A draft media ownership quadrennial review order and a draft item that would eliminate the ownership UHF discount were circulated on the eighth floor Monday, FCC officials told us. As expected (see 1606140052), the media ownership draft order would uphold most existing rules, sticking relatively close to an NPRM, and brings back the joint sales agreement attribution rule that was knocked down by the 3rd U.S. Circuit Court of Appeals, according to an FCC fact sheet. The UHF discount draft order also closely resembles its NPRM forebear, including a grandfathering clause that would apply only to arrangements or applications that were in existence when the 2013 notice was approved (see 1309270045), FCC officials told us.
Notable CROSS rulings
Ligado backers and critics have multiple suggestions for proposed conditions, including giving the Federal Aviation Administration final say on operational power levels and creating exclusion zones around airports, as the company pursues both license modifications and an NPRM for its planned LTE network. Tuesday was the deadline for reply comments on Ligado's request to modify its L-band mobile satellite service network license. Tuesday was also the deadline for initial comments on a sister proceeding seeking to allocate and auction 1675-1680 MHz for shared use with the National Oceanic and Atmospheric Administration, with replies due July 21.
The FCC should eliminate the eight voices test and newspaper/broadcast cross-ownership rule, NAB wrote the agency, posted in docket 14-50 Tuesday. That cross-ownership rule "affirmatively harms localism," and "exacerbates the perilous state of the newspaper industry," NAB said. The eight voices test "erroneously assumes that broadcast TV stations exist in a separate competitive universe that lacks multichannel video programming distributors (MVPDs), the Internet, online and mobile video services and all other competitors," NAB said. "That assumption is contrary to reality." The FCC can't use the incentive auction as a basis for not concluding the 2010 and 2014 quadrennial reviews in the time frame established by the 3rd U.S. Circuit Court of Appeals, NAB said. "Because Congress and the Commission already have decided that reducing the number of TV stations will serve the public interest, the Commission cannot properly use that public interest judgment as a basis to further delay fulfilling its obligation."
Siding with Verizon, a court overturned a National Labor Relations Board pro-union ruling in a picketing dispute. A panel of the U.S. Court of Appeals for the D.C. Circuit ruled the NLRB didn't giving proper deference to an arbitration panel decision in favor of Verizon (Verizon New England v. NLRB, No. 15-1062). "The Board misapplied its highly deferential standard for reviewing arbitration decisions," wrote Judge Brett Kavanaugh in the controlling opinion. The International Brotherhood of Electrical Workers (IBEW), Local 2324, waived its right to picket under a collective bargaining agreement with Verizon, but in a subsequent dispute, employees displayed pro-union signs in cars parked on company property that could be seen by passers-by, Kavanaugh wrote. After Verizon ordered the employees to stop and the union resisted, the telco invoked a clause of the agreement and won an arbitration panel decision. The union took the matter to the NLRB, where an administrative law judge also ruled in favor of the telco. On appeal, the board ruled 2-1 to overturn the decision. The NLRB may review arbitration decisions "in certain circumstances when the losing party says it has been deprived of a right otherwise guaranteed by the National Labor Relations Act," wrote Kavanaugh, but such reviews are conducted under the "highly deferential" Spielberg-Olin standard. "Under that standard, the Board should have upheld the arbitration decision in this case. The Board acted unreasonably by overturning the arbitration decision. Therefore, we grant Verizon’s petition for review and deny the Board’s cross-application for enforcement," said Kavanaugh's opinion, which was accompanied by two other opinions. Judge Karen LeCraft Henderson joined with Kavanaugh on most of the opinion while concurring on two parts. She said she doubted Kavanaugh's description of the arbitration deferral standard. Judge Sri Srinivasan joined, concurred and dissented in part. He said he concurred with the court's explanation of the legal standards. "My sole (and narrow) disagreement with the court concerns the application of that deferential standard in the specific circumstances of this case. In my respectful view, the Board’s decision was not unreasonable in setting aside the arbitration decision," he wrote. Verizon emailed that it's "pleased not just because its position has been vindicated after 8 years of litigation, but also because the Court's decision emphasizes the obligation of the NLRB to defer to collective bargaining agreements and the use of the arbitration process to resolve disputes that arise from time to time under those agreements." The NLRB and IBEW didn't comment.
