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Weekly Newsletter, 8/22

AT&T Proposes TV Repack Plan

ATBA attends Texas Association of Broadcasters Convention Session Auction in Austin, Texas, Thursday, Aug. 11.

ATBA attends Texas Association of Broadcasters Convention Session Auction in Austin, Texas, Thursday, Aug. 11.

 

AT&T created a plan to repack their television stations regionally after the incentive auction concluded that many people have praised as a success.

The plan, sent to the FCC in early August, relies heavily on AT&T's previous experience with complicated relevant spectrum relocations. In the proposal, they relay their plan to standardize processes and procedures using a time based plan for broadcasters to follow.

The plan would approach the post-spectrum auction repack in quarters, regionally, hinting that they believe a national plan would "expose the entire repack to risks." They plan to expound on their regional management model by "using sub-regions to decouple daisy chain impacts and assigning super regions for effective management and transparency, while preventing delays across regions."

Learning from previous efforts, AT&T's plan includes working transparently with stakeholders, maintaining realistic time and cost estimations, and mitigating risks through clear planning for each project milestone.

Many critics of this plan have raved about the benefits of this planned repack.

"We received the plan for the first time during the Texas Association of Broadcasters Convention last week," says Lee Miller, ATBA Communications Director. "It is interesting that AT&T gets it in that this is a huge issue for broadcasters and the country. It still does not address the timeline or details. "

Others agree that they want the plan to be more specific and grounded. John Eggerton, writer for Broadcasting Cable, said, "The FCC and broadcasters are in general agreement that a staged repack is the way to go, but hammering down the details and the timeline...will be the key."

The FCC is giving broadcasters 39 months to plan their repack.

Read AT&T's Repack Framework here: ATT Repack Framework BB1.

Week One of FCC Auction Ends with 12 Percent of Total Goal

judge-1587300_1280Week one of the FCC's auction is done, and the profit is almost $11 billion, 12 percent of their total goal of $88.4 billion.

The auction began Tuesday, Aug. 14 and ended Friday, Aug. 19.  Wells Fargo analysts claimed the asking prices increased five percent between rounds. Deborah McAdams of TV Technology suggests this next week of auctions, which began at 10 a.m. Monday, Aug. 22, will yield just over $20 billion if the bidding rounds continue to increase.

Auction yields need to reach $88.4 billion in order to cover the costs incurred by relocation and administration of TV stations and the reverse auction where broadcasters sold 126 MHz of the TV spectrum.

Here's to hoping this auction continues to sort itself out and that LPTV can survive the final cut.

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LPTV Investors Ask DC Circ. To Rehear Auction Challenges

Share us on: By Michael Macagnone

Law360, Washington (August 15, 2016, 8:52 PM ET) -- Low-power TV investors and a religious LPTV station urged the D.C. Circuit on Friday to reconsider tossing their challenge to the upcoming spectrum auction, saying the Federal Communications Commission has trampled the rights of LPTV license holders.

The petitioners urged either the original three-judge panel or the full court to rehear and possibly overturn the panel decision in June that rejected Word of God Fellowship Inc.’s challenge of the auction because the channel did not participate in the FCC proceedings below and Free Access & Broadcast Telemedia LLC’s challenge because owning option rights to LPTV stations did not give it the property interest necessary to sue.

Free Access, according to the petition, is left with no judicial recourse to challenge the repacking of spectrum in the FCC’s spectrum auction, which could take some LPTV stations off the air. The company argued that, while creditors have the option to protect their interests in bankruptcy and shareholders have other court protections to ensure their protection, option holders have no such recourse and should not be subject to the “shareholder rule,” which in this case bars owners of a company from challenging adverse agency action against the company itself.

The petition said that the Hobbs Act, the statute that gives federal courts jurisdiction over agency actions like the spectrum auction, should give Free Access standing and an opportunity to challenge the FCC’s actions in federal court.

“Its constitutional standing is uncontested (and unassailable). In holding that Free Access lacked prudential standing, the panel ignored Congress’ clear instruction that under the Hobbs Act, any ‘party aggrieved’ — irrespective of shareholder or option-holder status — may petition for review of FCC actions,” the petition said.

Friday’s petition also criticized the nixing of Word of God’s challenge, saying the channel should have been allowed to challenge the FCC’s plans on the basis of its participation in the [/companies/national-association-of-broadcasters]National Association of Broadcasters during FCC proceedings even though it did not participate separately. Requiring separate participation to retain standing undermines the purpose of trade associations and could create a mountain of duplicative filings in future rule-makings from companies preserving their standing, according to Word of God.

“It turns the Hobbs Act into a Hobson’s choice, forcing companies to either irrevocably delegate their judicial review rights to trade groups, or file needlessly redundant papers,” the petition said.

