FCC Seeks Comment on Updated Catalog of Post-Auction Reimbursement Expenses

Posted in Broadcast Regulation, Spectrum

MP900438810On October 13, 2016, the Federal Communications Commission (FCC)’s Media Bureau released an update to the Catalog of Eligible Expenses (the “Catalog”) that it will use as a guide when processing requests for reimbursement from the TV Broadcaster Relocation Fund.  Comments on the proposed updates are due by November 14, 2016 and reply comments are due by November 29, 2016.

The Media Bureau first sought comment in September 2013 regarding the types of costs that should be included in the Catalog and how to determine whether such costs are reasonable.  Based on that record and a report that the agency commissioned from Widelity, Inc., the Bureau adopted its initial Catalog in October 2015.

The proposed changes to the Catalog include increases in baseline costs previously proposed; the addition of new categories of expenses; and the removal of other categories of expenses which have been discontinued or the Bureau has determined will likely not be required due to technological advancements.

In addition to seeking comment on the specific proposed changes in the updated Catalog, the Bureau also is seeking comment on how to adjust baseline costs during the three year reimbursement period.  The Bureau proposes to adjust prices annually based on the Producer Price Index annual average.

Are Letters of Intent Worth Signing?

Posted in Corporate/Business

Parties can sometimes overemphasize the value of a Letter of Intent (“LoI”).  Quite often, parties spend legal fees to send drafts of letters of intent back and forth multiple times, when that time and money would likely have been The Deal Roombetter spent on negotiating the actual definitive agreement.  Since letters of intent should always be nonbinding (except in limited, unique circumstances), we often recommend that parties, particularly sellers, skip the LoI and move right to working on binding, definitive documents.

If an LoI is being utilized, buyers and sellers should approach them differently, and experienced transactional counsel likely have different starting points for LoIs depending on whether their client is the buyer or seller. Continue Reading

FCC Invites Broadcasters to Test Repack Reimbursement System

Posted in Broadcast Regulation

blogThe FCC is providing broadcasters with an opportunity to test and provide feedback on the Incentive Auction Broadcaster Relocation Reimbursement System, which is the online form that the Commission will use to collect requests for reimbursement of repacking expenses (technically known as FCC Form 2100, Schedule 399).

Beginning on October 4, 2016, broadcasters can access a test environment at https://apps2demo.fcc.gov/dataentry/login.html using their FRN and password.  A quick start guide is available at: http://www.fcc.gov/incentiveauctions/reimbursement.

The Commission is inviting broadcasters to provide feedback on the form and the test environment by November 4, 2016 to form399beta@fcc.gov.

FCC Considers Prohibiting Unconditional MFNs and Unreasonable ADMs

Posted in Broadcast Regulation, MVPD Regulation

fcc-logoAt its September 29, 2016 open meeting, the Federal Communications Commission (FCC or Commission) adopted a Notice of Proposed Rulemaking (NPRM) in which it proposes rules prohibiting “certain practices some multichannel video programming distributors (MVPDs) use in their negotiations for carriage of video programming” that the Commission believes “may impede competition, diversity, and innovation in the video marketplace.” Comments will be due 60 days after the NPRM is published in the Federal Register.

In the NPRM, the FCC proposes to prohibit the use of so-called “unconditional” most favored nation (MFN) provisions and “unreasonable” alternative distribution method (ADM) clauses in contracts between MVPDs and independent programmers. As described by the Commission, an “unconditional” MFN clause entitles a pay TV provider to receive favorable contract terms that a programmer has given to another programming distributor, without requiring the pay TV provider to assume any corresponding obligations from the other distribution agreement. The agency describes an ADM clause as generally prohibiting or limiting a programmer from putting its programming on alternative video distribution platforms, such as online platforms. The FCC focuses on these two provisions based on the record developed in response to a Notice of Inquiry issued in February 2016. The Commission characterizes the record as revealing that:

certain MVPDs have used their bargaining leverage vis-à-vis independent programmers to exact unconditional MFN clauses and/or unreasonable ADM provisions that hamper the ability of programmers to experiment with online distribution. Such contractual provisions make it challenging for programmers to achieve a profitable level of carriage, or to secure carriage without contracting away their freedom to present content to a broader audience via the Internet. Restrictions placed on programmers by unconditional MFN and unreasonable ADM obligations in turn create barriers to entry and hinder the growth of OVDs by restraining their access to content and precluding them from entering into mutually beneficial agreements with independent programmers. Continue Reading

FCC Meeting Update: Foreign Investment Rules and Independent Programming Proposal, But No Set Top Box Rules

