Narrow Supreme Court Decision Could Have Far-Reaching Implications for Public Access Channels

Posted in First Amendment

On its face, the Supreme Court’s 5-4 decision in Manhattan Community Access v. Halleck resolved a narrow question about whether a nonprofit public access channel operator was a state actor subject to First Amendment constraints.  But the Court’s opinion may have invited a more critical inquiry into the role that the government plays in regulating access to cable systems.

The history of this case starts in 1984, when Congress granted state and local governments the authority to require cable operators to set aside cable channels for public access.  The New York Public Service Commission utilized this authority and required Time Warner—now Charter—to set aside channels on its cable system in New York City for public access.  In turn, New York City delegated operation of the public access channels to a nonprofit called Manhattan Neighborhood Network (MNN).  Under New York state law, these public access channels must be made available to the public “on a first-come, first-served, nondiscriminatory basis.”

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FCC Reverse Auction Data Provides An Interesting Glimpse Into the Past

Posted in Spectrum

Auction BlockForty years ago, Boston’s “Don’t Look Back” had just left the top of the Billboard charts.  The chart topping hit featured lead singer Brad Delp singing that the past was “holding me back” and “far away and left behind.”

The FCC, however, is not taking Boston’s advice.  In the Incentive Auction Report and Order, the Commission committed to keeping information about unsuccessful bids in the reverse auction confidential for a period of two years following the close of the incentive auction.  Now, just over two years after the official end of the Incentive Auction, the Incentive Auction Task Force released detailed  bidding data for the broadcast side of the auction.  The information is available on the FCC’s Public Reporting System, which can be found at https://auctiondata.fcc.gov/public/projects/1000.

As you may recall, the Commission conducted the auction in stages.  Stage 1 featured a reverse auction clearing target of 126 MHz and lasted 52 rounds.  When the revenues generated in the forward auction did not exceed the total clearing cost, however, the auction proceeded to three additional stages, with Stage 4 featuring a clearing target of 84 MHz.  Under the clock auction format, the FCC “froze” stations bids when it did not have an available channel to accommodate those stations in the repack.  A station whose bid froze in an earlier stage could unfreeze in a subsequent stage as the demand decreased.  Furthermore, VHF stations could freeze and unfreeze during a stage as demand from UHF stations to move to VHF shifted.

While we will not attempt to recreate every detail of the auction (although we have no doubt some will try), our initial review of the new reverse auction data led to some interesting observations:

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A Broadcaster’s Guide to Spectrum Valuation (Auction 101 Edition)

Posted in Spectrum

Auction BlockWith another FCC spectrum auction in the books, many broadcasters may be interested in taking stock of the value of their spectrum usage rights and the likelihood that they may have an opportunity to monetize their spectrum sometime in the future.

Let’s start with the most recent news and then try to figure out what it means for broadcasters.  Last Thursday, the FCC announced the close of Auction 101, in which the Commission auctioned two 425 megahertz wide blocks of 28 GHz spectrum (27.5-27.925 GHz and 27.925-28.35 GHz) in just 1,536 counties spread across the United States (out of more than 3,000 counties total).  28 GHz spectrum is known as “millimeter wave” or “high-band” spectrum, and is characterized by short wavelengths that require dense networks with closely located transmitters.  By comparison, broadcast spectrum falls below 700 MHz and is characterized by long wavelengths that allow broadcast signals to travel long distances and penetrate buildings.

The value assigned to the 28 GHz spectrum, at $0.011/MHz-POP, was by far the lowest of the three most recent FCC spectrum auctions:

Auction Average Price (MHz-POP)
AWS-3 (Auction 97) $2.71/MHz-POP
TV Broadcast Incentive Auction (Auction 1002) $1.26/MHz-POP
28 GHz (Auction 101) $0.011/MHz-POP

However,  there are several explanations for the lower prices in Auction 101, including the location of the spectrum in a frequency band that requires more physical infrastructure, the lack of terrestrial operations in nearby spectrum bands, the smaller geographic areas for each license, and the sheer volume of spectrum associated with each license (425 MHz, compared with 5 MHz pairs in Auction 1002 and Auction 97).  Furthermore, the licenses available in Auction 101 only covered about 24% of the population and did not include counties located in most large metropolitan areas.

