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  • Rick Kaplan 10:21 am on March 29, 2016 Permalink  

    It Begins 

    Today is an exciting day at the Federal Communications Commission (FCC), with the official start of the broadcast spectrum incentive auction. And much is at stake – a successful auction means that spectrum will be repurposed, a huge amount of money will change hands and technology and spectrum policy will be shaped for the future. All of these things hang on the outcome of a brave and untested idea dreamed up by economists and enabled by engineers.

    The FCC staff deserves considerable credit for getting us to this point. As the idea of an incentive auction was explored in detail, challenges arose and the Commission’s staff grappled with them in earnest. To be sure, not every solution can be elegant and there remains disagreement about whether each one will prove successful, but the FCC staff is now able to push the “start” button and the initial spectrum clearing target will be revealed.

    A good deal of credit also goes to former FCC Chairman Julius Genachowski, who first presented the incentive auction concept as part of the National Broadband Plan, to Chairman Tom Wheeler, who has led the charge to dot the auction’s i’s and cross its t’s, and to all of the commissioners who have engaged in a difficult process to bring to light the key policy decisions at stake along the way.

    Even on this momentous occasion, we should be mindful that our work is only partially complete. The dedicated FCC staff is now turning its attention to one of the most complex processes of relocating incumbent spectrum users in its history. We must also recognize that the auction will harm low power television and translator services. This will affect many viewers across the country who rely on those services for critical public safety news and information. Broadcasters will continue to work with the Commission to ensure that damage to these and other critical broadcasting operations is minimized.

    What happens next is anyone’s guess, but the FCC staff can certainly be proud that they worked incredibly hard under tight timelines to bring us to the doorstep of this exciting auction.

  • Patrick McFadden 1:20 pm on March 23, 2016 Permalink
    Tags: , ,   

    Time to Stick to the Facts and Find the Right Answer 

    These are exciting times. The long-anticipated broadcast television spectrum incentive auction is scheduled to begin in less than one week. Designing the reverse and forward auctions has been a herculean task, and the Federal Communications Commission (FCC) staff deserves a great deal of credit for bringing the auction to this point in a timely fashion. But, unfortunately for the Commission, once the auction is complete, its work is only half done. That’s because the end of the auction brings perhaps the most challenging phase of all: repacking many hundreds – if not more than a thousand – broadcasters to new frequencies in the television band.

    As NAB has repeatedly documented, broadcasters have serious concerns about the arduous repacking process ahead. After all, it took the better part of a decade and three extensions of time to complete the digital television (DTV) transition, which involved relocating far fewer broadcasters, did not rely on flash cuts and was buttressed by tens of millions of dollars designed to help consumers make the switch to digital. Above all, however, the greatest worry with respect to the upcoming 600 MHz transition is the Commission’s current rule requiring every broadcaster to complete its involuntary relocation within only 39 months following the auction. If the FCC is serious about repacking as many as 1,300 broadcasters, anyone who has any understanding of the broadcast industry knows that it is impossible to accomplish that task in such a short period of time.

    Fortunately, the FCC commissioners have uniformly recognized the challenges associated with the repack and have indicated in testimony before Congress that – despite the current rules – they in no way want to see any broadcaster forced off the air for reasons beyond their control.

    On the other hand, the FCC’s chairman has continued to insist that the 39-month timeline is sound. When pressed by Congress to defend that deadline given that the FCC has not done any serious analysis of what it would actually take to conduct a nationwide repack, the chairman explained that 39 months was a reasonable timeline, because, after all, even NAB had originally suggested that 30 months would be sufficient. This answer is disingenuous, and given that it has been repeated on several occasions by Commission staff, it’s time to address and bury it once and for all.

    More than three years ago, NAB submitted its initial comments in the incentive auction proceeding (then under Chairman Julius Genachowski) recommending that the FCC extend its proposed timeline for moving stations to new channels following the upcoming broadcast spectrum incentive auction. The FCC had proposed a minuscule 18-month timeline, to which NAB responded, “[t]he 18-month construction time frame proposed in the Notice for relocating stations is unrealistically short.”[1] At the time, NAB assumed, as many did, that the Commission was considering relocating “approximately 400 to 500 stations.”[2] Thus, NAB recommended that the FCC extend the deadline to 30 months, which should be enough time to “allow most stations to complete” the transition.[3] In addition, to stretch that 30 months as long as possible, NAB also proposed that “the forward auction should not be deemed completed until, or after, the time at which stations file their construction permit applications,”[4] which the Commission did not adopt. And finally, NAB made clear that “based on television stations’ experiences in the DTV transition, stations in certain metropolitan areas (such as New York City and Denver) and stations in border areas requiring international coordination could require substantially longer than even three years to construct new facilities.”[5]

    Thus, not only did NAB rely on information at the time that suggested only 400 to 500 stations would move, and seek to push back the starting point for the timetable until after construction permits were issued, we also asserted that even repacking all of 400 to 500 of stations would require more than 30 months.

    Beyond those inconvenient details, there have been three important developments in the intervening three-plus years. First, the FCC released a set of sample repacking scenarios in the summer of 2014, suggesting that the Commission is likely to repack far more stations than NAB anticipated in our 2013 comments. Instead of moving perhaps 400 stations to new channels, the FCC’s publicly released simulations suggested that the FCC could require more than 1,300 stations to relocate. Second, once the FCC released this data, NAB commissioned a study – the first of its kind – to examine each of the challenging elements that make up a nationwide repack of many hundreds or more than 1,000 stations. Third, in May 2014, the FCC surprised everyone by adopting a “death penalty” repacking rule that would require stations unable to complete their transitions within 39 months – no matter what the reason – to go off the air. The rule did not contemplate any exceptions or extensions – a rigid and inflexible deadline that no one anticipated.

