Tagged: FCC Toggle Comment Threads | Keyboard Shortcuts

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

    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).

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

    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
    Tags: FCC,   

    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.

     
  • Patrick McFadden 11:04 am on April 30, 2015 Permalink
    Tags: FCC,   

    What to Expect When You Are Expecting (TV White Spaces Comments) 

    Last month, NAB filed a petition asking the Federal Communications Commission (FCC) to amend certain rules governing the use of TV White Spaces (TVWS) devices. In particular, we asked the FCC to require fixed TVWS devices to eliminate the illusory notion of “professional installation,” an undefined concept that allows an installer to enter the location of a device in the TVWS database. We’re asking the FCC to require automatic geolocation capability, and to hold database administrators accountable for falsified information entered into the database.

    While oppositions and comments on our petition are not due until tomorrow, the responses are predictable, and, in the public interest we thought we’d provide a little primer to what you are likely to see from TV white space proponents and their proxies.

    TVWS COMMENT #1: “NAB cannot identify a single instance of harmful interference caused by an unlicensed device.”

    This is a personal favorite, because it’s misleading on so many different levels. First, it’s a little like saying you shouldn’t wear a seatbelt because you haven’t yet had a car accident, or you shouldn’t have homeowners insurance because your house hasn’t yet burned down. No adult uses this approach in real life. Instead, we take reasonable precautions, precisely to avoid bad outcomes we can clearly anticipate. Second, there’s no surefire way to know if there has been harmful interference to licensed services from unlicensed devices. If a television viewer can’t receive a particular channel, she has no way of knowing if that’s due to a neighbor’s use of a TVWS device; she may just assume she can’t receive that channel and give up. Third, there are less than 600 TVWS devices operating nationwide right now. Yes, in the entire United States. Saying TVWS devices haven’t yet caused interference is a little like saying you haven’t yet been attacked by Bigfoot. It’s a true statement, but it doesn’t prove anything, and you probably don’t want to brag about it in public.

    TVWS COMMENT #2: “Problem? What problem? The FCC has cleaned up the database.”

    Not long after NAB filed its petition, the FCC went to work to clean up the database. TVWS enthusiasts are likely to say that the database has now been thoroughly scrubbed and polished and, as a result, there is no longer a problem. This is the equivalent of a teenager telling his parents he cleaned his room when all he did was shovel everything into the closet and slam the door. What you won’t hear is that anyone – yes, even you! – can register a TVWS device in the database right now, using a falsified location, and get access to channels you should not be able to use. Are you in Washington, D.C. and stuck without a single vacant TVWS channel? Don’t worry! You can easily register your device and enter its location as rural Montana to get access to channels that are currently occupied by local licensed users. This is the result of an obviously broken system destined to lead to interference problems.

    TVWS COMMENT #3: “TV White Spaces are really, really cool.”

    They may try to distract you. Because they don’t want to acknowledge the problem, and because they can’t deny the risk of interference, one or more TVWS enthusiasts will point at a really shiny object, and hope you look. They’ll wax poetic about the untapped, limitless benefits of more unlicensed spectrum for their corporate financiers. They’ll promise “Super WiFi,” “WiFi on steroids,” increased broadband competition, and expanded rural service. Of course, they won’t acknowledge that there are only a few hundred of these devices operating right now, five years and counting after the FCC approved the current rules.

    TVWS COMMENT #4: “NAB’s petition is premature. Don’t worry.”

    Kicking the can down the road is a great way to try to outlast the opposition. Some will argue that, even if there is a problem, the FCC can easily fix it later. This is, of course, shortsighted; rumor has it horses are really hard to chase down once they’ve been let out of the barn. Instead, a more reasonable approach is to establish clear rules of the road and allow manufacturers to start incorporating automatic geolocation capability in new devices before the market heats up. If, and it’s a big if, white spaces technology ever actually does live up to the rather large promises its proponents have been making, retrofitting thousands or hundreds of thousands of devices to incorporate geolocation capability will be costly and disruptive. That’s exactly the outcome NAB is trying to avoid.

