Regulating Risque Content: Obscenity and Violence on Television

Posted on April 8, 2013 by mjenkins

by Macy Jenkins

First Amendment

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” [1]

Material labeled “obscene” is not protected by the First Amendment, and therefore is subject to banning and criminal prosecution by federal and state governments.

Federal Communications Commission

The Federal Communications Commission (FCC) was established by Franklin Roosevelt in 1934. The Commission had the right to restrict content, to require fairness in political programming and to regulate public use. The fairness doctrine was dropped in the 1980’s but laws against obscenity, indecency, and profanity have prevailed since the 1950’s. [2]

Obscenity vs. Indecency vs. Profanity

A three-pronged test was established by the Supreme Court to define obscenity:

An average person, applying contemporary community standards, must find that the material, as a whole, appeals to the prurient interest
The material must depict or describe, in a patently offensive way, sexual conduct specifically defined by applicable law
The material, taken as a whole, must lack serious literary, artistic, political or scientific value. [3]

Indecency is defined by the FCC as “language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities.”

Source: West Seattle Funblog

Profanity is defined by the FCC as “language so grossly offensive to members of the public who actually hear it as to amount to a nuisance.”

It is a violation of federal law to (1) air obscene programming at any time, or (2) air indecent programming or profane language on broadcast television or radio between 6:00 am and 10:00 pm time. [3]

Although the FCC has the power to revoke a station’s license for noncompliance, it will typically charge the network with fine but leave their licenses in place.

Federal Communications Commission vs. Fox Television Stations (2012)

The gist of it: The FCC wanted to fine FOX for “fleeting expletives” on awards shows by Cher and Nicole Richie in 2002 and 2003. (Before 2004, the FCC banned only repeated uses of certain four letter words). The FCC also fined ABC over one million dollars for showing seven seconds of buttocks and a glimpse of “side breast” on NYPD Blue.

The ruling: The Supreme Court ruled that the FCC’s regulations were unconstitutionally vague and not clear enough for broadcasters to be able to follow them. [4] It held that broadcasters had a right to be warned if changes were going to be made to FCC policy. [5]

Recent headlines

Superbowl profanity

CBS is currently under fire after airing profanity during the Superbowl. Just after the Baltimore Ravens beat the San Francisco 49ers, Ravens quarterback Joe Flacco used the F-word and another player said another curse word. The moment aired on CBS because the network hadn’t set up a time delay. The Parents Television Council (PTC) is calling for the FCC to fine CBS.

Ironically, CBS had set up a time delay for Beyonce’s halftime performance – remember Janet? – but did not set up a time delay for the on-field coverage. (Photo by Christopher Polk/Getty Images)

PTC president Tim Winter said the following in a statement [6]:

“Now nine years after the infamous Janet Jackson incident, the broadcast networks continue to have ‘malfunctions’ during the most-watched television event of the year, and enough is enough. After more than four years of inaction on broadcast decency enforcement, the FCC must step up to its legal obligation to enforce the law, or families will continue to be blindsided.”

A 2011 study by The Parents Television Council found a 69% increase in profanity on primetime television between 2005 and 2010. [7] Source: Parenting Starts Here

Egregious Cases ONLY

On April 1st, the FCC announced that September 2012, it had eliminated 70% of its pending indecency complaints. That’s over one million cases. FCC Chairman Julius Genachowski stated that FCC officials will only focus on the “most egregious examples” of violations. [8]

A large concern is the amount of backlog that the agency is up against. At the same time of the announcement, the FCC asked for a public comment as to whether the cut back on the enforcement should actually occur.

PTC’s Winter weighed in on this, saying “either material is legally indecent or it is not.”

Violence in American Television

Violence is more prevalent than sex in American television. Some believe we’ve simply become desensitized to violent scenes. Experts believe the effects of continuous violent depiction is detrimental to society as a whole.