    Faced with this new information, NAB re-evaluated the timeline for the upcoming broadcaster transition. It became immediately clear that 39 months would not provide sufficient time to repack the number of stations the Commission was anticipating. As a result, NAB has asked the Commission to establish aggressive, but achievable, deadlines for repacked television stations after the auction, when more is known about many stations will move, where they are located and to which channels they will be moved.

    This evolution is certainly reasonable. New facts and circumstances demand new solutions. While it is concerning that some continue to hide behind comments NAB submitted more than three years ago under different circumstances, it’s frightening that these same officials are hiding at all. The point of the repacking conversation is not to prove who is right; rather it’s to get it right. As the FCC pivots to thinking about repacking – which is now likely less than a year away – rather than being cute about past comments, it should actually engage and wrestle with the enormously complex repacking problem ahead. Only that course will give the broadcasting and wireless industries confidence that the post-auction transition will be a success.

    [1] Comments of the National Association of Broadcasters at 50, GN Docket No. 12-268 (Jan. 25, 2013).

    [2] Id. at 50.

    [3] Id. (emphasis added).

    [4] Id.

    [5] Id. (emphasis added).

  • Bruce Franca 11:03 am on February 17, 2016 Permalink  

    Despite Not Knowing Where to Aim, CCA Thinks FCC Hit the Mark 

    Last week, the Competitive Carrier Association (CCA) released a paper arguing that the Federal Communications Commission’s (FCC) randomly selected timeline for completion of broadcaster relocation following the auction is right on the mark. Determining how to develop a timeline for a nationwide repack of broadcasters involves complex engineering challenges, so of course CCA hired . . . an economist(!) to conduct its assessment. At least with this approach, CCA could simply assume the repack will be just fine.

    Despite it being in their members’ interest to fully come to grips with how long it will take to clear broadcasters from their 600 MHz channels across the country, CCA’s approach is lackluster and misleading. Following the broadcast spectrum incentive auction, the FCC will require hundreds, if not more than a thousand, stations to move to new channels. No one knows, however, exactly how many stations will be forced to move or even the scope of what those moves will require. Very little preparation can occur in advance, as no station knows if and to where it will move, and in what order it may be required to change channels. While these questions should give any engineer or economist pause, CCA’s paper guarantees us all that it should be no problem to repack an entire nation in just 39 months.

    But in the real world, this is more than an academic exercise. Understanding this complex process is essential because, under the FCC’s current rules, every station assigned to a new channel must vacate that frequency within 39 months after the auction. The FCC’s rules provide no exceptions to this, other than the Commission’s general waiver authority. If the FCC forces more stations to change channels than can possibly be repacked in that timeframe, the FCC’s current rules require stations to go dark and viewers to lose television service.

    Rather than assume the outcome, NAB approached this problem with rigor. We worked with an engineering consultant, Digital Tech Consulting, Inc. (DTC), which has a staff with decades of experience in broadcasting and that conducted numerous interviews with service and equipment suppliers to determine what was and was not possible. DTC’s report remains the only analysis in the record of the time and resources needed to complete a nationwide repack of television stations, as safely and as quickly as possible.

    Given that NAB is most interested in the right, rather than the expedient, answer, we shared that information with stakeholders in the wireless industry, including CCA, long before it was made public. NAB and DTC spent time addressing any and all questions concerning the analysis in an effort to advance a conversation about how the FCC, broadcasters and winning forward auction bidders can accomplish an efficient, rational transition after the auction. NAB even offered to fund a second study overseen in part by the wireless industry to ensure that everyone was working with a diverse set of expert opinions.

    Rather than engage in a discussion regarding DTC’s work, CCA instead bought a seven-page paper shopped by an economics professor that contained the answer CCA wanted. The economics professor they hired is perhaps best known to auction followers as the $85 billion dollar man – a nod to his enthusiastic forward auction projections. What he is not known for is his engineering expertise. That helps explain why CCA’s paper contains a number of critical flaws. Here are just a few of the most obvious errors, for starters:

    First, CCA asserts that DTC’s estimate of the number of stations that might be repacked is substantially overstated. This is curious, because DTC’s estimate of 860-1,164 stations overlaps with CCA’s estimate of 756-888(sic)* stations. At a minimum, then, CCA’s study confirms that the lower end of the DTC estimate is a reasonable projection. Moreover, DTC based its numbers on publicly available information the FCC has released. CCA based its numbers on an optimization scheme its economics professor invented.

    *Note: CCA states “in all cases the total number of stations that must change channels ranges from 756 to 888.” However, the actual values shown in the CCA paper range from 766 to 921 and contain arithmetic errors. Maybe they should have assumed a better calculator.

    Second, CCA asserts that the DTC study fails to account for “sources of efficiency found in the field,” such as the deployment of broadband antennas that can operate on a broad range of channels in the UHF band. Unfortunately, CCA did not consult an economics professor with any broadcast engineering experience. Had it found one (or simply hired a broadcast engineer), it would have learned that broadband antennas cannot realistically be used for broadcast TV station repacking in most cases. That is because the FCC is repacking stations specifically to preserve their coverage area and population served, which will necessitate antenna patterns that are specific to each station. A broadband antenna is usually limited to one single antenna pattern across all channels. Thus, a single broadband antenna usually cannot simultaneously replicate the coverage of multiple stations. Instead, most repacked broadcasters will need to rely on specifically manufactured directional antennas.

