Turn Out the Lights: FCC Sets Expiration Dates for End of Analog and Out-of-Core LPTV Operations

Posted by David G. O’Neil on July 21, 2011

The FCC has announced the dates by which LPTV stations must cease operating in analog and on the out-of-core channels (Channels 52-69).  The deadlines are necessary to accommodate the digital transition of LPTV stations and to make the out-of-core channels available for wireless services in the 700 MHz band. 

LPTV stations operating on one of the out-of-core channels must cease operations by December 31, 2011.  LPTV stations operating in analog must cease operations by September 1, 2015.  As always, LPTV stations must be aware of additional deadlines or else risk losing valuable rights.  These deadlines fall into two categories:  out-of-core LPTV stations and analog LPTV stations. 

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To accommodate these new transition dates, the FCC:

●  Extended all existing digital construction permits for LPTV stations until September 1, 2015.

●  Dismissed applications for new analog low power television facilities that did not request operation on digital facilities by May 24, 2010.

●  Determined that if an LPTV station holds a construction permit for an unbuilt analog and unbuilt digital companion channel, and the analog permit expires and is forfeited, the digital permit is also forfeited (notwithstanding the later expiration date on that permit).

The maximum permissible digital Effective Radiated Power (“ERP”) for LPTV stations operating on VHF Channels 2 to 13 is increased to 3 kilowatts.  The maximum ERP for LPTV Stations operation on UHF Channels 14 to 51 will remain at 15 kilowatts.

Beginning December 1, 2011, LPTV stations providing ancillary or supplementary services will be required to file the annual Ancillary and Supplementary Services Report (FCC Form 317) and pay a fee of five percent of the gross revenues of any ancillary and supplementary services provided.

While it is understandable that the FCC wants to clear the out-of-core channels to accommodate the new licensees in the 700 MHz band, the timing is unfortunate.  If the FCC decides in the future to repackage the in-core channels as part of allocating spectrum for broadband, whether voluntary or otherwise, LPTV stations could find themselves in the undesirable position of having to change channels not once but twice, with the associated costs.

It is important that LPTV stations focus on these expiration deadlines, especially if they are operating in the out-of-core channels.  Failure to take timely action may result in LPTV stations finding themselves off the air --- permanently.

The Uncertainty of Unlicensed: New Threat Posed by House Draft Legislation

Posted by Rini Coran, PC on July 20, 2011

Yesterday, Steve Coran presented a webinar to members of the Wireless Internet Service Providers Association (WISPA) on spectrum reform legislation that is being considered by the U.S. House of Representatives.  The presentation focused on provisions addressing the future of unlicensed spectrum allocation, with discussion on a novel and untested auction concept that would require bidders wanting non-exclusive rules to bid against licensees wanting licensed rules for the same spectrum.  Steve commented that this is "untried and untested, and unlikely to raise significant revenues in light of the uncertainty the rules would raise."  Steve urged the WISPA members to participate in the advocacy effort by communicating with their representatives.

Rini Calls for More Transparency in FCC Media Ownership Review

Posted by Rini Coran, PC on July 19, 2011

Robert Rini was quoted in the July 18 edition of Communications Daily about the FCC’s Media Ownership Review: 

"Several industry officials said they fear that politics plays a role in this and all other quadrennial reviews, as the potential for deregulation attracts widespread public and legislative scrutiny. 'Processes get held hostage by political objectives,' said broadcast lawyer Robert Rini of Rini Coran. 'So I remain confident that if the process is allowed to move forward by the way that is allowed by the law' under the Telecom Act, the outcome will be a good one, he added. For the current review, 'there’s not enough transparency, despite all the rhetoric in favor of transparency, which really creates its own irony,' Rini said. 'Why doesn’t the FCC publish notes of its internal meetings? Why don’t we see drafts of rules? There are a lot of things the FCC could do to open up the process to more public comment.'" 

The Commission’s 2010 Quadrennial Regulatory Review of its ownership rules is underway.

Appeals Court Remands FCC's Media Ownership Rules; Raises More Questions than Answers

Posted by David G. O’Neil on July 18, 2011

Media ownership is in the news again as the Federal Communication’s Commission’s latest modifications to its media ownership rules have been affirmed in part and remanded in part by a three-judge panel of the U.S. Court of Appeals for the 3rd Circuit.  Most significantly, while most of the rules were affirmed, the FCC’s changes to its newspaper/broadcast cross ownership rule (“NBCO”) and its revenue-based “eligible entity” definitions were remanded for further consideration.  

