Federal Communications Commission DA 21-657 DA 21-657 Released: June 4, 2021 MEDIA BUREAU SEEKS TO UPDATE THE RECORD IN THE 2018 QUADRENNIAL REGULATORY REVIEW MB Docket No. 18-349 Comment Date: [30 days after publication in the Federal Register] Reply Comment Date: [60 days after publication in the Federal Register] With this Public Notice, the Media Bureau seeks to update the record in the 2018 Quadrennial Review proceeding, in which the Commission has sought comment, pursuant to its obligation under Section 202(h) of the Telecommunications Act of 1996, on whether its media ownership rules remain “necessary in the public interest as the result of competition.” See 2018 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 18-349, Notice of Proposed Rulemaking, 33 FCC Rcd 12111 (2018) (2018 Quadrennial Review NPRM); Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, § 202(h) (1996) (“1996 Act”); Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, § 629, 118 Stat. 3 (2004) (“Appropriations Act”) (amending Sections 202(c) and 202(h) of the 1996 Act). The prior comment and reply comment period in this proceeding closed two years ago. Comments in response to the 2018 Quadrennial Review NPRM were due by April 29, 2019, and reply comments were due by May 29, 2019. See Media Bureau Announces Notice of Proposed Rulemaking in the 2018 Quadrennial Regulatory Review Published in the Federal Register on February 28, 2019, MB Docket No. 18-349, Public Notice, 34 FCC Rcd 1043 (MB 2019). Recently, on April 1, 2021, the U.S. Supreme Court (Supreme Court or Court) issued an opinion in FCC v. Prometheus Radio Project, FCC v. Prometheus Radio Project, 141 S.Ct. 1150 (2021) (FCC v. Prometheus). reversing a decision of the U.S. Court of Appeals for the Third Circuit and restoring the Commission’s media ownership rules as adopted in the combined 2010/2014 Quadrennial Review proceeding. See Prometheus Radio Project v. FCC, 939 F.3d 567 (3d Cir. 2019) (Prometheus IV). This was the fourth in a series of decisions from the Third Circuit regarding the Commission’s media ownership rules. See Prometheus Radio Project v. FCC, 824 F.3d 33 (3d Cir. 2016) (Prometheus III); Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) (Prometheus II); Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) (Prometheus I). Consistent with the Supreme Court’s decision, in a separate order, the Media Bureau is reinstating the changes adopted in three orders that were part of, or related to, the 2010/2014 proceeding—the Incubator Order (adopted in 2018); the Order on Reconsideration (adopted in 2017); and the eligible entity definition from the Second Report and Order (adopted in 2016). See 2014 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket Nos. 14-50 et al., Order, DA 21-656 (rel. June 4, 2021); Rules and Policies to Promote New Entry and Ownership Diversity in the Broadcasting Services, MB Docket No. 17-289, Report and Order, 33 FCC Rcd 7911 (2018) (Incubator Order); 2014 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 et al., MB Docket Nos. 14-50 et al., Order on Reconsideration and Notice of Proposed Rulemaking, 32 FCC Rcd 9802 (2017) (Order on Reconsideration); 2014 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 et al., MB Docket Nos. 14-50 et al., Second Report and Order, 31 FCC Rcd 9864, 9960-10008, paras. 234-336 (2016) (Second Report and Order). Given the passage of time since the prior comment period ended, as well as the subsequent litigation culminating with the Supreme Court’s recent decision, we now seek further comment to update the record in the 2018 Quadrennial Review proceeding. Background. Section 202(h) of the Telecommunications Act of 1996 requires the Commission to review its media ownership rules every four years to determine whether they remain “necessary in the public interest as the result of competition.” 1996 Act § 202(h); Appropriations Act § 629. The Commission reviews these rules to ensure that they continue to serve the core policy goals of competition, localism, and diversity as intended. See, e.g., 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12116, 12128, 12140, paras. 9, 40, 77; Second Report and Order, 31 FCC Rcd at 9865, para. 3. On December 12, 2018, the Commission adopted a Notice of Proposed Rulemaking to initiate the 2018 Quadrennial Review proceeding and to seek comment on whether to retain, modify, or eliminate any of its structural media ownership rules. See 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12111-12, para. 1. The NPRM also sought comment on several diversity-related proposals offered in the record of the 2010/2014 Quadrennial Review proceeding. See id. at 12114, 12145-55, paras. 