July 30, 2020 Via ECFS
Marlene H. Dortch, Esquire Secretary Federal Communications Commission 445 12th Street SW Washington, DC 20554
Re: Notice of Ex Parte Communication MB Docket Nos. 20-73, 17-105
Dear Ms. Dortch:
Gray Television, Inc. (“Gray”) hereby submits this letter in response to various claims made by Nielsen Company (US) LLC (“Nielsen”) in its filings in the above-referenced proceedings. Despite its claims, Nielsen is unable or unwilling to provide parties to significant viewership proceedings with cost-effective, reliable data demonstrating over-the-air viewership. Nielsen’s self-serving comments are designed to maintain that company’s virtual monopoly over lucrative local viewership studies, not to ensure that television stations’ local viewing areas are properly defined. The Commission has the statutory authority to augment its process for determining significant viewership as Gray has proposed, and the public interest will be far better served by a streamlined process that will lead to quicker, cheaper, and more accurate results. Gray urges the Commission to adopt its proposal without delay.
I. Background and Introduction
The American broadcast system relies on television stations to deliver local news, emergency programming, weather, sports, and other information programming. Television stations can only fill this vital role if they are able to generate enough revenue from their local markets to fund the substantial expenses of producing local content. For that reason, the Commission’s rules defining a television station’s local market and the areas where it can deliver its full slate of programming without obstruction are crucial to the economics of local broadcasting and to local television itself. The rules for determining significant viewership at issue in this proceeding are an important part of the Commission’s framework for defining each television station’s local market. Getting these rules right is essential to ensuring the continuing health of local television signals, particularly in small markets.
As the Commission explained in the NPRM, the network non-duplication and syndicated exclusivity protections that are part of the core economics of local broadcasting “depend on the Significantly Viewed List being as accurate as possible.”1 This is because placement on the Significantly Viewed List empowers a local television station to ensure that all viewers in its
1 Significantly Viewed Stations, Notice of Proposed Rulemaking, FCC 20-41 ¶ 14 (rel. Mar. 31, 2020) (“NPRM”). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 2 natural economic market (including cable and satellite subscribers) are able to receive all of the programming the station broadcasts over-the-air, including network and syndicated programming. This, in turn, allows the station to maximize advertising revenue derived from airing these highly valuable (and expensive) categories of programming.
The key issues in this proceeding are whether (1) the rules adopted in 1972 and amended on several occasions in subsequent years are sufficient for maintaining an accurate Significantly Viewed List; and (2) if, not, does the Commission have the authority to adopt the streamlined process that Gray has proposed.
With respect to the first question, the overwhelming weight of the evidence in the record shows that the Commission’s current process for updating the Significantly Viewed List has become so burdensome and unpredictable that parties are unwilling to even commence the process. This is a particular problem in small communities and rural areas where Nielsen’s over- the-air audience measurement capabilities range from spotty to non-existent.2 The result of having a dysfunctional process for amending the Significantly Viewed List is that the list simply reinforces the bygone economic realities of 1972. This means the many stations launched after that date face a substantial disadvantage, because they aren’t on the List and they don’t have a reasonable chance to get the List changed. This disproportionately impacts minorities and women because few members of these groups owned stations in 1972. Moreover, due to unsolved access-to-capital issues, women and minorities are often relegated to purchasing less expensive stations in small markets or on the fringes of larger markets – precisely the stations that are most likely to face hardship in using the Significantly Viewed List to protect their natural economic markets.3 In short, the rules for amending the Significantly Viewed List are precisely the kind of outdated, ossified regulations that this Commission has tried to streamline and modernize.
The record also shows that the Commission has more than adequate authority to adopt the changes Gray suggests. The Commission’s authority to construct and maintain the Significantly Viewed List has never been questioned. Some parties’ efforts to find such limitations in the Copyright Act are misguided and don’t stand up to rigorous analysis. Indeed, the legislative and regulatory history of these rules demonstrates that Gray’s proposals are fully consistent with the Commission’s statutory authority and responsibility for maintaining an accurate Significantly Viewed List.
Nielsen has long played a leading role in the Commission’s efforts to update the Significantly Viewed List, and under Gray’s proposal it would continue to do so. As Gray has shown, however, in many areas, particularly in small markets, today Nielsen has little if any
2 Comments of Gray Television, Inc., MB Docket Nos. 20-73 and 17-105 (filed May 14, 2020); Express Comments of One Ministries, Inc., MB Docket Nos. 20-73 and 17-105 (filed May 15, 2020) (“One Ministries Comments”); Express Comments of Wallingford Media Company, MB Docket Nos. 20-73 and 17-105 (filed May 14, 2020; Reply Comments of Hubbard Broadcasting, Inc., MB Docket Nos. 20-73 and 17-105 at 2 (filed June 15, 2020). 3 See One Ministries Comments. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 3 capability to provide reliable data for updating the List. Rather than admit its deficiencies, Nielsen has chosen to defend its near-monopoly on providing significant viewership studies with vague promises about its current and future capabilities.4 The issue though is not whether Nielsen might improve its audience measurement techniques. It is whether Gray has proposed a better way to get to a more accurate Significantly Viewed List. The answer is obviously “yes,” and the Commission should adopt that solution regardless of what Nielsen does or can do in the future.
II. Gray’s Experience in Three Central Virginia DMAs Demonstrates the Need for Modernizing the Process for Determining Significant Viewership.