The decision retains the status quo for most of the media ownership rules and does nothing to resolve the NBCO rule – to the contrary, the regulatory uncertainty that clouds the troubled newspaper industry’s ability to combine operations with local broadcasters will continue until the FCC adopts a new NBCO rule. 

Similarly, the decision to remand to the FCC for further consideration changes in the media ownership rules to promote diversity in ownership for minorities and females fails to provide guidance on what criteria are necessary for any rules to survive Constitutional scrutiny. 

The only certainty provided in the decision is that the FCC’s media ownership rules for television and radio remain largely unchanged from almost a decade ago despite the radical changes that have reshaped the media marketplace.  And, most likely, significant changes to those rules will not occur in the foreseeable future. 

In light of this action, many commenters have focused on picking winners and losers.  If only it were that simple, given the recent history of the FCC’s efforts to modify its broadcast ownership rules (click to enlarge):

Media Ownership Timeline 2003-2011.jpgThe panel's decision focused on the 2008 NBCO rule, the Diversity Order and the FCC ownership and cross-ownership caps for radio and television.  The Court vacated and remanded the 2008 NBCO rule, finding that the FCC provided inadequate notice of and time for the public to comment on the new NBCO rule in violation of the Administrative Procedure Act.  The Court expects the Commission to address the court’s concerns and provide proper notice and allow comment in the context of the ongoing 2010 Quadrennial Review of the Commission’s media ownership rules.  The judges refused to consider challenges to five permanent waivers of the NBCO rule granted in 2008, concluding that the parties had not yet exhausted their administrative appeals before the FCC and that the appropriate venue for appealing any such decision is the U.S. Court of Appeals for the D.C. Circuit and not the 3rd Circuit.

The Court rejected various appeals challenging the Commission’s decision to retain the pre-2003 rules with regard to ownership caps for radio and TV stations in local markets and cross ownership of TV and radio stations in the same market.  The appeals sought to increase or eliminate the ownership caps altogether.  The Court held that the FCC’s authority to adopt ownership caps did not infringe upon First Amendment rights because the rules are rationally related to substantial government interests in promoting competition and protective viewpoint diversity.  Further, the judges found that the FCC had provided sufficient reasons for the ownership caps in its 2003 order. 

The Court rejected the definition of eligible entity adopted by the FCC in the Diversity Order, finding that the agency did not show how the new definition would increase broadcast ownership by minorities and females.  The judges concluded that most of the proposed expansion of eligible entities was focused either on small businesses or reinforcing existing prohibitions against discrimination.  The Court noted that the correlation between ownership of broadcast stations by small businesses and minorities and women were approximately the same, suggesting that most small business owners were minorities or females.  The Court instructed the FCC to consider other proposed definitions (such as socially or economically disadvantaged business) that might expand broadcast ownership by minorities and women.  The Court instructed the FCC to complete this review within context of the ongoing 2010 Quadrennial Review. 

As is often the case in life, the Court's decision represents a partial victory and partial defeat for all interested parties.  Critics of media consolidation should be pleased with the remand of the NBCO rules.  Because the remand is based on procedural deficiencies, however, the FCC could adopt new rules that allow the same or greater flexibility for NBCO in the future.  Proponents for amending the media ownership rules to reflect the current economic and market place realities cannot be surprised with the Court's decision to leave in place the Commission’s pre-2003 media ownership rules.  On the other hand, proponents of reducing the ownership caps cannot be pleased either, since the panel left intact the Commission’s media ownership caps and cross-ownership rules in effect prior to 2003 (see our Comparison of Changes in the FCC's Media Ownership Rules). Even the remand on the Diversity Order, while encouraging to proponents of increasing media ownership for minorities and women, does not guarantee that meaningful rules can be implemented that will pass constitutional muster.  In other words, while the adoption of gender and race neutral proposals most likely would survive a constitutional challenge, it is difficult to see how such neutral proposals would achieve the objective of advancing minority and female ownership in the broadcast industry rather than provide additional window dressing.

It is uncertain how the Commission will revisit these issues in the 2010 Quadrennial Review.  The Commission must address the 3rd Circuit’s remand of the NBCO rule and the Diversity Order.  After the 3rd Circuit rejected the media ownership rules the Commission adopted in 2003, the Commission in 2008 decided to retain the pre-2003 rules.  The Commission could adopt a new NBCO allowing for ownership of newspapers and broadcast stations or retain the pre-2008 rules and not allow any cross ownership.  

