FCC's Wheeler Jumpstarts Media Ownership Review

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By Kyle Daly

June 27 — Federal Communications Commission Chairman Tom Wheeler is circulating a plan within his agency that would largely leave intact existing media ownership rules.

Wheeler is proposing rules that would keep in place a ban on single ownership of newspapers and TV stations in the same market, but add an exception for failing media properties that would go out of business without cross-ownership, according to a fact sheet circulated by the FCC. Broadcasters oppose the cross-ownership limit.

Wheeler's proposal would also readopt a rule treating substantial joint sales agreements (JSAs)—agreements under which one broadcast station can sell advertising on behalf of another station in the same market—as representing ownership interests and therefore subject to ownership caps.

The chairman's move is a bid to revive a long-overdue agency review of media ownership rules. The U.S. Court of Appeals for the Third Circuit vacated the JSA rule in May because the FCC hadn't completed a congressionally mandated quadrennial review of the rules in roughly a decade.

Congress has pushed back against the JSA rule by using spending legislation to grandfather in existing JSAs through 2025.

Wheeler is proposing an official definition for shared services agreements, under which broadcast stations in a single market share assets such as news facilities and traffic helicopters, but would not count them toward ownership limits and adoption of a revenue-based definition of an “eligible entity,” the term the agency uses for companies and individuals that qualify for FCC initiatives intended to enhance diversity in the media industry. The Third Circuit in its JSA ruling ordered the FCC to clarify the eligible entity definition.

Wheeler separately circulated a proposal to end the so-called “UHF discount” under which ultra-high frequency (UHF) stations only count halfway toward national station ownership limits, an FCC official told Bloomberg BNA. The discount was instated in the analog television era, when UHF signals were less powerful than very high frequency (VHF) signals. For digital transmissions, UHF signals are stronger than their VHF counterparts.

Broadcaster Group Opposes

The National Association of Broadcasters, which has called for broader updates to TV ownership rules to take into account the effect the internet has had on the media industry, was quick to slam Wheeler's proposal.

“It is shocking that regulators who bless mammoth mergers like AT&T/DirecTV and Charter/Time Warner Cable would still bar common ownership of two TV stations or broadcast/newspaper combinations in a local market,” NAB executive vice president of communications Dennis Wharton said in a statement. He called on the full FCC, Congress or the courts to “end this indefensible FCC charade” and instate less limiting rules.

The proposal can be put up for a vote as soon as either three or more of the five FCC commissioners support it or it's placed on the agenda for one of the agency's monthly meetings.

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

To contact the editor responsible for this story: Tim McElgunn at tmcelgunn@bna.com

For More Information

A fact sheet on Wheeler's proposal is available at: http://src.bna.com/giu

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