5, 93-121. Specifically, the diversity-related proposals mentioned in the 2018 Quadrennial Review NPRM include extending cable procurement requirements to broadcasters, adopting formulas aimed at creating media ownership limits that promote diversity, and developing a model for market-based, tradeable “diversity credits” to serve as an alternative method for setting ownership limits. As a result of the Supreme Court’s decision to restore the changes made in the Order on Reconsideration, including the elimination of several rules, three structural ownership rules remain that are subject to the Commission’s quadrennial review process. Specifically, consistent with the Order on Reconsideration, the Newspaper/Broadcast Cross-Ownership Rule, the Radio/Television Cross-Ownership Rule, and the Television Joint Sales Agreement Attribution Rule are eliminated, and the Local Television Ownership Rule and Local Radio Ownership Rule are reinstated as adopted in the Order on Reconsideration. They are the Local Radio Ownership Rule, 47 CFR § 73.3555(a). the Local Television Ownership Rule, Id. § 73.3555(b). and the Dual Network Rule. Id. § 73.658(g). These are the same three structural rules on which the Commission sought comment in the 2018 Quadrennial Review NPRM. As noted above, the decision of the Supreme Court reversed a prior decision by the Third Circuit, which had vacated and remanded the Order on Reconsideration and the Incubator Order in their entirety, as well as the eligible entity definition from Second Report and Order. Prometheus IV, 939 F.3d at 589. The remainder of the Second Report and Order was not affected by the Third Circuit’s decision. In its decision, the Third Circuit found that the Commission failed to consider adequately the effect of its rule changes on ownership by women and minorities. Id. at 585-89. The Commission sought review of that decision by the Third Circuit en banc, which was denied on November 20, 2019. See Sur Petition for Rehearing, Prometheus Radio Project v. FCC, Nos. 17-1107 et al., Document No. 0031133411693 (3d Cir. Nov. 20, 2019). The court’s mandate issued on November 29, 2019, reinstating the media ownership rules adopted in the Second Report and Order. See Letter from Patricia S. Dodszuweit, Clerk, U.S. Court of Appeals for the Third Circuit, to Commissioners, FCC, Prometheus Radio Project v. FCC, Nos. 17-1107 et al., Document No. 0031133419681 (3d Cir. Nov. 29, 2019). The Media Bureau issued an Order on December 20, 2019 to restore those rules to the Code of Federal Regulations. 2014 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket Nos. 14-50 et al., Order, 34 FCC Rcd 12360 (MB 2019). The Commission, as well the National Association of Broadcasters, each filed a petition for a writ of certiorari seeking review of the Third Circuit’s decision by the Supreme Court. See FCC et al., Petition for a Writ of Certiorari, FCC v. Prometheus Radio Project, No. 19-1231 (filed Apr. 17, 2020); National Association of Broadcasters et al., Petition for a Writ of Certiorari, Prometheus Radio Project, No. 19-1241 (filed Apr. 17, 2020). The Court granted the petitions, and on April 1, 2021, the Supreme Court issued an opinion reversing the Third Circuit’s decision and restoring the Order on Reconsideration, the Incubator Order, and the revenue-based eligible entity definition from the Second Report and Order. See FCC v. Prometheus, 141 S.Ct. at 1160-61. In doing so, the Court found that the Commission’s decision in the 2017 Order on Reconsideration to repeal or modify several of its rules was not arbitrary and capricious under the Administrative Procedure Act and that the Commission had reasonably considered the available evidence in concluding that such changes were not likely to harm minority and female ownership. Id. at 1157-60. In addition, because the Court reached its decision based on other grounds, the Court did not reach arguments from industry petitioners that Section 202(h) bars the Commission from considering minority and female ownership as part of its quadrennial review. Id. at 1160 n.3. Contemporaneously with this Public Notice and consistent with the Supreme Court’s decision, the Media Bureau, in a separate order, is reinstating the changes adopted in the Order on Reconsideration and the Incubator Order as well as the eligible entity definition adopted in the Second Report and Order. See 2014 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket Nos. 14-50 et al., Order, DA 21-656 (rel. June 4, 2021) As the order sets forth, the Newspaper/Broadcast Cross-Ownership Rule, the Radio/Television Cross-Ownership Rule, and the Television Joint Sales Agreement Attribution Rule are eliminated, and the Local Television Ownership Rule and Local Radio Ownership Rule are reinstated as adopted in the Order on Reconsideration. Accordingly, the Eight-Voices Test is eliminated from the Local Television Ownership Rule, and the ability to seek case-by-case review of the restriction on ownership of two top-four ranked stations in the same market (Top-Four Prohibition) is reinstated as part of the rule. See Order on Reconsideration, 32 FCC Rcd at 9831-40, paras. 