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UHF Discount, Bloomberg Complaint Order Teed Up For FCC Votes

Acting FCC Chairwoman Mignon Clyburn has announced the items for the Sept. 26 public meeting and they include a vote on the proposal to do away with the UHF discount and an order resolving Bloomberg's long-standing complaint against Comcast for alleged violation of the FCC's news neighborhooding condition in the NBCU merger.

Currently the FCC only counts half of a UHF station's audience total toward the 39% national ownership cap. That rule dates from the analog TV days when UHF signals were inferior to VHF. The reverse is true in the digital age.

Removing the discount would prevent some super groups, like Sinclair, from getting any more super. And if it were applied to deals in the pipeline would create problems for Tribune's purchase of Local TV stations. It is expected to grandfather any current combos.

According to sources familiar with the document, the NPRM also explicitly asks whether given that turnabout in UHF/VHF fortunes, the FCC should now consider applying the discount to VHFs.

In addition, the NPRM says that the FCC has the authority to change the 39% cap, though it does not propose doing so, raising the point as part of its explanation of its authority to eliminate the discount. That means the FCC could get rid of the UHF discount or add a new VHF discount, raise--or lower--the cap, or combine all those in some way if it adjusts the rules.

The FCC is expected to approve the UHF discount NPRM, but that is no guarantee it will act expeditiously on an order. It may have signaled the move earlier in the month, when it proposed starting in 2014 to charge UHFs and VHFs the same regulatory fees, rather than charging UHFs less, as it has been doing, also an artifact of its inferior analog status.

Bloomberg has been pushing the FCC to come to a final decision on its complaint against Comcast for what Bloomberg alleges is a violation of the news neighborhooding condition the FCC imposed as a condition of allowing Comcast to meld with NBCU.

In a letter two months ago to Clyburn and the other commissioners, Bloomberg said the FCC should act "immediately" to move Bloomberg TV into all the standard-definition "news neighborhoods" on Comcast systems in the top 35 DMAs. It wasn't quite immediately, but it shows Clyburn is not content to be a caretaker in the seat

The company points out that it has been 29 months since the FCC approved the deal, and almost a year since the Media Bureau said there should be some neighborhooding, then stayed that decision pending review by the full commission. "[I]t is past time for the Commission to expeditiously act on this matter," said Bloomberg.

"The Commission has all it needs to enforce the news neighborhooding condition before any more of the seven-year time limit on the condition passes," Greg Babyak, head of government affairs for Bloomberg LP, has said. "With that final step, the Commission will ensure that millions of Comcast customers benefit from a greater diversity in cable news content."

The FCC back in May 2012 agreed with Bloomberg that Comcast needed to move the independent news channel into "news neighborhoods" -- groupings of news channels in adjacent channel positions -- to comply with the NBCU deal condition. That condition was meant to prevent Comcast from favoring its co-owned news nets, like MSNBC or CNBC, over independents.

In August, the FCC, in an order clarifying its May 2 order to Comcast to neighborhood Bloomberg TV, stayed the effectiveness of that order as it applied to markets with only a single standard-definition news neighborhood and no vacant adjacent channels.

The FCC said the partial stay would reduce consumer disruption if the FCC changes its decision per the review for which Bloomberg itself has asked.

Comcast disagrees that its news groupings in channel lineups meet the FCC definition of a neighborhood, and that in any event, those groups predated the deal condition and were "not based on any discriminatory motive to advantage CNBC or MSNBC or disadvantage Bloomberg."