Former News Corp. executive and current Fox critic Preston Padden has filed a copy of a New York state court ruling to buttress the challenge to Fox Corp.'s ownership of WTXF Philadelphia. Padden, a longtime executive working for Fox chairman emeritus Rupert Murdoch, called for designating the license renewal for hearing before an administrative law judge, given the court's ruling.

Manhattan State Supreme Court Justice David Cohen on Wednesday (January 24) refused Fox's petition that the court dismiss an amended complaint in voting machine company Smartmatic USA’s lawsuit against the company and Fox News Channel on-air figures Lou Dobbs, Maria Bartiromo and Jeanine Pirro, as well as Rudy Giuliani and Sidney Powell, surrogates for former President Donald Trump. Smartmatic accused Fox of spreading misinformation about its equipment and its role in the 2020 election.

Also Read: Ervin Duggan, Bill Kristol Back WTXF License Challenge

The court said the amended complaint was accepted because it sufficiently supported allegations that Fox employees “acted with malice by purposely and deliberating publishing knowingly false stories about plaintiffs [Smartmatic voting machines] in order to benefit Corp.’s financial interests.”

The Media & Democracy Project, citing Fox’s settlement of the Dominion Voting Systems lawsuit over similar election misinformation, last year challenged the renewal of WTXF at the Federal Communications Commission — and, by extension, the company’s character qualifications for holding any TV station licenses at all.

Given the conduct of Fox News employees surrounding false claims about voting machine irregularities, it said Fox lacked the character to hold that license — and, by extension, all of its TV station licenses.

Losing those licenses would be a huge financial hit. By its own count, Fox owns 29 full-power TV stations, including in 14 of the top 15 biggest markets, and owns duopolies — two stations — in each of the top three markets in the country, New York, Los Angeles and Chicago.

In filing a copy of that court decision with the FCC, Padden pointed out that the malice allegation in the court decision was the same one Media & Democracy was making at the agency in its license-renewal challenge and argued for the regulator “at the very least” designating the license for hearing.

But there were two decisions from the court this week, Fox pointed out in an email. The court also dismissed a petition to dismiss Fox Corp's counterclaim. 

That counterclaim is that plaintiff's request for $2.7 billion in damages from Fox was “calculated to chill defendants’ free speech rights” because the figure bore no relation to the company’s “actual worth and possible future profits.”

“Plaintiffs do not establish that there has already been a binding determination that their claims [against News Corp.] have a substantial basis in fact,” the court said, adding that News Corp.’s claims that the damages are “so extenuated from their actual lost profits that they were pleaded and/or sought in order to chill defendants’ free speech rights” has yet to be adjudicated in court.

“We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial, likely in 2025,“ Fox said in a statement. “As a report prepared by our financial expert shows, Smartmatic’s damages claims are implausible, disconnected from reality, and on their face intended to chill First Amendment freedoms.”

The Federal Communications Commission has granted low-power TV station WWOO-LD Westmoreland, New Hampshire, special temporary authority to test 5G broadcasts.

Low-power stations are looking to leapfrog the ATSC 3.0 standard’s data offload potential with what is being billed as “5G broadcasting.”

"Anybody who has been frustrated in a crowded football stadium trying to watch the game on a phone can understand the value of sending out on-demand streams and data via broadcast,” Preston Padden, longtime industry executive and chief strategic officer of the LPTV Broadcasters Association has said of the effort to turn low-power TV stations (LPTVs) into turnkey 5G players.

The FCC has given WWOO through January 16, 2024, to conduct testing of 5G broadcasts, which include TV signals that can be received by "smartphones, tablets, and any device (including traditional television sets) with a 5G chip that has been manufactured to permit the reception of 5G transmissions within the broadcast television band," the FCC said in granting the authority.

But in addition to TV signals, WWOO parent Milachi Media and its partner Qualcomm envision relieving congestion on 5G wireless networks. WWOO will broadcast traditional TV signals in 5G as well as working with public safety to provide video and data services to first responders.