    NAB is eager to create an environment in which TV White Spaces can be used effectively while protecting existing licensed users. That’s why we have proposed only modest rule changes to help make White Spaces work for everyone. The rules already require some TVWS devices to have automatic geolocation capability – we’re merely asking the FCC to extend that requirement to fixed devices, which transmit at high power. We’re also asking the FCC to take the simple step of incorporating some basic accountability into its database administrator rules, so as to avoid the next batch of John Q. Public registrations with addresses in Anytown, USA, and phone numbers of 867-5309. These changes aren’t complicated, and they aren’t costly. Let’s get this done.

     
  • Jerianne Timmerman 10:45 am on February 19, 2015 Permalink
    Tags: FCC   

    Double Standards, DISH and Designated Entities 

    The FCC should have been taking a victory lap following its $45 billion AWS-3 auction, which closed in late January. Instead, the agency was left fending off widespread criticism that “loopholes” in its auction rules effectively gave billions of dollars in subsidies to one of the largest corporations in the country.

    These criticisms arose from disclosures that two companies in which DISH Network reportedly has an 85 percent stake claimed about $3 billion total in “bidding credits” when acquiring licenses in the FCC’s AWS-3 auction. Bidding credits allow a bidder to reduce by some percentage its actual payment on its winning bids following an FCC auction. In this instance, DISH’s interests in Northstar Wireless and SNR Wireless – smaller companies with “designated entity” status under the FCC’s auction rules – will allow DISH to reduce its bill to the Treasury from around $13 billion to about $10 billion. Unsurprisingly, the headlines generated across the political spectrum decried these “government handouts” to large corporations and the “rip[ping] off” of U.S. taxpayers.

    While the public reaction focused on the massive subsidies afforded to DISH, broadcasters in particular were left scratching their heads. Less than a year ago, the FCC decided to treat a broadcast TV station that sells more than 15 percent of the advertising time of another TV station in the same market as owning that second station. As a result, stations in most markets are forbidden from selling more than 15 percent of the ad time of another station under the FCC’s decades-old broadcast ownership rules.

    How in the world does the FCC square its treatment of various forms of ownership? Why can’t a small TV station in South Dakota or South Carolina sell 20 percent of the advertising time of another station without the FCC saying it “owns” that station, when DISH can possess an 85 percent interest in a company without the FCC counting that as ownership?

    These diametrically opposed policies cannot be reconciled or justified. The FCC decided to attribute TV joint sales agreements (JSAs) under its broadcast ownership rules due to the supposedly significant influence that the joint sale of even small amounts of advertising time would provide one TV station over another. Indeed, the FCC is so convinced of the supposed harms of these JSAs that even long-established agreements expressly approved by the Commission must now be unwound, regardless of the detriment to the two stations.

    But now, remarkably, the FCC appears poised to determine that DISH’s 85 percent interest does not so significantly influence the two designated entity companies, thereby resulting in a free $3 billion to DISH in the AWS-3 auction. Even for broadcasters unfortunately inured to inconsistent, unfair and anti-competitive regulatory treatment, this outcome reaches a new low.

    NAB and its members have for decades fought the FCC’s disparate restrictions on the multiple and cross-ownership of television and radio stations – restrictions that do not apply to competing video and audio providers, including cable, satellite and online. The FCC must stop this unfair treatment if it truly cares about competition, diversity and localism. Rather than imposing uncompetitive ownership structures on broadcast stations that provide free local service, while at the same time shelling out billions in subsidies to pay-TV operators that charge consumers ever-higher subscription fees, the Commission should reform its rules to let broadcasters compete on equal footing.

     
  • Rick Kaplan 1:20 pm on April 29, 2014 Permalink
    Tags: FCC, ,   

    I Suppose It’s Worth A Try (When You Are On a Roll…) 

    There is overstating and then there is overstating.

    Last week, NAB proposed to the FCC commissioners some changes to the 600 MHz band plan included in the draft incentive auction order currently under review at the Commission. Specifically, NAB asked the FCC to shelve its planned 6-to-11 megahertz duplex gap that would be shared between wireless and unlicensed services, and instead adopt NAB’s “Plan B” and use a flat 10 or 11 megahertz duplex gap, of which 4 or 5 megahertz would be reserved exclusively for wireless microphones. NAB believes this is both fair and essential, as licensed wireless microphone users will be foregoing the current two exclusive 6 megahertz channels in favor of only 4 or 5 megahertz vital to providing breaking news coverage in local communities throughout the country.