    Third, CCA asserts that DTC significantly understates the number of qualified tower crews available for repacking work. It claims that there are 41 qualified tower crews available right now. That’s interesting, because the FCC’s own Widelity Report concludes that no more than 14 qualified tower crews are available to work on complex and tall towers, and that “there is likely to be more work than these crews can handle in a timely fashion.” The Widelity Report also states that it would take 41 months to complete repacking at a complex site, under ideal conditions – with no unforeseen delays due to weather or zoning issues. As an engineer, I can confirm that 41 months is longer than 39 months. In fairness, CCA’s ivory tower exercise does reference an unpublished “engineering study” that will perhaps attempt to substantiate its claim that 41 qualified tower crews are available. I guess we’ll have to wait for that paper, because CCA apparently hasn’t finished cooking the numbers yet.

    Fourth, CCA claims that the repacking task is “modest relative to the DTV transition.” No one who has seriously studied this issue – or was even around during the DTV transition – could possibly come to that conclusion. During the DTV transition, most stations were not required to flash cut to a new channel for their primary signal within a tight timeframe. Nor did broadcasters have to worry whether other stations made the switch to their new channels at exactly the same time to avoid interference to their viewers. Rather, most stations operated simultaneously on two channels, one with a digital signal and one with an analog signal, sometimes for a decade or more. At the transition date, most stations simply turned their analog transmitters off – there was no tower work and little engineering required. That was a vastly simpler transition, yet it was conducted with significantly greater resources than are available now. This flaw could have been avoided by consulting anyone in the broadcasting industry, even economists who are familiar with it.

    Finally, the underlying premise of CCA’s “Don’t Worry, Be Happy” analysis is that the supply of necessary resources will simply rise to meet the demand during the FCC’s short repacking window. Apparently loads of new vendors, whom broadcasters are expected to trust despite their total lack of experience, will enter the tower rigging or equipment manufacturing business, drawn like moths to a flame by a business opportunity that will last no more than 39 months. This also begs the question – does CCA’s economics professor believe that supply will necessarily always rise to meet demand? If, instead of 756-888 (sic) stations, the FCC was repacking 1,500 stations, would 39 months still be enough? What if there were 3,000 stations that needed to be repacked? Or 5,000? Would supply just adapt to meet demand? CCA’s economics professor must have been lucky enough to never have ordered a product that had a wait list.

    Broadcasters have no desire to delay the post-auction transition. It will be painful and expensive for stations, as well as disruptive for their viewers. But we do not have the luxury of assuming away the problem (or shopping a paper for a hefty price with no consequences if we are completely wrong). The FCC’s policy decisions on this matter should be driven by facts and serious analysis – not by crossing our fingers.

  • Patrick McFadden 12:09 pm on February 16, 2016 Permalink  

    The Best Things in Life Are Free (Even When You’re Worth More Than Half a Trillion Dollars) 

    “I don’t care how much money you have, free stuff is always a good thing.”
    – Queen Latifah

    While I don’t believe that Queen Latifah had Google in mind when she uttered this well-known line, she might as well have.

    Google has a lot of money. Not just a lot of money, but A LOT of money. Sporting a market capitalization of $548 billion, Google has passed Apple as the most valuable company on the planet.

    Thus, it’s safe to assume that, if Google wanted or needed something, it could afford to buy it. For example, Google has expressed an interest in “low band” spectrum. Given its interest in spectrum, one would assume that Google would be a major player heading into the Federal Communications Commission’s (FCC) upcoming broadcast spectrum incentive auction. This auction will feature as much as 100 megahertz of prime low band spectrum. It would be a perfect opportunity for Google to acquire spectrum usage rights, and Google’s participation would have the added benefits of raising billions in auction revenues for the government and helping to ensure the auction’s success.

    However, despite its interest in using spectrum, Google isn’t going to play in the auction. Sorry, Congress. Sorry, FCC. No dice.

    Why did Google decide to sit out yet another spectrum auction? The smart money is on Google recognizing Queen Latifah was really on to something. Even if you’re worth well more than half a trillion dollars, free stuff is still a good thing.

    Rather than bid in the auction, Google believes it has found access to free spectrum it can monetize. For the past year, Google has helped lead the charge behind the scenes to push the FCC to simply reallocate spectrum during the auction process for Googley purposes. Reallocation has no price tag. It’s just a gift. In this instance, Google has managed to convince the FCC to consider taking even more channels away from free, over-the-air television after the auction, and designating them for companies like Google. Never mind that this would kill off more free, diverse and rural television service across the country. Never mind that it will hamper innovation by companies not named Google. And never mind that it will crush any hopes of new and diverse entrants into the broadcast industry. If Google sees an opportunity to throw its $548 billion weight around and wind up with some spectrum schwag, why not do it?

    It’s also not for Google to care whether or not this is the right outcome for the country. Let’s face it, Google and its interest-group contractors can’t articulate any tangible benefits for the government’s gift. If the FCC moves forward with its Google Channel proposal it would be asking us to simply give Google the benefit of the doubt. The FCC isn’t attaching any specific public interest obligations to users of this spectrum, or heck, even requiring the spectrum be used at all. It’s really all up to Google.

    I suppose we can’t really blame Google, though. It’s our fault, not Google’s. If Google can keep pulling favors from the government to add to its $548 billion bottom line, more power to it. It’s up to all of us – most of all the FCC – to not keep giving things to Google for free. It seems we’ve made a habit of it. The Commission should recognize that it created a disincentive for Google to participate in the auction and will continue to dissuade Google from investing in all kinds of things if it keeps handing over the keys to the kingdom.

    For as Google well knows, it doesn’t matter how much money you have, it’s still much better to get something for free.

  • Patrick McFadden 12:04 pm on February 5, 2016 Permalink  

    ATVA: What Acorn? 

