Doug Halonen

The pay TV industry has scored points in its continuing campaign to reform retransmission consent, both on Capitol Hill and at the Federal Communications Commission -- but any significant additional reforms are more likely to come from the agency than Congress, industry lobbyists say.

“The bigger threat on retrans[mission] looms at the FCC with a chairman who is demonstrably hostile to the terrestrial broadcast system,” says one leading broadcast attorney who asked not to be identified.

Whether Congress ever takes additional steps to reform retransmission or not, Chairman Wheeler has already teed up a further notice of rulemaking seeking comment on whether to eliminate the agency’s network nonduplication and syndicated exclusivity rules, regulations that make it easier for stations to protect the exclusivity of their programming in their markets.

Former Federal Communications Commission Chairman Newt Minow and former National Telecommunications and Information Administration chief Henry Geller have urged the agency to plug what critics allege is a loophole in existing political advertising law that allows nonprofit groups to protect the identities of donors for some political broadcast attack ads.

“This pervasive use of secret money undermines the democratic process,” they said in a petition filed at the FCC. “Full sponsorship disclosure is the law.”

They are urging the agency to act, because FCC rules only require disclosure of the actual sponsor of the issue ads -- not also the individuals or groups who donated funds to the sponsor of the ads. In their petition, Minow and Geller insist that the FCC already has the power to require the additional donor disclosure.

“It is the responsibility of the FCC to enforce the long-established rule,” the two said in their petition. “The voting public needs and is entitled to know who is trying to persuade it.”

Federal Communications Commission Chairman Tom Wheeler has invited incentive auction stakeholders to meet with him personally to take their best shots at his proposed rules for the auctions -- before the agency adopts the regulations as widely expected on May 15 -- but at least some broadcasters are complaining that their meeting with the chairman appears to be little more than window dressing.

“On some levels, it’s an insult,” says one broadcast group representative, of the planned April 22 meeting between Chairman Wheeler and representatives of the National Association of Broadcasters, the TV networks, public broadcasters, network affiliate and station group representatives. “It’s hard to believe this will be a meaningful feedback session,” the station group rep added, of the half-hour session. “It will take half that time for everybody to go around and introduce themselves. What’s the point of dragging us in there?”

NAB coalition members, who have been decidedly unenthusiastic about the auctions from the get-go, are complaining in part because their half-hour “feedback” session with the chairman is allegedly too short to provide for substantive discussion -- and appears to be taking place after the chairman has already forwarded his rule recommendations to his fellow commissioners.

A National Association of Broadcasters request for the Federal Communications Commission to launch a National Broadcast Plan may not be in the industry’s best interests -- at least not according to Commissioner Michael O’Rielly.

“I worry what could be in parts of such a plan for your business,” said O’Rielly, one of the two Republican FCC commissioners. Commissioner O’Rielly suggested that broadcasters think twice before opening the door for a review by the same commissioners who recently voted to crack down on joint sales agreements, “the same people who just decided things that were against your interests.”

FCC Chairman Tom Wheeler said the agency would conduct such a review, if Congress mandated and funded it. That was a sentiment his two Democratic colleagues -- Mignon Clyburn and Jessica Rosenworcel -- subsequently shared.

The Federal Communications Commission won’t retaliate against broadcasters who refuse to participate in a planned agency outreach effort intended to educate broadcasters about why they might want to participate in the agency’s incentive auctions, a top agency official said.

“If someone from the FCC calls ... and you’re not interested and you don’t want to talk, ‘No thank you,’ is fine, and there will be absolutely no penalty,” said Howard Symons, vice chair of the FCC’s Incentive Auction Task Force.

Some broadcasters have raised concerns about the appropriateness of the planned agency outreach because the FCC licenses broadcasters and reviews station transactions. But Symons told broadcasters during the National Association of Broadcasters session that the FCC takes “very, very, very seriously” the statutory directive that auction participation be voluntary.

“I don’t think we can be passive as an agency and make this auction work,” Symons said. “But that doesn’t mean that you’ve got to take the meeting, that you’ve got to be interested,” Symons continued. “That’s not what voluntary means.”

The pay TV industry’s effort to include major retransmission consent reform provisions in satellite TV legislation appears iffy at best -- at least according to key congressional staffers.