66-85. The presumption under the Local Radio Ownership Rule that would apply a two-prong test for waiver requests involving existing parent markets with multiple embedded markets also is reinstated. See id. at 9841-46, paras. 86-95. In addition, the eligible entity standard and its application to regulatory measures as set forth in the Second Report and Order are reinstated, as are the regulatory measures adopted in the Incubator Order. See Incubator Order, 33 FCC Rcd at 7911-12, para. 1; Second Report and Order, 31 FCC Rcd 9960-10008, paras. 234-336. Discussion. With this Public Notice, we open a new comment window, specifically to encourage the submission of new or additional information to update the record in the 2018 Quadrennial Review proceeding. As noted above, the formal comment and reply period in this proceeding closed two years ago. Nonetheless, as evident from the docket in this proceeding, the 2018 Quadrennial Review proceeding has generated, and continues to generate, significant interest, including through the submission of additional information even after the initial comment period has ended. Accordingly, we ask commenters to take this opportunity to update the record in the 2018 Quadrennial Review proceeding, including with regard to the diversity-related proposals cited therein. See supra n. 9 (citing 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12114, 12145-55, paras. 5, 93-121). We seek comment, first, on materials that have been filed in the docket of this proceeding since the formal comment and reply period ended in May 2019. To the extent they have not already done so, commenters are invited to review these materials and the issues they raise and comment on them as they feel is appropriate. In particular, we seek comment on whether these materials, either individually or collectively, highlight any issues, including issues that may not have been fully explored by the 2018 Quadrennial Review NPRM, that commenters believe now warrant further comment and consideration. Moreover, are there issues raised in the 2018 Quadrennial Review NPRM, or in the record in response to that NPRM, for which new and relevant information has come to light? Commenters are strongly encouraged at this stage to provide detailed analysis, empirical evidence, and/or specific proposals that the Commission should consider in relation to such issues. In so doing, commenters should explain how such analysis, evidence, or proposals relate to the Commission’s interest in ensuring that its rules continue to promote the goals of competition, localism, and diversity. Beyond reviewing the existing record in light of the passage of time, we also seek submission of new or additional information regarding the media marketplace that commenters believe is relevant to this proceeding. Specifically, we seek information regarding the broadcast industry’s evolution since early 2019 and its current trajectory, including the effects, if any, of technological change, new entry, consolidation, or changing market conditions. We seek comment in particular on the further development and impact of technological advances and industry practices. In the 2018 Quadrennial Review NPRM, the Commission sought comment on whether and, if so how, it should account for multicast streams, satellite stations, or low power television stations for purposes of the Local Television Ownership Rule. See, e.g., 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12137-39, paras. 66-71. How should the increased use of these platforms, and other innovations, such as the continued deployment and use of the ATSC 3.0 transmission standard by the broadcast television industry, inform our review? What implications, if any, do these or other developments have for the Commission’s broadcast ownership rules or its core policy goals of competition, localism, and viewpoint diversity, which support those rules? Have recent industry developments altered the incentives or behavior of any market participants in ways that are relevant to this proceeding? Similarly, we seek comment on any other relevant trends that have been, or are being, observed within the broadcast industry or in related markets. Among other things, the 2018 Quadrennial Review NPRM noted the growth of online audio and video sources, including as sources for news and information, as well as the continued strength and importance of broadcast radio and television