NAB: FCC Too Quiet on Eight-Voices Test

Says commission has never justified 'arbitrary' line-drawing

FCC local ownership rules prohibits duopolies where TV station co-ownership would leave fewer than eight independently owned stations, which means most markets, but broadcasters say that prohibition is unjustified and unsupported by economic analysis and have commissioned a study buttressing their case.

The FCC does not plan on changing that rule, according to its quadrennial media ownership review proposal that has already been approved by a Democratic majority, though FCC Chairman Tom Wheeler has said the item remains under discussion, and can still be tweaked.

Facing yet another opportunity lost for the FCC to loosen ownership regs, the National Association of Broadcasters has submitted a study this week providing what it says is a basic economic analysis on the so-called eight voices test, an analysis NAB says the FCC has repeatedly failed to do itself.

"Despite the availability of clear ways to test empirically its selection of eight voices as the appropriate delineation for its local TV rule," the FCC said, "the Commission has failed to identify and analyze any economically or competitively relevant distinctions between markets with fewer than eight stations, and those with eight or more..."

In the report, economists Hal Singer and Kevin Caves conclude that the number is arbitrary, does not promote competition, and prohibits deals that would "likely" promote competition.

It bases part of that conclusion on its finding that "holding other factors constant [it accounts for the differences in market size], local advertising rates are no higher in markets with fewer than eight independently owned TV stations than in markets with eight or more independent stations."

The study asserts the eight-voices test is an "arbitrary and unfounded line-drawing exercise."

The FCC has long been under pressure from Republicans in Congress to undertake economic cost/benefit analysis of all its rules, and from some Democrats in specific cases.