Federal Communications Commission

The Federal Communications Commission adopted a Report and Order that strengthens its rules governing retransmission consent negotiations. This Order will help curtail a practice that has put upward pressure on cable and Direct Broadcast Satellite programming costs as well as prices to consumers.

The Communications Act requires cable systems and other pay television services to obtain a broadcast television station’s retransmission consent before carrying the station’s signal. The Act also requires broadcasters and pay television service providers to negotiate retransmission consent agreements in good faith.

The Order prohibits a television broadcast station ranked among the top four stations (as measured by audience share) from negotiating retransmission consent jointly with another top four station if the stations are not commonly owned and serve the same geographic market. Joint negotiation by these stations leads to higher retransmission consent fees because the practice reduces competition between the stations. Additionally, the threat of losing the programming of two or more top four stations at the same time gives the stations undue bargaining leverage in negotiations with Multichannel Video Program Distributors. To target collusive behavior effectively, the Order also defines joint negotiations.

Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly with Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly issued statements.

The Commission adopted a Report and Order that advances ongoing efforts to make more spectrum available for flexible use wireless services, including mobile broadband.

The Report and Order represents significant progress in the Commission’s ongoing effort to make available and promote efficient use of spectrum, including through sharing.

Access to these bands will help wireless companies meet growing consumer demand for mobile data by enabling faster wireless speeds and more capacity. Specifically, the Report and Order sets flexible-use regulatory, licensing, and technical rules for 65 megahertz of spectrum in the AWS-3 band, which includes the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands.

The Report and Order establishes a band plan that makes spectrum available in a mix of spectrum block and geographic license area sizes to meet the needs of large and small wireless providers. The Report and Order also establishes construction deadlines and other service rules, including a requirement that AWS-3 devices be interoperable within AWS-3 and AWS-1 frequencies. The Report and Order is the result of years of work across multiple federal agencies and in coordination with industry stakeholders to make 40 megahertz (of the total 65 megahertz) of the AWS-3 spectrum available for commercial use.

This spectrum will be available on a shared basis with federal incumbents in accordance with detailed plans for these agencies to relocate out of the frequencies or share within the frequencies. Chairman Wheeler, Commissioners Clyburn and Rosenworcel, with Commissioners Pai and O’Rielly approving in part and concurring in part. Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly issued statements.

One of the most cherished missions of the Federal Communications Commission is helping to bridge the accessibility gap in communications technologies.

The Accessibility and Innovation (A&I) Initiative was created to promote collaborative problem-solving on accessibility among academic, industry, consumer and government sectors. A signature project of the A&I Initiative is the Chairman's Awards for Advancement in Accessibility (Chairman's AAA) to recognize innovators for contributions to accessible technology. The FCC is now accepting nominations for the third Chairman's AAA. The deadline for submissions is March 31. Now we invite nominations in the following seven categories:

1. Advanced Communication Services (ACS)
2. Employment Opportunities
3. Intellectual and Developmental Disabilities
4. Mobile Web Browsers
5. Social Media
6. Closed Captions
7. Video Description

[Mazrui is Deputy Director, Accessibility and Innovation Initiative]

[Commentary] Making history is exciting, but it’s not easy. In the first-ever incentive auction, participating broadcasters will voluntarily relinquish spectrum rights in exchange for a share of the proceeds, and the recovered spectrum will be sold for wireless broadband use.

The remaining broadcast spectrum will be “repacked,” which means that some broadcasters who remain on the air will be given new channel assignments. That last step may sound anticlimactic, but getting it right will take the concerted efforts of everyone involved. Together we’ll need to craft policies and procedures to transition the broadcasters with as little disruption to the industry and consumers as possible.

That’s why we released for public comment a report that the FCC commissioned from a spectrum consulting firm, Widelity, to help us understand the process and costs associated with the post-auction transition.

[Lake is Chief of the FCC’s Media Bureau]

About a year ago I came to your community and said I have an idea. I said we need to reboot and reinvigorate E-Rate. Here’s something I’ve learned.

It’s good to have friends in Washington -- but it’s better to have an army. And you and thousands of others who are deeply invested in our schools, our students, and the future of education have marched together and put E-Rate reform right at the top of the agenda in Washington.

We have a proceeding at the Federal Communications Commission designed to look at this program from top to bottom. We have reform ideas before us from stakeholders of every stripe. And we have an Administration geared up and in sync with its ConnectED initiative.

But connection to schools is no longer enough. We need speed. We need broadband -- not just to the school door, but to the classroom. Beyond speed, we need simplicity.

The bureaucracy of the E-Rate program has become too much for too many of our schools to bear. So we need to make it easier for beneficiaries to participate in this program. Finally, we need to spend E-Rate dollars smart. We need to phase out old services and make room for more high-speed broadband. We need to restore what inflation has taken away from this program. Then we need spend what it takes to connect all our students -- no matter where they go to school.

