There were several reports in the broadcast trade press today about an article in the Hill newsletter from retiring Congressman Greg Walden about his proposals to increase diversity in broadcast ownership.  Congressman Walden, a former broadcaster, seeks in his Broadcast Diversity in Leadership Act to foster minority ownership and ownership by new entrants by establishing in legislation an incubator program similar to the one adopted by the FCC in 2018, but put on hold by the Third Circuit Court of Appeals in their decision on broadcast ownership (which is now before the Supreme Court – see our post here).  While, given the short time before the end of the Congressional session, the Congressman’s bill stands little chance of passing both houses of Congress and being adopted before the end of the year, the bill is worth reviewing as it has the support of both the NAB and minority-advocacy organizations, so it could well resurface in a new Congress.

The bill adopts much of the framework of the FCC’s incubator program (which we outlined in our article here).  Under the proposed legislation, an existing broadcaster could work with an aspiring broadcaster to help that new entrant purchase and operate a broadcast station. The bill asks the FCC to adopt rules outlining the support that could be provided to the new entrant, including training, financing and access to resources of the established broadcaster. The established broadcaster could even hold a non-controlling equity interest in the emerging broadcaster, as long as the new entrant retains control.  In exchange for providing the services or financing, if the incubation is determined to be successful after a two-year period, the existing broadcaster would be allowed to acquire one station in a similarly sized market that exceeded the current cap on broadcast ownership allowed by Section 73.3555 of the Commission’s rules.  So, if the existing broadcaster operates in a market where one party can only own 6 stations, it could acquire a seventh.
Continue Reading Congressman Walden Urges Adoption of Broadcast Diversity in Leadership Act – An Incubator Program to Assist New Entrants to Broadcast Ownership

The FCC’s rules limiting the common ownership of radio and television stations, and of television stations and daily newspapers, are triggered by the Grade A contours of the television station encompassing the city of license of the radio station, or the city in which the newspaper is published.  Since June, there has been one problem with the application of that rule (Section 73.3555) – television stations in the digital world no longer have Grade A contours.  When adopting service contours for digital television, the FCC specified a Noise Limited Service Contour ("NLSC") as essentially the equivalent of the Grade B contour of an analog television signal – the contour at which the majority of people can receive the signal a majority of the time.  The FCC also specified a principal city contour – the signal level that needed to be placed over a station’s city of license.  But the FCC never bothered to specify the Grade A contour, despite the fact that the cross-ownership rules were premised on that contour.  In a case decided last week involving the financial restructuring of a radio company, the FCC’s Media Bureau staff decided that they would use the NLSC as a proxy for the Grade A contour until such time as the full Commission otherwise directed.

This decision actually makes common ownership of television stations and either newspapers or radio stations somewhat more difficult, as the noise limited contour, approximating the old analog Grade B contour, actually extends further than where the Grade A contour would have reached (when a digital station replicated its analog service area).  Thus, using this standard, the owners of a television station could be precluded from having attributable interests in radio stations or daily papers in more communities than would have been the case in the analog world.  As the FCC is now embarking on its review of the multiple ownership rules (as we have written before), the FCC may well revisit this issue in the course of that review.


Continue Reading FCC Clarifies Application of the Multiple Ownership Rules After the Digital Transition Makes the Grade A Contour Disappear