Milachi said the tests should not create interference, but has agreed to stop them or cut power if they do. The FCC experimental license is contingent on noninterference, so the regulator could also pull the license if that were the case.

"We find that Milachi has proposed a definite program of research and experimentation; stands ready to proceed with such research; is not expected to cause any objectional interference; and the experiment is likely to provide valuable information to allow broadcasters to better understand how 5G Broadcast can be used not only for traditional television services, but also new and innovative video and data services," the FCC's Media Bureau said in granting the test request.

Fox Corp.’s license to operate WTXF Philadelphia is being challenged by The Media and Democracy Project, a group whose members include Preston Padden, a former high-profile Fox executive.

The group charges that Fox’s broadcast license should not be renewed because the company’s leadership manipulated its audience by knowingly broadcasting false news about the 2020 election that contributed to the attack on the U.S. Capitol on Jan 6, 2021.

Among the issues the FCC would consider in any review of character qualifications related to news distortion include the seriousness of the misconduct, the nature of any participation by company managers and owners in the misconduct, any efforts to remedy the wrong, and the company's past record regarding compliance with FCC rules and policies.

Fox agreed to pay $787 million to settle a lawsuit that alleged that false reporting by Fox News Channel defamed Dominion Voting Systems.

The Media and Democracy Project’s petition includes a declaration from Padden, a senior VP at Fox Broadcasting Co. from 1990 to 1997, which describes personal communications he had with Fox chairman Rupert Murdoch that indicate he knew what Fox News was reporting was not true.

MAD is calling on the FCC to initiate an evidentiary hearing into Fox’s conduct. It claims the FCC “has the duty to hold Fox accountable and send a strong message that intentional, knowing news distortion will not be tolerated on America’s airwaves.”

Nearly all petitions to deny TV station license renewals fail and the Media and Democracy Project does not cite ways in which Fox violated the law or FCC regulations.

“The Media and Democracy Project petition to deny the license renewal of WTXF-TV is frivolous, completely without merit and asks the FCC to upend the First Amendment and longstanding FCC precedent,” Fox said in a statement. “WTXF-TV / FOX 29 News Philadelphia is one of the finest local news stations in the country, broadcasting over 60 hours of local news and locally produced programming every week.”

In his declaration, Padden said WTXF and other Fox stations air Fox News Sunday, produced by Fox News Channel, and the show repeated some of Fox News’s false narratives about the election.

“In my opinion, as a result of Fox’s knowingly false narrative, large numbers of that radicalized population ransacked the U.S. Capitol on January 6, 2021, causing injury, property damage and attacking the very foundation of our democracy. In my opinion, Fox contributed to that tragedy,” Padden said. 

Padden stated that Rupert Murdoch is responsible for what airs on Fox News and Fox stations. 

“During my 7 years at Fox, ultimate decision-making authority for the operation of every part of the company — every division, every business unit, every subsidiary — rested with Rupert Murdoch,“ Padden said. “It was his ‘candy store.’ I get the impression that more recently he has begun to share power with his son, Lachlan Murdoch. But I can state without fear of contradiction that Rupert and Lachlan retain ultimate decision-making authority for every part of the company, including Fox News Channel and Fox Television Stations.” 

Padden said that in 2020 and 2021 he emailed with Murdoch, expressing concerns over the content on Fox. He said that without his knowledge some or all of those emails were produced by Fox as part of discovery in the Dominion case.

The emails show Murdoch knew Fox’s reporting was false but he allowed it, Padden said.

“For example on November 6, 2020, Mr. Murdoch wrote me: “Seems Trump listening to terrible advice from Guiliani versus Trump family wanting to wave white flag? Not sure of this but sounds likely,’ ” Padden said.

“Beyond doubt, Mr. Murdoch knew that Trump had lost the election, nonetheless, Fox continued to promote news stories and guests who claimed, without any basis, that the election was rigged,“ he said. “In my opinion, these actions on the part of Mr. Murdoch, his son and top Fox management significantly contributed to the upheaval that occurred at the U.S. Capitol building on January 6, 2021.”

Veteran network executive Preston Padden has been named chief strategist of the LPTV Broadcasters Association as well as a member of its board.

