While the trade press has been full of reports that the FCC has voted on an order addressing the issues raised in its Quadrennial Review of its multiple ownership rules, and that the decision largely left those rules unchanged (including the broad ban on the cross-ownership of daily newspapers and broadcast stations), no final decision on the review has yet been released. However, we did see on Friday that, in the FCC’s list of matters pending before the Commission for approval “on circulation” (i.e. to be voted on without being considered at an FCC open meeting) the ownership item was removed from the list of pending items, seemingly confirming that the decision has in fact been voted on and is thus no longer circulating for approval. If the press reports are to be believed, there has been no major change in the rules despite much last minute hope for some relaxation of the newspaper cross-interest rule. The rules are thus likely to be those indicated by the Chairman in his blog post in late June, which we summarized here. Even if the most significant rules (e.g. local ownership rules for radio and TV – the “duopoly” rules, and the newspaper-broadcast cross-ownership rules) remain unchanged, that does not mean that the broadcast community should ignore the upcoming decision, as there are bound to be other issues addressed in the order that may be of significance.
In connection with the newspaper cross-ownership rules, while the press reports indicate that the rules will remain in place, there are reports that there will be some sort of waiver allowed, seemingly where economics justify the combination. If this is akin to the “failing station” waiver used to justify the ownership of 2 TV stations in markets where such ownership would normally not be allowed, some have wondered, given the economic state of the newspaper industry, if such a waiver would ever be used as it will be a rare case where a last-minute broadcast combination will rescue a failing newspaper. But we will need to see what the details are of the waiver standard to be applied.
Joint Sales Agreements (“JSAs”) will also be part of this decision. The Third Circuit, as we wrote here, threw out the FCC’s decision making such agreements attributable – meaning that they could only be entered into where the stations involved could be co-owned. While it is anticipated that the FCC will reinstate the JSA ban, it may well include grandfathering provisions to reflect Congress’ express view that such combinations should not be broken up where they already exist.
In a separate proceeding (see our summary here), the FCC is also supposed to address the national ownership caps for television – specifically whether the UHF discount will continue to be applied. While this is not part of the Quadrennial Review, some reports have indicated that it is being considered at the same time – and that we might see a decision soon.
On the radio ownership side of the house, in connection with the last review, we wrote about some of the situations where the FCC made small changes in the rules that affected broadcast ownership. One of those issues before the FCC in this review had to do with stations changing markets by changes in their city of license. Whether the FCC alters that policy remains to be seen (though the Chairman’s blog post indicated that some change may be on its way). The treatment of broadcast ownership in embedded markets has also been addressed by comments in this proceeding, as have other specific situations where ownership limits should be waived. We’ll see if these issues are addressed.
Taking steps to encourage minority ownership is also on the table in this proceeding. The FCC’s prior failure to address the steps that it would take to encourage minority ownership was one of the issues raised by the Third Circuit in their recent action putting the Commission on notice that it had to move fast to get this decision out (the Third Circuit case being the same decision where the ban on JSAs was overturned). The decision specifying the steps that it will take to encourage minority ownership of broadcasting properties will certainly be noteworthy.
And there are likely to be other issues raised by specific parties that make it into the order. The trade press reports indicate that the order, having been voted on, is being edited and prepared for release, and should be public at some point this month. So watch for what is likely to be an important decision, even if it does not directly make fundamental changes in the basic ownership rules.