Monty Tayloe

Lawmakers of both parties fretted over White House reversal on ZTE and discussed balancing supply chain security with avoiding protectionism, at a Wednesday House Communications Subcommittee hearing. Rep. Anna Eshoo, D-Calif., said the committee should send a formal letter to the White House detailing its concerns about ZTE. Rep. Adam Kinzinger, R-Ill., hopes President Donald Trump’s comments on loosening sanctions against the Chinese smartphone maker were misinterpreted or that the stance changes. “We can’t play footsie with these companies,” Eshoo said.

CBS and a committee of its board filed a lawsuit and motion for a temporary restraining order seeking to prevent controlling stockholder National Amusements from “interfering with a special meeting of the Board of Directors” that would redistribute CBS stock to dilute National Amusement’s voting interest, the broadcaster said in a release Monday. Shari Redstone controls National Amusements. The dividend “would dilute National Amusements, Inc.’s voting interest from approximately 79% to 17%,” the release said. The court documents were filed in Delaware Court of Chancery. The special committee was formed in response to the proposed combination of National Amusements-owned Viacom and CBS, and voted Sunday that the proposed deal isn’t in CBS’s interests, the motion said. “The Special Committee believes that the Company and its public stockholders face a serious threat of imminent, irreparable harm in Ms. Redstone’s potential response to the Special Committee’s unanimous decision.” Such a significant change in ownership of a company that controls numerous broadcast licenses is likely to require FCC approval, broadcast attorneys told us. The suit makes it less likely that CBS will buy Viacom, Citibank analyst Jason Bazinet emailed investors. It appears "CBS management and part of the board has effectively decided either to take control away from the Redstones and chart their own course or to in effect be removed,” Barclays' Kannan Venkateshwar emailed. “If the restraining order is allowed by the court, the CBS board is likely to vote on the new shares on Thursday, but the shares won’t be issued till a decision is laid out on the lawsuit itself," Venkateshwar said. “For both CBS and Viacom, this lawsuit is likely to result in a period of uncertainty and a lack of closure one way or the other for some time,” the analyst said. “The lawsuit may take about six months to resolve itself.”

Sinclair is filing a new amendment to its application to purchase Tribune and Tuesday announced plans to divest 23 stations in 18 markets to Standard Media, Howard Stirk Holdings, Meredith Corp. and Cunningham Broadcasting, along with “another party to be announced.” Sinclair would hold on to WPIX-TV New York but will divest additional stations in Denver, Sacramento, Cleveland, Dallas, Houston and Miami, said a memo sent to employees Tuesday by Tribune CEO Peter Kern. The amendments weren't yet available on the FCC database. “While we continue to believe that we had a strong and supportable rationale for not having to divest stations, we are happy to announce this significant step forward in our plan,” said Sinclair CEO Chris Ripley in its release. “The actions outlined in today’s filing are designed to bring our proposed merger into compliance with the FCC’s broadcast ownership rules and pave the way for regulatory approval,” Kern said. Although opponents have faulted Sinclair for failure to specify divestiture plans, Tuesday’s release lays out specific buyers for most of the divested stations. Standard Media will purchase nine, Howard Stirk the three that will be run by Sinclair through joint sales agreements, Meredith and WGN-TV will purchase one each, and Cunningham two. Standard is purchasing its nine stations for $441 million, said an emailed release, while Meredith said it was purchasing KPLR-TV St. Louis for $65 million. Sinclair identifies seven stations as being sold to sellers that haven’t been determined. Broadcast attorneys speculate Sinclair might seek to close its deal quickly after oral argument in FCC defense of the restoration of the UHF discount appeared to go against the agency (see 1804240072). It’s expected that if the FCC approves of Sinclair’s modifications, the amended application will be issued for comment, industry officials told us. Sinclair and the FCC declined to comment.

LAS VEGAS -- Radio broadcasters have invested in data and connected with listeners through Facebook, and should be concerned about the current backlash against consumer data collection, radio executives said on a panel at the NAB Show. Broadcasters need to “keep a close eye” on consumers' reaction to data collection, because radio broadcasters already have a great deal of “sunk cost” at stake in consumer data, Cox Media Group Executive Vice President Bill Hendrich said. “We have all benefited from Facebook,” said broadcast consultant Fred Jacobs, president of Jacobs Media Strategies.

President Donald Trump tweeted in support of Sinclair Monday after the company was widely criticized for requiring anchors to read a script condemning fake news. “So funny to watch Fake News Networks, among the most dishonest groups of people I have ever dealt with, criticize Sinclair Broadcasting for being biased,” Trump tweeted. “Sinclair is far superior to CNN and even more Fake NBC, which is a total joke.”