Three adjoining Central Virginia DMAs – Richmond, Harrisonburg, and Charlottesville provide a quintessential example of how the existing rules can disadvantage small market stations across the country simply because (1) some stations in those markets were not on-air when the Significantly Viewed List was created and (2) the status quo is so difficult and expensive to change. Gray is the licensee of an NBC affiliated station in each of these markets: WWBT(DT), Richmond, Virginia; WVIR-TV, Charlottesville, Virginia; and WHSV-TV, Harrisonburg, Virginia.5 In 1972, however, the only NBC affiliate serving Central Virginia was WWBT(DT).6 Due to WWBT(DT)’s strong, then-analog VHF signal, it ended up on the Significantly Viewed List for two of the three counties in the Harrisonburg DMA and all five counties in the Charlottesville DMA.7
Today, WWBT(DT) retains its significantly viewed status throughout central Virginia, and it is carried by cable systems in the Charlottesville and Harrisonburg DMAs. This is despite the fact that in 2020, Longley-Rice methodology conclusively proves that WWBT(DT)’s over-the- air signal does not reach the vast majority of viewers in the Charlottesville or Harrisonburg DMAs.8 As a result, neither WVIR-TV nor WHSV-TV enjoy network exclusivity in their
4 Comments of the Nielsen Company (US) LLC, MB Docket Nos. 20-73 and 17-105 at 1-9 (filed May 14, 2020); Reply Comments of the Nielsen Company (US) LLC, MB Docket Nos. 20-73 and 17-105 at 1-2 (filed June 15, 2020); Notice of Ex Parte Communication of The Nielsen Company (US), LLC, MB Docket Nos. 20-73 and 17-105 at 2 (filed July 8, 2020) (“Nielsen Ex Parte”). 5 Gray’s NBC-affiliated program stream is broadcast on a multicast subchannel of WHSV-TV. 6 WVIR-TV didn’t even sign onto the airwaves until 1973, and Harrisonburg did not receive its own NBC affiliate until WHSV-TV added an NBC-affiliated multicast program stream in 2019. 7 The Commission should note that WHSV-TV is also on the Significantly Viewed List for many of these counties. That status, however, does nothing to protect it against WWBT(DT)’s distribution of NBC and syndicated programming in WHSV-TV’s market. 8 Attached as Exhibit 1 is a map that Gray has had prepared to demonstrate WWBT(DT)’s lack of signal reach in the Harrisonburg DMA and three of the four counties in the Charlottesville DMA. WWBT(DT)’s digital signal reaches the majority of viewers in Fluvanna County, Virginia but has limited reach in the remaining counties in the Charlottesville DMA. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 4 markets or even their communities of license, and WWBT(DT) – which can’t be seen over the air – reduces their ratings, which in turn reduces the amount of advertising revenue those stations can generate.9 Like dozens of other network affiliates serving small markets, Gray’s NBC affiliates in Charlottesville and Harrisonburg are at a considerable disadvantage, because of the market conditions that prevailed in 1972.
Under the current rules, Gray’s path to remedying this situation would be time- consuming, expensive, and uncertain. Gray would need to seek a waiver of the rules to permit its stations to enforce exclusivity against WWBT(DT) despite its presence on the Significantly Viewed List. This would require a showing that WWBT(DT) is no longer significantly viewed in areas for which it currently enjoys significantly viewed status. To make this showing, Gray would be required to pay several thousand dollars to Nielsen for a viewership study that Nielsen may or may not be able to provide.10 The Harrisonburg and Charlottesville DMAs are among the smallest of the small markets (market ranks 175 and 182, respectively) so it is likely that Nielsen would not have the data that Gray needs from the more than 50 cable communities in which WWBT(DT) is significantly viewed. Even if it could, that data would likely be based on “recall surveys” that are of questionable reliability and would add more time to the process of obtaining this data.11
Assuming Gray could get the necessary data from Nielsen and that data showed WWBT(DT) is not significantly viewed in the relevant counties and communities, Gray would then spend thousands more dollars in legal fees preparing and filing a waiver request with the Commission. Since the burden would be on Gray to demonstrate that WWBT(DT) is not significantly viewed, a potential opponent would need only to raise enough questions about the viewership data presented to succeed in preventing any changes to the status quo.12
9 Gray’s WWBT(DT) receives no benefit from this out of market carriage, because ratings services do not credit WWBT(DT) with this out-of-market viewership. Moreover, local advertisers in Richmond do not value the distant viewership and are unwilling to pay higher advertising rates, because WWBT(DT) happens to be on cable an hour away in Charlottesville or two hours away in Harrisonburg. 10 Nielsen has not described how its “flat fee” would apply to a petitioner seeking survey data for multiple communities and/or markets. 11 With Nielsen’s RPD+ methodology in its former diary markets, broadcasters are no longer confined to the traditional February, May, July, November “sweeps” periods. Nielsen is able to deliver survey data each month. Section 76.54(b), however, disfavors data collected between April and September. 12 The complexity of the current rules incentivizes oppositions, because a few thousand dollars in legal fees can often be money well spent if it raises just enough questions to cause the Commission to deny a petition. The Commission’s decision in Gray Television Licensee, LLC Petition for Waiver of Section 76.92(f) and 76.106(a) of the Commission’s Rules, Memorandum Report and Order, 30 FCC Rcd 1922 (2015) is a perfect example. The opponents merely had to raise questions regarding the correct zip codes to use for Parkersburg, West Virginia to derail Gray’s petition. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 5
Thus, the current rules require Gray to pay thousands of dollars to Nielsen; then thousands of dollars to its lawyers for a petition; then likely thousands of dollars more to defend against potential oppositions. After that, based on the average processing time over the last six years under the current rules, Gray would not receive a decision for another 15 months. That means if Gray started working on this tomorrow, and everything goes right, Gray’s Charlottesville and Harrisonburg stations might be able to start asserting their non-duplication rights by early 2022.13
Gray’s proposal offers a far more effective, accurate, and efficient way. Gray would first conduct a Longley-Rice study of WWBT(DT)’s signal. Since WWBT(DT)’s signal does not reach 25% of the land area or 25% of the population in any county in the Harrisonburg DMA or three of the four counties in the Charlottesville DMA, Gray could quickly file a petition seeking waiver of the Significantly Viewed List for WVIR-TV and WHSV-TV for those respective counties. The cost of obtaining the engineering and drafting the petition would likely be less than $2,000. Any station or MVPD in the market would have the opportunity to oppose the petition for any reason, including any data it was able to obtain from Nielsen or any other audience measurement company. Because Gray would have met its burden using Longley-Rice data, however, any opponent would need to overcome the presumption that WWBT(DT) is not significantly viewed over-the-air in the Charlottesville and Harrisonburg DMAs because WWBT(DT)’s signal cannot be received there. For that reason, Gray considers oppositions unlikely. Accordingly, Gray expects that its total spend on the petition would be less than $2,000 and that the Commission could process the petition in as few as four months after the petition was filed. And, under Gray’s proposal the proper functioning of the Commission exclusivity rules could be achieved by late 2020 or early 2021.14
13 Even if no third party opposed Gray’s petition filed under today’s rules, the average case takes nine and a half months to process. 14 While the problems in Central Virginia are caused by the fact that WWBT(DT) is not viewable in areas where the station is on the Significantly Viewed List, the opposite problem – stations that are not on the Significantly Viewed List where they are viewable – are equally common. For example, Gray’s NBC-affiliate for the Myrtle Beach-Florence DMA, WMBF(DT), places a strong signal over 100% of Georgetown County, South Carolina. See Exhibit 2. While Georgetown County is directly adjacent to Myrtle Beach, Nielsen assigns that county to the Charleston, South Carolina DMA. Many residents of Georgetown County – especially those who live within a five-minute drive of Myrtle Beach – prefer local news and local programming from the Myrtle Beach stations – WMBF(DT) itself provides more than 30 hours of local Myrtle Beach news. As a result, Spectrum Cable, which is the largest cable operator in Georgetown County, carries both the in-DMA Charleston NBC affiliate and WMBF(DT). Because WMBF(DT) did not commence operations until 2008, the station is not on the Significantly Viewed List, so Charter must black out WMBF(DT)’s network programming. Gray routinely receives complaints from residents in Georgetown County wondering why WMBF(DT) – a station they consider their local station and a station that is available to anyone with an over-the-air antenna – is riddled with blackouts. While the current procedures, with their attendant delay, expense, and uncertainty have deterred Gray from seeking Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 6
