FCC Approves National TV Ownership Cap NPRM 3-2

“It is time for the courts to opine on this matter. We need certainty, in a way that only the courts or Congress can provide, as to where the commission’s authority begins and ends,” O’Rielly said. “Since it doesn’t appear congressional action is forthcoming, I look forward to reviewing the record that will result from this proceeding.”

Despite being overshadowed by actions on net neutrality (see 1712140039), the NPRM is “a big deal” and part of the FCC majority’s efforts to “greenlight” media consolidation, said Commissioner Mignon Clyburn. Combined with recent FCC actions on the main studio rule, the Pai commission is “destroying” the agency’s “most basic values” and hurting media competition and localism, said Commissioner Jessica Rosenworcel. Both Democrats said the agency doesn’t have the authority to alter the national cap.

Republicans slammed Rosenworcel and Clyburn for having voted to eliminate the UHF discount during the previous administration and now arguing that the agency doesn’t have authority over the cap. The 2016 order eliminating the discount contained language arguing that the has such authority. “While several seats have changed up here, the law has not. So the suggestion by some that the FCC now lacks authority to do exactly what my colleagues said the commission could do in 2016 is curious, to say the least,” Commissioner Brendan Carr said. “Our work typically demands a modicum of consistency -- boring though it may be,” said Chairman Ajit Pai. Arguments the FCC had authority over the cap in the 2016 order were essentially “dicta,” Rosenworcel said in a news conference. The Democrats were voting for the underlying purpose of the order, eliminating the discount, she said.

Pai argued that since the agency now seeks comment on eliminating the UHF discount, Rosenworcel and Clyburn were voting against their own preferences. “A vote against this notice is effectively a vote in favor of keeping the UHF discount in place,” Pai said.

Broadcast industry officials think it’s unlikely the NPRM will lead to concrete action (see 1711210044), and Pai declined to predict the proceeding’s outcome in a news conference Thursday. Pai said he “can’t forecast” whether or when the FCC might act on the NPRM, since there’s not yet a record. There has been no lobbying activity on the national cap item in the docket since the draft was released, Media Bureau Chief Michelle Carey said.

The final order hadn't been released, but changed little from the draft version, Carey said. The NPRM seeks comment on changing or eliminating the 39 percent population coverage national ownership cap and UHF discount, and on whether the FCC has the authority to alter the cap. It asks whether the UHF discount should be eliminated or changed if the cap is altered, and whether there are public interest consequences to keeping or eliminating the cap. The order also seeks comment on how any FCC action should handle grandfathering existing combinations, the bureau said.

Public interest commenters tied the NPRM to Sinclair's deal to buy Tribune, which as filed would lead to the new combination over the 39 percent cap. “Ajit Pai is the broadcast industry’s deregulatory Santa Claus,” said Free Press Policy analyst Dana Floberg. “He’s bending over backwards to give Sinclair everything on its holiday wish list.” The actions are “regulatory favors” to that company, said Public Knowledge Senior Vice President Harold Feld. “It is a fine story of crony capitalism -- if we are fortunate enough to still have an independent press willing to cover it.” Eliminating the cap would “yield the greatest immediate benefit to Sinclair,” said the Coalition to Save Local Media, formed in opposition to Sinclair/Tribune. Sinclair declined to comment. Analysts say it likely will divest stations and have the deal approved by the FCC before the agency takes final national cap action (see 1712060051).

FCC Meeting Notes

Commissioners approved 4-1 an order Thursday updating commercial mobile radio service regulations, primarily by removing sections 20.7 and 20.9 of the rules. Clyburn dissented, raising questions about whether the order would reflect on how wireless carriers are classified. “Eliminating our current Part 20 rules means we will remove precedent and procedures that could help parties demonstrate that a mobile company’s wireless service should be classified as CMRS,” she said. “I understand that some may see that as a mere streamlining of commission rules, but in my opinion, this order removes certain procedural safeguards such as requiring the commission to put certain applications out on public notice.” Carr said the order eliminates rules that are two decades old, levels the playing field and eliminates regulatory burdens. Rosenworcel disagreed with Clyburn about the potential negative implications of the order: “It does not in any way alter the statutory definitions of CMRS nor does it affect the underlying regulatory obligations.”

The FCC voted 5-0 to adopt an NPRM and order to review its Rural Health Care Program of USF support and provide some near-term funding relief. The notice seeks comment on "increasing the RHC Program's $400 million annual cap and creating a prioritization mechanism" if demand exceeds the cap, among other potential changes, said a release. "We tackle two key issues, what size the program should be going forward, and how it can function more efficiently," said Pai: "Every dollar in this program needs to be stretched as far as possible to help those in need." He said the program was "oversubscribed" and noted waste, fraud and abuse concerns. O'Rielly said he would be "extremely reluctant" to support an RHC budget increase absent cuts to other USF programs, given collectively they're authorized to spend about $11 billion per year, with "no shortage of requests for additional funding" from recipients. "Instead of looking holistically and finding the necessary offsets, the commission has tended to increase funding at the expense of consumers," he said. "It is time for the commission to decide how much we reasonably and justifiably should take from ratepayers, then set an overall budget for USF and individual program budgets accordingly." Carr also voiced budget concerns. The order makes some immediate changes, waiving the cap on a one-time basis to allow unused RHC funds from prior years to be used in funding year 2017 (though June 30, 2018), and enabling service providers to voluntarily reduce their rates for qualifying FY 2017 requests while keeping their USF support constant.

The Schools, Health & Libraries Broadband Coalition applauded the RHC actions, calling the abuse discussion "a bit overstated." The program "is facing a funding crisis," said SHLB Executive Director John Windhausen. "We are especially pleased that the FCC adopted the SHLB Coalition’s request to roll over prior years’ unused funds to help address the funding shortfall. We are also pleased to hear that the FCC agreed to ask for comment on how to improve transparency and to consider including remote home telemonitoring, as SHLB requested."

Commissioners 5-0 approved an NPRM expanding the number of notifications that cable operators can email to subscribers rather than mail out as hard copies, as expected (see 1711300046). It's also seeking comment on updating the requirement broadcasters send carriage election notices to MVPDs via certified mail and what other means like email might substitute, the Media Bureau said. Pai said the item comes as the FCC is cutting its own use of paper while also regularly modernizing legacy rules that require mailings by a variety of industries. Emailing can be more appropriate than the “antiquated postal service," O'Rielly said. He hopes to see the broadcast carriage notifications move to a final order, with retransmission consent "contentious enough" without a fight over whether documents were mailed properly. Clyburn said switching modes for notification without consumer consent could give providers "another way to mask" price increases and service charges. She applauded changes from the originally circulated item so it now seeks comments on opt-in options rather than opt-outs. The bureau said there were no other substantive changes from the draft.