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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by January 10, 2017, reflecting information for the months of October, November, and December 2016.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station. The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the public inspection file a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.” By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations. The lists also provide important support for the certification of Class A television station compliance discussed below. We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness. Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during the license term. Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs. Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

It should be noted that the FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have fully complete Quarterly Lists or that do not timely place such lists in their public inspection file. The FCC’s base fine for missing Quarterly Lists is $10,000.

Preparation of the Quarterly List

The Quarterly Lists are required to be placed in the public inspection file by January 10, April 10, July 10, and October 10 of each year. The next Quarterly List is required to be placed in stations’ public inspection files by January 10, 2017, covering the period from October 1, 2016 through December 31, 2016. All TV stations, as well as commercial radio stations in the Top-50 Nielsen Audio markets that have five or more full-time employees, must post their Quarterly Lists to the online public inspection file. Note that, effective as of June 24, 2016, the website for the new online public inspection file for both TV and radio stations is https://publicfiles.fcc.gov/.

Stations should keep the following in mind:

  • Stations should maintain routine outreach to the community to learn of various groups’ perceptions of community issues, problems, and needs. Stations should document the contacts they make and the information they learn. Letters to the station regarding community issues should be made a part of the station’s database.
  • There should be procedures in place to organize the information that is gathered and bring it to the attention of programming staff with a view towards producing and airing programming that is responsive to significant community issues. This procedure and its results should be documented.
  • Stations should ensure that there is some correlation between the station’s contacts with the community, including letters received from the public, and the issues they have identified in their Quarterly Lists. A station should not overlook significant issues. In a contested license renewal proceeding, while the station may consider what other stations in the market are doing, each station will have the burden of persuading the FCC that it acted “reasonably” in deciding which issues to address and how.
  • Stations should not specify an issue for which no programming is identified. Conversely, stations should not list programs for which no issue is specified.
  • Under its former rules in this area, the FCC required a station to list five to ten issues per Quarterly List. While that specific rule has been eliminated, the FCC has noted that such an amount will likely demonstrate compliance with the station’s issue-responsive programming obligations. However, the FCC has noted that some licensees may choose to concentrate on fewer than five issues if they cover them in considerable depth. Conversely, the FCC has noted that other broadcasters may address more than ten issues in a given quarter, due perhaps to program length, format, etc.
  • The Quarterly Lists should reflect a wide variety of significant issues. For example, five issues affecting the Washington, DC community might be: (1) the fight over statehood for the District of Columbia; (2) fire code violations in DC school buildings; (3) clean-up of the Anacostia River; (4) reforms in the DC Police Department; and (5) proposals to increase the use of traffic cameras on local streets. The issues should change over time, reflecting the station’s ongoing ascertainment of changing community needs and concerns.
  • Accurate and complete records of which programs were used to discuss or treat which issues should be preserved so that the job of constructing the Quarterly List is made easier. The data retained should help the station identify the programs that represented the “most significant treatment” of issues, e.g., duration, depth of presentation, frequency of broadcast, etc.
  • The listing of “most significant programming treatment” should demonstrate a wide variety in terms of format, duration (long-form and short-form programming), source (locally produced is presumptively the best), time of day (times of day when the programming is likely to be effective), and days of the week. Stations should not overlook syndicated and network programming as ways to address issues.
  • Stations should prepare each Quarterly List in time for it to be placed in their public inspection file on or before the due date. If the deadline is not met, stations should give the true date when the document was placed in the public inspection file and explain its lateness. Stations should avoid creating the appearance that a document was timely placed in the public inspection file when it was not.
  • Stations should show that their programming commitment covers all three months within each quarter.

These are just some suggestions that can assist stations in meeting their obligations under the FCC’s rules. The requirement to list programs providing the most significant treatment of issues may persuade a station to review whether its programming truly and adequately educates the public about community concerns.

Attached is a sample format for a “Quarterly Issues/Programs List” to assist stations in filling out the Quarterly List. Please do not hesitate to contact the attorneys in the Communications Practice for specific advice on how to ensure your compliance efforts in this area are adequate.