The Federal Communication Commission’s Wireline Competition Bureau announces the results of the urban rate survey for fixed voice services, which will be used to determine the 2014 rate floor for incumbent eligible telecommunications carriers (ETCs) and the reasonable comparability benchmark for voice services.

The FCC also seeks comment on a petition to extend the deadline for compliance with the 2014 rate floor. Based on the survey results, the Bureau has calculated that the average local end-user rates plus state regulated fees of the surveyed incumbent local exchange carriers (ILECs) in urban areas is $20.46. Based on the survey responses, the Bureau also calculated the reasonable comparability benchmark for voice services to be $46.96.

The Federal Communications Commission’s unanimous, bipartisan reforms of universal service in November 2011 included changes to make the system fairer for all consumers.

Among these changes was the phase-out of excessive subsidies for basic phone service, which allowed some phone companies to charge their customers as little as $5 a month at a time when the average suburban or urban customer was paying $16. The reforms have been gradually eliminating these excessive subsidies to level the playing field for all consumers and contain the cost of the program, which is funded by universal service fees ultimately paid by consumers.

As we approach the third step of this phase-in, we are seeking comment on providing additional time to allow all interested parties to adjust. We look forward to public comment on this question as we work to make universal service fair for all consumers and businesses.

Commissioner Ajit Pai said: “Today the FCC announces a new ‘rate floor’ of $20.46 a month. What does that mean? Over a million customers in rural areas will face a rate hike of up to 46 percent in the next few months. This is bad news in tough times. Why should the FCC saddle rural Americans with rate increases when doing so may not save the Universal Service Fund a dime and may in fact divert scarce funds away from broadband deployment? And why should the FCC override state-set rates to raise costs for consumers?”
Right now, the economy is good for many people here in Washington, DC. But a recovery hasn’t
yet reached much of rural America. Let’s not add to the challenges our fellow citizens face by increasing
their phone bills. Instead, let’s freeze the rate floor indefinitely and reexamine this misguided policy.

The Spectrum Act establishes a $1.75 billion TV Broadcaster Relocation Fund to be used for reimbursement of eligible relocation costs. In the Broadcast Television Incentive Auction notice of public rulemaking, the Commission sought comment on the types of costs broadcasters and multichannel video programming distributors (MVPDs) are likely to incur and how to determine whether such costs are “reasonable” for purposes of reimbursement under the statute.

Comments in response to the NPRM suggested that the Commission establish cost estimates for categories of reimbursable expenses. The Commission engaged Widelity to aid the Commission in understanding the process and costs associated with the post-incentive auction transition. Widelity has produced a report, “Response to the Federal Communications Commission for the Broadcaster Transition Study Solicitation” along with a “Catalog of Potential Expenses and Estimated Costs” (Appendix B to the Report).

The Widelity Report recognizes that the post-auction repacking process will be complex and that the complexity will vary from station to station. Nevertheless, the Report concludes that, despite the significant challenges that the industry will face, “[w]ith cooperation as well as patience, creative problem solving, and guidance from the FCC and industry groups such as the National Association of Broadcasters, Association of Public Television Stations, and state broadcast associations, the transition can be achieved with the desired outcomes.”

We seek additional input from interested parties on the report and particularly on the Catalog of Potential Expenses and Estimated Costs. We now seek additional comment from industry participants on these suggested prices, as well as any comments on the report and any further comments on the categories of costs included. A final Catalog of Eligible Expenses and Estimated Costs will be released prior to the auction, and we believe the Catalog will provide useful guidance to broadcasters and MVPDs as they navigate the post-auction transition.

On March 31, the Federal Communications Commission is scheduled to vote on a proposal to restrict television broadcasters’ use of joint sales agreements (JSAs).

But the FCC currently doesn’t have the basic facts about JSAs. For example, the Office of Commissioner Ajit Pai (Office) asked how many JSAs there are in the United States among television stations and how many television stations owned by women and minorities participate in JSAs. Today, we still don’t have the answers to either of these fundamental questions. To partially fill this gap, the Office investigated whether there is a link between joint sales agreements and ownership diversity. Using publicly available sources, we estimate that:

• 43% of female-owned full-power commercial television stations currently are parties to JSAs.
• 75% of African-American-owned full-power commercial television stations currently are parties to JSAs.

“These findings raise serious questions,” Commissioner Pai said. “Why is the FCC targeting pro-competitive sharing arrangements that appear to disproportionately benefit female and African- American broadcasters? If the Commission forces broadcasters to terminate JSAs, how will that affect diversity? Why is the FCC rushing to a vote rather than taking the time to gather basic facts and study the effect of its proposal on ownership diversity? The Commission should not accelerate the troubling trend of declining minority ownership.”

The April Open Meeting of the Federal Communications Commission has been rescheduled from Thursday, April 24, 2014 to Wednesday, April 23, 2014.