Nexstar will sell three stations to African-American-owned Marshall Broadcasting and operate them under a sharing arrangement with Nexstar, subject to FCC approval of the $58.5 million deal, Nexstar said in a news release Friday (http://bit.ly/1utRSGj). MBG will fund the transaction through loans guaranteed by Nexstar, it said. The deal “addresses recent proposed FCC regulation changes while expanding the opportunity for minority broadcasters to play a greater role in the U.S. broadcasting industry as owners and operators of television stations,” said MBG owner Pluria Marshall. The FCC Media Bureau in March announced increased scrutiny for transactions involving sharing arrangements, and the full FCC enacted new rules for attributing ownership in sharing arrangements involving as sales. Both new policies pointed to public interest benefits as possible justifications for sharing arrangements, and the dearth of African-American-owned stations was discussed during the buildup to the rule changes (CD March 14 p9). Nexstar said it will provide sales and other nonprogramming services to MBG “allowing MBG to use Nexstar personnel for engineering support, master control, traffic and billing, and other administrative functions that do not relate to control of the stations or their programming.” The stations involved in the deal are Fox affiliates KMSS-TV Shreveport, KPEJ-TV Odessa, Texas, and KLJ Quad Cities, Davenport, Iowa, said Nexstar.
CEA’s survey finding that the percentage in the U.S. of Internet-only TV homes soon will top that of homes that get their TV exclusively through an antenna (CD June 6 p14) drew a sharp rebuke Friday from supplier Antennas Direct, which bills itself as the leader in antenna technology reinvented for the digital era. CEA President Gary Shapiro had said the findings are evidence that “we are at a pivotal point in consumer behavior, as fewer and fewer American homes are now using only antennas to watch their favorite television programs, and more and more households turn to the Internet as a source of TV content.” But Antennas Direct President Richard Schneider said Shapiro is wrongheaded because “with the popularity of digital television, antenna sales are on fire with unit volume doubling in the first quarter,” in an email. “The billions of dollars invested by broadcasters and antenna companies have brought joy to millions of Americans’ viewing experience. Customers are embracing this new digital over-the-air technology at a pace that is shocking for even the jaded consumer electronics industry.” Shapiro typifies those “who oppose innovation” and can’t “let go of the status quo,” Schneider said. “Consumers despise the relationship they have with pay television and want to be liberated from it.” Millions of American TV viewers “have already cut the cord,” he said. “Over-the-air television is exploding thanks to digital multicasting, cord-cutting and a better picture quality. You can’t stop that. They want the dozens of uncompressed high-definition channels over the air for free.” Shapiro in an email Friday defended the survey as “real unbiased objective research.” It shows that fewer and fewer people are relying on free over-the-air broadcast TV, Shapiro told us. “It also shows that there is real cord cutting going on. These are facts and we are just reporting them. The trend to other forms of media is real. Personally attacking me for the data is like attacking the weatherman because you don’t like the weather.” CEA is “on record” with the view that broadcast spectrum “is underused by the American public and we have supported the incentive auctions and were instrumental in getting that legislation to become a law,” Shapiro said. “We want to see the auction succeed.” Antennas Direct spokesman Scott Kolbe confirmed by email that the NAB supplied his company with journalists’ contact information so it could refute the CEA survey findings. NAB itself had declined comment on the CEA survey. “I think the reality is we are frustrated” because no antenna company can compete with CEA on lobbying resources, Kolbe told us. “It is a $50 sale and you are done.” Kolbe urged us to “look at the sales growth of Antennas Direct” and its competitors. “Everyone is growing,” he said. NAB representatives didn’t immediately comment.
The percentage in the U.S. of Internet-only TV homes soon will surpass that of homes that get their TV exclusively through an antenna, CEA said in a study. It estimated 6 percent of TV homes rely exclusively on an antenna, compared with 5 percent that rely on the Internet only for TV programming. “We are at a pivotal point in consumer behavior, as fewer and fewer American homes are now using only antennas to watch their favorite television programs, and more and more households turn to the Internet as a source of TV content,” said CEA President Gary Shapiro in a news release Thursday (http://bit.ly/1kCrMhj). He cited “a nine-year, downward trend that shows antenna-only viewership remains at all-time lows and an upward trend of consumers watching video programming when and where they choose.” Despite the explosive growth of smartphones and tablets, the TV “remains the most commonly owned video viewing device and our primary means of watching video content,” said Brian Markwalter, CEA senior vice president-research and standards. “But significantly more households that use televisions to watch TV programming are now also turning to alternative video devices at home. The explosive growth of Internet programming means consumers now have better options to watch video content on different types of screens they may own.” Viewership on connected devices continues to grow, with nearly half of TV homes surveyed reporting watching video on a laptop or smartphone in the last year, CEA said. More than a third of homes reported watching video on a tablet or desktop PC in the last year, it said. CEA used the survey results to trumpet its advocacy for broadcasters to free up their spectrum. “As consumers continue to turn to other devices and services for TV programming -- devices that need wireless spectrum to deliver the content we want anytime, anywhere -- it’s clear that the free, public spectrum given to broadcasters could be put to much better use,” Shapiro said. NAB declined comment.