Broadcasters “have made no substantive case” that letting them use vacant channels for the ATSC 3.0 transition would benefit the public interest, Microsoft replied Wednesday in docket 16-142. Broadcaster arguments that unlicensed uses don’t have guaranteed access to spectrum are “a distraction,” Microsoft said. “No prospective user is entitled to use spectrum for which it does not yet hold a license.” The FCC isn’t being asked to give white space users interference protection from broadcasters, Microsoft said. “It is being asked to grant new spectrum to companies that have said they don’t need it,” the company said, referring to the broadcasters. The Dynamic Spectrum Alliance agreed, saying allowing broadcasters to use vacant channels would “diminish” prospects for white space devices “as the uncertainty over the ‘temporary’ nature of the dedicated transition channels will chill large-scale investments.” The FCC should “hold the line” on simulcast rules, NCTA said. With 3.0 authorized, broadcasters “insist on generous waivers of the requirements codifying their promises,” NCTA said. “The simulcasting rules are already excessively generous to broadcasters at viewers’ expense.” NCTA took aim at noncommercial stations’ request for a blanket simulcasting waiver, urging the FCC to deny it. PBS, America’s Public Television Stations and the CPB said the agency shouldn’t delay granting the blanket waiver because NCEs aren’t often located near prospective simulcasting partners. “It is precisely in those areas with few over-the-air options that it makes sense to preserve, not reduce, the number of viewable -- i.e., ATSC 1.0 -- signals,” NCTA said. NAB, One Media, the American Cable Association and interest groups including Public Knowledge also commented (see 1803210025).

Broadcasters seeking to use vacant channels for the ATSC 3.0 transition are attempting to “squat” on free spectrum, said Consumers Union, Public Knowledge and the New America Foundation's Open Technology Institute in replies in FCC docket 16-142 Tuesday on a Further NPRM on the new standard (see 1802210064). Allowing temporary use of the vacant channels “will trigger a lobbying frenzy to make the giveaway permanent,” the groups said. That claim is “nonsense,” said One Media. “The use would be temporary in the same way the second simulcast digital channel provided to broadcasters during the analog-to-digital conversion was temporary.” Special temporary authority process would govern channel provision, ensuring temporary use, Pearl said. Mutually exclusive applications for vacant channels during the switch will be unlikely because broadcasters will coordinate with each other, but would be resolved with auctions as the rules require, NAB said. Giving broadcasters access to vacant channels “is not necessary at this time to protect consumers and it comes at a high cost,” said the interest groups. The vacant channels will let stations maintain signal quality during the transition, NAB said. “Any party claiming to be concerned about consumer protection during the Next Gen deployment should support the use of vacant channels as a concrete step that may help to minimize disruption of service.” Granting broadcasters' vacant channel request will impose costs on MVPDs, the interest groups said. “If the broadcaster‘s 1.0 signal is transferred to a transmitter other than one that is already transmitting a broadcast signal being carried by the cable system, the cable operator would need to purchase and install new receiving equipment.” The broadcaster entities also said the FCC should be flexible in granting waivers of the 3.0 simulcast requirements, and Pearl said the agency should grant blanket waivers for noncommercial and Class A stations. “Implementing this exemption would show the Commission’s support for deployment of ATSC 3.0 across the country, particularly in more remote or rural areas,” said Pearl.

The growing importance of internet technology issues such as privacy and cybersecurity means traditional regulatory battlegrounds like retransmission consent matter less and less, said NCTA President Michael Powell Tuesday. He used a Media Institute luncheon to expand on his concerns about tech companies (see 1803060022). Consumers and lawmakers are worried about burgeoning tech issues while the telecom industry is “trapped” in outdated fights, Powell said. The issues that “dominate” the attention of lawmakers and the public “all emanate from the internet,” he said. He doesn't expect action from lawmakers or the FCC on retrans anytime soon.

MVPDs, set-top box makers and energy efficiency advocates agreed to a four-year extension of their voluntary agreement on set-top box energy efficiency, NCTA and the Natural Resources Defense Council announced Thursday. The extended agreement includes provisions to further improve set-top energy efficiency by 2020, a reporting requirement for efforts to transition from physical devices to more energy efficient apps, and a process to move toward further efficiency increases, signatories told us. The voluntary structure is making devices more efficient, and “driving good incremental improvement,” said NRDC Senior Scientist Noah Horowitz.

A pair of MVPD reconsideration petitions against the ATSC 3.0 order aren’t considered likely to spur the FCC to rethink requirements for the new standard, attorneys and executives on the broadcast and MVPD sides told us. The order's effective date was Monday (see 1803050049).