    In response, New America Foundation’s Michael Calabrese blasted NAB’s proposal, saying that it “would be a death sentence for unlicensed broadband and innovation post-auction.”

    That statement almost made me feel badly. Were we essentially recommending an end to unlicensed innovation as we know it? Would our proposal lead to no more WiFi, garage door openers or cordless phones? Are we proposing to kill off baby monitors, and putting infants at risk across the nation? What have we become?

    After some serious soul-searching, my grandmother’s famous chicken soup (good for the soul) and a long hard look in the mirror, I looked to the facts to see if Mr. Calabrese was really on to something.

    Fact #1: In March, the FCC massively expanded the spectrum designated for unlicensed services by allocating more than 100 megahertz for that purpose in the 5 GHz band.

    Fact #2: Just last week, the FCC launched a proceeding to free up as much as 150 megahertz more spectrum for unlicensed services, this time at 3.5 GHz.

    Fact #3: In the draft incentive auction order, the proposal for the 600 MHz band is likely to render the duplex gap unusable for unlicensed services. It envisions scenarios where the duplex gap would be anywhere between 6 and 11 megahertz. Any plan allocating less than 11 or 12 megahertz between LTE uplink and downlink will, according to the unlicensed community, render that spectrum far less valuable.

    Fact #4: The FCC’s draft incentive auction order opens up channel 37 and a new guard band that will give unlicensed users brand new nationwide bands, including, for the first time, spectrum in major markets such as New York and Los Angeles.

    Fact #5: Under the draft incentive auction order, not only do wireless microphones lose well over half of their shared spectrum, but licensed wireless mic operators lose all 12 megahertz that are designated for exclusive use. Thus, if approved, wireless microphones will have gone from more than 60 megahertz of exclusive spectrum to zero in just five years. If there is any kind of “death sentence” in the draft order, it’s clearly just for wireless microphones.

    Unlicensed spectrum advocates – primarily Google and Microsoft – are on a serious roll in the spectrum department. In proceeding after proceeding, they keep racking up more free spectrum. And I completely subscribe to the theory of when you are on a roll, you should keep shooting. Mr. Calabrese’s play is really no more than a “heat check” for the spectrum world and Mr. Calabrese, along with Google and Microsoft, is probably feeling a lot like the Golden State Warriors’ Steph Curry right now.

    Thirty-foot jump shots aside, it is clear that absolutely no innovation is lost under NAB’s “Plan B.” In fact, the unlicensed community will exit 2014 having earned massive allocations of spectrum, including new nationwide spectrum blocks in the 600 MHz band. Thus, NAB’s proposal does nothing to drive a stake through the beating heart of unlicensed broadband innovation.

    On the other hand, it is hard to overstate the harm the current draft order would do to wireless microphones and the essential public service they help deliver. These devices – an innovation themselves, for what it’s worth – help broadcasters on a daily basis cover breaking news and weather in local cities and towns across the nation. When the president followed developments in the Boston bombing tragedy, he watched multiple local Boston broadcast TV stations to get well-informed, up-to-date, on-scene reporting. In order for that to happen, broadcasters relied on wireless microphones to deliver the news as it was breaking.

    Some unlicensed spectrum advocates believe the TV white spaces database to be some kind of panacea. It is not. FCC rules require that devices check the database only once every 24 hours. Thus, broadcasters can only be sure to be free from interference from unlicensed devices sharing their wireless microphone channels if the world is kind enough to inform them of breaking news a day in advance. And even if the FCC finally amends its rules to permit more frequent checking – which it should have done at the outset – in times of crisis wireless networks often go down, rendering the database useless. That is exactly what happened in Boston following last year’s horrific bombing.

    In a more temperate moment, Mr. Calabrese also noted that his coalition “strongly supports the NAB’s position that the FCC should continue to reserve two vacant broadcast channels for priority use by licensed wireless microphones.” He states that “[t]hese channels could be designated post-auction in each market and therefore would not in any way reduce the Commission’s flexibility during the auction.”

    To be clear, NAB’s “Plan A” that Mr. Calabrese refers to involves retaining today’s two exclusive channels pre- and not post-auction. This is because a post-auction reservation means essentially nothing in all of the major markets. In most of the top 100 markets, following the auction there will be no spectrum whatsoever available for reservation. Repacking and reallocation will take care of that.