stations in the local communities they serve. See id. at 12112-13, paras 2-3. To what extent, if at all, have trends such as these (or others) continued, accelerated, flattened, or reversed in recent years, such that the Commission should take account of any new or continuing trendlines in the current proceeding? What do these trends indicate with respect to consumers’ relative reliance on various sources for local news and information, and is there any difference in this respect between local and national news and information? Are there recent trends regarding broadcast industry ratings or revenues, including advertising, retransmission consent, and online revenues, that are relevant to this proceeding? In what ways will such trends impact the evolution and the viability of the broadcast industry? Are there other industry events or trends that have not previously been described or fully explored in this proceeding that may be relevant to the Commission? The 2018 Quadrennial Review NPRM, for example, notes the importance of the Internet as a means to access audio and video content today. See id. at 12112-13, para 2 (noting that “the growth of broadband Internet and other technologies has given consumers access to more content on more platforms than ever before”). In this regard, commenters should distinguish between Internet sources (e.g., websites, mobile applications, social media accounts) that are independent of, as opposed to those that are affiliated with, broadcast stations (e.g., television station websites). How, if at all, should the Commission consider recent trends regarding access to, or usage of, broadband Internet service or other technologies in conjunction with the media ownership rules? We note that the 2018 Quadrennial Review NPRM sought comment on the impact, if any, of the 2017 completion of the Incentive Auction The Incentive Auction included a reverse auction of broadcast television spectrum and the reassignment of certain full power and Class A television stations to new channels in a smaller TV band, referred to as repacking. See 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12139, para. 73 (citing Incentive Auction Closing and Channel Reassignment Public Notice, Public Notice, 32 FCC Rcd 2786, 2788, para. 1 (MB/WTB 2017); Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, §§ 6402 (codified at 47 U.S.C. §309(j)(8)(G)), 6403 (codified at 47 U.S.C. § 1452), 126 Stat. 156 (2012)). and the repack of the spectrum band on the Local Television Ownership Rule. 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12139, para. 73. Shortly after the release of the 2018 Quadrennial Review NPRM, the Commission reported that several dozen stations had discontinued operations while the vast majority of winning bidders chose instead to remain on the air through channel sharing arrangements. While 175 commercial and non-commercial full power and Class A television stations were winning bidders in the reverse auction, “[o]nly 41 stations permanently discontinued operations as a result of their winning bid” and “134 of the 175 stations of winning bidders are still available to their viewers.” Incentive Auction Task Force and Media Bureau Report on the Status of the Post-Incentive Auction Transition and Reimbursement Program, Public Notice, 34 FCC Rcd 304, 308, para. 11 (MB/WTB 2019) (noting 104 other “off air” winning television stations implemented channel sharing arrangements and 30 auction winners moved from the UHF to the VHF band). The 41 full power and Class A television stations that surrendered their licenses as a result of the Incentive Auction represented less than 2% of the 2,148 such stations that existed at the time. See Broadcast Station Totals as of Dec. 31, 2018, News Release (Jan. 2, 2019). The 39-month post-incentive auction transition period concluded on July 13, 2020 and all repacked stations have vacated their pre-auction channels. How, if at all, has the Incentive Auction and its aftermath affected the broadcast industry? In considering market trends since the comment period ended in May 2019, we seek comment specifically on the impact of the COVID-19 pandemic on this proceeding. For example, the Commission’s most recent Communications Marketplace Report (released on December 31, 2020) discusses some possible effects of the COVID-19 pandemic on the broadcast radio and television industries, most notably through decreased advertising revenue. See Communications Marketplace Report, GN Docket No. 20-60, Report, paras. 