Monty Tayloe

Broadcasters’ appeal to have their case for an injunction against online TV service Aereo reheard by a full panel of judges was denied Tuesday by the 2nd U.S. Circuit Court of Appeals in New York after a 10-2 vote. The failure of the appeal of denial by a three-judge 2nd Circuit panel of an injunction preventing Aereo from retransmitting TV stations’ content is not unexpected, said several broadcast attorneys and one of the appellants, Fox. The denial likely won’t have much effect on the several remaining court battles involving Aereo and competitor FilmOn, broadcast attorneys told us, though a dissenting opinion from 2nd Circuit Judge Denny Chin could boost future broadcaster appeals. “They can use Chin’s dissent as a roadmap of sorts in formulating their arguments,” said Fletcher Heald’s Harry Cole, who’s not involved in the case. Fox “will now review our options and determine the appropriate course of action, which include seeking a hearing in the U.S. Supreme Court and proceeding to a full trial on the merits of the case,” said the 21st Century Fox subsidiary in a statement.

Since that means the shareholders will still own both TV stations and newspapers, it doesn’t change status regarding FCC cross-ownership rules, said Fletcher Heald attorney Peter Tannenwald: “Unless they do something to change the ownership at the beginning it won’t make it any difference.” But Tannenwald said if the companies want to try to use the split to come into compliance with cross-ownership rules without receiving an FCC waiver, they could do so by more clearly separating the ownership of the two companies. Tribune said each of the companies will have its own board and senior management team, and “revenues in excess of $1 billion.” “This doesn’t remove the need to ask the question” about possible cross-ownership violations in the proposed Tribune/Local TV merger, said Free Press Senior Policy Director Matt Wood. He also said the spinoff doesn’t do anything to fix Free Press concerns about media consolidation. “We still see reduced journalism and reduced diversity of viewpoint,” he said.

The FCC should revisit rules barring foreign investment in broadcasting and relax regulations on AM radio to promote minority media ownership, said FCC Commissioner Ajit Pai at a Minority Media & Telecom Council breakfast Wednesday, part of the MMTC’s Access to Capital conference. Commissioner Jessica Rosenworcel also attended the breakfast, and also suggested possible rule changes to favor minority media ownership. Pai called the foreign investment rules “an anachronistic relic,” and said changes to them would help minority businesses by increasing the availability of capital, which he called “the lifeblood of a business."

A House Communications and Technology Subcommittee hearing on proposed reforms limiting the FCC’s power to review transactions and issue new rules is unlikely to lead to new legislation, said several industry and legislative officials in interviews Tuesday. Thursday’s hearing resurrects two bills that fizzled in the Senate in 20ll (CD March 27/12 p1). HR-3310 would consolidate numerous FCC reporting requirements into one annual report to Congress, and the more expansive HR-3309 would require the FCC to consider market forces before issuing rules, allow two commissioners to discuss commission business without issuing an ex parte and limit the power of the agency’s bureaus.

An FCC rule that will require all broadcast stations to post detailed information about their political ad sales online instead of just maintaining hard copies in their offices will be burdensome and difficult for smaller stations to comply with, said Fletcher Heald’s Peter Tannenwald, an attorney for many independent broadcasters. The rule is already in effect for the big four network affiliates in the top 50 markets, and set to apply to all broadcasters starting July 2014, but the FCC asked for comments on possible changes to its implementation, in a June 27 public notice (CD June 27 p20).

Tribune will likely avoid falling afoul of FCC ownership rules through shared service agreements in St. Louis and Denver, said Free Press Policy Director Matt Wood. He also pointed to previous Tribune efforts to sell off its newspaper properties as a possible solution to the cross-ownership conflict in Virginia. “There’s not a lot of formal levers for the FCC to grab onto,” he said, describing the deal as being “not as bad” as a recent plan for Gannett to buy Belo Corp.’s TV stations, which also featured a market overlap (CD June 14 p7). No mention was made of how Tribune and Local TV will get past cross-ownership rules during a conference call Monday held by the companies. The deal would allow Tribune to create “synergies” between its print, video and digital properties, said CEO Peter Liguori on the call. BIA/Kelsey Chief Economist Mark Fratrik said he believes the companies would not pursue the deal without believing it will be approved by the FCC. “They obviously have good legal counsel; good FCC counsel,” he said.