III. The Commission Should Revise the Rules Regardless of Nielsen’s Questionable Claims that It Can Improve Its Data.
Given that Nielsen currently enjoys a lucrative near-monopoly on significant viewership surveys and benefits from the status quo, it is unsurprising that Nielsen opposes change to the current rules. Nielsen’s defense of its practices and data quality, however, provide the Commission no basis for preserving the current process for determining significant viewership.
First, it’s unclear whether Nielsen’s plans to improve and augment its survey information would even satisfy the Commission’s rules for demonstrating significant viewership or lack thereof. Nielsen concedes that it does not deploy enough code readers to provide it with the information needed to conduct audience measurements “in the very smallest counties, within the very smallest markets.”15 Nonetheless, in its latest filing, Nielsen says that in those markets where it lacks sufficient code readers, it can “augment” the data with “recall surveys” conducted by telephone and on the internet.16 Nielsen provides precious little detail about how this process would work. For example, Nielsen has not included in the record: (1) how many additional people it would need to survey, (2) how long it would take to augment its code reader data with recall surveys, (3) its methodology for incorporating the various forms of data, or (4) how long it would take to provide data to a party requesting data that needs to be augmented. Realistically, Nielsen’s vague assurances that it can provide reliable data should give the Commission little confidence that it actually can do so – especially given Nielsen’s dismal track record over the last decade when rolling out new audience measurement techniques.17
to be added to the Significantly Viewed List in the past, the streamlined procedures Gray proposes would make it much easier for stations like WMBF(DT) to achieve significantly viewed status and end viewers’ confusion and disappointment over these rules. 15 Nielsen Ex Parte at 1. 16 Nielsen Ex Parte at 2. 17 See Report: Nielsen Botched First Day of PPM-Infused TV Ratings, Inside Radio (Oct. 7, 2019), http://www.insideradio.com/free/report-nielsen-botched-first-day-of-ppm-infused-tv- ratings/article_c998d8c2-e8d8-11e9-a231-6f2c284d6d4a.html; Jon Lafayette, ViacomCBS Blasts Nielsen Out-of-Home Ratings Delay, Broadcasting+Cable (July 9, 2020), https://www.nexttv.com/news/viacomcbs-blasts-nielsen-out-of-home-ratings-delay; Jon Lafayette, Nielsen Announces Delay Replacing Local-Market Diaries, Broadcasting+Cable (May 31, 2018), https://www.nexttv.com/news/nielsen-announces-delay-replacing-local-market- diaries; Adam Jacobson, Nielsen Explains Short Delay in TV Diary Displacement, Radio+Television Business Report (May 31, 2018), https://www.rbr.com/nielsen-explains-short- delay-in-tv-diary-displacement/; Michael Malone, Exclusive: Nielsen Scales Back Code Readers, Broadcasting+Cable (May 29, 2014), https://www.nexttv.com/news/exclusive-nielsen-scales- back-code-readers-131456; Dade Hayes, Upfronts 2016: Nielsen Dismisses ‘Noise’ About Total Audience Delays, Broadcasting+Cable (May 3, 2016), https://www.nexttv.com/news/upfronts- 2016-nielsen-dismisses-noise-about-total-audience-delays-156143; Karlene Lukovitz, Cross- Platform Measurement Moving Forward, Despite Setbacks, MediaPost (Feb. 10, 2017), Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 7 Second, it is simply unfair to make small-market broadcasters wait to see whether Nielsen’s new survey methodology works before they can rely on network and syndicated exclusivity rights that should be theirs already. If the Commission maintains the current rules and gives Nielsen a chance to employ its augmented procedures, it is a near certainty that those procedures will be challenged in any Commission proceeding and that such challenges will needlessly extend the time for a Commission decision. In the last six years, each of the four significantly-viewed cases that faced opposition involved opponents criticizing the validity of the Nielsen data used to support the petition.18 In those cases, the fastest decision was issued in about eighteen months, and the longest petition lay undecided for more than thirty months. With Nielsen adopting new, mostly undisclosed, and untested methodologies, the Commission can be sure that opponents will challenge those procedures, and Commission staff will be called upon to adjudicate Nielsen’s complex statistical modelling.
Third, Nielsen has not explained the extent to which it can provide data or whether its data would be more limited for television stations that have not purchased a Nielsen encoder and do not include a watermark in their signal. Hundreds of television stations, including religious stations, foreign language stations, stations serving niche audiences, shopping stations, stations that aren’t affiliated with a major network, and stations in the very smallest markets, may not have installed a Nielsen encoder signal because they do not conduct regular business with the large national advertising agencies that rely solely on Nielsen data for placing advertisements. For these stations, being rated by Nielsen provides few benefits. Thus, many have sensibly opted against installing and maintaining a Nielsen encoder.19 Nielsen does not explain whether it can adequately service those stations or whether they would be at a further disadvantage.
