The text of the FCC’s decision on the attribution of Joint Sales Agreements for multiple ownership purposes, and the termination of the 2010 Quadrennial Review of the ownership rules and the start of the 2014 Quadrennial Review, has now been released by the FCC. In a slim 211 pages of text, plus another 24 pages of concurring and dissenting opinions, there is more than enough for broadcasters, lawyers and regulators to digest for weeks. The Order addresses in detail the matters that had already been made public – the attribution of TV JSAs, the further examination of TV shared Services Agreements, and tentative decisions to not fundamentally change any of the Commission’s other ownership rules (with the possible exception of a favorable inclination to look at elimination of the radio-newspaper cross-ownership)(see our summary here). But there are many details to be examined as to how the Commission reached the decisions that it did and the nuances of the decisions that were made (e.g. the waiver policy that would allow some JSAs to remain in place – the Commission’s decision does not provide much detail – essentially saying that they will grant waivers to deserving JSAs that serve the public interest, but providing little detailed guidance as to what would make a good waiver case, except to say that temporary or short-term waivers were better than long-term ones, and that ones where there was little sharing of other services are better than ones where there is more sharing). We will cover all of these areas in more detail over the next few days.
But there were some interesting and less expected nuggets that popped out in a first read of the Order, and have not been much covered elsewhere. For TV, these include the tentative decision to replace the TV Grade B contour with the digital Noise Limited Service Contour for determining whether an individual or entity can own two TV stations in the same market. Instead of allowing ownership where the Grade B contours do not overlap, the Commission proposes to allow that ownership where the NLSC do not overlap, and to grandfather any combinations that would be affected by this rule change. Similar small but significant issues were also raised for radio.
For radio, the Commission currently requires that any change made in whether or not a station is in an Arbitron (or should we now say Nielsen Audio) Metro market, or a change in the Metro’s geographical borders, needs to be in place for over two years before it can be relied on by any broadcaster in a multiple ownership analysis. However, there have been cases where the FCC has determined that a change in the city of license of a station, where the city of license moves from a Metro county to one outside of an Arbitron metro, or to a city in another Metro, would become effective immediately, without the two year waiting period. See our summary of these policies, here. In the document released this week, the Commission proposes to limit the effect of this ability of a station to immediately take advantage of a market change brought about by changing city of license to situations where the station also physically moves its transmitter site to the new area in which it will be considered for multiple ownership purposes. The FCC asks for comments on this tentative proposal.
Also, the Commission mentions a proposal made by a client of mine for there to be different weight assessed in a multiple ownership analysis to different classes of FM radio stations – that Class A FM stations (which operate at significantly lower power than other FM stations) should not have the same weight in an ownership analysis as Class B or Class C stations that cover a much larger area. The Commission tentatively rejects that proposal – basically for the reason that it could allow one party to control more stations in a single market. But that was exactly the purpose of the proposal, as it sometimes takes several low power FM stations to cover a market and effectively compete with one high power station. Counting a high power station exactly the same way as a lower power station – one that covers a fraction of the population of the higher power station – does not make sense. While tentatively rejecting this proposal, the Commission asks for comments on it preliminary conclusion.
There are plenty of other issues to write about – the tentative rejection of any other changes in the local ownership rules for TV or radio, the tentative conclusion to retain the newspaper-television cross-ownership ban, and the decisions on JSAs and the proposals on SSAs. Note that everything but the attribution of the JSA is but a tentative conclusion, and the FCC will be seeking comment on all of these proposals, with no final decision likely for two years. We will be writing about the details of the FCC’s treatment of many of the other issues raised by this FCC decision in the coming days so that you can consider where you stand on these proposals, so check back!