FCC's Lake Signals To Hill That Deals Have Been Getting Done

Hearing testimony also explains media ownership actions
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FCC Media Bureau chief Bill Lake says that the FCC has granted the sale of 36 full-power TV stations, representing 12 different deals, since mid-March, which it issued guidelines about deals with associated sharing arrangements.

That is according to Lake in prepared testimony for the June 11 media ownership hearing in the House Communications Subcommittee.

Broadcasters have complained that the FCC has not been expeditious in processing transfers.

Lake outlined various steps the FCC has taken regarding media ownership rules, including making TV joint sales agreements (JSAs) over 15% of ad time attributable as ownership interest, new processing guidance from the Media Bureau on processing TV station license transfers involving JSAs and other sharing agreements (broadcasters have sued the FCC over both those), and the decision to combine the congressionally mandated 2010 and 2014 media ownership quadrennial reviews into what will become a 2016 review—June 30, 2016 is the target date for completion.

On the Media Bureau guidance, which the National Association of Broadcasters suggested was tantamount to new policy in guidance clothing, Lake said that the idea was to give broadcasters notice that the FCC has to consider the "full economic effects" of sharing arrangements and whether they link stations that are "asserted to be separately owned."

FCC chairman Tom Wheeler has signaled he thinks a communications lawyer cottage industry of local ownership rule circumvention has grown up around the sharing practice. Lake suggested that the guidance was to give broadcasters notice that they might want to rethink some complex sharing arrangements to avoid getting them caught up in lengthy reviews.

"Determining the full economic effects of these complex arrangements requires careful analysis, including review of the agreements and financial documents, to determine whether the arrangements together give one station an undue degree of operational and financial influence over another," he says in his testimony. "The Bureau released the Public Notice to apprise industry participants of the fact that review of transactions involving such complex arrangements between competing stations would necessarily be more intensive and potentially more time consuming. As I stated in March when the Public Notice was released, parties to future transactions may find that knowledge useful in considering the structure of future deals or the possibility of amendments to pending transactions."

In fact, following that guidance, Sinclair decided to propose actually turning in three station licenses and moving the programming to multicast channels in a complicated move to insure that its deal to buy Allbritton stations was shorn of sharing arrangements.

As to why the FCC has yet to produce a quadrennial review report to Congress years past the initial deadline, Lake pointed out that the FCC, under a previous chairman, had a media ownership item responsive to the review teed up in 2012 that could never get three votes needed for approval—Republicans opposed it and some Democrats were concerned that the FCC had taken the action without sufficiently gauging its impact on ownership diversity.

He said that the new timetable of June 2016 will allow for more input on how the market has changed since then.

He did acknowledge that the further notice teeing up the issues tentatively affirms that ownership limits—including newspaper-broadcast ownership limits—remain necessary in "the current marketplace despite the prevalence of new electronic media."

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