The FCC won’t take up the Bloomberg/Comcast channel placement dispute anytime soon, despite a plea last week (CD June 27 p16) from the financial news channel for the agency to act on the two-plus-year-old matter, several cable industry attorneys told us in interviews. With the recent Tennis Channel program carriage dispute decision against the FCC from the U.S. Court of Appeals for the D.C. Circuit (CD May 29 p1) and a new chairman unlikely to take office right away, the attorneys said the current commission probably won’t quickly resolve the issue. The dispute revolves around conditions of the Comcast/NBCUniversal deal and the placement of the Bloomberg TV network in the same neighborhood as other news networks owned by Comcast.

It is “past time” for the FCC to enforce the conditions of the Comcast/NBCUniversal deal order and make Comcast place the Bloomberg TV network in the same neighborhood as other news networks, said the cable programmer in a filing Tuesday (http://bit.ly/1cnx7ky). “After more than 29 months, over two years longer than the 180 days provided to the Commission to review the Merger, Bloomberg respectfully requests that the Commission enforce the Condition and issue a final decision on Bloomberg’s complaint.” Though Bloomberg has argued that Comcast should have to put Bloomberg’s standard-definition networks next to other news channels, Comcast has said it should only be required to put Bloomberg TV’s HD feed there (CD Oct 11/12 p12). Bloomberg pointed out that the deal order that contains the disputed neighborhood condition expires in just over four years. “That is to say that nearly 36 percent of the time required for the conditions has been allowed to run without full and meaningful implementation by Comcast of the news neighborhood condition,” said the filing. Bloomberg said the pleading cycle ended eight months ago on a Media Bureau decision to delay enforcing the condition until after an FCC review, but the commission has yet to take the matter. The FCC website listed a matter related to the companies as “on circulation” as of February. Comcast declined to comment. An FCC official said it’s not clear if acting Chairwoman Mignon Clyburn has a different take on the dispute than former Chairman Julius Genachowski, who was in control when the matter initially came before the agency. The Bloomberg filing may indicate that the company doesn’t want to wait for the commission’s current leadership transition, said public interest lawyer Andrew Schwartzman. “Waiting is costing Bloomberg money.” Schwartzman pointed out that it could be several months before FCC Chairman nominee Tom Wheeler takes office.

The FCC is ignoring a potential interference problem in the incentive auction and failing to drive consensus, said NAB Executive Vice President Rick Kaplan in a blog post Tuesday (http://bit.ly/17AeYn2). In response to a blog post by Wireless Bureau Chief Ruth Milkman (CD June 24 p1) endorsing a variable band plan -- in which wireless and broadcast operate use the same spectrum in different areas -- Kaplan said the FCC is not considering the widely held “consensus” belief that such a plan would lead to crippling co-channel interference. “Most notably, in [the FCC’s] unyielding quest and determination for reclaiming variable amounts of spectrum in different markets, the inherent interference consequences of a variable approach are simply being ignored,” said Kaplan. “The staff steadfastly refuses to study the issue with any rigor, model it or even ask a single question about it."

The U.S. Supreme Court’s Arlington ruling won’t have as strong an effect on court challenges to the authority of government agencies as expected, said several former FCC attorneys at an FCBA event on administrative law Wednesday. Last month’s ruling (CD May 24 p1) that government agencies should receive deference from courts in interpreting ambiguous laws about their own jurisdiction “won’t have the seismic significance some people give it,” said Wilmer Hale attorney Jonathan Nuecterlein. He was formerly an FCC deputy general counsel and recently named FTC general counsel. While the ruling ostensibly expands the authority of agencies like the FCC, determined courts will be able to work around it, he said. “When courts want to second-guess agencies’ interpretation of their jurisdiction, they're going to."