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FCC Wraps Affiliation-Contract Review - Broadcasting & Cable

FCC Wraps Affiliation-Contract Review

Declaratory ruling clarifies what is allowed in affiliation contracts between networks, TV stations.
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The Federal Communications Commission Wednesday issued a declaratory ruling clarifying the do’s and don’ts in affiliation contracts between networks and TV stations and officially ending a years-long review of those contracts.

Those clarified rules of the road include the rights of stations to pre-empt shows they think are inappropriate and a prohibition on networks reserving space on station's digital channels for content they have not come up with yet.

ABC, CBS, NBC, Fox and their affiliate associations asked the FCC back in June to adopt various compromises they had hammered out among themselves over when and under what circumstances stations can pre-empt programming and the understanding that networks cannot require the future carriage of to-be-determined digital content as part of the contracts.

The FCC decided to grant that request Wednesday, saying, "We agree with NASA [the Network Affiliated Stations Alliance] and the networks that additional guidance concerning licensee control, the right-to-reject rule and the option-time rule would be helpful to avoid future disputes, and that the principles identified … are consistent with the act and our rules."

The principles the FCC clarified were that: affiliates retain ultimate control over programming, operations and critical decisions; and contracts cannot allow the networks to hinder or prevent stations from rejecting programming they feel is "unsatisfactory, unsuitable or contrary to the public interest" or prevent them from pre-empting for "programming of greater local or national importance."

That is not an unfettered right, the two sides agreed, but the dispositive factor cannot be the economics, and the right may not be limited to breaking news or any other specific category of programming.

Stations must also be allowed to reject unsuitable programming even if they have not done so with a similar program in the past. That rejection should also not count against contractual limits on pre-emptions, although the commission said such limits are fine for programming that does not fall under a "right-to-reject standard.”

That standard is "“unsatisfactory or unsuitable or contrary to the public interest,” rather than, say, a network-series repeat the station wants to pre-empt for a local sports-team-preview show in which it gets to sell all of the ad time.

The FCC said the networks should not be able to impose any penalties, money or otherwise, for rejected programming. The networks were also prohibited from "optioning" time on stations without having the programming in hand to fill it, including being prevented from requiring affiliates "to carry, at some unspecified future date, unspecified digital content that the network may, or many not, choose to offer."

The initial request to the FCC to weigh in on affiliation contracts was filed by the NASA in 2001. It asked the commission to take a number of steps to cure what it said were inequities in the contracts that favored the networks and reduced stations' control over their airwaves.

The issues heated up in Washington during the FCC's indecency crackdown, when stations complained that they were on the hook for edgy network programming that they could not control and did not have sufficient notice of.

As its name suggests, the NASA was an alliance of the affiliate associations for the major networks. But since that 2001 filing, affiliate associations and networks over time hammered out agreements on the key points of contention, including rights to pre-empt programming for a variety of reasons.

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