The Federal Communications Commission (“FCC”) has invited comments on it’s Notice of Proposed Rulemaking (“NPRM”) on whether it should update its rules that determine whether a television broadcast station is “significantly viewed” in communities outside of its Designated Market area (“DMA”) for purposes of carriage on Multichannel Video Program Distribution (“MVPD”) systems, both cable and satellite.

Full power TV stations are normally entitled to a collection of rights within their DMA, including network and syndicated programming exclusivity – the right to require MVPDs to blackout duplicative programming on any out-of-market stations they carry – and must-carry rights for those stations that do not elect retransmission consent.  MVPDs also enjoy fixed copyright fees for carriage of in-market stations.  (Class A and LPTV stations do not have exclusivity rights, although they have asked the FCC for decades to grant them; and only a few in small markets have must-carry rights.)

TV stations may extend their local treatment rights to individual communities outside their DMA if they are “significantly viewed” in those communities.  “Significantly viewed” has been defined, for full and partial network stations, as having a 3% share of viewing hours and net weekly circulation of 25% within one standard error; for independent stations, the threshold are 2% and 5% respectively.  Measurements of viewing must be made by an independent professional service, during two weekly periods separated by 30 days, with only one measurement between April and September.  Importantly, “significant viewing” is limited to over-the-air viewing and excludes MVPD viewing and streaming.  The FCC published a list of significantly viewed stations in 1972; but since then, some stations have successfully petitioned to be added to the list, and some stations have successfully petitioned to have competing stations removed.

Significant viewing determinations have traditionally been made based on data derived from TV ratings surveys by Nielsen, which used to conduct these surveys up to four times a year (called “sweep” periods). In 2019, however, Nielsen abandoned its measurement method based on diaries filled out by viewers and migrated entirely to continual electronic measurement, based on various techniques, including obtaining data fed back from MVPD subscriber set-top boxes.  This change by Nielsen raises a question as to whether the independent professionally measured data on which the FCC has relied in the past are available any longer. Over-the-air viewing may not be separately measured from MVPD viewing anymore, and the concept of just a few sweeps a year is history.

So the FCC is asking, now what?  Are there other sources available for independent measurement data that separate over-the-air viewing?  Should the FCC rely on sophisticated computerized predictions of where a station’s broadcast signal reaches, with a presumption that if the signal gets there, people are watching?  Is the whole system so complicated and expensive now that smaller stations are discouraged from exercising their right to petition to be added to the significantly viewed list?

Then there are little questions about what could be killer legal constraints.  Do applicable statutes permit the FCC to change from viewer measurement to signal prediction?  What is the impact of the difference between copyright law, which seems to lock the FCC into its 1976 rules, and the Communications Act, which gives the FCC more discretion to amend its rules?  If the copyright law is an obstacle to change, would it be practical to have different significantly viewed methodology for copyright and for exclusivity purposes?

Finally, the FCC notes that the terms full network, partial network, and independent stations are defined in Rule Section 76.5 with respect to programming carried from “the three major national television networks.”  The number “three” seems a bit out of date these days, as it excludes FOX, to say nothing of Univision, Telemundo, The CW, MyNetworkTV, and other suppliers of programming to stations on a nationwide basis, which are likely to proliferate as new technology increases the multi-stream capability of TV stations.  The FCC asks whether it should update the definition.

There is a fair amount at stake here, and the differing language between the copyright and communications statutes introduces complexity that may not be easy to sort out.  Comments are due on May 14, 2020. Reply comments are due June 15.