There is literally no reason for the Commission to maintain the status quo based on Nielsen’s promises of better data. Gray’s proposal would obviate the need for relying on Nielsen at all in the first instance. Parties would be free to rely on Nielsen data if they wished, but the proposed changes would end Nielsen’s de facto gatekeeper role for significant viewership cases. The record before the Commission makes clear that changes are needed. Gray respectfully requests that the Commission take this opportunity to modernize its rules by adopting Gray’s
https://www.mediapost.com/publications/article/294936/cross-platform-measurement-moving- forward-despite.html; Mike Farrell, Nielsen to Retire Paper Diaries in 140 Local Markets, Multichannel News (last updated Mar. 29, 2018), https://www.multichannel.com/news/nielsen- retire-paper-diaries-140-local-markets-407738. 18 See WHP Licensee, LLC, Memorandum Opinion and Order, 33 FCC Rcd 3467 (2018) (commenter sought clarification regarding apparent inconsistency in Nielsen data); Media General Communications Holdings, Inc., Memorandum Opinion and Order, 31 FCC Rcd 1230 (2016) (opposition argued that Nielsen study presented misleading analysis of the station’s viewership); Chesapeake Television Licensee, LLC, Memorandum Opinion and Order, 30 FCC Rcd 6455 (2015) (opposition expressed concern that Nielsen Survey was out of date); Gray Television Licensee, LLC, Memorandum Opinion and Order, 30 FCC Rcd 1922 (2015) (opposition asserted Nielsen Study was flawed and failed to support requested waiver). 19 See One Ministries Comments. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 8 proposal to use Longley-Rice data, which is more widely available, affordable, reliable, and predictable than the significantly more costly Nielsen data, regardless of any improvements Nielsen might make.
IV. The Commission Has Full Statutory Authority To Change the Significantly Viewed Rules.
Several parties have questioned the Commission’s authority to revise its rules and procedures for determining significant viewership based on a supposed conflict with Section 122(a)(2)(A) of the Copyright Act.20 The text of Section 122 was originally adopted as part of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (“SHVERA”),21 reauthorized as part of the Satellite Television Extension and Localism Act (“STELA”),22 and reads as follows:
A secondary transmission of a performance or display of a work embodied in a primary transmission of a television broadcast station to subscribers who receive secondary transmissions of primary transmissions under paragraph (1) shall be subject to statutory licensing under this paragraph if the secondary transmission is of the primary transmission of a network station or a non-network station to a subscriber who resides outside the station’s local market but within a community in which the signal has been determined by the Federal Communications Commission to be significantly viewed in such community, pursuant to the rules, regulations, and authorizations of the Federal Communications Commission in effect on April 15, 1976, applicable to determining with respect to a cable system whether signals are significantly viewed in a community.23
NCTA, AT&T, and DISH read this provision to mean that if the Commission adopts Gray’s proposal, it will create two separate systems for determining whether a station is significantly viewed – one for purposes of the Copyright Act and another for purposes of the Commission’s
20 See Comments of NCTA – The Internet & Television Association, MB Docket Nos. 20-73 and 17-105 (filed May 14, 2020) (“NCTA Comments”); Reply Comments of NCTA – The Internet & Television Association, MB Docket Nos. 20-73 and 17-105 (filed June 15, 2020) (“NCTA Reply Comments”); Joint Reply Comments of AT&T and DISH, MB Docket Nos. 20- 73 and 17-105 (filed June 15, 2020) (“AT&T and DISH Reply Comments”); see also 17 U.S.C. §122(a)(2)(A). 21 See The Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), Pub. L. No. 108-447, 118 Stat 2809 (2004). As originally enacted in SHVERA, the significantly viewed station language was included in Section 119(a)(3) of the codified Copyright Act. 22 See The Satellite Television Extension and Localism Act of 2010 (STELA) § 203, Pub. L. No. 111-175, 124 Stat. 1218, 1245 (2010). STELA reorganized the satellite provisions of the Copyright Act and renumbered the language regarding copyright clearance for significantly viewed signals as Section 122(a)(2)(A). 23 See 17 U.S.C. §122(a)(2)(A). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 9 rules.24 AT&T and DISH fear that any change in the Commission’s significantly viewed rules will prevent satellite carriers from relying on the compulsory copyright license.25 Moreover, as the Commission pointed out in the NPRM, two previous decisions of the Commission went so far as to describe Section 122(a)(2)(A) as including a “requirement” that the Commission continue using the same rules for significant viewership determinations as were in effect in 1976.26 Gray submits that these interpretations of Section 122 are ahistorical misreadings of both the Communications Act and the Copyright Act.
