Broadcasting&Cable

On the eve of the White House Correspondents' Association Dinner in Washington, CBS president and CEO Les Moonves stopped by the Federal Communications Commission to meet with Chairman Tom Wheeler about a variety of issues, including why the FCC should not tinker with retransmission.

According to an ex parte notice submitted by CBS lawyers, Moonves, who has led CBS' aggressive charge to charge cable operators for its high-value content, urged the chairman to "maintain the current regime." He argued that the retransmission second revenue stream was critical to CBS' ability to continue to produce sports and entertainment and news.

Chairman Wheeler has tied his retransmission reform efforts, which include disallowing some coordinated negotiations and asking whether syndicated exclusivity and network nonduplication rules should be eliminated, to the size of consumer's cable bills. But Moonves said that given the size of its audience, CBS stations and affiliates "deserve the highest fees they can negotiate in the marketplace."

In a decision that could help ease the way for telecom operators to site their towers and boost broadband service, the Supreme Court has agreed to hear an appeal of a case (T-Mobile South v. Roswell, GA) involving how a city has to justify its denial of a tower-siting permit, a case which has split federal circuits.

T-Mobile had challenged an Eleventh Circuit ruling -- overturning a district court -- that held that the city of Roswell, which had denied a tower placement, only had to notify the operator in writing of the denial and provide access to the administrative record of the decision, but did not have to explain how the decision was made. But various other federal circuits have read the law as requiring the city to provide a decision separate from the administrative record and at least some explanation of the reason for the denial.

That way, if there is a challenge in court, there will be a judicial matter at hand to wheigh whether the evidence supports that reasoning. The Supremes have now agreed to try and resolve that split.

Every Republican member of the House Communications Subcommittee has asked Federal Communications Commission Chairman Tom Wheeler to rethink his plans to put some limits on the broadcast incentive auctions.

Chairman Wheeler has circulated a draft item that, under certain circumstances, would set aside some low-band spectrum (30 MHz) for companies that don't have as much as, say, Verizon or AT&T. It would also change its local-market spectrum screen so that low-band spectrum holdings would also trigger deeper FCC scrutiny of deals involving spectrum concentration.

In a letter to the FCC, the House members called that an attempt to "manipulate the market." They said that "artificial set-asides" and other restrictions "alter the playing field and distort the outcome."

The legislators predict that the FCC will only be clearing about 60 MHz of broadcast spectrum. That means half of the spectrum could be set aside.

The Republicans say that sounds like a cartel controlling prices by artificially controlling supply. "We urge the Commission to reconsider any plans that would further cloud an already complex auction and threaten the outcome for providers, consumers and the public safety community."

Ad agencies have at least one bone to pick with the White House over the Administration's Big Data report.

The report proposed, among other things, promoted legislation that would enhance communications privacy laws and put legislative muscle behind the voluntary agreements the Administration is pushing for as part of its privacy bill of rights.

The Association of National Advertisers praised the "thoughtful, balanced review" and the report's acknowledgement that "online advertising has been a vital driver of the growth of the Internet." It also said it supported national data breach legislation. But it was not so happy with suggestions for legislating privacy protections.

"[W]e do not believe there is a present need for broad new privacy legislation," ANA said. "Rather, consumers can be best protected through a combination of existing privacy laws and regulations, privacy enhancing technologies, effective self-regulation and the ultimate backstop of the powers of the Federal Trade Commission to stop false, deceptive or unfair acts or practices."

Jot Carpenter, VP, government affairs, CTIA: The Wireless Association, told C-SPAN that the AWS-3 and broadcast incentive auctions will be helpful, but probably not sufficient to meet burgeoning demand for wireless spectrum.

He said auctions and new tech will help, but it's time to start looking beyond those auctions to the next source of spectrum. He also told Comcast to bring it on if they want to launch a Wi-Fi based wireless service in competition to his members. He also said he understood broadcaster concerns about the auctions, but suggested, as has the FCC, that for some sharing spectrum could be attractive.

The Sunlight Foundation and Campaign Legal Center filed complaints against 11 broadcast TV stations for allegedly failing to post the requisite information about political advertising sponsors in their online political files.

The complaints say the stations failed to identify the candidate the ad referred to, the issue of national importance and the CEO or board of directors of the sponsor. The groups have been tracking the online broadcaster filings in the wake of the Supreme Court decision in Citizens United and subsequent court decisions that allowed more money from outside groups into the political system without ways to specifically track the underlying funders.

