Entercom and CBS Radio filed applications with the FCC for approval of Entercom’s all-stock buy of CBS (see 1702020070), show FCC and SEC filings. As part of deal approval, Entercom agreed to divest stations in seven markets, and the companies are asking the FCC for a six-month waiver of the TV/radio cross-ownership rules to allow CBS CEO Les Moonves and CBS Chief Operating Officer Joseph Ianniello to sit on the Entercom board (see 1703210041), said an SEC filing. The deal is expected to close in the second half of 2017, Entercom said.
Preliminary work to repack broadcasters after the incentive auction has begun and is going smoothly, said engineers, broadcasters, antenna manufacturers and industry officials in recent interviews. But they said that’s likely to change, both in April when the 39-month countdown clock on the repacking starts ticking and when it comes time to install all the new broadcast equipment stations will need to transition to their new channel assignments. A lack of experienced tower crews and the sheer amount of work needed is going to create a bottleneck, numerous industry officials said.
Nexstar Media and Sinclair agreed to create a consortium designed to let broadcasters compete with wireless companies using both ATSC 3.0 and current broadcast advertising, said a news release from the TV station owners and broadcast executives in interviews. The consortium, which “will promote spectrum aggregation, innovation and monetization,” will be jointly owned and controlled by Sinclair and Nexstar, the firms said. It's “non-exclusive” and the consortium “is intent on exploring the inclusion of other television broadcasting entities,” they said.
Broadcasters are becoming increasingly concerned about how the post-incentive auction repacking of TV stations will affect FM stations, engineers and attorneys told us. They said engineers have been discussing the matter for some time, and the matter recently became the subject of a push by NAB (see 1703140066). The association visited the FCC on the issue twice this month so far, according to ex parte filings. Unlike full-power and Class A TV stations, FM stations that have to change their facilities or go dark because of the repacking won’t be reimbursed, and they can’t use pay-TV carriage to reach viewers if the repacking affects signal strength, said Womble Carlyle radio lawyer John Garziglia. The FCC didn't comment.
A long list of deadlines and filing windows awaits broadcasters after the incentive auction, according to a workshop on the post-incentive auction transition at the FCC Monday. Incentive Auction Task Force staff described numerous opportunities for broadcasters to get extensions on requirements such as filing construction permits, but repeatedly said waivers that would allow a broadcaster to remain on their original channel beyond the 39-month transition period won’t be granted. Such waivers won’t be granted “in any event,” Media Bureau attorney adviser Shaun Maher said. Along with deadlines, the workshop discussed channel sharing, the public information requirements for broadcasters and rules for stations going dark.
While the FCC has just three commissioners, their monthly meetings are the only method Chairman Ajit Pai has to force a vote, former and current officials told us. The regulator has a “must-vote” rule to keep commissioners from stalling an item by refusing to vote on it. It's triggered by having three commissioners vote for an item, and thus won’t apply to a three-member commission, FCC officials said. Some said the practical effects of this are likely to be small, but others aren't so sure.
A draft item on new channel sharing rules could present some new opportunities for TV broadcasters, but may be limited in its practical application, numerous attorneys representing both full-power and low-power broadcasters told us. FCC Chairman Ajit Pai distributed the draft item last week (see 1703020076), and it's scheduled for a vote at the March 23 commissioners’ meeting. The draft would allow limited sharing for LPTV and translators with each other and with full powers, and sharing outside the context of the incentive auction. It's good for the FCC to be giving broadcasters these options, but opportunities for them to be applied are likely to be “rare,” said Fletcher Heald broadcast attorney Peter Tannenwald. “There are several restrictions that could reduce the viability of channel sharing under the draft order,” said Wiley Rein broadcast attorney Ari Meltzer in a blog post.
The FCC is expected to reinstate the UHF discount at its April meeting but the rollback of other ownership rules could take longer, broadcast attorneys said in interviews Tuesday (see 1703010074). Though broadcasters are looking at the deal opportunities that could be opened up by relaxing media ownership rules, “Clearly some stars have to align” for large deals such as a Sinclair Broadcasting/Tribune, said Wells Fargo analyst Marci Ryvicker in an email to investors. There is a pending reconsideration proceeding on the 2014 quadrennial ownership rule review, but the FCC could issue an NPRM on changes to the ownership rules before or in addition to a reconsideration order, a broadcast attorney said, which could lead to a longer process. Raising the national ownership cap, which would be needed for the Sinclair/Tribune deal, could require congressional action, and there’s still an outstanding court proceeding on the quadrennial review, said Fletcher Heald broadcast attorney Dan Kirkpatrick. “It could take some time," he said.
President Donald Trump and FCC Chairman Ajit Pai met Monday, the first known dialogue since they assumed their positions -- a contact between a president and a head of an independent agency that is seen as infrequent. They met in January during the transition period, ahead of Pai’s appointment as head of the agency (see 1701170025). Monday's meeting was at 3 p.m. in the Oval Office, according to Trump’s schedule. Former FCC Chairman Tom Wheeler came under fire during the last Congress amid accusations that he took direction from the White House on the open internet order, a charge he denied.
An order that would increase flexibility of channel sharing rules for broadcasters was circulated Thursday and will be on the agenda for the FCC’s March 23 commissioners' meeting, said a blog post by Chairman Ajit Pai. Under his transparency pilot program, the full text and an accompanying fact sheet were released. “The draft item would give low power TV and TV translator stations more options to stay in business and continue broadcasting essential news and information to the public,” Pai blogged.