FCC to Court: Allow WAGT to Ax JSA, Enter Spectrum Auction

Says Media General violated rules by seeking to block moves without notice
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The FCC is fighting for the termination of a joint sales agreement—a condition it imposed in its approval of the Gray-Schurz TV station deal—and to preserve the spectrum auction-eligibility of WAGT in the process.

The FCC and the Justice Department have told a Georgia U.S. District Court that Media General violated FCC rules when it sought and received an injunction preventing: 1) the termination of the joint sales agreement between Media General and Schurz Communications' WAGT Augusta, and 2) WAGT's participation in the FCC's upcoming incentive auction.

The FCC is looking to get the stay modified so WAGT can participate in the auction.

In an ominous footnote in a letter to the court, FCC general counsel David Gossett said nullifying those portions of the injunctions would limit Media General's liability for violating those rules, which the FCC said it is investigating as a possible license-threatening violation. "Given the facts as we understand them, the Commission has initiated an investigation and plans to issue a Letter of Inquiry within the near future in order to determine the full nature of the violation, and whether a hearing would be appropriate under Section 312 of the Communications Act [the section about revoking a station's license]."

As part of the FCC's approval of the sale of some Schurz stations to Gray, including WAGT, Gray agreed to terminate the Media General JSA and the FCC made that a condition of the approval.

Media General then sued to defend its contractual relationship, including by blocking dissolution of the JSA contract and WAGT's auction participation. The court granted the injunction.

Gray signaled it was putting the station in the auction and even said it planned to shutter it beforehand, but the FCC actually required it to keep WAGT on the air pending the auction outcome.

The FCC says that move violated its rules in two ways: a) "By seeking an injunction to require continued implementation of the JSA, Media General has sought a remedy in conflict with the Commission’s order, Dissolution of that provision of the injunction is necessary to allow WAGT to be operated consistent with the Commission’s mandate;" and b) "By seeking and obtaining the injunctive provision forbidding Gray to contribute the WAGT license in the upcoming FCC incentive auction, Media General has also violated Sec. 310(d) of the Communications Act. That section requires advance approval by the Commission for any assignment or transfer of control of a broadcast license."

Gossett told the court the FCC has long taken the view that it is a violation of 310(d) for a company to seek injunctive relief that interferes with a licensee's "ultimate control of a station."

Gossett pointed out that the auction begins March 29. "Any station failing to make an initial commitment on that date will be excluded thereafter from the auction," he said. Dissolution of this provision of the injunction prior to March 29 would restore to Gray the control of WAGT that it is required to possess by the Communications Act.

The FCC letter was submitted to the court by DOJ, letting it know that the injunction conflicts with the FCC's Feb. 12 approval of the Gray-Schurz deal as conditioned on the termination of the JSA.

A Media General spokesperson was not available at press time.

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