Self Regulation

Each network has a standards and practices department, which reviews programming and advertisements. The idea is to regulate content to keep many different parties happy. They have to meet FCC restrictions, intellectual property guidelines and personal rights requirements. At the same time, the networks are concerned with serving the good of society and also preserving the image of the network. And they have to keep a broader range of advertisers happy than cable networks do. [9]

V-Chip Technology

A “V-chip” allows adults to block television programs that they don’t want children to watch. Each program is encoded with a rating (see below). Adults can then program their televisions to only allow programs with a certain rating to be accessible. The Telecommunications Act of 1996 required all U.S. television sets to have V-chips. [10]

Content Rating System

The ratings system established in 1997 [9]:

TV-Y: Appropriate for all children
TV-Y7: Appropriate for children 7 and older
TV-Y7-FV: Programs in the Y7 category with more intense or combative fantasy violence
TV-G: Appropriate for a general audience
TV-PG: Parental guidance suggested
TV-14: Parents strongly cautioned – probably not suitable for children under 14
TV-MA: Mature audiences only

Many are unhappy with the V-chip because a lot of people don’t even know how to use it. And networks tend to “go light” with ratings or risk scaring off advertisers. [11]

Violent Content Research Act

Senator Jay Rockefeller
Source: csmonitor.com

Senator Jay Rockefeller (also chairman of the Senate Commerce Committee) D-W.Va., introduced the “Violent Content Research Act” in January.

His aim is to get the National Academy of Sciences to study the effects of media violence. Specifically, he wants them to look at the effect that violent programming has on child behavior. [12]

“Congress should do everything we can to address gun violence. We need comprehensive policies to fully protect our communities. This study is an important element of this approach.” [13]

Future of Content Regulation

When you boil it down, the content we see on television is determined by the green. If it’s too risque for advertisers, networks will adjust to please them. If it’s too risque for the viewers (and their children), networks will adjust to please them. Networks want plenty of happy advertisers; advertisers want plenty of happy viewers; and viewers…well what they want changes from minute to minute. The challenge is keeping up.

Sources

[1] “Bill of Rights” http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html

[2] “Regulating Television” http://chnm.gmu.edu/exploring/20thcentury/regulatingtelevision/

[3] “Obscene, Indecent and Profane Broadcasts” http://www.fcc.gov/guides/obscenity-indecency-and-profanity

[4] “Critic’s notebook: FCC vs. Fox, the Supreme Court decides” http://articles.latimes.com/2012/jun/22/entertainment/la-et-st-fcc-vs-fox-supreme-court-ruling-20120622

[5] “Federal Communications Commission v. Fox Television Stations, Inc.” http://www.scotusblog.com/case-files/cases/federal-communications-commission-v-fox-television-stations-inc/

[6] “Super Bowl F-bomb could put FCC in a bind.” http://blog.constitutioncenter.org/2013/02/super-bowl-f-bomb-could-give-fcc-a-headache/

[7] “PTC Files Supreme Court Brief in Support of Broadcast Decency.” http://www.parentstv.org/PTC/news/release/2011/0915.asp

[8] “FCC to target ‘Egregious’ Indecency Cases” http://www.tvnewscheck.com/article/66560/fcc-to-target-egregious-indecency-cases?ref=search

[9] “This Business of Television,” Third Edition; Blumenthal, Howard J. & Goodenough, Oliver R.; Billboard Books (2006).

[10] “Children and TV Violence” http://www.aacap.org/page.ww?name=children+and+TV+violence&section=Facts+for+Families

[11] “A 15-year failure? Parents Television Council says TV content ratings are flawed” http://www.deseretnews.com/article/865564776/A-15-year-failure-Parents-Television-Council-says-TV-content-ratings-are-flawed.html?pg=all

[12] “Rockefeller Pushes Senate Bill Calling for Study of Violent Content” http://www.thewrap.com/media/article/rockefeller-re-introduces-senate-bill-calling-study-violent-content-74656

[13] ”Gun Violence Legislation: Senate Bills Emerge With Bipartisan Support” http://www.huffingtonpost.com/2013/01/24/gun-violence-legislation-senate_n_2546382.html

Regulation of Distribution

Posted on April 7, 2013 by decesarechelsea

By: Chelsea DeCesare

History

Regulation in the cable industry refers to who has the rights to distribute broadcast station signals, and to whom. Regulation of cable distribution first came about in the 1940’s, when cable television system operators placed antennas in areas with good reception, picked up broadcast station signals, and then distributed them by coaxial cable to subscribers for a fee.[1]

Today, the distribution systems are far more complex. Consumers now have the option to decide when they want to view television content, and if they want to “binge view” through video on demand programs. With a variety of mediums available to take in content, it has become difficult for broadcasters to manage and regulate how and where materials are being viewed.

