F.C.C. Watchdog Looks Into Changes That Benefited Sinclair

Authored by nytimes.com and submitted by kickerofelves86
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Sinclair’s chief executive, Chris Ripley, has called Mr. Pai’s relaxation of media ownership rules a “landmark” development for his company and the industry. A union of Sinclair and Tribune would create the nation’s biggest television broadcaster, reaching seven out of 10 American homes. The F.C.C. and Justice Department are widely expected to approve the merger in the coming weeks.

The office of F.C.C. inspector general, which is a nonpartisan role that reports to the agency and regularly updates Congress on some investigations, said it would “not comment on the existence or the nonexistence of an investigation.”

Mr. Pai’s office and Sinclair declined to comment. When the legislators called for an investigation in November, a spokesman for the F.C.C., representing Mr. Pai, said the allegations of favoritism were “baseless.”

“For many years, Chairman Pai has called on the F.C.C. to update its media ownership regulations,” the F.C.C. spokesman said. “The chairman is sticking to his long-held views, and given the strong case for modernizing these rules, it’s not surprising that those who disagree with him would prefer to do whatever they can to distract from the merits of his proposals.”

A New York Times investigation published in August found that Mr. Pai and his staff members had met and corresponded with Sinclair executives several times. One meeting, with Sinclair’s executive chairman, took place days before Mr. Pai, who was appointed by President Trump, took over as F.C.C. chairman.

Sinclair’s top lobbyist, a former F.C.C. official, also communicated frequently with former agency colleagues and pushed for the relaxation of media ownership rules. And language the lobbyist used about loosening rules has tracked closely to analysis and language used by Mr. Pai in speeches favoring such changes.

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In November, several Democrats in Congress, including Mr. Pallone, called on the inspector general’s office to explore all communications — including personal emails, social media accounts, text messages and phone calls — between Sinclair and Mr. Pai and his staff.

The lawmakers also asked for communications between Mr. Pai’s office and the White House. They pointed to a report in March 2017 from The New York Post, in which Mr. Trump is said to have met with Sinclair’s executive chairman, David Smith, and discussed F.C.C. rules.

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Some members of Congress have asked Mr. Pai for such communications, but he has not responded.

The F.C.C. inspector general, David L. Hunt, and other officials in his office met with aides in the House and Senate, including those for Mr. Pallone, in December. The F.C.C. officials told the aides that they would open an investigation, according to four people with knowledge of the meetings.

In later conversations, F.C.C. officials said that an investigation was underway, according to two other aides.

The aides, all of whom work for Democratic lawmakers, would speak only on the condition of anonymity because the investigation is private.

The investigation could put the F.C.C. inspector general’s office in a high-profile situation.

Mr. Hunt was promoted to lead the office in 2011 by Julius Genachowski, a Democrat and the F.C.C.’s then-chairman, after working in the agency for about five years. The office investigates potential violations of civil and criminal laws by agency staff members and companies that receive money from the agency. On Wednesday, the inspector general for veterans affairs, a similar position, released a scathing report about travel spending by the department’s secretary, David J. Shulkin.

The F.C.C.’s inspector general does not make public all of its investigations. But details of some investigations have been disclosed through Freedom of Information Act requests and through the office’s reports to Congress.

In 2015, the inspector general’s office looked into possible coordination between the Obama administration and the F.C.C. chairman at the time, Tom Wheeler, on the creation of so-called net neutrality rules. The rules prevented broadband providers from blocking or slowing traffic to consumers. The inspector general said its investigation could not find clear improper conduct.

Antitrust experts said this new investigation may complicate the reviews of the Sinclair-Tribune deal by the F.C.C. and the Justice Department. Even if the deal were approved, they said, any conclusions of improper conduct by Mr. Pai could give fuel to critics to challenge the review in courts.

“An investigation could cast a cloud over the whole process,” said Andrew Schwartzman, a senior fellow at Georgetown Law Center’s Institute for Public Representation. “For the review, knowledge of an investigation could generate caution and even delay completion of the deal.”

goof_schmoofer on February 16th, 2018 at 12:03 UTC »

On November 16, 2016, then-Commissioner Pai traveled to Baltimore, Maryland to have an off-the-record meeting with Sinclair employees and lunch with key company executives.2 This meeting was not disclosed publicly at the time.

In December 2016, J ared Kushner, President Trump’s son-in law and current Senior White House Advisor, reported that the President’s campaign had “struck a deal” with Sinclair for better media coverage during the election

On January 6, 2017, Commissioner Pai met privately with Sinclair representatives at the Consumer Electronics Show 1n Las Vegas.4 This meeting was also not initially publically disclosed.

On January 16, 2017, Commissioner Pai traveled to New York City to meet privately with President-Elect Trump

On January 19, 2017, Commissioner Pai traveled to Arlington, Virginia, to meet again with executives from Sinclair.6 A summary of the meeting, filed in the FCC’s public docket, shows that the agency’s restrictions on joint or shared-service agreements were discussed in detail

On January 22, 2017, President Trump elevated Commissioner Pai to be permanent Chairman of the FCC.