    The American Television Alliance (ATVA) – the pay-TV industry’s leading voice these days – needs our collective help. It appears that our friends are suffering from a serious case of Chicken Little Syndrome. You remember Chicken Little, right? That’s the poor little chicken who believed that the sky was falling after she was hit on the head by an acorn falling from a nearby tree. Chicken Little was so alarmed she spread panic throughout the town – all because of an acorn.

    ATVA’s acorn is retransmission consent. When pay-TV companies seek to carry most local broadcast television stations, they have to negotiate with broadcasters for the right to do so. The overwhelming majority of these negotiations are uneventful and routine. They are business negotiations, conducted at arm’s length by sophisticated actors. As with any business negotiation, however, occasionally the parties struggle to come to terms. Infrequently, this results in a broadcast station’s removal from a particular pay-TV system until a deal can be reached.

    ATVA’s actions – and indeed its entire purpose – would make even Chicken Little blush. Unlike the unwitting Chicken Little, ATVA spends day and night fervently hoping that one of the many thousands of retransmission consent negotiations between TV broadcasters and multichannel video programming distributors go south and hit ATVA squarely on its head.

    You see, ATVA was conceived to create hysteria. ATVA’s strategy is to wait for an isolated example of a hiccup in negotiations – an acorn falling – and overreact in the most spectacular fashion possible. It’s as though ATVA has set up shop by the side of a busy road, just waiting for a car accident. Then, when an accident happens, ATVA sets off flares and air horns, and unfurls a banner triumphantly declaring, “SEE? I TOLD YOU THE HORSELESS CARRIAGE WOULD NEVER WORK!” ATVA wants you to ignore the hundreds of cars passing by without incident and focus only on that accident. If they make enough noise and sound scary enough, maybe someone will pay attention. That’s why, for ATVA, it’s not enough to turn a molehill into a mountain – the mountain always has to be Vesuvius and Pompeii always has to be on the cusp of being buried by ash.

    There are countless examples of ATVA’s strategy, including the recent impasse between Nexstar Broadcasting and Cox Cable. As the extended agreement between the parties expired, ATVA fired up its outrage machine (patent pending) and penned a Chicken Little letter to the Federal Communications Commission (FCC). ATVA claimed that, even though Cox isn’t an ATVA member and ATVA has no specific knowledge about the parties’ negotiations, ATVA nevertheless knew “exactly what is going on here,” and that Nexstar was engaged in a “shakedown.” ATVA claimed that FCC intervention in the market was urgently needed to protect the poor, tiny, helpless, cable company (that happens to be the third largest cable provider in the country).

    What ATVA doesn’t tell you is that Nexstar had, up to that point, successfully negotiated 1,200 retransmission consent agreements with pay-TV companies over the last 11 years. That’s right. 1,200 successful negotiations. But, when the 1,201st stumbles because a cable company holds out for lower rates or possibly even to trick regulators into action? The system is broken! Government intervention is desperately needed! The sky is falling!

    ATVA’s hysteria reflexes have to be razor sharp because it generally has only a narrow window of opportunity to put out exaggerated and misleading claims regarding these exceedingly rare disputes. In this case, ATVA didn’t have a moment to waste to stage its very public case of the vapors. Nexstar and Cox resolved their contractual impasse without great fanfare, despite ATVA’s convulsions. The parties reached an agreement without new heavy-handed government regulations, despite ATVA’s grandstanding. Good thing ATVA didn’t wait a day to see what happened – they would have wasted a perfectly good acorn.

    You might think that maintaining a constant, breathless stream of hyperbole would get exhausting after a while, but it’s the only real strategy ATVA has. After all, telling you the truth – that your cable company just doesn’t think it’s making enough money off of you – isn’t exactly a winner.

  • Zamir Ahmed 9:01 am on December 22, 2015 Permalink  

    Local TV Stations: Bastions of Investigative Journalism 

    In her New York Times column, “The Search for Local Investigative Reporting’s Future” (Dec. 5), Margaret Sullivan bemoans the uncertainty surrounding newspapers’ future investment in enterprise reporting that roots out corruption and exposes illicit behavior in local communities. What Ms. Sullivan should not forget is that local television broadcasters are picking up the mantle of serious investigative journalism as resources become limited at newspapers.

    In recent years, local TV stations have invested significant resources into building and expanding their investigative news teams both on-air and online. Some stations have even employed former newspaper reporters with extensive backgrounds in investigative journalism, such as Dispatch Broadcast Group’s WTHR Indianapolis, Block Communications’ WDRB Louisville and Capitol Broadcasting Company’s WRAL Raleigh.

    A few examples of broadcasters’ investment in investigative reporting locally and nationwide include:

    • Atlanta: In November, Meredith Corporation’s WGCL introduced an investigative news initiative featuring a team of reporters with over 100 combined years of television news reporting experience, including former The Washington Post reporter Art Harris;
    • St. Paul: Hubbard Broadcasting-owned KSTP recently hired as an executive producer of investigations and special projects Paul McEnroe, who was formerly The Star-Tribune’s most prominent investigative reporter;
    • Chicago: In July, NBCUniversal’s WSNS became the ninth Telemundo station to launch a dedicated news team to help consumers who have been wronged by local businesses;
    • Asheville: In May, Asheville Citizen-Times reporter Jon Ostendorff left the newspaper to join Sinclair Broadcast Group’s WLOS as an investigative reporter;
    • Washington, D.C.: Last December, Sinclair Broadcast Group-owned WJLA create an investigative unit focusing on rooting out government waste;
    • New York: Last year, Tribune Broadcasting’s WPIX brought together several award-winning journalists to form an investigative news team “to bring fraud and injustice to light…while protecting our viewers and keeping their families safe from harm.”

