New FCC rules crack down on local TV partnerships
FCC Chairman Tom Wheeler said such partnerships have been abused by many broadcasters who have used joint sales agreements to get around limits on the number of television stations a broadcaster can own.
Los Angeles Times
The Federal Communications Commission approved new rules Monday that will greatly reduce and potentially end the popular practice of business partnerships between competing local television stations.
FCC Chairman Tom Wheeler said such partnerships have been abused by many broadcasters who have used so-called joint sales agreements (JSAs) to get around the agency’s rules limiting the number of television stations a broadcaster can own.
The new guidelines are seen as a blow to several big broadcasters including Sinclair Broadcast Group, which owns KOMO 4, and Nexstar Broadcasting, two of the largest owners of local television stations. The FCC did not say how many JSAs exist, but industry estimates put the number above 100, primarily in midsized and smaller markets.
Broadcasters have argued that joint sales agreements and similar partnerships help keep struggling television stations afloat and increase diversity of content in smaller markets.
Public-policy advocates and consumer groups have countered that the opposite is true and that these arrangements serve only large media companies, harm competition and can lead to anti-competitive behavior.
Under the new FCC rules, a broadcaster that accounts for more than 15 percent of another station’s advertising sales would be seen as the de facto licensee of that station. Such a caveat could put them in violation of the FCC’s ownership rules.
The FCC typically limits the number of stations a company can own in an individual market to one in all but the biggest cities.
The agency said broadcasters will have two years to unwind their joint sales arrangements or can seek a waiver and try to make the case that the partnership serves the public interest.
The 3-2 vote was divided along party lines. All three Democrats — Wheeler and Commissioners Mignon Clyburn and Jessica Rosenworcel — voted yes while Republicans Ajit Pai and Michael O’Rielly voiced strong opposition.
Pai said joint sales agreements have allowed broadcasters to better serve their communities and that the case to get rid of them was “embarrassingly weak.”
He added that the FCC’s notice for the new rules did not cite a single complaint from an advertiser regarding JSAs, nor were there examples of such agreements resulting in one station “exercising undue influence” over another.
“This is the dog that didn’t bark,” Pai said.
Wheeler countered that joint sales agreements have been used to skirt existing rules to “create market power that stacks the deck against small companies seeking to enter the broadcast business.”