More than 8 years ago, a group of television station owners (the Network Affiliated Stations Alliance or "NASA") who operated stations affiliated with the major television networks filed a request with the FCC, petitioning the Commission to rule that certain provisions in network affiliation agreements that limited the ability of stations to preempt network programming should be prohibited. While some of these issues were raised in the Commission’s localism proceeding, the parties have now reached an agreement to resolve many of the issues. The Commission last week released an order approving that agreement and clarifying some of the legal issues as to what provisions can be contained in network affiliation agreements. These clarifications not only help to clarify the clauses that can be contained in affiliation agreements, but also give broadcasters insights as to what kinds of provisions can be included in any agreement by which one party provides programming to a broadcast station licensee, including agreements such as LMAs.
The Commission’s Order sets out standards governing the network-station relationship that insure that the licensee maintains control over programming and other basic operational decisions of their station. From this basic principal, the following specifics were adopted:
- Station licensees have an unfettered right to reject network programming that they believe is contrary to the public interest, "unsatisfactory" or "unsuitable
- Stations can preempt network programming when the licensee thinks there is some other programming which is of greater national or local importance.
- If a preemption is done for one of these reasons, the affiliation agreement cannot impose monetary or non-monetary penalties or limit the amount of such preemptions
- Affiliation agreements cannot give networks the right to "option" time in the future unless they make a commitment to fill that time with programming. This is important in a multichannel digital context, as it prevents networks from tying up time on a second or third channel that they might or might not use.
According to the Order and the Joint Request of the affiliates and the networks, these provisions are now embodied in network affiliation agreements. As these guidelines set out standards interpreting how the FCC views "licensee control", they should also be looked upon as providing guidance as to the provisions of other programming agreements, like LMAs or time brokerage agreements. There, too, licensees must remain in control of their own stations, and agreements should be sure to allow the licensee the unfettered right to reject unsuitable programming, and to substitute programming that would better serve the public interest. Seemingly, such agreements should not to reserve for a third party the right to program a digital channel without express agreements that programming will in fact be available for that channel. We will see if these standards are in fact extended to these other programming agreements in future FCC actions.