    Broadcasters’ investment in enterprise journalism has not gone unnoticed. Last July, Broadcasting & Cable ran a cover story about the increase in new and expanding investigative news teams at local TV stations. The article noted that attendance at the recent Investigative Reporters and Editors convention exceeded 1,650, significantly more than the 1,250 from the 2013 convention and a new record.

    Local TV stations’ investigations have also paid numerous dividends for viewers by uncovering corruption and illegality in local communities, carrying out broadcasters’ mission of serving the public interest. These investigations have also garnered prestigious national and local awards for their in-depth reporting, and prompted local governments to take action to correct the wrongs exposed. Just a small handful of the many investigations that broadcasters have undertaken include:

    • Tampa: Following a year-round investigation, in September TEGNA’s WTSP aired a five-minute news broadcast examining the influence wielded by a private PR consultant in local politics, potentially in violation of local and state ethics laws. The station supplemented that broadcast with a 6,000-word online article, extensive links to public records and online-only videos, a convergence of elements that earned the project kudos from the Columbia Journalism Review.
    • St. Louis: Meredith Corporation’s KMOV earned a 2016 Alfred I. duPont-Columbia University Award after launching an investigation of the area’s criminal justice system in wake of the shooting death of Michael Brown and subsequent civil unrest. Through more than 40 stories, the investigation revealed a system of mandated ticket quotas, speed traps, and fines to help small municipal courts make money. The reports prompted one local police department to end its ticket quota system, a judge being forced to resign and the firing of a police officer.
    • Baltimore: Hearst Television-owned WBAL received a 2016 Alfred I. duPont-Columbia University Award for its in-depth, breaking news reporting on what happened to Freddie Gray, the Baltimore man who was critically injured while in police custody and subsequently died a week later. The investigation into his death raised questions about police procedure and prompted major protests in the city and around the country.
    • Raleigh: Capitol Broadcasting Company’s WRAL produced a documentary from the Rio Grande Valley on the tens of thousands of unaccompanied minors illegally immigrating into the U.S. from Mexico and its impact on North Carolina. The report was credited as an “excellent example of local reporting” when it was cited for a 2016 Alfred I. duPont-Columbia University Award.
    • Dallas: NBCUniversal-owned KXAS, which partnered with the Dallas Morning News, was honored with the 2015 Gannett Foundation Al Neuharth Award for Investigative Journalism. The station looked into claims by injured U.S. Army soldiers, particularly those with mental wounds, that they were often mistreated, belittled and even ordered to do things that jeopardized their medical care by commanders. The report prompted changes to the Army Warrior Transition Units and sparked investigations and hearings by the U.S. House of Representatives.
    • “Full Measure”: Debuting in October, this Sinclair Broadcast Group-produced half-hour news program airs every Sunday on 162 television stations in 79 markets. The show focuses on investigative, original and accountability reporting and is hosted by Sharyl Attkisson, a five-time Emmy Award winner and Edward R. Murrow award winner for investigative reporting at CBS News.
    • New Orleans: Hearst Television’s WDSU continues to investigate questionable hiring practices by the district attorney in one of Louisiana’s most populous parishes, who recently brought onboard two employees that raised ethical questions. One new employee was tied to a federal corruption case involving a kickback scheme at the parish courthouse, while the other retired in order to collect a pension and was subsequently rehired in a part-time position.
    • Louisiana: An investigation by TEGNA’s WWL, in partnership with USA Today and other TEGNA newspapers, found that the state’s backlog of untested sexual assault kits may have only accounted for a fraction of outstanding kits. The investigation found that while a new state law requires law enforcement agencies to report how many untested sexual assault kits they had, only half of the agencies did and others reported lower numbers than was actually the case.
    • Rochester: Nexstar Broadcasting Group’s WROC aired a special report in February that exposed how teachers under investigation for misconduct were sent to the Alternative Work Location, dubbed “The Rubber Room.” In the spring of 2014, the 15 teachers and administrators sent to the Alternative Work Location received their salary but were not given any work assignments, the report revealed.
    • Arizona: In January, all Arizona television stations aired “Hooked: Tracking Heroin’s Hold on Arizona,” an investigative report produced in English and Spanish by students at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication in partnership with the Arizona Broadcasters Association (ABA). The program focused on the growing perils of heroin and opioid use in Arizona.
    • Detroit: Graham Media Group’s WDIV examined the school-issued helmets that several local high school football teams were using and tested their ability to prevent concussions. The station’s investigation found one in four helmets that were being used by the Detroit Public School System held one- or two-star ratings on a scale of five.
    • Denver: E. W. Scripps Company’s KMGH won a Peabody Award for its “Investigating the Fire” series, which examined a controlled fire set by the Colorado State Forest Service that expanded into an out-of-control forest fire that cost three lives and damaged 22 homes. Producing more than two dozen reports, two town hall meetings and a 30-minute special, the investigation uncovered negligence on the part of the Forest Service and prompted state lawmakers to take action to compensate victims.
    • Columbus: In a series called “Investigating the IRS,” Dispatch Broadcast Group-owned WTHR uncovered massive fraud caused by mismanagement and lack of oversight inside the Internal Revenue Service that cost American taxpayers billions of dollars. The investigation earned the station a Peabody Award and prompted the IRS to institute permanent changes in agency practices and policies.

    The questions Ms. Sullivan asks are the right ones: Where will local investigative journalism come from? Who will expose corruption and defend the taxpayer? Who is going to hold people accountable?

    Broadcasters understand our role as Americans’ most-trusted, top-choice news source and our power to drive local conversations.  That’s why many TV stations have invested in investigative journalism to fill the gap left by a declining print industry. I believe we have answered Ms. Sullivan’s questions. Broadcasters have already assumed the important role of the watchdogs of our democracy.

