DOJ Interested in Bifurcated Antitrust Trials to Avoid Confusion

The first focus in bifurcated trials would be on the burden of showing a transaction violates the Clayton Act, Delrahim said, with the second whether self-help remedies -- like TW's arbitration offer -- would solve the harms to competition and how enforceable that remedy is. That split approach would avoid analytical confusion and ensures the trial court can pay attention to important facts and focus on whether the promised fix solves competitive harms. He said once DOJ proves a proposed deal carries harm, the burden of proof should shift to the defendant having to show its fix would prevent competitive harm.

Delrahim said given the standard of review DOJ was facing in appealing the U.S. District Court allowing AT&T/TW to go forward, it "wasn't a surprise" the U.S. Court of Appeals for the D.C. Circuit upheld it. He said the agency still was pleased with parts of the appellate court decision, such as accepting Justice's contention that some vertical mergers can hurt competition by creating a combination of incentive and ability to hurt consumers. The official also noted it confirmed Justice should have been allowed to enter into evidence statements AT&T and DirecTV made in past regulatory proceedings.

Asked whether the DOJ and FCC should have a different definition of media markets, Delrahim said a strength of antitrust law is its flexibility, and market definitions do change, reflected by the fact every antitrust review is based on facts about the market itself.

The FCC and DOJ have different standards for merger review. But government has an obligation to modernize rules to reflect market changes, O'Rielly told reporters between sessions. "How they look upon the universe really matters." He called Justice's approach to the media industry "problematic."

STELA

Speakers called the Satellite Television Extension and Localism Act (STELA) reauthorization an opportunity to get other video-related revisions before Congress. One congressional proponent spoke at length about his hopes for a rewrite of video law. But he and others conceded that might not happen soon.

House Whip Steve Scalise, R-La., in a recorded interview, talked up his New Generation TV Marketplace Act. The nation's video laws -- in particular the retransmission consent regime -- "are so outdated," he said. A STELA vote likely won’t come to the very end of the year, said American TV Alliance Executive Director Mike Chappell. He said STELA expiration “is good for us,” since Congress tends to act when faced with deadlines. He said ATVA is rallying particularly around the Local Choice Act broadcast a la carte proposal. Some observers see a clean reauthorization as more likely (see 1903180055). Chappell said a Senate Commerce Committee media market hearing some had expected next week (see 1903150045) now is likely sometime later this spring instead.

"Just about anything would be better" than the current retrans regime, said ACA Chairman Bob Gessner. ACA President Matt Polka expects "a lot of ideas" to be floated in connection with STELA. The last four reauthorizations contained some form of broadcast carriage modification, he said, pointing to the ability to get that again this time. However, while there's a big need for an omnibus telecom bill, it's not clear the political will "can ever come together," Polka said.

O'Rielly criticized "pointy-headed liberal advocacy groups" advocating for municipal broadband while ignoring the investments cable ISPs made in expanding their networks and said it's likely additional federal spending on broadband deployment would go toward overbuilding already served instead of unserved areas. He said in the speech that "the entire government oversight model for video services needs a complete overhaul from top to bottom." He said a maturing over-the-top market will likely lead to local franchise authorities more aggressively seeking new fees and taxes and "go[ing] rogue." "Such bad behavior and practices cannot be permitted," he said. The agency's proceeding about treating cable operators' in-kind contributions required by local franchise authorities as franchise fees and subject to a cap "should be the start and not the end of our activities" on LFAs, he said, asking why LFAs have authority to scrutinize mergers or modifications.

C Band

O'Rielly said some C-band clearing proposals might have caused anxiety by lack of details, but cable operators need to avoid "a knee-jerk reaction in opposition." And "if you don't get greedy," cable operators' C-band reallocation concerns "will have to be fully addressed," he said to applause. After his speech, he told reporters he would "love" to see 400 to 500 MHz of the 3.7-4.2 GHz band freed up for terrestrial use, but that's not realistic since cable operators indicated they can't relocate all operations there. He said 200 MHz to 300 MHz is "a soft-landing spot."

Asked if he has concerns about a possible congressional reversal of his agency's Communications Act Title II rollback, O’Rielly said elections like the Democrats taking the House can affect policy. “So we see this ping-ponging effect.”

Gessner said 5G won't be a competitive threat in 85 percent of country due to implementation costs, and in those areas with competition, cable can be the fiber backbone: "No one in the cable space wants to be a 5G provider."

ACA said C-band clearing is seen as inevitable, but there are concerns about how and what happens if filters on earth stations used for video content aren't effective. The group raised red flags about the C-Band Alliance proposal (for example, see 1902050032) and ACA Senior Vice President-Government Affairs Ross Lieberman said the T-Mobile proposal also raises concerns given the amount of spectrum it seeks to free up and how that could affect small cable operators lacking options like fiber as alternatives for receiving programming.

M&A

The association and members have some merger and acquisition worries.

Impact on retransmission consent costs concerns ACA and some members if Nexstar gets government approval to buy Tribune. The association worries about commonly owned stations in one market, said Lieberman. "A harm of the merger" is "consumer prices are going to go up." DOJ may "look at the harm to consumers from price increases," he told reporters. "We’re sort of hopeful that they’re going to take a real hard, serious look at that deal." Earlier Wednesday, Nexstar and Tribune detailed plans to divest 19 stations in 15 markets to Tegna and E.W. Scripps for $1.32 billion cash (see 1903200058).

ACA Chairman-MCTV President Gessner, noting he used to work at a station, said the "good relationships" the operator has with stations in its markets don't carry through to bigger companies when those broadcasters are bought. Such close relations "helped us with our retransmission consent negotiations," Gessner noted. With each takeover, "as we get another step of bureaucracy away," there isn't such a relationship, he added: "It's a very different transaction," where the broadcaster may give MCTV a deadline to sign a lengthy contract rather than having a conversation.

Nexstar declined to respond to the retrans criticisms. "We will file our responsive pleadings at the appropriate time," emailed General Counsel Elizabeth Ryder.

T-Mobile/Sprint meantime is the rare telecom or broadcast deal America’s Communications Association is sitting out, Senior Vice President-Government Affairs Ross Lieberman responded to our question at a media briefing. Gessner and Boycom Communications President Patricia Jo Boyers, the association's vice chairwoman, likewise told us they're on the sidelines. They also said they haven't been contacted by DOJ, which with the FCC (see 1903200006) is reviewing the deal.

ACA Notebook

The American Cable Association is now America's Communications Association. The cable ISP trade group announced the name change here. Polka said it reflected fundamental market changes like the dominance of broadband over video service. He said ACA didn't want to attach its name to any specific technology. “Our focus needs to be more on the internet and the broadband size” than video “where we’re in harvest mode," said Gessner.

Pollster Frank Luntz worries technology and social media can divide people amid a trend of increased partisanship. "I think Twitter is the worst company on the face of the Earth," he told ACA. He said the company's product can breed incivility. He bemoaned that "we get our news to affirm us, rather than inform us, and it's really bad." And "demonization of the news media is awful, because we need them, no matter what side we’re on," he said. Twitter didn't comment.