In the first place, it is inherently implausible that in 2004 Congress decided to use SHVERA to lock in the Commission’s rules for determining significant viewership as they existed twenty-eight years previously – on the specific date of April 15, 1976.27 In the nearly three decades between April 15, 1976 and enactment of SHVERA, the Commission made at least one substantive amendment and countless technical amendments to Section 76.54.28 And the courts reviewed and sometimes reversed the Commission’s implementation of that rule, affecting
24 See n.20, supra. 25 AT&T and DISH Reply Comments at 4-6. 26 See NPRM at ¶ 12 & n.43 (citing Implementation of the Satellite Television and Extension and Localism Act of 2010 (STELA), Report and Order and Order on Reconsideration, 25 FCC Rcd 16383, 16409-10, ¶ 48 (2010) (“STELA Significantly Viewed Report and Order”); Implementation of the Satellite Home Viewer Extension and Reauthorization Act of 2004, Implementation of Section 340 of the Communications Act, Report and Order, 20 FCC Rcd 17278, 17291 ¶ 29 (2005) (“SHVERA Significantly Viewed Report and Order”). 27 The Commission should note that the April 15, 1976 date has no relationship to the particular significantly viewed rules. April 15, 1976 is simply an administrative cut-off date, roughly six months prior to passage of the Copyright Act of 1976. See Public Law 94-553, 90 Stat. 2541, Oct. 19, 1976, § 111(c)(4) (establishing April 15, 1976 as the cut-off date by which a cable operator had to be carrying a foreign station pursuant to then-existing Commission rules in order to avoid the new requirements of Section 111(c)(4)), § 111(f) (the “local service area” of a television station was to be determined pursuant to Commission rules in effect as of April 15, 1976), § 801(a)(2)(B) and (C) (prescribing rules for Copyright Office consideration of changes to the FCC’s rules after April 15, 1976 in determining copyright royalties)). 28 For example, in 1978, the Commission adopted an order changing its rules to permit a petitioner to use a single audience survey if a cable system serves more than one cable community. See Amendment of Subpart F of Part 76 of the Commission’s Rules and Regulations with Respect to Network Program Exclusivity Protection by Cable Television Systems, Docket No. 19995, Memorandum Opinion and Order, 67 FCC 2d 1303, 1305 ¶ 8 (1978). Almost a decade later, in KCST-TV, Inc., the Commission held that in order to obtain a waiver, a petitioner would be required to demonstrate for two consecutive years that a station was no longer significantly viewed, based either on community-specific or system-specific over-the-air viewing data, following the methodology set forth in section 76.54(b). KCST-TV Inc., 103 FCC 2d 407, 413 ¶ 11 (1986). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 10 what amounted to additional substantive changes to Section 76.54.29 In view of all these changes between 1976 and SHVERA’s enactment in 2004, it is irrational to conclude that Congress intended to go back to the significantly-viewed rules effective on April 15, 1976 for satellite operators, and satellite operators only. AT&T and DISH worry that permitting amendments to Section 76.54 of the Commission rules would create different significantly viewed regimes for cable and satellite operators, but the reality is that if their reading of Section 122(a)(2)(A) is correct, then those two regimes already exist: one for cable operators that includes all the changes to Section 76.54 since 1976 and one for satellite operators that doesn’t.30 This interpretation would apply the 1976 rules to satellite operators only because there is no similar provision that could even arguably restrict the FCC’s authority to amend the rule and procedures for significantly viewed determinations involving cable operators. No one has ever suggested that is the law and Gray certainly doesn’t believe that. Rather, the Commission should interpret Section 122(a)(2)(A) to permit change to the significantly viewed rules and conclude that those changes do not impact satellite carriers’ eligibility for the statutory license for significantly viewed signals.
Moreover, to interpret Section 122(a)(2)(A) as urged by NCTA, AT&T, and DISH, one has to conclude that Congress intended to limit the Commission’s authority to adopt rules that would maintain the Significantly Viewed List consistent with the public interest. Congress does not appear to agree. The House Report accompanying SHVERA states unequivocally that “The FCC determines which over-the-air television broadcast stations are considered significantly viewed stations in a particular community.”31 Later, in its recap of SHVERA as part of its report on the legislation that the Satellite Television Extension and Localism Act Reauthorization, the Senate reported in 2014 that “[b]eing designated as ‘significantly viewed’ gives a station the right to seek carriage by pay TV providers in an area outside of its home market without violating another station’s market exclusivity rights. The FCC maintains a list of significantly viewed stations. Stations may be added to or removed from that list on a community-by- community basis.”32 There is no suggestion here or in any other legislative materials that Congress believes the Commission’s authority to maintain the Significantly Viewed List according to the Commission’s general regulatory authority (including its right to change those rules when appropriate) is in any way limited by SHVERA.
The question remains, if Congress wasn’t trying to lock in the Commission’s significantly viewed rules as of April 15, 1976, what is the meaning of the reference to that date in Section 122(a)(2)(A)? The answer lies in the purpose of Section 122(a)(2)(A) and its
29 See, e.g., KCST-TV, Inc. v. FCC, 699 F.2d 1185 (D.C. Cir. 1983) (requiring Commission to review economic impact component of its rules for determining a station is not significantly viewed). 30 AT&T and DISH Reply Comments at 4-6. 31 See H.R. Rep. 108-660, at 16 (2004). Granted, the House Report accompanied a draft of SHVERA that did not include the reference to April 15, 1976. As discussed below, however, this change should be read as an administrative rather than a substantive change. 32 See S. Rep. 113-322, at 4 (2014). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 11 relationship to the statutory license granted to cable operators in Section 111 of the Copyright Act of 1976.33 Congress’ intent in adopting the Section 122(a)(2)(A) copyright license for satellite redistribution of significantly viewed signals is crystal clear from the House Report:
The section also permits satellite carriers to retransmit “significantly viewed” signals to subscribers who receive retransmissions of their local signals from their satellite carrier under the § 122 license. “Significantly viewed” signals are television stations that are located in adjacent television markets that are received over-the-air by a significant number of viewers in the local market but are technically considered to be distant signals. The § 111 cable license permits cable operators to retransmit significantly viewed signals to their subscribers royalty-free. Section 102 amends the § 119 license to permit satellite carriers to retransmit these signals royalty-free to create parity between the two licenses.34
Accordingly, Congress intended nothing more and nothing less than to ensure that satellite operators have the same royalty-free access to significantly viewed television signals as cable operators then (and now) enjoyed.
