Monty Tayloe

An upcoming FCC order requiring closed captions (CD June 18 p10) for online video clips will likely apply to all video clips of material that previously aired on TV, on websites owned by video programming distributors no matter the clip length, said FCC and industry officials in interviews Wednesday. The order is still being finalized, but would also give VPDs a 12-hour grace period to caption “time-sensitive” or live clips, defer the issue of responsibility for third-party clips to a further rulemaking and sets deadlines for compliance starting in 2016, they said. “We are really thrilled the commission is taking steps to address this issue,” said attorney Blake Reid of the University of Colorado, who represents consumer group Telecommunications for the Deaf and Hard of Hearing. Democratic commissioners are all seen as supporting the order (CD Feb 21 p5), which is on the preliminary agenda for the July 11 FCC meeting.

Comments on an FCC public notice on the aggregate interference cap and use of proxy channels in repacking stations were due Wednesday, the same day the item appeared Federal Register (http://1.usa.gov/1lU9gBZ). The lack of notice stems from a mix up in delivering the information to the Federal Register, an FCC official told us. The commission will likely be lenient in accepting late comments on the item, the official said. The public notice announcing the call for comments was released by the FCC June 2 (CD June 4 p17). Replies are due July 22.

A Pandora request that the FCC issue a declaratory ruling that it complies with foreign ownership rules could have implications for future tests of the FCC’s newly relaxed policy toward foreign ownership (CD Nov 15 p3), and could end up decided by a commission vote rather than a bureau-level decision, said broadcast attorneys in interviews this week. Commissioners Ajit Pai and Mike O'Rielly condemned the wording of the commission’s declaratory ruling at the time for being too vague, and it’s not clear what sort of precedent approval of Pandora’s petition would set, the attorneys said. The rule was partially intended to provide access to capital for minority station owners -- a situation that doesn’t apply to Pandora, attorneys said. “We were hoping the first few filings would be minority broadcasters seeking new financing,” said Minority Media and Telecommunications Council President David Honig, who had been a strong supporter of relaxing the foreign ownership restriction.

The U.S Supreme Court’s decision on Aereo (CD June 26 p1) may have a bigger effect on new technology than majority opinion author Justice Stephen Breyer intended, especially for tech related to TV, said representatives from several trade associations in interviews. By saying companies with an end-product that resembles cable TV should be treated similarly to cable TV by copyright law, the court’s opinion is likely to chill investment interest in tech that appears to deliver a similar product to cable, said American Cable Association President Matt Polka. ACA filed a brief in the case in support of Aereo. “This is not a good thing for consumers,” Polka said: The decision “really calls into question the ability of companies to innovate.” Aereo said over the weekend it’s shutting its service. (See separate report in this issue.)

Commenters on the FCC 2014 quadrennial review (QR) of media ownership rules will be able to use demographic data as a basis for their comments, due to simultaneous release of the commission’s 2014 report on ownership of commercial broadcast stations (http://bit.ly/1mnqjYm) and a one-month extension of QR deadlines (http://bit.ly/1sL3hUN), several public interest group officials said in interviews Friday. Although the statistics, garnered from station Form 323 submissions, are less extensive than public interest groups would like, it will still inform comments on the QR rulemaking, said Andrew Schwartzman, senior counselor at Georgetown Law’s Institute for Public Representation.

The NAB will go to court to prevent the coverage areas of its members from being reduced by the FCC’s TVStudy software “if and when that is necessary,” association President Gordon Smith told us Wednesday in an interview to be aired over the weekend on C-SPAN’s The Communicators. Along with the incentive auction, Smith discussed broadcasters’ win in the Aereo case (see separate report above), politics at the FCC and the commission’s ownership policies.

The future for Aereo after its U.S. Supreme Court defeat (CD June 26 p1) isn’t clear, but it’s not likely to end up being bought by broadcasters or content companies, several broadcast officials and industry analysts told us Thursday. Aereo CEO Chet Kanojia has said in media reports that the company’s technology is valuable. NAB President Gordon Smith told us in an interview Wednesday (see separate report below) that broadcasters could eventually seek to do business with Aereo. But Aereo’s likely not an attractive acquisition for broadcasters with its business model seemingly destroyed by Wednesday’s 6-3 decision, said BIA Kelsey Chief Economist Mark Fratrik: “Aereo doesn’t really have a lot to offer.” Aereo did not comment.

Broadcasters won their case against streaming TV service Aereo in the Supreme Court Wednesday, in a 6 to 3 decision (http://1.usa.gov/1lbK8Si). That makes it very difficult for Aereo to continue operating, several broadcast and copyright attorneys told us. Justice Stephen Breyer wrote the majority opinion, ruling that despite Aereo’s unique technology, the company’s end product was little different from that of a cable company and should be subject to laws intended to impose copyright restrictions on cable companies. Oral argument was in April (CD April 23 p1).

Set-top boxes are responsible for “just 1.3 percent of a typical household’s energy use,” NCTA said in blog post Thursday (http://bit.ly/UifNf4), responding to a recent Los Angeles Times article’s comparison of set-top energy use to a washing machine. A recent industry voluntary agreement on set-top energy use (CD Dec 24 p1) means the devices are improving faster in energy use than a Department of Energy proposed standard would have, NCTA said. Users can check set-top energy use for themselves (http://bit.ly/1iLOobc) by taking advantage of transparency requirements in the voluntary agreement, NCTA said. The L.A. Times article is “incredibly misleading” said NCTA. The L.A. Times stands by the story, its author, Ralph Vartabedian, told us in an email. With multiple set-top boxes to serve multiple TVs, the boxes can be the largest use of power apart from air conditioning, he said. He also disputed NCTA criticisms that the story equates set-top box energy use with a washing machine’s. “We never said the box consumes that much power. In fact, the very next sentence in the story says these [boxes] consume 35 watts continuously,” Vartabedian said. “We checked with other private and government energy organizations and they concurred with our research and say our story is accurate.”

The FCC should initiate a rulemaking to reform “unnecessarily onerous” pay-TV effective competition rules, said Commissioner Mike O'Rielly in a speech on regulation of the video market at a Media Institute luncheon Thursday. Along with effective competition, the FCC should relax its media ownership and foreign ownership rules, and consider eliminating the sports blackout rule, O'Rielly said. An NPRM proposes to end the blackout rule (CD Dec 19 p8). If the commission ignores the current competitive state of the video industry and doesn’t relax rules in that area, it will “look more foolish than an ostrich that has buried its head in the sand,” O'Rielly said.