"Often the only way to track this money, which is so obviously influencing our elections, is through the broadcasters’ political files, which until 2013, were kept only on paper, locked away in file cabinets," said the Sunlight Foundation.

Broadcasters are hoping to enlist consumer groups in battling cable operators over what broadcaster group TVfreedom.org is calling abusive pay TV practices.

At least one, Public Knowledge, signaled it would be happy to work with the group on the issue of billing practices. In a letter to eight public interest groups, TVFreedom called on them to "join the organization in developing an open and collaborative process that will place a public spotlight on the abusive billing and business practices being undertaken by the cable and satellite TV industry that are harming consumers."

The groups, in addition to Public Knowledge, are Free Press, Consumers Union, Consumer Action, Consumer Federation of America, New America Foundation, National Consumer League and Public Citizen.

The letter cites a lack of competition and consumer choice in the US video marketplace as justifying a hard look at cable's alleged billing practices including hidden fees, excessive equipment rentals, early termination fees and overbilling.

“We’ve known from the day that the Comcast-Time Warner Cable deal was announced that Comcast intended to divest some subscribers, so this doesn’t change anything,” said Sen Al Franken (D-MN). “The fact remains that Comcast will have unprecedented power in the television and broadband markets, and I’m very concerned that Comcast will use that power to squeeze competitors and consumers.”

"This convoluted transaction may change the final score, but it can't change the fact that this deal is a big loss for innovation and competition," said Matt Wood, policy director for Free Press. "Cable barons have always done a great job dividing up the country and refusing to compete with each other. Turning three giant companies into two behemoths gives no comfort to content providers or consumers. It should be equally unimpressive to lawmakers and antitrust authorities too."

Public Knowledge is not looking that far ahead, said a spokesman, since the deal would have to be approved for the swaps to be made, and it is not looking for that to happen. Besides, he pointed out, Public Knowledge took the swaps into account in its initial assessment of the merger -- Comcast had signaled it would spin off enough systems to keep the new company below the FCC's traditional 30% cap on subs. But critics have said the creation of an ISP with some 40% of subs -- Comcast has figured it at closer to 20% when all competitors are factored in -- changes the equation. Does it make [the deal] any more palatable? No," he said. "It's still a deal that we are staunchly opposed to."

"No set of conditions are going to make the deal palatable to the public interest and I don't see how this changes the basic dynamics of the deal, which are terrible for consumers and competition," said Todd O'Boyle, a spokesman for Common Cause.

The wave of TV station consolidation that is driven in part to extract larger retransmission payments from cable and satellite operators, might also help broadcasters push back against network demands for reverse retransmission payments.

In a new report, analyst Michael Nathanson of MoffettNathanson Research says that retransmission payments to the Big Four broadcasters has increased seven-fold to more than $1.5 billion over the past five years. The network’s owned and operated stations command much bigger retransmission payments than other affiliate owners.

Nathanson estimates that Fox stations got retransmission payments of $1.01 per home in 2013. CBS' stations got 90 cents, NBC’s got 87 cents and Disney’s generated 83 cents, he figures. Non-O&O station groups earned retransmission payments ranging from almost $1 for Nexstar to 25 cents for Tribune. Getting fees closer to what the O&Os get is one factor driving station mergers.

But the networks are looking to grab a piece of their affiliates growing retransmission fees. “By most accounts, the expected rate of reverse retransmission payments for a Big Four station in one of the Top 100 markets is between $0.50-$0.75 per subscriber, which would mean that station owners would be forking over a majority of their own current retransmission payments,” Nathanson says in the report.

Wireless companies told the House Commerce Committee that the National Telecommunications & Information Administration should get out of the spectrum management business.

Currently, the Federal Communications Commission and NTIA divvy up those duties, with the FCC overseeing commercial spectrum and NTIA government spectrum.

In comments to the committee in response to a white paper on spectrum management, CTIA: The Wireless Association said that FCC and NTIA have to coordinate with each other, their spectrum management has been "inconsistent."

"In order to overcome these duplications and inefficiencies, a single entity should be responsible for spectrum policy (establishing national spectrum goals and strategies) and implementation authority (licensing spectrum use)," CTIA says. NTIA would not be cut out entirely. It is the President's chief communications policy advisor, and could continue in that role and advocate for spectrum on behalf of federal agencies.

CTIA put in a plug for licensed spectrum. Cable, by contrast, is pushing for as much unlicensed as can be freed up. That is because cable ops are boosting their mobile broadband play in competition to wireless via unlicensed spectrum that allows them to wire broadband subs on the go through hundreds of thousands of Wi-Fi hot spots.