Broadcasters on D.C. Roll in Vegas

Broadcasters are gathering at NAB Show this week with one eye on the panels and exhibit floor and another on the clock, but their luck is running more like rolling a seven than snake eyes.

The eye that is on Las Vegas will see an industry primed for some big changes thanks to the change in administration.

FCC Chairman Ajit Pai, who will keynote a general session on Tuesday, has already demonstrated his commitment to giving broadcasters the new transmission tools to be competitive in the multiplatform digital world, helping push through a rulemaking that would allow TV stations to roll out a new broadcast television standard called ATSC 3.0, also known as Next Gen TV.

He also revoked a March 2014 advisory that put a damper on joint sales agreements.

“There is a new dawn at the FCC with Ajit Pai at the helm,” said National Association of Broadcasters Executive Vice President of Communications Dennis Wharton. “He’s a breath of fresh air. He’s someone who believes in the mission of broadcasters.

“He’s not going to be with us every time on every vote,” said Wharton, “but he will give us a fair hearing.”

According to NAB, Pai has already moved quickly on issues of particular importance to broadcasters. That would be increasing the flexibility of using FM translators for AM stations and the Next Gen TV rollout, which will allow broadcasters to deliver content to cell phones and laptops and target emergency alerts.

“All things are looking pretty good for broadcasters after we’ve leveled some regulatory hits from previous FCCs,” said Wharton.

Pai is widely expected to put fresh eyes on media ownership regulations his predecessors declined to loosen. He said after the March public meeting that the FCC’s regulations should match the modern realities of the marketplace.

The newspaper/broadcast cross-ownership is unlikely to survive a Republican FCC majority that voted against the 2016 Quadrennial Review order that let it and other regulations stand. On the table are local ownership rules as well as a possible revisit of the 39 percent ownership cap.

“The FCC has blessed multi-billion-dollar mergers of major MVPDs,” Pai said recently, “but somehow when it comes to the combination of a newspaper and a radio station in Otumwa, Iowa, we suddenly get the vapors,” a hysterical state usually associated with great aunts with a tendency toward fainting.

Broadcasters are ready to expand if the FCC gives the word.

Attorneys at Akin Gump, in a recent policy advisory, said they expected Pai to reinstate the UHF discount, which allows only half the audience reach of a UHF station to count toward the national ownership cap.

At press time, the FCC was widely expected to reinstate the discount in advance of the convention.

“Many believe that the elimination of the UHF discount will provide a catalyst for consolidation opportunities in the television sector,” Akin Gump concluded.

Many also believe that the 39 percent national ownership cap could be raised as well.

Wharton doesn’t see that as an immediate priority for the chairman. He said opening up the local ownership proceeding to lift cross-ownership regulations and loosen duopoly regulations seem to be more pressing issues, with a review of the cap perhaps occurring toward the end of the year or next year. Pai has talked up the value of duopolies in the smaller markets where they are now prohibited.

But NAB has some bones to pick with the commission as well.

The FCC decided not to delay the shot clock on the repack of more than 1,000 TV stations following the incentive auction. Broadcasters will have fewer than three months to apply for construction permits for new and modified facilities.

The 39 figure that NAB is more immediately interested in is the 39 months the FCC has given them to repack after the auction. NAB has petitioned the FCC to reconsider the repack framework, both the time frame and the $1.75 billion fund, which it says are insufficient and unfriendly to viewers.

Wharton calls that 39 months a “sword of Damocles” hanging over the industry’s head.

The FCC is encouraging broadcasters to use NAB Show as an opportunity to compare notes and coordinate now that they know who is moving where and when. Wharton has some definite opinions.

He called that 39-month schedule one that is “probably not going to be met.” He is hoping this FCC recognizes that broadcasters should not have to pay out of pocket, or pay with license revocation, if they can’t meet that deadline.

Broadcasters have some support from Democrats and Republicans for legislation that would move the date and raise the funding cap — notably Rep. Frank Pallone (D-N.J.), ranking member of the House Energy & Commerce Committee.

“The last thing Ajit Pai is going to want to do is cause massive disruption to consumers and put broadcasters out of business,” said Wharton.

Asked what he would most like to hear from Pai at the convention, Wharton said Pai is already playing their song. “He has said broadcasting was a window on the world when he was a kid growing up in Kansas. He appreciates what we do, which is music to the ears of local broadcasters.”

He said he would like to hear what Pai has been saying throughout his tenure on the FCC: that he supports Next Gen Television; that the media ownership restrictions on broadcasters are outdated; and that he wants to support revitalization of AM radio. “He will be preaching to the choir,” said Wharton.

Expect some hearty “Amens.”