FCC Implementation of CALM Act Picks Up Speed; Order to Circulate Soon

The order may account for MVPD concerns by scaling back a May FCC proposal, in an issue career commission staffers are now grappling with. They're looking at how to use a “safe harbor” proposal from the NCTA (http://xrl.us/bmh83x) in the forthcoming draft order, according to interviews with agency officials. The American Cable Association, CenturyLink and Verizon are among those that have said in recent days that they support aspects of the NCTA’s plan, filings in docket 11-93 show (http://xrl.us/bmh837).

The legislation requires rules be in place by Dec. 15, and agency officials said the FCC will likely have adopted and released an order by then. There’s some uncertainty among FCC, industry and Capitol Hill officials about when the legislation requires the rules to be effective, through publication in the Federal Register, which can take several weeks after an item is adopted. The act says the commission “shall prescribe” by Dec. 15 the rules. Some said they think that means rules need only be adopted by then, while others said it means any order must also take effect. “The rules must be completed Dec. 15 and become effective one year later,” said the office of Rep. Anna Eshoo, D-Calif., the legislation’s sponsor.

The forthcoming draft order likely will require big TV stations and MVPDs to begin complying with the act a year after the rule takes effect, industry executives said told us. They said smaller broadcasters and pay-TV systems likely will get more time, perhaps the additional year that a waiver provision under the act allows. Such waivers could be renewed for another year, the act says. The legislation requires the agency to adopt rules by Dec. 15, and they'll go into effect a year after the commission adopts them, a bureau spokeswoman said.

Bureau officials are considering whether to send an order to Chairman Julius Genachowski to circulate for a vote that departs from the proposals in a rulemaking notice on the CALM Act, agency officials and industry executives said. The May rulemaking eyed requiring all TV stations and MVPDs to be responsible for all spots they carry, something which industry has opposed but which Eshoo has backed (CD July 12 p6). Bureau officials now appear to be trying to incorporate parts, but not all, of the NCTA safe harbor proposal into the order, agency and industry officials said. The bureau spokeswoman declined to comment on work on the CALM Act order.

"We appreciate the Media Bureau’s willingness to engage in a constructive dialogue on these issues,” said NCTA Senior Vice President Rick Chessen. The association is “hopeful that the bureau’s ultimate recommendation will reflect a balanced approach,” he added. The bureau doesn’t appear to have settled on what tack to take on safe harbor for TV stations and MVPDs, said other industry executives and agency officials. But they said it appears the NCTA’s safe harbor proposal is gaining momentum.

The bureau seems to be “borrowing from” the NCTA’s plan, said a pay-TV executive. Staff appear to be looking at whether to require large MVPDs to periodically test the volume levels of ads on national cable networks they carry, perhaps yearly, the executive said. If there’s a pattern of complaints about too-loud commercials, the pay-TV company would have to do more testing to see if the spots really were overly loud compared to surrounding programming, the person said. MVPDs likely wouldn’t have any safe harbor for commercials they insert into any programming, whether on their own channels or on national networks where they can do so-called local ad inserts, the executive said.

MVPDs should be able to rely on “certifications from program networks” that ads conform to the Advanced TV Systems Committee’s A/85 loudness standard, if the commission holds pay-TV companies responsible for volume on spots they don’t originate, the NCTA’s plan said. “As with the ’safe harbor’ proposal, any MVPD relying on certifications would need to ensure that its equipment passes through the program network information transmitted pursuant to A/85,” said the recommendation. “Larger MVPDs would need to (1) run periodic tests of networks on a randomly-selected basis, and (2) test a particular network where the number of complaints suggests potential noncompliance. Because all MVPDs generally receive the same programming feeds, compliance testing by larger MVPDs should benefit the entire system without imposing unnecessary costs on smaller entities.”

Verizon said it generally backs a safe harbor provision “that would better take into account the roles assigned by the A/85 Recommended Practice for the various players in the video creation, aggregation, and distribution chain in addressing the loudness levels of commercials.” The telco-TV provider still objects to the extent of the authority the agency sought to exercise in the rulemaking, according to a filing posted Tuesday (http://xrl.us/bmh9b9) in the docket. It recounted Verizon executives’ meeting with Chief Bill Lake and other front-office Media and Enforcement bureau officials. “MVPDs should not be liable for the loudness of commercial advertising that they merely pass through -- and may be currently contractually required to pass through without any alterations,” CenturyLink reported executives told front-office staffers of both bureaus last Thursday (http://xrl.us/bmh9cj). “Should the Commission decline to take this approach, CenturyLink supports the proposal described in NCTA’s October 18, 2011 ex parte."

ACA said it backs the NCTA’s plan for ads from cable networks, where large MVPDs “volunteer” to have the FCC impose testing requirements on those big operators. “ACA’s support is based on its desire to seek and provide a compromise with the Commission’s overly expansive reading of the standard,” the association of small operators said in a filing. “To apply the testing requirements in the NCTA proposal to smaller operators to enable these MVPDs to qualify for a safe harbor regarding advertisements inserted upstream by programmers, exceeds the requirements of the standard. Moreover, any additional benefit of extending the obligations beyond larger MVPDs would be negligible since programmers distribute the same programming feed containing their inserted commercials to all MVPDs, large and small alike.”