Broadcasting&Cable

Although AT&T and Time Warner have signaled they expect to bypass the Federal Communications Commission review of their proposed $108.7 billion merger—a review that would be triggered by the exchange of FCC licenses like those used to transmit CNN and HBO—AT&T chairman Randall Stephenson signaled a spin-off of CNN was not in the cards. "I don't know why we'd even talk about that," he said. "It doesn't seem relevant to approving a deal like this. What would be the competitive issue that you're remedying with spinning off CNN? There are not competitive issues with owning CNN." President-elect Donald Trump, who has been highly critical of CNN, has threatened to block the deal, leading some to see a spin-off as a way to ease the path to approval. But Stephenson said in the interview that he sees it as a "basic vertical merger" that will ultimately be approved.

The incoming Trump Administration is said to have signed off on an approach to remaking the Federal Communications Commission offered by the FCC transition team.

The FCC would be restructured to better reflect the convergence of the digital age as a first step, and, eventually, move functions deemed "duplicative," like, say, competition and consumer protection, to other agencies, particularly the Federal Trade Commission. Jeff Eisenach and Rosyln Layton have argued that what remains would be "a more coherent and streamlined " agency that "would more effectively serve the goals of consumers, competitors, and Congress."

The plan may dovetail with comments from Eisenach and Layton to Congress in 2014 as AEI scholars. Their two main conclusions were that 1) "the historical silo-based approach to communications regulation is inapposite to the modern communications ecosystem” and 2) the FCC functions are largely duplicative of those of other agencies. But it also takes a page or two from a regulatory reform proposal of former-FCC Chairman Bill Kennard back in the late 1990s

The federal government has no antitrust issues with the proposed $1.5 billion merger of ISP Consolidated Communications Holdings and ISP holding company FairPoint. That came in an early termination notice from the Federal Trade Commission, which means that neither it nor the Justice Department had issues with the merger that required either conditions or suing to block it, so its Hart-Scott-Rodino antitrust review was terminated early.

The merger still needs to get the approval of the Federal Communications Commission, whose review extends beyond antitrust to public interest concerns. Consolidated Communications companies provide approximately 219,000 residential and 409,000 business broadband connections, approximately 189,000 residential voice lines (VoIP and POTS), and approximately 269,000 business voice lines (VoIP and POTS). FairPoint companies serve about 310,000 broadband and 377,000 residential voice subs. It also owns and operates a fiber network of more than 21,000 miles and 1,300 communications towers. The deal was filed with the FCC Dec 20.

NCTA: The Internet & Television Association has told the Office of Management and Budget not to approve the Federal Communications Commission's new 5G cybersecurity data collection requirements. That came in a letter the week of Jan 2 to OMB.

As part of the FCC's Spectrum Frontiers Report and Order on freeing up more spectrum bands for 5G wireless and fixed broadband, which was approved last July, the FCC required public disclosures with the FCC on "plans for safeguarding networks and devices from security breaches." NCTA says the "substantial" new reporting requirement—OMB has to sign off on added paperwork burdens in new federal rules per the Paperwork Reduction Act (PRA)—is unnecessary, has no "practical utility," and "grossly" underestimates the time and effort in compiling. NCTA says the requirement will either require "a high enough level of generality to avoid compromising network security by providing details that create vulnerabilities, but therefore offer the FCC information with no practical use," or expose information that could reveal vulnerabilities and actually decrease 5G cybersecurity. NCTA says that the PRA requires that utility of information must be actual, not theoretical or potential, and the FCC has not demonstrated an "actual, timely use for the information."

A pair of Democratic Reps who have pushed for greater transparency in political advertising disclosures were encouraged by the Federal Communications Commission's new clarification, issued this week in resolving a raft of complaints, but suggested it fell short of what they were looking for. Reps Ben Ray Luján (D-NM) and John Yarmuth (D-KY) said, “While we are encouraged by this first step toward better transparency in the FCC’s political file rules, it merely highlights that more work needs to be done." They said for starters that if the new Administration wants to "drain the swamp," it should include strenghtening disclosures so that it was clear that the "true donors" behind issue ads were identified. They also want the FCC's online political file database to be machine readable. They said they would introduce new legislation to make sure that the public knows who is funding the political ads they see and hear.

