5 Keys to Ownership RulesFCC’s dereg-lite approach could be trumped by regulatory follow-up 1/09/2012 12:01:00 AM Eastern
After a half-decade of stays and remands and court wrangling
that are still not over and done with, the Federal Communications
Commission has proposed loosening the newspaperbroadcast
cross-ownership rules, which it tried to do back in 2007. The
commission also wants to leave in place most other media ownership regs
that broadcasters argue will kneecap them in the race for the digital future.
With the FCC poised to reclaim a third of remaining TV station spectrum,
broadcasters were looking for some slack in the rules—leeway
the FCC isn’t planning to give them, except for removing a radio-TV
cross-ownership rule that various broadcast sources call a bone with
little meat on it. And while the commission is not likely to significantly
remake its retrans rules in a separate
proceeding, it has given cable
operators some hope that it could
address that issue through the
media ownership proceeding.
Here are five key takeaways
from the FCC’s current proposal.
1. Not much help. Because
it does not loosen TV duopoly
rules or eliminate the newspaperbroadcast
cross-ownership ban, the
FCC’s proposal does not provide
the help broadcasters were looking
for. And yes, while it does loosen
the TV-radio station cross-ownership
ban, which the National Association
of Broadcasters asked for,
broadcast attorneys speaking on
background say nobody was pushing
hard for that move anyway.
2. SSA SOS. Broadcasters appear most concerned by the FCC’s signal
that it’s looking at counting TV station shared service agreements toward its
station ownership caps. That would be a big victory for cable operators that
have been pushing the FCC to close what they see as a loophole that allowed
stations more muscle in retrans talks. The move would be a back-door way
to tighten retrans rules outside the current open petition on retrans.
The FCC wants to know whether shared services agreements, particularly
ones involving news sharing, are “substantively equivalent to
agreements that are already subject to our attribution rules [which include
some local marketing and joint services agreements], and are they
therefore attributable today or should they be attributable?”
3. A possible multicasting penalty. The FCC is also raising the spectre
of tightening the duopoly rules, citing the extra capacity of multicasting.
Broadcasters have been pushing multicasting and its diverse new offerings
as a reason for the FCC to leave them enough spectrum to navigate the digital
future. But the FCC is using the proliferation of new channels to suggest
those might be enough new real estate to justify limiting dual ownerships.
In the NPRM, the FCC asked for comment on whether it should limit
TV station owners to one station per market. “[D]oes multicasting replicate
the potential benefits to station owners and viewers associated with owning
a second in-market station (e.g., efficiency gains and improved programming),”
the commission asks, “or are there benefits unique to common
ownership that cannot be replicated by multicasting?” The FCC also asks
whether it should “limit the ability of station owners to form dual affiliations
involving certain networks.”
Which leads straight to point 4….
4. Help! According to NAB
figures cited by a coalition of
small-market broadcasters, TV
stations need all the help they can
get from the FCC to operate more
those joint agreements.
In meetings with FCC commissioners
right before the holidays,
the Coalition of Small-Market
Television stations delivered
some sobering numbers to staffers
for FCC commissioners Robert
McDowell and Mignon Clyburn.
According to data submitted
to the FCC and based on NAB
TV financial surveys, the pretax
profit average for stations
in markets 50-210 went from
$908,462 in 1999 to only $42,003 in 2009, the last year for which figures
were shown. That is a drop of 95.4%. The figures were only slightly better
for Big Four network affiliates, dropping from a $1,096,054 average pretax
profit in 1999 to only $131,863 in 2009, a precipitous slide of 88%.
5. Over-the-top is still under the radar. The FCC has tentatively concluded,
once again, that it should not include over-the-top video as part of
the competitive TV station marketplace. “While the growth of MVPDs and
Internet delivery of video programming is undeniable, the impact of this
growth on the broadcast television industry is unclear,” the agency stated.
That comes even though the FCC’s media bureau has signaled that it expects
online to eventually be the country’s video delivery system of choice,
and the commission is trying to reclaim broadcast spectrum in part to meet
the increasing capacity demands for wireless video downloads.