Federal Communications Commission

In recent months, the Federal Communications Commission’s Media Bureau has reviewed an increasing number of proposed broadcast television transactions involving both agreements to share facilities, employees, and/or services of various types between stations and financing and/or contingent interest agreements involving those stations.

These arrangements have drawn substantial public scrutiny.

The FCC is issuing a public notice to provide guidance concerning the Bureau’s processing of applications seeking FCC approval of proposed transactions that involve combinations of sharing arrangements and contingent or financial interests. In the ongoing review of proposed transactions involving sharing arrangements, the FCC has identified a concern that a broadcaster that has entered into a sharing arrangement with another same- market station in which it also has a contingent financial interest, such as an option to purchase the station or as a guarantor of the other station’s financing, may obtain a degree of operational and financial influence that deprives the licensee of the second station of its economic incentive to control programming.

Also, the compensation provisions of agreements to share facilities and employees, to jointly sell advertising, and to jointly acquire programming, can be structured such that the licensee of the station bears little or none of the risks and reaps little or none of the rewards for the performance of the station. While each case must be judged on its individual facts, the FCC has determined that proposed combinations of such sharing arrangements and contingent financial interests warrant careful scrutiny in our review of applications.

In separate statements, the FCC’s two Republican commissioners -- Ajit Pai and Michael O’Rielly -- said they opposed the bureau’s notice, at least partly on procedural grounds.

Federal Communications Commission Chairman Tom Wheeler announced that the following items will be on the tentative agenda for the next open meeting scheduled for Monday, March 31, 2014:

• Amendment of the Commission’s Rules Related to Retransmission Consent: The Commission will consider an Order making certain rule revisions and clarifications to facilitate the fair and effective completion of retransmission consent negotiations, and a Further Notice of Proposed Rulemaking seeking commen on whether to eliminate the network non-duplication and syndicated exclusivity rules.
• Broadcast Ownership Rules Quadrennial Regulatory Review: The Commission will consider a Further Notice of Proposed Rulemaking that initiates the 2014 Quadrennial Review of broadcast ownership rules, addresses issues referred to the Commission by the Third Circuit’s remand of the 2008 Diversity Order, and a Notice of Proposed Rulemaking to define and require the disclosure of a category of sharing agreements between broadcast television stations. The accompanying Report and Order determines that certain television joint sales agreements are attributable.
• Increasing Utility of Unlicensed Spectrum in the 5 GHz Band: The Commission will consider a First Report and Order that would revise rules to make 100 megahertz of 5 GHz UNII-1 band unlicensed spectrum more useful for consumers and businesses, and reduce the potential for harmful interference to certain incumbent operations.
• Meeting the Nation’s Demand for Licensed Spectrum: The Commission will consider a Report and Order that would adopt allocation, licensing, service, and technical rules to make available for auction 65 megahertz of AWS-3 spectrum for flexible use services, including mobile broadband.

In January 2014, the Federal Communications Commission initiated an experiment to inform our policies to build next generation networks in rural America. We invited proposals to tell the FCC whether there is interest in constructing high bandwidth networks in high cost areas, and to tell us how it could be done. We issued an invitation, and the response has been astounding. To date, we have received nearly 1,000 expressions of interest from all parts of the country and more are being filed every day.

Proposals from rural telephone companies, from rural electric co-ops, from cable and wireless service providers, from schools and libraries, from research and education networks, from communities. The proposals are varied, geographically and technologically diverse, yet all have a common theme. They are expressions of a desire to deliver better, more robust Internet access service, faster speeds to communities in rural areas.

They are expressions by people who understand that high bandwidth services are becoming increasingly important to the future of economic development, education, health care, government services, entertainment, information, communication and creativity. And many, such as those from telephone and electric co-ops and anchor institutions, are expressions from organizations rooted in local communities.

[Chambers is FCC's Chief, Office of Strategic Planning and Policy Analysis]

The Federal Communications Commission has long recognized that it shares a unique trust relationship with Tribal Nations.

It is this unique government-to-government relationship that guides the FCC in its dealings with Tribal Nations and in the Commission’s efforts to promote Tribal self-sufficiency and economic development. As part of these endeavors and its efforts to ensure that the concerns of Tribal governments are considered in all relevant Commission proceedings, the Commission created the FCC-Native Nations Broadband Task Force.

Now, the Commission, through the Office of Native Affairs and Policy (ONAP), is acting to reinvigorate the Task Force to ensure that it continues its vital work. Specifically, by this Public Notice, ONAP seeks applications for open positions on the Task Force. Applications are due by May 15, 2014.

