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FCC to Tackle Media Ownership, Spectrum Allocation Rules at March Meeting

Thursday, March 13, 2014

By Bryce Baschuk  

March 10 --The agenda for the Federal Communications Commission's March 31 open meeting includes four substantial items targeted at changing the nation's media ownership rules and increasing spectrum allocations, among other issues.

The most controversial item scheduled for a vote at this month's meeting, an order aimed at adjusting the agency's media attribution rules regarding joint sales agreements (JSAs) among broadcast TV stations, will likely pass along party lines. The proposal would make JSAs, which combine advertising and resources between TV stations that compete in the same market, attributable under the commission's current media ownership restrictions.

If approved, the proposed change might deal a significant blow to broadcast companies like Sinclair Broadcast Group Inc. by forcing them to modify or terminate existing arrangements. New FCC attribution rules could impact “some or all” of Sinclair's advertising revenue from such arrangements, the company said in a recent filing with the Securities and Exchange Commission.

Broadcasters argue that JSAs and shared service agreements (SSAs) help local stations pool their resources and boost advertising dollars that have shrunk due to increased competition from online and cable outlets.

The FCC's two Republican commissioners, Ajit Pai and Michael O'Rielly, said they oppose the intent of the proposal because it would harm broadcasters' abilities to offer local programming and news.

FCC Chairman Tom Wheeler, a Democrat, said the proposal is “not designed to stop beneficial efficiencies in the television business,” but rather will “enable fact-based determinations to ensure competition, diversity, and localism at this very important juncture in the media marketplace,” according to a recent blog post.

FCC Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel are likely to side with Wheeler, commission sources told Bloomberg BNA.

Retransmission Consent Rulemaking

The FCC will consider a further notice of proposed rulemaking to begin the agency's 2014 quadrennial review of broadcast ownership rules. The commission has not completed the congressionally mandated review in six years. House lawmakers recently introduced legislation that would, among other things, prohibit the FCC from modifying its media ownership rules regarding JSAs until the FCC completes its 2010 quadrennial review of media ownership rules.

The March 31 meeting agenda includes a proposed order to prohibit large, local broadcasters from collaborating in cable carriage negotiations--an order the agenda says would “facilitate the fair and effective completion of retransmission consent negotiations.” The proposal would bar two or more separately owned top-four stations in a common market from banding together in retransmission consent negotiations with cable companies.

Under the proposed rule change the commission would adopt a “rebuttable presumption” that considers joint negotiation among large, same-market broadcasters to constitute a failure to negotiate in good faith. Section 325(b) of the Communications Act requires broadcast television stations and multichannel video programming distributors (MVPDs) to negotiate retransmission consent agreements “in good faith.”

The proposal is intended to protect consumers from the rapidly rising costs of retransmission consent deals. Broadcasters have sought higher fees from distributors to retransmit their network programming as a means to offset declining advertising revenues and increased sports programming costs.

The commission will consider a further notice of proposed rulemaking that seeks comment on whether the FCC should eliminate network non-duplication and syndicated exclusivity rules.

5 GHz Wi-Fi Order

The FCC will consider a report and order that seeks to revise rules that would liberate 100 megahertz (MHz) of spectrum in the 5150-5250 MHz band for unlicensed Wi-Fi use. If approved, the order seeks to improve Wi-Fi use in areas like hotels, convention centers and other crowded locations where the existing Wi-Fi capacity gets overwhelmed quickly.

The proposal seeks to permit unlicensed outdoor spectrum operations with a maximum power of 1 watt in the Unlicensed National Information Infrastructure-1 (U-NII-1) band by limiting interference levels from outdoor Wi-Fi systems.

The proposed order stems from recent concessions by Globalstar Inc, an incumbent user in the 5.1 gigahertz (GHz) band, which worked with the National Cable and Telecommunications Association to reach a consensus on how Globalstar's licensed spectrum at 5.1 GHz can accommodate greater unlicensed use while minimizing interference with its communications systems.

Cable companies such as Comcast Corp., Time Warner Cable Inc., Cox Communications, Bright House Networks, and Cablevision Systems Corp. have spent the past several years activating more than 200,000 Wi-Fi hotspots in the U.S. Such a network of wireless connection points could help those companies compete against incumbent wireline and wireless broadband service providers like Verizon Communications Inc. and AT&T Inc.

AWS-3 Spectrum Auction

The FCC will consider rules to govern the commission's highly anticipated spectrum auction of 65 MHz of spectrum from the AWS-3 band. The agency will adopt new allocation, licensing, service and technical rules to auction the valuable 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands. The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. No. 112-96) requires the FCC to auction and license spectrum in the AWS-3 band by February 2015.

The FCC's ability to maximize proceeds from the AWS-3 auction will affect how the agency formulates rules for next year's broadcast spectrum incentive auction of the 600 MHz band. The commission got a major boost in November when the Defense Department agreed to relocate its key operations away from the 1755-1780 MHz band in a move that allows the FCC to pair it with 2155-2180 MHz band.

Revenue generated from the auction will fund the $7 billion development of FirstNet, a nationwide interoperable communications network for first responders, and help pay down the nation's debt.

Last month the commission auctioned 10 MHz of H Block spectrum for $1.56 billion.

The agenda for the March 31 meeting was released March 10.

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com


The FCC's March open meeting agenda is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-325964A1.pdf.

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