Monty Tayloe

With the exact nature of expected divestitures from Sinclair buying Tribune likely depends on DOJ, industry officials and analysts said in interviews they expect stations to be spun off in the Seattle and St. Louis areas and that 21st Century Fox is a likely buyer. Broadcast attorneys and analysts don’t draw any conclusions from the FCC’s stopping of the deal shot clock Thursday (see 1801110063). Since the 180-day shot clock is largely a formality anyway, the agency’s decision to start or stop it rarely signifies much, said Holland and Knight broadcast attorney Charles Naftalin. “I wouldn’t read too deep into the tea leaves.”

The full FCC voted 3-2 -- as expected -- to propose a $13.4 million forfeiture for Sinclair Broadcast for more than 1,700 instances of improperly identified paid content (see 1712180064), but the FCC’s Democrats say that’s too little for a $2.7 billion company. “The proposed forfeiture of over $13 million is more than three times any penalty that has ever been imposed for violating our sponsorship identification rules,” Chairman Ajit Pai said in a statement released with the notice of apparent liability. “Does this mark yet another example of special treatment by the FCC majority? You decide,” Commissioner Mignon Clyburn said in her statement.

Until the markets in which broadcasters compete are accurately defined, FCC ownership rules won’t be able to accurately reflect them, said Brooke Ericson, aide to Commissioner Mike O’Rielly, on a panel at the Practising Law Institute conference Friday. Critics of the recent ownership rule changes aren’t denying the media landscape has changed, but they're concerned the recent relaxation of the rules could have consequences for diversity and localism, said Free Press Policy Director Matt Wood. The market isn't “filling the void” left by declining local news outlets, Wood said. PLI Friday also heard from congressional officials (see 1712080060).

The FCC approved its ATSC 3.0 order 3-2 Thursday over the objections of Democrats, as expected (see 1711140053). Commissioners Jessica Rosenworcel and Mignon Clyburn were highly critical of 3.0's transition plan order, which was little changed from what circulated last month. The plan is “cavalier” about possible consequences for consumers and MVPDs, Rosenworcel said. “Not ready for prime time,” said Clyburn. The order intentionally doesn't address every aspect of the new standard, Commissioner Mike O’Rielly said. “Many questions remain,” he conceded. “This won’t be the last time we address ATSC 3.0,” he said.

The FCC is expected to eliminate or relax numerous media ownership rules Thursday on a party-line 3-2 vote, industry and agency officials told us. That's despite calls Wednesday by Democratic senators for the Inspector General (IG) to investigate Chairman Ajit Pai for a possible quid pro quo relationship with Sinclair Broadcast and for Pai to recuse himself from both the media ownership and ATSC 3.0 items (see 1711140053) since they would benefit Sinclair. The FCC’s impartiality in review of Sinclair buying Tribune “may be tainted,” said 12 senators, including Tom Udall, D-N.M., Elizabeth Warren, D-Mass., Maria Cantwell, D-Wash, Bernie Sanders, I-Vt., Richard Durbin, D-Ill., and Ed Markey, D-Mass.

The FCC’s draft ATSC 3.0 order is expected to be approved 3-2 on a party-line vote, and the few changes since it was circulated last month will largely favor broadcasters, industry and eighth-floor officials told us. MVPD groups lobbied hard for changes to the 3.0 transition plan, but broadcast and pay-TV officials said the final version would include few changes favoring their positions. Sinclair executives, meanwhile, downplayed privacy concerns with 3.0 (see 1711140046).

The conflict over ATSC 3.0 rules continued Thursday. Democrats inside and outside the FCC slammed the plan, as one of the biggest groups in communications that says it represents the public interest bickered over conflicts of interest with the main broadcaster association. Commissioners may not all OK the move when they vote on it in a week.

The FCC’s draft ATSC 3.0 order requires broadcasters to offer the same programming on both their simulcast 3.0 and 1.0 stations but appears to have looser restrictions on contours and image quality, will allow low-power TV flashcuts, and as expected (see 1710170048), doesn’t interfere with retransmission consent negotiations involving 3.0, according to a draft order released Thursday. The draft includes a further notice in which the agency would seek comment on using vacant channels during the 3.0 transitions and on waivers for simulcasting rules.