  • Rick Kaplan 12:08 pm on September 23, 2015 Permalink

    Revisionist History, Cable Goodies and Still Nothing for Consumers 

    On Tuesday, Federal Communications Commission (FCC) Chairman Tom Wheeler’s Media Bureau chief, Bill Lake, took to the blogosphere in an attempt to reverse the palpable lack of enthusiasm for the Chairman’s plan to eliminate the broadcast TV exclusivity rules. Unfortunately, Mr. Lake’s written defense of the Chairman’s proposal is fatally flawed and obscures the larger questions surrounding the Chairman’s recent efforts.

    There are many reasons why Chairman Wheeler’s self-generated push to eliminate the Commission’s network and syndicated exclusivity rules is misguided. As the National Association of Broadcasters (NAB) has detailed in numerous filings, the exclusivity rules enhance localism without granting new substantive rights. They also create a significant marketplace efficiency by preventing protracted and expensive litigation over private marketplace deals. They are part of a larger comprehensive system developed and reworked by Congress over the last several decades and serve as an important deterrent against cable operator mischief of the sort that industry typically reserves for its customers.

    Since the Chairman first circulated his proposal in August, broadcasters across the country have reminded the FCC that Congress already has in place a carefully constructed framework that includes exclusivity protections at its core. As Mr. Lake acknowledges for the first time, Congress, the White House and the FCC forged an agreement among stakeholders in 1971 that would lead to cable’s compulsory license, content owners’ compensation and broadcasters’ bargained-for exclusivity protection at the FCC. Notably, the cable industry received a hefty government subsidy in the copyright deal, as the government and not the market continues to set the rates cable companies pay for the underlying content they re-sell to consumers.

    Mr. Lake argues that despite this agreement, subsequent events nullify the need for the FCC to uphold the part of the system that promotes local broadcast TV service. Specifically, Mr. Lake asserts that because Congress instituted the retransmission consent regime in 1992, there is no longer a need for the FCC to preserve local exclusivity. The thinking goes that broadcasters need not worry about the importation of distant signals because retransmission consent makes it more difficult for cable companies to obtain the rights to import signals from third-party stations.

    This argument, however, is not only inaccurate, but also completely misses the point. When enacting the retransmission consent regime in 1992, Congress stated expressly:

    [T]he Committee has relied on the protections which are afforded local stations by the FCC’s network non-duplication and syndicated exclusivity rules. Amendments or deletions of these rules in a manner which would allow distant stations to be submitted on cable systems for carriage or local stations carrying the same programming would, in the Committee’s view, be inconsistent with the regulatory structure [adopted in the 1992 Cable Act].

    Contrary to Mr. Lake’s central claim, Congress was well aware of the importance of the exclusivity rules when it granted retransmission consent rights to broadcasters. The “major piece[] of the intervening history” (i.e., the 1992 Cable Act) that Mr. Lake identifies in his blog itself recognized that exclusivity is part and parcel of the copyright/retransmission consent framework. It is awfully difficult to claim that an intervening event fundamentally altered an initial deal when the authors of that event stated that they were incorporating all of the elements of the original agreement.

    But even if those pages of intervening history were lost, one could simply look to the satellite reauthorization bill Congress passed just last year to see how hollow Mr. Lake’s claim rings. In reauthorizing the satellite distant signal license, Congress yet again preserved local exclusivity for satellite viewers. Therefore, even if somehow one could claim that Congress didn’t understand the potential impact of retransmission consent on exclusivity in 1992, no one can plausibly claim that Congress was so blind as to miss the implications of local exclusivity in 2014. And does Mr. Lake seriously think that Congress meant to create a mechanism for broadcasters to enforce their exclusivity rights against satellite, but not against their cable competitors?

    Moreover, missing in all of this historical rewriting is that neither the Chairman nor Mr. Lake even attempt to suggest that consumers may benefit from the Chairman’s proposal or that eliminating the rules will alleviate some burden that the Commission currently faces. Their central premise is simply that the rules are “old” and “unnecessary.”

    As NAB has highlighted elsewhere, if age were the measure of a regulation’s validity, why is the Chairman wasting his time with the relatively recent exclusivity rules, when the World War II-era media ownership rules are comparatively low-hanging fruit? The beauty of the Commission’s oversight of the ownership rules is that, unlike the exclusivity rules, Congress actually requires the FCC to review them every four years to see if they are still operating in the public interest. This raises the question of why consideration of the exclusivity rules has vaulted ahead of a meaningful review of the ownership rules, which have been subject to an ongoing proceeding since 2009 with no end in sight.

    It can be a tough pill to swallow to pull back a proposal one has made to his or her colleagues. In this case, however, it appears that no one but the Chairman and Mr. Lake believe that eliminating the exclusivity rules is a good idea, or even, at best, should be a Commission priority. Even the American Cable Association (ACA) only supports the change insofar as it leads to the Commission outlawing exclusive broadcaster arrangements altogether. With history and common sense as a guide, it’s time to shelve this proposal and move on to more important matters that preserve localism, competition and diversity for the benefit of consumers.

  • Patrick McFadden 12:24 pm on September 11, 2015 Permalink
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    Some Changes for a More Balanced Auction 

    Yesterday, NAB filed a limited petition for reconsideration of the Federal Communications Commission’s (FCC) recent “Procedures Public Notice” laying out additional details concerning the forthcoming broadcast spectrum incentive auction. First, we’re asking the Commission to reconsider its decision to relocate TV stations in the duplex gap, which eliminates the only remaining exclusive use spectrum available for wireless microphones broadcasters use to cover breaking news and emergencies. Second, we’re asking the Commission to reconsider the level of market variability it will permit in light of recent progress made in international coordination with Canada and Mexico. We’re limiting our request for reconsideration to those two issues primarily because they are subject to quick fixes. The Commission could grant our request without in any way threatening its target March 29, 2016 start date for the auction.