The petition urged the D.C. Circuit to reach beyond the jurisdictional decision it reached in June to address what the petitioners’ view as a violation of the Spectrum Act. It said the law requires that the agency preserve spectrum for LPTV stations, not “repack” it as the agency has interpreted, potentially pushing them off the air.

The panel heard oral argument in the case in early May. During the hearing, other parties including LPTV station owner Mako Communications LLC also slammed the repacking plan as making low-powered broadcasters secondary to full-power stations and wireless carriers, in violation of the Spectrum Act.

Representatives for the FCC declined to comment Monday. Counsel for the groups could not be immediately reached for comment.

Judges Thomas B. Griffith, David B. Sentelle and Sri Srinivasan sat on the panel for the D.C. Circuit.

Free Access and Word of God are represented by C. Boyden Gray, Adam Rabun Fast Gustafson, Jeffrey White and Derek S. Lyons of Boyden Gray & Associates PLLC and Glenn B. Manishin of ParadigmShift Law LLP.

The FCC is represented by William J. Baer, Robert J. Wiggers and Kristen C. Limarzi of the U.S. Department of Justice and in-house by Jacob M. Lewis, Jonathan B. Sallet, David M. Gossett and Thaila K. Sundaresan.

The case is Free Access & Broadcast Telemedia LLC et al. v. Federal Communications Commission et al., case number 15-1346, in the U.S. Court of Appeals for the District of Columbia Circuit.

--Additional reporting by Jimmy Hoover. Editing by Brian Baresch.

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Weekly Newsletter, 8/15/16

GraphCable Subscriptions Fall by 705,000 Over the Past Year, 12 times faster

The following is a story done by Media Life Magazine, a magazine for media planners, buyers, and the advertisers they serve. 

Cord-cutting is becoming more common, that much is clear.

It started as a trickle. Right now it’s a steady stream. The question is whether it will become a deluge, and if so, how long until that happens.

No one knows for sure, and so every quarter they look for new clues.

The latest quarterly pay TV subscriber numbers show people shed subscriptions 12 times faster over the past year than they had the prior year.

That’s according to an analysis by BTIG Research. It reports that 705,000 people dropped their subscriptions to the top eight providers, including Comcast, DirecTV and Charter, in the 12 months ended in June.

That’s compared to 59,000 during the 12-month period that ended in June 2015.

The annual rate of subscription decline has hit 2 percent.

BTIG analyst Rich Greenfield blames the declines on several factors: inflexible packages, surcharges that drive subscribers nuts, and high overall pricing for cable compared to the low monthly prices of streaming video on demand.

“Increased cord-cutting and cord-shaving ties directly to our view that antenna households utilizing streaming devices are increasing rapidly, albeit off a low base,” he writes.

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FCC Votes To Retain Restrictions On Cross-ownership censorship-610101_640

The FCC voted to keep the rules restricting the cross-ownership of newspapers, radio stations, and TV stations in the same market on Wednesday, Aug. 10, according to an article posted on Reuters.

This is an old and very contested rule, especially by struggling newspapers. In the digital age, convergence in media is important to survival.

The Newspaper Association of America had comments about the ruling. They called it a "40-year-old rule that is more obsolete than the eight-track tape or the mainframe computer."

FCC Chairman Tom Wheeler proposed keeping the restrictions as well as other individual market limits with "slight modifications" in June. He wished to relax the regulations by allowing failed or failing newspapers or stations to be owned by others in the same market.

"The result [of keeping the current regulations] will be less resources for the local news on which our democracy depends," the Newspaper Association of America also said.

The proposed regulations by Wheeler also keep regulations barring mergers among the top four national television broadcast networks.

Weekday circulation feel 7 percent in 2015, according to a report done by the Pew Research Center in June, which is the greatest decline since 2010. Sunday circulation and advertising revenue also fell. Media Life Magazine reported that subscribers to pay TV fell 12 times faster this year than the previous year.

Every four years, the FCC has been ordered by a Congressional commission in 1996 to review the regulations on cross-ownership rules. However, the review last completed before Aug. 10, was back in 2006.

What are restrictions like the cross-ownership rule doing to the media and communications field? Are the regulations and the FCC in the right? Or does the FCC need to back off?

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Weekly Newsletter

Factor Fiction-Debunking a Few Myths about the FCC's Incentive Auction

This article originally appeared on Lexology, a source of news for Globe Business Media Group.

Jonathan Cohen, one of my partners at Wilkinson Barker Knauer LLP, has been closely following theincentive auction by which the FCC is looking to clear a significant part of the television band and take that spectrum, slice it up into different size blocks, and resell it to wireless companies. He has been guiding numerous companies through its complexities. We’ve written much about the auction on these pages, and now Jonathan offers these observations about the auction. – DDO

With the FCC’s Incentive Auction poised to move into its next phase with the August 16th start of active bidding in the forward auction, where companies looking to provide mobile broadband services will bid on licenses carved out of the spectrum vacated by TV broadcasters, we thought it might be helpful to address a few of the myths that seem to be floating around about the auction.