ATSC 3.0 "would be the first standard to marry the advantages of broadcasting and the Internet," FCC Chairman Ajit Pai blogged Thursday, confirming he will put the order authorizing deployment of the next-generation TV system up for a vote at commissioners' Nov. 16 meeting. ATSC 3.0 "holds the promise of delivering better video and audio, advanced emergency alerts, improved accessibility features, personalized and interactive content, and mobile television reception to American consumers," said Pai. The vote is "whether to allow television broadcasters to use Next Gen TV on a voluntary, market-driven basis," he said. "I want America to be at the forefront of innovation in the broadcast sector, the wireless sector, and every other sector of the communications industry." The FCC's release of a draft 3.0 was viewed as imminent at our Thursday deadline. Pay-TV providers are concerned about how the FCC’s proposed 3.0 order (see 1710250049 or 1710250052) will treat the expected simulcasting requirement and handle retransmission consent negotiations, said officials from the American TV Alliance on a media call Thursday. “The devil will be in the details,” said Harris Wiltshire attorney Michael Nilsson, who represents ATVA. Without restrictions on simulcasting to show the same programming or serve the same contour area, broadcasters could leave neighborhoods without 1.0, or show such viewers a shopping network while the Super Bowl airs on 3.0, Nilsson said. MVPDs are concerned that without restrictions on how 3.0 plays into retrans negotiations, broadcasters could require MVPDs agree to transmit 3.0 signals before stations are sure how they will use the signal, Nilsson said. Such restrictions would also protect consumers, said Michael Calabrese, director of the Wireless Future Project at the New America Foundation. The transition could leave consumers without service, and since the standard isn’t backward compatible, they could face costs of upgrading TVs, Calabrese said. The switch also could cost federal, state and local governments, said Ross Marchand of the Taxpayers Protection Alliance. Governments own thousands of sets, and the move would mean they need to upgrade that equipment, Marchand said.

The FCC’s Nov. 16 meeting is widely expected to include a vote authorizing ATSC 3.0, industry officials said. The 3.0 draft order could face a party-line 3-2 vote, industry officials told us. The draft is expected to require broadcasters to simulcast ATSC 1.0 signals that are substantially similar but not identical to their 3.0 signals, and isn’t expected to contain provisions barring 3.0 from being a factor in retransmission consent negotiations, industry officials said (see 1710170048). The American Cable Association, meanwhile, is joining American TV Alliance (see 1708100033) and Charter Communications (see 1710230049) urging the FCC to require carriage negotiations of ATSC 3.0 streams be held separately from talks about continued carriage of ATSC 1.0 signals. In a docket 16-142 ex parte filing Tuesday, ACA said if the FCC doesn't do so for all MVPDs, it should at least do so for small ones "uniquely susceptible to broadcast coercion" in carriage talks. Alternately, the agency could bar broadcasters from demanding carriage in a format the MVPD doesn't yet carry, ACA said. NAB didn't comment. Recapping a meeting with Office of Engineering and Technology staff and Media Bureau Chief Michelle Carey, ACA said the FCC should make clear parties can agree to carry 3.0 signals in formats other than those transmitted over the air, including formats compatible with existing cable equipment, so there's no question down-conversion is allowable. ACA urged the FCC not to allow 3.0 flash cuts, or at least only until equipment becomes commercially available that would let MVPDs receive, down-convert and deliver the signals in a viewable format. Meantime, NAB criticisms of Verizon's stance on 3.0 (see 1710240072) don't account for the effects of the new standard on MVPD customers, a Verizon spokesman said. "Any mention of consumers or the new equipment or higher programming costs that could hit them if the transition to ATSC 3.0 is forced on them prematurely before there's market demand" was "notably absent" from a recent NAB filing attacking the pay-TV company, the spokesman said. "We’re supportive of innovative new technologies, and have no beef with ATSC 3.0."