By Barry Skidelsky, Esq.
Barry is a NYC based attorney and consultant in private practice, handling diverse regulatory, litigation and transactional matters, principally for clients (such as lenders, owners, management and talent) and other lawyers who are involved directly or indirectly with communications, media, entertainment and technology. A member of the NYSBA EASL Section Executive Committee, Barry co-chairs its Television-Radio Committee, and he is former chair of the NY chapter of the Federal Communications Bar Association (whose members in part practice before the FCC in Washington DC). Barry was also a former General Counsel for several private and public companies in the above mentioned fields, and can be reached at (212) 832-4800 or firstname.lastname@example.org.
At this morning's meeting of the Commissioners of the Federal Communications Commission (FCC), the FCC: (i) voted unanimously to adopt a Report and Order intended to foster increased foreign ownership of and foreign investment in U.S. broadcast stations; and, (ii) with two dissents along party lines, as frequently occurs, voted to adopt a Notice of Proposed Rule Making (NPRM) intended to promote the growth of independent video programming.
Foreign Ownership of U.S. Broadcast Stations (FCC GN Docket No. 15-236)
Citing the outdated original policy underpinnings of avoiding interference with ship to shore radio communications during war time, the FCC downplayed those national security concerns and noted the current inconsistency between FCC regulations that on the one hand allow foreign citizens to own a nation-wide mobile wireless network in the United States, but on the other hand restrict foreign ownership of merely one small rural American radio station (an implied reference to Pandora's efforts to buy a small FM radio station in South Dakota, in an attempt to leverage a music copyright licensing advantage).
Accordingly, the FCC today unanimously voted to extend to broadcasters a liberalized and streamlined foreign ownership approval process, akin to that adopted about three years ago for common carriers. Stated goals were to reduce regulatory burdens and to foster or improve access to capital, which now affords foreign lenders and investors an unprecedented opportunity to be (or become more) involved with inter alia U.S. radio and television stations licensed by the FCC.
Diverse and Independent Sources of Video Programming (FCC MB Docket No. 16-41)
In addition, a majority of the FCC Commissioners voted to adopt an NPRM intended to benefit video programmers -- who are independent of major studios and multichannel video program distributors (MVPDs), such as cable and satellite system operators -- in connection with carriage contract negotiations between the video programmers and MVPDs.
Essentially, the FCC proposes to ban certain TV carriage contract clauses that the Commission believes unfairly favor MVPDs, such as most favored nations (MFN) and alternative distribution media (ADM) clauses that MVPDs have insisted on being included in deals they negotiate with independent programmers. MVPD bargaining power generally disfavors the content owners.
Although both MVPDs and independent video programmers or content owners (as well as other interested persons or entities) will have an opportunity to file formal comments with the FCC about this matter after the agency releases the text of its NPRM (as usual, editorial privileges were reserved at today's meeting), the lack of authority by the FCC to meddle in private TV contract negotiations will surely be raised.
Video Navigation Choices and Devices (FCC MB Docket 16-42; CS Docket No. 97-80)
Lastly, the also controversial and so-called TV set top box (STB) item was dropped from today's FCC agenda at the eleventh hour in the wake of opposition from content and copyright owners, as well as due to the apparent failure of a majority of the FCC Commissioners to reach consensus on this item.
The STB item remains in circulation for further consideration at the FCC behind closed doors, with any opportunity for further public comment uncertain as of this writing.
Ostensibly, the FCC wants to give consumers competitive alternatives to paying monthly STB rental fees to their cable or satellite providers. However, the politics, issues and other realities behind this item are much more complex, and they are far beyond the scope of this brief summary of today's FCC actions.
As always, all of us who are involved directly or indirectly with the ever converging fields of communications, media, entertainment and technology, are best advised to stay informed -- and, whenever possible, to actively participate in rule-makings and otherwise engage in advocacy -- to help shape the federal government's involvement in the related creative and business realms, and for the benefit of the public and private interests we may respectively represent.