Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
- President Trump has nominated Danielle Thumann Severs for one of the vacant seats on the FCC. Thumann currently works as Senior Counsel to FCC Chair Brendan Carr. Earlier in her legal career, in addition to other positions at the FCC, she worked for Crown Castle tower company and Wilkinson Barker Knauer law firm in Washington. She has been nominated to fill the vacant Republican seat on the FCC. The nomination must be approved by the Senate and, as no one has been nominated for the vacant Democratic seat, there is some speculation that Senate Democrats will try to hold up her confirmation until such a nomination is made.
- At its regular monthly Open Meeting, the FCC adopted a Report and Order eliminating the 39% national TV ownership cap. The FCC has not yet released the adopted order, but as we noted here, the draft Report and Order stated that the FCC will instead do a case-by-case review of any proposed TV combination exceeding the current cap to see if it is in the public interest by weighing factors including the transaction’s potential benefits (e.g., increased local programing and innovation) and its potential harms (e.g., decreased local programming, increased retransmission consent fees, and loss of communications workers). The FCC stated in the draft order that repealing the cap would allow TV broadcasters to better fulfill their public interest obligations, including by increasing investment in local programming and by providing leverage (through greater audience reach) in the local broadcasters’ negotiations with the national networks. Although Congress set the cap, the draft order found that the FCC could repeal the cap due to its broad authority to adopt, modify, or eliminate its broadcast ownership rules and to act in the public interest, and Congress did not eliminate this authority when it set the cap. See our Broadcast Law Blog article here for more on the issues surrounding this action.
- Chairman Carr issued a statement that said that this action was important to preserve localism. He noted that the FCC had waited too long to abolish the rule limiting broadcast and newspaper cross-ownership until “the damage from agency inaction was all but complete.” He did not want local broadcast TV to go the way of the newspaper by limiting broadcasters’ business options. He said that restrictions on ownership by local TV companies made no sense when national broadcast and cable programmers and digital media services, which compete with broadcasters, can all reach 100% of the country. And he said that the FCC’s authority to change the cap was clear – citing a Court decision and stating that “[a]n unbroken line of FCC Chairs going back more than a dozen years all agreed that the FCC has the authority to modify the cap.”
- FCC Commissioner Gomez released a statement opposing the action. Gomez said that the decision “is unlawful on its face” because “only Congress can change” the cap, noting that others including former FCC Commissioner O’Rielly, former House Majority Leader DeLay (R-TX) (who negotiated the 39% compromise), and Senator Cruz (R-TX) agree with her position or are skeptical of the FCC’s authority. As a matter of policy, Gomez stated that “eliminating the cap does not free local broadcasters from economic pressure, it just changes who is doing the squeezing . . . from Big Tech” to “Big Media,” which “does nothing to protect the communities this cap was designed to serve.”
- At the Unidosus Annual Conference, Commissioner Gomez accepted an award for her efforts to protect freedom of speech. In her speech, Gomez said that “when I joined the FCC, I . . . did not expect that defending the First Amendment would become one of the central fights of my career,” and that “for almost two years I have watched this administration wage a deliberate campaign of censorship and control against broadcasters and journalists.” Gomez noted that her position on the Commission might end soon, but that she had “spent my time pushing companies, broadcasters, and public officials to find their courage, and I’m happy to say it is starting to work”—noting that broadcasters are now pushing back and “refusing to let the government decide who counts as a real journalist and what counts as real news.”
- The FCC announced that it had returned to the US Treasury roughly $881 million in unused funds from the TV Broadcaster Relocation Fund—marking a significant milestone in the conclusion of the Broadcast Incentive Auction, which repurposed 84 MHz of low-band TV broadcast spectrum for commercial and unlicensed wireless use. FCC Chairman Carr stated that “in support of the Trump Administration’s efforts to seek out government waste, we took a hard look at money sitting in our agency with an eye to limiting government spending and reducing wasteful programs,” and that the FCC “found the time was ripe to ‘clean house’ and ensure money does not sit languishing at the agency level when it can be given back to the U.S. Treasury for the financial benefits of the Nation.” These funds were not used in reimbursing broadcasters and others for their costs incurred in the TV Repack after the Incentive Auction. The last chance to claim reimbursement from these funds was in 2022 (see our note here).
- The Media Bureau entered into a Consent Decree with a Wisconsin AM and FM translator station licensee to resolve its investigation into the licensee’s purported unauthorized transfer of control. The Bureau found that the licensee’s former owner transferred his entire ownership in the licensee to his daughter one year before filing a transfer of control application seeking FCC approval to do so. The Consent Decree requires that the licensee pay a $8,000 voluntary contribution to the U.S. Treasury.
- The FCC’s Media Bureau released a Declaratory Ruling granting Connoisseur Media’s petition to exceed the foreign ownership limits of Section 310(b) of the Communications Act. Connoisseur sought approval to permit up to 100% aggregate indirect foreign ownership interests, and specific approval for two Cayman Islands entities and a citizen of the United Kingdom to hold indirect ownership interests greater than 5%. The Bureau found that granting the petition was in the public interest because doing so afforded Connoisseur greater access to capital and enabled it to compete better in the marketplace by providing it with additional resources to invest in local content and new digital capabilities. The Bureau imposed routine conditions that accompany such waivers, requiring Connoisseur to monitor its foreign equity and voting interests, to obtain FCC approval for any new foreign investors holding 5% or more (or 10% for certain investors) and for any foreign individual or entity holding a controlling interest, and to promptly disclose any noncompliance with the FCC’s foreign ownership rules.
On our Broadcast Law Blog, we published an article on the September deadline for the filing of applications to participate in the FCC’s February auction of construction permits to build new FM stations in over 130 communities around the country. The article also discusses other deadlines and procedures set for that auction.