Cap Flap: Affils Want FCC to Keep Nets’ TV Limits - Broadcasting & Cable
Non-network-owned stations want their own potential audience reach doubled, though

The NAB Show may be a Kumbaya moment on many fronts, but there is a split among TV stations over just who should be allowed to own more TV stations — a divide with historic precedent.

According to filings in the FCC’s review of its national broadcast owner audience reach limits, the National Association of Broadcasters, whose members include both affiliates and network-owned stations, has asked the regulator to allow TV stations to essentially double their audience reach by extending the UHF discount — which counts only 50% of a UHF station’s audience reach toward the national cap of 39% of U.S. TV households — to include VHF stations as well. That would increase the overall reach to 78% of the country.

Enter the network affiliate associations en masse. Their filing — on behalf of ABC, CBS, NBC and Fox affiliated stations — also promotes ownership deregulation, but with one big difference.

Preserve ‘Balance of Power’

While the affiliates agree that the FCC should double the reach — for affiliates — they argue that the agency needs to restrict network-owned stations to the current cap “to ensure that the network-affiliate balance of power does not skew so heavily in favor of the networks that local stations’ ability to create and distribute high-quality, locally-focused programming is compromised.”

Affiliates say the FCC needs to “jealously guard” the cap on network-owned stations, suggesting their networking “impulse” threatens localism.

The filing struck an omimous tone. “The balance of power continues to shift further in favor of the networks, who capitalize on economies of scale and scope in the production and distribution of their programming and who assert ever-increasing control over their affiliates in terms of access to network programming and channels of distribution,” it read.

Without the cap, affiliates contend, networks would strip affiliations from more stations.

Those with long memories may remember it was the networks’ push for raising the ownership cap almost two decades ago that led to a fracture in the NAB between affiliates and owned stations and the networks’ decision to exit the trade group.

NBC and Fox quit the NAB in 2000 and CBS left in 2001 over the cap issue, with ABC following suit in 2003.

The Big Four ultimately returned after the dust had settled and the cap was raised to 39% by Congress, splitting the difference between NAB’s position of keeping it at 35% and the FCC’s move to raise it to 45%.

In that case, it was the NAB lobbying against increasing ownership limits, citing network power.

Sources have said that the NAB’s silence on the new Locast service, which streams TV-station signals over the internet in New York without permission (but with local ads), is in part because non-network-owned stations are not happy with networks dealing directly with over-the-top services to stream their high-value content without local ads and without affiliate input. The filing appears to buttress that belief.

NAB president and CEO Gordon Smith, in an interview (see Washington, page 30), said he was waiting for direction from the NAB board and the networks.

Regulatory Disparity on Retrans

The affiliates told the FCC that the fact that it has not classified online video distributors as multichannel video programming distributors (MVPDs) subject to retransmission-consent rules (which govern compensation for carrying stations) is a problem.

Because of that regulatory disparity, they said “networks insist on negotiating directly with [online video distributors] for all of the terms of carriage of network-owned stations, the networks’ owned cable networks and their affiliates’ programming.”

NAB had no comment beyond its filing, which sought the discount for network stations as well as affiliates, saying everyone needed the scale to compete against pay TV companies, OVDs and social media giants.

Affiliates clearly see powerful rivals closer to home that they need help to compete with — their own networks .

The NAB Show may be a Kumbaya moment on many fronts, but there is a split among TV stations over just who should be allowed to own more TV stations — a divide with historic precedent.

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