The Incentive Auction Task Force will let repacked broadcasters and MVPDs draw on $1 billion of the $1.75 billion repacking reimbursement fund upfront, holding the rest in reserve for future costs, the IATF said in a public notice in docket 16-306 Monday (see 1710160038). Meanwhile, a bipartisan group of legislators as expected formally asked FCC Chairman Ajit Pai not to extend the repacking deadline beyond July 3, 2020 (see 1709290060 and 1710060057).
IATF Allocates $1 Billion of Reimbursement; Costs to be Lower; Many Legislators Seek No Repack Delay
The FCC Incentive Auction Task Force will allow mostly broadcasters and some MVPDs to draw initially on $1 billion of the $1.75 billion repacking reimbursement fund, the IATF announced. That’s less than was requested by NAB, Ion and public TV groups. But the estimated cost of the repacking dropped from $2.12 billion to $1.86 billion, IATF said, a number likely to keep changing as repacking progresses. A smaller shortfall would make it more likely that Congress will authorize more funds to make up the gap, broadcast industry officials said.
Democratic FCC Commissioners Mignon Clyburn and Jessica Rosenworcel are seen as unlikely to fully support a draft order that would eliminate the main studio rule, broadcast industry officials told us. The item is seen as unlikely to change much from an original public draft before the Oct. 24 commissioners' meeting, an FCC official told us. The FCC's Democrats are seen as unlikely to unreservedly vote in favor of the draft order, and may concur or dissent instead, industry officials told us.
DOJ antitrust thresholds would act as a check on radio groups expanding if the FCC eliminated the AM/FM subcap rules, said Beasley Media CEO Caroline Beasley and Urban One CEO Alfred Liggins on a panel at the National Association of Black Owned Broadcasters Broadcast Management Conference Thursday. DOJ limits on broadcasters expanding too much in any market would stop “wholesale” consolidation of radio owners maneuvering to acquire more FM stations after subcap elimination, Liggins said. That makes elimination of the subcaps “not as scary” as it might appear to AM broadcasters, he said. Beasley and Liggins support elimination or relaxation of the subcaps, though Liggins -- who is black -- conceded that the loosening of the rule would “not be great for minority ownership.” Consolidation would be a boost to the radio industry, Liggins said. NABOB President Jim Winston said that eliminating subcaps would soon lead to the demise of the AM radio industry, with large companies likely jettisoning such stations, manufacturers ceasing to make the equipment, and AM engineers unable to find work. Proponents of AM should seek to elevate the band’s sound rather than keep rules in place that limit companies’ growth, Beasley said. Broadcasting needs the ability to consolidate, said Tegna CEO Dave Lougee. Broadcasters face more competition than they once did and must concentrate on content and specifically live and local content, Lougee said. There’s “not a great market for non-day and date specific content,” Lougee said. “What’s on the air needs to be live,” Lougee said. “That doesn’t mean it needs to be news.” Restructuring of debt-burdened iHeartMedia and Cumulus is unlikely to lead to many spun-off stations, Liggins said. Management of iHeart wants to keep “scale” and instead of offloading stations, would likely seek to grow if ownership rules are relaxed, Liggins said. Cumulus could seek some transactions, but they are likely to be station swaps that allow it to consolidate its reach to certain markets, Liggins said.
A tweet from President Donald Trump Wednesday condemning “NBC and the Networks” for airing “Fake News” and questioning whether it would be appropriate to “challenge their License” was seen as a possible threat to freedom of the news-media yet extremely unlikely to lead to any actual action, media scholars and communications attorneys told us.
A public notice announcing how much of the $1.75 billion repacking reimbursement fund will be allocated upfront to broadcasters will be issued “soon,” FCC Incentive Auction Task Force staff said Tuesday. Many broadcasters have been holding off on ordering repacking-related equipment until the amount of reimbursement money is announced, said broadcast attorneys and NAB filings in docket 14-252. IATF said the initial allocation would be “an amount sufficient to allow stations and MVPDs to get started with their channel transitions." NAB, Ion and other broadcasters pressed the IATF in recent weeks to offer more of the funds upfront (see 1709280068). IATF Chair Jeanne Kiddoo said the commission wants to hold some of the fund in reserve to deal with any differences between estimated and actual costs and to avoid having to get back funds from broadcasters with lower-than-expected expenses (see 1707270051).
Sinclair Broadcast and Tribune didn’t give specifics on how they will bring their proposed deal into compliance with FCC ownership rules, in the response this week to an agency request for more information, but industry attorneys told us that they don’t believe that reticence makes an FCC OK of the transaction less likely. Sinclair is negotiating with the DOJ and still deciding its specific course of action, and the FCC is expected to soon make changes to its ownership rules, Sinclair said. “It is premature at this point for Sinclair to know what specific steps will be required to comply” with FCC ownership rules, Sinclair said. “By failing to provide serious answers to the FCC’s straight forward questions, Sinclair-Tribune is refusing to respect the Commission’s role,” said a statement from the Coalition to Save Local Media, a group formed to oppose the Tribune deal.
A draft item that would seek comment on changing some broadcaster notice and reporting requirements is expected to get little pushback from inside or outside the FCC, broadcast industry and public interest officials said in interviews Thursday. The draft NPRM would seek comment on relaxing the reporting requirements for broadcast ancillary services and either eliminating broadcast application notice rules or allowing them to be satisfied with online postings rather than newspaper ads (see 1710030059). “It’s the lowest of low-hanging fruit,” said Multicultural Media, Telecom and Internet Council President Emeritus David Honig. MMTC was among those asking the agency to relax such rules (see 1708040037). “This is a textbook example of a rule revision that will help small businesses with no harm to consumers,” Honig said. The item is on the tentative agenda for the commissioners' Oct. 24 meeting.
House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., said she's pursuing her FCC reauthorization bill despite recent delays in work to revise a draft of the bill that circulated in July and was discussed at a House Communications oversight hearing (see 1707190051, 1707250059 and 1709220055). “Our proposed reauthorization bill includes relief from the newspaper/broadcast cross-ownership rule, a proposal that has had some bipartisan support in the past,” Blackburn said during a Media Institute event Wednesday evening. “We should at least be able to agree to this slight nod to reality as a first step in considering further reform.” Also at the event, Tegna CEO Dave Lougee said localism is an antidote to America’s increased tribalism, and broadcasters need regulatory changes to continue providing locally focused content. “Localism undermines division,” Lougee said. He's “optimistic” the FCC will loosen ownership restrictions to allow broadcasters to better compete with large companies in other media. “We have to move away from archaic rules and anachronistic market definitions,” Lougee said.
The Occupational Safety and Health Administration is investigating deaths Wednesday of three broadcast tower workers in Miami-Dade County, Florida, said Miami-Dade Fire and Rescue and OSHA spokesmen. OSHA doesn’t release preliminary information on investigations, but it confirmed the workers were employees of Texas-based tower company Tower King II. A Fire and Rescue spokesman told us the men were killed after equipment collapsed, causing them to fall hundreds of feet. In an interview last month, Tower King II CEO Kevin Barber told said his crew was preparing for a job in Florida connected with the post-incentive auction repacking, and his firm is one of a very limited number that could take on the most challenging tower work (see 1708160050). Tower King II, The National Association of Tower Erectors, NAB and tower owner Sunbeam Television didn’t comment. Commissioner Mike O'Rielly tweeted a link to TV news coverage of the incident Thursday morning. "May God please welcome them & bless their families. So sad," O'Rielly said.