NAB, NCTA Agree: FCC Attribution Should Exclude Small Stakes
Broadcasters and cable operators agree the FCC should exempt from attribution rules small stakes in media companies that are majority owned by another party. Commenting on an agency notice on cable ownership limits, NAB, NCTA and individual cable and broadcast companies urged reinstatement of the so-called single majority shareholder exemption. The provision was remanded in 2001 in Time Warner v. FCC by the U.S. Appeals Court for the District of Columbia when it tossed out cable ownership limits. By a 3-2 vote Dec. 18, the FCC again limited cable operators to serving no more than 30 percent of U.S. pay-TV subscribers, also remanded in the Time Warner case.
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NAB sees no “changes” to warrant revising the “narrow exemption” to FCC attribution rules, it said. Under the rules, when one entity owns more than half an asset, holders of minority shares in broadcast, cable and media assets need not count those stakes toward FCC broadcast ownership limits. “Retaining the exemption will facilitate investment in the broadcasting industry at a time when capital markets are competitive and many broadcasters are making capital- intensive upgrades and equipment overhauls,” it said. Ion Media said keeping the exemption will “provide certainty to broadcasters in these increasingly uncertain financial times.” In a joint filing, CBS, Disney, Fox and NBC Universal said the holder of a minority stake in a broadcaster can’t affect programming or other decisions made by the majority owner.
Comcast, NCTA and Time Warner also endorsed reviving the exemption in filings opposing FCC limits on the number of channels a cable system can carry that are affiliated with it. “It is time for the Commission to abandon its consideration of a vertical ownership cap and terminate this proceeding,” said NCTA. Comcast said cable operators can’t impede a channel’s success by not carrying it because there are plenty of pay-TV competitors, including AT&T, DirecTV, Dish Network and Verizon. “The Commission once again fails to do what the D.C. Circuit said it must do in any final order: formulate a rationale that would justify any particular limit,” Time Warner said. “The commission also fails to address the other ground on which the D.C. Circuit reached its decision -- effective competition.”
NCTA and other cable filers asked the agency to leave in place a limit of 75 channels subject to the 40 percent cap, as the commission proposed in the notice. Lifting the 75- channel limit would mean all of a cable operator’s channels would be subject to the cap, instead of just 75. “The Commission proffers no support for its ’tentative conclusion,'” said NCTA. “The proposal to remove the 75- channel cap would dramatically increase the First Amendment burdens on cable operators.”
Verizon asked the FCC to “clarify” that the 30 percent system ownership cap and other rules approved in the 2007 order don’t apply to areas where two or more wireline companies are selling TV. “Faced with competition, all providers have a strong incentive to provide the desirable programming that consumers want,” it said.