Class A Television Stations Only

Class A television stations must certify that they continue to meet the FCC’s eligibility and service requirements for Class A television status under Section 73.6001 of the FCC’s Rules. While the relevant subsection of the public inspection file rule, Section 73.3526(e)(17), does not specifically state when this certification should be prepared and placed in the public inspection file, we believe that since Section 73.6001 assesses compliance on a quarterly basis, the prudent course for Class A television stations is to place the Class A certification in the public inspection file on a quarterly basis as well.

A PDF version of this article can be found at 2016 Fourth Quarter Issues/Programs List Advisory for Broadcast Stations.

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Being close observers of the FCC, Congress, and the federal government in general, we get a lot of questions about what the next year will likely bring in DC.  While changes in administrations tend to increase the number of questions like that, rarely have I been as deluged with such requests as this year.  Everyone wants to know what a Trump presidency will bring, particularly to the FCC.  In the absence of solid information, many have rushed in to fill the information vacuum.

These prognosticators tend to fall into two camps: those who project onto the new FCC all their hopes and wishes (and who inevitably will be disappointed when the FCC charts its own path), and those who are just plain guessing, figuring that they will turn out to be right 50% of the time (overlooking the fact that there are way more than two answers to most problems in Washington).  As a result, the only somewhat reliable chatter remains characteristically vague, focusing on very general trends (deregulation anyone?) and avoiding specifics.

However, even with a level of uncertainty at the FCC rarely seen in its 82-year history, there are quite a few things we can predict for 2017 with near certainty.  You’ll find all of them in the Pillsbury 2017 Broadcasters’ Calendar, published earlier this week.

For example, without even knowing what proceedings a reconstituted FCC will elect to launch this coming year, we can already predict with a high degree of certainty that the most likely day for the FCC’s filing system to implode will be December 1.  Why?  Because with the FCC’s announcement this week that NCE stations will join commercial stations in having a unified December 1 ownership report filing deadline (yes, our Broadcast Calendar is that up-to-the-minute), pretty much every station in America will be making at least one filing by that deadline, with most making multiple filings (it is also the deadline for TV stations to file their DTV Ancillary Services Reports, and for stations in eleven states to file Mid-Term EEO Reports).

There are many other deadlines and requirements spelled out in the Broadcasters’ Calendar, so at least in that regard, broadcasters will know what is coming at them in 2017.  And, as new developments occur in what promises to be a singularly interesting year at the FCC, you can be certain we’ll be discussing them here at CommLawCenter.

So if all the uncertainty is stressing you out, keep a copy of the Broadcasters’ Calendar close at hand, stay tuned to CommLawCenter, and remind yourself that 2017 isn’t a complete unknown.

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Noncommercial stations caught a break today.  For many years, broadcast stations filed annual ownership reports on the anniversary date of their license renewal deadline.  Since those deadlines varied from state to state (and even between radio and TV in the same state), determining whether a station had filed its reports on time could be challenging.  That task was further complicated by the fact that a licensee owning stations in multiple states could elect to consolidate the filing of its ownership reports for all stations on the license renewal date for any one state in which it had a station.

Ultimately, the FCC concluded that the reports didn’t need to be filed annually, and made them biennial.  The result was that it became even more difficult for the FCC to keep track of whether a station had filed on time.  In fact, a licensee that had consolidated its ownership report filing date across multiple states might not even be filing in the same year as the FCC would normally expect.

Ultimately, the FCC gave up and decided to adopt a unified national deadline for commercial TV and radio stations in 2009.  At the same time, it expanded the list of entities that were required to file the reports (previously, sole proprietorships, general partnerships composed only of individuals, and LPTV licensees were exempt).  It set November 1 of odd-numbered years as the consolidated filing deadline, and indicated that it planned to eventually adopt a unified national deadline for noncommercial stations as well.

