FCC Circulates Update To Ownership Rules, But Not Many Changes Evident

Rule Review

The FCC has circulated Chairman TOM WHEELER's proposed update to the media ownership rules for the 2010/2014 Quadrennial review.  

The fact sheet released by the Commission retains most of the present restrictions on ownership and some additional restrictions, including the television joint sales agreement attribution rule remanded by the Third Circuit Court of Appeals; existing caps on local ownership are retained, as are the widely-criticized newspaper-broadcast cross-ownership ban (although with a waiver option for "failing stations") and the radio-television cross-ownership restriction (modified to reflect the move to digital TV).  Radio ownership rules are being retained, with minor exceptions, including a new market definition for PUERTO RICO and clarification of grandfathering rules applicable to community of license changes.

Also retained is the "top four" TV station ownership restriction, with the addition of a rule to prevent broadcasters from swapping network affiliations to evade the rule.  The rules will not be changed to prevent a move which has become more common in recent years, with TV stations putting one of the "big four" networks on a digital subchannel and spinning off the former affiliate to another owner.

The proposal also addresses the Third Circuit’s remand of diversity issues by re-adopting the small business revenue-based eligible entity standard (based on Small Business Administration standards), but declines to adopt any race-based or gender-based measures.  Shared services agreements for TV clusters wil get a formal definition and will require filing with the FCC but will not, for now, be attributable.  

The release states, "The order, if adopted, finds that the current media ownership rules remain necessary in the public interest but require minor updates to reflect current industry trends and marketplace realities. Given that the broadcast TV incentive auction is underway and its results will not be known for some time, the auction’s effect on the marketplace is not yet clear.  The Commission’s future quadrennial ownership review will be able to assess the impact of marketplace changes resulting from the auction."

NAB EVP of Communications DENNIS WHARTON issued a statement saying, “We’re disappointed that Chairman WHEELER continues to ignore the will of both the courts and Congress by proposing to retain broadcast ownership rules that long ago outlived their usefulness. It is shocking that regulators who bless mammoth mergers like AT&T/DIRECTV and CHARTER/TIME WARNER CABLE would still bar common ownership of two TV stations or broadcast/newspaper combinations in a local market. Ultimately, NAB hopes the five-member FCC, Congress or the courts end this indefensible FCC charade, and that meaningful ownership reform is adopted for the benefit of the millions of Americans reliant on free and local broadcasting.”

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