With the invention of the Digital Video Recorder or DVR as well as Video on Demand technology, both consumers and companies have the power to record and disseminate live television. For many cable and network providers, this budding technology has threatened vital advertising and subscription revenues.

The Evolution of the DVR

Tivo and ReplayTV

In January 1999, TiVo unveiled it’s Personal Television Service at the National Consumers Electronics Show. After unveiling the first working prototype, and despite an estimated four to five months of work remaining to complete a real working product, the company shipped the first DVR on the planet on March 31, 1999. [2]

ReplayTV also premiered in 1999, and allowed viewers to record, rewind, and store cable and broadcast programs of the consumers choosing. [3]

Both TiVo and ReplayTV currently charge subscribers anywhere from $80 to $200 for their services. Additionally, the services act as a liaison between television signal providers and viewers. They interpret the signals from a provider and allow consumers to tell them what programs they want to record. [4]

As a result, there were no initial regulations placed on TiVo, as the content being recorded had to be obtained through a cable subscription.

Video on Demand

Television video on demand or VOD systems first came to prominence in the 2000’s. VOD’s either stream content through a set-top box, a computer, or smart device. With a VOD, viewers can either watch in real time on television, or download to an outside device for viewing at any time.

With the creation of internet VOD systems, companies looked to pen licensing agreements with media companies in order to provide viewers with a library of shows and movies that they could access at any time.

Netflix

In January of 2013, Netflix signed a multi-year licensing agreement with both Turner Broadcasting and Warner Brother’s Television Group.

The agreement includes episodes of shows from Cartoon Network, Warner Bros. Animation, Adult Swim, and TNT. The deal, which will only make content available to U.S. Netflix subscribers, went into effect on March 30, 2013. [5]

Additionally, in December of 2012, Netflix and Disney reached a first time licensing agreement that allowed the streaming of back catalog classic Disney films including Dumbo, Pocahantas, and Alice in Wonderland.

The Disney deal stipulated that by 2016, all new theatrically released films in the pay TV window will be able to be watched instantly. This includes all films produced by Disney, Walt Disney Animation Studios, Disneynature, Pixar Animation Studios, and Marvel Studios. [6]

New and Controversial On Demand Systems

The Hopper

Aereo

Backlash

Dish Network vs. Network TV

In September of 2012, Fox, NBC Universal, and CBS filed a copyright infringement lawsuit against Dish Network. The lawsuit was in response to the release of new software called “The Hopper,” which allows subscribers of the satellite network to skip commercials during programs that have been previously recorded.

The broadcast networks asserted that new DVR technology is a violation of their copyrights and puts programming in danger by undermining advertisements which still make up a bulk of programming revenue.

In a court filing Dish Network said:

“This case is about freedom of consumer choice, individual families’ choice to elect, if they want, to time-shift their television viewing and watch recorded television without commercials.”

The Hopper system was officially released on May 10, 2012 and is only currently available to PrimeTime Anytime service customers.

While the lawsuit is being settled, Fox has refused to air any Dish Network commercials that feature the Hopper service. [7]

Aereo vs. Broadcast Networks

Last year, CBS Corporation, Comcast, News Corporation, and the Walt Disney Company filed two suits against Aereo, a start-up Internet service that streams stations without compensating them.

The lawsuits were first filed in March 2012, mere weeks before the service was set to premiere in New York. However, a district court judge denied the request for a preliminary injunction last summer. [8]

On April 1, 2013, a federal appeals court in New York upheld a ruling in favor of Aereo.

