The FCC will probably take a wait-and-see approach to some of the questions it raised in a further notice of proposed rulemaking (FNPRM) on program access rules, agency officials and communications lawyers predicted. Along with letting its ban on exclusive contracts between cable operators and the networks they own expire Oct. 5, the agency solicited comments on several other proposals to expand some program access protections to multichannel video programming distributors seeking to license national cable channels (CD Oct 9 p1). Should the commission see competitive problems developing as a result of letting the exclusivity ban expire, the further notice could give the commission a way to reopen the issue, an FCC official said.
Career FCC staff, trying to finish media ownership rules, are set to release statistics on ownership of all U.S. radio and TV stations to include those results in the forthcoming draft order, agency officials said. They said the Media Bureau may release, as soon as Thursday, aggregate information on what Form 323 biennial ownership reports say about who holds various classes of broadcast licensees. That data from 2009 and 2011 -- to be presented in aggregate form for the first time and after delays releasing it -- would then update the record, agency officials said. Bureau staff appear to be nearing an end to drafting the quadrennial media ownership order that was due to have been finished in 2010, agency officials told us this week.
After months of delay, the FCC released an order that will let cable operators fully encrypt their services in all-digital systems. The order, published Friday (http://xrl.us/bnuci7), had been expected as far back as February (CD Jan 26 p6). But a presentation by Boxee, which introduced a device designed to use cable operators’ unencrypted basic tier signals, slowed its approval (CD Feb 8 p4). The order is largely consistent with what an earlier draft proposed, but adopts a series of commitments by the six largest cable operators for accommodating devices like Boxee’s. The commission concluded that a limited number of customers will be affected by the rule change. Communications industry attorneys following the rulemaking said they don’t expect the order to be challenged.
Comments on a rulemaking to update cable signal leakage rules are due Dec. 10, replies Jan. 7, in docket 12-217, the FCC said in Tuesday’s Federal Register. It said (http://xrl.us/bntaog) the rulemaking, approved by commissioners at August’s monthly meeting (CD Aug 6 p10), would create equivalents for digital cable systems for the rules now in place for analog.
The FCC released a further notice of proposed rulemaking (http://xrl.us/bnsshn) Friday seeking comment on a series of questions about its program access rules. The notice was part of a broader rulemaking in which the commission let a ban on exclusive contracts between cable operators and the networks they own expire. In its place, the order adopted a case-by-case framework under Section 628(b) of the Communications Act for evaluating whether such arrangements hurt competition, with a rebuttable presumption that exclusive deals involving regional sports networks are considered unfair, industry and FCC officials said.
Judges had questions in the three major areas of Time Warner Cable’s challenge of the FCC’s ability to require continued carriage of an independent channel while an indie’s program carriage complaint is before the agency. The constitutionality, administrative process and statutory authority of the FCC to require standstill carriage were extensively raised in an oral argument Thursday, said communications lawyers in attendance allied with each side in Time Warner Cable v. FCC. Those issues were dwelled on in briefs at the 2nd U.S. Circuit Court of Appeals (CD Oct 4 p3). Onlookers said oral argument was notable for running more than quadruple the amount of time the 2nd Circuit had scheduled.
The FCC is still expected to let expire a ban on exclusive contracts between cable operators and the networks they own Friday, despite strong opposition from multichannel video programming distributors that don’t own content, Stifel Nicolaus analysts wrote investors Thursday. That’s the day before program access rules sunset without renewal. “While changes are still possible, our sense is big cable is winning and the FCC is not going to extend the ban or bolster the competitors’ presumptive rights much beyond the chairman’s proposal,” they wrote. “Instead, the FCC seems likely to impose a ’shot clock’ on complaint proceedings and examine various issues” in a further notice of proposed rulemaking, they said.
A court appeal of updated program carriage rules shows independent channels’ desire for continued FCC regulation of multichannel video programming distributor contracts remains in conflict with the goal of major cable operators that own networks to cut back on such rules. NCTA had joined Time Warner Cable’s challenge of a 2011 order letting commission staff authorize continued carriage of a channel that brought a complaint as it’s adjudicated. Bloomberg, NFL and the Tennis Channel are among owners of indies seeking to keep the rules. Judges Susan Carney, Denny Chin and Reena Raggi, of the 2nd U.S. Circuit Court of Appeals, will hear oral argument on Thursday afternoon for 12 minutes from an FCC lawyer and from six apiece from Time Warner Cable and NCTA representatives in its 9th-floor courtroom (http://xrl.us/bnshpo).
The FCC on Friday approved a notice of proposed rulemaking that will establish rules for an incentive auction of broadcast spectrum for wireless broadband, to take place as early as 2014. The NPRM moves the FCC a step closer to what is already the most anticipated auction since the 700 MHz auction four years ago. Commissioner Ajit Pai concurred only on parts of the NPRM, saying the commission leaves too many critical questions unasked.
Conventional wisdom about the planned FCC voluntary incentive spectrum auction holds that only the weakest broadcasters will participate. The thinking goes that stations with strong local news operations and a major network affiliation will avoid the auction while weaker full-power and Class A stations -- independents, home-shopping and religious stations -- will attempt to cash out (CD Sept 18 p1). But that overlooks two groups of TV stations that may have good reasons to consider selling their spectrum licenses at auction: Stations in actual or virtual duopolies, and the stations owned by the major broadcast networks, often referred to as owned and operated stations, or O&Os. The commission is set to approve a notice of proposed rulemaking Friday to begin setting up the auction.