The FCC has released a Declaratory Ruling providing guidance on whether certain provisions in affiliation contracts between networks and their station affiliates are consistent with the Communications Act and the Commission's rules and policies. The FCC reasoned that clarification of licensee control, the right-to-reject rule and the option-time rule would help to avoid future controversies in network/affiliate relationships.
With respect to licensee control, the FCC affirmed that affiliates must retain ultimate control over station programming, operations and other critical decisions with respect to their stations, and that network affiliations must not undercut this basic control.
With respect to the right-to-reject rule, the FCC affirmed that networks and their affiliates are prohibited from entering into any contract that prevents or hinders the station from rejecting or refusing network programs which the station reasonably believes to be unsatisfactory, unsuitable or contrary to the public interest. In addition, such agreements cannot restrict the station from substituting a program which, in the station's opinion, is of greater local or national importance. Moreover, the FCC stated that affiliation agreements should not include provisions that:
- Limit preemptions for "greater local or national importance" to breaking news events or other specific types of programming;
- Prevent affiliates from rejecting a program as "unsatisfactory or unsuitable or contrary to the public interest" because they have carried a similar network program in the past;
- Impose monetary or non-monetary penalties on affiliates based on right-to-reject preemptions; or
- Subject right-to-reject preemptions to, or count them against, contractual preemption limits.
Finally, the FCC affirmed that affiliation agreements should not include provisions that: (i) result in the optioning of the station's time to the network organization or have the same restraining effect as time optioning; (ii) obligate stations to carry a network's programming or other content during certain time periods without reciprocally obligating the network to provide the content for those time periods; or (iii) require affiliates to carry unspecified digital content that the network may offer at some unspecified future date.
A copy of the FCC's Declaratory Ruling can be found here.