The FCC meeting yesterday proposed to attribute Joint Sales Agreements (making them “count” for multiple ownership purposes – meaning that one broadcaster can’t do a JSA with another station unless it can own the other station). The Commission also apparently kicked the can down the road on all other multiple ownership matters – not changing the local TV ownership rules or amending the newspaper broadcast cross-ownership restrictions, instead deciding to further consider any modification of the rules. No decision on these issues is expected until probably 2016. See theFCC’s Public Notice of that action here. Shared Services Agreements will also be examined – though new ones have effectively been put on hold during the course of the examination by an FCC processing policy released two weeks ago that requires that any party proposing any sort of sharing agreement in a transaction requiring FCC approval demonstrate how that sharing agreement serves the public interest. Also at the meeting, the FCC took actions to ban joint negotiation of retransmission consent fees by any two of the top 4 rated stations in a TV market, and to reexamine the network nonduplication and syndicated exclusivity rules (see the FCC’s decision here). While we will have more details on these decisions in the coming days, as we fully analyze the texts of the FCC decisions as they are released, for now it is interesting to look at these decisions with the perspective of history.
Having represented broadcasters in Washington for over 30 years, one sees many of the same issues debated over and over again. Many of the issues that were thought to be settled years ago come to the fore after most of the participants at the FCC, and even those in industry, forget that these battles had already been fought and seemingly decided. In introducing the FCC’s examination of Shared Services Agreements at yesterday’s meeting, the representative of the FCC’s Media Bureau talked about how the examination of each transaction will be important for the FCC to determine if there are too many interlocking ties between stations that are supposed to be competitors in a market. Not mentioned was the fact that this same kind of review used to be done by the FCC under what was called the “cross-interest policy,” a policy that was repealed by the FCC in 1988.
Under the cross-interest policy, the FCC prohibited one person or entity from having an ownership interest in one station in a market, and a “meaningful relationship” with another station in the same market. The search for a meaningful relationship consumed thousands of man-hours of review in hundreds of cases trying to decide if shared employees, consultants, advertising agencies, time brokerage agreements, and other interests were enough to restrict competition in a market. In 1988, long before the explosion in the number of broadcast outlets brought about by the introduction of thousands of new FMs in the late 1980s and afterward, and the expansion of TV through new UHF stations, much less the competition from Internet and satellite-delivered media, the FCC concluded “the plethora of media services, with the increased result in a diversity of voices, strongly undercuts any underlying need to examine the relationships deleted by this decision.”
So, here we are, 26 years later, and the FCC is again in the business of examining on a case-by-case basis the relationships between stations to determine if they should be permitted or forbidden. The sydex/network nonduplication issue are also replaying the 1980s. Syndex rules were in place in the 1960s and 1970s, only to be repealed by the FCC in 1980, and then reinstated in 1988. Network nonduplication protection issues were also debated during this same timeframe, leading to the rules that are now in place. Here we are, over 25 years later, revisiting those same issues once again.
While we will write more about the specifics of these decisions in the coming days, recalling history shows that the whims of the regulators can bring back old issues that were seemingly well-settled, and upset expectations that were built up over time. No doubt, the justifications offered in the FCC decisions will be scrutinized by reviewing courts in light of the history, to see if the FCC’s changes in approaches over time are adequately justified by the record in this proceeding and the reasoning of the FCC.