    Now I understand the eagerness of many companies – especially major tech companies and wireless carriers – to feed off of the broadcaster carcass in the upper 600 MHz band. The Chicken Little approach, however, won’t get it done. Facts will. And the fact is that wireless microphones need some small exclusive home in their 600 MHz band in order for newsgatherers to keep providing the kind of on-scene up-to-date information for their viewers. There is a place for nearly everyone in the incentive auction, and both NAB’s Plan A and B for wireless microphones reflects the best and most appropriate balance.

     
  • Rick Kaplan 2:03 pm on April 9, 2014 Permalink
    Tags: FCC   

    The Missing Piece of Chairman Wheeler’s Broadcast Vision 

    At the annual NAB Show in Las Vegas on Monday, NAB President and CEO Gordon Smith publicly called for the Federal Communications Commission (FCC) to develop a National Broadcast Plan. He suggested that this plan, inspired by the National Broadband Plan, should outline the FCC’s vision for how the government can help drive, or at least not impede, innovation and investment in broadcasting.

    Broadcasters have been craving a coherent and holistic FCC vision for their industry for quite some time. Rather than be subject to piecemeal and often contradictory regulations and expectations, broadcasters yearn to understand where the agency sees them as part of the overall telecommunications landscape. Are broadcasters “special” because they are the lone voice of localism and diversity, and therefore will be regulated as such? Or is the FCC going to measure the relative value of the industry on how it competes with the wireless and cable industries, and thus level the playing field by freeing up broadcasters from their shackles of unparalleled regulation?

    FCC Chairman Tom Wheeler responded in a speech Tuesday to Smith’s call by setting forth his high-level vision for broadcasters. The chairman should be commended for sharing his long-term view of the industry. It’s essential that broadcasters understand how their regulator perceives their role within the overall telecommunications landscape.

    The chairman explained that the broadcast industry is at a crossroads, saying, “We are at an inflection point where broadcast licensees can move from being the disrupted, to being the disruptor.”

    He is right on the money. Broadcasters have the potential collectively to be a major disruptor. They can provide the increasingly vital competition to the heavily consolidated – and ever consolidating – cable and wireless industries.

    The chairman is off target, however, with respect to the manner in which broadcasters can most significantly be disruptive. In his mind, broadcasters should aim to become another Netflix; in other words, they should focus on delivering their content over the Internet. He asked broadcasters to focus on “digital,” meaning they should focus more on their Web properties than broadcasting over their own wireless networks.

    I don’t know about you, but a future that gives even more power to the incredibly consolidated and exceedingly powerful cable and wireless industries – one that puts them as our gatekeepers – sounds like a future that ultimately only disrupts broadcasters, and not the overall ecosystem.

    In my view, with the right policies and flexibility in place, broadcasters can leverage their exceptional local content and, perhaps most notably, superior transmission system, to truly shake up the wireless and cable grip on the marketplace. Broadcasters even have a terrific opportunity to serve as a driver of the over-the-top industry (as opposed to a mere client), by allowing cord-cutters to receive free broadcast TV while supplementing with over-the-top content.

    The chairman’s own words brought our differing visions into stark focus:

    “[Broadcasters] possess the two most important components of a successful digital strategy: compelling content – specifically, the most important content: local content – and the means to promote it.”

    What is most notable about this passage is what is missing. Most TV broadcasters in attendance assumed that the chairman would note that the two best broadcast assets are local content and a unique and spectrally efficient architecture. The omission of the latter is important because it demonstrates that the chairman does not see, as many broadcasters do, a game-changing value in our one-to-many architecture. At no point did he acknowledge this competitive advantage. The only value of our architecture in his mind was as a wireless sandwich board, advertising how great our over-the-top content is.

    It is not lost on many broadcasters that the chairman’s vision happens to fit nicely into two of his three highest priorities: the spectrum incentive auction and the open Internet. First, if broadcasters buy into his vision of them as over-the-top content providers, they don’t really need their spectrum and therefore they should participate in his incentive auction. Second, if broadcasters become over-the-top content providers, they should be concerned about broadband providers slowing down their service or demanding payments for delivery to consumers, and thus should line up in support of the chairman’s controversial drive for robust rules governing the Internet.