Padden is currently an independent consultant and principal of Boulder Thinking LLC as well as an adviser to private-equity firm Grotech Ventures.

The association represents 5,500-plus stations nationwide.

Padden's lengthy resume includes representing smaller and independent outlets, including as president of the Association of Independent Television Stations. In addition he has been president of distribution for Fox Broadcasting, president of the ABC Television Network and executive VP of government relations for The Walt Disney Co.

“I am excited to join LPTV BA because of the huge untapped potential of LPTV stations and their valuable spectrum,“ Padden said. Also among his past posts was one representing TV stations looking to maximize their value in the broadcast incentive auction. ■

Citing a smear campaign to continue to prevent Gigi Sohn from being seated as the fifth FCC commissioner, former Fox and ABC/Disney executive Preston Padden has written the chair of the Senate Commerce Committee to call out those tactics and advocate for Sohn, with whom he is not aligned politically.

Padden also said he had been in contact with Fox Corp.’s Rupert Murdoch, an opponent of the Democratic nominee. He said he was able to assuage Murdoch’s “misgivings” about Sohn’s nomination by pointing out that she was helpful in Padden’s efforts as a top Fox exec to secure the FCC waivers needed to start the Fox network and “fend off” fierce lobbying from ABC, CBS and NBC in the process.

One of the knocks on Sohn from her conservative critics — Sohn is a progressive Democrat — was over tweets critical of Fox News she posted when a private citizen, prior to serving as a counselor to Obama-era Federal Communications Commission chair Tom Wheeler. Sohn has said she regretted some of her word choices.

Also: Sohn Supporters Call Out Dithering Dems

Padden called Sohn a “superbly qualified” nominee who should get confirmed ASAP. He also asked that the letter be read into the record of a potential third nomination hearing on Sohn, who was nominated by President Joe Biden to fill the vacant third Democratic seat more than two years ago.

Padden said he was afraid Sohn was ”in danger of falling victim to the worst, and most cynical and baseless smear campaign ever waged against a nominee to serve on the FCC."

Just this past weekend, a story from the U.K.’s Daily Mail about Sohn was picked up by conservative U.S. outlets including Breitbart and Newsmax. Padden cited it as the latest in a string of accusations that he suggest were the lowest of the low.

“The press stories ginned up by Ms. Sohn’s opponents are beneath scurrilous and are beneath the dignity of this Committee,” he wrote. “For example, one Daily Mail online story (not a Murdoch publication) began with a picture of Ms. Sohn juxtaposed next to a salacious picture of a sex worker with whom Ms. Sohn has absolutely no connection. This is ‘Tabloid Trash’ at its worst, all brought to you, I believe, by agents of some of the country’s biggest Cable Companies and ISPs.”

Also: Sohn Tells Congress She Will Be Fair, Impartial

Sohn has long advocated for supporting new programming networks and voices to provide competition to established players, including conservative networks like Newsmax, whose founder has previously weighed in in support of Sohn. In fact, in the video embedded in Newsmax’s online story on the Daily Mail article was an interview with Chip Pickering, a former Republican Congressman and current chairman of competitive carrier lobby group INCOMPAS, talking about why he supported Sohn and how helpful she had been in promoting the “little guys” over dominant players.

Below is the full text of Paddden’s letter of support:

Chair Cantwell, Ranking Member Cruz and Members of the Committee:

I respectfully request that this letter be included in the record of the hearing that will be held on the nomination of Gigi Sohn to be a Commissioner of the Federal Communications Commission. Ms. Sohn’s politics are to the left of mine, but she is a superbly qualified and experienced nominee who should be confirmed as soon as possible.

I have the greatest respect for this Committee and its Members before whom I have testified many times as President of the ABC Television Network, a founding executive of the Fox Broadcasting Company and as the head of Government Relations for both News Corporation/Fox (Murdoch) and The Walt Disney Company.  I fear that this esteemed Committee, like Ms. Sohn, is in danger of falling victim to the worst, and most cynical and baseless smear campaign ever waged against a nominee to serve on the FCC. Ms. Sohn’s only sin is that she roots for the underdog and for consumers. As a result, some of the dominant Cable TV companies and Internet Service Providers have stooped to lows never before seen to smear Ms. Sohn.  They correctly fear that she would be a vote to require them to compete fairly and to respect consumers.

