Legislative Activity

Congress And FCC Consider Joint Sales Agreements And Retransmission Consent

Last Thursday, March 6, Rep. Greg Walden (R-OR), chairman of the House Commerce Subcommittee on Communications, released the first discussion draft of legislation to reauthorize the Satellite Television Extension and Localism Act (STELA), which contains provisions set to expire on December 31, 2014. The subcommittee is expected to discuss the draft at a hearing this Wednesday, March 12. In particular, the draft bill, which would reauthorize STELA for five years, includes provisions that would:

  • Restrict broadcasters from engaging in joint retransmission consent negotiations;
  • Prohibit the Federal Communications Commission (FCC) from modifying its rules to attribute broadcast ownership based on joint sales and/or shared services agreements until the FCC releases a single order that addresses all of the media ownership rules that must be reviewed on a quadrennial basis and closes the 2010 quadrennial review proceeding;
  • Eliminate the ban on cable providers deleting or repositioning broadcast television station channels during “sweeps” week; and
  • Eliminate the set-top box integration ban.

The draft bill’s provision on joint sales agreements is at odds with FCC Chairman Tom Wheeler’s reported plans to proceed with a vote at the commission’s March 31 open meeting on new rules that would attribute ownership for joint sales agreements in some cases. Under the FCC’s current ownership rules, a television broadcaster is prohibited from owning more than one of the top four stations in a market. Broadcasters, however, have used joints sales agreements to authorize one station owner to sell advertising time on another station in the market without holding an ownership stake in that station. Under Chairman Wheeler’s proposal, a broadcaster that sells 15 percent or more of the advertising time for another station would be deemed to hold an ownership interest in that station for purposes of complying with the ownership rules. Broadcasters found to be in violation of the new rules would have two years to comply with the rules by either lowering the amount of advertising time sold on the other station or by applying for a waiver. The FCC also is expected to seek further public comment on whether similar restrictions should be placed on broadcasters’ use of shared services agreements, under which two separately owned stations in a market share resources.

Additionally, the FCC also is expected to consider new rules generally consistent with the STELA draft’s objective of restricting broadcasters from engaging in joint retransmission consent negotiations. Specifically, Chairman Wheeler is expected to propose rules prohibiting joint retransmission consent negotiations between two of the top four separately owned stations in a local market. The rules also could adopt a rebuttable presumption that coordinated retransmission consent negotiations by any two stations in a market are not in the public interest. Chairman Wheeler is expected to begin circulating the item containing these proposals at the FCC this week.

House To Vote On FCC Process Reform Act

The House is expected to consider the Federal Communications Commission Process Reform Act of 2013 (H.R. 3675) this week under suspension of the rules. The legislation, which proposes a number of changes intended to improve the efficiency and transparency of FCC processes, is expected to pass with bipartisan support.

This Week’s Hearings:

  • Wednesday, March 12: The House Commerce Subcommittee on Communications will hold a hearing titled “Reauthorization of the Satellite Television Extension and Localism Act.”
  • Wednesday, March 12: The House Judiciary Committee will hold a hearing titled “Exploring Alternative Solutions to the Internet Sales Tax Issue.”

Regulatory Activity

FCC Seeks Comment On E-rate Public Notice

Last Thursday, March 6, the FCC’s Wireline Competition Bureau released a public notice seeking further, focused comment on three issues addressed in the commission’s E-rate Modernization Notice of Proposed Rulemaking, released last July. Specifically, the FCC requests comment on:

  • How best to focus E-rate funds on high-capacity broadband, especially high-speed Wi-Fi and internal connections;
  • Whether and how the FCC should begin to phase down or phase out support for traditional voice services in order to focus more funding on broadband; and
  • Whether there are demonstration projects or experiments that the FCC should authorize as part of the E-rate program that would help the FCC test new, innovative ways to maximize cost-effective purchasing in the E-rate program.

Following release of the public notice, FCC Commissioner Ajit Pai voiced his belief that the public notice “bodes poorly for real reform” because “[r]eform should mean eliminating the priority system that arbitrarily favors some technologies over others. Yet the Public Notice doubles down on it.” Commissioner Pai further complained that the Wireline Competition Bureau issued the public notice at the Bureau level, depriving the commissioners of an opportunity to weigh in on the issue. Comments on the public notice are due April 7. Reply comments are due April 21.

FCC Announces New Connect2Health Task Force

Last Tuesday, March 4, Chairman Wheeler announced the formation of a new FCC task force designed to bring together the FCC’s expertise on the intersection of broadband, advanced technology, and health. The CONNECT2HEALTH Task Force will consider ways to accelerate the adoption of health care technologies by leveraging broadband and other next-gen communications services. The task force will be chaired by Michele Ellison, who previously served as chief of the FCC’s Enforcement Bureau.

This Week’s Events:

  • Monday, March 10: The board of the First Responder Network Authority (FirstNet) will hold meetings of its committees on (1) planning and technology; (2) governance and personnel; (3) finance; and (4) outreach.
  • Tuesday, March 11: The full FirstNet board will convene an open public meeting.