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FCC Could Make New Year’s Revolutions

Fate of Title II rules and broadcast-TV band are in play 1/04/2016 8:00 AM Eastern

WASHINGTON — 2016 is shaping up to be a watershed year for lawyers, lobbyists and executives at communications companies as the FCC attempts to remake the TV band, a federal court weighs wrecking that agency’s plans to regulate the Internet and as ISPs ramp up broadband buildouts and upgrades.

 

Congress will likely be tied up with getting itself re-elected, so the Federal Communications Commission will be the hot spot of activity. Still, cable operators are hoping the Senate can see its way clear to making the ban on taxes on Internet-service providers permanent. That almost happened in December, before a group of Democratic senators blocked the move because it was not paired with a bill to levy sales and services taxes on Internet-based transactions.

 

Given the election year, cable lobbyists are not expecting much from Congress. They have their fingers crossed for some form of network-neutrality legislation, though a complete smackdown of the FCC’s rules by the U.S Court of Appeals for the D.C. Circuit could light a fire under that effort.

 

FCC chairman Tom Wheeler may try to front-burner some key decisions in case fellow Democrat Mignon Clyburn exits the agency to run for the house seat held by her father — or signals that she needs to consider that possibility. There has been scuttlebutt that she may seek to succeed Rep. James Clyburn (D-S.C.), but a source close to the commissioner said that was not their understanding.

 

In any event, it will almost certainly be Wheeler’s last year in the post, and he has plenty on his plate. Cable operators will be looking for an FCC decision on set-top security, preferably confined to just security rather than the extended AllVid approach to navigation devices, pushed by computer companies, that could allow for the disassembly of cable’s channel bundle.

 

The National Cable & Telecommunications Association has been pushing back hard on the tech firm-backed effort.

 

Broadcasters will have to apply for the incentive auction by Jan. 12 or watch from the sidelines. Those who do apply will have until March 29 to commit to the auction, or head to the sidelines as well.

 

RETRANS REDUX

 

Retransmission consent will return to center stage this year, too. TV stations and their representatives in Washington will likely be in a pitched battle with cable operators over how the FCC should, or should not, adjust its retransmission-consent regime.

 

The chairman initially tried to push a vote on getting rid of the broadcast-exclusivity rules, which backstop contractual exclusivity by preventing cable operators from importing duplicative programming from outside a local market, including during retransmission-consent impasses.

 

Cable operators would have been glad to see those rules go, but broadcasters convinced some high-profile congressional Democrats to weigh in against such a move, and Wheeler could not muster the Democratic votes on his own commission.

 

But Wheeler has said the proposal could be reintroduced as part of a congressionally mandated review of retrans that is currently underway.

 

If broadcasters get their way, the FCC will tread lightly. If cable operators get their way, retrans blackouts will be written out of broadcasters’ playbooks, with socalled baseball-style arbitration (in which an arbitrator decides between dollar amounts proposed by both sides) introduced and those exclusivity rules excised.

 

More than one Democratic source signaled Wheeler could get even more pushback from his own party, given what they see as his “my way or the highway” approach to the issues on which he is clearly passionate, but not always politic. But a top Republican source tapped into the communications marketplace said that, style points aside, the chairman deserves credit for mostly delivering on his agenda.

 

The FCC is working on a new privacy enforcement regime for broadband Customer Proprietary Network Information (CPNI), information that telecommunications services keep about their subscribers, after giving itself new oversight powers through the Title II reclassification. Whether it gets to follow through with that depends on the D.C. Circuit’s decision on those rules, which could come down by the end of the first quarter or early in the second.

 

TITLE II’S DAY IN COURT

 

Most handicappers predict the decision will be a mixed bag, with the FCC losing on some parts and winning on others — and an appeal by some party is almost a given.

 

Cable and other ISPs continue to maintain success for Title II in court will result in a less-successful broadband buildout and a crimp on new investment.

 

One thing that probably will not return to the front burner anytime soon is Wheeler’s proposal to reclassify some online video providers as multichannel video programming distributors (MVPDs) so they could get program access protections. That received pushback from some big Silicon Valley players worried that those privileges would come with new obligations, such as public, educational and government (PEG) and broadcast mustcarry requirements.

 

And while it may be a case of closing the barn door after the horse has escaped, been caught, trained to race and has won the Triple Crown, the FCC is under a selfimposed 2016 deadline to resolve its overdue quadrennial review of media-ownership rules, which have been on the books for decades.

 

D.C.’s 2016 ‘To Do’ List

Congress, courts and the FCC will be grappling with issues vital to both cable operators and broadcasters

 

Incentive auction: March 29 will be the first day of the rest of most broadcasters’ lives, as they either put spectrum in or wait to see where they are headed in a remade post-auction spectrum band.

 

D-Day for cable deals: The FCC must vet two major mergers — Charter-Time Warner Cable and Altice-Cablevision Systems — that could redraw the competitive landscape; decisions are expected, or at least hoped for, in the first half of the year.

 

Net neutrality: The U.S. Court of Appeals for the D.C. Circuit could decide on the Title II challenge by April; then, more court decisions are likely as whoever’s ox is most gored appeals.

 

Retransmssion consent: The FCC is working on review of good-faith negotiations, per congressional mandate. A decision this year could include bagging programming exclusivity rules, but chairman Tom Wheeler may not have the votes for that.

 

Broadband Customer Proprietary Network Information: Under Title II classification of ISPs, the FCC has new power over consumer privacy and is working on a framework that could be a “beast,” one top cable agency watcher said.

 

Set-tops/navigation: The FCC is working on a software solution to replace its previous CableCard set-top security regime. Cable operators will nonetheless continue to support the CableCard.

 

Media ownership: The FCC has set itself a “no earlier than June” deadline for finishing its review of ownership rules. After more than 10 years of uncertainty, broadcasters will be looking for some answers.

— John Eggerton

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