FCC Aims to Crack Down on TV Consolidation

The agency plans to limit coordination and deals between TV stations.

A customer stands in front of a wall of flat panel televisions at a Best Buy store June 19, 2007 in San Francisco, California.
National Journal
Brendan Sasso
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Brendan Sasso
March 6, 2014, 9:08 a.m.

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion plans to tight­en its reg­u­la­tions that lim­it how many broad­cast TV sta­tions a single com­pany can own in any one mar­ket.

The rules are in­ten­ded to pro­mote com­pet­i­tion and en­sure that view­ers have ac­cess to a di­verse range of views in the me­dia. But Re­pub­lic­ans are ex­pec­ted to op­pose the move, warn­ing it could force some loc­al TV sta­tions out of busi­ness.

FCC Chair­man Tom Wheel­er an­nounced a pro­pos­al Thursday that would crack down on “joint sales agree­ments,” in which one TV sta­tion sells ads for an­oth­er. TV broad­casters ar­gue the deals al­low strug­gling sta­tions to share costs.

But FCC of­fi­cials con­cluded that the ar­range­ments un­der­mine the agency’s me­dia-own­er­ship rules by al­low­ing one sta­tion to con­trol or in­flu­ence an­oth­er. Un­der Wheel­er’s pro­pos­al, any sta­tion that sells 15 per­cent or more of the ads for an­oth­er sta­tion would count as own­ing that sta­tion for pur­poses of the agency’s me­dia-own­er­ship cap.

FCC rules bar any com­pany from own­ing more than one of the top four sta­tions in a mar­ket.

In a state­ment, Wheel­er said that treat­ing the joint-sales deals as own­er­ship is “simply re­cog­niz­ing real­ity.”  

Wheel­er’s pro­pos­al would also bar TV sta­tions from band­ing to­geth­er as a group when they ne­go­ti­ate with cable pro­viders. Cable com­pan­ies have com­plained about the in­creas­ing fees they have to pay to of­fer broad­cast TV chan­nels. The chair­man’s staff con­cluded that joint ne­go­ti­ations by broad­casters have in­creased costs for cable pro­viders, lead­ing to high­er bills for con­sumers.

The FCC plans to seek in­put on how it should handle deals between TV sta­tions to share re­sources, such as news heli­copters or staff.

The pro­pos­als closely track re­com­mend­a­tions that the Justice De­part­ment made last month. 

“The pro­posed ini­ti­at­ives are not de­signed to stop be­ne­fi­cial ef­fi­cien­cies in the tele­vi­sion busi­ness,” Wheel­er said. “They are de­signed to en­able fact-based de­term­in­a­tions to en­sure com­pet­i­tion, di­versity, and loc­al­ism at this very im­port­ant junc­ture in the me­dia mar­ket­place.”

The FCC plans to vote on the rules at its meet­ing on March 31. But Ajit Pai and Mi­chael O’Ri­elly, the two Re­pub­lic­ans on the five-mem­ber com­mis­sion, are ex­pec­ted to vote against the changes. 

In a state­ment Thursday, a spokes­man for Pai said the chair­man’s pro­posed lim­it­a­tion on joint-sales deals is “a dag­ger aimed at the heart of small-town broad­casters.”

“It’s a job-killer that would res­ult in less news pro­gram­ming, less di­versity, and more sta­tions go­ing dark,” the spokes­man said.

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