The reason Congress directed the Commission to apply the significantly viewed “rules, regulations, and authorizations of the Federal Communications Commission in effect on April 15, 1976,” is due to the complex way in which Congress went about ensuring that cable operators would enjoy royalty-free access to significantly viewed stations when it adopted the Copyright Act of 1976. Cable operators’ compulsory license for significantly viewed stations arises from Section 111 of the Copyright Act. When that provision was adopted in 1976, April 15, 1976 was used in that section as the cut-off date for determining whether a particular cable system was located in the “local service area of a primary transmitter” (i.e., a television station).35 The effect of a cable system being within the “local service area” of a television station was that the station was deemed “local” rather than “distant” for that cable system.36 If a station was “local,” the cable system was not required to pay copyright royalties for carriage of that station.37 The part about this that is no longer obvious is that as of April 15, 1976, the “local service area of a primary transmitter” included all areas where a television could demand mandatory carriage from a cable system,38 and, as of that date, this included all areas where a station was deemed significantly viewed.39 Thus, use of the April 15, 1976 date in Section 111
33 See The Copyright Act of 1976, Public Law 94-553, 90 Stat. 2541, Oct. 19, 1976. 34 See H.R. Rep. 108-660, at 16. The reference to the “119 license” refers to SHVERA’s placement of the statutory license for significantly viewed signals in Section 119. STELA moved that text to Section 122(a)(2)(A). 35 See 17 U.S.C. §111(f). 36 See id. 37 See 17 U.S.C. 111(d)(2). 38 See 17 U.S.C. 111(f). 39 See Cable Television Report and Order, 36 F.C.C.2d 143, 171 (1972). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 12 was designed to ensure that stations deemed significantly viewed by the Commission would be deemed “local,” i.e., royalty- free, for copyright purposes. This portion of Section 111 was not intended to lock in the Commission’s rules as of April 15, 1976 and prohibit the Commission from making future changes; it was intended to lock in the principle that significantly viewed signals would always be deemed local for copyright royalty purposes.
When Congress imported the April 15, 1976 date into Section 122(a)(2)(A) through SHVERA, the date was used there to accomplish precisely the same purpose. Under Section 122(a)(2)(A), a satellite subscriber is deemed to live in a community where a station is significantly viewed if that community is deemed significantly viewed for cable operators pursuant to the rules applicable on April 15, 1976.40 The effect is that a satellite operator’s retransmission of that station in the significantly viewed area is royalty free under Section 122(c).41 As with the cable compulsory license, Congress’s purpose in referring to the “rules, regulations, and authorizations of the Federal Communications Commission in effect on April 15, 1976” was not to incorporate the Commission’s procedures for determining significant viewership that were in effect on that date; it was to refer to the body of Commission rules that led to a particular community being deemed within a station’s significantly viewed area for cable operators as of that date. In other words, since carriage of significantly viewed signals was royalty-free for cable operators due to the rules in effect on April 15, 1976, the same would be true for satellite operators. That is exactly how the copyright royalty system works today, and nothing Gray has proposed would change that.
It is also clear that Congress did not intend to use the Copyright Act of 1976 or SHVERA to freeze the Commission’s rules in place as of April 15, 1976, because the 1976 Act included a specific provision – Section 801(b)(2)(B) – which deals with how the Copyright royalty tribunals should handle certain types of changes to the Commission’s rules that occur after that date.42 If Congress had intended to freeze the procedure for determining significant viewership with respect to cable systems, surely it would have said so given that it specifically legislated the impact of changes to other royalty-related Commission rules. Since Congress did not mention the Commission’s rules governing significantly viewed determinations, the Commission should presume that in 1976 it intended to leave the Commission free to alter those rules according to the Commission’s own statutory authority. And since Congress is deemed to understand the legislative and regulatory background when it legislates, the Commission should presume that SHVERA was intended to harmonize the complex provisions of the Copyright Act, not to impair the Commission’s normal rulemaking authority. Congress’s only intended effect of the April 15, 1976 date in both the 1976 Act and SHVERA was to ensure that certain categories of stations – including stations the Commission deems significantly viewed – would be permanently carried on a royalty-free basis. The determination of which stations qualify as significantly viewed remains up to the Commission under whatever criteria it deems sufficient.
40 17 U.S.C. §117(a)(2)(A). 41 17 U.S.C. §117(c). 42 17 U.S.C. §801(b). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 13 In addition to Congress’s express intent and the language and structure of the Copyright Act (as well as a healthy dollop of common sense), the Copyright Office agrees that Section 122(a)(2)(A) did not cement the Commission’s 1976 significantly viewed procedures into permanent place. In 2009, the Copyright Office submitted its report to Congress regarding the functioning of the statutory copyright licenses granted to cable and satellite providers pursuant to Section 109 of SHVERA.43 In that document, the Copyright Office responded to suggestions from the National Association of Broadcasters that certain procedures for determining significant viewership should be amended. Had Section 122(a)(2)(A) stripped the Commission of the authority to make such changes, one would expect the Copyright Office to have pointed that out. To the contrary, in responding to NAB’s proposal in the Section 109 Report, the Copyright Office stated “the Office cannot recommend NAB’s ‘significantly viewed’ proposal in this context. This is a matter of communications law and policy that should be addressed by the FCC in any instance.”44 If the Copyright Office believes that changes to the significantly viewed rules and procedures remain in the FCC’s purview, there is little reason to fear that changes to those rules will not be fully credited by the Copyright Office in its royalty decisions.