Ms. Sohn’s opponents have planted article after article alleging that she is against Native Americans, against Hispanics, against rural communities, against police and that she is connected with illicit sex workers. It’s all rubbish!  A total of 375 organizations, companies, elected officials and local governments, including numerous Tribes, Hispanic organizations and public safety officials have voiced their support for Ms. Sohn’s nomination!

The press stories ginned up by Ms. Sohn’s opponents are beneath scurrilous and are beneath the dignity of this Committee. For example, one Daily Mail online story (not a Murdoch publication) began with a picture of Ms. Sohn juxtaposed next to a salacious picture of a sex worker with whom Ms. Sohn has absolutely no connection.  This is “Tabloid Trash” at its worst, all brought to you, I believe, by agents of some of the country’s biggest Cable Companies and ISPs.

I worked for Rupert Murdoch for seven years and secured for him waivers of FCC Rules that stood in the way of the launch of Fox Broadcasting Company — the long-sought fourth free-over-the-air TV Network. Recently Mr. Murdoch sent me a note that expressed misgivings about Ms. Sohn’s nomination. I replied by reminding him (actually, he may never have known) that because Ms. Sohn fights for underdogs (which Fox certainly was in its early days), and because she saw the pro-consumer benefits of a fourth network, she was very helpful to our efforts to fend off fierce lobbying attacks from the three established networks and to secure the waivers that we needed. And I advised him that Ms. Sohn’s interest in requiring dominant Cable and ISP “pipe” companies to play fairly could be helpful to a company like his that has important content assets, but no bottleneck “pipes.” Mr. Murdoch responded that he stood corrected in his view of Ms. Sohn.


Respectfully Submitted,

Preston Padden
Boulder Thinking, LLC

Saying he has no dog in the fight (other than a spectrum-use watchdog), former top DirecTV and The Walt Disney Co. executive Preston Padden said the Federal Communications Commission needs to set strict receiver standards if it is to get the highest and best use out of the valuable spectrum it oversees.

“Our system of spectrum licensing cannot work if entities are licensed for a particular set of frequencies and then the associated industry floods the market with receivers that ‘squat’ over, and preclude the use by others of, a much broader set of frequencies,” Padden told the FCC in an informal comment on the agency’s inquiry into improving receiver interference protections.

Big Tech companies are continuing to try and head off any FCC effort to establish what they said would be “one-size-fits-all” standards for 5G receivers that would work against the regulator’s goals of an innovative 5G environment.

Padden, now an independent consultant, cited his nearly 50 years dealing with spectrum licensing issues in arguing that spectrum “squatters” are effectively the ones allocating spectrum, not the FCC.

Also: CTA Says Receiver Standards Could Stifle Innovation

While Padden said some “middle ground” proposals for freeing spectrum while protecting against interference to receivers have been offered, they won’t work.

What would work, he said, was an idea he credits to Dale Hatfield, executive fellow at the Silicon Flatirons Center, which, like Padden’s consulting firm, is based in Boulder, Colorado. That would be to appoint a special master inside the FCC’s Office of Engineering and Technology — essentially someone with a pocket protector and no dog in the fight — to cut through conflicting claims and studies from incumbents and new users. 

“These Special Masters could take testimony or statements, under oath,” he said. “They could initiate discovery, issue subpoenas and cross-examine witnesses. Conceptually, hearings could be conducted by the Commission en banc, by a single agreed-upon commissioner or by an expert from inside or outside the agency.”

Also: FCC's Simington Has Dynamic View of Spectrum Sharing

The FCC in April opened an inquiry into setting wireless receiver standards, one of several routes the agency could take, alone or in tandem, to protect signals in increasingly crowded spectrum bands. FCC chair Jessica Rosenworcel laid out that road map back in April. “We recognize that a variety of approaches may be appropriate, whether through industry-led voluntary measures, commission policy and guidance, or rule requirements where other approaches would be insufficient,” she said after the FCC approved the Notice of Inquiry (NOI).

