On April 4, 2014, the FCC’s Media Bureau released an Order granting TiVo’s request to extend, until June 1, 2015, the requirement that all new HD set-top boxes include an IP-output port that complies with an open industry standard for home networking.  Small cable companies that serve 400,000 or fewer subscribers received an additional three months, until September 1, 2015, to come into compliance. 

Background.  In October 2010, the FCC eliminated the IEEE 1394 interface mandate for set-top boxes in its “CableCARD Fix Order.”  In that order, the FCC specified that:

• By July 1, 2011, operator-supplied two-way HD boxes must include an IP-based output that supports recordable HD video and closed captioning data; and
• By December 1, 2012, the boxes must support certain functional requirements for interactive audiovisual communications enabling the receipt of video content by networked devices in the home.

The rule was designed to enable consumers to connect an IP device in their home (such as a smart television, retail set-top device, or a computer) to the set-top box provided by their cable operator, thereby giving consumers more options to view and navigate programming.

When it adopted the home networking functionalities requirements, the FCC declined to specify a standard by which these service offerings were to be provided.  Instead, it left the issues to be worked out by industry.  However, by 2012 it became clear that an open industry home networking standard would not be ready before the December 1^st deadline and TiVo petitioned to clarify the standard and extend the deadline.  In November 2012, the Media Bureau granted cable operators an 18-month extension of the compliance deadline until June 2, 2014.  Small cable companies that serve 400,000 or fewer subscribers over one or more cable systems were given an additional three months, until September 2, 2014, to comply.

Additional One-Year Extension.  TiVo petitioned to extend the deadline again in January 2014.  In ruling on TiVo’s most recent waiver request, the FCC acted to grant cable operators an additional 12-month extension to implement the home networking standard until June 1, 2015.   This industry-wide relief was granted because the record demonstrated that, despite best efforts, industry home networking functionalities standards had yet to develop.  Significantly, the FCC again granted small cable companies that serve 400,000 or fewer subscribers over one or more cable systems an additional three-additional months, until September 1, 2015, to come into compliance.

For more information about the home networking requirement, please contact Elvis Stumbergs at (202) 872-6881 or estumbergs@cinnamonmueller.com.

FCC Releases Reminder on Simulated EAS Tones, Seeks Industry Assistance

ACA, NCTA, NAB, MPAA and other industry leaders recently received a letter from FCC Chairman Wheeler and the four other Commissioners seeking their assistance in spreading the word about the importance of compliance with the FCC’s Emergency Alert System (“EAS”) rules.  Specifically, the FCC is concerned about the recent increase of actual or simulated EAS tones in video programming. 

The Communications Act and FCC rules prohibit any transmission of the EAS Attention Signal or codes, or a simulation of them, under any circumstances other than a genuine alert or an authorized test of the EAS system violates the Communications Act and FCC rules.  The FCC’s forfeiture guidelines set an $8,000 fine as the base forfeiture for EAS rule violations.

The letter and other recent FCC actions illustrate how important EAS enforcement is for the FCC.  Last November, the FCC Enforcement Bureau released an Enforcement Advisory to remind EAS participants of the laws governing appropriate use of the Emergency Alert System codes and Attention Signal.  At the same time it issued the advisory, the FCC proposed a $25,000 fine against a cable programmer and entered into a $39,000 consent decree with a broadcaster for transmitting programming that contained simulated EAS tones.  Last month, the FCC’s Enforcement Bureau issued a Notice of Apparent Liability proposing large fines against Viacom ($1,120,000), NBC Universal ($530,000), and ESPN ($280,000) for transmitting false EAS alert tones.   

With their letter, the Commissioners aim to deter and eventually eliminate misuse of EAS tones, and seek to work with each association in educating their members to preempt any need for further enforcement actions in this area. 

If you have questions about the FCC’s EAS rules, please contact Bruce Beard at (314) 394-1535 or bbeard@cm-chi.com.

FCC Prohibits Non-Commonly Owned Top Four-ranked Stations in the Same DMA from Jointly Negotiating Retransmission Consent Agreements

            The FCC recently released an Order prohibiting top four-rated (“Top Four”) television broadcast stations licensed in the same Designated Market Area (“DMA”) and not commonly owned, operated or controlled, from jointly negotiating retransmission consent agreements with a multichannel video programming distributor (“MVPD”).  The prohibition applies to:

• A Top Four station delegating negotiating authority to another Top Four station;
• Two or more Top Four stations delegating authority to a common third party (e.g., a consultant); and
• Top Four stations entering into any informal, formal, tacit or other agreement and/or conduct that signals or is designed to facilitate collusion regarding retransmission terms or agreements between them.

