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GOP: FCC Rules Hamper Broadcast Ability To Compete - Broadcasting & Cable

GOP: FCC Rules Hamper Broadcast Ability To Compete

Majority staff memo for June 11 hearing says FCC rules have failed to match changing market
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The House Communications Subcommittee Republican majority is clearly looking to deregulate broadcasters they see as competitively disadvantaged on the regulatory front.

That is according to a copy of the majority staff memo for this week's hearing on "Media Ownership in the 21st Century."

"As broadcasters – and newspapers – face increasing competition for Americans’ attention, additional regulatory flexibility will permit them to increase efficiencies and compete against unregulated competitors," said the majority staff in the memo. Among the topics of conversation will be the FCC's continued newspaper/broadcast crossownership ban. Former FCC chairman Julius Genachowski proposed loosening that ban, but chairman Tom Wheeler backed off that decision in combining the 2010 and 2014 quadrennial regulatory review of those rules, asking whether loosening their ban was the right way to go, a decision the FCC won't weigh in on until 2016, he has indicated.

"The Commission’s decades-old ownership rules simply have not kept up with changes in the media marketplace and are hampering traditional media’s ability to compete," the Republican staff memo says.

Among the ownership rules the memo suggests are on the table for discussion at the June 11 hearing are, in addition to the newspaper/broadcast crossownership ban: Local TV ownership limits (the duopoly rule); local radio ownership limits; the national cap (39%) on one TV station group’s percentage of households; diversity issues radio/TV crossownership rules, prohibitions on owning more than one broadcast network.

More broadly, the legislators could look at the merger review process by which the FCC also "promulgates policy and guidance" on ownership, the waiver processes through which the FCC can "shape" the industry, and the FCC's attribution rules.

Some Republicans joined broadcasters in their unhappiness with FCC decisions to make most TV station joint sales agreements (JSAs, those over 15% of weekly ad sales) attributable as ownership interest, and the Media Bureau's guidance on how it will view sharing agreements with associated financial arrangements.

The Communications Subcommittee majority has already registered its disaffection with the JSA decision at an oversight hearing with FCC chairman Tom Wheeler last month.

Subcommittee chairman Greg Walden (R-Ore.) pointed out that the FCC's crackdown on JSAs and other actions could lead some to believe the FCC might be "bullying" broadcasters into the incentive auction. The National Association of Broadcasters has suggested as much, and is suing the FCC over both the JSA decision and the Media Ownership guidance.

At that hearing, Wheeler said that he looked at the new Media Bureau guidance as a procedural reform to give broadcasters more certainty than the constantly changing decisions coming out of that FCC "black box."

Wheeler has repeatedly said the goal is not to prevent sharing in the public interest, but what he sees as efforts to circumvent the ownership rules. He said the reality with JSAs was that it was becoming a K Street cottage industry of lawyers finding creative ways to get around the FCC's rules and "pervert" the basic concept of ownership.

"The change in the attribution of JSAs is troubling, given the benefit generated from such arrangements," the Republican staffers said in the memo.

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