The NOI was unanimous, but that was not necessarily an indication of any unanimity on which approach to take. At this stage, the NOI is only an effort to collect info on how to improve receiver performance and expand the FCC’s traditional focus beyond transmitters alone. ■

Former News Corp. and Disney executive Preston Padden continues to advocate for the FCC nomination of Gigi Sohn despite being on the opposite side from Sohn on some high-profile issues.

Padden sent a letter to the leadership of the Senate Commerce Committee, which is holding a second hearing on Sohn's nomination after it failed to get a planned vote in the committee last week.

Padden did not take issue with holding the hearing, which some Sohn fans have. But what he did take issue with, according to a copy of the letter, which he asked to be put in the record for her hearing, was the efforts by some of his friends at media companies and their associations to "throw sand in the gears" of her nomination.

Padden himself is a former trade association head, having run the Association of Independent Television Stations (INTV) where, like Sohn, he advocated for independent voices in a sea of larger players.

He says those friends are good people just doing their jobs, as he did, but advises Senators Maria Cantwell (D-Wash.) and Roger Wicker (R-Miss.) to focus not on whether or not industry players agree with Sohn but whether she is qualified, the answer to which he said is a "yes."

Padden disagrees with Sohn on the need for net neutrality rules and on her copyright stances. He points out that whoever gets the third Democratic nomination is going to support net neutrality rules, so that is not an issue specific to Sohn.

He also disagrees with Sohn over copyright issues, specifically Sohn's support of the now-shuttered Locast, which asserted a copyright exemption to stream TV station signals without having to ask or pay. A court concluded it did not qualify for the exemption and Sohn signed on to a settlement of the case as a board member. But he said that involved a legitimate question about copyright law that reasonable people can disagree about.

What he said everyone should agree on is that Sohn "is one of the most prepared and experienced nominees in the history of the FCC."

He points out that even NCTA president Michael Powell in what Padden called "unhelpful" comments still conceded she is "a respected and accomplished public interest advocate."

NCTA had issues with Sohn's offer to recuse from Locast-related issues, suggesting she either needed to recuse herself from other issues she has advocated for--like net neutrality rules, which NCTA opposes--or not recuse from any of them.

Padden said he does not have a vested commercial interest in Sohn's confirmation, but instead an interest in getting an "important voice" on the commission, and one "that belongs." ■

Preston Padden, a former top News Corp. executive, has tweeted his unhappiness with the News Corp.-owned The Wall Street Journal,  in the latest twist in the ongoing drama of the Gigi Sohn FCC nomination saga.

Sohn was nominated for the empty Democratic seat on the Federal Communications Commission and after some delay and pushback from Republicans, is scheduled to get a confirmation hearing February 2, though at least one hold threat looms even if she is favorably referred for a full Senate vote.

Padden, who told NextTV several weeks ago he believed that Sohn deserved a seat on the commission, their policy differences notwithstanding, fired off a series of Twitter posts on Monday (January 31) making his key points after he said the WSJ had declined to publish them in his letter in support of Sohn even though the paper has run several pieces opposing her. The New York Post, also a News Corp. property, has run additional criticism of Sohn.

Preston also sent Next TV an updated version of the points in his letter, which is published here.

One of the issues Republicans had with Sohn were some tweets critical of News Corp.'s Fox News Channel, but that did not seem to create as much of a stir at her confirmation hearing as might have been expected.

The WSJ letters editor had not returned a request for comment at deadline as to why the paper declined to print the letter. Padden shared the response the editor had given him: “Unfortunately, we won’t be able to publish the letter, but I hope you can place it elsewhere, as you mentioned.” ■

On Saturday (January 29), The Wall Street Journal published its fourth — fourth — editorial opposing the Federal Communications Commission nomination of Gigi Sohn. The editorial accuses Sohn of “prevarication” about the TV service Locast” But the facts in the Journal’s own editorial show that she told the truth — the settlement money came from Locast’s parent, Sports Fans Coalition of NY. Yes, the court judgment was larger than the settlement. But the plaintiffs reasonably settled for taking every last penny that SFCNY had!

