Wiley Rein Encourages FCC to Ease Anti-Collusion Rules

Posted in Broadcast Regulation

FCCThis morning, on behalf of Wiley Rein, I filed a letter encouraging the FCC to issue a formal declaration that, with the final stage rule satisfied, no communications by broadcasters about the reverse auction can violate the Commission’s prohibition on certain auction-related communications.  The Incentive Auction has handcuffed the broadcast television industry in many respects for over a year now, and the continued prohibition on communications serves only to inhibit important business discussions as broadcasters prepare for the repack and post-auction operations.

You can view our letter here.

FCC Commissioners Pai and O’Rielly Rebuke NCE FRN Decision

Posted in Broadcast Regulation

On January 4, 2017, the FCC’s Thumb Downtwo Republican Commissioners, Ajit Pai and Michael O’Rielly, issued a scathing statement against the Media Bureau’s decision, issued that same day, to deny petitions for reconsideration regarding FCC Registration Number (FRN) reporting requirements for non-commercial educational (NCE) broadcasters. Those requirements, imposed in January 2016 (the 2016 Order), oblige board members of NCE stations to provide a unique FRN on the station’s biennial ownership reports (FCC Form 323-E). Board members must submit their full Social Security Numbers to the Commission via an online database in order to receive an FRN. In May, American Public Media Group and others filed petitions seeking reconsideration of the FRN requirement. The Media Bureau, on delegated authority, dismissed the petitions, reasoning that they merely repeated arguments the Commission had already heard and considered.

In the joint statement, Commissioners Pai and O’Rielly called the new NCE reporting requirements “needless,” “unnecessary,” and “pointless,” and highlighted the fact that NCE broadcasters from at least two-thirds of the states sought relief from the regulation. The Commissioners also criticized the Bureau’s denial as unilateral and issued in such a manner as to bypass the Commissioners—an “especially unfortunate” procedural action and “just another example showing why the Commission’s use of delegated authority needs to be fixed.”

Noting that the majority of Commissioners support neither the Bureau’s decision to deny the petitions nor the 2016 Order, Commissioners Pai and O’Rielly invited NCE broadcasters “to file an application for review so that the newly constituted Commission will have an opportunity to revisit this matter.”

FCC Review of 2016 EAS Test Identifies Improvements, Opportunities

Posted in Broadcast Regulation

ReportThe FCC’s Public Safety and Homeland Security Bureau has released its initial findings from the 2016 nationwide test of the Emergency Alert System, which reflect improvements from the 2011 test but further opportunities to strengthen the EAS.

On September 28, 2016, FEMA, the Commission, and the National Weather Service, conducted a nationwide test to assess the reliability and effectiveness of the EAS and FEMA’s Integrated Public alert and Warning System (IPAWS).  Following the test, EAS participants were required to file two reports: one providing initial results and a second report providing additional details.

The Commission’s analysis indicates that the 2016 test was more effective than the last nationwide EAS test in 2011.  Among the highlights:

  • More than 21,000 radio stations, broadcast television stations, cable systems, satellite services, and other EAS participants participated in the nationwide test—a 26% increase in participation from the 2011 nationwide test.
  • 94% of test participants successfully received the test alert—a 12% improvement from the 2011 nationwide test.
  • For the first time, 74 EAS participants retransmitted the IPAWS-generated Spanish language version of the alert.

Continue Reading

FCC Suspends Biennial Ownership Reports for NCE Stations with February 1, April 1, June 1, August 1, or October 1 Filing Deadlines

Posted in Broadcast Regulation

MC900434822The FCC has suspended the existing 2017 filing deadlines for non-commercial educational (NCE) stations’ biennial ownership reports. As a result, NCE licensees with biennial report filing deadlines on February 1, April 1, June 1, August 1, or October 1, 2017 are not required to file the existing form 323-E by those deadlines. Instead, NCE licensees will be required to file biennial ownership reports on FCC Form 2100, Schedule 323-E on or before December 1, 2017, with information current as of October 1, 2017, and to file biennially thereafter. The revised reporting requirement was adopted by the Commission in January 2016 to conform the ownership reporting requirements for NCE stations more closely to those for commercial broadcast stations.

FCC ALJ: Cost Savings Alone Not Enough to Justify Discriminatory Treatment of Non-Affiliated Networks

Posted in MVPD Regulation

GSNCablevision_Company_Logo.svgThe FCC’s administrative law judge (“ALJ”) has once again sided with a programmer in resolving a complaint under the Commission’s program carriage rules.  More than five years after GSN filed a program carriage complaint against Cablevision, ALJ Richard Sippel issued an initial decision finding that Cablevision improperly discriminated against GSN on the basis of its non-affiliation when moving GSN from Cablevision’s expanded basic tier to its “Sports Pak”—this despite the fact that the ALJ determined that Cablevision had demonstrated that it saved programming fees as a result of the retiering.

Section 616 of the Communications Act and the FCC’s implementing regulations prohibit multichannel video programming distributors (MVPDs) from “unreasonably restraining the ability of an unaffiliated programming vendor to compete fairly by discriminating in video programming distribution on the basis of affiliation or non-affiliation of vendors in the selection, terms, or conditions” for carriage.

GSN alleged that Cablevision discriminated against it on the basis of non-affiliation by moving GSN to the “Sports Pak” while leaving affiliated networks, including similarly situated WeTV and Wedding Channel along with expensive affiliated sports networks, in the expanded basic tier.  Cablevision originally considered and rejected proposals to move GSN to its Silver tier and to move GSN and three other unaffiliated networks to the Sports Pak to reduce programming expenses.  Ultimately, GSN was the only non-sports or outdoors network included in the “Sports Pak,” which Cablevision renamed the “Sports and Entertainment Pak.”  Continue Reading

Negotiating Seller Reps and Warranties in a Purchase Agreement

Posted in Corporate/Business

The Deal RoomOne of the most heavily negotiated parts of a purchase agreement is often the seller’s representations and warranties – and for good reason.  The seller’s reps and warranties serve three very important purposes in a purchase agreement: (1) they constitute what the seller is willing to tell the buyer as being true about the assets at the time of signing the agreement, (2) they are tested at closing when the seller needs to re-certify to the buyer that those same things are still true about the assets and (3) they can form the basis of an indemnification claim if the buyer discovers a problem after closing.

Let’s take each of those items one by one. Continue Reading

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