    Separately, we are also seeking clarification as to whether the FCC’s current incentive auction design is consistent with the Spectrum Act’s requirement that the incentive auction be voluntary for broadcasters – or whether the FCC’s chosen mechanism will effectively nudge broadcasters into participating.

    Here’s the issue. The natural consequence of the FCC’s variable band plan is that some broadcasters will be assigned channels that are in the new wireless band – that is, they will be operating on channels that are used by wireless carriers in other markets. For a long time, the FCC had been suggesting that broadcasters would be randomly selected to be placed into the wireless band, and it would not be based on whether and to what extent they participated in the auction. Obviously, it would be alarming if the FCC made judgments based on participation.

    The recent Procedures Public Notice, however, could be read to suggest the FCC has decided that only non-participating stations will be placed in the wireless band if the auction successfully closes at the initial clearing target. In addition, it appears that the only other stations that could be added to that list are broadcasters who participate but drop out in one stage, only to see the auction move on to another stage because it could not close. In other words, if the auction fails to close at that initial stage, the only additional stations that can be relocated to the wireless bands are stations that drop out because their asking price is too high. This doesn’t exactly sound “voluntary” to most broadcasters.

    While the Commission doesn’t seem to believe there is any harm to broadcasters if they are assigned a channel in the wireless band because they will receive the same protections in the repacking process as other stations, no broadcaster would voluntarily choose relocation there.

    Television stations operating co- or adjacent channel to new wireless licensees will be extremely limited in terms of their ability to expand their facilities after the auction. As a practical matter, this may constrain their ability to relocate, increase their service area or even innovate. Further, broadcasters, as well as the Commission itself, are all too familiar with the uncertainty and disputes surrounding television stations operating on channel 51 and wireless carriers operating in the 700 MHz Lower A Block. Stations on channel 51 are protected by the Commission’s rules, just as the Commission is now promising to protect stations stranded in the 600 MHz band. Those protections, however, have not prevented costly and time-consuming disputes. Similarly, a broadcaster that has a station relocated in the 600 MHz band will have to factor the prospect of ongoing inter-service interference issues into its business plans.

    The bottom line is that a broadcaster placed in the wireless band will be surrounded by wireless operations that are incompatible with, and hostile to, the broadcaster’s continued operations. It would be as if one’s home was forcibly relocated to a commercially-zoned neighborhood; the home might be identical, but it would not be as comfortable, and certainly not as valuable.

    Our hope is that the confusion emerging from the Procedures PN is just that and that broadcasters do not now have to factor in their participation decision the potential penalty of being shipped to the wireless band. The incentive auction can be a tremendous success as a voluntary auction and broadcasters – not just the speculators – are eager to keep the process moving swiftly.

  • jmago2014 10:23 am on September 8, 2015 Permalink  

    Program Exclusivity, Part III: Haven’t We All Seen This Movie Before? 

    An old adage says that those who do not study history are doomed to repeat it. In the world of communications, I would posit a variation on that adage: Those who have lived through regulatory controversies are doomed to repeat them – forever. As one who has witnessed many regulatory controversies since 1978, I am one of the doomed.

    The current controversy over network non-duplication and syndicated exclusivity provides a prime example. I first encountered this controversy in 1980, when, as a very young litigation attorney for the FCC, I was tapped to help write a brief defending the FCC’s repeal of the syndicated exclusivity rule. Cable operators – and the National Cable & Telecommunications Association (NCTA), which was led by Federal Communications Commission Chairman Tom Wheeler at the time – had contended that the rule was unnecessary and harmful to them, while broadcasters argued they had bargained for the right to attract viewers with popular programming so they could earn the revenues to serve their communities. The rules provided a practical enforcement tool to prevent cable operators from siphoning local stations’ audience share with duplicating programming. In a split vote, the FCC repealed the rule.

    I remember that writing the brief wasn’t easy. I spent many long hours pouring over the record to find every nugget to support the decision. In the end, the Second Circuit deferred to the expert agency’s judgment because the FCC was able to point to two extensive staff reports, multiple studies and several years of investigation to justify the rule’s repeal.

    That could have been the end of the matter, but it was not. Just eight years later, in light of actual competitive damage to broadcasters and real world experience, the FCC reversed course. It reinstated the syndicated exclusivity rule, finding that it served the public interest. This time the cable operators went to court.

    I had less of a role in this second case, but when you read the decision, the agency’s line of defense clearly was very similar. The FCC pointed to new studies and an extensive record to support its new decision. Of course, it was harder, because the Commission was reversing itself – there is a much higher burden for the agency in those situations. But, they were able to meet that burden because they had substantial data to rely on.

    This brings me to the current debate. To reverse itself again (not just on syndicated exclusivity, but now network non-duplication as well) the Commission will need to have a very strong record to show that the rules are unnecessary and/or harmful. I don’t see that here.

    It is not enough to merely say that times have changed. While there may be more types of multichannel video providers today, that also means broadcasters face more competition for local audiences and more fragmentation of their advertising revenues. Nothing has undermined the Commission’s finding, when reinstating the syndex rule, that cable competes with free over-the-air television and has the incentive to erode the exclusivity a local station bargains for. The record shows that the incentive to undermine exclusivity is actually stronger today, because cable actively pursues and earns a greater share of local advertising dollars. And, why else would cable operators like Cablevision be asking not only to eliminate the current rules, but also to have the Commission prohibit broadcasters from even bargaining for local exclusivity? The Commission cannot conclude on this record that cable operators are unlikely to import duplicating distant signals harmful to local stations. That is going to be a problem for today’s FCC litigators if the Commission repeals these rules.

