A report and order establishing the framework of the incentive auction will be presented to the FCC this spring, announced the Incentive Auction Task Force in its update presentation at Thursday’s open commission meeting. The R&O will be followed by two public notices and comment periods to finalize every aspect of the auction, applications from prospective bidders will begin to be accepted in early 2015, and the auction itself will be held in mid-2015, said task force’s Chairman Gary Epstein. The NAB and CTIA praised the commission’s timeline, though some broadcast attorneys told us they're concerned about a lack of specificity and the commission’s plans for reaching out to broadcasters. “We are on course at speed to get this thing done,” said FCC Chairman Tom Wheeler.
FCC Chairman Tom Wheeler’s office had planned to circulate a draft order Thursday that would attribute TV joint sales agreements (JSAs) for the purposes of calculating ownership, but the item is expected to be delayed until March, an agency official told us. The order would have treated the attribution of TV JSAs the same way as for radio, counting as 15 percent toward ownership, the official said. It’s not clear why the item may be delayed. The item would also have included a further notice of proposed rulemaking on media cross-ownership, the official said.
The FCC shouldn’t appeal the U.S. Court of Appeals for the D.C. Circuit decision that struck down most of the agency’s net neutrality order (CD Jan 15 p1), said Commissioner Ajit Pai. The “better course” would be to let Congress clarify the scope of FCC authority over the Internet, he said. Pai also discussed during the appearance to be shown this weekend on C-SPAN the FCC incentive auction and repacking, broadcaster sharing agreements and hotel phone problems with dialing 911.
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.