Broadcasters, Public Interest Communities Disagree Over UHF Grandfathering

Tribune echoed the initial comments of Univision and other broadcasters calling for the FCC to retain its proposal to grandfather transfer of control applications that were pending as of the date of the NPRM. “This approach takes into account the settled expectation that transactions will be evaluated under the rules in effect when applications are submitted,” it said (http://bit.ly/1m1iHOK). It conserves the financial and human resources already committed to the transaction by the parties and FCC staff and “it avoids the inequity of retroactive rulemaking and a forced divestiture,” it said.

Tribune also urged the FCC to permanently grandfather station groups that would exceed the national ownership cap in the absence of the UHF discount, it said. The limited grandfathering proposed in the NPRM “jeopardizes both the public interest contributions of Tribune and other broadcasters and the high level of service enjoyed by their viewers because it could lead to forced divestiture in situations as prosaic as a corporate change that does not affect the size of the station group,” it said.

NAB rejected CCA’s suggestion to eliminate the UHF discount and to review broadcast ownership and retransmission consent rules to determine whether there’s an impact on stations’ incentives to relinquish their spectrum for the incentive auction. That approach would be unlawful, NAB said (http://bit.ly/1b0fR4s). The rationale for CCA’s proposed rule changes “has no relationship to the purposes of any of the rules CCA has identified.” It would be an utter abuse of discretion “for the FCC to eliminate, adopt or modify any rules for reasons that have absolutely no relationship to their intended purpose,” it said. CCA’s proposals for giving broadcasters further incentives to participate “would actually be unlawful coercion to discontinue operating in direct contravention of the statutory requirement that auction participation be voluntary."

To suggest there is no connection between broadcast regulatory policies and their influence on the auction is “nonsensical,” said CCA President Steve Berry. “Broadcast policies will impact broadcaster participation considerations in the voluntary auction and ultimately impact the availability of spectrum,” he said in a statement. “If broadcasters really want to be free of the regulatory burdens they claim to be burdened with, the wireless industry is more than happy to purchase their spectrum for billions of dollars.” In its initial comments, CCA claimed that the UHF discount discouraged stations from participating in the incentive auction, and the VHF discount would have the same effect (CD Dec 18 p4).

NAB didn’t take a position on whether the FCC should change or eliminate the current national TV ownership cap, but it did urge the FCC “to reevaluate the UHF discount only within the broader context of an examination of the national cap,” it said. “This approach would allow the commission to properly evaluate the public interest harms and benefits of modifying the method for calculating compliance with the cap and to comport with applicable Administrative Procedure Act requirements."

Free Press, Common Cause, Media Alliance and the United Church of Christ challenged the merits of some broadcasters’ grandfathering proposals and adoption of a VHF discount. In a joint filing, they cautioned that if the commission decides to grandfather stations, it should be careful that it does not undermine its decision to repeal the UHF discount (http://bit.ly/KhnkFp). The commission “must resist broadcasters’ appeals to maintain the UHF discount’s legacy even after the rule’s elimination,” they said. “The primary concern is that we don’t want all current UHF stations to be grandfathered because any station that was changed from VHF to UHF after the digital TV transition took place wouldn’t have been relying on the UHF discount,” said Eric Null of the Institution for Public Representation, who is counsel for the groups. It wouldn’t be appropriate for the commission to grandfather those stations that were clearly not relying on the discount, he said. “If you did that, it would undermine getting rid of the UHF discount because you're allowing stations that didn’t rely on it to be grandfathered regardless,” he added.

The public interest groups cautioned against using the proceeding to create a VHF discount. Such a discount isn’t appropriate given the technical realities of the band, they said. The average lost coverage for VHF stations is insignificant “because while signal penetration is worse for some stations post-digital transition, coverage has remained the same or improved for other stations,” they said.