    Others assert that there is no reason for the FCC to enforce exclusivity, as broadcasters can fight for exclusivity through contracts. But stations cannot simply use the courts to enforce contractual rights to exclusivity. Court dockets are already overcrowded, leading to delays in deciding civil cases. Beyond that, it is not clear just what type of private action a station could bring. The likely party importing a duplicating signal, the cable operator, has access to a compulsory license and is not a party to the network/syndicator/station contract. It seems that the only way to stop the duplication would be for the network or syndicator to stop delivering its programming to the duplicating distant station. How would that serve the public? Everybody loses in that scenario.

    Even assuming a station could get into court, the cost of the litigation would be prohibitive. The median cost of civil litigation is around $91,000 and would likely be more here since stations would need lawyers with special expertise. That would drain most stations’ resources for hiring reporters or purchasing updated equipment (in addition to the investments the Commission either requires or urges stations to make to improve accessibility) and could break stations in small markets where revenue margins are very slim. If local service in those markets still matters, the exclusivity rules still matter. The FCC should retain these rules.

    Jane Mago retired as NAB’s General Counsel and Executive Vice President of Legal Affairs last year. She joined NAB in 2004 after a 26-year career at the Federal Communications Commission, where she held many high-level positions including general counsel, chief of the Office of Strategic Planning and Policy Analysis, deputy chief of the Enforcement Bureau and legal advisor to three commissioners.

  • NAB 11:33 am on August 28, 2015 Permalink  

    Attempting to Hold the FCC to the Law on Effective Competition 

    Scott Goodwin, associate general counsel, National Association of Broadcasters, joins guest blogger Steve Traylor, executive director and general counsel, National Association of Telecommunications Officers and Advisors.

    Today, our organizations – the National Association of Telecommunications Officers and Advisors (NATOA) and the National Association of Broadcasters (NAB) – along with a local franchise authority in Minnesota, filed a lawsuit in federal court challenging the FCC’s decision this past June to upend the way it determines whether cable communities are “effectively competitive.” In our view, the Commission’s decision – made over the objection of two commissioners – was bad for consumers and wrong on the law.

    Under the 1992 Cable Act, local franchise authorities may regulate a number of the ways in which cable operators interact with consumers in areas that are not deemed to be “effectively competitive.” If an area reaches a certain level of competition in pay TV services, however, the local authorities are stripped of many of their consumer protection tools and the local cable operator is free to bill and set terms of service pretty much as it pleases.

    Last December in the satellite reauthorization bill, Congress instructed the FCC to make limited administrative changes in the processing of effective competition petitions filed by small cable operators. Congress asked the FCC to complete this relatively simple task within six months of the bill’s passage. The notion was that small cable operators lacking in resources could benefit from a streamlined filing process without substantively changing their obligation to prove that they are operating in “effectively competitive” areas.

    Rather than swiftly tackling this uncontroversial task, FCC Chairman Tom Wheeler instead opted to push through an order that turned Congress’s directive on its head. Instead of mere administrative changes, the chairman proposed to deem the entire country effectively competitive – about as substantive a change as one could imagine. To make matters worse, Chairman Wheeler also proposed to make this change for all cable operators – big and small. So what should have been an insignificant adjustment ended up being a sand-shifter that cable’s biggest players could love.

    How does this change benefit consumers? It doesn’t. Literally not at all. No one could even muster a serious claim to that effect. The Commission could only tell the public that this new direction would cut down on the time it took for big cable operators to file effective competition petitions (even though an operator could file one petition covering thousands of areas) and for FCC staff to process those petitions.

    In fact, consumers are the big losers in this sea change. By deeming the nation effectively competitive, the FCC stripped from local franchise authorities across the country their longstanding roles as cops on the beat. Without the power to protect consumers, local authorities are being pushed aside to allow for higher cable prices – especially for basic cable service – more mysterious fees, higher equipment costs, and the potential disintegration of the basic tier of service, including the loss of Public, Educational and Governmental (PEG) channels.

    It’s no wonder that a large group of U.S. senators and representatives opposed the FCC’s decision. This group includes Sens. Barbara Mikulski (MD), Patrick Leahy (VT), Al Franken (MN), Amy Klobuchar (MN), Jeff Merkley (OR), Edward Markey (MA), Ron Wyden (OR), Bernard Sanders (VT), Jack Reed (RI), Tom Udall (NM), Sheldon Whitehouse (RI), Sherrod Brown (OH), Tammy Baldwin (WI), Martin Heinrich (NM), Elizabeth Warren (MA) and Rep. Frank Pallone Jr. (NJ-6).

    Unfortunately, this action appears to be only the first step that the Commission may take that gives cable operators – yes, cable operators – more leeway in and less oversight over their customer service. Not only did the FCC vote to disable an important check on cable companies at the local level, but now it is weighing whether to dismantle part of our nation’s localized system of broadcasting, which ensures that every local community has relevant news and information available to them. This trend is even more disturbing in light of cable’s rapid consolidation and truly dismal customer service record.

    This hardly seems the time to put a thumb on the scale already favoring the cable industry. We filed this lawsuit because we’re hoping to preserve one of the last vestiges of active oversight against an industry that doesn’t treat its consumers as if it is subject to any, let alone effective, competition. While federal courts traditionally give agencies a great deal of leeway, we believe that this time, they’ll recognize that the FCC went way too far.

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