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The FCC this week released the full text of its decision on the revision of the multiple ownership rules that it adopted at its December 18 meeting.  While the text goes into great detail on the decision to relax the newspaper-television cross ownership restrictions (causing the ruling to be condemned by consolidation critics), the order is very brief in addressing the numerous other issues with the multiple ownership rules that were raised in this proceeding.  Television broadcasters sought greater opportunities to consolidate in local markets, and radio broadcasters requested reconsideration or clarification of various aspects of the Commission’s 2003 decision adopting Arbitron market definitions as the basis of the determining how many radio stations are in a particular market.  These requests were all rejected, some summarily.  Will these parties who were denied relief from the FCC protest as loudly as the critics of the decision with respect to the relaxation of the TV-newspaper cross ownership limits?

We summarized the decision with respect to the newspaper television rules here.  That summary was based on the statements made at the December 18 meeting and on the press release issued that day which provided a brief summary of the Commission’s decision.  The outline we provided in December was basically accurate, and there were few surprises about the newspaper-television cross ownership rules in the text.  The Commission was very thorough in documenting the basis for its decision that newspapers and television stations could be commonly controlled without adversely affecting the public interest, citing a legion of studies supporting their decision, while carefully refuting the studies supplied by consolidation critics.  However, the remainder of the decision, dealing with other aspects of the multiple ownership rules which the Commission refused to change, contained reasoning which was far more limited.  In some cases, particularly dealing with radio issues, the reasoning was almost absent.Continue Reading FCC Issues Text of Its Multiple Ownership Decision – New Combinations for Newspapers and TV, No Ownership Changes for Radio

Yesterday’s unique Public Notice outlining Chairman Martin’s proposals for reform of the multiple ownership rules (which we summarized here) is a surprisingly restrained and limited approach to relaxation of the ownership rules – proposing to relax only the newspaper-broadcast cross-ownership prohibitions, and only in the Top 20 TV markets.  Moreover, the reform would only allow the combination of a daily newspaper and a single radio or TV station, and the newspaper-TV combination would only be allowed if the TV station is not one of the Top 4 ranked stations in the market.  While the extremely limited nature of the proposed relief has not stopped critics of big media from immediately condemning the proposal (see the joint statement of Commissioners Copps and Adelstein, here), much less attention has been paid to those multiple ownership issues that the Chairman’s proposal does not seem to address – including TV duopoly relief in small markets and clarifications to the radio ownership rules requested by a number of broadcasters who sought reconsideration of the changes that arose from the 2003 ownership reforms. 

The Chairman’s Public Notice is itself a new approach to regulation – putting out for public comment (due by December 11) an action of the Commission just before that action is to be taken.  Usually, the Commission proposes a set of rule changes in a Notice of Proposed Rulemaking, and the Notice provides time for interested parties to comment and then reply to each other’s comments.  Once all the written comments are submitted to the Commission, parties and their representative often make informal visits to the FCC to argue about the suggestions that have been made, and eventually, after much consideration, the Commission’s staff writes up a decision which is vetted by the Commissioners and their staff, and voted on by the full FCC.  Usually, these final decisions are shrouded in secrecy – though outlines of the proposals are often the subject of informed gossip and rumor, rarely does anyone see the full set of rules that the Commission is considering until after the decision is made. 

Continue Reading What Chairman Martin’s Multiple Ownership Proposals Omit – No Relief for Radio and TV

The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market.  In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station.  And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules.  It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).

These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns.  In the radio world, such agreements would not be possible to the same extent.  A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules. 

Continue Reading An Option, A Guaranty, and a Shared Services Agreement – OK By the FCC

Last week’s announcement of the partnership between eBay and Bid4Spots and the impending full launch of Google’s service to sell online radio spots beg for FCC action to clarify how these services will be treated for lowest unit rate purposes. We have written about this issue before (see our note here), and the increasing number of online sales tools for broadcast advertising inventory highlights the issue. If advertisers can buy spots using these online systems on a single station, or if stations offer their spots to a particular advertiser at a set price for a specific class of spot, it would seem that these spots could have an effect on the station’s lowest unit rate if the spots sold through the online systems run during lowest unit rate periods (45 days before a primary or 60 days before a general election.). For the peace of mind for all broadcasters, it would be worth the FCC clarifying the status of these services as we hurtle toward what will probably be the busiest political year ever.

In looking at some of these systems, it appears that some of these systems are premised on specific stations offering spots to advertisers on a cost-per-point basis, for specific dayparts as designated by the advertiser and agreed to by the station.  For instance Bid4Spots system advertises that it holds an auction to sell the spots on Thursday for the following week.  And it appears that spots must be sold by a station in specific dayparts on a non-preemeptible basis. For the week in which the spots are offered, the sale of such spots would appear to set a lowest unit rate for non-preemptible spots that run in the same time period. Continue Reading Will On-Line Spot Auctions Have an Impact on Lowest Unit Rate? – Only the FCC Knows For Sure