The FCC is expected to move soon to create a broadcast incubator order, before a deadline, said broadcast and anti-media consolidation attorneys in interviews. The 3rd U.S. Circuit Court of Appeals told the agency to file a report on the status by Aug. 6 when denying an emergency stay of a media ownership reconsideration order (see 1802070053). Though the 3rd Circuit asked only for a report, it could hurt the agency’s case to show up without a voted-on incubator order or strong indications one is coming soon, said numerous attorneys on both sides. The agency is unlikely to show up to court empty-handed, said Georgetown Institute for Public Representation Director Angela Campbell.
The FCC kidvid NPRM was constructed to relax those rules for broadcasters while remaining acceptable to kidvid supporters, industry and FCC officials said (see 1806200058). It's not certain how the proposal will be received, and one Senate Democrat condemned the NPRM Tuesday.
Gray Television agreed to buy Raycom for $3.6 billion, creating the No. 3 U.S. broadcast group, they announced Monday. It includes divestiture of nine stations in markets where the companies overlap, and their combined reach would be 24 percent without the UHF discount, executives told investors. That’s intended to give the acquisition a smooth ride through the regulatory approval process, said Gray Executive Vice President Kevin Latek. “We are doing that on purpose,” he said, calling the plan “the realistic approach.” Latek expects the deal to close in Q4.
The FCC should reject Sinclair/Tribune’s divestiture plans as a sham, wait for the U.S. Court of Appeals for the D.C. Circuit to rule on the UHF discount and block the transaction, said petitions to deny in FCC docket 17-179 by a host of anti-media-consolidation groups, MVPD entities, state attorneys general, Newsmax, the Parents Television Council and American Civil Liberties Union. “This proposed merger, which would create the largest television broadcasting company in history, is anticompetitive to its core,” said the ACLU. NCTA and three state attorneys general had concerns.
Commissioner Mike O'Rielly took to multiple media outlets to plug a coming kidvid deregulatory plan, as the FCC issued the draft NPRM and opened a docket on the proceeding. Also Thursday, a self-described "coalition of 23 center-right consumer advocates" supported the effort. O'Rielly hopes to complete the kidvid proceeding "by the end of the year," he told a TechFreedom podcast. An NPRM seeking comment on relaxing the rules, spearheaded by O’Rielly, is set for the July 12 commissioners’ meeting (see 1806200058). A tentative meeting agenda was just released (see 1806210063).
The FCC July 12 agenda will tackle C-band spectrum for 5G, an NPRM on children’s TV rules as expected (see 1806180055), and false emergency alerts, but not the national TV ownership cap, said industry attorneys and Chairman Ajit Pai's blog. Though the FCC was seen last week as aiming to take on the cap in July (see 1806140055), the agency is now seen as shooting for the August commissioners’ meeting. “It’s imperative that we remain at the front of the pack,” for 5G, Pai said. The July meeting also will include proceedings on nationwide number portability, 800 MHz spectrum and handling of formal complaints, he wrote.
More than 30 radio licensees have written the FCC to support the proposed C4 FM class since docket 18-184 opened June 5, though the Federal Register hasn't published the notice of inquiry. “I fully support the FM Class C4/73.215 petition for rulemaking filed by MMTC and SSR Communications,” said Simmons Broadcasting CEO Bob Simmons. “The ability to increase power on our two Class A stations to 12kW and more effectively compete would be a huge benefit to our position in the markets we serve.” Most of the letters appear similar, and text apparently inadvertently included in one indicates the letters are part of an organized campaign. “[T]hen add something about your situation, such as your track record of community service, awards, emergency coverage, et cetera” said a letter from Wilbur Martin, manager of WABO Waynesboro, Mississippi. SSR Communications owner Matthew Wesolowski originally proposed the C4 FM class in a petition to the FCC, and told us he asked supporters to write in to demonstrate interest in the potential new class.
Broadcasters seeking a 50 percent national ownership cap are correct about why relief is needed, but their arguments also demonstrate why the limit should be eliminated entirely, Nexstar wrote the FCC, posted Monday in docket 17-318. Commissioners may soon vote on altering the cap now at 39 percent (see 1806180055). “The 50 Percent Proponents appropriately rest their position on the types of 'tectonic changes' in the communications marketplace” but “ignore the reality that such changes do not justify a national television ownership cap set at 50 percent, but instead a complete repeal of the cap,” Nexstar said. CEO Perry Sook has predicted predicts a raise to 65 percent, saying broadcasters must “ask for a pony to get a puppy” (see 1806140055). The Nexstar letter cited AT&T having bought Time Warner and prospects for Fox's takeover by Disney or Comcast as evidence broadcasters are dwarfed by competition. “These companies are already behemoths when compared to the nation’s largest local broadcasters before any of these market-altering transactions,” Nexstar said. The scale efficiencies created for broadcasters by a 50 percent cap would be increased if the cap were eliminated, Nexstar said. “Plucking a number out of thin air” would be arbitrary and capricious, Nexstar said. Ion said the cap should be removed, in meetings last week with Chairman Ajit Pai, Commissioners Mike O’Rielly and Brendan Carr, Media Bureau Chief Michelle Carey and an aide to Commissioner Jessica Rosenworcel, a filing said. If the FCC doesn’t eliminate the cap, it should adopt permanent grandfathering for “companies like ION that have built new competitive networks based on the traditional discount to the national audience reach of UHF stations,” the company said. Raising or eliminating the cap will lead to higher retransmission consent prices for consumers, said the American Cable Association in a meeting last week with Carey. The FCC should “confirm and quantify this harm through its own econometric analysis” and consider it in any plans to alter the cap, ACA said. The FCC can’t “transmogrify” the UHF discount into one based on ratings, the association said. Using ratings as a basis for calculating reach was suggested by NAB in the form of a discount for all broadcasters and by Covington Burling attorney Mace Rosenstein as a rejiggering of how reach is determined (see 1806050040). The FCC “has always defined ‘reach’ in terms of whether a viewer can physically access broadcast signals,” ACA said. “Ratings have nothing to do with a station’s ‘reach,’ at least as the Commission has always understood that term.”
The FCC should relax radio subcap rules, entirely removing limits on owning AM stations and relaxing limits on FM stations, said NAB in a letter to Media Bureau Chief Michelle Carey Friday. The proposal would allow licensees in the top 75 markets to own up to eight FM stations instead of the current five, and do away with FM subcaps in other markets. AM subcaps would be eliminated nationwide, and licensees in the top 75 markets could increase their limit to 10 FM stations by acting as incubators for new entrant broadcasters. Though some broadcast officials called this a compromise, National Association of Black Owned Broadcasters President Jim Winston said it would be “a drastic relaxation” of ownership rules that would hurt diversity and kill the AM band. The FCC is expected to address subcaps when it tackles the 2018 quadrennial review later this year.
The FCC is seen leaning toward an order that would set a 50 percent national ownership cap but may no longer be shooting for a July commissioners’ meeting agenda that's also expected to include an NPRM on relaxing kids' video rules, broadcast lawyers and executives said in interviews Monday (see 1806140055). Several said the agency may need more time to settle on a final ownership cap number and arrive at a final cap order, and one suggested the agency may no longer be seeking to beat the expected ruling against the UHF discount by the U.S. Court of Appeals for the D.C. Circuit. If an FCC order on the cap is held until the agency’s August meeting, it's still likely to beat the expected court verdict, attorneys said. The July agenda is expected to be released Thursday.