Most likely the Commission will adopt new rules to assist minorities and women in participating in ownership of broadcast stations.  The challenge for the Commission will be to adopt new rules that are beneficial while remaining race and gender neutral.  For example, it is unclear whether reintroducing the tax certificate policy for the sale of broadcast stations to minorities and females would withstand Constitutional scrutiny, though tax certificates can be helpful in promoting diversity by giving small businesses leverage in a negotiation. 

The biggest challenge will be for broadcasters seeking to relax the Commission ownership caps.  Broadcasters should file comments in the 2010 Quadrennial Review urging relaxation of the ownership caps, for example.  Presumably the Commission will issue a public notice in the future inviting comment on the issues raised by the 3rd Circuit’s decision.  We have blogged previously that application of the duopoly rules for television stations in medium to smaller markets, without the safety net of “small market” waivers, undermines localism.  

At the same time broadcasters must recognize that, once again, the media ownership rules are in a state of uncertainty and litigation, which likely will remain unresolved for the near future.

FCC Seeks to Improve Compliance with its Broadband Data Collection Rules

Posted by Rini Coran, PC on July 15, 2011

“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” (Sherlock Holmes, “A Scandal in Bohemia”) 

Broadband deployment data are critical to spectrum and broadband policy, both in Congress and at the Federal Communications Commission. Incomplete or incorrect data about infrastructure can hinder FCC initiatives, such as efforts to promote competition, to implement the National Broadband Map or proposals to direct Universal Service funding to underserved areas. Nevertheless, the FCC has determined that many service providers have not complied with mandatory reporting requirements designed to drive the FCC’s data collection, even as an open FCC proceeding considers possible reforms to the program. 

To encourage participation and to improve compliance, earlier today, the FCC hosted a webinar to review the basics of the rules and procedures for filing FCC Form 477 – the FCC’s primary data collection tool for broadband, voice and other services. The filing requirement applies to several categories of service providers, including facilities-based providers of broadband connections to end users, providers of wired or fixed wireless local exchange telephone service, providers of Interconnected VoIP and facilities-based providers of mobile telephony. As a result, the rules apply to companies such as telcos (fixed or mobile), cable operators, satellite companies, Wireless ISPs, managed ISPs, and VoIP providers (including “over-the-top” providers). The filing deadlines for Form 477 occur twice per year: March 1st (providers must file data as of December 31 of the previous year) and September 1st (providers must file data as of June 30 of the same year). 

In the webinar, Wireline Competition Bureau Chief Sharon Gillett emphasized two points for service providers. First, the requirement to file Form 477 is mandatory, and providers are expected to comply. Second, data submitted in Form 477 are afforded confidential treatment, meaning that no provider-specific information is shared with outside parties.  

The Bureau’s chief data officer Steve Rosenberg described how data collection or Form 477 submission problems often fall into three categories: 

  • Nonfilers: According to Rosenberg, several hundred providers don’t file with the FCC, so their data aren’t counted.
  • Improper certifications: Rosenberg indicated that sometimes outside consultants gather and submit the data, but he said that such certifications may make data more difficult to correct and may raise questions of reliability of the data.
  • Repeated mistakes: Rosenberg pointed out that some filers simply file incorrect data, for example, by putting too many subscribers into one census block in a county or build upon incorrect data from prior filings, even after working with FCC staff to correct prior filings. 

Yes, the Form 477 instructions are a bit dense, and gathering data at a granular level can be time-consuming for many providers. The key takeaway from the FCC’s webinar is that the FCC is prioritizing education and compliance efforts for broadband data collection – a move that is often a precursor to stepped-up enforcement efforts.

FCC's Proposals for Clearing FM Translator Application Backlog May Harm AM Stations

Posted by David G. O’Neil on July 13, 2011

Approximately 6,500 applications for new FM translator service have languished since 2003, with each application representing a potential missed opportunity to enhance local service to the public. Yesterday, the Federal Communications Commission announced a new notice of proposed rulemaking seeking comments on how to reduce the backlog.  Unfortunately, the FCC advocates throwing out many applications instead of expediting their processing.  Even worse, the FCC has imposed a freeze on the processing of applications for existing translator stations seeking to serve urban markets. 

The 6,500 translator applications have caused friction among proponents of FM translator and LPFM stations.  Translator applicants are frustrated by the FCC’s processing delays, while LPFM proponents are concerned that granting these applications will preclude the licensing of future LPFM stations, especially in larger markets.  Further complicating the matter: a substantial number of the pending applications were filed by two affiliated applicants; Radio Assist Ministries and Edgewater Broadcasting. 