Posted in Broadcast Regulation, MVPD Regulation

FCCAt its September 29, 2016 open meeting, the FCC adopted rules to make it easier for broadcasters to seek approval for foreign ownership, reformed the methodology for publicly traded broadcasters and common carriers to assess compliance with the statutory foreign ownership limits, and proposed rules it believes will strengthen the position of independent programmers in negotiations with multichannel video programming distributors (MVPDs).  The Commission tabled the most anticipated item on its agenda, however, delaying the adoption of rules requiring MVPDs to offer apps as a substitute for set top boxes. Continue Reading

FTC Workshop Shines Additional Light on Need for Effective Disclosures

Posted in Advertising Issues, Program Content

spotlight_____by_mo_design-d54nrtl[1]At a recent Federal Trade Commission (FTC) workshop, the focus was squarely on how advertisers and marketers should ensure the effectiveness of consumer disclosures, particularly on new digital platforms. Terming the topic one of “exceptional importance” that has been under study for more than one hundred years, FTC Chairwoman Edith Ramirez opened the workshop by emphasizing the agency’s focus on how best to evaluate the effectiveness of disclosures.  The workshop sessions highlighted a variety of issues related to and research regarding disclosures, including the following five key takeaways:

Continue Reading

The Silver Lining in the FCC’s UHF Discount Order

Posted in Broadcast Regulation

silver liningOn Wednesday, the FCC issued a long-expected Order abolishing its 30-year policy of applying a “UHF Discount” when calculating a broadcaster’s compliance with the 39% National TV Ownership Cap.  At the same time, the Commission refused to adopt a “VHF Discount” in recognition of the technical inferiority of VHF channels following the digital transition.  The Order comes as a blow to television networks and large station groups that are near the national cap and whose opportunities for growth into new markets are now limited.

But those looking for a silver lining should pay attention to the FCC’s discussion of its authority to alter the UHF Discount.  Continue Reading

FCC Bids Adieu to UHF Discount

Posted in Broadcast Regulation

calculatorThey say all good things must come to an end, and for the FCC’s UHF discount, the end has arrived (pending the outcome of near-certain litigation).  Earlier today, the FCC issued a Report and Order eliminating its 30-year old policy of applying a 50% “discount” to market populations served by UHF stations when calculating compliance with the 39% national TV ownership cap, declaring that “the UHF discount cannot be justified in the digital world.” At the same time, the FCC declined to adopt a comparable VHF discount, finding that the circumstances that justified adoption of the UHF discount 30 years ago do not extend to VHF stations today.

When calculating a station’s compliance with the national TV ownership cap, the Commission considers the population of the market rather than the population served by an individual station’s contour. Recognizing the “inherent physical limitations” of the UHF band, the agency in 1985 adopted the UHF discount, explaining that the discount compensated for the fact that the signal strength of a UHF television signal decreased more rapidly with distance, resulting in smaller coverage areas and smaller audience reach. Although the actual national ownership cap has fluctuated since that time, the UHF discount has remained in place. Continue Reading

Join Us for Destination Repack: A Multi Industry Roadmap

Posted in Broadcast Regulation, Broadcast Technology, Spectrum

Destination RepackOn October 19, 2016, Wiley Rein’s Telecom, Media & Technology Practice will be partnering with The Association of Federal Communications Consulting Engineers (AFCCE) to host an educational program on the challenges faced by broadcasters post the Federal Communications Commission’s (FCC) Spectrum Auction.

Join us to discuss approaches to the post-auction repacking process, including:

◾Repack 101: Defining the Challenge
◾Ready, Set, File: The Three Month CP Sprint
◾Show Me the Money: The TV Broadcaster Relocation Fund
◾Managing the Transition: How to Move Up to 1000 Stations in 39 Months
◾What About 3.0? Is There a Role for Next Generation TV in the Repack?

For additional details and to register, click here.

The More Things Change, The More They Stay the Same… FCC Tweaks Broadcast Ownership Rules in 2014 Quadrennial Review Order

Posted in Broadcast Regulation

ChangeOn August 25, 2016, the FCC released the text of a Second Report & Order that concludes both its 2010 and 2014 “quadrennial review” proceedings (the “2016 Order”). The Commission is required by statute to review its rules governing the ownership of broadcast radio and television stations every four years to determine whether they “are necessary in the public interest as the result of competition” and to “repeal or modify any regulation [the Commission] determines to be no longer in the public interest.” In addition to reviewing its rules according to this standard, the Commission also considered certain issues remanded to the agency by the U.S. Court of Appeals for the Third Circuit in decisions that were issued on review of the Commission’s 2006 and 2010 quadrennial review proceedings.

In the combined 2010/2014 proceeding, the Commission determined that its existing media ownership rules, with some minor modifications, remained necessary in the public interest. In addition, the FCC reinstated its decision to consider television joint sales agreements (“JSAs”) to be “attributable” ownership interests, established a definition for “Shared Services Agreements” and adopted disclosure requirements for such agreements, and reinstated its revenue-based eligible entity standard. Continue Reading