217, 249 (2020). The report, however, also notes that, despite MVPD subscriber declines, “retransmission consent revenue earned by major station groups increased in both the first and second quarters of 2020 by nearly 20% compared to the first and second quarters of 2019,” suggesting that retransmission consent revenues for television stations “have not been meaningfully affected by the COVID-19 pandemic.” See id. at para. 217. To what extent, if at all, should the Commission consider, in this proceeding, changes to, or effects on, the broadcast radio and television industries as a result of the COVID-19 pandemic? What are those changes or effects? Which, if any, should be considered temporary in nature and which could be expected to have a lasting impact? What implications, if any, do they have for the Commission’s broadcast ownership rules? In addition to identifying and describing developments and trends, we also ask commenters to tell us whether there is any further empirical evidence the Commission should consider. For instance, are there any new or additional data that are now available, or studies that have been published or performed, that would inform the Commission’s analysis? For example, we note that earlier this year, two economists from the Commission’s Office of Economics and Analytics released a working paper examining the relationship between the number of independent local television news operations in a market and market size. See Kim Makuch and Jonathan Levy, FCC, Office of Economics and Analytics, OEA Working Paper 52, Market Size and Local Television News (Jan. 15, 2021), https://www.fcc.gov/reports-research/working-papers/market-size-and-local-television-news. If so, we encourage commenters to submit copies of such data or studies in the docket of this proceeding (to the extent they have not already done so) and urge commenters to provide any interpretations, analyses, and conclusions based on such materials. In particular, we welcome any insights or analysis of research regarding how to further the Commission’s policy goals and whether such research suggests any specific rule changes. If so, in what ways do the data or other information support such changes? We encourage commenters to draw any such conclusions or connections between the data and potential policy or rule changes as tightly and as explicitly as possible. Where possible, we also encourage commenters to quantify and explain the benefits or costs associated with any policy or rule they discuss or, in the alternative, to explain the difficulties faced in trying to quantify benefits and costs in this context and how the Commission might nonetheless evaluate them in the absence of extensive or conclusive objective metrics. Moreover, in addition to identifying, analyzing, and submitting existing materials, we welcome commenters to take this opportunity to compile data or conduct further research that can be submitted to the Commission during the new comment window. Finally, we seek comment on whether there are any other legal or economic factors, changes, or issues that the Commission should consider in the context of this quadrennial review and, if so, how the Commission should evaluate or address them. Initial Regulatory Flexibility Analysis. The NPRM included an Initial Regulatory Flexibility Analysis (IRFA) pursuant to 5 U.S.C. § 603, exploring the potential impact on small entities of the Commission’s proposals. See 2018 Quadrennial Review NPRM, 33 FCC Rcd at 12159-62. We invite parties to file comments on the IRFA in light of this request to refresh the record. Ex Parte Rules – Permit But Disclose. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission’s ex parte rules. 47 C.F.R. §§ 1.1200 et seq. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules. Filing Comments and Replies. All filings must be submitted in MB Docket No. 18-349. Pursuant to sections 1.415 and 1.419 of the Commission’s rules, 47 CFR §§ 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). · Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/. · Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. · Filings can be sent by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. · Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. U.S. Postal Service first-class, Express, and Priority mail must be addressed to 45 L Street NE Washington, DC 20554. · Effective March 19, 2020, and until further notice, the Commission no longer accepts any hand or messenger delivered filings. This is a temporary measure taken to help protect the health and safety of individuals, and to mitigate the transmission of COVID-19. See FCC Announces Closure of FCC Headquarters Open Window and Change in Hand-Delivery Policy, Public Notice, DA 20-304 (March 19, 2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY). Additional Information. For additional information on this proceeding, please contact Ty Bream of the Media Bureau, Industry Analysis Division, Ty.Bream@fcc.gov, (202) 418-0644. -FCC- 2