Myth: In the initial stage of the reverse auction, broadcasters were greedy, demanding that the government pay $86.4 billion for their spectrum.

Reality: This line of thinking demonstrates a fundamental misunderstanding of the way the Incentive Auction was designed to work. In each round of the reverse auction, the FCC makes price offers to TV stations, who decide whether or not to accept them. Not the other way around. The FCC decided to set opening price offers at very high levels. The highest opening “go off-air” price offer was $900 million (for a station in New York City), but nine-figure opening offers were plentiful, including to a station in Ottumwa, Iowa (DMA #200).

These high prices apparently encouraged a lot of stations to make the initial commitment to accept its opening price offer, which led the FCC to try to clear 126 MHz of spectrum in the initial stage – the most the rules would allow. Under the FCC’s auction design, as prices decline, a TV station can reject the FCC’s offer at any point, but the FCC can continue to reduce its clearing price offers to a station still in the auction only as long as it was still feasible to repack that station given all the other stations that would remain in operation after the auction.

At the 126 MHz clearing target, only channels 14-29 are available in the repacked UHF band, and this apparently caused the auction prices for many stations to “freeze” at high levels (once it was determined that a station could no longer be repacked), resulting in the $86.4 billion total clearing cost announced at the end of June. For all we know, however, a great many TV stations that are now possible “winners” in the reverse auction might have been willing to keep accepting price offers below their frozen prices. It was the auction design – freezing station’s buy-out prices when that station could no longer be repacked – that set the prices, not the broadcasters.

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ATSC 3.0: What You Need to Know about the Future of Broadcast Television

OLYMPUS DIGITAL CAMERA

OLYMPUS DIGITAL CAMERA

This article originally appeared on C-Net, a source of product reviews, how-tos, and more.

The next generation of broadcast TV is coming, whether you're ready or not. Actually, no one's ready, and that's sort of the point.

ATSC, or Advanced Television Systems Committee, is the group that decides what over-the-air (and more) TV signals look like. Last year about 76 percent of US households subscribed to cable, satellite or fiber for TV, while 21 percent relied on antenna reception for at least one TV in the home. But that antenna number went up four points compared to 2014, according to the Consumer Technology Association.

The airwaves are still an important source of free TV for millions of Americans, despiteFCC auctions selling off TV spectrum to wireless carriers like T-Mobile. Free TV, however, is in for some big changes.

Back in the day, the ATSC decided on 1080i and 720p resolutions for digital and HDTV broadcasts, and today just about every cable or satellite show uses one or the other. Up next, not surprisingly, is 4K resolution, along with a host of other improvements including high dynamic range (HDR), better sound and even 3D (remember that?) and access via your phone.

Their standards and by extension, what's next for over-the-air TV, will have effects that reach far beyond the people who get their TV via antenna. It could affect what you see and hear on your TV for years, maybe even decades, to come.

So what is the ATSC?

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Does The FCC Lack Authority To Boost Required Amount Of Video Described Programming?

realization-of-video-771447_1280The FCC recently proposed an increase in the required amount of video described programming for cable and broadcast. The current requirement is 50 hours of video described programming per quarter, and the FCC's proposed increase is 87.5 hours per quarter as well as pushing for the required stations to be moved from the top five to the top 10 nonbroadcast networks.

The American Council of the Blind replied to the FCC's previous proposition to expand its video description requirements to the top ten cable nets that was approved in March by providing preliminary statistics on a study they did over blind consumer satisfaction. The ACB agreed with the increase, and they said the consumers do as well.

An issue many broadcasters and cable providers have with the required hours is that the FCC does not recognize much of their video described programming. The FCC only recognizes primetime and children's programming.

In its own reply to the FCC's proposed change, the National Association of Broadcasters said: "These rule changes would exceed the Commission’s statutory authority and impose undue burdens on providers. First, adoption of the proposals would be arbitrary and capricious because the Commission fails to meet its statutory mandate to justify additional rules based on a meaningful cost-benefit analysis of the video description rules. Second, even if the Commission had fulfilled this mandate, the CVAA [The Twenty First Century Communications and Video Accessibility Act of 2010] does not authorize the Commission to increase the number of networks covered by the rules or adopt the no backsliding proposal. Finally, NAB urges the Commission to gradually phase-in any rules ultimately adopted, and provide flexibility to providers required to meet the higher quota."

Providing programming assistance for the blind and seeing impaired viewers is important, but has the FCC overstepped its bounds with this proposed increase?

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