FCC Commissioner Ajit Pai will vote against an NPRM seeking comment on eliminating the UHF discount on TV station ownership at the commission’s open meeting Thursday, a spokesman for his office told us. The item will likely still be approved on the strength of votes from Commissioner Jessica Rosenworcel and acting Chairwoman Mignon Clyburn, said an FCC official. Neither commissioner’s office commented.
Two chairs of House panels that oversee the FCC don’t want the elimination of the UHF discount to “punish business” by affecting existing ownership groups or pending transactions, they said in a letter to acting Chairwoman Mignon Clyburn Thursday (http://1.usa.gov/1aHA9VF). “Specifically, we are concerned that elimination of the UHF discount could inequitably harm those broadcast owners with pending transactions that were initiated under the existing UHF discount rule,” said House Commerce Committee Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore.
FCC Chairman nominee Tom Wheeler is expected to arrive at the agency sometime later this year with an ambitious agenda, but the time he will have in office is limited and several issues loom which could take up much of his first year. Industry and FCC officials told us that then-Chairman Julius Genachowski did Wheeler no favors by staying into May rather than leaving after the end of Barack Obama’s first term as president. Several industry officials who have spoken with Wheeler said he has a big agenda, but is all too aware that he will have limited time as chairman.
The FCC faced tough questioning Monday as judges on the U.S. Court of Appeals for the D.C. Circuit asked if the open Internet order afforded ISPs enough flexibility to escape being treated as common carriers. Judge David Tatel suggested FCC General Counsel Sean Lev had conflated the agency’s own theories, and not defending the rules as they are actually written. By the end of the two-hour oral argument in Verizon v. FCC, two of the three judges said they couldn’t see how the antidiscrimination provision of the net neutrality rules was anything other than an impermissible common carriage restriction.
The FCC faced tough questioning as judges on the U.S. Court of Appeals for the D.C. Circuit asked if the open Internet order afforded ISPs enough flexibility to escape being treated as common carriers. Judge David Tatel on Monday accused FCC General Counsel Sean Lev of conflating the agency’s own theories, and not defending the rules as they are actually written. By the end of the two-hour oral argument in Verizon v. FCC, two of the three judges said they couldn’t see how the antidiscrimination provision of the net neutrality rules was anything other than an impermissible common carriage restriction.
Wednesday’s 2nd U.S. Circuit Court of Appeals decision in Time Warner Cable, NCTA v. FCC (CD Sept 5 p4) vacating the standstill rule on procedural grounds indicated the agency would be within its rights to resurrect it, experts said. But the FCC might face a steep court battle in doing so, said foes of the rule including the then-commissioner who voted against it, in interviews last week. The standstill rule, created in a 2011 order, let commission staff authorize continued carriage of a channel involved in a program carriage complaint while a decision is pending (CD Oct 4 p3).
Verizon and Vodafone said Monday they reached a deal under which Verizon will buy the U.K.-based carrier’s 45 percent stake in Verizon Wireless for $130 billion (http://vz.to/17je3As). The deal had been long rumored, and talks were confirmed last week by the seller (CD Aug 30 p11). The deal would put Verizon on an equal footing with AT&T, which has owned its wireless operations since the AT&T/BellSouth deal consolidated AT&T’s control of what had been Cingular. Analysts and public-interest officials don’t expect major regulatory hurdles for the transaction, they told us in the hours after the deal was disclosed.
Fire Island Battle Forces Exam of Whether Wireless Equal to Traditional Phone Service, Officials Say
As the fight continues over Verizon’s plan to rebuild its network on Fire Island destroyed during Superstorm Sandy using wireless infrastructure, one big question that arises is what’s wrong with wireless anyway as an alternative to the plain old telephone service. With small carriers across the U.S. deploying wireless-only systems and larger carriers making wireless a big part of their IP transition plans, some industry observers are asking if the FCC needs to change its regulatory worldview of wireless substitution. Last week, the FCC Wireline Bureau opted not to “automatically” grant Verizon’s Communications Act Section 214 petition (CD Aug 15 p1) to discontinue domestic phone services, but to instead request additional data from Verizon.
The FCC should deny Local TV’s request to transfer control of three TV stations to Dreamcatcher Broadcasting under shared service agreements (SSAs) as part of Local’s proposed $2.73 billion sale of 19 TV stations to Tribune (CD July 2 p2), said Free Press and Put People First in a petition to deny filed Monday (http://bit.ly/13Pfmaf). The stations are in Hampton Roads, Va., and Wilkes-Barre, Pa., areas that have market overlaps with Tribune newspapers and thus a conflict with FCC cross-ownership rules, said the petition. Tribune “seeks to evade” the cross-ownership rules by using Dreamcatcher as a “shell corporation” to own the stations while Tribune provides them with services under SSAs, said the petition. Former Tribune President Ed Wilson owns Dreamcatcher, and the company was created shortly after the proposed merger was announced, the groups said. “For all intents and purposes, Tribune would control the Dreamcatcher stations and daily newspapers that serve the same communities as these stations, thereby violating” the commission’s cross-ownership rules, said the petition. Tribune disagreed with the groups’ characterization, and told us it’s preparing a response to their petition. “The transactions have been structured in compliance with FCC rules and precedent,” a Tribune spokesman told us in an email. “A transaction can be legal and still not be in the public interest,” responded Andrew Schwartzman, who represented Put People First in the petition and has opposed media consolidation for many years with the Media Access Project. “Any transaction that has the same result as a violation of the Commission’s local ownership rules is necessarily contrary to the public interest,” said the petition. If the commission does grant Local’s request to transfer the stations to Dreamcatcher, it should make the approval conditional on the outcome of any rulemaking related to the FCC’s 39 percent national television ownership cap, the groups said. The FCC is circulating a draft NPRM seeking comment on possible elimination of the UHF discount (CD Aug 14 p1). The Tribune/Local merger would put Tribune’s nationwide coverage at 44 percent if the discount didn’t exist, the groups said. “Absent the UHF discount, the proposed assignment of all Local TV stations including these three licenses to Tribune would violate the national television multiple ownership rule,” said the petition. The commission should also address the Local TV request as a full panel rather than through the delegated authority of its bureaus, said the petition. The matter merits the attention of the full commission because “the use of SSAs to evade the Commission’s ownership rules is an unresolved question,” the groups said, referring to a pending application for review in the Media Council Hawai'i ownership case (CD June 21 p20). Delaying a full commission ruling on SSAs and the ownership rules could lead to “additional litigation” or “harm parties to such SSAs because they will face the problem of unwinding them” if the commission grants the Media Council of Hawai'i Application for Review, the groups said. “These transactions raise novel questions of law, fact, and policy, and thus must be acted upon by the full Commission rather than the Media Bureau,” said the petition.
FCC Chairman nominee Tom Wheeler will play a critical role in whether the agency should impose some kind of limits on how much 600 MHz spectrum any carrier can buy in the incentive auction of broadcast TV spectrum, said numerous industry executives and former commission officials.