As the Commission noted in the NPRM, on two separate occasions in 2005 and 2010, the Commission indicated that it believed Section 122(a)(2)(A) requires the Commission to continue using the same procedures for determining significant viewership as it used on April 15, 1976.45 In its order implementing SHVERA in 2005, the Commission rejected a request for modification of the Section 76.54 process for determining significant viewership, stating, without analysis, that “modifications to the Section 76.54 process would be inconsistent with the SHVERA's requirement that we use the same rules for making significantly viewed determinations that were in effect as of April 15, 1976.”46 Likewise, in its 2010 order implementing STELA, the Commission rejected two requests for changes to the significantly viewed rules primarily because it deemed the requests outside the scope of the proceeding, but also noted that “any changes to the Commission’s existing rules for determining significantly viewed status would be inconsistent with the statute’s requirement that we use the same rules for making significantly viewed determinations that were in effect for cable operators as of April 15, 1976.”47 The Commission asks in the NPRM whether there is any reason for the Commission to revisit these determinations. As the analysis above indicates, the Commission can and must correct the misstatement of its authority in these two brief passages in the SHVERA and STELA implementing orders. In both cases, the Commission looked at Section 122(a)(2)(A) and incorrectly concluded that the April 15, 1976 date used in that section was meant to substantively limit the Commission’s authority. In fact, as described above, the date was merely an
43 See Register of Copyrights, Satellite Home Viewer Extension And Reauthorization Act Section 109 Report, June 2008, available at https://www.copyright.gov/reports/section109-final- report.pdf. 44 See id. at 109. 45 See n.26, supra. 46 SHVERA Significantly Viewed Report and Order, 20 FCC Rcd at 17921 ¶ 29. 47 STELA Significantly Viewed Report and Order, 25 FCC Rcd at 16409-10, ¶ 48. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 14 administrative cut-off date meant to ensure that cable and satellite operators are on an equal footing with respect to providing significantly viewed stations to subscribers on a royalty free basis. The history and structure of the Copyright Act, as well as all of the available legislative history shows that Congress never saw Section 122(a)(2)(A) as a limitation on the Commission’s authority to determine whether stations are significantly viewed. The Commission shouldn’t view it that way either.48
Section 340 of the Communications Act, which was also enacted as part of SHVERA, further confirms that the Commission is not bound to forever maintain unchanged its significantly viewed procedures in effect as of 1976.49 Section 340 authorizes satellite carriers to retransmit the signal of an out-of-market station to a subscriber located in an area in which the Commission has deemed that station to be significantly viewed.50 In those cases, the satellite carrier may carry the significantly viewed signal without having to blackout duplicative programming.51 As the Commission noted in the NPRM, Section 340 makes no reference to the 1976 rules.52 Instead, Section 340 simply applies to satellite providers the same significantly viewed determinations that were applied to cable providers prior to December 8, 2004 and requires that the same rules will apply to significantly viewed determinations for both cable and satellite providers going forward.53 When Section 122(a)(2)(A) is viewed properly as an effort to place cable operator and satellite providers on an equal footing for copyright royalty purposes (and not to mandate the Commission’s rules), it is easy to see how Section 340 was intended to do precisely the same thing for signal retransmission purposes. Section 340 didn’t have to mention the Commission’s rules as of a specific date because it didn’t need to synchronize satellite operators’ retransmission rights with a very complex, nearly thirty year-old copyright statute. Still, Congress’s action and the result was precisely the same: cable operators and
48 If the Commission is reluctant to reverse its decisions in the SHVERA and STELA orders, the Commission should still adopt Gray’s proposal consistent with its previous finding that the Commission is bound by its rules in effect in 1976. Gray has not proposed repeal of any of those rules. They would remain in full force and effect and could be used by any party. Instead, Gray has proposed an augmentation of those rules to permit a streamlined, alternative path to the same result that the Commission’s existing rules would reach if they still functioned properly. In this respect, adopting Gray’s proposal would not be fundamentally different from the Commission’s 1978 adoption of changes to the significantly viewed rules, see n.26, supra, or the numerous tweaks the Commission has made to the rules to reflect changed circumstances. See, e.g., SHVERA Significantly Viewed Report and Order at ¶ 51 (removing references to analog Grade B contour from 47 C.F.R. §76.54(c) due to the DTV transition). Like the outmoded Grade B contour standard, the Commission should not be forced forever to deal with an outdated audience survey system that no longer works. 49 See 47 U.S.C. §340(a). 50 See id. 51 See id. 52 See NPRM at ¶ 13. 53 See 47 U.S.C. §340(a). Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 15 satellite providers must be subject to the same rules – rules that the Commission is free to enact or amend.
Thus, the Commission was right to conclude that it has the authority to adopt Gray’s proposals consistent with Section 340,54 but NCTA, AT&T, and DISH are wrong to claim that this interpretation will lead to different standards being applied for copyright purposes under Section 122(a)(2)(A) and for retransmission purposes under Section 340.55 The same standard will apply in each case – the standard the Commission adopts for determining significant viewership.56 Because Gray’s proposal treats cable and satellite operators equally, it satisfies the requirements of Section 340.
Moreover, in response to concerns from NCTA,57 Gray once again reiterates that its proposal does not propose any changes that would remove any stations from the Significantly Viewed List, reverse any previous Commission significant viewing determinations, or extend any significantly viewed waiver beyond the non-duplication rights currently associated with it. Gray is simply proposing a more effective, efficient way to get to the exact same types of results that the current system produces.
Ultimately, this proceeding comes down to the Commission needing to modernize its rules to provide the television marketplace with viable options to correct the long-standing inaccuracies of the significant viewed list. By adopting Gray’s proposal, the Commission can take a huge leap toward accomplishing that goal. Gray urges the Commission to adopt its proposal without further delay.
54 See NPRM at ¶¶ 13-15. 55 NCTA Comments at 4-6; NCTA Reply Comments at 3-5; AT&T and DISH Reply Comments at 4-6. 56 Gray recognizes that the Copyright Office ultimately would be responsible for interpreting Section 122(a)(2)(A) and could abandon its 2009 view that significantly viewed determinations are the Commission’s responsibility. For all the reasons described herein, Gray thinks it is highly unlikely that the Copyright Office would come to the absurd conclusion that due to changes to Section 76.54(b), satellite providers could not rely on the statutory license to carry some significantly viewed stations. Nonetheless, even if the Copyright Office reaches that conclusion, the worst result would be that satellite carriers would have to negotiate private, market-place deal for retransmission of a station in any out-of-market areas where it is added to the Significantly Viewed List using Longley-Rice. If a satellite operator wants to carry that same non-significantly viewed station in that same out-of-market area, it must negotiate a private, market-place deal. There is no reason for the Commission to avoid adopting changes to its rules if as a result of those changes no satellite operator is in any worse of a position than it already is today and the parties could cure any deficiency by entering into a free-market, private copyright agreement. 57 NCTA Comments at 4; NCTA Reply Comments at 5 & n.15. Ms. Marlene H. Dortch MB Docket Nos. 20-73 and 17-105 July 30, 2020 Page 16
Respectfully submitted,
GRAY TELEVISION INC.
