FCC Launches Quadrennial Combo Review

Releases text of ownership order on JSAs and further rulemaking proposal
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The FCC has officially combined the 2010 and 2014 quadrennial media ownership reviews, which includes not loosening most broadcast ownership rules while continuing to ask whether they should be lifted in the future. The item also makes TV  joint sales agreements (JSAs) of over 15% of ad sales attributable as ownership interests.

The FCC adopted the item on a 3-2 party line vote March 31 and Tuesday released the combination report and order and further notice of proposed rulemaking, which becomes official 45 days after they are published in the Federal Register.

“The existing record demonstrates not only the dynamic changes that are taking place in the media marketplace but also the continued and vital importance of traditional media outlets to local communities,” the FCC said. “The proliferation of broadband Internet connections and other technological advances have changed the ways in which many consumers access entertainment, news, and information programming. Yet traditional media outlets are still essential to achieving the Commission’s goals of competition, localism, and viewpoint diversity.”

The commission said that some broadcasters have “rebounded in a significant way” from the economic meltdown and are poised to grow stronger, arguing that the upcoming incentive auctions are an opportunity for them to become “even healthier.”

But others, it says, are not doing as well, “often in crowded major markets.”—those are some of the markets where the FCC will be looking to pick up spectrum in the auction.

The item says that at some point the Internet may be a stronger competitive factor in the overall media marketplace, but that time is not yet. “If broadband penetration continues to rise, which is a policy priority of the Commission, it may have major implications for a future review of our broadcast ownership rules. At this time, however, we believe that the broadcast ownership rules proposed herein remain necessary to protect and promote the Commission’s policy goals in local markets.”

As previously reported, the item does not propose loosening the newspaper-TV crossownership rule or local ownership caps, but asks whether newspaper/radio and radio-TV crossownership rules should be lifted.

The FCC will require that attributable TV JSAs be reported to the FCC within 30 days of being entered into. Existing JSAs that become attributable under the new rules will get two years to unwind, or for the owners to otherwise come into compliance. The FCC will provide for a public interest waiver of the new TV JSA attribution rules.

Also as previously reported, the item seeks input on how the FCC should treat various sharing agreements, including defining shared services agreements and requiring commercial TV stations to disclose those to the FCC. “The current lack of information impedes the Commission’s and the public’s assessment of the level of influence and control that these agreements may confer over independent stations.”

The FCC concludes that the prohibition of two of the Big Four broadcast networks merging remains necessary to promote competition. “[W]e believe that a combination between top-four broadcast networks would reduce the choices available to advertisers seeking large, national audiences, which could substantially lessen competition and lead the networks to pay less attention to viewer demand for innovative, high quality programming,” the commission said.

"NAB is currently reviewing the order with particular focus on details surrounding the waiver process,” said National Association of Broadcasters senior VP Ann Marie Cumming. “With the FCC now seeking to undo JSAs, which it had previously approved, we believe there should be ample opportunities for broadcasters to pursue waivers that preserve the public services these station partnerships have made possible in local communities across the country."

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