    To what degree the chairman’s vision is truly comprehensive or instead a clever way of convincing broadcasters to support his legacy items is anyone’s guess. At this point, it’s frankly too hard to judge.

    Either way, forward-thinking broadcasters truly understand the value of their transmission system and the value of their spectrum. They also know that spectrum value will only increase. That’s why broadcast companies have spent over $50 billion in buying and selling stations for years. Despite the chairman’s not-so-subtle warning that the incentive auction is a “once-in-a-lifetime opportunity,” broadcasters get that their spectrum values will not drop anytime soon.

    Indeed, many broadcasters are looking to do far more with their spectrum, whether it is higher quality video (4K and 8K), robust delivery to mobile devices or new IP-based solutions for emerging needs such as machine-to-machine technologies. They are also looking to help address the challenge of delivering wireless video; that pesky issue that causes wireless networks to slow down and even fail altogether. And broadcasters can do this for consumers for free; i.e., video delivery over a broadcaster’s transmission system that won’t eat into expensive wireless data plans.

    The chairman’s remarks demonstrate that broadcasters have their work cut out for them. Unlike the chairman, they don’t, and likely never will, view themselves as mere content companies or websites. Obviously their digital properties are a strong compliment to their core businesses. In fact in most markets the most viewed local websites are already broadcast television and radio websites. And local broadcasters continue to find new ways to go over-the-top with their network partners. But the industry also possesses a unique and spectrally efficient delivery system that should not be overlooked. In fact, the FCC can’t overlook it. Our architecture – both radio and television – has to be a key component in addressing our nation’s spectrum needs in the future.

    A National Broadcast Plan would look at the ways in which our transmission system could make a meaningful difference in spectrum policy and services to which all Americans have access. A meaningful National Broadcast Plan would not shrink broadcasting into a mere Web service, but grow it into a real competitive force against wireless and cable. If all we do is ride on their backs, we will ultimately always be beholden to them. For a chairman whose watchwords are “competition, competition, competition,” his remarks conspicuously overlooked meaningful intermodal competition in the delivery of video content.

    Broadcasters want to be a major part of the future, and not just in the way in which they’ve been an integral part of the past. Broadcasters – both radio and television – want to continue to morph technologically to help address the need for competition, localism and diversity. We cannot do that by surrendering spectrum and putting ourselves and our viewers at the mercy of the wireless and cable industries. We must be a true competitive force, and we need the FCC to have the vision and courage to be a partner in allowing us to do so.

     
  • jmago2014 12:31 pm on March 11, 2014 Permalink
    Tags: FCC, JSA,   

    Looking to the Law 

    As a General Counsel – now at NAB and formerly of the FCC – I tend to believe that adhering to the law is a good thing.  That is why I am very troubled by the broadcast ownership order now circulating at the Commission and the blog posts filed by senior FCC officials supporting it.

    The very first line of the Chairman’s blog post makes it surprisingly clear that the agency must take a closer look at the law before moving forward on the proposed order. His post describes the FCC’s quadrennial obligation to review the broadcast ownership rules as one to “determine if they need to be modified to serve the public interest.”  That is not the law.

    Section 202(h) of the 1996 Telecommunications Act which imposes the quadrennial review requirement on the FCC was adopted as part of a deregulatory framework. The statute states that the Commission “shall determine whether any [broadcast ownership] rules are necessary in the public interest as the result of competition.” And, it goes on to say that the Commission “shall repeal or modify any regulation it determines to be no longer in the public interest” (emphasis added).

    Given this directive, I find it very hard to understand how one could conclude that reaching back to a docket from 2004 to increase regulation of joint sales agreements (JSAs) without any consideration of the larger picture or change in the marketplace is consistent with the directive of Section 202(h).

    I am even more perplexed and troubled that the apparent basis of the decision to declare television JSAs attributable is a sweeping and inaccurate generalization that JSAs necessarily create de facto ownership and thus violate existing ownership rules.  The blogs do not reference or apparently consider the very significant database of JSAs that resides at the FCC. Instead, they draw conclusions from Securities and Exchange Commission (SEC) filings.  Those filings respond to rules and goals established by the SEC for a very different purpose than FCC licensing. SEC filings are not a part of FCC precedent or law.

