Broadcasting&Cable

A Q&A with National Association of Broadcasters President Gordon Smith. He has his sleeves rolled up for a brawl. On Capitol Hill, the NAB is fighting to keep the Satellite Television Extension and Localism Act (STELA) reauthorization bill from being a referendum on retransmission, a draft bill on which the association went along with restrictions on coordinated retransmission only because it was, frankly, the best deal it could get.

In the Supreme Court, broadcasters are trying to keep Aereo from delivering a body blow to their businesses models. At the FCC, they’ve been preparing for a March 31s vote on limiting joint sales agreements (JSAs) and coordinated retransmission, an incentive auction that Smith says could wind up in court if the FCC doesn’t change direction, and what Smith suggests is an FCC bias against his members. Smith said that he would like to see something like the National Broadband Plan for broadcasters, but hopes Chairman Wheeler will adopt a more negotiable mood.

“We’re trying to show [the FCC] that there is a third way that is not just in the interests of broadcasters but in the interests of the American people, specifically minorities and small markets,” Smith said. One thing Smith proposes is to raise the ownership attribution trigger on JSAs from 15% of a station’s sales to 30%.

Referring to Chairman Wheeer’s signal that sharing arrangements should be disallowed using the competitiveness argument, Smith sees it as an attack against broadcasters: “If you were really serious about being fair, you would also take on the interconnections between cable and wireless [the NAB has asked the FCC to look into the cable/telco/satellite ad consortia]. What is good for them ought to be good for us, too. But it seems to only be applied against us.” Smith also commented on the, the need for preventing interference in future spectrum auctions, and the uncertainty of blackout provisions.

The House Communications Subcommittee draft of the Satellite Television Extension and Localism Act (STELA) bill that will be the subject of a markup March 24 and 25 still contains the provision that would undo the Federal Communications Commission's planned March 31 vote to limit TV joint sales agreements (JSAs).

That will certainly be a bone of major contention with Democrats at the hearing. FCC Chairman Tom Wheeler has decided to take action on JSAs, and limiting coordinated retransmission negotiations among the top four stations in that March 31 vote, while launching a combined 2010/2014 quadrennial ownership regulatory review.

The draft bill also limits coordinated retransmission, though in a slightly different way than Chairman Wheeler's proposal -- it is not limited to the top four and cable operators could elect to allow for coordinated negotiations if they chose -- but would disallow any commission action to make JSAs attributable until it has wrapped up that 2010 quadrennial review. The draft would still eliminate the ban on integrated set-top boxes, something cable operators have been pushing for, but that will also get pushback from Democrats.

Federal Communications Commission Chairman Tom Wheeler is on a mission to crack down on TV station sharing arrangements, particularly ones that look like efforts to skirt the rules.

With local caps on ownership and no rules explicitly against them, broadcasters have used joint sales agreements (JSAs) and shared news and other services agreements to extend their reach, and profits, without violating FCC rules.

But Chairman Wheeler has made it clear to broadcasters, in private meetings and public notices, that such arrangements will soon have a higher hurdle to overcome. Chairman Wheeler’s sword and shield is the public interest standard, which permits the commission to disallow deals even when they do not violate antitrust laws -- or even FCC rules, apparently.

The Federal Trade Commission has told the US Court of Appeals for the Ninth District that the Children's Online Privacy Protection Act (COPPA) does not preempt state privacy protections for teenagers' online information.

That came in an amicus filing to the court in a case involving Facebook's Sponsored Stories feature that allegedly "deploys" users' names and images without their consent, which would violate California privacy and unfair competition law, said the FTC.

While Facebook settled the class action suit, which was filed in district court, some of the members of the class objected and challenged the settlement, saying Facebook had not ensured that valid parental consent would be needed for Sponsored Stories. The court rejected that appeal, saying that COPPA "may 'bar any efforts by plaintiffs to use state law to impose a parental consent requirement for minors over the age of 13.' COPPA's online privacy protections only apply to Web sites targeted to kids under 13."

Sinclair says it will restructure its Allbritton deal to make it more palatable to the Federal Communications Commission, which is looking closely at sharing agreements coupled with financial arrangements such as purchase options.

The FCC, under new chairman Tom Wheeler, has signaled tied arrangements such as those in the Sinclair/Allbritton deal would have a high hurdle and now Sinclair is offering to remove those hurdles in the interests of getting a deal done.

Sinclair said it was concerned about meeting the one-year July 27 date for closing the merger, after which it can be terminated from either side.