As a lifelong broadcaster and Disney copyright advocate, I agree with the plaintiffs against Locast on the merits of the copyright issue. But these are legitimate questions about the law on which reasonable people can disagree.

Ms. Sohn’s association with Locast itself should not be disqualifying. For example, the prominent media and internet entrepreneur Barry Diller, former business partner of the WSJ’s owner, was associated with a venture almost identical to Locast called Aereo. I doubt that the Journal would editorialize that the highly regarded Mr. Diller is unfit for a prominent federal nomination.

Gigi Sohn is among the most qualified nominees in the history of the FCC. As a former News Corp. senior exec, I am at a loss to explain News Corp.’s all-out offensive against Ms. Sohn in both the WSJ and the New York Post! ■

Former top Fox and Disney executive and a long-time champion of independent broadcasters, Preston Padden has penned an online op ed supporting Gigi Sohn as the fifth commissioner on the currently politically tied FCC.

Padden concedes he and Sohn have disagreed on any number of issues--he is a small government, free market advocate, she a progressive backer of government regulation in service of her view of the public interest. But he said she will be "an important and necessary voice for competition and disruptive new market entrants at the FCC."

Padden said that when he was president of the Association of Independent TV Stations, he said Sohn was a "tireless" ally in keeping those stations afloat amidst a desire by network TV stations and cable operators to "snuff them out."

Padden moved to News Corp. after that company bought the Metromedia independent stations and decided to use them as a launching pad for a fledgling fourth network. Padden, as president of network distribution of Fox Broadcasting, was again up against networks looking to crush the upstart. "Again, it was Gigi to whom I turned to help us fight our battles at the FCC," he said. "While no fan of Rupert (as he is unlikely to be a fan of Gigi’s), Gigi understood that the establishment of a fourth free-over-the-air television network was a longstanding FCC public interest goal."

And while one of the big knocks on Sohn among Republicans were some tweets about Fox News Channel on cable, Padden said that, on the broadcasting side, she was, again, a tireless advocate, this time "for Fox Broadcasting Company against entrenched industry forces."

Padden said Sohn was an ally again when Disney faced what he called the anti-competitive gatekeeper of a combined AOL-Time Warner.

While he concedes he and Sohn strongly disagree on some issues, she is "a great human being," and will be "an effective advocate for competition and new market entrants – all in the service of consumers," a voice that is needed whether from a conservative, a progressive or libertarian," he said. 

Sohn has drawn strong Republican pushback--including a hold threat. She has yet to get a confirmation vote in the Senate Commerce Committee. ■

Former top News Corp. executive Preston Padden said that "no reasonable person" would believe Fox News, which he said has morphed from a "truthful center-right news network to a channel that has contributed to dissension in the country and the election "big lie."

Padden is the former president, network distribution, for Fox Broadcasting and Chairman and CEO of  American Sky Broadcasting (which merged into Dish). He is currently principal of Boulder Thinking, LLC., a consulting firm.

That came in an op ed July 5 in The Daily Beast, which is owned by another former News Corp. exec, Barry Diller.

Padden said that News Corp. founder Rupert Murdoch is "brilliant, courageous, optimistic, and a gentleman," but said his news operation has gone off the rails and that he has been unable to persuade Murdoch of that.

Also Read: Fired Fox News Reporter Ed Henry Sues CNN, NPR

"Over the past nine months I have tried, with increasing bluntness, to get Rupert to understand the real damage that Fox News is doing to America," he wrote. "I failed."

Padden has history with what he characterized as the "truthful, center-right" Fox News. "I played a cameo role in the birth of Fox News by accompanying Roger Ailes to meet with then-Mayor Rudy Giuliani to seek his help in persuading Time-Warner CEO Gerry Levin to carry Fox News on the all-important Time-Warner Cable systems in New York City," he wrote, saying Levin did not want to provide "oxygen" for a CNN competitor (a concern ultimately borne out by the ultimate ratings power of Fox News). But Murdoch ponied up enough to secure carriage.