“We have made it very clear in the House side that STELA [the Satellite Television Extension and Localism Act] is not the right place to address retransmission consent reform,” said Grace Koh, a House Commerce Committee staffer.

Also during the same session, Shawn Bone, a top Senate Commerce Committee staffer, said that the committee’s chairman -- Sen Jay Rockefeller (D-WV) -- has previously taken the position that retransmission disputes are between two companies, and should remain that way. “There’s a great deal of reticence -- I think both from Chairman Rockefeller’s perspective and broadly on the Senate Commerce Committee -- from intervening in these disputes,” Bone said, although adding that, “nothing’s off the table.”

Judge Koh also said House GOP committee leaders believe a cable TV industry request to include a reform provision in STELA that would eliminate the must-buy rule should be shifted to a planned multi-year review of the entire Communications Act.

The Federal Communications Commission’s new crackdown on joint sales agreements is not part of an agency effort to spur TV stations to participate in the incentive auction -- or so said Bill Lake, chief of the FCC’s Media Bureau.

“The FCC is not having a war with over the air broadcasters,” Lake said. He also said that while the FCC regularly granted new JSAs over the past decade, the agency also has regularly warned broadcasters that a crackdown might be coming.

In addition, he said that the spectrum that the FCC needs to make the incentive auction a success is mostly in larger markets, and that the about 130 existing JSAs are mostly in smaller markets.

“So there’s really a disconnect there,” Lake said. He said the FCC will entertain requests for both types of waivers but that ones based on programming independence face an uphill battle. “I frankly think it would be very difficult for someone to justify a waiver of that particular ilk,” he said.

It was a bad day for broadcasting at the Federal Communications Commission, and perhaps a worse one for the National Association of Broadcasters, the lobby that is supposed to make sure the industry doesn't have any bad days anywhere in Washington.

Despite the vigorous opposition of the NAB, the FCC closed loopholes in its local ownership rules that have allowed broadcasters to effectively operate multiple stations, sometimes two Big Four affiliates, in small and medium markets. It banned new joint sales agreements (JSAs) and ordered broadcasters to unwind existing ones within two years.

The NAB is "getting pounded" at the FCC, said one group TV station executive and NAB member, who asked not to be identified. But the news out of the nation's capital is not all bad for NAB, according to communications policy players. The association is holding its own on Capitol Hill, where the battles may be fewer, but the stakes are considerably higher.

The NAB’s ineffectiveness at the FCC is worrisome to broadcasters because other important issues are currently in the regulatory pipeline. Among them are the UHF discount and the sports blackout rule. The FCC is considering eliminating both.

After Free Press's Lauren Wilson suggested on Twitter that Federal Communications Commissioner Ajit Pai's concern for people of color is insincere, Commissioner Pai tweeted back that he is proud of his "Indian heritage and I am never going to apologize for standing for what I believe is right.” Wilson then tweeted an apology.

The exchange came in the context of the controversy surrounding FCC Chairman Tom Wheeler's plan to ban joint sales agreements, which Free Press supports and Commissioner Pai opposes.

In an effort to head off an all-out Federal Communications Commission ban on joint sales agreements, the National Association of Broadcasters rolled out a detailed compromise proposal that would allow some JSAs to continue.

The proposal essentially asks the FCC to carve out an exemption from the blanket ban on JSAs that the agency is widely expected to adopt as soon as March 31. The exemption would protect JSAs that broadcasters can show provide public interest benefits and meet a series of specific tests intended to limit one station from using a sharing agreement to control one or more additional TV stations in the same market.

Under one key test in the NAB proposal, a brokered station in a JSA deal would be required to retain control of at least 85% of station programming and keep at least 70% of the brokered station’s net advertising revenue. In addition, the NAB proposal would require the licensee of the brokered station to retain “ultimate control over rates charged for advertising” and to retain an “option to hire its own advertising sales staff or retain other sales services,” said NAB President/CEO Gordon Smith in a letter to FCC Commissioner Mignon Clyburn.

Also under the NAB proposal, it would be up to the broadcaster who wants to continue an existing JSA -- or create a new one -- to “demonstrate clear and specific public interest benefits,” Smith said.