The FCC upcoming draft broadcast ownership quadrennial review order is expected to resurrect the commission’s vacated joint sales agreement rules and stick close to a 2014 Further NPRM on media ownership, said attorneys on both the broadcaster and public interest sides of the issues. They said in interviews this and last week that there may be some fluidity on the newspaper/broadcast cross-ownership rule that was specifically targeted in the 3rd U.S. Circuit Court of Appeals majority opinion that spurred the FCC to action. The item, planned to go on circulation by June 30 (see 1605250073), is expected to contain few surprises, several attorneys told us. The FCC declined to comment Tuesday.
Tuesday’s court ruling upholding the FCC net neutrality order likely forecloses any legislative movement on the topic this Congress, lawmakers in both chambers and from both parties told us after the ruling. The 2-1 U.S. Court of Appeals for the D.C. Circuit (see 1606140023) ruling frustrated Republicans and thrilled Democrats, many of whom released statements and expressed interest in the expected appeals process. Capitol Hill offices had been watching closely for the long-awaited D.C. Circuit ruling and weighing legislative possibilities depending on the ruling (see 1606090064).
GOP House Commerce Committee staffers outlined many potential problems with the FCC ISP privacy NPRM, in a staff memo for a Tuesday Communications Subcommittee hearing: “Concerns with the FCC’s approach to privacy vary, from legal experts that question the FCC’s rationale for the rules and raise concerns that the FCC’s rules are a violation of the First Amendment guarantee of free speech, to those in the business community concerned with the economic and social consequences of the FCC’s regulatory approach.” The six-page memo elaborated on the concerns and cited arguments favoring an FTC-centric approach.
The FCC study of Hispanic TV station ownership was generally condemned by public interest groups and got no broadcaster reaction, in filings in docket 14-50 Thursday and Friday. NAB didn't file comments on the study. Public interest groups including the Benton Foundation, Common Cause, Communications Workers of America, Prometheus Radio Project and United Church of Christ filed joint comments that were highly critical. Public Knowledge and Common Cause jointly filed comments denouncing media consolidation. “The Study, while a useful contribution, does not materially advance the task of providing an evidentiary base for evaluating the Commission’s ownership policies,” said the joint filing from UCC and others. The Media Bureau didn't comment.
The Media Bureau hasn't identified a “technologically and economically feasible alternative” to the current designated market area system, it said in a report to Congress on increasing localism through market modification. The report was required by the Satellite Television Extension and Localism Act Reauthorization, and was intended to address the issue of “orphan counties” -- localities in a DMA that are largely in another state, making it more difficult for them to receive local news. This problem is rare, the bureau said. The “overwhelming majority of consumers in the United States” can access programming from TV stations licensed to a community within the same state, it said. The existence of orphan counties “may have less to do with the fact that DMAs cross state lines and more to do with broadcast television economics and the incentives broadcast stations have to reach large populations,” the bureau said. “Adopting a DMA alternative would not alter this reality.” Instead, localities considering market modification should work closely with local broadcasters “to ensure the standards for market modification are met,” the report said. Legislators could consider future laws to provide “targeted relief” for orphan counties in rural areas, the report said. It rejected suggestions that repealing syndicated exclusivity and network non-duplication rules would increase localism. Since the FCC has an open proceeding on those rules, pleas to get rid of them should be dealt with there, the bureau said. Encouraging stations to make their programming available online could increased localism, the report said.
One big question that has emerged in light of filings on the FCC ISP privacy NPRM is to what extent the agency may incorporate FTC suggestions (see 1605270057) into its final rules. Industry observers say they expect the FCC to feel some pressure to modify its rules to harmonize them with those of the FTC, though maybe not enough to change course (see 1605270022).