FCC interim policy on shared services agreements

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With the change in administration at the FCC, there are opportunities for certain actions to be taken very quickly, without going through the full process of a rulemaking requiring public notice of the proposed rule change and time for public comment.  At the end of this last week, we saw the FCC’s Media Bureau take actions in three different proceedings directly applicable to broadcasters to undo what had been done during the prior administration – rescinding actions with respect to noncommercial ownership reports, the disclosure of information about the sponsor of political advertisements, and on the treatment of TV assignment and transfer applications for television stations where shared service agreements are involved.  Below, we’ll give a few details about each of those actions.

Two of the rescinded actions were January rulings by the Media Bureau which, at the time they were issued, drew statements of concern from then-Commissioners Pai and O’Rielly.  The Republican Commissioners argued that the actions should have been taken by the full Commission, not the Media Bureau.  As these decisions were not final (appeals can be taken or reconsideration requests can be filed within 30 days of an action, and the full Commission, on its own, can set aside a staff action within 40 days), the Media Bureau, presumably at the urging of the new Chairman, set these actions aside for further consideration by the full Commission.Continue Reading Undoing the Past – New FCC Rescinds Rulings on Noncommercial Ownership Reports, Political Broadcasting Sponsorship Disclosure and Shared Services Agreements

Next week, on August 6, the FCC will be taking the initial comments on its Quadrennial Review of the multiple ownership rules – looking at what limitations should be placed on the ownership of broadcast stations by one individual or company.  As we have written, this Review follows the FCC’s resolution of the last Quadrennial Review, started in 2011, where the FCC made joint sales agreements between TV stations in the same market “attributable interests” – meaning that you can’t enter into a JSA unless you can own that station under the rules.  All of the other issues on the local ownership rules – including whether to change the rules setting the number of radio or TV stations that can be owned in a single market, and whether the rules against the same market cross-ownership of radio and TV stations, and of daily newspapers and broadcast stations should be modified – were pushed back to this new Review, which is not supposed to be finally decided for another two years.  While we wrote about some of the hidden nuggets in this proceeding in defining radio and TV markets here, let’s look a little deeper at some of the other issues involved in the review – today the local TV ownership rules.  In advance of next week’s comment deadline, there has already been much relevant regulatory action this past week – including the FCC’s approval of the Sinclair’s acquisition of the Allbritton TV stations (but only after Sinclair agreed to surrender to the FCC for cancellation TV stations licenses in two markets as its ownership of those stations would not be allowed under the current rules), and a GAO report addressing Shared Services Agreements between TV stations.

Currently, the FCC allows an owner to hold one TV license in a market, except in certain limited circumstances where two can be owned.  An ownership combination is allowed in the normal course only where there would be eight independently owned stations left in the market after the combination, and only where the combining stations are not both Top 4 stations in the market.  The Commission does also allow some combinations where one of the stations is “failing,” but that is looked at only on a case-by-case waiver basis.  Many broadcasters have argued that, particularly in small markets where there is insufficient revenue to support multiple fully competitive stations, greater consolidation should be allowed.  But the Commission has tentatively rejected that idea in its Notice of Proposed Rulemaking in the new Quadrennial Review.  Why?  Seemingly, small market consolidation was not favored on the simple theory that consolidation is bad, and on the hope that, if the FCC forbids consolidation (and stops any sort of sharing arrangement, like the JSAs that it has already prohibited, and the Shared Services Agreements that it has suggested in this proceeding need to be further limited), minorities and other new entrants will enter the market.  Both of this week’s events – the Sinclair acquisition and the GAO report, seem to cut against the FCC’s beliefs.
Continue Reading Comments on Quadrennial Review of FCC’s Broadcast Ownership Rules due Next Week – Local TV Ownership Issues Highlighted By GAO Report and Sinclair Acquisition Approval