However, the FCC quickly discovered that given the increased complexity of the reports, and the fact that the information reported in them was required to reflect a station’s ownership as of October 1 of that same year, broadcasters were having trouble generating all of the required ownership reports in just 30 days.  The FCC also had some teething pains with the new electronic form, with the result that the November 1, 2009 deadline ended up being extended multiple times, ultimately resulting in a deadline for the 2009 reports of July 8, 2010.

After that painful ordeal, the FCC in 2011 permanently moved the commercial station deadline to December 1 of odd-numbered years, providing stations with a 61-day period to file the reports.  Perhaps because of how difficult and drawn out the process of establishing a unified deadline for commercial stations had been, the FCC moved very slowly in establishing the promised unified deadline for noncommercial stations.  It wasn’t until January 8, 2016 that the FCC moved forward on that front, adopting an Order creating a new online form (FCC Form 2100, Schedule 323-E) and establishing a unified national deadline for noncommercial stations to file it.  Because the new form had to be approved by the Office of Management and Budget (and that approval published in the Federal Register) before it could be used, it has still not gone into effect, meaning that throughout 2016, noncommercial stations have continued to file on a state-by-state basis using the old form.  It therefore seemed likely that a lot of noncommercial stations would end up filing two sets of ownership reports in 2017—one set on a station’s license renewal anniversary, and one set on the likely December 1, 2017 unified filing date.

Thankfully, the FCC announced this afternoon that it would not be burdening noncommercial stations with dual filings in 2017, releasing an Order suspending all 2017 biennial ownership reporting deadlines for noncommercial stations and announcing that 2017 will indeed be the year that noncommercial stations will finally have a common ownership reporting deadline.  That deadline will be December 1 of odd-numbered years, the same as the deadline for commercial stations.

That’s good news for noncommercial stations in general, and particularly for those with limited resources to make such filings.  Consider it an early Christmas gift from the FCC.

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At the end of Stage 2 of the Spectrum Auction, I wrote about bidder fatigue and the hope that the FCC would drop its spectrum clearing target a couple of notches for Stage 3 to expedite the conclusion of a now seemingly interminable auction.  Unfortunately, the FCC held fast to its incremental approach.  As a result, the FCC attempted to clear 108 MHz in Stage 3, leading to a reverse auction that lasted 30 days and resulted in a $40.3B target for the forward auction.  That was roughly double the amount of money bid in the forward auction in Stages 1 and 2.  Also, with the Stage 2 forward auction concluding after only one round of bids, it seemed unlikely the skies would suddenly open up and start raining big-dollar forward bidders in Stage 3.

That has now proven true, as the Stage 3 forward auction commenced at 10am this morning and officially ended at 12:01pm.  Like Stage 2, it lasted only a single round of bidding.  Technically, it concluded even faster than Stage 2, which took 2 hours and 14 minutes before being declared over, a whole 13 minutes longer than today’s auction.  Having taken six years to reach this point, the fact that we are measuring entire auction stages in minutes is disappointing to say the least.

The good news?  The FCC is apparently feeling at least some urgency to move the auction along to a conclusion, announcing today that it anticipates launching the Stage 4 reverse auction on Tuesday, December 13.  Unfortunately, with the Stage 1, 2, and 3 reverse auctions taking 28 days, 30 days, and 30 days respectively, even a fast-moving Stage 4 can’t conclude the auction in 2016.

While the forward auction bid totals have dropped in every stage of the auction as the amount of spectrum being sold has dropped ($23.1B in Stage 1, $21.5B in Stage 2, and now $19.7B in Stage 3), the totals have been fairly consistent.  To declare the auction concluded, the FCC will at a minimum need forward auction payments to cover the reverse auction total, the $1.75B for repacking, and the several hundred million in auction expenses incurred.

As a result, the spectrum clearing target will likely need to drop until the total bids in the reverse auction are less than $17B.  That would allow the FCC to cover the reverse auction payments for spectrum plus the roughly $2B in repacking costs and auction-related expenses if the forward auction still brings in $19B or so.  However, since the total forward bids have dropped a bit in each stage, it’s reasonable to assume that trend will continue, meaning total reverse auction bids will need to drop significantly below $17B for the auction to finally conclude.  That’s quite a way from today’s $40+B target and, barring some surprises, makes it likely the auction will see a Stage 5 and perhaps a Stage 6, taking us far into 2017.