Aereo is able to stream broadcast stations by operating an array of tiny antennas that pick up over-the-air signals. Subscribers pay about $12 a month, and receive control over one antenna. Aereo basically turns the subscriber’s phone, computer or tablet into a small television set, but without the rabbit ears that would normally be needed. Subscribers can then select programming over the internet.[9]

An array of antennas in Brooklyn allow Aereo to avoid paying the retransmission fees that operators have traditionally paid for access to stations. Those fees are an increasingly important revenue source for the stations.

The Court of Appeals for the Second Circuit affirmed the lower court ruling on April 1, in a 2-to-1 decision, saying that Aereo’s streams of TV shows to individual subscribers did not constitute “public performances,” and thus the broadcasters’ copyright infringement lawsuits “are not likely to prevail on the merits.” [10]

The Future

Looking ahead, Aereo’s win in court may make other companies more comfortable in joining the service. Some prospective partners include cable channels that want carriage (Bloomberg TV signed the first such deal with Aereo last year) and wireless providers. And the mere existence of the service may cause the broadcasters to speed up their own plans for streaming programming to phones and tablets.

Analysts suggest that some cable and satellite providers, such as those that pay billions of dollars in retransmission fees for the right to carry broadcasters’ signals, might start to mimic Aereo’s system to get around the fee requirements. Others predicted that the broadcasters might lobby Congress to change the law. [11]

The outcome of this case will undoubtedly influence the way future systems do business in the future. In the meantime, all we can do it wait, and watch for the next big thing to enter the market and revolutionize the business yet again.

Sources:

1. FCC Encyclopedia: “Evolution of Cable Television” http://www.fcc.gov/encyclopedia/evolution-cable-television

2. Tivo: History http://www.tivo.com/jobs/questions/history-of-tivo/index.html

3. ReplayTV: History http://www.replaytvupgrade.com/replaytvcompanyhistory.htm

4. Tivo Updated Payment Plans March 2013 http://www.tivo.com/abouttivo/policies/tivoservicepaymentplanstermsandconditions.html

5. CNN Money: “Netflix Scores Cartoon Network Adult Swim and More Time Warner Content.” http://money.cnn.com/2013/01/14/technology/netflix-time-warner/index.html

6. Bloomberg Online: “Disney’s Netflix Deal Gives Top Billing to Online Movies.” http://www.bloomberg.com/news/2012-12-05/disney-s-netflix-deal-gives-top-billing-to-online-movies.html

7. CNN Money: “Broadcasters Sue Dish Over Ad-Skipping DVR.” http://money.cnn.com/2012/05/25/technology/dish-auto-hop-lawsuit/index.htm

8. Newser Online: “Divided NY Federal Appeals Court Rejects Lawsuit, Giving Green Light to Aereo Live TV Service.” http://www.newser.com/article/da5cvfj81/divided-ny-federal-appeals-court-rejects-lawsuit-giving-green-light-to-aereo-live-tv-service.html#continuedBelow

9. A New Domain Blog: “Aereo: How It Works and How It’s Working So Far.” http://anewdomain.net/2012/04/06/aereo-has-launched-lets-hope-they-are-for-real/

10. The Wall Street Journal: “Court Denies Broadcasters’ Motion to Shut Down Aereo.” http://online.wsj.com/article/SB10001424127887323296504578396543358747194.html

11. Bloomberg Online: “Diller-Backed Aereo Beats Network Bid to Close TV Service.” http://www.bloomberg.com/news/2013-04-01/diller-backed-aereo-beats-network-bid-to-close-tv-service.html

Big Media

Posted on September 18, 2012 by tgstaudt

by Thomas Staudt

Ownership Rules

FCC Proposes Relaxing Media Ownership Rules

The Federal Communications Commission Has Proposed Changing Media-Ownership Rules [19]

The biggest news in Fall 2012 regarding the topic of Big Media is a proposal by the FCC to implement changes in the media ownership rules. The biggest change aims to relax the ban that prevents cross-ownership of a television station and newspaper in the same market. The rule does not apply to top 20 markets, although a waiver could be obtained to allow it to be applied. Regulations against the ownership of duopoly television stations will remain in effect. The proposal comes at a time when the media landscape is shifting, and local news operations are struggling for resources. ^[1]