So what does this mean for broadcasters?

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Effective January 22, 2019: FCC’s Elimination of Paper Contract Filing Obligation for Broadcasters

Posted in Broadcast Regulation, Ownership Rules

On January 22, 2019, the FCC’s Order eliminating broadcasters’ obligation to file paper copies of contracts pursuant to Section 73.3613 of the Commission’s rules will go into effect. Covered contracts include those related to network affiliations, control of station licenses, certain employment agreements, joint sales agreements (“JSAs”), and local marketing agreements (“LMAs”) (collectively, “Section 73.3613 documents”).

This Order eliminates the burden to file physical copies of covered contracts on paper with the FCC Secretary’s office but, importantly, does not remove all related recordkeeping requirements. Instead, broadcasters must continue to either (1) maintain an updated list of Section 73.3613 documents in their online public file and provide a copy within seven days of receiving a request, or (2) upload copies of all such documents to the online public file. Broadcasters must add covered contracts to the public file or list of contracts within thirty days of execution or amendment, and must update their inventory or list to reflect a contract’s termination within thirty days of such termination. To comply with the new rules, the list of contracts contained in the public file must include any execution or expiration dates, as well as a description of the document, the parties to the contract, and the type of agreement.

The Order also extends rules that expressly permitted the redaction of JSAs and LMAs to all Section 73.3613 documents. Broadcasters may redact information that would generally be subject to confidential treatment under the FCC’s rules, including commercial, financial, or trade secret information that would cause competitive harm if shared with the public.

This Order reflects another of the Commission’s efforts to modernize its rules applicable to broadcasters, removing a rule that has been on the books for nearly eighty years.

What the FCC Shutdown Means for Broadcasters

Posted in Broadcast Regulation

As a result of the partial government shutdown, the Federal Communications Commission suspended most operations yesterday, January 3, 2019, and most Commission staffers are furloughed.  Despite the shutdown, many FCC computer systems will remain operative, and certain deadlines will remain unaltered.  For example, staff involved with spectrum auctions are unaffected by the lapse in funding, and most auction-related activities (including those related to the post-Incentive Auction repack) remain on schedule.  Most other deadlines are delayed only to the extent they fall during the shutdown.

Below, we summarize how the shutdown will affect various broadcast filings at the FCC.

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FCC To Commence 2018 Quadrennial Review At December Open Meeting

Posted in Broadcast Attribution, Ownership Rules

The Federal Communications Commission has released the draft meeting agenda for its December 2018 open meeting, which includes a Notice of Proposed Rulemaking (NPRM) commencing the 2018 quadrennial review of certain of the agency’s broadcast ownership rules. This review will be the latest in a series conducted pursuant to the Telecommunications Act of 1996, which requires the agency to periodically examine the covered rules and determine whether they remain “necessary in the public interest as the result of competition,” and to repeal or modify any rule that does not meet that standard. The draft 2018 NPRM tees up for review (1) the Local Radio Ownership Rule, (2) the Local Television Ownership Rule, and (3) the Dual Network Rule, and asks for comment on several diversity-related proposals that the agency has previously considered. With respect to the specific rules under review, the draft NPRM recognizes that the media marketplace in which broadcasters compete has undergone “dramatic changes” since the late 1990s when agency first began the periodic media ownership reviews, but does not reach any tentative conclusions regarding whether these developments warrant changes to any of the rules at issue. Nor does it deal with the national television ownership rule or the so-called “UHF discount,” which are the subject of a separate pending proceeding. Continue Reading

New York Court Casts Renewed Doubt Upon Fantasy Sports Ads

Posted in Advertising Issues, Broadcast Attribution

New York, once a battleground in the fight over whether fantasy sports are legal, has returned to the spotlight once again. Those who have watched this issue may recall that the New York legislature passed a law legalizing and regulating fantasy sports in 2016. This ended a legal fight between fantasy operators and the New York Attorney General’s Office and cleared the way for legal fantasy sports operations by DraftKings, FanDuel, and others in the state. The law declared fantasy sports to be games of “skill” rather than “chance” and therefore not illegal “gambling” prohibited under the state penal code, providing what many viewed as a final resolution to the matter. Under the new law, fantasy sports operations flourished in New York, and spending on broadcast and other forms of advertising promoting them increased. But now a New York state court has called into question whether the legislature had the power to legalize fantasy sports given a provision in the state constitution, renewing the debate over the legal status of fantasy sports contests – and whether such contests can be legally advertised – in the state.