The Federal Communications Commission's Media Bureau has approved the Nexstar-Media General merger in an order published on the FCC website Jan 11. Both broadcasters had asked the FCC to waive its rule preventing a decision on the deal while the spectrum auction was still in progress.

The commission agreed and at the same time approved the merger. Citing the proposed spin-offs to make the merger comply with local and national ownership rules, the FCC concluded that the merger is OK, and it would waive the prohibition on completing the deal during the auction. Among the public interest benefits the Media Bureau included Nexstar viewers' access to Media General's DC news bureau and the establishment of state news bureaus. It gave "minimal weight" to cost savings and efficiencies or assertions that the deal woudl result in lower programming costs or more diverse programming. The FCC also gave little weight to their contention that the deal would make it a more attractive partner to pay-TV providers--a number of which opposed the deal--and would have more "strategic alternatives:" outside of broadcasting. "Nexstar has provided insufficient information for us to verify this benefit," the bureau said. But given the expanded news presence, the FCC concluded that the companies had "adequately" established the deal was in the public interest. At the same time, the FCC denied the petition to deny the deal filed by the American Cable Association, Cox and Dish.

The first Federal Communications Commission meeting under new, Republican leadership will consist of a single item. That is according to the tentative agenda circulated Jan 10. The noncontroversial item is an order that would "eliminate the requirement that commercial broadcast stations retain copies of letters and emails from the public in their public inspection file and the requirement that cable operators retain the location of the cable system’s principal headend in their public inspection file."

It is a fitting first item since, unlike many a recent vote, nary a discouraging word was heard about it at the public meeting where the commissioners agreed on the proposal. While the public doesn't need to know where the principal headend of a cable system is (where it takes the TV signal off the air and puts it on the wire), and publicizing it could be a security threat, the FCC pointed out in May that TV stations and the FCC still need to know where it is, so the item will elaborate on how that info should be collected and made available to both.

The bipartisan congressional Internet of Things working group comprising Sens Deb Fischer (R-NE), Cory Booker (D-NJ), Cory Gardner (R-CO) and Brian Schatz (D-HI) has reintroduced the Developing Innovation and Growing the Internet of Things (DIGIT) Act. The bill was introduced in the last Congress, following up on a resolution that passed the Senate last March that called for a national strategy on IoT.

The bill would "convene a working group of federal entities that would consult with private sector stakeholders to provide recommendations to Congress." Those would include on how to encourage the growth of IoT, seeking input from the private sector to help prevent "regulatory silos." It would also direct the FCC to launch a proceeding on the spectrum needs of IoT. Congress has estimated that more than 50 billion devices will be connected by 2020 generating billions in economic opportunity. The bill directs the Secretary of Commerce to convene a working group of federal stakeholders to advise Congress on how to plan and encourage IoT, including spectrum needs and the appropriate regulatory environment for things like consumer protection, privacy and security.

The Federal Communications Commission's Media Bureau has tentatively concluded that both stations being reimbursed for moving expenses after the spectrum auction and those who will not be reimbursed but will be moving anyway should file periodic progress reports with the commission. That came in a public notice describing the information broadcasters will need to include in those reports. Broadcasters who won their auction bids to move from UHF to VHF or from higher V to lower V channel positions won't get moving expenses paid out of the $1.75 billion transition fund—they are expected to use some of the money from those multi-million dollar FCC payouts to pay for their moves. But while broadcasters who are getting reimbursed are required to file periodic progress reports "showing how the disbursed funds have been spent and what portion of their construction is complete," the same requirement was not put on nonreimbursable stations. But given that those stations will also be part of the daisy chain of moves and equipment upgrades, the FCC is asking for public comment on whether it should require reports from them as well, suggesting that it should.

Apparently, Rep Marsha Blackburn (R-TN) has been tapped to head the House Communications Subcommittee. Rep Blackburn has been active on the subcommittee, opposing the Federal Communications Commission’s network neutrality rules, broadband privacy framework and set-top box revamp. She has been vice chair of the full committee. She is also on President-elect Donald Trump's transition team executive committee.