Advocates for the proposal suggest that allowing mergers between local television and newspaper outlets will allow the outlets to stay in business in a tougher media economic climate. Without the rule change, the argument is that total media outlets will severely decline do to sustainability issues in the coming decade. ^[2]

Opponents of the plan claim that relaxing the ownership rules will promote further concentration of ownership, and erode diversity, competition, and localism that are in the public interest. The FCC has agreed to accept further opinions and research on the manner, and will hold off on voting until early 2013. ^[3]

Tribune Requires Ownership Waiver for Sale

The Tribune Company is an FCC Waiver Away from Emerging from Bankruptcy [20]

While the FCC considers officially changing cross-media ownership rules, the FCC announced in November, 2012 that it was close to granting a cross-ownership waiver to the Tribune Company to allow the transfer of ownership to a group composed of Oaktree Capital Management, Angelo Gordon, and JP Morgan Chase. The waiver is needed because the group currently owns television assets in Los Angeles and four other markets involved. A permanent waiver is expected Chicago, and temporary 1 year waivers for Los Angels, New York, Miami and Hartford. The waivers will allow the closing of the sale, and the completion of four years of bankruptcy. ^[4]

Ownership Report

FCC Releases Minority Ownership Report

At the beginning of November, 2012, the FCC released its bi-annual report on the ownership of commercial broadcast stations in theUnited Statesas of the end of 2011. The timing of the report is noteworthy as the FCC is in the midst of examining further deregulation of ownership rules, something critics believe will lower ownership diversity even further.

Of the nation’s 1,348 television stations, whites own 69.4%. That is an increase from 63.4% in 2009 when there were 1,187 stations. Accompanying this, African American ownership fell from 1% to 0.7% and Asian ownership fell from 0.8% to 0.5%. Following national trends, Hispanic ownership rose, but only slightly, from 2.5% to 2.9%. There is also a large gender gap in commercial television ownership. While on the rise, women own only 6.8% of stations in the US as of 2011, up from 5.6% in 2009.

The television ownership statistics are not dramatically different than radio, where whites own 80% of stations, and men own 70%. ^[5]

Cable Networks

Liberty Media Spins off the Starz Network

Starz Will be Spun Off into Its Own Company by Liberty Media [21]

Liberty Media announced in August, 2012 that they intend to spin off their premium network Starz into a separate, publicly traded company. The deal is expected to be completed by the end of 2012. Liberty shareholders will receive Starz stock as a one-time dividend. The new company will acquire all of the Starz portfolio and assets, as well as $1.5 billion debt, and undisclosed cash. ^[6] Analysts are skeptical about the financial prospects of the new company, with Starz reporting an 11% decline in income against last year. ^[7]

Fox Purchases Stake in YES to Assist Clearance

On November 20, 2012, News Corp, the parent company of Fox, agreed to purchase a 49% ownership stake in the YES Network. A specific price was not released, but analysts estimate the deal values the network near $3 billion. News Corp completed the deal with Goldman Sachs and Providence Equity Partners. The contract includes a path for Fox to increase its ownership stake to 80%. YES has a contract to air New York Yankees baseball games through 2042, and is expected to be used as strong leverage to increase retransmission rates and guarantee clearance for other Fox properties in the nation’s largest market and surrounding areas. ^[8]

Current TV for sale

Al Gore’s Current TV is Up for Sale [22]

In October, 2012, Current TV, the networked owned by former Vice President Al Gore, announced that it was up for sale. The struggling network does not have a full time program line-up, and is focused on the far left side of the political spectrum. Austin, Texas startup SocialGood.tv confirmed December 1, 2012 that it was working to raise funds to purchase the network. Although they do not yet have the funding, a released business plan shows that they would move the network to the political central in order to increase both viewer and advertising bases. SocialGood.tv claims to be close to having financing in place, but it will remain to be seen if the company can complete the transaction. ^[9]