The NAB has “deep reservations” about the framework for the incentive auction, said NAB President Gordon Smith in a released statement Thursday (http://bit.ly/1jWuwkV). The auction report and order turns the auction into a “significant setback” for local broadcasters and viewers, Smith said. The framework ignores congressional direction to “do no harm to broadcasters who choose not to participate in the voluntary auction,” said Smith in the release. Americans won’t care if wireless carriers add more wireless spectrum but will “be quite angry” to lose broadcast TV, Smith said. He urged the FCC to hold nonparticipants harmless and said Congress should “exercise the proper oversight needed” to protect broadcasters. “If broadcasters are coerced through unrelated regulatory actions” the auction ceases to be voluntary, Smith said.
Broadcasters won the lottery to determine which venue will hear petitions for review against new FCC rules on joint sales agreements (JSA) and its handling of the quadrennial review of media ownership rules, according to court documents. The matter will be heard in the U.S. Court of Appeals for the D.C. Circuit, where NAB, Howard Stirk Holdings and NexStar Broadcasting had all filed court challenges. Prometheus Radio filed its own challenge in the 3rd U.S. Circuit Court of Appeals, necessitating the lottery. The matter of venue may not be over, said Georgetown Law Institute for Public Representation senior counselor Andrew Schwartzman, representing Prometheus. The public interest group has filed a motion to transfer the case to the 3rd Circuit, and it’s likely to be granted, Schwartzman said. The 3rd circuit has handled challenges to the quadrennial review in the past, Schwartzman said, making it the likely venue for the case.
Broadcast company Howard Stirk Holdings filed its own challenge to the FCC’s rule that makes joint sales agreements where one station is responsible for over 15 percent of another’s ad sales attributable for ownership calculations, joining the NAB petition filed last week (CD June 2 p1). The JSA rule is “arbitrary and capricious” and violates the Administrative Procedure Act, HSH said in its filing in the U.S. Court of Appeals for the D.C. Circuit . HSH had applied for the first waiver under the new JSA rules to allow it to participate in the Sinclair/Allbritton deal (CD April 24 p12), but Sinclair announced a restructuring of that deal to comply with the FCC’s new JSA regulations, which means HSH can’t participate even with a waiver (CD May 30 p4). One of the few remaining broadcast operations owned by an African American, HSH had asked for the waiver on public interest grounds.
The FCC released a public notice (http://bit.ly/1nIKTtt) Tuesday on the aggregate interference cap and the use of proxy channels when preserving coverage area and population served in repacking stations after the incentive auction. Commenters in the auction proceeding had argued that an FCC policy in the Auction Order to consider population served during the process of channel reassignment would not protect stations from aggregate interference after the repacking. In the public notice the FCC released an analysis showing that “approximately one percent of all stations in simulated channel reassignments received new interference above a one percent cap, and that the majority of stations received new aggregate interference well below the pairwise interference limit adopted by the Commission,” the PN said. The PN includes “constraint files” to assist interested parties in conducting their own repacking studies. “To generate sufficient data from which to draw meaningful results, Commission staff performed 100 simulations using several variations of the approach we developed for creating simulated sets of stations to be repacked,” the PN said.
The FCC Enforcement Bureau fined an unlicensed FM radio operator $25,000 for operating a pirate station in Fort Lauderdale, Florida. The FCC previously imposed a penalty on Damian Allen for operating a pirate radio station in Pompano Beach, Florida, on the same unauthorized frequency, the bureau said in a forfeiture order (http://bit.ly/1hsx7IS). That Allen would commit the same violation on the same frequency “demonstrates a deliberate disregard for the Commission’s authority and its rules,” it said. The bureau also proposed a $20,000 fine against Marc-Knus Charles for apparently operating an unlicensed FM station in Pompano Beach. The FCC warned Charles of the violation in writing, “but he nevertheless continued to operate illegally,” it said in a notice of apparent liability (http://bit.ly/1pAuarX). The bureau said the violation justifies a $10,000 upward adjustment to the $10,000 base forfeiture.
TVfreedom.org urged the pay-TV industry to stop “superfluous” price increases. It also asked pay-TV providers to offer consumers more flexibility on multiyear contracts, and give consumers “assurances that their monthly bills won’t continue to increase at four times the rate of inflation, year after year,” a spokesman said Monday in a blog post (http://bit.ly/1j7Ml6h). The record profits in the cable industry are derived “directly from the average consumer’s wallet,” he said. With few viable alternatives, most subscribers, “who are locked in to service contracts, feel like they have little choice but to pay the hefty monthly pay-TV bills that continue to go up,” he said.
The FCC Media Bureau dismissed a complaint from low-power TV station KGCT Nowata, Oklahoma, against Cable One. KGCT argued that Cable One failed to carry KGCT on its cable system from Cable One’s headend in Bartlesville, Oklahoma, the bureau said in an order released Friday (http://bit.ly/1nLhkF2). Cable One argued that it reoriented its antenna as requested by KGCT and retested the signal “only to find that KGCT’s signal still does not meet the required strength,” the bureau said. Because KGCT isn’t able to deliver a good quality over-the-air signal, “it is not a qualified LPTV station” for carriage, it said.