FCC to Break Up Big TV Stations

Despite a GOP outcry, new rules will limit coordination between TV stations.

Shoppers look at televisions at Walmart during the Black Friday sales on November 23, 2012 in Quincy, Massachusetts. Black Friday, the start of the holiday shopping season, has traditionally been the busiest shopping day in the United States. 
National Journal
March 31, 2014, 9:31 a.m.

Over­rid­ing in­tense Re­pub­lic­an op­pos­i­tion, the Demo­crat­ic lead­ers of the Fed­er­al Com­mu­nic­a­tions Com­mis­sion voted Monday to crack down on me­dia con­sol­id­a­tion.

The new rules bar mul­tiple broad­cast TV sta­tions in the same mar­ket from shar­ing a single ad­vert­ising staff. Demo­crat­ic FCC of­fi­cials ar­gue that ma­jor TV com­pan­ies around the coun­try are us­ing “joint sales agree­ments” to un­der­mine the agency’s me­dia-own­er­ship caps.

The FCC bars any com­pany from own­ing more than one of the top four TV sta­tions in a mar­ket. By selling ads for mul­tiple sta­tions, com­pan­ies have been able to dodge the FCC’s own­er­ship cap while ef­fect­ively con­trolling sev­er­al sta­tions, the agency of­fi­cials said.

The goal of the TV own­er­ship cap is to en­sure that view­ers have ac­cess to a di­verse range of views in the me­dia and that no single cor­por­a­tion is able to dom­in­ate the flow of in­form­a­tion.

While the TV sta­tions serve loc­al mar­kets, ma­jor me­dia com­pan­ies such as Sin­clair own dozens of sta­tions around the coun­try. 

“The com­mis­sion has long im­posed lim­its on con­cen­tra­tion of own­er­ship for use of the pub­lic’s air­waves,” FCC Chair­man Tom Wheel­er said. “Today, what we’re do­ing is clos­ing off what is a grow­ing end run around those rules.”

But Re­pub­lic­ans warn that the new rules will force small loc­al TV sta­tions off the air. They ar­gue that the joint-sales deals help sta­tions save costs and fo­cus more re­sources on cov­er­ing news im­port­ant to their loc­al com­munit­ies.

Ajit Pai, a Re­pub­lic­an FCC com­mis­sion­er, said the or­der is the “most prob­lem­at­ic” he has en­countered in his two years at the agency. The agency’s oth­er Re­pub­lic­an, Mi­chael O’Ri­elly, called it an “un­jus­ti­fied step back­wards.”

The Re­pub­lic­an com­mis­sion­ers ar­gued that the FCC should be loosen­ing — not tight­en­ing — its me­dia own­er­ship rules. Lim­it­a­tions on how many news­pa­pers a TV com­pany can own in a mar­ket are es­pe­cially out­dated, they ar­gued.

Even Demo­crat­ic Com­mis­sion­er Mignon Cly­burn ex­pressed some con­cern that the new TV own­er­ship rules could hurt small and minor­ity-owned sta­tions. But she signed on to the pro­pos­al when the chair­man’s of­fice agreed to out­line more de­tails about how small sta­tions can ap­ply for a waiver to con­tin­ue their joint-sales deals.

In a state­ment, the Na­tion­al As­so­ci­ation of Broad­casters said the FCC made an “ar­bit­rary and ca­pri­cious de­cision” — a hint that the group plans to sue to block the new reg­u­la­tions. The House En­ergy and Com­merce Com­mit­tee is ad­van­cing a bill that would force the FCC to com­plete a lar­ger re­view of its me­dia-own­er­ship rules be­fore it could break up the joint-ad deals.

But the ac­tion won cheers from lib­er­al ad­vocacy groups. Craig Aaron, the pres­id­ent of Free Press, said the new rules will “stop broad­casters from us­ing shell com­pan­ies to skirt the agency’s own­er­ship lim­its.”

“It’s time for con­glom­er­ates to start play­ing by the rules,” Aaron said. “Di­vest­ing some of their sta­tions could open the door for truly in­de­pend­ent and di­verse own­ers to enter a mar­ket­place con­glom­er­ates have con­trolled for years.”

The rules will bar new joint ad deals and will give sta­tions two years to break up their ex­ist­ing agree­ments. 

Some have spec­u­lated that Wheel­er is try­ing to drive down the value of broad­cast TV sta­tions to en­cour­age them to sell their li­censes for auc­tion to cel­lu­lar car­ri­ers. Wheel­er called the the­ory “ba­lo­ney” in a press con­fer­ence fol­low­ing the agency vote.

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