O&O Stations

Fox Sells WUTB in Baltimore to Deerfield Communications

In May 2012, Sinclair paid $25 million to Fox for the affiliation for WBFF in Baltimore, as well as an option to purchase the Fox owned and operated station in Baltimore, WUTB, by March 31, 2013. The station had served as leverage for Fox when negotiating with Sinclair, as Fox used the threat of pulling the Baltimore Fox affiliation from Sinclair’s flagship, WBFF, and switching to their own WUTB. ^[10]

On November 29, 2012, Sinclair exercised the option to purchase WUTB, paying an additional $2.7 million for the station. Because Sinclair owns WBFF in Baltimore, the sale is between Fox Television corporate, and a third party Deerfield Communications. Sinclair will control the station through an operations contract with Deerfield, and will owe an additional $25 million to Fox, or Fox can exercise an option to acquire certain stations from Sinclair’s current portfolio. ^[11]

Television Station Groups

Nexstar Buys 5 TV Stations

Nexstar Broadcasting announced that intends to reinvest its windfall from this year’s political season to purchase 5 television stations in California and Vermont. On November 5, 2012, Nexstar announced that it paid Newport Television $35.4 million for the CBS affiliate, KGPE, in Fresno, CA; the NBC and CW affiliate, KGET, in Bakersfield, and a low-powered Telemundo affiliate, KKEY, in Bakersfield, CA. ^[12]

In a separate sale, Nexstar Broadcasting announced the completion of a deal November 5, 2012 to purchase Fox affiliate WFFF in Burlington, VT from Smith Media. Nexstar agreed to pay $17.1 million for WFFF and sister station WVNY, an ABC affiliate. The Burlington DMA is important due to its sizeable Canadian audience, including Montreal. ^[13]Mission Broadcasting is also involved in the transaction due to media ownership laws. The FCC is expected to approve the transaction in the first quarter of 2013, upon which, Utica, NY NBC affiliate WKTV will be the only television station still owned by Smith Media. ^[14]

Cox buys 4 Newport Stations

COX Media Purchases 4 Newport Television Stations [23]

Newport Television also closed a deal to sell 4 stations to Cox Media on December 4, 2012. Cox purchased the FOX and CBS duopoly, WAWS and WTEV, in Jacksonville, Florida as well as the FOX and MyNetwork affiliates, KOKI and KMYT, in Tulsa, Oklahoma. ^[15]

Sinclair buys 7 Newport Stations

On December 3, 2012 Sinclair Broadcasting closed a deal for $459.7 million for seven stations owned by Newport Media. WKRC in Cincinnati, OH; WOAI in San Antonio, TX; WHP in Harrisburg-Lancaster, PA; WPMI and WJTC in Mobile, AL; WHAM in Rochester, NY, and KSAS in Wichita, KS are the stations included in the deal. Sinclair has already announced sweeping personnel changes at many of the stations involved. ^[16]

Sinclair and Nexstar in running for 24 Barrington stations

Sinclair Television is a Finalist for Barrington Television Stations [24]

On November 29, 2012, Barrington Broadcasting, the group run by former AOL Time Warner COO Bob Pittman, announced that it was looking to sell its entire portfolio of 24 television stations. Located in 15 markets ranging from market size 67 to 200, the portfolio consists of ABC, CBS, NBC, FOX, and CW stations. Although several companies made bids, Sinclair Broadcasting and Nexstar are the finalists. These two companies have advantages over others due to their nationwide retransmission agreements with a variety of distribution platforms. Upon the completion of a sale, the retransmission rate of the sold station would become that of the new owner, often much higher than that negotiated by the station. ^[17]

Denali Media Purchases Three Alaska Stations

On November 9, 2012, Denali Media Holdings, Alaska’s largest telecommunications company, announced that it was looking to purchase three additional television stations across the state. As part of a strategy to create a state-wide news and entertainment network, Denali is purchasing the Anchorage CBS affiliate, KTVA, from Media News Group of Denver. It is also purchasing the NBC affiliates in Juneau and Sitka, KATH and KSCT respectively, from North Star Broadcasting. The FCC is expected to approve the sales in early 2013. ^[18]

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Regulation of Distribution

Posted on September 18, 2012 by Baindu Saidu

by Baindu N. Saidu

Distribution refers to the means by which television programming is delivered to consumers. It is done through traditional means like Broadcast, Cable or Satellite television, or through newer means like Video on Demand (VOD), Digital Video Recording (DVR), and online Subscription Video On Demand (SVOD) services like HULU Plus and Netflix.