The Obama Administration launched its latest multistakeholder process on standards and best practices for improving the notice and takedown system for infringing Internet content.

The goal is to come up with voluntary standards and avoid the scorched earth debate that took down the Stop Online Piracy Act legislation in 2013. The day-long meeting, which was overseen by the Department of Commerce and hosted by the US Patent and Trademark Office, appeared to find common ground on the need to focus on one issue rather than tackle several at once. That issue was a standardized template for the notice and takedown regime under the Digital Millennium Copyright Act (DMCA), which is the way content rights holders and ISPs inform Web users of allegedly infringing content.

A representative of the Motion Picture Association of America agreed that standardized templates was a good topic to start with. He also said that the focus should be on a process that was effective, not just efficient. The point is not to generate millions of notices, but to cut down on the need for them by cutting down on infringement, he added.

Comcast and Time Warner Cable initially broached the subject of a possible merger almost a year ago, before deciding to pull the trigger on a deal in February, according to documents filed with the Securities and Exchange Commission.

According to an S-4 registration statement filed by Comcast on March 20 outlining an upcoming special shareholders’ meeting to approve its $69 billion deal to acquire Time Warner Cable, TWC executives first approached Comcast about a possible deal back in June 2013, shortly after Charter Communications began talks about its own possible deal with the New York-based cable operator.

Cable operators and other media company stakeholders in the Internet Governance Coalition say they welcome the National Telecommunications & Information Administration's announcement that it will work on transitioning US oversight functions over the Internet Corporation for Assigned Names and Numbers (ICANN), the domain naming system (DNS) body, to a nongovermental, multistakeholder model.

The coalition said that it embraces the opportunity to help with that transition. "We especially applaud NTIA's resolve to 'maintain the security, stability, and resiliency of the Internet DNS' and not to 'accept a proposal that replaces the NTIA role with a government-led or an inter-governmental organization solution.' The latter would be a definite nonstarter."

The coalition unites edge players and cable and telecommunications Internet service providers (ISPs), networks and tech companies. Its members include Amazon, AT&T, Cisco Systems, Comcast NBCUniversal, Google, Juniper Networks, Microsoft, Telefónica, Disney, Time Warner Cable, Twenty-First Century Fox, and Verizon. NTIA's move -- it has been the "historic steward" of the domain naming system -- is consistent with the Obama Administration's support of a multistakeholder model of Internet governance.

The switch-over won't be for a while, though, as the NTIA's current contract with ICANN is not up until Sept 30, 2015, and in the interim it will continue in its stewardship role.

The National Cable and Telecommunications Association told the Senate that the Satellite Television Extension and Localism Act (STELA) is an appropriate venue for retransmission changes as well as "discrete" video reforms, but that those should not include applying multichannel video programming distributor (MVPD) regulations to over-the-top.

In response to the Senate Commerce Committee request for input on STELA reauthorization, NCTA said that another five-year renewal was about right, but with a more technologically-neutral approach that treats functionally equivalent services alike.

"Congress should examine the Act broadly, to ensure that the law does not confer any regulatory advantage or disadvantage based on the use of any particular technology," NCTA told the committee. The association said that Congress should not extend "existing competitive protections for the traditional video marketplace [the committee's wording] to online video providers."

The FCC is currently considering whether to extend program carriage, access and other protections to over-the-top providers. But NCTA argues the online video space is already competitive and flourishing. "There is no need to extend any provisions of the 1992 Act to online video distributors," it said, but added that if the Congress did extent protections, it must also extend the "commensurate obligations of that Act."

The "clearly erroneous inputs and technically unsound assumptions" in the Federal Communications Commission's band plan proposals on repacking and interference methodologies must be abandoned or risk a failed incentive auction. That was the message from broadcasters, commercial and noncommercial, networks and stations to the FCC on March 18.

Broadcasters are accusing the FCC of cutting corners on its variable band plan proposal and warn it will be "playing with fire" if it attempts to lowball the interference problems inherent in that approach to repacking broadcasters after the 2015 incentive auctions to free up broadcast spectrum for broadband wireless.

In comments to the FCC, the National Association of Broadcasters, whose members include the broadcast networks, teamed with the network affiliate associations, PBS, CPB and the Association of Public Television Stations to advise the FCC where they thought it was going wrong with its proposed band plan, saying its repacking methodology would be illegal not to mention, though they did, creating "significant interference" issues.