This week, an interesting concept has been advanced in a series of applications filed with the FCC. Ion Media Networks, the successor to Paxson Television, has proposed to transfer some of its broadcast stations to a new company, Urban Television LLP, to be owned 51% by Robert Johnson, the former owner of BET, and 49% by Ion itself. But, when we say that they are transferring "some" of its stations, we don’t mean that any of its stations are being transferred, but instead only that a piece of its stations are proposed to be transferred. Ion proposes to continue to own and operate stations in every market where it currently operates, but proposes to sell digital multicast channels to Johnson. Unlike any LMA or other programming agreement, the proposal is to actually take one 6 MHz television channel and break it up so that Ion continues to program one channel with its programming and the Urban Television will program the other channel with its programming, and become the actual license of that portion of the spectrum. The FCC has accepted the applications and issued a Public Notice, giving parties 30 days to file comments on the proposal.
It is not unheard of for two licensees to share the same channel – though where it is currently occurs most frequently is in connection with noncommercial broadcasters who share a single radio or TV channel, they divide it by time, so that one licensee operates, say midnight to noon and the other operates from noon to midnight. Obviously, in these shared-time arrangements, both broadcasters are not operating on the same channel at the same time. This new proposal, though, does not come out of the blue. The idea of allowing a broadcaster to sell a digital channel to a different company, has been proposed before, for both Digital Television and Digital HD Radio channels when the original station is multicasting, as a way to increase diversity of ownership.
For instance, the Diversity and Competition Supporters Coalition, a group of national organizations who promote the increase in opportunities for new entrants into broadcast ownership, proposed to the FCC such arrangements as ways to increase minority ownership and ownership by other new entrants. DCS made these proposals several times, commenting in support of the concept in the Commission’s proceeding to encourage Diversity in media ownership. In the Diversity proceeding, the Commission specifically made the proposal to allow shared time arrangements to operate in both digital radio and television, though the Notice of Proposed Rulemaking focused on HD Radio digital multicast channels, rather than digital television multicast channels. The Commission has yet to rule on this proposal.
In the past, Chairman Martin had indicated his interest in this type of arrangement. While the split in ownership is probably not terribly controversial in and of itself, what may well be likely to draw objection is the associated request for must-carry rights for both the existing "main" station and the new "station" that would be spun off to the new licensee. Chairman Martin has many times been seen as being in favor of multi-cast must carry rights for television broadcasters, though he has not yet been able to convince a majority of the other Commissioners to back such a proposal. Cable and satellite television interests would, of course, be concerned about such an expansion of must-carry obligations. The ability to sell digital subchannels and to create new television stations with must-carry rights could substantially multiply the number of television stations that cable systems would have to carry. This could well be an issue that will be challenged. And, with this specific proposal now before the FCC, the Commissioners may finally have to rule on the issue, though when such a ruling might come is anyone’s guess.