I applaud the US House of Representatives for passing the Federal Communications Commission Process Reform Act of 2013, HR 3675, and I commend the leaders of the Commerce Committee’s Subcommittee on Communications and Technology -- Chairman Walden and Ranking Member Eshoo -- for their bipartisan efforts to advance this legislation. I hope that this common-sense bill, as well as the Federal Communications Commission Consolidated Reporting Act of 2013, HR 2844, which the House of Representatives passed 415 to 0 back in September, will soon be enacted into law. Together, these bills recognize the need to modernize the FCC to reflect our dynamic, converged communications marketplace. And they would eliminate outdated mandates on the agency, streamline its operations, and make it more accountable to the public.

The United States is at a point where broadband and video have joined to form a virtuous cycle. The big question we face is how to fully transition from the analog world to a digital one based on the Internet Protocol, or IP.

The FCC recently decided to move forward with local experiments in which companies can move customers from old networks to IP networks. We are going to see what happens when aging infrastructure is turned off. These tests will give us valuable data. And we will then use that data to make a successful national transition to all-IP networks.

Once that happens, companies will be able to focus their investments exclusively on high-speed networks. Consumers’ appetite for Internet video is placing new demands on broadband providers to expand the highways that carry that traffic. Providers are doing just that. Cable operators are spending billions of dollars upgrading their technology using a new technical standard that transmits data much more quickly. Telephone companies are deploying more fiber. Wireless providers are expanding 4G LTE networks. And a new entrant, Google, is activating gigabit fiber in cities across the country.

One might ask: How has this all happened? Well, it wasn’t government fiat. It was private enterprise, taking risks to innovate and build, and competing for consumers in the free market, that brought about the digital revolution. It was our private sector that spent over one trillion dollars over the past fifteen years to upgrade cable systems, launch satellites, lay fiber, build towers, and deploy our broadband infrastructure. Rather than owning companies or directing capital spending, the United States Government has sought to create a regulatory framework that gives companies the right incentives to make these investments.

First, we have removed regulatory barriers to infrastructure investment. Second, we have created a free market for spectrum. And third, we have embraced free trade and foreign direct investment as a way to promote capital formation. Each has played an important role in fostering the innovation we see in America today. And I believe each serves as a valuable lesson for regulators going forward.

I commend [Federal Communications Commission] Chairman Tom Wheeler for issuing a Public Notice that includes a proposal to ensure non-English-speaking persons have access to important information in an emergency.

This proposal asks broadcasters, as well as state and local governments, to work on a plan to address the needs of such persons if a non-English station is knocked off the air during an emergency. During our field hearings to study service outages during Super Storm Sandy, we learned how important broadcaster cooperation was to keeping TV and radio stations operational so communities could receive information.

This Public Notice asks several questions about the details necessary to implement this proposal. Responses to these questions will help the Commission craft specific rules, if necessary, to promote this goal.

[March 11]

The joint sales agreement proposal being put forward appears flawed and not in the public interest.

My meetings and the record indicate that the JSA portion could significantly impair the ability of broadcasters with diverse voices to offer local programming, such as news, to meet consumer needs. Moreover, the proposal would establish a very subjective ‘Mother-May-I’ approach to obtain or retain a JSA, which is a recipe for market uncertainty and reduced offerings. Most importantly, this effort fails to meet the Commission’s obligations under current law. […]

Even before receiving the specifics of the proposal, I strenuously disagree with the intended direction, and hope it is dramatically changed before it is presented to the Commission for a vote later this month.

[March 10]

The Federal Communications Commission has launched an interactive webpage with best practices to assist text message providers and 911 call centers with deploying text-to-911.

The webpage contains materials prepared by Vermont, Texas, and other state 911 call centers (known as public safety answering points or PSAPs) that have already successfully integrated text-to-911, with expertise and insight that can ease the deployment process for others.

For example, the State of Vermont has developed a list of “lessons learned” from its highly successful text-to-911 implementation as well as a series of informational videos for potential text-to-911 users. The webpage is a tool enabling text providers and PSAPs to contribute and refer to comments, best practices, and informational materials. It additionally contains documents from public safety organizations, with Frequently Asked Questions, a checklist of issues that 911 call centers should consider, and technological options available to support text-to-911.

[March 10]

At the SXSWedu Conference & Festival, Federal Communications Commission member Jessica Rosenworcel set out her perspectives on modernizing the E-Rate program.

“At the FCC we recently started a reform effort to modernize our E-Rate system -- what I like to call E-Rate 2.0. Just like with the evolution of any operating system, we need to take the good that we have put in place, build on it, and upgrade it for the future.”

The Three S’s of E-Rate reform: Speed, Simplify, and Spending Smart.

• Speed. In the near term, we want to have 100 Megabits per 1000 students to all of our schools. By the end of the decade, we want to have 1 Gigabit per 1000 students to all of our schools.
• Simplify. We need to reduce the bureaucracy associated with E-Rate.
• Spending Smart. “Spending smart means better accounting practices that the FCC has already identified will free up for more E-Rate broadband support over the next two years. But spending smart goes beyond that. Because on a long-term basis we need to make sure that all E-Rate support is focused on high-speed broadband.”

[March 7]