Prior FCC action has focused on balancing the competing concerns of the translator and LPFM factions.  In 2007, the FCC adopted a cap preventing applicants from filing more than 10 applications in any application filing window.  Applying the cap to the translator applications would require dismissal of 80 percent of the applications. 

The FCC seeks public comment on its conclusion that the 10 application cap is inconsistent with the Local Community Radio Act of 2010 (“LCRA”), which became law in January 2011.  The LCRA repealed the requirement that LPFM stations operating on the third adjacent channel to a full-power station must provide interference protection to that station.  The LCRA also assigns a co-equal status to translators, booster stations and LPFM stations.  The FCC also seeks comment on whether the FCC has authority to give priority to later-filed LPFM applications over a pending translator application, given the co-equal status under the LCRA.  The FCC is not seeking comments on relaxing certain technical restrictions as required under the LCRA. 

The FCC is considering several alternatives to address the competing concerns of translator and LPFM stations.

  • Opening a joint translator/LPFM filing window.  Under that proposal, the FCC would dismiss the pending translator applications and would open a new filing window for new translator and LPFM stations.
  • Prioritizing future LPFM applications over the pending translator applications. The FCC is uncertain whether this proposal would satisfy the co-equal status set forth in the LCRA.
  • Dismissing some of the pending translator applications for markets in which there are an insufficient number of LPFM channels as determined by the FCC.

The FCC proposes establishing LPFM channel “floors” based on market size.  For example, all pending translator applications in Markets 1-20 would be dismissed if there are not at least eight available LPFM channels in the market.  Lower LPFM channel floors would be established for markets 21-50, 51-100, 101-150 and smaller markets in which more than four translator applications are pending.  The FCC’s analysis of the results for pending translator applications based on specific rated markets are available in Excel and PDF formats.

The FCC is suspending processing of any pending applications for existing FM translator stations that propose a first-time transmitter site within any market that has fewer LPFM channels than the proposed channel floor.  The FCC also is imposing an immediate freeze on any new translator applications proposing a move into a new market.

The FCC remains concerned about the trafficking of authorizations granted for the translator applicants.  The FCC seeks comments on what limitations can be imposed under the LCRA, including national application caps of 50 or 75 and local application caps. 

Finally, the FCC is reconsidering its restriction on the use of FM translator stations to rebroadcast AM stations.  At present, only FM translator stations with licenses or permits in effect by May 1, 2009 may rebroadcast the signal of an AM station.  The FCC seeks comment on whether the May 1, 2009 limit should remain intact or should be extended to include the pending 6,500 translator applications. 

The FCC’s approach, eliminating the 10-application cap and potentially increasing the number of FM translator stations that may rebroadcast AM stations, nevertheless contains several proposals that could halt the progress in providing programming to communities.  More than 500 AM stations now use FM translator stations to rebroadcast their AM signals, making it possible to provide local news, information, sports and other programming (especially during evening hours for daytime-only AM stations) that otherwise might not be available.  The proposed LPFM channel limitations undermine that progress.  Even more troublesome is the immediate suspension of processing translator applications and the freeze on so-called market move-ins.  To broadcast AM stations over FM translator stations, it is often necessary to move the translator station closer to the AM station.  The freeze would make it extremely difficult to move translator stations to locations to rebroadcast AM stations, with the resultant diminution in service to the public. 

All in all, while the FCC purports to balance the competing concerns of translator and LPFM stations, the FCC’s proposals actually give an advantage to LPFM, in part by failing to address the impact to AM stations that also rely on translator service.

Comments and Reply Comments must be filed within 30 days and 45 days after publication of the FCC's rulemaking proposal in the Federal Register.

Steve Coran to Attend Wireless Without Limits Cruise

Posted by Rini Coran, PC on July 12, 2011

Steve Coran will attend the Wireless Without Limits Cruise to the Bahamas November 7-11, 2011. Steve will be delivering a keynote address on wireless spectrum developments and participating in break-out sessions.

Steve Coran to Speak at Super WiFi Summit

Posted by Rini Coran, PC on July 12, 2011

Steve Coran will be speaking at the Super WiFi Summit in Austin, Texas September 13-15, 2011. The Super WiFi Summit is co-located with ITEXPO West at the Austin Convention Center. Steve will be speaking about TV white spaces.