When the National Broadband Plan was announced by the FCC in 2010 as a way of repurposing spectrum while reducing the federal deficit, broadcasters were, for the most part, decidedly uninterested in the reverse auction.  Only after the FCC presented sky-high valuations for broadcast spectrum in the Greenhill Report did shareholders insist broadcast companies take a closer look.  It now looks like that initial disinterest was fully justified, with most broadcasters having spent more on their auction participation and forgoing deal opportunities during the “quiet period” than they can ever hope to derive from the auction itself.

So broadcasters’ first instinct regarding the Spectrum Auction may well have been the right one.  And that part about the excess auction proceeds reducing the federal budget deficit?  Turns out that’s not happening either.

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November 2016

This Broadcast Station Advisory is directed to radio and television stations in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

December 1, 2016 is the deadline for broadcast stations licensed to communities in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont to place their Annual EEO Public File Report in their public inspection file and post the report on their station website. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by December 1, 2016.

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment.

In addition, those SEUs with five or more full-time employees (“Nonexempt SEUs”) must also comply with the FCC’s three-prong outreach requirements. Specifically, Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening, except in exigent circumstances, (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits, based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term. These Menu Option initiatives include, for example, sponsoring job fairs, participating in job fairs, and having an internship program.

Nonexempt SEUs must prepare and place their Annual EEO Public File Report in the public inspection files and on the websites of all stations comprising the SEU (if they have a website) by the anniversary date of the filing deadline for that station’s license renewal application. The Annual EEO Public File Report summarizes the SEU’s EEO activities during the previous 12 months, and the licensee must maintain adequate records to document those activities. Nonexempt SEUs must submit to the FCC the two most recent Annual EEO Public File Reports with their license renewal applications.

In addition, all TV station SEUs with five or more full-time employees and all radio station SEUs with more than ten full-time employees must submit to the FCC the two most recent Annual EEO Public File Reports at the midpoint of their eight-year license term along with FCC Form 397 – the Broadcast Mid-Term EEO Report.

Exempt SEUs – those with fewer than five full-time employees – do not have to prepare or file Annual or Mid-Term EEO Reports.

For a detailed description of the EEO rule and practical assistance in preparing a compliance plan, broadcasters should consult The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters published by Pillsbury’s Communications Practice Group. This publication is available at: https://www.pillsburylaw.com/publications/broadcasters-guide-to-fcc-equal-employment-opportunity-rules-policies.

Deadline for the Annual EEO Public File Report for Nonexempt Radio and Television SEUs

Consistent with the above, December 1, 2016 is the date by which Nonexempt SEUs of radio and television stations licensed to communities in the states identified above, including Class A television stations, must (i) place their Annual EEO Public File Report in the public inspection files of all stations comprising the SEU, and (ii) post the Report on the websites, if any, of those stations. LPTV stations are also subject to the broadcast EEO rules, even though LPTV stations are not required to maintain a public inspection file. Instead, these stations must maintain a “station records” file containing the station’s authorization and other official documents and must make it available to an FCC inspector upon request. Therefore, if an LPTV station has five or more full-time employees, or is part of a Nonexempt SEU, it must prepare an Annual EEO Public File Report and place it in the station records file.

These Reports will cover the period from December 1, 2015 through November 30, 2016. However, Nonexempt SEUs may “cut off” the reporting period up to ten days before November 30, so long as they begin the next annual reporting period on the day after the cut-off day used in the immediately preceding Report. For example, if the Nonexempt SEU uses the period December 1, 2015 through November 20, 2016 for this year’s report (cutting it off up to ten days prior to November 30, 2016), then next year, the Nonexempt SEU must use a period beginning November 21, 2016 for its next report. Continue reading →

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November 2016

The staggered deadlines for noncommercial radio and television stations to file Biennial Ownership Reports remain in effect and are tied to each station’s respective license renewal filing deadline.

