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Broadcasters Lobbying FCC For Small-Market TV Duops

5/25/2003 08:00:00 PM Eastern

Concerned the FCC may not go far enough in permitting ownership of two TV stations in small markets, broadcasters led by the National Association of Broadcasters last week kicked a lobbying effort into high gear.

"No problem in the broadcast-ownership area is more pressing or more in need of remedy than relief to mid-sized and smaller stations," wrote LIN Television President Gary Chapman and three other heads of small and midsize chains to the FCC last week.

In a proposal that FCC Chairman Michael Powell gave to fellow commissioners two weeks ago, broadcasters could own two stations—a so-called duopoly—in any market, as long as both are not among the market's four top-rated. Combos that don't meet the new voice test could be granted waivers on a case-by-case basis.

Although the FCC believes that the change would permit two-station TV combos in roughly the country's 100 largest markets, the NAB said many of them don't have enough commercial stations to make duopolies possible.

No drastic change

The FCC plan is hardly the drastic change broadcasters expected when federal judges two years ago ordered the FCC to ditch its "voice" test requiring a market to have at least eight separately owned stations after a duopoly was formed. That test has restricted duopolies to roughly the top 30 markets.

The FCC plan also fails to bring relief to stations in small markets, where there are too few advertising dollars to keep four separately owned stations afloat, the NAB says.

To make more small-market duopolies possible, the NAB is pushing a new idea that would ease the duopoly restriction in smaller markets.

As an alternative, the NAB suggests that the FCC stick to the "top-four" prohibition in the 25 largest markets. In markets 26-75, pairs between the top three would be banned; in markets 76-210, combos of the top two would be off-limits. NAB still prefers its "10/10" plan, which would allow pairing of stations with a share greater than 10 with those below 10, but acknowledges making little traction with that.

Promotes competition

Because "undisputed" evidence shows low-rated affiliates to be losing money in 2001, the NAB argues, the FCC proposal "would leave stations in most small markets without any ability to form an economically viable structure. Permitting weaker stations to combine would allow them to develop the resources to remain competitive in those markets."

In the 100 largest markets, according to NAB, six would have no opportunity for duopolies, and another 10 would have only one. In markets 101-210, where low-rated stations are really hurting, 81 markets would have no duopolies permitted, and only four could permit more than one. Among those hurt would be Sinclair, which is under order to unwind a local marketing agreement in Charleston, S.C., where it owns WMMP(TV) and operates WTAT-TV.

The industry's desperate claims contrast sharply with worries voiced by the FCC's two Democratic commissioners and other deregulation opponents. Last week, Commissioner Jonathan Adelstein characterized Powell's plan as "extreme" and putting corporate profits above the public interest.

Consumers Union Director Gene Kimmelman said the FCC's duopoly relaxation goes too far already: "The FCC is about to make a mistake in local markets." He said Powell should return to an earlier plan to approve specific combos after a case-by-case diversity analysis rather than rather than relying on a liberalized voice test.

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