On February 3, 2017, pursuant to unilateral direction from the now Chairman Pai, the FCC’s Media Bureau announced that it would no longer review joint sales agreements and shared- services agreements in broadcast mergers

On February 23, 2017, the FCC started a proceeding to allow TV broadcasters to begin using Next Gen TV (also known as ATSC 3.0)—a technology for which Sinclair holds the key patents

On March 6, 2017, Chairman Pai again met with President Trump. Chairman Pai, stated that he and the President did not discuss “any pending proceedings” at the FCC.

On April 12, 2017, Chairman Pai led the FCC in a party line vote to ease ownership caps by reinstating the technologically-outdated UHF discount.ll Without this reversal, Sinclair would have been legally barred from merging with Tribune.

On April 21, 2017, Sinclair announced its intention to purchase Bonten Media Group (Bonten), owner of 14 television stations in eight markets. Bonten also provided services to four other stations through joint sales agreements.

On May 8, 2017 Sinclair announced its intention to acquire Tribune for $3.9 billion.

On June 30, 2017, the FCC approved the purchase of seven Bonten stations by Sinclair (Sinclair divested the other seven stations). The transaction was later consummated by the parties on September 5, 2017, at which time Sinclair assumed the joint sales agreements held by Bonten.l4 If the FCC had not relaxed its review of joint sales agreements consistent with Sinclair’s request, it is unlikely this transaction would have been approved expeditiously without the termination of at least some of the joint sales agreements.

On October 24, 2017, Chairman Pai led the FCC (on a party-line vote) in eliminating the broadcast main studio rule. Doing away with the rule, which was established in 1940, benefits the largest broadcasters, especially Sinclair who has made a pattern of reducing local investments in station studios and consolidating studio and newsgathering operations at its headquarters in Maryland.”

At the upcoming November 16, 2017 FCC Open Meeting, Chairman Pai is expected to lead FCC (on a partisan basis) to take two actions that will directly benefit Sinclair.

Chairman Pai is expected to lead the FCC’s party-line vote to eliminate decades-long rules that prevent TV stations in the same market from merging if the outcome leads to fewer than eight independent stations operating in that market, or if the merger is between two of the top four stations in a market.[6 This rule change directly benefits the monopoly aspirations of Sinclair by eliminating the need for it to divest any of the stations it is purchasing from Tribune.'

At the same meeting, Chairman Pai also is expected to lead the FCC (on a party-line vote) to approve broadcaster’s use of Next Gen TV. The item that Chairman Pai has put forth for vote would directly benefit Sinclair. First, the draft order would establish a licensing framework for broadcasters that would allow Sinclair to establish and

Your investigation should, at a minimum, examine the following questions:

Whether the totality of the Chairman’s actions with regard to media ownership policies, media concentration policies, or the Sinclair- Tribune transaction, demonstrate actual impropriety, unscrupulous behavior, favoritism towards Sinclair, or a lack of impartiality?

Whether the totality of the Chairman’ actions with regard to media ownership policies, media concentration policies, or the Sinclair-Tribune transaction demonstrate the appearance of impropriety, unscrupulous behavior, favoritism towards Sinclair, or a lack of impartiality?

Whether the Chairman’s actions create the appearance or demonstrate the actual lack of independence of the FCC?

Whether Chairman Pai’s actual impropriety, unscrupulous behavior, favoritism towards Sinclair, or a lack of impartiality requires that he recuse himself from all matters that would materially impact Sinclair or media ownership and media concentration matters?

Whether the appearance of Chairman Pai’s impropriety, unscrupulous behavior, favoritism towards Sinclair, or a lack of impartiality requires that he recuse himself from all matters that would materially impact Sinclair or any media ownership and media concentration matters?

Whether the FCC’s consideration of the Next Generation TV matters has been unduly influenced by the Chairman’s desire to boost the business interests of Sinclair? Please include in your answer whether the FCC’s examination of this matter has appropriately taken into account the competition and anti-trust issues raised by Sinclair’s role as the sole patent holder of key components of the Advanced Television Systems Committee 3.0 (ATSC 3.0) technology.

The draft order under consideration will not require Sinclair to offer, to other broadcasters, access to its patented ATSC 3.0 technology on a reasonable and nondiscriminatory basis. https://www.fcc.gov/document/next- generation-broadcast-television-standard.

Source

braille_animalia on February 16th, 2018 at 02:30 UTC »

The article does not make clear what the allegations are. Does anyone know what it takes to make coordination “improper”? Are we talking about kickbacks, or is mere discussion with Sinclair improper?

HumorAdjacent on February 16th, 2018 at 01:15 UTC »

Spoilers: Congress won't do anything about this :(