The Senate Communications Subcommittee scheduled a spectrum hearing for Thursday, as expected earlier in February (see 1702100051). It said Friday the hearing will be at 9:30 a.m. in Dirksen G50 with the following witnesses: CTIA Vice President Scott Bergmann; Recon Analytics analyst Roger Entner; Microsoft Deputy General Counsel Dave Heiner; Raycom Media President Pat LaPlatney; and Satellite Industry Association President Tom Stroup. The hearing will "explore the future of spectrum policy and how wireless technology benefits consumers and the economy," the committee said. "It will also examine evolving market demand for licensed and unlicensed spectrum and the Federal Communications Commission’s recent spectrum auctions.”
Rising prices in some spectrum auctions worldwide are leading to “more expensive, lower quality mobile broadband services,” the GSMA said in a report released Wednesday, “Effective Spectrum Pricing.” The average final prices paid in auctions increased 250 percent from 2008 to 2016, “with the most exorbitant price tags often influenced by policy decisions,” the GSMA said. “The era of judging the success of auctions based on headline-generating revenue figures is over,” said Brett Tarnutzer, GSMA head of spectrum and a former FCC official, in a news release. “The damage done to consumers -- and the wider digital economy -- by policies that artificially inflate spectrum prices has been too great. While auctions remain an effective means of awarding spectrum, regulators should adopt spectrum policies that focus on maximising the benefits for society, rather than simply driving up the cost of spectrum.”
Small cable operators and groups opposed to media consolidation on one side, and media allies on the other disagreed whether the FCC should reconsider newspaper/broadcast cross-ownership and other media-holdings restrictions as NAB wants. The association and Nexstar petitioned for reconsideration, which the American Cable Association opposed (see 1701250054). About a dozen groups including unions and led by the United Church of Christ opposed such deregulation, but it was backed by Cox Media Group and the News Media Alliance (NMA). Filings were posted Tuesday and Wednesday in docket 14-50 and the subject of an NMA news release Thursday. The UCC, Communications Workers of America, National Association of Broadcast Employees and Technicians, Prometheus Radio Project and others said broadcasters raised no new facts not already considered by the regulator. "The US Court of Appeals, which has retained jurisdiction over the remand in Prometheus III [the court case is named after that group] directed the Commission to assess the impact of any repeal or modification of an ownership rule on opportunities for station ownership by women and minorities. The Commission has conducted no such assessment" here, said the consolidation foes. "Neither petition mentions, much less challenges, the Commission’s threshold determination that it is premature to change the media ownership rules before it has had a chance to evaluate the 'dramatic effect' that spectrum auctions will have on the broadcast marketplace." Comments related to FCC plans for shuffling TV stations after the incentive auction were the subject of separate filings posted this week (see 1701260033). Cox Media sees the rules retaining long-time hurdles to one company owning a broadcaster and daily paper in the same market as a "veritable museum of the way things used to be." When the 1996 Telecom Act mandated periodic review of media ownership rules, Congress didn't "expect the endless cycle of delay, court appeals, and regulatory inertia that have characterized the past two decades of biennial and then quadrennial reviews," said the broadcaster. Nix "this analog-era rule once and for all," wrote NMA. "In the remarkable seven years it took the FCC to conduct its 2014 quadrennial review, the Commission compiled a record clearly demonstrating that the cross-ownership ban is a musty anachronism that undermines the very values for which it was promulgated. Yet, inexplicably, the Commission concluded its review in August 2016 by deciding to retain the rule in essentially the same form in which it was adopted in 1975."
It will take roughly two years, until Q4 2019, for the FCC's new home at Sentinel Square III at 45 L St. NE to be constructed, an official connected with the project told us. Former FCC Chairman Reed Hundt keeps a swatch of the carpet that lines the agency's current Portals headquarters in his office as a memento of his involvement in that building's interior design, and it could be an interim chair or the commission's next permanent chair who will oversee the design of the work spaces in the new building.
President-elect Donald Trump’s transition team now includes a telecom executive eyeing FCC changes to come under the new administration, according to its roster of landing team members updated Thursday. Joining the three American Enterprise Institute scholars on the FCC landing team is David Morken, CEO of North Carolina-based Bandwidth.com. He chairs the Bandwidth.com subsidiary company Republic Wireless, which outlined plans to spin off from Bandwidth earlier this month.
Obama administration pushback to the Senate’s Mobile Now drafts last year targeted core bicameral and bipartisan spectrum proposals from Capitol Hill. Federal officials successfully killed attempts to provide financial incentives to federal agencies to relinquish spectrum and a mandate to free up a higher amount of spectrum, largely through criticisms never made public but shown in emails that Communications Daily acquired through a Freedom of Information Act open records request to NTIA. Emails also show the administration’s hand in adding language on bidirectional sharing and its objections to spectrum leasing language, which surprised some we interviewed who saw the critique.
The FCC Media Bureau can't approve a waiver allowing Nexstar/Media General to complete their $4.6 billion deal because it “has no delegated authority to waive spectrum auction rules,” said the American Cable Association in a letter filed in docket 16-57 Tuesday. “Rather than file their request for waiver with the Wireless Telecommunications Bureau -- which has delegated authority regarding spectrum auctions, Applicants wrongly filed their request for waiver in the docket for the Media Bureau’s review of the transfers of control of Media General’s broadcast television licenses to Nexstar,” said ACA. The cable association also objected to granting the transaction on any bureau's delegated authority, because of the uniqueness of Nexstar's request. “Given the unprecedented situation Applicants’ request presents, sound policy requires a decision to be issued by the full Commission,” ACA said. The association also filed in opposition to aspects of Nexstar/Media General itself, seeking conditions on the combination to prevent it from affecting retransmission consent negotiations (see 1611250042). Nexstar and the Media Bureau didn't comment.
The FCC incentive auction “quiet period” has stretched on 10 months, longer than most TV broadcasters expected, squashing dealmaking and making it difficult for lawyers to serve their clients, broadcast attorneys said in interviews last week. With the auction widely forecast to stretch into 2017, some broadcast industry officials are seeking relief. The quiet period was expected to make dealmaking difficult (see 1411280041). The Incentive Auction Task Force said it will consider ending the communications prohibitions after the auction's final stage rule has been satisfied to give broadcasters more time for the repacking. It's the dampening effect on transactions that's the real difficulty of the quiet period, said broadcast attorneys and BIA/Kelsey Chief Economist Mark Fratrik.
Charter Communications and T-Mobile were among those spending much more on lobbying in Q3 than a year earlier. Charter's lobbying expense was $1.99 million, vs. $980,000. Charter successfully acquired Time Warner Cable and Bright House Networks in the interim. T-Mobile spent $2.17 million, up from $1.4 million.
The FCC spent just more than $100 million on spectrum auctions in FY 2015, said a report released by the agency Tuesday. The biggest expense, $56 million, was “other contractual services,” followed by personnel costs at $27 million. FromFY 1994-2014, the FCC said it spent $1.42 billion on auction, bringing in an average $4.3 billion per year in cash receipts including receipts from FY 2015.