Noncommercial radio stations licensed to communities in Colorado, Minnesota, Montana, North Dakota, and South Dakota and noncommercial television stations licensed to communities in Alabama, Connecticut, Georgia, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont must electronically file their Biennial Ownership Reports by December 1, 2016. Licensees must file using FCC Form 323-E and must also place the form as filed in their station’s public inspection file.

On January 8, 2016, the Commission adopted changes to the ownership report forms and a single national filing deadline for all noncommercial radio and television broadcast stations like the one that the FCC previously established for all commercial radio and television stations. However, until the Office of Management and Budget approves the new forms, noncommercial radio and television stations should continue to file their biennial ownership reports every two years by the anniversary date of the station’s license renewal application filing deadline.

A PDF of this article can be found at Biennial Ownership Reports are due by December 1, 2016 for Noncommercial Radio Stations in Colorado, Minnesota, Montana, North Dakota, and South Dakota and Noncommercial Television Stations in Alabama, Connecticut, Georgia, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont

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November 2016

All commercial and noncommercial educational digital television broadcast station licensees and permittees must file FCC Form 2100 – Schedule G by December 1, 2016.

The FCC requires all digital television stations, including all commercial and noncommercial educational full power television stations, digital low power television stations, digital translator television stations, and digital Class A television stations, to submit FCC Form 2100 – Schedule G (formerly known as the FCC Form 317) each year. The report details whether stations provided ancillary or supplemental services at any time during the twelve-month period ending on the preceding September 30. It is important to note that the Form 2100 – Schedule G must be submitted regardless of whether stations offered such services. Form 2100 – Schedule G must be filed electronically in the Commission’s Licensing and Management System (“LMS”), absent a waiver, and is due on December 1, 2016.

Ancillary or supplementary services are all services provided on the portion of a DTV station’s digital spectrum that is not necessary to provide the required single free, over-the-air signal to viewers. Any video broadcast service that is provided with no direct charge to viewers is exempt. According to the FCC, examples of services that are considered ancillary or supplementary include, but are not limited to, “computer software distribution, data transmissions, teletext, interactive materials, aural messages, paging services, audio signals, subscription video, and the like.”

If a DTV station provided ancillary or supplementary services during the 12-month time period ending on September 30, 2016, it must pay the FCC 5% of the gross revenues derived from the provision of those services. This payment can be forwarded to the FCC’s lockbox at the U.S. Bank in St. Louis, Missouri and must be accompanied by FCC Form 159, the Remittance Advice. Alternatively, the fee can be paid electronically using a credit card on the FCC’s website. The fee amount must also be submitted by the December 1, 2016 due date.

A PDF of this article can be found at Annual DTV Ancillary/Supplementary Services Report Due for Commercial and Noncommercial Digital Television Stations

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With great anticipation, the Stage 2 Forward Auction commenced at 10am this morning.  It officially ended at 12:14pm, when the FCC announced:

Bidding in the forward auction has concluded for Stage 2 without meeting the final stage rule and without meeting the conditions to trigger an extended round. The incentive auction will continue with Stage 3 at a lower clearing target.

As I wrote less than a week ago, there was never much hope that the Stage 2 Forward Auction would bring in the $57B or so needed to cover the FCC’s bidding commitments and associated costs in the Stage 2 Reverse Auction.  The Stage 1 Forward Auction concluded at a paltry $23B, and a sudden jump in bidding to nearly $60B in Stage 2 was definitely going to be a bid too far.  However, as we discussed last week, spectrum auction groupies are basically split into two camps: those who think that wireless bidders were holding back in Stage 1 to conceal their resources and bidding strategies, and those who thought Stage 1 represented the high water mark, with the total amount bid going down as the amount of spectrum being cleared dropped with each stage.  Based on this morning’s results, the latter group is growing.

