Yesterday, the FCC issued its long-awaited order completing the first Quadrennial Review of the agency’s media ownership rules since 2007. Broadcasters and others who had clamored for rule updates to reflect competitive and other changes in the U.S. media landscape were disappointed by the FCC’s decision to retain the current prohibition against newspaper-broadcast station cross ownership and many other ownership restrictions.
By a 3-2 vote along party lines, the FCC adopted the Quadrennial Review order on August 10 but delayed the order’s release to allow additional time for the commissioners to complete their written statements. Rejecting broadcasters’ calls to lift the newspaper-broadcast cross-ownership ban and to ease current limits on local station ownership, the FCC’s Democratic majority declared that “the public interest is best served by retaining our existing rules, with some minor modifications.” In support of that finding, the majority explained that the current rules “promote competition and a diversity of viewpoints in local markets,” adding that preservation of the existing rules “is oneway in which the Commission can help to promote such diversity.” While acknowledging that the ongoing incentive auction “may have a dramatic impact on the television landscape in many markets,” the FCC concluded: “it is too soon to quantify this impact.” As such, the FCC said it would be “premature to change our media ownership rules in anticipation of the incentive auction’s impact at this time.”
The order also reinstates the FCC’s March 2014 ruling deeming joint sales agreements (JSAs) among competing local television stations to be attributable ownership interests. Citing the FCC’s failure at that time to complete the 2010 Quadrennial Review as directed by Congress, the Third Circuit Court of Appeals struck down the JSA attribution rule in May. In compliance with the will of Congress, which has since passed legislation that “grandfathers” JSAs in existence prior to March 2014, the order specifies that grandfathered JSAs will not have to be unwound and that grandfathered JSAs may be sold without triggering any ownership issues.
Other rule changes require (1) the disclosure of shared services agreements among broadcasters and (2) extension of the FCC’s ban on co-ownership of two top-four rated TV stations in the same market to cases of network affiliation swaps. Asserting that some broadcasters use network affiliation swaps as a means of gaining leverage in retransmission consent negotiations, a spokesman for the American Cable Association termed that rule change “a positive step that the FCC is taking to . . . improve the functioning of the retransmission consent marketplace.”
Members of the FCC’s Republican minority and the National Association of Broadcasters (NAB), however, lamented that the order ignores competitive marketplace changes that justify less regulation. As FCC Commissioner Ajit Pai complained in a 17-page dissenting statement that, “the more the media marketplace changes, the more the FCC’s media regulations stay the same,” Commissioner Michael O’Rielly described the FCC order as being divorced from the realities of today’s media marketplace.” The NAB charged the agency with failing “to conduct the rigorous media ownership review mandated by Congress.”