            Background.  The FCC’s rules obligate television broadcast stations and MVPDs to negotiate in good faith the terms and conditions of retransmission consent agreements.  The FCC issued regulations addressing retransmission consent negotiations following enactment of the 1999 Satellite Home Viewer Improvement Act, and amended these “good faith negotiation regulations” pursuant to the 2004 Satellite Home Viewer Extension and Reauthorization.

            Under the FCC’s rules, the following actions or practices violate a broadcast television station’s or MVPD’s duty to negotiate retransmission consent agreements in good faith: 

• Refusal to negotiate retransmission consent;
• Refusal to designate a representative with authority to make binding representations;
• Refusal to meet and negotiate at reasonable times and locations, or acting in a manner that unreasonably delays retransmission consent negotiations;
• Refusal to put forth more than a single, unilateral proposal;
• Failure to respond to a proposal of the other party, including the reasons for the rejection of any such proposal;
• Execution of an agreement that prevents a party from entering into a retransmission consent agreement with any other television broadcast station or MVPD; and
• Refusal to execute a written agreement that sets forth the full understanding of the parties.

In addition, a television broadcast station or MVPD may demonstrate, based on the totality of the circumstances of a particular retransmission consent negotiation, that the opposing party breached its duty to negotiate in good faith.

In March 2010, the American Cable Association (“ACA”), along with 14 MVPDs and public interest groups, filed a rulemaking petition arguing that changes in the marketplace, and the increasingly contentious nature of retransmission consent negotiations, justified revisions to the FCC’s retransmission consent rules.  ACA specifically argued that competing broadcast television stations obtain undue bargaining leverage by negotiating together when they are not commonly owned.  In 2011, the FCC issued a Notice of Proposed Rulemaking regarding proposals contained in the petition, and the action in the Order follows from this Notice.

New Joint Negotiation Prohibition.  The Order declared that a Top Four station owner commits a per se violation of its statutory duty to negotiate in good faith if the station jointly conducts retransmission consent negotiations with another Top Four station if the stations (i) are not commonly owned, operated or controlled, and (ii) serve the same DMA. 

The FCC considered this to be prohibited “joint negotiation.”  A “Top Four” station is one that is ranked among the top four in a DMA, based on the most recent all-day Nielsen audience share measurement.

            The FCC recognized that although much of the existing coordination between stations occurs as part of formal agreements, a prohibition should apply not only to agreements that are legally binding, but also to less formal methods of coordination.  Accordingly, a same-market Top Four station that is not commonly owned, operated or controlled may no longer:

• Delegate authority to negotiate or approve a retransmission consent agreement to another Top Four station (or its representative);
• Delegate authority to negotiate or approve a retransmission consent agreement, along with another Top Four station that is not commonly owned (e.g., a consultant); or
• Engage in any informal, formal, tacit or other agreement and/or conduct that signals or is designed to facilitate collusion regarding retransmission terms or agreements with another Top Four station.

Effective Date.  The FCC adopted the rules prospectively.  Stations subject to this rule are prohibited from engaging in joint negotiation as of the effective date of the Order (30 days following publication in the Federal Register), regardless of whether they are subject to existing agreements, formal or informal, obligating them to negotiate retransmission consent jointly. 

However, the rule does not apply to joint negotiation by same market, separately-owned Top Four stations that has been completed prior to the effective date of the rules, and it does not invalidate retransmission consent agreements concluded through such joint negotiations.

            Enforcement.  MVPDs or broadcasters may file complaints with the FCC within one year of:  (i) entering into an agreement that they believe violates the good faith rules; (ii) identifying conduct that they believe violates the good faith rules, so long as the negotiations are unrelated to any existing agreement between the parties; or (iii) providing notice that they intend to file a complaint on the grounds that their request to negotiate retransmission consent has been denied, unreasonably delayed, or unacknowledged in violation of one or more of the good faith rules.

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If you have questions about the FCC’s good faith rules, or retransmission consent negotiations in general, please contact Barbara Esbin at (202) 872-6811 or besbin@cinnamonmueller.com, Scott Friedman at (312) 580-8557 or sfriedman@cinnamonmueller.com, or Elvis Stumbergs at (202) 872-6881 or estumbergs@cinnamonmueller.com.