handling of the $1.75 billion repacking reimbursement fund and commitment to the TVStudy auction software, and the attorneys said there’s widespread industry concern that the FCC deferred many of the auction decisions to later proceedings. That delay could force opponents to take the commission to court sooner rather than later, said Cooley broadcast attorney Jason Rademacher. It’s much easier for a court to prevent or change a repacking process that hasn’t happened yet rather than unwind one that’s already occurred, several attorneys pointed out. “By deciding just these major policy things they've put people in a strategic box,” Rademacher said.
The FCC shouldn’t include the TVStudy software planned for use in the incentive auction and repacking in its upcoming auction report and order, said NAB auction expert Rick Kaplan in an interview Friday. NAB commented Friday (http://bit.ly/1ghCXqp), urging the commission to use the original Office of Engineering and Technology-69 software instead, because even when running the same specifications as the original software, TVStudy produces different calculations for stations’ coverage area and population served. “Some stations lose and some stations gain, but Congress instructed the FCC to protect all stations,” Kaplan said. FCC officials and industry associations have said TVStudy has features the original OET-69 software doesn’t (CD June 3 p7), and it would be difficult to do the auction without them. “Not only does the new software improve upon the previous iteration, but it also contains features that will be necessary to conduct the incentive auction,” commented CTIA in docket 12-268.