Broadband Cable Association of Pennsylvania


March 19, 2014

A U.S. regulator whose vote is needed to change television-station ownership rules that may force Sinclair Broadcast Group Inc. to sell assets is pushing to ensure smaller companies can win exceptions. Mignon Clyburn, a member of the Federal Communications Commission's Democratic majority, said in an interview she wants "balance" as the agency tightens regulations for controlling more than one station in a market. Sinclair, Nexstar Broadcasting Group Inc., Lin Media LLC and Gray Television Inc. have dropped in trading ahead of the FCC's vote scheduled for March 31. Marci Ryvicker, an analyst for Wells Fargo Securities LLC based in New York, in a note yesterday cut the companies to market perform from outperform, citing a "worsening" regulatory environment.

FCC Chairman Tom Wheeler, a Democrat who proposed the change, needs the votes of Clyburn and the commission's third Democrat to prevail. Both Republican commissioners have criticized the measure. Clyburn cited a section of law that calls for the FCC to lower barriers for entrepreneurs and small businesses and said she wants "the ability to uphold those standards and those goals." She declined to say if she would vote for Wheeler's proposal. "This is an item that is still very fluid and I'm looking forward to continuing to work with my colleagues because we all in the end I believe want the same thing: to achieve balance," Clyburn said.

The FCC is targeting arrangements in which one station sells advertising time for a nearby station, setting up what Wheeler in a March 6 blog post called "a legal fiction" that circumvents agency rules. The FCC limits station ownership in order to promote diversity and competition. Sinclair, based in Hunt Valley, Maryland, owns or provides programming and services to 149 TV stations in 71 markets, according to a company filing with the Securities and Exchange Commission. It provides non-programming services such as sales and management help to 20 stations in 17 markets, according to the filing. The practice helps stations operate efficiently, and better serve their communities, Sinclair said in the filing. Under Wheeler's proposal, stations sharing ad sales would be considered commonly owned, and companies would have two years to come into compliance with rules against owning multiple stations in the same market. Broadcasters could apply for waivers, Wheeler said.

Clyburn today said there "will be a pathway for waivers if something does not neatly fit in the decision which we lay out." The commission is trying to work out "ways that we can make that clearer and more efficient" before the vote. Broadcasters say sharing can help fund TV coverage of local events. The arrangements "in fact, greatly foster localism and diversity," Gordon Smith, president of the National Association of Broadcasters, told Clyburn in a March 12 meeting, according to a filing. "The chairman is proposing to use a sledgehammer where a scalpel, if anything, is far more appropriate" to address "purported bad actors," Clyburn was told by Smith and Rick Kaplan, executive vice president with the Washington-based trade group, according to the filing. Kaplan is a former aide to Clyburn.

The number of full-power commercial TV stations licensed to black owners has dropped in the past decade from 21 to three, of which two are operated as part of sharing arrangements, James Winston, executive director of the National Association of Black Owned Broadcasters, a Washington-based trade group, told Clyburn in a Feb. 26 meeting, according to a disclosure filing. The FCC should consider on a case-by-case basis whether shared arrangements "have the potential to promote diversity of ownership," Winston said. Bloomberg

Florida and other U.S. states will join the Justice Department in seeking to determine if Comcast's plan to merge with Time Warner Cable is legal under U.S. antitrust law, Florida said in a statement to Reuters. "We are part of a multistate group reviewing the proposed transaction along with the U.S. DOJ (Justice Department) Antitrust Division," the Florida state attorney general's office said in an emailed statement. It was not known how many states had joined the task force.

Separately, Indiana officials were also looking at the deal to determine "the potential impact in Indiana." Erin Reece, a spokeswoman for the Indiana attorney general's office, did not indicate if Indiana was part of the multistate group. The attorneys general group is focused on broadband rather than cable in assessing the $45.2 billion deal, according to a source familiar with the effort who was not authorized to speak on the record. Comcast did not immediately respond to a request for comment on the states' review of its proposed deal.

Comcast has previously argued the combination would not reduce competition because the two cable providers do not compete in any markets. The company pledged to divest 3 million subscribers, so the combined customer base of 30 million would represent just under 30 percent of the U.S. pay television video market. A combined Comcast and Time Warner Cable would also have roughly one-third share of the high-speed Internet market. Comcast, which is the No. 1 U.S. cable provider, said on February 13 it had agreed to acquire No. 4 Time Warner Cable.

That generated criticism from some lawmakers and consumer groups concerned that there were already too few options when Americans went to sign up for broadband or cable service. Content providers - entities that make television shows and movies - also worry that a merger of the two cable giants will mean too few buyers for their products, and that those buyers will be able to push their fees down. Comcast, which owns large amounts of content after its 2011 merger with NBC Universal, and Time Warner Cable paid nearly $14 billion to content companies last year for the rights to show their films, television shows and sporting events. The fact that states are involved typically gives the Justice Department additional resources - and sometimes creates additional pressure - to ensure that a proposed transaction complies with antitrust law. The Federal Communications Commission must also approve the deal before it can close. Reuters

It's been a winter of near-record snowfall totals combined with lower than average temperatures. Rest assured, this winter has taken its toll on us all, but most especially, local businesses who have felt its impact. The weather was the topic of conversation at a recent Palmerton Area Chamber of Commerce luncheon. Peter Kern, chamber president, polled various business owners in attendance to see exactly how their businesses have been affected by the various snowstorms this winter. Perhaps Richard Nothstein, part-owner, Country Harvest Family Market, summed it up best. "There's not a real advantage (to a storm)," Nothstein said. "You lose later on."

The dialogue continued as Carl Kern, Blue Ridge Communications TV-13's main weather anchor and a senior videographer, gave a presentation. A graduate of Elizabethtown College, Kern earned his BA degree in communications. He interned at TV-13 in 1986, started at the station as a videographer in January of 1996 and began as a weatherman in April of 1997. Kern told chamber members that they can be their own weather authority because they're familiar with the area in which they live. "The weather is very, very repetitive," Kern said. "The extremes are becoming more extreme." Kern said that in his role as weatherman, he attempts to relate the weather to what people are experiencing. A brief question and answer session followed. Kern then thanked those for attending the function. Lehighton Times News

Walt Disney Co. reached a compromise with shareholders, saying it will split the roles of chairman and chief executive officer in the future under what the company called "normal" circumstances. Disney, the world's largest entertainment company, amended governance guidelines that say the chairman will be an independent director unless the board decides "the best interests of shareholders would be otherwise better served," according to a regulatory filing. The change outlines steps to be taken when the chairman isn't independent. The move averted a showdown at Disney's annual meeting, held on Tuesday in Portland, led by Chairman and Chief Executive Officer Robert Iger. Associated Press