FCC Provides Guidance on Net Neutrality Compliance Ahead of Federal Register Publication

Posted by Rini O'Neil, PC on July 05, 2011

Late last week, the Federal Communications Commission’s Enforcement Bureau and General Counsel’s office jointly released a Public Notice offering “initial guidance” on how Internet Service Providers can comply with the transparency and disclosure rules that the FCC adopted in its Open Internet Order last December.  These are among the same “net neutrality” rules that Verizon and MetroPCS filed lawsuits to stop last December – lawsuits that U.S. Court of Appeals for the D.C. Circuit dismissed as “premature” because the rules had not been published in the Federal Register. We expect that the clarifications and explanations in the new “initial guidance” will be contained in the Federal Register publication of the Open Internet Order, which will trigger a new round of judicial review.  In this sense, the timing of the guidance can be viewed as a pre-emptive effort to possibly eliminate or narrow the lawsuits that will eventually be filed following Federal Register publication.

In another sense, the Public Notice actually provides some clarity to ISPs on how to comply with the disclosure rules.  The FCC once again stated that the guidance is illustrative and that broadband providers can implement other approaches that will comply.  Here are the five areas where the FCC provided clarification: 

  • Point-of-Sale Disclosures – The Open Internet Order requires ISPs to disclose network management practices, performance characteristics and commercial terms “at the point of sale.”  The Order further stated that, to meet this requirement, a provider must prominently display links to disclosures on a public website.  The FCC clarified that providers do not need to create or distribute hard copies of disclosure materials or to train sales employees to make such disclosures. Providers instead may direct prospective customers to the web page (not just the ISP’s home page) orally and/or prominently in writing.  In retail offices, broadband providers should have available devices that consumers can use to access the disclosures.
  • Service Description – The Open Internet Order requires broadband providers to disclose accurate network performance information.  For fixed broadband, the 13 large ISPs that are participating in the FCC’s SamKnows speed test can use the results as a sufficient representation of what their customers can expect.  Those ISPs that are not participating in the project can use the methodology to measure actual performance.  The FCC plans to release the methodology and the results before the rules become effective.  Alternatively, ISPs may disclose actual performance based on internal testing, consumer speed tests or other reliable third-party sources.  For mobile broadband, the FCC is collecting data on broadband performance and, when that information has been analyzed, the FCC plans to provide further guidance.  Until that time, mobile broadband providers may disclose the results of their own or third-party testing.  For all broadband providers, the Public Notice encourages disclosure of the source and methodology used to evaluate performance, and expects disclosure to be modified if actual performance materially differs from the disclosure. Expect the standards of disclosure to evolve based on comments filed in the FCC's separate "Need for Speed" proceeding, where the FCC has sought comment on the types of broadband speed and performance information that would be of most use to consumers.
  • Extent of Required Disclosures – The Commission stated in the Open Internet Order that its list of potential disclosure topics “is not necessarily exhaustive.”  Obviously, this statement aroused anxiety in ISPs who were concerned that potential findings of non-compliance for disclosures the FCC didn’t even mention.  Given this vagueness – and the potential legal pitfalls that could ensue – the Public Notice “clarified” that certain information contained in the Order will suffice for compliance “at this time,” though the FCC can determine in the future that that different disclosures are appropriate “at that time.”  The compliance disclosure topics are in paragraphs 56 (for all broadband providers) and 98 (for mobile broadband providers) of the Order and are summarized in this presentation.
  • Content, Applications, Service and Device Providers – The Open Internet Order requires disclosure to content, application, service and device providers.  Given the uncertainty over what broadband providers must disclose to these edge providers, the Public Notice clarified that the disclosures sufficient to enable consumers to make informed choices will generally satisfy the disclosure obligations to edge providers.  Thus, the FCC anticipates that broadband providers should only need to have one set of disclosures, and “technologically sophisticated” edge providers should be able to rely on a disclosure statement that the broadband ISP provides to consumers.
  • Security Measures – In response to claims that disclosure of numerous and constantly evolving security techniques would be unduly burdensome on broadband providers, the Public Notice reiterated the “touchstone” of its transparency rules – disclosure of information sufficient for consumers to make informed choices.  As examples, the FCC expects broadband providers to disclose if security measures intended to spread of viruses, malware, spam and other threats also prevent end users from running mail or web servers.  The FCC does not expect ISPs to disclose internal security measures that do not affect consumer choice, such as routing security practices.

Left unaddressed was the uncertainty surrounding enforcement of the Open Internet rules.  As we wrote in our earlier blog post, the FCC’s failure to articulate timing of decisions on complaints and remedies for non-compliance made it difficult for broadband providers to assess the risk associated with the complaint process.  At least with the guidance offered in the Public Notice, broadband providers have a little more clarity that will, hopefully, spur disclosures that are not put to the enforcement test.