Washington

Belo, Gannett: Spin-Offs Violate No FCC Rules

Broadcasters say petitions have neither case nor standing to make it 8/09/2013 04:57:51 PM Eastern

Gannett and Belo have told the FCC that their plan to spin off five stations as part of the merger of their station groups complies with "all applicable Commission rules, policies, and precedent." They also say that those who have petitioned to deny those sales don't have standing to file such a petition.
 
As part of that deal, Gannett is selling those stations to operating companies headed by former Belo group chief Jack Sander, and Ben Tucker, former head of the Fisher station group.
 
Their defense of the deal came in response to petitions to deny the stations transfers by public activist groups and some cable operators, who argue that the spin-offs violate the spirit of the local ownership caps since Gannett has signaled it will count those spun-off stations in its financial statements and has included them in talking about the super group it is creating.
 
Belo said the oppositions to the Tucker, Sander spin-offs "are based on a selective and distorted reading of the carefully structured and limited services agreements contemplated by the applications and on an assortment of unsubstantiated claims concerning potential future actions by the parties."
 
It called some of those objections a "stale and overblown rehash" of arguments raised in media ownership proceedings, thus "nothing more than a transparent and improper attempt to single out one proposed transaction for attack and end-run the rulemaking process.
 
As to the standing of the public interest groups and MVPDs, Belo says that neither qualify as a party in interest entitled to file a formal petition to deny because they can't establish their injury or causation, the latter because Gannett and Belo could enter into similar joint services agreements with or without a merger deal, so the deal itself is not the cause of the alleged injury.
 
In its response, Gannett echoed the points about the spin-offs complying with all the rules and the opposition being a way to use the deal as a vehicle for media ownership policy changes.
 
"The Commission has fully considered what should and should not be attributable in both the same-media and cross-media ownership contexts," Gannett said. "The rules at issue here are explicit and precise, even if they do not match [petitioners] policy preferences. The parties to the transaction not only have respected those restrictions, they have negotiated agreements that are far more limited than what is permissible."
 
Gannett says its Belo deal is not the right venue for a referendum on on ownership or retransmission consent rules. The MVPDs who petition to deny the transfers are concerned about joint retrans negotiations, though Gannett points out that some of its spin-offs don't include such collective negotiations, though it also says those don't violate FCC rules.
 
"These broadcasters have said nothing to refute our view that the FCC should find that Gannett et al. intend to engage in the practice of coordinated retransmission consent negotiation and conclude that this provides a legitimate reason to deny the transfers or attach meaningful conditions," said Matt Polka, President of the American Cable Association, who was one of the petitioners.

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