When it comes to overseeing and regulating of these different means of mass television distribution, the Federal Communication Commission (FCC) is the principle government agency in charge. Its jurisdiction covers the means of mass emerging television technologies at the intersection of telephone, internet, computing, and digital signals. [1].

via the FCC website (http://www.fcc.gov/logos)

Several events have been ongoing during this semester related to the regulatory and legal aspects of distribution include a satellite provider, Dish’s disputes with both cable and broadcast networks, and the FCC’s ongoing plans for an incentive auction to reclaim spectrum space for wireless operators.

Dish Network vs. AMC Networks

The Networks’ dispute started years earlier with Cablevision’s lawsuit against Dish over their Voom HD channel which Dish stopped carrying in 2008. AMC was spun off from Cablevision in 2011. In April 2012, Dish notified AMC that it would drop their channels and by July, when their contract expired, Dish removed AMC Network channels AMC, WEtv, IFC, and Sundance from its lineup [2].

The companies indicated different reasons for the dispute. AMC stated that DISH dropped its programming because it wanted to gain leverage in an unrelated lawsuit involving Cablevision and their Voom HD channel [3]. DISH, conversely stated that the dispute was over “bundling,” in which big networks like AMC try to sell several of their channels, both high- and low-rated, to providers in a bundle to get a better price [4].

Image via Deadline website (http://www.deadline.com/tag/dish-network/)

By September, Dish’s 14 million subscribers had been without any AMC channels for more than two months and feared not be able to view the season premiere of the AMC hit show, The Walking Dead, set to premiere October 14. Speaking on the dispute, Dish’s senior vice president of programming, Adam Shull stated that “The problem is they’re asking me to pay for four channels for really what is the price of three shows,” thus Dish wouldn’t be paying for any AMC shows [5].

On their part, AMC turned to social media in a quest to get their channels back on Dish, launching a YouTube video contest for angry Dish subscribers called “Hey DISH, Where’s my AMC?” [6].

The conflict would not be resolved until October 21 when Cablevision and AMC Networks settled their lawsuit with Dish Network for $700 million. The deal brought to end a dispute over whether Dish breached an affiliate agreement by terminating AMC’s Voom HD Network in 2008. At a trial that began in late September, AMC sought some $2.4 billion in damages from what it believed was Dish’s improper termination. Dish had defended itself by saying that it had the authority to cancel the Voom deal based on a contractual clause requiring Cablevision/AMC to invest $100 million per year on the channel. As part of the deal Dish also reached a new carriage agreement with AMC, bringing the network back to their lineup along with IFC, Sundance, and WEtv [7].

Dish Network’s AutoHop vs. Broadcasters

Image via Dish Network Website (http://godish.com/)

Another battle Dish Network has been involved in pertains to the AutoHop feature for its DVR systems, Hopper and Joey. Introduced in March, Autohop, an International Consumer Electronics Show (CES) Innovations 2013 Design and Engineering Award Honoree, allows users who are watching Primetime Anytime recordings to completely skip commercials. When the user starts watching a recording, they are allowed to choose whether or not to skip commercials. Users who choose to skip the commercials move from segment to segment of TV shows without having to watch the ads [8]. This feature has undoubtedly caused uproar with broadcasters, who depend on ad sales for a majority of their revenue.