Not that we should be surprised.  With the FCC starting the bidding where the bids left off in Stage 1, the main reason for bidding in Stage 2 was to correct for any refinements of bidding strategy since Stage 1.  Based on Stage 2 concluding after only one round of bidding, it appears that the wireless bidders had already refined their strategies before Stage 1 commenced, and didn’t see any reason to change their approach now.

The rapid conclusion of the Stage 2 Forward Auction does appear to have surprised the FCC a bit.  The FCC announced this morning that:

The FCC expects to release a public notice next week announcing details about the next stage, including the clearing target for Stage 3, and the time and date at which bidding in Stage 3 of the reverse auction will begin.

While this language is quite similar to the language that concluded Stage 1 (except for the addition of “expects to”), it certainly contrasts with recent statements from the FCC about its intent to accelerate the auction process, including its statement (later modified) that the Stage 2 Forward Auction would commence “on the next business day after the close of bidding in Stage 2 of the reverse auction.”

So the big question now is whether the FCC will continue to slowly reduce the clearing target (126 MHz in Stage 1, 114 MHz in Stage 2, and now 108 MHz in Stage 3?) as it previously indicated it was bound to do, or whether it can make a more significant reduction that brings the forward and reverse auction dollar figures much closer together.  While some have argued that there is no reason for the FCC to expedite the process, and that remaining on the slow and meticulous path of very incremental clearing targets converts the greatest amount of broadcast spectrum to wireless use, bidder fatigue is definitely beginning to set in.  More importantly, the sooner the auction is concluded, the sooner spectrum is freed for its newfound purpose, so the delay is not harmless.

In addition, the continued applicability of the rule on prohibited communications during the auction has put much of the TV broadcast industry into a cryogenic state, particularly with regard to station sales.  Dragging the process out any longer than necessary causes real economic harm, and the impact only grows as station owners recognize there will be no windfall and want to move quickly to sell stations they otherwise would have sold several years ago.

With forward auctions now measured in hours, it is clear that it is the reverse auctions where significant time is being lost in concluding the Incentive Auction.  The Stage 1 Reverse Auction lasted 28 days, and the Stage 2 Reverse Auction lasted 30 days.  Unlike the Forward Auction, which went from 14 days to half a day, the Stage 2 Reverse Auction still consumed significant time, even with a reduced spectrum clearing target.  More rapidly reducing the spectrum clearing target is the most efficient way of moving new spectrum to wireless use, commencing the broadcast repack, and putting broadcasters back on the road to normalcy.

After six years of the National Broadband Plan and its key component, the Spectrum Incentive Auction, it’s getting hard for broadcasters to remember what normal feels like.

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The FCC has announced the conclusion of the Stage 2 Reverse Auction, moving the spotlight from the broadcasters willing to relinquish 114 MHz of their spectrum to the bidders in the forward auction hoping to buy it.  Unfortunately for those wishing to see a speedy conclusion to the Spectrum Incentive Auction, the FCC set the cumulative buying price for 114 MHz of spectrum at $54,586,032,836, plus the cost of the $1.75B repacking fund and the cost of conducting the auction itself.

Given that forward auction bidders in Stage 1 stopped bidding at $23 billion, it seems unlikely that they will show up for Stage 2 so rejuvenated as to bid two and a half times that amount now.  If they don’t, then the auction will move to Stage 3 and likely into 2017 as well.  Still, $55B is significantly less than the $88B the FCC was targeting in the Stage 1 Forward Auction, confirming the FCC’s earlier assertion that the additional broadcast spectrum needed to reach the original clearing target of 126 MHz is quite expensive.  While the likelihood of Stage 2 concluding the auction appears small, a 40% drop in the clearing cost, while clearing over 90% of the spectrum originally targeted by the FCC, definitely illuminates the path to where supply will meet demand.  Unfortunately for many broadcasters, that point on the path is not looking like one that will bring stations anywhere close to the prices initially presented to entice them into the auction in the first place.