    Indeed it is striking that the blogs make no reference to the decades old FCC indicia of control: decision-making authority over programming, personnel and financing. Those indicia led the FCC staff to approve at least 50 JSA arrangements since 2011, making clear in their review that the licensee must control at least 85% of programming and retain at least 70% of net advertising revenue. Also, to pass muster, the terms of the deal must apply at least 20% of station value to the license value.  The FCC is not free to ignore precedent.

    Similarly, as a matter of law, the FCC is not free to simply ignore the record before it. Here, basing a decision on gross generalizations that JSAs are intended to get around ownership rules is wrong.  Adhering to the law in this case requires the agency to take a hard look at the evidence in its own records and consider the presentations made by NAB and others – presentations that demonstrate the varied nature and very real public interest benefits of television JSAs.

    Finally, adhering to the law in this case means taking the directive of Section 202(h) seriously. The Commission must look at the local television ownership rules in light of current competitive conditions. That cannot mean starting another never-ending quadrennial review while tightening restrictions on local broadcast stations alone. 

     
  • Rick Kaplan 11:47 am on June 25, 2013 Permalink
    Tags: , , FCC, Genachowski, , Spectrum Act, Wireless   

    What Consensus Really Means and the Importance of Driving It 

    In December, the U.S. House Energy and Commerce Committee conducted an oversight hearing on the Federal Communication Commission’s (FCC) implementation of the Spectrum Act, and specifically the Commission’s work on the upcoming voluntary broadcast incentive auction. One of the most instructive moments of the hearing occurred during a series of questions posed to then-FCC Chairman Julius Genachowski by Rep. Ed Markey (MA-5). The congressman repeatedly asked Genachowski varying versions of the following questions:

    So again, do you have a process that’s totally fair to the broadcasters and to the wireless industry that’s in place? Have you had them in your office simultaneously with their engineers to talk about the issue so that you can hear and your experts can hear the differences which they have?

    . . . .

    Do you ever have a meeting yourself with the engineers in the room with the other, you know, from all industries you’re sitting there with you? Are engineers hearing the disagreements?

    The congressman was pushing the chairman to see if he and/or his staff were taking an active leadership role and directly engaging with industry to tackle this extremely complex proceeding. In effect, he was urging the FCC to drive consensus – to bring stakeholders together to see if there is a sweet spot where those most affected by the auction can find value and buy into the process. Thus, rather than passively perusing the filed comments in a back room and then eventually one day producing a final order seemingly out of thin air, he was suggesting that the FCC should be getting everyone in a room and driving towards a decision.

    Had that happened yet at that point? No.

    Has it happened in the more than six months since the Commission was urged to do so? No. (That is, unless we count a lone public workshop that was followed up in record time by a Public Notice unsurprisingly having little to do with what was actually achieved at the workshop).

    In the absence of a staff process designed to drive consensus through openness, transparency and engagement, however, diverse industries and public interest groups have assembled on our own to work through the various challenges presented by the auction and attendant broadcaster repacking. These conversations have led to a great deal of progress, and even consensus on some major issues.

    Have we found unanimity? Of course not. To be clear; reaching consensus is not the same thing as unanimity. Certainly everyone doesn’t have to agree for a general consensus to emerge. Our work has moved the ball far down the field on typically contentious issues. And we believe strongly that the Commission staff should have adopted, and should be adopting, a “get in the room together” approach so we can achieve an expeditious and successful conclusion to the pre-auction process.

    Industry and public interest progress is nowhere more apparent than the general consensus that emerged concerning the defining feature of the band plan offered in the original incentive auction Notice of Proposed Rulemaking, which widely separated the wireless uplinks and downlinks and placed in between them high-powered broadcast operations. By sitting down together – outside the traditional and somewhat opaque FCC comment process – every company and organization invested in the outcome of the auction (except literally one) agreed that the proposal was an engineering nonstarter. This conclusion was facilitated by broadcast, licensed wireless and unlicensed wireless engineers conferring, sharing information and working towards what would best serve the public interest.

    Last Friday, the FCC posted a blog entitled, “A Band Plan that Serves the Public Interest,” which along with some previous staff remarks, appears to imply in response to growing criticism over the staff’s proposed plans, that only the Commission, and not industry or the public interest community, has the public interest truly in mind. Nothing could be further from the truth, especially in this instance where what is at stake is delivering high quality broadcast and wireless signals to consumers. Indeed, a band plan in the public interest is most likely to result from a process that engages stakeholders in a meaningful fashion and thoroughly examines all of the thorny issues involved.