In May, three of the major broadcasters (CBS, NBC, and Fox) filed suit against Dish Network in Los Angles, contending that the technology violated copyright law. Dish simultaneously filed a suit against ABC, CBS, and NBC in New York seeking a declaratory judgment affirming the legality of their technology [9]. In documents filed August 22, Fox’s lawyer argued that AutoHop was in “violation of the express terms and conditions of its contracts with Fox and federal copyright law. Both parties argued their respective points of view in front of U.S. District Court judge, Dolly Gee, on September 21 in Los Angeles. On November 6, Gee denied Fox’s request for a preliminary injunction that would shut AutoHop down. Gee, in denying Fox said, “Although Dish defines some of the parameters of copying for time-shifting purposes, it is ultimately the user who causes the copy to be made.” She also pointed out that Fox hadn’t proved there would be “irreparable damage” if no injunction was issued. Any harm to Fox, she said, could be relieved by monetary damages. The judge did agree with Fox though that Dish had likely committed copyright infringement and broken the contract between the two companies in making copies of Fox programming for alleged quality assurance [10].

On November 9, Fox filed an appeal against the denial of its request for an injunction, moving the matter from the U.S. District Court to the U.S. Court of Appeals for the Ninth District[11]. More legal action from broadcasters followed on November 24 when ABC sought a preliminary injunction from U.S. District Judge Laura Taylor Swain in Manhattan federal court to also block AutoHop [12].

The broadcasters’ reason for going after AutoHop is that it “will ultimately destroy the advertiser-supported ecosystem” they depend on for revenue [13]. The networks make more than $19 billion a year in advertising, money that pays for the high cost of programming. Without advertising, network executives say, media companies would have to charge distributors three times the current rate for their signals, added costs which would be passed on to consumers. Dish, on its part, said that it believes that the AutoHop feature does not violate the networks’ copyrights. Instead, the company said AutoHop is simply an enhancement of existing ad-zapping technologies, and ultimately a matter of consumer choice [14].

FCC Incentive Spectrum Auction

Image via Cio website (http://www.cio.com/article/717594/FCC_Approves_Wireless_Spectrum_Incentive_Auction_Plan)

The FCC is a quasi-autonomous commission that has elements of each of the legislative, judicial, and executive branches of government. It is part of the group of independent regulatory agencies (see also the FAA, FTC, and SEC) [15]. In its control of television, the FCC performs several distinct functions such as rulemaking, licensing, registration, adjudication, enforcement, and informal influence [16].

Last February, President Obama signed a law empowering the FCC to buy spectrum from broadcasters wishing to give it up and then turn around and auction it to wireless broadband carriers. The FCC is working on the implementing rules for the incentive auction — so-called because broadcasters have a cash incentive to give up their spectrum [17]. They have hopes that the auction could begin as early as 2014, but have until September 2022 to conduct the sale and license the airwaves to wireless companies [18].

For the most part, full-service broadcasters with major network affiliations and newsrooms have said they have no interest in the incentive auction, preferring to hang on to their entire spectrum so they can offer new services. However, other broadcasters that are struggling see the incentive auction as a way to recoup some or all of their investments. Speculators have also entered the market, buying up marginal stations with the intention of selling their spectrum at a profit in the FCC auction [19].

Fall FCC Spectrum Auction News

September 07, 2012: FCC Chairman Julius Genachowski set to release the FCC’s framework for the spectrum auction with target of having a report and order voted by mid-2013 and the auctions completed by the end of 2014 [20]. Full article.

October 04, 2012: Chairman Genachowski said that the FCC will exceed its 300 MHz target for freeing up spectrum, a target the commission set in the National Broadban Plan [21]. Full article.

November 13, 2012: An anonymous group of broadcasters interested in selling their TV spectrum in the incentive auction created the Expanding Opportunities for Broadcasters Coalition and tapped former Fox and Disney lobbyist Preston Padden to lead their efforts before the FCC as the commission writes rules for the auction [22]. Full article.

December 03, 2012: FCC officials spelled out some financial options in a PricewaterhouseCoopers LLP webcast, urging listeners to file comments as the commission works to write rules for the auction. The deadline for comments on its Notice of Proposed Rulemaking was extended to Jan. 25, with reply comments due March 26 [23]. Full article.

With the auction yet to occur, there is more news to come. To stay updated, check out the FCC’s official website.