So while the Stage 2 Forward Auction might be anticlimactic for broadcasters looking for a highly profitable end to what seems a very long trek from the announcement of the National Broadband Plan over six and a half years ago, it will still be informative.  In particular, it may settle the debate between those who believe the Stage 1 Forward Auction set the high water mark for how much the wireless industry would bring to the table for the absolute maximum amount of spectrum, and those who believe wireless bidders were holding back in Stage 1 to conceal their motivations and bidding strategies, nearly certain the auction would proceed to further stages.  If the Stage 2 Forward Auction brings in less than Stage 1’s $23.1B, that trend will not be promising for a quick or profitable end to the auction for those broadcasters still willing to sell spectrum.

Of course, that could be because the wireless bidders are still confident more auction stages are coming, and will continue to hold their ultimate bids in reserve for those later stages.  So it goes with history’s most complicated auction, where the more you know, the more you are left to fathom what it means.

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The era of newsgathering drones is upon us.  Since new Federal Aviation Administration rules allowing limited commercial operation of drones (also known as unmanned aircraft systems or UAS) weighing 55 lbs. or less took effect a little over a month ago, media organizations have moved quickly to utilize the technology.

Sinclair Broadcast Group, which operates or provides services to 173 television stations across the country, recently announced it was going “all in” on newsgathering drones.  It plans to have 80 trained and certified UAS pilots working in 40 markets by the end of 2017, and already has launched UAS teams for newsgathering in Washington, DC; Baltimore, MD; Green Bay, WI; Columbus, OH; Little Rock, AR; and Tulsa, OK.  Providing an example of the benefits drones can bring to newsgathering, Sinclair released footage taken over the Cedar River in Cedar Rapids, IA, showing an aerial perspective of a newly constructed flood wall as the city braced for flooding.

Sinclair’s announcement comes on the heels of CNN’s launch of CNN Aerial Imagery and Reporting (CNN AIR), a unit with two full-time drone operators dedicated to integrating aerial imagery and reporting across CNN networks.

Broadcasters and other organizations with newsgathering operations are increasingly taking advantage of the FAA’s new “Part 107” rules, which took effect on August 29, 2016.  The small drones authorized under the rules offer broadcasters and other news organizations a cost-effective way to gather aerial footage, especially as compared to the cost of using helicopters.  While the Part 107 rules have paved the way for widespread use of newsgathering drones, broadcasters and other potential UAS operators should keep in mind that some requirements must be met before UAS operations can commence.

To protect the public, the Part 107 rules come with a number of operational limitations on UAS operation.  However, if a party can demonstrate the ability to operate safely while deviating from a specific limitation, the FAA may grant a waiver of one or more of the specific limitations found in its rules.  With regard to newsgathering operations, the most relevant limitations (and therefore good candidates for waiver requests) include the prohibitions on flights above people not participating in the UAS operation, flights beyond visual line of sight, flights above 400 feet (or more than 400 feet above a building or other structure), and nighttime flights.  The FAA has added a portal to its website for waiver applications, and has recorded a standard-issue government YouTube video on the subject.  For an example of a waiver that has been granted, take a look at CNN’s waiver for flights over non-participants.

In addition, the Part 107 rules require those operating small drones to either hold a “remote pilot certificate” or be under the supervision of a person who holds such a certificate.  To qualify for a certificate, the applicant must be at least 16 years old, be vetted by the Transportation Security Administration, and pass an aeronautical knowledge test at an FAA-approved testing center.  The FAA offers a free online preparation course for the knowledge test.  In addition to pilot certification, Part 107 requires that all drones used for commercial purposes be marked and registered.  Drones can be registered through the FAA’s website.

Pillsbury launched one of the nation’s first UAS legal teams long before commercial operations were possible, and being a part of these developments has been fascinating.  Because of the myriad issues UAS operations involve, Pillsbury’s UAS practice consists of an interdisciplinary team of lawyers from our Aviation, Communications, Privacy, and Transportation practices.  Those contemplating entering the world of UAS operations for newsgathering or other purposes will find the UAS team’s blog and advisories an excellent place to start.

It’s time to stop reading about drones in the news, and start reading news brought to us by drones.