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Commission Seeks Comment on Revised Proposals for Protection of Class A AM Stations

Posted in Broadcast Regulation

On October 5, 2018, the Federal Communications Commission, as part of its ongoing efforts to revitalize AM radio, released a Second Further Notice of Proposed Rulemaking(SFNPRM) seeking comment on revised proposals regarding interference protection to Class A AM stations (so-called “clear channel” stations). The SFNPRM is a follow-up to the Commission’s Further Notice of Proposed Rulemaking released in 2015, in which the agency sought comment on technical proposals to reduce the nighttime protection afforded to Class A stations so as to enable more local AM stations to increase their nighttime service. Comments are due 60 days after the item is published in the Federal Register; reply comments are due 90 days after publication.

Clear channel stations, of which there are 57 in the continental U.S. and 16 in Alaska, are currently authorized to broadcast at up to 50 kW daytime and nighttime and are designed by rule as providing primary and secondary service over extended areas. Accordingly, these stations are afforded extensive daytime and nighttime protection from interference by co- and adjacent-channel AM stations. Specifically, clear channel stations in the continental U.S. are protected during the day to their 0.1 mV/m groundwave contour from co-channel stations, and to their 0.5 mV/m groundwave contour from adjacent-channel stations. At night, clear channel stations are protected to their 0.5 mV/m-50 percent skywave contour from co-channel stations and to their 0.5 mV/m groundwave contour from adjacent-channel stations.

The issue of clear channel station protection has been a contentious one since the FCC raised it in 2015, largely pitting Class A station owners against the operators of less powerful, more local AM stations. Class A licensees have resisted proposals to reduce their extensive interference protection, citing the vital role of clear channel stations in national emergencies and other benefits of wide-area AM stations listenable at night across large portions of the country. Owners of smaller AM stations, on the other hand, have pointed to their need to curtail or entirely eliminate their locally-based service at night to protect Class A stations hundreds of miles away. Continue Reading

FCC Sets October 12, 2018 Deadline for Registration of United States-Based Foreign Media Outlets

Posted in Broadcast Regulation, Foreign Ownership

The Federal Communications Commission (FCC) has released a public notice setting October 12, 2018 as the initial deadline for “United States-based foreign media outlets” to file reports with the FCC. The reports are required pursuant to the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (NDAA) and must contain certain specified information. The question whether an entity is subject to the NDAA’s reporting obligation requires a multi-faceted inquiry, and we believe that the universe of entities that must file reports with the FCC is likely to be relatively limited. However, the FCC’s announcement provides a timely reminder for all entities with foreign ties to assess not only whether they must file reports under the NDAA, but also whether they may be subject to separate registration requirements under the Foreign Agents Registration Act (FARA), which the Department of Justice (DOJ) has recently taken a greater interest in enforcing against foreign-owned, controlled, or funded media outlets, most recently including Chinese state-run Xinhua News Agency and China Global Television Network. Continue Reading

National EAS Test Postponed Until October 3, 2018

Posted in Broadcast Regulation

Sound the alarms, or rather, don’t . . . At least not yet.

The FCC and FEMA announced today that they are postponing the nationwide test of the Emergency Alert System and the Wireless Emergency Alert System originally scheduled for this Thursday, September 20, 2018, due to the ongoing response to Hurricane Florence.  The test will now be held on the back-up test date of October 3, 2018.

Broadcasters will be required to file their “day of test” information on ETRS Form Two  at or before 11:59 PM EDT on October 3, 2018.
Broadcasters will be required to file the detailed post-test data sought on ETRS Form Three on or before November 19, 2018