New Transparency Initiative

After consistently calling for more transparency in the FCC rulemaking process during his time as a minority Commissioner, now Chairman Ajit Pai is making good on his promise. In a significant departure from the secrecy that prevailed under every former FCC Chairman, on Thursday March 2, 2017, Chairman Pai released the proposed text of six items up for a vote at the March 23, 2017, FCC open meeting. While this new period of transparency is still in its infancy, it signals the beginning of an era in which the FCC seems committed to publicly providing details of its proposed actions.

Channel Sharing Rules Overview

When the FCC adopted rules for the broadcast incentive auction it wanted to incentivize participation from broadcasters in the auction. In furtherance of that goal, it permitted both primary broadcast television licensees (full power and Class A TV stations) and secondary broadcast licensees (low power television and TV translator stations) to share a single TV channel, giving potential bidders an option to sell their spectrum to the FCC while continuing to stay on the air. One of the items pre-released ahead of the March 23, 2017 open meeting, is a draft order to permit channel sharing by stations outside the broadcast television spectrum incentive auction context. If adopted, the order would expand non-auction channel sharing by allowing: (1) primary broadcast licensees to enter new channel sharing agreements once their respective auction-related channel sharing agreement ends, (2) Class A stations not subject to an auction-related channel sharing agreement to channel-share with another station, and (3) primary broadcast licensees to channel share with secondary broadcast licensees.

Full Power and Class A Stations

The proposed order would allow full power stations with auction-related channel sharing agreements to enter new channel sharing agreements, outside of the incentive auction context, once their respective auction-related channel sharing agreement ends. This would allow those stations to continue to operate after their auction-related channel sharing agreements expire or otherwise terminate. However, the FCC will not allow full power stations without auction-related channel sharing agreements to enter into channel sharing agreements as “sharees” outside of the auction context.

The proposed order would also permit Class A stations to enter new channel sharing agreements outside the auction context even if they are not party to an auction-related channel sharing agreement. The FCC concluded that doing so is a logical extension of the FCC’s decision to adopt more flexible auction-related channel sharing rules.

Secondary Stations

The proposed order would permit all secondary stations (LPTV stations and translators) to enter new channel sharing agreements, outside of the incentive auction context, because the FCC concludes that it has the potential to increase the opportunities for displaced secondary stations to survive the spectrum repack and continue providing programming to the public. As an added benefit for smaller, resource-constrained secondary stations, channel sharing has the potential to reduce construction and operating costs, and to increase coverage area if sharing with a full power station.

MVPD Carriage Rights

The order proposes that full power stations with auction-related channel sharing agreements that subsequently share a channel outside of the auction context will continue to maintain the same carriage rights at their new shared channel that they would have had if they were not channel sharing. The order also proposes that secondary stations that share a channel outside of the auction context will maintain the same limited carriage rights at their shared location that they would have if they were not channel sharing. However, secondary stations that are not operating on a non-shared channel on the date of release of the upcoming post-auction Closing and Reassignment Public Notice will be denied any must-carry rights. Additionally, the order concludes that all Class A stations that share a channel outside of the auction context will maintain the same limited carriage rights at their shared location that they would have had if they were not channel sharing, even if sharing a full power station’s channel.

Licensing and Operating Rules

Even though the Commission has chosen to permit channel sharing outside of the auction context, each station on a shared channel will continue to be licensed separately, have its own call sign, and be independently subject to all applicable FCC rules and compliance requirements.

Notwithstanding the foregoing, a Class A station that opts to share a full power station’s channel will be permitted to operate with the technical facilities of the full power station. Conversely, a full power station sharing a Class A station’s channel will be required to operate at the Class A station’s lower power level. In contrast to the flexibility allowed full power stations to change community of license in the auction context, stations must continue to serve their existing communities of license if they enter into a new post-auction channel sharing agreement.

We will have to wait until March 23rd to see whether this Order is adopted as written or goes through any modifications prior to adoption.