But that was then, said Padden, and now the channel has caused "millions of Americans—most of them Republicans (as my wife and I were for 50 years)—to believe things that simply are not true," including about the Jan. 6 attack on the Capitol and the election results. "[M]illions of Americans believe these falsehoods because they have been drilled into their minds, night after night, by Fox News," he said.

Also Read: Fox News CEO Suzanne Scott Renews Employment Contract

Padden said he does not believe most of the "falsehoods" on Fox News reflect Murdoch's views, pointing out that he encouraged Padden to wear a mask during the pandemic and get vaccinated. He also said he believes Murdoch thinks former President Trump is "an egomaniac who lost the election by turning off voters, especially suburban women, with his behavior."

Fox had not returned a request for comment at press time (July 5 is a federal holiday).

Preston Padden, advisor to the C-Band Alliance, says the suggestion by some that a private market sale of C-Band spectrum licensed by the FCC breaks with precedent, and maybe even with the law, are way off base. 

The alliance comprises satellite carriers willing to give up some of their licensed spectrum under the right conditions, though how much and under what conditions are the sticky wickets. 

That defense of a private sale came in a series of tweets Thursday (Oct. 31) in the wake of recent Hill hearings on the issue:

[embed]https://twitter.com/BoulderPreston/status/1189956523776077824[/embed][embed]https://twitter.com/BoulderPreston/status/1189955520221700096[/embed][embed]https://twitter.com/BoulderPreston/status/1189962542270967808[/embed]

The senator referenced is Sen. John Kennedy (R-La.), the colorful chairman of the Senate Financial Services Subcommittee, who has criticized the FCC for even considering a private sale, arguing that such a sale may be illegal and in any event would be handing money to foreign companies that should go to the treasury. 

At a House hearing this week, opponents of the alliance suggested such a private sale was unprecedented, and Kennedy hammered FCC Chairman Ajit Pai over the issue at a hearing last week and has been very vocal elsewhere about money going to broadband deployment rather than satellite carriers. In fact, he has said that a private sale "stinks;" and if there were such a sale the American people were going to get "screwed, blued and tattooed."

The issue is whether an FCC auction of C-Band (midband) satellite spectrum for terrestrial 5G or a private market sale between the satellite spectrum licenseholders and the carriers who want it would be the fastest and fairest way to get some of that spectrum to market and advance the nation's interest in winning the race to next-gen wireless. 

Padden has previous experience with spectrum repurposing, having headed a group of independent TV stations willing to give up spectrum for wireless in the FCC broadcast incentive auction. 

The decision will not ultimately be Kennedy's or Congress' but the FCC's. FCC Chairman Ajit Pai has said he has yet to make up his mind on the complicated issue, but signaled he hopes to vote on a decision in the coming weeks.

WASHINGTON — Preston Padden a former top News Corp. and The Walt Disney Co. executive now representing auction-interested TV stations as head of the Expanding Opportunities for Broadcasters Coalition, wants broadcasters to take aim at cable’s compulsory license, which is the blanket license that allows them to deliver out-of-market and in-market TV stations without negotiating separately for all of the content they contain.

The National Association of Broadcasters has indicated it may be ready to push for the elimination as well, at least of the distant-signal license.

Not surprisingly, cable operators represented don’t want the license to go away. Federal Communications Commission members are being asked to vote on a proposal by agency chairman Tom Wheeler to eliminate the syndicated exclusivity and network non-duplication rules, which prevent cable operators from importing TV-station network, syndicated and local programming in cases where that would duplicate in-market versions.

If the exclusivity rules are going to be excised, Padden said, the license needs to go too, though that would require action from a notoriously inactive Congress.

Multichannel News Washington bureau chief John Eggerton recently caught up with Padden, who explained why the two issues are linked and why their fates should be also. An edited transcript follows.

MCN:What’s wrong with the compulsory license?

