FCC Won't Deny Nexstar-Mission Fort Smith, Ark., Sale

Federal Communications Commission's Media Bureau Won’t Block Sale of KFTA-TV Fort Smith, Ark., by Nexstar Broadcasting Group to Mission Broadcasting

By John Eggerton -- Broadcasting & Cable, 3/3/2008 2:03:00 PM

The Federal Communications Commission's Media Bureau declined to block the sale of KFTA-TV Fort Smith, Ark., from Nexstar Broadcasting Group to Mission Broadcasting, or to hold up the license renewal of KFTA or Nexstar's KNWA-TV in nearby Rogers, Ark.

But the commission did admonish Nexstar for making false claims on its application to sell the station, and it will not allow the two stations to air each other's digital-TV signals.

A low-power-station owner in the area, Ft. Smith 46, had asked the commission to deny the sale and to deny the renewal of the licenses, saying that the planned joint-sales agreement and shared-services agreement between Nexstar and Mission "went far beyond" the norm and effectively represented Nexstar's continuing de facto control of KFTA, which, it argued, violated FCC local-market-ownership limits.

Those limits would not permit actual duopolies (one company owning two stations) in a market as small as Fort Smith.

Ft. Smith 46 pointed to Securities and Exchange Commission filings that attributed Mission's revenues and debts to Nexstar and even referred to the markets they shared as duopoly markets. Nexstar countered that the language was for financial purposes and that in this case, duopoly was clearly defined as markets where it had joint-services agreements with Mission.

Ft. Smith 46 also said that given the FCC's recent proposal to make joint-sales agreements subject to the ownership rules going forward, the FCC should wait until it had made that determination to grant the sale.

The FCC found that the agreement did not violate its ownership rules. "The commission has long held that it is not bound by the definition of ‘control’ used in securities law," the FCC said. "In any case, as noted by Nexstar and Mission in their opposition, the SEC Form S-4 states that Mission may make programming decisions with which Nexstar disagrees, which does not indicate that Nexstar will hold operational control over Mission."

But the Media Bureau did prevent the stations from doubling up their DTV signals. KNWA had proposed running the DTV version of KFTA on a DTV-multicast channel, with KFTA planning to do the same with KNWA's DTV signal.

"We note that the commission has yet to determine whether such an agreement would be subject to the commission’s attribution standards," the bureau said. "We will thus prohibit Nexstar and Mission from entering into such an agreement and, to the extent the parties have already entered into such an agreement, we will require that it be dissolved."

The FCC also found that the Nexstar and Mission had not told the truth when they claimed that "neither is a party to a pending application where unresolved character issues had been raised," as the FCC put it in its order Monday.

In actuality, Cable America filed a petition to deny license-renewal applications against other stations, alleging the same de facto control issues, which Ft. Smith 46 said remained pending.

The FCC said they were still pending, but it accepted Nexstar’s and Mission's argument that it was inadvertent and not an intention to deceive because Cable America had requested that its petition be dismissed. It admonished Nexstar and Mission, which is an official reprimand, but did not fine them nor block the transfer.