    We do not appear, however, to be headed in that direction. Most notably, in its unyielding quest and determination for reclaiming variable amounts of spectrum in different markets, the inherent interference consequences of a variable approach are simply being ignored. The staff steadfastly refuses to study the issue with any rigor, model it or even ask a single question about it.

    With respect to the challenges of variability, NAB has itself adopted a “getting everyone in the room” philosophy, even without the incentive auction staff leading the way. At stake is significant co- and adjacent channel interference that affects broadcast and wireless operations and arises under most variable band plans. The problem in the most basic terms is this: If Market A (e.g., New York) clears less spectrum than adjacent Market B (e.g., Philadelphia) and therefore Market A continues to have broadcast operations on channel X (e.g., channel 46) while Market B moves to wireless operations on that same channel, the wireless and broadcast operations on that shared channel will interfere with one another. There is no doubt this is a serious issue. And even though the Wireless Bureau dismissed the problem without any analysis (in a nonsensical footnote in its Public Notice), following the bureau’s Public Notice, AT&T, Verizon Wireless, Qualcomm, Ericsson and others have joined in to second the notion that further work on the subject is required.

    We understand why variability could be of great benefit to the Commission’s auction designers at Stanford, but its potential positives do not necessitate that we should turn a blind eye to inconvenient engineering realities. As we’ve learned from a number of interference missteps in the not-so-distant past, including the frustration on the part of the wireless industry with the interference between channel 51 and the 700 MHz A block, even if you look the other way and pretend there’s nothing to see, interference will come back to bite you where it counts one way or another.

    Even though we’ve identified a serious concern, we are not arguing that we are at the end of the variability road. We are merely stating that we’ve identified a potentially fundamental problem and, at the very least, this must be the beginning of the road. It’s not enough to say, as the blog post did, that “[b]y implementing a band plan that supports variation between markets, we would not be forced to limit the auction to the amount of spectrum available in the least cleared markets.” While true, that completely neglects the question precedent of whether, from an engineering perspective, variability is possible or even wise.

    Once again, rather than cross our fingers and simply hope that we don’t end up on the wrong end of an uninformed and therefore arbitrary decision, we’ve actively engaged with stakeholders across industries on the issue. We’ve laid out everything we know about co- and adjacent channel interference, not only in filings at the FCC, but in data we’ve openly shared throughout the commercial wireless and unlicensed industries.  We have one aim: to figure this issue out, one way or another, so that the Commission can truly have a successful and timely auction.

    We have also laid out an alternative plan should the interference inherent in variability not be worth its benefits. Our nationwide non-variable plan incorporates three relatively easy steps:

    • After setting a spectrum acquisition target (e.g., 84 MHz), lay out the various nationwide repacking scenarios to determine in what areas the Commission must have volunteers and how many it needs.
    • Determine how much revenue will likely be raised from a forward auction from the target amount of nationwide spectrum.
    • Use those anticipated (and soon to be realized) funds to pay broadcasters in areas where the spectrum is actually needed, and repack broadcasters to the nationwide spectrum target in markets where no volunteers are needed.

    This proposal helps the Commission maximize its use of the information it has up front – where it will, and will not, need participants under various scenarios – and then focus its financial incentive efforts on the areas where volunteers are truly needed. If this is done correctly, we believe the Commission can develop a great wireless band plan that clears the same robust amount in every market (international coordination notwithstanding), and leads to a harmonious balance between broadcasters and wireless operations in the new 600 MHz band. Furthermore, it eliminates the co- and adjacent channel interference threat that looms large under most variable scenarios.

    We remain committed to driving a process that is best for the public interest and thankfully the Acting Chair and Commissioners have each made clear that they recognize the need for engagement and balance among industries. By engaging with all stakeholders, we’ve been able to find large areas of general consensus on a number of issues, which should help the Commission move expeditiously in this process. We will continue this push, all with the aim of creating a band plan and auction that serves free, over-the-air broadcast viewers as well as licensed and unlicensed consumers, otherwise known as the public interest.

     
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