Preston Padden: Simply stated, the cable and satellite compulsory license, which applies to all broadcast programs, makes broadcasters second-class copyright citizens.

MCN:How so?

PP: Cable networks, which are not subject to compulsory license, get paid under copyright amounts that make our retrans dollars look like chump change.

MCN:So, that blanket license is not an artificially low price versus a negotiation?

PP: Because cable operators and satellite operators have to pay full copyright for cable networks, those networks get vastly more money than we do.

Congress adopted the compulsory license when cable was a fledgling, struggling industry. And when they adopted it, the consensus agreement provided protections for broadcasters so this government license granted to cable did not trump the licenses broadcasters have to negotiate in the marketplace. Those protections were syndex and non-dupe. It is absolutely unthinkable to repeal syndex and network non-dupe without also repealing the underlying compulsory license.

MCN:Can you explain the consensus agreement?

PP: In 1971 I was a kid lawyer on the edge of the room as the cable, broadcast and movie industries struck the historic copyright and communications policy agreement. It had three parts. The copyright owners got the Copyright Act changed so that cable retransmission of programs was a performance. The cable industry got a compulsory copyright license, and the broadcasters got non-dupe and syndex. They were all part of one integrated agreement, and you can’t break syndex and non-dupe off from the compulsory license part.

MCN:Broadcasters have been fighting hard to keep syndex and non-dupe.

PP: The broadcast industry has been on a losing trajectory on these issues for a decade, and unless we change our strategy we are going to glide into oblivion.

MCN:Can you share your history with these rules? You helped get syndex reinstated by the FCC in the late 1980s when you headed the Association of Independent Television Stations [INTV].

PP: Right. When Charlie Ferris was chairman of the FCC, he was buddies with Ted Turner, who had his superstation (WTBS). And Ferris had enough guts to pick on independent stations by repealing syndex, but he did not have enough guts to pick on the network affiliates.

FCC chairman Dennis Patrick had the wisdom to restore syndex. He also led an FCC decision that called for the repeal of the compulsory copyright license. And that decision was the commission’s last word on the subject. So, right now, the FCC is on record in favor of repealing the compulsory copyright license.

It is that compulsory license that makes broadcasters second-class citizens and holds us back from being paid fairly for the value of our content.

MCN:You are arguing for getting rid of syndex and non-dupe, too.

PP: Because if you get rid of the compulsory license, you also don’t need retrans. Think about it. Cable channels get paid vastly more than us, and they don’t have retrans. How does that happen? It happens because they have full copyright rights. They are firstclass copyright citizens, and broadcasters are secondclass copyright citizens.

The broadcast industry should have been storming the Hill for the last decade trying to get rid of the compulsory license.

MCN:But they haven’t. Perhaps it is because you also link it to getting rid of retrans, which sounds like heresy.

PP: It is hard. Because it is going to require broadcasters to think differently and embrace a world different from the world they have known. But if they don’t, they’re going to die.

MCN:Should the FCC’s unanimous decision to eliminate the sports-blackout rules, which also backstopped contractual exclusivity, have been a signal the FCC would take aim at exclusivity rules?

PP: Yes. But the fact that the cable people got in the satellite bill a mandate for the FCC to weaken retrans was the clearest sign I’ve seen. Our team was only playing defense. And the Redskins will tell you, if you never have your offense on the field, you can’t win a game.

MCN:But won’t this make life a lot more complicated for everybody?

PP: Not at all.

MCN:Why not?

PP: When a syndicator or program owner sells a show to USA Network, they give USA the right to telecast the show and the right to sublicense the copyright to cable and satellite systems.

When they sell a show to broadcasters, they would use the same kind of form that gives it two licenses, the license to broadcast the show and the license to sublicense it to cable and satellite operators in their market.

Very simple. It happens every day for over 500 cable networks, and I don’t understand why it would not work equally as well for broadcasters.

But, to go back to the proceeding at the FCC now, it would be absolutely unthinkable to repeal syndex and network non-dupe unless the compulsory license also goes away. The compulsory license and syndex and non-dupe are ham and eggs. You can’t have one without the other.