Robert J. Folliard, III Senior Vice President – Government Relations & Distribution 4370 Peachtree Rd. NE Atlanta, GA 30319 202-750-1585
John R. Feore Henry H. Wendel Cooley LLP 1299 Pennsylvania Ave, NW Suite 700 Washington, DC 20004 (202) 842-7800
Its attorneys
Exhibit 1 Bel Air Fairmont Aberdeen Vineland Martinsburg Reisterstown Bridgeton Keyser Millville Frederick Eldersburg Towson Grafton Lochearn Rossville
\ 0 \0
0\0\\0\ Brunswick Smyrna Clarksburg 0\0\\0\0\\
\00\\0\0\0\0 Damascus Baltimore \\00\\0\0\\0\
\00\\00\00\\0\ \\0\00\\0\\00\\ Chesapeake RF Consultants, LLC \\0\00\\0\\00\\ Elkridge \00\\00\00\\0\ Radiofrequency Consulting Engineers \\00\\0\0\\0\\ WWBT(DT) Richmond, VA \00\\0\0\0\0 Winchester Dover 0\0\\0\0\\ Digital Television and Radio Glen Burnie 0\0\\0\0 Gaithersburg \ 0\0 Leesburg FCC Coverage Contour (NLSC) Rockville Laurel Weston PredictedSeverna Longley-RicePark Coverage Buckhannon Crofton Reston Silver SpringDetail to SelectedAnnapolis Counties and Cities Elkins Milford Front Royal Chantilly Washington Centreville prepared for WWBT Ch. 10 Alexandria Easton Manassas Gray Television Inc. Lic File#Warrenton 0000108718 FCC Noise Limited Service Mount Vernon Contour (NLSC) 36 dBµ Seaford Dale City Waldorf June, 2020 Cambridge Rockingham La Plata Culpeper Harrisonburg Madison Salisbury Ocean City Greene Fredericksburg Augusta Lexington Park
Staunton Albemarle Pocomoke City Waynesboro Charlottesville
Covington Lexington Buena Vista Ashland Glen Allen WWBT Area Population Mechanicsville Predicted Coverage (sq. km) (2010 Census) Richmond Prop Model: Longley-Rice Albemarle County, VA Total 1,880.6 --- 98,970 --- County within NLSC 290.7 15.5% 8,434 8.5% Climate: Cont temperate Conductivity: 0.0050 County L-R ≥ 36 dBµ 460.9 Lynchburg24.5% 8,855 8.9% Bellwood Charlottesville City, VA Total 26.5 --- 43,475 --- Dielec Const: 15.0 Bedford Chester City within NLSC 0.0 Timberlake0.0% 0 0.0% Refractivity: 311.0 City L-R ≥ 36 dBµ 2.0 7.5% 3,309 7.6% Farmville Hopewell Williamsburg BlacksburgAugusta County, VARoanoke Total 2,514.5 --- 73,750 --- Receiver Ht AG: 10.0 m Petersburg County within NLSC 0.0 0.0% 0 0.0% Receiver Gain: 0 dB ChristiansburgCounty L-R ≥ 36 dBµ 22.4 0.9% 61 0.1% Time Variability: 90.0% Staunton City, VA Total 51.8 --- 23,746 --- Poquoson City within NLSC 0.0 0.0% 0 0.0% Sit. Variability: 50.0% City L-R ≥ 36 dBµ 0.0 0.0% 0 0.0% ITM Mode: Broadcast Waynesboro City, VA Total 39.4 --- 21,006 --- Newport NewsSignal Resolution: 0.25 km City within NLSC 0.0 0.0% 0 0.0% City L-R ≥ 36 dBµ 0.0 0.0% 0 0.0% Greene County, VA Total 406.4 --- 18,403 --- Longley-Rice PredictedVirginia Signal Beach Level County within NLSC 0.0 0.0% 0 0.0% County L-R ≥ 36 dBµ 94.7 23.3% 734 4.0% 36 dBµ or Greater Madison County, VA Total 833.6 --- 13,308 --- Martinsville South Boston Suffolk County within NLSC 0.0 0.0% 0 0.0% Emporia Franklin Below 36 dBµ County L-R ≥ 36 dBµ 116.0 13.9% 535 4.0% Rockingham County, VA Total 2,210.6Danville --- 76,314 --- County within NLSC 0.0 0.0% 0 0.0% Scale 1:1,750,000 Mount Airy County L-R ≥ 36 dBµ Eden 5.6 0.3% 0 0.0% km Harrisonburg City, VA Total 45.2 --- 48,914 --- Roanoke Rapids City within NLSC 0.0 0.0% 0 0.0% 0 20 40 60 Roxboro V-Soft Communications LLC ® © City L-R ≥ 36 dBµ Reidsville 0.0 0.0% 0 0.0% Henderson Oxford Elizabeth City
Winston-Salem
Exhibit 2
Hoke Cumberland Jones
\ 0 \0 0\
York Union Richmond Sampson 0\0\\
0\0\\0\0\\
Anson \00\\0\0\0\0
\\0\
\\00\\0\0
\00\\00\00\\0\ Duplin\\0\00\\0\\00\\ Chesapeake RF Consultants, LLC \\0\00\\0\\00\\ WMBF-TV Myrtle Beach, SC \00\\00\00\\0\ Radiofrequency Consulting Engineers \\00\\0\0\\0\\ \00\\0\0\0\0 0\0\\0\0\\ Digital Television and Radio 0\0\\0\0 FCC Coverage Contour (NLSC) Scotland \ 0\0 Predicted Longley-Rice Coverage Detail to Georgetown County, SC Onslow Chester Lancaster Chesterfield Robeson Bladen prepared for Gray Television Inc. Marlboro Pender
Fairfield July, 2019 Darlington Kershaw Dillon New Hanover Columbus Lee
Marion Florence Richland Brunswick Lexington Sumter Horry WMBF-TV Ch. 32 Lic BLCDT-20091105AAP Calhoun FCC Noise Limited Service Contour (NLSC) 41 dBµ Clarendon Williamsburg
Georgetown Orangeburg
Bamberg Dorchester Berkeley Allendale Colleton Longley-Rice Predicted Signal Level 41 dBµ or Greater Charleston Hampton Below 41 dBµ
WMBF-TV Area Population Scale 1:1,500,000 Predicted Coverage (sq. km) (2010 Census) Georgetown County, SC Total 2,261.0 --- 60,158 --- km 0 20 40 60 County within NLSC 2,261.0 100.0% 60,158 100.0% V-Soft Communications LLC ® © County L-R ≥ 41 dBµ 2,261.0 100.0% 60,158 100.0%
Jasper Effingham