Monty Tayloe

Increased competition in the video industry may have undermined the basis for must-carry rules, argued Latham Watkins cable attorney Matthew Brill at a Federal Communications Bar Association continuing legal education event Monday evening. Recent federal court opinions in cable program carriage cases Comcast v. FCC (CD May 29 p1) and Time Warner, NCTA v. FCC (CD Sept 5 p4) have said that cable’s decreasing market power is eroding the legal basis for many of the provisions from the 1992 Cable Act designed to protect broadcasters, Brill said. Along with recent program carriage cases, the FCBA event touched on Aereo’s case before the Supreme Court.

FCC Chairman Tom Wheeler likely has the votes to get approved the draft order to tighten restrictions on sharing arrangements and limit joint negotiation of retransmission consent agreements, said several communications attorneys and industry observers in interviews Friday. It’s unlikely that Wheeler would have rolled out the planned regulation on Thursday (CD March 6 p7), several days before the required “white copy” date, without believing he had the Democratic commissioners’ votes needed to pass the rules, the industry observers said. Republican commissioners Mike O'Rielly and Ajit Pai have both indicated that they oppose rule changes to make sharing arrangements attributable, and industry officials said they expect no votes.

An order to make TV-station joint sales agreements (JSAs) attributable for calculating ownership caps and to prohibit joint negotiation in retransmission consent agreements will go on circulation Monday, the FCC said. Also on circulation then will be an FNPRM seeking comment on shared services agreements (SSAs) and FCC ownership policies that kicks off the 2014 quadrennial review of media ownership, the commission also said Thursday. The FNPRM proposes retaining the current dual-network rule and the local radio rule, tentatively concludes that cross-ownership rules for newspapers and TV stations should remain, and asks whether to eliminate rules against newspaper/radio and the radio/TV combinations rule “in favor of reliance on the local radio and local television rules,” a senior commission official told reporters Thursday. Broadcasters criticized the draft order, while pay-TV interests seeking changes to retrans rules cheered it.

Commissioner Ajit Pa highlighting a joint sales agreement’s (JSA) beneficial effect on a noncommercial TV station owned by an historically black college is a message to the commission’s Democratic members, said several broadcast attorneys in interviews Wednesday. Their clients don’t want the FCC to make attributable for ownership quotas JSAs. Chairman Tom Wheeler is said to be likely to seek such attribution in an order that might circulate Monday in time for the March 31 commissioner meeting (CD Feb 25 p1).

The U.S. Solicitor General’s urging the Supreme Court to rule against Aereo while preserving prior case law that allows cloud computing is likely to have an influence on the high court’s final decision on the streaming-TV service, said several attorneys in interviews Tuesday. “It’s pretty clear that briefs from the SG’s office are influential,” said Pillsbury broadcast lawyer John Hane, who isn’t connected to the case.

The FCC Media Bureau requested financial information from Sinclair about its relationship to the companies with which it will have sharing arrangements as part of its proposed purchase of Allbritton’s TV stations, said a filing by Sinclair Tuesday (http://bit.ly/MZrO5A). Though the financial details are redacted under a pair of protective orders issued by the bureau Friday (CD Feb 24 p23), the submission includes financial results going back to 2010 for stations involved in the transaction, the details of performance bonuses paid to Sinclair by companies with which it has sharing arrangements and information about Sinclair’s guarantees of bank debts for those companies.

A Comcast purchase of Time Warner Cable is unlikely to lead to a resurrection of the horizontal ownership cap limiting the portion of national subscribers a cable company can serve, and any FCC move to bring back such a cap is unlikely to affect the $45 billion deal, said analysts, cable attorneys and public interest groups in interviews. The FCC’s former cap was twice struck down by the U.S. Court of Appeals for the D.C. Circuit, but Comcast raised the issue again when it said the terms of the proposed Time Warner Cable deal would include a voluntary divestiture of 3 million subscribers to stay under the old cap’s 30 percent threshold (CD Feb 14 p3). A Comcast spokeswoman told us Friday that the divestiture is intended to “assuage concerns” about the size of the new company.

Creating merger conditions to address the effects on programmers of Comcast’s proposed $45.2 billion buy of Time Warner Cable would likely be difficult for regulators, said several cable attorneys and analysts Friday. The leverage the merger would give the new cable giant in programming negotiations is likely to be an important front in the antitrust debate over the transaction (CD Feb 14 p1), they said.

Comcast’s proposed $45.2 billion dollar deal to buy Time Warner Cable is likely to face serious regulatory hurdles but could still be approved, said analysts and attorneys Thursday. “There will be those who fear the sky is falling,” said Comcast Executive Vice President David Cohen Thursday in a media conference call on the regulatory implications of the proposed deal. Cohen said Comcast and TWC’s businesses don’t overlap, and the deal isn’t substantially different from other cable transactions. “This merger is pro consumer and pro competition,” Cohen said.

A plan for proposed changes to the rules governing joint service agreements (JSAs) by FCC Chairman Tom Wheeler’s office has been shared only with the offices of his fellow Democratic commissioners, Jessica Rosenworcel and Mignon Clyburn, said several FCC officials. Republican commissioners Mike O'Rielly and Ajit Pai were “kept out of the loop,” one FCC official said. It’s not uncommon for a chairman’s office to work on items without giving a heads-up to commissioners of the opposing party, several former FCC officials said. It can breed animosity, one former eighth-floor official said. Such partisan inclusion in the drafting process was said to have happened under then-Chairman Julius Genachowski, as staff developed conditions to allow Comcast to buy control of NBCUniversal (CD Jan 18/11 p1).